Dick Martin Blogs

U.S. welfare state

2012-02-24T09:25:28-05:00

The biggest single expenditure in the federal budget is the rats nest of credits, deductions, and exclusions built into the tax code.

Ironically, most of those expenditures benefit people with higher incomes, not the poor.

David Brooks' column in today's New York Times adds some context and perspective to the issue of tax expenditures, which I discussed previously here.

The context: when tax expenditures are included, the U.S. is a bigger welfare state than Italy and other European countries (not a good thing).

Perspective: both Obama and Romney have proposed tackling the problem (a good thing). But Obama's approach is a bit timid and Romney's is a bit vague (not a good thing).

On the other hand, the issue has moved out of think tanks and the blogosphere into places like Brooks' column (a very good thing).

Education gap

2012-02-22T12:31:39-05:00

A good friend cautions that practically anything can be correlated to something else in a way that makes it appear to be its cause.

For example, one British study found that shaving less than once a day increases a man's chance of stroke by 70%. Another study showed that working the night shift increases women's risk of breast cancer by 50%.

So I submit this study with some trepidation. Especially since it touches on two politically sensitive topics -- race and income inequality.

Stanford University researchers have found that family income has replaced race as the determinant of educational success.

Sean F. Reardon, a Stanford University sociologist authored a study showing how the gap in standardized test scores between rich and low-income students grew by about 40 percent since the 1960s. It is now double the testing gap between blacks and whites.

“We have moved from a society in the 1950s and 1960s, in which race was more consequential than family income, to one today in which family income appears more determinative of educational success than race,” he wrote.

Some believe income inequality is more sympton that cause -- the poorly educated aren't equipped to get the best-paying jobs.

Others say the poor can't get a good education because, well, they're poor. They live in neighborhoods with inadequate schools and have to cope with social problems from joblessness to broken family structures.

The causes of the educational gap are undoubtedly complex and stubborn.

But whether cause or correlation, there's little question that the rich get better educated, the better educated get rich, and so on.

And wherever you get on this merry-go-round, what seems certain is that it has to be tackled from both ends. The rich need to see this as their problem too.

Information diet

2012-02-09T14:01:21-05:00

Why is public discourse so divisive these days?

I'm increasingly convinced it's due to the information we consume.

As Clay Johnson put it in his new book, The Information Diet, "Just as junk food can lead to obesity, junk information can lead to new forms of ignorance."

Of course, one person's junk food can be another's gourmet feast. And everyone is entitled to a few guilty pleasure, whether its Lay's potato chips or the latest issue of People magazine.

And I'm less concerned about people who major in Snooki and the Kardashians than about those whose principal source of news is cable TV or the Internet.

Sadly, according to the Pew Research Center, those are the two fastest growing sources of news about the current political campaigns.

Cable's position as people's primary news source may be the product of all those GOP debates. And the Internet's growth plateau probably reflects young people's general lack of interest in the current GOP primaries.

But hidden within these results are some troubling statistics. "Republicans are far more likely to count on Fox News (36%) for campaign information than are Democrats (11%)," Pew says. "Democrats are much more likely than Republicans to rely on CNN (26% vs. 12%) and MSNBC (17% vs. 5%)."

This continues a dangerous information diet of only consuming what we like. People increasingly live in echo chambers where all they hear is their pre-existing opinion reflected back to them.

My suggestion? If you're a liberal Democrat, tune into Bill O'Reilly occasionally. If you're a conservative Republican, watch Rachel Madow now and then.

If you're a regular reader of the New York Times, read the editorial page of the Wall Street Journal. And vice versa. To get really worked up, read the "comments" online.

You'll disagree with 98 percent or more of what they say.

But if you take the time to try to understand why they believe what they do, you might find a value or a principle that you can share.

That is the beginning of becoming OtherWise. You'll be free of the echo chamber.

Politicized religion

2012-02-08T13:13:48-05:00

I'm writing about politics more than usual because it's turning into the best real-life example of how difficult it is to understand people unlike ourselves.

Politically, I consider myself a liberal Democrat. And I have to admit that it's often a struggle to understand conservative Republicans.

Some political scientists suggest this is because politics in the U.S. have become a "civil religion" of sorts. I see the logic of their perspective.

But I have absolutely no problem understanding my Presbyterian, Jewish, and Muslim friends, even though I consider myself a practicing Catholic. Believe it or not, we seldom discuss issues of dogma. I can't remember the last time I argued with someone over the virgin birth.

Historically, religious faith in America has been socially benign. Practically no one believes adhering to his or her faith -- or even believing in God -- is necessary to be a good American.

Political belief, on the other hand, has always had a divisive edge. Plenty of political partisans are quick to question the patriotism of the other party.

When religion does become a flash point, it's usually because some politician has hijacked it. Most Pro-Life and Pro-Choice campaigns are aimed less at changing people's beliefs and behavior than at winning elections.

Religion has played a unique role in American society from its earliest days. Many of America’s first settlers came here to escape religious persecution, and most of its Founding Fathers were suspicious of state religions. The result was a clear separation of church and state.

That didn’t mean Americans gave up on religion. On the contrary, Americans are the most religious people in the developed world. Alexis de Tocqueville speculated that religion played an important role in balancing the American ideal of individual freedom with concern for the good of the community. Religious and political beliefs moderated each other.

No church institution was pulling political strings, yet the belief that we should treat others as we want them to treat us tempered the potential excesses of a free market, survival of the fittest, free-for-all.

Joining a church has historically been the most common form of association in the United States, even surpassing sports and other leisure activities.

But if most Americans are highly religious, we are also religiously tolerant, believing there are basic truths in all religions. Only 10 percent to 12 percent of us believe that salvation is available only to our coreligionists. As a result, Americans are a rarity in human society—religiously devout, diverse, and tolerant.

Unfortunately, back in the 1980s, politicians discovered the potential power of leveraging personal religious beliefs. The GOP put an anti-abortion plank in its campaign platform. The Democratic party, either out of contrariness or out of allegiance to its feminist wing, countered with a pro-choice platform.

The games were on. They have since been broadened to include -- among other topics -- gay marriage and, most recently, contraception.

I think the politization of religion may be one of the most divisive social developments of the last 30 years.

Ironically, my own church seems to be feeding this dangerous development by attacking the requirement that all insurance plans should include contraceptive services.

No one is saying Catholics have to use contraceptives (though 98 percent of Catholic women of child-bearing age do).

The health care law simply says that insurance plans should cover contraceptives so non-Catholics working for a Catholic institution that is not a church can get them like everyone else.

The Church's stand isn't a matter of religious liberty; it's politics. And a sad contribution to the politization of religion.

Political vampires

2012-02-07T12:05:37-05:00

Conspiracy theories are like vampires -- they never die.

Take, for example, the theory that Obama was not born in the U.S.

That one percolated along for years, fueled by the likes of Donald Trump, and only seemed to be put to rest when the White House released a copy of the president's long-form birth certificate.

Surveys taken immediately before and after the birth certificate's release showed an increase in people believing that Obama was born in the U.S.

"OBAMA WAS BORN IN THE U.S."

Before Release After Release

True 55% 67%

False 15% 13%

Not Sure 30% 20%

The long form birth certificate, alas, was not exactly a wooden stake in the heart of that particular conspiracy theory. Here are the same results as of last month.

"OBAMA WAS BORN IN THE U.S."

Before Release After Release January 2012

True 55% 67% 59%

False 15% 13% 17%

Not Sure 30% 20% 24%

Of course, Republicans were much more likely to believe Obama wasn't born in the U.S., but even they backed off after the long form certificate was released (from 30% believing he was born in the U.S. to 47%).

But in both cases, the increase in people believing Obama was born in America did not come from those who were convinced he wasn't, but from those who were not sure. Before release of the birth certificate, 25% of Republicans didn't believe he was born here; after the certificate, 23% still did.

And in January 2012, the proportion of the general public believing Obama was born here was just a little higher than before his birth certificate was released. The proportion of Republicans who believe Obama was born somewhere else had increased to 37% -- even higher than before the long-form certificate was released and twice as high as the public as a whole.

If that isn't troubling enough for you, read the comments on the research from which these statistics are taken. Obama, it seems, has the social security number of a man born in Connecticut.

Rumors -- they're the vampires of American politics, blood-sucking and immortal.

Budget cutting

2012-02-06T05:00:00-05:00

I once participated in an executive education program in which we were all given a spread sheet of the federal budget and told to balance it solely by eliminating spending.

That was about 25 years ago when the federal government spent a lot less than it does now. Nevertheless, few of us were happy with the process or with the results.

The choices came down to cutting entitlements like Medicare and Social Security or cutting so-called discretionary spending like the national park service, education, or defense.

Of course, raising taxes should have been another option, but for the sake of this exercise, that was taken off the table.

There was a fourth option, though, that no one mentioned,and that I didn't appreciate until recently. In fact, in aggregate, it represents a higher level of spending than any other category, including social security, medicare, or defense.

By itself, it represents almost 6 percent of the country's gross domestic product. If eliminated, it would wipe out 80 percent of the trillion dollar deficits we've been running up lately. Most surprisingly, it's been sitting in the Congressional Budget Office's annual budget outlooks since 1974.

I'm talking about the so-called "tax expenditures" -- all the exclusions, deductions, and credits knitted into the income tax code, often to accomplish some social purpose, like encouraging home ownership, but just as often to satisfy some well-connected special interest.

By law, a tax expenditure is defined as "“those revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.”

Most of these tax expenditures go to individuals, not corporations. And the very biggest should be familiar to everyone. I'll mention just a few highlighted by the Congressional Budget Office in its annual outlook (pages 93 - 96).

Excluding the cost of employer-provided health insurance from incomes is the single largest tax expenditure, equal to 1 percent of GDP by itself. If that cost was also subject to employment taxes, it would represent 1.8 percent of GDP in total.
The deduction for owner-occupied home mortgage payments equals 0.8 percent of GDP.
The preferential rate given dividends and capital gains equals 0.5 percent of GDP. And allowing inherited assets (e.g., stock) to avoid the capital gains tax equals another 0.3 percent of GDP.

There's more. In fact, someone counted more than 170 tax expenditures in the code and that number has increased by 25 percent over the last 10 years.

If all the tax expenditures were eliminated, there would be no deficit. Don't take my word for it. Here's GOP congressman Paul Ryan, quoted in National Review:

"Tax expenditures have a huge impact on the federal budget, resulting in over $1 trillion in forgone revenue each year. . . . To put that number in perspective, $1 trillion is roughly the total amount the government collects each year in federal income taxes."

And here is the actual budget impact for the items I mentioned above over the next five years:

Tax exclusion for employer contributions to health insurance: $659.4 billion
Deduction for mortgage interest on owner-occupied houses: $484.1 billion
Lower tax rates for dividends and long-term capital gains: $402.9 billion
Exclusion of capital gains at death: $194 billion

That's $1,740,400,000,000. Nearly two trillion dollars. By coincidence, isn't that even more than the congressional "super-committee" was supposed to cut as part of the deficit reduction bill passed last summer? In half the time?

Of course, no one wants to lose tax deductions. But 70% of the benefit from the tax expenditures mentioned above benefit only the richest households, the 15 percent making more than $100,000.

A deduction for home mortgage interest is worth about twice as much to someone in the 28 percent tax bracket as to someone in the 15 percent tax bracket. Simply converting the deduction to a modest, maximum tax credit could lower the government's tax expenditure significantly, while focusing the benefit on lower income families.

In fact, economist Donald Marron points out that "If policymakers want to use the tax code to encourage certain types of behavior, credits can often achieve the same results as exclusions and deductions, but more efficiently and at lower cost."

Furthermore, although these tax expenditures have commendable goals -- such as encouraging home ownership and capital investment -- they can also have perverse consequences.

For example, excluding the cost of employer provided health insurance from taxation favors people who work for large companies and may prompt people to consume more health services than they really need. The home mortgage deduction may prompt high-income people to buy more expensive houses -- or borrow more money -- than they would otherwise since the government is subsidizing their loan.

Attacking tax expenditures won't solve all our budget problems. But I'm convinced they will go a long way towards finding the beginnings of a solution. I'm joing good company on that score -- both the Bowles-Simpson deficit commission and the Dominici-Rivlin task force demonstrated that eliminating or reshaping tax expenditures can allow for significant cuts in tax rates, while significantly reducing budget deficits.

That's a twofer we can't afford to ignore.

Oval office polarization

2012-02-05T10:15:18-05:00

The Oval Office may not have any corners, but it does seem to tilt to the right or the left, depending on the incumbent.

Keith Poole, who I have mentioned here before, has developed a specialty of sorts measuring the degree of political polarization in the U.S.

His general thesis is that our politicians are a lot more polarized than we are.

But he also has some interesting observations about the contrasting polarization of the two major parties. In a previous post, I provided charts showing that Republicans have moved further away from the center than Democrats.

Now Poole has developed a chart showing that President Obama is the most moderate Democratic president since the end of World War II, while President George W. Bush was the most conservative president in the post-war era.

Poole made these observations based on Congressional roll call votes on which the president clearly indicates his support or opposition. For a fuller explanation, see Poole's posting here.

A word from our sponsor

2012-02-04T15:47:36-05:00

This blog is principally a real-time report on the research and thinking for my next book, Otherwise, to be published by the American Management Association in June and available for pre-order here. For more on the theme of the book, please see my previous post here or read the posts that follow. Your comments and contributions are welcome. To subscribe,enter your email address in the column to the left or select your favorite RSS reader.

Coming apart at the seams

2012-02-04T12:47:12-05:00

One of the best political science books I've read recently is Coming Apart: The State of White America (1960 - 2010) by Charles Murray.

Don't let the subtitle mislead you. Murray focused on white people to avoid conflating race with class.

(He may also have been trying to avoid the controversy surrounding his most famous book, The Bell Curve, which seemed to suggest blacks have lower IQs than whites.)

Murray believes America is coming apart, but along class not racial seams.

It doesn't do his thesis justice, but, in brief, he believes America's new class system is the product of homogeny-- our tendency to associate with people like ourselves.

Homogeny wasn't much of problem back in the 1960s, he says, because most people had roughly the same level of education, Only 8 percent of the population had a college degree. And people with widely different incomes lived in relative proximity to each other. As a result, we all shared the same basic cultural values.

But over the last 50 years, two mutually reinforcing trends changed that equilibrium.

Over those decades, more of us went to college. And America changed from a manufacturing economy to an information economy. Manipulating data became more important than bending iron, putting a premium on brain power.

College degrees became tickets to the best paying jobs in the new knowledge industries or professions.

Today, about 28 percent of Americans have college degrees. Those highly educated people tend to marry each other and to make their homes in neighborhoods filled with people just like themselves.

An elite class of college-educated, affluent knowledge workers was born. And over the last 50 years, they have been busily replicating themselves. Murray calls them a new "upper class." And they are concentrated in a relatively small number of communities.

In fact, Murray identified 882 zip codes where most of the residents are in the 95th percentile of education and incomes. That is, only five percent of other Americans have more education and higher incomes.

What Murray finds troubling -- and does a pretty fair job of documenting -- is how isolated these people are from the lives of ordinary Americans, not only physically, but also culturally. They have no idea how the rest of the country lives.

And what's particularly dangerous is that they are also the people who run most of our country's cultural, political, educational, and media institutions.

As Murray says (I'm paraphrasing), if a truck driver can't empathize with a Yale professor, it's not a big deal. But when the Yale professor, or the producer of the nightly news, or an advisor to the president, can't empathize with truck drivers, we're in for trouble.

To be fair, if not equal

2012-02-02T13:41:29-05:00

A good friend has written an interesting and perceptive post on inequality and fairness.

He's not particularly concerned about the former, but he thinks the latter is a real problem.

And he makes a series of suggestions that he thinks could help Mitt Romney own the issue. Given Mitt's recent comment that he's "not concerned about the very poor," that may be an unattainable goal. But my friend's ideas are worth considering.

He sugests making the tax code simpler, lowering rates, and eliminating preferences to ensure that all income is treated the same way, whether it's salary or capital gain. To my mind, that would be a good start, but I have doubts about its feasibility.

Our tax system is fruit of the same tree as many of our other problems -- namely, the increasing polarization of our political process.

As I mentioned earlier, Americans are less politically polarized than they think. But the people they elect are even more polarized than we realize.

Keith Poole has documented this change in a number of studies. This chart, for example, shows that the two parties haven't been as ideologocally far apart since the 1930s.

He also documents how moderates in Congress have essentially disappeared. The chart below plots the percentage of “overlapping” members in each chamber over time. Overlapping members are those Republicans who are tmore liberal than the most conservative Democrat; and conversely, Democrats who are more conservative than the most liberal Republican.

At their peak, overlapping members comprised majorities in each chamber. In the last few Congresses, the overlap has vanished; that is, the most liberal Republican is to the right of the most conservative Democrat.

The implications of this change in Congress' ideoplogical makeup are serious. It not only means that it is more difficult to get legislative action on important matters. It means that each party approaches those problems with diametrically opposite biases.

The Republicans believe government is always the problem; the Democrats, that it is always the soluton. The truth, of course, is closer to the middle. The problem is that there's no one there.

Electing majorities of either party won't solve the problem, but actually exacerbate it. In the end, the system won't produce fairer results until we elect people who are less ideological.

Housing segregation at new lows

2012-01-31T13:23:58-05:00

A new study by the conservative-leaning Manhattan Institute reports that housing segregation is at its lowest level in more than a century.

Indeed, far fewer African Americans live in neighborhoods that are predominantly black, far fewer white people live in neighborhoods that are predominantly white.

So by that measure at least, American neighborhoods are less segregated than they used to be.

But -- and you knew there would be a "but" -- that still leaves plenty of room for improvement.

Part of the problem is that our historical benchmarks are so lousy. In 1960, half of blacks lived in neighborhoods that were 80 percent black. Today, only two out of ten do. So by that measure, we're making progress.

But as the Brookings Institution's chief demographer told the New York Times, “The average black resident still lives in a neighborhood that is 45 percent black and 36 percent white. At the same time, the average white lives in a neighborhood that is 78 percent white and 7 percent black."

A lot the improvement in what were once predominantly white communities is due to the influx of Asian and Hispanic immigrants. And a lot of the improvement in formerly predominantly black communities is due to the large numbers who have moved to the Sun Belt states in recent years.

Meanwhile, people of color continue to live in poorer neighborhoods than whites with comparable incomes.

So let's celebrate progress, without getting complacent.

Polarization anyone?

2012-01-30T12:32:48-05:00

Americans are less politically polarized than you'd think watching TV.

More to the point, we're far less polarized than our political leaders.

I've quoted Keith Poole and others to the effect that Congress has not been so polarized since the Civil War. No wonder so many of us think the political landscape is fracturing into islands of "us" and "them."

Two-thirds of the public thinks we are sharply divided into red and blue states of mind.

But a new study of national elections over the last 40 years shows pretty convincingly that Americans are actually not very far apart on issues ranging from government-provided healthcare to defense spending and women's equality.

What gives?

Real polarization is pretty much confined to the political elites -- the relatively small number of people who are most committed to their political party and more likely to be politically active. Exaggerating differences turns out to be a powerful tool in getting out the vote, or -- these days -- the nomination.

So that's what they do, and the media, liking nothing more than a good fight, not only cover it, but encourage and enable it.

Even the estimable Bob Schieffer couldn't resist putting words in Newt Gingrich's mouth on "Face the Nation." He asked Gingrich if he thought Mitt Romney was "too dishonest to be president."

Gingrich was too smart to repeat the words, but launched into his standard complaint that "(Romney) came into the debate prepared to say things that are false. I will let you decide whether that is clever or whether that is really bad."

Schieffer wasn't too shy to ask his next guest if she agreed with Gingrich's "serious charge" that Romney is "too dishonest to be president." (Transcript here.)

And do it goes. One talking head's question becomes a political cadidate's "serious charge."

Votes, ratings -- chasing either at all costs is what threatens to drive us apart.

Polarization anyone?

What's Newt up to?

2012-01-25T11:20:28-05:00

Newt Gingrich likes to call Obama "the food stamp president."

He did it last August and he's been repeating it ever since, most recently yesterday.

What's Newt up to?

Clearly, he's pandering to the same resentment Reagan exploited when he complained about "welfare queens."

But there may be more to it. Brown University political scientist Michael Tesler has done a great deal of research showing that racial attitudes are still very strong predictors of how people feel about Barack Obama. It even spills over into attitudes toward initiatives like his healthcare reform and his Supreme Court appointments.

These racial attitudes contributed to what Tesler calls "the 'otherization' of Barack Obama by his political opponents."

Indeed, it shows itself in the so-called "birther" movement. More than half of GOP primary voters still believe Obama was born outside the U.S. And accusations that Obama is a closet Muslim still pop up from time to time at Republican campaign rallies.

Is it merely a coincidence that Gingrich has been calling Obama "the food stamp president" while also implying that African-Americans would rather be on food-stamps than get a job?

Hardly. Newt is playing a subtle race card, appealing to people who are OtherDim or OtherDumb.

Trust

2012-01-24T12:33:49-05:00

PR giant Edelman conducts an annual survey of public trust in government, business, the media, and non-governmental organizations (NGOs).

It may have started as a way to promote the firm, but the findings have been consistently insightful.

This year's wave (the twelfth) is no different:

Trust in governments declined precipitously around the world in 2011.
For the first time, nearly half of the public says it doesn't trust governments to tell the truth.
Trust in business fell everywhere except in China, where nearly three-quarters of the public have confidence in it.
CEO credibility fell even more precipitously than trust in the institutions they lead.
Although business is more trusted than government, nearly half the public believe governments don't regulate businesses enough.
The media was the only institution trusted more in this wave than in the last.
But social media saw the biggest rise in trust, surging by 75 percentage points.
NGOs remain the most trusted institutions overall.

For more, see Edelman's web site or this executive summary.

Alinsky lives

2012-01-23T09:14:55-05:00

In a victory speech following his win in the South Carolina primary, Newt Gingrich called President Obama a "Saul Alinsky radical."

But ironically enough Gingrich can credit one of Alinsky's core precepts for his victory.

"The organizer dedicated to changing the life of a particular community must first rub raw the resentments of the people of the community; fan the latent hostilities of many of the people to the point of overt expression," Alinsky wrote.

That's exactly what Gingrich did when he took on the national media for asking him about ex-wife's accusations of infidelity. Instead of responding to the charge, he tapped into the resentment a lot of small-town conservatives feel towards the Washington-New York-Hollywood elite who mock their values.

I'll bet Gingrich rides that horse all the way to the GOP convention.

He told CBS's Bob Schieffer that Romney wasn't connecting with voters because the governor-turned-private-equity-king didn't appear "authentic." That's true. An essential element of authenticity is not only being true to who you are, but sending a clear signal that "you're one of us."

For better or worse, as far as thousands -- maybe millions -- of Americans are concerned, with all his faults and weaknesses, and despite his PhD and swelling bank account, Gingrich is one of them.

Disappearing common ground

2012-01-21T13:11:06-05:00

A friend who is a retired AP staffer and an astute observer of journalistic trends drew my attention to an article in the Washington Post.

In it, columnist Marc Fisher reveals at least one reason our politics are so divisive.

"Polarized news market has altered the political process in South Carolina primary," declares the headline in the web edition.

Fisher followed three people in South Carolina and documented how they get their news on public issues. Not surprisingly, accessing campaign news and commentary is not particularly challenging. South Carolina is at the business end of a fire hose of campaign rhetoric.

Much of it splashes onto voters' own PCs and smart phones. Fisher followed one voter who awoke to more than 100 postings from Facebook friends, forwarding stories they thought she'd like. And, of course, the web gives South Carolinians access to campaign news from around the world.

But all those news sources have one thing in common -- they all tend to share the voter's own worldview. "More and more citizens are tucking themselves inside information silos where they see mainly what they already agree with," Fisher writes.

''The result," he says, "is an electorate in which conservatives and liberals often have not only their own opinions but also their own sets of facts, making it harder than ever to approach common ground." A raft of studies support Fisher's observation.

"The more clearly defined a voter’s political leanings, the more likely that person is to identify a few trusted news sources," Fisher writes. "Moderates and independents are much more likely to view a relatively broad array of news outlets as trustworthy. And, according to surveys of news consumption, the less ideologically rigid voters are, the more likely they are to take in news that may not match their point of view."

Since people with a well-defined political ideology are also more likely to dominate the political process, I guess we can look forward to ten more months of this. At least.

The power of metaphorical thinking

2012-01-18T11:51:21-05:00

There's nothing like a good metaphor to get a complicated idea across.

Small businesses are the "engine" of economic growth. The middle class is "treading water." Etc.

We like metaphors because they make abstract ideas concrete and easier to understand.

So we think of "time" as having physical properties -- it "flies" or it's "running out." Or we think of peronalities in terms of temperature readings -- people are "warm" or "cold." Etc.

The metaphors people use can give us an insight into their thinking. Research suggests metaphors can even unconsciously shape their behavior.

People asked to remember a past event leaned backwards; people asked to think about the future leaned forward. People holding a cup of warm coffee were more likely to think an interviewer was warm and friendly than people holding a cold drink. Etc.

Journalist Julia Graf wrote a great post on the phenomenon back in April.

And one of her points -- that metaphors can mislead -- is worth remembering in this political season.

So what?

2012-01-17T11:29:10-05:00

Okay, say that inequality is real, and it's worse than it used to be. So what?

Well, it's more than a matter of one group envying another. Inequality seems to be related to the fundamental functioning of society.

Consider these correlations.

Economists measure inequality using what is called the "Gini Index," named after the Italian who invented it.

A country with perfect equality, where everyone has the same income, would have an index of 0. If only one person had all the country's income, the index would be 1. Measures between 0 and 1 indicate how evenly distributed a nation's income is.

It's generally acknowledged that incomes in the U.S. are less evenly distributed than in most other countries. In fact, many people take pride in that. Thet believe it's the natural consequence of our freedom of opportunity.

But look at the implications for levels of trust. The countries with the highest proportion of citizens who believe "most people can be trusted" tend to be those with less inequality.

Now look at the same measure within the United States.

It's pretty much the same pattern. So it can't simply be a function of the capitalist system versus European and Latin American welfare states.

And now look at the same correlation over time in the U.S.

In years when incomes were more evenly distributed, such as in the 1960s, trust was higher than in years with a more concentrated share of incomes, such as in the 1990s.

So does inequality matter? Only if you think it's important for people to trust each other.

And these levels of inequality in the U.S. may help explain why so many people see the world as warring camps of "us" and "them."

Is it real?

2012-01-16T13:36:08-05:00

Is income inequality real?

If it's real, is it any different now than historically?

An economist at the University of California has probably produced the most complete data on those questions.

Based on tax records from 1907 to 2008, Emmanuel Saez unearthed a U-shaped pattern in the share of incomes going to people in the top 10 percent of incomes.

From 1907 to 1940, the top 10 percent earned about 45% of the total. During the war years, their share dropped to about 33%, and it stayed there until the 1970s when it rose back to the mid-40s (e.g., 48% in 2008, the highest share since 1928).

What's most interesting is that when Saez took these figures apart, he discovered that most of the fluctuation in the top ten percent's share of incomes occurred within the very top one percent's share. (The top one percent's share went from the low 20s in the 1920s to less than 10 percent in the 1960s and back to the low 20s in 2008.)

By the way, the top one percent of incomes started at $368,000 a year in 2008.

The stark differences become even clearer in Saez's anlysis of recent household incomes. Between 1993 and 2008, average real incomes for the lowest 99 percent grew less than one percent a year (i.e., an average of 0.75%). In contrast, during the same period, incomes for the top one percent grew 3.9 percent per year.

Thanks to the benefits of compounding, over that 15-year period, that's a 12 percent increase for the 99 percent and a 79 percent increase for the top one percent.

In other words, in that 15-year period, the top one percent captured more than half of all income growth.

But, as they say on TV, wait there's more!

Saez went even deeper into that period and broke out the periods of expansion and recession. All incomes declined during the recession periods of 2000-2002 and 2007-2008, even the top one percent's. And all incomes grew during the expansionary periods of 1993-2000 and 2002-2007, even the 99 percent's.

But what's interesting is to contrast the four periods.

During the 2000-2002 recession, people in the one percent highest income category bore 57 percent of the decline. During the 2007-2008 recession, they bore less than half (47%) of the decline.

Saez's findings on what happened during the expansions deserve to be quoted because they shed so much light on the current controversy:

"While the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993–2000, these incomes grew only 1.3 percent per year from 2002–2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.

"Those results may help explain why the dramatic growth in top incomes during the Clinton administration did not generate much public outcry while there has been an extraordinary level of attention to top incomes in the press and in the public debate since 2005. Moreover, top income tax rates went up in 1993 during the Clinton administration (and hence a larger share of the gains made by top incomes was redistributed) while top income tax rates went down in 2001 during the Bush administration."

So yes, it's real. And it's different.

Not class warfare

2012-01-14T10:05:47-05:00

Want to know why the rich owe something to the less well-off?

Elizabeth Warren gave the best answer I've heard so far:

“There is nobody in this country who got rich on his own. Nobody. You built a factory out there, good for you. But, I want to be clear: you moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory and hire someone to protect against this because of the work the rest of us did. Now look, you built a factory and it turned into something terrific or a great idea. God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

You can see her for yourself on YouTube.

Everything's connected

2012-01-12T11:23:04-05:00

In the old spiritual, Ezekiel reminded us that the foot bone's connected to the ankle bone, the ankle bone's connected to the shin bone, etc.

That's worth remembering. Everything's connected, even the fact that we're increasingly disconnected.

Yesterday, a Pew Research Center survey showed that divisions between rich and poor are the greatest source of social conflict. That shouldn't be too surprising given that income inequality now is higher than it's ever been in U.S. history. Indeed, the U.S. is now on a par with Uganda.

Meanwhile, some politicians refuse to talk about it. Mitt Romney, for example, says it's simply a matter of "envy." His competitors for the GOP nomination seem to agree, decrying Democrats for trying to stimulate "class warfare" whenever they bring up the issue of rising inequality.

Indeed, some political scientists see a strong connection between income inequality and political polarization. In fact, it's the subtitle of one of the best books I've read on the topic -- Polarized America: The Dance of Ideology and Unequal Riches.

In it, the authors show how political polarization and income inequality fell in tandem from 1913 to 1957 and then rose together dramatically from 1977 on.

Part of the reason, they claim, is that Republicans increasingly moved away from redistributive policies that would reduce income inequality. They suggest that rising immigration in the 1970s made this shift possible. Non-citizens, a larger share of the population and disproportionately poor, can't vote. So there was less political pressure from the bottom for redistribution than there was from the top against it.

In what they call "the choreography of American politics," inequality feeds directly into political polarization, and polarization in turn creates policies that further increase inequality.

Interestingly, Pew's last report showed that immigration was the greatest source of conflict and it's still a close second, pretty much within the margin or error.

So there you have it -- inequality, immigration, political polarization, they're all connected. Just like Ezeckiel said.

You are what you read

2012-01-11T10:24:44-05:00

Every day, I see more evidence that people filter information through the lens of their political beliefs.

Case in point:

Yesterday, the White House announced the appointment of Cecilia Muñoz as director of the Domestic Policy Council, making her one of the president's top advisers.

Both the Wall Street Journal and the New York Times covered the appointment with straightforward stories, describing her background and the significance of her new position.

In its online headline, the Journal highlighted her role as an advisor on immigration matters; the Times positioned her as an "Hispanic advisor."

By 10 a.m., the Times' story had generated exactly one comment, suggesting that the president should further reshuffle his senior staff by asking Joe Biden to step aside as candidate for vice president in favor of Hilary Clinton.

The Journal story, meanwhile had generated 158 comments, compared to just nine comments on the appointment of a new White House chief of staff, announced the same day and also reported in the paper.

Most of the Journal comments were similar to this beaut from James Jenkins: "And while they are at it, how about turning Homeland Security over to Al Quada? Unbelievable, does this appointment come with a full surrender to Mexico? King Obama is showing his true colors; Anti-USA! When do the treason trials begin? Or has Mexico successfully bought off Congress as well?"

Apparently, Mr. Jenkins, who wisely chose to keep his online profile private, is concerned that Ms. Muñoz was once a senior officer of La Raza, the nation's largest Latino advocacy group. She also advised the Obama administration on immigration policy, though her previous job was to oversee inter-governmental relations. Her parents are immigrants from Bolivia, not Mexico.

I will probably dig into this a little more when I have the time, but my general impression is that the Journal's readers tend to comment on the paper's stories at a higher rate than the Times' readers. If that's true, it would be fun to figure out why.

Meanwhile, it's becoming increasingly clear that we are what we read and we read what we are.

Do the Rich Have Feelings, Too?

2012-01-08T10:33:41-05:00

Does having piles of money make you less compassionate?

According to a U.C. Berkeley study, well-off individuals show less empathy and sensitivity to distress in others than working-class individuals do.

The rich “seem to be more absorbed in their own lives,” says the study’s co-author, Michael Kraus. He also notes, “Thinking about the self a lot, it becomes easier to ignore those around you.” Feelings are kind of 99 percenty, anyway.

Or so says Heather Havrilesky in a super-brief piece in the New York Times Sunday Magazine. But didn't at least two of the three people pitcured with the piece (above) give a big chunk of their cash to others? (I have no idea who the guy in the armless tee is, but he seems to be assocoated with the Heat, whoever they are.) I'm told the guy in the armless tee is Le Bron James, a basketball player with the Miami Heat basketball team. He apparently made $14.5 million last year and has a host of lucrative endorsement deals. Like Facebook's Zuckerberg and Oprah Winfrey, he supports a host of philanthropic endeavors. Maybe they're the exception that proves the rule?

Anyway, isn't the Times' "One Page Magazine" feature terrific? It reminds me of some front-of-the-book material in the old Harper's magazine before Lewis Lapham got his hands on it.

Another chief

2012-01-05T12:02:07-05:00

Continuing to be optimistic, I want to draw attention to an article in today's Wall Street Journal.

It describes a relatively new corporate trend -- the appointment of Chief Diversity Officers.

Corporate headquarters may be in danger of occupation by too many "chiefs," what with Chief Executive Officers, Chief Financial Officers, Chief Marketing Officers, Chief Communications Officers, etc. But even the Journal seems to think this particular version could be a timely addition to the rolls.

"Having a diverse work force no doubt helps a company's image," it writes, "and some say it can also impact the bottom line by reducing employee turnover, boosting innovation and attracting new business."

The paper cites a PriceWaterHouse Cooper's finding that some 60% of Fortune 500 companies have appointed CDCs, a quarter reporting directly to the CEO. Most have traditional human resource responsibilities, but interestingly some are also responsible for marketing.

Sadly, not all the paper's readers see the value. For example, Dan Freeman, president of a NJ- based marketing firm of all things, considers it "a total piece of rubbish." He accuses the reporter who wrote the piece of sounding "much more like the mouthpiece of the Democratic-Government establishment than a journalist."

Building up a righteous head of steam, he writes, "Workplace diversity is institutionalized racism against white men. Nothing more. No better than the KKK and perhaps worse, since it is sanctioned by the state. ... Diversity is something to be tolerated; not worshiped."

On his web site, Mr. Freeman claims an impressive list of blue-chip clients. Apparently, they are unaware of the country's changing demographics. (Dan, if you see this, contact me. I have reserved a free copy of OtherWise for you.)

But, back to the bright side, only about half a dozen people had commented on the Journal article by mid-morning. Some might consider this a sign that there is little interest in the subject. In my new optimistic mode, I prefer to think most of the Journal's readers saw the headline and said "Duh?"

Let's be less crazy

2012-01-04T13:03:13-05:00

Sustaining an optimistic note for the new year, let's consider some remedies for my oft'-cited finding that people are crazy.

We are, but we don't have to wallow in the craziness of the cognitive errors that are the legacy of our stone-aged brains.

If someone disagrees with us, instead of looking for evidence that our view is correct, why not look for evidence contrary to what we believe? It might be a bit uncomfortable, but it could lead to more accurate information.

When someone sends us email that is too good to be true in terms of proving a long-held belief, why not check it out on Snopes.com or FactCheck.org before forwarding it to someone else? It could kill a delicious bit of gossip, but YouTube videos of some kid trying to skate board on a two-story railing can be entertaining too.

If someone pontificates on an issue we know little about (except what our political leanings would suggest is the correct position), why not ask questions instead of taking sides? A couple of good questions to ask: what do people on the other side of the issue say? Why do they say that?

If we have a favorite right- or left-wing columnist, why not try reading someone on the other side of the political fence once in a while? NPR often teams David Brooks and E.J. Dionne, and they almost always manage to be informative and entertaining without resorting to name-calling, insults, or sarcasm.

Finally, why not adopt as a motto the sign posted in many of those Republican caucus rooms last night? "Good manners are practiced here."