Obama Popularity

Why has Obama's popularity plummeted?  He has accomplished a great deal that is not getting talked about.  He is the victim of the press and his opponents (some racist) that keep chanting "Obama Care" is bad.  This seems to stop further thinking about actual consequences.  It reminds of Gov. George Romney whose campaign for the presidency coincided with the Vietnam War.  He went on a fact-finding mission and came back and said he had been "brain washed" by the generals.  Well, we can't have a president who can be brain washed and the press repeated this trope over and over again and Romney's quest for the presidency was over.  The press and many people did not want to know more. 
Culture is a strange animal that is hard to understand.  Words can enter the language, and no matter how misleading, they have a life of their own, albeit pushed along by opinion makers.  Why is not "Affordable Care" is easy to say as "Obama Care?"  But, then the opponents would have to admit that they simply don't want to give aid to the poor--they don't deserve it.

Merger Fever--the patient is sick

The Federal Reserve has gone to great lengths to keep interest rates low.  So what have American firms been doing?  Borrowing to build new plants and employ more people?  Wrong! 
They are using retained earnings and borrowing to buy their own stock and other companies.
Prof. Richard Roll of the University of California has formulated "the hubris hypothesis of corporate takeovers."  "Lately Prof. Roll has been studying the role of narcissism--a personality disorder characterized by excessive self-love--in corporate takeovers.  When executives are excessively self-involved, he said, they may ascribe unrealistic attributes to themselves, like great strategic vision or deal-making ability, leading them to extend their domains by seeking acquisitions and wheeling and dealing rapidly." (reported in the NYT Jun 22, 2014)
         And what are the results? Prof. Rene Stutz found that during the Merger and Acquisitions mania of the period 1998-2001 shareholders of public corporations over-all lost huge sums. 
         Economic theorists have gone to great lengths to exclude psychology from economics, but it comes at a cost of reality.  Just because psychology does not fit mathematical models is no reason to exclude it. Theorists deride the above as just telling stories.  But, a good story is worth a lot of equations that miss the point.

WW I and other Idiocies

It is the 100^th anniversary of WW I, one of the bloodiest and unnecessary wars in human history.  The excuse for the war was the assassination of the Austrian Archduke by a crazy man.  The Austrians demanded compensation (as if there is compensation for murder).  When it was refused, countries began to take sides based on historical and cultural ties—not unlike kids choosing sides on a playground.  The tragedy was compounded by the generals who did not understand machine guns.  Wave after wave of soldiers were sent to slaughter on both sides.  The eventually “victorious” Allies demanded huge reparations from the Germans. The consequence was bitter resentment that provided the base for Hitler’s rise.  We ignored the push-back of human emotions.

      Among the other idiotic moves was the drawing of uninformed boundaries in Africa.  We are still living with the consequences such as ethnic wars. Another result was a revulsion against war that resulted in Western delayed response to the armed invasions by Hitler.

The Nanny State?

The FDA is considering phasing out trans fats as already banned by New York City, Philadelphia, and the state of California.  Rush Limbaugh groused that bureaucrats shouldn't regulate what people eat because it's none of their business. The no-nothings are crying about the "nanny state" that takes away freedom.  Whenever I hear the word "freedom" I ask whose freedom are we talking about.  I know that freedom for the pike is often death for the minnow.  The nanny state argument claims that if people want to eat unhealthily, it only harms consumers of hydrogenated oils.  NOT TRUE.  If peoples' diets make them unhealthy it raises the health insurance rates for everyone.  Further, if the people are on Medicare, it raises taxes to support their care. 
     Finally, some people know their weaknesses and call on the state to help them out in moments of weakness.  If they doubt their own resolve, they may favor prohibiting some foods that promise to taste good, but are unhealthy.  Of course, their freedom to be free of temptation is at the expense of those with dietary fortitude.  Alas, not everyone can be free if interests conflict.

Bird Brains

Chickens and geese have more brains that we have given them credit for and more than some members of Congress who care little for the less fortunate.  This from Nicholas Kristof--
"The nobility of geese was most on display at execution time.  My job as an 11-year-old when we beheaded the geese was to capture a bird and take it to the chopping block as my dad wielded the ax. So I would rush at the terrified flock and randomly grab an unlucky goose.  The bird in my arms would honk in terror and try to escape, and the other geese would cower in the corner of the barn.
       Then one goose would emerge from the flock and walk tremulously toward me, terrified but unwilling to abandon its mate.  It would waddle after me toward the chopping block, trying to honk comfort to its mate."  NYT Oct. 20, 2013

Gun Control

Are we so wanting for meaningful expression of manhood that thousands of men demand the right to own assault weapons?  Must all peaceable men, women, and children be beholden to the whims of such men?  Stop this world, I want to get off.

Agriculture and Revolution

“Bread provides one-third of the caloric intake in Egypt, a country where 38 percent of income is spent on food,” notes Sternberg. “The doubling of global wheat prices — from $157/metric ton in June 2010 to $326/metric ton in February 2011 — thus significantly impacted the country’s food supply and availability.” Global food prices peaked at an all-time high in March 2011, shortly after President Hosni Mubarak was toppled in Egypt.

Everything is linked: Chinese drought and Russian bushfires produced wheat shortages leading to higher bread prices fueling protests in Tahrir Square. Sternberg calls it the globalization of “hazard.” 

Source: Friedman, NYT

Of Quarterbacks and CEOs

The quarterback for the winning Baltimore football team was given a raise to $120 million over six years.  The CEO of Heinz could land a $212 million golden parachute if he leaves the company after it is taken private.  The quarterback said the money was not all that important but rather "to get the respect that I felt, that I feel now from this organization."  What ever happened to promotions, the gold watch, and ribbons as in the military? 
   The sensible Swiss just passed a limit on CEO salaries.

Nobel Without Emotion

 The new winners of the Nobel Prize  for economics must be living on another planet whose inhabitants have no emotions. Elegant theory it may be, but relevant to the real world is another mater.

"Mr. Shapley explained how individuals can be paired together in a stable match even when they disagree about what qualities make the right match. The paper focused on designing an ideal, perfectly stable marriage market: that is, how mates find one another in a fair way, so that no one who is already married would want (and be able) to break off and pair up with someone else who is already married.

It was an elegant and simple mathematical model that explained the optimal way to match up men and women.

Selective Perception

"Chances a Republican believes today that Iraq had weapons of mass destruction at the time of the 2003 invasion: 2 in 3."
Source: Harper's Index, September 2012.
Proving once again that we see what we want to see!

Dumb and Dumber No. 2

A New York man is killed while riding his cycle to a rally protesting a law requiring a helmet. He was not wearing a helmet. That's dumb!

GBT

Applause to three local congretations of the United Church of Christ who welcomed Michigan Pride attendees this weekend. Unfortunately, Michigan is one of five states to ban all forms of recognition for same-sex relationships. The Bible quoters held a rally at the state capitol while the Pride Parade was in progress in Lansing. Would that the Bible quoters were as emotionally anti-war as they are anti-gay. The Biblical references to love and peace need more attention.

Dumb and Dumber, No. 1

I am starting a new series entitled “Dumb and Dumber.” First, I want to make a distinction between dumb and stupid. Dumb is when a person makes a wrong choice out of ignorance of the facts. Stupid is when a person hasn’t the sense to act in their own self-interest, often because their minds are captured by slogans and myths. An example of the latter is when low and modest income people support tax breaks for the rich. That's stupid.
The first example of dumb is the large number of people who buy gluten-free foods when only two percent of the population is allergic to gluten. Gluten-free is now a fad food, perhaps confused in popular minds with carb-free and thus good for those on diets. That’s dumb.
Please add your favorite example as a comment.

"World A Safer Place" ??

I'm sorry Mr. Obama, the world is not a safer place with the implementation of your order to kill Ben Laden. You have fallen into the same trap as your predecessor who thought winning military battles would make the world safer. How many more years of evidence do you need to see that it is not true? The death of Ben Laden will only further energize terrorists. Terror breeds terror.

Your Brain on Music

"Research is showing that our brains understand music not only as emotional diversion, but also as a form of motion and activity. The same areas of the brain that activate when we swing a golf club or sign our name also engage when we hear expressive moments in music. Brain regions associated with empathy are activated, too, even for listeners who are not musicians.

And what really communicates emotion may not be melody or rhythm, but moments when musicians make subtle changes to the those musical patterns."

New York Times, April 18, 2011

Culture and the Economy

It is not possible to understand the economy without understanding the culture that lies behind it. Below are some key facts:

1. The traditonal pension plan is disappearing. In 1980, 39 percent of private-sector workers had a guaranteed income for retirement. Today it is 15 percent.
2. Many retirees banked on their homes for retiremen funds. But, a decline of around one-third in housing prices has altered that. Around 20 percent of homeowners owe more on their mortgages than their home is worth.
3. The personal savings rate averaged around 10 percent in the 1970s-1980s. But, by 2007, the rate dropped to negative.
4. About three-quarters of people file for Social Security as soon as they are eligible at 62. Early retirement means that people after 62 have no work income out of which more savings could be set aside. Yet, these are the years when income is the greatest making savings easier.
We have a culture of living it up now, and the devel take the hindmost. No wonder that we have a lot of grouchy seniors who want to blame government taxes and spending for their troubles.

Get Real

Lots of people have not yet adjusted their expectations to today's realities of slow or no growth. This ranges from members of the Detroit Symphony Orchestra striking for higher pay while city services are being cut and the auto companies are not flush with charitable donations any more; Students asked to pay higher tuition in Great Britain, workers in France and Greece. Some have resorted to riots and destruction to insist on what they have come to believe is their right to more.
A bright spot is Michigan State University President Simon who refused a salary increase, in part because there was no money for faculty raises this year. Now if the basketball coach would follow suit, that would be news.

Consumer Culture

We have created a culture where many Americans don’t think they have to live within their means. So, if they “need” something,” they buy it on credit. More new stuff is acquired even if they must rent a storage space for the old stuff. If people lose their jobs, they try to maintain their old level of consumption. In times past, people in a financial jam would have gone to parents and family, and the parents would tell them “You don’t need that if you are using my money.” But, with a credit, debit, or pay-day loan, they don’t have to face anyone saying no.
There are twice as many pay-day loan offices than there are Starbucks, and people may pay over 400% interest for a two week loan. Overdraft protection on a debit card is not called a loan but euphemistically termed a “courtesy” by the banks as they collect enormous fees. Some people will take money, if available, no matter their chance of repayment. And financial organizations take advantage of this. As one wag put it, there are two words Americans love to see—“Free” and “All you can eat.”

Child safety

There are many social problems that I don't have an answer for. But, when solutions are obvious and cry out for implementation, I find it maddening. Take for example, the following numbers: "The overall annual death rate for boys is 19 per 100,000 (youths). For girls, it is just 10 per 100,000. Sex and age combine to produce a death rate of 45 per 100,000 among boys 15 to 19."
I don't have an answer for behaviors rooted in custom and culture. But, experience suggest some policies that would reduce the deaths. Kansas, Mississippi, Montana, and Wyoming have the highest motor vehicle death rates for people younger than 19. Kansas allows 16-year-olds to drive without nighttime or passenger restrictions. A child can get a license with nighttime restrictions at 14 1/2 in South Dakota and at 15 1/2 in MIssissippi."
Daa! How tough is that to figure out?
Until these states learn something from experience, I am not going to drive there.

I think our drug policy is of the same kind. The present policies of penalties for sellers here and producers in foreign countries do not work. What are your examples?

Data for the above from The Washington Post, December 23, 2008, p.F5.