Monthly Archives: September 2015

Eugenics Summary, and HBD-Based Policy

Concise summary of eugenics by polymath Martin Sewell.

The most important passage:

Herrnstein and Murray found that when they moved the average IQ down statistically by just 3 points, from 100 to 97, all social problems were exacerbated: the number of women chronically dependent on welfare increased by 7%; illegitimacy increased by 8%; men interviewed in jail increased by 12%; and the number of permanent high school dropouts increased by nearly 15%.

The problem is politicians, both the left and the right, are afraid to touch the hot potato that is HBD, instead regurgitating same ol’ environment-based solutions to societal problems. For the left, we need more wasteful social programs in a futile effort to close an achievement and wealth gap, which is really an IQ gap. For the right, they say that with smaller government, stronger family units, and more religion, problems like crime, unemployment, and poverty will be lessened. I’m more receptive to the right’s approach but, even then, these solutions lack originally, and despite decades of trial and error and good intentions, among certain groups, social problems like unemployment, academic underachievement, and crime remain high. It’s time to at least consider biology-based solutions to these problems. For example, make welfare conditional on birth control, with possible serialization for repeat offenders. Encourage abstinence/birth control among high-risk groups.

On Reddit in early August, upon news of gunshots being fired in Ferguson on the one-year anniversary of Michael Brown’s death, someone suggested, perhaps jokingly, that Ferguson needs some Planned Parenthoods. Maybe he’s right. That’s an example of an HBD-based solution that could solve the crime problem, and that’s also an example of where the right could bridge the gap with the neo-liberal left by supporting such policy. That’s where I agree with neo liberal Steven Levitt in his assessment that maybe not all life is sacred. But neither the right nor the left want to accept the biological reality that maybe some people are born ‘worse’ than others, predisposed to poverty and incarceration, while others are born ‘wired’ for success, and that policy should reflect this reality. No, let’s just keep repeating the same tired platitudes over and over and hope these problems go away. But, again, the reason why people are afraid to speak out is for fear of the consequences which, in our era of political correctness and public relations, can be quite grave.

Related: World’s ‘Smartest Man’ Supports Eugenics

‘Trickle Up’ Economics; Silicon Valley Technocracy; Neo Liberals

From AVC Trickle Up Economics

I would like to propose another approach that I call “trickle up economics” in which we lower the tax and other burdens on the lower and middle class, we invest in educating their children (and them), we make sure they have the skills to get good jobs in the economy of the future, and we make sure they have access to things like good transportation, safe neighborhoods, healthy food, quality health care services, etc that are required for them to be fully functioning citizens in our society.

Fred is ignoring how the effective tax rate for the lower and middle class has actually been declining for the past few decades due to growing entitlement spending, tax credits, and other benefits that are paid for by higher-income earners. The lowest of income earners actually have a negative effective tax rate:

If anything, we’re spoiling the underclass. The top 5% deserve more, as they the individuals who create jobs, businesses, economic value, and wealth – too much of which is redistributed to those on the bottom who do not contribute to the economy or to technological progress in any meaningful way.

But it’s not that I want the government completely out of the picture – I’m not a libertarian anarchist – but resource optimization is needed. In much the same way that a company restructures to become more efficient and productive, America needs a similar restructuring. Silicon Valley has proven again and again adept at weathering all macroeconomic storms – from recessions, to financial crisis, emerging markets busts, to oil crashes – while other regions struggle with chronic stagnation. Maybe this is a testament to the efficacy of high-IQ and ingenuity of Silicon Valley, combined with a free market and meritocracy, and if the ethos of this technology subculture is applied to broader governance, maybe America will reach its full potential.

But then why do I read AVC if Fred is wrong many times? Because he still gets a few things right, and his optimism about technology and markets sets him apart from welfare liberals, the worst kind of all, like Stiglitz, midget Robert Reich, Krugman, and, of course, Bernie Sanders. There are perspectives from across the political aisle that are congruent to some of my views, particularly some aspects of macroeconomics. The ‘neo left’, which includes Larry Summers and Steven Levitt, to their credit, understand the importance of property rights and the ownership society within a meritocracy, and they are more receptive to science that runs counter to the egalitarian/’blank slate’ worldview, whereas welfare liberals try to censor HBD-based science while promoting dubious global warming science. The welfare left attacks creationism, yet they become creationists when confronted with the science of IQ as it pertains to socioeconomic achievement.

The american dream has always been about opportunity. You start out with nothing and through hard work and a good body and mind, you make it and lead yourself and your family to a better life. That, by the way, is the story of the Gotham Gal and me. We arrived in NYC in 1983 with not a penny to our names. Nada. Nothing. I am not even sure how we came up with the security deposit for our first apartment. But we had good educations and had secured good jobs. And we worked for everything we have. We made it.

The welfare left wants to believe that capitalism and the ‘American Dream’ is dead due to too much wealth inequality, yet hard-working, high-IQ people like Fred keep proving the left wrong.

The Millennial Mindset – Individualism Over The Collective

From the NYT: The Death of the Party

This agrees with my ‘thesis’ that millennials are perhaps smarter and better informed than prior generations, which is why millennials are eschewing socializing for solitary intellectual endeavors such as watching Netflix, reading, STEM, debating economics online, or coding rather than partying.

This quote seems to epitomize the INTP/INTJ millennial mindset of introversion being better than extraversion:

Then you have the hyper-competitive post-2008 economy that rewards intellectualism, ‘results’, and individuality over social skills and collectivism; for example, the decline of unions – which are inherently collectivist, diminishing employee benefits, increasing productivity, less job security, and the growing wage gap between the middle/lower and upper class:

Being smart means you make more money:

And you get worldwide internet sympathy and free stuff:

When you’re smart, people actually care about you, your opinions, and your problems; but, when you’re not smart, you’re just another cog, another ‘eater’.

And you see evidence of the embrace of ‘millennial mindset’ in popular culture, with hugely successful TV shows and movies featuring socially awkward protagonists, as well as Reddit AMAs by scientists getting thousands of up-votes and positive comments.

Millennials aspire to be like Buffett, Zuckerberg, and Thiel – people who are better at creating technologies than relating to other people, and who became rich through brains rather than family connections or the ability to throw football really far.

Home prices in the Silicon Valley are up a mind-blowing 70-100% since 2011. Who’s getting rich? The smart people, including rich foreigners, who own homes, as well as private quality run by high-IQ people. Same for stocks, which are up 200% since 2009. Only 49% of Americans own stocks, and those who do tend to be better educated and richer – or, in other words, smarter.

Since 2008, the rules of the economy have changed, and millennials know this, which is why the stigma of living with your parents until your 30′s, not having a social life, being cash poor, or being unemployed is gone. Millennials understand the trade-off between short-term gains ( pissing away rent every month to a landlord to achieve ‘independence’, a lousy summer jobs that pays peanuts) and the creation of long-term wealth: skipping the useless Summer job and instead learning high-paying skills like STEM, or living with parents and using the saved money to buy a home, hence achieving real financial independence instead of the illusion of independence.

The unemployed physicist or computer scientist who is flooded with six-future job offers is, economically speaking, at a much greater advantage than the liberal arts dropout working at Starbucks, even though the later technically earns more money. The former has much greater earnings potential over the long-run, and thus is ‘richer’ despite being ‘cash poor’. Millennials understand that wealth is not about how much money you have right now, but about your future earnings potential, which in the case of the unemployed physicist, coder, or quant is very high. The key is delaying instant gratification for long-term value creation, a concept which millennials seem to grasp.

Maybe that’s why millennials are so obsessed with personal finance, STEM, and self-sufficiency, for example. Even ‘selfie’ culture is an example of the ‘self’ being more important than the ‘collective’. Same for the rise of MGTOW and ‘mens’s rights’, both which emphasize individualism against politically correct social norms. Millennials understand that the economy is and will continue to become more competitive and that you cannot rely on the ‘collective’ – be it the government, friends, or family – to pull you up – you have to forge your own destiny, your own wealth, and your own success. Or in the words of James Altucher, ‘choose yourself’.

The economy is forcing everyone to become ‘Objectivists‘, with economic reality showering cold water on the delusions all too many grew up believing from their friends, clergymen, family, and teachers – the delusion of a steady paycheck just for ‘showing up’, the delusion that social skills are more important than competence, and the delusion that we’re all special snowflakes when, in fact, biological reality means that some people are ‘better’ than others.

Could you imagine Ayn Rand at such a party? I think not. She, like many millennials, would probably be immersed in thought, or some form of solitude.

Sorry Marx, Capitalism May Not Be Self-Limiting

From the Wall St. Journal: The Middle-Class Squeeze

dire forecasts of Karl Marx…

The Marxian prophecy may be wrong because of the Pareto Principle, which is that the richest 20% contribute 80% to consumer spending, while the poorest contribute very little. This means that Capitalism may not be as self-limiting as commonly believed by some. America’s middle class may not be so important anymore, and the economy as measured by GDP, technological progress, profits & earnings, and exports can do fine even as many see their economic prospects stagnate. Capitalism as measured by profits & earnings, economic activity and consumer spending is doing better than ever. There is a billion-strong and growing middle class in China and all over the world that is overtaking the American middle class. Globalist consumer companies Apple and Nike keep posting blowout earnings year after year. Disney, too. Then you have business to business – Cisco, Oracle, and Microsoft, for example, selling enterprise software and hardware to other businesses all over the world.

In the Silicon Valley, techies strait out of college are making 6-figures. Anyone with a good idea and some coding can become a multi-millionaire or even a billionaire within 2-3 years, with notable examples being Dropbox, Facebook, Snapchat, Uber, and Pinterest..If that’s not capitalism, I don’t know what is.

If you’ve ever had the misfortune of arguing with a liberal about economics, he will tell you the problem is our regressive tax system that hurts wage earners, since the income tax is sometimes higher than the than long-term capital gains rate. What the liberal ignores is that investment involves risk, potentially 100% of invested capital or more, unlike a paycheck. Or in mathematical terms, the cumulative equity curve of a paycheck is monotonically increasing whereas investments have ups and downs.

But technology also means that while inflation adjusted wages may be stagnant, you get more bang for your buck. For example, a TV today has much more utility than a TV set manufactured 40 years ago. Before the invention of compact storage formats (VHS, DVD), movie choices were limited to what was playing at the theater or on TV, but Netflix, at an affordable monthly price, provides thousands of choices instantly at your fingertips.

And also, entitlement spending keeps surging, offsetting stagnation of wages. This is evidenced by declining out-of-pocket costs for healthcare and tuition; prices are high, but grants, loans, and other subsidies keep rising.

Inflation adjusted prices for food and energy keep falling; for example, food has become so affordable and abundant, there is an obesity epidemic. People have dozens of appliances plugged in all night and day, sucking power.

Also employee benefits, especially healthcare, have out-paced inflation.

But on the other hand, as part of the post-2008 bigger is better theme, capitalism may be harder for small business due to high borrowing costs, unlike large business that have very cheap borrowing. Forever low interest rates benefits multinationals that can raise gobs of cash by selling low-yielding debt, while small business has to pay very high yields. Large business also have better pricing power, economies of scale, and can buy inputs in bulk, which is good for profits. This allows large businesses to ‘price out’ smaller competitors, sometimes by lowering profit margins temporary to put a smaller competitor out of business before raising them again. So capitalism may great for big guy, but harder for small guy unless, I suppose, you’re in web 2.0 or other select industries. I’m sure there are some capitalism opportunities catering to the new ‘tech elite’ in Silicon Valley, whether it’s food, landscaping, or child care.

While nations, economies, and civilizations come and go, America is not typical. There have been only two major crisis in the past 100 years (1929, 2008). Emerging market, on the other hand, are a minefield. Pretty much every emerging market has at some point defaulted and or had a crippling crisis that required the IMF to bail them out. It’s better to not lose sleep over crisis, although the doom and gloom media tries to make it seem like financial crisis are an everyday occurrence.

The good news is policy markers are good at fixing crisis when they occur, which I think is more important than predicting them. We can’t let an irrational fear of crisis impede economic progress if we have the tools to quarantine crisis as it arises.

Bullshit & Success

It’s ironic how the site called ‘Without Bullshit’ posted some bullshit of its own in a recent article, How to judge people, by Josh Bernoff.

Bernoff gives some examples of ‘failure’ that aren’t really failures when put in the correct context. You see this all the time online – off people telling their stories of how they were at a supposed ‘disadvantage’ only to succeed wildly, but you never hear the countless stories of people who failed and continue to fail, never succeeding. Such people make up the ‘hidden’ bulk of society, who achieve little in life. They are hidden because you never hear about the, yet they are the majority. All we hear are the Daredevil stories.

Bernoff lists the following as his ‘failures’:

My first job was writing software manuals.

I’ve never joined a company with more than 150 people in it.

How are these failures? Facebook, Google, Apple, and Microsoft all at one time had less than 150 employees. Were all those early employees failures?

How is writing software manuals a ‘failure’. It beats working at Walmart, and probably pays more, too.

I’m currently earning next to nothing.

Kinda misleading. A person with marketable skills but temporary unemployed is in a much better position than someone who is gainfully employed but with low-paying skills. Many successful people get gigs and contracts which, while sporadic, pay large sums when they are realized, compared to people who go to work for a smaller but more consistent paycheck.

I was laid off from my last two jobs. All my other jobs lasted three years or less each.

Being laid off doesn’t mean you personally failed, unless you obviously didn’t meet the goals of the company in spite of your best efforts. Maybe you were laid off because of the the economy or other factors outside of your control. Choosing to leave a job doesn’t mean you failed, if you find a better job. There just isn’t enough information by provided by the author to assume he failed.

Every book I’ve written has had someone else’s name on the cover alongside mine. Each book I publish sells less than the last one.

Considering the majority of manuscripts are rejected, getting anything published is a success, unless he’s talking about self-publishing.

My teenage children have made choices that would horrify some people.

Economist Bryan Caplan has some interesting research that parenting has little influence on long-term behavior of children:

Instead of thinking of kids as lumps of clay that parents “mold,” we should think of kids as plastic that flexes in response to pressure – and springs back to its original shape once the pressure goes away.

Some successes:

I was the best math student at Penn State in decades, graduating in 3 years with a 4.0 average.

I earned a National Science Foundation Fellowship and accepted MIT’s offer to join their Ph.D. program in mathematics.

The successes obviously outweigh the failures. Is his successes weren’t so impressive and rare, he probably would not have had the courage to list the failures, which aren’t really that big of failures to begin with.

Most people have poor critical thinking skills, accepting things prima facie – if it’s written by an ‘authority’, it must always be true. I can read anything and, provided it’s not too long or outside of my expertise, immediately find counterexamples in about 90% of instances. Counterexamples don’t necessarily refute a thesis, but often the author will write a strong-worded article without even considering counterexamples, which are obvious to anyone with even average mental ability who is paying attention.

Does Tesla Really Lose $4,000 Per Car?

Excellent article that dispels the liberal myth that Tesla is an unprofitable company that is dependent on subsidies.

Although California offers a $2,500 rebate per electric car, this is just a tiny fraction of the sticker price for a Tesla, and the people who are buying are not doing it for the subsidy but instead to project status and for the high performance of the car.

Tesla has profit margins of 25% per car, and similar to the Amazon business model, Tesla is reinvesting its profits to build its infrastructure. Wall St. is aware of this, which is why no one cares that Tesla is cash flow negative.

There is a big difference between losing money for every car sold and spending more money than you make. Considering the profit margin on the Model S is over 25%, Tesla is actually in the latter category. Making the Model S is profitable. Rapidly expanding into a major car manufacturer while making the Model S is not.

*Edit: look at it this way. You want to open a McDonalds. It will cost you $500,000, which you borrow from a bank. The first year you bring in a million dollars in revenue, and make $100,000 profit from sales. However, you borrowed and spent $500,000 opening the store, which means you sort of lost $400,000 that first year.

Would Reuters say you lose $2.00 for every Big Mac sold? I guess so.

The left is so desperate to see Tesla fail, but keep coming up empty-handed each time. Whether it’s imagined regulatory issues or ‘exploitation’ of its drivers, the same for Uber, which keeps defying the left’s insistence that it’s a bubble. All these companies keep rising in value year after year, as their businesses continue to grow despite all the doom and gloom from the media.

Nike Reports Blowout Earnings, Don’t Blame Bull Market on QE

Wish I had more time to read NRx & HBD blogs and related commentary, but I’ve been glued to the stock market in anticipation of the market breaking higher, in which case I am prepared.

The Grey Enlightenment is a midpoint between the ‘Dark Enlightenment’ and ‘The Enlightenment’, in rejecting egalitarianism and liberalism but supporting capitalism, technology, and the study of human biodiversity (HBD). Anther theme of the blog is debunking sensationalism, whether it’s doom and gloom, economics nonsense, liberalism in the news, or get-rich-quick schemes.

Based on my economic analysis, there is no compelling reason for much further downside in the market. Today Nike had huge earnings in agreement with my thesis that the economy fundamentally sound thanks to consumer spending, especially consumer spending from the wealthy and foreign consumer.

The left insists that QE is driving the market higher, ignoring the role of blowout earnings from companies such as Nike, Disney, Google, and Apple…ignoring the role of the consumer, technology, and globalization.

The correlation between QE and rising stock prices may merely be coincidental. For example, the fed began to taper way back in Spring 2013, but the market rallied another 20% in the two years that followed. The market continued to rise after the fed officially ended QE in October 2014. But if the market and economy were entirely dependent on QE, there would have been a bear market and recession in 2013, which obviously there wasn’t.

Nike sales +14%, orders +17%. China +30%, EMs +19%, Japan +35%, Eastern Europe +26%. But.. But.. $CAT told us world is falling apart…$NKE

— Rahul Sharma (@retail_guru) Sep. 24 at 01:57 PM

As you can see, there is huge growth of Nike sales in in China. So much for that China crisis, libs. Another doom and gloom prediction debunked by empirical evidence and data.

Nike apparel is not cheap, as everyone knows. So when the left says the consumer is dead, capitalism is dead, or the economy is weak, the left is projecting their own personal anti-capitalism biases instead of being impartial to the data. There is weakness in some areas such as wage growth, but strength in many others like consumer spending.

Volkswagen Scandal Exposes Liberal Hypocrisy

I thought liberal Germany according to the left is supposed to be ethically and morally superior to America.

I guess not…

Volkswagen emissions violations

In September 2015, Volkswagen admitted to using illegally installed software to change emissions test results for 11 million of its diesel engine cars sold between 2009 and 2015. The deception resulted in engines passing U.S. Environmental Protection Agency (EPA) standards and yet having vehicles emitting up to 40 times the legal limit of nitrogen oxides. The company has apologized for creating the emissions scandal while the disclosures have brought into question whether VW diesel engines were actually cleaner for the environment than regular gasoline engines.

This shows that liberals are hypocrites, which many already suspect to be true.

The Daily View: Privacy, Silicon Valley Housing, The Failure of Democracy, Gender Achievement Gap in the Sciences

This is being passed around like an STD: What Happens Next Will Amaze You

The infamous dating site for married people Ashley Madison was hacked, revealing personal information and and easily-cracked passwords for millions of users. Some of these users are already the subject of active extortion.

Australia passed an incoherent and sweeping data retention law, while the UK is racing to pass a law of its own.

The horrible Hacking Team got hacked, giving us a window into a sordid market for vulnerabilities and surveillance technology.

The 2014 Sony Pictures hack exposed highly sensitive (and amusing) emails and employee data.

According to the left’s logic, the hacking of Sony emails is amusing, but the hacking of Ashley Madison is a crisis and a crime against humanity. Passwords don’t matter if the database is compromised. The liberal ‘sanctity of privacy’ in regard to infidelity, cookies, and celebrity nudes apparently doesn’t apply to the NSA or corporations like Sony. And people who are on Ashley Madison, just like celebrities who post salacious photos on their phones and cloud storage devices, deserve to be exposed for living immoral, depraved lives. If you care about privacy, stop using cloud storage and buy a thumb drive. Very simple solutions.

The left tries to present privacy as an all-or-nothing issue; either you have full privacy or totalitarianism. I’ll sacrifice a little freedom and privacy if it means not being blown into smithereens when flying. I support free markets, but am not one of those nutty civil libertarian types.

The same liberals who pretend to care about the troops oppose technology (drones) that would result in fewer deaths of servicemen.

Soon the web was infested with all manner of trackers, beacons, pixels, tracking cookies and bugs. Companies learned to pool their data so they could follow customers across many sites. They created user profiles of everyone using the web. They could predict when a potential customer was going to do something expensive, like have a baby or get married, and tailor ads specifically to them.

They learned to notice when people put things in a shopping cart and then failed to buy them, so they could entice them back with special offers. They got better at charging different prices to people based on what they could afford—the dream of every dead-eyed economist since the dawn of the profession.

Heaven forbid corporations try to make a profit, and – gasp – make our user experience easier?

If at the height of boom times we can look around and not address the human crisis of our city, then when are we ever going to do it? And if we’re not going to contribute to our own neighborhoods, to making the places we live in and move through every day convenient and comfortable, then what are we going to do for the places we don’t ever see?

The San Francisco housing affordability situation is a supply and demand problem, not due to ‘greedy’ tech capitalists. There is a scarcity of home in this sought-after region, and second, as I explain in an earlier article, zoning and other costs make it difficult to establish new housing. The slideshow also fails to mention efforts by Google to make housing more affordable:

Google Offers Affordable Housing
Google offers free Fiber internet in public housing
Google invests $28 million in affordable housing

Up to 400 housing units, targeted toward low-income and median-income households, could be built in the area, depending on how much building allotment Google is granted. (The location would be 4.5 acres of land that Google purchased last year for $98.1 million, and is outside of North Bayshore, bordering Sunnyvale.)

But of course, we can’t let counter-evidence get in the way of the left’s anti-technology narrative. The author also fails to mention that most of San Francisco often doesn’t allow residential building rise higher than four or six stories, making it hard to accommodate a lot of people at low cost. Instead, thanks to policy enacted by liberals, workers who cannot afford to live in the city are forced to commute for hours. Whether it’s bank bailouts, high tuition, or the lack of affordable housing, the left is often responsible for the problems they complain about.

I went to school with Bill. He’s a nice guy. But making him immortal is not going to make life better for anyone in my city. It will just exacerbate the rent crisis.

The left also fails to understand that capitalists want to make technology accessible, provided they can turn a profit – and sometimes they still do so at a loss. Making Bill immortal, which I’m highly skeptical is possible, will open the door to making more people immortal.

Here’s Elon Musk.

In a television interview this week, Musk said: “I’m trying to do useful things.” Then he outlined his plan to detonate nuclear weapons on Mars.

These people are the face of our industry.

Another shot by the left at great capitalist Elon Musk. Some on the right say that the left loves Elon Musk…hardly; the left whines constantlyalleged crony capitalism, as well as attacks on Mr. Musk himself. In 2013, with an intentionally botched ‘review’ of the Tesla roadster, the NYT tried, and ultimately failed, to defame Tesla:

Recall in 2013 the increasingly irrelevant liberal rag The New York Times tried, with much desperation and futility, to defame Tesla and Elon Musk in an editorial where avowed liberal auto reviewer John M Broder deliberately ran his test Tesla out of electricity in order to write a bad review. Tesla stock was trading at $40 at the time; it’s now at $210, to the chagrin of the liberals who wanted to see Tesla fail, and another defeat for the wealth spreading left in their war on success and capitalism.

But, also, let’s face it: It’s a great time to be rich and smart, especially in the Silicon Valley. This is the new ‘enlightenment’ or ‘renaissance’ before our eyes, on our phones, at Caltech and MIT, online, and at the molecular level with the second biotechnology boom.

Peter Thiel has publicly complained that giving women the vote back in 1920 has made democratic capitalism impossible.

He asserts that “the fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism.”

I’m so tired of this shit. Aren’t you tired of this shit?

I’m not tired of this ‘shit’; we need more people to speak up against the failure of democracy, suffrage, and political correctness. Peter Thiel is right. Look at how Obama got the majority of the female vote and what a disaster that has been. The problem with democracy is people voting to expand the welfare state and, second, people voting on charisma, not policy, both of which helped Obama get into office against the more experienced and competent Hillary, Romney, or McCain.

Let’s look at the data. In 2005, Larry Summers was infamously forced to resign from his post as president of Harvard for merely stating what many suspect to be true but are afraid to say: women tend to be underrepresented in STEM due to cognitive differences at the ‘high end’, or according to his full statement:

“It does appear that on many, many different human attributes — height, weight, propensity for criminality, overall IQ, mathematical ability, scientific ability — there is relatively clear evidence that whatever the difference in means — which can be debated — there is a difference in the standard deviation, and variability of a male and a female population. And that is true with respect to attributes that are and are not plausibly, culturally determined. If one supposes, as I think is reasonable, that if one is talking about physicists at a top 25 research university, one is not talking about people who are two standard deviations above the mean. And perhaps it’s not even talking about somebody who is three standard deviations above the mean. But it’s talking about people who are three and a half, four standard deviations above the mean in the one in 5,000, one in 10,000 class. Even small differences in the standard deviation will translate into very large differences in the available pool substantially out.”

Although men and women have roughly the same mean IQ (around 100), they differ in variance, in that women have a smaller variance than men, and hence there are fewer ‘genius’ IQ scores among women, which can explain the gender gap in the sciences.

From Brietbart: SCIENTIFIC PROOF THAT PUBLIC DEBATE IS DOMINATED BY STUPID PEOPLE

The funny thing is this is from Britbart London…Americans, who are too brainwashed by political correctness, including even the right, won’t touch the subject of HBD, but the Brits will. The Enlightenment, which brought evolutionary science to the forefront, originated from Western Europe, not America. Boris Johnson, the mayor of London, said what American politicians are too spineless to admit, and predictably the left was outraged that someone would make an inference between IQ and socioeconomic outcomes. That would mean that some people are born ‘better’ than others, in refutation to the left’s belief in the ‘blank slate’, limiting the effectiveness of wasteful taxpayer-funded liberal social policy to create equal socioeconomic outcomes.

As shown below, women tend to dominate low-IQ majors, in agreement with Summers’ statement:

And women have less variance of IQ scores:

The same liberals who insist that sexuality is biological or that humans are causing global warming refuse to accept the science of gender as it pertains to cognitive ability. Again and again, the ‘pro science’ left picks and chooses the science they want to believe in, rejecting all the science that doesn’t agree with their egalitarian, ‘blame the rich’, blank-slate worldview. Putting people of average of below average IQ in positions of power, or giving such individuals power over high-stake outcomes, is why there is a ‘war on boys’ in the public schools, why there was a financial crisis, and why Obama was elected – twice.

The fate of the world may not depend on a single person, but maybe a handful of smart people who create the technologies that advance civilization, which from the caveman who tamed fire to the scientists who are harnessing hydrogen fusion, is the same as it ever was.

Part 1. Misconceptions About the 2008 Financial Crisis

The subject of the The 2008 banks bailouts (TARP), which understandably angered both Republicans and Democrats, a pertinent case study in pragmatism, in which other otherwise inviolable free market was temporary suspended for the ‘greater good’ of the economy, but ultimately, in spite of great criticism, the bailouts proved to be a success, or at the very least a Pyrrhic victory. Sometimes, as in the example of TARP, the most effective policy is the one that no one likes, sort of like bad tasting medicine that you want to spit out, and this compromise between short-term sacrifice and pain and long-term success underscores the trio of rationalism, utilitarianism, and pragmatism – in contrast to traditional left/right policy that seeks immediate gratification even if such policies prove useless and wasteful in the long-run. Part two will discuss TARP and its aftermath in further detail.

Although its been seven years since the ratification of TARP, many misconceptions about the program, as well as the 2008 financial crisis, remain, which I discuss in detail in an earlier article, Defending Finance: Why Bankers and Economists Are Not to Blame for the Crisis.

Economists are generally better at fixing crisis than predicting or preventing them. The fact 99% of economists failed to predict the crisis doesn’t render the profession useless or economic policy ineffective. If an oncologist cannot actually prevent someone from getting cancer, or predict when someone will get cancer, does that mean oncology is a useless profession? Doctors can create risk profiles, but this alone cannot predict who will get sick and when.

Homeowners share some of the responsibility in terms of reckless borrowing and not reading the fine print. Did anyone really think it was a good idea buying a 6,000 square-foot mc-mansion on a $40,000/year income? It’s simple common sense, and people who are lacking in it should and do pay the price.

Institutions and wealthy individuals who bought mortgage backed securities, often in search of extra yield, like homeowners, bear personal responsibility for their own bad decisions, poor risk management, and poor market timing. Just because Goldman or whoever sold these products doesn’t mean they were guilty. Is an ETF provider guilty because their ETF falls in value? No, the ETF is created to meet a market demand for the underlying asset, and the ETF creator, as per the prospectus, has no culpability whether the product succeeds or fails.

As I explain in the article linked above, contrary to popular belief, people did go to jail for mortgage fraud. From the WSJ:

In the three years since the crisis peaked in October 2008, the Justice Department has filed financial-fraud cases against 14,843 defendants, according to the letter to Mr. Grassley. Over that time, it said, more than 1,100 people have been sentenced to prison for mortgage fraud.

The letter names 17 CEOs and other senior corporate officers convicted of significant financial crimes. Most of the 17 committed frauds that weren’t directly related to the financial crisis. They include Allen Stanford, convicted in March of running a Ponzi scheme; Raj Rajaratnam, jailed last year for insider trading; and Zevi Wolmark, who pleaded guilty this year to bid-rigging in the municipal-finance market. Courtney Dupree, convicted last year of a $21 million bank fraud, makes the Justice Department’s list.

The left keeps ignoring these details, parroting the same line that no one went to jail for mortgage fraud.

But then why were so few, if any, executives punished? One reason is that it’s very difficult to actually build a high-profile criminal case. Unlike TV and movie crime dramas that are settled in under an hour, government cases take years to build, and even longer in court, exhausting hundreds of millions of dollars and tens of thousands of man-hours. In light of this, defendants will often agree to pay a fine and admit no wrongdoing, even when gilt seems obvious.

As explained by NyBooks, The Financial Crisis: Why Have No High-Level Executives Been Prosecuted?, one reason for the lack of high-profile convictions is because prosecutors are targeting firms rather than individuals; second, since 911, for the FBI fraud has taken a backseat to counter-terrorism; third, that the SEC is going after Ponzi schemes, which are much easier to prove criminal intent than, say, investigating the sale of complicated mortgage-backed securities; and, finally, individuals and firms that bought mortgage backed securities are considered ‘savvy’ investors, as opposed to naive ‘mom and pop’ investors.

Another possibility is that no fraud was actually committed, but rather the system collapsed due to ‘good intentions’ in increasing home ownership, which later went horribly wrong. The crisis also involved mistakes in risk management by firms, and mistakes are not illegal. The sudden failure of the housing market, as well as many financial institutions, was a multi-sigma event that firms were not only unprepared for, but could not have possibly foreseen. Few foresaw that securities which were marked ‘AAA’ would become worthless in less than a year.

The same liberals who want the banks to fail and Wall St. to burn fail to realize that it was their polices that contributed to the mess in the first place. The Clinton administration, as well as various other liberal pressure groups, were complicit in inflating the housing market by forcing lenders to create risky loans to meet quotas. From Wikipedia, Government policies and the subprime mortgage crisis:

The Department of Housing and Urban Development (HUD) loosened mortgage restrictions in the mid-1990s so first-time buyers could qualify for loans that they could never get before.[131] In 1995, the GSE began receiving affordable housing credit for purchasing mortgage backed securities which included loans to low income borrowers. This resulted in the agencies purchasing subprime securities.[132]

The Housing and Community Development Act of 1992 established an affordable housing loan purchase mandate for Fannie Mae and Freddie Mac, and that mandate was to be regulated by HUD. Initially, the 1992 legislation required that 30 percent or more of Fannie’s and Freddie’s loan purchases be related to affordable housing. However, HUD was given the power to set future requirements. In 1995 HUD mandated that 40 percent of Fannie and Freddie’s loan purchases would have to support affordable housing. In 1996, HUD directed Freddie and Fannie to provide at least 42% of their mortgage financing to borrowers with income below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.

“The National Homeownership Strategy: Partners in the American Dream”, was compiled in 1995 by Henry Cisneros, President Clinton’s HUD Secretary. This 100-page document represented the viewpoints of HUD, Fannie Mae, Freddie Mac, leaders of the housing industry, various banks, numerous activist organizations such as ACORN and La Raza, and representatives from several state and local governments.”

Thus, in the year 2000, HUD Secretary Andrew Cuomo increased to 50 percent the percentage of low-income mortgages that the government-sponsored entities known as Fannie Mae and Freddie Mac were required to purchase, helping to create the conditions that resulted in over half of all mortgages being subprime at the time the housing market began to collapse in 2007.

Since the government, particularly under the Clinton administration, played such an important role in the crisis, criminal proceedings would be tantamount to the government being its own plaintiff and defendant. Do you think Eric Holder would go after one of his own? Fat chance.

The left wants fordable housing and high-paying job for everyone – provided that companies and individuals are not allowed to make too much money. And it’s always Republicans’ fault when things go wrong.