Fierce

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It’s not close. Our women, American women, are better than yours. At least as far as international athletic competitions go they are. When the 2016 Olympic Summer Games in Rio concluded, American women had won more gold medals than anyone-as in more gold medals than any other country’s men and women combined. Actually, Great Britain’s combined men and women tied them. But you get the point. It was a thorough and complete domination. From the track, to the pool to the basketball court, their 27 gold medals were the best ever performance by any women’s team in history.

If you watched, Brianna Rollins, Nia Ali and Kristi Kaslin stand on all three tiers of the podium-three beautiful American women alone at the top of the world, having just swept the women’s 100 meter hurdles-something never done by any three American women in Olympic track and field history and you weren’t proud, then you don’t get proud. Something struck me when I saw them up there. It was a feeling that grew over the last few weeks as I watched strong American women of all shapes and colors and sizes drubbing their world class competition. It was something more than just the overwhelming emotional sense of pride. It was this: Title IX was one hell of a piece of legislation.

In 1972, Title IX was signed into law by President Nixon. It was a sweeping bill that prohibited gender discrimination in any education system that received public funding-which for the most part is all of them. The reason Title IX is significant to women’s performance in the Olympics is that the law’s most well known provision required equal opportunity for women in athletics.Which means that universities receiving public funding had to invest in women’s sports with things like facilities, equipment and scholarships at parity with their men’s sports. So if you’re the University of Texas, and you want to spend $25 million on your football program so that ticket sales, sponsorship and cable TV deals can make your university $101M (these are the real numbers from 2013 according to Forbes by the way), then you are going to have to find a way to proportionately invest in women’s sports as well.

Of course you won’t make $100M more. But you have to do it. It’s the law. This is one of those times where most agree, without the legislation, the free market isn’t getting us the same outcome. Women’s collegiate and high school sports have been climbing to amazing heights ever since. Like I said, Title IX is one hell of a piece of legislation.

Though the athletics portion gets most of the press, it’s actually just a small part of the law. The rest of it was aimed at eliminating gender discrimination within the entirety of the education system. Before title IX, it was legal to exclude women from the same classes men took. Pregnancy was grounds for expulsion. Most women professors were forced to teach at women’s schools. Title IX also made it the school’s responsibility to fight sexual harassment and discrimination within their classrooms and campuses. There’s more, but you could fill a book with it, or hundreds of pages of legislation. Like I said, it’s a hell of a law. It did more to create the modern educational dynamic of inclusion for women than any one thing over the last fifty years.

The outcomes fostered by the change have been clear in athletics-1 in 27 women participated in high school sports in 1970. Now it’s 1-2.5 and we’re pummeling the rest of the world in the Olympics on my television every four years. But what about the rest of it? Has it been as helpful?

It’s hard to measure in its entirety but the quick answer is yes. According to the Department of Justice, women now graduate from college at a higher rate than men. And the trend pretty much keeps up at High School and post graduate education levels as well.

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Source: Equal Access to Education: U.S. Department of Justice Forty Years of Access to Title IX. February, 2012

Over the last forty years, education and athletics have drastically changed the horizons of American women. That much is clear. Which brings us to the real pay off issue here-women in the workplace. We’ve moved the needle in the early part of life for women in America-school and athletics-but what’s happened in the workplace?

There’s much to be said these days about gender inequality at work. There’s a commonly accepted notion of income disparity and an ongoing political debate about the status of American maternity leave relative to other industrialized countries.Those are the political debates. The ones where we try to figure out how our government or awareness and media pressure can solve this stuff by forcing change at the highest level-top down to right the wrongs. But if you do a little digging and study some of the research by people that actually approach this scientifically, you’ll see that there’s really more going on here then will be solved by laws or PR campaigns. There’s a real, moral issue here that lives much closer to the ground where moral issues tend to live-at the you and me level.

According to a paper published by Harvard economist and professor Claudia Golden in 2014 in the American Economic review, women working full time in America earn about 30% less then men do on an annual basis. In 1980, it was 44%. Much of that difference actually has to do with the types of occupations women choose to enter into-and not straight favoritism towards men. If you normalize the wage gap to compare like experience, education levels and occupation type, that number narrows to 18%. And when you look at women who entered into the workforce more recently, within the last 20 years, the number drops even further to 10%. Which means that it’s getting better. Better, however, means women in the work force, are still valued at 90% of what a man is.

Golden goes on to argue that there are two forces at work here in the gender wage gap. The first she refers to as the explained portion. The explained portion makes up the majority of that original 30% gap and has to do with occupation type, differences in education and job availability for women who entered the work force before today’s generation. That portion is the portion that decreases when we normalize the comparison by like occupations and education levels. It’s also the portion that’s decreased the most over the last 40 years.

The second portion of the gap is less clear. She calls it the residual portion. There’s less firmly understood or proven about that. But with women now more educated then men with decades of equal work experience behind them, it’s fair to say that there’s likely not an acceptable explanation for why a woman is 90% of a man.

The obvious place to look to explain the residual lag in compensation is just plain old sexism. There’s no doubt in my mind, that’s part of it. Not because I ever see it out in the open in the work place in 2016. I know about sexism the way I know about racism. I’m a 40 year old white guy. Which means a lot of other 40 something white guys casually assume I’m part of the racist misogynist club. So when it’s just us, it comes out enough that I know it’s still there. There’s only one reaction you can have if you care about the residual problem in workplace compensation equality, which you should. Stomp it out when you see it. People have enough pain and hardship in their lives to deal with stupid old white guys longing for the days of Mad Men. It’s not cool. It’s not funny. It needs to go away…for good.

The other part is a little more nuanced. There’s a story in the data that Golden shares in her paper. There’s a pattern in how some employers compensate, especially in corporate America where they focus their highest compensation on management. Companies in corporate America tend to compensate workers willing to work longer hours with promotions and higher salaries. And by longer hours I mean over and above the normal 40 a week. Those of us in the corporate rat race know what I mean. 40 hours is a lie. And the higher you rise, the more it grows. 50, 60 hours is the norm.

There’s another interesting thing thing that we can learn from the data. It’s actually what the data doesn’t show us. Those 60 hour weeks aren’t accounted for on any balance sheet anywhere. It’s the hidden expectations of success. We don’t get overtime. We get promotions and big bonuses when our outcomes warrant it. When they don’t, we don’t. So when you look at it, not actually putting in that extra time, doesn’t show up anywhere. There’s nothing to point to that’s absent. It’s silent evidence. Where we see it materialize though, is what happens to the pay gap between men and women as they progress through their career. It grows. And it bottoms out in the late 30’s and early 40’s, then starts to recover. And if you think about it, a strong hypothesis starts to materialize.

The longer a woman stays in the work force, the more likely she is to be disproportionately effected by the commitment of family.

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Source: American Economic Review, April 2014

Now, why that is or if it’s right is something you can’t explain in a two thousand word essay-or a any essay for that matter. Why having a family impacts a women disproportionately more than men is a facet of our society that has been thousands of years in the making. But I can tell you, it’s very real because I see it every day.

Sometimes, it’s a choice. I have female colleagues who willingly take reduced roles, work part time or even change to contractor status in order to reduce their commitment to their job. And in searching my memory, I can’t think of a single instance where a man did the same. Now, because of the industry I work in and the relative stage I am in my career, these women are unquestionably the primary breadwinners in their home. Yet, they still made that choice to cut back though. And I have to be clear, where I work is about as accommodating an environment as you are going to find in corporate America.

Just because some choose to cut back doesn’t mean there’s not a problem though. For every one of those women who have chosen to sacrifice career progression for family, there are several more who would not or could not make that choice. And that’s where we need help. And by we, I don’t just mean government or corporate leadership. Political pressure on high visibility issues like maternity leave and wage discrimination help. But it’s not all of it. The American working woman is an amazing asset. The bigger role they play in anything, the better we get. Just look at Rio. So if we want to rise, they have to rise with us. And it starts by realizing that one thing that has absolutely nothing to do with gender.

When I was on active duty in the Navy, I didn’t work with many women. I went to Annapolis for college which was a little less than 90% male. I served on one of the last all male ships for my first tour. And then I transferred into other units that were only open to male participants. By the time I got out, I’d spent most of 15 years working only with men. Of my three war-time deployments, only my last one had a woman attached to the unit I served in. It’s safe to say that by 2011, when I left that world, I had about as little exposure to women in the workplace as was possible in 21st century America.

That might seem like a problem when it comes to understanding women’s issues. But it’s not. I’ve been at it for a few years now and they haven’t killed me yet. Because what the military taught me, and what is lacking when we don’t stand by our colleagues when they’re doing the human see-saw act that is balancing being mom and a business leader, is that we’re all in this together. And when we can, we take care of each other. Which is something that has nothing to do with gender and everything to do with giving a crap about the other humans you work with.

My commanding officer sent me home from Iraq for a few weeks when my son was diagnosed with autism. And when I came back to finish the deployment, he made me leave on the first set of planes taking us home-even though I’d taken two weeks away, which no one else got to take and officers usually left last. He knew I was a wreck and so was my wife. And when he saw her at the post deployment banquet, he pulled her a side and told her that I did an amazing job. And that she should be proud of all I did. And that he was personally grateful for the strain she took that allowed me to do it. He knew we both felt guilty about it-irrational as that sounds.

He gave me what I asked for because he knew what I needed to stay a part of the team. And if he didn’t, and I had to choose between my family and the team, my family won. So he didn’t let me choose. He didn’t worry about setting a bad precedence or about how it would look. Or maybe he did, because it looked like he gave a crap about me and my family-which he did.

This whole thing-all of it-works better when we realize we’re all in this together. And we do what we have to, to keep each other in the fight. And remembering that is what we can do, to close the gap for gender equality in the workplace-not governments, not shareholders. Us.

So when one of your employees comes into your office and hesitantly tells you that she’s pregnant and her due date is smack in the middle of your peak business season, the only answer is congratulations. And if she tries to apologize-it happens- don’t you dare let her. And when one of your employees who’s just returned from maternity leave asks to work on a part time schedule, for part time pay, because three kids under four and two full time working parents is just about impossible, you say, of course. Because that’s the only answer-even if your company’s policy doesn’t clearly state you have to. Don’t you dare make her choose between her work and her family, if you can help it.

Being a tough leader doesn’t mean coming down on your people. It means finding ways to make those situations work, while making it look easy, up and down the management chain. You could wait for the law or for your corporate policy to catch up with what’s right. Or you could lead and take the strain yourself. If you can’t, maybe this leadership thing isn’t for you.

And if you’re reading this as a professional woman-or man- without a family by choice or otherwise and this treatment strikes you as unfair, you’re right. It is unfair. Just like getting pulled out of a presentation to your CEO as an executive at a software company because your 12 year old got in a fight at school is unfair. Mom is usually who you call for that-no matter who you are or what you’re doing. And yes, that mom has a choice. Leave and go get him, or walk back into the meeting and go about delivering her presentation while being mom gets de-prioritized. Whatever she chooses, and I’ve seen it go both ways, it won’t feel good-either way. And that’s not fair either.

Yes, having a family is a choice-usually. And it’s not your fault they chose it. Rest easy, you’re still getting the better end of that deal. At least at work that is. Even if it simply means never having to make that crappy choice that I’ve seen dozens of times. Because that choice sucks the way few things in life suck. So cut them some slack. The workplace and the world will be a better place for it.

The American woman is fierce. I have no better term for her. They showed the world their strength and grace and toughness these last two weeks at the Olympics. But they show it in super human ways every day, splitting the unfair load of mother, wife, and pro. It takes a fierce woman to choose to jump into it. Why in the world would we ever do anything to keep that kind of fight on the sidelines when we’ve got so much to gain from inclusion.

There’s a lot of this that’s on you and me. And we can do better.

 

 

 

 

 

 

 

 

 

City By the Sea

My people are an old Atlantic City people. We go back to the grand days of the boardwalk empire. My great-grandfather was a boat captain in the inlet basin. He drove the famed Miss America speedboats. My grandmother was a show girl in the Ice Capades. She performed on Steel Pier long before it burnt down and fell into the sea. My father worked over 30 years on the Atlantic City Beach Patrol. I put in 6 myself. It’s in my blood.

Gambling came to the city the year I was born. My mother, a schoolteacher, worked as a blackjack dealer in the summers and in the evenings. She wasn’t from there. She married into Atlantic City. And it wove itself into her. She died there.

I have aunts and uncles and brothers who all work in the casino industry today. And though I left to join the navy when I was 18, and spent most of my adult life in California, Atlantic City has stayed with me. It’s the kind of town that leaves a mark-for good or for bad.

Like I said. It’s in my blood.

Something’s gone horribly wrong with America’s Playground though. To be honest, something’s always been wrong. She’s never really been on the up and up. Even when she tried. And now it looks like it’s caught up to her in a way it never had before.

This past week, the municipal government of Atlantic City received permission to shift paying their employees-cops, firefighters, teachers, etc-to a monthly basis instead of bi-weekly. Had she not, the city would have been out of money by the end of the month. This new payment schedule buys them until May. Which means that unless something changes, the first and arguably grandest destination resort of 20th Century America will be unable to pay her employees, her debt obligations or any of her other financial commitments. In which case, under normal circumstances, she would declare bankruptcy.

Except she can’t.

Because there’s something else going on in New Jersey. Something that, fifty years from now, history and political science majors will be dissecting in case studies. If we’re lucky.  If we’re not, they’ll be teaching it to our grade school and high school students learning about it the way they learn about things like Tammany Hall or the Teapot Dome scandal.  It will be one of those otherwise obscure events we teach to generations for how teachably perfect it illustrates a massive societal problem of the time, and how it served as a warning-a canary in the coal mine if you will-that ushered in change. It’s a troubling compilations of civic catastrophe.

If you’re not paying attention to it, let me help.

If you are paying attention to what’s going on in New Jersey, you’ll see what appears to be a long series of governing through press conferences. You’ll see the mayor of Atlantic City, Don Guardian with his odd bow-tie, defiantly standing at city hall trading barbs with the imposing Governor Chris Christie, fresh off of his unsuccessful presidential bid having somehow been out bullied by Donald Trump before eventually endorsing him in a tragic race to the bottom that is the political despair of the Republican Party. The mayor and the governor are at an impasse.

But over what?

Hold on tight because this gets complicated. And you may begin to think I’m joking as I explain. Sadly, I’m not.

The municipal government of Atlantic City wants to receive state assistance that is on par with other municipalities. If they do, they will be able to pay the bills. If they don’t they will likely have to declare bankruptcy. But they can’t. Because bankruptcy would have to be approved by the governor. And he won’t. Because the governor believes that Atlantic City spends too much money on their government workforce and is incapable of self government. And he’s right. So he wants state takeover of the city as a condition of increased funding. Except he can’t do that because only the state legislature can pass that type of legislation and they won’t. Because a state take-over would void all public union contracts previously negotiated by the city of Atlantic City and open up state collective bargaining agreements that would no doubt be more austere.  And if there’s one thing you don’t do as a state legislator in New Jersey, it’s take on public unions. Which brings us back to three groups pulling on the same rope in three different directions. All while the meter is running in Atlantic City who is out of money. It’s a mess that’s hard to follow but that’s about 150 words that sums it up.

So who is right?

No one.

What I just said is a massive oversimplification of the issues. But that actually doesn’t matter because the level of detail required to form an opinion on their differences and take a side isn’t required. Because no one’s right. Which is good for me because if I actually had to take sides, family barbecues would be uncomfortable. It’s a remarkably small town and I’ve got family on both sides of this issue all the way to the top. Me glossing over the details isn’t for lack of information or understanding. It’s because it doesn’t matter.  Because what they actually can’t agree on, won’t be what is taught in history classes fifty years from now.  How they’ve gotten to this stand off and what it says about early 21st Century America, will be.

If you took the time to listen to what Governor Christie said in his press conference earlier this week, you would have heard him run through a litany of items showing a gross mismanagement of tax payer money by the Atlantic City government officials.  He called out the fact that police and fire department employees, allowed to retire in their 40’s are able to cash in unused sick pay and vacation time to walk away with $300K “boat checks” on retirement. And that health care plans divested by the state decades ago but still in use in Atlantic City were costing the government $4M more a year than they need to. And that there are over 100 municipal employees that make over $100K a year. And that the utilities managed by the city are inefficient and have needed to be reformed or privatized for decades. All of these things are clear and inarguable mismanagement for a city of 39,000 people. That’s right. There are only 39,000 people in Atlantic City. Hold that thought.  We’ll get back to it.  The list goes on and on to make the point:

Horrible greedy government workers are manipulating the system for personal gain while their city goes broke.

That’s the message.

Here’s the thing with those claims. They’re reasonably accurate. For the most part, these are indefensible positions for the municipal government to have. And they are in need of reform. And they probably don’t deserve to receive state assistance unless they fix them.  But here’s one other thing to consider.

None of it matters.

Not a bit of it.  Because the budget gap for Atlantic City is about $100M. Annually. You could fire every one of those high paid employees and save $10M. Great. Now you’re down to $90M. In fact, you could fire every police officer and fireman in the city-don’t worry this is hypothetical- and still only be about 2/3 of the way to solving your problem. And one other thing. It’s 2016. $100K isn’t really that much money in NJ where you’re going to pay 4% property tax on your highly valued home. So when it comes down to it, this massive over spending is wrong and it needs to be fixed. Because of principle and future impacts. But fixing it isn’t solving the problem. At least not on a material level. Let’s ask a better question.

How did a city with 39,000 people open up a budget deficit of $100M?

Here’s where this story actually starts to matter. Because on a microeconomic scale, it’s an extreme but accurate portrayal of what is happening in 21st century urban America.  The city has a massive infrastructure that is designed to support it’s singular industry, casino gaming. Over 30 million people a year visit the city. Another 40,000 are employed by the casinos. None of them live in Atlantic City. Because the city of Atlantic City has 39,000 people. 75% of those people own no property. Which means that the city’s lone source of income, property taxes, is funded almost entirely by the lone industry in the city-casinos. 80% of city revenue comes from the property taxes paid by the casinos.  Which is great. Until the economy takes a turn for the worse, and a neighboring state opens a few casinos and then the industry tanks.

In 2015, four of Atlantic City’s 11 casinos closed.  And the fifth, the Borgata, the largest tax payer in the city was awarded a $150M tax ruling that makes it so they don’t have to pay taxes to the city for years or until the debt is paid off. Which means that Atlantic City lost about half of its tax revenue, almost overnight.

That’s how 39,000 people get behind a $100M eight ball.

In Atlantic City it’s the casinos. In Detroit it was the auto industry. In Baltimore, it was the steel industry. Name the town and the outcomes are the same. High paying, working class jobs have left urban America because they’ve moved overseas, been automated or moved to the suburbs.  And those that do work in the cities live outside of it. That’s always been the case in Atlantic City. So those left behind, the urban poor, live in a city that quickly runs out of money during an economic downturn and the basic services, schools, police and safety and general infrastructure-see Flint, MI-break down. And the urban gap widens.

In the four decades that Atlantic City has had gambling, the revenue generated by that gambling is in the tens of billions of dollars. The property values have increased over 600%. But the people of Atlantic City haven’t benefited much. They have double the unemployment rate of the rest of the state. Their median income is a third of the rest of the state. Their crime rate is six times the rest of the state. 30% live under the poverty level. Beyond the gaming and tourist attractions-the ones still open are actually amazing-the city of Atlantic City is an urban wasteland. And in about a month, they’re about to stop paying their teachers…and their cops…and their firefighters. It’s a cycle of despair we don’t have a way out of.  And it’s bad for all of us, not just them.

Enter the State of New Jersey. The bow-tied mayor has a point. This is why municipalities organize into counties and why counties organize into states and states organize into a union. They do it to minimize risk. The state clearly benefited by the fact that South Jersey’s economy boomed in the last decade. And the city gets 0% of the gaming revenue, unlike the 2% being proposed for the cities hosting the development of proposed North Jersey Casinos-which will kill Atlantic City by the way. But in the mean time,  now that Atlantic City is suffering, it’s time to help them weather the storm. Right?

Here’s the second part of the discussion that actually matters. The governor can’t help.  Because the state is broke too. Not the same way that Atlantic City is broke. The state can pay its current bills. It just can’t pay it’s future ones. Here’s why.

When you look at New Jersey’s government spending on a macro level, it looks pretty unremarkable. New Jersey has the 8th largest budget in America for the 8th largest economy in America generated by the 11th largest population. New Jersey spends just over $11K per citizen, which is 12th highest in the country. As bad as taxes feel in New Jersey, the state collects about $10K in taxes per citizen which is the 17th most in the country.  Which means that the state runs about about a thousand dollars per citizen in the red each year. Which sounds bad but it’s actually better then neighboring Pennsylvania, New York, Connecticut and Massachusetts. Only 10 states run at a surplus. The others close the gap with planned federal funding or other assistance programs. So what’s wrong with New Jersey?

Well, the big one is this. For the last 20 years, the state government has decided not to fund it’s pension program.

If you listen to the governor talk about the issue, you’ll hear him speak  of a massive out of control pension program that has suffered mismanagement resulting from public unions having their way with the government contracts. Which there’s certainly truth to. But when you actually look at the numbers, it’s about on par with other states expenditures. New Jersey spends about $1,100 per citizen on pensions, the 8th most in the country, entirely aligned with the size of its economy-less than New York, about the same as Pennsylvania. There’s one difference though. New Jersey hasn’t fully funded its pension fund for the last 20 years. In fact, from 2001 to 2004, they didn’t fund it at all. And now, New Jersey has a $37B pension gap for a state with $100B budget.  Which means they can pay pensions to those currently retired, but unless something changes, those retiring in the future will have nothing.

Now, the details of how the Governor has handled the pension problem are a source of great frustration and anger for state and local employees in New Jersey. They claim that he’s  been a bully, called people names and gone back on his word. And they’re right. He has. Partly because of who he is. But mostly because he’s trying to jam reform down the throats of New Jersey citizens to close a gap that even draconian reform won’t solve.  Because the damage is done. The ship has already hit the ice berg. And the only thing that’s going to help New Jersey is massive increases in revenue-yes that means taxes. Or a complete scrapping of their pension system. Which means that people who have paid into a pension system that legally have the right to expect a return on it when they retire, will not get one. Which is wrong. And no one can tell anyone that it’s right. And telling them they are greedy and that the pension system is bloated is political crap designed to lubricate the populous for change. Just like calling out how many employees in Atlantic City make over $100 a year.  It’s the same thing.

You can ignore it all.

Because it’s detached from the real tragedy here. Which is this. Unfortunately, all the expectations that the citizens of New Jersey had for their retirement, assumed one thing.  That the public representatives that they elected to office, the legislature, the governors, all of them, would do their civic duty and responsibly manage the states finances. For 20 years they did not. So all bets are off.

Democracy has consequences.  Electing the wrong people has consequences.

So what does this have to do with Atlantic City?  It’s not a long leap. The governor can’t let them declare bankruptcy because places like Camden and Patterson and a list of other urban areas in New Jersey that are in similar boats would quickly follow suit. And if the governor capitulates and simply hands Atlantic City the funding, he has the same risk. So he’s using Atlantic City as an opportunity to drive reform because in the end, the state can’t pay its own bills and it can’t run the risk of paying municipal bills for the failing urban areas. So here’s the message. We can help. But it’s going to be painful for you. And any of you other places thinking about going this route, take notice.

In the end, both sides have valid arguments. And the men standing at the podiums trading political jabs aren’t the ones that put their respective organizations in this mess. And what will probably happen is some level of anti-climactic agreement that involves some state take over and assistance and both Atlantic City and New Jersey will live to fight another day, having successfully kicked the can down the road, the way American politics in 2016 does.

So why will they be teaching this in civics classes 50 years from now?  Because in one small package- 4.1 miles of build-able land to be exact-the Atlantic City crisis illustrates two of the most troubling issues about American society today. The first is urban decay that has resulted from the de-insdustrialization of America. The crumbling infrastructure and failing socioeconomic climates in our cities is a massive problem driving racial inequality and driving citizens in the most powerful country in the world down to a quality of life that is massively at odds with our national wealth. The second is that we have a cataclysmic entitlements problem in our country. At the state level, we are under funding our pensions by a trillion dollars collectively. That’s 20% underfunded. And if you think that’s bad, social security at a federal level is 32% underfunded, that’s a shade under 26 trillion dollars. Right now about 40% of our federal budget goes to social security and medical costs.

And it’s not enough.  Not by a long shot.

So, while we select the next leader of the free world, candidates from both sides are waving the shiny objects of traditional values, immigration and wars on women. But probably the only two things that really matter is that our economy can no longer support our urban inhabitants and we’re going to go broke because we can’t fund our entitlements without massive cuts in other areas or higher taxes. Those are hard problems. Give a listen for solutions in our national political debate. You won’t hear them. And as we plod forward on our path as we do, eventually we’ll fall over when the issue becomes so big that we have no choice. What Atlantic City is telling us is when we do fall, we’re left with men standing at podiums shouting bad options at each other. Because all the good ones went away when the tide of irresponsible governing receded.

I’m saying prayers for my friends and family back home that they make it through this difficult time as whole as they can. In the end, it’s the people that suffer. But it’s also the people who elect. So we’ve got a choice here.  Learn the lesson Atlantic City and New Jersey are teaching us. Or face the consequences.

I’ll mourn the canary. Those are my people. Everyone else, worry about the coal mine.

Democracy has it’s consequences.

 

American Employment, 2016

The United States of America has reached full employment-that sought after term used by economists that describes an unemployment rate where all who are able and willing to work, are working.  Though the actual number that represents full employment varies based on who you ask, it’s around 5.5% or less.  That’s where we are.

This month, Americans attained a massive achievement.  In a long fought journey back from the depths of recession, we’ve traveled from 10% unemployment, a rate not measurably exceeded since the Great Depression, to full employment.  Every single day of reduction of unemployment since the Great Recession of 2008-9 has taken place under the Obama administration.  During this same time, our federal deficit spending, as a % of GDP has shrunk to its lowest point since 2005-lower than all but one year in the Reagan and first Bush administrations combined, lower than the first term of the Clinton Administration.  These are facts supported by raw data that has been collected by consistent, non-partisan means for decades.  These numbers of economic strength are hard to argue with, on a macro-economic scale.  But for some reason, most Americans don’t feel that good about the direction of the country-in economic perspectives. Even our most fervent optimists admit, it doesn’t really feel like full employment. But why?  You could dismiss the sentiment as a result of partisan bickering in an election year-one covered on an unprecedented scale by the largest media market in the history of mankind, accelerated by our current social media environment.  You could do that.  Or, you could take a deeper look at the data.  We did the latter.

That Data

There’s no shortage of data to be found on topics that people care about these days.  But you have to be careful with who is supplying it to you.  Political organizations, even those that don’t sound political but actually are-think tanks, policy centers etc., tend to start with a point and then find the data to confirm it.  If you’re serious about data though, and you are interested in understanding instead of confirming, you start with the data.  The confirmation comes later.

The Bureau of Labor Statistics is a virtual treasure trove of data.  And if you take a look at two massive surveys they collect, the Occupational Employment Statistics Survey (OES), and the Current Population Survey (CPS), you can see the detail on job categorization, population, pay and employment status in raw form.  That’s exactly what we did.  What we found was a very clear and compelling.

Unemployment

You’ve heard President Obama himself tout the massive reduction in unemployment on his watch.  If you’ve paid attention to the Republican presidential primary race, you’ve also heard the counter-point that the impressive number is a “fake” number.  And that behind it, hides significant problems with people who have quit looking for work or people under employed.  So which one is it?  The good news is, the CPS, which is a monthly survey consistently delivered since 1994 and scientifically managed to be statistically significant, actually tracks that stuff.  What does it say?  Well, it says that the President is right.  We have reduced unemployment significantly across all groups, to include marginally attached workers (those who want work and stopped looking) and part time workers.

It’s not 5.5% like the pure unemployment number, but it’s pretty much back within normal range of our pre-recession levels.  Unfortunately for the opposition, but fortunately for the country, people are finding jobs-full time jobs-again.  And the trend is continuing to improve every month.

Job Category

So if we’re getting jobs, clearly they’re not good ones any more.  That’s why people are upset.  Right?   That’s the voice of discontent from the middle class these days.  So we looked in the Occupational Employment Survey to see how things have changed, since the current form of survey started in 1997.  Terminology regularly changes here, so we had to do quite a bit of work to broaden it to get to an apples to apples comparison, but here’s what we found.
Screen Shot 2016-02-19 at 8.33.18 AMOur conclusion is that there has been a little shifting around.  But not much.  For the most part, over the last 20 years, Americans are consistently working in the same types of jobs.  There’s some uptick in management and computers,  some shrinkage in agriculture and science, but it’s mostly the same.  So what’s going on?  Well, when you start to look at income, the picture gets clearer.

Income

When you peal back the overall employment status, number and job type, you can see the income patterns.   At the highest level, the American worker is actually out-legging inflation over the last two decades.

Screen Shot 2016-02-19 at 8.33.43 AM

The graphic above shows that, as a whole, the American worker makes $626 more a year then they did in 1997 adjusted for inflation.  That’s a good thing.  So, unemployment is stable, we’re continuing the same types of work we used to do at a macro level, and we’re making more money then we used to.  What’s the problem?   It’s this.  The “we” in that statement above, is fantastically uneven when you move one click down on the income detail.

Screen Shot 2016-02-19 at 8.34.32 AM

If you are one of the higher paid job categories, things have been pretty rosy for you the last few decades.  White collar and professional jobs have seen their income increase relative to inflation since 1997 significantly.  When you look at the management bucket, the second highest paid group behind the much smaller legal industry, you see a massive 20% increase in income for people already making more money then just about everyone else.  Hold that thought.  Because it will start to help you understand some of the frustration being felt by the other group of American workers shown in the next graphic.

Screen Shot 2016-02-19 at 8.34.11 AM

Educators, blue collar workers and service providers are hurting.  If you look at manufacturing, construction and maintenance workers, you’ll see that group has seen a 10% pay cut since 1997, despite being the most productive manufacturing workforce in the world, per capita.   That group is the largest portion of the American workforce.  Roughly one-in-four Americans works there.  Our next biggest group, Administrative workers, is down 4%.  So when you start to look at that pie chart through the lens of income, the picture actually gets pretty bleak.

Screen Shot 2016-02-19 at 8.33.30 AM

There are a lot of Americans, most actually, that are in a worse condition now, then they were 20 years ago, from an employment perspective.  Which means there’s a lot of Americans who are justifiably dissatisfied. And the current political environment is quickly taking that appropriate dissatisfaction and throwing gas on it-urging us ever closer to a once inconceivable outcome of a Trump/Sanders presidential race.

People are angry.  And I think we’ve done a fair job at showing why they’re pissed.   But where should we aim that anger?  Which side has it right?  Is it Trump angry?  Is it Bernie angry?  Let’s start with some facts.

Some Facts brought to you by the good folks at Forbes Magazine, the Huffington Post and the United Nations.

  • In 2001, China joined the World Trade Organization.
  • The average annual salary for a manufacturing employee in China is $7,705.
  • The average annual salary for a manufacturing employee in the U.S. is $37,440.
  • 22% of the world’s manufacturing is done in China, more than any other country in the world.
  • 17% of the world’s manufacturing is done in America, more than any other country in the world except China.
  • In 1992, the United States manufactured more goods than any country in the world. China was 6th.
  • Companies in the S&P 500 reported over 30% profit growth in 2012.
  • During that same time, employment in those companies shrank by 1M jobs.
  • Over the last decade, corporations in America have increased employment in countries other than America 30%.
  • According to Moore’s Law, computer processing capacity doubles every year.

There’s a lot that goes into why the economic outlook has changed over the last two decades.  You’ll find most of your major culprits somewhere in that list though.  And though you could throw the catch all, “because that (insert political figurehead) has ruined America, we’re so unfriendly to business, all the jobs are leaving”, I’ll add one more graphic that shows that the business and taxation environment in America has never been greater and that investment in the American workforce during that time has been non-existent.

Screen Shot 2015-06-08 at 11.28.25 AM

So what?

Unfortunately for some potential office seekers, economically speaking, you don’t see immigration, the degradation of conservative family values, government spending, Obamacare, welfare or even taxation in that list above.  You could try to add taxes in there if you want to. Our corporate tax rates (35% max) have been the same since 1994, and haven’t been lower since 1941. So you would be wrong. So why are the people that are most impacted by this shift so angry at those things?  It’s a really hard thing to explain.  But I’ll give it a shot.

Most of the things that have driven a negative shift in the quality of life for middle class Americans are events driven by innovation and free market capitalism.  So we’re stuck with a choice between being angry at something we don’t know how to be angry at and being ok with our lives being worse then they used to be.  We do neither willingly.  So, like an unhappily married couple, working class Americans have taken to blaming their outcomes on the things we really know how to get angry with.  Things like inequality, racial injustice, immigrants, people who are different, whoever is in charge.  Did I say people who are different?  Burn the witches because the crops have failed.  We’re humans.  This is what we do. And it’s not new.  So we’re doing it in spades.  We can’t get mad at free market capitalism and innovation, but we can get mad at something.

What do we do about it?

This is where you have to be careful. Using the impacts of free market capitalism to explain a negative economic outcome and claiming that free market capitalism is bad are not the same things.  Capitalism is good.  Right now, though, it’s not good for the American middle class.  It’s improving the middle class of developing countries at an unprecedented rate.  And that’s good.  Because it promotes global societal health and stability.  And though people are screaming about how dangerous the world is today, coming off a century of near global nuclear war, multiple world wars and the spread and then failure of communism, ISIS is a relative lightweight compared to the demons of our past. We’ve never been safer. But we’ve still got a problem. Our middle class is hurting.  And the data shows it’s real pain.  And it has nothing to do with whatever party is in office.

So what do we do about it?  Well, unfortunately for most of the working middle class folks who identify as conservative, you’re not going to like the answer.  The types of things that tend to solve the problems of employment income and de-insdustrialization tend to look like government intervention in the economy.  And that’s a little scary.  But I’d like to start a discussion on solutions and outcomes. This is what that sounds like.  Here are three things I would like to see help the middle class.

  1. Increase in public works projects that will overhaul our deteriorating infrastructure (see Flint, MI) and create high paying jobs for skilled laborers that can’t be outsourced.
  2. Decrease the burden of healthcare costs for all Americans.
  3. Incentivize private sector investment in the American workforce or levy higher taxes on their record profits. Doing neither is bad for America.

Now, I assume that many people will object to these proposals.  Especially the #3.  That’s scary stuff.  But we’re in uncharted ground and it’s not going to fix itself.  I even assume that the very people who this will actually help will also object to them in the name of principal.  But what I’d ask of those who do is to demand that your candidate provide an alternative solution to the very real problems of the American middle class.  And don’t settle for the nonsense designed to channel your focus and frustration at things like immigration, rich people, Muslims, gay people, cops or the poor.  They have nothing to do with it, no matter how much you want them to.  If we’re going to get better than we are,  we have to be better than that.  And we’ve got real problems to solve.

Those Who Work

America’s history of political discourse has had its share of twists and turns.  Though our current debate may feel like it’s been going on forever, it hasn’t.  It was born in the middle of the last century. There were distinctly different debates that preceded it that political scientists refer to as party systems.  In America, we’ve had six.  Some have made more of an impact then others. We’ve chosen sides between the president and congress, slavery and abolition, business and workers.  The current struggle is between the need for government intervention and the preservation of civil liberties.  There are subsets of it.  But the core is summed up simply.  Mostly out of habit, the words that our politicians and prospective presidential candidates are using may make it feel like that debate is continuing.  It’s not. There’s something very different happening.

The 2016 presidential primary elections are not progressing the way most of us who pay attention to these things may have anticipated. The drastically different conservative representation in candidates is signaling something.  It’s a change.  During the last 80 years, two massive events have driven how we define our political affiliations. The first was the social safety net created by FDR’s New Deal. The second was the Civil Rights Act of 1964 and the movement that it represented. Both were instances where the federal government intervened to represent Americans who could not represent themselves. Both represented an infringement of some sort on civil liberties by those least in need of representation. And the resulting top level argument of most of the last century has been a battle between expanding government involvement in people’s lives and defending civil liberties.  What we’re seeing now is a signal.  That debate is dying out.

The Good Government

We’ve had the forces of political inertia colliding for generations now without shrinking government involvement in our lives. Why?  The truth isn’t as nefarious as our stale establishment conservative presidential candidates might want you to believe.   The reality is that the modern world has more problems that government is suited to solve then our founding father’s would likely have imagined-things like racial equality for instance. It took 600,000 American deaths to eliminate slavery. And for another 100 years there was still no significant move towards racial equality until the federal government intervened.

Let’s look at health care. Our first president was bled to death by his doctor because that was the medical treatment used for almost everything a full quarter century after the Declaration of Independence was signed.  Yet I’ve seen more than my share of founding father quotes to disparage the Affordable Care Act. Healthcare cost in America, left to private enterprise and driven by profit has been spiraling out of control since the dawn of modern medicine. And now we’re finally getting around to working our way out of it with a clumsy solution to a real problem.

We can point to retirement. We live 40 years longer than we did when we signed the Declaration of Independence. But unfortunately, our bodies can’t work 40 years longer. So we need some way to fund life after work. So the government helps where most can’t and never have.  The case is pretty easy to make. We need some level of government intervention in our lives. And though some of the sound bites from our conservative candidates still sound like the argument is still alive.  It’s not.

But conservatives shouldn’t be discouraged.  There’s righteous energy in the new debate.  And though the only people who have tapped into it are horribly unsuited for high office, which will almost certainly cost you any chance at a Republican president in 2016, you’ll probably get the message.  Which is progress, because your old argument is a loser.

The Bad Government

In March 2011, a team of sociogists and political scientists at Harvard, Vanessa Williamson, Theda Skocpol, and John Coggin released their findings from extensive research conducted on the Tea Party movement. Skocpol and Williamson later published The Tea Party and the Remaking of Republican Conservatism the following year expanding on their findings.   What they concluded about the core beliefs of what is considered to be a far right subset of the larger party is very different from the limited government views of core conservatives.

“Tea Party activists hold positive views about the government entitlement programs from which they personally benefit—including Social Security and Medicare, and also other entitlement programs they have used. ”

These programs have been in place for several generations now providing critical benefits to our society. They’re not hard to advocate for. And they’re equally difficult to oppose as a whole. Which starts to eliminate some portion of the “big government” debate. So it’s shifted to something else. The thread that’s becoming more and more prevalent within our conservative base is subtle but if you take the time to listen to it, it’s powerful.

“Tea Party activists view themselves in relation to other groups in society. Tea Party activists in Massachusetts, as well as nationally, define themselves as workers, in opposition to categories of non-workers they perceive as undeserving of government assistance. Concerns about freeloading underlie Tea Party opposition to government spending.”

Recently, Alec MacGillis wrote about the phenomenon of blue collar growth within the Republican Party in his New York Times article Who Turned My Red State Blue?

“The people in these communities who are voting Republican in larger proportions are those who are a notch or two up the economic ladder — the sheriff’s deputy, the teacher, the highway worker, the motel clerk, the gas station owner and the coal miner. And their growing allegiance to the Republicans is, in part, a reaction against what they perceive, among those below them on the economic ladder, as a growing dependency on the safety net, the most visible manifestation of downward mobility in their declining towns.”

The conservative movement that is growing is no longer a crusade to stop government infringement against personal liberties.  It’s those who work and contribute to society against those we believe do not. 

Those That Work

But is it a good movement?  Certainly it has attracted a certain zeal for hatred of groups like immigrants or minorities. Which is what most of us more moderate participants tend to find most disagreeable.  But if those of us who disapprove of the notion of an angry white mob driving the Republican primary can suspend our outrage for long enough to actually gather some perspective on the well intention-ed,  we can start to separate some signal from the noise.   Here’s the signal.

The basic fear of the conservative base and many other Americans that we’re talking about is that we’re afraid that we’re becoming a welfare state. It’s a simple, valid fear.  One that most independents and even progressives should have.  We should all be wary that our social safety net could be investing too many resources in areas that are ineffective and creating dependence in those it supports.  And that the resources we are forced to invest on this are becoming unmanageable.    So let’s ask the question.  Is that happening?

What the data says…

From a taxation perspective, we are not a welfare state.  If  you exclude what a nation’s people actually contribute directly to social security programs for the express purpose of receiving it in return during retirement, you can see a clear view of how much a government collects from it’s people for the express purpose of funding government activities and distributing wealth through welfare programs.   Looking at other G20 countries, the 20 largest economies in the world, only Japan, China and India collect less from their people as a percentage of their overall economy.

Screen Shot 2016-01-18 at 6.40.25 AM
-Data Source worldbank.org data tables.

So, at least at the highest level, we’re not in crisis. But just because we’re collecting less, doesn’t mean that we don’t have a welfare expense issue though.  But it does mean that we’re not over-run by tyrannical over bearing capitalist killing taxation.  The data doesn’t support that common sentiment.  But what does it say about welfare spending?  Clearly 10% of the American GDP is a massive amount of money to be taxing our people.  So it’s a fair question.  Here’s what the data tells us is reality.  In the grand scheme of things, welfare is significant but not dominant.  Nor is it spiraling out of control.

Screen Shot 2016-01-18 at 11.14.50 AM
-Data Source usgovernmentspending.com
Screen Shot 2016-01-18 at 11.26.08 AM
-Data source usgovernmentspending.com

What we see is that behind social security, health care, education and defense, we get around to welfare programs.  And though 8% of the U.S. federal, state and local spending is a lot of money, over $500 billion, it’s not spiraling out of control.  In fact, we see it as a straight line correlating with the health of the economy over the past 15 years.  Spending peaked in 2010 at the height of our measures to recover from the great recession and has dropped dramatically since.  Most of the delta over the last five years has been the variability of the unemployment benefits which peaked in 2010 and have rescinded as the economy has strengthened.  In short, the social safety net was doing exactly what it was supposed to do, for that period of time. That’s tough to put on a bumper sticker.  But it’s true.

So why are people so angry?  Well, part of it is the American culture of self determination.  Which, by the way, is an immensely powerful and positive aspect of who we are and we should protect it. But it doesn’t mean we get to be angry for nothing.  Well, the good news for the outrage and anger engines is that we actually do have something to be pissed at.  There’s something else in play here.  Something that feels more permanent. And it’s this.  There is a sinking feeling of dependency that starts to set in when you look at the massive cultural divide between those on government assistance and those that aren’t.  The data supports it.  And there’s clues in how we break down our welfare spending.

Here’s how we spend our welfare money in America.

Screen Shot 2016-01-18 at 11.45.19 AM
-Data source usgovernmentspending.com

About half is spent on things like unemployment, food programs for children and SSI. Things that most agree are a
fairly easy sell for all but your most ardent libertarian sects of America.  Though I’ve heard some people voice frustration about the easy availability of Special Supplemental Income (SSI), a little over 1% of Americans under 65 receive it.  Most have very real disabilities.  The real issue to focus on is how effective we’re being with the other half of what we spend on welfare.

There’s a lifetime of science and opinion that could go into what I’m going to put into a paragraph here.  Which is fine because the intent of this article is not to solve our welfare problem. The intent is to identify the issue in so much as it is relevant to what is driving our changing political debate.  So here goes. Focus on the areas in red on the pie chart above.  In those areas, we have too many people receiving benefits too long that do not have a sufficient criteria for work or education to qualify them for the means tested benefits.  Let’s be specific here though. The problem is not “people these days”  or “those people” or “that culture“.  The problem is how we administer the programs, most of which are federally funded but administratively delegated to state or local entities.   Those programs simply aren’t good enough at establishing and tracking consistent work requirements to deliver an effective, progressively helpful social safety net.  And the standards they are held to in order to receive funding are too low.

Having that opinion doesn’t mean that I hate the poor or that I am insensitive to the issue of racial segregation we suffer from today that we caused over the first three quarters of our existence as a country.  Having that opinion means that I’m looking at the data.  And I know we can do better.

What’s the point of a social safety net?

What should a social safety net do for a given society.  Well, it should do two things at a minimum.  For starters, it needs to get people out of poverty.  This is actually where we do well.  It’s not coincidence that prior to the existence of government assistance in America, our poverty level was about one in four.  Now it’s a little lesser than one in six.  And if there’s one thing that I’ve learned from the years I’ve spent in undeveloped countries, high levels of poverty are bad for everyone.  Not just for the poor.  It’s bad for national security, bad for the economy and bad all around.  It should be avoided at all costs.    The second thing that a social safety net needs to do is lift people out of poverty by mandating development.  That is what we don’t do well at all.  It’s a problem.  One worth some level of dissatisfaction or even outrage. Unfortunately, the political debate we’re having isn’t really scratching the pragmatic itch for America though.

Why not?

Because it’s not focused on solving anything.   It’s focused on stoking the outrage of a base of people frustrated by the party line that they’re being fed.  Here it is: America has become a welfare state spiraling out of control at the expense of all the hard working Americans.  The data and facts don’t support that.  Which is the great thing about good data and facts.  They’re right whether you believe them or not.   That doesn’t mean that we don’t have a problem though.  And it’s a big one that is using a quarter trillion dollars a year less effectively than it could.  So how do we start to hold our government accountable for the required change?  That change by the way, is not reducing taxes.  So stop it.  We’ve got more problems to solve than ever before and we haven’t been this little taxed for generations.  Don’t believe it?  Look at our historical tax files at the IRS.com.  So how do we start the dialogue?

It starts with an exercise in focus.  Focus starts with ignoring what isn’t important.  So what isn’t important? Here’s a list to start with.

  • The fact that there’s no way to guarantee that some people are not  going to get over on the system.
  • The fact that many of the people on government assistance look different than many not on it.(there’s a reason for that…and it’s called the first 180 years of our 240 years as a country)
  • The fact that some people on government assistance may buy something nice.
  • The fact that you know a guy who’s not really hurt getting disability.
  • The fact that we have 12M undocumented immigrants in our country not contributing to the revenue required to fund the system.  (it’s a problem but if you actually cared about the welfare portion of that issue, you’d just make them legal tomorrow so you could tax them and the problem would be smaller)
  • The fact that you have never been on government assistance because you work hard and have personal accountability.

This list isn’t exhaustive.  But it’s the flavor of rhetoric that is getting in the way of actually fixing the problem.  And though these things aren’t fair and can be frustrating, if you fill your thought space and debate with them, you don’t leave anything left for fixing the problem.  And that’s really the point.  Unless the point is just to have something to be perpetually dissatisfied about.  The rest of us are on to that by the way.  The 42% of the electorate that identifies as independent- we see it coming a mile away.  So do what we do.  Learn to tune it out and we may actually change something. Or don’t.  And stay angry.

 

 

 

 

Archie’s Prophecy

In February of 2004, Eli Manning, the younger brother of NFL star quarterback Peyton Manning and son of All Pro New Orleans Saints Quarterback Archie Manning, was poised to be the number one pick in the NFL’s draft after a record breaking college career at his father’s Alma-mater, Ole Miss. The San Diego Chargers, coming off of a dismal season, their 10th losing season in the previous 11, had the first pick in the draft.

Eli was to be their savior, just like his brother was to the good people of Indianapolis.

There was one problem though.

His dad.

Archie had a very clear message for his son. The Manning’s were too good for San Diego football. He was right.

Looking back on the last 11 years of football in the NFL, it’s hard to point to a more prophetic piece of advice than Archie’s to his son.  Even beyond football, his guidance has proven to be one of the great “listen to your dad, son” moments in history.

Let’s review:

In 2004, the Chargers already had a quarterback, Drew Brees. They went ahead and drafted Eli anyway only to trade him to the Giants for their first pick that would ultimately land the Chargers their current quarterback Philip Rivers. Which means that during one calendar day, April 24th, 2004 the San Diego Chargers had Drew Brees, Eli Manning and Philip Rivers on their roster. Two of those three are on their way  to the hall of fame. The other presently plays for the Chargers.

It’s not Philip River’s fault though. And he may make it to the Hall. Besides Warren Moon, he’s thrown more touchdown passes than any other quarterback never to play in a Super Bowl. Which appears to be a very Charger thing to do. There are only five players in NFL history to throw over 250 touchdown passes and never play in a Super Bowl. Two of them, Rivers and hall of famer Dan Fouts, played for the Chargers. Which means that if your goal is to have your son be the best quarterback of his generation never to win anything, then the Chargers are your team.

Archie, who played 15 years in the NFL, made the Pro-Bowl and was widely regarded as one of the best quarterbacks of his era, never had a winning season. He knew the tune being played in San Diego well. And he didn’t like it.

Besides never really winning anything, as that’s not quite enough, there’s one other thing that is hard to put your finger on about San Diego and football that perhaps is even more damning. One that Archie probably sensed when evaluating his son’s opportunity. One that no one who loves football in San Diego is really willing to admit.

San Diego just doesn’t care that much about the Chargers.

Today the Chargers might be playing their last game as the San Diego Chargers. Because they are leaving. If not this year, soon.

For decades, the Chargers have been in a battle with the city of San Diego over the construction of a new stadium that deep down inside, most doubt was ever going to be built. Because it takes tax payer money.

On average, the 20 or so NFL stadiums built over the last 20 years have averaged about 65% public funding. Which means at a price tag of 1.5 Billion dollars, the city would have to come up with about a billion dollars.

Last year the city of San Diego paid their entire police and fire departments about $650M. Starting to see the problem?

You really need to care about football, more specifically about your team, in order to make that kind of investment. You need to care about football in a way that your football team is synonymous with your city. In a way that you feel like this type of investment and re-development will turn you city around. In a way where you believe that the existence of your football team is going to make your city more “livable” over the next 30 years.

If this is you, chances are, San Diego isn’t your town.  .

There’s an interesting thing that happens when you look at the demographic data of any given NFL city and the surrounding areas. If you take a look at how many people in a city are native to the area and expand that to the state as a whole, something interesting happens. It gets even more interesting when you factor in a team’s historic winning percentage, how long that city has had NFL football and the proximity of other established NFL teams. You can create what I like to call, a cultural significance index for any given NFL team. It’s not a fan support index as any team’s current performance is the indicator for that. It’s an index of how ingrained in the culture of the population of a given city a specific team is; how much they identify with the team.

Here’s what the data says:

Top 10 most culturally significant NFL teams for their current city:

  1. Green Bay Packers
  2. Pittsburgh Steelers
  3. Chicago Bears
  4. Cleveleand Browns
  5. Detroit Lions
  6. Philadelphia Eagles
  7. New England Patriots
  8. Minnesota Vikings
  9. New York Giants
  10. Buffalo Bills

Top 10 least least culturally significant NFL teams for their current city:

  1. Arizona Cardinals
  2. Tampa Bay Buccaneers
  3. Miami Dolphins
  4. Jacksonville Jaguars
  5. San Diego Chargers
  6. Seattle Seahawks
  7. New York Jets
  8. Houston Texans
  9. Oakland Raiders
  10. Atlanta Falcons

There’s some culturally insignificant teams that are filling the stands with lots of energy these days.

Seattle and Arizona come to mind.

Remember, this isn’t an index of how happy a city is with their team. It’s how much their city identifies with that team as part of their culture. If the Seattle Seahawks rattled off three or four losing seasons in a row, chances are the city would be significantly less energized. If the team left, life would go on.

If the Green Bay Packers or Pittsburgh Steeler’s left, people would wander around in the empty parking lot crying tears of despair for decades, largely unsure of their purpose as a community.

The Chargers are the 5th least culturally relevant team in the NFL. Of the four less significant then the Chargers to their respective area, only the Arizona Cardinals have had less winning seasons over the last 20 years. Of those five teams the Chargers play in the oldest stadium, 50 year old Qualcomm, ranked 30th out of 31 by Athlon Sports and Life Magazine’s stadium quality index.

So, you get it.

If the San Diego Chargers were a stock, you’d sell them. Because they’re in San Diego. And now they’re leaving. Because they should.

The billion dollars that San Diego tax payers would have to shell out to build a new stadium is something almost all San Diegans will realize no financial return on. Some local businesses may. Corporations may gain access to box suites. They might get a Super Bowl every 15 years. But your average San Diegan will get nothing, except the satisfaction of knowing their beloved Chargers are still here.

Here for the 29% of San Diegans over 25 who are actually from San Diego.

If San Diego is smart, they’ll never build it. They’ll move up the road to Los Angeles. Which by the way, doesn’t care about football either.  They haven’t had a team in 20 years. But they will have a stadium.  Because they’re big enough for two teams.

Look a little further down the list of culturally irrelevant teams and you’ll see the Raiders. They’re #9. And their stadium is #31. Get ready for 16 weeks of home games in Los Angeles. Because anything else doesn’t make any sense.

As for Eli, he’s got two Super Bowl rings, playing in a brand new stadium the the Giants and Jets self funded without any tax payer money for a team that is hugely culturally relevant in the largest market in the country. He’s played for the same head coach his whole career and he’s got a new contract worth $84 million.

The Manning’s won this debate. It’s not close.

Something about the “awe shucks”  delivery of Archie Manning makes me feel like he didn’t take the time to do the data dive that I’ve done to validate his guidance though. But like legendary tennis coach Vic Braden, highlighted in Malcolm Gladwell’s Blink, who can predict a fault on a serve over 85% of the time before the ball is even hit because he’s simply seen that many of them, Archie Manning  has seen enough bad football to know it when he sees it.

It’s likely the people of San Diego will see the last of theirs today.

The Thin Blue Line

Over the past 12 months or, the national discussion about the conduct of our law enforcement officers in our urban neighborhoods has reached a fever pitch. Amidst the backdrop of instances of excessive force and murder we’ve taken up sides and dug in.  And though we’ve once again found ourselves drunk on outrage and addicted to the argument, I’d like to offer up a moment of clarity-a brief chance to find some signal in the noise by answering two important questions.  They’re simple questions but important ones and I haven’t heard anyone ask them yet.  So here goes.

What is it that we’re really asking of our urban police officers in America today?

And what expectations should we reasonably have for their success?

Law Enforcement in the Age of Deindustrialization

In order to get our arms around the full scope of the task we’ve asked out of our law enforcement professionals, it’s important to understand where we are on the arc of our journey as a society. This isn’t a commentary about the American fall from grace or even a challenge to our idea of American exceptionalism. I’ll leave that to the politicians. This is a factual account of the socioeconomic outcomes of deindustrialization. Which may feel less exciting than moralizing and pontificating about times past, but it’s critically more relevant to this discussion, if the discussion is aimed at solution.

Here’s the cold truth. We are no longer an economy where people labor at making things in America. We still make things. Just differently then we used to. We produce 4% more steel then we did during the Reagan administration. We do it with a quarter of the workforce though. As a result, we are an economy where the labor focuses on doing things and enabling the consumption of things. This is not a function of societal decline or poor leadership. It is a result of the globalization of the industrial workforce and the progress of technology that America has largely driven. Good, bad or indifferent, something happens to the population of a nation that goes through the process of deindustrialization. As a result, something happens to what we ask of those that police it. And for specific areas, like our decaying urban environments, that something is not pretty.

The post-World War II era was a period of massive industrial boom for America.  It started with the mobilization of the war effort, continued with the requirements for export to rebuild Japan and Europe and peaked as that industrial engine fueled the automobile industry, suburban housing and the massive boom of consumer goods consumption in the 50’s and 60’s.  But as the globalization of the manufacturing workforce began in the 70’s, our industrial employment engine began to atrophy.  Not because we were dying as a country, but instead because we began to progress into a services economy. The FIRE industries of Finance, Insurance and Real Estate took hold and have maintained. Within the last 15 years, we’ve added the technology sector into the mix to create a very different work force than we had decades ago. The impact of on our urban environments has been very clear. Most of the higher paying middle class jobs today exist outside of the city in suburban America. What’s left in our cities is two things really- a small number of the true industry leaders and power players that live in the extreme high end neighborhoods and the “second city”, as defined in the landmark study by Karl Alexander and his team from Johns Hopkins University highlighted in the recently published book The Long Shadow.

The Long Shadow refers specifically to Baltimore but it’s a fair proxy for any town urban America.

“It is a wonderful place for a weekend visit and a great place for some to work, but this new economy is focused more on making money than on making things. That leaves a gaping hole in the middle, and most of the well-paid professionals laboring in those office towers head out to the suburbs at day’s end. Then the second city emerges, with the low-wage night crew cleaning and security personnel standing guard.”  

Right now, the residents of Baltimore are, in the best cases, those that make the “second city.”  At worst they are the generationally destitute living off of a social safety net that is ill equipped to provide them with the one thing that has any chance at providing them with a future; relocation. There is no future for them in the city. And no way to leave either.

The Bethlehem Steel Works once employed 30,000 people in Baltimore at a time when 75% of all jobs in the region existed within the borders of the city.  By 2005, the plant employed 1,500 workers.  In 2013, it was closed.  There is no recourse for that level of job destruction.  And I want to be clear, our national economy is as strong now as it likely ever has been.  Our middle class urban one, however, is in ruin.  Which is an important distinction because it highlights that most of America has no idea the level of urban decay we are experiencing.

There’s one group that is painfully aware of it though-urban law enforcement. They’re left with the charge of keeping the peace in the societal crater that’s left behind.

Policing the State of Incarceration

There are over 700,000 police officers of some flavor in our country. Roughly one out of every 220 adult Americans is a law enforcement officer.  This is aligned with the ratio of most industrial countries.  All across America these professionals arrest 39,000 people every day.  That’s not aligned with the rest of the industrialized world.  You’re twice as likely to be arrested as an America in American as you are as if you were a Brit in the U.K for example.  We have a lot of laws that put people in prison these days and a lot of sentencing guidelines that dictate long prison terms. None of them, by the way, were passed by law enforcement officers. The result is that we also have more people in prison than any other country in the world.  These people come disproportionately come from our urban areas. 95% of them will eventually be released, mostly unemployable, back into those same urban areas-those same urban areas that have lost all of their jobs.  The cycle of prison recidivism within an already economically depressed area creates an environment in which the standard for policing looks more like survival than keeping the peace.

 Alone and Afraid

12% of our national police force is black.  Which actually aligns to our national demographic.  But there’s something critically offsetting in our urban police forces, relative to the population they are tasked with serving. The economic shift from urban industrialization has largely left our urban minority communities behind.  I’ll avoid the “why” behind that because it’s a study in and of itself.  Centuries of forced segregation and exclusion from professional organizations takes its toll.  In focusing narrowly on the demographic outcomes of that shift, however, we see that now, our urban neighborhoods are for the first time in our history, less than 50% white.

In contrast, Atlanta is the only major metropolitan area with a majority minority police force. Which tells us that the communities being policed in our urban neighborhoods are rarely policed by officers from that neighborhood.   And though there are some hiring biases for legacy applicants, for the most parts, these neighborhoods also lag in high school graduation rates, college graduation rates and just about every professional career placement statistic.  These neighborhoods presently don’t produce enough professionals to fill our police forces.  Again, the why behind that is a different discussion.  But the outcome is clear.  Our urban police officers are being asked to patrol neighborhoods for which they have little cultural identification. The distrust and suspicion that this breeds on both sides is as much at the core of the problems we’re having today than any other factor.

So what?

We are asking an impossible task of our urban police forces.  It’s getting worse not better.  We’re asking them to keep the peace in areas of profound economic depression, the result of a permanent global economic shift that has destroyed the urban middle class with no hope for return. We’re forcing a concentration of convicted criminals with little hope for financial prosperity and a painfully disturbing rate of recidivism into that mix.  And to cap it off, we’re asking them to do it in neighborhoods of complete cultural and geographic unfamiliarity.

Last year, the Chicago metropolitan area had roughly the same per-capita murder rate as Nigeria.  Cities like Baltimore, Detroit and Philadelphia aren’t far behind. Which means that the implied peace we’re asking our law enforcement officers to keep is not there to start with. So what expectations should we reasonably have for success?  I honestly don’t know.  What I do know is that even if recent evidence has weakened our willingness to give them the benefit of the doubt as to their intent, it should not have weakened our appreciation for the near impossibility of the task for which we have charged our urban law enforcement officers with.  It doesn’t excuse those that do wrong or free us from the obligation of prosecuting them. But it does add some perspective.  So the next time you run into a cop, especially a city cop, remember that. And the next time you consider what is important to you when you exercise your democratic rights, think about the crisis of urban America, and how you could help our finest by addressing it with meaningful civic action.   Because in our cities, the modern American police officer has an impossible task, and we’re not talking seriously about anything that will change

The American Discourse and the Impact of Citizen’s United

A few weeks ago I read a tweet with a link from author Doris Kearns Goodwin’s appearance on the Daily Show. In it she said, “I think if I were young now, the thing I would do more than anything is to fight for an amendment to undo citizens united.”

Goodwin is a Pulitzer Prize winning historian who has written on FDR, Teddy Roosevelt, Lyndon Johnson, the Kennedys and others. About 13 of the 900 or so pages of her book Team of Rivals was turned into the movie Lincoln by Steven Spielberg. She is unquestionably considered one of the foremost American historians of our time. Which means when she talks about great American causes I tend to listen. But what about the Supreme Court’s Citizens United ruling from 2010 has drawn the attention of Kearns and many others as the great risk to democracy of our time? To answer that, you have to do some digging on how we got here and understand where “here” actually is.

Campaign financing regulation actually predates our country. There’s a funny story of how George Washington won an election in the 1750’s to the house of Burgess because he handed out alcohol and food at the poles. It was actually pretty normal at the time. Virginia passed a law shortly after outlawing the practice. By the middle of the 19th Century, America began to pass laws that prohibited politicians from demanding contributions from civil service workers and then appointing them to positions based on the heartiness of their contribution. Hard to imagine it took 75 years or so to figure that out but you have to remember, we were 1st market movers when it comes to world powers and democracy. We had some things to figure out. Around the turn of the 20th century, President Theodore Roosevelt drove legislation that curbed corporate and private participation in the same type of patronage actions. By the middle of the 20thcentury we got around to getting organized unions out of mobilizing their workers to fund campaigns as a prerequisite for membership. So by the 1970’s we had mostly eliminated the affronts to democracy that lesser developed nations still suffer from. From there, it got a little more complicated.

The Federal Election Campaign Act Amendments of 1974 (FECA) formed the basis for much of the current federal campaign laws. It included limits on contributions to federal candidates and political parties, a system for disclosure and voluntary public financing for presidential candidates. The Act tried to impose campaign spending limits but the Supreme Court threw it out 2 years later. It also created a governing body, the Federal Election Committee. So by the 70’s, there were limits on contributions, transparency on those contributions and a governing body to enforce the rules. There were still no limits on campaign spending either by a candidate or corporation for support of a candidate’s party or cause though.

In 2002, the McCain-Feingold Act was signed into law. This act materially accomplished two things. It eliminated “soft money” from party finance. Soft money is a term used for political party general purposes like party building “activities” that weren’t subject to regulation. The second thing that McCain-Feingold did, and this is actually what Citizens United overturned, was eliminate corporate funding of issue advocacy ads; those ads which name an actual candidate within 30 or 60 days of an election. Corporations could still fund ads that advocated for conservative or progressive causes all they wanted through third party groups like the Koch Bros, American’s for Prosperity. But as a corporation or union, you couldn’t “pick your guy” and bank roll him. And though the spirit wasn’t to advocate for a specific group, you could fund groups that said or even called themselves “Hillary is destroying America”. Which happened, regularly and legally. Which means that prior to 2010, corporations and private organizations could and did already contribute massive amounts of money to finance political actions.

So if it didn’t create corporate participation in politics, what did the Supreme Court actually do in 2010? Well it can get complicated but, materially, it did two specific things. It removed the ban on independently funded adds 30-60 days before an election and opened up direct funding for corporations and unions for express advocacy ads. It had some second order effects on the characteristics of the groups that could organize to raise funds for an election but the important part is that it streamlined the process for corporate and union participation in funding. Which has triggered the outcry. But there’s a lot of noise in the outrage, and as a result, there’s a chance to miss the signal in the noise. Because when you look at the data, something doesn’t match up here.

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Federal Campaign Spending

There has been, without question a massive increase in campaign spending since Citizens United in 2010. But if you look closer at the data behind campaign finance, we see it actually predates 2010, substantially. In 1996, we spent about $21 million on federal elections, through regulated channels. By 2004, that amount rose to $340M. That’s a 1500% increase within the cycle of two presidential elections.  But that actually doesn’t tell the full story. If you count the “soft money” explosion that led to McCain-Feingold, spending in the 96 election rose to almost $300M, several times more than any other year. Though McCain Feingold eliminated that “flavor” of spending, it appears that we couldn’t un-ring that dinner bell. By the following presidential election in 2004, outside spending for federal elections had increased 900 percent. That’s 900 percent in four years, six years before Citizens United.

So when you actually look at the path of historical spending above, and also take into consideration that the “soft money” from the mid 90’s isn’t accounted for in that data, we see something very clearly. And it didn’t happen in 2010. Something very different happened about 20 years ago, and the impact has been an explosion in spending on elections. And as big as the increase has been since Citizens United, it’s actually nowhere near the jump we saw between 1996 and 2004. So what happened in 1996? Quite a bit actually.

The day I enrolled at the United States Naval Academy in the summer of 1995, I was issued a computer. That computer was different than all the computers that the Naval Academy had issued in the previous decades to its thousands of students in one very important way. It connected to the internet. At the same time, the digital cable revolution was crossing America increasing the average channels of cable offering from dozens to hundreds. Fox News and MSNBC launched the next summer. So about the time when our campaign spending began to explode, something else was exploding too; the amount and methods for which we began to consume information.

Here’s some data. In 1996, the average American spent about 500 hours watching cable TV a year. By 2010, that number had more than doubled to about 1100 hours a year. We also watched network TV, where “mature” information lives, about 300 hours less. You can also add in 200 hours a year on the internet that didn’t exist at all prior to 1996. And here’s the kicker, according to a study by the mobile measurements and platform company Flurry, you can add another 800 hours a year on smartphones. Which means that we spend more than twice the time consuming information today then we did 20 years ago. Which means one thing. There’s a lot more money to be made off of the American attention span than there used to be. And there’s a lot more competition to get it.

Taking a breath, a calm step backward and an objective look at the data, and we start to see what’s at work here: economics. In order for a market to exist, there has to be demand. Prior to 1996, the demand for information, political or otherwise was relatively small. We had newspapers, magazines and a handful of television channels. Over the past 30 years though, technology has changed that opportunity. And as a result, investment in the media world has also changed. Prior to 1985, corporate investment in media kept pace with the general economy. After 1985, that changed. By 1995, communications industry spending grew at 150% of the pace of the economy. By 2014, growth in media spending had nearly doubled our economic growth rate. And we were off to the races.

If you look at the type of spending that has blown up, it’s what is referred to as independent expenditures. In lay terms, it’s money that comes from somewhere other than the candidates or parties directly like wealthy individuals, corporations or Political Action Committees (PACs). Independent expenditures actually account for over 90% of the increase in spending. And again, it started almost a decade before Citizens United with a 1000% increase from 2000 to 2004. If you pair that finding with the advent of the information consumption age it leads you to one very strong conclusion. Massive amounts of money have flowed into the federal campaign system over the last twenty years for one very good reason. There’s actually something to spend it on that works.

Ask yourself, what in the world would you have been able to spend $1 billion of advertising money on in 1980? How many network TV ads or mailers could you send? How many people could you compel to go knock on doors? Not that many. Which brings us to as close to a smoking gun as you’re going to get for the cause of our massive increase in campaign spending. Which leads us back to the question of Citizens United and what to do about it.

The exercise with McCain Feingold has taught us a fairly valuable lesson. Now that there’s a mature market for profiting off of political expression, efforts to close it down through finance reform serve mostly to change the flavor of money flowing in. We can squeeze the balloon, but unless you pop it, it’s still going to hang around. Which leads us to the next logical question. How do we pop the balloon? Well, we actually can’t. If there is demand, and it is legal, there will be money to invest. Even further, the billion dollars we spent on the election directly in 2012, is merely a fraction of the total media market that is, in some part being fueled by the content of political discourse. Which means that even if we found a way to completely abolish political spending altogether, it wouldn’t put out the fire. The 24-hour news cycle, social media markets and talk radio are a hell of a lot bigger than the $1 billion industry. The six biggest media companies in the country, GE, Viacom, Disney, Newscorp, CBS and Time Warner had just under $280 billion in revenue in 2010. The money being raised for campaign financing isn’t driving our media and how they choose to market and display content. Because it’s not the campaign money that they’re after. It’s our attention.  And as long as we humans are susceptible to focusing on things that affirm our beliefs or outrage us, then the current dialogue isn’t going anywhere and neither is the media market it fuels.

So if it’s not the money, what is the great evil that we’re trying to shout down right now? What is the Doris Kearns Goodwin advocating for in the form of a Constitutional Amendment? Remember, Constitutional Amendments are big deals. They do things like outlaw slavery, grant citizenship, allow women to vote, ban drinking, allow drinking, let us speak freely, have due process, carry assault rifles. When we amend the Constitution, it needs to yield an outcome. Which is why it’s not easy to do. As for the issue of campaign finance, I think we can all agree that there’s something that feels unclean about the combination of large sums of money and the democratic process. But it’s still fairly regulated and we’re not actually accusing anyone of outright fraud of corruption here. So what is the problem? It’s actually a pretty big one and it’s been happening for a few decades.

The problem isn’t that we’re buying our candidates. The problem is that we’re subjugating them, and not with the will of the people as they ought to be.  And the result is the polarization of our two political parties. Over the last 40 years, democrats and republicans have increasingly voted only democratic and only republican more and more. In 1970 if you were in the United States Senate, the majority of a party voted the same way on legislation 27% of the time. Which was good, because when you wanted to get things passed, you had the opportunity to convince reasonable people in both sides of the party to agree. In 2014, the majority of a party voted the same way 70% of the time. Which means, quantitatively we’re 250% more polarized now than we were 40 years ago. Which is a problem. Because it means our politicians used to put a lot more thought and a lot more consideration into their positions

If it’s not campaign financing that they’re afraid of, then what exactly is it that’s driving our politicians to take so few risks? That one’s pretty clear. It’s fear. Fear of a media market that has long since outgrown the need for campaign spending and has since moved on to the more fruitful harvest of outrage, conflict and dissent. If you think that’s an overstatement, consider this. The first Republican Presidential Primary debate in the 2016 election was the highest viewed cable program in the history of cable television. There’s blood in the water now and if you step out of line against the base, someone is going to market the outrage immediately and on an inescapable scale. So you don’t, because you want to keep your job, which unfortunately isn’t the goal of our government. A politician wanting to keep his job isn’t a new phenomenon though. It’s as old as the institution of democracy. What is new, is the scope and scale of the information engine capable of taking it from them.

So do we mobilize and advocate for a Constitutional Amendment as Goodwin said? While it’s likely that eliminating some level of the spending in campaigns won’t hurt, I think it’s also fair to say it won’t solve the problem. There’s a wild fire burning and though the Supreme Court poured gas on it in 2010, it didn’t light the fire. And it’s only a matter of time before that fire doesn’t need the fuel of campaign finance at all and provides us with candidates who draw eyeballs instead of money.

Donald Trump anyone?

 

 

 

Guns, People and Poverty: A Study in What Kills Who

 

Guns don’t kill people. People kill people.   It’s a logical statement and one that’s hard to argue against. It usually pops up in some form on your social media stream in the aftermath of a mass shooting. Clearly it’s unfortunate that mass shootings happen with enough regularity to be able to present a pattern. The patterned response exists nonetheless.  Since it does, we probably owe it to ourselves to do a little digging on its validity. So we did. We compiled data from three sources: the CIA Fact Book, The United Nations Office on Drugs and Crime, and the World Bank Group. In doing so we were able to establish a complete data set on 71 countries from all regions of the globe that could provide current data on socioeconomic status, homicide, gun violence and urban/rural population density. What the data shows was very telling. Here’s what we found:

If you are going to murder someone, you’re probably going to do it with a gun

Of all the homicides in the 71 countries that contributed to the analysis, two-thirds of them were committed with a firearm. By itself this data point alone says nothing specifically about whether or not guns actually contribute to the chance that someone is going to get murdered. It only shows that the method of choice in homicides is a gun. It leaves plenty of room for the argument that once a person decides to kill someone, they’re going to do it by any means available. The gun is simply the most available. It’s not an impossible argument, though its hard to imagine how people would figure out how to pick up the slack in the absence of such an efficient tool as the gun.

An interesting pattern appears when you include the overall homicide rate along with the percentage of homicides committed by firearm though. What we saw was that as homicide rates rise, so does the percentage of homicides committed by gun. Take Honduras for example, the murder capital of the world at almost twice the murder rate of the next most murderous country Venezuela. The percent of homicides by firearm in Honduras is 83%.   Venezuela’s is 80%. On the other end of the spectrum we have Denmark. Denmark has the lowest homicide rate of any country in the analysis. Less than a third of their homicides were committed by firearm. What the data tells us is pretty clear. If you want to contend for the title of murder capital of the world, you can’t do it without using guns. After all, if you’re in the volume business, efficiency is key. When it comes to killing, guns are as efficient as it gets.

Guns alone actually don’t kill people.

Does the presence of guns alone lead to gun violence? Chalk one up for the gun advocate lobby here. The amount of civilian owned firearms in any given country alone actually has no correlation to the homicide rate. According to the annual UN survey, there’s a lot more guns out there then you would think. Our love affair with the firearm in America is well publicized. With 88 guns for every 100 people, our reputation is warranted. We’re more than twice the next highest country. Not far behind us in the rankings is a country like France. France has about 31 firearms for every 100 people. Both the U.S. and France are nowhere near the top of the homicide list, despite being at the top of the list of the countries with most civilian owned firearms though. To answer the narrowly focused question, do guns kill people? The data is clear. Guns alone do not kill people. There’s a trend hiding in the data though. You just need to add one more ingredient to see it.

Something very interesting happens when you include poverty in the analysis. What we see is that though having a lot of guns does not make for a dangerous society, adding poor people and guns together does. Take a country like Liberia in West Africa. Liberia is the poorest country in the analysis with 80% of its population living below the poverty line. With that level of poverty, it’s pretty easy to assume that they also have a high homicide rate. That would be a poor assumption.   You’re actually more likely to get murdered walking the streets in America than in Liberia. In fact you’re almost 50% more likely. Why? Again, the data is pretty clear. Liberia has no guns. Liberia has one gun for every 100 Liberians. We have 88.

Liberia isn’t an outlier either. Chad, Niger, Senegal, India, Bangladesh and Cambodia are all countries with huge poverty rates from different regions of the globe that all have the types of low homicide rates that rival first world countries. They also all rank in the lower third of all countries in civilian owned guns. When you add guns to poverty you have places like Honduras, Colombia, Mexico and South Africa. These titans of murder find themselves in the top third in poverty and civilian firearm ownership. The data is clear and unambiguous. The secret sauce that leads to the highest murder rates in the world is one part poverty, one part fire arms. Guns don’t kill people. Poor people with guns kill poor people.

So what about America?

Using the Liberia example again we can actually do a pretty useful comparison. If you live in Liberia, you are five times more likely to live below the poverty line than in America. If you live in America you are 88 times more likely to own a firearm than if you live in Liberia.  If you live in America, you are 50% more likely to be murdered than if you live in Liberia.   There’s really only one theory to take away from that comparison. Either we Americans are just inherently more violent than Liberians, or it has something to do with the guns. When you add other countries into that same comparison and we see the same thing over and over again, we start to approach a pretty sound conclusion. Our propensity to own firearms appears to make us less safe than other first world countries and even some third world ones. But if guns alone don’t make us unsafe, which is what we clearly stated previously, then why are we less safe then other countries?

For one, we have so many more guns than everyone else, it’s almost impossible to think that there would be no consequences to that. Even if you were willing to make that leap though, there’s another interesting dynamic with America that you have to consider. Though we are undoubtedly one of the world’s most prosperous countries, we have a much higher poverty rate than our more socialist or communist counterparts. This is no commentary on the evils of capitalism. I’m a big fan. So let’s quickly get past that. What is important though is the fact that we do have concentrated pockets poverty that also have high civilian gun ownership. The result of this is that though our national homicide rate is low relative to the whole group, the consequences of the pattern of poverty and guns on our urban areas has an acutely destructive impact on them. Let’s use Chicago as an example. Chicago is the murder capital of the United States. Pockets of Chicago’s South and West Side have between 40-60% of their residents living below the poverty level. Now add the high civilian gun ownership rate that is experienced across America, you get a very rough outcome.

Numerically speaking, the Chicago Metropolitan area has a homicide rate that would put it in the top ten countries on the planet wedged between Nigeria and Panama. Chicago is not alone. Baltimore is actually worse percentage wise.  It’s on par with Rwanda. Yes, Rwanda, the place with the movies about genocide.  Even less prolific metropolitan areas like Philadelphia, from a homicide perspective, are on par with places like Angola or the Sudan. When you put it in perspective, it starts to feel like something that requires more than a bumper sticker for a solution.

So What?
The striking conclusion that we can take away from this broad analysis is that guns are just another one of many aspects of the human experience that make it much harder to be poor. Like drugs, disease, and recessions, adding guns into poor environments has a disproportionately negative effect when compared to more affluent areas.  In America, the gun control discussion is one of the most divisive and partisan ones that we encounter.  The debate involves special interest groups, culture, tradition and a standing Constitutional debate about what our founding father’s intended. What it rarely involves is fact, data and perspective.  When the loudest voice in a debate leads with rhetoric you get bumper stickers and memes instead of informed insights and decisions.

The data is clear. Without question, guns kill people. Not by themselves of course. No one ever claimed that a gun by itself killed anyone. We should find that particular challenge to gun control insufficient if not insulting.  When the conviction in a debate is on the side least impacted by the negative outcomes of an issue, it should signal a call for those objective few among us to look harder into reality to demand more of the discussion. The analysis is done. The conclusion is a hard one. Guns kill poor people. Whether or not you care about that is up to you.

The Great American Economy: A Study in Data and Self Deception

Economy  noun econ·o·my \i-ˈkä-nə-mē, ə-, ē-\ the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location.

When we ask the American people what their top considerations are in any congressional or presidential election, without question one of the top issues they raise is the economy.  From the definition above, it’s hard to actually imagine that people care about the economy in a literal sense though.  The theories and systems related to that which is described by the definition of an economy are best left to classrooms.   What people actually mean when they say “the economy” is that they care about aspects of our fiscal and monetary policy that actually impact our lives.  Fiscal being budgetary and taxation activities.  Monetary being activities conducted by the Federal Reserve that impact interest rates.  We choose to use the word “economy” to sum all that up in one average sized word.  We like terms that we can put in our back pocket so we can pull them out when required in discussion or debate to prove a point.   So the “economy” is what we care about.  And so it becomes top issue.

If you think about it just a little bit more though, you can actually give some purposeful voice to the demands of the people’s economy.  When you think about it in reasonable terms, and its important to be reasonable here because there’s quite a bit at stake, you can produce a pretty distinct list of exactly what we care about. To be even more precise, you can get to eight portions of the economy that we really care about.  Here they are in a somewhat particular order.

What American people want of their “economy”:

1. Income that keeps pace with inflation

2. Job growth equal to employment demand

3. Stable employment rates

4. Historically moderate tax rates

5. Affordable cost of borrowing

6. Participation in growth through investment

7. The ability to retire at a reasonable age

8. A safety net in hard times.

The good news is, we actually have data on all eight of these categories. When you throw economic theory and political principles out the window, you can do some unbiased statistical analysis.  So we did that.  We analyzed 19 separate economic categories that included government spending, income tax rates, interest rates, trade deficits, financial markets, GDP, budget surplus/defecit and corporate profits.  By simple correlation analysis, we can ignore the rhetoric and theory and look at simply what the data tells us.   So here it is both in raw form and commentary.

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What happens when taxes went up? 

People had less money.  But you didn’t need data to tell you that.  But interestingly, job growth increased and unemployment decreased.  The S&P 500 went up.  Corporate profits decreased, which makes sense, because they were paying higher taxes.  In the statistical world, we are always careful to point out that correlation is not causation.  Which means in lay terms, just because two points of data showed a pattern, it doesn’t mean one caused the other.  What we do know is that the data alone does not support the history of dire economic consequences from tax increases.  That doesn’t mean we have to like them though.

What happens when corporate profits increase? 

Surprisingly nothing.  Though profits increased with lower taxation, the growth doesn’t appear to materialize into wage increases, job growth or significant financial market gains.  From a data perspective, the only thing that appears to benefit from corporate profits, is well, corporate profits.  This isn’t a purposeful commentary about the evils of corporate America. It’s simply what the data says.

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What happens when corporate profits decrease?

We don’t know because it’s never happened.   Even during the great recession that started in 2008, corporate profits continued to grow at record rates.  What correlates to the spike in unemployment and the crash in financial markets is a slow down in the rate of growth.  Which means companies were more profitable during that time than in the years previous to the crash, they just weren’t more profitable enough.  And why did it slow down?  As far as the data shows, for no reason at all related to taxes, wages, spending, interest rates etc.  Which leads us to believe that free market forces of expansion and contraction dictate rate of growth; not taxation, wages, spending, trade, currency exchange rate etc.  Again, this is not principle or rhetoric, just data.

Do we spend more tax payers money when we raise taxes?

Oddly, no.  One of the strongest correlations in the entire analysis shows that we spend more when taxes are lower.  Clearly no one is arguing that when we lower taxes, we spend more because taxes are lower.  What we are saying however, is that the data shows us that we spend independent of how much money we collect from taxes.  Which is why our national debt is higher now as a percentage of GDP than at any time in our history.  The conclusion is that it has at least as much to do with historically low tax rates than it is out of control spending.

Is our spending out of control?

We do spend more than we used to.  The increases in spending exist in social security, medicare and medicaid, and social safety net programs.  People live longer then ever before and medical care that simply didn’t exist in the recent past presently does exist.  What we choose to spend on safety net programs is a choice. When unemployment spikes, our government spending does as a result.  Choosing to do so however appears to have no negative impact on any economic outcomes that we care about, other than supplying us with income and resources when we fall on hard times.  It simply means we spend more money.  Which matters, especially when you don’t fund it.

So what’s the “so what”?

What does it all mean?  The rhetoric around taxes and spending and how it impacts our lives is not supported by the data.  We certainly don’t like to pay higher taxes.  Nor should we.  But the increased costs associated with modern lifespans and healthcare are taking their toll.  And this is not because of the Affordable Care Act.  At least not yet. Most of this data comes from well before it was in place..  There is one important consideration though.  Whatever our political affiliation, we all agree that at a minimum, a government’s role is to exist and remain solvent so it can continue to govern. Which is a pretty low bar.  If you take this data seriously, and I do, you see that there’s nothing that actually supports the “trickle down” effect from lower taxes.  Which is actually good in one way.  It leaves us with a clear choice; to have the services that our government presently provides or to not have the services that our government presently provides.  Right now we’re choosing to have them and not pay for them because we’re hiding behind the rhetoric that choosing to pay for them would be bad for the economy.   The data doesn’t support it but our inability to have effective political debates in congress, or anywhere won’t let us get to that choice.  My guess, is we’d have some, divest of others and maybe even improve ones that weren’t working.  We’d be forced to prioritize.  That is, if we could actually talk about this.  Which we can’t.

This level of analysis isn’t particularly hard to do and the conclusions that it yields are strikingly conclusive.  They’re just not popular ones to advocate for because frankly, we can’t have honest discussions any more without being stuck in the irrelevant loop of “government bad” -v- “government good” paralysis.   Which puts us in the impossibly dysfunctional position of having more, paying less and not being able to prioritize anything until we drive off a cliff of insolvency.  Painful truths hurt.  So we don’t say them.  If we don’t want to pay for the social programs, then cut them.  But there will be no denying that we are cutting them in order to preserve the lowest tax rate in my life time. Or, maybe we try reviewing and prioritizing, like any organization on the planet that has a budget. But we can’t, because we’ve stopped talking.   And so the self deception continues and our deficit grows as does our compliance with our insolvency as a nation.  This one actually isn’t that hard. But it’s going to take a discussion.  And we can’t do that any more.

The American Presidents….By the Numbers

In 1948, historian Arthur M. Schlesinger conducted a poll of 75 historians asking them to answer the question, who are our greatest American presidents?  Since then, and probably before, it’s been a pretty popular debate.

Though previous attempts to rank our presidents have been based on observation and opinion, the names at the top and the bottom of the lists are pretty consistent; Lincoln, Washington, FDR at the top. Andrew Johnson, U.S. Grant, Warren G. Harding are at the bottom. When you actually think about it though, it’s really an impossible question. Is Washington better than Lincoln? Probably not at winning the Civil War at least.  He owned slaves and had a penchant for leading uprisings against his government. Washington probably isn’t your guy in 1861. We’ll never know what speech Millard Filmore would have given the day after the Japanese attacked Pearl Harbor. Most of us will never know anything Millard Filmore said. I promise you though, he was our 13th president.

Circumstance plays a big part of it and so it becomes an illogical discussion.  So why do we do it?  Partially because debate is an inescapable function of the human condition. It’s what we do. We argue about just about anything we can compare. There is another reason though. A more practical one. We debate who our great American presidents are because we are bench-marking our current prospects. We are looking at the greats of the past to see the potential in our future and so we find value in the debate. Because we find value in the debate doesn’t mean that we are having the right debate though.

A more effective question is what makes a great president? And if we were to look at how we’ve evaluated them in the past the answer is clear. For the most part, it’s crisis.  The true great ones, Lincoln, FDR, Washington, led through periods of dire crisis.  Which begs the next question.  Do we really want the next great president? It probably sounds counter-intuitive but I hope I never live to see our next great American president.  I hope that great American presidents are over.  Great American presidents mean war, suffering, economic catastrophe and death.   So when we talk about great president’s, might we have the debate differently? Shouldn’t we shy away from desiring a great president and instead focusing on desiring a great presidency?  That’s what I’m rooting for.

With that in mind, we took a shot at looking back at our presidents through that lens.  We built an algorithm to see what the data says and then compared it to what history says.  The results were interesting.

The good news is that this is actually pretty easy.  Because you can  measure prosperity, progress and opportunity, things we would likely agree make for a “great presidency” by observing patterns in economic data, scope and scale of war, territorial expansion and Constitutional legislation.   So that’s what we did. The table below illustrates the rankings of American presidents by using an algorithm incorporating historically collected data.  The table compares the outcomes of the algorithm to the aggregated results of a dozen or so polls of historians regarding presidential rankings.   As you might expect, the data tells a different tale then the anecdote.

Score Algorithm Ranking Historical Ranking
100 George Washington 1 3
74 Ulysses S. Grant 2 37
73 Thomas Jefferson 3 4
69 Andrew Jackson 4 8
67 James Monroe 5 14
65 Bill Clinton 6 21
63 Ronald Reagan 7 17
63 James Madison 8 13
62 Franklin D. Roosevelt 9 2
61 Grover Cleveland 10 19
60 Rutheford B. Hayes 11 25
58 Dwight D. Eisenhower 12 9
57 Theodore Roosevelt 13 5
57 John Adams 14 18
57 William McKinley 15 20
52 Harry Truman 16 7
52 Andrew Johnson 17 41
52 James K. Polk 18 10
51 John Tyler 19 36
51 Barrack Obama 20 16
50 Lyndon B. Johnson 21 15
50 Woodrow Wilson 22 6
49 John Quincy Adams 23 18
48 Millard Fillmore 24 39
47 James E. Carter 25 27
47 George W. Bush 26 33
47 Calvin Coolidge 27 31
46 William Taft 28 22
45 George H.W. Bush 29 23
43 Franklin Pierce 30 40
42 Martin Van Buren 31 24
40 Chester A. Arthur 32 28
40 Richard M. Nixon 33 32
39 James Buchanan 34 42
37 Warren G. Harding 35 43
37 Benjamin Harrison 36 38
36 Gerald R. Ford 37 26
35 John F. Kennedy 38 11
22 Herbert Hoover 39 30
22 Abraham Lincoln 40 1
19 Zachary Taylor 41 35
17 William H. Harrison 42 38
14 James. A. Garfield 43 29

The data behind the comparison shows several things.  First, the algorithm and the historian polling are moderately correlated, meaning that the two lists are not entirely at odds with each other.  Immediately, some clear differences jump out at us though.  Here are some of the more glaring insights.

Where’s Lincoln? 

I challenge you to find a historian that does not include Lincoln in their top three on their index of presidential greatness. This algorithm, however, does not measure personal greatness.  It measures outcomes relative to the quality of life of the people being governed. Lincoln’s presidency was marked by unprecedented carnage through war, national crisis and ultimately assassination. It’s safe to say if we could have avoided it, we would have.  The numbers clearly show that, giving him the most significant historical overvaluation relative to the data.

There’s something else interesting though. You can’t really capture, through data, the accomplishment of paying off the debt of overdue societal progress. Which tells us that ignoring required change, like abolishing slavery, ultimately results in really lousy outcomes for the people who actually put their foot down to change it.  And though history treats them well, the lives of the American people, as they lived them, were miserable.  So if you can, change things before you have to.

Was Washington really that great?

Was Washington really worthy of the title father of our country?  The data says so.  He had the highest average economic growth of any two term president outside of FDR.  Despite our fledgling status as a nation and our relative inability to defend ourselves against foreign enemies, Washington managed to steer us clear of war.   He signed just under half of all Constitutional Amendments ever passed and he expanded the territorial holdings of our country from nothing to something.  The first eight years of our country’s existence could have gone terribly wrong but it did quite the opposite.  Washington oversaw prosperity, stability, growth and progress on a scale not duplicated by any president since.

Did we really get Grant that wrong?

Grant was a great general, but a bad president.  That is what I was taught in history class growing up and obviously what our historians voted as they ranked him the 37th ranked president out of 43.  The data shows something different.

Though recession hit during the latter years of his two terms, the recovery and post-Civil War boom actually show that America experienced 5% GDP growth annually during Grant’s two terms. This ranks him fourth among all two term presidents behind FDR, Washington, and Jackson for economic growth.  As a modern frame of reference, Reagan and Clinton, both uniformly considered to be fiscal successes as presidents, were both about 4.1%.

President Grant also governed during a period of relatively stable peace and even ratified the 15th Amendment providing the right to vote to African Americans, a significant political debate of the time. So why is history down on Grant? The headlines point towards corruption and the eventual recession of the mid 1870s. Data doesn’t measure corruptions.  Just outcomes, but it does raise an interesting question.  Should we care about corruption if it doesn’t hurt us?  I think we do but perhaps the lens is that it is more of a long term problem.  We shouldn’t tolerate corruption, even in an environment of prosperity because it erodes the fabric of our political discourse. And ultimately it breaks down.  Site Bill Clinton and the damage his character issues did to the perception of trust in our politicians.  More on him later though.

There’s something else interesting in the data relative to Grant. If you look a little deeper, we begin to see indications of what may have been influencing our historians in their selections. Of the presidents that have the largest historic undervaluation relative to the algorithm, the top two, Grant and Andrew Johnson immediately followed Lincoln.  Rutherford B. Hayes, who followed Grant, also cracked the top 6 of undervalued presidents. This group who ushered in the era of those labeled the “forgetful presidents” has been much maligned by history.  But they actually governed during a period of unprecedented growth and stability.  But we know growth and stability isn’t what we remember. We remember the other stuff.  It’s safe to say that Grant, along with Andrew Johnson and Hayes suffered mainly from a case of not being Abraham Lincoln.  History has never really gotten over the fact that America was robbed of being led through post-Civil War reconstruction by the hero that delivered us from near destruction as a nation.

What gets a president noticed?

James Garfield spent 200 days in office.  Despite that, historians have him ranked as the 29th greatest president.  That means, despite being in office for about as long as a single Major League Baseball season, Garfield is considered a more effective president than 14 other men by historical opinion.  Only two of those 14 also served for under a year. Which means Garfield, having done nothing at all, in a literal sense, is considered more effective than 12 other presidents who served in office for years. This includes two term Presidents Grant and George W. Bush.

How is that possible?  The pattern in the data is very clear.  Of the four most overvalued historic presidents, three were assassinated.  Lincoln, Kennedy and Garfield were all killed while in office.The fourth most overvalued president, Woodrow Wilson, was a war time president.   If you want the American people to remember you fondly, get killed in office or go to war. Both things, most would agree would be outcomes to avoid, if we could.

 

What about the new guys?

The algorithm doesn’t care about how recently you were president. Reagan and Clinton are both ranked in the top ten, having served two peaceful terms of economic prosperity within the last 40 years. Both also crack the top eight undervalued presidencies. Historians tend to need some water under the bridge before they feel justified in giving due credit. After all, they are historians.  The data says that President Obama is ranked 20, just four rungs below where our historians forecast his placement.  The data behind his predecessor, George W. Bush, hands him the title for the lowest ranking full two term president at 26. I have some particularly leftward leaning friends who wonder regularly how “W” got two terms. The data supports their concerns. To keep this discussion data driven and bi-partisan, the outcome of the “Hope and Change” promised by Candidate Obama has him looking up at President John Tyler. From a data perspective, Tyler had a more effective presidency despite his somewhat less inspiring campaign slogan of “Tipecanoe and Tyler too…”

So what?

In the end, the data is just another way to debate the question.  It’s an algorithm that was built by a person, which means it is subject to its own biases and inadequacies. What it does show is that there are patterns to our bias that data and analysis can point out. It also shows that data, while important, often misses the qualitative aspects of measurement, like the gross injustice of slavery that mandated Lincoln’s great national and personal sacrifice.  Or the scandal and clear instances of dishonesty of the Clinton era and the long term erosion of the confidence in government.  But the data does serve to offer a different perspective. It’s why we use data in business.  It’s why we use it in sports.  And now, more than ever before, data is how we make sense of our past and the world around us.

For me it brings our two critical insights.  And the first is that presidential performance is outlived by societal impact.  You can change, for good or bad, things that long outlive your term.  The second is that change is easiest before its needed.  And though we celebrate the presidents who force it under dire circumstance, the lives of Americans who lived through it are largely miserable.  So change things before you absolutely must.  Think social security, climate change etc.  If you don’t and you rely on the “great man” to do it for you, the fee is high for that service.

In the end, it’s data.  And data helps start the discussion.  If it ends there, it’s less useful.  But if you ignore it, you tend to start in the wrong spaces.