Saturday, March 30, 2013

Disability insurance as welfare ("Unfit for Work: The Startling Rise of Disability in America")

Chana Joffe-Walt of National Public Radio wrote an in-depth look at people receiving government assistance for disability. It's a depressing piece, focusing less on the people who are physically unable to work-- those intended to receive disability, and those who could work but don't because it would reduce their disability benefit. NPR has aired interviews with many in the article, so you can hear their conflicted emotions about the perverse incentives to which they're responding.

"As far as the federal government is concerned, you're disabled if you have a medical condition that makes it impossible to work. In practice, it's a judgment call made in doctors' offices and courtrooms around the country. The health problems where there is most latitude for judgment -- back pain, mental illness -- are among the fastest growing causes of disability."

Welfare reform is often trumpeted as having seen a decrease in the state welfare rolls across the country, with the assumption often being that they force themselves to find work. But Walt found that States had simply shifted the burden onto the federal government, finding ways for many of their welfare recipients to be declared "disabled" in order to shift them onto the federal rolls.
Walt provides testimony from workers in the South, where the rates of workers on disability are highest, who have seen their plants close. Facing unemployment and low-wage alternative because they are aged, unskilled, or uneducated, workers were actually advised by their company's HR reps to get onto the disability rolls instead of looking for a new job.

The part of the piece that struck me most was the plight of children. Children with physical disabilities and learning disabilities serious enough to threaten the child's ability to perform well at school also qualify for disability. Their parents receive a check to help offset hypothetical missed work due to the extra work to help their child. Some families in poverty, however, have come to rely so much on their child's disability check that they have an incentive NOT to see their child improve. An improvement in their grades and development would result in a reduction of the disability check.

There has been a 700% increase in the number of children on disability since the late 70's.

Some of the kids with disabilities can work low-skilled jobs like other teenagers-- at McDonalds, for example. But the family essentially faces a high marginal tax rate, the teenager's wages wouldn't offset the amount their disability check would be reduced by-- hence disincentivizing work.

This struck me the most because we have a special needs child who has qualified for state-provided free preschool for special needs children in Kentucky. While we're seeking a professional diagnosis for him in order to better learn how to help him develop and "reach his potential," we could very well be faced with the same perverse incentive-- he could qualify for disability and the income would help us substantially, and the worse he does the larger the help. 

In an interview with Ezra Klein, the author points out that many in the disabled community, who advocated for the Americans with Disabilities Act, have a goal of getting more disabled people into regular jobs along side non-disabled colleagues. The current disability system, however, works against their goal. It's an ironic challenge for reform.

The problem, if it's not obvious to you, is that you have an increasing number of able-bodied people who are no longer producing-- making the country less wealthy-- and no longer contributing via payroll tax to Medicare and Social Security, but receiving benefits from them, a further drain on the system. It's also parents, particularly those in poverty, who have a disincentive to see their challenged child visibly improve or move onto work-- to possibly break that same cycle of poverty. Some on the Left have criticized the piece by saying it's not an expensive enough problem to care about or the the problem will mostly go away when the economy resumes its normal rate of growth. But there seems to be very little discouraging the U.S., or the world for that matter, from its current slow rate of growth. Exactly how expensive does misuse of government funds have to be in order to seek reform?

"I'm guessing a large majority of Americans would be in favor of some form of government support for disabled children living in poverty. We would have a hard time agreeing on exactly how we want to offer support, but I think there are some basic things we'd all agree on.
Kids should be encouraged to go to school. Kids should want to do well in school. Parents should want their kids to do well in school. Kids should be confident their parents can provide for them regardless of how they do in school. Kids should become more and more independent as they grow older and hopefully be able to support themselves at around age 18."

I highly recommend the piece to everyone, it's very thought-provoking.

Thursday, March 28, 2013

Marriage Privatization

Advocacy for the privatization of marriage seems to me to be a plausible response from Christians to the issue of gay marriage, and one we should have advocated long ago. The basic idea is that individuals can privately define what "marriage" is, instead of the State. "Married" would cease to be an adjective on government forms, replaced with something like "civil union" that serves the same legal purpose. "Marriage" is a union of man and woman, performed and regulated by the Church, where as "civil unions" are something the State decides and regulates. The Church doesn't have to recognize anyone as "married" unless it wants to; likewise, the State doesn't have to recognize anyone as unified that the church says is "married." The State sets guidelines on how to obtain a civil union-- the legal rights of "spouse," or "partner" and the Church has nothing to do with it.  

Marriage was God's design for man and woman (Genesis 2:18-25). Marriage is a word picture of Christ and His bride, the Church (Ephesians 5:22-33). The word "marriage" carries with it a deeper meaning to Christians than is perhaps generally understood by the public. Ask someone "when are two people 'married?'" you're likely to get varying answers. When a pastor says "husband and wife," when they get their marriage license, when they become "one flesh," ie: copulate, etc.  John Piper writes that
"God himself performs the union referred to in the words 'become one flesh.' That union is at the heart of what marriage is."

To a Christian, "marriage" is a proper union of one flesh between a man and a woman and needs no other definition.* 

When you look at the history of our marriage laws, you see legal precedent back to times when the State and the Church were the same entity--ie: Anglican England. The laws granted a man and woman exclusive sexual rights to each other. It also conferred legal status for inheritance and debt contract responsibility (ex: repaying a husband's debt) purposes. Common Law marriages still on the books in the U.S. are an artifact of this idea. If a man and a woman were illegally cohabiting, the Church and the State would eventually recognize them as "married" without a license application because they had become "one flesh." 

Marriage licenses date back to the Middle Ages and are a way to restrict who gets married, and a way for the government to collect revenue. Governments forbid marriage of underage people, inter-religious or inter-racial marriage, of people who couldn't procreate, etc (see list). Many of the restrictions were due to Church-State unity-- any enemy of the Church was an enemy of the State.

The Founders wrote the U.S. Constitution to explicitly protect religious freedom by protecting churches from this type of government interference-- many original colonies were founded by refugees fleeing persecution from the Church of England. If an Anglican wanted to marry a Catholic, the government had no business interfering.  As a result, marriage as something determined by the State that churches simply put a stamp on is something that made churches uncomfortable in the 1600s and still today. From a 2006 Boston Globe article (italics mine, HT: Wikipedia):
"A group of local Episcopal priests, saying that the gay marriage debate has intensified their longtime concern about acting as agents of the state by officiating at marriages, is proposing that the Episcopal Church adopt a new approach. Any couples qualified to get married under state law could be married by a justice of the peace, and then, if they want a religious imprimatur for their marriage, they could come to the Episcopal Church seeking a blessing from a priest."

Under marriage privatization, the church wouldn't have to say "you're married" unless it approved, but the State could infer the same legal rights of the marital compact to anyone it wanted-- it just wouldn't be called "marriage," as that would be an incorrect definition. For example, one of my former pastors refused to marry any non-Christian, even though the State had granted them legal status as a "married" couple. I consider marriage privatization as simply a recognition of the rights of the couple to be counted as unified (for tax, inheritance, etc.) and the pastor's right to use the biblical definition of marriage. This is an affirmation of the separation of Church and State.

The most thorough argument I've seen is "A 'Judeo-Christian' Argument for Privatizing Marriage" by Daniel A. Crane, a lawyer who graduated undergrad from Wheaton. He writes:
"It is ironic that the push for greater legal control of marriage—a constitutional amendment uniformly defining marriage (as between man and woman)—comes primarily from those constituencies that stand to lose the most from a precedent establishing marriage as a civil relationship requiring uniform rules."

There has unfortunately been less thinking and more fear mongering about the issue among evangelicals, see this piece criticizing Cass Sunstein's advocation of privatization in the book Nudge. Sunstein, who served in Obama's cabinet, would abolish the word "marriage" from the legal code-- it'd be purely a private or church term, not a legal definition. Two people could be "legally unified," and who cares if a church says they're "married." They'd get to file taxes jointly and have the same inheritance tax breaks, etc. (The inheritance tax issue is what sparked the Supreme Court hearing on DOMA). The only attempt at thoughtful rebuttal of the issue from an evangelical Christian perspective I've seen is this one from Al Mohler, who unfortunately is responding to a caricature of the argument in a poorly-written piece in the San Francisco Chronicle years ago. Mohler (different article) agrees that the Church's definition and the State's definition no longer align.
"The cultural impact, Mohler said, will force pastors to address their position on marriage, and obligate churches to declare they don't believe certain couples are married -- when the government says they are. Parents, Mohler added, will need to train children on the biblical definition and role of marriage, in the face of what the culture is telling the children. Christian institutions also will need to address their legal rights, which may be curtailed."
So, if Church and State definitions of marriage differ, why not free the two entities up to use different terms? This seems no different than my former pastor refusing to marry non-Christians. Would Mohler object to a gay man and his partner being able to file taxes jointly? I don't see that he'd care, so long as they weren't defined as "married," in which case he is on the exact same page with Cass Sunstein and libertarian supporters of privatized marriage. Would Mohler object to children being adopted by a unified couple of the same gender? Maybe, but he'd have to then argue that the children would be better off in an orphanage or in an unstable heterosexual home, and I don't think anyone makes that argument.

Perhaps there is something I'm missing here. What am I missing? Feel free to comment constructively.

* Perhaps you disagree that a Christian must define marriage as only between man and woman. Okay, but wouldn't you rather that we work out that definition privately rather than have the government decide what the Church should believe? That's my point.

Wednesday, March 27, 2013

On "Googling"

Students of Marketing 101 know that companies hate dilution of their brand vis-a-vis their trademarks becoming part of the vernacular. It diminishes the company's identity by confusing it with one of the company's products.  Xerox used to be the modern example of this as people started to say "Xerox this," instead of "photocopy this." "Kseroks" became a common verb in foreign countries instead of learning "photocopy." Google has been issuing cease and desist orders for years for people using "to Google" as a verb meaning "use a search engine to look something up." You can only say "google" if you mean "use specifically Google's search engine to look something up." Google is now going after the Swedish Language Council for the same issue.

Here's the problem: I know in my head I should probably use "search," or maybe "do a search," in a conversation with someone rather than "google." But yesterday in mid-conversation with someone I decided "search" made me sound incompetent. Like it suggests I personally fumble around various search engines to find something because I'm not that internet-savvy. I use Google--not Bing, Yahoo! or any inferior search engine and I definitely am an expert user. So, I said "google."

What do you think? Does "search" now sound incompetent compared to "google"?

Tuesday, March 26, 2013

Book Review (#2 of 2013) A Genuine Faith by Rodney Reeves

Dr. Rodney Reeves had a bigger impact on me than perhaps anything else in my 3.5 years living in Bolivar, MO. A friend and former student of Reeves aptly called him "a walking paradigm shift." I've heard Reeves preach the best sermons on the Apostle Paul I've ever heard, marveled at his use of the Socratic method in his preaching to encourage deliberation and thought from his audience, and I've watched him wrestle with thoughts on his blog all to my great personal benefit. 
"I'm a Baptist because I was raised Baptist" is probably the most radical comment from a Baptist pastor/theologian I've ever read. (Most say they're Baptist, Methodist, Pentecostal, etc. because they're "right.")
Whether it's a men's retreat or his Introduction to New Testament freshmen, the man always gives his audience something they hadn't thought about before and desperately want to push back on.  The book is no different than its author.

It's countercultural even in its publishing. When most contemporary Christian books are following a model of fewer words and more flash on a page, making it hard to call them a "book," this book required the publisher to squeeze words tightly onto the page to keep it from being an even longer tome. As such, there is a lot of thought on each page that it takes a long time to ponder.

It's also countercultural in its many introspective criticisms of evangelical Church culture. This is not a "how to" book as the subtitle suggests, it's a "let's acknowledge how hard this is" book (P. 13):
"Jesus cannot teach me to be an American Christian because he was a Galilean Jew."

Reeves is a Greek scholar and uses that to examine the four Gospel authors' perspectives on Jesus and to flesh out both the contexts and motives in their writings.  
"We cannot follow Jesus by ourselves. It takes twelve people to follow Him" (P. 18). 

There are a lot of statements Reeves makes in the book that I might disagree with. That "the beloved disciple" in John might well have been Lazarus rather than John himself, for example. Reeves' assertion that the Jerusalem church became a destitute burden on the other churches precisely because they gave up all their possessions in a communal life (see Acts) is something I've never heard even Austrian Christian economists purport. But Reeves' statements always make you think "But why do I have the presupposition that I have? Can I defend it?"

I learned a lot about the Gospels and read them differently now-- particularly Luke. It's easy to take the readings from the book, look at the thoughts on Reeves' blog, and combine the two. I will never view the Lord's Supper the same way as I used to-- every church I've ever been in worldwide does it in an incorrect manner, I'm convinced. You can find your own life-changing nuggets in the book. 

It doesn't appear Reeves has ever traveled to Israel or other parts of the ancient world, where he might color his pages with descriptions of what terrain looked like, how the people live, etc. It's written from a Midwestern-Southern American Christian perspective, so his own experience with the Church may be irrelevant to your own. I see that as somewhat of a weakness, but Reeves mainly sticks to the written word. He is not the liberal some might want to peg him as-- he is critical of biblical scholars who while reading between the lines "also ignore the lines." This book is also not available in an e-book format which is my biggest criticism-- I don't have notes that I'd normally have for the book since I'd have to handwrite or type them as I read. 

I give this book 4 stars out of 5. I highly recommend it to any Christian looking for deep, challenging thoughts on the Gospels.

Monday, March 25, 2013

Book Notes: International Business by Charles W. Hill (8th edition)

I rented this textbook for Kindle via Amazon for an International Business MBA course I taught this semester. I found the text easily accessible by students and most of the case studies well-written.

Given my various forays into finding a career overseas, I found the chapter on human resources perhaps most intriguing. The book presents various strategies for staffing overseas, which I'll not get into. But Hill presents results of various surveys on results and job satisfaction of people who took overseas assignments on behalf of a company in their home country. Overall, it's not a pretty picture. While American companies increasingly seek and profit from overseas opportunities, the expatriates who help achieve that success seemingly get the short end of the stick.

Some stats which stand out:
"(B)etween 16 and 40 percent of all American employees sent abroad to developed nations return from their assignments early, and almost 70 percent of employees sent to developing nations return home early."

Sending an employee overseas is a big risk for a company because most don't seem equipped to determine whether the employee can handle it-- and has almost no legal way of evaluating whether spouse and children can. 
"Tung’s research, for example, showed that only 5 percent of the firms in her sample used formal procedures and psychological tests to assess the personality traits and relational abilities of potential expatriates...90 percent of the time employees were selected on the basis of their technical expertise, not their cross-cultural fluency."

"'inability of spouse to adjust' was the top reason for expatriate failure among U.S. and European multinationals but only the number five reason among Japanese multinationals."

"Managers of European firms gave only one reason consistently to explain expatriate failure: the inability of the manager’s spouse to adjust to a new environment."

Spouse's lack of personal career fulfillment appears to be a factor:
"(Of) spouses, 49 percent were employed before an assignment and only 11 percent were employed during an assignment." 

What type of people are successful overseas? (bold mine) 
"Mendenhall and Oddou identified four dimensions that seem to predict success in a foreign posting:
self-orientation, others-orientation, perceptual ability, and cultural toughness...Self-orientation: The attributes of this dimension strengthen the expatriate’s self-esteem, self-confidence, and mental well-being. Others-orientation: The attributes of this dimension enhance the expatriate’s ability to interact effectively with host-country nationals.
Perceptual ability. This is the ability to understand why people of other countries behave the way they do; that is, the ability to empathize. Cultural toughness. This dimension refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting. "

Perhaps worse than not evaluating and training an employee in areas of cross-cultural competency before sending him overseas is not validating that employee after he returns. This is the sad part. 

"Often when they return home after a stint abroad—where they have typically been autonomous, well-compensated, and celebrated as a big fish in a little pond—they face an organization that doesn’t know what they have done for the last few years, doesn’t know how to use their new knowledge, and doesn’t particularly care."

"77 percent of those surveyed took jobs at a lower level in their home organization than in their international assignments." 

"15 percent of returning expatriates leave their firms within a year of arriving home, and 40 percent leave within three years." 
"56 percent of the managers surveyed stated that a foreign assignment is either detrimental or immaterial to one’s career."
"many expatriate managers believe that headquarters management evaluates them unfairly and does not fully appreciate the value of their skills and experience."

It seems employees take overseas assignments primarily for the increase in pay, and perhaps other personal reasons-- like wanting to see the world. But in most cases, it hurts their long-term career aspects with the parent company. Even if they get deep personal fulfillment from their experience overseas, the return hoe robs them of the benefit. I would have expected the opposite. 

There are a few happy stories. Large multinationals with a diverse workforce criss-crossing the globe have figured out it's worth investing in their employees' lives overseas and celebrating their success upon return. Shell built and staffed elementary schools on-site for company employees. Monstanto has a complete re-repatriation program where returning expats share with their colleagues their experiences, and the company makes an effort to learn from the employee's debriefing. Ericsson is another listed as managing an overseas workforce well, particularly learning cross-culturally. 

I've experienced life overseas as a single, married without children, and married with child. I can definitely relate to the issues of the importance of spouse fulfillment. I tried to point out to my students that HR issues involving overseas staff was just one more item companies tend to underthink and overlook before moving into an overseas market.

Wednesday, March 20, 2013

How To Fill Out Your March Madness Bracket (2013 edition)

It's that time of year. First, keep this in mind: If Team A has a 70% chance of beating Team B in a single game, who do you bet on to win (assuming an equal payoff either way)? Team A, of course, you have a 70% chance of winning--great odds.

If Team B wins, does that mean you were "wrong," or that Team B is a better team? No. It means that it won one of the 3 games out of 10 it is likely to win. In baseball, a .300 batting average is "good." That player gets out 70% of the time. Does his getting a hit in the at-bat I happen to watch make him better than .300? No. Remarkably, sports commentators are ignorant of this fact. (Ironically, I know a baseball coach who tweets complaints that his local weatherman is "wrong" when the weatherman predicts a 30% chance of rain and it rained. ). That's why brackets "bust" -- a 30% chance is not 0%. 

So, do we have any algorithms out there that give us probability?  Sort of. We have several systems that rate teams based on their performance. A couple I like are Jeff Sagarin's, which mainly uses a team's points, and Ken Pomeroy's which uses teams' offensive and defensive efficiency (points per possession) to create a Pythagorean winning percentage. Simply use the ratings to determine how teams match up, and you have your pick-- the higher-rated team has a greater than 50% chance of winning that particular game. There are several other ratings systems out there, here you can see them ranked by accuracy.

You can use the ratings to see if there are any obvious "upsets," meaning a lower-seeded team is more probable to win the game. You can also deduce which games are "closer" than their seed makes it appear.  Say, a 12 seed that is just barely worse than the 4 seed opponent. Maybe they have a 40% chance to win as opposed to a different bracket where the 12 and 4 are much further apart. (Sorry, you have to do your own homework here.) They are more likely to "upset" the opposing team, and make sense to choose if you want to write down something less than 50% certainty. But, given my example in the first paragraph, it doesn't make logical sense to bet on the less-certain option given an equal payoff. (This is why I like pools where teams are auctioned off. Try to find the "bargain" team with a relatively high probability of advancing that you can buy cheaply.)

The Vegas opening line is also a remarkably accurate predictor. Just following its advice, you have a 73% chance of being correct (just remember that 27% chance of being wrong isn't 0%). You can look up the Vegas oddsmakers' line for the first-round games. The selection committee seeds teams fairly "accurately," meaning it matches the assigned probabilities. One glaring "error" appears to be Florida this year, they should be a 1 seed based on the models.

Another predictor is the engine at You have to trust that its game engine spits output similar to real college games, I've never seen a study done on it. But it's useful for illustrating probability:
Kansas won 18.2% of the championships in its simulation of 1,001 games. Remember that all the probabilities combined have to equal 100%.

My bracket has Louisville beating Florida in the championship. As soon as I tweet that, I'll get responses telling me that I'm "wrong," even though I've gone with the option with the highest probability outcome according to the algorithms I used-- and algorithms beat humans over time (read Kahneman). Perhaps "wrong" simply means there is a greater chance of someone else winning it-- that would be correct. If Florida has an 18% chance, the rest of the field combined has an 82% chance! But it's rational to bet on the team with the highest odds-- go with the 18% team instead of the 14% team-- irrational to do anything else.

Monday, March 18, 2013

Book Review (#1 of 2013) Thinking Fast and Slow by Daniel Kahneman

Kahneman is a Nobel laureate whose work I was already familiar with, particularly after having read the book Nudge (my review). Thinking Fast and Slow (TFAS) explains the nuts and bolts behind behavioral economics, and how, as psychologists, Kahneman and Amos Tversky helped shatter certain foundations of microeconomics-- namely utility theory and the way economists assume rationality and preferences work among people making choices.

Since studying economics, I've striven to be "rational," to think like an "Econ" as opposed to a rational human. (By "rational" I mean the definition of "having internally consistent beliefs.")
This book helped illustrate how impossible that is, even for the most self-aware. The helped me think about my own cognitive biases and the emotions behind some of my decision-making.

Every chapter is similar, which makes it rather monotonous. A hypothesis springing from a real-life observation, an explanation of various (often amusing) experiments done, some conclusions, and then a "how to apply this discovery or concept to everyday conversation/decision making."

The book starts by differentiating our thinking into two "systems," which become our friends throughout the book. System 1 is the instinct, gut reaction system. System 2 is the slower, processing system. If I write "2 + 2," your System 1 immediately says "4." But if I say "2 x (3 x 5) / (4 x 44)" you have an instant physiological reaction-- your pupils dilate, your heart rate increases, and your System 2 goes to work figuring it out.  Kahneman points out many illogical errors our System 1 is prone to make, and how to address them. This is a crucial concept for leaders and decision-makers.

For example, System 1 often falls for the "halo effect," assigning multiple positive attributes to someone just because we like one particular attribute of them. You see someone giving a speech with a warm smile-- perhaps it subliminally reminds you of your uncle. You feel he must be a nice guy, an honest guy, a good family man-- someone you can trust. But all you know about him is his smile. Choosing to vote for him on your assumptions is illogical. But, politicians through the ages have gotten elected on little more than their physical attributes.
This is one reason I don't watch political speeches and debates often-- I prefer to read them afterwards. This helps eliminate the halo effect from the person's body language, looks, smile, audience reaction, etc.

System 2 is "lazy," according to Kahneman-- it requires focused effort. Perhaps the above helps explain why "Stocks with pronounceable trading symbols (like KAR or LUNMOO) outperform those with tongue-twisting tickers like PXG." Our System 1 likes simple things. (Kahneman says that finance is "an entire industry built on the illusion of skill," eagerly reminding us that return of index funds beat returns of actively-managed portfolios.)
System 1 also falls for the fallacy that human intuition is better than algorithms based on statistical data. This is the old Money Ball debate. Algorithms beat humans, get over it. System 1 is too optimistic. Optimism seems hardwired into the human psyche and helps explain our capitalist system as well as Westward expansion. Entrepreneurs rate their chances of success much higher than historical odds. If they were relying purely on their System 2 to make the decision to enter the market, they might never enter as rational justification falls away quickly.

Kahneman won the Nobel for prospect theory, which he explains in detail. Two identical propositions presented differently lead to different preferences from the responder, something that shouldn't happen if people are rational calculators, as standard economics assumes. People are loss-averse, proven time and again in experiments. If I offer you $50 for certain or a 75% chance to win $100, you should logically take the chance (your expected payout is $75 compared to the $50)-- but most people don't, they'd rather take the sure thing. The pain of losing the sure thing would outweigh the potential gain. This loss aversion shows up in various aspects of life. Studies have found that golfers putt better when going for par than they do for birdie-- they don't want to bogey.
"If in his best years Tiger Woods had managed to putt as well for birdies as he did for par, his average tournament score would have improved by one stroke and his earnings by almost $1 million per season."

It seems obvious to me that Kahneman doesn't have any kids, as he makes observations that any parent would see as obvious. Most of his experiments involved adults, and it would have been interesting to see how kids behave in similar situations.

There are too many examples of cognitive biases and fallacies to list here, but one section that was new to me was the idea of there being an "experiencing self," and a "remembering self."
"What we learn from the past is to maximize the qualities of our future memories, not necessarily of our future experience. This is the tyranny of the remembering self."
You often don't remember the wonderful game your NCAA basketball team played, or the fact that the best player went 10-12 from the field, an excellent percentage. What you remember is that he missed the shot at the buzzer that would have given your team a win-- a memory that still stings. You disregard the 24 other shots your team missed from the field that would have also made the difference-- that last memory is what "lost the game." 

People's evaluation of overall well-being is dependent upon recent events and what stands out in memory.  A fascinating experiment revealed:

"Adding 5 'slightly happy' years to a very happy life caused a substantial drop in evaluations of the total happiness of that life."
People would rather go out "on top" than see a significant decline in performance, happiness, or health before going out.  It's a tragedy when an athlete plays too long as a diminished version of his former self-- he's ruined the memories of so many, and diminished his previous accomplishments. This is logically nonsense, his previous records haven't changed, only our current evaluation of him. 

How the "remembering self" handles regret was particularly important to me. When making a major decision, factor in what the reduction in your happiness will be if it doesn't work out the way you hope. Add that to the cost/benefit analysis of making the decision.

It's not all gloom and doom, Kahneman tells us what research says about "happiness," which is tricky to define. Income above $75,000 in the U.S. has rapidly diminishing marginal returns to happiness. More education, likewise, correlates with more stress and less happiness. 

"Religious participation also has relatively greater favorable impact on both positive affect and stress reduction than on life evaluation...Surprisingly, however, religion provides no reduction of feelings of depression or worry."

Marriage, in itself, is an overall wash because it improves some areas of satisfaction while worsening others. Kids bring satisfaction, but only if the time spent with them isn't a chore-- driving them all over town to their many activities, for example, can be much more stressful than satisfying.

Research has shown Kahneman:
"It is only a slight exaggeration to say that happiness is the experience of spending time with people you love and who love you."
Kahneman recommends switching from passive leisure, like watching TV, to more "active leisure," like socializing with friends, exercising, and doing other non-obligatory activities with people you enjoy being around.

I give this book 4.5 stars out of 5. A very worthwhile read.

Wednesday, March 13, 2013

2% RGDP growth

Here's an exercise for the reader:
Leave the country. Come back X years later. As you drive around town and wander around Wal-Mart, what percentage of the things you see are "new," meaning they didn't exist when you left before (just estimate--this isn't scientific). Which prices have risen, which have fallen?
A few of my own observations after returning from Turkey:

1. Subway lets you order sandwiches online now. (This has become commonplace in Turkey. If Subway only delivered they'd be on par with most Turkish fast food places.)
2. There are new flavors of old cereals. New editions of old toys (for children and adults), with more features, memory, etc.
3. More banks now let you deposit checks via your iPhone, even some of the smaller banks (our still does not, alas, but it still pays the highest interest on a checking account in the U.S.). 
4. Prices of external hard drives and flat-screen televisions are lower than they were a year ago.
5. I have more options for using a pre-paid cellphone than I did a year ago. 

A few things change, most stay the same. Maybe 2% of things are "new."