Americans and Poverty

The bad news is that poverty sucks. The good news is, at least if you are an American, you have never likely seen it, much less experienced it personally.

According to a map I received in our last issue of the National Geographic Society, the top 25% of people in the world make just over $12,000 a year. That means the poorest Americans on average are still some of the wealthiest people on this planet. Would you rather be one of the poorest people in America, or would you rather be "wealthy" in Bangladesh?

Poverty is relative. Americans have been socialized into believing they have a right to whatever they want, regardless of their economic condition. Thus in this country, what we call poverty is more likely conditions associated with over-extended debt than anything resembling dirt-floor subsistence living. I am guessing that if we spent a day with the average Cambodian, we would spend more time being grateful for what little we may have (glass half full) and much less time being obsessed with the wealth of others (glass half empty).

While many will have us focus on the gap between rich and poor, shouldn’t the real focus be on the poor and the conditions they live under? Are they improving? Or are things really getting worse for America’s poor?

Jealousy may get us to focus on what others have obtained -- thus making us feel they (the “rich”) have been “stealing” from us or are under some moral obligation to share their wealth with us, (whether that is willingly or by the coercive force of misguided legislation). As Americans, we tend to be oblivious to the fact that 95% of the rest of the world would gladly change places with the poorest among us. To them, WE are the rich people. Do those from foreign lands have the same moral standing to make claim on the wealth of average Americans? How much is too much? Who gets to decide that?

One of the most common mis-perceptions in economics is the idea that wealth is static: if someone has something, it must then cause me to have less. But this is contrary to reality. Wealth is created via the productivity of people, not just through the distribution of existing resources. (For example: personal computers didn’t even exist several decades ago. Now there are millions and millions of them. Not only has this progression made computer producers wealthy, it has also made their users more productive, making them wealthier as well.) The creation of wealth makes everyone better off.

And while the paychecks of athletes and movies stars may seem outrageous to the majority of us -- especially in comparison to teachers and firemen, the success of the former did not create the poverty of those on the other end of the scale. In fact, in many ways, the exact opposite can be argued. The more ultra-wealthy people there are in a country, the higher the standard of living for the poorest of that same country. In other words, we shouldn’t be considering redistributing the wealth of the richest among us, we should be trying to create conditions that promote the successful creation of MORE wealth.

As Economics Professor Steven Horwitz recently pointed out in an article titled The Poor Are Not Getting Poorer: “One look around at even the bottom fifth of American households today - where children are watching cable TV, surfing the Web, or chatting on cell phones while Dad takes free generic medicine and Mom heats something up in a microwave - shows the poor are hardly getting poorer.”

Yes, this “Great Recession” has been extremely painful, but we, as Americans, still have much to be thankful for. More importantly, we need refocus on creating more wealth and not worrying about who has too much.

More Thoughts on Bill Gates (via Milton Friedman)

Recently, in an internal company blog, I responded to a question regarding what role a company’s profit plays in its pursuit of corporate social responsibility. The question centered around information gleaned from an article in The Economist.

Consistent with other things I have blogged about in the past, here was my response:

Let me start with a thought experiment.

After decades of successfully building businesses, Bill Gates is a billionaire many times over. Now he wants to use large portions of his wealth to the betterment of Africa. How does he best serve this goal?

One, he can give away his money through various charities, or two, he can do what he does best, build more wealth by creating more businesses.

Think of how many thousands and thousands (and thousands) of people who have successful careers directly tied into the technology businesses Bill Gates has created. He is directly -- and indirectly -- responsible for putting food on the tables of virtually every IT person on this planet, (not to mention multi-millions of others who happen to use a PC in their daily work life). Therefore, is he being “responsible” by giving his wealth away? Or would Africa (and the rest of the world) be better off if he just continued to do what he is great at, creating more technology and building more businesses? I would argue the latter.

Considering the question of what defines socially responsibility is the proverbial equivalent of the “give a man a fish” versus “teach a man to fish” question. Both are good, but one is better.

Wealth is not static. Wealth grows exponentially. Wealth is the building block that creates more wealth. And while “giving” may instinctively seem more altruistic, I would argue, “building” is the much more effective (and responsible) method for Bill Gates to successfully meet his goals. Bill Gates should do what Bill Gates does best. No matter how much money Bill Gates “gives” away, his work in the business world will forever remain his greatest contribution to humanity. And while being socially responsible may include both “giving” and “building”, the “act” should not be confused with the “results”. The latter (building) will almost always give better results. It perpetuates more building.

Making a profit is at the core of being socially responsible. Anything hindering that goal is counter productive to helping others. And taking it to the individual level, all responsibility begins with personal responsibility. When the flight attendant explains the safety procedures before your next flight, she will tell you that: “in case of emergency, put your air mask on first before helping others.” So it is in life. Take care of yourself first. This is what makes you able to help others.

(This goes beyond “financial” profit, by-the-way. For instance, this explains why something like work/life balance is so important. It is not only in the employee’s best interest, it is in the longterm best interest of the employer as well. After all, someone who takes care of himself is in a much better position to help others than someone who burns out.)

Perpetuating and maintaining profitability is the single most important factor allowing a business and/or a person to take on social responsibility in the first place. In fact, that is why [our company’s] value number eight: Earn a Reasonable Profit, is the most important value.

Without it, the other seven would not exist.

Skydog -- The Movie

Duane Allman died on October 29th, 1971 at the ripe old age of 24. Despite Skydog’s short time on this earth, Rolling Stone Magazine would later list him as one of the greatest rock and roll guitar players of all time, second only to Jimi Hendrix.

Even though I grew up within walking distance of the Canadian border, it was difficult to go very long without hearing the South’s greatest band, the Allman Brothers blasting out of every older kids’ eight tracks inside their muscle cars. Unfortunately, I did not purchase my own copy of the classic Eat A Peach album until I reached adulthood. And, not unlike Miles Davis’ Bitches Brew, it would take me another dozen years or so of listening to it before I fully appreciated it.

Today, I can not listen to this without wondering how different today’s American music would be if we had had a few more decades of Duane’s influence.

There is an interesting twist to the final chapter of Duane Allman’s story. Duane Allman died in a motorcycle accident, crashing into the back end of a truck. Legend has it that the name of the album containing his final contributions, Eat A Peach, was derived from the crash. Supposedly the back end of the truck that ended Duane’s life was carrying peaches. Cool story...if it were true. Actually, according to snopes.com, the name came from a quote Duane made when asked by a magazine interviewer, what he was doing to help the revolution. His answer, “...every time I am in Georgia, I eat a peach for peace.”

Considering his father was murdered when he was a child, the adventures he must of had growing up with little brother Gregg, the incredible people he did session work with, his meteoric rise to fame, and the final, tragic crash that ended it all -- this legend’s short life would be great material for a movie.

I think Mark Twain knew what he was doing

It can really be fun writing a column in this era of political
correctness and the absurdities that fall within that subject. There
are just so many of those absurdities out there that the subject
matter appears to be never-ending.

The latest of which is the rewriting of Mark Twain’s Huck Finn.
I can understand that there are those out there who do not approve of
Twain’s use of “The N-Word”, but we need to remember that in the
time this literary treasure was written, the use of the word was
pretty much universal.

But aside from the embarrassment, anger, or disgust that Twain’s use
of the word may cause some people, there are also First Amendment
issues with making changes to the work, especially when the author is
no longer around to defend his choice of language. Guarantees of
freedom of speech and freedom of the press come readily to mind here.

The book was first published in England in 1884 and in the United
States the following year. And for over 125 years it has been
recognized as one of the great American novels.

Now, all of a sudden, we have a great need to fix a novel which many
believe was written as a scathing look at racism in this country.
Changing the dialogue in Twain’s masterpiece will not only diminish
the impact of the satire, but take something valuable away from the
basic story itself - the vernacular of the southern antebellum society
of the 1860’s, the people of the time period in which the novel is
set.

All of this commotion over the language used in the book,
specifically the terms “injun” and “nigger” is nothing new. It
was criticized back when the book was first released, and even more so
as we moved into the 20th century, primarily because of its “racial
slurs”. Now, it seems, we are going to change the two words in
question to “indian” and “slave”.

I don’t know about you, but somehow I don’t believe that changing
those two words in the Huck Finn novel is going to do anything to curb
racism in the United States today. And it is certainly not going to do
anything to enhance the original satirical intent of the novel.
All this brings to mind another question.

Just who is it that determines our minds are so delicate that we need
someone to filter what we are reading, hearing or seeing?

I tend to see this attack on American literature as an infringement
on the rights of, not only the author, but also on me, the reader. I
like to think that I possess enough basic intelligence to recognize
satire when it lies before me, and I take offense at someone other
than myself attempting to protect my “sensibilities” through this
or any other form of censorship.

The purpose of the change is to try and get the book back on reading
lists in the classrooms where indignation over the terms used has
caused it to be banned. But a book that has stood as an American
classic for the past 125 years, probably needs very little help
remaining on the reading lists of those who value literature for the
sake of literature. Those who would ban it have trouble seeing
beyond their own prejudices, and project those prejudices on to the
rest of us. And if they, those who would see it banned, hold enough
sway with their local school boards and administrations, it will be
banned from some classrooms.

More’s the pity.

But don’t diminish the work to satisfy the vocal few. The work
stands on its own merits. Just by attempting to ban it, they are
engaging the discussion that the original work intended. To change it
would stifle that vital discussion.

Since it was written, the book has continued to stir the controversial subject
of racism. Just that fact alone should be enough to leave things as
they are. As time passes we are becoming more and more reluctant to
tackle an issue such as racism aloud, and tend to squelch anything
that might provoke that discussion, hoping it will go away. This
appears to be just one more case of that.

Fact is, unless you bring the subject to the forefront and beat it
down by confronting it, it will just sit festering in the background
awaiting a new opportunity to raise its ugly head.

I believe the terms “injun” and “nigger” to be offensive, not
only to those to whom the terms may be directed, but also to anyone who
believes racism to be an evil. But I also believe that if we keep
shoving the subject under the bed where no one can confront the evil,
it will never go away.

Banning two words in Twain’s classic novel can have a more detrimental
impact than you might suspect.

(I wrote this as a column for the 2-3-11 issue of NSN, but the subject of censorship pisses me off so much I thought I'd throw it in front of a few more people)

Taleb Again

I quote other people often. For one, I find quality quotes concise, interesting and obvious truths about things we often overlook. The other reason is, well, I am not all that original. After all, it is much easier to sound smart than it is to think. Some would call this intellectual plagiarism. I simply consider it edification of someone wiser. Either way, stealing quotes is not something I will be giving up any time soon, especially now that I have the latest book from Nassim Nicholas Taleb scheduled to show up in my mail box next week.

The Bed of Procrutes is a self-explained book of philosophical and practical aphorisms. From the few I have perused, I reckon these will be a bit deeper than what you would find in Poor Richard’s Almanac and maybe even a bit wittier than some of those Mark Twain penned. Either way, if his last book is any indication, I will be re-reading it multiple times.

A sampling, the first three from the first page:

The person you are the most afraid to contradict is yourself.

An Idea starts to be interesting when you get scared of taking it to its logical conclusion.

Pharmaceutical companies are better at inventing diseases that match existing drugs, rather than inventing drugs to match existing diseases.

Thought provoking. Look forward to reading the rest of it.

And yes, I expect I will be quoting from it often. (At least whenever I feel the need to sound smart.)

Being Older Equates To Being Happier

It seems, when we are young, we spend all our time trying to live up to other's expectations. When we get older, we get past that.

According to an excellent article in the Economist, The U-bend of Life, regardless of how most people view aging, getting older is actually a good thing. As the article points out:

The greyer the world gets, the brighter it becomes...

Ask a bunch of 30-year-olds and another of 70-year-olds which group they think is likely to be happier, and both lots point to the 30-year-olds. Ask them to rate their own well-being, and the 70-year-olds are the happier bunch....

Although as people move towards old age they lose things they treasure—vitality, mental sharpness and looks—they also gain what people spend their lives pursuing: happiness...

Having just been around that U-bend myself, this all seems pretty relevant.

While I was of college age, my oldest brother related something to me that has stayed with me all these years. He said that when I went to my ten year high school reunion, I would waste most of my time trying to impress everyone with how successful and cool my life had become. Then at my twenty year reunion, I may do more of the same, but to a lesser degree. Then, by the time my thirty year reunion came along, I would no longer give a damn and would actually be more interested in just being able to spend time with old friends. Although, I have always seen the logic in his observations, until now, I never realized how incredibly accurate they are.

I am finding that U-bend to be a real thing from my perspective. After a rough patch a few years ago -- the traditional "mid-life crisis", I suppose -- the last couple have been the absolute best years of my life. Stranger yet, even though I am now on the back forty, I am unusually optimistic that even better ones are yet to come.

Halloween 1992 Jerry Garcia

I just stumbled on this Jerry Garcia remake of Warren Zevon's Werewolves of London.

On a whim, I bought a plane ticket to Oakland so I could spend Halloween of ‘92 with Jerry Garcia. It was his first show since recovering from a heart attack. I met my friend Brad and a van load of his tribe from Seattle. I didn’t have a ticket for the show, but Brad was able to barter for one in the parking lot once I got there.

I hung out with a girl from Japan. I met her in the top row of the Oakland Coliseum and promptly dragged her down to the front of the stage. She was out-of-place, all dressed up, obviously having no clue about the Dead or their cultural following. She spoke very little English. I wore a t-shirt that read: “We are the people your parents warned you about.”

I was a wonderful ambassador.

Fun times.