Election Season: Meet the Candidates

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Hello once again, my intrepid readers! Yes, I’ve been away from this blog for a while, but elections are in full swing and it’s time to parse the truth from the lies once again. In order to do this in a somewhat constructive manner I will be going over the Candidates for Office of the entire United States and introducing you to three aspects: their platform, their record, and their honesty. This will be rated as follows:

PLATFORM:

Platform will focus on what the candidate says they are running on and what their speeches are about. I won’t take up all of it, just the items that seem interesting and may want scrutiny (positive or negative). In addition, what a candidate talks about or supports but doesn’t mention in speeches will be added to their platform (especially if it is a contradiction).

RECORD:

Record will focus on how their record differs from their platform, or how their record has been on the salient issues of today. If the candidate has no record, then this will focus on their past and education and their perceived ability to match the challenges facing them.

HONESTY:

The big one, honesty will focus on the number and scale of lies and confirmations that these candidates have in their record and in the current campaign. Ads, lack of refutations, etc will be counted towards their honesty.

Once all these items are noted, I will make a recommendation based on the criteria listed. This should by no means influence your vote, but I hope it will make clear to you why someone who does this sort of analysis would vote the way they do, instead of the reactionary and emotional politicking of the last 14 years. My primary goal here is not to persuade, but rather to educate on why elections can be so frustrating for those who take the time to know the race and the issues. I hope you learn something from this and take away some useful information.

 

Counting Beans (Part Two)

Fact Fans! It’s time for another round of WTF? (With math!)

The income inequality debate has been going on for quite some time in the United States. Ever since the 1970’s, income growth has split into three tiers, and the pattern continues today. This leads to a multitude of different arguments, some on income inequality, some on income growth inequality, and some on inflation and wage inequality. These arguments are often found thrown together in mix, with everyone referring to them as the same argument. But as any reader here will know, things are not always what they seem at first glance.

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Let’s look at the first argument:

The claim here is that the top earners make far more money than the middle or lower earners, and that this is a recent problem (as in, this is not the way it has always been). These two arguments have to be looked at separately  as even if the first is true, it is no simple task to show that it is improper aside from relativistic thoughts about fairness. Since we deal with facts here, we will not be making the moral arguments.

Factually speaking, in 1970 the median incomes were divided as such:
(Source: US Census Bureau, adjusted for inflation)

Data 1970
20th percentile $15,126
Median (50th) $35,832
80th percentile $60,148
95th percentile $95,090

In 2009 they were a little different:

Percentile 2009
20th $20,453
50th $49,777
80th $100,000
95th                                                               $180,000

As you can see, income differences have existed for a while, in 1970 having less of a gap than in 2009.

Difference           1970            1970        2009          2009
95th-20th $79,964 15.91% $159,547 11.36%
95th-50th $59,258 37.68% $130,223 27.65%
95th-80th $34,942 63.25% $80,000 55.56%

This means the income gap is growing, as claimed. There has always been an income gap, also as counter-claimed. This argument only establishes that there is a gap and it is growing. The next part may help to explain why this is so.

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The above graph shows the increase in income over the years. In the later 70’s, the top earners continued to grow in their income while the lower percentiles almost flatlined in growth. This continued until the 2000’s, where that growth still rose more but only slightly. Income also did not go down as much for the top earners as for the rest during the recession.

This brings us to the other two points: has there been a change in income growth (and how much), and how does it affect the ability to purchase relative to inflation and private economic growth?

Looking back at the data, we can see the growth for each group:

Difference 1970-2009                         Amount                               Percent
20th percentile $5,327 35.22%
Median (50th) $13,945 38.92%
80th percentile $39,852 66.26%
95th percentile $84,910 89.29%

Keep in mind that this is over a span of 39 years, or about 0.9% a year for the poor, 1% for the mid, 1.7% for well off, and 2.3% for the rich. There is most certainly a difference here, and it is quite large (more than double growth in wages for rich versus poor).

Note also that this is not about how much one earns, but how much what they earn grows per year. This in and of itself is obviously unequal, but it gets worse still. See, 2.3% of $10,000 is much less than 2.3% of $100,000. Not only is the growth more by percent, but as the discrepancy grows so does the wage gap.

This is readily apparent from the chart above. While the median income only gained $13,000 in real income, the upper income earners increased their incomes 3 times that and the top earners increased their incomes 6.5 times that. As this trend continues, that difference will only increase. If this trend continues for another 39 years, the following will be the resulting income difference:

2009-2048 Amount 2009 Percent growth Amount 2048 Difference $
20th percentile $20,453 35.22% $27,656.55 $7,203.55
Median (50th) $49,777 38.92% $69,150.21 $19,373.21
80th percentile $100,000 66.26% $166,260.00 $66,260.00
95th percentile $180,000 89.29% $340,722.00 $160,722.00

In short, if this trend continues, in 2048 the poor will have increased their income by $7,000, and the median will have increased 2.5 times that, the rich would have increased almost 10 times that, and the upper rich would have increased 23 times that. This is the numerical reality that many conservative authors will not acknowledge when they deny there is a non-justifiable income gap.

Lastly, we need to look at inflation rates to see if these increases in salary keep up with it. The optimal inflation rate is 2%; above it, and we start to see people not able to afford basic items, below it, and we start to see a devaluation of the currency and its buying power (unemployment also goes up since businesses can’t afford to pay workers). Mostly, the USA stays around 1.5-2%, and it’s worked out nicely for the economy so far.

In the following chart we will look at wages adjusted for inflation from 1970-2009:

1970 2009 Difference Difference per year
Median Wages
(Inflation Adjusted)
$45,146 $52,195 $7,049 $180.74

Not bad right? Who wouldn’t want to have an extra $180 in their pocket a year?

Oh, except let’s look at standard commodities in 1970 versus 2009. Remember, these values are adjusted for inflation, so any increase of price is on top of inflation:

1970 2009 Difference Difference Per Year
Price per Gallon
(Inflation Adjusted)
$1.514 $3.608 $2.094 $0.054

Gas expenses per year:

Average gallons a year Price 1970 Price 2009 Difference Difference per year
789 $1,194.55 $2,846.71 $1,652.17 $42.36

Rent per year:

Average rent (Adjusted) 1970 2009 Difference Difference per year
Per year $4,980.00 $8,160.00 $3,180.00 $81.54

Uh oh, that cut quite a bit of our winnings away, about $123, leaving us with a much smaller $57 a year boost. Well still, that’s fine, a good rai-

Average Utilities (Adjusted) 1970 2009 Difference Difference per year
Per year $595.00 $3,171.96 $2,576.96 $66.08

Crap. Now we are losing money. Thankfully, the food prices have dropped some:

Average Food (Adjusted) 1970 2009 Difference Difference per year
Per year $7,696.00 $6,604.00 -$1,092 -$28.00

Which means we are in the green! By around $19! A year! Ok, not pretty, but sti-

Average Healthcare (Adjusted) 1970 2009 Difference Difference per year
Per year $1,074.56 $4,824.00 $3,749.44 $96.14

Shit.

I think I rest my case.

Disputo

Hello and welcome to the first “Disputo,” or discussion. I will paraphrase a discussion about economics and wage growths from the CNN.com forums (a great place to start discussions and have debates!). Sometimes these discussions are simply places for egos to blow around and racist trolls to inhabit, and occasionally a good discussion comes out of it. This conversation was one of the latter, and provides the basis for the post following this one.

(EDIT: No, I do not get paid by CNN to advertise or debate. I wish I did, but sadly, no)

As sources “Tracto” is using the Social Security Administration Median Wage statistics and I am using, primarily, the BLS income data and the US Census Bureau’s median income data. The reason this is important will become apparent in the discussion, but if you want to review them you can find them here (http://www.ssa.gov/oact/cola/central.html) and here (http://www.davemanuel.com/median-household-income.php) in their easiest form, though I suggest you look at the BLS and USCensus sites themselves to confirm the data, as I did.

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ImageTracto: 

The average wage has gone up more than inflation, NOT down. Since the glory days of Clinton, in 1995, wages have gone up very dramatically, despite the false and evidence free claims of many:

1995:
Median net compensation: 16,650.16
Average net compensation: 23,700.11

2011:
Median net compensation: 26,965.43
Average net compensation: 41,211.36

The claim that wages have stagnated or gone down is factually false. Inflation has cut into some of that, but not enough to stagnate the wages. If the wages had risen in line with inflation (as calculated by westegg, choose your preference), the numbers in 2011 would have been 34,543.37, and 24,267.93.

ImageIter Veritas:

How about instead we use the US census data and the Bureau of Labor Statistics? There we see that the median wage in 1995 was 33,207 (inflation adj = 49,945) and 2012 = 49,103 (Inflation adjusted = 50,054).

Wages have risen in line with inflation, but some prices have increased more than inflation (especially transport prices) which makes it difficult to keep up. So you are correct and incorrect.

ImageTracto:

Claiming “prices have increased more than inflation” is absolute nonsense. What do you think inflation is?

ImageIter Veritas:

Ok clarification: The price of certain goods is far higher than the national average inflation. Those goods are typically the things the everyday person needs, and while the average looks ok, those items are no longer manageable for the average taxpayer. So I can understand why they are worried, even though wages (again, on AVERAGE) have remained about the same.

This is probably a wage gap argument, if you want to skip right to that.

ImageTracto:

No, I don’t think so. The inflation rate calculation is based on those things that the average person supposedly needs, not everything including luxury items out of reach.There are flaws in the CPI calculation, to be sure, but it isn’t completely out of touch with reality, as you seem to imply. And yes, certainly some things are rising faster than the overall inflation rate.

The wages, again, have NOT remained the same. They have gone way up. This claim just isn’t true. Median wages have unquestionably gone up. What has held people back IS inflation, but it hasn’t stopped their progress entirely. What has outstripped inflation is medical costs, higher education costs, and housing – all things that the government subsidizes the purchase of.

ImageIter Veritas:

Let me put it in numbers so we can put this issue to rest:

Gasoline was $1.514 as per the US department of energy and the Energy Information Administration in 1995 adjusted for inflation. It is now $3.608. That is a huge rise in price that does not match inflation, and affects everything from transport to food prices (transport plays a role in that).

Median income has risen by $109 total per year for the last 18 years. Compare that to the change in 18 years before that. In 1977 we had a median wage (adjusted for inflation) of $45,884. In 1994 we had a median wage of $48,418. That’s a $2,534 gain, or approximately 23 times as much as it has since 1995 to now.

Ironically enough, we did see a massive increase in wages from 1995 to 2000 (49,945 to 54,841), but we lost that and dipped back down before rising again in 2007 (54,489) before dropping like a stone in the recession. So the original argument stands: in this recession, we have lost most gains in wages over the last 18 years.

ImageTracto:

You pick some commodities and say they have “risen faster than inflation.” Other things have gone down. LOTS of them. Inflation looks at overall price levels.

The non-inflation adjusted numbers for median wages are not arguable. That median wage you quoted for 1995 is not accurate. You have quoted median household income, NOT median wage. The two are not the same, because household sizes and hours worked have changed.

The SSA numbers are accurate.

ImageIter Veritas:

Ok, I’ll use median wage, though I think income is better since many people don’t earn traditional wages. But ok. Let’s lay it out then with a longer study, 1955 to today:

– Minimum wage has increased from 4.39 to 4.97 using the Constant (1996) wage inflation adjusted set by the BLS and DOL. Increase of 13%, or 0.23% a year.

– The SSA website itself claims that the median income before 1962 is unavailable as that is the earliest year they measured it. They use the National Average Wage index, which shows up as $3301.44, which is inflation adjusted $28,283. And this is, as you pointed out, average, not median.

– The SSA puts the current wage at $42,979, a growth of 52%. This translates to 0.9% increase a year since 1955, which is nice in my book, but not nearly as nice as the 275% increase the top 1% received between 1979 and 2007, or about 9.8% a year (CBO report).

– The governmental body that is using median wage, the BLS, states that the median wage in 1955 was $4418, or currently $37848. That’s only a 13.6% increase, or 0.24% a year.

ImageTracto:

You are falling into another total fallacy, claiming that the top 1% “received” a 275% increase. Nothing could be more false. Different people formed that one percent at each of those points. Most people in the top 1% of income are there for a single year of their lives; they are not a lasting class of people that are somehow unfairly being given other peoples’ money.

Wages have gone up more than inflation has, period.

ImageIter Veritas:

Now you bring up a good point. Yes, it is entirely possible that those at the top of the income brackets are different people. It’s not very likely to change all that often, which you can check with the Forbes 500 and a myriad other ways, but it does not prove that they are indeed the same folks. But that was never my argument. My argument is that the people protesting this system have a valid concern.

So far you have stuck to a single number, one that I have checked and discovered lacking context. The scope is too small, the numbers do not align with other specifically research organizations, and they are not adjusted for inflation.

Now I will attempt again to explain the wage/inflation equation. Using median income, we see $119 dollars increase as adjusted for inflation, or a 0.2 or 0.3% increase in 18 years. That increase is not in line with inflation rate at all. Even using your wage statistics, with your numbers, adjusted for inflation the difference is ($26965.43 – $25083.6) $1881.83, or a 7% increase over 18 years.

Neither of those keeps up with actual optimal inflation rate of 2% a year. In order to provide for a good economic growth, wages shouldn’t just match inflation, their growth should equal approximately the optimal rate of inflation.

ImageTracto:

The Forbes “400” doesn’t have a thing to do with it. That group is measured by wealth, not income, and even if it were income, it would account for only 400 people out of more than 3 million who form the top 1% of income earners, and more than 1.4 million that file returns. As to it not changing very often, you’re right that it isn’t “very likely” to change all that often, because it is certain that it will do so, each and every year.

You claim that wages have not kept up with inflation, which they have and more. You have claimed that substituting household incomes for wages counts as a valid counter argument.

Average household sizes have been shrinking for years. Total hours worked are less. Wages are NOT household incomes, wages are the amount of money paid per unit of work. A household working 2000 hours at an average of $20 per hour is NOT making a lower wage than a household working a total of 3000 hours at an average of $15 per hour. It is making a higher wage.

You state an explicit growth, over inflation, and then claim that wages haven’t kept up with an “actual optimal inflation rate.” What does that even mean? The actual inflation rate is just that – an actual value. It isn’t fixed, it varies!

ImageIter Veritas:

In the original post you stated that you had adjusted the 1995 values for inflation, yes. I stated that the SSA numbers had not been adjusted by the SSA, whereas the BLS numbers were adjusted by the BLS. That gives consistency, and tells me a bit about the priorities of the people posting them (as in, one cares about comparison, and one does not). I used that as a statement about the reliability of an organization expressly dedicated to analysis over one that does it on the side, not as a statement to disparage your ability to adjust for inflation.

I think I see where we are getting into trouble here. The optimal rate of growth for an economy has an inflation rate of 2%. We haven’t always kept to that, but it’s been reasonable. Wages adjusted for inflation do show an increase in wages in total, I am not arguing that. However, one measurement for prosperity in a nation is an increase in the wage itself, not just adjusted for inflation.

Many people claim that wages have increased faster than the inflation rate, and by that they do not mean adjusted, they mean better than 2%. Nations with median wages that remain the same are considered to be stagnated, with no growth of its citizens toward more economic prosperity (unless you work with sustained economy theory, but that is not generally in line with capitalistic principles).

In the last 18 years, wages, even by your numbers, have increased by a measly $2697.50, or $149.86 a year. That would seem great until you note that that is a growth of 0.6%. Other nations in this time span have seen their wages improve by legally mandated 1%+ per year. This does not mean we are doing poorly, but we are certainly not focused on the economic prosperity of our middle class.

And that brings me to the final point, one which you keep saying is irrelevant. The entire reason this discussion even occurs is that while median wages have risen by 0.6%, upper wages (and income, again I reiterate that the upper percents do not have wages but income from capital gains, derivatives, and dividends) has risen by 0.9% or more. Go back further in history and you see this effect increase (Since 1970’s, wage has increased 0.6% median and 1.9% high and 0.57% lower wage).

You can’t discuss the numbers without the context. Yes, wages have risen even adjusted for inflation, but they have not risen faster than inflation rate. It has not been a dramatic increase, and it is not competitive with other nations. There is an imbalance in the increase of prosperity which is well documented as an income inequality issue, one that is the basis for this entire discussion.

ImageTracto:

Your claim that the inflation adjustment has to be done by the same parties that do the data gathering is specious. It’s a circumstantial ad hom argument. You won’t get a substantially different answer.

Real wages/compensation have unquestionably risen. Household incomes arguably have not, but wages most certainly have, and this is an absolutely key point to comprehend.

What incomes haven’t done is rise fast enough to satisfy the expectations of many, who see the earnings of others, who earn more than them, as being their rightful property, somehow “stolen” from them, and “unfair.” People who hold this position – that incomes haven’t risen enough to be “fair,” then falsely claim that those incomes haven’t risen at all, or have fallen, with zero evidence to back this up.

If you want to say that is isn’t “fair” that some people are earning too much more than others, then by all means say that. If people would just say what they really mean, they wouldn’t have to rely on fallacies and distractions, and do things like challenge sources with circumstantial ad hominem arguments.

ImageIter Veritas:

I’m sorry if you feel I am trying to distort your argument; that was never the intention. There are two items in play that I believe you are glossing over, and that is why I replied in the first place.

The first is your claim that wages have risen dramatically, and as such we should not whine about it. I saw that wages had not risen all that much, and tried to show you why that statement was in error. I’m not sure if you are still holding to that, but the reality is wages have barely risen faster than inflation.

The second is that we really do have a wage inequality problem, and this is a recent thing. Before 1970 we had wage growth for every strata of earners, and that growth was similar (not the amount, the growth). After 1970 it began to split into three branches, with the upper wages keeping their growth from before and the lower two slowing to a crawl. This has kept up even to today, so that we see a change in growth that is not only unequal in perspective but quite simply not equal in reality.

I am not advocating that everyone get paid the same for different work. I am however stating that the record shows an unequal growth in wages. That is why people are upset, not because they don’t make as much but because their wages will not grow as much as someone who already has a lot. That is the key point you must understand.

My position has always been:

– Wage increases since 1995 have not been dramatic, they have been sub-par.
– Wage GROWTH is unequal, and it doesn’t have to be so nor is it proper in a sustainable model for it to be so.

After this it devolved into insults, unfortunately. Still, a good source and motivator for research, the result of which you can see in the following post. Hope you enjoyed this experimental post!

The Gay Equation

There has been a lot of talk on the subject of same-sex marriage as more and more countries are lifting restrictions and bans in place for centuries. In the United States, the debate rages on more than ever, with a Supreme Court decision on the Defense of Marriage Act (DOMA) looming and the majority now in favor of repeal. As you travel through the forums discussing this issue, many people are shying away from the religious arguments and attempting to build cases using logical, economic, and historical arguments. Unfortunately, most of these are filled with misconceptions, fallacies, and wrong data and statistics (my personal favorite). Therefore, here are the top new arguments against same-sex marriage and why they fail the logical tests.

(EDIT: This article is written from a rare one-sided perspective. I have long ago decided that there is no balanced argument on this issue aside from a theocratic one, and that is not justifiable for civic law.)

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1) “Homosexuality is absolutely a mental illness and has been recognized by psychologists as such from the beginning. It’s only because of political agendas that this has been changed.”

This little nugget brings us back to 1886, when German sexologist Richard von Krafft-Ebing decided that the only proper form of sex was for procreation. This study was one of the first to include bi- and homosexuality to the already long list including wanting too little sex, too much, wanting sex when you were elderly, oral sex, sadism, masochism, and masturbation. This study went on to be cited by many psychiatrists up to 1953, when the DSM-1 originally described it as a mental disorder and was inundated with protests from private citizens and the National Institute for Public Health (the leading medical and biomedical institute of the times and a powerful presence today).

Shortly (in relative terms) thereafter the American Psychological Association removed it in 1975 as a disorder and told all mental health practitioners to “take the lead in removing the stigma of mental illness that has long been associated with homosexual orientations.” Other organizations went through similar changes, all adopting the known fact that homosexuality is not a disorder of any sort and the classification of it as such is nothing more than discrimination and stigmatization. Thus this argument is no longer valid and certainly not recent.

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2) “Gay, bisexual, and other men who have sex with men (MSM) represent approximately 2% of the US population, yet are the population most severely affected by HIV. In 2010, MSM accounted for 63% of all new HIV infections”

This claim is from a CDC study in 2008 and usually accompanies a claim that homosexuality is dangerous and thus should be discouraged because of the chances of infection. It further goes on to claim that HIV is a gay disease and that it could be fought better if people were no longer gay. The CDC study also claims that 1 out of 5 gay men had HIV.

This claim suffers from both factual and source related issues. For one, the CDC put out new data in 2012, in which the statistics were slightly different. 3.5% of the nation identified as homosexual, with more women than men identifying as homosexual. The rate of infection for HIV was 47% for homosexuals, 33% for heterosexuals, and 20% IV drug use and other reasons. It also stated that 1.46 million Americans were diagnosed with HIV.

For those who like math, that means that in order to fulfill the idea that American (population 315 million) gay men (population: less than  5.12 million) have a one in 5 chance of having HIV, 1.1 million HIV positive Americans would have to be gay men. That’s 76%, not 47% and not even 63%.

For the gay disease claim, one has only to look at the worldwide data on HIV to see how utterly wrong that is as well. We rank far below the most prevalent nations in HIV. While we have a total HIV population of about 1.4 million (a 0.36% prevalence rate), countries like Zimbabwe and Mozambique have prevalence rates in the 20-30’s. The majority of that is through heterosexual relations and male on female rape.

Lastly, the argument uses a very narrow scope. If we were to look at the population who has syphilis, chlamydia, gonorrhea, HPV, Herpes, etc. and the demographics of each, an argument like the above would be enough to outlaw all sex forever. And we wouldn’t want that, would we?

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3) “Giving gay couples the right to marry would cost us far too much in our Social Security funds! Adding them to the spousal benefits program would cost us hundreds of millions, if not billions!”

Social security comes in many forms. Child support, retirement, spousal support are just a few of them. The total fund for Social Security is $768 billion for the entire program. Each worker receives a retirement benefit. The average benefit is $1,230. There are approximately 154 million people in the workforce right now (or 49%).12.8% of the nation is over 65. Our national population is 315 million. The maximum spousal benefit one can receive is 50%. Approximately 3.5% of the nation is gay. Approximately 51% of the nation is married.

What do all these numbers have to do with each other? Well:

Take the % of retirees multiplied by the population, multiply that by the percent in the workforce (thus eligible for benefits), multiply that by the average benefit, divide by two (since only half this number are married) and divide by two again (since only one spouse receives this benefit). That is the total amount that spousal benefits costs today for heterosexual couples: $6.075 billion.

If homosexual Americans act in a similar manner towards marriage statistics, then we take the above and multiply it by 1.75% (or half the gay population) then we get $106.3 million as the maximum total cost of spousal benefits by lifting marriage restrictions on homosexual Americans.

To put that in perspective, that’s 1.7% of the current spousal benefits budget and 0.0138% of the social security budget. It’s not even marginally small.

Another factor that most people fail to mention is that gay people have been paying full social security and income taxes throughout the time that straight people have but haven’t been able to enjoy the same benefits (deductions, discounts, inheritance, etc.) of which some married straight people enjoy. Homosexual people’s money is being funneled into the same programs and usages, further reducing deficits and plugging up holes in the system.

This argument was used against slavery (cost of living would go up) desegregation (housing costs would go up, social services would go up) and granting women the right to vote (voting costs would go up). Each time the change was described as dramatic, and each time the objection was defeated and the results mild.

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4) “Divorce rates for gay marriage are incredibly high! In the Netherlands, the average length of a gay marriage is 1-1.5 years!”

This claim comes from a study that in conservative forums is called the Dutch Gay Marriage Study, but in the real world it is called “The contribution of steady and casual partnerships in the incidence of HIV infection among homosexual men in Amsterdam.” A less pithy title, I’m sure, and one that doesn’t quite match the argument being made.

This study was a study on the transference of AIDS in casual partnerships. Monogamous men were excluded from the study, as were all women. Oh, and it took place between 1984 and 1996. For those a little light on Dutch history, that was 5 years before same-sex marriage was legalized in the Netherlands.

The truth is since 2001, nearly 15 thousand (14,813) Dutch gay couples have married. In the next 12 years, 1,078 divorced. That’s a divorce rate of 7%, far below our national average (40-50%, depending on source and prediction). So far, 93% of gay marriages are up to 12 years long and running strong.

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So the next time you come across a claim like the above, look into it a bit deeper. As we have found out, statistics are hard to beat when you have the right data.

Once again, thanks for reading, and keep searching for truth.

Finding The Right Needle In A Haystack

Hello and welcome back readers. There has been a lot of debate and discussion while I’ve been off the net, and many missed opportunities to seek the truth in the great miasma that is our information stream. Sometimes it is difficult to know exactly what is important and useful, and lately it’s difficult to know what is actually truthful (or even to know what truthful is).

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                                   Ironic, isn’t it?

We all know the term information overload. There is just so much out there that we can’t find the right data, or there is so much conflicting data that nothing makes sense. Everyone has a logical or emotional argument about why their information is better and everyone is trying to sell it to others.

Each person tries their hardest to fit all the pieces into the picture, like solving a puzzle, or finding all the clues to a mystery. But what if it isn’t a mystery at all? What if, instead of fitting the pieces of the puzzle together, you are actually fitting pieces into a puzzle? Instead of looking for the needle in a haystack, you are throwing more hay on in an attempt to squeeze the needle out?

There is a profound difference between not having the right knowledge and not interpreting the knowledge correctly. We’ve all had moments when we realize that the thing we needed was right in front of us the whole time. We’ve also had those moments when that bit of information we needed was just out of reach. The problem comes when we see those two situations as aspects of the same thing.

If we know almost everything we need to know, but not quite, then we are missing a piece and need to look for it. Trying to shift the 499 puzzle pieces together in a difference configuration is not going to help us get the total picture no matter how smart we might be. Similarly, if we can’t find information we know we have, adding more makes the search more difficult. Yet we continue to treat and attempt to solve these cases as if the cause of the problem doesn’t matter.

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Puzzle situations can best be described in two steps: look for what is missing and find it. This comes up all the time when we know we are missing data, such as when we don’t know the time, or we need the statistics on the economy, or we need to know what the founding fathers meant by the 2nd Amendment. In each of these cases, we know there is an answer, a piece of information we either don’t have yet or don’t have access to. The picture is almost complete, but we need that element to make our conclusions.

Puzzles are actually quite simple. You put together what you have (what you know) and it shows you what you don’t have (what you don’t know). This is known as referential knowledge: you infer what the missing information is from the information that is present.

In the picture above, we know a lot about the piece even when we’ve never seen it. For example,  we know it has four prongs, that the prongs are round, that the body is shaped like a square, and that it most likely is blue, and opaque so as not to let the light through. We know all this, even though we don’t know where it is, nor do we necessarily ever have to have seen it. In fact, just by knowing what’s missing, we’ve already completed the hardest part of the puzzle. There is no mystery left; all we have left to do is find and place the piece. Sure we might see the complete picture then, but we already know (or infer) what it will be from what we don’t know.

Referential knowledge is an incredibly powerful search tool. But what happens when we have more pieces then are useful? What happens if the piece doesn’t conform to our inference or preconceived notions? What happens when we already have the piece, but we ignored it or put it somewhere else?

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One of these things is not like the other…

Mysteries are quite different from puzzles. When we have a mystery we already have all the data we need, and maybe too much to see clearly. It’s like having a 700 piece puzzle where you only need 100. Unlike with a traditional puzzle, there is no missing piece, but you do need to find the correct ones.

Mysteries occur much more often then puzzles. We often have all the information and more thrown at us by our hyper-connected world. The problem is you have 700 sources of information, and only 100 are relevant and accurate. Sometimes it’s easy to see what you can throw out (the red piece in the picture probably doesn’t match the rest), but more often every piece on sight will seem important and factual.

Many tools are available for wading through information, but it usually boils down to the CAP system: Cross reference, Add sources, and view Perspectives.

Most information is linked, and if there is no way to follow the claims or reasoning from the source, then the likelihood is that this puzzle piece is random and a distraction. Current political conversations are full of these bits of information that are unconfirmed and usually damaging if taken alone and out of context. But when cross-referenced and fact checked, many pieces fall away to reveal the true situation underneath.

Sometimes that isn’t enough. If a piece ever seems to just hang out there, it’s usually not because no one else noticed it. Our history is filled with ideas that people thought were revolutionary, but others long before them had created and dreamed them up (see the steam engine for a great example of this). More and more people are putting information and ideas out there, which means much of our information comes with duplicates. Knowing how many people post the same information is new information, but what they post isn’t. Getting rid of those pieces that are copied we can find the point of a message.

Mostly both of these methods are good for clearing up a source of information, but if you really want to learn the truth, you have to look at the perspectives. Who is a player in the game? What are their sources? What drives them? Look specifically at the motivations and facts, gather the data, eliminate the duplicates and cross reference for facts. Usually this takes you from 700 pieces to 100, and then it becomes a puzzle again.

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                       Breaking news! World once again flat.

So why are we talking about this? Quite simply, our public discourse is a mess. Mysteries drive our debates, forcing people with no time to try to sift through a mountain of information, all the while trying to convince them that they just don’t know the right thing yet. If only they had that final puzzle piece it would all make sense. Meanwhile, studies that find those pieces, documents that outline the full picture, are ignored because we feel that the information is difficult to interpret and there must be some way we can reorganize the facts without looking for new ones.

In the last year, we’ve seen this with healthcare (mystery), climate change (puzzle), Benghazi (puzzle) and the economy (mystery). The healthcare debate framed itself as a puzzle, with people on both sides trying to tell you what the bill meant while ignoring what the bill meant. The information was available and clear, yet rumors from religious bans to complete government takeover to death panels were seen as credible pieces. We weren’t missing anything, we just didn’t sift through the data well enough.

For example, there was much debate about how much the plan would cost middle class Americans, and if they had to sign up for it or could keep their own. The answers where simple: cheapest single plan was around 3K a year (less for families) with a max out of pocket of $4,167 and yes. But the debate rang out for months, claiming that they had to step over and citing a $20,000 number over and over as if it were reasonable to pay $1750 a month (at the time the cheapest private plan for a family of four was 392 a month, or $4704 a year. Average costs under Obamacare as per major insurance companies comes to about $2672 with subsidies, ones you get if you are earning up to 400 times the poverty level (which is $92200, and covers 80% of the us population)).

http://bangordailynews.com/2012/07/02/health/obamacare-fact-check-can-you-keep-your-health-plan/
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
http://en.wikipedia.org/wiki/Poverty_in_the_United_States
http://healthreform.kff.org/subsidycalculator.aspx

Climate change was different. We lacked the definitive data to show that current climate patterns were mostly caused by human waste. This year saw that change. Studies confirm what many suspected, that the patterns have shifted since the Industrial Revolution. Freak weather this whole year through has been linked to the climate change. 2 years ago opponents argued that climate change wasn’t even happening; now they maintain, against the found puzzle pieces, that we have little to nothing to do with it.

http://climate.nasa.gov/evidence/

Benghazi was also a puzzle. We didn’t have the information, we didn’t have the confirmation. Politicians didn’t let that deter them however, and when one side ran off with the story the other, instead of seeking the missing pieces, insisted that it knew what the pieces was before we even had a clue. Once the argument was framed as a mystery, the facts stopped mattering and the discussion became about what information was relevant. We’re still seeing this today, where the president maintains he explicitly said Benghazi was a terrorist attack (he didn’t) while his opponents claim he was soft on the attackers (he wasn’t). Meanwhile neither of them seem to focus on the idea that people killed other people, and the puzzle is who and where are they, not what are they and what did we say. Creating a mystery has made it harder to uncover the missing puzzle piece.

http://www.forextv.com/forex-news-story/full-transcript-of-obama-s-rose-garden-speech-after-sept-11-benghazi-attack
http://abcnews.go.com/blogs/politics/2012/11/new-detailed-account-of-benghazi-attack-notes-cias-quick-response/

And that brings us to the economy, the most clouded piece of mystery in our current public debates. Roughly 4.8% of our population is an economist, yet everyone believes they know what is really occurring in the market. Out of the 541 members of congress, 201 list business as their background. Out of those, 5 were former accountants. None were economists. Yet on Sept 14th, 2012, the congressional GOP saw fit to chastise the Library of Congress (who, incidentally, are analysts and economists) for printing a report saying that all the talk by non-economists about the economy was, as our vice president put it, Malarky.

http://www.forbes.com/sites/rickungar/2012/11/02/non-partisan-congressional-tax-report-debunks-core-conservative-economic-theory-gop-suppresses-study/

So here our best analysts and economists serve up a true report on the economy by sifting through all the data they have (which is considerable), present it to Congress, and have it scuttled because they didn’t like the answer. Again, this is the thought process of trying to find a missing piece that isn’t missing. We know the answer, but it’s not enough because it’s not the picture that some want.

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Doesn’t matter, this chart was just compiled by a PhD in Economics analyst researching other professional analysts and using hard data gathered over 10 years. Obviously not the right way to find the answers.

So the next time you find yourself embroiled in a debate, ask yourself, is this about a puzzle or a mystery? Are you looking for something, or trying to figure out which something is correct? Be sure of your goal before you try a strategy that ends up muddying the picture. Otherwise we will continue to ignore evidence and manufacture relevancy until nothing matters, not even the truth.

Thanks for reading, and until next time, keep searching for truth.

Counting Beans…

For all you numbers fans, its time for another round of WTF? (with math!)

There has been a lot of talk about the 99% this year, as well as wage discrepancies and class warfare. Since it is such a big topic, we hear at Iter Veritas decided to look at 12 large companies that have been in the news lately about salaries  profits, and the like, and then do a little math. The results below:

Let’s compare the CEO wages of the big 12 companies to a calculated best case salary of the average worker. To do this, we will take the Gross Revenue (total money made), minus the Operating Income (the profit left after operating costs and wages but before taxes and interest) of these companies and minus the Highest Pay Rate (CEO), divided by the number of employees in America, or more simply put:

$(GR – OI – HP) / #Emp

This should give us the average amount the company pays for its infrastructure, inventory, wage, and other expense per employee that is not the CEO. Obviously this is not the amount paid out in wages on average, since it doesn’t take out the operating costs of the business, but trust me, its shocking enough:

Company Revenue (billion) Operating Income (b) Highest Pay (mil)
C GR OI HP
Starbucks 13,29 1,99 16,07
JC Penney 17,2 -0,002 53,28
Darden(OliveG) 7,5 0,648 8,48
Wendy’s 2,13 0,137 16,54
Macy’s 26,41 1,863 17,65
DE (Applebees) 1,08 0,117 5,39
Burger King 2,33 0,363 4,02
Sears 41,57 -1,5 9,93
Target 69,87 4,46 19,71
McDonalds 27,01 8,529 4,07
YUM(Taco, KFC) 12,63 1,815 20,41
Walmart 446,95 26,558 18,13
Company Employees  Average pay (w/o taxes or operating costs out)  % CEO pay
C #Emp  AP  %
Starbucks 176533                                  63.919,66              0,40
JC Penney 159000                                107.853,58              0,20
Darden(OliveG) 165475                                  41.356,82              0,49
Wendy’s 168672                                  11.717,77              0,07
Macy’s 171000                                143.446,49              0,81
DE (Applebees) 173350                                    5.524,14              0,10
Burger King 191815                                  10.233,71              0,25
Sears 293000                                146.962,70              1,48
Target 365000                                179.151,48              0,91
McDonalds 859978                                  21.485,35              0,53
YUM(Taco, KFC) 880330                                  12.261,98              0,06
Walmart 1400000                                300.267,05              1,66

Again this is WITHOUT taking operating expenses into account.

Note how there are average wages of less then 6 thousand per year up there.

None of the percentages go above 1.7 percent of the CEO wages, and only 2 go above 1 percent.

5 of the 12 companies don’t pay in this best case scenario above the poverty line.

The highest paid CEO has the 2nd least successful company in terms of profit margin (OI/GR): 0.01%

The second lowest paid CEO has the most successful company in terms of profit margin: 31.5%

The middle-paid CEO has the 10th highest profit margin: 14.9%

Here’s a graph of CEO pay versus Profit Margin %

Again, note that the CEO pay has little to do with the actual profits they achieved, and actually seems to almost have an inverse relationship (the higher the pay, the lower the profit).

Now these companies employ 5 million people total, or about 3.5 percent of the workforce. These are very well known and public companies. They have a gross income of 668 billion, an operating income of approximately 45 billion, and a net income (after taxes) of 25.5 billion dollars in total for the American side of their companies.

This means they spend 20.5 billion in taxes and interest, or approximately 3% of their Gross Revenue. Considering this does not include the interest taken out of the profit, that number could be lower depending on the interest charges for the company. So the rate they pay is far lower then the federally mandated rate of 39% (which is usually pointed out by economists as the different between tax rate and effective tax rates).

If you’re wondering how much windfall we would create by closing the tax loopholes and actually charging 39%, based on these 12 companies alone we would have 240 billion dollars more in income. That would be enough to fund half of our entire country’s public schools system.

The only way we get close to a 39% rate is if we were only to tax their incomes after all expenses. If we were taxed the same way corporations are taxed we would get to write off food, transportation, electricity, classes, vacations, everything except for interest items (like mortgage). Imagine only paying taxes on the money you keep after paying for your everyday living costs. That’s what a corporate tax rate is like.

So the next time someone asks why you think there is a major wage discrepancy in this country, or why corporations aren’t people, or why class warfare is not the purvey of the “spoiled masses,” point them to this blog. We all might learn something new.

A long journey starts with small steps…

…And one gathers companions along the way.

Hello world, welcome to Iter Veritas, the journey towards the truth. This blog was born of an intention to promote a cause some have written off as archaic or even unnecessary, a cause most assume is self-sustaining. I assure you, it is not. And without people to care and people to search, truth will lose all meaning in a world edging more and more towards perspectives.

What this blog is is an attempt to connect the various perspectives to come as close to truth as we can. This does not mean that all views will be given equal credence; if you cannot back up your perspective with truth, it will not stand with its companions. Not here. It does however mean that everything you are certain of will and should be challenged in an effort to better understand truth.

What this blog is not is a pulpit, a place to promote only one perspective. I fully expect there to be shared and heated discussions, and I fully expect to receive and deliver fiery speeches over the nature of truth and the validity of facts. If you want to go on this journey with me, prepare to have your faith shaken, your interests changed, and your certainty forever weakened.

I do not claim to be impartial, and I hope you will not be either. I have my judgments and my interests and my perspective. But more importantly, those on this journey will all posses an open mind and a thirst for truth over right, for fact over belief, and for true equality of ideas.

So here we go! If there is to be a fight, then let us fight not for what we believe in, but what we know to be true. If there is to be revolution, let it be one for truth. And if we must judge, let us do so in full light, scrutiny, and participation of the world. Good luck, and interesting travels.