Friday, December 22, 2017

Has U.S. median income risen after all?

Despite the large increase in U.S. income inequality, consumption for families at the 25th and 50th percentiles of income has grown steadily over the time period 1960-2015. The number of cars per household with below median income has doubled since 1980 and the number of bedrooms per household has grown 10 percent despite decreases in household size. The finding of zero growth in American real wages since the 1970s is driven in part by the choice of the CPI-U as the price deflator (Broda and Weinstein 2008). Small biases in any price deflator compound over long periods of time. Using a different deflator such as the Personal Consumption Expenditures index (PCE) yields modest growth in real wages and in median household incomes throughout the time period. Accounting for the Hamilton (1998) and Costa (2001) estimates of CPI bias yields estimated wage growth of 1 percent per year during 1975-2015. Meaningful growth in consumption for below median income families has occurred even in a prolonged period of increasing income inequality, increasing consumption inequality and a decreasing share of national income accruing to labor.
--Bruce Sacerdote, "Fifty Years of Growth in American Consumption, Income, and Wages," on the importance of the deflator

What happened to the Napalm Girl?

You may not recognize me now, but you almost certainly know who I am. My name is Kim Phuc, though you likely know me by another name. It is one I never asked for, a name I have spent a lifetime trying to escape: “Napalm Girl.”

You have probably seen my picture a thousand times. Yes, that picture. The image that made the world gasp. Some called it a turning point in the Vietnam War—a Pulitzer Prize-winning photograph of me in 1972, age 9, running along a puddled roadway in front of an expressionless soldier. I was photographed with arms outstretched, naked and shrieking in pain and fear, with the dark contour of a napalm cloud billowing in the distance. ...

Those bombs have caused me immeasurable pain over the course of my life. Forty-five years later I am still receiving treatment for the burns that cover my arms, back and neck. But even worse than the physical pain was the emotional and spiritual pain. For years I bore the crippling weight of anger, bitterness and resentment toward those who caused my suffering. Yet as I look back over a spiritual journey that has spanned more than three decades, I realize the same bombs that caused so much pain and suffering also brought me to a place of great healing. Those bombs led me to Jesus Christ.

My salvation experience occurred on Christmas Eve. It was 1982. I was attending a special worship service at a small church in Vietnam. The pastor, Ho Hieu Ha, delivered a message many Christians would find familiar: Christmas is not about the gifts we carefully wrap and place under a tree. Rather, it is about the gift of Jesus Christ, who was wrapped in human flesh and given to us by God. As the pastor spoke, I knew in my heart that something was shifting inside of me.

A decade removed from the defining tragedy of my life, I still desperately needed peace. I had so much hatred and bitterness in my heart. Yet I was ready for love and joy. I wanted to let go of my pain. I wanted to pursue life instead of holding fast to fantasies of death. When Pastor Ho finished speaking, I stood up, stepped out into the aisle, and made my way to the front of the sanctuary to say “yes” to Jesus Christ.

When I woke up that Christmas morning, I experienced my first-ever heartfelt celebration of the birth of Jesus Christ. I know what it is like to experience terror, to feel despondent, to live in fear. I know how wearying and hopeless life can be sometimes. After years in the spiritual wilderness, I felt the kind of healing that can only come from God. ...

My faith in Jesus Christ is what has enabled me to forgive those who had wronged me—no matter how severe those wrongs were. Faith also inspired me to pray for my enemies rather than curse them. It enabled me not only to tolerate those who had wronged me but to love them.
--Kim Phuc Phan Thi, WSJ, on a peace that passes understanding

Wednesday, December 20, 2017

Bipartisanship used to be seen as a sign of dysfunction

From the end of World War II to roughly the end of the Cold War, American politics and policymaking was markedly different. The Democratic and Republican parties were internally diverse, with distinct factions that often did not agree with each other on fundamental issues. Liberal Northern Democrats, such as Senators Ted Kennedy and Walter Mondale, had to contend with conservative Southern Democrats. In the Republican Party, conservative “Regular Republicans” had to contend with liberal Northeastern Republicans, like New York’s Jacob Javits and Massachusetts’s Edward Brooke (the “Rockefeller wing”). To pass anything, parties had to reach across the aisle to find willing partners from the other party—partners that changed depending on the issue.

On civil rights, for instance, to pass the landmark Civil Rights Act of 1964, Democratic President Lyndon Johnson relied on the votes of 25 Republican senators, including all 16 Northeastern Republicans, to end a filibuster by his fellow Southern Democrats. On economic policy, Republican President Ronald Reagan in 1981 relied on the votes of 50 “boll-weevil” conservative Southern Democrats to pass his budget—and later tax cuts—through a Democratic House of Representatives.

To many, this cross-party dealmaking was a sign that American politics was broken. The American Political Science Association called for “responsible” political parties who could present a coherent platform, ostensibly be elected on it, and then implement its planks. Others lamented the seemingly intractable divided government—in which Republicans reliably controlled the presidency and the Democrats controlled the Congress—of the 1970s and 1980s, going so far as to call for four-year House terms so that members of Congress were tied to the presidential ticket. 

Beginning in the early 1990s, however, the political parties started to become more ideologically coherent and competitive, and the result was the broken policymaking we see today.
--Kenneth Baer, The Atlantic, on broken yesterday and broken today

Tuesday, December 19, 2017

The hijacking of the word "evangelical"

When I became a Christian in college, in the early nineteen-seventies, the word “evangelical” still meant an alternative to the fortress mentality of fundamentalism. ... In those years, there was such great energy in the movement that, by the mid-nineteen-nineties, it had eclipsed mainline Protestantism as the dominant branch of the Christian church in the U.S. ...

Today, while the name is no longer unfamiliar in my city, its meaning has changed drastically. The conservative leaders who have come to be most identified with the movement have largely driven this redefinition. But political pollsters have also helped, as they have sought to highlight a crucial voting bloc. When they survey people, there is no discussion of any theological beliefs, or other criteria. The great majority of them simply ask people, “Would you describe yourself as a born-again or evangelical Christian?” And those who answer ‘yes’ are counted. More than eighty per cent of such people voted for Donald Trump, and, last week, a similar percentage cast their ballots for Roy Moore, in the Alabama Senate race. So, in common parlance, evangelicals have become people with two qualities: they are both self-professed Christians and doggedly conservative politically. ...

“Evangelical” used to denote people who claimed the high moral ground; now, in popular usage, the word is nearly synonymous with “hypocrite.” ...

Understanding the religious landscape, however, requires discerning differences between the smaller, let’s call it “big-E Evangelicalism,” which gets much media attention, and a much larger, little-e evangelicalism, which does not. The larger, lower-case evangelicalism is defined not by a political party, whether conservative, liberal, or populist, but by theological beliefs. ... Evangelicals have generally believed in the authority of the whole Bible, in contrast to mainline Protestants, who regard many parts as obsolete, according to Bebbington. They also see it as the ultimate authority, unlike Catholics, who make church tradition equal to it. In addition, the ancient creedal formulations of the church, such as the Apostles’ Creed and the Nicene Creed, as well as others, are taken at face value, without reservation. And, again, unlike many in mainline Protestantism, evangelicals believe that Jesus truly did exist as the divine Son before he was born, that he actually was born of a virgin, and that he really was raised bodily from the dead.

Do the self-identified white “big-E Evangelicals” of the pollsters hold to these beliefs? Recent studies indicate that many do not. In many parts of the country, Evangelicalism serves as the civil or folk religion accepted by default as part of one’s social and political identity. So, in many cases, it means that the political is more defining than theological beliefs, which has not been the case historically. ...

Yet there exists a far larger evangelicalism, both here and around the world, which is not politically aligned. In the U.S., there are millions of evangelicals spread throughout mainline Protestant congregations, as well as in more theologically conservative denominations like the Assemblies of God, the Southern Baptist Convention, and the Lutheran Church, Missouri Synod. But, most significantly, the vast majority of the fast-growing Protestant churches in Asia, Latin America, and Africa all share these same beliefs. And in the U.S., while white Evangelicalism is aging and declining, evangelicalism over all is not. ...

Here in New York City, even within Manhattan, I have seen scores of churches begun over the last fifteen years that are fully evangelical by our definition, only a minority of which are white, and which are not aligned with any political party.

In my view, these churches tend to be much more committed to racial justice and care for the poor than is commonly seen in white Evangelicalism. In this way, they might be called liberal. On the other hand, these multicultural churches remain avowedly conservative on issues like sex outside of marriage. They look, to most eyes, like a strange mixture of liberal and conservative viewpoints, although they themselves see a strong inner consistency between these views. They resist the contemporary ethical package deals that today’s progressivism and conservatism seek to impose on adherents, insisting that true believers must toe the line on every one of a host of issues. But these younger evangelical churches simply won’t play by those rules. ...

The movement may abandon, or at least demote, the prominence of the name ["evangelical"], yet be more committed to its theology and historic impulses than ever. Some predict that younger evangelicals will not only reject the name but also become more secular. That is not what I have been seeing here in New York City. And studies by the Pew Research Center and others indicate that religious denominations that have become more friendly to secularism are shrinking precipitously, while the evangelical churches that resist dilution in their theological beliefs and practices are holding their own or growing. And if evangelicals—or whatever they will call themselves­—continue to become more multiethnic in leadership and confound the left-right political categories, they may continue to do so.

Thursday, December 14, 2017

A Chinese student puzzled by Western idealism

The doctrines that shape the worldviews and cultural assumptions at elite Western institutions like Cambridge, Stanford, and Goldman Sachs have become almost religious. Nevertheless, I hope that the perspective of a candid Chinese atheist can be of some instruction to them. ...

One [Stanford GSB] class was about strategy. It focused on how corporate mottos and logos could inspire employees. Many of the students had worked for nonprofits or health care or tech companies, all of which had mottos about changing the world, saving lives, saving the planet, etc. The professor seemed to like these mottos. I told him that at Goldman our motto was “be long-term greedy.” The professor couldn’t understand this motto or why it was inspiring. I explained to him that everyone else in the market was short-term greedy and, as a result, we took all their money. Since traders like money, this was inspiring. He asked if perhaps there was another motto or logo that my other classmates might connect with. I told him about the black swan I kept on my desk as a reminder that low probability events happen with high frequency. He didn’t like that motto either and decided to call on another student, who had worked at Pfizer. Their motto was “all people deserve to live healthy lives.” The professor thought this was much better. I didn’t understand how it would motivate employees, but this was exactly why I had come to Stanford: to learn the key lessons of interpersonal communication and leadership.

On the communication and leadership front, I came to the GSB knowing I was not good and hoped to get better. My favorite class was called “Interpersonal Dynamics” or, as students referred to it, “Touchy Feely.” In “Touchy Feely,” students get very candid feedback on how their words and actions affect others in a small group that meets several hours per week for a whole quarter.

We talked about microaggressions and feelings and empathy and listening. Sometimes in class the professor would say things to me like “Puzhong, when Mary said that, I could see you were really feeling something,” or “Puzhong, I could see in your eyes that Peter’s story affected you.” And I would tell them I didn’t feel anything. I was quite confused.

One of the papers we studied mentioned that subjects are often not conscious of their own feelings when fully immersed in a situation. But body indicators such as heart rate would show whether the person is experiencing strong emotions. I thought that I generally didn’t have a lot of emotions and decided that this might be a good way for me to discover my hidden emotions that the professor kept asking about.

So I bought a heart rate monitor and checked my resting heart rate. Right around 78. And when the professor said to me in class “Puzhong, I can see that story brought up some emotions in you,” I rolled up my sleeve and checked my heart rate. It was about 77. And so I said, “nope, no emotion.” The experiment seemed to confirm my prior belief: my heart rate hardly moved, even when I was criticized, though it did jump when I became excited or laughed.

This didn’t land well on some of my classmates. They felt I was not treating these matters with the seriousness that they deserved. The professor was very angry. My takeaway was that my interpersonal skills were so bad that I could easily offend people unintentionally, so I concluded that after graduation I should do something that involved as little human interaction as possible.

Therefore, I decided I needed to return to work in financial markets rather than attempting something else. I went to the career service office and told them that my primary goal after the MBA was to make money. I told them that $500,000 sounded like a good number. They were very confused, though, as they said their goal was to help me find my passion and my calling. I told them that my calling was to make money for my family. They were trying to be helpful, but in my case, their advice didn’t turn out to be very helpful.
--Puzhong Yao, American Affairs, on a man without ideals. HT: Marginal Revolution

Saturday, December 9, 2017

Ticketmaster and scalpers help artists

And then there are those much-unloved “service fees” that vendors like Ticketmaster add. In New York, they average 21 percent of the ticket price but, as we heard earlier, they can reach 100 percent of face value.
[Economist Eric] BUDISH: Something that’s not widely understood is that these service fees often — part of them goes back to the venue. ... So Ticketmaster takes all the P.R. hit for these egregious service fees. But actually a lot of that money spreads its way around the rest of the food chain. 
[Head of music at Ticketmaster North America David] MARCUS: It’s actually historically kind of part of Ticketmaster’s business model to take on the burden of that negative sentiment. ... We would say it in the hallways: the reason that we’re successful as we are is because we take those bullets on behalf of the venue, the artists, the promoter.
[Stephen] DUBNER: OK, so let’s back up a bit here — the real scalping is going on between who and whom? 
[Scalper Ken] LOWSON: Well, promoters and teams sell directly to brokers. You know, and then those brokers and list them on the marketplace. You know, for a team owner, it’s their ticket. And for a promoter, it’s their ticket, it’s not the artist’s ticket. I don’t know another industry that intentionally advertises one price to intentionally hold it, and resell it secretly.
DUBNER: Yeah, but what we’re told is that artists are typically not getting any of that additional markup. Are you saying that’s not the case, that they are getting some of that markup? 
LOWSON:Well, maybe it’s something like that. But their managers are hired to make them the most money. And in the end, you know, if you’re taking a guaranteed amount that’s higher than the revenue from the tickets. It’s like a pre-scalp. 
DUBNER:I just want to make sure I understand it. So it’s not that the artists are, per se, getting a cut — let’s say a ticket sells for $100 on the primary, gets marked up to $500 right? It’s not like the artist is getting any of that additional $400, it’s that the guarantee that their manager negotiates for them is based on a ticket sale price somewhere in between $100 and $500, is that what you’re saying? 
LOWSON: Well, they’re negotiating with, you know, a promoter which is for a flat amount per show. There’s 50 shows on the tour, “we want $50 million.”
--Freakonomics Radio on who's making really money on service fees and scalping 

Saturday, December 2, 2017

The similarities between Trump and Bill Clinton

The key for Mr. Reagan and Mr. Clinton was convincing the public that they were not distracted by the investigations but instead remained focused on doing their jobs and serving the American people. In Mr. Clinton’s case, at least, it was partially an act — while he was able to effectively manage major foreign policy issues even at the height of the impeachment debate, in private he was consumed by the investigation, raged endlessly about his tormentors and at times seemed deeply distracted.

Aides found Mr. Clinton absently playing with old campaign buttons, and at a meeting with the Congressional Black Caucus, it fell to an adviser to conduct the discussion while the president’s mind drifted off. On another occasion, the head of the World Bank called a top White House official after a meeting with Mr. Clinton to say, “It’s like he isn’t there.” During a visit to the Middle East, an aide noticed Mr. Clinton trying to keep his mind from wandering off by scribbling on a yellow legal pad, “Focus on your job, focus on your job, focus on your job.”
--Peter Baker, NYT, on an eerily familiar description of a president. The difference, of course, is that Bill kept it hidden from the public.