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December 2011

A new business model

LessigA friend recently put me on to Larry Lessig.

Or perhaps I should say "reintroduced" me. I knew Lessig as an expert in intellectual property law. But once again, the world had moved on when I was busy somewhere else.

Lessig had retired his IP blog and had redirected his prodigious intellect toward reforming our very system of government.

See, for example, a recent talk he gave to promote his new book, Republic, Lost: How Money Corrupts Congress and a Plan To Stop It. Lessig is determined to upend a political system that perpetuates itself by polarizing people and driving wedges between them.

He described his goal quite succinctly in the Huffington Post:

"We Americans are diverse. We have different views. Some of us want more government. Some of us want less. Some think the state has done enough to achieve equality. Some think it's not begun to do its job. Some want flat taxes. Or no taxes. Some want progressive taxes. Or at least more taxes. We are different in a million ways, we Americans, but we are all equally Americans. And if you're leading a movement that won't acknowledge that difference (or more frighteningly, that believes that mere rhetoric is going to erase that difference), then you're not looking for fundamental reform. You're looking for a putsch."

Finding common ground would be a much more productive alternative, he says. That doesn't mean abandoning your principles. It does mean refusing to operate from bias and stereotypes about others. It means really trying to understand people's real-world situation and motivations. 

"We can't afford to simply indulge the passion of our differences," he says. Particularly because the money interests that have captured Congress want to keep us fixated on our differences, whether political, religious, racial, social, cultural, or ethnic. 

It's time we refuse to operate within that business model. 

Dare I say it's time to be Otherwise?



Person of the year

All the angry people.002Over at Time, they held a round-table to brainstorm candidates for their annual selection of "person of the year."

The panel was predictably esoteric, ranging from the verbose earnestness of Brian Williams to the incisive wit of Seth Myers, with stops for the thoughtful contributions of chef Mario Batali, law professor Anita Hill, pledge-enforcer Grover Norquist, and actor Jesse Eisenberg.

The discussion was actually pretty interesting. All the panelists -- except Williams, who picked Steve Jobs -- selected someone connected with the populist movements in America and the Middle East.

But it was left to Seth Myers to put the right label on the people behind these movements, whether Arab Spring, Tea Party, or Occupiers.

They're angry.

Their incandescent anger shows up in survey after survey. Any institution that ignores or minimizes the strain of anger that animates them does so at its own peril.

And they, more than any other individual or group, "influenced the news most, for better or worse," in 2011. (Time's criteria.)

But Time magazine is unlikely to follow the advice of its own outside panel. So I put together my own cover to memorialize Myer's acumen.


Book cover

My publisher, the American Management Association, has come up with a cover for my book, now scheduled to come out in June 2012.  This is it:

I like it, but I'd also be interested in hearing your opinion. 

Do you think this will cause potential readers to pick the book off the shelf?  Does the subtitle clearly communicate the subject?  What do you think?




Photo_frame_6Sometimes it's not what you say, but how you say it.  

Make that most of the time.

Here's evidence from an experiment conducted over at The Monkey Cage. In brief, they asked people what they thought of "a government program intended to help Americans afford to own homes." 

Half the people surveyed were told the program would make people “eligible to deduct the monthly mortgage interest from their taxable income, thereby reducing their tax burden.” The other half were told that the program would make people “eligible for a grant from the federal government to help them afford the monthly payment.”  

In the first case, people were told that participant's "savings" because of the program would be about $94 billion in 2011; in the second, they were told the government's "expenditures" in the same period would be about $94 billion.

Both statements, of course, are accurate descriptions of the current tax deduction for home mortgage payments.

Here's the interesting part.  When described as a tax deduction, 58% of people were in favor; when described as a "grant," only 33% were favorable.

The Monkey Cage, also analyzed the results by political ideology. Not surprisingly, conservatives were twice as likely to support a government program that is delivered through the tax code, but less willing to support this program when it is described as a "grant." In fact, they were just as likely as liberals to favor tax deductions to support such a program.

Many people consider tax deductions just another form of expenditure.  They're "grants" by another name. 

 Now, consider this: there are more than $1.1 trillion "tax expenditures" in the current tax code. That's more than we spend on defense, social security, and Medicare/Medicaid. It's about as much as the federal government collects in income taxes every year.

And more than 70% of those tax expenditures, or "grants," go to people making more than $100,000 a year.

For more on tax expenditures, see a report by the Congressional Joint Committee on Taxation. Hopefully, the deficit "super-committee" has read it. 


Stop that metaphor!

used to think metaphors were the product of language. Now there's growing evidence that we've had the cart before the horse.

It seems that a good part of language is the product of metaphors, not the other way around.  

 The theory goes like this: We felt warm when mom held us to her bosom. Later, something like that feeling, to which we had attached a word, came over us when a close friend greeted us. So we used the same word to describe that experience -- "He greeted me warmly."

And so it goes with other experiences. In both English and Chinese, "thinking" is tied to metaphors of movement in space. "We lose our train of thought, call something to mind, think up something."  

 We're especially prone to attach metaphors to abstract concepts like time -- e.g., "time flies," "time drags," etc.

Sounds harmless enough. But here's the kicker: metaphors seem to have their own physical circuits in our brains. And a long series of experiments suggest that they actually affect our behavior.

  • People holding warm cups of coffee were more likely to judge others as trustworthy than those holding cold cups. 
  • People asked to remember a time when they were socially accepted judged the room to be 5 degrees warmer than those asled to remember being snubbed. 
  • People asked to squeeze a soft ball perceived gender neutral faces as female; those asked to squeeze a hard ball perceived them as male. 
  • People holding heavy clipboards judged currencies to be more valuable and their opinions to be more important. 
  • People asked to think about doing something wrong, like cheating on a test, were more likely to request an antiseptic cloth after the experiment than those who had thought about good deeds.
  • People asked to think about a future event leaned slightly forward while thinking about the past caused others to lean slightly backwards. 

So watch those metaphors rattling around in your head. They may be coloring your thinking. And your behavior.



Human nature or second nature?

att Ridley offers hope that we can get over our tendency to otherize people by race.  

In his Wall Street Journal column, he cites research suggesting that it isn't human nature to categorize people by race, but a cultural artifact. 

Social anthroplogists have long believed that evolution left us with a tendency to be suspicious of people outside our own group. In our ancient hunter-gatherer past, it was usually wise to avoid people who weren't part of our own clan or tribe. Outsiders would compete for resources, including suitable mates; they might take off with valuables; and they could bring new diseases with them.

But Ridley says recent research argues that the other groups our hunter-gatherer ancestors came across were seldom of other races. So racial categorization is not "human nature" but simply culture latching on to race as the expression of "groupishness" that is part of human nature.

If that's right, we should be able to get over a tendency to racisim more easily than if it were hard-wired into our stone-aged brains.

I hope that's right.

Robert Putnam, the Harvard political scientist, has pointed out that when he was growing up, people's religion was a much bigger deal than it is today. Jews only wanted to marry Jews; Catholics, Catholics; and so on. Today, when it comes to dating and marrying, religion has as much relevance as left-handedness.

But I suspect race will be a little more difficult to conquer, if only because "colorism" seems to affect people of all races, including African-Americans.

And, while inter-racial marriages are increasing, Blacks and Whites still tend to wed at much lower rates than people of other racial combinations. In fact, Whites are the least likely of any racial group to marry someone of another race.

Racism may not be hard-wired into us per se. But I fear that for too many of us, it's second nature.




Income inequality

Here's an interesting perspective on income inequality -- whether you're rich or poor doesn't matter as much as the gap between you and others.

Richard Wilkinson, an expert in public health, has charted the hard data on economic inequality. He found that a host of ills flow from inequality -- from mental illness and life expectancies to levels of social trust and the well-being of children.

Social harms

Again, he's not simply saying that being poor results in lower life expectancies. That would be a definite "Duh?"  He's saying that in a society with gross income inequality the poorer suffer from a range of social ills. And to guard against accusations that he's cherry-picking data to fit his thesis, he arrayed an internationally accepted standard of child well-being against measures of income inequality.

Child well-being
By the way, he gets the same results when he looks at individual states in the U.S. Measures of social health are worse for people who live in states with high income inequality than in states with less.

The charts above illustrate his point, but to get the full flavor of his thesis, watch the YouTube video of his talk at the TED conference. Or better yet, buy his book, The Spirit Level: Why Greater Equality Makes Societies Stronger.

A friend tells me that you could ascribe practically any cause to the Occupy Wall Street people.  Maybe so.  But income inequality has to be at the top of their list of gripes.  Wilkinson's data helps explain why they may be right.


Purple inequality

David Brooks sees two kinds of inequality in the United States. 

In his New York Times column earlier this week, he assigned them colors, apparently corresponding to the political leanings of the people who obsess about them. 

"Blue Inequality," he says, is all about income and wealth – the 1% who are well-off and the 99% who aren’t so much. "Red Inequality" is all about education – those who have college degrees and those who are less well-educated.  

Brooks concedes that both camps have reason for their respective concerns. Incomes have been steadily increasing for the lucky 1%, while their poorer cousins are stuck where they were five or six years ago.  And people with a college degree are not only more likely to get better-paying jobs, they’re also more likely to marry, have kids, stay married, and lead more fulfilling lives.

While conceding that incomes matter, Brooks maintains that the education gap is what we should really worry about. After all, money isn’t everything and, even if it were, a good education is the surest path to accumulating more of it. More importantly, well-educated people have larger social networks and are generally more engaged in civic life. 

I know Brooks’ thinking well enough to know that his argument isn’t a clever ploy to deflect attention away from concerns about income inequality. He’s not a died in the wool proponent of trickle-down economics and laissez-faire capitalism. He’s willing to pay his fare share towards the common good. But he exhibits a surprisingly myopic view of people with "Blue" tinted political leanings. 

Brooks concedes that income and education inequality are linked. But I think he may be underestimating how closely intertwined they are.

First of all, few would question that a good education pays for itself over time. BusinessWeek estimates the annualized net return on a college degree ranges from 12% at MIT to 4% at Black Hills State University in South Dakota.

But college has become an increasingly expensive investment. One study shows that tuition and fees increased 439% from 1982 to 2007, while median family incomes rose only 147%. The cost of attending a four-year public college consumes 28% of the median family income; at a private university, it would eat up 76%.

So the middle class has been financing college educations through debt, the same way it has been paying for everything else. According to one recent study, the average graduate leaves college with about $34,000 in loans to pay off.

Some experts worry that a college education may soon be out of reach for many middle class families. It's already a bridge too far for most lower income kids.

So while there’s a strong correlation between education and a host of social ills – from out of wedlock births to smoking – there’s  also a significant income component. That's part of Occupy Wall Street's message.

On this issue, Brooks is uncharacteristically color-blind. We don’t have Red and Blue shades of inequality. It’s more like a single strain of Purple.