I check in with the kitten of the blogosphere regularly because he links to interesting stuff. His comments, however, are strange at times, almost dimwitted. I don’t know what to make of it, but maybe he struggles with his sanity or something. Either way, this post got my attention. He is right that companies continue to use pre-employment testing even though the courts ruled against it in Griggs. I worked at two companies that employed the Wonderlic, math and vocabulary tests and personality profiles. I’ve administered so many tests I lost count long ago. The thing he does not understand is that these are not used in isolation. That’s how big companies get around Griggs. In many cases, the testing is done after a decision to hire. Companies also have diversity programs to avoid the dreaded disparate impact claim. Of course, all firms use filtering mechanisms to sort resumes.

That later bit is something employees like the aforementioned blogger don’t get. Management regularly meets with HR to discuss standards and practices. The reason it is not just “standards” is there are a lot of things done at the HR side that are not formal policy. That’s both out of necessity and habit. Humans are not, in fact, moist robots. If Sally from HR went to a Catholic college, she may be partial to applicants from Catholic colleges. Fred, a state U grad, may favor the state university. HR could very well be tasked with hiring minorities or women, even though it is not official policy. What no company does since Griggs is use an IQ test as a first filter. That’s no longer legal and a sure way to get sued. They may achieve the effect, but that’s in response to Griggs, not in spite of it.

A topic I like to tub thump about is what to do with low IQ workers in a modern, technological society. For most of human history, there was a demand for most if not all of the low IQ population. Farming required a lot of labor. Maintaining buildings, roads and so forth required loads of guys willing to take direction. Into the 1960′s, manufacturing soaked up most of the low IQ workers. When the banks decided to sell off the manufacturing base, retail and services were seen as the cure for excess unskilled labor. We would have an economy based on selling one another insurance and doing each others laundry! Of course that could never work, but it worked for a while as easy credit allowed us to pull forward GDP. Now, it is not working.

The evidence, I think, suggests two things. One is the massive expansion of credit in the free money era far outpaced economic productivity. Anyone who has worked at a company realizing booming sales knows the phenomenon. You hire and spend in order to meet the demands of the customers. Even though it is clear that increasing efficiency is the wise policy, the easiest is to add resources. There’s a lag, though, and resources continue to accumulate after demand slows. There reaches a point when this shows up in profits. The business reacts by cutting staff and expenses. The watch word become “efficiency.” Sales stabilize, costs are cut and profits are increased by getting more done with fewer resources, mostly people.  That’s what has happened in the American economy. GDP growth has been flat, so business looked to efficiency for profit gains.

The other thing that I think we see is the lagging effect of technology. For 25 years technology raced ahead of what users could use. By the time of the Great Recession, we had an enormous amount of excess technology. The old joke in the 1990′s was that 90% of Microsoft Word users utilized 10% of the product. Few companies utilized 25% of their IT investments. They may have been sitting on all the tools to automate big parts of the business, but they never deployed the technology. Once the economy soured, they looked to those in-house tools to increase efficiency. Put another way, in 25 years we produced 100 years worth of automation tools. It is going to take some time to work through the excess.

This brings me back to the point of the post. We have a lot of people on some form of government assistance. In fact, the government claims that nearly half of all homes have at least one person on the dole. I think we can assume that a big chunk of that number is for retired people. Another big chunk is the poor and stupid. Simply putting them on welfare does not solve the problem. Unless we are willing to have large scale reservations for the low skilled, this economic problem will soon be a very serious social problem. Large number of idle dimwits is never a good outcome for a society. While elites can temporarily erect barriers to protect themselves, the end result is predictable.

Everything is relative. When I was a boy, by grandfather would tell me stories of his youth in the second decade of the last century. He was born in 1910 and came over here at some point from Russia. That was always a mystery. The family was dirt poor, but he remembered it fondly. He told stories of the Depression too. Of course, he had stories from the war years. Again, all fond memories despite the fact he and his family survived great deprivations. Our younger years are always the best of times, even when those times are terrible. Heck, I have fond memories of the 1970′s, even though my family could barely keep the lights on. I was a kid and did not care. I had fun.

Anyway, this post by Ashok Rao is interesting and a bit scary. Fake unemployment is at ~7.5% right now. Real unemployment is something closer to 11%. Some claim the figure, when backing out the part timers, is probably over 15%. I’ve always hated such games, but the government keeps playing games with the numbers. This WSJ article is a good read on the subject of part-time workers. NRO has a post from Veronique de Rugy with a pretty graphic.  Anyway, the two things that jump out to me from Ashok’s post is that job gains have flattened out now. We see that in the weekly numbers and the monthly NFP. Employers are filling jobs with temporary workers when possible, but avoiding any permanent increases to their work force.

That means this is the best of times. if you are a boomer looking to retire, you don’t care. The good times are gone anyway. The 20-somethings, on the other hand, are getting screwed and are going to get even more screwed. This economy, with all of them living at home and hustling part time work, is as good as it gets for a while. Looking at the recent economic data, we are headed into a period of near zero growth and possible even recession. That means the unemployment numbers will spike up again in the next year.  Two years from now we could be looking back at today fondly as the good old days.

I saw this linked by Kathy Shaidle. It does seem like race relations have gone south since Obama was elected. That’s probably wrong. We feel the here and now so it seems better or worse that previous times. We forget how we felt ten years ago or twenty years ago. We forget that the Left blamed this on George Bush. We also forget the riots after Rodney King and the ugliness following the OJ trial. Go back further and we have race riots dating to the 19th century. The fact is, there is money to be made telling black people that the blue eyed devil is coming for them. More important, there is money to be made telling white people looking for salvation that they can get by pointing at the other white people and calling them racists.

The sad truth is race relation will probably never get better than we see today. In fact, I suspect they get much worse in the coming decades. Humans just don’t like mixing it up and we really hate in tough times. As the mathematical realities of our situation bear down on us, the friction between ethnic groups will grow worse.

One of things that strikes as you drive through the state of Maryland is the weird driving. If you are traveling north-south, you will be on I-95 through the state. You will also spend a lot of time behind someone in the left lane driving below the speed limit. You will also find you regularly have someone deliberately driving in your blind spot. You speed up, they speed up. You slow down, they slow down. The crazier thing is you will come up on a slow poke in the left lane. You decide to pass using the middle lane. They will speed up as you pass trying to remain in your blind spot. They were doing 55 and then they force you to crack 100 to get around them. Once you get by them, they slow down again and disappear into the rear view.

Spend time in the state and you quickly figure out what’s going on. There is a combination of provincialism and dullness you rarely see elsewhere. Rhode Island has a bit of this. In both cases you have a small state surrounded by large culturally and economically dominant states. That explains the provincialism. I’ve met people from Maryland and Rhode Island who have never left the state. I’ve met college graduates who never leave the state. They take their vacations at home. They work in jobs that do not require travel because they simply have no interest in anything outside the state. The result is strange customs like the weird driving habits. I’ve often chuckled while driving in neighboring states when I see a long line of cars in the left lane behind one car with Maryland plates. The poor guy must be freaking out.

There’s another piece and that’s the dullness. Central Maryland has a very high number of dimwits. I don’t just mean the slack-jawed yokel type. I’ve met college graduates with a dimness that you would normally associate with the back woods. Out of curiosity I looked up IQ by state. The first link was this one. It seems to jive with what Steve Sailer has reported. He’s one of the most reliable writers on the subject so I assume it a good estimate. Looking through the list I see Maryland is 32 and and Rhode Island 33. If I were to guess, central Maryland, the Baltimore – Washington corridor, is below the state average and the smart fraction is very thin. It is not Detroit thin, but those with an above average IQ will be lonely.

Maybe it is all the lead pain in Maryland buildings.

That fat slob of a New Jersey governor has the chattering classes talking about the brewing fight between “libertarians” and “conservatives” over the direction of the GOP.  Here’s a representative article on it. The author does a fair job of labeling one side the establishment and the other insurgents. Calling the GOP conservative is not just a factual error, it accepts the establishment view of the world which is inaccurate and self-serving. America’s ruling elites range from fanatically left-wing to mildly liberal. The fanatics call the mildly liberal “conservative” and “right-wing.” The mildly liberal call the other guys liberal and progressive, when they dare stand up for themselves in public.

The GOP’s role in this is as a rubber stamp for the Democrats. The Democrats are run by the fanatics. They chased off their mildly liberal members in the 1990′s. The GOP is run by the mildly liberal, but have a sizable number of non-liberals of various stripes. For as long as I’ve been alive, the myth is that the non-liberals run the GOP, but that was always nonsense. At best they contribute some color to an otherwise drab party of establishment career men. In every fight, the establishment types surrender to the fanatics to the great disappointment of the non-liberals. Now, it appears the non-liberals are starting to wake up and target the surrender wing of the GOP. As Michael Walsh noted on NRO, it is a good time to have the fight.

My own view is the status quo is only brought down through crisis and catastrophe. That’s why every epoch is book-ended by violent conflicts. The Civil War ended the colonial period, ushering in the Industrial Age.  The riots of the late sixties and stagnation of the 1970′s ended the post-war period and ushered in the free money era. Revolutions throughout the Soviet Bloc ended the communist era, just as it started it. If the GOP is going to become something other than the Stupid Party, it will be a bloody mess before it emerges. The old guard will not leave quietly. Their friends in the establishment will move heaven and earth to support their collaborators.

My bet is the old guard wins for now. Until the money runs out, nothing will change.

One of the things you learn quickly when working with complex software is that one tiny change in one area of the program can result in unexpected behavior in another, unrelated, part of the software. Even when you know the software in detail, you are often surprised by the results of small changes. The reason for this is there are so many variables and related conditions, it is impossible to keep them in your head all at once. There are limits to how many chess moves the mind can anticipate. Put another way, we’re not that smart. Even high IQ types who work complex problems in physics run into this, which is why they control for as many things as possible in their proofs.

Anyway, the social planners never seem to get this or even recognize it exists. They are so confident in their power to model the new socialist man they blithely assume all sorts of things about the human condition. ObamaCare is a good example of this at work. They started with one goal in mind. They wanted to transfer the costs of giving middle-class health care to the poor from the government to private business. That means mandating coverage for employers. They quickly figured out that the unemployed and seasonal would not get coverage so they came up with the individual mandate.

It sounds good. If you have a job you employer has to pay the freight. If you don’t have a job, then you have to pay the freight. Eventually, people with eyes and time on earth in America explained that ghetto dwellers were never going to buy insurance. They also explained that most employers could not afford insurance. That means expanding Medicaid and subsidizing private insurance. One and one it went until the result was a 2,000 page bill requiring tens of thousands of regulators writing tens of thousands of pages of regs. All of which would be layered on top of the existing tens of thousands of regs. A massively complex system was going to bolted onto a massively complex system the legislators did not understand.

Since becoming law, we have been treated to a hilarious series of unexpected results. Employers are afraid to hire, not knowing the consequences. Their lawyers quickly figured out a way out of the mandate by moving from full time to part time. Hundreds of thousands have lost benefits because they are now part time. Now, cities in financial trouble will follow suit by throwing their workers onto the government system to avoid paying health care bills. Detroit is first up, trying to erase a few billion in expenses by shoveling their employees onto the dole. You can be sure every other city will look to do something similar. It is too tempting.

The result of all of this is pretty much the opposite of what the central planners expected. Instead of decreasing the cost to government, costs will go up faster. Instead of more people with insurance, you will see fewer people with insurance. Unions are ready to revolt because they suddenly find themselves no longer able to offer benefit plans. Doctors, seeing their earnings prospects decline are leaving the system and finding ways to carve out private systems for upper middle-class clients. On and on it goes, a myriad of unexpected outcomes accelerating the collapse of the health care system.

Wisdom is knowing what you don’t know. The opposite of that is being a liberal central planner.