Friday, June 29, 2012

Ethanol Does Pollute

I recently attended a lecture by a college professor about the dangers of climate change.  During the presentation he praised the mechanic of the university airplane for converting it to use ethanol-based fuel.  (He uses this airplane to fly to Alaska and back for his research.)  Since the thrust of his presentation was reduction of CO2 in the atmosphere, it seemed strange that he should commend a switch to ethanol which is a hydrocarbon and also emits CO2 when burned.  Using ethanol is about reducing dependence on foreign oil, not reducing CO2 in the atmosphere.

This may come as a surprise to some, but in this black-and-white world of environmental slogans many are led to believe that ethanol = good and gasoline = bad, as this presenter implied.  After reviewing a number of sources, I found the below table on CO2 emissions and the energy per gallon for various substances.  There is a more detailed explanation on the source website.  The conclusion is that ethanol emits less CO2 per gallon, but also produces less energy per gallon.  When you go through the calculations, it comes out that it emits at least 95% of CO2 as gasoline for an equivalent amount of energy to power your car or this airplane.  Ethanol is not really a “cleaner” fuel in terms of CO2 for climate change modeling.

Now consider how much land area an oil well takes up compared to a cornfield and that use of gasoline does not affect the food supply.  Is this another instance where we have not applied sufficient critical thinking before promoting a politically correct solution?

Monday, June 25, 2012

Why Behavior Matters

The foundation of this blog is that the vast majority of our so-called contemporary crises can be traced to individual behaviors.  If you agree with the majority opinion of Americans over the past 30 years, that the country is headed in the wrong direction, it should be reassuring to find that this negative trend can be traced to the consequences of our actions and decisions.  We are not victims!  Things are not beyond our control!

What the media and the politicians tout as crises, are situations we have gotten ourselves into and can get ourselves out of.  They are situations we can improve by improving our behavior.  Everyone makes mistakes, but if we educate ourselves about the source of these errors, poor behavior in five key dimensions, there is hope.  That hope does not come from political leaders of either party or from advocacy groups or helping organizations.  It comes from people becoming more disciplined, responsible, logical, values-oriented and savvy on economic matters.  That, in turn, forces the media, advertisers, the government and industry to respond to us in new ways, based on our new behavior.  By acting correctly more often we save ourselves from pain and also avoid contributing to larger societal problems.

Weekly I give a couple of examples of how poor choices can lead to bad outcomes, hoping to educate people about this new model, this new way of thinking.  Do you think that you or your children being overweight is something Michelle Obama can or should fix?  Do you think your being unprepared for retirement is the fault of some bank or the government?  If you do, you don’t remember that long before the Great Recession many Americans were using their houses as piggybanks, abusing their credit cards to take vacations they couldn’t afford or to buy things they didn’t need and betting on the market while they signed for loans on first or second houses .  We spent our money on the equivalent of witchcraft:  unproven supplements, psychics, magic bracelets, shoe inserts and feng shui.  If it was green, organic or based on ancient oriental wisdom, it went into our shopping carts without a second thought.  We bought things and acted in ways to impress our neighbors; fighting over the latest athletic shoes and designer merchandise; buying cooler cars and clothing; and believing the hype that these would make us more successful, more lovable, happier or better persons.  When the consequences of our actions arrived, we called ourselves victims, hired lawyers or voted for candidates who promised to fix our problems painlessly with (nonexistent) government money!  “Most people believe that individuals alone can't make much of a difference” as this article on energy conservation tells us, but the cumulative efforts, actions and decisions of everyone working together are so powerful that it can make or break America regardless of government regulations or industry initiatives.

Ultimately, our behavior does have consequences.  Our errors catch up to us every time we are lax in these dimensions.  Unlike the news, politicians, or ad campaigns, I am not trying to entertain, flatter, frighten or tell people what they want to hear.  This is the truth.  We, and we alone, must take control to get better outcomes.  It all adds up.  Examples are so easy to find and I will continue to present them here.

Friday, June 22, 2012

Caution on Dietary Supplements

If you have read previous postings (Aug 11, Aug 29, and Nov 7, 2011, Feb 10 and 27, 2012), you might think that I have a negative view of dietary supplements:  vitamins, minerals, herbs and the like.  Actually, my concern is that people are too easily persuaded of their efficacy and too casual about potential dangers.

First it’s a discipline issue – just another shortcut.  Eat anything you like but take your vitamins.  Some promoters promise that you will magically avoid disease or old age.  Friends and relatives swear by their power and offer free samples at home or at work.  Few of these people have researched the science behind them, so it’s impossible to separate real results from the placebo (sugar pill) effect.  To make matters worse, FDA regulation of these substances is far more lax than for prescription medication, and we all know stories where the FDA had to backpedal on well-tested drugs.

I was reminded of this by three recent news articles in quick succession.  “Omega-3 supplements may not aid aging brain” (June 14).  This comes at a time when many foods have added to their labels “with omega-3” as if it were some wonder drug.  “Task force recommends against Vitamin D, calcium supplements” for preventing cancer or bone fractures (June 14).  Contrast that with news the next day “Vitamin D With Calcium Shown to Reduce Mortality in Elderly.”  Further in this article it warns, "Some studies have suggested calcium (with or without vitamin D) supplements can have adverse effects on cardiovascular health…Although our study does not rule out such effects, we found that calcium with vitamin D supplementation to elderly participants is overall not harmful to survival, and may have beneficial effects on general health."  (I added the emphasis to show how iffy these conclusions are.)  No wonder people are confused and more apt to take the advice of a neighbor or co-worker!

Furthermore, in the case of supplements the government is less involved, leaving the responsibility for understanding benefit and side effects to us.  FDA guidelines on supplements generally show that they get involved in problems or safety issues only after they arise.  It is the manufacturer’s responsibility to ensure safety.  There are no regulations regarding dosage, and if they advertise benefits that are not true, it becomes a case for the Federal Trade Commission (FTC) to prove that they are making false promises.

In terms of discipline and critical thinking then, the wisdom when it comes to supplements is three-fold.  First, it is better to get needed nutrients from your food than from a pill, vitamin water or an additive to some convenience food – calcium from dairy and vitamin D from the sun, etc.

Second, it’s smart to be skeptical about claims of manufacturers and your friends.  As you can see the research is still going on, even on basic items such as calcium supplements for bone loss, and tests are not always as stringent.  It takes some research to separate the claims from reality. 
Finally, it’s best to consult with your doctors, as supplements do have side effects and may interact either with each other or with prescription drugs.

Monday, June 18, 2012

Childhood Obesity and Parental Responsibility

One of the most devastating life events is to outlive your children.  This may result from accidental deaths, drunk drivers, overdoses, mishaps with weapons, or childhood disease.

Our society (mostly through government intervention) now goes to great lengths to protect children from accidents and injuries.  Examples include placing rubber tire shavings or mulch under playground equipment, limiting second hand smoke, banning the game of dodge ball in some schools, mandating child car seats, dictating school lunch standards, encouraging helmets and pads for bicycle riders and skateboarders, etc.  It has gotten to the point where today’s grandparents joke about how they ever survived without all these safeguards.  Nonetheless, protecting children is important and a prime responsibility of parents.

So it's ironic that while obesity is linked to so many serious health issues, parents don’t seem to react with appropriate urgency.  Pre-diabetes and diabetes is on the increase among teens.  Diabetes can cause all sorts of problems, including blindness, nerve damage, heart attacks and strokes.  Half of overweight teens face heart problems.  Obesity can also increase the risk of cataracts and complications during medical tests and procedures.  What makes it worse is that younger people will endure the effects of these medical problems for many more years.  Diseases once thought of as common only among older people, such as heart attacks, strokes, kidney failure and even cancer, could begin to show up when our children are in their prime.  A few years from now when young girls are ready to become young mothers, being at an unhealthy weight may increase the danger that their babies develop metabolic problems that lead to diabetes.

When there is a delay between behavior and consequences, even serious consequences, people tend to take the situation less seriously.   Smoking is an excellent example.  What most parents don't understand is that childhood obesity also falls into this category.  Isn’t it time for parents to step up and take an active role in the health and future of their children?   Don't leave it to the government to solve this problem.  First, it's not their problem to solve and second, examples of responsibility among parents on any subject will have a positive effect on their children.

Friday, June 15, 2012

Bargain Hunting

Since the beginning of the Great Recession we have been able to find some great bargains.  Some people have gotten a great deal on a house, perhaps at the expense of the seller - but it was a bargain.  Most have less expendable income or are being careful with their money which seems to have inspired more bargains in the area of home repair or maintenance items that we might ordinarily put on hold, such as windows, roofing, etc.  Many other sellers have been forced to become more competitive.  This is all good for us, the consumer.  Not everything is the bargain it appears to be, however, and a little bit of critical thinking helps.

Today I received a letter telling me that I could get a different cable, internet and phone package for a bargain price.  In fact I could save over $600 for the first year over the regular price.  Wow, I thought, that probably means that next year they will be adding over $50 per month to my bill.  That's the price I should really use to compare, unless I plan to switch back and forth between cable companies on a yearly basis - oops! the very small print on the back says it requires a 2-year agreement and a $35 setup fee.  So it wasn't such a great deal after all.

Likewise, I see ads in mailings, on TV, in the newspaper or on the Internet saying that each major insurance company can save me hundreds of dollars a year on auto insurance compared to all the others.   How does that work?  It reminds me of one of those M. C. Escher drawings where the waterfall feeds itself or where no matter how many times you go down the stairs you keep ending up on the top floor.  They can't all be less expensive than each other.  As I mentioned before, one even  boasts that 85% of the people who switched are paying less.  Isn't that just another way of saying that 15% of our customers are not too bright?  When these ads are looked at closely, they defy logic.

Marketing people are tricky; they are paid to lure you in.   Fortunately, they are not allowed to lie to us directly, but some of their promises seem really fishy when exposed to basic critical thinking.  I read recently that America was a pioneering society where action was often valued over thinking.  When you are being attacked by a grizzly bear, it's not time to stop to contemplate options; but when you are being enticed by an advertisement or a salesperson, you have all the time in the world.  No matter how often they tell you it's for a limited time only, we all know similar deals will turn up in a couple of weeks or months.  Think of the possibilities for saving and to force more forthright advertising if more people's behavior reflected strong critical thinking!

Monday, June 11, 2012

Down with Auto Loans!

Let’s use some critical thinking and a little easy arithmetic to improve our long-term financial situation.  The question for today is:  Why should anyone older than 45 ever need an auto loan?

Suppose you buy your first new car at the age of 25.  You have very little to put down and get a 4-year loan (by buying a car you can afford to pay off in 4 years).  Keep the car for 6 years.  For the final two years of ownership, continue to make the car payments to your own bank account.  When you are ready to buy a new car, you will have some trade-in value for the current car – probably around 40% of the original price.  You will also have a new car fund worth more than half of the original price of your first car, because you made two years of additional payments to yourself, which included interest.  Even if auto prices went up by 4% per year, you could still buy a comparable car and be able to put about 75% down – a far cry from the zero down on your first purchase.

Now you are 31 and could even afford to splurge on a car 10% more expensive.  When you put down all of that money, that car will be about 68% paid for when you drive it home.  Making exactly the same payments (not adjusted for inflation or anything) and the car will be yours in less than two years.  Keep making payments to yourself while you keep the car for 6 years. 

At age 37 when you trade your car in, you will be able to afford 88% of a new car that is again 10% better than the one you traded in (or buy a comparable model for cash).  In either case by following this same pattern, in 6 more years you will be 43 years old and be able to buy your cars for cash for the rest of your life.

Remember, those monthly car payments, mostly paid to yourself, never increased from the time you were 25.  Presumably your income has increased but the monthly cost of your car fund has remained stable and you no longer rely on auto loans.  Wouldn’t this be a great way to become more financially secure and also get back at those "greedy" bankers!  And if you are no longer 25 years old, it's not too late to start.

Friday, June 8, 2012

Responsibility and Freedom

The so-called obesity epidemic is a case of Americans consistently failing to act with discipline in terms of what they eat and how much they eat.  Politicians and other advocates see Americans getting fatter and apparently taking no responsibility to improve the situation.  It was less than four weeks ago that I warned in Obesity Epidemic and the Food Police (May 14) about where this particular aspect of lack of responsibility would lead.  “If we don’t fix it ourselves, others will step in with their mandates, programs and artificial incentives, excusing this outside interference as being in the interest of public health.”  On February 3 in Blame the Sugar, I said, “If we don't step up and take responsibility for our behavioral failures and begin to make some changes, well-intentioned people will call for government action and our freedoms will slowly erode.”

For anyone who didn’t believe me, we now have the case of Michael Bloomberg, mayor of New York City, proposing to amend the city health code “to restrict sales of sugary soft drinks to no more than 16 ounces a cup in city restaurants, movie theaters, stadiums and arenas…” Further down in the same article it reminds us of the other food-related actions in New York City since 2003:  requiring restaurant chains to post calorie-counts on menus, banning trans-fats from restaurants and prepared foods and banning sugary beverages from vending machines in schools and city-owned buildings.  He also dropped whole milk from public school cafeterias.

This is what I mean by erosion of freedom.  Slowly and with the best of intentions the government reduces our choices, treating us like children.  Each step seems small and could easily go unnoticed as we continue our busy lives, but our complacency leads to more and more restrictions.  Meanwhile, nothing is really solved.

Monday, June 4, 2012

Are People Getting Dumber?

It might be easy to pass off all the examples I give of poor choices by saying that people are just not as intelligent as they used to be.  College entrance scores on the SAT have been trending downward since the 1970s.  The time it takes to earn a college degree, once assumed to be four years, now is over five.  Last year the authors of Academically Adrift reported that nearly half of college students “did not demonstrate any significant improvement in learning” during their first two years.  We frequently hear about kids graduating from high school unable to read or do simple arithmetic without a calculator.  The government finds it necessary to pass consumer protection laws to combat the "deceptive" practices of businesses and advertisers.  And how else would you explain more than 20,000 children hurt each year in shopping-cart incidents? – Shopping carts!

Instead there is good evidence that people are actually getting smarter from one generation to the next.  It’s called the Flynn Effect.  As summarized in “Explaining the Flynn Effect” a paper by Jariel Rendell: “In the United States between 1932 and 1978, mean IQ scores rose 13.8 points, or approximately 0.33 points each year (Flynn, 1984), and IQ scores continued to increase at least into the mid 1990s (Rowe & Rodgers, 2002).”

Despite ongoing research, the reasons for the increase in pure intelligence are unclear, and opinions vary considerably.  Some think that, having gotten more exposure to these types of tests in recent years, Americans are just getting better at test taking.  Some say that people today have an advantage from the technological advancements and have developed the ability to think more abstractly.  Others attribute the improvement to better nutrition.

So if everyone is getting smarter, why do so many agree that America is headed in the wrong direction, going to hell in a hand basket?  One theory is that poor time management in a rushed society leads to poor results despite increased intelligence.  My contention, which I think my previous posts bear out, is that it has nothing to do with intelligence, but rather with the misapplication of that intelligence due to incorrect assumptions promoted by our society.  This leads to problematic behavior in the areas of Critical Thinking, Perspective, Discipline, Economic Understanding, and Responsibility.  It’s a behavior problem when intelligent people make poor choices.

It’s incorrect to write poor choices off as the result of stupid people doing stupid things.  Look at the current news.  No one can say John Edwards is not intelligent.  He earned multiple degrees and didn’t just squeak by, graduating with honors.  He had a successful law practice before being elected to the Senate.  Now he is at risk of going to prison.  Haven’t we all known intelligent people who made bad decisions:  doctors who continued to smoke long after the dangers were well-known; people who spent money they didn’t have to impress others; teachers and priests seducing young people?  The problems we face as a nation are related to behavior, not intelligence.  The sooner we learn this, the quicker solutions will come.

Friday, June 1, 2012

Eating Healthy Costs Less!

When I walk through the grocery store and look at the choices and prices, I am puzzled about the widely held belief that it costs more to eat healthy.  This has been the accepted explanation as to why poor people tend to eat a less healthy diet.  True, it’s more expensive to buy the foods that promote themselves as extra healthy, and often aren’t worth the price difference: organics, vitamin- and mineral-enriched foods and bottled water (often drawn from someone else's public water supply); but good old fruits, vegetables and sugar-free cereals always seem reasonably priced.  Not only that, but they are healthier than convenience foods that are easier to prepare, but often contain added sodium for flavor.

Now I have found the explanation of why foods that are good for you are perceived to be more expensive.  This new information published by the USDA tells a different story.  It really is not more expensive.  Previous studies compared the relative cost to get the same number of calories, not on the basis of weight or serving size.  In a society where we are warned about the level of obesity and its rate of increase, does it make sense to try to duplicate the same number of calories?  Still, those who published the original findings are sticking to their claims.  Is a cup of coffee and a donut really cheaper for breakfast than a bowl of raisin bran with non-fat milk?  From a per-calorie standpoint, it may be, but then you have to spend more on an artificial fiber additive later in the day and pop a vitamin supplement to make up the difference.

According to the USDA there is no reason other than a hurried lifestyle and poor choices to explain why most people don’t eat healthier.  Add another reason, that people have developed a taste for the less healthy food.  In most cases though, changes can be made without a financial impact.  When I pick up lunch at Subway, a sandwich on whole wheat bread costs exactly the same as any of the others.

Bottom line, it sounds like the poor dietary choices throughout our society are much more a matter of behavior than a matter of economics – just as I would have guessed.