Of Fish and Ponds

Is it better to be a big fish in a small pond or a small fish in a big pond?

This is a question that I have pondered over the years.  Thinking about myself as well as for my children.

There are obvious advantages to being the big fish in the small pond. Competition is not as stiff in the small pond and this can be an advantage in building confidence.  It is simply easier to compete by getting a chance to practice and hone your skills without feeling inferior along the way.

However, in the long run we all have to compete in the big pond.  And the pond has gotten even bigger over the years with increased mobilization and globalization.  At some point you have to test yourself against the best.  After all, it is only by going up against the best that you can have a chance to be the best. But which is the best path to travel to get there along the way?  The small or big pond?

Malcolm Gladwell in his new book, David and Goliath, seems to come down pretty firmly on the side of the big fish in a small pond.

A big part of the reason deals with the belief you have in yourself. And that also has a lot to deal with whether you will continue to put the work in that is necessary to succeed over the long term.

The small fish in the big pond is much more likely to get discouraged and quit because they think they are not good enough.  The big fish in the small pond does not feel that way.  Each success reinforces their belief in themselves.  They continue to practice and work and, as a result, they also get better and better.  At some point they may move to the big pond and they can be very successful.  Starting in the big pond right from the start they very likely would never would have made it.  They would have quit in discouragement thinking that they could not measure up.

This occurs because we form our impressions of ourselves by looking locally, not globally.  We don't compare ourselves to the broadest group but to those immediately around us.  That is our frame of reference.

Gladwell makes the point by asking which countries have the highest suicide rates?  Countries such as Switzerland, Denmark or Iceland whose citizens say they are very happy.  Or Greece, Italy or Portugal where people consistently say in surveys they are unhappy?  The reality is that suicide rates are much higher in the "happy" countries. After all, it must be much harder to hold it together if you are depressed in the midst of a sea of smiling faces.  On the other side, misery does indeed seem to love company.  If everyone is unhappy in the same boat it doesn't seem quite as bad after all.

According to Gladwell, all of this should cause some concern when considering the real value of affirmative action programs which are designed to assist disadvantaged minorities.  These programs are clearly well-intentioned. However, looking at the big picture, is it really helping these groups?

Gladwell cites data which indicates that black students are routinely offered positions in law schools one tier higher than they would otherwise be able to attend.  However, 51.6% of black students in U.S. law schools are in the bottom ten percent of their class and 75% fall in the bottom twenty percent.

Why is this important?

Research by law professors Richard Sander and Stuart Taylor indicates that getting great grades at a good school is better than getting good grades at a great school when entering the legal job market.  For example, a top fifth class rank at Fordham had jobs and better compensation than a middle class rank at much more prestigious Columbia Law School.

How does Gladwell sum it up?

Parents still tell their children to go to the best schools they possibly can, on the grounds that the best schools will allow them to do whatever they wish. We take it for granted that the Big Pond expands opportunities, just as we take it for granted that a smaller class is always a better class.  We have a definition in our heads of what an advantage is-and the definition isn't right. And what happens as a result? It means that we make mistakes. It means that we misread battles between underdogs and giants. It means that we underestimate how much freedom there can be in what looks like a disadvantage. It's the Little Pond that maximizes your chances to do whatever you want.

I came across this graphic from Boom Football that also makes the point quite well by comparing the Super Bowl rosters of Seattle and Denver based on how highly recruited the players were coming out of high school.  The number of stars indicate how highly the athletes were ranked by college football recruiters.

Note that on both the Seahawks and the Broncos rosters the number of 2-Star and Unranked players is higher than the 5-Star and 4-Star players.  The reality is that the elite BCS (big pond) programs (Alabama, Notre Dame, Ohio State, Texas, USC etc) rarely even recruit an athlete that is 2-Stars or below.  These kids end up at smaller schools (little ponds) where they have a much greater opportunity to play and develop their skills.  On the other hand, many 4-star and 3-star recruits at the bigger schools may get little playing time and never progress.

Who ends up in the NFL?

Don't underestimate the small pond.

Inconsistent, Incongruous or Insane?

When I look at federal policy across the spectrum of issues it is hard to not scratch my head quite often. Inconsistent? Absolutely? Incongruous? It seems so. Insane? Perhaps.

Let's see what I am talking about.

We have 92 million Americans of working age who are not working.  The unemployment rate is stubbornly high almost six years after the economic downturn of 2008.

However, many employers say that we need to reform our immigration rules to allow more workers into the country because they can't fill the jobs that they have.  This clearly points to an educational   system at the high end of the job market where we are not producing the right number of graduates (tech, engineering, science).  At the same time, the low end jobs can't be filled because we have established a welfare system that makes it more attractive to stay on the dole than work.

So the answer is to let millions of more people into the country when so many Americans are not working?

We are also hearing calls to raise the minimum wage.  Minimum wage workers tend to be young. Although workers under the age of 25 only represent 20% of all workers, they make up about 50% of all minimum age workers according to BLS data. 

Those under age 25 also have an unemployment rate that is more than double the overall rate according to the most recent BLS report..  For example, the unemployment rate for those 16-19 is 22.0% and it is 11.9% for those 20-24. This compares to a 5.4% unemployment rate for those 25 years and older.  Bear in mind, the unemployment rate only considers those that are actively seeking workers.  This does not include any young people in school.

Therefore, what exactly will an increase in the minimum wage accomplish?  It certainly will not result in assisting any of these young people to get a job.  In fact, basic economics suggests that it will result in an increase in unemployment.

An increase in the minimum wage will almost assuredly result in greater incentives for business to further automate to eliminate low wage jobs.  Why do you need a person to take your order at McDonald's?  Just put your order in on a touch screen. No need for a human being to do that.  The machine also never shows up late for work.  Or complains about their workload. And there is no FICA taxes or health insurance coverage to be paid.

McDonald's is already in the midst of adding touchscreens in 7,000 of its restaurants in Europe.  Is it any coincidence that this effort has gone into Europe first with its onerous work rules and sky high labor costs due to big government rules?  By the way, Europe also has an overall unemployment rate of 12.0%.

We also have health care reform which was supposed to address the needs of some 47 million Americans without health insurance coverage.

Of course, almost half of the uninsured in the United States is "healthy and young". Asked the question as to why they have not purchased health care coverage previously most of them say that cost is the main reason.

So how was healthcare reform structured to handle this problem?  Obamacare established a slew of mandated benefits that drove up the costs of health insurance across the board. It also required that the old could not be required to pay more than three times the cost of the young for health coverage.  The problem is that actuaries will tell you that the old actually have about six times the health costs of the young.  This means that under Obamacare the cost of health insurance coverage is actually much, much higher than it before for the young.

Predictably, the young and healthy uninsured are not buying Obamacare policies. The health insurer Humana stated last week that only 20% of its Obamacare enrollees are under age 30.  42% are 50-64.  Humana said that they expect to tap into three risk adjustment mechanisms funds under the law of between $250 and $450 million for reimbursement of these losses by the federal government.  These numbers indicate that the policies they sold were underpriced by about 25%.

Therefore, the solution to the problem was exactly the opposite of what was required if the objective was to lower the number of insureds. The net result appears to be that many more people were forced off of individual plans they liked than those who purchased health insurance in the Obamacare exchange.  In fact, it appears that only about 20% of those enrolling in the Obamacare exchange were previously uninsured. People have just been churned from one plan to another.

Do you see why I scratch my head often when I see what is going on in Washington?

Inconsistent? Incongruous? Insane?

You decide.

Steps to Success

One of the first posts that I wrote when I started writing BeeLine three years ago was about Amy Chua who wrote an essay in the Wall Street Journal on "Why Chinese Mothers are Superior."  She also wrote a book on the subject, Battle Hymn of the Tiger Mom.

Chua's essay received a lot of attention and, not surprisingly, a great deal of criticism with her straightforward citation of three main differences between Asian and Western parenting styles as she made the case as to why Asian mothers were raising higher achieving children.

• Western parents are too concerned about their children's self esteem.  Chinese are not. Asians  assume strength in their children, not fragility.  Therefore, they push hard on them and hold them accountable for results.

• Chinese parents believe their children owe them something.  Many Americans seem to believe that since they were responsible for bringing the child into the world that they owe the child in some way.

• Asians believe they know what is best for their children and override their children's own preferences and desires. Chinese parent s understand that nothing is fun until you're good at it. To get good at anything you have to work, and children on their own never want to work, which is why it is crucial to override their preferences.

Having three children who competed in the classroom and in music with Asian children in high school  and speaking with their parents, I understood where Chua was coming from.  These parents generally held their children to higher expectations and strongly believed in the ethic and value of hard work.  To a much, much higher degree than other parents I knew.  And my wife and I for the most part.

Of course, it is always dangerous to generalize.  Not every Asian parent brings their children up the same way. There are Asian kids who are slackers, C students and can't play a C-flat.  However, stereotypes are a fact of life and anyone who denies they don't do it either is not telling the truth or does not understand how the human mind works.

The fact is that we all stereotype because all of our brains use shortcuts to make decisions. It is the way the brain is wired. These shortcut pathways make decision making easier. Our brain is a wondrous thing. Most of the calories we burn in a day go to fuel this enormous power plant. Therefore, the brain always tries to make decisions that use the least amount of effort and energy it can. These shortcuts are called heuristics.

If you are human you use heuristics, bias and stereotypes every day. If you don't know better you are going to start with a default position as you assess things. For example, if you are looking at a product you are not familiar with and you have two items to choose from, you are going to assume the expensive option is better. If you move to a new city and need to open a bank account, you are going to assume that the bank with 50 branches and the skyscraper downtown is better than the bank with one office. After all, if they got that big they must have done something right.

However, as I pointed out in my post earlier this year, Toil, Training and Talent, the success of those Asian students has little to do with innate "talent". It is largely a function of the expectations of the family and just plain old hard work, practice and study.  That is the secret.

Malcolm Gladwell in his book, Outliers attributes it to a "rice paddy" attitude. Simply stated, tending to a rice paddy is a 360 day, 3,000 hour per year activity. It is exacting, hard work where effort and dedication make a huge difference in results. The peasants that tended these rice paddies may be long gone but the culture carries on in their progeny. Gladwell makes the point that there is nothing that indicates that Asians are naturally any better at math, science or music but each requires hard work, persistence and doggedness. It is more attitude than aptitude.

Chua is out with a new book tomorrow (co-authored with her husband, fellow Yale University professor Jeb Rubenfeld), The Triple Package:Why Groups Rise and Fall in America,  which is sure to raise some more hackles and controversy.  In the Triple Package Chua and Rubenfeld explain their belief as to why some religions and races have been more successful in America than others. 

You have to admit that Chua is not afraid of taking on some tough issues for thought and discussion.

First, religion.  Chua states that those of the Jewish and Mormon faith have has outsized success in American compared to their Protestant, Catholic, Buddhist, Muslim, and atheist counterparts.

Second, race or culture.  Indians, Chinese, Iranians, Lebanese, Nigerians and Cubans have achieved a relatively higher level of success in America compared to their counterparts according to the authors.

Or course, some critics of Chua and Rubenfeld see an internal bias in their conclusions since Chua is from from a Chinese culture (her parents) and Rubenfeld is Jewish.  However, my own experiences over my lifetime confirm what they are saying about these groups.  They fit into my own stereotype that would be my default position I had to guess, successful or not?

So what do these groups have going for them? The authors cite a "cultural edge" that allows them to better take advantage of the opportunities that America offers.  They see a "Triple Package" of elements that provides these cultures that edge that has given them disproportionate success compared to their numbers in American society.

What are they?

A superiority complex. Insecurity. Impulse control.

What do each of these mean?

Each of these groups has a basic belief that they are exceptional.  That they are a cut above in contrast to the way most Americans are taught to believe that everyone is equal.  These groups don't believe that. They believe in themselves first and foremost.  

You might ask that if that is the way they feel how could insecurity come into play in "The Triple Package"?  This seems contradictory.  However, I see it as the difference in how they believe others view them.  In their heart they believe in themselves but in their head they know others don't, As a result, they believe they have something to prove, to themselves and others. This drives these groups to outsized success.

Finally, self-control.  This is the ability to delay self-gratification and exhibit self-discipline.  It is also the ability to not give into temptation and quit when the going gets tough.

Of course, none of these attributes is the domain of any group.  Each of these could be readily embraced by anyone in America. Those are the stereotypes coming into play again.

I have not read "Triple Package", only a couple of summaries and reviews.  I am not sure that I buy into everything that I think Chua and Rubenfeld are saying.  However, the basic elements of success that they are writing about here are not much different for anyone in my book.

It starts with your attitude. No one is going to achieve success without believing that they can do it and the patience to carry it through the steps necessary.

John Wooden, the former UCLA basketball coach, called it the Pyramid of Success.  You see many of  the same elements over and over when someone is writing about the secrets of success whether it is Chua, Gladwell or Syed (who I profiled in Toil,Training and Talent). 

Hard Work. Practice. Belief. Faith. Passion. Self -Control. Initiative. Skill. Poise. Confidence.  

There is no secret to success.  It is much like the Super Bowl last night.

It is preparing better. It is blocking and tackling better.  It is covering the field better.  It is taking better advantage of opportunities that you are given.

And in the United States of America, everyone is given opportunity unlike any other place in the history of mankind.  

My wish is that more people believed it and achieved it.  It is there for everyone.

“Whether you think you can, or you think you can't--you're right.”

                                                                                            -Henry Ford

You Don't Build Up The Poor By Pulling Down The Rich

"No person was ever honored for what he received. 

Honor has been the reward for what he gave."

                                                                                                     -Calvin Coolidge


I was reminded of this quote by Calvin Coolidge as President Obama has attempted to make something of income equality.  Of course, I don't hear anything said about effort inequality, work inequality or capability inequality.

The fact is that different people put different effort and work into different things.  People also have diverse capabilities and talents.  I can barely hammer a nail in straight.  My father-in-law can build anything.  He builds and fixes things at our house and I do his taxes.  We both end up in a better position than we would on our own.

Thomas Sowell wrote about "The Inequality Bogeyman" in his column recently.

If we all had the same capabilities and the same limitations, one individual's limitations would be the same as the limitations of the entire human species.

We are lucky that we are so different, so that the capabilities of many other people can cover our limitations.

Sowell points out that the obsession of the liberal intelligentsia is on the money people receive and almost no attention is paid as to what causes other people to give them that money.  In other words, let's focus more on what people give to society than what they receive. As Coolidge suggested, this is what really matters.

When the intelligentsia discuss such things as the historic fortunes of people like John D. Rockefeller, they usually pay little — if any — attention to what it was that caused so many millions of people to voluntarily turn their individually modest sums of money over to Rockefeller, adding up to his vast fortune.

What Rockefeller did first to earn their money was find ways to bring down the cost of producing and distributing kerosene to a fraction of what it had been before his innovations. This profoundly changed the lives of millions of working people.

Too many discussions of large fortunes attribute them to "greed" — as if wanting a lot of money is enough to cause other people to hand it over to you. It is a childish idea, when you stop and think about it — but who stops and thinks these days?

The transfer of money was a zero-sum process. What increased the wealth of society was Rockefeller's cheap kerosene that added hundreds of hours of light to people's lives annually. 

Edison, Ford, the Wright brothers , and innumerable others also created unprecedented expansions of the lives of ordinary people. The individual fortunes represented a fraction of the wealth created.

Is it any different today?  Are we supposed to begrudge Steve Jobs or Bill Gates and say that they were greedy when they founded Apple and Microsoft? What about Jeff Bezos and Amazon? 

The reality is that each of these men has given much, much more to all of us through their effort and innovation than they ever received. 

No one is forced to buy an iPhone or use PowerPoint or buy a book on Amazon.  The only thing you are forced to buy right now is an Obamacare healthcare policy :).  Therefore, Obama might have a point with regard to the CEO of Anthem or Aetna.

The money and wealth that is in the hands of the rich came from you and me and many others because we saw value in the trade for our own benefit.  

The money itself is not wealth. Otherwise the government could make us all rich just by printing more of it. From the standpoint of a society as a whole, money is just an artificial device to give us incentives to produce real things — goods and services.

Those goods and services are the real "wealth of nations," as Adam Smith titled his treatise on economics in the 18th century.

Even those of us who create goods and services in more mundane ways receive income that may be very important to us, but it is what we create for others, with our widely varying capabilities, that is the real wealth of nations.

This is an important principle to remember as President Obama takes to the airways to try to create division and dissension among us.

It also seems appropriate to close with another quote from Calvin Coolidge that is worth remembering.

"Don't expect to build up the weak by pulling down the strong."

That has been the undoing of many, many economies over the years.

I know it hard to for many young people to believe but we once had an even cooler President than Barack Obama!

The State of the Union is Simply and Utterly Depressing

I am not watching President Obama's State of the Union speech tonight.

According to Barack Obama all is well but it could be a whole lot better if 1) Congress would just leave all the decisions to him, 2) have the rich give all their money to him so he can redistribute it and 3) people just need to get with the program and just love Obamacare even if they lost the plan they liked and the doctor they loved.

I thought I would invest the time saved in not watching that fairy tale and present a more realistic (and factual) view of the State of the Union in January, 2014.

• The labor participation rate is the lowest it has been in 35 years at 62.8%.  

• There are currently 92 million Americans of working age who are not working.  To put this in perspective, there are just 145 million Americans working in the civilian labor force.

• Despite the fact that the population of working age Americans has increased by 15 million since 2007, 2 million fewer people are working today than 6 years ago.

• The unemployment rate for those age 16-24 (of those not in school) is over 16%. 

• The unemployment rate for black teenagers 16-19 (who are not in school) is 36%.

• The unemployment rate for black Americans (11.9%) is more than double the white unemployment rate (5.9%) and it is almost triple the Asian rate (4.1%). 

• Over 3 million students dropped out of high school last year. 

• An average of only 59% of students in the 50 largest U.S. cities graduate from high school.  

• There are more than 47 million people on food stamps.  There were 27 million on food stamps in 2008.

• The hospital and doctor bills of almost 50% of all babies born in the United States last year were paid for by Medicaid.

• 41% of all babies born in the United States are born out of wedlock.  73% of black children are born out of wedlock.

• Obamacare was enacted based on the statement that there were 47 million people living in the United States with no health insurance coverage.  The best estimate today is that less than 1/3 of the 2 million (as of 12/31/13) who have enrolled for health coverage on the public exchanges were previously uninsured.  In the meantime, almost 5 million people lost previous private coverage they had in the individual market.  

• The current U.S federal debt is $17.3 trillion.  This equals over $54,000 for every man, woman and child in the United States.  It is about $120,000 for every working man and woman in the country.

• Federal debt as a percent of GDP has grown from around 60% of GDP when President Obama took office to 100% of GDP today.

• A great deal of the debt that has been taken on has been through actions of the Federal Reserve where it has essentially "printed the money".  The Federal Reserve now over $2 trillion of federal debt.  To put this in perspective, all U.S. Savings Bonds only amount to less than $200 billion. Private pension plans hold less than $500 billion.  All mutual funds hold less than $1 trillion.

• The United States is more unpopular in the Muslim world today than under President Bush according to numerous polls.  For example, 54% of Pakistanis disapproved of U.S. leadership in 2008.  Today that number is 92%.

• Only 14% of Americans approve of the job Congress is doing.

• 53% of Americans say that the Obama administration is not competent running the government.

How can I not end my State of the Union blog without a laugh?

This is one of my favorites from Gary Larson's The Far Side.

Any resemblance to events occurring last night is purely coincidental.

Credit: Gary Larson, The Far Side

Mitt, Marcus and the Myth

Climate change chased me indoors this weekend.  I ended up watching two movies-Mitt (the documentary about Mitt Romney's Presidential runs) and Lone Survivor (the Peter Berg movie about Navy Marcus Luttrell and his fellow Navy Seals in combat in Afghanistan).

Watching "Mitt" reinforced my belief once again what a grave error the country made in the 2012 Presidential election.  It is just too bad this documentary did not play before the election.

Mitt Romney is the real deal.  I did not agree with everything he did in the campaign but there is no way you cannot respect the man that he is. Watching the movie you cannot come away without understanding that this is a man who has great self-awareness, intelligence and humility.

A couple things that I found particularly interesting in the film that tell you something about the man.

*Minutes before he is to leave for the first debate with President Obama he is picking up litter he spots on the hotel balcony that his grandchildren had left behind.  There is Romney in his suit and tie cleaning up the place to insure the litter does not blow away when is just about ready to walk out the door to debate "the most powerful man in the world."

*Romney fully understood that a caricature had been developed that he was a "flipping Mormon" and he also understood that there was very little he could do about it.  That is just the way the game is played.  It might not be fair but Romney understood that you just have to deal with what is, not what you want it to be.

*There was very little in the movie that suggested that Romney was "handled" by his handlers.  A lot of that could have been the result of the editing of the film. However, in all of the scenes right before he went on stage for one of the debates there was no last second coaching from anyone but his family.  That tells me something in itself.  Mitt Romney is his own man.

*I thought it was particularly interesting seeing the scene in his hotel room as he came to the conclusion that he had lost to Barack Obama.  He talked about what his concession speech should say.  Should he be completely gracious or should he talk about his concern about the path the country is on?

Romney mentioned in that moment that he believed (as I do) that the country was living on borrowed time.  He stated he thought that there was a very real chance that within the next five years the country would reach a tipping point and go over a cliff because of our tax, spend and borrowing policies.  He was not that blunt on the stage that night in his concession speech nor was he during the campaign (perhaps he should have been).  He was gracious as always but he also left no doubt about his concerns for the future of out country. This is what he said that night in November, 2012.

... I ran for office because I’m concerned about America. This election is over, but our principles endure. I believe that the principles upon which this nation was founded are the only sure guide to a resurgent economy and to renewed greatness.

"Mitt" is worth 90 minutes of your time.  It is on NetFlix.

The second film I saw was Lone Survivor.

It is a hard movie to watch. However, it is also inspiring to know that we have men like Marcus Luttrell, Michael Murphy, Matthew Axelson and Danny Dietz who are willing to commit themselves in such a way for their country and their brothers in arms.

Marcus and these men were all the real deal.

What is most troubling in watching Lone Survivor is seeing the effects of the Rules of Engagement that our soldiers have to observe in this war zone.  I doubt that any nation has ever put so many restrictions and rules on its soldiers in a war zone as we have on our own in Afghanistan.

I understand the delicate balance we are trying to achieve in winning the hearts and minds of the Afghan people while also fighting the Taliban and Al Qaeda.  However, if in doing so we have to continually put our service men and women in excess danger, perhaps we should not be there to begin with.

The Lone Survivor incident occurred under the Bush Administration so don't think this is just a post criticizing President Obama.  There is plenty of blame to go around when it comes to how we have constrained and restrained our combat troops from engaging the enemy to prosecute the war on terror while defending our men and women.

Just as troubling is the tragedy of August, 2011 when 30 American special forces were lost (including 22 Navy Seals of which 20 were from Navy Seal Team VI) when the Chinook helicopter they were being transported in to support other troops under attack, was shot out of the sky by a Taliban RPG.

Restrictive rules of engagement are also at the center of questions about why we lost some much blood and treasure at one time in that incident.  An after-action report by CENTCOM command on the loss of these men is very troubling as reported by Breitbart.com.

The CENTCOM report indicates that the Task Force Commander declined to strike the Taliban targets with the Apaches or the AC-130 gunship because they couldn’t confirm whether the group of Taliban they were following were carrying weapons. That shows the counterproductive nature of the rules of engagement, Karen Vaughn says:

When the families from the crash were meeting with the Army’s Investigation Team and Naval Officers, a father asked why they didn’t use a drone strike to take out the Taliban. A 3-star Admiral responded, “We are trying to win their hearts and minds.”

Of course, while we are worried about losing the hearts and minds of the Afghans we are literally losing the hearts and minds, and arms and limbs, of our troops. It certainly doesn't seem to be fair trade to me.

The Breitbart story also raises questions about the expectations on the special forces in Afghanistan and the operational tempo these men and women were expected to sustain in the war effort under the Obama Administration.

The CENTCOM report itself notes that in August 2009 the number of monthly objectives was 54. But in August 2011 – the month that the helicopter, "Extortion 17," was shot down – that number had grown to 334 objectives, more than a 600 percent increase in just two years.

The other problem was the increasing use of Afghan locals in these operations in another attempt to win their "hearts and minds."

Another outstanding issue is that Afghan military and police forces are involved in planning every special operations mission, creating a possible problem with operational security.

All of this is interesting in light of the fact that Barack Obama came to office supposedly as a "man of peace".  In fact, he was awarded the Nobel Peace Prize barely nine months after taking office. ( If you want a good laugh go back and read the press release announcing Obama's selection).

This leads me to ask a question.

Were more Americans killed in Afghanistan under the Presidential administration of George W. Bush or Barack Obama?

The answer to this question says a lot about a lot of things.

I doubt that fewer than one in a hundred people on the street could answer this question correctly.

The fact is that nearly three times as many American soldiers have been killed in Afghanistan under Barack Obama as under George W. Bush.

630 men and women lost their lives on the battlefield in Afghanistan under President Bush in eight years.  That is about 79 per year.

1,671 Americans have lost their lives in the last five years under President Obama.  That is an average of over 334 per year.

On a per year basis, more than four times as many have lost their lives in the last five years as they did in the previous eight years.  These numbers do not include another eight Americans who have already been killed in Afghanistan in 2014 so far in January.

In addition, an increasing number of these casualties is the result of Afghan forces who have turned on American soldiers and killed them in inside jobs.

Have you heard much about any of this on the evening news?

Where are the anti-war protestors today that kept calling President Bush a warmonger?

What happened to all the film footage of those caskets being airlifted to Dover (DE) Air Force Base during the Bush Administration?  It seems to have mysteriously disappeared now that President Obama is in office.

Obama may have run for office as a man of peace but his record in office is far removed from his rhetoric.  What is worse is that the gains made during the Bush administration brought relative peace and stability in Iraq.  The American deaths we suffered actually produced something tangible.  We now see those gains have been reversed in Iraq under Obama and in Afghanistan it is difficult to see that we are getting anything for our casualties on the battlefield.

Thankfully we still have men like Mitt and Marcus.  Unfortunately, Barack Obama is more myth than man.  I was reminded of that when viewing "Mitt" when I once again saw the famous exchange between President Obama, Romney and debate moderator Candy Crowley on the subject of Benghazi.  You may recall this was barely a month after the events of that fateful night.

It is now almost a year and a half after those events.  We know for certain that the White House knew Benghazi was a terrorist act almost immediately and yet (obviously for political purposes) they concocted a story that the killing of Ambassador Stevens and the others was a spontaneous act due to a video.  To this day, we still do not know what or where President Obama as the events unfolded that was more important than an attack on a U.S diplomatic mission.  We also know that not one person has been brought to justice for the killings.

Here is what President Obama said in the debate that night about Benghazi along with my comments on what we know today.

Decide for yourself.  Man or myth?

OBAMA: Secretary Clinton has done an extraordinary job. But she works for me. I'm the president and I'm always responsible (Secretary Gates has stated that Obama was no where to be found in the White House that night even though Obama had been informed of the attack), and that's why nobody's more interested in finding out exactly what happened than I do (We still don't know much more today about the true facts of that night than at that time.)

The day after the attack, governor, I stood in the Rose Garden and I told the American people in the world that we are going to find out exactly what happened. That this was an act of terror  (He sent his team out in force over the next ten days to blame a video rather than an act of terror) I also said that we're going to hunt down those who committed this crime ( A year and a half later no one has been brought to justice for the killings).

And then a few days later, I was there greeting the caskets coming into Andrews Air Force Base and grieving with the families (He told the families that it was all the fault of a video rather than an act of terror).

And the suggestion that anybody in my team, whether the Secretary of State, our U.N. Ambassador, anybody on my team would play politics or mislead when we've lost four of our own, governor, is offensive. That's not what we do. That's not what I do as president, that's not what I do as Commander in Chief. (Patently false based on the facts)

Does Hot and Humid Beat Cold and Hungry?

It seems that a lot of things that I was writing about a year or so ago have gotten the attention of other writers recently.

Women in combat, the labor participation rate and the secrets of the rich are all topics that I covered  a while back that have been picked up by other writers in recent weeks.

I had another deja vu moment last week when I saw this column by Michael Barone in the Washington Examiner asking the question, "Do we face a disastrous century due to global cooling?".

That reminded me of a blog post I wrote almost three years ago, "I'll Take Hot Rather Than Cold Any Day".

Of course, even without seeing Barone's column I probably would have been reminded of my own words about "climate change" as I woke up yesterday to -5F on the thermometer outside on my deck.  If that was not enough, I also heard on the radio yesterday that my hometown of Cincinnati is a mere 6 inches of snow away from breaking the historical annual snowfall record for the city.

It sure doesn't feel like I should be worried about global warming.

Here is what I wrote three years ago on the subject of climate change.

I am not a climatologist or meteorologist. However, I consider myself a practical thinker who makes decision by looking at facts. I have also learned that it is always important to look beyond the "facts".  How are the facts packaged and what is the motivation of the messenger.

Over the years, I have listened to the claims about human created global warming.  Without even spending a lot of time on the science, these claims never seemed to make sense to me.  The planet is known to have warmed and cooled over the years.  Even if the data shows it is warming, how do we know it is caused by man when you look at past history?  We know there was an ice age.  We also know the ice melted.  How did it ice up? How did the ice melt?

I can't help but be a little skeptical when I also see the changing explanations about the climate.  In fact, it does not even seem to be global warming we are worried about any more, it is climate change.  We also heard a few years ago that we would see far less snow because of global warming.  When we got more snow, we were then told this was caused by the warming. 

It is all very confusing for something that is supposed to be so settled in science. I also remember in the late 1970's and 1980's all of the talk from scientists was concern that the planet was cooling.  What happened?  That was only a few short years ago- a speck of time in the history of the earth.

When you consider past history you also quickly realize that God dwarfs anything that man can do.  For example, the year 1816 was considered "The Year Without a Summer" after Mount Tambora erupted and the ash seemed to veil the sky across large swaths of earth.  Crops failed around the world and famine followed.  Riots and political unrest were not far behind.  People tend to get really angry when they are hungry.  How much did the average global temperature fall that year? - only about 1 degree! 

That story has always made me much more concerned about global cooling than warming.  A rise in temperatures is actually beneficial for food production.  It can extend the growing season further north. Cooler temperatures do the exact opposite.  Given a choice there is little doubt where I come down.


That is a nice lead-in to Barone's column where he posits the question of whether we are facing a period of global cooling? What is of interest are recent reports about sharp reductions in sunspot activity.

Is this something to be concerned with?

Historian Geoffrey Parker thinks so. In his book Global Crisis: War, Climate Change & Catstrophe in the Seventeenth Century, Parker recounts the political and demographic disasters that plagued the world in that global cooling century. 

 
What caused all of this? Climate change. However, it was not global warming, it was global cooling that caused longer and harsher winters and cooler and wetter summers. This resulted in disrupted growing seasons that caused famine, malnutrition, death, disease and fewer births.

What seemed to cause the cooler climate according to scientists?  Lack of sunspot activity.

“The development of telescopes as astronomical instruments after 1609 enabled observers to track the number of sunspots with unprecedented accuracy. They noted a ‘maximum’ between 1612 and 1614, followed by a ‘minimum’ with virtually no spots in 1617 and 1618, and markedly weaker maxima in 1625-26 and 1637-9. And then, although astronomers around the world made observations on over 8,000 days between 1645 and 1715, they saw virtually no sunspots: The grand total of sunspots observed in those 70 years scarcely reached 100, fewer than currently [the book was published in 2013] appear in a single year. This striking evidence of absence suggests a reduction in solar energy received on earth.”

The sun's recent sunspot activity is at its lowest level in 100 years. In fact, some scientists see eerie similarities in the sun's activity to the period right around 1645 when the so-called mini ice age hit.

Again, I am not a climatologist or meterologist.  However, I do know that people like to eat.  Having enough to eat is pretty important for survival.  The simple fact is that a warmer world climate would tend to increase the food supply with longer growing seasons.  A cooler climate will generally shrink the growing seasons and the food supply.

Of course, there are other factors connected to climate change such as water levels, water supplies and the like.  However, on balance, history tells us that colder is generally worse than warmer for life on earth.  

Therefore, still count me as saying that I'll take hot rather than cold any day.

Especially as I gaze at my thermometer outside reading 4F at the moment.

Try me again in August to see if I have changed my mind.  You never know.  I do respond to facts.

Time and Money

Do you want to be rich?

I am going to let you in on a secret on how the richest Americans became wealthy.

You might think that inheritance was the secret formula for most people.

However, the vast majority of rich people became wealthy simply by their work effort.

You have an even better chance of becoming wealthy if you marry someone else that is working full-time and can stay married and avoid divorce.  That way you leverage your resources while also limiting your individual living expenses by sharing household expenses.  However, that is still not the ultimate secret.

I wrote about some of these "secrets" last March in my post, "Income Inequality and Individual Responsibility" where I pointed out that if you simply graduate from high school, work full time and marry before having children your chances of being poor are infinitesimal.

Kevin D. Williamson of National Review Online looks at the issue of rich versus poor and comes to a similar conclusion. Despite the popular narrative, the wealthiest Americans are not living on trust funds that were handed to them along with a silver spoon when they were born.   They got rich by simply working hard for it.  In fact, wealthy households contain on average more than four times as many full-time workers as do poor households.  The fact is that there are not many "idle rich" folks in this country.  There are, however, a lot of "idle poor".

There is a reason that money earned from work accounts for a relatively large share of the holdings of rich Americans: They work more — a lot more. While Census Bureau data document a very large gap in the prevalence of college degrees among the top 20 percent vs. the bottom 20 percent, there is an even larger and more significant gap — 60 percentage points — between full-time employment for householders in the top income group vs. the bottom income group. There is, to be sure, such a thing as the working poor, but the most salient characteristic of poor households is the lack of full-time workers in them. For the bottom income group, there is an average of 0.42 earners per household, with 68.2 percent of householders not working at all, as opposed to 1.97 earners per household and only 13.3 percent not working for the highest income group. 

The highest-income families also got there by being married.

Family matters. Not surprisingly, 78.4 percent of those highest-income families were married couples, as opposed to 17 percent for the lowest-income group. What this all means in brief is that the highest-income families are composed almost exclusively of two-earner households, the overwhelming majority of them married couples. Those who are inclined to see public policy mainly through green eyeshades may sniff at the social conservatives and their quaint worries about marriage, but there is a very strong connection between how we conduct our family lives and our economic outcomes — the very word “economy” derives from the Greek term for household administration, οἰκονομία.

Williamson also found that in rich households inherited wealth constituted a smaller share of their total assets than in middle income and poor households.

Wealth transfers — inheritances and gifts combined — constitute a small part of the holdings of the rich, whether you define “rich” in terms of income or net worth. For the top income quintile, gifts and inheritances amount to 13 percent of household wealth, according to research published by the Bureau of Labor Statistics. For the top wealth quintile, they amount to 16 percent. For the hated “1 percent,” inherited wealth accounts for about 15 percent of holdings. 

And the percentage of wealth passed on from generation to generation among the rich has actually been decreasing for a number of decades.

Contrary to the story the Left likes to tell about economic inequality in the United States, those numbers have gone down over recent decades — by almost half for the wealthiest Americans. Meanwhile, inherited money makes up 43 percent of the wealth of the lowest income group and 31 percent for the second-lowest. In case our would-be class warriors are having trouble running the numbers here, that means that inherited money on net reduces wealth inequality in the United States (measured as a ratio) rather than exacerbating it; eliminating inherited wealth would have approximately twice as much of a negative effect on modest households as on wealthy ones. (emphasis added).

Along with Williamson's article I also came across this interesting infographic on the "Habits of the World's Wealthiest People" that was put together by Nowsourcing.  This work was based on Thomas C. Corley's study of the daily habits of 233 wealthy and 128 poor people.

If you don't believe it takes work to get to the top of the economic ladder just consider the differences in the traits between those that were wealthy and those that were poor.  Almost every one of these traits requires some work or effort on the part of the individual.  It does not necessarily occur naturally in the human condition.


                                                                    Wealthy                    Poor


Maintain a to-do-list                                         81%                        9%
Wake up 3+ hours before work                        44%                        3%
Listen to audio books during commute            63%                        5%
Network 5+ hours or more each month           79%                       16%
Read 30+ minutes or more each day                88%                        2%
Love to read                                                        86%                        26%
Watch 1 hour of less of TV everyday                 63%                         23%
Believe good habits create opportunity             84%                         4%

The reality is that the real secret of the rich is that they make better use of their time if you look at the data above.

A loyal BeeLine reader recently sent me a link to a short book written in 1910 by Arnold Bennett entitled, "How to Live on Twenty-Four Hours a Day" that really drove this point home to me.

It takes about 30 minutes to read the piece but it is a good reminder that time is the most valuable of all commodities.  And nothing has changed with regard to time in the last 100 years.  A lot has changed in the world since then but we still have the same amount of time available to us each day.

Philosophers have explained space. They have not explained time. It is the inexplicable raw material of everything. With it, all is possible; without it, nothing. The supply of time is truly a daily miracle, an affair genuinely astonishing when one examines it. You wake up in the morning, and lo! your purse is magically filled with twenty-four hours of the unmanufactured tissue of the universe of your life! It is yours. It is the most precious of possessions. A highly singular commodity, showered upon you in a manner as singular as the commodity itself!

For remark! No one can take it from you. It is unstealable. And no one receives either more or less than you receive.

Talk about an ideal democracy! In the realm of time there is no aristocracy of wealth, and no aristocracy of intellect. Genius is never rewarded by even an extra hour a day. And there is no punishment. Waste your infinitely precious commodity as much as you will, and the supply will never be withheld from you. No mysterious power will say:—”This man is a fool, if not a knave. He does not deserve time; he shall be cut off at the meter.” It is more certain than consols, and payment of income is not affected by Sundays. Moreover, you cannot draw on the future. Impossible to get into debt! You can only waste the passing moment. You cannot waste to-morrow; it is kept for you. You cannot waste the next hour; it is kept for you.

We never shall have any more time. We have, and we have always had, all the time there is. 

How did the rich get what they have?  The secret really is how they used their time.

They continued going to school instead of standing on a street corner.

They planned a to-do list instead of doing nothing.

They got out of bed and starting doing something rather hitting the snooze button.

They believed that success came from good habits rather than waiting for good luck.

They waited to get married before they had children with someone.

They worked and saved rather than borrowed and spent.

They made conscious choices on how they spent their time and lived their life.

No one gets more or less time than anyone else on this earth.  To be successful you have to use that time wisely.  That is the ultimate secret of success.

It is a lesson that everyone should consider more fully.  And with time, it is never too late for anyone.

The chief beauty about the constant supply of time is that you cannot waste it in advance. The next year, the next day, the next hour are lying ready for you, as perfect, as unspoilt, as if you had never wasted or misapplied a single moment in all your career. Which fact is very gratifying and reassuring. You can turn over a new leaf every hour if you choose. Therefore no object is served in waiting till next week, or even until to-morrow. 

Myths and Math

I have written a number of times about the labor participation rate over the last three years.  That is the % of Americans working compared to the total working age population (ages 16-64).  The unemployment rate just considers those who are currently seeking work .  

As I have written previously, I am more focused on the labor participation rate than the unemployment rate as a gauge on our economy. The unemployment rate calculation has become too subjective. It only counts those as unemployed if they are actually looking for work. It does not count those who become discouraged and have simply quit looking. It does not count the young slacker who has dropped out of school and is living in his parent's basement playing video games. It does not count the older worker who got laid off at age 59 and "retires" because of no decent job prospects.

In the end, every American is a mouth to feed, clothe and shelter. If there are fewer people pulling the wagon and more people in the wagon, we have a fundamental problem. The money gets spread around in thinner and thinner increments. That is just basic economics.

The labor participation rate in December slumped to a 35-year low of 62.8% last month. The last time we had a lower percentage of working age Americans employed was in 1978. Of course, in 1978 there were many fewer women working outside the home.  

Credit: Zero Hedge

To put the overall labor participation rate in perspective, there are now 92 million Americans of working age who are not working!  In December alone, almost 1 million Americans disappeared from the labor force.  

Credit: ZeroHedge

A number of commentators seem to suggest that the precipitous drop in the labor participation rate is no big deal.  They are quick to offer a number of explanations rather than confront the ugly facts in the charts above.  For example, they cite the aging population, more students in school and fewer men in the workforce compared to years past.

Diane Furchtgott-Roth of the Manhattan Institute debunks all of these myths and more in a column in The Washington Examiner.

Myth 1: The population is aging, so people are retiring earlier

You often hear that labor force participation is declining because older people are retiring. No harm in that, right? But since 2000, the labor force participation rates of workers 55 and older have been rising steadily, and the labor force participation rates of workers between 16 and 54 have been declining. The labor force participation rate of Americans 55 and older has increased by 5 percentage points from 2003 to 2013, and by 2 percentage points since the beginning of the recession in 2007. These men and women have seen increases in labor force participation rates and employment levels.

In fact, unemployment rates for the 55+ age group are lower than any other age group and they have also had the smallest percentage point unemployment rate increase of any age group since 2007.

Myth 2: Kids are in school, so it doesn’t matter

In 2013, 55 percent of 16- to 24-year-olds were participating in the labor force, compared to 62 percent in 2003, a decline of 7 percentage points.

Although this is a substantial decline, a common myth is that since these young people are in school, the change does not matter — because they are getting an education that will get them better jobs in the future. But the percentage of 16- to 24-year olds enrolled in high school, college, or university has risen by only 0.3 percent over the past decade, from 56 percent to 56.3 percent, an insignificant amount. These people are not in school, nor are they working.

Myth 3: It’s just men, part of a long-term trend

Male labor force participation has been declining for decades as they retire earlier and move from heavy manufacturing, with its hours of overtime, to higher-paying 9-to-5 service-sector jobs. But the shrinkage of the labor force over the past 10 years, especially since the recession, has hit both men and women — except for those older than 55.

Since 2007, the labor force participation rate of men 25-54 has gone down by more than two percentage points. For women it is one percentage point. For 16- to 24-year-olds, the rate has declined by five percentage points for men and four percentage points for women.

Here is the bottom line math on all of this since the beginning of the recession in 2007.


6 million more workers 55+ are working today than in 2007. Very few baby boomers are retiring if they have a job.


6 million fewer 25-54 year olds are working today than in 2007. Therefore, canceling out the job growth of the age 55+ group.


2 million fewer 16-24 year olds are working than in 2007.


This all adds up to 2 million fewer working age people working today than in 2007 despite the fact that the population of those of working age has increased by approximately 15 million.

Credit: Tim Wallace via Mike Shedlock

The chart above is from last October but it provides a good picture of what has happened. The red bars are population changes and the blue bars are job changes. This pretty clearly shows that it didn't really matter what age you were over the last six years. There have just not been enough jobs to go around.

The unemployment rate may be down but the number of employed today is much worse than it was over six years ago.  That is the only math that counts.

Hospital Pains and Payers

I came across a report today on the costs of inpatient hospital costs in the United States from the Agency for Healthcare Research and Quality.

This Statistical Brief entitled, "National Inpatient Hospital Costs: The Most Expensive Conditions by Payer, 2011" provides the distribution of inpatient costs by primary payer as well as illustrating which conditions accounted for the largest percentage of each payer's hospital costs.

Who are the payers?  The primary payers are Medicare, Medicaid, private insurance and the uninsured.

What about the costs to provide the care?  The hospital costs represent the hospital's cost to provide the service-not what the hospital is paid for the service.  It also does not include physician fees associated with the hospitalization.

Here are some of the interesting factoids I found in the report.

• In 2011, inpatient hospital costs totaled $387 billion for nearly 39 million hospital stays.
• Nearly 2/3 of inpatient hospital costs were for individuals on Medicare ($183 billion) and Medicaid ($60 billion). Private insurance only accounted for 29 percent of hospital costs and only 4 percent for those who were uninsured.

• The most expensive condition treated in U.S hospitals is septicemia that consumes over $20 billion in hospital costs and in which over 1 million hospitalizations result.  Osteoarthritis is the second most expensive condition followed by complication of devices, implants and grafts.  It is interesting that conditions #1 and #3 often result from previous interventions in the hospital to begin with.
• Costs relating to liveborn babies is fourth on the list of conditions.  However, this involves almost 4 million discharges compared to 1 million cases of septicemia.
• The high number of cases and costs for septicemia, osteoarthritis and complication of devices, implants, etc.is the result of a huge number of the cases being Medicare-related. These conditions represent three of the top four high cost conditions for Medicare. Congestive heart failure is the fourth.  
• Liveborn births is ranked #1 in Medicaid costs accounting for 10% of total hospital costs on 1.7 million hospital discharges.  This is almost 50% of total costs for births nationally!!
• Mood disorders is the fourth-ranked condition in terms of costs for Medicaid.
• Liveborn costs are also the highest total hospitalization cost for private insurance but it represents only 5% of total private insurance costs.
• Osteoarthritis and back disorders ranks #2 and #3 in expensive conditions for private insurance. Interestingly, neither of these conditions show up in the Top 20 for Medicaid.  
• The #1 high cost condition billed to the uninsured are heart attacks and strokes at #3.  This suggests that due to lack of insurance coverage the uninsured neglected preventive care to a greater extent than others with coverage.  At the same time, it is interesting that liveborn costs were #20 on the list of the uninsured.  Could it be that the lack of health insurance is very effective birth control?

What I found interesting in looking at the report was that total inpatient costs billed to uninsured patients totaled only $17 billion for 2011 representing only 4% of total inpatient costs.  And to think that the country went through Obamacare principally because of these "high" hospitals costs that were being transferred to the rest of us?  It truly boggles the mind when you look at the data.

In addition, there are many liberals that believe that the country needs "Medicare for All".  Again, looking at the data, almost 2/3 of inpatient healthcare costs are for individuals on Medicare and Medicaid.  Only 29% of costs are incurred for private insurance.  It almost seems that we are not too far from "Medicare for All" anyway.