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Towards a label-free world


No LabelsMy new book makes three recommendations for anyone who would be OtherWise.

The first is to better understand oneself -- all the unconscious biases and prejudices that we carry around, the psychological mechanisms that cloud our judgment and decision-making, and the stone-age legacy that shapes our social life.

The second step is to better understand the people around us who have a different culture, racial background, sexual orientation, religious belief, or who we consider "different" in some other way. Ironically, the trick at this stage isn't learning more about their differences, but about all the ways they are just like us. 

The third step should be the easiest, but it requires the most discipline. It consists of refusing to go along with the common practice of otherizing people who are different.

At the most basic level, that means objecting when someone tells a sexist or racist joke, not out of some sense of political correctness, but because it perpetuates a culture of "us" and "them." It's literally de-meaning because it robs some people of their individuality.

Political and social labeling is akin to the same thing. Think about it, do you know anyone who is consistently and completely "left" or "right" on every issue? Does it make sense to apply those labels so freely? 

Being OtherWise doesn't mean papering over disagreements. But it does mean being able to disagree with people without demonizing them. As psychologist Jonathan Haidt told PBS' Bill Moyers, we should make questioning people's motives, intelligence, or patriotism as inappropriate as smoking in public. Not only should we avoid doing it ourselves, but we should call each other on it.

In the midst of the political campaigns, that's going to be really tough. But if we can't do it, steps one and two will be pretty meaningless.

 



U.S. welfare state

UncleSamTaxCredit

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


Academic-Achievement-GapA 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.

Education Gap.017“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.

 


 



Politicized religion


Religion-vs-politicsI'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


Vampire.027Conspiracy 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

Budget-cuts1-jpgI 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

Oval-office-2010-new-overviewThe 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.

Presidents_common_space_1DPoole 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.



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Coming apart at the seams



SeamsOne 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

Polar2A 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.

Polar_housesenate_difference
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.

Moderate disappeared

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.