Risk-Averse Regulators

Friday, November 13th, 2009

Eric Falkenstein tells a tale of risk-averse regulators:

A friend of mine runs a small bank. He said the regulators came in, and said that they had too much money invested in brokered deposits. Like any businessman he wanted a spotless review, because any negative marks could imply he could not do certain things, such as expand a new office, acquire or be acquired. Bad reviews give the government an undefined option to meddle, veto, who knows? So he asked, what level would be alright with you Fed guys? They said, ‘that’s a business decision”. My business friend noted they were very clear that they do not give advice or anything that could be construed as advice.

Translation. We are suspicious of your exposure, but do not want to defend our suspicions.

This is government in action, afraid to make any hard decisions.

Anomaly or Pattern?

Wednesday, November 11th, 2009

The Fort Hood shooting is an example of how an event can be considered an anomaly or a broad pattern, depending on preconceptions:

The major media and the White House have a strong belief that Muslim extremism is idiosyncratic and mainly irrelevant. As Chris Matthews stated, ‘we may never know if religion was a factor at Fort Hood’ (who’s this ‘we’ kemosabe?). Obama cautioned against ‘jumping to conclusions. The New York Times has the headline articles “Army Chief Concerned for Muslim Troops, and also Little Evidence of Terror Plot in Base Killings, and finally, Painful Stories Take a Toll on Military Therapists. The narrative they want to tell is that a poor psychologist was overwhelmed by the stress of listening to troops discuss their stress by going over to Iraq, and that the biggest problem created by this event is anti-Muslim bigotry.

Consider that when 4 college kids were killed at Kent State in 1970 it was quickly decided this was the signature event of how the government war machine was killing unarmed American kids, as opposed to an unintended accident caused by students bent on increasing anarchy until something happened. James Byrd was a black man murdered by some white supremacists in 1998. There are prime time documentaries, foundations, and major references by politicians and pundits on this event, as if it signified a broad issue. Actually it was highly unusual, most interracial violence involves black perpetrators and white victims, the disparity in crime propensity is on the order of the male/female difference.

Events are either anomalies or examples of a pattern based on a simple politically correct view of how the world works, still based on Marx’s class lens: the dominant class is responsible for everything bad done by everyone, either directly or indirectly. The Statistical Abstract of the United States has lots of tables on crime victimization by race, but not the perpetrator by race, because we don’t want to blame the victim.

How does this relate to Falkenstein’s area of expertise, finance?

The Fed keeps easy to read data on mortgage rejection rates by race, but hides default rates by race, which has led to innumerable simplistic newspaper stories that have ‘proved’ rampant discrimination by banks.
[...]
If the statistical disparity was simply due to bigoted discrimination, closing the gap would be costless. As they say, things always end badly, otherwise, they wouldn’t end. Once subprime blew up, sticking with the Marxist narrative right-thinking people were quick to blame banks for forcing ill-advised mortgages on minorities.

The same principle is involved in education, crime, and borrowing, that of seeing any behavior by socially disadvantaged groups as more evidence of their victimization by the dominant majority. Policies predicated on mistaken assumptions make things worse. By promoting the belief that bigotry accounts for most of every disadvantaged group disparity, the PC elites are doing more harm than good to everyone. Their bad solutions are then applied to everyone, creating a race to the bottom based on great intentions.

Innovation is Not Rewarded

Tuesday, November 10th, 2009

Innovation is not rewarded, Eric Falkenstein says, because thinking different generally isn’t a good idea:

I personally have known a lot of really smart people and have to say they are more unconventional in their ideas, yet most of their ideas are crazy. If you have ever been to a Mensa meeting (IQ but little formal education), you realize how things like homeopathy, or truthers, get their bearings. If you have ever hung out with PhDs, you know how limited their competence scope is (at research universities they have the same IQ as Mensans, but are more disciplined and less creative). It’s no wonder guys like stereotypical MBAs, who are not so analytical but rather personable and articulate, tend to dominate society. I suspect MBA rule is less catastrophic than PhD or Mensa rule, if only because they aren’t as certain of themselves. This all gets back to the idea there is an optimal IQ, and it’s not 180, but rather, say, 125 (probably the modal IQ for any large group leader, such as Presidents and CEOs).

Being smart is a good thing, and I’m happy when my kids do well on cognitive tests because of what this portends for their life (as Charles Murray noted, most people would prefer their kid had 15 more IQ points than get $1 million on their 21st birthday). Yet highly intelligent people tend to innovate more, and such innovation tends to be counterproductive for the innovator. So, the fact really smart people can answer a question faster or more accurately than others, is at some point offset by the fact that when they have to supply the question — as is the case once they leave formal schooling — they will be attracted towards less conventional, usually irrelevant or wrong, paths. For every Steve Jobs or Albert Einstein there were many who lived and died in obscurity; for every Black-Derman-Toy there are hundreds of insanely convoluted, in-house models, of no value.

Obama’s Alpha Delusion

Friday, October 30th, 2009

The current administration recently unveiled $3.4 billion in stimulus grants for advanced electricity-grid projects, and Eric Falkenstein calls this Obama’s Alpha Delusion:

This PR parade relies on the idea that this administration, if not Obama himself, gets into details, and chooses the right cutting edge technologies and methods. Look at Obama above, with his sleeves rolled up, giving pointers to an appreciative bunch of field managers (perhaps the NEA can get to work on some Soviet Realism in this context). In this case, Obama merely has to allocate some of our money to a select list of projects that are aligned with the buzzwords ‘clean energy’, and we get the increasing returns to scale that Paul Krugman won his Nobel Prize for (too bad Ann Krueger didn’t win a Nobel for showing the same ‘infant industry’ argument has been a pretext to protect inefficient industries for over 200 years).

It never occured to any of these guys that there aren’t any magic solutions to our energy problem. They act as if we only tried to develop batteries, we could have ten times the power. See this video from Zocalo, and at the end of the critical discussion about the oil industry an audience member earnestly asks: “can’t we develop energy out of water?” as if the only reason we use oil is because the Rich Uncle Pennybags character from the Monopoly Game is not letting us. The electric car predates the internal combustion engine. My laptop and cell phone routinely run out of energy, highlighting the high reward waiting for the next battery innovation. There has been and continues to be research, and incentives, to increase the efficiencies of batteries.

Obama hates being compared to socialists, so I’ll refrain and compare him to a communist. In the state published hagiography, Divine Stories About the Dear Leader, Kim Jong-Il is presented as someone excellent at golf, pistol shooting, technology, and battlefield courage. He’s basically better than everyone at everything. For a communist state that belief is necessary, otherwise their system is too centralized.

Obama and his experts are presumably more efficient than the market at allocating more resources to productive technologies. The idea that since the market won’t provide funds, perhaps the informed expected return on battery investment is truly low, seems absurd: how could selfish oafs who run business know better than an articulate, caring, public servant? It’s The Secret writ large: think it true, and it becomes so. No wonder it’s a popular idea: would that it were true.

Unfortunately, the bien pensants who adore Obama (or really, adore that they adore Obama), see his value add being multifaceted micromanagement. There are countless $3.4B special investment targets to do, each one with dreams of cold-fusion, high-speed trains, and the end to the achievement gap. Most people think that ‘good smart people’ are better in almost every way than your average businessman, and most people think they vote for such people, thus these politicians should be directing activities the way a coach directs a football team.

Alas, the value of extreme intelligence and knowledge of detail, does not scale at the managerial level. It runs out of benefit to a ruler, because they cannot and should not try to micromanage things. Thus, the best developer of a new technology is often a lousy director for a state or large corporation, and the best managers are often not the best developers. Indeed, a key advantage of those who are smart — but not too smart — is they know they don’t know more than everyone. The Barak Obamas and Paul Krugmans, having excelled at Harvard or MIT, can more easily think they actually know more than everyone else, leading to the classic Fatal Conceit of planners everywhere.

The idea that the only feasible alpha for a leader of a large collective, is to enforce rules and get out of the way, is simply preposterous for those who think the Invisible Hand is merely a theory used by conservatives to excuse their indifference. This reflects a failure to appreciate the complex, homeostatic mechanisms of self interested agents within a free market, and the infinite number of ways top-down rules are worked around when applied to the masses. As Hayek noted, the biggest flaw with the free market is that it wasn’t designed, it emerged spontaneously, which causes people to dismiss its value. Thus, they have 1000 page plans like our health care bill, or ideas about new committees that will assess issues intelligently and disinterestedly.

McAlpha Deception

Tuesday, October 27th, 2009

Alpha is like secret sauce, and Eric Falkenstein estimates that 90 percent of alpha is misrepresented:

Anyone in charge of a business line making money, is usually too embarrassed by the straightforward nature of their advantage to admit it, so they have to point out some nuance that makes absolutely no difference. Thus, every market maker, making money off order flow, will swear they are adding value ‘reading the tape’ or trading like a turtle, or some other such nonsense. Finance is probably the worst, because there’s so little alpha and so much branding and ‘sticky money’, that truth-telling is a strictly dominated strategy. If you ask your average financial executive to explain what he does, chances are he won’t tell you even if he knows. Further, many are actually clueless. They don’t know their job is to provide the appearance of a method to the whims of the main decision-maker, that they fit the right diversity box, or their husband is a senator. Admitting the truth would be too depressing, and the mind is very good at protecting its self image.

Falkenstein takes the secret-sauce metaphor one step further:

I like McDonald’s: it’s clean, I like the burgers and fries, my kids enjoy their play areas and have a fairly nutritious lunch (hamburger with apple slices and milk). But their burgers tend to lose adult taste tests against Burger King. Why? McDonald’s burgers are primarily loaded with ketchup, which appeals to kids, where BK has more mayo, which appeals to adults. The solution might seem easy, add an option to replace ketchup with mayo.

But that would make the burger choice seem much less alpha-like. A burger chain has a reputation, and they carefully project one of having super quality and care, or something outside the box like a square shape, or flame broiling. Heaven forbid they state, these are hamburgers, not steak. They are cooked by people who have trouble remembering to wash their hands after using the bathroom (thus the prominent signs), let alone the ordinal ranking of rare, medium, and well-done. A multinational corporation can’t produce a medium rare burger without generating a class action E. coli lawsuit, and a well-done piece of ground beef is about as nuanced (yet still enjoyable), as an ice-cold light beer.

But that’s like a finance professor saying all investment analysts can’t predict the market. A thriving industry goes on, acting as if they have alpha in every ‘buy’ recommendation, every burger. Thus, the newest McDonald’s creation are their new Angus burgers. They have… lots of mayonnaise. Too much in fact. So, even though they know this is the true ‘secret sauce’ in the adult burger battle, they emphasize the Angus dimension, and then overload the key ingredient. I prefer the more predictable double quarter pounder with no pickle.

Epictetus the Life Coach

Monday, October 19th, 2009

Marcus Aurelius, not EpictetusEric Falkenstein turns to Epictetus the Life Coach, because optimism has one glaring deficiency:

The problem with optimism is that it’s blatantly incorrect: we aren’t all above average in everything, things do not always get better, and we can’t always get what we want. The problem with realism is that by itself it is depressing, a demotivator that does not elevate.

He summarizes Marcus Aurelius’s stoic advice from his Meditations as don’t sweat mean people:

But this is actually quite important, because frustrations with people, not nature, causes most of our grief. Most of what causes people angst are not exogenous constraints of no one’s fault, but rather, when people do things that seemingly are intended to harm you: someone cuts you off in traffic, privately belittles your contributions to colleagues. Recognize there are things you can control, and those you can’t, and this include other people’s actions: learn the difference, and don’t worry about things you can’t control (aka the Serenity Prayer).

Big Man Basket Case

Wednesday, October 7th, 2009

Africa is a basket case, Eric Falkenstein notes. Then he shares the origin of the term:

The term basket case came from WWI, indicating a soldier missing both his arms and legs who needed to be literally carried around in a basket.

I did not know that. I think I was happier not knowing that.

Falkenstein’s real point is that the big man phenomenon is holding Africa back. He cites Theodore Dalrymple‘s explanation:

The young black doctors who earned the same salary as we whites could not achieve the same standard of living for a very simple reason: they had an immense number of social obligations to fulfill. They were expected to provide for an ever expanding circle of family members (some of whom may have invested in their education) and people from their village, tribe, and province. An income that allowed a white to live like a lord because of a lack of such obligations scarcely raised a black above the level of his family. Mere equality of salary, therefore, was quite insufficient to procure for them the standard of living that they saw the whites had and that it was only human nature for them to desire—and believe themselves entitled to, on account of the superior talent that had allowed them to raise themselves above their fellows. In fact, a salary a thousand times as great would hardly have been sufficient to procure it: for their social obligations increased pari passu with their incomes…

The thick network of social obligations explains why, while it would have been out of the question to bribe most Rhodesian bureaucrats, yet in only a few years it would have been out of the question not to try to bribe most Zimbabwean ones, whose relatives would have condemned them for failing to obtain on their behalf all the advantages their official opportunities might provide. Thus do the very same tasks in the very same offices carried out by people of different cultural and social backgrounds result in very different outcomes.

Eric Falkenstein’s Finding Alpha

Monday, September 21st, 2009

Tyler Cowen definitely liked Eric Falkenstein's Finding Alpha:

It’s the best readable summary I know of why CAPM fails (see my comments here). Market data do not, upon examination, show a close connection between risk and return, at least not once you start moving out on the risk spectrum beyond T-Bills and the like. It’s not just the famous Fama and French papers, it is worse than you think. I also like the author’s “relative status” theory for why many people enjoy risk; it reminds me of Reuven Brenner, a neglected economist to this day.

Nonscientists Naive about Science

Friday, September 18th, 2009

Nonscientists are often naive about science, Eric Falkenstein says, even when they have great faith in it:

If you go to The Skeptic’s Guide to the Universe, you invariably hear a bunch of caricatures of those who disagree with conventional wisdom on science — most of which truly are quacks, but not always — and they pedantically emphasize how these alternative views are ‘not science’: they have beliefs that do not have peer-reviewed tests supporting a falsifiable hypothesis. Or listen to Chris Mooney, a journalists who thinks the masses are insufficiently scientific, and argues that Republicans hate or are ignorant of science. He argues we should have more ‘pro science’ candidates, reflecting the 19th century progressive notion that with education, most disagreements and bad policy disappears. Most importantly, if the masses knew more, he surely thinks then popular opinion would converge to his. This from a journalist, a clan whose scientific proficiency is similar to the athleticism of mathematicians.

When journalists talk about science in general this is usually a pretext for saying those who disagree with their favorite idea are wrong, because they are unscientific. Who can be against science? There isn’t a formal anti-science movement because it’s indefensible in principle. They then caricature their opponents, taking the most inarticulate advocates from the other side, and skewering their illogic. They then sit back and take take inordinate pride in their scientific pretensions, as if their selective discussion was objective. The fact is, most ‘big’ scientific issues do not conform to the scientific method, where one puts out testable hypotheses, rejecting ones that are falsified.
[...]
God is dead, but faith did not disappear. Rather, people always have faith in whatever they think is really important. With God out, now what is important is some big cause that, when fixed, will create a better world. As Eric Hoffer noted in The True Believer, ‘all mass movements are interchangeable’, meaning nationalistic, religious, social, political movements have the same true believers. Western civilization has tossed off nationalism and religion, but we are just as ideological as ever, only now we pride ourselves that our beliefs in social or ecological justice as the result of truth, divined through science. If only.

A Good Place to Start a Fight

Friday, September 11th, 2009

Eric Falkenstein discusses the politics of insincerity:

A major problem in politics is that it is not optimal for any party to say what they mean. People pound the table as to how innocuous a certain policy is, and how ‘crazy’ anyone must be to be against it. Others highlight a different endgame, a principle, or the insincerity of the policy. This is why Michael Kinsley famously said a ‘gaffe’ is when a politician accidentally says the truth. Ignorance, and bad faith, make truth-telling a dominated strategy.

It is important to distinguish between private and public sphere here, as in my private life I can adopt a truth-telling strategy because when I encounter the ignorant and those of bad faith, I can simply avoid those neighbors and friends going forward. In contrast, one must build coalitions in public, and one cannot simply abstain from interacting with such parties. Thus, insincerity is needed much more in public contacts than private contacts [one still needs some insincerity in private, like saying 'your butt doesn't look big in that' to your spouse].

Ignorant people will misinterpret your assertions or plans. The idea that getting rid of the minimum wage helps the poor or that giving people money to destroy old cars is a waste of money, is a complex assertion that takes an equilibrium argument, and is primarily theoretical. The benefits are seen and the costs are unseen. Alternatively, the idea that it is optimal for governments to have 5-year plans for industrial production at one time seemed obvious, based on the fact one plans before building a bridge. In this case, the error is not in undercounting the unseen, but a flawed analogy.

Then there are those with bad faith. Often these aren’t people out to get you, but rather, see your immediate aim as not in the best interest of their overall plan, and so want to stop it at all costs. Your failure is not their direct aim, but rather, consistent with their objective. Their opposition can be direct (‘no new taxes!), but it can also be indirect, helping the ignorant develop antipathy by clever caricature (‘he wants to hurt small businesses!’).

Thus, people often speak in metaphors based on principles no one is against. For example, in litigation, when asked ‘what is your endgame?’, an honest response would state one’s direct claim against the defendant. This would be a specific demand, but that presents a problem. Perhaps your endgame is something that an ignorant person would find highly dubious or self-serving if discovered. For example, you could merely want to effect a noncompete agreement, stifling a new competitor. Perhaps your endgame is costing your ex-employee a lot of money to signal to current employees the futility of trying to negotiate for more within the firm. Clearly, these are not sympathetic aims, even if your plan for crushing some plebes is part of a greater good via using your ultimate booty to fund a charity in Africa. So instead of saying something specific you say ‘to protect our intellectual property and enforce valid contracts’. You start broad, and when pressed, get less broad, but always keep at a level where any Sunday school teacher would agree with your goals.

In health care, I think the bottom line is that most people see this as a foot in the door to greater government control of a large segment of our economy, one that will be used for more egalitarian, and politicized, allocation of resources. Democrats in this country like egalitarian redistributions, and ‘politicized’ is just a pejorative for ‘democratized’. Republicans emphasize the inefficiencies of egalitarian distributions, the violations of liberty. As health care is expensive and already highly regulated, it’s sort of like the Balkans of historical Europe, a good place to start a fight on this more fundamental issue.

People Lie About Alpha

Friday, September 11th, 2009

If you take risks and make money, Eric Falkenstein notes, then, after the fact, everyone says that you took good risks, but if you take risks and lose money, well, you were just being foolish.

So people lie about alpha. They pretend that their returns from taking risks (beta-bets) are risk-adjusted returns (pure alpha). But then, it has long been the case that successful people are good at doing one thing while saying they are doing another:

Augustus Ceasar was successful because unlike Julius Ceasar he appeased the senators by making it seem like he restored the Republic (where the senate is in charge), when in practice he had probably more power than Julius Ceasar. When unions are successful they promote their agenda by appealing to how they are helping their customers, assiduously maintaining quality via their exclusionary rules. Affirmative Action was successful because proponents said it definitely does not imply quotas. The key is that many large strategies involve duplicity.

Things Never Change

Saturday, September 5th, 2009

Eric Falkenstein is reading a military and political history of Rome that he finds interesting and depressing, because it demonstrates that things never change:

All the dysfunctional diagnoses and remedies, leading to decline. You get the feeling society’s optimal sphere of military control was greater than its optimal governance size, making most of its last 5 centuries a disequilibria of waxing and waning coalitions and dynasties. I don’t think our politics is much better. Certainly, the best of the Romans are better than most modern politicians, but bit by bit they misunderstood what was sustainable, how to balance authority with sustainable power. Eventually it was no longer Holy, Roman, or an Empire.

What was most interesting was the part on how Romans needed to raise money, but had to resort to debasing the currency by decreasing the amount of silver in their money, which really took off in the third century AD. As prices rose they were totally flummoxed as to the cause, and blamed this on ‘greed’, a common enough political response in the twentieth century to excessive money growth. But fundamentally, there was no solution because the size of the Empire was larger than could be sustained, and monetizing the debt was a symptom of this problem. No politician gets power saying we should do less, the assumption is always that a state can achieve whatever it wants if it tries really really hard. Blaming symptoms we don’t like, such as greed and hubris, is a constant refrain. Some things never change.

Survivorship Bias and Austrian Business Cycle Theory

Friday, September 4th, 2009

Eric Falkentein shares his take on survivorship bias and Austrian business cycle theory:

When I was in charge of capital allocations at KeyCorp, I spoke with many of the business line managers, and was impressed by the fact that all of them had rather sterling track records, especially in the last recession. But I later figured this was all survivorship bias: the losers in the last recession lost their jobs. Thus, each thought they had some special alpha, special asset class, impervious to the mistakes of those who caused the big losses in the past. For a 45 year old who has never really screwed up it’s hard not to think this is the case, as opposed to merely the blind selection process of capitalism. This error is the fundamental genesis of business cycles, in my opinion.

In grad school, while learning macro, I would spend nights reading Austrian Business cycle theory, including von Mises’s Human Action (900+ pages!), and lots from Hayek. I was intrigued by the idea that business cycles were caused by a misallocation of resources, as opposed to merely ‘too much’ investment. That is, say you have 10% of the country’s resources in internet development, but discover the demand only wants 5%. All is fine as long as you don’t care about profits, look at sales/price ratios, but then eventually people get tired of not making money, someone says ‘the emperor has no clothes! There will never be profits’, and everyone stops investing in these areas. The transition from the old to new regime is only possible via firm failures and involuntary unemployment, because people don’t switch to new jobs until their old ones are gone, forcibly.

My only beef with the Austrians is that they emphasized the genesis of this missallocation via money creation, especially the fiat money creation of central banks and how this causes the interest rate to be ‘too low’, causing overinvestment in capital. This again gets into a straight aggregate overinvestment story, and that isn’t very empirically robust. I think to the extent there is overinvestment, it isn’t total investment nearly as much as in the wrong sectors. Today, that sector is housing, and finance.

Diversity is The Most Important Thing public schools teach

Thursday, September 3rd, 2009

Diversity is The Most Important Thing public schools teach, Eric Falkenstain laments:

In theory, diversity is about accepting people different than you; in practice diversity means those who ignore diversity have more moral clout. Thus, my kid’s schools do not have little birthday celebrations (eg, cupcakes) anymore because the new Somalis don’t celebrate birthdays, and we wouldn’t want to implicitly single them by having birthdays as was done for years. No one can mention this sucks in public, however, without being called in intolerant bigot, and as we all know, diversity is The Most Important Thing public schools teach.

Or a bunch of Hasidim move to a small town in Iowa to run a kosher meat packing plant (and hire illegal immigrants at $5/hour), avoiding the locals in their social activities and in schools, referring to them as shiksas and goyim, and the locals, not the new asocial group, needed to learn to ‘understand and respect each other’s differences’.

An institution that employs a bunch of autistic types is ‘diverse’, even though no individual who works there is accepting of diversity except management.

Thus, diversity is about acceptance when you are passive or ‘leading’, but for those who are not considerate about existing mores or who are doing, it’s a pretext for being insular.

Happiness in Modern America

Wednesday, September 2nd, 2009

Charles Murray was honored at the AEI a few months ago, and he gave a talk about happiness in the context of modern America:

His talk hit on an interesting paradox of welfare programs aimed at the poor, that it affects the satisfaction of life for those who are most likely to gain life satisfaction via non-vocational activities, such as faith, family, and community. Most liberals see faith as authoritarian delusions, and family and community needs the responsibility of the government. That’s not horrible if you have an interesting job you are proficient at, but if you are merely a hard working mensch, your paths to a meaningful and satisfying life are taken away.

In Murray’s words — but with my emphasis:

To become a source of deep satisfaction, a human activity has to meet some stringent requirements. It has to have been important (we don’t get deep satisfaction from trivial things). You have to have put a lot of effort into it (hence the cliché “nothing worth having comes easily”). And you have to have been responsible for the consequences.

There aren’t many activities in life that can satisfy those three requirements. Having been a good parent. That qualifies. A good marriage. That qualifies. Having been a good neighbor and good friend to those whose lives intersected with yours. That qualifies. And having been really good at something — good at something that drew the most from your abilities. That qualifies. Let me put it formally: If we ask what are the institutions through which human beings achieve deep satisfactions in life, the answer is that there are just four: family, community, vocation, and faith.
[...]
The sources of deep satisfactions are the same for janitors as for CEOs, and I also said that people needed to do important things with their lives. When the government takes the trouble out of being a spouse and parent, it doesn’t affect the sources of deep satisfaction for the CEO. Rather, it makes life difficult for the janitor. A man who is holding down a menial job and thereby supporting a wife and children is doing something authentically important with his life. He should take deep satisfaction from that, and be praised by his community for doing so. Think of all the phrases we used to have for it: “He is a man who pulls his own weight.” “He’s a good provider.” If that same man lives under a system that says that the children of the woman he sleeps with will be taken care of whether or not he contributes, then that status goes away. I am not describing some theoretical outcome. I am describing American neighborhoods where, once, working at a menial job to provide for his family made a man proud and gave him status in his community, and where now it doesn’t. I could give a half dozen other examples. Taking the trouble out of the stuff of life strips people — already has stripped people — of major ways in which human beings look back on their lives and say, “I made a difference.”