Frozen Toothpaste

Until recently, I wasn’t aware that “progressive” had an opposite. Surely, many Democrats would prefer that Republican or conservative were seen as opposites of progressive, but they’re not. “Regressive,” I now know, actually is the opposite of progressive, at least in taxes. (And in hindsight, I feel dumb for not having thought of that.)

This is a distinction I didn’t know would ever matter, and perhaps it never will. Nonetheless, it’s useful as at least a few presidential candidates — mostly Republicans, and none of the frontrunners — are promoting wholesale tax reform, like the “FairTax.”

Before we go too far, a brief introduction. In the simplest terms, taxes can be progressive, proportional, or regressive. Income tax in America is progressive, in that the more you earn, the more you (theoretically) pay — both in pure cash value and in proportion to income.

A proportional tax is something like conventional sales tax, in which all citizens pay the same percentage. That means that regardless of income, all citizens are effectively charged the same tax for their purchases (this fluctuates geographically, but that’s a separate issue.)

Thankfully their are no widespread and regressive taxes that I can use as an example. The rate of a regressive tax decreases as income increases. Which means that, if assessed on income, hedge fund manager are taxed less than their secretaries. This is currently true, but it is generally considered a problem with the tax-code rather than good policy.

Instinctively, I think most Americans would feel that progressive taxes are ideal, fixed taxes reasonable depending on circumstances, and regressive taxes barbaric. Our tax code usually supports this idea, though some interesting issues crop up when one looks critically at these distinctions.

The sales tax as it currently exists could be considered regressive. After all, on goods bought under the tax, the extremely poor and the extremely wealthy have to buy similar quantities of essentials — food, toiletries, clothes. Yet, in relation to income (or wealth), richer people pay a lower proportion or their net worth than the poor.

This distinction can be made to seem erroneous if one remember that sales tax is a tax on consumption not income. But if it were to become the sole tax administered in the country, the distinction would become a much more important one.

The FairTax, supported most prominently by Mike Huckabee and Ron Paul, is effectively a flat national sales tax. In order to abolish the IRS (which seems to be the basis for most of the plan’s support), FairTax legislation would mandate a flat tax (of 23%) be assessed against all retail sales. This means that against income, the tax would be far more regressive than America’s current income tax structure.

In order to “assure” that this tax is the good progressive kind, the program would entitle all people to a “prebate.” This rebate would assure that there would be effectively no tax paid on “necessities” (calculated from the federal poverty line). This sounds good, but what about those living below the poverty line who fail to receive the prebate? In the situation of the homeless, there seems a dangerous possibility that the FairTax might be regressive. But I have to admit it’s an admirable plan — far more so than I originally saw (see below).

EDIT (11/30/07): This piece contained a factual error, pointed out by Alejandro Gonzalez, regarding the rebate of the FairTax. I had mistakenly believed it to be a rebate only for those below they poverty level; it’s truly a “prebate” — paid in advance — to all citizens to subsidize the price of “necessities.” The final paragraph has been amended to correct the error.

Maslow’s hierarchy is neither incredibly new nor incredibly novel. If Wikipedia’s to be believed, the idea was originally published in 1943 in a paper called “A Theory of Human Motivation.” Further, it’s an idea that, once known, seems to have been all but self-evident the whole time.

Maslow’s basic idea is that certain needs always take precedence over others. That there are primitive or basic needs that, if unfulfilled, leave people unable to seek higher — perhaps one could say more evolved — needs.

In short, if one has a desperate need to eat, they’ll be unable to contemplate their position in life and reach any type of self-actualization. Because self-actualization is a higher — which is to say less essential — need, it loses out not only to physiological needs, but also to the need to be loved.

In Maslow’s system, there are five levels, as the pyramid above shows. The most basic level is the physiological — things like eating, sleeping, and breathing. Above those are the needs for safety — of home, health, family, and employment. Above those are interpersonal needs for love and belonging among a circle of family or friends. Near the top, Maslow placed the need for esteem — both from oneself and others. At the top, he placed self-actualization in morality, creativity, and the like.

This system has been critiqued — and rightly so — for it’s absoluteness. Certainly people with unfulfilled lower needs can and do achieve some of the higher needs. Being unloved can lead some to more prescient self-actualization; being hungry could paradoxically make someone more respectful and respected.

These needs probably aren’t nearly as contingent as Maslow’s hierarchy suggests. It’s not as if being hungry before lunch makes one unable to work toward the higher need of security in employment. People regularly delay short-term fulfillment of a basic need in persuing higher goals. But this deficiency doesn’t deprive the hierarchy of value — we can use the framework but ignore some of it’s more unlikely implications.

One way the hierarchy is useful: it makes painfully clear why so few revolutions are started by the people who may have the most to gain by them. The poorest of the poor, without homes or foods, often have the most to gain if society reorders itself. But they rarely call attention to their plight in any meaningful or widespread way. They’re likely more concerned with needs for food and shelter than with the needs of society’s malcontents as a group. They likely don’t even recognize their presence in such a group.

Thus, it is often the better-off who act as spokesmen for the lowest of society. Very few homeless form together into activist groups without outside influence. The common reason society would offer for this fact is that the homeless are universally too heavily drugged to act — something I find at least a little offensive. The reasoning that comes from Maslow’s hierarchy seems more reasonable than the theory that the homeless are uniformly too lazy or loaded to speak out about their needs.

Similar analogies can be found all over the world. The situations in Burma, North Korea, or Zimbabwe are all similar. Despotic ruling regimes can easily maintain control because the people over whom they rule are so concerned with lower needs that they have little time to pay attention to macro-economic policies or leaders that are almost certainly doing them harm. “Third world” farmers harmed by the dumping of cheap subsidized crops into their country from abroad rarely manage to rebel because they don’t have the time or energy.

But contrary to Maslow’s theory, people can — and do — act without their lower needs fulfilled. The Burmese protesters show that even if physiological or security needs are unfulfilled, people may decide that there is more to be gained by fulfilling their higher needs first. After all, if they truly reorder the culture of their country, they would be more likely to create a secure and physiologically-satisfied population.

Though I wouldn’t risk my life in defense of the academic truth of Maslow’s hierarchy, I think it can be a useful tool. A reminder, from time to time, that there are simple reasons that injustice is not often stopped by those treated unjustly. Whether or not those with their lower needs fulfilled have a responsibility to assure that others can get the same level of fulfillment is a debate I’m not ready to entertain. But I think in light of some of Maslow’s insights, its something everyone should give at least a second’s thought.

Microlending — or microcredit — has gotten more and more press recently, both good and bad.

In the simplest terms, microlending is the practice of making small and unconventionally secured loans to those generally outside the banking system. That is: for people without collateral, a credit history, or demonstrable employment, it’s a way that they can get additional money to finance their small business. As you could probably expect, this is done primarily in “third world” countries, where there are a number of people without access to conventional banks.

Built upon the old adage that, “you’ve got to spend money to make money,” it’s argued that microcredit, by allowing the previously unable to start businesses, is a innovative way to fight poverty. Last year, Bangladeshi Muhammad Yunus won the Nobel Peace Prize for his work creating and running the microcredit Grameen Bank.

The Grameen Bank, like many micolenders, loans mostly to women. This is based on the idea that women are more responsible when supplied with credit and are thus less risky borrowers. And though we could condemn such lenders for sexism, I don’t think we should. After all, with few other ways to secure such loans, the banks have to use simplistic ways to assess risk. Another rating factor they use, with much success, is to have other community members assess the borrowers creditworthiness.

Recently, Mr. Yunus has himself come out against microcredit — of a certain stripe. As microlending has gained prominence and recognition as a potentially profitable lending scheme, more and more for-profit banks are getting into the game. This is bound to create waves in a field previously dominated by not-for-profit lenders or those that share their profits with their customers, as Mr. Yunus’s Grameen Bank does.

Though Mr. Yunus doesn’t deny that for-profit lenders can also bring people out of poverty by their lending, he argues — as on recent episode of PBS’s NOW — that the goal of microcredit institutions should only be to bring people out of poverty. That for-profit banks often charge higher fees than not-for-profit microlenders is Mr. Yunus’s main concern. Though the lenders argue that they simply need the fees for their administration expenses, many doubt this to be true.

Some have also made the point that Mr. Yunus and other microlenders don’t have much evidence that their programs are any better at bringing people out of poverty than conventional welfare-style programs. Though these critics don’t actually argue that microcredit is less efficient than such programs, they are rightly skeptical that it is the miracle cure that some have tried to make it — after all, countries still need basic infrastructure to allow businesses to succeed. Such skepticism is probably merited, but it hardly a reason to ignore microcredit’s strengths.

One of the most interesting things about microlending is that you can do it. You won’t make any money, but Kiva, an American non-profit, allows people like us to make microloans in $25 chunks — you can loan no less, but you can also loan much more. You earn no interest on the money you lend, but you can relend your $25 dollars when it’s paid back.

Strictly speaking, Kiva loans have no guarantee of repayment. The organization boasts that 99.7% of their loans are repaid in-full and on-time. And though microlending isn’t actually charity, a 99.7% chance of your money doing exactly what you want it to — and then being returned — is better than any conventional charity can offer.

Though most doubt that microlending can end poverty by itself, it’s certainly a step in right direction. And even if I don’t think giving to conventional charities should be replaced by microlending, that doesn’t mean that microloans cannot be a portion of one’s giving.

Yesterday, Economist.com published a story about HSBC’s Climate Confidence survey, the results of which are intriguing, if not a little surprising. The basic table of result is at right (click for full size, cribbed from HSBC’s results).

The results show that though citizens of so-called developing countries are generally thought to be more concerned about development, etc than they are about climate change, this is not borne out by the data. Rather, HSBC’s survey results show that “developing” countries have higher levels of concern than most developed countries. Whether this is due to bad information, either in the US or in Brazil, is an interesting question, but it’s not one the survey answers (or could).

HSBC has categorized their surveyed countries into four groups. The “skeptical pessimists,” those European countries surveyed, are characterized by low levels of concern for the problem, and low optimism about solving it. Americans are alone among the nine surveyed countries in both doubting that there is a problem, yet being more willing than Europeans to believe that the problem can be solved. The level of concern in India, Brazil and Mexico is far greater than that in either America or Europe, although those countries suggested great optimism about the world’s ability to solve the problem. Finally, China and Hong Kong shared relatively high levels of concern, as well as the highest level of confidence that the problem was being adequately handled.

The results are also revealing about individual countries. For example, in the USA climate change was a fourth concern, after terrorism, health care, and constantly later ages of retirement. In China, climate change was the top concern, followed by child’s future, health care, and terrorism (in that order). The difference is striking, and whether it reflects where concerns actually should be or where media and political powers want them to be is a different question.

In any case, these are fascinating results whose implications are not entirely clear. Thus, for concluding remarks, I will cede the floor to The Economist:

Perhaps it is not surprising that people in the developing world are worried. Rich countries are in the temperate parts of the globe; it is the world’s hotter, drier nations that will feel the effect of climate change first. Indeed, they may already be affected: rainfall patterns are going awry in China, and the earlier melting of Himalayan snow is damaging agricultural productivity in bits of the Indian subcontinent. Concern about climate change may also be bound up with broader environmental worries, which are mounting in China in particular.

Still, these findings certainly overturn previous assumptions about attitudes around the world. Does that matter? For those who think that governments should be taking stronger measures to avert climate change, it probably does. The interesting implications are not so much for Europe and America. People in those regions don’t think climate change is the most important problem in the world; but nor are their governments behaving as though it is.

What these data change is the debate about involving poorer countries. When developing-country governments resist pressure from Europe and America for action, they can still use the argument that climate change is mostly the rich world’s fault. But the argument that their people have other priorities for government action looks harder to sustain. Whether they choose to listen to their people’s concerns is, of course, another matter.

For quite some time, I’d assumed that I simply didn’t understand these two words. I’ve seen the verb “to founder” in print, quite often where I expected “to flounder.” As such, I decided that flounder probably wasn’t proper English, but rather a perversion of the real word, “to founder.”

I even went so far as to inform people of my error in this matter. None of them thought (or knew) to correct me, so I preceded to think that I had solved the mystery.

It wasn’t until recently that I finally got around to investigating the difference, and was surprised by what I found.

First, both founder and flounder are real English verbs. And indeed they are used in roughly the same context, though they do mean different things.

This usage guide, from the American Heritage Book of English Usage, is perhaps the best and most simple explanation I can find:

People often confuse the verbs founder and flounder. Founder comes from a Latin word meaning “bottom” (as in foundation) and originally referred to knocking enemies down; people now use it also to mean “to fail utterly, collapse”: The business started well but foundered. Flounder means “to move clumsily, thrash about” and hence “to proceed in confusion.” Thus if John is foundering in Chemistry 1, he had better drop the course; if he is floundering, he may yet pull through.

Thus, I floundered with this distinction. But, by looking it up, I saved myself from foundering. And that’s good to know.