Sounds Crazy #9 | Bandwidth

Back in my academic days we were not allowed to spend any University money on coffee and tea. I would ask politely why I couldn’t create a more convivial workplace by providing free beverages for my postgrad students and research assistants only to be told it was not allowed. Even in the department tearoom there was an honesty box to cover the cost of the milk.

I never understood this and used to think it was just the system being stingy. And being me, I railed, often taking my team out for coffee even though we had a perfectly suitable coffee room next to the labs. The first thing that happened when I converted our research into a company was the purchase of a kettle followed swiftly by a water cooler.

What upset me back then was the assumption that productivity was all about the number of hours at the desk and how expertly one counted beans. It obviously had nothing to do with how happy people were at work.

Research is repetitive stuff. In our case there were many hours of routine sample processing every day. This meant taking regular breaks was essential to our sanity. The irony is that these days we would be instructed by the OH&S officer to stop peering down the microscope and go to yoga class — but I digress.

What got my goat recently was a report on the front page of the weekend paper telling us that the new Australian prime minister has decreed that all travel by politicians and Federal bureaucrats must have permission.

Mr Abbot requires that government ministers sign off on travel requests from civil servants and that he himself must agree to any travel that costs more than $50,000.

Now I don’t know about you, but I always thought that members of parliament and the senior staff that support their efforts were there to develop, debate, design and implement public policy.

Instead Mr Abbot wants them to be travel agents.

I would rather have the finite daily energy allocation to the brains of national leaders and their staff to be used furthering the public good.

I want them thinking about policy and figuring out the endless machinations of delivering it effectively. Not wasting valuable mental bandwidth as travel police.

Next they will be buying their own coffee.

Sounds crazy because it is.

When 24% is really 0.8%

According to the 2010 World Public Opinion Poll, the average American thinks the US spends 27% of the federal budget on foreign aid.

The actual figure is close to 1%. Even with the fickle nature of survey data this is a huge discrepancy, unbelievable really.

Does the average person on the sidewalks of US towns and cities really think that the US government gives a quarter of its money away in foreign aid? One dollar in four, leaving three to pay for everything else at home. Surely not.

Perhaps the perception is there because the US is by far the biggest single contributor to overseas development aid.

In 2010, the OECD reported the US spent $30 billion on aid, more than half as much again as the next most generous country, the UK ($14 billion), and 23% of the global total.

As a percentage of gross national income that $30 billion is just 0.21% and well below the average country effort (0.4%). It is also half a percentage point below the UN target of 0.7%. As it happens only five countries meet the UN target (Norway, Luxemburg, Sweden, Denmark and Netherlands).  The US would need to up the ante to $100 billion to catch up with the Scandinavians.

So the reality is that most countries give away less than half a cent in the dollar of national income to assist other countries develop. And the cynic would chirp that even this tiny percentage is not entirely altruistic as often the money is spent on goods manufactured at home plus some of the recipient countries will become trading partners in the fullness of time.

$30 billion was 0.8c in the dollar of the $3.6 trillion US federal budget of 2010.

Why the huge discrepancy? I must say I am at a loss. It could be because the average person has little notion of just how big the US budget is and so easily thinks that the donor part must be substantial. Or maybe people just don’t realize the huge cost of services at home.

Then again, we all tend to think that we are more generous than we actually are.

Whatever the reason, the numbers suggest there is huge difference between what people think is happening and reality.

Greek debt again

I came across this interesting visual presentation on the size of the Greek national debt… maybe staggering is a better adjective.

Recall that the talented presenter was dwarfed by half a trillion dollars. Now let’s go across the pond to the US.

The US national debt is roughly $15,717,900,000,000

That is $15.7 trillion if my conversion is correct – a tad more than Greece and a huge $50,000 for every US citizen.

In principle the US has a better capacity to repay creditors given the debt is 107% of GDP compared to 143% for Greece, but I just can’t get my head around the absolute number. And even though I lay no claim to an understanding of economics I am sure that owing more than you earn is not a good place to be.

You can see why climate change action is neither here nor there when the world has chosen to walk along this kind of fiscal knife edge.

More on the size of the task

Asleep

Asleep

Just about every couple wants to raise children. It is an innate, inescapable need that is hardwired and natural. All organisms have this requirement to make more.

So when couples face biological challenges to natural conception they seek help that in most western countries now includes the benefits of medical technology. In vitro fertilization (IVF) and related fertility treatments have helped hundreds of thousands of couples create a family with more than 3 million babies born since the techniques were introduced in 1978.

Not surprisingly there was much chuntering at the Australian government for removing subsidies for IVF treatment under the national medicare system. Australian couples now have to find up to $2,000 per treatment in upfront cash.

In the short time since this funding change that has saved the government around $50 million, IVF proponents claim that some 1,500 babies have not been born because many people cannot afford the treatment.

Perhaps I am callous because my first thought was that this good news; 1,500 fewer mouths to feed. But then I am obsessed with 8,000 an hour and sometimes find it hard to empathize with childless couples as I have two sons and a step-daughter.

So I mellowed and clipped my own ear for being so heartless.

Then came the kicker. Advocates were arguing that, in fact, $50 million was a sound investment spurned. Eventually the ROI on the $50 million from taxes paid by those 1,500 kids more than justifies the government spending on the subsidy.

This is where I really despair. There can be no rational argument for taxes being a return on government investment because this is not an investment model. Taxes are a way if distributing wealth for services that are financial beyond most individuals, not an investment scheme. Nor are the accounts complete. The environmental cost of 1,500 omnivores living western lifestyles for 80 years would make $50 million look trivial.

The thinking that makes intelligent people (the proponent in this case was a University professor) misquote economic rationalism is scary.  It suggests that we are just more-making machines unable to pull in the logic to understand what we do. The bigger picture eludes us in our quest for advocacy, especially when that finds us on the moral high ground.

In an earlier post I pointed to the size of the task to support 7 billion humans in practical terms of energy, food and water is gargantuan.

Now I am concerned that the size of the task in the human dimension is even bigger if our logic is stuck with the eventual benefit of babies to the tax system.

Spending on the environment

The Australian government budget outcome for 2008 reported an expenditure of A$280 billion (US$180 billion at time of writing) or 25% of GDP.

Divided equally, 280 billion would give each resident of Australia A$13,340 and that was, more or less, what happened to the money.

Welfare, health and education combined to account for A$161 billion or 58% of the expenditure. People accept taxes as a necessity of life partly because these things, along with infrastructure, defense and other primary needs are best paid for collectively.

It makes sense to also pay for fundamental services such as clean air, fresh water, food and shelter. The food we eat and the roof over our heads we pay for after the taxman has taken his cut. What about paying for the rest?

The government spend on the environment is difficult to estimate. There is no line item in the budget, so we must estimate for the following:

  • A3.8 billion on agriculture, fisheries and forestry
  • A$3.2 billion on recreation and culture
  • A$16.6 on the public service

Let’s be generous and say this adds up to A$10 billion or 3.6% of the federal environment spend. That’s A$10 billion for a land area of 7,692,024 square km.

This rounded amount, A$10 billion, is a curious figure. It suggests that we can get clean air, clean water, conservation, and aesthetic outcomes for 21 million inhabitants, plus extensive natural resource exports, for $13 per hectare.

“Ah,” the skeptic would interject, “what about the monies spent by the state and local government, not to mention the huge amount of input from farmers, resource managers and community groups?”

Fair enough. Let’s double the amount to capture the contribution from all pockets in the government purse – $26 per hectare is now more than the defense budget… by $4 per hectare.

It makes you think that from the government perspective at least, the environment is free.

Mark