You are currently browsing the monthly archive for November 2018.

Parenting: Gardening? Or Carpentry

By   Shlomo Maital

 

I have not yet read Alison Gopnik’s 2016 book, The Gardener and the Carpenter – but I am writing about it, after hearing her on a Hidden Brain podcast. I will certainly read this book soon and highly recommend it. Gopnik is a professor of psychology at U. of California, Berkeley.

   Here is her main argument about our children: We worry too much and do too much for them: children flourish when they are given freedom. When it comes to looking after kids, be a gardener not a carpenter . ‘Parents should be like gardeners. The aim is to provide a protected space in which children can become themselves’

   In Gopnik’s metaphor – a carpenter builds a table or a bookshelf, starting with a plan, and then executes the plan. Some parents think parenting is like carpentry – plan the children’s nature, and development, and see it unfold according to plan.

   Gopnik sees parenting as gardening.   Create a secure, rich environment for children. Turn them loose. Watch them grow and develop.   Be prepared for many surprises. Give them freedom to explore who they are and what they want. And then, like a garden, watch the results, that will often amaze, maybe sometimes sadden, you.  

   Here is a small experiment that conveys this message:

     In 2011, a team of psychologists did an experiment with some preschool children. The scientists gave the children a toy made of many plastic tubes, each with a different function: one squeaked, one lit up, one made music and the final tube had a hidden mirror. With half the children, an experimenter came into the room and bumped – apparently accidentally – into the tube that squeaked. “Oops!” she said. With the other children, the scientist acted more deliberately, like a teacher. “Oh look at my neat toy! Let me show you how it works,” she said while purposely pressing the beeper. The children were then left alone to play with the toy.

     In the “accidental” group, the children freely played with the toy in various random ways. Through experimenting, they discovered all the different functions of the tubes: the light, the music, the mirror. The other group, the children who had been deliberately taught how to use the toy by the teacher, played with it in a much more limited and repetitive way. They squeaked the beeper over and over again, never discovering all the other things the toy could do.

     Gopnik observed, in the podcast, that “parenting” is a relatively new word, a 20th C. word. And it implies a measure of control, of shaping, of design, of ‘carpentry’. Of course, parents educate children, teach them values, and keep them safe. But all this, she says, should be done in an atmosphere of discovery and exploration.  

     A book review sums it up well:   “To seek to parent a child, Gopnik argues, is to behave like a carpenter, chiselling away at something to achieve a particular end-goal – in this case, a certain kind of person. A carpenter believes that he or she has the power to transform a block of wood into a chair.  When we garden, on the other hand, we do not believe we are the ones who single-handedly create the cabbages or the roses. Rather, we toil to create the conditions in which plants have the best chance of flourishing. The gardener knows that plans will often be thwarted, Gopnik writes. “The poppy comes up neon orange instead of pale pink … black spot and rust and aphids can never be defeated.” If parents are like gardeners, the aim is to create a protected space in which our children can become themselves, rather than trying to mould them.”

    

Advertisements

 

State & City Budgets:

Dangerous Hot Potato

By   Shlomo Maital

      US State and Local Budget Deficit/Surplus, 1960-2016

     Amazon has just announced it will split its new headquarters buildings between Long Island City, Queen’s, and Northern Virginia, and a smaller center in Nashville.   According to CNBC: “The company said it will receive up to $2.2 billion in performance-based incentives from the three areas: $1.5 billion associated with its investment in Long Island City, $573 million in Arlington and up to $102 million in Nashville. The incentives take the form of cash grants and tax credits, and some take effect over time.”

     The announcement highlights an interesting fact. As MIT Dean Lester Thurow noted once, companies once paid taxes to cities, and now cities pay taxes to companies (like the huge grants Amazon received). True, Amazon will invest substantially – but giving over $2 billion to a company whose stock is worth $800 billion? That made $3 billion in profit in 2017?   From city budgets that are already strapped? Amazon’s Jeff Bezos, of course, cleverly strategized by creating a competition among cities over who would give him the best deal.  

   And there is a much deeper problem, too.

   The U.S. federal government recorded a $100.5 billion budget deficit in October, an increase of about 60 percent from a year earlier. That is the gap between what the federal government spent and what it earned in taxes, in just one month!. On a yearly basis, the federal deficit is headed for a record 1 trillion dollars, or over 5 % of US GDP. The cause? Mainly, the massive Trump tax cut passed in 2017. Most of it went to businesses, and they in turn spent it on buying back their shares and on dividends. Very little went to capital investment.

     How will this deficit affect ordinary Americans? The press focuses on the massive $20 trillion US public debt that future generations will have to pay, as the federal government borrows tons of money to pay its bills. But there are deeper reasons for concern.

     Many experts predict an imminent slowdown in the US economy – perhaps, a recession. What happened in the last recession that followed the 2008 financial crash?

     According to Tracy Gordon, Brookings Institute, Washington, “More than in past economic downturns, state and local governments were a prominent casualty of the recent recession. States in particular saw their revenues plunge. Although state taxes have been rebounding, local property taxes have dipped, consistent with a two- to three-year lag between home prices and property tax rolls. These reductions coincide with state cutbacks in local aid, further squeezing local budgets.

       [See Figure: State & Local Government Deficit/Surplus 1960-2016]

   Why is this a potential serious problem? Gordon continues,    

     “These are critical issues because states and localities perform most of the activities we commonly associate with government. They undertake most direct spending on public goods and services (including their expenditures from federal funds), and they bear primary responsibility for investments in education, social services, and infrastructure that directly affect our national economy and quality of life. States and localities are also key economic players, comprising 12 percent of Gross Domestic Product (GDP) and employing 1 out of 7 workers – more than any other industry, including health care, retail sales, and manufacturing.”

   In other words, state, local and city governments supply the things that underpin quality of life – health care, education, transportation, infrastructure. They generate one dollar in every 8 dollars of GDP and employ one worker out of every seven.

     So, here is a scenario that is a cause for worry. The US economy goes into recession in late 2019. The trillion dollar federal budget deficit swells dangerously. The federal government slashes spending where it can – cutting financial aid to state governments. State governments (many are constrained by law to balanced budgets) in turn slash their grants to municipal, local and city governments.

     And these, in turn, slash spending on the things that make life pleasant, or bearable, for most Americans. Potholes? Traffic jams? Dangerous roads?   No money available to fix them.

     This is a dangerous game of ‘hot potato’.   And it’s not a pipe dream. It happened in 2010.   Deficit hot potato passes from the federal government to the state government, which in turn tosses it on to local and city government. The buck stops there, and that hot potato burns our fingers. It happened before – it will happen again.

     On a recent trip to the US, my wife and I made frequent use of WAZE. WAZE kindly told us about every pothole. And there were a whole lot of them.   I don’t recall that feature in other countries.

       Even in good times, city budgets are strained. Seeking re-election, mayors spend their money on the short-term, while costly long-term capital spending is neglected. (Why spend money to help some future mayor, maybe a rival, get elected?).  

       There is a solution. Let state legislatures require cities to build five-year capital expenditure budgets, to accompany the one-year operating budgets. Let the federal government help the states and cities pay for interest costs on debt that finances capital spending. Protect those five-year budgets zealously from ‘theft’ (shifting spending from long-term to short-term).  

       Conservatives will scream, socialism!   Five-year plans are used, for instance, in China. OK – ever looked at China’s infrastructure? Fast trains, brand new airports?

       Hot potato crises for city budgets make no sense. It’s time for a change.

        Half the world’s population now lives in cities. By 2050 that will rise to 75%.   How cities spend their money and raise their revenues will have a huge impact on the wellbeing of the people who live in them. And there is a ‘hot potato’ problem. It’s time to fix it.

Divided America: In Pictures *

By Shlomo Maital

 

 

   How divided is the United States politically? An interesting graphic from the Washington Post tells the story.

   Top figure: % voting Democrat, mid-term (Nov 6) House of Representatives, by gender. Women: 66% (2/3).    Men: 50% (1 in 2). Huge difference.

   Middle figure: % voting Democrat, by age. Young (18-39)   66%. (2/3). 65 and older: 45% (less than 1 in 2).

   Bottom figure: % voting Democrat, by education (white people). College women: 66% (2/3). College men: 50%.   Non-college men: 37%.

     Other graphs will tell the same story: East Coast/West Coast vs. Heartland (Middle states).   North vs. South. City vs. Rural.

     A New York Times headline summed up the election: Election confirms America’s divisions.

     A close study of the 3 graphs shows: The divisions have been there since 2008 – but in 2018, they have grown substantially.

     Not all of this divisiveness and anger can be blamed on Trump. Some comes from the fact that a few have grown wealthy, many have grown poorer. This deep economic division was ignored – and America will now pay the price.

 

*   Source: Washington Post, Brian F. Schaffner, Nov. 10. “….these charts are based on data from the Cooperative Congressional Election Study (CCES), a large-scale academic survey conducted in every election year since 2008. For the 2018 CCES analysis, we used pre-election interviews with respondents weighted to be nationally representative of the adult population. We then applied a likely voter model trained on previous election cycles to create estimates for the 2018 electorate.”

Global Economy: Clouds Gather

By Shlomo Maital

Caption: In the EU, the current state of the economy, and expectations for the near-term future, have both turned down sharply since the beginning of 2018.

 

   I regularly respond to a questionnaire from Ifo – Institute for Economic Research, based in Munich. Ifo regularly surveys economists and business leaders around the world, to put a hand on the pulse of the global economy.

   Ifo’s latest report is worrisome. Here are some excerpts from their latest report:

   “Sentiment in the euro area continued to weaken this quarter. The ifo Economic Climate for the euro area fell significantly from 19.6 points to 6.6 points, plunging to its lowest level since mid-2016. Experts downwardly revised their assessments of both the current economic situation and their expectations significantly. The euro area’s economy is moving into rough waters.”

   There are major problems in Italy and Spain. Italy’s new right-wing government is quarreling with the European Commission. Spain is showing signs of instability.   In Germany, Chancellor Angela Merkel announced she will not run again for the leadership of her party, and may possibly resign as Chancellor by year’s end. Hungary is muzzling the press and its judiciary.

   The Ifo report continues: “Experts scaled back their export expectations for the euro area, reflecting beliefs that barriers to trade have grown higher. At the same time, a larger number of experts now believe that short and long-term interest rates will rise over the next six months; and that the US dollar will continue to strengthen.”

     China’s economic growth is slowing, and the renminbi (yuan) is touching 7 to the dollar. In tomorrow’s election, the US may find itself with a split Congress – Democratic House, Republican Senate.  The US stock markets had their worst month in years.

   The world is now paying for neglecting countries, and wage-earners, who were left out of global growth and wealth creation. Migration has destabilized Europe, the Mideast and to some extent, the US.   If wealth does not come to a country, and if it is not distributed well, many people in that country will flee toward the wealth.   And when they do, the resulting instability will put a deep dent in wealthy economies.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
November 2018
M T W T F S S
« Oct   Dec »
 1234
567891011
12131415161718
19202122232425
2627282930  

Pages

Archives

Advertisements