politics

Why do you believe what you believe (about Trump and Clinton)

~ Hermann P ~ 3 Comments
I want you to stop reading this and write down two things… Just open up notepad, or get a pen and paper.

I want you to write down what you think about Hillary Clinton and Donald Trump. Don’t overthink it, if you think Trump is a racist write that. If you think Hillary is a liar, write that.

Then I want you to write down WHY you believe that. Try and be as specific as possible. If Trump is a racist, why? What did he say? What did he do? When did he say and do those things? Where did you hear about it?

Now do the same for Clinton. You think she screwed up with her email server? Ok. Why? You think she caters to Wall Street and is in the pocket of big banks… fine. How come? Where did you hear about that?

I did this myself and what I found out was I actually have FAR more confidence in my conclusions than my underlying information justifies.

CLINTON
I didn’t fully trust Clinton because of the private email server stuff as well as her connections to Wall Street, her high income, prior real estate dealings. I thought she sounded a bit overly aggressive on one hand and also kind of “fake woman of the people.”

TRUMP
For Trump it was much stronger. I thought he was a bigot, a cheat, a self serving arrogant promoter preying on people’s fear and ignorance. I know about Trump university (from reading articles somewhere?), I know about him wanting to build a wall (from his website), his desire to deport Muslims (from retweets and articles).

To my shock and surprise I could really not really recall specifics. I hadn’t read any of Clinton’s emails that are available to see WHAT she said. I went to Trump’s site and checked out his policies and read some articles online, but I hadn’t really dug deep into things he had written (now or before), looking at in depth interviews… sure I’ve seen debates and collections of public appearances, but nothing super deep. My conclusions were strong, but my evidence was superficial at best.

IT GETS WORSE
Now consider this.

Try and recall WHERE you got that information from and who wrote it? Was it an online newspaper? Was it a series of retweets? Was it facebook shares in your stream… if so, where did THEY come from? What was the position or agenda (if any) of the person who created this material?

I actually could tell you almost nothing about any of that. I have no idea who wrote what about the people that are running for president so I couldn’t tell you if THEY are “good” or “bad.”

What I DID learn is that I have massive confirmation bias. I THINK that I have deep knowledge about things I care about a lot, but I don’t.

Now… I know that there are people who follow these things closely and know A LOT about the candidates, especially the one they like. But I think they probably know A LOT LESS about the candidate they don’t like; and I suspect that there is even stronger confirmation bias going on.

The vast amount of information available combined with the advanced technology to segment and search makes it possible to paint nearly any picture of reality you care for.

Imagine your own situation.

Let’s say that a large group of well paid, super motivated and highly intelligent people wanted to paint you in a certain light. Within their reach is ALL the information about you that exists. All the things you buy and sell, the places you’ve worked and people you worked with. Maybe your past 10-20 years of emails. All the websites you’ve joined and looked at. Where your kids went to school. All the information about your parents, siblings, friends. Now imagine they want to paint you in either a bad or good light. Do you think that would be possible? Do you think it would accurately reflect who you think you are?

SO WHO DECIDES?
This goes back to a book called “Public Opinion” by Walter Lippmann. In it, he explores this topic deeply. His conclusions are as true today as they were nearly 100 years ago. Our opinions are made up by forces quite beyond our control, out of our sight, and in a largely unconscious way. We don’t have the time, intellect or desire to understand thousands of complex topics in depth and then deliberate to come up with a “real” opinion. So we must use shortcuts. We trust people we regard as legitimate, we parrot our parents and mentors. We listen to our friends. We listen to media. Thus, paraphrasing Lippmann, a functioning democracy MUST have experts who can manipulate and manage the public mind… manufacturing consent as the term goes.

That’s why it’s so important to hit all these areas when you are running for office. In fact saying that you DON’T care about these things is one of the most important messages to get out there.

Think about that.

It takes A LOT of message volume to communicate and convince large groups of people that you are not focused on telling them what they want to hear :). Is it believable that someone who doesn’t care about that could possibly get their voice heard in such a loud, busy and crowded arena. I don’t think so.

The campaign managers who are focused 100% of the time on getting people to believe what they want are going to be much better at this than you or I can be in our short, busy, crowded days.

SO WHAT DO WE DO?
I don’t really know. I tried to read through all the emails that were released, but there are 1925 of them. The ones I DID read were mostly one or two line responses she gave saying “Interesting.” “Pls Print,” and “Have a happy holiday.” I’m sure there’s some meat in there somewhere, but man… do I want to spend 4 hours digging it up? NO!

So how do I know what she said. Well, I’ll go to my trusted news source. But did THEY read the 1925 emails or did they do what I did and rely on someone else who went through them. But who is THAT person, and what is their motivation? Is it possible that actually almost NO ONE has read all those emails and thus the contents and message are just layers of bias with scant evidence? Or maybe 10-15 people have actually read them all and those people have businesses that shape the buyers ability to manage public opinion?

I mean who has the motivation to read all those emails, put them together and summarize conclusions? That is unlikely to be a free and unbiased exercise.

The truth is, to just get an understanding of this one topic in this one election I would have no choice but to read them myself, then familiarize myself with the context, look at other sources, and so on.

It’s simply not possible.

So…what I think has to be done is to treat with skepticism what we read and we ourselves believe. Try to deliberately read things we find grating to our own existing assumptions. We should be deliberate about our ignorance and our biases. We will always have them, but at least we can try to identify them.

Most importantly, I think we need to always keep in mind the possibility that we are totally wrong and when we find something important that we care about we really need to understand opposing sides as well as our own… not to change our minds or to be wishy washy, but to make sure we can clearly understand and articulate what our biases and assumptions are. I think that will at least give us a chance at arriving at a reasonable conclusion in any topic.

Simple Visualization of Household Income Distribution by Quintile Over Time

~ Hermann P ~ 1 Comment
I’ve been commenting and thinking about income, unemployment and social effects for a while now, but I had a really hard time finding a nice, simple multi-decade view of household income distribution.

It turns out this is easy to do. The data is readily available here and it goes back to 1967 based on census data… so it’s about as “objective” and consistent as you can get.

APPROACH
My approach is brain dead simple. I take the mean household income by quintile, add up the total and then divide each quintile by the total to get a % of the “pie” that quintile earned. Then I divide each % by the previous year’s % to get the delta from year to year. That should give a somewhat clear picture of how households in different brackets are doing comparatively over time.

I’ll put the table details below.

VISUALIZATION
I used a waterfall chart because I think it does the best job of showing the change over time.

NOTE: The first bar is the delta from 1967-1970 and the second bar is from 1970-2005. Then it becomes annual. I’m doing this on purpose to show the long term change as well as visualizing the last recovery between 2008 and 2014 (I couldn’t find 2015 data).

So here it is by quintile:

INTERPRETATION
We must be honest with ourselves that without knowing the size of each group we can’t know the total impact, but I am going to assume that the highest quintile did not grow meaningfully in % of total population.

So given that assumption, since 1970 every other quintile has had a meaningful decline in income (as a percent of total income to all quintiles) with the worst drop hitting the 2nd quintile.

Additionally, since the great recession only the top quintile has had a gain in income so that pretty much explain why the perception of most people is there hasn’t been a recovery. If your paycheck goes down or stays the same… you don’t feel like anything is recovering.

Now WHY this is happening is playing itself out in lots of political and social debates. I’ll save that for a different day.

In any case it helped me understand how the country as a whole can be wealthier but the majority of the people in it can feel poorer.

RAW DATA TABLE
If you want the actual excel file, email me.

Why I think America is a great country

~ Hermann P
It’s eternally popular in the United States to think that we are the verge of ruin.

Newspapers love to talk about it.

Politicians love to whine about it.

People with agendas can point out one problem after another.

Today, like any other day, it looks like we are on the brink of disaster and there is no way that we can possibly get out.

These people are wrong.

And when people look to the past to try and work out what the future should look like they are being short sighted and foolish. We should not seek to make America tomorrow look anything like America yesterday.

Yes. The founding fathers were really smart and great visionaries, but they also made tons of mistakes that have been corrected over the past 200+ years. In fact, their greatest contribution was that they knew they didn’t know everything and so they created a flexible and self-improving system. They could not even imagine the world today and would be mesmerized by what was built on their foundation.

Let’s look at a short list of things that America has overcome:

1) Revolution. We were a series of colonies run by the biggest and most powerful empire in the world. A comparatively rag tag group of “terrorists” were able to defeat that large empire in a brutal and protracted military engagement.

2) Country Construction. Other countries have done this, but very few have then subsequently formed a country that DIDN’T duplicate what they had just fought against. We DIDN’T crown a king. We DIDN’T end up with 13 different countries that blow each other up every couple of decades.

3) Slavery. Remember how slavery used to be legal? Remember how people would say if we got rid of it the entire economy would collapse? Remember how we fought a brutal civil war over it? Well… our nation survived that and it was probably the most difficult test in our history.

4) Child Labor. Like slavery child labor has a rich history in the US. And this isn’t ancient history. The final nail in the coffin of child labor was pounded in 1938. Now I know that there are kids who work and I’m sure there’s child exploitation, but it’s largely stamped out and a federal crime.

5) Women’s Rights. Remember when women were basically the property of men? Remember when women couldn’t vote? Remember when the entire idea of sexual harassment didn’t even exist. Well, it wasn’t until 1920 that the 19th amendment granting women the right to vote… something that would be unthinkable back in 1776.

6) McCarthyism. Remember when our country was locking people up for what they think? Remember when millions of people ran around believing that someone they know could be a spy for the Russians and that if we didn’t lock them up our whole country would be destroyed? Well… we survived that too…. and I know people see parallels with terrorism today, but it’s not even close to the same level… at least not yet. But we’ll survive that too.

7) Civil Rights. Remember the good ol’ 50s when it was totally legal to force black people to go to the back of the bus, drink from separate fountains, go to separate schools and not go into certain stores? Well… that’s gone too. And while racism is still alive and well it’s a completely different picture today. I see parallels here with the transgender issues today and I’m confident that will go down the same path… I just wish it didn’t take so much time and cause so much pain.

8) Cold War. Now we’re getting to something I actually lived through :). Remember when the world was going to be blown up at any moment? Thousands of nukes were going to destroy everything and the US was one of the countries that would be responsible for that. Well… we survived that, at least so far. Unfortunately there are still thousands of nukes out there, but I don’t remember seeing too many headlines that a massive nuclear attack is going to blow us up.

I could go on and on. I missed a lot. 2 world wars, the great depression, presidential assassinations, impeachment, getting off the gold standard, stagflation. Choose your poison.

TODAY’S PROBLEMS ARE NOT THAT BAD

Today we have climate change, shrinking middle class, destruction of manufacturing, rise of China, immigration, growing national debt, crumbling infrastructure, and so on.

I would argue that few of these problems rates as highly as the ones above, but they all seem much worse today. And I would argue that we are well positioned to respond to them, work out solutions and come out a better country because of it. Further, I think in 100 years we will look back and think “what the hell were those idiots thinking?”

And that’s the point.

We MUST look forward and create new solutions, not look backwards and pine for the past. That’s what makes America a great country… optimism and belief in the future despite the current environment of adversity and negativity.

Also, we underestimate the “Platform of America.” By that I mean that if you travel around the world what you notice is things like a reasonably stable rule of law, freedom to say and think what you want, the right to representation, due process, access to clean food and water, low crime rates, low infant mortality, support for education and entrepreneurship are NOT free and broadly available. Any person living in America is inside of a incredibly powerful platform that each of us can build upon.

That’s rare in the world today, and much rarer in history.


WAIT A MINUTE, ARE YOU SOME KIND OF BLIND PATRIOT NATIONALIST

Not at all.

America does and has done many terrible things, especially when we operate abroad. One of my biggest problems with America is that the way we act and behave outside of our borders is often the exact opposite of what we do inside. I wish this wasn’t the case and I hope in the future we can really become an exporter of certain fundamental principals that I think need to be universally available and aren’t.

We need to stop supporting dictators. Period.
We need to stop financing the toppling of democratically elected leaders.
We need to be opponents of the things we wouldn’t tolerate internally both in action and in speech. And I don’t mean fighting stupid wars, I mean supporting international frameworks that will transform the world in a positive way.
We need to provide our citizens health care.
We need to improve our infrastructure.
..and on and on…

America is a deeply flawed country that needs to do lots of work. And we’ve also done many terrible things which we can never pay back.

I’m also not saying “America is the greatest nation on earth.” Those statements are silly because there is no great basis of comparison. There are many great nations in the world and we can all learn from each other… but I DO think that America has one of the best systems for doing exactly that.

I’m also not saying that America will always be the #1 super power or the richest country etc. The future is unknowable and countries tend to grow and shrink all the time. The UK was once the biggest empire in the world, as was Spain. No longer. But I’d argue that the UK is also still a great country and has been around for many centuries longer than the US.

DON’T LOVE IT OR LEAVE IT… FIX IT

I often hear people say or imply that if you don’t love America, you should leave.

That’s cowardly. You should try to fix it and the people that tell you to leave because you don’t like something here miss the entire power of the American platform.

It NEEDS criticism, conflict, constant questioning, strong opinions and, unfortunately, even occasional violence, in order to be shaped, molded and improved.

The last thing we want is a country of people that are content with the way things are and if anyone disagrees with them they are invited to shut up or leave.

That’s anti-American.

We should invite difference of opinion, stand up for our beliefs, argue, debate… anything short of violence and over time I believe we will come out with a better system… at least that has been the trend.

LOOK TO THE FUTURE
When I look at the past and present, makes me look to the future.

The solutions to today’s problems will not be found yesterday.

Slogans like “make America great again” are looking at things the wrong way around. There are things that ARE great today and things that aren’t. So lets figure out how to make the things that aren’t great better instead of trying to rewind to clock to some historical fantasy that didn’t and won’t exist.

Let’s build on this amazing platform and improve the world for ourselves, our children an our fellow humans of the earth.

If you disagree and think th

I don’t know about everyone else but I am optimistic that when I die the world will be a better place than it is today, and it’s up to all of us to make sure that happens.

Do Rich People Really Pay Less Taxes?

~ Hermann P
WARNING: INFLAMMATORY CONTENT AHEAD!
My reason for interest in this topic is primarily driven by the impact taxes have on most people of the world as well as the confidence that individuals have in taking any extreme position on the topic.
Just as random sample , here are some claims of the “rich paying more” position:
And here’s some saying the opposite:

I’ll let you google it yourself. It’s easy to come up with very confident and authoritive articles that will support whatever you want to believe.
So there you go… case closed. The rich and poor both pay more than the rich and poor…
…and that is actually true.
You would think that since taxes are fairly objective… that is to say, reported collected taxes is an objective measure, reported income is an objective measure; this should not be a controversial topic.

But it’s not.

INTERPRETATION, ANALYSIS, INCENTIVES AND THE DATA ECHO CHAMBER
I think the primary reason for this is that most people are not really interested in whether or not the poor or the rich pay “too much” or “too little;” they are interested in affirming their bias. So I created a little matrix to represent this across two simple dimensions:
Ok, over simplified, but basically this breaks people into self-identified buckets that influences their perception and informs how they look for information. If you are rich and you feel “justified” about it, I suspect you will tend to find information that makes your tax situation seem unfair towards the “I pay too much” side, implying others pay too little. Conversely, if you feel “rich/unjustified” then the reverse is true. The situation if you are “poor” is not very different, although I suspect the # of people who deliberately fall into the “poor/justified” bucket might be small… I also think that the # of people who subconsciously feel this way might be pretty big; that is to say people who are poor and feel that they somehow deserve it.
So how does this play out? Well, if you’re rich and feel you “deserve it” you might type into Google “do the rich pay too many taxes” and boom… tons of support. If you are rich and “don’t deserve it” you type in “do the rich not pay enough taxes” and boom… tons of support for that too. Since the way search engines work is they echo what is sought after and avoid contrary positions; this can easily lead each side to believe they are objective and everyone agrees with them… cause… well… the data says so. How many people actually try to search for the opposite of what they believe and then compare the differences to check against their biases. That sounds hard!
And of course there is plenty of data to back up any position. For example, in terms of “total federal income tax collected by income bracket” the richer groups pay more in total receipts. That gives you graphs like this:
Wow. That’s pretty convincing. I mean, look… rich people used to pay just over half… now they pay over 3/4 of the taxes! Case Closed!!
But wait… something critical is missing… how was the total income earned distributed over that time period. Well, that question creates graphs like this:
Aha! Now we’re getting somewhere. Those rich bastards have almost tripled their income, while their tax contribution has only gone up 20%. CLEARLY the poor are paying way too much.
Hmm… well maybe.
But hang on a second there professor… is it that the rich people got way richer at the EXPENSE of the poor, or was it that the subsequent fifths should have gotten richer as well but because of other things (that have nothing to do with taxes) they didn’t? Maybe there’s not enough welfare? Or maybe wage policy was bad? Or maybe it was all that outsourcing and we just haven’t figured out how to outsource Investment Bankers and CEOs… yet!
CORPORATE BASTARDS – I KNEW IT!
Next up, we can look at the SOURCES of tax revenue over time which makes charts like this one:
Aha! It’s those bastard evil corporations that are using their huge might to suck up all the money for themselves. No doubt they are filtering that revenue to those upper 1% earners as well. Now it all makes sense…
Well… maybe.
But maybe… as companies globalized their sources of profit got broadly distributed to other countries… other countries where they owe taxes to THOSE governments. Consider things like companies trying to repatriate money or moving their corporate headquarters to countries with friendlier tax laws.
Back in the 1960s and 1970s the US was much more of a self-consuming market. So it just isn’t this simple… During that same time the US’ trade deficit has also exploded. Well… it turns out when you import most of what you consume; your corporations aren’t paying taxes on the development, manufacturing and distribution. And if they can figure out a way to make that stuff cheaper AND pay less taxes… it makes sense that they will try and do that, right?
Let’s be honest, all those iPhones and iPads are not being made over in Cupertino. At least not right now.
As much as we want this to be a simple problem… it isn’t. And that makes it so that anyone with an axe to grind can make the picture look however they like.
LET’S LOOK A BIT DEEPER
So, what’s really going on here?
Something that became very clear to me is that regardless of their position on the topic, people had a very similar approach to taxes.
We see taxes are a weapon that you use AGAINST the “other” group as opposed to a neutral mechanism that helps distribute large but necessary public costs as equitably as possible across the population.
Very few articles talk about taxes as a process by which we fund important things like: infrastructure, defense, education, health, etc. Instead it’s almost always either:
a) a platform to complain about how someone else has it better than me or has something they don’t deserve
b) a platform for complaining about how a political party or individual I disagree with is an idiot
One thing that people seem to be unified on… OTHER people don’t pay enough taxes whereas I, of course, pay too much.
That is… the system is unfair:
..and there is definitely a relationship between how much you pay (in absolute terms) and how unfair you think it is.
This is pretty unhealthy, in my opinion, and what is at stake is our ability to create a functioning society.
Personally I don’t see taxes as bad or good, nor do I see them as a weapon that should be used in class warfare. There are plenty of other class warfare weapons that are perfectly legitimate and probably more effective: minimum wage, employment laws, social security limitations and payouts, welfare reform, and so on. And those are equally fun to debate!
CONCLUSION
I think when we think and talk about taxes we should try to look at it from two perspectives:
1) Which programs/projects/institutions benefit from public ownership and support and which don’t.
2) How can we distribute the costs of those programs/projects/institutions in such a way that the wealth of the payer is proportionate to the cost they bear.
That means we need much more debate and transparency around what (1) actually is. I suggest an itemized list of public projects/programs/institutions, their associated cost and each person’s “share” of that bill. So basically I know that when the DOD buys a stealth bomber, I paid $4.89 for it, and I can then look at where I spent my money and decide where I think it makes sense and use that to inform my voting behavior.
Maybe I think that an extra Grade Vanilla Latte would have been much better than a stealth bomber… or maybe I’d be willing to forego that extra 24 pack of diet soda so that we can fix some of the crumbling bridges. Ultimately those are the decisions that we are making, but they are so buried that we don’t think about it this way.
In this way we can see taxes as a way to get maximum benefit from public contribution to important projects that we all need as opposed to this evil institution that is just sucking up all our money and giving it to others far less deserving than ourselves.