August 2006

Bernanke isn't worried about the declining role of home equity in consumer spending (Thursday, 8/31/06)
The Chairman of the Federal Reserve believes that increasing incomes will help offset the diminishing role of home equity that has been supporting consumer spending and, therefore, the U. S. economy. Incidentally, Martin Crutsinger reports that consumer spending was up last month in the United States.

In other good economic news, factory orders declined less than expected last month, core inflation was up less than expected, and the number of first-time jobless claims dipped a bit last week.

On the other hand, Rick MacDonald from Action Economics says that their experts are forecasting job growth for the month of August to remain modest and unimpressive, although slightly above other median forecasts.

Ben Bernanke expects productivity in the United States to continue growing. This means that more work will be done by fewer people, which is good news for the nation's overall standard of living, but may not be good news for some workers with increased workloads who may begin to envy the laid off.

Also, will there be a growing number of Americans who are "locked out of the economy," in a sense, and, so, will not benefit from standard of living increases? We're mostly talking about averages here, and every beginning statistics student has heard the old thing about how, with your head in the refrigerator and your feet in the oven, on the average, you're quite comfortable.

Today's NewWork News Web Tip: Europa Nostra Thursday, 8/31/06)
Anyone who has had an Alzheimer's patient in the family knows how devastating loss of memory can be for an individual. It can be similarly disabling for a society to lose contact with its past. Moreover, given the readiness with which rumors and legends arise and are perpetuated, it's particularly important to preserve tangible artifacts from the past to assist in the "reality testing" process in order to resist the strong tendency people have for simply making up goofy stuff to believe which never happened. Since 1963, Europa Nostra has worked to assist in the preservation of cultural artifacts in the European region.

Today's NewWork News Web Tip: Project on Student Debt (Tuesday, 8/29/06)
Some American young people will be kept out of the housing market for years because they will have to use available funds each month to make their student loan payments. In fact, a major portion of their earnings for many years will go to pay interest on their loans. The Project on Student Debt enables you to make state-by-state as well as school-by-school comparisons.

Bleak peek ahead? (Monday, 8/28/06)
What lies ahead for the American economy? According to a story from Washington published in Doha's Gulf Times, things are beginning to look gloomy. Meanwhile, Steven Greenhouse and David Leonhardt of the New York Times report that America may be in the first prolonged period of economic growth since the Second World War that has not been accompanied by an increase in real wages.

Incidentally, "real wages" refers to buying power with inflation taken into account. Many Americans, including some reporters, still say that it takes more than $6.00 to buy what $1.00 would buy in 1960, as though things cost six times as much now as then. Not so--it simply means that $6.00 now is the same as $1.00 was 46 years ago. The numbers inflate, but it's the buying power that's important. For instance, is the price of gasoline really at an all-time high in the United States? No, in terms of buying power, it cost more for a time about forty years ago than it has recently. Nonetheless, Americans, who have been used to cheap energy compared to, say, the Europeans, are feeling the crunch now as home values decline at the same time.

America's the best at everything, right? Don't believe it (Monday, 8/28/06)
The United States certainly isn't the exclusive world center of ethnocentrism, but it's still easy to hear Americans brag about themselves as if they were drunks in a bar. Many may be thinking about some of the worst places on Earth when they say that "America is the greatest country in the world," and may not be thinking too much about how that sort of braggadocio sounds to people in Canada or England or Australia or Switzerland or Sweden or some of the other places where people are happy with where they are but feel no reason to claim that their country is better than everybody else's.

David Francis has been examining a new report from Washington's Economic Policy Institute which says that, by many measures, the United States is now a second-rate industrial nation, despite its still having the world's largest economy and despite the fact that it remains the world's only military superpower. However, for those who have exposed themselves to news reports during recent years, having the ability to blow the old Soviet Union off the map or end life on the planet doesn't necessarily mean that it can get its way in all kinds of conflicts.

Does the world need for the United States to be more successful in a greater variety of ways than it has been recently? Does it need for the U.S. to be better? Just as the U.S. has been a very important and beneficial influence in world history so far, the answer seems to be a resounding "Yes!"

An Encouraging word is heard from Jackson Hole (Saturday, 8/26/06)
Two Princeton economists presented a research paper at the Federal Reserve symposium arguing that the outsourcing of jobs to other countries has resulted in increased productivity in the United States, which has resulted in higher wages. Everybody who heard their presentation said, "Really? Well, okay, that settles that." We're KIDDING.

Actually, it's likely that we will hear a variety of responses as well as alternative arguments during the days, weeks, and months ahead. For one thing, a key issue has been the number of jobs remaining in the United States, not just how well remaining jobs pay. If, for instance, outsourcing eventually leaves one guy with a job, but it pays tremendously well, most Americans won't regard that as progress.

On the other hand the Princeton scholars' data deserve a close and serious look, because the only way we can ever be sure about anything is to conduct competent research. There are strongly-held attitudes on all sides of the outsourcing question, but it isn't good enough simply to make something up.

Even employers who really don't care about people should know that ignoring psychiatric disorders in the workplace will cost them (Tuesday, 8/22/06)
At any given time, approximately 20 percent of American adults will meet diagnostic criteria for one or more of the dozens of types of disorders listed in the latest edition of the American Psychiatric Association's Diagnostic and Statistical Manual. Among other things, this means that workers who are suffering from psychiatric disorders are extremely common. USA Today's Stephanie Armour says that an increasing number of employers are getting the message.

If you're skeptical that the incidence of so-called "mental illness" in society is as high as we have said, you need to catch up to research in the field and examine the origins of your own attitudes. It isn't true that "we're all a little abnormal," and, even if "we all have our own problems," problems aren't the same as illness. Also, if an illness becomes more common in the population, that doesn't make it more normal. The incidence of Type II diabetes has been increasing in American society in recent years as well, but it's still just as much a disease as it has ever been, and physicians will have no difficulty distinguishing between a diabetic and a healthy person.

Incidentally, we say "so-called mental illness" not to imply that there is anything fake about any of the diagnosable disorders, but simply to suggest that this widely used term itself is a bit out of date. For instance, the term "mental illness" tends to reinforce the mistaken idea that these problems are "all in a person's head" or that they are somehow imaginary or voluntary. In fact, many disorders traditionally considered to be "mental" are now known to be physical. If your pancreas isn't functioning normally, you may be diabetic. If your brain isn't functioning normally, you may be clinically depressed. To understand either, you will need to learn about its chemistry.

The disorders are real, and the 1 in 5 incidence statistics are well-documented. If you use the clinical diagnostic criteria from the American Psychiatric Association, measure and analyze very carefully, and use the highest-quality methods available, this is what you will find. Approximately 20 percent of the adult population is suffering from one or more diagnosable psychiatric disorders at any particular time. However, they aren't always the same people, and there are dozens of very different disorders, most of which do not fit popular stereotypes. Forget most of what you've learned about psychiatry or clinical psychology from the movies, because most traditional beliefs about either the patients or the therapists are simply wrong.

Today's NewWork News Web Tip: America's Best Colleges 2007 (Saturday, 8/19/06)
Here are the latest college rankings from U. S. News & World Report.

A college degree is like a currency: it has value only if a lot of people believe it has value. Genuine learning and knowledge, on the other hand, are intrinsic goods, however achieved by whatever means in whatever context.

No matter what school you attend, or if you attend no school at all, the bottom line has do with the extent to which you really are educated, not who you might have pleased along the way or whether you have a certificate from a particular institution to display on your wall. It seems to us that, in the long-run, the world asks only 1) Do I really KNOW anything, and 2) Can I really DO anything? If the answer to these questions is "yes," there aren't any other important questions. If the answer is "no," there aren't any other important questions either.

The great social competition in the United States over degrees and certificates, as well as whether one has attended this university or that, reminds us of Oscar Wilde's remark about people who know the price of everything and the value of nothing. It also reminds us of people who insist on buying an item in a fancy, expensive store for much more than the same product might cost in an unpretentious setting.

Despite common assumptions, things such as wealth, possessions, or certificates do not add value to their possessor. It's what we DO that is important, not what we HAVE, and, in particular, what we do with what we have. For generations, with sufficient commitment, it has been possible to obtain an excellent education for nothing at the public library. Now, a far greater variety of high-quality resources are available than ever before if you are more interested in the "content of books than in their covers;" i.e., in genuine learning, as opposed to symbols.

The most fundamental revolution in a thousand years is underway in higher education. The meanings of accreditation and degrees are likely to become increasingly attenuated during the years ahead. Among many other things, employers are likely to have to learn how to identify on their own people who really know something and can really do something, rather than abrogating this responsibility and supporting conditions that encourage people to worry about where their college is ranked according to criteria chosen by a popular news magazine.

Today's NewWork News Web Tip: Community College Review (Friday, 8/18/06)
Since the most recent U. S. News & World Report college rankings have just been published, this may be a good time to point out, for those who are more interested in actual learning than the reputation of the school they attend, that there are a very large number of community colleges in the United States at which one can obtain an excellent education while saving tons of money.

No matter what your long-term educational objectives are, your future won't be limited in the least if you do well during your first two years at one of America's excellent community colleges before transferring as a junior to the four-year institution of your choice. Your four-year degree will be the same, no matter where you spend your first two years, and the difference could be tens of thousands of dollars of student debt.

If you want to explore America's community colleges, an excellent place to begin is the Community College Review.

Who's obtaining medical service overseas? (Thursday, 8/17/06)
More Americans are seeking medical services in places like India and Thailand, but people from other countries are still coming to the United States for service at leading medical centers such as Baltimore's Johns Hopkins University and Minnesota's famed Mayo Clinic as well. The United States still has some of the leading medical facilities in the world, but gleaming new centers in places like Thailand are staffed by top professionals who have been trained at major centers in North America and Europe.

The principal difference, however, is price. Many Americans are finding that they can obtain the same services for as little as one-tenth of what they cost in the U.S. As Patrik Jonsson reports from Atlanta, these highly attractive price/quality-of-service ratios are gaining the attention of employers who feel that they can save money by sending workers and their family members out of the U.S. for medical treatment.

Today's NewWork News Web Tip: Science Wars: What Scientists Know and How They Know It (Thursday, 8/17/06)
The Teaching Company was established in 1990 by Harvard Law grad, Tom Rollins, who also served as Chief Counsel of the United States Senate Committee on Labor and Human Resources. During the past decade and a half his company has produced hundreds of excellent recorded lecture series on a great variety of topics on tape cassette, CDs, DVDs, and for digital downloading to your computer or MP3 device. Many of the series may be available from your public library.

At any rate, of particular importance is Lehigh University's Steven Goldman series on what philosophers for centuries have referred to as "epistemology" as applied specifically to science and its history. It's a series of 24 recorded lectures which Professor Goldman calls Science Wars: What Scientists Know and How They Know It.

We've pointed out a number of times that even most educated people misunderstand what science IS, including the fact that it is defined, not by its subject matter, and certainly not by its conclusions at any particular time, but, instead, by its METHODS. "Science" really is just another name for the best available methods for developing trustworthy answers to empirical questions of all kinds, whether we call the activities, "the sciences," investigative journalism, historical research, court procedure, or something else.

Moreover, if you really do discover or develop methods that are demonstrably superior to those currently used by scientists, they become, not an alternative to science, but, instead, PART of science.

The Netherlands achieve top ranking as a global helper (Monday, 8/14/06)
According to the Center for Global Development's Commitment to Development Index this year, the Netherlands ranks number 1. At least one writer feels that Canada's number 10 ranking is unsatisfactory. According to the Center for Global Development, where is the United States? Despite widespread beliefs among Americans that their country is the most generous of all, the U.S. comes out at number 13 in this year's rankings.

Is it really a Plexiglas® ceiling? (Tuesday, 8/8/06)
Glass is much easier to crash through. Amy Joyce reports in the Washington Post that women are still greatly underrepresented at the top of American corporations. Not that things are better for women at non-American corporations, incidentally. Ms. Joyce's article includes a sidebar listing the 10 women (sic) who are running Fortune 500 corporations.

Incidentally, as evidence that professional education may be more a matter of training than genuine education, many women of color are leaving big law firms because of discriminatory climates, according to the American Bar Association. If you assume, by hanging out with people in big firms who have spent a lot of years in school, that you'll be in sophisticated surroundings, you may be disappointed. Moreover, if you assume that anybody who has been to college knows about the RAND Corporation, say, it appears that, despite spending more years in school than nearly anybody else, many medical specialists don't seem to.

We've long advocated a fourth year of law school that concentrates on context in order to put attorneys in better touch with the historical, and rapidly changing socioeconomic and cultural circumstances within which they conduct their work, but current needs go far beyond the work itself. We also believe that many persons in a variety of professions, while perhaps not wanting to sacrifice any of their professional training for broad education, do need to become more educated outside their fields.

The sophistication of many professionals is very deep, but also very narrow, and it's useful to keep in mind that only about 45 years ago, many Americans were entering dental, medical, or law school after only two years of college. A few decades before that, many were becoming lawyers after not going to college at all.

Abraham Lincoln is a spectacular example of someone who became a big-time corporate lawyer in Illinois as well as President of the United States, but, who, despite his lack of formal education, was far more educationally sophisticated than most Americans today, let alone during his own time. Most other professionals during his era or during our own time have accommodated themselves to the knowledge explosion in their own fields by studying more deeply in increasingly narrow specialties.

However, we believe that universities and other such organizations are primarily EDUCATIONAL institutions for producing EDUCATED persons, not job or career training institutions. While everybody has to make a living, and doing so in the new global economy has become more difficult and requires higher levels of skill, our survival as a species may very well depend on the extent to which college graduates and, in particular, professionals and other highly influential individuals really are educated, highly-developed persons, not simply people who are good at their narrowly-defined jobs.

Today's NewWork News Web Tip: Investigative Reporters and Editors, Inc. (Monday, 8/7/06)
The Constitutional basis for America's "free press" is the same as for "academic freedom." In fact, it's the same Constitutional guarantee of free expression that everyone has in the United States, the First Amendment.

Constitutionally, there is nothing special about either reporters or professors. They have the same freedoms as everybody else. In fact, anyone who wants to call him or herself a "journalist" can do so, as the Internet has made clear during recent years. Colleges and universities don't have a proprietary relationship to inquiry, learning, or knowledge either. Knowledge belongs to everybody, and anyone is free to engage in scholarship or express opinions on intellectual topics with or without the approval of established university professors.

However, free inquiry and free expression are critically important parts of a democracy, and the entire country as well as much of the world have benefitted from the fact that there are large, firmly-established institutions dedicating themselves to these activities and containing so many knowledgeable and talented people who work hard at getting the most and best out of themselves in their work.

Here's Investigative Reporters and Editors, Inc., an organization of reporters and others interested in investigative journalism which has carried on its work for more than thirty years.

Economic eye of the beholder? (Thursday, 8/3/06)
Is it any wonder that many politicians prefer to speak directly to the public, rather than be interpreted through the eyes of reporters and editors? Jeannine Aversa in Washington reports that the latest government reports reflect a thriving economy, while Zubin Jelveh only a few miles away in New York says that services and factory data are below expectations. On the other hand, Jeannine Aversa says that factory orders picked up in June, and Anne D'Innocenzio in New York says that retailers "report solid sales in July."

It's reminiscent of newspaper columnist and TV commentator George Will who, in response to current reports of global warming, likes to haul out his newspaper clipping from some years ago which trumpeted that scientists expected that the world could be heading into a new ice age. That was what some reporter and editor said at the time, but we have no idea which scientists were saying what or why.

It all suggests that there really is no substitute for people--particularly journalists, lawyers, and politicians, as well as other opinion leaders--coming to learn something about statistics and substantive disciplines such as economics and environmental science so that they can interpret data themselves.

We've said for sometime that statistics should be considered a part of basic education now, given that we are surrounded by important phenomena which are inherently statistical. Trying to think about them or talk about them without this terribly important branch of applied mathematics is like trying to talk about pharmacy while leaving out all that hard stuff about chemistry.

President Bush may share in common with some of his noisiest critics a lack of understanding of WHAT IT TAKES to develop trustworthy answers to empirical questions of all kinds. At the very least, one must begin with honest questions, as if one really doesn't know, because unless or until one does what it takes to know, one really DOESN'T know. Moreover, this fundamental reality is not altered, no matter how rich, famous, or powerful a person is.

Okay, here's more about money and happiness (Wednesday, 8/2/06)
Many persons, often those who don't have much and are seeking ways to adjust to the fact that others have more, frequently point out how unimportant money really is, and may even repeat the familiar aphorism, "Money can't buy happiness." There's even been a good deal of research on the subject of whether wealthy people are really happier, on average, than persons who are not wealthy.

However, maybe we typically don't ask the right questions. Hypothetically, at least, it might seem that money often influences those things to which we attribute happiness, and that it might be more reasonable to ask about the conditions under which money, wealth, possessions, or consumption correlate with happiness. As a man said at a recent YMCA banquet in St. Paul, Minnesota, "It isn't what you HAVE, but what you DO that's important," and we might add that this includes what you do with what you have, particularly if you have a lot.

One of the founders of Yahoo! was asked how it felt suddenly to possess wealth of $10 billion. He said that he has learned that having $10 billion isn't any different from having $1 billion, and that the new money was most important to him the day he first realized that he would no longer have to scramble to find a way to meet his car payment. His work schedule didn't seem to be influenced by his new wealth, incidentally, because he seems to be one of those persons who doesn't work for money in the first place. He suggested that we was quite happy, but that his work had far more to do with it than his money.

Famed financial advisor Suze Orman offers some opinions on the money-happiness issue.

Today's NewWork News Web Tip: European Monitoring Centre on Racism and Xenophobia (Tuesday, 8/1/06)
Given America's long, sordid history with the primitive institution of slavery, it may be difficult to believe that the United States is not the exclusive world center of bigotry and racism. In fact, racism and xenophobia continue to be common throughout the world, and, given the vast migrations of people throughout the world now and the extent to which ancient ideas and attitudes are coming into daily collision in the modern world, these conditions seem to be central to many of the world's most bloody conflicts. The European Union focuses on conditions that can lead to greater tolerance through its European Monitoring Centre on Racism and Xenophobia.