Rise If You Must

Sep 17

UnBearable: The Unbelievable Awfulness of the Berenstain Bears

(Note: This originally ran in the Fall 2012 issue of Scooter, the now-defunct parents magazine published by the New York Observer. Scooter’s website no longer works, so I’m putting this up here.)

Late last October, I found myself looking for a children’s book about Thanksgiving, something to introduce my two-and-half year old daughter to the approaching holiday. Owing to a surprising dearth of children’s literature about this cherished autumn feast, I wound up with The Berenstain Bears Give Thanks.

Here’s what happens in the book: Papa Bear has been doing work for a local farmer, who pays with a live turkey. Sister Bear adopts the turkey as a pet and refuses to eat turkey at Thanksgiving. The family relents and eats fish for Thanksgiving instead.

Give Thanks is part of the Berenstain’s “Living Light” series, a subdivision of Berenstain country in which lessons about God are imparted. I have no idea why the Berenstain God approves the eating of fish but not turkey on Thanksgiving. But I do know that the last thing a parent of a toddler needs is literary and faith-based encouragement for picky eating.

After just a few doses of that finicky Sister Bear’s behavior, my daughter arrived at her grandparents’ home for Thanksgiving with a driving passion against eating turkey. To her, the main point of the holiday appeared to be about avoiding the consumption of turkey, as it was for Sister Bear. For all I know, her two-year-old theology thought God hated turkey eaters. Thanks, Berenstains!

Berenstains will infiltrate your life in a number of ways. A well-meaning friend brings a Berenstain Bears book to a birthday party. Your mother in-law visits with a well-worn copy from your spouse’s childhood library. Perhaps you pick up one of the Berenstain books because of the relevance of its theme. This is one of the Berenstain Book Industrial Complex’s tricks: there are hundreds of titles, one for almost any occasion: a Valentine’s Day book, a first-day-at-school book, a budget-cuts-shutting-down-a-school-play-ground book, even a neighborhood-racial-integration book.

Since you are not an imbecile, you are initially put off by the hideous cover. It is sure to feature four or five members of the Berenstain family—all absurdly and insultingly ugly. Mama Bear is wearing a hat or, more commonly, a bonnet—a bonnet!—and a dress that looks like it was smuggled off the grounds of a breakaway post-Mormon polygamist cult. Brother Bear and Sister Bear are identical except for their clothes—blue slacks for Brother, some hideous pink romper for Sister. Papa Bear somehow wears overalls all of the time. Honey Bear, the baby of the family introduced in 2000, seems to be thrown in as an afterthought—which, in fact, she was.

Open the book and the situation is no better. The illustrations would be dull if the colors were not so garish. The bears typically stand around in wooden poses with not a suggestion of dynamism or movement. Their faces bear no indication of thought or emotional presence, unless a grin or grimace counts towards such a thing. Not a hint of charm or whimsy or technique redeems any of the art. The bears are devoid of wit. It’s a wonder anyone would inflict these pictures on a story that someone had actually taken the time to write.

At this point, if you are lucky or particularly wise, you will have set aside the Berenstain Bears. Preferably far from home, somewhere it will never be discovered by your offspring. If you are unlucky or unwise, the book will find its way into the proximity of your child. You will be asked to read the book. This is your last chance. You must refuse to read it. Do anything but read it. Suggest a different book. G oout to the park. Resort to declaring it ice cream time, if you must. But do not read the Berenstain Bears to a child.

Reading the book will reveal that the story is—unbelievably—worse than the art. The art merely betrayed lack of thoughtfulness. But the story is to thought as a black hole is to starlight. Where the art lacked action, the plot is grindingly dull. Where the drawings lacked whimsy, the text reads as if it were written under rigid orders to avoid creativity. There are no jokes that are funny. No surprises that are unexpected. It’s all wooden grins and grimaces.

As a parent, you know what is likely to follow: you will be required to read the book over and over. Your child will demand it at naptime, at bedtime, whenever his or her day becomes just slow enough to remember that some-where in the house there is a book about bears. Time and time again, you will spend precious minutes with your child—time you should rightfully be cherishing—resentfully reading the worst children’s books ever written.

The drudgery stems from the generic characters. As the official Berenstain Bears website puts it, the bears’ names were chosen to “emphasize their archetypical roles in the family.” But that fancy word “archetype” is wishful thinking. They are more like half-conceived types. The bear children are neither childlike or child-ish—they are likeish. Mama and Papa and Honey are likeish too. They are approximations of abstractions. To call the Berenstains anthropomorphized bears insults both humans and bears.

The incessant moral hectoring makes the dull-ness ever more excruciating. Each plot is organized around the relentless pursuit of a life lesson: Don’t be mean to your brother, mind your parents, weary our helmet and kneepads while skateboarding, don’t eat turkey on Thanksgiving. Fine enough advice, except for the weird turkey thing, but it is rendered tedious by the lack of imagination with which the themes are introduced, explored and resolved. It’s like watching a train wreck that you see coming a mile away—except there is no wreck. Just a train reliably pulling into station after station after station. The Berenstain books are the train spotting of children’s literature.

Most insidious is the Berenstain empire’s cleverness in coopting the otherwise unassailable canon of bear books for children, at whose pinnacle sits A.A. Milne’s Winnie-the-Pooh. The Berenstains are clearly derivative of the three bears encountered by Goldilocks. (Brother Bear was originally called Little Bear—and Sister Bear wasn’t introduced until later.) Don Freeman’s Corduroy tells the sweet tale of a stuffed bear looking for a home. Paddington Bear stows aboard a ship from Peru to London.

But the Berenstain series repudiates this proud tradition’s central tenet: that a book can be wonderful for parents and children. The franchise seems founded upon the almost anti-literary idea that children must be taught early reading through books whose art and narrative make them unbearable to read. Sure, kids may like them—but kids will drink detergent if you leave it in a cup placed on a low table. They aren’t the best judges.

Despite the dreadfulness of these novellas, they have been selling for 50 years, originally blessed by none other than Ted Geisel, aka Dr. Seuss. A few of the earliest installments, especially those rewritten in rhyme like the series-launching Big Honey Hunt, are admittedly pleasant reads. Not great, but good enough if you don’t have a Milne or Freeman around. But in short order, the books went terribly wrong. My research into the Berenstain oeuvre confirms that they have been awful for decades.

Perhaps we get the literature we deserve. But surely the delivery of just desserts has constitutional limits, I hope. Because even the most annoying parents among us should be spared these Bears.

Sep 16

The Rent is Too Damn High -

The New York Post asks: “Are there any middle-class New Yorkers anymore?”

This sounds like the start of many complaints about the hollowing out of New York City’s middle-class. But, in fact, the article is unwittingly about the stupidity of “affordable housing” in NYC.

The article points out that there are a number of “affordable” “middle-income apartments” in Hell’s Kitchen sitting empty. The developers and city officials are baffled.

"In a city with an apartment ­vacancy rate of less than 2 percent, and where an average Manhattan one-bedroom is nearly $4,000 a month, the Gotham West complex has vacant one-bedrooms that cost $2,509," the article states. "To qualify for that one-bedroom, you have to make between $88,102 and $95,865 a year."

Somehow no one see the problem. So let me spell it out.

The yearly lease on this place is $30108. At the highest level of income acceptable to get that apartment, your post-tax take home pay is $60369. That means that you are paying just about 50% of your take home pay on your rent. That is very far from “affordable.”

At the lower bound of income, you’re paying 54% of your take home pay to your landlord.

It gets even worse in the bigger apartments.

"Two-bedrooms rent for $3,020, for instance, with an applicant with a maximum income of $109,000 a year," the Post reports.

At that income, your after-tax earnings are $67,430. The rent is $36,240. So you’re paying 54% at the maximum income boundary. The maximum.

So why are the “affordable” apartments languishing? Because the rent is too damn high.

Sep 05

Stay Out Of College -

Felix Salmon has put together a terrific interactive graphic that lets you measure out the lifetime returns of various educational choices. You should definitely go play with it.

That said, I don’t think Felix’s analysis on the featured charts page is correct. His very first piece of advice is “Don’t be a fool, stay in school.” This is based on the fact that the median lifetime earnings of a person with a four-year college degree are significantly higher than those of someone who doesn’t go to college.

That’s true as far as it goes. A male with a four-year arts degree has $1.5 million of lifetime earnings over the 26 years following high school. The high school graduate has $1.1 million. 

Here’s the thing about that: the extra $400,000 in lifetime earnings comes about after an initial investment in education of $95,000 in the years immediately following high school. 

That is not a bad return on investment. It’s equivalent to around 5.7% compounded annually. 

But there are better opportunities available. Specifically, the return on investing in financial markets is likely to be better than the return on investing in college.

Charles Schwab currently forecasts that the long-term return on the S&P 500 will be 7.4% compounded annually. Over 26 years, that amounts to around $608,000.

Which means that you would do better to avoid college and instead invest the money you would spend on college in a low-cost index fund.

Even if you took a more conservative approach that mixed stocks, bonds and cash-equivalents, you would still likely be able to beat the return on college.

Don’t be a fool: stay out of school.

Aug 13

[video]

Feeling Froggy with Robin Williams

I never met Robin Williams but my daughter Rose did.

I think Mork & Mindy changed my life. I’m not sure I can explain how but my wife probably can. She often feels like she lives with a clueless alien and I usually agree. Mork, Robin Williams, taught me that was okay. Maybe even normal in a really not-normal way.

Rose was standing on a corner in Brooklyn. She was 3 1/2 years old. It was a rainy day so she was wearing her froggy rain boots.

"Are your boots made out of frogs?" asked a stranger.

"Yes. In a sense," Rose replied.

"I hope that sense isn’t smell. Because dead frogs smell like formaldehyde," the stranger said.

"How rude!" Rose told him. She wondered if her boots smelled and what formal-ideahide might be.

"Too true," he said.

The light changed. Robin Williams stood still. As Rose crossed the street, she heard a sound from behind her.

"Ribbit. Ribbit. Ribbit."

RIP Robin Williams. Thanks for all the laughs.

Aug 11

Godel’s Loophole: A Mystery Resolved

One of the great unsolved problems of American constitutional law goes by the name of “Godel’s Loophole.”  

I’ve solved the problem. But before I get to the solution, let’s go through the problem.

Kurt Godel, the famous Austrian mathematician and philosopher who emigrated to America, once claimed to have found a logical contradiction in the U.S. Constitution. Because of this fatal flaw, the U.S. was vulnerable to being transformed into a dictatorship, according to Godel.

The story of the loophole comes to us from Princeton University mathematician Oskar Morgenstern. He says that Godel claimed to have discovered the constitutional weakness while studying for his U.S. citizenship examination. 

Morgenstern and Albert Einstein both tried to dissuade Godel from spending too much time thinking about this point. Apparently they had a lot of conversations about this because Godel was obsessed with the point. You probably would be too if you had lived to see Austria transform from a Republic to a fascist state.

 Morgenstern and Einstein warned Godel that he really shouldn’t press this point during the citizenship interview. What happened next will blow your mind, as the internet likes to say.

When we came to Trenton, we were ushered into a big room, and while normally the witnesses are questioned separately from the candidate, because of Einstein’s appearance, an exception was made and all three of us were invited to sit down together, Gödel, in the center. The examiner first asked Einstein and then me whether we thought Gödel would make a good citizen. We assured him that this would certainly be the case, that he was a distinguished man, etc.

And then he turned to Gödel and said, Now, Mr. Gödel, where do you come from?
Gödel: Where I come from? Austria.
The examiner: What kind of government did you have in Austria?
Gödel: It was a republic, but the constitution was such that it finally was changed into a dictatorship.
The examiner: Oh! This is very bad. This could not happen in this country.
Gödel: Oh, yes, I can prove it.

So of all the possible questions, just that critical one was asked by the examiner. Einstein and I were horrified during this exchange; the examiner was intelligent enough to quickly quieten Gödel and broke off the examination at this point, greatly to our relief.”

So what was Godel’s loophole? The answer doesn’t seem to have been recorded in any surviving document. Speculation is rampant on the internet. Most of it, of course, is deeply unsatisfactory.

Fortunately, I’ve discovered a loophole and I think it’s what Godel had in mind. It meets the most important criteria: it is based on ‘inner contradictions’; it could lead to the end of the Republican form of government; it is not obvious or widely known.

The problem arises because of a flaw in Article II of the constitution. Section 1 of this article assigns the executive power to the president, sets the term for elected presidents and vice-presidents at 4 years, and establishes the electoral college procedures for presidential elections.

It also limits the presidency to natural born citizens, sets the minimum age, provides for the compensation of the president, and includes the oath of office of the president.

The problem arises from the 6th clause, which describes the succession to the presidency in certain cases. 

In Case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the Same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President and Vice President, declaring what Officer shall then act as President, and such Officer shall act accordingly, until the Disability be removed, or a President shall be elected.

This leaves open the question of who shall be president when the vice president and the president are both removed, dead, or incapacitated. Congress gets to decide who shall act as President.

There is, however, no mention of a term of office for this type of president. The four year term mentioned in the first clause of Article II clearly refers to elected presidents and vice presidents. Neither is there an indication of when the next election must be held. And so long as there is no election, the Congressionally selected officer remains president. 

That is, Congress could remove an elected president and vice-president and set up a new, unelected president who could hold the office indefinitely. 

This section of the constitution was amended in 1967 but that amendment doesn’t resolve this problem. Godel’s Loophole is still there.

Aug 04

Venn Diagram of Venn Diagrams.
In honor John Venn’s 180th birthday.
(Note: I didn’t create this and don’t know the source. If you made it, let me know and I’ll gladly give you credit.)

Venn Diagram of Venn Diagrams.

In honor John Venn’s 180th birthday.

(Note: I didn’t create this and don’t know the source. If you made it, let me know and I’ll gladly give you credit.)

May 06

Legal Notice. Read Carefully: Your Rights May Be Affected -

By permitting, allowing, or suffering me to purchase any of your products or services, whether directly from you or indirectly through dealers, vendors, agents, or other third-parties, you agree to irrevocably surrender all rights to compel me to arbitration or to waive my rights to proceed against you as a member of a class action. In order to make this provision effective and allow effective vindication of my rights, you also agree to irrevocably surrender all rights to compel arbitration and to prevent class actions against all other purchasers of your products and services. You also agree to cover all of my costs associated with bringing an action, including attorneys’ fees and any damages awarded against me, irrespective of the outcome of the action.

Mar 20

Monetary Theory and the Trade Cycle -

It’s very strange that people still find the idea that the supply of credit is not directly linked to the supply of savings to be controversial. This isn’t something MMT or the BoE made up.

Mises was saying this in 1933. 

"It is an apparently unimportant difference in exposition that leads one to this view that the monetary theory can lay claim to an endogenous position. The situation in which the money rate of interest is below the natural rate need not, by any means, originate in a deliberate lowering of the rate of interest by the banks. The same effect can be obviously produced by an improvement in the expectations of profit or by a diminution in the rate of saving, which may drive the "natural rate" (at which the demand for and the supply of savings are equal) above its previous level; while the banks refrain from raising their rate of interest to a proportionate extent, but continue to lend at the previous rate, and thus enable a greater demand for loans to be satisfied than would be possible by the exclusive use of the available supply of savings. The decisive significance of the case quoted is not, in my view, due to the fact that it is probably the commonest in practice, but to the fact that it must inevitably recur under the existing credit organization

Mar 02

We need to talk about money and nominal growth

Scott Sumner’s recent post on the alleged irrelevance of monetary policy channels seems aimed to alienate anyone who has taken the time to notice what’s been going on with the economy, banking and monetary policy for the last few years.

Sumner says there’s “no need to talk about ‘channels’” because concerns over propensities to spend, borrow, or lend can be shown to be false by three statements about the world. What are the statements?

1. Counterparties don’t matter.  The Fed buys assets from counterparty X, who almost always immediately cashes the check and the new base money disperses through the economy almost precisely as it would if the Fed had bought assets from counterparty Y, or counterparty Z.

That’s just not right. When the Fed buys a bond, it buys it from a primary dealer. The primary dealer, in turn, either had it in inventory or, more likely, bought it from one of its customers.

Customers buy and sell bonds continuously, whether or not the Fed is buying. The banks have multiple teams of guys whose job it is to facilitate customers doing this. The selling and buying is based on price and other considerations (like portfolio rebalancing or consumption plans). The folks selling bonds do whatever they were going to do with the proceeds—reinvest, pay for their kids college, buy a swimming pool—regards of whether it was the Fed buying or not.

The customer didn’t get a check to cash when he sold his bond. Instead, the balance in his deposit account with the dealer showed an increased. That’s a minor quibble but it is important since I think the concept of “cashes the check” leads to confusion.

This deposit growth doesn’t disperse anywhere. It sits as a deposit until the customer does something else with it, in which case it just becomes a deposit in another account. How would it disperse? Remember, Scott is arguing that “propensity to spend” doesn’t matter. But it is only through spending that the deposit disperses.

2.  The propensity to spend doesn’t matter for the same reason.  Once counterparties get rid of the new base money, the impact on NGDP depends on the public’s propensity to hoard money, and any change in the incentive to hoard. In the long run money is neutral and NGDP changes in proportion to the change in M, depends on the ‘M’ regardless of whether the person receiving the money has a marginal propensity to consume of 90% or 10%.  Either way they’ll almost always “get rid of” the new money, either by spending it or saving it.  Saving is not hoarding, it’s spending on financial assets.

That last sentence is correct.  When the Fed buys a Treasury or a government-backed mortgage-bond from someone who was using it as a savings/investment vehicle, the former bond holder is left with a deposit in a savings account and that deposit is a financial asset.

Why is the counterparty going to “get rid of the new base money?” She is going to do whatever she was going to do with the proceeds of the bond sale. Perhaps spend it on consumer goods, perhaps purchase a different financial assets.

She traded her bond for “base money,” which is to say an increase in his deposit account. I suppose you can say that she’s “spending it on financial assets” since she has “purchased” a deposit at a bank.

But how is this getting rid of anything? It’s just accepting what was on offer in exchange for the bond.

3. The lending channel doesn’t matter.  In the long run all nominal prices rise in proportion to the change in M.In the short run sticky wages and prices cause the new money to have non-neutral effects.  Those non-neutral effects reflect wage and price stickiness, not “channels” of spending.

Why would nominal prices rise because savings are now held in dollar denominated bank deposits instead of dollar denominated government bonds?  What’s changed that could cause a change in NGDP?

Sumner’s obviously a smart and thoughtful guy. But he’s never explained to my satisfaction why we should expect great macro-economic effects from this “new money.” Treasuries are future claims on money, acquired in exchange for current money. So what has happened when “base money” is expanded through QE, is that the central bank has transformed future claims into present claims.

What has changed isn’t really a change in quantity. What’s changed is the yield, maturity and liquidity characteristics of the public’s holding of financial assets. Perhaps those differences are enough to trigger a nominal rise in prices but I suspect that’s getting things backward. It’s not the change of the mix of financial assets (fewer bonds, more deposits) in portfolios that activates behavior likely to push up prices or nominal growth; it’s the change in behavior and plans that leads to changes in portfolios.