Treating Symptoms

Driving around in the car listening to the radio the other day, I heard back-to-back public service announcements. 

The first was the sad story of the kid sitting in the corner of the playground without enough energy to play because he was hungry. It told me that one out of six kids in America is hungry and there is no reason for it. Donations would presumably help get food to the kid and solve the problem.

Someone at the station may not have been paying attention because the second PSA had the same theme, except this time it said that one out of five kids in America is hungry. I didn’t pay close enough attention to tell if this was a solicitation from the same charitable organization. I was too busy thinking about the underlying messages.

These PSAs actually led me to wonder about two questions. First, where did those seemingly iffy statistics come from? With about 74 million children in America, the difference between one in five and one in six is about 2.5 million kids. Are they hungry or not? But that’s just nitpicking.

The more important question is why are we only treating the symptoms? Hungry kids on the playground are the result of kids not being fed at home. Why are around 30 million families not feeding their kids? This is not a question anyone seems interested in answering – not these organizations and not the government. We just hear lamentations about how unfair it is that the food is not distributed more justly.

It’s hard to believe, especially at a time of full employment and help-wanted signs up everywhere, that all those families have just fallen on hard times. There must be a sizable percentage where people just plain didn’t acknowledge that it was an important enough consideration to be able to feed their kids before having them. In some cases she may have thought about how cute babies are and how having one would make her happier. In other cases he may have thought how cute she was and how getting her into bed would make him happier. When the consequences of those behaviors come calling, he may or may not even stick around and she can always look to the government to help bail her out.

Meanwhile the government has programs to feed the family while those other programs from the PSAs try to find ways to move the food around so the kid gets a good breakfast or a sandwich for lunch. Such systems are treating the kids almost as hostages. They are hungry and need to eat, so no one addresses the underlying issue of parental responsibility! Over and over we treat the symptoms and never dig any deeper to solve the core problem.

What’s worse is that by treating the symptoms, nothing was being done to discourage the same behavior by this generation or to discourage the same in the next. Whenever society decides to shelter people from consequences of their actions, they have less motivation to change, and others that observe this dynamic are less inclined to view those same decisions as problematic.  Of course, society can't let the kids go hungry and to confront irresponsible parents is branded as lacking compassion. Later everyone sits around wringing hands and wondering why the War on Poverty has not reduced the poverty rate after 50+ years in operation; but few understand why we will probably be hearing the same statistics 50 years from now unless something changes.

This and That

Critical thinking leads to some interesting questions and observations.

A friend recently asked me why he has to pay for syringes for his wife’s diabetes injections while drug addicts on the street can get them for free, funded by taxpayers like him.

How can people plan to pay for their children’s education or their own retirement when they can’t even plan for an annual vacation?  “According to a survey by financial planning company LearnVest, 74 percent of Americans have taken on debt to go on vacation.  The study surveyed 1,000 adults. It showed that, on average, Americans take on about $1,100 in debt for each vacation.”

The article adds:  “Around 55 percent of Americans forget to plan ahead for vacations when setting their budget for the year, according to the survey. It also shows that one-third of Americans would rather save money for a vacation than for a house or retirement.”  (See my earlier comments on vacation planning and gasoline price.)

People are puzzling about the drastic increase in overweight pets.  An analysis from veterinary clinics across the country of about 2.5 million dogs and 500,000 cats treated last year found an increase of more than 150% in overweight dogs and cats over the last 10 years.  About 1 in 3 are either overweight or obese.  The only surprise here is that they are still doing better than their owners.  (Can I say owners or do I have to call them pet parents for fear of offending someone?)

What is the city council of Minneapolis thinking?  They want to “require stores to charge a fee for any type of bag — paper or plastic — they give out.”  Can’t they see that this will hurt the poor the most?  Don’t they know that more people know about recycling than know that cloth grocery bags should be washed out periodically to avoid cross-contamination?

Two studies, one from University of Washington and the other the University of California, Berkeley, about the effects of the first tier of minimum wage increases in Seattle came to different conclusions.  One says it hurts the workers; the other says the workers benefit.  But Forbes reports there are “potential problems with both studies.”  The jury is still out and many economists do agree that the potential success or failure will be influenced by factors unique to the Seattle economy.  This is why it’s so important to conduct most of these experiments on the state and local level, rather than trying to impose a one-size-fits-all solution from Washington, then wring our hands as flaws later appear.

Here is a link to an informative table.  It shows murder rates by state by year from 2001 to 2015 with highlights showing which states had the death penalty (also by year).  It appears that the death penalty has no effect at all on the murder rates, even looking at data from individual states that banned it during that time period.  But some persist in defending capital punishment despite the fact that besides apparently not deterring crime, those cases are many times more costly than comparable cases.

Also interesting is that, despite what we might hear on the news or from politicians, the overall murder rate in America is half of what it was in 1980.

It’s a strange world we live in.  We all must be critical thinkers and question rather than passively accept any idea just because it sounds good.

Luck or Hard Work?

As I was doing research for another entry, I ran across an interesting Quote of the Day on the Forbes website.  “People that work hard and legitimately do everything they can, tend to be luckier” – Julian Edelman.  For those who are not sports fans or happened to miss it, Julian Edelman is the receiver on the New England Patriots who made the spectacular, shoestring catch near the end of regulation time that allowed the Patriots to win the Super Bowl.  It looked like luck was involved as he sprawled between two defenders to keep a deflected ball from barely touching the ground, but a great deal of skill and excellent reflexes were evident in the many replays.  (Google Super Bowl highlights.)

It struck me as a very good thought, along the lines of people making their own luck, the saying popular among motivational speakers.  But do most people really believe this?  And if so, does our behavior reflect it?

My first stop took me to this headline from 2006, again from Forbes:  “Research now shows that the lack of natural talent is irrelevant to great success. The secret? Painful and demanding practice and hard work.”  Worldwide research, including many studies over the prior decade usually in sports, music and chess where performance is easier to observe and assess, but also in other areas like business, have supported a few surprising conclusions.  The first is that “nobody is great without work…  There's no evidence of high-level performance without experience or practice.”  Second, there is a difference between deliberate practice and mere repetition.  “Consistency is crucial.”

Though there are some skeptics, experts pretty much agree that success depends on hard work.  But do ordinary Americans believe hard work is superior to luck in most cases?  I searched for likely poll questions for a clue.

This source shows results from a Pew Research worldwide questionnaire.  In less developed countries citizens believed luck or political connections were more of a factor, but the US led the pack with the opposite stance.  When asked, “Which forces affect your success?” 79% listed hard work and only 19% mentioned being lucky.  (More than two answers were possible with the sum being more than 100%, so some may have answered both.  It wasn’t a pure either/or question.)

A Reason-Rupe Poll from the fall of 2011 asks a similar question but sorts the responses by political affiliation.  They asked which was more important, either hard work or luck and help from others.  Overall, 81% voted for hard work over the luck and help, which got 15%.  The range was surprisingly close. Tea Partiers were at 89%, Democrats at 74%, with Republicans and Independents in the middle.  In a separate analysis by race, findings were similar with the lowest agreement by African-Americans, who still favored hard work by about three out of four, a sizable majority.

More recently, a 2013 Rasmussen Reports of American attitudes found “86% Believe Individuals Make Their Own Success” by hard work and good decisions.

It appears that the sentiment expressed after the Super Bowl is widespread in America and not divided across political, racial or any other lines.  Most Americans think you get ahead through hard work.  It is difficult then to explain how politicians can get any support for notions like the one-percent haven’t worked hard for their wealth and don’t deserve it.  Conversely, why are we expected to assume that everyone who is not making it in America is a victim?  The behavior factor in most cases is totally ignored.  The news media always portray the homeless and others in difficult situations as being “down on their luck,” downplaying at best any poor decisions that may have led to their predicament.  Hence young people today who could benefit by learning from the mistakes of others see only victims of circumstance rather than behavior to avoid.  Great learning is lost by our need to be compassionate in all cases and a failure to be intellectually consistent.

The World's Richest

Last time I gave a very short summary of the principles of economic understanding.  Often personal and governmental decisions arising from good intentions lead to disruption and unintended consequences, whereas economic understanding would help us to anticipate and avoid these very natural outcomes.

One important omission from last week was the idea that the “economic pie” is getting bigger.  As the economy grows everyone is better off.  It is not the case that if I get more you must get less.  It's not a zero-sum game where having winners means some must be losers.  This is not obvious to young people because progress takes time.  

Eighty years ago only about half the households in the US had a radio and flush toilet.  Only about 60% had a car and 70% had electric lights.  About 60 years ago televisions came on the scene, and in another ten years color TV.  It wasn’t until about 40 years ago that home air conditioning began to spread.  Microwave ovens and home video recorders were brand new.  Regular use of personal computers in home and office came about in the last 25 years.  Cell phones and smart phones followed.  Today we take all this for granted, but we can afford to have the lifestyle we have due to a growing economy.

The poor today have appliances that a few generations ago were limited to the rich or that no one had because they were not invented yet.  The latest information I found were 2011 Census estimates of the percentage of poor households in the US that owned the following:  clothes washer and dryer (65%), refrigerator (98%), microwave (93%) air conditioner (83%), television (96%), video recorder/DVD (83%), computer (58%), cell phone (81%).  Those numbers are higher today, and it all came about through innovation, increased productivity and a growing economy, not because someone else had to settle for less.

 But Oxfam International sees it differently.  Using the tag line: “The power of people against poverty,” their focus seems not to be on eradicating poverty directly, but on the size of the gap between the world’s haves and have-nots.  In the news this week, a press release against income inequality lists the eight richest men in the world whose combined wealth equals that of the poorest 50% of the world.  Oxfam has been releasing this type of information each year before the World Economic Forum in Davos, a private conference for the world’s richest people, apparently trying to embarrass and shame them into supporting the cause.  (Note that just 1% of the people in the bottom 50% of the world are from North America.  And using their measurement criteria, new college graduates who owe more money than they have could be counted among the world’s poor.)

If we took everything away from these eight and distributed to the 7.4 billion people in the world, each of us would get $57.70.   The following year we would get considerably less from the next eight or ten or twenty.  It doesn’t work that way.

Some of the people listed are Bill Gates, who sold software to billions; Jeff Bezos, who lets us shop for almost anything on Amazon; Warren Buffet and Mark Zuckerberg.  None of these people forced us to give them our money.  We could have used inferior software, not shopped from home and never joined Facebook.  But many people chose to support them.  That’s how they got to be the richest people in the world, by inventing something we wanted, that added value to our lives and that we were willing to buy.  Gates and Buffet have set up charitable organizations.  Amazon has just announced plans to add 100,000 jobs in the US over the next 18 months. 

Now that we have freely given them our money and the growth of their companies has provided a huge number of jobs, Oxfam thinks they should feel guilty and the government should punish them with higher taxes.  Doesn’t confiscating someone’s money through threat of force constitute punishment?  (Should we limit the number of twitter followers anyone can have so we all have an equal chance to get our message out?  Wouldn’t that be fairer, too?)

Economic growth doesn’t work that way, and the key to ending poverty is through economic growth, not artificially shuffling around a fixed amount of money.

Where Do Those Numbers Come From?

You hear it all the time from politicians and news anchors:  97% of scientists agree on climate change; women are paid 79% of what a man is paid for the same job; and the rich are getting richer while the poor get poorer.  But where do these numbers come from?

I found more information about the first number in a Forbes article written by Alex Epstein.  Now Epstein is the author of A Moral Case for Fossil Fuels, so he definitely is not unbiased.  But he says that a 2013 paper by John Cook and others “found that over 97 percent [of papers he surveyed] endorsed the view that the Earth is warming up and human emissions of greenhouse gases are the main cause.”

To begin with the 97% refers to papers reviewed, not to scientists or even to all papers on the subject.  To get to 97% Cook developed three categories.  The first, “explicit endorsement with quantification,” refers to papers stating that at least half the problem is attributed to human activity.  This appears to be a small number of the papers.  The second category, “explicit endorsement without quantification,” includes papers that did not specify how much of the problem was due to human activity.  In the final category, “implicit endorsement,” are papers that only imply but do not state outright that some of the global warning is man-made.  Add all these categories up to get 97% of papers reviewed.  The only papers excluded were those that explicitly denied any man-made factor.

Epstein goes on to quote some of the authors of the reviewed papers who say Cook’s interpretation is not representative of their views.  So the source of this number gives no evidence that 97% of scientists agree and makes no mention that warming will be catastrophic, a thought the politicians and media automatically assume.  Finally, a reading of the paper itself shows that its stated purpose was to influence public opinion.

The pay issue is an easy one if you think it through.  The 79% number is probably accurate, but unfortunately meaningless.  It compares the pay of all women working full time to that of all men working full time.  It does not compare women in the same job to men in the same job.  In comparing the whole population, it doesn’t distinguish between the type of job, time on the job, or other factors (other than discrimination) that may affect pay level.  A more statistically accurate number is around 95.5%, which is still not acceptable but much closer to the truth.  And in some careers women earn more than men.  But even the department of labor publishes this bogus percentage as an argument for equal pay.

This Time article, written by a woman, gives good reasons for calling the 79% statistic a myth, but does not offer a more correct figure.

Finally we get to the earnings and wealth of the Top 1%, the rich who keep getting richer.  Well it’s true, the rich do continue to get richer, but the actual people in that category tends to change over time.  But I did wondered exactly how rich are they.  Do they have enough money to support all the programs that everyone wants to bill them for through higher taxes?

This should be an easy calculation – find out what percent of wealth they have and multiply by the total wealth in the US, a number probably available from census figures.  As it turns out, it is not so easy.  I looked up the percent of wealth held by the 1% in several different sources and found that it was almost 40% in April 2000, 35.4% as of 2010, 35% in 2007, but also 42% in 2007 (from another source), 40% in October 2011, and also 40% in 1995.  Where do these numbers come from?  They can't all be right.  Who do you trust?

It is also interesting that to be in the top 1% by income, you must earn more than about $470,000 per year.  So that evil top 1% by income, who are not paying their fair share, includes everyone playing in the NBA and all but the minimum salaried rookies in the NFL and top golfers and your favorite movie and TV stars, not just hedge fund managers and bankers on Wall Street.

With a little critical thinking, it turns out that numbers everyone throws around so confidently have problems.  And, by the way, the poor are not getting poorer.  According to a Congressional Budget Office report, the growth in average real after-tax household income for the bottom quintile of wage earners from 1979 to 2007 was about 18 percent, not a lot, but not poorer either.  ("Real" means inflation-adjusted.)