Half Changed World

Some quick reviews and comments:

• D and I have been reading The Phantom Tollbooth as his bedtime story.  I had great fond memories of this book from my childhood and was eager to share it with D.  We both enjoyed it, although not quite as much as I’d hoped.  He didn’t get a lot of the puns, which probably means that it might have been better to wait a year or two.  And I was surprised in re-reading it to discover the near total lack of female characters.  (The exceptions are the Which, the Soundkeeper, and Rhyme and Reason, who need to be rescued, of course.)  My recommendation if you’re reading it out loud is to go ahead and make Tock female.  Next up is The Champion of Merrimack County.

• I got sent a review copy of Snacktime! the new kids album from Barenaked Ladies.  I’m a fan of BNL and am always up for new kids music, so it seemed like a good fit.  It’s a fun album, similar in silliness to Here Come the ABCs’.  N particularly likes 789, and D likes Popcorn and The Ninjas (although he protests that he’s a ninja and he’s not "unspeakably violent").  I don’t think there’s anything on the album that’s as inspired as If I Had a Million Dollars, but I wouldn’t want to throw it out the window after a long car trip (and that’s actually high praise for kids’ music).

• I’ve been getting Cookie magazine for a few months (I was offered a chance to get it for airline miles).  It’s certainly nothing profound, but it’s entertaining, and I think the reviews of kids books, games, etc. are interesting.  The fashion layouts are pretty absurd — I don’t spend $70 for a shirt for myself, and I’m sure not spending that kind of money on clothes for my kids. But they’ve decided that if I get this, I must want Lucky as well, which is a total waste of paper as far as I’m concerned.

I’m listening to the political news while I post.  I wouldn’t have believed it two years ago, if you had told  me that on the night that Obama clinched the nomination, I’d be feeling bittersweet.

Via Kathy G at the G Spot, I found this debate between Gary Becker and Richard Posner on the NYC experiments about providing cash incentives to parents and older teens to reward school attendance, parent-teacher conferences, and good grades.  This is part of Bloomberg’s broader anti-poverty strategy, something that I had been meaning to discuss for a while, so I’ll jump on in.

Becker has what is probably the classic economist’s take:  "boys and girls as well as adults respond to incentives."  While recognizing that there may be challenges with targeting the program correctly, he thinks that it’s worth trying the experiment to see if it work.  I basically agree with this — I think it’s funny that people get horrified about "bribing" kids to do well in school, but aren’t upset when workers get bonuses for good performance.

Posner comes up with a number of nitpicks of the program, but his fundamental concern is that poor attendance is a symptom, not the disease: "Paying children to attend school will reduce truancy rates some but
without improving school quality, and perhaps without improving the
education of the children receiving the payments."  (He thinks that school vouchers are the solution, but that’s another story.)

Interestingly, this has a lot in common with Margy Waller at Inclusionist’s concern that the Bloomberg anti-poverty initiative assigns the blame for poverty to poor people’s bad choices.  If the schools are fundamentally falling down at their job of educating kids, giving the kids money for passing tests is like giving me money to make a jump shot.  Similarly, low-wage workers have high job turnover in large part because that’s how the jobs are designed.  But, that said, MDRC has been studying programs designed to improve job retention and advancement.  And so far, one of the most effective programs has been one in Texas, which provided financial incentives to former welfare recipients who were employed full-time.

I agree that I worry about the framing of these payments as all about overcoming poor people’s bad values.  You can also tell a convincing story about how the financial incentives make it possible for a worker who is paid by the hour to take off from work to go to a parent teacher conference, or wait in a crowded medical clinic to get the kid immunized, or let the parent keep their job by hiring a more reliable babysitter, but that’s not how these payments are being covered in the media.

Kathy notes that behavioral economics also raises the issue that there are some times when cash incentives can have perverse effects. In Ariely’s language, a financial incentive can shift things from a social setting to a market setting.  So people were less likely to help someone load a car when offered an insultingly low wage than when asked to do it out of altruism, and were more likely to pick up their kids late from child care when the center instituted a late fee.  That’s one of the reasons I won’t tie my kids’ allowances to their picking up their rooms or helping out around the house — it would implicitly allow them to choose to forgo the allowance and not pitch in.  But I’m not convinced that this analogy applies to the incentives in the experiment.

The recent discussion of budgeting and how we’re dealing with rising prices inspired me to revisit my experiment of trying to stick to the thrifty food plan for a month.  This gives us a budget of $501 a month.  (Note that this is different from the Food Stamp Challenge which asked politicians to live for a month on the average monthly benefit of about $90 a person a month.  The average benefit is significantly lower than the maximum benefit, because most Food Stamp recipients have earnings, and their benefits are reduced as a result — they’re not really expected to feed themselves with only their Food Stamps.)

As before, I’m only looking at actual expenditures, not trying to allocate a cost to the food that’s in our pantries and fridge as we begin.  That said, we were totally out of milk this morning.

T stopped at Trader Joe’s this afternoon, and our first grocery bill for the month comes in at $21.53, including two gallons of milk at $3.69 each, pizza dough and sausage for pizza later in the week, "Sir Strawberry Juice" and a couple of odds and ends.  By contrast, 3 years ago when we did this before, on the first day we paid $2.45 and $3.05 for two gallons of milk (at Costco, but still…).

update: for another view of inflation, check out this NY Times graphic (via Visualizing Economics).  Shows you both where the average consumer spends the most money, and what’s getting more expensive (and what isn’t).

We had some very impressive thunderstorms this afternoon, and the picnic we were going to attend to was canceled.  N had a party to attend, so I let D spend extra time playing on my computer.

I had promised to look on NASA’s web site for pictures from the new Mars lander, and we did find some fine images, but the hit of the day was the NASA Kids’ Club.  Lots of games with a space theme, some more overtly educational than others, organized by difficulty level.  You can send your name to the Moon.  And, new today, Buzz Lightyear travels with the shuttle to visit the space station.

I also signed D up for his own Galaxy Zoo account, and he passed the qualifying test with ease, but didn’t have patience to classify more than half a dozen or so objects.

Ariane Hegewisch and Janet Gornick have a new report out on what countries other than the US are doing to mandate workplace flexibility.  It’s all quite astonishing from the US perspective, but I’m honestly most surprised by the statistic that the US has the lowest labor force participation rate for college-educated prime-age women of any of the countries studied.  That’s a pretty strong response to the claim that "no one will hire women" in Europe because of the social protections.    It also makes it hard to believe that US women’s labor force participation has hit its "natural limits" and can’t possibly go any higher.

Ariane said that she might be up for being "interviewed" on this blog — what questions would you like to ask her?

With energy and food prices both climbing, one of my regular readers suggested that I ask all of you all what adjustments you’re making.  Are you reducing your driving?  Cutting coupons?  Reducing meals out?  Saving less?  And how much are these adjustments hurting?  Do you feel like it’s a big sacrifice, or something you hardly notice?

In our household, I’d say we’re making relatively minor adjustments:

• Trying to consolidate errands, do fewer grocery runs.
• Doing more shopping at the less expensive grocery stores, and buying less convenience foods
• Really paying attention to turning out lights, unplugging appliances when not in use.
• Taking the bus to NYC instead of driving (the parking costs in NYC were killing us)
• Generally asking "do we really need this" before buying stuff — especially in the $20 to $50 range, which doesn’t feel like big spending, but adds up fast.

I can’t say we’ve really cut back on our day to day driving — I was already driving to the metro, rather than downtown, and the bus is really more of a hassle than the additional savings justify.  (It’s a bit slower than driving, but real problem is that the low frequency makes missing the bus a disaster, so you have to build in huge margins for error.)  I’m actually sort of dubious about these stories about how so many people are shifting from cars to buses.  I’m not disputing the fact that public transit systems are seeing big percentage increases in ridership — but we’re starting from such a low base that if only a few percent of drivers shift to buses, that can be a 30 or 40 percent increase in bus ridership.

I just put in a low-flow showerhead, but that was really an environmental choice rather than a frugal one.  Overall, we’ve done a lot to improve the efficiency of our house — new windows, new boiler (we have baseboard heating), high efficiency washer and dryer, high
efficiency kitchen appliances.  Over the long run, these will save money, but for now, we’ve been writing a lot of big checks for them.

In the short run, things will be better for the next few months, as we won’t have to pay for N’s preschool, and have already paid for camp for the boys.  But then he’s going 5 days a week instead of 3 next year, so that will cost about an extra $200 a month.   But then
after next year we’ll be done with preschool and will feel rich.

Several years ago, I read an article on Money.com called the "60 percent solution" in which they argue that you should keep your fixed expenses down to 60 percent of your take-home income.  (I see I wrote about Warren and Tyagi’s version of this plan two years ago).  If you were doing that before the recent run-up in prices, you’re probably giving up some of your extras, but you don’t have to do anything drastic.  If 80 or 90 percent of your paycheck was already allocated to fixed expenses, there’s not a lot of room to adjust.

The reason I thought the 60 percent solution article was interesting was that it recognized that it’s really hard to save significant amount of money by shaving your grocery bill.  Some of us never spent $5 a day on fancy coffees in the first place, and so can’t find savings by giving them up. Instead of squeezing at the margin, it may be better to bite the bullet and look for big changes to make — a smaller house or apartment, taking in a roommate, finding a second job.

A few weeks ago, I got an email asking if I would be interested in receiving a copy of Avatar, Book 3, Volume 3.  I asked T if that was that show that he and the boys have been watching on netflix, and he said yes.  So I accepted the disk, and asked T to write the review.  As you’ll see, he’s effusive in his praise.  If you read this blog, you know that I’m not always that nice to folks who send me stuff to review, so this is the real deal.

The boys are now all caught up, so they’re eagerly awaiting the last 6 episodes, airing on Nick later this summer.

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I spent some time updating my extremely out of date blogroll.  I think I got rid of all of the blogs that aren’t being actively updated, but if you see one that I missed, please let me know.  If you’re a regular reader here and have a blog that I haven’t included, feel free to give a shout out in the comments.

It appears that Congress overrode the President’s veto on (most of) the Farm Bill today.  (Due to a clerical error, the bill that was sent to Bush omitted an entire title — earlier today, it looked like they might have to pass the whole bill over again, but apparently they’ve decided that they can override the veto on what was sent to him today, and deal with the last title after the Memorial Day recess.)

The bad news is that the bill continues huge subsidies for agribusiness, at a time when commodity prices are at record highs.  The good news is that it contains some real improvements for the Food Stamp program (now to be called the Supplemental Nutrition Assistance Program, or SNAP) — increasing the average benefit by increasing the amount of income that is assumed to be needed for purposes other than food, allowing more  child care expenses to be deducted, allowing the employment and training program to help people buy the equipment and uniforms they need to start a job, adjusting the asset limit for inflation over time.  There’s also more money for WIC (which is *not* an entitlement, and can run out of money when lots of people apply.)

So, how do you weigh these issues?  People I generally trust don’t all come down on the same side of this. Parke Wilde at the US Food Policy blog is pretty disappointed.  He’s astonished to find himself agreeing with the President’s criticisms of the bill.  The Food Research and Action Center is thrilled to finally pass the nutrition title improvements.

I’m more on the FRAC side of this argument.  While this is definitely a bill I need to hold my nose to support, I don’t see any other way that we could have gotten the nutrition title improvements.  While the White House may not have actively opposed these improvements, they sure weren’t going to put pressure on wavering Republicans to support them in a freestanding bill.

It’s clear that when I don’t have the energy to post, I should put up something about housing costs, and then my commenters will take it from there. 

I’ve been listening to the This American Life’s piece about the housing bubble and crash, and it’s fascinating.  As suggested by the title of the episode, The Giant Pool of Money, it focuses on the supply side of the mortgage business, how it was in everyone’s business to keep generating loans and not to ask questions about whether they were really good risks.  It’s nearly an hour, and if you didn’t grab the podcast already, you need to stream it, but it’s worth listening to anyway.