Monday, March 4, 2013

Europe's Grandma Crisis - WSJ.com

Europe's Grandma Crisis - WSJ.com


Like most grandparents in Italy, Isidoro and Antonietta Arcidiacone were thrilled to help out when their daughter, Grazia, and her husband started a family 2½ years ago. They got more than they bargained for.
The 67-year-old retired police officer and his wife have taken their daughter's family back into their one-bedroom apartment in Rome. Mr. Arcidiacone takes his two toddler grandsons to the playground and pediatrician. Ms. Arcidiacone makes homemade gnocchi and peels the skin off grapes so the boys don't choke. This summer, the extended family is decamping to the grandparents' native region of Calabria, in southern Italy.
"Mamma and papà are fundamental. We couldn't cope without them," Grazia Arcidiacone, a smiley 36-year-old brunette, said on a Saturday morning as she sat in her parents' kitchen cuddling 14-month-old Francesco.
The Arcidiacones are part of Southern Europe's unheralded social safety net—an army of older family members who are helping younger generations make ends meet during the region's crippling economic crisis. Half of all abuelos, or grandparents, in Spain take care of their grandchildren nearly every day, and 68% of all children under 10 in Italy are looked after by their nonni when not in school or with parents, according to official numbers. By way of comparison, 19% of preschoolers in the U.S. were taken care of primarily by grandparents while their mothers worked in 2010, according to Census Bureau figures.

The Iv-B disconnect puts strains on all forms of V-Bi insurance and safety nets, here the families help to quench the chaos from the GFC. As money becomes scarce for welfare this puts more strain on them causing cracks and fatigue in their relationships like flexing a piece of metal.
Here it isn't just baby sitting. The number of 25-to-34-year-olds living at home with mom and dad in Italy is rising—it was 42% last year, compared with 33% in 1994—and most say they can't afford otherwise. "Until 2009, staying at home was a choice," says Linda Laura Sabbadini, head of social affairs at Italian statistics agency Istat. "Then, staying at home started becoming a necessity."

'Back At Square One': As States Repurpose Welfare Funds, More Families Fall Through Safety Net

'Back At Square One': As States Repurpose Welfare Funds, More Families Fall Through Safety Net


Butler is among the millions of low-income Americans sliding into the ranks of a group experts call "the disconnected" -- people who are both out of work and not receiving welfare. Their desperate straits reflect the extent to which key components of the American social safety net have been substantially reduced in recent years, just as the worst economic downturn since the Great Depression has amplified demand for help.

In an Iv-B economy there can be pressure to weaken V-Bi, also they can become short of money after loans to the Iv-B economy are not repaid after hitting the ceiling. Welfare can be reduced because the insurance nature of it seems to create a moral hazard, this can create a temporary boom as innovations grow. For example forcing some people off welfare might allow some businesses to grow that could not get desperate enough people to work there. However these can be Iv-B weeds as they grow to absorb these new resources, then crash causing people to use up their savings.
In Georgia, as in many states, gaining cash assistance has become increasingly difficult since the landmark welfare reform signed into law by President Clinton in 1996. Nationally, the share of poor families with children that were drawing welfare cash benefits plummeted from 68 percent to 27 percent between 1996 and 2010, according to an analysis of federal data by the Center on Budget and Policy Priorities (CBPP). During the same period, the number of poor families with children grew from 6.2 million to 7.3 million.
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Behind these precise data points lie messy stories of frustration over the seeming impossibility of navigating a bewildering welfare system that sometimes seems rigged for rejection; over mounting bills that can't be paid; over plans subject to constant renegotiation in lives ruled by scarcity. Like many states, Georgia does not track what happens to people who are eliminated from its welfare rolls. But in conversations with six women who have tried to gain cash assistance here, this is the picture that emerges: Vexation, fear and deepening trouble.

The Bell Curve book

Chapter 5
Poverty

Who becomes poor? One familiar answer is that people who are unlucky enough to be born to poor parents become poor. There is some truth to this. Whites, the focus of our analyses in the chapters of Part II, who grew up in the worst 5 percent of socioeconomic circumstances are eight times more likely to fall below the poverty line than those growing up in the top 5 percent of socioeconomic circumstances. But low intelligence is a stronger precursor of poverty than low socioeconomic background. Whites with IQs in the bottom 5 percent of the distribution of cognitive ability are fifteen times more likely to be poor than those with IQs in the top 5 percent.

IQ can mask a lot of other problems as well, for example poor people might have poor nutrition that restricts intelligence, also a lack of motivation to think in terms of symbolic IQ tests because of education problems. IQ tests have a more subtle problem in that they fall on a normal curve, the questions are selected for this. They then test for random ability, the questions are usually independent of each other so solving one doesn't help a person to solve the next one. However Iv-B thinking is more in roots and branches where it is more important to think in chains. For example a programmer might have high random intelligence (RI) which helps him to do each part of a program, however he might have low chaotic intelligence (CI) which helps him to make chains of programming code that might have to be thousands of lines long to work. Many programmers have this problem, they manage to complete a course at school but cannot code on large projects. This chaotic intelligence or CI is innovative or counter innovative, B people who are inventors might use this to build new ideas from older ones like the roots of a plant looks for new nutrients. A farmer or miner might have this chaotic intelligence where he can pursue a goal tactically discarding ideas that don't work until he finds a new system that works.

Random intelligence or RI is more suited to team players because each piece of a team job is independent of the others but tending towards a conventional or normal outcome. A union worker might have this RI where he can work as a plumber for example in building a house, then a carpenter, an electrician, a tiler, a concreter, etc also work as teams to fit their work in with the plumber to build a new house. These homes tend to be highly normalized, the RI of the workers is towards doing a normal job so the whole property is resistant to collapse. CI or chaotic intelligence would be like one person building a whole house, if they made some critical mistakes then the whole property might collapse, they would have more chance however of coming up with a new house design.

This is probably why so many talented programmers have been found since the rise of computing, many of them amateurs, often also those with poor grades or little desire to do schoolwork of the kind that denotes high IQ scores. To create a CIQ or chaotic intelligence quotient is beyond the scope of this article, but basically questions need to build on each other like IV branches or B roots. A person doing the test might solve one part which leads to one or more other parts as branches that are more difficult. At some point he might fail to go to higher branches. This is like many games where people can excel even when poor students with this CIQ, they might complete levels that get harder such as in warcraft and continue to go higher. Instead CIQ might be like B, a person might have to be tested in research by looking for information, like treasures in some games that unlock new parts of the game. The allows the roots structure to grow, it might measure for example a person's ability to innovate or invent something new while Iv CIQ would measure a person's ability to exploit new ideas as counter innovations.   


How does each of these causes of poverty look when the other is held constant? Or to put it another way: If you have to choose, is it better to be born smart or rich? The answer is unequivocally "smart." A white youth reared in a home in which the parent or parents were chronically unemployed, worked at only the most menial of jobs, and had not gotten past ninth grade, but of just average intelligence—an IQ of 100—has nearly a 90 percent chance of being out of poverty by his or her early 30s. Conversely, a white youth born to a solid middle-class family but with an IQ equivalently below average faces a much higher risk of poverty, despite his more fortunate background.
When the picture is complicated by adding the effects of sex, marital status, and years of education, intelligence remains more important than any of them, with marital status running a close second. Among people who are both smart and well educated, the risk of poverty approaches zero. But it should also be noted that young white adults who marry are seldom in poverty, even if they are below average in intelligence or education. Even in these more complicated analyses, low IQ continues to be a much stronger precursor of poverty than the socioeconomic circumstances in which people grow up.

Failed states

http://nyudri.files.wordpress.com/2012/07/failed-states-2012.jpg
failed-states-2012.jpg (967×535)

This gives an indication of Roy and Biv societies, critical and in danger would be Roy, the borderline as on the G and Gb fence, and stable and most stable as Biv.

Economist's View: 'Important Reasons to Challenge Professor Mankiw'

Economist's View: 'Important Reasons to Challenge Professor Mankiw'


This captures an essential point (see here too):
Stepping back from these particulars, the larger point is that most government transfers take the form of social insurance against risks related to health, unemployment and poverty. As with private insurance, people shouldn’t expect the premiums they pay to equal the benefits they receive. What they should expect — and appreciate — is reduced risk of an economic shock that could turn their lives upside down.

Sunday, March 3, 2013

How much can taxes curb inequality?

How much can taxes curb inequality?



How much can taxes curb inequality?

The Wall Street Journal’s David Wessel has an excellent piece Monday on what academic research tells us about taxes and inequality in the United States. The short version: Inequality has exploded in the past three decades. Taxes, meanwhile, have gotten more progressive — though not enough to counteract that increase in inequality.

The rise of the Iv-B economy occurs from innovations, these are increasing because of computerization creating more booms and busts as well as winners and losers. Putting a brake on this runs the risk of collapsing the growth of some causing stagnation, it is more important to have strong I-O policing to reduce wealth inequality from fraud and predatory speculation. For example much of this inequality cam from the run up to the GFC from financial speculation rather than legitimate businesses.
I’ve made the graph below to illustrate that latter fact. The red line shows how much taxes and transfers (such as food stamps) have done to reduce inequality between 1979 and 2009. The data comes from table nine here. The blue line, meanwhile, shows how much more progressive taxes and transfers would have had to be in order to maintain 1979 levels of economic equality.
In 2009, taxes and transfers reduced inequality by 26.4 percent, around the same amount as the 24.8 percent reduction in 1979. But the tax code actually has to become more and more progressive every year to prevent inequality from growing. Taxes and transfers needed to reduce inequality by 38.2 percent in 2009 to keep it down to 1979 levels.

The Revolt against TED « NYU Development Research Institute

The Revolt against TED « NYU Development Research Institute

That solving any of their favorite global problems would require political solutions—if only to ensure that nobody’s rights and interests are violated or overlooked in the process— is not something that the TED elite, with its aversion to conventional instruments of power and its inebriated can-do attitude, likes to hear. ….TED’s techno-humanitarians—{are nother} brigade of what the Nigerian-American writer Teju Cole has dubbed “The White Savior Industrial Complex.”

TED can act as a V elite that brings together ideas to cooperate and synthesize new ones, this is like the V leaves of a tree that feed the R prey, like the poor people of the world. The V wealthy often give money and ideas like this.