« Fit to print | Main | Obama's world of troubles »

November 24, 2014

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

We the free people of the great state of Arizona got our guns and Christian faith. We don't need no stinking high per capita income. God Bless Uncle Joe. Repeal Obamacare! What don't you understand about ILLEGAL

Cults never fail. They can only be failed. Where's INPHX to illustrate that point?

Amazing, I just posted something over on the immigration post and came now to this post.
A not surprising post by A1 Arizonan

Oh so true. Boosterism cannot trump reality. That said, I search for a solution, even one, that will right the process back to where Phoenix should be.

Certainly, the loss of the local ownership of the banks. The loss of headquarters of companies (with the attendant focus on local value). The change in business models from needing great amounts of space and many workers to produce magical widgets (say Motorola during its high points) have contributed. No longer do companies look for large tracts because the businesses no longer produce like that in the US.

I would love to see some ideas from others on how to change the economic/business/living model to move the economy and personal income levels up the scale.

What concerns me the most is the apparent denial of the truth of Jon's column and the apparent willingness to ignore the reality by those making decisions that will continue to impact the future of Phoenix.

That is why I escaped back to CA, after AZ sucked me dry.

In reflecting (briefly and without much in the way of on-the-ground observation) it would appear that Phoenix’s situation is not good and can only get worse (except for Cal who would say it’s a better situation). Here’s why.

1.From what I read here, the agricultural segment is in decline – and has been for decades. The drought may be the kill-shot. The best prognostication on the matter that I put any credibility to predicts that the drought is not a one year deal. Look to at least a decade or more of this.
2. Mining is dead?
3. Manufacturing: from what I can tell, Intel is the only real manufacturing operation in the metro. Good news-bad news. Intel could pull the plug at any time.
4. As a result of 1, 2 and 3, tourism and retirement destination big drivers economy. Great sources of low income employment – but that’s about all.
5. Related: demographics. Large population of retired geezers and destitute immigrants.
6. Poor geography (leaving aside the water situation) – combined with the lack of a hub-type airport – makes it unsuitable for branch office type operations. Not really a transportation hub; it’s just too far from anyplace else.
7. Natural beauty. Yes you can see wonderful mountain vistas, but the up close experience is one of unrelenting boredom.

It seems the big growth is in restaurants...in old town Scottsdale...well bars, anyway.

Cannot even begin to tell you how nice it is not to live in constant fear of permanent unemployment. Since I left Phoenix for Denver, I've had several interviews and landed 3 jobs, even though I'm over (gasp!) 50. Just met a woman Saturday night who graduated with her masters as a nurse practitioner at 58 --- She got hired quickly and continues to work full-time several years later. It took me five years to muster the courage to leave Phoenix. Sixteen months later I see it as the best decision I've ever made.

It's sad that there are few safe middle to upper middle class neighborhoods in Phoenix with a great sense of community and no HOA. When comparing the income and property tax rates among other regulations and fees in Los Angeles or San Diego compared to Phoenix, the cost of living in Phoenix should be a lot lower than it is. Restaurants and hotels aren't that much lower priced than in San Diego or Los Angeles and land costs there are at least double. The low cost of living isn't being passed down to the majority in the linear slums of Phoenix earning under $15 an hour and paying a high regressive sales tax and even a food tax.

If Gov-elect Ducey is successful in eliminating the state income tax, I highly doubt the increased $$ in the pockets of the toffs is going to trickle down in the form of lower prices or higher wages to largely working-poor metro Phoenix.

Inflation in items that you need like food and energy will likely keep up at a steady pace, while wages for the majority will remain stagnant or decline. If another real estate boom with championship golf comes to fruition, I hope what's left of the middle class don't get caught up in another real estate frenzy like in 2005-07. I think if wages in Phoenix were higher, there wouldn't be as much temptation to get involved in flipping houses. Developers though, will reap the benefits in the long run from real estate hustles.

WKG, as the desert continues its encroachment, Arizona becomes one of the New Confederacy states.
"Obama still does not appear to have escaped the spell of the neocons who continue to dominate American geopolitical thought despite the bloody disasters that they helped cause in Iraq, Afghanistan and elsewhere."
http://consortiumnews.com/2014/11/24/possible-motives-for-ousting-hagel/

A pessimistic note from an old man: If you believe that the democrats are going to take the country back, HA. My prediction is that their is a revolution that ends with the
Neo-Cons in charge of the US and Mexico. And a lot of dead and incarcerated "liberals".

My apologies for the following: in the recent "Novel open thread" Jerry McKenzie had some interesting comments about the national debt. I have some replies about the size and growth of the debt, about who was responsible, and why; and to what extent it has been reasonable or not. Rather than see it buried on the continuation page of a thread three blogs back, I'm posting a copy here as well:

Jerry McKenzie wrote:

"Total debt peaks around 1950 and then is paid down even during Ike's infrastructure programs."

Debt as a percentage of GDP peaked in 1946. However, the absolute size of the debt (dollar amount) kept increasing, and the debt was NOT "paid down".

Gross federal debt was about $256 billion in 1950, $271 billion in 1954, and $287 billion in 1959. It only gets bigger from there. Something similar is true for debt held by the public (i.e., gross federal debt minus debt held by government accounts).

What IS true is that debt as a percentage of GDP decreased pretty consistently year after year from 1946 until reaching a low in the 1970s of about 35 percent of gross federal debt (and about 25 percent of debt held by the public), where it stayed (with small increases or decreases) until the early 1980s, when massive deficit spending under Ronald Reagan began fueling both economic growth and a large increase in debt.

Reagan came into office at a time of two serious recessions in the early 1980s, so this kind of countercyclical spending is consistent with Keynesian economics, at least, it was initially; but after the economy took off he was simply piling on debt. Debt as a percentage of GDP rose about 15 percentage points from 1982 through 1989.

Profligate deficit spending Under President Bush (Sr.) also quickly increased debt; gross federal debt as a percentage of GDP rose to about 65 percent of GDP (and debt held by the public rose to about 48 percent of GDP).

Under Clinton, who raised income taxes instead of cutting them, the federal deficit began shrinking hugely, both as a percentage of GDP and in absolute (dollar value) terms: in FY 1992 the deficit was about $290 billion; by 1997 it had shrunk to just $22 billion; in subsequent Clinton budget years (the fiscal years 1998 through 2001) the federal government ran large budget surpluses: the smallest was $69 billion in FY 1998, and the largest, in FY 2000, was $236 billion.

During the Clinton years, gross federal debt as a percentage of GDP shrank from about 65 percent down to 55 percent. (Debt held by the public as a share of GDP shrank from about 48 percent down to 31 percent.) Part of this was economic growth and part was the actual paying down of debt through large budget surpluses (almost unheard of in modern times).

Note that, contrary to claims by conservatives, Clinton era budget surpluses did not result from windfall capital gains tax collections resulting from the dot-com bubble.

For example, in 2000, federal capital gains tax receipts totaled $127 billion. Not all of those were swollen from the dot-com bubble (some portion were simply ordinary capital gains tax receipts); but even if you subtract the entire federal capital gains tax receipts of $127 billion from the $236 billion budget surplus for that fiscal year, you still get a budget surplus of $109 billion.

Note that Clinton's budget surpluses are also consistent with Keynesian economics: countercyclical spending calls for the government to run surpluses when the economy is going gangbusters (to reduce inflationary pressures) as well as for deficit spending when the economy is in recession (to offset private spending decreases and stimulate demand).

By contrast, Bush Jr. cut taxes when he came into office, and also took the nation into two expensive wars (Afghanistan and Iraq) and the country began racking up deficits so large that they made Reagan and even Bush Sr. look like tightwads by comparison. From a budget surplus of $128 billion in FY 2001 (which began October 1 2000 while Clinton was still serving in office), to a $158 billion DEFICIT the following year, rising to deficits of $378 billion and $413 billion the following two years; large deficits continued through the rest of the Bush years. Note that the recession of the early 2000s ended in November 2001, so Bush Jr.'s huge deficits can't be blamed on recession related receipt decreases.

Jerry McKenzie wrote:

"There is absolutely no excuse for the present debt level."

Federal debt held by the public, as a percentage of GDP, was up to about 39 percent (from a Clinton era low of about 31 percent) as of FY 2008; but since the fiscal year 2009 budget begins October 1, 2008 and Obama didn't get sworn into office until January 2009, it's difficult to sort out how much of the increase in FY 2009 spending was the result of Bush's last budget (after the crash and the bank bailout began) and how much was the result of budgetary changes made by Obama after he came into office. The FY 2009 debt held by the public was about 52 percent of GDP, so whether from one or both presidents (most likely both) that's a whopping single-year increase of 11 percentage points.

However, much of the increase in debt held by the public during the subsequent years of the Obama administration, came from the additional Treasury securities acquired by the Federal Reserve System under its "quantitative easing" program to increase banking liquidity and stimulate bank lending. (What it actually stimulated, arguably, was an increase in stock market values as money was diverted into financial speculation; but that's not the worst possible outcome in an economy where spending depends on disposable income and consumer confidence.)

Even though the Fed is nominally independent, it's actually a policy arm of the federal government; at least, it is to the extent that the Fed isn't going to hold the Treasury Department over the barrel for debt repayment, like, say, the Chinese government does.

So, it makes sense to net out the increase in federal debt held by the Federal Reserve System in evaluating the amount of debt increase by the Obama administration.

For FY 2010 federal debt held by the public, net of debt held by the Federal Reserve, was 55.5 percent of GDP. For FY 2013 (the last year for which actual figures are available) this figure was 59.6 percent of GDP. That's an increase of only 4 percentage points in the debt (as a percentage of GDP) since the first budget which Obama had undisputed control over (FY 2010); and the percentage actually stayed the same from FY 2012 to FY 2013.

So, there IS an excuse (at least for Democrats) for the increase of the debt as a percentage of GDP. First, most of this increase was racked up under Reagan, Bush (Sr.) and Bush (Jr.). Second, there is the housing crash, banking crisis and bailout, credit crunch, and quantitative easing by the Fed, not to mention crisis related increases in unemployment insurance, Medicaid and food stamp payments as households lost job income and had homes repossessed, thus increasing the number of households qualifying for government aid.

A four percentage point increase in debt as a percentage of GDP is not bad at all given those circumstances. (Again, this is debt held by the public, net of the increase in debt held by the Federal Reserve.) If you include FY 2009 (whether you attribute the debt increase that fiscal year to Bush, Obama, or both), we're talking about an additional 11 percentage points; but note that this came in a single year, at the height of the various crises.

You can find the debt figures in Section 7, Table 7.1 of the Historical Tables; this includes debt held by the public net of Federal Reserve debt, which is in the far-right column of that table. You can find the deficit figures in Section 1, Table 1.1 in the same source:

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/hist.pdf

For federal capital gains tax receipts by year, see this table from The Tax Foundation:

http://taxfoundation.org/article/federal-capital-gains-tax-collections-1954-2009

P.S. From FY 2008 to FY 2009, the year that debt as a percentage of GDP experienced its largest recent increase, federal government outlays increased by about $535 billion.

Of that, about half, or $265 billion, was an increase in "Commerce and Housing Credit" spending. I'll assume that this was largely related to the Troubled Asset Relief Program (TARP), which was signed into law by President Bush on October 3, 2008 and which attempted to address systemic banking problems resulting from the mortgage crisis (purchasing the toxic subprime and other securitized mortgage debt).

Generic "Health" spending (primarily Medicaid) contributed another $54 billion of increased spending; while Medicare (the retirement age medical insurance program) accounts for another $40 billion increase.

"Income Security" (which includes unemployment compensation, housing assistance, and food stamps) contributed another $103 billion increase.

Social Security accounted for another $66 billion spending increase.

The total for all these items is about $528 billion: this accounts for nearly all of the roughly $535 billion increase in federal spending from FY 2008 to FY 2009.

Most or all of the legislation mandating these spending increases predated the Obama administration. Except for TARP, most of it predated the Bush administration, and involves automatic spending increases as the economic crash caused increased eligibility and benefits claims by households.

At the same time, federal receipts (tax collections) decreased by about $419 billion from FY 2008 to FY 2009 because of deteriorating economic conditions as the housing crisis spread beyond the subprime market and unemployment and foreclosures grew.

That accounts for a deficit increase of $954 billion from FY 2008 to FY 2009. That, in fact, is the difference between the FY 2008 budget deficit of $458.5 billion, and the FY 2009 budget deficit of $1,412.6 billion.

Note also that according to the Ccngressional Budget Office (CBO), enacting President Obama's stimulus bill (The American Recovery and Reinvestment Act of 2009, or ARRA) would increase the federal budget deficits by $185 billion over the remaining months of fiscal year 2009.

So, of the huge increase in the federal deficit and corresponding whopper of an increase in debt as a percentage of GDP from FY 2008 to FY 2009, only $185 billion was directly due to Obama's stimulus package. Don't forget also that GDP actually shrank from FY 2008 to FY 2009, and debt as a percentage of a shrinking figure exagerrates the debt.

P.P.S. Federal debt held by the public shrank from over 100 percent of GDP at the end of WW II (1946) to about a quarter of GDP (25 percent) in 1979. During this time, Congress was under control of the Democrats almost continuously.

Also: for documentation of the details in spending increases between FY 2008 and FY 2009 given above, see Section 3, Table 3.1, p. 58, here:

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/hist.pdf

P.P.P.S. The Obama stimulus that accounted for $185 billion of the deficit increase in FY 2009 was split between tax cuts/credits and spending. I know that in the bill as a whole about 37 percent was tax cuts/credits. So, it would not be unreasonable to assume that roughly 40 percent of this or $74 billion was from revenue shortfalls caused by tax cuts/credits. That compares to a total decrease of $419 billion in federal revenues that year; mostly from the economy's deepening problems, clearly.

Restructuring the Arizona University System to increase accessibility, affordability, and accountability to a public university education for many more Arizonans can increase higher educational and income attainment.

http://PSUandAzTech.blogspot.com

...while also breaking-up the ASU monopoly within Greater Phoenix.

“Fact is not the same as essence, or even truth.”

Came across this today:
The economist John Maynard Keynes, accused of changing his mind about monetary policy, famously replied, “When the facts change, I change my mind. What do you do, sir?” The honest answer to Keynes’s question is “Often, nothing.”

Data can bear on policy issues, but many of our opinions about policy are grounded in premises about the nature of human life and human society that are beyond the reach of data. Try to think of any new data that would change your position of abortion, the death penalty, legalization of marijuana, same-sex marriage, or the inheritance tax. If you cannot, you are not necessarily being unreasonable.

Charles Murray in “Coming Part: The State of White America, 1960-2010”

wkg, our cultural values don't depend on statistical evidence. They are what they are. Still, depending on the overarching interests of a particular political coalition, people might suddenly decide to tribalize against certain economic tenets as a means of fighting a pitched if imaginary war in its own defense. Keynesian economics, for example.

I'm old enough to remember when the South sent people to Congress who faithfully brought home the bacon even as they were making sure their black constituents got a much smaller share. Still, it seems almost like an oasis of sanity by comparison to the current hysteria. How is it that a party (or "movement" if you're inclined to describe this program in a gastrointestinal way), became convinced that the "market" was the answer to all their problems? Cut taxes on the rich and watch this bottle rocket take off. Except, of course, it never does. John Maynard Keynes could have explained to you why not but it's Charles Murray who tells you what you really want to hear.

Murray earned his conservative cred by detailing (see: The Bell Curve) how blacks have lower IQs than white people. Not that conservatives are racist! No, I'm the racist for even mentioning his discredited thesis. Oddly, it was first excerpted in the quasi-liberal magazine The New Republic, whose editor at the time was Andrew Sullivan.

You're free to believe anything your tribe holds as holy doctrine (science isn't proven, tax cuts for the rich pay for themselves, blacks are inferior, terrorists hate us for our freedom, etc., etc.) My own suspicion is that most of your tribe isn't really committed to some of these concepts except as a means of broadening your Culture War to include as much of quotidian reality as you possibly can. It's how a fairly anodyne educational policy, Common Core, became yet one more issue in the right's cosmic battle against all of us heathen liberals.

Arizona is busy adopting almost the entire cultural agenda of the hard right. The economic part is particularly interesting since it dovetails with the Randian fantasy that redistribution is theft and that we're not a society where people look out for one another except, out of tribal allegiance, to impose its moralistic and religious values as official state doctrine. Arizona used to be a middle-of-the-pack state 30 years ago. Now, it's rivaling Alabama and Mississippi for bottom-of-the-barrel honors.

It's okay to believe things and have opinions. As Keynes said, however, when facts change, he changes his mind. You won't because your culture is anti-empirical and based on a toxic creed of race-based hierarchy. It's the only way Republicans can win - aim low and hit the bullseye.

Stevenson on TED: "We will ultimately not be judged by our technology, we wont be judged by our design, we wont be judged by our reason and intellect. Ultimately you judge the character of a society, by how we treat the poor, the condemned and the incarcerated. The opposite of poverty is not wealthy; the opposite of poverty is justice."

"No more water, fire next time" James Baldwin

Great piece by Jon, far and away the soundest economic analyst who focuses on Phoenix.

This is part of the ongoing indictment of nitwits and exploiters in high places that has plagued metro Phoenix for decades. It wasn't always this bad. We had high hopes. Somehow, voters have to be shaken from their apathy and activated.

I offer another telling metric and that is Gross Metropolitan Product per Capita. The following data are from the Brookings Institution (GMP) and the US Census (2012 estimates):

A comparison of metro Phoenix with three other nearby big metros:

LA
GMP $789.7 bil
Pop 13.1 mil
GMP per capita $50,500

Denver
GMP $150.5 bil
Pop 2.65 mil
GMP per capita: $56,895

San Diego
GMP $188.4 bil
Pop 3.18 mil
GMP per capita $59,300

Phoenix
GMP $194.5 bil
Pop 4.3 mil
GMP per capita $44,924

LA is 12.4% better than us and they are awash in low-paying hospitality jobs. Not everyone is a studio exec.

Denver, our time zone mate, outperforms us by 27%+. They have nice skiing, but not much sunshine to salve the masses.

San Diego, which some Phoenicians think is all about retired navy people and summer vacations, absolutely stomps on Phoenix's head, outperforming it in GMP per capita by 32%!

And, then there is Greater Phoenix. A place we don't even like to acknowledge exists (Arizona Diamondbacks, Arizona Coyotes, Ballet Arizona, Valley this and Valley that, ad nauseam). We are a metropolitan area with more nearly a million more people than Greater Seattle or Minneapolis-St. Paul - more people than metro Rome or Berlin, but we compete in Riverside's economic development league.

Metro Phoenix's choices have not been good ones. Governance has not been constructive for the masses. Trickle-down hasn't trickled. And, it continues.

BTW - the population and GMP numbers are from 2012.

@Soleri Re: “our cultural values don't depend on statistical evidence.” That’s pretty much what Murray is saying. Many things are more important and whatever some statistical/logical analysis might indicate.

Re: “to tribalize against certain economic tenets”. Excellent use of loaded language.

Re Keynesian economics: An excellent idea. Somebody somewhere should try it. When it comes down to theory and history, I’ll take history every time.

Re “the South sent people to Congress who faithfully brought home the bacon…” pretty much still do. Not condoning it at all. But some of the bacon is deemed not tasty.

Re: “the current hysteria.” What are you referring to?
More later. I’d like to get into the Ferguson thing – but let’s see how this goes.

wkg, we used to do it - Keynesian economics - all the time when a recession hit. We did in 1981 when Ronald Reagan was president, and most recently when George W Bush was president during 2001's modest recession. You might ask yourself why your tribe didn't go into fits of hysterics about that. I'd ask you myself but I'm pretty sure you would regard that as a "loaded language". For whatever reason, the right regards deficit spending as an outrage when a Democrat is president, and as evidence that deficits don't actually matter when a Republican is president.

Not that Tea Party Republicans are insincere. Let's just call them incompletely informed.

Some of that bacon the South got, like the TVA, was a major economic benefit to the region. We can't do those projects now because......well, you know why. Gotta make the rich richer. That way, we'll all be rich someday real soon.

So WKG WHAT U think the odds are on the Confederacy winning the next one. I can't wait to be someone's slave.

@Soleri: Here is my understanding of Keynesian economics. To counteract economic cycles, the Feds should stimultate during recessions. During booms it should moderate via anti-stimulante. Budget-wise this means deficites during recessions and surpluses during booms. We have only implemented half the program.

OK, now that I have the federal budget thing out of my system (for the moment) I'll try to contribute to the current thread.

Per capita personal income is an average derived by adding up individual incomes then dividing by the total number of individuals. Note that the latter includes children and retirees who do not earn an income or whose income is low, all of whom bring the average down.

It also includes households with an OK income but a higher than average number of children. A household income of $48,000 divided six ways (two parents and four children) gives a per capita personal income of just $8,000 for that household.

Extend the microcosm of this household to the macrocosm of a metropolitan area and it's obvious that demographics DO matter when evaluating this kind of income statistic. With all due respect, you can't dismiss them by quoting your political enemies (Goldwater Institute spokesman) or with vague rhetoric about "gold standard" statistical measures.

The point about Phoenix's Latino population isn't that they're Mexican (most are U.S. citizens); the point is that, statistically speaking, Latinos have lower household incomes than Anglos. They also have larger families (again, statistically). Combine the two and you get a factor that lowers areawide personal per capita income.

It's important to control for demographic differences before per capita personal income (PCPI) can be meaningfully compared between metro areas.

In the latest Census count, the City of Phoenix's "Hispanic" population is 41 percent of the total, which is higher than most cities. Nationally, Hispanics make up 17 percent of the population. In the Metro Phoenix area 30 percent or nearly a third of residents are Hispanic.

This doesn't even take into account the fact that Hispanics are likely to be undercounted, particularly in a state like Arizona with strong anti-illegal immigrant political currents and a sizeable fraction of undocumented residents.

As for age, according to the Pew Center, "In the Phoenix and Dallas areas, 38% of the Hispanic population is younger than 18—the highest among the top 10" metro areas. Pew also notes that "Median ages among Hispanics in the top 10 Hispanic metro areas range from a low of 24 years (Phoenix) to a high of 39 years (Miami)."

So, Phoenix has both a high percentage of Hispanic residents and a Hispanic population that is the youngest among metro areas in the nation with a large Hispanic population.

Retirees raise the citywide median age (which is still lower than the nationwide average) but retired households on fixed incomes tend to decrease rather than increase the PCPI.

The Morrison Institute notes that "Phoenix-area Hispanics with less than a high-school diploma comprise 38 percent of its adult Hispanic population, about the same percentage as for all U.S. Hispanic adults. Among all Phoenix-area adults of any ethnicity, 14 percent lack a diploma."

Also: "Phoenix ranks ninth among the top 10 Hispanic metros in its percentage of Latinos with a bachelor’s degree or higher, 10 percent, which is slightly lower than the percentage for all U.S. Hispanic adults. Among all Phoenix-area adults of any ethnicity, 28 percent have a B.A. or more."

It's well known that, statistically speaking, those without high-school diplomas tend to earn less than other groups. So again, the demographics must be factored in when evaluating PCPI. If you don't like the Goldwater Institute flack, try listening to Bill Hart of the Morrison Institute:

"Phoenix-area Latinos form one of the nation’s largest populations of young, low-income, undereducated U.S. citizens. It’s a population that’s growing and not going away."

http://sod208.fulton.asu.edu/media/news-events/policyblog-hart-what-it-means-to-be-hispanic-in-phoenix


@Soleri. More

Re “or "movement" if you're inclined to describe this program in a gastrointestinal way”: LOL. Good one.

Re “the "market" was the answer to all their problems”: I certainly don’t think so. If fact markets should be used in a relatively narrow sense – the purchase of goods and services from strangers. I will say that non-market options have shown themselves to be worse. An aspect of this is the role is the functions of NGO’s in society to address various needs – but that is way beyond the scope of this thread.

Re “Cut taxes on the rich and watch this bottle rocket take off.” Agree. But there’s no reason to think that raising them will work either.

Re “John Maynard Keynes could have explained to you why not but it's Charles Murray who tells you what you really want to hear.” Murray, to my knowledge, is not an economist at all. From the two books of his I have read, economic measures were very peripheral.

@Emil: I’m not quite sure what PCPI means.
For example, from Wiki (Portland entry)
The median income for a household in the city is $40,146, and the median income for a family is $50,271. Males have a reported median income of $35,279 versus $29,344 reported for females. The per capita income for the city is $22,643. 13.1% of the population and 8.5% of families are below the poverty line. Out of the total population, 15.7% of those under the age of 18 and 10.4% of those 65 and older are living below the poverty line. Figures delineating the income levels based on race are not available at this time.

More locally, Phoenix has a PCIP of around 40K. That would be 80K for a household of two or 120K for a household of three. Those are pretty good numbers – hardly the kind of numbers you’d expect for an impoverished metro this Phoenix.

I went to the BLS site briefly and couldn’t find anything – not that I was looking all that hard.

I think in comparing one metro to another the PCPI (whatever it is) is telling us something that is true – even without knowing the details.

wkg, you were quoting from Murray at the outset of this discussion that data can't change deeply held beliefs. Well, I offered to you the phenomenon of the Tea Party, a group of anti-deficit zealots (but only when a Democrat is president) who have politicized their untutored grasp of Keynesian macroeconomics in a rather negative way. And you're right that Murray is not an economist. He's not a climatologist either. But to be a member of your movement only requires deeply held beliefs about arcane subjects you folks are otherwise utterly ignorant of. All you have to do is tune in talk radio for, say, five minutes, to understand things are really very, very simple on your side. (see also: conspiracy theories). So, what does Charles Murray tell you? That your "culture" matters more than factual knowledge itself. How else do you explain the right's aversion to science and empiricism?

wkg (quoting Charles Murray) wrote:

"Data can bear on policy issues, but many of our opinions about policy are grounded in premises about the nature of human life and human society that are beyond the reach of data. Try to think of any new data that would change your position of abortion, the death penalty, legalization of marijuana, same-sex marriage, or the inheritance tax. If you cannot, you are not necessarily being unreasonable."

This is questionable. I see what Murray is getting at, but on the other hand, I think the argument is framed too narrowly.

Talk about "new data" almost suggests a set of numbers. Information can be wider than data; and unfamiliar arguments can provide new information and data, as well as organizing them in new ways that, indeed, one might find convincing on some of the topics listed, if one is trying to be reasonable.

The "premises about human society" that Murray alludes to do not exist in a vacuum. While some do exist as self-evident truths or derive from transcendent reasoning that will not be affected by additional argument, many are conditioned by the very society being evaluated by the individual. That includes what one learns at home, at school, in church, and in media such as newspapers, magazines, television, radio and the Internet, and in some cases at work or even at the local bar.

It also includes imaginary scenarios constructed by individuals attempting to make sense of observations. It sometimes seems to me in listening to the most rabid conservative pundits that the conclusions they reach about both the topic and the views of their political opponents on the topic, come not so much from observation as from hypothetical scenarios and conversations in their heads with imaginary persons to whom are assigned certain stereotypical traits. The same is sometimes true of liberals.

At the same time, it's important to remember that we all exist in an environment of incomplete and imperfect information. It seems that many individuals exacerbate this by immersing themselves in a media environment conducive to their preexisting prejudices. They look for information which confirms their biases and tend to dismiss or ignore information which might modify their opinion contrary to their political or other leanings.

Demonizing conservatives is counterproductive if one is dealing with intelligent and well-meaning individuals. That isn't to say that patient and well constructed arguments will immediately convert conservatives into liberals on any particular topic. After all, if they didn't reach such views overnight they are unlikely to abandon them overnight.

But being willing to discuss issues and open a dialog can be rewarding: I find that I learn a lot about a topic when trying to reason about it and research it for the purpose of presenting an argument, even if I don't convert anyone to my point of view. Sometimes the opposing party presents information which causes me to modify my views, also. Meanwhile, if all parties get a chance to see that maybe not all of their political counterparts are sinister, irrational, or devious self-aggrandizers, there is a better chance for truth to emerge.

I like the dialectical approach, which holds that one begins with a thesis (viewpoint, framework, argument, premises) and that the flaws in this generate an antithesis (opposing viewpoint, etc.); the interplay of the thesis and antithesis can, if allowed to, produce a synthesis, which attempts to take the best parts of both and integrate them in a new thesis. But the new thesis is unlikely to be absolutely perfect, and in turn generates a new antithesis, and the process of (hopefully) refinement continues. And of course, conditions change, and as they do, premises, arguments, and conclusions must sometimes reflect this.

Meanwhile, not only is this process of refinement hampered by an environment of incomplete and imperfect information, but also by variations in the quality of reasoning about it, as well as simple institutional memory. Sometimes what makes the difference is the way that information is analyzed, and the critical reasoning skills brought to bear. Sometimes it is the level of communication skills. All of these vary, both individually and within a single individual over time.

When it all comes together, it's wonderful. But then there is the problem of institutional memory. Every generation tends to regard the state of knowledge as being more highly developed than ever before. But it's remarkable how many insights seem to be forgotten. New generations start the process of learning anew, and the errors of history sometimes repeat themselves for a long while before the world seems to learn its lesson properly.

wkg wrote:

"Emil: I’m not quite sure what PCPI means."

As I explained above, PCPI stands for per capita personal income. That means adding up individual (personal) incomes then dividing by the number of individuals. Very simple. Now you know.

Household income refers to the total income of a household. So, if a household has six members (two adults and four children) and the two adults make a total of $48,000 a year and the children have no personal income, the annual PCPI for that household is $8,000 and the household income is $48,000.

Median income refers to the income level at which half of the population being considered earns less and half earns more. It's literally the halfway point. The population measured by median income might be individuals (persons), households, or families (not always classified the same as households).

Mean income is another measure. It's simply the arithmetic average we all learn how to construct in school. Like median income, it can be applied to individuals, households, or families. The problem with mean income is that incomes at the extreme ends (poverty, wealth) can distort the average.

PCPI is a form of mean income measure applied to individuals. If ten people make a total of a million dollars, then the PCPI is $100,000. But if nine of those people make poverty wages and the tenth has a huge income, obviously the average income is distorted and a median rather than mean measure would be more illuminating.

Similarly, if ten people make $100,000 then the PCPI is $10,000. But if many of those are children who don't have a personal income then the average is distorted; that $10,000 figure might conceal much more normal household incomes. For example, if those ten people comprise two households each of which has two parents and three (non-earner) children, then that $100,000 total income translates into two household incomes of $50,000 each. You can see how misleading certain statistical measures of income might be, depending on the circumstances and on the income measure selected.

P.S. Another, type of measure, encountered less frequently than mean and median averages, is the "mode". The mode is simply the most common value in the population being considered. For example, if among ten people, six of them make $35,000 a year, then that is the mode income, regardless of the other details of income distribution among the group.

It's often useful to use (and contrast) all of these measures when analyzing such things as income distribution; but this is comparatively rare. Mode data is also hard to come by and might have to be assembled by hand from raw data if it is not published in a report.

Emil, I certainly appreciate your posts of explanation and I strive hard to understand them, but please do not assume "We" all easily understand all your info.

"It also includes imaginary scenarios constructed by individuals attempting to make sense of observations.

At the same time, it's important to remember that we all exist in an environment of incomplete and imperfect information."

I agree

"Mean income is another measure. It's simply the arithmetic average we all learn how to construct in school."
WE?
I didnt learn this in school but I think now at 74 I got it.

"PCPI stands for per capita personal income. That means adding up individual (personal) incomes then dividing by the number of individuals. Very simple. Now you know."

Glad you think its simple.

Side bar (or a cheap martini is a Sidecar)
1984n comes to then UK
http://www.vice.com/read/nuj-journalists-police-spying-197

@Soleri (continuing on. I throw a left jab and back comes a double barrel shotgun blast)

Re “I'm the racist for even mentioning his (Murray’s) discredited thesis.” The thesis has been more shouted down than discredited. Let’s not go into the IQ thing. But measures somewhat analogous to the measure such as SAT or GRE scores have measurable racial differences. We all wring our hands and try to say “what do we do about this?”

Here’s his real point: our system highly awards the top 20% of the cognitive spectrum (regardless of race). While there is a small population getting along on inherited wealth – the vast majority of us live primarily on what we earn. Our policies need to focus more on the “just folks” demographic.

Re “broadening your Culture War to include as much of quotidian reality as you possibly can.” Is there a better reality to consider? How about the reality I see on TV? How about an imaginary utopian reality? You can’t be serious.

Re ”a fairly anodyne educational policy, Common Core” A lot like Obamacare. Take a real problem we can all agree on (15% of people don’t have insurance) and conflate it into a program that works its way into every nook and cranny of the educational system. This goes way beyond the question of “what should all kids know?”

Re ”cosmic battle against all of us heathen liberals.” Many of the most strident and really most effective liberals are highly religious.

Re “impose its moralistic and religious values as official state doctrine”. Ultimately all law is based on values or principals. How could it be any other way?

wkg, Murray's argument about race and IQ depends on some fairly fuzzy definitions about what is "race". Is there some established correlation between the amount of melanin in one's skin and cognitive ability? Murray himself does not answer. We do know that low socio-economic status coupled with a history of national animus to black people have created a hellish misery in which many blacks find themselves . Out of Murray's thesis emerges something close to a self-justifying reaction: why bother spending money alleviating the worst effects? It's genetic! You can't fix it!

Oddly enough, it's the "science" of race that finds its most passionate defenders on the right. Evolution might be widely disputed but there's a broad consensus that blacks are inferior. From there it's an easy step to a nation that's eerily eager to believe cops are always justified in shooting young black men. Or, in Cleveland, a 12 year-old boy.

I don't want to minimize your feelings on this subject so much as redirect your attention to a nation that is no longer meeting the future pro-actively. That is, our political system has run aground on these circular arguments of identity, race, history, and responsibility. Hamstringing the political process in the name of a largely imaginary culture is a temper tantrum. One party uses that emotion to redistribute wealth upward thus ensuring the greatest income inequality in the advanced world. Education suffers (see: Arizona), social mobility shrinks, and people are convinced that only "markets" as opposed to conscious public strategy can solve problems.

Right-wing bromides function as a fig leaf over its spectacularly wrong economic and educational policies. That's why demonizing Keynes is so important for Team R. Once you decide that only the rich are truly worthy then the national interest shrinks as their economic power grows. Lo and behold, guess whose political interests are preeminent here? Those of the wealthy or yours?

I am aware of right-wing socio-economic theory, sometimes called Sam's Club conservatism, that focuses on the values of the working class. But the problem here is that its core ideological features are indistinguishable from the Randian ecstasies of people like Grover Norquist and Paul Ryan. That is, make the rich and richer, and just wait for the magic! And wait, and wait, and wait. If there's economic policy in that for the Little Guy, I suspect it comes down to privatizing Social Security and voucherizing Medicare.

A secular nation that treats everyone equally is a great blessing. The values of the Enlightenment are enshrined in our Constitution and there shouldn't be any reason to collapse their social utility for the yahoo values of fundamentalists, bigots, and authoritarians. Individuals are the fundamental political units in our system of government, not religious or racial majorities. That principle supersedes your principle of majoritarian privilege.

http://www.manataka.org/page269.html

http://www.theglobalist.com/the-american-mezzogiorno/

http://www.theglobalist.com/american-mezzogiorno-how-the-south-really-operates/

http://www.nytimes.com/2014/11/27/us/without-passing-a-single-law-obama-crafts-bold-enviornmental-policy.html?action=click&contentCollection=U.S.&region=Footer&module=TopNews&pgtype=article

Obama's best legacy?
Obama care will only help if there are people on the planet to use it

Emil Pulsifer, the problem with your argument regarding "controlling for demographics" is that it ignores the economic existence among certain groups (i.e., Latinos, retirees), thereby only comparing favorable groups (i.e, Whites, Asians, non-poor people).

A city or metropolitan area consists of ALL the people who must be taken into account, not cherry-picking certain groups over another under the guise of "controlling for demographics".

Every city has high-performing and low-performing groups and yes, some cities have a higher proportion of high performing groups versus other cities.

However, the way to address this is to provide opportunities to advance the success of lower performing groups instead of putting the head in the sand by "controlling for demographics".

@Soleri re: “Is there some established correlation between the amount of melanin in one's skin and cognitive ability?” No. The data used by Murray for “black” is for those who self-identify themselves as black. Almost all “blacks” in the US are of mixed race. President Obama himself is 50% white.

Re: “We do know that low socio-economic status coupled with a history of national animus to black people have created a hellish misery in which many blacks find themselves.” I’d go far as to say the “hellish misery” may be worse today than it has ever been. The nominal improvement in economic matters is more than offset by the destruction of the black community, family breakdown, violent criminality (which is mostly black on black), etc. I’ll recommend Murray’s “Coming Apart” which a compendium of various statistics, trends, etc. on the white underclass community which is on the same track.

Re: “why bother spending money alleviating the worst effects?”. I really don’t know how we would spend our way out of these problems. I sometimes wonder if our post JFK social policies haven’t abetted the process. You don’t need to go full Emil on me, but a few ideas of yours would be appreciated.

cal Lash, I have read several "truths about Thanksgiving" today, your Manataka.org being the most unfamiliar to me. This one is interesting too, http://online.wsj.com/articles/pilgrims-and-the-roots-of-the-american-thanksgiving-1417029561?mod=Life_and_Culture_newsreel_2

Sanjeev, the way I interpreted Emil and the quote that you cite, is not that he is trying to weed out certain groups but that he is using "Latinos [mainly young Latinos] and retires" to explain why Phoenix currently has a lower PCPI than comparable cities.
I think most of us would agree that "the way to address this is to provide opportunities to advance the success of lower performing groups..."

@Emil: Sorry I haven’t responded on your most excellent post on “methodology”, for lack of a better word. Thanks.

wkg, I don't have Murray's book in front of me although I know the broad argument he's making. Poor whites and blacks no longer have the power of a restraining culture guiding them to marriage, gainful employment in menial occupations, and teaching them lessons in deferred gratification. For that, we should blame liberals because of food stamps, abortion, and hippies.

I threw the flip side of that argument at you in a previous thread that culture will necessarily reflect an economy that uproots tradition, mores, customs, and institutions. Capitalism is an unrelenting force in our lives, driving people out of farms, villages, towns to big cities. This is true everywhere in the advanced world. In Scandinavia, for example, you see the erosion of tradition culture everywhere, especially marriage. Yet society still functions reasonably well and the working class is not nearly so driven to despair. Of course, other highly functional polities don't simply make life hellish for their poor from an ideological fetish. So why do we? I suspect some of that is a cultural hangover from the Protestant work ethic, and another even more crucial factor is the politicized anxiety of the Culture War, including its costliest subset, the war on drugs.

The culture is what it is because of capitalism more than people deciding it's fun to be poor and degenerate. I understand you won't buy this argument but it's a good idea to step back from the battlefield here and survey those nations that are prosperous first-world nations and function better than we have. What do they do differently? What political choices have they made different from ours? How do their institutions adapt to new stresses but still perform reasonably well?

The U.S. has gone to hell in a hand basket during regimes of liberals and conservatives alike. The children of stalwart conservatives like Ronald Reagan and the various Bushes are vividly hip with modern lifestyles. Most young Catholic marrieds practice birth control. The most reactionary Supreme Court justice, Clarence Thomas, is married to a white woman. Sen. Rob Portman, R-OH, broke with his party on marriage equality because he has a gay son. Few young women are virgins when the marry. Governor Jan Brewer of Arizona had a son who died of AIDS and another son on SSDI with mental health problems. Jimmy Swaggart visited prostitutes, Sen David Vitter, R-LA, wore a diaper at a Washington brothel. Rep Scott Desjarlais, R-TN, an ardent pro-lifer, demanded his ex-wife and girlfriend undergo abortions.

You catch my drift?

You want to blame the culture but the Culture War has actually been a godsend for your tribe. Its primary political utility is to remind the old and fearful to vote Republican. And Charles Murray provides the high-toned arguments for it with pious hand-wringing along with scary statistics.

The Culture War is a fraud. It tells conservatives that if we returned to Mayberry via the ballot box that all would be well. Please listen to me here: NO IT WON'T. All it will do is make the rich richer, which is the entire reason behind it. If we can't expect Sarah Palin and her family to act differently from the very people Charles Murray is describing in his book, how can he honestly expect ordinary schlubs to act Amish?

Murray writes books that are widely ridiculed among social scientists but sell well among "movement" conservatives. His books make you feel good about being better than other people, particularly black people. Ann Coulter will write a book called Godless (about evil liberals, of course) and showcase her "faith" on the book cover by wearing a cocktail dress with a gold cross dangling between her augmented breasts. That's conservatism in a nutshell.

Congratulations to Isabel Allende. On Monday past, President Obama presented Isabel with the Presidential Medal of Freedom.

http://www.ted.com/talks/isabel_allende_tells_tales_of_passion?language=en#t-32064

Why U will not need an Income in Phoenix in the future or why the desert will win.
http://www.cnn.com/2014/11/30/tech/innovation/record-temperatures/index.html?hpt=hp_t2

Sanjeev Ramchandra, I was not "cherry picking" when I said that in order to meaningfully compare income statistics from different metropolitan areas, one must begin by controlling for demographics.

Apparently, when you took your masters degree in Higher and Postsecondary Education, you weren't taught the concept of scientific controls.

You'll need to understand those if you are, for example, comparing test results from different student populations in order to determine which teaching methods are most effective in producing good test scores. Otherwise, your analysis may be confused by outside factors which influence the test results but which have nothing to do with teaching models. Accounting for these outside factors is what is known as "controlling for them".

Mr. Talton is comparing the income statistics of different metropolitan areas, including Phoenix, and interpreting differences as evidence of the performance of the local economies, ranking their comparative superiority or inferiority.

However, it is important to remember that other factors may be responsible for part of these differences. One of the most important of these other factors is demographics.

This is not to say that Mr. Talton's criticisms of the Phoenix economy are without merit; it is to say that we have to control for (that is, take into account in our analysis of the results) demographic factors such as a higher than average number of children (generally non-earners), and lower-than average educational attainment and income levels, all of which correspond statistically to Phoenix's higher than average Latino population.

How to remedy such deficits is an entirely different issue, which I have not touched upon in my remarks above.

Two additional important factors that must be controlled for when comparing the income statistics of different metropolitan areas, are local wage laws, which can buoy the bottom end of wage earners by setting the local (state and/or municipal) minimum wage; and the general cost of living in the area, which is an important input into wages (that is, when rent, transportation, and food cost more, employers generally have to pay more).

Demographics, wage laws, and cost of living, can all have an important affect on metropolitan incomes; and comparisons of local economic performance which fail to take account of these extrinsic factors are likely to skew and misinterpret the results.

cal lash, try picking up a copy of a small, highly readable pamphlet-sized book by Darrell Huff called How To Lie With Statistics. It makes many of these things clear. It is not an instruction manual for liars; it is a manual for those who wish to avoid being deceived by them, where numeracy is concerned.

P.S. Please note that my book rcommendation to cal lash was an attempt to address his remarks about schooling (what he was or wasn't taught) and not a comment on our sterling host, Mr. Talton, whose integrity is not in question.

Incidentally, cal, my own personal experience of school is that it wasn't a congenial environment for learning; that children (including myself) usually lack the maturity to take an interest in topics like statistics, economics, and so forth, even when those subjects are taught; that they are not taught much even in high-school; that when they are taught the subjects are often presented in such a sterile, theoretical context that it is difficult for children to understand the practical import of such topics; that (like most every subject taught in American schools) they are accompanied by such an avalanche of irrelevant details that the basic principles are obscured; and that much of what is taught in school is memorized with little comprehension just long enough to pass exams.

My own idea of education reforms centers around cutting way back on the size of textbooks, concentrating on basic principles and following up with lots of varied problem solving where these principles are illustrated in concrete fashion; then repeating the subjects each year even if in highly abbreviated form, so as to increase retention.

Jon Kyl is heading up the effort for water reform in AZ. He'll make Detroit blush for their "lenient" water billing policies.

Let's face it. AZ is a colony of corporate wealth. Whatever can be taken, will be taken, and we will be left with Gov. Ducey calling for more clear cuts to increase the rain runoff (damn trees!).

This state had so much promise when I came here in the 70's. Now I feel like I live in a dead zone. My children have all left for greener pastures (almost anyplace away from here.) Some Arizonans just elected another neocon, regressive administration to lead the state, and that will never change as the governor's race is always held during presidential midterms. Just over half of thirty six percent of people control this state's electoral future. Jerry McKenzie nailed it in his comment: "AZ is a colony of corporate wealth." The good ol' boys have won this part of the west, and they can have it.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name is required. Email address will not be displayed with the comment.)