The Social Impact of the Great Recession

The recession will end, even this one. But it won't be back to the usual, it won't be back to the "happy days" of inflated real estate and easy profits on Wall Street. We're in the middle of a huge social shift, not unlike what happened in the 1960's. My guide to understand what's happening is Albert O. Hirschman.

When the IT- and telecom bubbles burst, there was a blip when people sat down and asked themselves what the meaning was with it all, but Osama bin Laden shook us out of all that, and George W. Bush took the opportunity to launch a couple of wars while lowering taxes on the rich, which got the economy started again, even though it was heading down the wrong way leading to the Great Recession of 2008.

But there was an underlying shift going on, a shift of the type Albert O. Hirschman discussed in his brilliant little book Shifting Involvements - Private Interest and Public Action (Princeton University Press, 1982, 2002)

The "me first" era had run its course and no Hummer or three-car garage could ease our existential pain, or address the large public issues that loomed ever larger at the horizon (war, poverty, health care for all, global warming, infrastructure...). The failure of private solutions lowered the alternative cost of public action, which we saw in the tremendous outburst of support and volunteering for the Obama campaign.

The shift from private to public emphasis helped prepare us for the challenges we are now facing, and it will be strengthened by the impact of the recession. This was illustrated well in Peter S. Goodman's story in the New York Times on August 28: Reluctance to Spend May Be Legacy of Recession

The Great Depression imbued American life with an enduring spirit of thrift. The current recession has perhaps proven wrenching enough to alter consumer tastes, putting value in vogue. 

“It’s simply less fun pulling up to the stoplight in a Hummer than it used to be,” said Robert Barbera, chief economist at the research and trading firm ITG. “It’s a change in norms.”
...
“Not only have people lost money, but they don’t expect as much appreciation in the money they have, and that should affect consumption,” said Andrew Tilton, an economist at Goldman Sachs. “This is a cultural shift going on. People will save more.”

Not only will they save more, they will take part in public life much more as their private options are limited when dealing with huge collective problems.

That's bad news for conservatives who live off fear and government-bashing.

Hans Sandberg

Gapminder Minds the Missing Natives

Gapminder reacted fast after I pointed out a mistake in the U.S. Population map on their site. Hans Rosling, a Swedish professor of international health who became worldfamous overhight after a TED speech in 2006, wrote to thank me for my alert.

"We agree that it would have been best to show the native population, but we have not found any such time series. Gapminder only have the resources to display existing dataset and make them freely available."

In another comment from Gapminder, Zhang writes that "we have changed the name of the indicator (US citizens), and also added some explanations in the tooltip bar, which could be seen when you hover your mouse on the indicator."

Hans Sandberg

What's Wrong With This Gapminder Graph?

I'm a big fan of Hans Rosling and his Gapminder, but even his wonderful graphics program falls under the old GIGO rule, i.e. Garbage-In-Garbage-Out.

Take a look at this graph of the U.S. population (and click on the link below to work with it!) 



The U.S. population

Now, follow this link so that you can compare it with the first graph.

The immigrant population in the U.S.

Pull the slider on the first graph all away to the left, and watch what happens. The entire population disappears. Isn't that strange? What happened to the native population, i.e. the American Indians? You could say that well, they were not part of the U.S. population, but then again, why do we count the non-citizen immigrants in the second graph?

There is only so much an automatic tool can do. You still need human judgement to get it right. I'd like to see an updated map where we can see the shrinking native population as the first few rounds of (mostly European) immigrants arrive and spread. It would be a more disturbing picture, which is often the case with the truth.

Hans Sandberg

Why Is Healthcare Suddenly Such A Hot-Button Issue?

Many of these mad people (not talking about Sarah Palin this time) are genuinly upset, but they are not upset about their kids dying in foreign lands or their jobs being lost to outsourcing. They are upset about the fact that the Obama government is trying to expand healthcare coverage to poor people like them. It's strange! The only explanation I can think of is that they feel like they are about to fall into an abyss, making them grasp for anything. And guess what, the mad radiorators are stoking the fire, playing on their fears. If they had more "socialism", i.e. more social security, unemployment insurance and healthcare coverage, they wouldn't feel so desperate. Which is why republicans never liked the benefits big government can provide. They don't want people to feel safe, because when you feel safe your relax, the adrenaline wears off and you start to talk to people instead of yelling at them. Fear is a wonderful preserver of Status Quo.

Hans Sandberg

Can Good Design Save Moribund Newspapers?

Here is an inspiring and fascinating TED talk about newspaper design. The basic idea is basically that you might be able to save the newspaper by making it beautiful, a piece of art. I would certainly be more willing to pay for a paper that looks really good, but the question is if I would do it over and over, if the design pull doesn't go away after a while.

Hans Sandberg 

Paul Krugman Nailed It: Big Government Did It! Now what?

Paul Krugman nailed it this morning in his New York Times column:

So it seems that we aren’t going to have a second Great Depression after all. What saved us? The answer, basically, is Big Government.

It's not over yet, of course, and the right-wingers will paint the future (without Bush-Cheney) as black as they can imagine it... hyperinflation, a new Weimar era.. but it's self-serving bullshit.

At the end of his column Krugman writes:

There’s still, I fear, a substantial chance that unemployment will remain high for a very long time.

One question nobody raises in the U.S. is where all the new jobs are going to come from now that we have outsourced manufacturing to China and white collar jobs to India. Maybe the jobs won't return, because of automation, outsourcing and information technology. Why not then cut the workday/workweek, and share the work that still needs to be done? A crazy idea? Of course, about as crazy as the idea that the workday should be 8 hours and not 11 or 14 or whatever. Was 8 hours a day/40 hours a week written in stone on the tablets Moses brought down from the mountain?

If you have a job that needs to be done, and you need to feed the whole clan (humanity), which way do you prefer?
1) Let 80-90 percent of the people do the job, and let the rest rot (after all, aren't there workhouses, Uncle Scrooge would have said?)
2) Reset the standards so that more people can share the work and the pay. It doesn't have to be completely egalitatarian and non-capitalist, but could be done by simply resetting the standard. 30 hours a week, and for those companies, countries that don't comply, there are always fines, taxes and tariffs, like we would do for those employing child labor.

Hans Sandberg