Archive for the ‘Poverty’ Category

On the Easterlin Paradox

Saturday, April 19th, 2008

I’ll let the New York Times guest-column speak for itself:

Arguably the most important finding from the emerging economics of happiness has been the Easterlin Paradox.

What is this paradox? It is the juxtaposition of three observations:

1) Within a society, rich people tend to be much happier than poor people.
2) But, rich societies tend not to be happier than poor societies (or not by much).
3) As countries get richer, they do not get happier.

Easterlin offered an appealing resolution to his paradox, arguing that only relative income matters to happiness. Other explanations suggest a “hedonic treadmill,” in which we must keep consuming more just to stay at the same level of happiness.

One criticism of the Easterlin report is that the data upon which it is based, comes mostly from survey responses and there is a psychological hobgoblin at work here because we don’t tend to think highly of ourselves when we admit we’re unhappy. So it stands to reason the responses are going to be skewed toward “oh yeah, I’m ecstatically happy.”

But another criticism I would have is that we have a societal taboo against acknowledging one of the possible — and I would label highly probable — outcomes: That money makes you happy. Let’s face it: Overly-simplistic as that may be, missing money when you need some really sucks!

But I think anyone pondering the situation for a minute or two would have to admit there has been, at least since the 1950’s or so, a swelling of pressure on people to presume out loud that wealth is only tangentially related, if it’s related at all, to a state of happiness. The pressure is sufficiently significant that it has an effect on people who have no personal experience at all, with being destitute & happy, or with having wealth in abundance and being dismal. And that’s my definition of significant pressure: When people are missing anecdotes within their personal experiences that would be needed to back something up, and will nevertheless sit there and say “oh yeah…uh huh, that’s right on.”

Well, the author of the column, Justin Wolfers, goes on to drop a bombshell:

Given the stakes in this debate, Betsey Stevenson and I thought it worth reassessing the evidence.
Last Thursday we presented our research at the latest Brookings Panel on Economic Activity, and we have arrived at a rather surprising conclusion:

There is no Easterlin Paradox.

The facts about income and happiness turn out to be much simpler than first realized:

1) Rich people are happier than poor people.
2) Richer countries are happier than poorer countries.
3) As countries get richer, they tend to get happier.

Moreover, each of these facts seems to suggest a roughly similar relationship between income and happiness.

Now, you can see from the reports and the cool graphics, that there is an abundance of data going in to these conclusions. So a disturbing question arises: Assuming this attack on the Easterlin paradox withstands scrutiny better than the paradox itself, are there some negative social ramifications involved in realizing this? Once it settles in that money does indeed make us happy isn’t there a risk that we’re all going to become a bunch of hair-pulling eye-gouging money grubbing zombies?

Well…to answer that we’d have to get into the debate about the “pie people”: Those who insist, like Michelle Obama, that when some among us have bigger pieces of pie then someone else must have smaller pieces, and in order to get more pie to those deprived persons it will be unavoidably necessary to confiscate pie from someone else. All transactions are zero-sum, in other words.

Seems to me, if you buy into that you have to agree there was at least a social benefit to the Easterlin paradox, even if it wasn’t true. And there must be a commensurately deleterious effect involved in repealing it.

I suppose, like the Easterlin paradox, the Pie Paradigm ought to be given a benefit of doubt, of sorts, so it can remain standing on clay feet across the generations without much supporting evidence. There must be a truth to it, and even if there isn’t, there must be a social benefit to believing it, and even if there isn’t, darn it it just feels so good to say it’s true.

Except, like Columbo, I can’t help noticing just one…little…thing.

So many of these Pie People, like Ms. Obama herself — are stinkin’ rich. What does that say about them, if they really do believe in the pies?

Five Words

Wednesday, April 16th, 2008

Freakonomics held a contest to find the best six-word motto for the United States, and in my book it was a smashing success because the grand prize winner was a work of art:

The United States of America:
Our Worst Critics Prefer to Stay

The runners-up are plenty good enough to reproduce here, each and every single one of ’em.

Caution! Experiment in Progress Since 1776

The Most Gentle Empire So Far

You Should See the Other Guy

Just Like Canada, With Better Bacon

When Gerard wrote this up, he graciously accepted a late entry, an unforgivably smarmy tidbit that percolated in the frontal lobes of one of the writers for The Blog That Nobody Reads…the blog you’re reading right now. The nobodies who don’t come by to not read The Blog That Nobody Reads, will relate to the observation that this was quite out of character for us — our entry was shorter than par. We nudged up against the gauge at a trim, slim five words, sixteen percent less than what was originally requested.

Yes, that’s right! We expressed an idea in less space! Five little words…and by the time they’re done, without a single additional syllable, the reader is offered proof of what makes this country truly, uniquely great. They’re so inspiring you almost want to run, walk or jog to the Bay State and chuck a couple crates of tea in the harbor all over again.

To find out about content thereof, you can follow the link to Gerard’s site…or…you can use your mouse clicker and highlight the text below…drum roll, please…

The United States of America:
Our Poor People Are Fat

McConnell on Poverty

Sunday, December 23rd, 2007

Heading out to the dreaded shopping malls yesterday I was listening to Mike McConnell’s show and I heard an interesting take on poverty. What poverty is, McConnell asserted, is a collection of natural consequences that spring from a single action. And the action is, when one is unable to afford to have kids, or to have a certain number of kids, to go ahead and have ’em anyway.

He was adamant that it worked the other way as well: If one seeks to end poverty, all one has to do is find a way to stop people who can’t afford to have kids, from having them.

If those both hold true, then this is a virtual definition.

It seems at first blush a bit simplistic, but when I think on it, it does make more sense than the various ways we more conventionally confront the problem. Some childless guy can’t get a job and ends up homeless — that isn’t really what we call “poverty,” is it? And if our various social issues were limited to that and nothing more, it would be solved pretty easily. People multiplying in localities unable to support the population with the natural resources immediately available…that is poverty. We solve it by means of mass communication. Somebody goes out with expensive television equipment, and it’s always a guy or a gal with a double-chin and a waist size of at least 40. Talks into the camera with a barely-alive little girl in his arms with a bloated belly and bones sticking out of her skin and uses the words “won’t you please” in some sentence or another. Some guy like me looks at that and says “well, I suppose I should, but I just can’t get past how well fed this guy is; no matter how I try to explain what’s going on here, it boils down to someone not dealing straight with me.” But someone sends in the checks — nobody says anything about the overpopulation problem that is the cause of this poverty, and next year the problem is even worse.

Sounds a lot like Nazi dysgenics principles, to say such a thing. But it isn’t. “Grandfather” in everybody who’s made it past the birth canal. Then go ahead and reproduce in whatever numbers you want, regardless of race color or creed. Just be able to afford it, that’s all — or else, don’t. Poverty gone.

Is it? I think so. Maybe with that, and Sam Kinison’s rule about living where the food is.

I dunno, maybe this does make me a big ol’ meanie. But the more I think on it, the less sense I think our conventional strategies make. There is no human activity more worthy of what we typically call “planning,” than making a family. But when we talk about “family planning” what we are usually talking about is putting more money and political power into family clinics, which then hijack our systems of justice so our laws can be twisted around and keep it legal to have abortions. It ends up being an exercise in making sure every abortion that can possibly happen, happens — having a lot more overlap with dysgenics than anything McConnell said that I paraphrased above.

And then when poor women produce large numbers of children, we move things around to make it all work so that every mouth is fed. And we should. But the next baby is coming, and the next, and the next…in households that, for whatever reason, simply can’t afford it. We’re told we become a more civilized society when everybody looks out for everybody else, and we believe it — with absolutely no reason provided to us to think such a thing. All incentive for closing up the baby factory, is gone, and so the babies continue to be pumped out where nobody can afford them…and so we all end up taking care of each other’s problems, a little bit MORE than we did the year before.

America has a very high standard of living. Those countries that live in poverty, by definition, have much lower standards. The other countries don’t end up emulating America — quite the reverse. America has installed a system in which un-poor people provide for the poor people, who then crank out more babies because no worries, someone else is taking care of the babies. So the well-off country is emulating not-well-off countries, dismantling the capitalist system that has made the higher standard of living possible in the first place. The not-well-off countries do not emulate the well-off country.

If a space alien landed here from a distant galaxy, or a man frozen in time 2,500 years ago was thawed out and reawakened, with the new arrival sufficiently strong in cognitive thinking and communication skills but completely unaccustomed to the events of recent generations…would you be able to explain it to him in a way that makes some sense? Because I wouldn’t. And if you can’t either, and the new arrival somehow manages to reconcile the information with people just being…kinda strange…what follows next has a better shot at leaving him absolutely flabbergasted.

We have this canard going around that the “root cause of terrorism” has something to do with this stuff we call poverty. There is some anecdotal evidence to support this, and a lot of people believe it, even though they recognize it as political agitprop. If that is really the case, it would make it even more urgent to fight poverty in a logical manner. But…we don’t. We just keep writing checks, in so doing, paving the way for more babies to come into the world. We find ways to feed the babies using socialist practices and economic models that history has shown to be more of a precursor to poverty rather than any kind of scourge. And in so doing, make it possible for more babies to be born into families that can’t afford them. We call this eradicating poverty, even though nobody who thinks on it for more than a couple minutes will conclude that it really is.

We recognize cognitive dissonance as something that may be a problem for us from time to time, but when it comes to making sure terrorism doesn’t happen, we’re immune. That issue is just too important. And so on that, if on none other, we are cool-headed, rational thinkers. No cognitive dissonance here. Well…au contrair. When one presumes poverty causes terrorism, in whole or in part, one is forced to conclude we’re really not giving the terrorism fight our all.