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Explaining California “lifers,” or why people stay in a failed state.

November 13, 2012 3 comments

I have been a resident of several states across the United States, but two in particular stand out. One is California, to which I moved when I was ten, left at fifteen, and returned to for college. The other is Minnesota, where I was born, but to which I did not return until after college.

Just recently, my total time spent as a Minnesota resident surpassed my time as a Californian, capturing a plurality of my life’s years. Many have found it remarkable that I left a tropical paradise like California for the frigid tundra of Minnesota, but if you can look past the weather, California simply isn’t a great place to live. As I have been saying for years, “it’s a nice place to visit, but I don’t want to die there.”

Many of my friends disagree with me. One has spent nearly 70 years (aside from higher education back east) in the same beach community. Another calls himself a California “lifer,” which I find eerily similar to how prisoners with life sentences describe themselves.

In any case, while California has many things acting in its favor, it is nevertheless a failed state that I simply cannot find attractive as a home. To be fair, Minnesota is also heading in the wrong direction, but if California is just about to break the tape, Minnesota is still putting its running shoes on.

Victor Davis Hanson at the City Journal recently attempted to explain why he is a California “lifer,” in an article entitled “California, Here We Stay.” Many reasons he cites make perfect sense. Family heritage is one, and it is perfectly understandable. Indeed, it is the best reason I can think of for why I live in Minnesota and not Texas. There is the weather, of course. And there are certain cultural and educational institutions that are very attractive.

On the other hand, hegemony and inertia cannot prevail forever – just ask Britain, Rome, Greece, even Akkad. The general rule is that it is better to be present for the incline phase than the decline phase, and I can’t help but think that even the best of California has hit its peak. If UC Berkeley were a stock, it’d be Pets.com.

Hanson is honest about California’s shortcomings. Finances built on rainbows-and-unicorns accounting methods; poor primary and secondary education; hostile business climate running the productive out of state; environmental extremism – all of these things are conspiring to choke off the best of what the state has to offer the world.

On the other hand, he makes a point that I simply cannot get behind:

Another reason to feel hopeful about California is that it’s reaching the theoretical limits of statism. To pay for current pensioners, the state simply can’t continue to bestow comparable defined-benefit pension packages on new workers, no matter how stridently the public-sector unions claim otherwise. And as public insolvencies mount—with Stockton, Mammoth Lakes, and San Bernardino seeking bankruptcy protection a year after Vallejo emerged from it—public blame is finally shifting from supposedly heartless state taxpayers to the unions. The liberal unionism of an aging generation is proving untenable, as we saw in recent ballot referenda in which voters in San Diego and San Jose demanded that public-worker compensation plans be renegotiated.

California is reaching the theoretical limits of statism? This strikes me as remarkably naive, and it sounds hauntingly similar to things like “it couldn’t happen here,” or “it can’t get any worse.” Or perhaps “there are no black swans.”

I for one prefer not to underestimate the statist impulses of a polity that has consistently pushed the once-bright beacon of hope that was California back into the dark ages of economic and social thought. And they did it in less than a century and a half to boot.

In my personal opinion, the decay in California is not over, and it is not close to being over. I know that making predictions is the easiest way to be proven wrong, but here goes nothing.

I think that California will continue to be held in a chokehold by statists until the situation becomes completely untenable on a state level. At that point, the citizens of California will become enraged – not at their elected Judas goats, but at the federal government for not bailing them out. Seeing the practical importance of California’s electoral votes to their parties, the statist kindred spirits in Washington will forge a bipartisan grand bargain to bail out California, complete with all the crony capitalism and blatant corruption that entails. California will then double down on its failed policies and things will get worse. Another bailout will happen in quick succession, and while token gestures may be made to restore fiscal sanity, the damage will have been done.

California’s future is not bright. Perhaps California “lifers” have a reason to stay if they are already wealthy or comfortable enough to avoid the worst of the coming catastrophe. But if you’re a common person, your odds are poor.  I fully expect to see the middle class, whose livelihoods are far more likely to hinge on the day-to-day health of the economy than the wealthy, to continue to flee.

My only hope is that they don’t bring the politics of old California with them when they go.

Law Professors are Completely in Touch with Reality

December 24, 2011 Leave a comment

From the ABA Journal comes a story of two law professors, from Yale and Berkeley, attempting to tackle what they assume to be a problem of inequality.

Piggybacking on the popularity of the Occupy Wall Street movement within their echo chamber, these useful idiots are proposing a tax on the 1%, which would cap their incomes when the inequality grows “too large.”  What is “too large”?  Why, it’s 36 times the median household income.

Of course.  Because 37 times would just be beyond the pale.

Actually, their justification is probably worse than if they had no justification.  As proof that 36 times the median is the right place to cut people off from the rewards of their hard work, they point to a 1916 warning from Justice Louis Brandeis, who claimed in an entirely conclusory way that “too much” inequality will reach a tipping point where democracy is undermined.

Well if Saint Brandeis said it, then color me convinced!  No need for anything like, well, real analysis.

Okay, sarcasm over.  In all seriousness, there is no reason to believe that something like this would work as planned.  The unintended consequences would be enormous, and I am quite certain that, although these professors could figure this out if they wanted to, inconvenient facts are being brushed aside in partisan fervor.

Off the top of my head:  High income people would move out of the country.  People would stop working as hard.  Entrepreneurs would no longer take risks.  Growth would stagnate. Progress would grind to a halt.

The immense stupidity of this proposal is almost beyond words.

Replace the LSAT with Psychological Testing?

December 3, 2011 Leave a comment

TaxProfBlog highlights a bit of interesting legal scholarship, called “Predicting Lawyer Effectiveness – A New Assessment for Use in Law School Admission Decisions.”  Briefly, the paper looks to overcome some difficulties with the Law School Admissions Test by replacing it with psychological measuring for those things which correlate with effective lawyering:

Innovative exploratory research by two UC Berkeley faculty (Marjorie Shultz, Law and Sheldon Zedeck, Psychology) has demonstrated that on-the-job professional effectiveness of lawyers can be predicted. The new Shultz-Zedeck tests, developed based on models from employment selection and promotion and the field of industrial psychology, identify and assess many factors not measured by the LSAT that are vital to lawyer efficacy, such as problem solving, advocacy, practical judgment, and communication skills. Exploratory research conducted with participation of more than 5000 law grads suggests that tests can be developed and validated that will predict professional performance (as appraised by peers and supervisors).

As an attorney myself, I have a couple of problems with this.

The first one is easily the most serious, and I think it highlights the real and stark disconnect between the scholarly pursuits of legal academia and the realities of the real world.  Of course, these peer and supervisor reviews sound perfectly good in theory, but as anyone who has submitted to an annual performance review in a company’s down year will know, there is often no true connection between performance and the results of your performance review.

The idea that assessments can be done in an objective manner exhibits, I believe, a willful ignorance of the actual psychology of the workplace.  Odd for a psychological study.  I would like to believe that perhaps these effects would be tempered by an aggregation study, but even that would matter but little.  After all, job performance is an individual metric, as is the decision whether to admit a potential law student.

I simply do not believe that there is a way to remove office politics, which are often backstabbing and brutal.  There is no good way to control for the subjective measure of attractiveness, shown to be correlated with increased earnings on average, and more than likely correlated with friendlier performance reviews.  There is no good way to control for the questionable effects of height, also shown to be correlated with greater success.  And how would one correct for the fact (fact!) that some groups of peers and supervisors are far better than others?  After all, being judged effective at a top New York City law firm is different than being judged effective in your job at the local suburban ambulance chaser’s firm.  The worst lawyers at the best firms may well be better than the best lawyers at poor firms.

Also, as someone who has studied and taught the LSAT, I refuse to believe that there is anything peculiar to it that disadvantages underrepresented minorities.  Anyone who knows the test knows that LSAC bends over backwards to reduce test bias, to the point where the only credible way to posit bias would be to claim that it is tilted against “overrepresented” groups (one might call this “reverse-bias,” but like “reverse-racism,” I revile this term; racism and bias are what they are, and they require no direction, forward or reverse).

Perhaps instead of introducing pseudo-scientific and easily manipulable psychological data points as a replacement for a very cut-and-dry test, we should recognize that the purported lack of qualified minority candidates for law school is far more likely due to our failures in public education, and the massive amounts of structural waste in the public school systems? In reality, it does unqualified minorities no favors to introduce them to a situation where everyone else (whose grades form the curve!) is better equipped to succeed.  This leads to underachievement, poor job prospects, usually crushing debt, and ultimately – although not for everyone – perverse consequences.

For the foreseeable future, there will be no perfect way to determine whether law students will succeed as lawyers, nor is there any particular reason to require them to be, given that there are basically no legal job openings but for the very top candidates anyway.  I cannot imagine that this psychological profiling program would be successful.  And perhaps more importantly, I cannot imagine that we could comprehend ex post what the possibly horrifying unintended consequences would be.

Trojans beat the Bruins. Again.

September 1, 2010 Leave a comment

Everyone knows that the USC Trojans are better on the gridiron than the UCLA Bruins.  (42-28 overall record; 11 national titles to 1; a record of 9-1 over the past decade; etc.), but UCLA students could always point to the university rankings by the likes of U.S. News and restore a sense of superiority.

No longer.

USC has passed their crosstown rivals in the rankings for the first time after an impressive run over the last 10 years or so.  USC ended the year ranked #23, with UCLA at #25.  Berkeley landed just ahead of USC at #22.  Unfortunately for public school partisans, USC will continue to overtake, and Berkeley is just the next step.

Why?  State budget cuts have been implicated, including in the article cited above.  Similarly, a new report has come out indicating a more than $20 billion shortfall in the UC pension system.  Apparently, employees of the UC system haven’t been paying into the pension fund for 20 years(!) because they thought it was overfunded!  This is indicative of a bigger problem – not so much that UC will have to pull almost $21 billion out of  a hat, but that apparently no one at the UC system can do math.  After all, $21 billion shouldn’t be able to just sneak up on you.

That being said, the shortfall itself is not chump change, and it will certainly precipitate a further slide in the rankings.  Consider the quote from UC President Mark Yudof:

Yudof has warned of terrible consequences if the problem is not tackled quickly. “If we do nothing, in four years, the University will be spending more on retirement programs each year than we do on classroom instruction,” he wrote in a recent letter to UC employees.

What does that sound like to you?  A microcosm of what’s wrong with this country?  Why yes!

Our country’s 2010 budget is $3.55 trillion.  (It’s entitled “A New Era of Responsibility: Renewing America’s Promise, and apparently they were totally serious and unironic when choosing that name.)  Estimates for the unfunded liability of Social Security alone run between $10 and $18 trillion.  The UC system’s total budget is roughly $20 billion, and its unfunded liability is almost $21 billion.  Of course, UC can’t monetize its debt either.

USC’s climb up the college rankings has been fairly impressive.  However, the UC schools’ coming drop in the rankings will almost certainly be more impressive.

n.b.  The unfunded liabilities of Social Security will be addressed in a future post.

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