Tuesday, January 26, 2016

The Demand for Villains

Thomas Sowell wrote in RealClearPolitics on January 26, 2016:


The latest tempest in a teapot controversy is over a lack of black nominees for this year's Academy Awards in Hollywood.

The assumption seems to be that different groups would be proportionally represented if somebody were not doing somebody else wrong. That assumption carries great weight in far more important things than Academy Awards and in places more important than Hollywood, including the Supreme Court of the United States.


In an earlier era, the groupthink assumption was that groups that did not succeed as often, or as well, were genetically inferior. But is our current groupthink assumption based on any more hard evidence?

Having spent decades researching racial and ethnic groups around the world, I have never yet found a country in which all groups -- or even most groups -- are even roughly equally represented in most endeavors.

Nor have I been the only one with that experience. The great French historian Fernand Braudel said, "In no society have all regions and all parts of the population developed equally." A study of military forces around the world failed to find a single one in which in which the ethnic makeup of the military was the same as that of the society.

My own favorite example of unrepresentativeness, however, is right at home. Having watched National Football League games for more than 50 years, I have seen hundreds of black players score touchdowns, but I have never seen one black player kick the extra point.

What are we to conclude from this? Do those who believe in genetics think that blacks are just genetically incapable of kicking a football?

Since there have long been black colleges with football teams, have they had to import white players to do the opening kickoff, so that the games could get underway? Or to kick the extra point after touchdowns? Apparently not.

How about racist discrimination? Are racists so inconsistent that they are somehow able to stifle their racism when it comes to letting black players score touchdowns, but absolutely draw the line when it comes to letting blacks kick the extra point?

With all the heated and bitter debates between those who believe in heredity and those who believe in environment as explanations of group differences in outcomes, both seem to ignore the possibility that some groups just do not want to do the same things as other groups.

I doubt whether any of the guys who grew up in my old neighborhood in Harlem ever went on to become ballet dancers. Nor is it likely that this had anything to do with either genetics or racism. The very thought of becoming a ballet dancer never crossed my mind and it probably never occurred to the other guys either.

If people don't want to do something, chances are they are not going to do it, even if they have all the innate potential in the world, and even if all the doors of opportunity are wide open.

People come from different cultures. They know different things and want different things.

When I arrived in Harlem from the South as a kid, I had no idea what a public library was. An older boy who tried to explain it to me barely succeeded in getting me to get a library card and borrow a couple of books. But it changed the course of my life. Not every kid from a similar background had someone to change the course of his life.

When Jewish immigrants from Eastern Europe arrived in New York in the 19th century, they were even poorer than blacks from the South who arrived in Harlem in the 20th century. But the Jews crowded into public libraries because books had been part of their culture for centuries. New York's elite public high schools and outstanding free colleges were practically tailor-made for them.

Groups differ from other groups all over the world, for all sorts of reasons, ranging from geography to demography, history and culture. There is not much we can do about geography and nothing we can do about the past. But we can stop looking for villains every time we see differences.


That is not likely to happen, however, when grievances can be cashed in for goodies -- and polarize a whole society in the process.

Sunday, January 17, 2016

Is U.S. Heading Toward Recession?

Investor's Business Daily published this opinion:  

 Downturn: Stocks are diving, retail sales are slumping, and economic bellwether Wal-Mart is shuttering 154 U.S. stores. Meanwhile, China's markets are in free fall. Is it too early to mention the "R" word?

We've been accused of being Pollyanna-ish in our views, which tend toward the optimistic when it comes to the flexible, naturally buoyant U.S. economy.

And, to be sure, the stronger employment growth — payroll jobs increased an average 230,000 a month last year — and the decline of the unemployment rate to 5% are both positive signs.

But not everything is going so well — starting with the stock market. The S&P 500 has skidded 8% since Jan. 1, its worst start ever. As USA Today reckons, $2.3 trillion in shareholder wealth has been wiped out — a huge hit that will be felt across the economy.

Even before the market decline, however, clouds were gathering. Retail sales fell 0.1% in December and were up just 2.2% year over year. And Friday's announcement by Wal-Mart that it's closing 269 stores — 154 of them in the U.S. — can only be bad news.

Then there's China. Its stock market index has plummeted more than 40% since the middle of 2014 as the nation's once-booming export- and investment-driven economy goes bust. Around the world, factories and businesses built to satisfy China's insatiable demand for raw materials and capital goods have fallen silent.

For the U.S., that was a lot of lost momentum going into the new year.

The Atlanta Fed's widely followed gauge of current economic output suggests fourth-quarter annualized GDP growth was just 0.8% or so — within spittin' distance of recession territory.

So, yes, as we start 2016, a recession is a real possibility. Add to that the likelihood of three or four Fed rate hikes this year, and the economy's brakes will be on.

What do we do? The standard Keynesian answer is to boost consumer spending by redistributing money from the 1% to the middle class and by more government "stimulus." After all, consumers are two-thirds of all spending. So they need to be stimulated for the economy to grow, right?

Wrong. This would be a huge mistake — as it was in 2010. What really ails the economy right now is a lack of business investment. That's real stimulus. Investment creates consumption by making products to consume, and the income with which to buy them.

Unfortunately, orders for nondefense capital goods, a proxy for business investment, have fallen 11 straight months, averaging a 3.4% year-over-year decline every month in 2015 — a sign of extraordinary weakness.

How can this be after years of record-low interest rates and stock market gains?

Obamanomics has created the most anti-business environment in postwar history. Businesses face a record onslaught of regulation, a world-high 35% tax rate, higher minimum wages, hostile legislators who routinely demonize profits and success, an erratic Fed and growing uncertainty about the U.S.' political future. Why invest?

The bigger point is, recessions don't just happen; they're made. And it looks like we're making one now.



Read More At Investor's Business Daily: http://news.investors.com/ibd-editorials/011516-790183-us-economy-loses-momentum-going-into-2016.htm#ixzz3xVPHamYJ

Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook