Number Crunching…

More and more, business, government, and education rely on numbers, but from what I’m seeing, fewer and fewer decision-makers understand what lies behind the numbers or how the numbers are being used in ways that border lies, and all too often those in business or government who do understand the numbers are those with essentially few ethical restraints. This isn’t new. Mark Twain noted that, “There are lies, damned lies, and statistics.”

Right now, there are two disparate trends in number crunching. The first is to use numbers to make everything more “efficient” and profitable, but this emphasis has two distinct problems. First, for the most part, efficiency and profitability are calculated on an ever-shorter time scale, and if something’s not profitable in terms of this year’s or next year’s budget, it tends to get slighted or eliminated, even if total profits/efficiency over time would be greater. Coupled with this tendency is the attitude on the part of decision-makers that can be expressed as: “How can you prove we’ll be better off in the future; today’s hard numbers show we’ll be better off now. Anything farther out is just speculation and guessing.”

In addition, there’s an ever-increasing tendency to use numbers to quantify the unquantifiable or to use data that’s seemingly relevant, but isn’t. More than a few studies have shown that frequent so-called performance reviews that require numerical quantification, to put it bluntly, don’t work. In higher education, the use of student evaluations has a negative correlation to evaluating the best professors, because the best professors require more of students, and, most student down-rate demanding professors. In addition, the wide-spread use of student evaluations has also led to grade inflation. Grade inflation has led to students who are unsuited to higher education staying in the system longer and usually incurring more student loan debt without being able to pay it off. And those are just a few of the problems with numerical quantification of human performance.

Paradoxically, the second discouraging trend in number crunching is the growing disregard for any numerical analysis that requires more spending now to preclude greater future outlays. The most obvious case is that of Social Security and Medicare. Congress and the last few presidents, including the present incumbent, all talk about the coming shortfall, but no one wants to do anything, yet the earlier steps are taken, the less the cost in any one year on any taxpayer. There’s a similar problem with federal deficit spending.

And, of course, there’s the global warming problem, which for all the rhetoric, isn’t going away, and won’t. And each year that meaningful remedial measures aren’t taken means greater future costs. No… in the next few hundred years, we won’t destroy the planet’s environment, but at the current rate of ice-cap melting, which is increasing faster every year than most scientists calculated, in some thirty years, the U.S. alone will have to replace, repair, and relocate millions of structures, highways, port facilities, and utility infrastructures, as well as build seawalls, and redesign and rebuilt harbors and ports — all just to keep places like New York City functional. Just one storm in New York already flooded the subways and cost hundreds of millions to repair. And that doesn’t include all the naval facilities in Norfolk, a good chunk of Florida, Sacramento and the interior bay area, and a great deal of other valuable real estate, not to mention millions of houses and businesses. What no one seems to want to recognize is that we’re facing a monumental construction, relocation, and remediation problem that will cost trillions of dollars just in the U.S.

Yet, at the moment, the U.S. is running a huge current account deficit; the interest on the national debt will soon exceed the defense budget; billions of dollars in student loans will be defaulted; our existing infrastructure is crumbling; and those are just for starters for U.S.-based problems.

Then add to that military problems and massive social unrest caused by tens of millions of refugees fleeing drought-and-flood-caused famines around the globe because of climate change – a fact that the notoriously conservative U.S. military has already raised as a growing problem.

Yet all the politicians are worried about keeping taxes low this year and for the foreseeable future, claiming that economic growth will take care of the deficit and all the other economic problems. Even the most optimistic economists don’t see any reductions in the deficits, and that’s with budgets that don’t address any of the major increasing costs. That means that we’re pushing off addressing all sorts of future problems, in large part because no one really wants to look at the numbers impartially… and especially not if it means taking on fiscal responsibility.

But don’t worry; the worst won’t occur, if we’re fortunate, until most of us are dead.

Don’t Tell Me…

One of the unspoken rules of the current Administration seems to be “Don’t tell me what I don’t want to know.” That’s especially true where science or impartial technical expertise is involved.

For the first time since 1941, there is no White House Presidential science advisor. Scott Pruitt, the head of the Environmental Protection Agency, gutted the EPA Science Advisory Board, and replaced the scientists with industry shills. Ryan Zinke, the Interior Secretary, has transferred and otherwise marginalized or replaced scientists. Agency after agency has changed guidance and policy to minimize the use of scientific data and studies.

Why? While there’s been a muted denial of these events and statements along the lines of “redressing the balance” and “ensuring that the views of industry are heard,” the bottom line is simple. Quite a few industry practices are damaging to the environment and to public health, and the science is unequivocal on these points. There is no science that says more ozone from auto emissions isn’t unhealthy, or that fine particulates don’t cause lung damage, or that current coal mining practices aren’t contributing to black lung disease, or that coal mining tailings ponds aren’t endangering community water supplies – just to name a few issues out of many more.

Economists who pointed out that the “tax cuts” would create far greater long-term economic and only a one-time short term economic boost have been ignored, as have those who’ve pointed out that increasing tariffs would lead to trade wars, higher costs of living, and more international tensions.

Mr. Trump’s continual attacks on the Mueller investigation are another aspect of the “don’t tell me” attitude that pervades the administration. When Mueller’s legal team is obtaining not only indictment after indictment, but also guilty plea after guilty plea, it’s pretty clear that it’s not a witch hunt with no substance. There’s also evidence to indicate that a number of people warned Trump about problems with Michael Flynn, and Trump ignored them because it wasn’t what he wanted to hear.

Add to that the fact that he didn’t want to hear the irrefutable facts and pictures showing that his inauguration crowd was far less than he claimed or his continual denial of the facts showing that voting fraud by Americans is minuscule, especially compared to the significant evidence that the Russians attempted to influence the Presidential election. From all these examples, and quite a few others, it’s more than clear that this administration is ignoring anything and everything that doesn’t agree with its beliefs, and to a far greater extent than any previous administration, given how pervasive this willful ignorance has already become.

The real question is how long Trump and his supporters will be able to deny economic, scientific, legal, and other technical aspects of reality… and how much it will cost the rest of us to pick up the pieces and repair the damage… and how many people and organizations will be permanently injured by this cavalier mindset of denial.

Income Inequality?

Over the past decade or so, there’s been a great deal of talk about income inequality and also, to a lesser degree, about intergenerational mobility, that is, the changes in a family’s economic status between successive generations. What’s been surprising to some, and what many better-off Americans have trouble believing, is that the United States is no longer the leader in inter-generational family wealth/income upward mobility. A variety of studies over the last decade has shown that the United States had about one third the mobility of Denmark and less than half that of Canada, Finland and Norway. France, Germany, and Sweden also had higher mobility, with only the United Kingdom of this group being less mobile than the U.S. Less than four percent of Americans born to a family with income in the bottom fifth end up in top fifth.

Forty-two percent of U.S. children born to parents in the bottom fifth of the income distribution remain in the bottom, while 39 percent born to parents in the top fifth remain at the top.

Studies of wealth and income inequality all find that education and parental income play a significant role in determining the income mobility of their children, but there’s one factor that’s all too often downplayed, and that’s the role of family. First of all, the relative stagnation of middle and lower class wages, the rising costs of living, and, frankly, rising expectations – have all made it more and more difficult for families, especially families with children, to live on a single income. Today, men’s earnings still constitute the majority of total family income, but their share has dropped from 75 percent of average family earnings to 61 percent. In other words, for most families, even holding the same income position as one’s parents, let alone obtaining upward family income mobility, requires a couple’s combined earnings. Two-partner families increase, on average and over time, their assets by 16% more a year than single parent families.

But those figures ignore another aspect of family – and that’s the support, financial and otherwise, that doesn’t show up on balance sheets or in statistics. When parents help a couple over a hard financial period, or a medical catastrophe, or even lend a car when one breaks down, these acts of support often prevent the total disintegration of a family’s well-being. Obviously, such support is easier to give and obtain in families with higher incomes, yet this kind of support is even more comparatively valuable for lower middle class and working class families

Unfortunately, as a result of a number of factors, including the fact that financial problems are the largest single cause or marriage break-ups, marriage rates have plummeted in the lower-income socio-economic groups, resulting in a comparatively larger number of single-parent families. While such families have always had a harder time economically and especially in providing the additional education for children that is necessary for their economic success, this change makes it even harder for families in such groups to improve the financial situation.

This is rapidly becoming a vicious circle, because economic inequality reduces marriage rates and educational opportunities for the poorest members of society, which in turn makes it ever harder for them to escape poverty, while improving the opportunities for wealthier families to remain prosperous, even when the efforts and abilities of their offspring may well be less than those of others lower on the economic totem pole.

And, unless we find a way to break this cycle, income inequality and the concomitant anger and resentment of the less-fortunate will continue to increase, and, with it, social unrest and violence.

Hatred and Arrogance

Humans are beings who can both think more deeply than other creatures [at least from what we now know] and feel, often intensely. While these dual capabilities provide certain advantages, they also create problems which we tend to ignore, and this willful ignorance, at which we’re also very good, often makes the problems of overthinking and overfeeling worse.

As I’ve mentioned before, all too many overthinkers believe that correct logic leads to good solutions, but that’s not necessarily true, especially if the premises or assumptions or “facts” are incomplete or incorrect, or if the logic is designed to change people’s feelings, because emotions aren’t easily swayed by logic.

On the other side, strong feelings, especially hatred, can easily turn otherwise intelligent people into stupid idiots. And when hatred is linked to a need to belong to a group, or extreme frustration, and especially to both, the results range from horrible to catastrophic. Riots are almost always the result of emotions overriding intelligence, and the results of riots benefit no one and simply reduce the resources available, and usually that means fewer resources are available to those who had too few to begin with.

This allows those with resources to point out how “stupid” the rioters were, because most riots have the greatest destruction in the areas serving the rioters and the most loss of life among the rioters, at least until the frustration and hated among the under-privileged results in a national revolution, which has happened more than a few times.

Those with resources, more often than not, are not blinded so much by hatred, but by arrogance, or by supreme self-confidence in their own righteousness and abilities, which allows them to rationalize the idea they’ve earned, all by themselves, everything that they have, and that those with less have less solely because they have less ability and less determination.

Each “side” feels the other to be unreasonable and spoiled, and those feelings exacerbate hatred.

And, unhappily, this growth of hatred and arrogance is what has led to where we now stand, which is on a course toward severe social upheaval, if not worse.

Publishing in a Changing Market

Even a decade into a market changed by ebooks, it’s clear – at least to me – that a significant fraction of readers [and some rather large publishers as well] don’t really understand what’s happened and the implications and ramifications of those changes.

First off, despite all the words and arguments to the contrary, the costs of getting a book published haven’t changed much, except that they’ve increased. What has changed, particularly with self-published authors, is who is paying what costs. The cost of physically printing a book was never the majority of cost. From what I’ve been able to determine, the actual cost – just of printing – a hard-cover book runs in the range of three to six dollars, depending on the length of the book, the quality of paper and cover, etc. The costs of physically distributing print books likely run around a dollar a book. A standard publisher’s other costs — editing, proofing, typesetting, cover art, marketing, etc.– still run around ten dollars a hardcover. Those costs are all attributed to the first two years of sales for most publishers, but only a small percentage of books bring in significant revenue after two years. Now, I might be a bit off on some of this, but I’m in the ballpark.

Under the old marketing agreements, and those that still exist for printed books, the publishers sell books to stores at fifty to sixty percent of list price. Since most large publishers are barely more than breaking even, and some are losing money, there’s not a lot of profit involved. Add to that the fact that, even for the most successful publishers, almost half of all books sold lose money, which is why publishers need best-sellers.

So… how come all these independent authors can sell their ebooks for $3.99 or $5.99? Well… they can do that because they’re personally absorbing all the costs that are born by publishers. They have to come up with the cover design and artwork. They have to line up editors, or alpha or beta readers; they have to do the formatting or hire someone else to do it. They have to do the marketing, and make the arrangements with Amazon or someone else [who takes a percentage, of course]… or spend the time handling the finances and the bookkeeping. And the vast majority of these authors – probably 98% – actually lose money… in addition to spending a huge amount of time for which they’re not compensated, except if the book sells really well. Now, the ones who are indeed successful reap solid rewards, if not as much as most people think, because they’re not saddled with the costs of books that didn’t earn out in the way a standard publisher is.

So the lower prices of all those cheaper self-published books come out of the hides of their authors… and those dollar and time costs are substantial. Why do you think that almost all indie-published authors who are offered deals by major publishers take them… gladly?

For those of us who are with major publishers, and who aren’t multi-million sellers, the rules have also changed. We have to spend more time personally marketing, arranging appearances, attending things like comic-cons and conventions, for some of which we may be partly compensated and for some of which we’re not compensated at all. We spend more time and effort, generally for less return, than authors did twenty years ago – just like almost everyone else. And authors whose later books lose money also risk losing their publisher, requiring either more non-writing work or trying to make it by self-publishing or going with a small press [and a great many end up taking on more non-writing work].

One way or another, lower prices for ebooks come at the expense of the authors of those books. In addition, the consumer demand for cheaper books is creating a secondary market of generally lower-paid writers who are all competing with each other to write and produce books at a lower cost, and that means either lower quality or even more cost and strain on the writer. The demand for lower-cost ebooks also fuels the demand for pirated works, usually of best-sellers, but that piracy reduces the sales of those best-sellers, in turn reducing the risks that publishers will take on new or unpublished authors… and they’re definitely taking less of those risks, for the most part. That reduces the scope of what’s available from some major publishers and in some bookstores, and it means that readers have to work harder to find those kinds of books in the mass of hundreds of thousands of self-published or indie-published electronic works.

In short, no matter what anyone says, lower ebook prices have a lot of costs that no one really thinks about, and even fewer care about – just like they don’t really care about what’s behind the lower prices from Amazon and Walmart, or not enough to change their buying patterns.