Monday, January 28, 2013

Teachers' Pay

Here is the problem.  Teachers have one of the most important jobs in society, teaching our children.  They must have a college degree, but their pay and benefits are comparable to those who work in unionized manufacturing jobs.  Professional football players and other entertainers provide a service that is totally unnecessary for our survival, yet they are paid ten to twenty times as much as teachers with top end athletes getting tens of millions of dollars.  It challenges our sense of fairness.  How could we let that happen?

Maybe the answer lies in behavior, specifically in the dimension of perspective.

If we decide to take our family to a college or professional football game, it could easily cost us around $500.  That includes 4 tickets, parking, food and drinks and a souvenir or two.  Of course this assumes that we can even get tickets for a single game, because in some places the demand is so high.  This is for a single one game and doesn’t even address the idea of season tickets.  On the other hand, if the city decided to raise our taxes by $500 per year to pay the teachers better, most people would join the mob storming city hall in protest.  (This link shows a non-scientific poll of Massachusetts voters when the governor suggested raising income taxes to support schools and highways.) 

But our willingness to support our favorite team doesn’t stop there.  We will set aside 3 or more hours each weekend to cheer them on.  We buy their clothing, intently watch, and critique the players, coaches and officials.  Players who miss blocks or tackles, players who drop passes and coaches who don’t make it to a bowl game or a playoff game are fired with our approval.  The stars have us hanging on their every word and buying the products they endorse.  On the other hand, ask us to commit an hour per month or less to attend a PTA meeting or a teacher’s conference, and we react negatively or indifferently.  It seems like an imposition.

Finally, teachers do not do one of the most important jobs in society alone.  They are part of a team that provides that service.  The team consists of teachers and parents.  Asking teachers to do it alone is like asking the offense to win games without a defense.  Do parents believe they are part of the educational team or are they too quick to side with their child against the teacher when problems arise?  Should parents be held accountable for daily assignments as well as for student preparation, both in terms of learning and of their attitude toward learning?  If there were more parental involvement, if children arrived at school expecting to learn rather than expecting to be entertained, would there be such a need for smaller class sizes?

Perhaps teachers aren’t paid what they should be based on their contribution to society.  Perhaps athletes and other entertainers are paid too much.  We are the ones making those decisions by what we choose to support and what we choose to ignore.  Again it’s about our behavior:  our values, our choices, our perspective.

Friday, January 25, 2013

What is Favorable Behavior?

As I catalogue behavior, giving examples of the kind we’d like to see more of vs the kind we can do without, how do I distinguish between the two?

It’s easy to see that behavior is favorable when it results in good for both the individual and society.  Usually this is the case, but there are exceptions.

If you eat that extra piece of chocolate cake or fail to exercise, it may be bad for you and society, leading to personal medical problems associated with obesity and increasing overall healthcare costs to society (estimated at $145 billion in 2011).  If you buy a house you can afford, it’s good for you and drives the economy.  If you can't afford it, you may face foreclosure; and a large number of foreclosures can be disastrous for the economy.  Both personal and societal consequences are the same.

If you waste your money on goods or services responding to hype or non-scientific thinking, you harm yourself financially.  I have written before about organic food not being worth the price difference; about dietary supplements being unregulated, not tested to FDA standards and possibly dangerous; about other false remedies and magic accessories being more common today than in the days of the traveling snake oil salesmen.  Another example is bottled water , paying one thousand times the price of tap water for a less-regulated, less-inspected product (unless it comes from the company’s own tap, which is sometimes the case).  Although this wasted money may support jobs, the personal losses may eventually become a burden to society when it comes time to pay for college, healthcare and retirement.

Sometimes individuals benefit from a particular behavior, but society loses.  When they refuse to accept their share of responsibility for a mishap and sue for extraordinary amounts, they do well but increase the cost to everyone through higher insurance premiums and higher prices (due to warning labels, special packaging, restrictions, and added risk).  Sympathetic juries contribute to this problem.  

Similarly, when someone collects questionable benefits from the government or his company, the burden falls on us.  Collecting unemployment with no intention of looking for a job or worker’s compensation for a faked condition may seem clever, but it costs society.  Shoplifting profits the thief but harms honest shoppers.  Spending shareholder money on fancy office furnishings or extravagant trips may seem appropriate to a CEO, but from a societal standpoint, it’s no better than shoplifting or embezzling.  Politicians who spend our money to buy our votes are equally despicable.

Many of these behaviors, however, are encouraged or at least condoned by our reaction to them.  We tolerate the cheaters, reelect generous politicians, shrug at malingering, approve of outrageous jury awards and self-censor so as not to offend anyone.  We must recognize these behaviors as unacceptable and react accordingly.  We will not turn the corner on “America headed in the wrong direction” unless we start correcting our own failings and confronting the destructive behaviors of others.  America's failure will not come from big, bad government policies or greedy businesses, but from the accumulation of the small errors and indifference of 310 million citizens.

Some may argue that my examples and the tendencies they exhibit have been around for ages.  It’s only human nature to take the easy way out.  Why diet and exercise, for example, if you can get a pill or some surgery to solve the problem with a lot less effort?  It’s part of the culture to look out for ourselves instead of the overall societal good.  True, some of these tendencies run deep, but it’s easier to change a behavior than to change a culture or human nature.  In our interdependent society, where we can communicate anywhere in the world from a phone in our pocket, ramifications are more immediate, intense and widespread.  If our expectations are out of control, our judgment flawed, our discipline and sense of personal responsibility weak, the consequences will come back to haunt us more abruptly and severely than ever before.  Behavior matters.  Our hopes for America depend on increasing favorable and overtly rejecting detrimental behavior.

Monday, January 21, 2013

Robbing Peter to Pay Paul

When I call for economic understanding by saying that there is no magic money tree, here is what I mean.  When corporations incur added costs, whether it be shoplifting, a utility rate increase, wage increases or higher taxes, they find a way to pass the cost along to their customers, usually as higher prices.  When governments decide to spend more money, they either raise taxes or borrow, leaving the taxpayers to absorb the cost directly or pay the interest now and leave the principle repayment to future generations.  No magic money tree means that the funds must come from somewhere, not out of thin air, and that somewhere is usually from our wallets, directly or indirectly.  The consumer/taxpayer is the bottom of the economic food chain.

As 2013 begins, the Affordable Care Act (ObamaCare) requires manufacturers of medical devices to pay an excise tax, 2.3% of sales.  Besides the possibility of reducing costs by outsourcing to other countries and reducing development budgets, the industry also hints that the added costs will result in a price increase.  As this article points out:  “Recent surveys show that medical technology executives are examining a host of other options that will have negative consequences, including passing along the added costs through price increases.” (Emphasis added)  Those of us who don’t believe in a magic money tree are not at all surprised.

But look at how circular this situation becomes.  The government adds a tax to help offset the cost of healthcare.  The companies pay the tax by raising prices.  Healthcare providers, doctors and hospitals, raise their prices to account for their now higher costs.  Insurance companies raise their premiums or co-pays to account for their now higher costs.  The government uses the tax money to subsidize health insurance that is now more expensive due to the tax itself!  If anything, the cost of the whole system increases due to the added administration associated with paying and collecting this new tax.

In an economy such as ours, this concept of punishing greedy companies with taxes or penalties doesn’t seem to work very well, and why would we even want to punish someone who provides us with a product or service that we want or need?  In general, magic-money-tree thinking leads to a host of unintended consequences.  

As citizens and voters we can solve this, but not until we stop thinking this way ourselves.  This type of logic drives decisions by both parties at all levels.  They tell us that most of a project will be paid for by a government grant, as if that's not our money too.   They try to make us believe that corporations pay taxes by just reducing their profits or paying their CEO less.  They spend as if the bills will never have to be paid, as if, yes there is a magic money tree or secret treasure to make it all right.  

Friday, January 18, 2013

Diet Soda and Depression

I have mentioned before the tendency of journalists and the media to try to get and hold our attention with emotionally charged pictures or stories.  We regularly see news about the results of studies that seem surprising, scary, or shocking, but are usually somewhat meaningless.  They challenge our ability to remain calm and think rationally about the subject.  Here is another example.

“A new study finds that people who drink diet sodas or fruit drinks are more likely to be diagnosed with depression.”  The article continues very responsibly to explain the size and nature of the study and to emphasize that a link does not necessarily mean that drinking diet sodas causes depression, but the headline - Drinking diet soda linked to depression – has us hooked.  (With sugary soft drinks being blamed for obesity - blame the soda, not the person drinking it - our choices are narrowing.)

Thinking critically about it, we know that correlation is not the same as causation.  "Linked to" isn't the same as "caused by."  We may wonder what we are supposed to do with this information – stop drinking diet soda so to avoid depression or start drinking lots of coffee, which the article tells us may have the opposite effect?  I don’t think it works that way.

Later in the article they say, “more research is needed.”  So what was the point?

Why should we even care about these kinds of studies that give preliminary findings, or publicize findings before they are presented for formal review, or rely heavily on self-reporting as opposed to objective observation?  As I pointed out before, we don’t have the time or energy to be worried about everything, so there is nothing really useful about such news.  But it does make for catchy headlines.

Monday, January 14, 2013

Flu Season

Flu season gives the media another excuse to trot out experts to give us advice about how to live.  If we exhibited a little more critical thinking behavior, they might decide that this is not necessary.

Much of critical thinking is pretty simple.  It doesn’t require an understanding of experimental design, statistics or other mathematical concepts.  Mostly it comprises what used to be called common sense or what I call “the rules of the game.”

These rules of the game we have heard often.  They make sense and lead to a happier life.  Despite hearing them over and over, apparently many people ignore them.

Flu season is just one example.  Every year people are advised to get flu shots.  This year, when the outbreak is worse than normal, the call is longer and louder, but it’s not new.  We are also advised to wash our hands more often and to keep them away from our faces.  This article repeats that advice with some very interesting data.  Children who wash their hands regularly miss less school.  “When 40,000 Navy recruits were instructed to wash their hands five times a day, their rate of respiratory infections fell by 45 percent.”  We know we should, but do we?  “Ninety-one percent of Americans say they wash their hands after using a public toilet, but an observational study conducted in the six US airports found that only 26 percent of men and 17 percent of women actually did.”

Once we get through flu season, we will hear from financial experts telling us to "pay yourself first," that is, put aside savings before you start spending.  They will advise us to have an emergency fund and to make a list before going to the store to avoid the temptation of impulse items or unneeded purchases.  They will tell us how much we can save by making our coffee at home or brown bagging instead of buying lunch.  The list is always the same.  The rules of the game don’t change.

In the summer we will be told to use sunscreen.  Before school starts we will hear about the importance of vaccinations and be reminded that rumors about a link between vaccinations and autism are completely untrue.  Don’t forget to see the dentist twice a year and, between visits, to brush and floss.  Eat well and exercise.

The rules of the game don’t change.  They are basic.  We should know them by heart.  If we can’t follow through on these simple, common sense behaviors, how do we expect to grasp and solve more difficult issues like gun violence, education, healthcare, poverty, legalizing drugs, or the national debt?