Disentangling Poverty, Social Mobility, Wage Stagnation, and Inequality – Part V: Poverty and Making the Basic Income Guarantee Work without Killing the Goose

Politics and Economics

Who needs the Basic income Guarantee (BIG) the most? Poor or near-poor people, which I’ll define as qualifying adults in the bottom two household income quintiles. That would be about 72 million people. Although BIG would be sent to adults in all income quintiles, those in the top three quintiles would receive no net BIG after taxes, so in my calculations I will ignore them.

Here’s where the 72 million figure came from: there are about 24 million US households in each income quintile. Each household has an average of 1.5 adults, not counting adults who receive Social Security, public sector pensions or veterans’ benefits (who would not receive BIG in my proposal). That adds up to about 36 million individuals per quintile, times 2 equals 72 million. Admittedly, the figuring is rough – but good enough for the purpose at hand. [Note: Social Security Retirement would eventually be replaced by BIG but that would be a complicated and lengthy transition, so for the purpose of a BIG that could be feasible within the next 20 years, I’m leaving SSR alone].

The upper household income limit for the first quintile is about $20,000 a year. For the second quintile, it is about $40,000. What would be a reasonable amount of money to send to these folks? Enough to move them away from the brink of destitution but not so much to discourage work.

In the last post, I found $545 billion in federal and state budgets to pay for BIG, all by transferring existing funds. While most adults would receive a monthly BIG, most would also pay the entire BIG amount back in taxes – from the middle income quintile and up. I’m thinking people would have the option to have the government set aside their BIG payments – perhaps in interest-bearing accounts – to pay back in taxes or as a way to save for major expenditures.

Let’s say 5% of the BIG budget goes to overhead expenses, including dealing with fraud. That leaves about $515 billion, which would be $600 per person for the 72 million in the bottom 2 quintiles.

However, starting with the second quintile, there would be an incremental increase in taxes on the BIG as other sources of income increase, so that the net BIG for individuals in the second quintile, on average, would be about $300 a month (more at the lower end vanishing to nothing at the upper end of the quintile). The idea is to make the tax increase sufficiently incremental that it doesn’t create any disincentive to make more money through other sources of income, mainly work.  This would release about $257 billion to increase the net BIG for the bottom two quintiles. I’m not going to calculate exactly how much, because it’s really complicated and we’d get lost in the numbers. (Remember that since everyone in the middle and higher quintiles essentially pay back their entire BIG in taxes, I’m not counting them in these calculations).

However, in order to proceed, I’m estimating that with the partial tax payback from the second quintile,  everyone in the bottom quintile would actually get a net BIG of $800 a month and the average net BIG for the second quintile would go up to $400/month.  Also, for the bottom quintile, almost all would also qualify for food stamps (SNAP) for themselves and/or their children. Average SNAP benefits are worth about $150/month per person, so a combined BIG+SNAP would be worth about $950 a month per adult for the bottom 20%ile of the population.

Enough to take the edge off but not enough to discourage work for those who can work. In addition, there would continue to be government programs to help children – and, less generously since they’re already getting a BIG, the homeless and disabled. All without raising taxes from their current levels.

Sounds good to me.

Time as a Scarce Resource: Abundance can be Bad for You

Explorations Outside the Box

Having too much time on one’s hands, as in “today I really don’t have to do anything, although I know I should” often leads to inertia and procrastination, which feeds on itself: the longer one delays doing something, the harder it is to just do it. Not doing erodes self-confidence in one’s ability to achieve something through doing. Self-confidence isn’t a willed attitude – if it’s healthy and not delusional, self-confidence is based on accumulating evidence one can do what it takes for the task at hand.

The longer one is out of it, the more psychological barriers to getting back in. None of this is casting aspersions on anyone. I’m not talking about “character”. I’m talking about conditions that undermine moving forward.

Having Our Cake and Eating It, Part IV: Reducing GHG Emissions from Electricity Production

The Environment

According to the US Environmental Protection Agency, the primary sources of greenhouse gas emissions in the US are:

• Electricity production (31% of 2013 GHG emissions), mostly from burning fossil fuels, especially coal and natural gas.

• Transportation (27% of 2013 GHG emissions), primarily from burning fossil fuel for our cars, trucks, ships, trains, and planes.

• Industry (21% of 2013 GHG emissions), mostly from fossil fuels for energy and GHG emissions from chemical reactions necessary to produce some goods.

• Commercial and Residential (12% of 2013 GHG emissions), such as from heating and air conditioning.

• Agriculture (9% of 2013 greenhouse gas emissions), such as GHS emissions from livestock such as cows, agricultural soils, and rice production.

• Land Use and Forestry (offset of 13% of 2013 GHG emissions) – Land areas can absorb or release green house gases. Since 1990, managed forests and other lands in the US have absorbed more CO2 from the atmosphere than they emit.

There you have it. My goal is to explore ways to reduce GHG emissions in each of the above sectors by a whole bunch.

Electricity generation is the biggest culprit. Options for reducing emissions include more solar/wind/nuclear and better carbon capture. Development of “clean coal” technologies will also be important. Remember: the perfect is the enemy of the good.

Reducing demand for electricity would also reduce power plant emissions. And since reducing demand has mostly to do with industrial, commercial and residential  usage, the EPA categories are clearly not independent of each other.  Here we’re mostly talking about increasing energy efficiency and reducing consumption. Solar will be part of the mix but I’m ambivalent about biofuels – at least at the current state of biofuel technology. As a rule, anything that leads to significant expansion of agricultural land at the expense of wild habitat should be avoided.

Demand for electricity would also go down if more of the population moved to milder climates, away from those long, cold winters. It would help further if more of us moved to bigger cities, which are associated with lower energy consumption due to smaller living units and the prevalence of multiple-unit residences (e.g., apartment buildings). Another plus of urbanization is that urban residents drive much less than their rural and suburban counterparts.

Speaking of transportation, that’s next.

The Fundamental Attribution Error and Its Discontents

Scientific Encounters

Most of us who have taken an introductory psychology course have learned about the “fundamental attribution error”, which is the tendency to attribute behavior to individual characteristics instead of situational factors. The assumption here is that situations exert much greater influence on behavior than personal attributes like desires, emotions, goals, personality, or temperament. The FAE has achieved the status as received wisdom – a solid scientific fact. It’s hard to find criticism of the concept.

However, as John Harvey and colleagues pointed out years ago, you can’t talk about “error” without addressing the accuracy of the attribution in specific instances. Imputing dispositional characteristics can be both a logical and empirically tenable explanation for behavior. FAE defenders might respond: well, when everybody does the same thing in the same situation, obviously the situation is calling the shots. Take, for instance, the Milgram experiments where just almost all subjects ending up administering what they thought were painful electrical shocks to other participants in the study. Their personality and moral qualms weren’t worth diddly-squat.

To which I would respond: you can’t use extreme example to prove a general case. Just about everyone breaks under torture too, provided it’s painful or long enough. That doesn’t mean everyone reacts the same way to, say, mild stomach discomfort. And even though everyone “ultimately” ends up behaving a certain way in some types of situations, the details matter. In the Milgram studies, subjects varied in how much and how long they resisted before caving in to the researchers’ requests. If the experiments had stopped earlier, there would have been a lot of individual variation – and since the experimental situation was the same for all subjects, attributing behavior variation to characteristics of the individual subjects would have been reasonable and not erroneous.

And then there’s the idea that people from “individualist” western cultures are more prone to the fundamental attribution error than people from “collectivist” Asian cultures since the latter are more likely to explain behavior in situational terms than individualist westerners. But attributions aren’t just something one absorbs from the wider culture – they are something people use to predict and influence the behavior of others. An attribution has staying power when it helps us navigate the social environment. An inaccurate attribution isn’t a particularly useful attribution. If you live in a society that values adherence to situation-specific social rules over individual expression, it’s probably more accurate to attribute behavior to situations in those societies – but less so in individualist societies. Context matters.

Let’s change the terminology and call the FAE an “attribution heuristic”. Heuristics are general rules of thumb that often work well enough but sometimes don’t. The Fundamental Attribution Error is dead! Long live the Attribution Heuristic!

Reference:

Harvey, John H.; Town, Jerri P.; Yarkin, Kerry L. How fundamental is “the fundamental attribution error”? Journal of Personality and Social Psychology, Vol 40(2), Feb 1981, 346-349.

Having and Eating Our Cake: Preliminary Considerations – Part III

The Environment

Materials and energy are mainly used up in the production, transport/delivery and consumption of goods and services.

In a recent online poll of 1,009 individuals, over 60% of each age category said they prioritize life experiences over possessions. Whether “experiences” are more damaging to the environment than possessions depends on the experiences and the possessions.

Per the World Bank, per capita CO2 emissions in the US are 17 metric tons per year (roughly 37,500 pounds) – about 4 times the global average. How could we cut that in half without putting a serious dent in the American standard of living?

This is a complicated question. We’ll have to figure out CO2 emissions for typical products, services, and activities, what a decent standard of living would be, and which and how much of the products, services and activities are required to achieve a decent standard of living. A lot of guesswork and assumptions will be involved. Approximation is the goal, not precision.

Next: a bunch of calculations.

Monopolies, Political Communication and the Milgram Experiments

Explorations Outside the Box, Politics and Economics

The thing about monopolies is that they are mostly harmful when they are truly monopolies – that is, there is no real competition for the product/service they provide and the price of entry is steep for potential competitors. But what constitutes the competition is not always obvious. Take Greyhound. Greyhound could be considered a monopoly in some areas of the country, but only when competition is defined as other companies of the same kind, i.e., other bus companies. We know that’s absurd. Greyhound’s competitors are also other forms of transportation: cars, planes, trains. Seen that way, Greyhound is just a teeny company struggling to survive in a jungle full of giants.

Likewise, with political communication: the competition for political ads isn’t just political ads of the unlike-minded; it’s a much broader spectrum of the communicative diet we all feed on: newspapers, movies, TVs, novels, and of course the whole internet. Insofar as one is exposed to a diversity of viewpoints, one is less susceptible to being manipulated to agree with any particular viewpoint. A few alternative sources of information and opinion greatly diminish the influence of Powerful Others, whether they be moneyed interests or scientists in lab coats.

Speaking of which, remember the infamous Milgram experiments? This was where subjects were manipulated to “torture” (in their own minds) people with electrical shocks when scientists in white lab coats bid them to do so – even though much of the time, the subjects expressed qualms and seemed pained by what they were doing. Those experiments produced a “truth” that has passed into the cultural meme-basket: it doesn’t take much to make people do awful stuff. The trappings of authority are enough to command obedience.

My take-home message from the Milgram study is totally different, based on a less well-known variation of the experiment: sometimes another “subject” (actually in cahoots with the researchers) would be witnessed by the real subject. If that phony subject disobeyed requests to administer electric shocks past a certain intensity, chances were the real subject would also refuse. In fact, witnessing just one other “subject” who is seen to disobey the white-coated researcher reduced the level of subject obedience to 10%.

The essential idea here is when there is only one product or viewpoint and there is no exposure to competing products or viewpoints, resistance crumbles.  Even a little competition can make a huge difference.

 

Attention, Working Memory and Cognitive De-Coupling

Scientific Encounters

Attention can be directed or involuntary. Insofar as different brain networks are involved in directed and involuntary attention, they reflect categorically distinct processes. This dual-process model of attention has been criticized, however. Rather than conceiving directed and involuntary attention as mutually exclusive categories, some argue it would be more accurate to consider their differences as matters of degree. From this perspective, the attributes of attention vary along a continuum, with directed and involuntary attention representing opposite poles of the continuum. For example, directed attention is more controlled and goal-driven and less automatic and stimulus-driven than involuntary attention (Moors and De Houwer; 2006).

However, since separate brain regions are involved in the different types of attention, they probably have some defining characteristics that do not overlap. This is the position of Evans and Stanovich (2013) who support the dual-process theory of cognition and say the key feature of Type 1 (associated with involuntary attention) is “autonomous processing” and the key feature of Type 2 (associated with directed attention) is “the ability to sustain the decoupling of secondary representations—a key feature of all working memory tasks.” Cognitive decoupling happens when we distinguish what we suppose to be true from what might actually be the case. Type 2 processing involves experiencing beliefs as beliefs, as windows-in-themselves and not windows-on-the-world.  So, when we are coupling cognitive-wise, we are considering cognitions as objects of attention – much like when we are “observing thoughts”.

Evans and Stanovich call Type 1 the default process and Type 2 the interventionist process. Thus when we consider our intuitions, beliefs, emotions, and thoughts as such, we are intervening with their unfolding. We have paused them.

References:

Moors, A., & De Houwer, J. (2006). Automaticity: A theoretical and conceptual analysis. Psychological Bulletin, 132, 297–326.

Evans, Jonathan St. B. T. and Stanovich, Keith E. Dual-Process Theories of Higher Cognition Advancing the Debate Perspectives on Psychological Science May 2013 vol. 8 no. 3 223-241.

Thoughts and Thinking: Attention, Working Memory and Observing Thoughts. Part V

Observing Mindfulness

Attention can be directed or involuntary. Insofar as different brain networks are involved in directed and involuntary attention, they reflect categorically distinct processes. This dual-process model of attention has been criticized, however. Rather than conceiving directed and involuntary attention as mutually exclusive categories, some argue it would be more accurate to consider their differences as matters of degree. From this perspective, the attributes of attention vary along a continuum, with directed and involuntary attention representing opposite poles of the continuum. For example, directed attention is more controlled and goal-driven and less automatic and stimulus-driven than involuntary attention (Moors and De Houwer; 2006).

However, since separate brain regions are involved in the different types of attention, they probably have some defining characteristics that do not overlap. This is the position of Evans and Stanovich (2013) who support the dual-process theory of cognition and say the key feature of Type 1 (associated with involuntary attention) is “autonomous processing” and the key feature of Type 2 (associated with directed attention) is “the ability to sustain the decoupling of secondary representations—a key feature of all working memory tasks.” Cognitive decoupling happens when we distinguish what we suppose to be true from what might actually be the case. Type 2 processing involves experiencing beliefs as beliefs, as windows-in-themselves and not windows-on-the-world.  So, when we are coupling cognitive-wise, we are considering cognitions as objects of attention – much like when we are “observing thoughts”.

Evans and Stanovich call Type 1 the default process and Type 2 the interventionist process. Thus when we consider our intuitions, beliefs, emotions, and thoughts as such, we are intervening with their unfolding. We have paused them.

References:

Moors, A., & De Houwer, J. (2006). Automaticity: A theoretical and conceptual analysis. Psychological Bulletin, 132, 297–326.

Evans, Jonathan St. B. T. and Stanovich, Keith E. Dual-Process Theories of Higher Cognition Advancing the Debate Perspectives on Psychological Science May 2013 vol. 8 no. 3 223-241.

Thoughts and Thinking: What are We Doing When We “Observe Thoughts”? Part IV

Observing Mindfulness

Let’s assume that the subjects in a recent experience sampling study* were fairly typical: that is, resting-state experience – the default mode we’re in when not performing tasks – usually doesn’t involve words. The content of our resting states is mostly something else, like a sensory impressions, visual imagery, waves of emotion, or unsymbolized thinking (wordless and imageless, but there doing something – like wondering or questioning or realizing – but without words).

So if our “task-independent” experience doesn’t involve words most of the time, what does it mean to “observe thoughts as they unfold”? What are we observing when the mental activity does not include words? And when they do, how do we mark the boundary between one “thought” and another? For that matter, even when the words are a-flowing in our heads, where does one word-chunk start and another begin? When we listen to someone, we constantly update our understanding of their meaning and intention. How is it different when we observe our inner speech? If it’s not all that different, why does it sound weird to “observe” someone’s speech “unfold” but less so when we observe our “thoughts” unfold? For that matter, what’s the difference between observing someone talk and listening to them? And what would be the difference between “observing” our thoughts and listening to them?

Are we merely “aware-ing” – that is, performing the brain function of tracking attention? Attention goes all sorts of places: to our task, to verbal content of inner speech, to what we’re looking at or hearing (in our heads or in the world).

It may be that our sense of discrete thoughts is a product of working memory capacity: a thought is what we can behold as a thought the few seconds it reverberates in our awareness. Since humans extend working memory capacity by chunking things into meaningful units, we experience thoughts as meaningful units. When meaningful units have verbal content, that means whole words, complete phrases, and sentences. And even when they don’t, we tend to remember them that way, because word combinations are just so chunkable.

Wait! I’m making it sound like being aware of thoughts is remembering thoughts. That’s right.

*What goes on in the resting-state? A qualitative glimpse into resting-state experience in the scanner Hurlburt, R. T., Alderson-Day, B., Fernyhough, C.s and Kühn, S. Frontiers in Psychology www.frontiersin.org October 2015 Volume6 Article1535 http://dx.doi.org/10.3389/fpsyg.2015.01535

 

Having and Eating Our Cake: High Living Standards/Thriving Planet – Part 2

The Environment

Is it possible for human societies to achieve or maintain a high standard of living without causing significant environmental harm? As a first step in this exploration, I’m going to define a high standard of living as a situation where the basic needs of the population are taken care of and about 50% of income can go to discretionary spending. As for environmental harm, I’ll focus on the amount of land, material and energy required for the economic functions of production, consumption, and transport/delivery of goods and services.  Less land, material, and energy means less environmental harm.

Basic needs include adequate housing, food, transport, clothes and healthcare. Discretionary spending would be on things like more-than-adequate housing, etc., plus all the rest: entertainment, recreation, personal growth, etc. Obviously, the line between adequate and more-than-adequate is a bit arbitrary; it’s still a necessary distinction.

For the purpose of this discussion, I will assume continued economic growth is a good thing. The relatively affluent/environmentally benign society I’m trying to create won’t be like the Hobbits Shire or a Buddhist paradise; it will retain a certain edge. There will an unending quest for more and better, fueling innovation and getting young people excited. Of course, for those who are so inclined, seeking meaning and well-being by letting go of desires will still be an option. For the rest, desire, status competition, and perpetual dissatisfaction will be as per usual. But at least all will have basic housing, food, transportation, healthcare, and something to wear.

Ok, so how can we give our society the basics+ with less land, less stuff and lower carbon emissions?

To be continued….