An important piece of research from Ingrid Gould Ellen, Michael C. Lens, and Katherine O’Regan (PDF):

Potential neighbors often express worries that Housing Choice Voucher holders heighten crime. Yet no research systematically examines the link between the presence of voucher holders in a neighborhood and crime. Our paper aims to do just this, using longitudinal, neighborhood level crime and voucher utilization data in 10 large U.S. cities. We test whether the presence of additional voucher holders leads to elevated rates of crime, controlling for neighborhood fixed effects and either time-varying neighborhood characteristics or trends in the broader sub-city area in which the neighborhood is located. In brief, crime tends to be higher in census tracts with more voucher households, but that positive relationship disappears after we control for existing trends. We find far more evidence for the reverse causal story; voucher use in a neighborhood increases in tracts with rising crime, suggesting that voucher holders tend to move into neighborhoods where crime rates are increasing.

There’s a general association between poor people moving into a neighborhood (whether via vouchers or anything else) and living conditions declining in the neighborhood. People like to blame other people for their problems, especially if the people look differently from them, so this is often interpreted as poor people creating bad conditions when another interpretation of the story is that poor people tend to migrate to places where conditions are deteriorating because it’s cheap. Insofar as the latter trend dominates (as this research suggests) it indicates that people need to ratchet-down their fear of policies that might allow “undesirable” types to have access to their neighborhood.

It’s interesting to try to think about the incentives facing Greek Prime Minister George Papandreou. Normally you would think that a national prime minister’s best option is to try to do the stuff that’s likely to get him re-elected. No matter how bleak the outlook, this is your dominant strategy. But in the era of globalization and EU-ification, I think the leaders of small countries are actually in a somewhat different situation. If you leave office held in high esteem by the Davos set, there are any number of European Commission or IMF or whatnot gigs that you might be eligible for even if you’re absolutely despised by your fellow countrymen. Indeed, in some ways being absolutely despised would be a plus. The ultimate demonstration of solidarity to the “international community” would be to do what the international community wants even in the face of massive resistance from your domestic political constituency.

My guess is that even if Brian Cowen turns out to have permanently destroyed the once-dominant Fianna Fail, he has a promising future on the international circuit talking about the need for “tough choices.”

Here touring the various palaces and such, my thoughts have drifted a bit to the ancien regime world of a Europe dominated by a transnational nobility. To the extent that the elites of the EU governing class identify with each other more than they do with their own populations, the weird elite-driven EU governance model has sort of recreated that.

Felix Salmon and Joe Weisenthal have recently launched attacks against the idea that an NGDP level target would be credible or effective that I think are worth a response.

In response to Salmon, I think that if you think about it step by step that the idea that the Fed Chairman can create a self-fulfilling prophesy just by talking is less crazy than it sounds. Consider a scenario in which Bernanke says “I want NGDP to grow faster than 5 percent but slower than 10 percent until it catches up with the pre-crash trend and I’m prepared to do crazy stuff to make it happen.” How do sophisticated investors and large firms react to this announcement? Maybe some people find it non-credible. Maybe most do. But nobody is going to lower their growth and inflation forecasts in response. Some people will raise them. And higher expected inflation and real growth will drive higher actual expected inflation and real growth. As long as Bernanke responds to that by saying “NGDP growth has accelerated exactly as I planned, now I continue to want NGDP to grow faster than 5 percent but slower than 10 percent until it catches up with the pre-crash trend” then the second time around some of the skeptics will become converts and the convergence will continue. The announcement doesn’t need to persuade everyone, or even most people, it just needs to push expectations in the right direction.

Weisenthal, operationally, says cheap loans can’t resolve the debt overhang: “People don’t want (and can’t utilize) cheaper loans: What people need is more income to pay off this debt.” Right now, I have a mortgage. The interest rate on it is pretty low. But it’s not 1 percent. If the Fed wanted to offer me a loan at a one percent interest rate that would be sufficient in scale to pay off my existing mortgage, that would reduce by debt burden just as easily as a higher income would. Thus far the Fed’s policies have been oriented toward giving free money to banks in hopes that this will circulate down to the little bit, and the circulation has been blocked by a lot of other issues. But a determined central banker can get around this. Direct provision of super-cheap credit would work fine.

I suppose I agree with Will Wilkinson about the importance of “an ethos of initiative, hard work, and individual responsibility” though I have no real idea why he thinks most progressives are against such an ethos. It strikes me that cultivating such an ethos is sort of integral to making a progressive agenda work. I think back sometimes to the time when I stumbled into a Stockholm Metro station and got the person working the booth to explain what I needed to do to use the city’s bikeshare system. This wasn’t really her job, and the conversation wasn’t in her native language, and obviously no practical harm would have come to her if she’d blown me off but I take it that she took pride in working for Stockholm Metro and had a self-conception as someone who’s a helpful public servant. Any effective public agency from the United States Marine Corps on down is built in pretty profound ways on an ethos of duty and hard work in an even more profound way than things in the for-profit business sector. People who believe in public sector work and public services must believe in the idea of a strong work-ethic.

But if I look at America today, what I see undermining any meaningful notion of work ethic is a kind of run-amok ethic of moneymaking. The old Calvinist idea about money, as I understood it, was that hard work, discipline, and prudence were moral virtues. They were also things that are more likely than not to lead to personal prosperity. So prosperity shouldn’t be stigmatized as ignoble, it should be rather seen as something likely to flow from virtuous behavior. But this equation assumes that morally speaking what matters is the hard work, the discipline, and the prudence. Cutting corners, lying, cheating, or stealing to make a quick buck doesn’t fit the bill. Earning a multi-million dollar salary to deliver below-average performance as the CEO of a firm and then take a multi-million dollar golden parachute when you get sacked doesn’t fit the bill. Spending your days and nights dreaming up smart regulatory arbitrage schemes doesn’t fit the bill. In terms of what it says about your personal virtue, if you’re going to earn your keep identifying and exploiting previously unknown loopholes in the legal framework, you may as well just go out and break the law.

There’s no particular honor and dignity in owning the copyright to Mickey Mouse or Batman, and then spending money lobbying congress for retroactive copyright extensions. A businessman who takes the ideas of initiative, hard work, and individual responsibility seriously would forget all about that nonsense. But the idea is aloft that business executives actually have a moral obligation to spend their days finding ways to engage in profit-maximizing rent-seeking and loophole exploiting. This kind of “you should make as much money as possible through any legal means necessary” spirit is toxic to the kind of ethos that’s made the various forms of modern industrial capitalism successful. Whether or not a person who gets in a car wreck gets free surgery (as in Canada) or merely surgery implicitly subsidized through the tax code (as in the USA) is neither here nor there. A well-designed welfare state is an excellent thing to have, but to have a culture that valorizes hard work you need to actually valorize hard work not just money-making.

For the first couple of decades of median wage stagnation, one could accurately say that wages for college graduates were rising. Therefore it was possible to construe the economic malaise as primarily a skills malaise. But for the past 10 years, wages for BA-holders have also been stagnant. The crisis of growth has grown more generalized, and while more education would be helpful it’s no panacea. This is all true. So when Richard Kim writes this I sympathize:

Like a lot of the young protesters who have flocked to Occupy Wall Street, Joe had thought that hard work and education would bring, if not class mobility, at least a measure of security (indeed, a master’s degree can boost a New York City teacher’s salary by $10,000 or more). But the past decade of stagnant wages for the 99 percent and million-dollar bonuses for the 1 percent has awakened the kids of the middle class to a national nightmare: the dream that coaxed their parents to meet the demands of work, school, mortgage payments and tuition bills is shattered. Down is the new up.

But the “Joe” in question was a New York City public school teacher who wracked up $35,000 in debt over three years to obtain an MFA in puppetry from the University of Connecticut and is now frustrated that he can’t get his old job back. This is not what I would make my lead example for a story about the perfidy of the 1 percent or the collapse of the American dream. If anything, it’s a much narrower story about the perfidy of the University of Connecticut MFA program. To a small extent, it’s also a story about a misguided public school teacher compensation system. Joe wound up getting screwed, since between the time he left to get his MFA and the time he got it, the labor market for teachers collapsed. But had he done this earlier in the decade, his three years getting an MFA in puppetry would in fact have qualified him for a $10,000 a year pay bump even though there’s no reason to think getting the MFA would make him a better teacher.

The whole system of paying teachers bonuses to acquire largely meaningless extra credentials is a totally wacky back door subsidy to the nation’s master’s degree programs that mostly serves to waste teachers’ time. Even without getting into any more controversial ideas about teacher compensation, it would make much more sense to scrap these bonuses and reallocate the money to higher base pay across the board. You don’t need an MFA in puppetry to be a good school drama teacher, and if you’re not a good school drama teacher there’s no reason to think an MFA in puppetry is going to turn you into one.