Friday, July 5

Confessions of a Black Mr. Mom" by Ta-Nehisi Coates


This is an interesting article but before that some other points. 

As an economic and psychological aspect, children raised in a family turn out to be better citizens, more educated, more economically active and happier. 

That said, divorce is quite high in western societies so quite a lot of families are not a twin parent family. 

Also the welfare state ensures that if you have a child out of wedlock then you have benefits and child support. Plus many other issues and factors mean that for some groups, some countries, the number of children being brought up in families without a father is extraordinarily high. And that has high individual, family, social, economic and societal costs like imprisonment, low income, drug abuse etc etc. 

difficult to fix this issue but some try to do so. Here's an article by a black father who is trying to be a father! Personally and emotionally speaking, I find this totally bewildering as to why a father wouldn't be 100% involved with his children. But as an economist I understand that this behaviour of black and other men abandoning their children is a natural outcome of the economic and social incentives. 

Society and the family structure   is changing dramatically, and will need careful observation for lessons learnt. 



"Confessions of a Black Mr. Mom" by Ta-Nehisi Coates

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Respond to this Article March 2002

One man’s crusade to redefine African-American fatherhood.

By Ta-Nehisi Coates

In one of his more interesting comic sketches, Chris Rock compares one group of African Americans, “niggas,” to another more wholesome group, “black people.” “You know what really bugs me about niggas is the way they always take credit for stuff a normal man would just do,” says Rock. “Like, ŒI raised my kids.’”

By Rock’s definition, I know exactly where I belong among African Americans today. For I am sure that even for this meager deed of fatherhood I am performing, I deserve a lot more than credit. My mission sounds simple enough: carting my young son through West Manhattan to visit another friend, working in Chelsea. I have logged enough baby hours to earn the title “stay-at-home dad,” so I’m not exactly new to this. But our trek into the city elicits terror because of three converging factors: 1.) I am a hefty 6’4” black male—-anything can happen. 2.) It’s Manhattan—-everything might happen. 3.) My son is 7 months old—-something always happens.

Thursday, July 4

King João II of Portugal “O Príncipe Perfeito” and the Jews (1481-1495)

A paper that i was sent was quite interesting. King Joao II of Portugal is quite an interesting chap. I was interested in him not just because of what he did in Portugal but of his funding of expeditions to India (people who think that the Portuguese were fun chaps should really read up on what these guys did in the Indian Ocean, they were true barbarians, unbelievable savages).

Second was the fact that this chap was responsible (during the time of Columbus), to divide up the world between Spain and Portugal.

Third was that this king was supposed to be the personification of Machiavelli’s work..Very interesting indeed.

But I digress, as is usual with Europe for a very long time, the Jews got it in the neck. This paper, Sefarad (Sef)
Vol. 69:1, enero-junio 2009, págs. 75-99, ISSN 0037-0894 by Francois Soyer of the University of Southampton tells all about how this fellow was an absolute infamous horrible man with the Jews. I quote:


A central element of this reputation has been João II’s treatment of the thousands of Jews who were expelled from the neighbouring kingdoms of Castile and Aragón in 1492 and who came to Portugal. King João has become particularly notorious because of his enslavement of a
number of these Castilian Jews as well as his decision to deport Jewish children seized from their parents to the inhospitable island of São Tomé in the Gulf of Guinea. Somewhat unsurprisingly, the Portuguese sovereign gained the reputation –both in contemporary Jewish accounts and in the work of modern historians– of a callous tyrant who pitilessly persecuted the Jews;
resorting to cruel methods in order to extort funds from the Castilian Jews and coercing many of them to convert to Christianity. By way of illustration, Isaac Abravanel (1437-1508), one of the foremost Jews at the Portuguese Court until his exile in 1483, used the epithets “tyrannical,” “deceitful” and “iniquitous” to describe João II in his work.
Likewise, the Cretan Rabbi Elijah
Capsali (c. 1490-1549), who interviewed many Iberian Jews, presents João II
in his famous chronicle as an inveterate enemy of the Jews and describes the
monarch as a “repulsive” and “wicked” king. In his work, Capsali went to the
extreme of including an extraordinary paragraph in which God punished João
II for his cruelty towards the Jews by sending an avenging angel to slay him
and thus avenge his Jewish victims.

The paper is just amazing to read. Here’s one more quote:

the episode recorded by Solomon Ibn Verga, who himself
came to Portugal in 1492 with his family, is particularly moving:

There was a [Jewish] woman from whom they had taken six children.
When the unfortunate woman heard that the King was leaving the church
[where he had just attended mass], this woman [started to] implore his mercy and threw herself at the feet of his horse, pleading with him to return her
youngest child to her but the King would not listen to her.
The King ordered his servants: “take her out of my sight!”
[The woman] continued to plead her case with yet louder screams and
[the servants] abused her.
The King then exclaimed: “Let her be, she is like a bitch whose pups
have been taken away from her!”

Europe, your history is full of ill-treatment towards minorities. Why just blame the Nazi’s? there is good form for anti-Semitic attacks in pretty much every country.

Wednesday, July 3

Are human rights and economic well-being substitutes? The evidence from migration patterns across the Indian states

This was a very interesting paper. But the highlights and abstract first


Intra-national migration as a tool to measure revealed preferences for human rights protection and economic well-being
Economic well-being can serve as a substitute for bad protection of human rights
Results are not driven by discrimination against particular ethnic or religious groups or type of human rights violations considered
Human rights complaints are interpreted in the opposite way by migrants to states with high and low trust into the government
The effect is driven by states with high TV penetration


The objective of this paper is to study the relationship between the demand for human rights and the demand for economic prosperity from the “exit” perspective, looking at migration patterns. We investigate intra-national migration in India, which is a federation of various states that feature significant economic and political differences. The paper finds that the quality of human rights protection and the economic well-being in the target state are substitutes with respect to determining patterns of migration. These results depend on framing effects; human rights complaints appear to be interpreted differently by migrants, depending on the trust in the government in the target state.

First. Here’s the regression model

View the MathML source

for all i ≠ j

where Migrij denotes the number of migrants from state i to state j; Inci and Incj represent the income per capita in states i and j, respectively; HRi and HRj indicate the number of human rights violations complaints in states i and j, respectively; Distij is the highway distance between the capitals of these two states;CommonLangij is a dummy that is equal to 1 if both states belong to the same linguistic zone; and Controlsiand Controlsj represent the set of control variables for states i and j, respectively. Thus, the estimated equation is essentially a gravity model in which we regress the number of migrants from one state to another state on the income per capita in the target state and the origin state, the human rights violations complaints in these two states, and interaction terms between human rights violations complaints and income.

I really really like this formulation. Fascinating, very well done indeed. Simple but very intuitive.

But with the elections coming up, people need to think through how states approach their twin goals of security (as per human rights maintenance and enhancement versus economic growth. The news isn't as clear cut. When you are poor as a state, people will take off from your state if you are bad at human rights. But people can go to a state with higher economic growth but with potentially lower levels of human rights.


Tuesday, July 2

Show me the money

Another very interesting paper trying to explain the drop of the US savings rate. The savings rate dropped from 8.6% in 1980-90 to 5.5% 1990-2000. The reasons are multiple, such as technology improvements, labour productivity, medical care cost increases, asset appreciation, improved credit access, etc. etc.

The abstract

This paper investigates the effect of mortgage equity withdrawal on saving in the US over the period 1993–2011. A multivariate time series analysis based on a vector error correction model (VECM) is carried out. The saving rate, mortgage equity withdrawal, net wealth, interest rates and inflation are included in the empirical model. The results show that the equity withdrawal mechanism plays a relevant role in explaining the saving rate pattern.

People tend to think that the bankers are to blame for the crisis, yes, sir, but as I have already pointed out so many times, don't be a bloody economic illiterate and then blame the Jews for everything. That ship has sailed a long time back and all it does is to expose you as one of the Daily Mail readers. Just like we did pogroms way back and blamed the Jews for everything, blaming the bankers for everything just tells me that you are a doofus :P

Our economic conditions and civilisation is undergoing some serious changes but at the end of the day, one has to recall that basic economic laws are fairly constant. Don't spend more than you have, if you are going to take on debt, then you will have higher fixed costs, the business cycle cannot be wished away, etc. etc. So having more savings is good, very well. So like the paper shows, people shouldn't goose the mortgage market so much. Rental is a perfectly good alternative, see the situation in Germany for one example of a housing market which is not driven by home ownership lemming like behaviour.

Monday, July 1

How the government helped the banking crisis

not this one, the one before. I quote the abstract:

This essay examines how the Banking Acts of the 1933 and 1935 and related New Deal legislation influenced risk taking in the financial sector of the U.S. economy. The analysis focuses on contingent liability of bank owners for losses incurred by their firms and how the elimination of this liability influenced leverage and lending by commercial banks. Using a new panel data set, we find contingent liability reduced risk taking. In states with contingent liability, banks used less leverage and converted each dollar of capital into fewer loans, and thus could survive larger loan losses (as a fraction of their portfolio) than banks in limited liability states. In states with limited liability, banks took on more leverage and risk, particularly in states that required banks with limited liability to join the Federal Deposit Insurance Corporation. In the long run, the New Deal replaced a regime of contingent liability with deposit insurance, stricter balance sheet regulation, and increased capital requirements, shifting the onus of risk management from bankers to state and federal regulators.

Remember the partnership structures of the investment and other banks were unwound quite a lot. Once you have removed this contingent liability and make it public, well, you see what happens. Here’s an idea for the banking industry, bring back the partnership model (I know, I know, I am kidding)