Archives: Reg Murphy Pubs

When ‘feeling bougie’ is a good thing

Written by Don Mathews on . Posted in Don Mathews, Reg Murphy.

Ever heard the term “bougie?” (It’s pronounced with a soft g, as opposed to ‘boogie’, which is pronounced with a hard g.)

I heard “bougie” for the first time this past summer from several of my college students. The students found it humorous that I had never heard the term, but they cut me some slack because I’m old.

“Bougie,” of course, derives from “bourgeois.” My students didn’t realize that because most had never heard the term “bourgeois,” and the few who had really didn’t know what it means. I cut them some slack because they’re young.

Karl Marx used bourgeois, with much venom, as a synonym for the capitalist class and the values and habits of that class. Most other writers define bourgeois more broadly as the middle and upper classes and their values and habits.

“Bougie” is a tongue-in-cheek term with several meanings. One student said that if you’re in the mood for some serious shopping, you’re “feeling bougie.” Another student explained that to be “bougie” is to purchase upscale consumer items to create the impression that you have money and upscale consumer tastes, even if you don’t.

Either way, the fact that 21st century American young adults have come up with the term “bougie” and use it with such playful irony would have Karl Marx wailing and gnashing his teeth in his grave. And not just Marx. From well before Marx to the present day, scores of intellectuals, from the right as well as from the left, have reviled bourgeois society for being shallow, materialistic, small-minded and devoid of real virtue.

And not just intellectuals. Artists, frequently those whom bourgeois society has made rich, as well as aristocrats and cultural defenders of aristocracy have made denigrating bourgeois society a reason for living.

One of the slams against bourgeois society is that its moral and spiritual shallowness render it incapable of inspiring anything great or transcendent, or an appreciation of the great or transcendent, especially in literature, music and art.

Hmmm. Consider the most bourgeois society on the planet, that of our own country. So: no great or transcendent literature, music, or art has ever been produced in America? Really? One ought to look a bit before making such a claim.

But bourgeois society’s contribution to literature, music and art goes far beyond what it has produced. Thanks to bourgeois capitalism, people of all walks of life have sufficient income and leisure to enjoy the world’s greatest literature, music and art.

Bourgeois society has made the greatest literature available dirt cheap. Cervantes’ Don Quixote can be had for $8, Twain’s Adventures of Huckleberry Finn for $6.

Each of Shakespeare’s plays are available for $5, while volumes of his complete works start at $22.

The greatest music is available at comparable prices. Even better, one can listen to the greatest music for free at that wonderful bourgeois audio-video circus, youtube.com.

What about great art? One can view masterpieces ‘second hand’ in books or on-line. Good art, though, is readily available for ‘first hand’ viewing and even purchase.

Bourgeois society has a huge appetite for art. No need to look far for proof. St. Simons Island is loaded with art stores. And as the rejuvenation of downtown Brunswick kicks into gear, art shops and studios are leading the way.

No doubt plenty of you will be giving great books, great music, and local art as Christmas gifts. The people who receive those gifts will be enriched far beyond the price of the gift. Now, if you ask me, that’s what ‘feeling bougie’ ought to mean.

  • Don Mathews
  • Reg Murphy Center

Data shows tax simplification could work

Written by Skip Mounts on . Posted in Reg Murphy, Skip Mounts.

Economics is a data driven social science. It is a social science because economists are trying to understand why people do what they do. It is data driven because economists hardly ever agree on anything.

Beginning with the first course in economics as undergraduates and continuing into graduate school, economists learn about many alternative types of theories. Over time, after being exposed to these alternatives, economists tend to become comfortable with those theories they think “work.” By “work,” we mean that these theories seem to do the best in explaining why people do what they do. For example, I tend to fall into the free market category. In my understanding, theories based on free market principles do a good job explaining human behavior.

The next thing we do is to see if our preferred theories are supported by real world data. This is why economics is beautiful. The theories that we love and use must be consistent with data collected from real world observation. Remember, the goal — we want to know why people do what they actually do. Theories that are not supported by the data may be a great brain exercise, but they are useless in helping us understand reality.

Here is a piece of data. Between 1968 and 2015, in the aggregate, the percent of national income going to income tax collections is 17.35 percent. A horizontal line set at 17.35 percent nicely represents a graph of the actual individual annual percentages. Yet, over this same period, the top tax rate has ranged from a high of 77 percent to a low of 28 percent while ending at the current 39.6 percent. Viewed another way, no matter how hard the federal government tries to capture our income through tax collections, they ultimately only get 17.35 percent. At a top rate of 77 percent, we work very hard to find ways to not pay taxes. As the rate falls we don’t work so hard at tax avoidance.

So, if Congress is currently working on tax reform, why not go all the way to work on tax simplification and let it be data driven. If, in the end, all we are going to give the government averages 17.35 percent, why not just have one tax rate of — go figure — 17.35 percent. Do away with all deductions and the like state and local taxes, mortgage interest, childcare — all of them.

Have one standard deduction based on family size, period. In this world, every one will use a post card and the IRS bureaucracy could be reduced. This is what the data tell us. Should we listen? Or better yet, should our political leaders listen?

  • Reg Murphy Center
  • Skip Mounts

When discrimination is a good thing

Written by Melissa Trussell on . Posted in Melissa Trussell, Reg Murphy.

Discrimination is a dirty word. Rarely a day passes in which we are not confronted with news of alleged discrimination in employment, law enforcement, or some other setting. And each time, the news arouses intense emotion from the accuser, from the accused and from those who sympathize with either party. Regardless of which side of a particular case you identify with, I bet we can all agree that if — when — discrimination happens, it is bad.

Economic theory generally agrees with our moral compass. Discrimination based on characteristics such as race, gender, or religion causes inefficiencies in markets and overall economic losses to society. This is an important result, and maybe one day I will write more on this.

This week, though, another kind of discrimination is on my mind — a good kind of discrimination. Discrimination in its literal sense is not always bad. For example, for those of us who will find ourselves in retail stores or shopping online this Friday, discrimination could be very good. Let me explain.

Price discrimination is the term used to describe a situation in which a firm charges different prices to two or more groups of consumers who purchase an identical product or service. The idea is that if the firm is able to figure out which customers would not buy their product at higher prices, they offer them a deal to entice them to buy, but they maintain higher prices for customers who are willing to pay more. The result is that consumers — especially those with lower incomes — have greater opportunity to purchase the good or service, and firms are able to sell more and generate higher profits. Both consumers and firms benefit from good discrimination.

As we discussed this idea in class last week, a student pointed out that Black Friday sales are a good example of this type of discrimination. Those who are willing to fight crowds and stand in long lines pay lower prices for the same products others will buy for higher prices closer to Christmas.

Parents of young children know all about this. Last holiday season, the hottest toy on the market was the Hatchimal, one of several “species” of egs that hatches into a trainable stuffed animal when appropriately nurtured by its human. Wal-Mart’s 2016 Black Friday add promised Hatchimals for $48.88, as much as a 20 percent discount off the regular price of the toys. Of course, supplies were limited, and the toys flew off shelves, leaving many to buy the toys later at full price, or worse — from resellers for as much as double the regular retail price.

On its surface, this example may not make price discrimination seem all that good. After all, Black Friday discounts just lead to empty shelves and frustrated customers. But, the good in price discrimination is what keeps us coming back every year after the Thanksgiving turkey has been put away. The good is in the opportunity for the deal — an opportunity over 154 million Americans took advantage of in 2016. Even if most parents left last year frustrated by empty shelves, many were willing and able to purchase Hatchimals later at higher prices. And some parents who may never have been able to pay the resellers’ prices had the opportunity to make their children happy because of Black Friday price discrimination.

  • Melissa Trussell
  • Reg Murphy Center

We’ve got some catching up to do

Written by Don Mathews on . Posted in Don Mathews, Reg Murphy.

Next month marks the 10-year anniversary of the onset of the Great Recession of 2007-2009. Not exactly an anniversary to celebrate. The Great Recession hit the U.S. hard and Georgia harder — and it creamed Glynn.

So, where is our local economy today compared to where it was 10 years ago, just before the recession hit? And how has our local economy fared over the last 10 years compared to Georgia and the U.S.?

A telling measure of an economy is real gross domestic product — real GDP for short. Real GDP is the inflation-adjusted market value of an economy’s production, as well as income generated from production. Tracking how real GDP changes over time tells us a lot about the health of an economy.

In the U.S., real GDP fell by 3.2 percent from 2007 through 2009. It has grown every year since 2009, and is now 14.4 percent greater than it was 10 years ago, just before the recession hit.

In Georgia, real GDP fell by 6.7 percent from 2007 through 2009. It has grown every year since 2009, and is now 6.6 percent greater than it was 10 years ago.

In Glynn, real GDP didn’t just fall from 2007 through 2009. It fell from 2007 through 2014, and by a whopping 15.8 percent. It began growing again in 2015, but is still 7.9 percent less than it was 10 years ago.

An even more telling measure of an economy is real per capita GDP. Real per capita GDP — or real GDP per person — is real GDP divided by the economy’s population. Real per capita GDP says much about the standard of living in a region.

In the U.S., real per capita GDP was $49,126 in 2007. In 2009, it was $46,680, a decrease of 5 percent from 2007. U.S. real per capita GDP is now $50,577, 3 percent greater than its 2007 level.

In Georgia, real per capita GDP was $46,734 in 2007. By 2010, it had fallen by 9.4 percent to $42,029. It is now $44,723, still 3.6 percent below its 2007 level.

In Glynn, real per capita GDP was $40,255 in 2007. It then fell in each of the next seven years to $31,478 in 2014, a decrease of 21.8 percent from its 2007 level. Glynn real per capita GDP has increased since 2015 and is now $33,580, still 16.6 percent below its level ten years ago.

Note the gap between real per capita GDP in Glynn and real per capita GDP in the U.S. The gap was big in 2007: real per capita GDP in Glynn was 18 percent less than real per capita GDP in the U.S. The gap has since become a chasm. Real per capita GDP in Glynn is now 33.6 percent less than real per capita GDP in the nation.

That is not just a gap between a couple of arcane economic numbers. The gap between those numbers reflects a gap in living standards and a gap in the things that drive living standards.

The news is certainly not all bad. Our local economy is growing again, and at a decent clip. Not only are real GDP and real per capita GDP growing again, we’re also seeing significant improvement in the labor market.

But goodness, we’ve got some catching up to do.

  • Don Mathews
  • Reg Murphy Center

Entrepreneurship is alive and well in Brunswick

Written by Skip Mounts on . Posted in Reg Murphy, Skip Mounts.

On the first Wednesday of every month at 9 a.m. a group of people gather at Tipsy McSway’s in downtown Brunswick to listen to two entrepreneurs talk about their businesses or nonprofits. We hear it all — beginnings, histories, successes, problems and challenges. Such is the nature of 1 Million Cups, Brunswick. These meetings have been going on for 18 months so it is time to tell the citizens of the Golden Isles what we have learned about our Brunswick entrepreneurs.

In general, entrepreneurs are an interesting lot. Regardless of where one goes, you tend to find them in unexpected places. They value their individuality. And they all have interesting stories that have led them to do what they do. In many cases their calling is so strong they have to do what they do.

Almost 42 percent of our entrepreneurs and presenters and their enterprises can be found in downtown Brunswick. It seems like there is a general impression in our community that not much is going on in downtown. While there is often news of renewed hope of a hotel and conference center development project, entrepreneurs are filling the void. Entrepreneurs will often go where others will not. Opportunity has many different faces and between Norwich and Newcastle streets may offer such an unexpected place.

Nearly 53 percent of our 1 Million Cups entrepreneurs are women. This is very unusual relative to other communities that support a 1 Million Cups forum. Entrepreneurs are, more often than not, go-it-alone, risk-taking pathfinders. Here, success is its own reward where judgment is only found in the ability to please customers. Opinions based on arbitrary characteristics such as gender do not find a home in the world of entrepreneurs.

To affirm these points about our Brunswick entrepreneurs, new freedoms and social liberalizations are being introduced in Saudi Arabia through the influence of reformer Crown Prince Mohammed bin Salman. One of the first signs of the impact of these small initial changes is the appearance of entrepreneurs and their food trucks in the capital city of Riyadh. One of the most popular, judging by the line of men wanting to buy coffee, is run by a woman and her daughter.

Finally, Brunswick entrepreneurs have some amazing stories. Entrepreneurship is more than just starting a business. It involves the beginning creativity necessary to identify unmet needs of others or problems that need to be solved. In the case of our Brunswick entrepreneurs opportunity and creativity have been found in the napkins of a grandmother, in the hearts of rescue dogs, in the wellbeing of veterans, in the desire to give kids their own places to read at home, to just know that there is opportunity in the vacant buildings in downtown Brunswick and on and on. All are special and unique. Entrepreneurial storytelling is alive and well in Brunswick.

Data from studies of the Kauffman Foundation of Kansas City show that since 1980, businesses aged 0 to 5 years show positive net job creation — more jobs are created than destroyed. Businesses 6 to 10 years of age show zero net job creation over the same period while businesses older than 11 years show negative job growth. So, economic prosperity and job creation is found in new firms. The ecosystem that generates new businesses is the land of the entrepreneur. From the experiences presented at 1 Million Cups, Brunswick, our ecosystem is alive, well and very special.

  • Reg Murphy Center
  • Skip Mounts

Economic development requires involving the community

Written by Melissa Trussell on . Posted in Melissa Trussell, Reg Murphy.

Last week, my colleague Dr. Don Mathews wrote about ways in which Hurricane Irma gave us a glimpse of what life is like for millions of folks living in developing countries without electricity or running water. I have spent a good bit of time living and working in developing countries, and I echo Don’s sentiment — thank goodness for electricity and plumbing here at home.

While I am grateful for the ways in which Southeast Georgia differs from countries in the developing world, I have become increasingly aware of the ways in which we are similar. A high percentage of our population live in poverty (Glynn County — 19 percent, Indonesia — 11 percent), though the gap between our richest and poorest households is astounding. We have low labor force participation (Camden County — 49 percent, Nigeria — 56 percent). And residents of our region who are over age 25 are unlikely to have earned a college degree (Charlton County — 11 percent, Ecuador — 14 percent).

With such similarities to low-income countries, there are things we can learn about ourselves by looking to the literature on economics and policy in developing countries. For starters, one of the greatest lessons in economic development is the need for all actors with a stake in the success of the community to work together toward a shared vision. For long-term, sustainable development to occur, everyone — government entities, business owners, nonprofit leaders and, perhaps most importantly, local residents — must be involved throughout the development process.

There is a classic example of development done wrong: the well-meaning charitable giver who decides to collect shoes from his home country to give away to barefoot children in a village in a developing country. Consequentially, the children are shoed, but the local cobbler goes out of business, and the entire village becomes dependent on outside aid to provide footwear.

The shoe-giver attempts to address an immediate symptom with an unsustainable solution, and the result is to move the village backward, rather than forward in economic development. What made this solution unsustainable? It did not involve all local stakeholders in the shoe market. It was a development project done for the community rather than with the community. Perhaps a better approach would have been to involve the community in finding and addressing the root of the barefootedness. Maybe the real problem is not a lack of shoes, but a lack of job opportunities, leaving parents unable to afford shoes for their children. And the “solution” of providing free shoes adds the cobbler to the list of unemployed.

So, what can we in Southeast Georgia learn from this example of an unsuccessful development attempt in a poor village far away?

Consider our development goals here at home, poverty relief; improved labor force participation; increased education; community revitalization. In working toward these goals, our efforts are best spent first getting to know our poor, our non-working, our young and others in our communities to understand what our needs really are before we start blindly throwing shoes. And as we get to know our neighbors and understand our collective strengths and weaknesses, we will be in a position to work together to capitalize on our strengths to address our weaknesses through sustainable economic and community development.

  • Melissa Trussell
  • Reg Murphy Center

An economic lesson from Irma

Written by Don Mathews on . Posted in Don Mathews, Reg Murphy.

There are certainly more preferable ways to learn economics than suffering a hurricane. But Irma happened, and there are economic lessons that we can learn from it.

One lesson is: Thank goodness we live when we do and where we do.

Life with electricity and water supply and sanitation systems is not just more convenient than life without them. When the power goes out and the water system stops working, life gets unhealthy and dangerous fast. Puddles of stagnant water become ripe sources of illness and disease. And good luck to you if you get sick or hurt or go into labor when there’s no power or clean running water or roads that can be traveled by car.

Yet life without electricity and running water and cars was the way life was for thousands of years, until quite recently. In 1900 — not long ago in the history of human beings — the U.S. was already the richest country in the world. In that year, 3 percent of homes had electricity and 15 percent had running water and flush toilets.

The poorest country on earth today is the Central African Republic. Life expectancy in the Central African Republic is 52. In the U.S. in 1900, life expectancy was 47, and disease from ingesting contaminated water — cholera, dysentery, typhoid and others — was a leading cause of death.

Life without power and a functioning water system for four days after Irma was a worrisome burden. Imagine living your entire life without them. The fact is that we here in 2017 in the U.S. and a few other choice spots on the planet are by far the richest people in the history of the human race.

How did that happen?

Ideas. We are the beneficiaries of a combination of revolutionary ideas that brought about the miracle of modern economic growth that economist Deirdre McCloskey calls the Great Enrichment.

First came the idea, which caught hold in the late 16th century, that knowledge, especially scientific knowledge, can and should be used to improve the everyday lot of humankind.

Mix that with the humanist ideas of the European Enlightenment — in particular the idea that the world of here and now is important and should be made better — and the revolutionary Enlightenment ideas about economic liberty: that people have the right to offer their labor services to any employer they choose, that they have the right to enter markets to sell goods and services without restraint by government or competing producers and that to engage in such productive economic activity is good for humanity.

The consequence of people living those ideas has been the utterly astounding enrichment of living standards of the past 200 years.

In 1800, income per person in the United States was roughly $1,000 — in today’s dollars. In 1900, it was about $5,700. Today, it’s $46,400. That’s an increase in living standards since 1800 of a factor of 46. There is nothing comparable in human history.

It’s ironic — capitalism is really not about the accumulation of capital, physical or financial. What makes capitalism capitalism is ideas: about liberty, innovation, entrepreneurship and the moral value of creating things that improve people’s lives.

Enjoy your electricity and running water.

  • Don Mathews
  • Reg Murphy Center