Jim Cramer, the interventionist

It was in the mid-90s when I was a college student, that I read an article in the american GQ about the legendary Jim Cramer, the Harvard educated lawyer that became hedge fund manager, making crazy returns year after year.
I would have never believed that the man who inspired me to go and work in the fin services, the archetypal "greedy" hedge-fund manager, would someday make such a passionate call for Fed intervention (see video below) -and worse, all this, just to save the jobs of his friends in Bear Sterns ("...my people are in this game for 25 years, and they are now loosing their jobs").
I work in the fixed income myself, and I expect that my bonus this year will be hit hard by the turmoil in the credit markets, but I strongly believe that when investors are getting juicy spreads for taking risks, they should also be prepared to pay for any losses. You can't have it both ways Jim.

The best is towards the end, when he says: "we spent billions to build houses in Iraq, we should do sthg for the millions that cannot pay their mortgage here". Note that JC had publicly supported the Iraq invasion.

Why women will never* get paid more than men on average

Ok, today we ll be politically incorrect. Note for the feministas: before you start yelling and calling me sexist, first read carefully and then note that my statements are not normative, but descriptive.

So, this piece (here) from GSB news, implies that Garry Becker asks: "Will Women Get Bigger Paychecks Than Men?". If you read carefully the article, Garry Becker never explicitly answers positively. But if he actually thinks so, he is plainly wrong.

Some background for my argument: As all studies show, the average IQ of men and women is (almost) the same, but their distributions are different. Men's IQ has a higher variance than women's. To put simply, there are more "limited" men than "limited" women but there are also more smart men than smart women (this phenomenon explains why there are more men than women in high-end science and engineering positions, as poor Lawrence Summers dared to suggest).

See a visualisation of the different variance here:






Now, in modern information-based economies, jobs that are IQ-intensive tend to pay increasingly much more. At the same time the relevant pay-size of these IQ-intensive jobs (banking, IT, senior management, high-end sciences) is growing compared to non-IQ-intensive sectors (like music, sports etc.). Moreover, the companies or the "invisible hand" in these IQ-intensive sectors have developed very efficient intelligence screening mechanisms. The effect of that is a trend that smarter people are getting higher and higher payments.

Given also that the IQ-payment relationship is not linear but rather exponential and that it is floored on the downside (basic salary) but uncapped on the upside (millions), it is clear that men will always have a higher average payment than women.

In this analysis I do not discuss other factors, like the fact that the testosteronized male brains drive men, more than women, to compete hard for power and status -which usually relates to higher payments.

*All the above assume:
-similar employment rates for the two sexes
-continuation of the trend in modern economies where IQ matters more and more
-no material discriminating intervention from the state
-no material genetic engineering alteration