There used to be a big educational gap between poor children and everyone else.  And not just because they were in failing schools; poor kids showed up at school less prepared than the other kids, and the gap widened over the years. 

Now, according to Sean Reardon, there is also a gap between the middle class and the elite.  American society is increasingly stratified, he says, because elite parents are investing so much in the cognitive enrichment of their kids.

But is that really the right explanation?  The rich pulling away from the middle class is also exactly what we would see if test-taking ability has a substantial inherited component, and the American economy is increasingly selecting for people who are very, very good at taking tests. The latter is undoubtedly true, and there's some fairly strong evidence for the former, in the form of studies of adopted kids.  Such studies tend to show that adopted kids bear a much stronger resemblance to their biological parents in terms of lots of things, from weight to income to test scores, than they do to their adoptive parents.  Once you've hit a fairly basic parenting threshhold--food, health care, touching and talking to your kid, and not physically or sexually abusing them--the incremental benefits of more intensive parenting seem at best small, at worst unclear.  

I have no doubt that Reardon is right, and wealthy parents are investing more in their kids because they can.  But how do we know that this, rather than the fact of having parents who are great at taking tests, makes the difference. If you take a newly married graduate of the Naval Academy with strong SAT scores, do their kids show up at kindergarten meaningfully less prepared than the children of a hedge fund manager who makes many times more?

David and Charles Koch, the billionaire brothers who fund a number of libertarian causes, are rumored to be interested in buying the Tribune Group, which includes the LA Times.  (Full disclosure: my husband received a one-year fellowship from the Charles Koch Foundation, and works for Reason Magazine, which I believe receives some funding from David Koch.)  As you can imagine, this has stirred up quite a bit of anxiety in some quarters.  Steve Pearlstein, the Washington Post's liberal business columnist, has suggested that perhaps the LA Times staff should threaten to quit if the Kochs buy the paper.

But regardless of labor action, my former colleague, Garance Franke-Ruta, writes that the Kochs effort is doomed.  Newspapers are liberal because their audience is liberal, she says.  And they're staffed by the people who live in cities, who are also liberal.

A friend who is 1) not liberal and 2) not in the news business asks me what I think of this.  Is it really impossible to imagine a conservative newspaper?  

Why no.  I don't have to even imagine.  The Wall Street Journal and the New York Post spring readily to mind.  So do smaller papers from smaller cities, like New Hampshire's Union Leader.  

A New York Times story this morning suggests a pattern of massive fraud and abuse, abetted by a complaisant government, in government settlements that were supposed to compensate for discrimination by the USDA against minority farmers.  

Long story short: black farmers complained that they had been discriminated against when seeking loans from a USDA program.   Those loans are supposed to help farmers buy seed and fertilizer, and float the long period between sowing and harvest.  They sued the Clinton administration, which settled even before they'd opened the discovery process.  This is known as the Pigford settlement, a name which will be familiar to readers of conservative news sites, which have been on this case for some time.

The New York Times reports that the judge initially restricted the settlement to people who had actually been farming during the period covered by the settlement, but some people complained.  What about people who had attempted to farm, but been stymied by their inability to procure government loans? Should they be shut out of the settlement?  So the judge expanded the criteria to include people who'd attempted to farm.  Unfortunately, the government doesn't keep track of people who have maybe thought about farming.  And apparently, it didn't have decades worth of records of the loans they'd denied.  So the government was forced to rely on the word of the applicants.  Here's what happened next:

Delton Wright, a Pine Bluff justice of the peace, recalled what happened after word of the settlement reached his impoverished region: “It just went wild. Some people took the money who didn’t even have a garden in the ground.” He added, “They didn’t make it hard at all, and that’s why people jumped on it.”

Jonathan Mahler has a very entertaining roundup of Curt Schilling's adventures in corporate life.  It seems that Schilling assumed that if he was good at being a pitcher, he'd probably also be good at running a video game company.  This was not the case:

Schilling had no idea how much time and money it took to build the software required for such a game. And he didn’t exactly help matters by weighing in with suggestions of his own. There was, for example, that instance when he mentioned in an e- mail that it might be cool to have mounted combat on flying pigs. The design team worked on nothing else for a week.

Indeed, Schilling didn’t know the first thing about the world outside baseball. That’s not hyperbole: He once asked the president of 38 Studios if employees got weekends off. Another time he suggested that they work 14 days straight so as not to lose their momentum. (No need for travel days when you’re playing only home games!) Schilling was so clueless that he had to be told by his wife’s uncle, a retired corporate executive, not to personally guarantee the company’s lease.

Schilling filled his board with family members and, to the dismay of his president, promised employees half of 38 Studios’ (notional) profits. He also insisted on retaining majority control of the company -- which became something of a problem when he started his search for outside investors.

When web publications have more pages than advertisers, they often run "house ads"--ads for the publication itself.  It's an increasing problem for the industry, because offering a digital page is cheap.  This is one of the reasons that web advertising has so far utterly failed to make up for the print ad revenue that publications have lost as traffic has moved online.  

This morning, I saw something a little bit surprising on James Lilek's site: a house ad for . . . Google.

I've never seen a Google house ad before.  And I had not, prior to this, been googling for information about Google+, or otherwise intimating to the search cookies that I wanted to be fed this sort of ad.  Which suggests one of two things: either Google is so disappointed in the performance of Google+ that it's willing to forgo ad revenue in order to try to goose a failing brand, or Google is no longer getting enough ad buys to fill its ever-growing inventory.  Either one is pretty interesting.

Bit of a stir this morning, as Politico reports that Congress is considering exempting its staff from an Obamacare provision which will require all congressmen and staffers to get their health insurance through the exchanges.  Apparently, it's not clear that the government is authorized to actually pay for this insurance, meaning that the folks on Capitol Hill might have to buy insurance out of their own pocket.  (The ruling from the Office of Personnel Management, which governs this sort of question, is still pending.)

As you can imagine, Congress and their staffers are not happy about the prospect of paying for their own health insurance.  So Politico reports that they're discussing maybe getting together and offering themselves a little relief from the law.  Apparently, it's a lot easier to get Congress to talk about exempting themselves from Obamacare than it is to get them to talk about exempting the millions of other Americans who will be affected.

Ezra Klein argues that no, they're not talking about exempting themselves from Obamacare, just this specific provision, which Klein calls "a drafting error".  In response to which, I'd offer two observations:

First, this is, in fact, about exempting themselves from Obamacare.  This is a provision of Obamacare.  It is in the bill.  You may think that it shouldn't be in the bill, or that it shouldn't be in the bill in the way that it's written.  But--assuming that these discussions are actually happening--Congress is considering exempting itself from the one provision of the bill that actually directly affects Congress.  As far as they're concerned, this is exempting themselves from Obamacare; the rest of the bill affects Hill staffers only indirectly.  

This will be your second post today on the problem of collecting sales taxes on Internet transactions, because after I wrote the first post, it became clear to me that most people who are writing about it do not understand why this is onerous for small business. I mean, sure, hey, there's all these different rates, but that's what software is for!

It's pretty obvious that most of the people writing about the sales tax have never run a small business. They are thinking about the transaction from the point of view of the consumer, where you punch in what you want to buy, and the software painlessly calculates the percentage for you. Few of the commentators I've read have asked themselves what happens to the money after the software has collected the money. Do the sales tax fairies simply whisk it off to the nice folks at the state tax department?

Sadly, no. Rather, as an SBA guidebook for small businesses points out, you have to file a tax return with each and every locality for which you have collected tax. The bill streamlines this a bit, but you've still got to keep 50 states’ worth of records and file 40-odd states worth of returns. 

Generally, states require businesses to pay the sales taxes they collect quarterly or monthly. You’ll have to use a special tax return for sales taxes, and report all sales, taxable sales, exempt sales and amount of tax due. Not paying on time can result in penalties. As always, check with your state or local government about the process in your location.

On Monday, I wrote about long-term unemployment, and why it's a large enough problem that the federal government should be trying to do something about it.  I got pushback along two lines:  

1.  Extended unemployment benefits probably caused the unemployment, by giving people an incentive to stay home instead of finding a job.  

2.  Regulations and taxes are making it too hard to hire people.  

I am sympathetic to the basics of each argument.  Regulations and taxes do make it hard to grow a business and create new jobs, a point I made in my last post.  And extended unemployment benefits do give people an incentive to stay home instead of finding a job.  Indeed, I know people who have done just that.  One of them wrote a novel that sold for a bunch of money and earned back all the benefits they'd collected, and then some.  The rest of them basically sat around and did nothing until their benefits ran out, and then found another job.

(Fun fact: the defendant in Quill v. North Dakota was ... Heidi Heitkamp, then a state official, now the woman that Maureen Dowd thinks should have voted for tougher gun control because, er, she’s a mother.)

Now Congress is riding to the rescue, with a bill that will force Internet companies to collect sales tax on their transactions. My colleague Dan Gross is enthusiastically in favor. I’m ... less so.  

Efforts are underway to build a parallel market in Cypriot euros, currently frozen in Cypriot bank accounts (hat tip to Tyler Cowen):  

Is your cash stuck in a Cypriot bank? Someone might be willing to take it off your hands.

Distressed-debt investors and brokers are circling Cyprus, the Mediterranean island that last month plunged its two main banks into an emergency restructuring and blocked thousands of depositors from touching all their money.

The idea: investors buy frozen bank deposits, at a discount. Depositors who need access to their money get a payoff immediately, instead of waiting months or years for the bank restructuring to be completed. Investors get a shot at a big payoff down the line.

Last week I wrote that many political commentators seem to have internalized the movie version of negotation as an actual model of how the world works, rather than a dramatic convenience.  That is, they think that the way you get what you want is to make an extreme demand so that you can be "bargained down" to what you actually want.  In real life, this tactic frequently misfires--not least because if it worked, your counterparty would start making equally outrageous demands, and you'd be right back where you started.  Nonetheless, it's an extremely common delusion among activists, and arguably, the president himself fell prey to it during the gun control debate.

This weekend, Maureen Dowd proved that the armchair activists are not the only ones who have begun confusing entertaining fictions with real life.    

The White House had a defeatist mantra: This is tough. We need to do it. But we’re probably going to lose.

When you go into a fight saying you’re probably going to lose, you’re probably going to lose.

DC is having a special election for City Council today, which has once again aggravated the long-running wounds of DC racial politics.  I was reading the stories about the candidates, clicking from link to link, when suddenly I stopped at this arresting graphic:  

Why is this so interesting?  Because as DC residents know, that graphic was way off.  Census data indicate that DC lost its black majority sometime in 2011, not 2014.  If current trends continue, the city will become majority white sometime in the next decade.  

A young kid getting his first try as a TV anchor opened up his very first broadcast by whispering "fucking shit" into a live mic.  Presumably, he didn't know he was live.  But the television station, KFYR in North Dakota, has fired him anyway.  

For shame, KFYR.  Yes, obviously he got nervous and made a mistake.  And I know that he thereby exposed children to profanity which they otherwise would have had to wait until recess to hear.

But there's no evidence that this was deliberate.  Whatever happened to the groveling apology and the second chance . . . the kind of forgiving spirit that made America great?  Many of the people in North Dakota are there because some ancestors screwed up not once, but multiple times, flubbing life so bad back East (or in Europe) that they had to get in a covered wagon and head out to somewhere where they could start over.  

And I say that in admiration.  They were the people who had the caliber not to take failure lying down: to pick up and try again.  And they were aided by a society that helped them do just that, offering them land and the opportunity to bring something out of the earth.  North Dakotans are the descendants of the ones who took that chance and made it work.  Why are they now denying that same second chance to a kid who made one bad mistake?  

Paul Krugman takes to the New York Times op-ed page today to discuss America's greatest crisis: the long-term unemployed.  It's a topic that yours truly has been banging on about for quite a while.  But it's gotten a bit of new urgency from the paper that Paul Krugman cites in his column.  

But first, a little background. Basically, the normal relationship between unemployment and job vacancies seems to have broken down for the long-term unemployed.  As hiring has ticked up, the short-term unemployed are doing fine, but the long-term unemployed are not re-entering the labor force at the rates that we'd like to see.  They are suffering from what economists call "unemployment scarring": their time out of work has made them less employable.  

You know why unemployment is under 8% today?  Because a whole bunch of people have just given up and dropped out of the labor force.  They've decided that it's no use looking because no one will hire them.

But is this because employers are discriminating, or because they're somehow different from those who have only been out of work a short time?  Economist Rand Gayad decided to do a test.  He sent out 4800 fictitious resumes, which differed by length of unemployment, experience, and number of times they'd switched jobs.  What he found was that the long-term unemployed were less likely to get called for an interview than people with less experience, but a shorter duration of unemployment.  

How much did it cost to shut Boston down?  People have been throwing around some large numbers, arrived at by multiplying the number of people who stayed home by their wage, or some variant on this method.  

But of course, this isn't right.  Most of the stuff that wasn't done on Friday will instead be done on Monday, or sometime in the next week.  The salaried employees who stay home will work harder than usual.  The hourly workers will, in many cases, pick up extra shifts.  

Of course, not all the activity will be restored.  Many events like banquets and charity balls that were cancelled will not be rescheduled, because planning those sorts of events takes months.  Ancillary vendors from caterers to dry cleaners have lost revenue that will not be made up.  Tourists who couldn't go out will go home with their money unspent.  Restaurants and airlines permanently lost the opportunity to sell a spot in those seats.  So there has been some real loss of "truck barter and exchange" that is simply lost, not delayed.  

But those losses are likely to have been small relative to Boston's overall economy.  The real loss was the fear, and the lost enjoyment.  That is, people who would rather have spent their Friday day at the office and their evening socializing with friends had instead to spend it cowering in their homes--and some people very close to the action had to leave their homes and go somewhere else.  But the economic impact of this is hard to calculate.  Not least because some people might have been happier having an unexpected day off and making up the work later.