Will Recession Derail Trump Second Term?

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A strong economy is a powerful advantage to Presidents seeking re-election. Voters tend to credit the sitting President with a successful economy. This is why Bill Clintons admonishment, “It’s the economy, stupid” has resonated for so long.

In a year and a half we will be at the polls voting on whether Donald Trump gets anther term or is replaced by his democratic challenger. Will the economy help or hurt his chances?

Hard to say. We have seen an expanding economy since the end of the Great Recession in 2009. Sooner or later it will slip into recession, that is a natural economic cycle. We are due for a recession, and signs are emerging that our economic engine is slowing.

The Global Picture

Recently the International Monetary Fund – something like our Federal Reserve – released a report that the world economy is slowing at the beginning of 2019. However, this is expected to be only a temporary condition, with a modest rebound expected for the second half of 2019, aiding the Trump campaign. 

Trumps Tariffs Targeting China

China is important the world economy and especially to Trumps re-election.

His controversial decision to implement tariffs on Chinese goods last year was made at a time when our economy was in better shape than theirs, but now the tables have turned.

Economists were recently surprised at the strength of the Chinese economy. This is making trade talks between the United States and China a little dicey. Neither country has a clear advantage over the other at this point meaning that neither is especially driven to make concessions and move talks ahead.

However, in order to control inflation China recently raised interest rates which will likely stabilize its economy during the presidential election, giving Trump a chance to reduce or eliminate tariffs. He will certainly cast this as a major victory, scoring a huge win with voters.

Economic Trends in the US

How voters experience the economy will be the strongest influence on voting behavior during the 2020 race. 

The Ongoing “Retail Apocalypse”

For several years online selling has been denting traditional brick and mortar sales outlets. Thousands of stores have closed and the trend towards online buying will likely continue.

But this is an uneven trend. Some states have seen considerable downturn in retail closures and jobs, others have experienced notable growth.

This could turn into a huge challenge for Trump. If the media is flooded with images of empty stores plastered with “Space Available” and “Closeout” banners the belief in a Trump backed booming economy could be seriously undermined.

Stocks are Surging, but Bonds Are Signaling a Recession…Maybe

Bonds are like stocks, but instead of representing a share of a company, they are a share of a company’s debt. Buying a bond is like giving a loan. Governments and large corporations create and sell bonds that buyer redeem at specific dates for more than what they paid. The value of the bonds varies depending on the overall financial health of the bond issuer and the overall economy.    

Lately short term bonds have been outselling long term bonds. This implies that investors are unsure about the long term health of the economy. Consequently they are buying short term bonds that mature in a few months or year or two, and are avoiding more risky long term bonds.

This is called a “bond yield inversion” and has been a reliable predictor of recession in the past. It is only one indicator, however, and the inversion has not been steady. At least not yet. If the economy experiences shocks or unexpected crises this could change very quickly.

Diminishing Quality of Employment

For some time the employment picture has been undergoing fundamental changes. Although the unemployment rate is at an all time low, the quality of jobs is also at an all time low. People might have jobs, but they don’t have money or security.

A 2018 Federal Reserve research report found these troublesome facts about the financial security of typical Americans:

  • 40% could not afford an unexpected $400 bill
  • 20% could not pay monthly bills in full
  • 25% could not afford needed medical care

This is bad news for families and individuals, it reveals something very troubling about the overall economic health of the United States, especially in light of very low unemployment.

Recessions come and go. As recoveries expand people who were unemployed or employed in poor paying jobs, move onto better jobs at higher pay. They buy things they have been putting off, creating demand throughout the economy. Widespread demand results in an overall increase in prices, or inflation. This is measured by a calculation called the Phillips Curve. A little inflation is a good thing because it shows the economy is healthy and expanding.

But…The Phillips Curve No Longer Works

Even though more people are employed they are not buying like they have in the past. Inflation is not occurring, at least not to the extent it should given an unemployment rate of less than four percent. Expanding employment does not mean an expanding economy anymore.

The reasons for this are unclear, but a recent analysis by the Dallas Fed finds that the combination of a shift to online sales and the increasing number of gig employment explains quite a bit.

“… online shopping and gig employment can help account for a flattening of the Phillips curve and a drop in the natural headline rate of unemployment”.

The automatic solution to increasing inflation following a recession has always been increasing interest rates. The governors of the Federal Reserve can’t agree on whether to increase rates. Increased employment has always meant inflation and increased interest rates, but that relationship has changed.

The Federal Reserve

This is why President Trump has been critical of the Federal Reserve chairman, Jay Powell. The Fed has been increasing rates modestly, discouraging borrowing and expansion, much to the displeasure of Trump. That is why he has been advancing the appointment of his associates Stephen Moore and Herman Cain to the Fed. (Note: Cain has declined the appointment.)

Recently the Fed gave into Trumps criticisms and have frozen interest rate increases, but that could change at any time in the lead up to the election of 2020.

So Will the Economy Hurt or Help Trump in the 2020 Election?

It’s hard to say. Any number of things could happen that could either help or hurt Trumps campaign.

The words of my high school history teacher have echoed in my head for decades:

“Politics follows economics.”

Politics has a minimal effect on the economy, but the economy has a huge effect on politics. That’s what makes the intersection of the two so interesting.

Politics: The Final Refuge of Bigotry and Hate Speech

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I’m a political agnostic.

I don’t align myself with any group or ideology and do not identify as liberal, conservative or progressive.

Those are not really political labels, but social ones.

What passes for political debate are really expressions of in-group/out-group prejudice and bigotry. The focus is not on the role that government can play in social and economic challenges, but on winning unwinnable arguments.

I don’t want any of it.  

Instead I strive to find out what the issues are actually all about and whether it is the role of government to address them.

But most people seem obsessed with pursuing outrage.  

Outrage engages people emotionally, and opportunists on all sides use it to advance political and social agendas. Many people refuse to learn about the dynamics driving social and economic issues. Consequently, they and have no understanding of the complex issues involved and fall victim to superficial “solutions” that serve the needs of special interests.

Maybe it’s just too hard to think about. Maybe the effort needed to read a book or a few academic papers is too much.

It’s easier to parrot the lines of political celebrities – few of whom have any specialized knowledge about the issues they make proclamations about.

Tens of thousands of mostly young people die violently every year in the urban centers of large cities, and we ignore it.  Instead we hyper focus on school shootings and argue about background checks.

School shootings claim fewer children than those murdered by parents, and far fewer than child victims of gang violence. Fifteen dead under the age of 18 is the toll of an especially bad weekend in one of our large urban centers.

Google the name of a large city along with “murder” or “homicide” and you will see what I mean.

Chicago celebrated that only 20 people were murdered on its streets in January of 2019. That record is worthy of celebration in light of the 72 shot and 13 killed on a single weekend the previous August.

During the 2016 presidential campaign Bernie Sanders brought up inner city violence, but was shut down by Hilary Clinton who used accusations of racism to bury the issue. It was to her political advantage to do this, but at the obvious disadvantage of people living in a war zone under occupation by militarized police.

But Hilary has a point, of sorts.

When you start asking questions about the source of this violence you can’t avoid talking about the culture of inner cities.

What values drive people to make their homes in these places? What makes membership in a gang so attractive?

Single mothers are held up as virtuous heroes, but if the social structure of traditional nuclear families mitigates urban violence that identity is threatened. Politicians who court the female vote certainly do not want to alienate those voters.

It’s much easier to elicit emotional responses by blaming “deplorables” or “libtards” and focus on character flaws that may or may not exist.

And that is where the bigotry comes in.

Politics is the last place where hate speech is still tolerated.

Robert DeNiro’s remarks at the 2018 Tony Awards is an example.

Criticizing the president is fine, but the use of profanity and inability to articulate a coherent statement is not a political statement. Political discourse requires an understanding of political and economic theory, and a willingness to forgo passion and emotion in favor of intellectual inquiry and dispassionate analysis.

Sadly, what passes for political discourse is mostly people screaming at one another, each trying to extract an admission of defeat from the other.   

I don’t want any part of it.   

A Trump Second Term In 2020? It Might Happen!

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A lot of people have such a low opinion of Donald Trump that they can’t even think about the prospect of his re-election. That’s too bad, because there is a rational argument supporting the contention that he just might win.

A Trump win in 2020 is within the realm of possibility.

So, bear with me while I point out a few trends that might predict a Trump victory in 2020.

Trump has low approval numbers, but that does not erase the fact that he enjoys rock solid support from his core constituency. Nothing he does seems to erode the support of millions of voters who believe in him. What do they see in Trump that justifies this level of support?

They see authenticity, for one thing.

While Hilary takes on a strained Sothern accent when she’s in the South, and Obama drops his “g” when speaking to African Americans, Trump is consistent with his folksy informal speaking style. He doesn’t craft messages for his audience. He speaks off the cuff, sometimes abandoning the prepared remarks in front of him.

And people love it.

Most of his recent rallies have packed the venues, no matter how large they are. People drive for hours to get to his speaking engagements, then spend more hours looking for a place to park.

And they cheer him on, sometimes breaking into spontaneous chants.

What’s that all about?

Maybe because identity politics has run its course. The Clinton Era is over. Trump uses words like “our”, “us” and “we” in the context of “Americans” more than any politician in recent memory.   

Trump reminds his supporters there is nothing wrong with being proud of one’s country.

And people love that too.

More people than you might think.

In an era of hostility and incivility only the most ardent of Trump supporters publicly reveal themselves. Wearing a MAGA hat, or making pro Trump statements in public can invite physical aggression and social ostracism. Just yesterday I saw a bumper sticker saying:

“If you voted for Trump don’t follow too close. I don’t trust your judgment.”

These messages of intolerance are hard to miss and they might be having an unintended consequence.

Not all Trump supporters advertise their support.

The extent to which support for Trump are not detected by surveys and polls is, by definition, unknown. But it exists.

Check it out here. And here. And here. Even here.

But there are very obvious signs of Trumps popularity, too.

Economists at Goldman-Sachs, the conservative investment bank, recently released an analysis finding that Trump has a shot at re-election in 2020 owing mostly to incumbency advantage and a strong economy.

Other financial analysts come to the same conclusion:

“The economy is just so damn strong right now and by all historic precedent the incumbent should run away with it.”

Even Piers Morgan has gone on record predicting a Trump win in 2020.

But there is more.

Trump is raising more money than any of his Democratic challengers.

The Trump campaign has $82 million in the bank, double what it had at the beginning of the quarter. Yes, Trumps war chest doubled in only three months. He now has twice as much as much as the two leading Democratic candidates, Bernie Sanders and Kamala Harris, combined.

Finally, Trump has made accomplishments that could sway undecided independents to his side of the ballot. North Korea, low unemployment and a bullish stock market could generate support from this large block of potential Trump votes.

A very interesting collection of figures with the ungainly title, President Trump Job Approval by Demographic Subgroups, Overall and Within Party Subgroups is now posted at Gallup.com.

Almost every Independent subgroup shows significant approval for Trump. If enough of them vote for Trump he will be swept into office in a landslide.

Or not.

It’s the uncertainty that makes politics so interesting. Between now and the election any number of things can happen that will affect the outcome of the 2020 election.

All sides will endlessly manipulate the Mueller Report for political gain over the next year and a half.

Sooner or later the economy will fall into recession. Lately it is showing signs of weakening, and could as easily help Trump as hurt him.

Whoever the Democrats pit against Trump will also make a huge difference in how the election plays out. Trump is a master at ridiculing and diminishing his opponents, but eventually someone will be able to turn the tables on him.

One thing is certain, though.

Neither the Democrats or Republicans have any certainty of winning the 2020 election.

The 2020 Election Looks Like a Three Ring Circus

I have to admit that one of my guilty pleasures is following politics. There isn’t anything partisan about it for me – I’m a political atheist and have no alliance to any political party. The antics of politicians and the media are an unending source of amusement for me.

It’s so entertaining!

Take Joe Biden. You can’t help but feel sorry for the guy.

Every time he opens his mouth something embarrassing comes out. There are You Tube compilations of his embarrassing gaffes with new embarrassments added almost daily.  Like denying he is running for President and then letting it slip that he is. Or urging a guy in a wheelchair to stand up and take a bow.

Biden provides comic relief while our political parties adopt a time tested guide as they navigate the path to the 2020 election:

“When in danger or in doubt, run in circles, scream and shout.”

The Republican party collapsed into a disorganized mess when Trump won the election. Old time GOP stalwarts left the party and longtime senators announced their retirements. Trump has basically taken over the party, not because powerful GOPers are supporting him, but because they’ve thrown up their hands and are running for the exits.

The Democrats are in the same boat, but for a wholly different reason.

They’ve moved so far to the left and have taken identity politics to such an extreme that they can’t even agree on a basic philosophy. They leave facts and reality behind while they alienate their supporters with emotionally driven tirades and reveal a shocking ignorance of American history and democratic principles.

No, Congresswoman Ocasio-Cortez, the 22nd Amendment was not passed by Congress to prevent FDR from being re-elected. The Founders stipulated three forth majorities in the House Senate and state legislatures to ensure broad support across the political spectrum for constitutional amendments. By the way, the 22nd Amendment was ratified several years after FDRs death.  

The intent of the 22nd Amendment was to prevent progressivism from leading to fascism.   

Rep. Ilhan Omar of Detroit has done a stellar job of insulting the Jewish community not only with her comments, but also with her (non)apology. Jews have been an important demographic for the Dems, but that might be changing. It will be interesting to see if the traditionally Democratic Jewish voting block stays home in 2020.

President Obama is so concerned about democratic infighting that he made a rare political statement recently, warning the party about ideological litmus tests and circular firing squads. He is clearly concerned the party will self-destruct in time for the 2020 election.

And it just might.

The Democratic party does not have a unifying message uniting their base. Instead more than twenty contenders have officially entered the race for the democratic nomination for president while the party lacks a coherent platform.

What issues are they pushing to electrify and gain support from the Democratic rank and file?

For Andrew Yank it’s circumcision. Nancy Pelosi wants 16-yearolds to vote. Not to be out done, Bernie Sanders wants to allow incarcerated felons to vote. Kristin Gillibrand is still figuring out what she thinks, but she knows it’s different from what she thought before.  

As entertaining as this might be, there is a very serious aspect to such a wide range of trial balloons – big donors don’t give to candidates who don’t have a powerful message that can bring voters to the polls.

Trump doesn’t have that problem.

Although the election is a year and a half away Trump has managed to amass about $20 million in campaign donations, most of which were from individuals contributing under $200. None of the Democratic hopefuls are even close.

That’s a measure of how much grass roots support Trump enjoys. 

Trump rallies draw more people than there are parking spaces, and the overflow crowds are driven and enthusiastic. Trump has the knack of articulating powerful messages about immigration, trade, and the economy that electrifies his base.

The only thing the Democrats can agree on is that they don’t like Trump, and that might be their undoing. At least Elizabeth Warren thinks so.

The Gallup organization is posting a very interesting collection of figures with the ungainly title, President Trump Job Approval by Demographic Subgroups, Overall and Within Party Subgroups.

It takes only a glance to see that subgroups of Republican voters approve of Trump in the 80% to 90% range, while approval among Democratic subgroups is in the low single digits.

No surprise there.

The surprise is in the Independent numbers. Almost every Independent subgroup shows significant approval for Trump. If enough of them vote for Trump he will be swept into office in a landslide.

Of course, the only poll that means anything is the one voter create on election day. That day is a year a half away and a lot can happen between now and then.

The thing I find interesting and entertaining is the unknown path leading to that day.

Changing Your Thinking Will Change Your Weight — Part Two

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In Changing Your Thinking Will Change Your Weight Part One we talked about how the words we use when thinking or talking about weight loss can be powerful agents of motivation. Simply substituting “healthy eating” for “diet” removes negative connotations and helps make us feel more in control of our eating behaviors.

This principle can be applied to developing many habits and attitudes we need to lose weight and keep it off.

Changing the way we think about healthy food is a good example.

I was talking to a woman recently about healthy eating and she mentioned that she had been eating a lot of salads lately. But she didn’t use the word “salad”. She said “rabbit food” and wrinkled her face in disgust.

That’s not the way to build motivation and seize control of eating habits. Clearly, she could find nothing rewarding about eating salads. Referring to salads as “rabbit food” implies it is animal food and unfit for human consumption. Not very encouraging.

Most days I eat sardines right out of the can, but I don’t especially care for sardines. They just aren’t very appetizing. Do I concentrate on all the negative aspects of eating sardines? No. I think about how important it is to include fish in my eating routine.

Fish is high in protein, and that means ounce for ounce it satisfies hunger better than just about anything else. I try to limit eating to mealtimes, so it’s normal for my body to expect food at certain times throughout the day.

After all, you are supposed to feel a little hunger when lunch or dinner rolls around. I look forward to feeling hunger before a mealtime because it is a sign I haven’t been snacking and undermining my weight loss goals. I also look forward to the sensation of feeling full after I eat my sardines.

A lot of this is just reminding ourselves of things we already know.

For example, I remind myself that fish is high in DHA and EPA, two Omega 3 fats proven to have profound effects on metabolizing cholesterol and increasing cognitive functions. For someone like me who has issues with triglycerides and makes a living with my brain these facts are highly motivating.

That little change in perspective – looking forward to the positive nutritional results of a food instead of the immediate sensory satisfaction – makes a huge change in my experience of eating. Instead of thinking only about the sensation of what is in my mouth, my focus changes to healthy eating and the benefits it has for my body and lifestyle.

I apply the same thinking to the sensation of hunger. I can gain weight very easily – it’s a sign of success in long-term weight loss – because my body has become so efficient at digesting what I eat. Notice that I changed “I gain weight very easily” into something positive by paring it with a sign of successful weight loss. Easy weight gain is a sign that I’ve successfully lost weight in the past.

That’s a good thing!

Also, instead of thinking of a hunger pang as a distressing sign that my body is in need of nutrition and is sending out a distress call for immediate feeding I take a different perspective. A hunger pang is a signal that my body is turning from metabolizing energy from sugars and proteins in my bloodstream to metabolizing fat reserves.

That’s a good thing!

It means I’m losing weight, which is exactly what I want to do. Making that simple change in perspective puts me in control of the experiences associated with eating. I feel good about that hunger pang.

I welcome it!

It means that I’m on my way to accomplishing my goal of maintaining my weight and living a healthy lifestyle.

None of this is “looking on the bright side” or searching for a ray of positivity in the gloom. It’s all about applying facts to the experience of weight loss and fighting our human compulsion to make things harder than they really are.

Try it. It will take practice to make it a habit, but that’s true of any skill worth learning.

 

If you liked this article, you may find these interesting also:

 

Can’t Lose Weight? Create a Diet That Works!

How to Ensure a 95% Diet Failure Rate

Why Willpower Is Powerless When It Comes to Dieting

Five ways to use this powerful psychological trick to lose weight

Stop avoiding exercising your mind and body

Forget Health Insurance; Live Healthy and Manage Your Own Healthcare Instead

How I Lost Forty Pounds and Kept It Off and Why You Probably Can’t

How Sleep, Intestines and Microbes Keep Us Fat

Why Physical Exercise Makes You Smarter and Protects Your Brain

Five Things I Learned From the Secret Life of Fat

Changing Your Thinking Will Change Your Weight — Part One

One important approach to lose weight is to think about what you say to yourself about food and eating. Most people think of losing weight as an uncomfortable and arduous task. If that is your perspective on the future you probably are not opening your arms to enjoy a new experiences, one that is healthy and good for you.

Focusing on denying yourself the food you really want to eat and anticipating hunger and discomfort is not the way to motivate yourself to change your eating habits. The trick is to starting thinking of healthy foods and eating in new ways.

For example, notice that I used the phrase “healthy foods and eating” instead of “dieting”.

I avoid the word “diet” and “dieting” for two reasons.

First, it’s not really accurate. We are always on a diet. Whatever we are eating is our diet. If you eat mostly vegetables you are on a vegetable diet. If you eat noting but ice cream you are on an ice cream diet. Your diet can be healthy, unhealthy or something in between, but you are always on some sort of diet.

Once you start thinking about a diet this way it opens the door to making changes to your diet. You can change what you eat, when you eat, and how often you eat. That is far more complex than thinking,

“I’m on a diet.”

That phrase brings up the second reason I don’t like using the word diet. For most people the word “diet” has negative connotations. Diets are restrictive. They require us to eat foods we don’t like and we have to stay hungry all the time.

Those are not the kinds of images about healthy eating that tend to motivate people.

Instead of inviting that kind of imagery, forget the word “diet” or “dieting” and avoid the words or thought “I am on a diet” or “I have to go on a diet”. Remind yourself that you are always on a diet – your diet is whatever you are eating. You can have a healthy diet or an unhealthy diet.

Instead of “diet” I prefer to think of what I eat as either “healthy eating” or “unhealthy eating”. Simply by changing the word I use to describe what I’m eating makes two big changes.

First, it puts me in control. I can eat whatever I want any time I want it. I am not at the mercy of a “diet” probably created by someone else that I have to follow without fail. It’s no longer a matter of obedience, conformity and compliance.

I make decisions about what I eat throughout the day, guided by my desire to keep my weight down and keep my body healthy.

Second, an episode of unhealthy eating is just that – one event that is something less than optimal. It’s not “failing at my diet” or “going off my diet”. Instead, it is just a small change to what I normally eat.

So, forget dieting and think about eating healthy. It’s such a small change, but has enormous power in changing your eating behaviors.

 

 

Is The Trump Bump Running Out of Steam?

It is normal for our economy to get a bump when new and promising things happen. Economic measures go up at the first of the year, when a new president is inaugurated and following tax reform legislation. People are generally more optimistic at those times and spend more freely boosting the economy.

Those events contribute to the marginally better economy we are experiencing, but there are some troubling blips on the radar. The smooth sailing may be over and we might be facing turbulent times.

First, the effects of the Trump tax cuts are diminishing. IRS policy changes for the 2019 and 2020 tax years will result in increasing taxes. Standard deductions will be going up in response to anticipated inflation, meaning that a larger share of income will be subject to taxation. This will have the effect of taking money out of the economy in 2019 without returning any real value. That might slow inflation, but at the expense of a decrease in the standard of living for most people.

Here is a chart comparing the rise of tax receipts with the rise in average hourly wages over the last couple of years:

Source: U.S. Bureau of Economic Analysis, Federal government current tax receipts: Personal current taxes [A074RC1Q027SBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/A074RC1Q027SBEA, November 17, 2018.

The important thing to compare are the angles of the two lines. Generally the blue line, tax receipts, is stepper than the orange line representing hourly income. That means that taxes are increasing at a greater rate than income, lowering real income. Even though we might make more money the increases are eaten up by taxes that are increasing even faster than wages. The sharp dogleg in tax receipts is the temporary bump in paychecks we saw right after the Trump tax bill was passed.

Another troubling development is the increase in household debt and delinquencies on payments. Household debt reached a new record of $13.5 trillion dollars last quarter. Household debt is the aggregate of all personal debt arising from personal loans, credit cards, auto loans, home mortgages and student loans. Debt can be a good thing when it is being reliably paid down, but payments have become less reliable.

Student loans, credit card and auto debt delinquencies have been rising, especially student loan delinquencies which have increased from 8.6% to 9.1% in the last quarter. This implies that increases in wages are not keeping up with the ability to service debt.

The troubling thing about student load debt is that it does not result in a net wealth increase for people holding it. Education is not a good investment when jobs are scarce, yet that is when people tend to go to school. The chart below starkly illustrates the lack of a relationship between education and income. Education is a good investment only during good economic times. Going into education debt during a downturn only ensures more poverty.

Source: U.S. Bureau of the Census, Real Median Household Income in the United States [MEHOINUSA672N], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MEHOINUSA672N, November 17, 2018.

Other signs of a weakening economy are jittery tech stocks. The FAAMG stocks — Facebook, Amazon, Apple, Microsoft and Alphabet – have an outsize effect on the stock market. When the techs experience a downturn, so does the rest of the stock market.

Although the FAAMG stocks are generally healthy, trends are gathering that might have an impact on their volatility. Facebook is losing members and its stock value has been declining since the summer when foreign manipulation of public opinion came to light during the 2016 election. IPhone sales are down, and holiday buying expectations are guarded.

None of this means a recession is imminent. What is concerning, though is that our new economy is not nearly as resilient as the one that disappeared in 2008, and even a modest downturn could have catastrophic effects on so many members of our economy living and dying with poverty.

A Red Hot Labor Market? Don’t Believe It!

We’ve been seeing headlines screaming about low unemployment rates and a red hot job market.

I’m not seeing any of this.

The people I know still struggle along, looking for a decent job and taking any short term low wage job they can get. I’ve got a gig at a community college and don’t see any of my adjunct colleagues quitting the part time adjunct grind for jobs demanding graduate degrees and specialized knowledge — even though that is what they all have because it is required by the college.

An increase in the availability of good jobs would be reflected throughout the economy, but does not seem to be happening.

Historically, inflation increases when economies come out of recession and hiring picks up. That is because people are making more money and catching up on the buying they have deferred wile unemployed, creating demand.

But that’s not happening.

Inflation is edging up just a little, but that might because the Federal Reserve has been increasing interest rates just in case inflation increases.

If people were getting hired and making more money we would also expect a rise in home sales, but that isn’t happening. In fact just the opposite is happening. Since 2017 home sales have been sliding down and seem to be accelerating over the last six months or so.

We would also expect auto sales to increase, but nothing dramatic is happening there either, although there has been a slight uptick since August of 2018.

Real labor shortages also change the way employers hire.

When employers need workers they start lowering barriers to employment like credit and background checks, unrealistic demands for education and experience and start offering training programs.

Most significantly wages start increasing.

Although some of that is happening it isn’t what we could consider an economic trend.

The latest Employment Situation form the Bureau of Labor Statistics is not showing dramatic changes in any of its common measures of labor.

Long term unemployment, discouraged workers and those no longer in the labor force are all tracking steady. The only thing changing are the number of people who hold multiple jobs. That group has risen by about 25% since the beginning of 2014 and although progress has been jittery this seems to be a long term trend.

Quite possibly the rise in employment is mostly attributable to an increase in low paying part time jobs. This would explain the lack of impact in the rest of the economy that we would expect if well paying full time jobs were being filled. It also explains the increase in multiple job holders.

So, no, claims of a red hot job market are not supported by BLS statistics, the Federal Reserve or the National Association of Realtors.

Most likely this is just hype coming from people and organizations with an agenda who spread economic fantasies in hopes they will come true.

References

U.S. Bureau of Labor Statistics, Multiple Jobholders, Primary Job Full Time, Secondary Job Part Time [LNU02026625], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/LNU02026625, November 12, 2018. https://fred.stlouisfed.org/series/LNU02026625

National Association of Realtors, Existing Home Sales [EXHOSLUSM495S], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/EXHOSLUSM495S, November 12, 2018. https://fred.stlouisfed.org/series/EXHOSLUSM495S

U.S. Bureau of the Census and U.S. Department of Housing and Urban Development, New One Family Houses Sold: United States [HSN1F], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HSN1F, November 12, 2018. https://fred.stlouisfed.org/series/HSN1F

U.S. Bureau of Economic Analysis, Light Weight Vehicle Sales: Autos and Light Trucks [ALTSALES], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/ALTSALES, November 12, 2018. https://fred.stlouisfed.org/series/ALTSALES

College Takes Four Years. Education Takes a Lifetime

Photo by Heather Schwartz, Unsplash.com

When we think about the value of a college education, it is usually in the context of making a living. We expect that a college education will result in higher earnings over the course of our lifetime. This idea has been drummed into us for the last thirty years. For decades, the education industry has been repeating the mantra that ever more education means ever more income.

 

There might be some truth to that, but it a relatively new view of the value of education. My parents and grandparents didn’t see things that way. Sure, higher education contributed to a higher standard of living, but that was not really the point of going to school. My parents put me on the college track when I was elementary school, not for the promise of a high income, but because an education built character and made individuals better citizens.

 

In their view, smart people have a civic duty to get an education because of the benefits it returns to society.

 

This wasn’t an idea created by the generation before mine. The Founders of the United States had a reverence for education. Concepts like equality, liberty and democracy are abstractions – they are intangibles, sometimes called metaphysical because we cannot see or even visualize them in our imaginations. Without an education, it is very difficult to understand sophisticated arguments about political theory and the rights of man.

 

Graduating from college meant I was educated and ready to contribute to moving my country past the convulsions of the 60’s and 70’s that was tearing it apart. I was very proud of myself for earning a bachelor’s degree.

 

That is, until I read the newspaper.

 

About a week after the formalities of the graduation ceremony, I was sitting on my parents’ couch reading an editorial. I don’t remember what the editorial was about, but I vividly remember a reference to The Scarlet Letter and having no idea what the editorial was trying to say because I had never read the book.

 

I was stunned.

 

Here I am, I thought, a week out of college with a newly minted diploma attesting to my new status as an educated American, and I don’t know what a newspaper editorial means because I have not read a well-known classic American novel.

 

I resolved to plug that hole in my education.

 

I began going to the city library, working my way through canyons of bookcases packed with classic works of fiction and highbrow literature that I had avoided in high school and college. I’d pick out a book I had heard about but never read, head to the overstuffed chairs at the ends of the bookcases, and start reading.

 

Some books I just could not manage.

 

Anything by Dickens or the Bronte sisters are just too slow and boring. And who would want to go to the trouble of writing a book and then title it The Scarlet Pimpernel? I never got far enough in that book to find out what a pimpernel is or why a scarlet one is noteworthy.

 

The unfamiliar names of characters in War and Peace confused me no end, but I made index cards with mini-biographies to keep everyone straight. Even then, I found the book just plodding along. Just the same, it brought the Russian history courses I took in college to life.

 

This got me excited about Russian history and I read biographies of Catherine the Great, Ivan the Terrible and Peter the Great. I even got to Nicholas and Alexandria, the story of the last Tsar and the revolution that brought communism and half a century of untold suffering to the Russian people.

 

That got me started on Russian dissent Aleksandr Solzhenitsyn’s works.

 

I read For the Good of the Cause and found out how the human need for social hierarchy combined with an imposed inhuman bureaucracy creates institutionalized abuse. This is very relevant in an era of Bong Hits for Jesus and school districts reporting sexually active students to law enforcement. Anyone advocating progressivism in education should read For the Good of the Cause to see how a too much of a good thing can undermine human and civil rights.

 

The relevance of old stories to modern concerns was something else I discovered.

 

St. Elmo is one of the first romance novels. It was written in the 1880’s, I think, and is so full of archaic words that I kept a dictionary nearby as I read the book.

 

The plot was follows the formula of modern romance novels. Some things never change – and our appetite for romance novels is one of them.

 

The main character was a young woman nursing a broken heart who meets a mysterious wealthy stranger, who also lost at love. St. Elmo was the grief stricken mystery man and the narrator was the governess – the nanny — of his children. I found out that back in those days a “bluestocking” was an older, conservative woman who thinks young people have no discretion, decorum or respect for propriety.

 

Sound familiar? Human nature is very slow to change and books like St Elmo reminds me how similar we are to generations long past.

 

The Iliad and The Odyssey, both written by Homer almost a thousand years ago, might be the first novels ever written. In the last few years archeologists have found that people and events described in these books really existed. Homer describes the Trojan War in some detail, as well as the duplicity that spawned the famous wooden horse. Helen of Troy makes a series of appearances as well, and Homer explains her role in the conflict.

 

Something in The Odyssey frequently comes to mind when I see people openly wearing guns in public.

 

In the book, the main character, Odysseus, finally returns to his hometown after 20 years of adventures. He finds that although his wife had remained pure and true to him, men vying for her bed and her fortune surrounded her. He reveals himself to his son who wants to grab swords and axes to intimidate and scare off the interlopers. The old man immediately rejects the idea saying,

 

“Bare steel in sight draws men to fight.”

 

Instead of inviting a bloody confrontation, they hatch a plan to discreetly keep their weapons under their cloaks and use their intelligence and ingenuity to achieve their goals. That part of the book always comes to mind when I see people openly toting pistols in public. If Homer was to reincarnate in Walmart his modern advice might be, “Carry your gun discreetly and like Odysseus and his son, use your wits to avoid using it”.

 

Something truly amazing about The Odyssey is that the plot of 2000 movie O Brother, Where Art Thou? is based on it, although it is set in Depression era Mississippi and the main characters are prison escapees. Imagine, a poem written almost a thousand years ago made into a modern motion picture!

 

Finally, there is Gone with the Wind. Unfortunately, the book is now the focus of racial conspiracy theories. Historical revisionists claim the books’ purpose is to glorify slavery and the antebellum South, but that simply is not true. Most people advancing that assertion have likely not read the book, although they might have seen the movie.

 

The famous move limits itself to the love story between Rhett Butler and Scarlett O’Hara, but their romance is just a superficial subplot in the book. The real story is more complex and very relevant to what we are now experiencing in the wake of the collapse of the industrial economy in 2008. It’s as if the southern survivors of the Civil War left a time capsule detailing their struggles creating a new economy from the ashes of an old one.

 

The book actually explores the question of why, in the aftermath of the destruction of an economy, some people achieve success and others do not. In the beginning of the book author Margret Mitchell tells of listening to adults who were alive during the Civil War incessantly discussing this question.

 

Some people who were wealthy before the war were able to rebuild their fortunes afterwards, but many of their peers did not. At the same time, there were people who were very poor before the war, yet afterwards did quite well for themselves.

 

What is it that determines an individual’s financial fate when they live in the ruins of a formally vibrant economy? It not just the ability to work hard – Americans are notable throughout the world for their work ethic. Plenty of people work very hard, but never achieve much material success. We call them the “working poor”.

 

Why is it some do so well and others do so poorly? This is an especially relevant question today as we move past the collapse of the industrial economy of the 20th century and begin building a new economy.

 

Individually we are facing challenges very similar to what Mitchell heard her elders discussing when she was a child. Like them, now there are people who struggled in the old economy who are doing very well in the emerging one. On the other hand, some people who were doing quite well in the late 20th century are now living like Tom Joad, a character in Grapes of Wrath, another book, (and movie), examining the plight of people facing the aftermath of a collapse of a national economy.

 

Education is not just about getting a college degree and making more money than you would otherwise. It is about amassing a wealth of knowledge that makes the world more understandable. A broad wealth of knowledge helps us see important nuances and reveals connections and insights others have experienced.

 

I found out that in order to learn new things it is essential to have a foundation that new knowledge can build upon. Learning a new language or musical instrument is a good example of this. In the beginning, learning is very slow and difficult because there is no context for the new knowledge. As learning takes hold it becomes easier to add new knowledge to what we now understand. Every morsel of knowledge is a foundation for more knowledge. Every bit of new knowledge has a relationship with previously learned knowledge.

 

Education is the antidote to “fake news”, conspiracy theories mascaraing as insight, and emotional catchphrases that subtly undermine principles of justice and equality.

 

Education leverages the value of the struggles and victories of people who came before us. Their knowledge and experiences strengthen our cognitive insights and understanding as we grapple with our challenges and struggles.

 

A college degree is just the beginning of education. It is a foundation for the real education to come – a lifetime of intellectual excitement and exploration.

 

 

 

 

 

Can’t Lose Weight? Create a Diet That Works!

In previous articles about weight loss, I’ve talked about why will power doesn’t work, that simply being aware of one’s excess weight correlates with gaining even more weight, and my own struggles and victories with weight control.

In this article, I’ll give some examples of why we cannot trust ourselves to manage weight loss and why we need to approach the problem like a nutritional scientist.

In his excellent book, Subliminal, Leonard Mlodinow tells us about a fascinating series of experiments in which researchers manipulated the brain arousal of volunteers, then subjected them to a range of situations in which they made decisions about their relationship with other people, the taste and desirability of different foods or explanations for their opinions or observations.

In one experiment, for example, researchers would show subjects two pictures of randomly chosen people of the opposite sex and ask which was more attractive. Later they would show the subjects the picture they did not choose and ask why they found the person attractive. More than 75% of the time the subjects did not realize the picture experimenter presented them was the one they did not find attractive, but that was not the point of the experiment.

The point was how the subjects would respond when the experimenter asked what they found attractive about the person in the picture. The 75% who did not realize the picture presented was of the person they found to be least attractive identified all sorts of reasons for why they found the person in the picture attractive, even though they had identified it as unattractive previously.

That might be of passing interest, but then researchers repeated the experiment in the context of food.

When food is involved things became very interesting.

In supermarkets, researchers set up taste tests of jams by different manufacturers. Again, they presented two samples and asked for a preference based on taste. They kept track of which brands of jam volunteers preferred and did not prefer, and later gave them a sample that was actually the brand the volunteer did not prefer.

Again, when asked about what they liked about the sample they had earlier stated they did not like, the subjects identified all sorts of characteristics such as taste, consistency, color and sweetness or tartness that determined their preference. In reality, they had already tasted the brand and labeled it as less desirable.

Your Brain and the “Pepsi Paradox”

The Pepsi Paradox has bedeviled soft drink marketers for decades.

The Pepsi Paradox is the fact that in blind taste tests people overwhelmingly rate Pepsi superior to Coke, but a large portion of them prefer Coke when they know what they are drinking.

How can this be?

The portion of our brain that rests directly above our eye sockets is the Executive Center. It is the “mission control” center of the brain where complex networking decisions that coordinates the many different organs of our brain.

The ventromedial prefrontal cortex (VMPC) resides in the Executive Center and helps the brain determine whether objects are associated with safe, warm and familiar experiences.

In blind taste tests using some volunteers with damaged VMPC and others with intact VMPCs, both groups preferred Pepsi in the blind condition when they did not know which brand they were drinking. This was no surprise and was no different from what happens when all volunteers have intact VMPCs.

However, the preferences of volunteers with damaged VMPCs were consistent in their preference for Pepsi. The Pepsi paradox disappeared. Regardless of whether they knew what they were drinking, they preferred Pepsi. The lack of a fully functioning VMPC seems to keep previous experiences from influencing judgements about current experiences.

The VMPC is the brain organ that undermines our objectivity, at least when it comes to food preferences.

These have been just a few examples of how our brain can fool us about the most basic of our food preferences and decisions making. There are far more.

The IKEA Effect and Diet Planning

I’ve been talking about how unreliable our thinking and decision-making about food choices can be because understanding our biases and prejudices has a huge effect on strategies for weight loss.

Clearly, successful weight loss requires more than just good intentions and will power. It is important that well thought out planning, an effective strategy and choosing cognitive and behavioral supports long before altering eating or exercise habits.

Why is creating a comprehensive plan so important? Something called the IKEA Effect.

Dan Ariely, a well know social psychologist at Duke University, coined the term to label a cognitive-behavioral trait that all humans seem to have. We value things more if we contribute to their creation, and the more we contribute the more we value the product.

In Ariely’s excellent and very readable book, “The Upside of Irrationality” he tells the story of Pillsbury marketers in the 1940’s trying to popularize various powered mixes for desserts, cakes and pies. Homemakers of the era took great pride in the ability to cook delicious foods from scratch, so marketers of instant food, especially cakes, were facing a serious challenge in convincing women to buy the new instant foods.

A marketing psychologist named Earnest Dicter realized that women who took great pride in creating desserts from scratch might find that simply adding water to a ready-made cake mix disrespectful of their talents. It is another version of technology replacing artisanship and diminishing hard won skills of expertise.

Dicter suggested simply printing an additional instruction on the side of the cake mix box to add one raw egg. The very simple change of adding the egg became a symbol of involvement and connection with the finished cake. That simple gesture resulted in a sudden and dramatic increase in cake mix sales.

Ariely launched a number of experiments exploring why we value things more highly when we have a hand in creating them. What is so powerful, he wondered, about creating something?

In one series of experiments, Ariely had volunteers follow directions to make simple and complex origami swans. He then had the volunteers rate both their own creations and the creations of others. Naturally, he found volunteers rated their own creations higher than those made by others.

However, he followed this with auctions of the origami. Again, he found that the people who created a particular origami swan valued it higher than those made by others did. Furthermore, the more effort put into the origami increased the value people had for their creations. Interestingly, only completed origami was valued; incomplete creations had no value at all.

This is why kits of all kinds are so popular. IKEA has made retail history by not selling completed products, but prefabricated kits the customer assembles. We put more value on things when we put effort into completing them than those that are already complete. Our involvement in creating something gives it value.

Amazingly, animals share this trait.

In the early 1960’s psychologist, Glen Jensen noticed that lab rats would continue to press a bar to get pellets of food even though an effort free bowl of food was available. In a controlled experiment all but one of 200 rats would visit the food bowl, but leave it if a bar dispensing food pellets were available.

Subsequent studies support this conclusion.

Psychologists Brooks Carder and Kenneth Berkowitz performed several animal experiments in the 1970’s finding that rats preferred pressing a bar for food rather than eating “free” food as long as the effort was not excessive (Carder and Berkowitz 1970, 1972):

“Rats were trained to eat free food from a dish, then trained to press a lever for similar food. The free food was then presented while subjects were pressing on several reinforcement schedules. Subjects continued to press for reinforcement when one or two presses were required for reinforcement, and ate little free food. When ten presses were required for reinforcement, rats preferred free food and pressed little or not at all. It was concluded that, when work demands are not too high, rats prefer earned food to free food” (Carder and Berkowitz 1970 Abstract).

In her fascinating, book Zoobiquity: What Animals can teach us about health and the science of healing, Barbara Natterson-Horowitz tells us about the controversial practice in European zoos of “Carcass Feeding”. Zoos in Europe are cautiously exploring the health benefits of feeding freshly killed prey animals to large predators.

Although the animals have to work harder when eating a carcass they become healthier and seem less anxious than when eating their usual fair of ground domestic meat. Even though it takes far more effort to crush bones and chew through ribs and hooves, big cats seem to prefer it.

The idea of putting forth effort for a rewarding experience is not limited to animals.

In his fascinating book Satisfaction, Neurologist Gregory Berns tells of an experiment by one of his graduate students, Cary Zink (Zink, Pagnoni, Martin-Skurski, Chappelow and Berns 2004):

It occurred to Zink that if we value money only because it has value, the pleasure center of our brain – the striatum, a structure in the mid brain at the top of the spinal column – would have a consistent reaction no matter whether an individual perceives they are earning money or simply accepting it.

However, if earning money has value, aside from the value of money, our striatum pleasure center should react more strongly when we perceive we have put effort into earning money.

And that is exactly what happens.

Subjects required to press a button in order to receive a reward generated more activity on the striatum than those who didn’t. Pressing a button in an fMRI machine may seem trivial, but it represents effort. Even that minimal effort generated a large increase in striatum activity indicating a pleasurable experience. The reward is in the effort we put into earning, not strictly in the tangible payoff itself.

What this tells us

First Mlodinow tells us how difficult it is for us to think about our eating habits. We say we like the taste of something, but if we are misled, even just a little, we will make up all sorts of reasons why we like the food that we never said we liked.

The Pepsi Paradox illustrates that we have brain structures that emphasize past experiences and opinions to the extent that we have trouble realizing we like one thing more than another.

Finally, Ariely, Berns and Zink make convincing arguments that we value things we create more than things others create, and that we are hard wired to feel pleasure when we earn something.

Putting this all together, we find evidence to support the idea that we are not very good monitors of our eating behaviors. We are easily misled and confused. Even in the best of circumstances, we are very bad at objectively examining our thoughts and behaviors related to eating and weight loss.

What does this tell us about how we need to go about losing weight?

For one thing, it is clear that we must put far more effort into weight loss than simply following a diet we read in a book or magazine. It’s not that diets in books and magazines are flawed, although many of them are. The biggest problem lies within us – we just don’t do a very good job of thinking clearly about food, eating and nutrition. Finding a good weight loss program is easy. The hard part is removing the unconscious thoughts and behaviors that undermine us.

We have to remove ourselves from our weight loss efforts.

But how the heck do we do that? How can we remove ourselves and still have influence over what we do?

Scientists face the same problem. They are searching for truth, but if they allow their personal biases and prejudices to influence their research, grant money will dry up and professional reputations become tarnished.

So how do scientists do it?

They measure everything of importance, record those measurements and examine them for changes. This is “data collection and monitoring” and it is at the heart of determining why things occur.

Let’s revisit Berns, Ariely and Zink for a moment. Their message seems to be that we have more value for things we have a hind in creating. The more effort we put into creating something the more value we place on it.

That is the IKEA Effect.

When we follow a diet plan like the Mediterranean Diet, we are simply along for the ride. Someone else came up with that diet, and we are just following his or her lead. “Eat more vegetables, and don’t forget the olive oil” is about as invested as we get.

However, when we create our own custom diet, designed for our unique biology, life style and metabolism we will be far more likely to lose weight permanently. This is because we care about the success of our own creation more than the creation of a diet book author.

That is because it takes effort. Not the effort of following someone else’s diet, but the effort of going to the trouble of discovering what works for our individual situation. Learning about how our individual body manages food, and fat, then writing our own diet book with only one reader – us – is the most promising path to permanent weight loss.

It sounds like a huge project, and it is. But like any other huge project if we just take it a step at a time we will eventually get to our destination.

The first step is to educate ourselves about nutrition, eating and weight loss. The fact that you have read this far show that you are already taking the first step. Here are a few other sources of knowledge to digest:

The Secret Life of Fat: The Science Behind the Body’s Least Understood Organ and What It Means

The Obesity Code: Unlocking the Secrets of Weight 

Fat Chance: Beating the Odds Against Sugar, Processed Food, Obesity, and Disease

Used copies of these books are no more than five dollars; you can get all three for less than $20.00, including shipping.

(Avoid the Kindle versions – you want physical books that will sit on a desk or table reminding you of the highlighted the parts that are most relevant to achieving your weight loss dreams.)

Do it now. Each book has a link to Amazon. If you can afford $20.00, you can afford to start your education on permanent weight loss.

When you’ve started those, it will be time to begin creating your personal diet plan.

Stay tuned.

I’ll tell you exactly how to do that in a future article at Medium.com and OnwardThrougtheFog.com.

 

 

References

You can find my previous weight loss articles at Medium.com, or my blog site, OnwardThroughtheFog.com

Ariely, D. (2010). The upside of irrationality: The unexpected benefits of defying logic at work and at home. New York: Harper.

Berns, G. (2005). Satisfaction: The science of finding true fulfillment (1st ed.). New York: Henry Holt.

Carder, B. (1972). Rats’ preference for earned in comparison with free liquid reinforcers. Psychonomic Science, 26(1), 25-26.

Carder, B., & Berkowitz, K. (1970). Rats’ Preference for Earned in Comparison with Free Food. Science, 167(3922), 1273-1274. doi: 10.1126/science.167.3922.1273

Jensen, Glen. (1963). Preference for bar pressing over “freeloading” as a function of number of rewarded presses. Journal of experimental psychology. 65. 451-4. 10.1037/h0049174.

Mlodinow, L. (2012). Subliminal: How your unconscious mind rules your behavior (1st ed.).New York: Pantheon Books.

Natterson-Horowitz, B., & Bowers, K. (2012). Zoobiquity: The astonishing connection between human and animal health (First Vintage Books edition. ed.).

Zink, C. F., Pagnoni, G., Martin-Skurski, M. E., Chappelow, J. C., & Berns, G. S. (2004). Human striatal responses to monetary reward depend on saliency. Neuron, 42(3), 509-517.