May 25, 2011

The Social Structure of Socialists

Justin Katz

Glenn Reynolds highlights an article in the New York Post that hits some familiar notes:

For more than 15 years, New York state has led the country in domestic outmigration: For every American who comes here, roughly two depart for other states. This outmigration slowed briefly following the onset of the Great Recession. But a recent Marist poll suggests that the rate is likely to increase: 36 percent of New Yorkers under 30 plan to leave over the next five years. Why are all these people fleeing?

For one thing, according to a recent survey in Chief Executive, our state has the second-worst business climate in the country. (Only California ranks lower.) People go where the jobs are, so when a state repels businesses, it repels residents, too.

Taxes, mandates, regulations... it's the same old story with a plain dramatic conflict: difficulty building the better life to which Americans historically aspire. Reynolds puts it perfectly:

Have you noticed that wherever what Walter Russell Mead calls the "blue state model" is applied, you get a crust of really rich people, jobs for some folks who service them, and then not much employment or opportunity for younger people?

Perhaps it comes down to basic philosophy. To those who advocate for blue-state policies, it is the natural order of things that some are suited to high position and those who are not must be cared for as subjects. Anybody who wishes to move from the low group to the higher without following the strict guidelines for acculturation by which one imitates and reinforces his betters must be a suspicious, greedy character.

Thus college becomes a route to learn the habits of thought and affectations that give weight to elite biases. Thus highly paid union organizers stand as the representatives of the uninitiated in the ruling class. Thus professional advocates work toward a growing class of permanently dependent wards of the state. And thus develops the attraction of regions that allow greater freedom and more independence.

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This is just plain nonsense numbers. Consider NY ranks top 10 in the US for per capita income and top 10 for average home values, clearly because lack of business opportunity leads to more personal income and increased value of real estate, right?

People leave realatively dense states for states with less density, leave states with high housing costs for those with lower housing costs, and leave cold states for warm ones, especially as the population ages and retires. What a shock!

Posted by: Russ at May 25, 2011 10:37 AM

My own experience with the "progressive" city of Boston was that the entire system is set up to drain middle class individuals of every red cent they own. The fees, fines, and taxes on everything imaginable stacked up to obscene levels just for trying to live simply and get from here to there. There was a crushing sense of inevitability to the process - they want your money, they're going to get it, and that's all there is to it. No jobs, of course. "Public services" consisted of one of the worst public transit systems in the country and cops earning 200k in overtime for sipping coffee on construction details. The FBI estimated that at least 50% of the fire department was retiring on fraudulent disability during its initial probe. Vicious public union battles and indicted politicians were every day's news. The experiences of receiving a $50 parking ticket for parking in front of your house without a city permit or receiving a $25 ticket for putting your trash out a day early with a polaroid picture of the front of your house taken by a police officer taped to the violation notice is difficult to describe - you feel angry and violated, exactly as I imagine one would feel being robbed by a violent criminal street gang.

If that is the blue state model, you can have it. I'm very happy in my low-tax red state. The ironic part is that public services are much better here. The public works are beautiful, public transit runs smoothly, and public servants are actually courteous and helpful instead of entitled and verbally abusive toward the citizenry like Boston police and firefighters.

Posted by: Dan at May 25, 2011 11:26 AM

Russ, you are completely missing the point. I'm not sure how the numbers lie that people are leaving New York. What you forgot to mention is that New York has exorbitant taxes and high cost of living. Per capita income and house prices don't consider how expensive it is to maintain the lifestyle. Not to mention, who wants to move to NY when there are already high taxes on expensive homes? Not so attractive.

You also missed that it's the young people who are leaving. This group under 30 doesn't want low wage jobs and can't afford the high COL. Does it matter if you're making 40K a year if you need to pay costly bills, rent/mortgage, and taxes. People want to live where their money actually means something. Not to mention, all of NY is not dense; just the city. Still expensive to live there!

Posted by: Rosie at May 25, 2011 11:29 AM

"actually courteous and helpful instead of entitled and verbally abusive toward the citizenry like Boston"

Reminds of the time I went otthe Sec. of States office, in Boston, to make a $10.00 filing. I handed across the form and a $10.00. The clek looked at me, then looked away, and yelled "Hey, we got another a--hole". Because of employee theft, they had progressively lowered the "maximum cash" to $10.00. Since my last prior visit, they had established a "no cash" rule.

Posted by: Warrington Faust at May 25, 2011 11:56 AM

"Russ, you are completely missing the point... You also missed that it's the young people who are leaving."

OK, let's talk about young people. That's a product of immigration. So the problem as you see it is that we don't have enough Mexican immigrants?

The information from the Census Bureau highlights the impact of recent waves of young Mexican immigrants and their children, who are helping to slow the aging of the population in many parts of the United States. It is reinforced by fresh data released Thursday that show a median-age jump of 2.5 years or more over the last decade for states including New Hampshire, Wisconsin, Ohio and Connecticut where there are fewer immigrants...

"The age divide has a race-ethnic dimension, and it will certainly play a role in politics that pits benefits for seniors with those for younger adults and their children," Frey [a demographer at Brookings Institution] said.

Not to mention that "Mexican immigrants, who are younger and more likely to have children, tend to lean Democratic if they vote." Kind of throws the whole premise of the post into question, no?

Posted by: Russ at May 25, 2011 2:57 PM

That made absolutely no sense, Russ. What do "Mexican immigrants" have to do with young people leaving New York in search of jobs and lower taxes? Why are you hyperlinking and blockquoting totally irrelevant articles?

Posted by: Dan at May 25, 2011 3:23 PM

Outmigration is based on Census data. Migration of immigrants to the south and west impact those numbers as the AP article points out, making those areas younger than places like the northeast that are getting older as the boomers age.

I'm not arguing that demographics aren't changing, just that the reasons are myriad and more complex than Justin's blue state hypothesis.

Posted by: Russ at May 25, 2011 4:25 PM

The only response I can think of to Russ' incoherent and irrelevant post: ¿qué?

Posted by: Rosie at May 25, 2011 4:29 PM

"young people... That's a product of immigration"

Whoa. Yes... It is now, for three reasons I can see:

1. There's a cultural thing about 'the more kids the better'. Also, there is still a significant religious factor contributing to pregnancy in the Hispanic community.
2. Our society has said "you won't starve, and for the most part you won't be homeless", which means that those who are dependent are not disincentivized from having additional children.
3. Comparatively, the established white middle class sees children largely as a liability, since they're expensive enough to have to forgo fun and leisure in order to provide and nurture.

Basically, as a middle-class guy, a kid right now would cost me $BIG, while an additional child to my welfare-dependent counterpart might actually improve her fiscal situation marginally. Allow me to list the things that she gets subsidized or free that I have to pay full price for:

Food, housing, transit (free bus passes to the disabled), child care, and utilities.

We've designed our society like a 'ponzi scheme' where we need ever-increasing numbers of young people to maintain growth and cover our costs, I wish we didn't do that. But you're looking past the hard, politically-incorrect numbers about how well people do based on what background they come from. Who cares if immigrants and welfare moms are the lifeblood of population growth if the 'average outcome' of their offspring is either a wash or even further dependence?

If middle and upper middle class families are only having 1 child and half of them leave for greener pastures when they're graduated, but poor families are having 2-3 kids who stick around, you'll quickly see MASSIVE changes in our regional society that will undermine even the best-laid long-term financial models.

I fear this is already happening... I know of plenty of places that are hiring for entry-level jobs, but they are unable to find high-school grads who can communicate (read/write email) well enough to work. In the high-tech areas, I've seen hiring in RI switch from 'we're looking for someone who knows this stuff' to 'we need someone who can learn this stuff' because the skills of the workforce don't match up with the demands of the marketplace. Meanwhile, those languishing with nothing but a diploma, but not even the basic skills to do meaningful work need to be fed and housed, mostly on the backs of those of us who significantly trimmed our vision of the American Dream.

Posted by: mangeek at May 25, 2011 5:10 PM

The "Ponzi Scheme" analogy is deadnut crosshairs accurate when describing much of what this nation's financial future has morphed into.

The "American Dream" has two meanings now. I subscribe to the original one, albeit trimmed. The second is the one that's killing us. That'd be the one where the aspiration is to aquire as much as possible while at the same time contributing to society as little as possible. Working the system, so to speak.

Posted by: swamper at May 25, 2011 9:16 PM

"I'm very happy in my low-tax red state."

RICHMOND -- At a news conference last week at Northrop Grumman's Rosslyn offices, where a panoramic view of Washington loomed outside a floor-to-ceiling wall of glass, Virginia Gov. Robert F. McDonnell ticked off the reasons he thinks the giant defense contractor chose to locate its new corporate headquarters in the commonwealth.
He cited the state's low corporate tax rate, its business-friendly regulations and right-to-work laws that prohibit requiring employees to join unions.

One factor the Republican didn't mention: The massive flow of federal spending that provides the core of Northrop's business and has made it the nation's 61st-largest company.

McDonnell has been a leading voice in railing against rising federal spending. But lost amid the calls for Washington to freeze or reduce spending is this twist: Although most economists agree that mounting federal debt could be dangerous to the national economy, Virginia has thrived on Washington's decade-long spending spree, according to analyses done by professors at Virginia colleges.

Ten cents of every federal procurement dollar spent anywhere on Earth is spent in Virginia. More than 15,000 Virginia companies hold federal contracts, a number that has almost tripled since 2001. Total federal spending -- from salaries to outsourced contracts -- has more than doubled, to $118 billion, since 2000, as homeland security and defense spending skyrocketed in response to the 2001 terrorist attacks and the wars in Iraq and Afghanistan. By 2008, it accounted for about 30 percent of Virginia's entire economy.

May6, 2010 Rosalind Helderman Washington Post

Posted by: Phil at May 26, 2011 6:52 AM

Thanks for the link, Phil. Oh wait, you didn't provide one. See, I wanted to read the "article" you selectively blockquoted here, but it isn't really an article at all - it's an opinion piece. You didn't mention that fact when you cited it as if it were a piece of credible journalism. I'm noticing some similarities to Russ and OTL here.

"Total federal spending -- from salaries to outsourced contracts -- has more than doubled, to $118 billion, since 2000, as homeland security and defense spending skyrocketed in response to the 2001 terrorist attacks and the wars in Iraq and Afghanistan. By 2008, it accounted for about 30 percent of Virginia's entire economy."

That's some Tom Sgouros-worthy logic and mathematics right there. You know what is located 5 miles across the border from DC? The Pentagon. So every dollar going to the Pentagon Defense Budget is counted as padding "Virginia's Economy"? I don't need to point out the ludicrous accounting methods being employed there. I don't understand - if federal spending (mostly on internal federal operations and contracting, not public works and public services, etc.) solves an area's financial problems, why are neighboring DC and Maryland high-tax hellholes overrun with homeless and wrought with corruption and public union conflicts?

Posted by: Dan at May 26, 2011 8:03 AM
The only response I can think of to Russ' incoherent and irrelevant post: ¿qué?

I'll try to use smaller words next time. Perhaps you could try tapping the big ones out.

Posted by: Russ at May 26, 2011 1:02 PM

btw, this has nothing at all to do with the financial crisis.

But, hey, let's pretend it was too many regulations that caused the problem.

Posted by: Russ at May 26, 2011 1:07 PM

Russ - we're not saying that "too many regulations" caused the housing collapse. If you actually paid attention instead of just attacking "the rich" because it fits into your progressive narrative fallacy, the federal government directly intervened in the subprime housing market by facilitating, subsidizing, and even mandating subprime mortages. Do you even understand what GSEs Fannie Mae and Freddie Mac did? What their purpose was? Add in the Federal Reserve's maintenance of artificially low interest rates over the past decade spurring short-term overinvestment overall, as well as an implicit bailout guarantee from government based on previous creditor bailouts and "too big to fail" doctrine, and you have a perfect storm through which firms were directly incentivized to overinvest in subprime mortgage loans. Like most woefully-ignorant-on-economics progressives, I really don't think you understand any of these mechanisms beyond the "Wall Street crashed the economy" drivel Pat Crowley posts over on RIFuture.

Posted by: Dan at May 26, 2011 1:32 PM

Dan, spare me the condescension. I moved here from NYC. I've worked at quite a few of those banks and still have many friends at some of the larger ones. If you actually paid attention you might realize that nothing I've posted is an "attack on the rich."

I even agree with some of what you say about the causes of the crisis (the Posner quote I posted specifically mentions the actions of the Fed with regard to interest rates).

With hindsight, the reasons for the failure are obvious, Posner said. Excessive deregulation enabled excessive risk-taking. Add to that mix the abundant credit made possible by the Federal Reserve’s loosening of purse strings following 9/11 and the abundant capital of the oil-boom years, and the world faced an economic house of cards of historic proportions...

But blaming Fannie and Freddie?

But here’s the thing: Fannie and Freddie had nothing to do with the explosion of high-risk lending a few years ago, an explosion that dwarfed the S.& L. fiasco. In fact, Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble.

Partly that’s because regulators, responding to accounting scandals at the companies, placed temporary restraints on both Fannie and Freddie that curtailed their lending just as housing prices were really taking off. Also, they didn’t do any subprime lending, because they can’t: the definition of a subprime loan is precisely a loan that doesn’t meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income.

So believe what you like, but I've yet to see anything from you that shows me that you understand the causes with any depth more than what I might find on

Posted by: Russ at May 26, 2011 4:31 PM


I'm sure you'll have time in your workplace to read the entire article.

Posted by: Phil at May 26, 2011 4:38 PM

Found it on my own, Phil. I was merely concerned for any casual readers who might be misled by your irresponsible blockquoting and citations.

You don't know where I work, what I do, or what my work schedule is, so feel free to keep insulting me out of ignorance. People can simply extrapolate and conclude that you make the same kinds of political arguments based on zero facts and plenty of progressive "feelings."

Posted by: Dan at May 26, 2011 6:37 PM


You're the one who called me an "insufferable idiot" a "racist" a "classist" and an "ageist". Those are the insults you have sent my way. But that's OK. As a lawyer you must try to disparage those who present evidence that weakens your case. By the way how does your state bird stack up against Rhode Island's Rhode Island Red?

Posted by: Phil at May 26, 2011 9:45 PM

The "racist," "classist," and "ageist" remarks were accurate descriptions in context and were responses to specific comments you had made. If you care enough to provide the actual quotes in context, I would be more than happy to explain and elaborate.

"Insufferable idiot" was an insult based on nothing except my own emotion. While admittedly immature, I won't apologize for the remark because it was in response to you repeatedly accusing me of employee misconduct without any evidence besides the fact that some of my posts occur when you (wrongfully) assume that I should be working. In the face of outright libel, I consider that a relatively tame response.

Posted by: Dan at May 26, 2011 10:58 PM


Are you telling me that it's possible that you were supposed to be working while writing a comment at 10:58 PM ?

Posted by: Phil at May 27, 2011 4:27 AM

Phil - your earlier jab implied that I should be working at 8:00AM and 1:30PM and that I was doing something wrong by writing comments here. Are most people at work at 8:00AM? No. Was I at work at 8:00AM? No. Hmmm, now what is something that people usually do around 1:30PM...

You're right though, Phil. This is what's important. Not the state of Rhode Island going bankrupt. My work schedule is what should be discussed here.

Posted by: Dan at May 27, 2011 7:58 AM
You didn't mention that fact [that a piece was an op-ed] when you cited it as if it were a piece of credible journalism. I'm noticing some similarities to Russ and OTL here.

I can't think of a single instance where I've failed to post the link to my source (versus some folks I know who don't cite any sources credible or otherwise). If you can't be bothered to click through, don't blame me for not spoon-feeding it to you.

Posted by: Russ at May 27, 2011 12:11 PM

To your credit, Russ, you do usually provide a link to the source of your horrendous tl;dr blockquotes. To your discredit, the material you regurgitate into your comment boxes tends to be unsolicited and from self-proclaimed experts so biased in their presentation and politics as to render any incidental substantive content contained within them worthless. My comparison was referring to your perpetual citation of progressive hired guns like Kohn and Krugman as some sort of established authority.

Posted by: Dan at May 27, 2011 1:11 PM

What? Progressive views come from progressive sources? Shock! You don't like what they have to say, but that's not the same as saying they're unqualified. Krugman is a Nobel winner and Kohn has written more than a dozen books mostly about education and numerous articles on education reform.

The fact that you dismiss out of hand anything outside your own opinion makes me think that Lew Rockwell comment was not so far from the truth. Not to mention that I have also recently cited nonprogressive sources such as the Associated Press, Judge Posner, and W. Edwards Deming.

Posted by: Russ at May 27, 2011 2:13 PM

Oh come on, Russ. You're telling me that if I blockquoted Hayek (also an economics nobel prize winner) and Ron Paul (author of numerous books on the Federal Reserve and Constitutional history) in support of libertarian-conservative fiscal policies, then you would recognize their contributions and defer to their expertise? No, you'd respond exactly the way we are responding to your "progressive experts."

Posted by: Dan at May 27, 2011 3:09 PM

"Thus college becomes a route to learn the habits of thought and affectations that give weight to elite biases. Thus highly paid union organizers stand as the representatives of the uninitiated in the ruling class. Thus professional advocates work toward a growing class of permanently dependent wards of the state. And thus develops the attraction of regions that allow greater freedom and more independence."

I'm not quite sure I understand the narrative you're putting forward here. Is Rhode Island's biggest problem that there are too many well-educated folks advocating for the interests of those less fortunate? Would the state be better off if they simply got jobs as outsourcing consultants and built McMansions in South County with nary a thought for the poor? Union organizers try to create more independent, taxpaying citizens who hold decent jobs. Allowing huge corporations to outsource jobs, and pay nothing in taxes, is a sure-fire way to create the "permanently dependent wards of the state" you dread so much.

Posted by: Alan Ginet at May 29, 2011 10:28 PM
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