Wednesday, February 15, 2012

The U.S. Government is Still Basically a Big Insurance Company with an Army

I don't remember whether I commented on this when the Obama Administration released its budget last year, but I'll point it out this year - as Ezra Klein comments, the U.S. government continues to be basically a big insurance company with a large army:

And the work my agency should probably be counted as "insurance" as well, though we're in the "everything else" category above. So, yes, the elderly and the military eat up 2/3s of the federal budget, leaving not much for the rest of what citizens want the government to do.

Also, on a personal note, I'm about to get on a plane to Europe, so there will likely be no posting for 1.5-2 weeks. In the meantime, check out the archives, and take care of yourselves!

Tuesday, February 14, 2012

14 Ways for an Economist to Say, "I Love You" or "My Demand for You is Inelastic"

For any economists out there looking for last-minute ways to tell their partners or their secret crushes "I love you," check out these amazing and hilarious Valentine's Day cards from

Happy Valentine's Day, everyone - especially to my dear wife, for whom my demand is always inelastic and with whom I always hope to trade dinners. I love you more than I know how to say, Ali!

Sunday, February 12, 2012

Does a Richer Parent = Good Parent While a Poor Parent = Bad Parent?

[Before I get to the content of today's post, I've got a small personal update. I offer my apologies that blog posting has been so sparse this month - I got seriously knocked out by some sort of illness the first week of February, and work has rather blown up in my face this past week, and I'm leaving on a vacation to Europe in three days that will last until the end of February, so there won't be much (if any) posting happening until March. But, my work should be calmer after I get back, and I hope not to get sick again, so posting should resume at its normal pace in March.]

Image source.

What makes people good or bad parents? It's a question central to the continued survival of the human species (or human civilization, at least), so it's not terribly surprising that people have written thousands of books on the subject and continue to argue over even the most minute and trivial parenting points.

First off, I'll remind everyone of either good or terribly depressing news, depending on your perspective - as you may remember from your Freakonomics and SuperFreakonomics, Levitt and Dubner do some serious economic analysis of parenting outcomes, and they uncover two interesting facts:
  1. It doesn't really matter if you're a good parent or a mediocre parent; what you do as a parent has little impact on your child's outcome in life. What matters most is that you not be a bad parent.
  2. If you want to improve your child's lot in life, it doesn't really matter what you do - it matters what/who you are. For example, the variable that most strongly correlates with a child's success in school is the number of books in that child's home - not whether the child actually reads those books with Mom and Dad or on their own.
So, to be a good parent, you just have to not be a bad parent - but you don't have much control over this, as it's largely determined by who you are prior to having a child.

A recent economics essay, however, gives us a more nuanced view of the above-discussed phenomena - these economists argue that wealth (which certainly influences the number of books in a person's home), rather than cultural mores or other variables, is the most important determinate of whether a person will be a successful parent. In their essay, the authors lay out their rationale for why richer people make better parents:
Good parenting requires psychic resources. Complex decisions must be made. Sacrifices must be made in the moment. This is hard for anyone, whatever their income: we all have limited reserves of self-control, and attention and other psychic resources. In that moment, fretting about the deadline, your psychic resources were depleted. Facing pressure at work, you did not have the freedom of mind needed to exercise patience, prioritize and do what you knew to be right. To an outsider, in that moment, you would look like a bad parent.
Low-income parents, however, also face a tax on their psychic resources. Many things that are trifling and routine to the well-off give sleepless nights to those less fortunate. To take a simple example, everyone may face the same bank overdraft fees – but steering clear of them is pretty easy for the well-off, while for the poor it requires constant attention, steely reserve and enormous amounts of self-control. For the well-off, monthly bills are automatically deducted and there is still some slack left over. For those with less income, finding ways to ensure that rent, utilities and phone bills are paid for out of small, irregular paychecks is an act of complicated financial jugglery.
Shocks get magnified. For the well-off, a broken- down car is little more than a temporary annoyance; if needed, they can “just take a cab.” For those with less income, it necessitates real, meaningful trade-offs and painful sacrifices. If taking a cab becomes unavoidable, it may mean having to spend less on groceries. It may mean cutting back on the time spent with a child on account of having to work extra hours to make up for the unexpected expense. Equally, trying to avoid shelling out the cab fare may mean taking an extra couple of hours to get to work, with less time and energy left over for other things, not least supervising a child’s school- work and keeping tabs on his social life.
When cash is tight, that feeling you have when that deadline was looming, becomes a constant mental state. Well-off people have the luxury of freedom of mind. Their psychic resources are reserved for “difficult,” “important” things that have a big impact on their well- being in the long run. But those with less income are not as fortunate. They have the same (limited) capacity for self-control and attention – but are forced to expend a large fraction of it on dealing with the ups and downs of everyday life. Simply managing the basics of life uses psychic resources.
This leaves less psychic resources for the important things in life. Part of the mind is constantly fretting about putting food on the table. Put in this light, is it any surprise that low-income parents look like worse parents?
The authors aren't implying that ever-richer people make ever-better parents; indeed, if you spoil your child and take care of them to the point where they never develop the capacities for independent thought and action required to be a functional, self-standing human being, you've gone to the opposite extreme and become a worse parent on account of your wealth.

Rather, they're saying that what makes for good parenting is having some kind of minimum amount of resources available in order to avoid depleting one's psychic resources by stressing out over day-to-day occurrences. This minimum amount of resources leaves parents free to focus on the softer needs and longer-term decisions required to be good parents.

This insight has profound implications for public policy. It suggests that we could strengthen our society's collective parenting skills by helping all Americans achieve some minimum level of economic security. It suggests that many of our policy interventions in the field of parenting - which often require "bad" parents to take their children to yet another program, to monitor the children's progress, to attend regular meetings, etc. - actually make "bad" parents even worse parents because these programs further tax the "bad" parents' already limited psychic resources.

This discussion ties in closely to a couple of my previous posts - one post that discusses how evidence-based research has demonstrated that the most effective anti-poverty programs are the ones that simply give cash to the poor, and a second post discussing the fact that when giving cash to poor families, it's more effective to give that cash to women than men. Perhaps these economists' essay have found the causal link as to why the most effective poverty programs simply give cash to poor women - since women are usually children's primary caretakers, giving them more cash frees up their psychic resources to make better decisions, both for their children and their entire household, making them better parents and wiser citizens, in addition to decreasing their level of material deprivation.

Unfortunately, I doubt these lessons will take hold anytime soon in the U.S. - instead, the U.S. seems intent on further harassing poor parents though such ill-advised measures like requiring people to pay for drug tests out-of-pocket before receiving any kind of government assistance - even though it is clear that this kind of drug testing costs far more money than it saves because people seeking government assistance use drugs at a rate lower than the general population. The only ones who benefit from this kind of government policy are the drug testing companies, who become richer on the backs of the poor.

Oh well - I'll keep praying that, someday, we'll elect smarter politicians.

Thursday, February 2, 2012

How Many Days (Years?) Did Bill Murray Spend Reliving Groundhog Day?

"Don't drive angry. Don't drive angry!"

Happy Groundhog Day, everybody! Even though this has to be one of the most bizarre American holidays of them all, it's always good to have an excuse to party, right?

I love the film Groundhog Day - the 1993 film is a brilliant comedy and some of Bill Murray's best work. I remember that I recorded it off TV onto VHS tape sometime in my early teens and occasionally popped it in the VCR to relive the magic (and horror) of a never-ending February day in Punxsutawney, Pennsylvania.

So, almost everyone knows that Bill Murray's character (Phil Conners) has to relive the same day, Groundhog Day, over and over again, until he gets it exactly right. In the meantime, he learns to play the piano, gets to know the life story of almost everyone in Punxsutawney, tries to commit suicide several times, learns to speak perfect French, learns how to make ice sculptures, and has a variety of other adventures. All this makes for a great film - but how many days does poor Phil spend reliving Groundhog Day?

According to Obsessed with Film, which did a relatively extensive calculation of the days needed to acquire all of Phil's skills and knowledge exhibited through the movie, (drumroll please ....)

Phil/Bill spends 12,403 days (just one week short of 34 YEARS) stuck in Groundhog Day. Now I understand why he tries to kill himself at least a dozen times!

(P.S. Sorry for the lack of posting this week - I've been sick and therefore quite out of it. Regular posting will resume next week, assuming that I'm not still sick.)