Your Lyin’ Eyes

September 11, 2013
Posted by Jay Livingston

What will drive health care costs up in the next decade?  According to the CBO,

• Medicare costs will increase by $513 billion
• Medicaid costs will increase by $303 billion
• Obamacare costs will increase by $135 billion

(The CBO does not use the term Obamacare.  It prefers “Health insurance subsidies and related spending.” The full report is here.) 

Here’s a simple bar graph.

If you put the data on a graph showing the same increases over time, what title would you give to the chart?  If you’re the right-wing Heritage Foundation , it’s obvious.

 

Yes, the Heritage Foundation looks at the chart and finds that the blame for the increase in healthcare spending goes to Obamacare.*

Who are you going to believe – the Heritage Foundation or your lying eyes? Healthcare costs may be driven to $1.82 trillion, but Obamacare, accounting for less than 10% of that, will not be doing much of the driving.

(HT: David Leonhardt)
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*The huge irony in all this is that Obamacare, like Romneycare in Massachusetts, is based substantially on the individual-mandate model originally proposed by the Heritage Foundation. Heritage praised it in Massachusetts but now opposes it even to the extent of mislabeling their own charts.

The Elementary Forms of the US Open Finals

September 10, 2013
Posted by Jay Livingston
Cross posted at Sociological Images


Some sociologists went to the US Open final yesterday and posted about it on Facebook.  Here’s what they saw. Notice the size of the court.

(Photo by Jenn Lena)

                                   
I saw the match too. When I got home from work, I turned on CBS.  Here’s what I saw.

On my 40" flat-screen Samsung, I could see the match as though I were in the box seats, nothing between me and the court. I could see the grimace on a player’s face, the sweat stains on his shirt. I sat on an upholstered chair. And it cost me nothing. 

How much was a plastic seat in the top rows of Arthur Ashe Stadium? I don’t know. My grounds pass on Day 3 was $66.  So, $200?  More?   Seats for the finals were $95. I have sat up there near the top. The players are colorful miniatures moving around on the green rectangles. The distant perspective allows – forces – you to see the whole court, so you are aware of placement strategies and patterns of movement you might otherwise not have noticed. But tennis isn’t football; strategy, especially in singles, is fairly obvious and not complicated.*

From way up there, the players are so far away.  It's as though you were looking at your TV through the wrong end of a telescope. You see the game differently, and you hear it differently. A player hits a solid backcourt shot, and for a noticeable half-second or so, you hear silence. Only when the ball is clearing the net do you hear the impact of the stroke. 

Why go out to Flushing Meadow? It’s ridiculous to think about this in the narrow economic framework of money and tennis narrowly defined.  My $0 view of the match was far better than that of my FB friends in their expensive seats high above the court.  Close that micro-economics book and open Durkheim.  Think about the match as ritual. It’s not just about Nadal and Djokovic whacking a fuzzy yellow ball back and forth for a couple of hours. A ritual includes everyone. If you’re there, you are part of that group. You are one with the with the people in the stadium and with the charismatic figures in center court

That’s why, if something is a ritual, being there is so important. Showing up is more than just 80%. It’s everything. If you’re there, you are part of our group. You go to Thanksgiving dinner at Aunt Diane’s house not because the food is good. You might get better food and more enjoyment at home with take-out Chinese and a TV.  You go because your presence defines you as a member of the group. Not going is tantamount to saying that you are just not part of this family.

The Final is not just any match. It is the ritual that anoints our king, hence the trophies and pageantry and ritualistic incantations (speeches) after the match.  I would guess that most of the people there yesterday would choose even a so-so final over a close, well-played match on an outside court in Round 3.  Because this match is so important, it generates more mana. And that energy is created by the crowd.  Of course, the crowd’s perception is that it is the players who are creating that special feeling, and it helps if the match on the court is close and well-played. But the same match – every shot exactly the same – played in an early round in a nearly empty stadium would not create that same feeling for the handful of spectators who showed up.

What makes the ticket worth all the money then is not the quality of the play. It is the symbolic meaning of the ritual and the strong feeling you get from being part of that ritual. You were there, with Nadal and Djokovic. That ritual exists in sacred time, linked to other great finals matches.  So maybe you save your ticket stub or your program as your link to that sacred past.

I saw the same match, and I had a better view. But I’m not going to save my cable TV bill.

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* One of my favorite tennis quotes – I don’t remember who, only that he was not a native speaker of English. In a post-match interview, a reporter asked him a question about strategy, with the assumption that he must have had some complicated game-plan. The player didn’t understand.  “I heet the ball to heem; he heet the ball to me.”  That’s a fairly good description of what happens in most singles matches.

Fed Lines and Headlines

September 7, 2013
Posted by Jay Livingston


The Fed has been optimistic about the economy and has been hinting that it might scale back its aggressive bond-buying program.  But the jobs report on Friday was not encouraging – an estimated 169,000 jobs added. The really bad news was the shrinking of the labor force.  Apparently a lot of people are giving up the search for a job. 

Did the new data on jobs make the Fed reconsider its plans?  It depends on which  headline you read – the New York Times or the Wall Street Journal.

Here’s a larger version of the Times headline:

Is the Fed undeterred, or have its plans been muddied?  Once you get past the headlines, the stories say pretty much the same thing.  Four sentences after that headline about “muddied” plans, the WSJ said, “Friday’s jobs data did little to move the needle in either direction.”  Which is pretty much agreeing with the Times that the jobs report did not “deter” the Fed.

Habits of the Holland Heart

September 2, 2013
Posted by Jay Livingston

I spent a week in Holland, Michigan at the end of August (family, wedding), but I didn’t find out until now that also in August, the Atlantic was running a series of blogposts (here, for example) about Holland by James Fallows, who was also hanging around town. 

Fallows writes admiringly of Holland.  A strong sense of civic engagement has kept the downtown vibrant while elsewhere in the US, downtowns have had their life sucked out by the malls and bigbox stores at the periphery. That civic sense probably has something to do with Holland’s history as a conservatively religious Dutch town.  It’s hard to miss the Protestant presence. Churches and church schools abound. So do Dutch names. Also windmills and tulips.

On Holland’s main street, this banner –  a spoof on “American Gothic” – conveys the dour Dutch Reform sensibility and the tulips. The civic engagement is less obvious, contained perhaps in the idea that the town can laugh at itself.

But Holland also has a healthy manufacturing sector – furniture, scrap and recycling, pickles – and Fallows attributes much of Holland’s vitality to the non-corporate ownership and therefore the non-corporate ethos and behavior of those companies. These are family-run companies, not large multinationals. For those big corporations, says Fallows. . .

. . . it is a compliment rather than a criticism to say that ultimately they care most about dividend growth and "maximizing shareholder value." Toward that end layoffs, outsourcing, cost-cutting, cheese-paring, union-busting -- you name it, and if it can arguably lead to greater long-run corporate profitability, then by definition it is what management is supposed to do.

A family or privately run business can do things differently, for better and worse. Worse: management jobs for relatives, whether competent or not. Better: deciding in some cases to take a temporary loss, or settle for less-than-maximized profit, in exchange for some other goal. (The full Fallows post is here.)

In the schema of Habits of the Heart, Holland weaves the Biblical and civic republican strands of the American tradition. The other strands – utilitarian individualism (a.k.a. greed) and expressive individualism – are less in evidence.  Holland’s big businesses are firmly in the international economy, but while they act globally, their owners and executives think locally. They seem to see themselves as part of the local community. 

I hadn’t read Fallows’s articles when I was in Holland so I knew nothing of its economics, but one thing immediately struck me as we drove around. (Missing a turn and ranging far from your intended direct route can have its advantages.)  It was obvious that there was wealth here, but the homes in Holland were relatively modest by US standards.  Where in other places McMansion developments or individual new monstrosities would be rising, Holland had normal ranch and two-story houses with lawns of a size that you could mow even without industrial-scale equipment.*
                               
It was as though the display of such opulence would violate community standards.  In fact, several people I spoke with mentioned the resentment that David and Carol VanAndel are incurring with their construction of a $3.6 million mansion overlooking Lake Michigan.  (VanAndel is heir to the Amway fortune.)

By standards of East Hampton and elsewhere, it’s not exactly a tear-down, but it’s certainly not top tier.  Yet for the people in Holland, it was literally enormous – outside the norm – even for the wealthy.  On top of that, VanAndel is indulging his individual wishes explicitly at the expense of the public. He is cutting off public access to Big Red, the landmark lighthouse.

The lighthouse and pier are public, but access goes through VanAndel property, and he wants to allow the public to walk that path only on Tuesdays and Thursdays. That is not the civic-mindedness that Fallows finds just about everywhere else in Holland.

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* Big problem with methodology here – journalistic impressionism rather than social science (I haven’t even scanned Zillow). Maybe Holland is rife with mansions, and I was just looking for conspicuous consumption in all the wrong places.