Recession Porn - Let's Change the Channel

Economic News got you Down?

Let’s Change the Channel


I’ve heard it described as ‘recession porn’. In the media, you find an economic forecast or story that is awful and you run with it. It sells papers or gets people watching (kinda like the car wreck mentality).

Lately, however, we may have turned a corner. The Globe & Mail recently used the decline in the usage of the terms ‘depression’ and ‘economy’ in a Google search as a sign things may have bottomed out. A couple of weeks ago I was at an economic development conference where a keynote speaker suggested we’re not REALLY in a recession – if you compare us with 2002, a year more typical than the crazy and unsustainable boom years experienced more recently. Maybe these people are grasping for straws or maybe it’s the natural optimism that comes with spring.

One thing that the current economic downturn provides us with is a chance to

look differently at the way we measure the world, our communities and maybe ourselves.

In Canada we’re guaranteed ‘peace, order and good government’. Our American cousins get the much sexier ‘life, liberty and pursuit of happiness’ in their Constitution.

But how often do we actually stop and consider our own happiness. Lately, there’s been some great research that’s suggested our continued fixation on Gross Domestic Product (GDP) as a sign of how well we’re doing is about as wrong as having an all-lard diet. In other words, we’re watching the wrong channel.

In the early 20th century when GDP went up, society became better. People lived longer healthier lives, enjoyed more school and were generally happier. (Believe it or not, early economists were trying to make society happier.)

However, that relationship started to change in the west 50 years or so ago when people didn’t get any happier while incomes continued to rise. In fact, rates of suicide, depression, anxiety, alcoholism, and mental illness all started to climb. It didn’t take long for people to start criticizing GDP as a bad measure of progress – GDP goes up when people smoke more, when insurance claims for vandalism are filed, or when more is spent on prescription drugs.


Economists and others searched for meaningful ways to answer ‘where are we?’ and ‘where do we want to go?’. ‘Can’t measure, can’t manage’ is a common adage in management circles.

There was some promise with Genuine Progress Indicators (GPI), which also tried to measure the well-being of people in a country. It tries to separate between good and not-so-good growth and factor in things like costs of resource depletion (deforestation), crime, family breakdown, etc.

In 1972, the King of Bhutan proposed Gross National Happiness (GNH), trying to ensure Bhutan, a tiny mountain kingdom above India, would preserve its unique cultural and spiritual features when opened to the world. GNH tried to balance four pillars: promotion of equitable and sustainable socio-economic development, preservation and promotion of cultural values, conservation of the natural environment and establishment of good governance. Bhutan has struggled with measuring this but it is, to its credit, the only country among the world’s 20 happiest countries, as documented in a well-regarded study by the UK’s Adrian White.

The Happy Planet Index (not the smoothie company that Vancouver Mayor Gregor Robertson co-founded) takes things a step further. It looks at well-being and wealth but then subtracts ecological footprint and adverse impact on one’s neighbour. Therefore, a gas guzzling country that fires missiles into the neighbourhood would score low. Canada and the US do not crack the top 100 in this.

The New Economics Foundation, a group based in the UK, are certainly shaking things up with the Happy Planet Index. They claim to do economics as if people and the planet mattered. They’ve caught the ear of many governments, including the Conservatives in Britain.

Sure, it’s interesting to play with numbers when they’re all rolled up at the national level, but do these measures of well-being help us in Nelson or the Kootenays?

My work at the community level on business vitality and community vitality has been trying to generate meaningful information from perceptions (do young people want to live here?) because there is no data.

That’s why I propose Nelson becomes a leader in measuring personal and community well-being as a way of REALLY charting how we’re doing and deciding where to go next. Nelson is quickly asserting itself as a leading community for food security, pesticides, and producing top-notch cultural products (community theatre, music, KCR’s radio programming). Why not be a front-runner on well-being (happiness) as well?

We could start by asking ourselves these key questions:

• How would you describe your overall quality of life/happiness?
  
• As a citizen in this community, how satisfied are you with the overall quality of life in it?
  
• In the past 5 years, do you feel it’s improved/stayed the same/worsened?
  
• What do you think will be the answer in 3 years?

Perhaps it’s time we changed the channel.

NOTE: If you want to see how your well-being stacks up against our European cousins’ check out www.nationalaccountsofwellbeing.org. The cool graph at the end is well worth the 15 minute investment.



Mike Stolte is Executive Director of the Centre for Innovative & Entrepreneurial Leadership (CIEL – www.theCIEL.com). He also writes as the Happy Economist (www.happyeconomist.com).

This article was originally published in the Nelson Daily News.

You are God For a Week - Bhutan, etc.

I Can’t Get No Satisfaction
Time Balance, Financial Security Biggest Barriers to Happiness in Capital

You are God for a week. You have one more miracle left. You can cure the blind or relieve chronic back pain.

Which choice will make for a happier world? Hmmm. A difficult decision isn’t it?

Surprisingly, relief of chronic back pain is the clear winner. Like lottery winners who get happy for a short burst, or, at the other end of the spectrum, paraplegics who lose the use of their legs and become depressed for a time, we humans get used to things quickly and return to a certain steady state of happiness. Those ‘cured’ of their blindness will likely get used to seeing and return to a level of happiness somewhere near where they started. Chronic pain, however, is a constant irritant and, unless treated, will make us very unhappy for a long time.

The economics of happiness looks at evidence to better make these trade-offs. The trick is finding and measuring things in a systematic, meaningful and accurate way. If the pursuit of happiness seems silly to you, consider that the World Bank, Organization for Economic Co-operation and Development (OECD), United Nations and others have recently declared developing better measures of progress – happiness (also called subjective well-being), quality of life, sustainability – as priorities.

When last I left you we were somewhere in the Himalayan Kingdom of Bhutan, population 700,000, trying to find ways of measuring their country’s progress using a newly developed Gross National Happiness (GNH) Index. No policy or program can be developed without considering GNH in this country that’s twice the size of the RDCK.

The Bhutanese have recently tried their first happiness survey, one that takes seven hours to complete. Ouch! One of the survey’s developers, Mike Pennock, an epidemiologist for Vancouver Island Health Authority (VIHA), thought the idea so great, he brought the survey home and tested it in Greater Victoria. Not the seven hour version, though.

With support from eight organizations including the province, the regional district, VIHA, the United Way and Victoria Community Foundation, Victorians became the guinea pigs for the rest of the world in November 2008. While questions of well-being have often been part of surveys, this survey was ALL about happiness and satisfaction.

Greater Victorians scored 76 out of a possible 100 in both happiness and satisfaction, scoring highest in freedom from deprivation (92) and availability of social support in times of crisis (83). Some of the lower scores were in interpersonal trust (69), ability to participate in cultural, arts and recreational events (65), satisfaction with governance (67), and the quality of the local environment (63). The lowest scores were in the areas of satisfaction with financial circumstances and security (53) and time balance (46).

Pennock was surprised at the very low score in time balance. He believes that financial and time-related stresses are affecting many people as well as people trying to care for and provide activities for their kids. Interestingly, the richest and poorest reported the most stress. Long commuting times are also taking their toll, with commuters from Sooke, Colwood and Metchosin scoring much lower than those living in the core of Victoria. About one in four Victorians spends little or no time doing what they really enjoy.

When Victorians were asked what would given them the most additional satisfaction in their life, less stress and more financial security were the top two answers, with 66% of the 2,400 respondents wanting these. Only 6% believed more possessions would bring them additional satisfaction.

While Victoria’s score of 76 may seem high, it ranked 35th of 45 Canadian communities recently surveyed using the basic happiness and satisfaction question. The highest scoring community was Granby, Quebec with many East Coast communities also scoring near the top. Pennock credits the East Coast dominance to their tight social networks. In a country comparison, Canada stands in the top 5, slightly behind leaders Denmark (82) and Switzerland (80).

With Greater Victoria’s survey information, the Capital Regional District and its partners hope to make some decisions that improve the happiness and satisfaction of Victorians. For instance, more resources may go towards chronic and mental illness, changing commuting patterns or better informing Victorians of what makes them happy (study after study shows we’re pretty hopeless at recording our happiness accurately unless we keep a record and ask the right questions).

With a few tweaks, the survey next travels to some Brazilian communities. Now that is has a benchmark established, Victoria hopes to do an on-line version of the survey on a yearly basis and offer a toolkit to other interested communities. If you’re interested in bringing this to the Kootenays, please e-mail me at happyeconomist@gmail.com.

Who knows, maybe we can solve the riddle of my chronic back pain or at least get happier trying to find a solution!

Mike Stolte is Executive Director of the Centre for Innovative & Entrepreneurial Leadership (CIEL – www.theCIEL.com). He also writes as the Happy Economist (www.HappyEconomist.com).

Originally published in the Nelson Daily News.

Maximizing Happiness

“You will never be happy if you continue to search for what happiness consists of”

Albert Camus, writer & philosopher

Sorry Albert!

How wrong Monsieur Camus was! Research has recently begun to pinpoint what makes people happy and which people are happiest. Being the type of person who needs to know, I look with anticipation to every new happiness study so I can get on with the business of fine-tuning my life to maximize my happiness and discover interesting material that others find interesting or useful.

In this column, I’ll summarize some general research on what makes people happy and speak to how some of specific research on some of the big questions has helped me make some key decisions in life (in future issues I will provide a more in-depth examination at some of the more interesting research).

First, and very importantly, a little defining is in order. Happiness, in most of what I will write about, is generally agreed to mean feeling good, enjoying life and feeling it’s wonderful. Unhappiness is feeling bad or wishing things were different. Researchers often ask questions using happiness, satisfaction and a ‘1 (worst) though 10 (best)’ life scale to ensure they are talking about the same things to different people. And yes, researchers have recently managed to validate these subjective, self-assessed scores by using MRIs, brain scans measuring brain activity.

Who the Happy are….

According to a huge European study collected over 12 countries involving more than 100,000 people, the happiest people are highly educated, female, have a high income, are young or old (definitely not middle-aged), retired, looking after the home and are self-employed. Obviously, very few of us can fit into all these categories. In fact, I fit into very few of the categories (I feel old – does that count?) and still manage to be somewhat happy (as an economist, I find it hard to say something without qualifying it).

The seven key factors affecting happiness in a positive way are good mental health, satisfying work, secure work, a secure and loving private life, a safe community, freedom and moral values.

The most unhappy people are unemployed, divorced and are experiencing extreme ill health.

Being wanted and feeling wanted, both at home and in society at large, are both significant and universal across cultures. It’s also hard to have a high quality of life suffering from a chronic disease.

Here is what the research concludes on the some of the big questions affecting happiness and how I’ve used the information to change my life.

Wealth and happiness.

Wealthier people are marginally happier. For the most part though, research reveals that there’s not much of a difference once you’ve reached a minimum family income. A Time Magazine poll of Americans found that 81% of those making $35-49,000 year were happy all the time compared with 88% of those making more than $100,000 (interestingly, other research has demonstrated that 25% of Americans are mildly depressed at any point in time). More startlingly, in for both high and low incomes, the same proportion of people reported being happy rarely or not often. Thirty-seven percent of the people on Forbes list of wealthiest Americans are less happy than the average American.

At a national level we observe the same effect. The U.S., despite its massive wealth, scored 15th among nations in happiness behind poorer countries like Mexico, Colombia, and El Salvador. Georgia, Ukraine, Russia and Zimbabwe, all dealing with issues of poverty and limited political freedoms, scored lowest.

With wealth, there are two things going on. The first is habituation, or getting used to something quickly. Humans adapt quickly and soon after getting our new leather sofa – that we worked weekends and long nights of overtime to save up for – it too, is just another piece in a living room that doesn’t get lived in. The second is relativism. It’s essentially keeping up with the Joneses, our families and our peer group. Jim and Lisa get a second vehicle and take a ski vacation. The pressure builds for us to keep up. They are no smarter or better than we are we think. Pretty soon we’re showing off our big new plasma screen and the stakes of this no-win game have been raised.

Lesson #1: First off, if I have a choice between working some extra time for money or spending it with my family, I now pick the latter. Sure, it would be nice to have a new deck, to have the dull house painted or to have a new toy for the kids but the extra money will come at the expense of my weekends and my nights, already busy with family obligations. Research, and common sense, tells me the toy will soon be forgotten.

Lesson #2: Don’t get sucked into competing with the Joneses. Easier said than done. However, choosing friends that have similar values to you when it comes to money can be helpful and help relieve the financial stress we all experience. Ten years ago, I moved to a smaller community that seemed to eschew a culture of thrift. People drive older cars, attend garage sales and seem more content with second hand toys than in the big city. I make considerably less but I feel much less stressed financially .

Community and happiness. “Community matters: roots are as important to people as for trees,” says happiness researcher John Heliwell. Community is a significant factor in happiness. Combined with family, and friends, this is the veritable happiness trifecta. Heliwell’s studies look at social capital, trust, links and cohesion as big factors in the community puzzle. In communities with high rates of crime, there is lower trust. People who live on ground floors have markedly higher rates of anxiety and mental illness. A recent Australian study showed that nine of the 10 happiest federal electoral ridings were small, rural and rather poor while their urban cousins were often surly and unhappy.

Lesson 3: We are all social animals craving meaningful interaction. For me, seeking out a real community – one that was vital, active and that welcomed newcomers – was a good bet at tipping the happiness scales in a positive direction. In addition, living in a smaller community also assists me with reducing clutter, the scourge of the 21st century, and a true stressor.

Health and happiness. Happier people are healthier, live longer, have better immune systems. As mentioned earlier, having chronically poor health is one of the best ways to sabotage your happiness.

Lesson #4: While nutrition and exercise are critical (and get the lion’s share of attention on health), research also suggests that two other key components of health affecting happiness are adequate sleep and managing stress. One study concluded two of three American women were chronically sleep-deprived (getting less than seven hours a night). This perpetual fatigue had a greater effect than job satisfaction or income on happiness. I go to bed early now! Stress, often caused by worrying about the future, is a growing health and happiness affecting issue. Some quick remedies I’ve adopted are paring down my to-do list to half or less, setting goals that are more realistic (not too easy but not too challenging), spending time with people I genuinely like and can be myself with, and keeping a ‘gratitude’ journal (see last issue). I’ve tried but not yet mastered meditation. Trail running and cross country skiing with my MP3 player and some relaxing tunes create short ‘reality breaks’ that have meditative qualities for me. Research has shown that meditating Buddhist monks have enormous activity in the portion of the brain associated with happiness.

Work and happiness. We all need to feel wanted and needed. Most of us spend a good chunk of our lives working and thinking of work.

Lesson #5: Heliwell’s research concludes that next to job security, it’s most important to instill trust in the workplace. As an employer, I have focused on creating an environemeent that focuses on these. In descending order, Heliwell also found that having a variety of tasks, employing skills, having a job free of conflicting demands and having enough time also affected happiness, and ultimately workplace productivity. If you’re a boss or business owner, take note. If you’re an employee, show this to the boss!

TV and happiness. People who watch a lot of TV aren’t as happy as those who watch little or not at all.

Lesson #6: First of all let me say, that the studying happiness – long the exclusive domain of spiritual leaders and psychologists – makes me happy in itself. I know myself well enough (remember those Greek philosophers who advised one to know thyself before seeking happiness).

Originally Published in Porch Magazine by Mike Stolte, www.HappyEconomist.com

How Happiness has made me Happy

“Those only are happy who have some object other than their own happiness; on the happiness of others, on the improvement of mankind, even on some art or pursuit, followed not as a means, but as an ideal end. Aiming thus at something else, they find happiness by the way.”

John Stuart Mill, Philosopher, Father of Capitalism & Modern Economics

I’m happier since beginning to study happiness.

First off, I’m a learner. I need to be learning in order to be happy. I once came across a lovely simple recipe for happiness that stated it simply – one needs to truly live, to love and be loved, to learn and to leave a legacy for true happiness. Simple, almost too trite. For me, I found the learning part of this advice to be a missing ingredient to understanding my happiness. If I I’m not constantly learning, I realize, I get bored. Boredom and happiness are not easy companions. Over the last few years, the interest in happiness and research related to it has exploded. Happiness is no longer the exclusive domain of spiritual leaders. Until recently, psychology offered little to the study of happiness focusing almost exclusively on unhappiness and depression, the evil alter egos of happiness. Thankfully, happiness research is now becoming an integral part of neurobiology, sociology and now economics. Each day, there’s more to read, still more data to analyze, and more insights to make. For me, nothing makes me happier.

Secondly, the data makes me happy. Using it, I have learned that I shouldn’t expect to be happy all the time, despite society telling me I deserve the latest and greatest and that I’m but a quick pill pop away from solving my gloominess or other ‘dysfunction’. In a strange Darwinian way, scientists have recently found that temporary depression and unhappiness are necessary barometers of health, and ultimately for human survival. (Deep, long lasting depression` is unhealthy though). People aren’t getting happier in the rich West. As noted in the last issue, suicide, depression, anxiety and a whole host of problems are on the rise despite our newfound wealth. Research suggests that we get used to what we have very quickly. This habituation effect (I like to call it the ratcheting effect) helps explain why lottery winners on one extreme and recent parapalegics on the other settle back into old happiness levels. They simply adapt to their new circumstance.

Research also suggests our peer group and the people we associate with on a daily basis plays a huge role in our happiness. If everyone around you does well financially except you you can expect your happiness will be affected. Despite what we’d like to think, we’re a hierarchical species. Taking this research to heart, it would suggest disassociating from Bill and Melinda Gates and their social circle.

Thirdly, I have begun to make some important life choices to maximize my happiness. Call me a crazy economist, but I believe in data. Tempered with common sense, a knowledge of oneself (data only presents averages and generalizations

Fourthly, I become animated in talking about something I love and that others are struggling with. Like all teachers, I teach so that I may learn.

Originally published in Porch Magazine

Mike Stolte is the Happy Economist: happyeconomist@gmail.com

Nelson - A Boutique Community?

Will Nelson Become a Hollow Boutique Community?

Made in the Kootenays Housing Crisis Requires Home-made Solutions

Now that I have my house in the Kootenays should I care about housing for others? If prices are too high here, won’t the current financial crisis straighten things out, like it’s doing to formerly overheated housing markets south of the border? If there aren’t enough rentals, won’t the market respond and build some?

These are all questions that emerged at the “100 Mile Ideas Diet” conversation café on innovative affordable housing solutions that CIEL (www.theCIEL.com) organized at Oso Negro (www.osenegrocoffee.com) last week (this was the 4th of 5 forums on issues related to community vitality). Housing is such a broad and relevant topic (we all need housing) that the café was only able to scrape the surface of the issue, in the process tapping into some passionate beliefs and values when it comes to housing and possible solutions.

“The market has failed, and failed colossally here”, began housing consultant Derek Murphy. In the last great market failure, governments stepped in. Murphy gave the caffeinated crowd of 75-80 some history and context. A housing shortage caused by the swooning ranks of boomers in the ‘70s led provincial and federal governments of the day to become proactive, not only providing units (through non-profits and cooperatives) and incentives for housing developments, but also offering generous subsidies to low and even middle income earners to buy homes (up to $10k). This time around that same supply crisis we experience here in Nelson is more of a regional issue. It’s confined mainly to the west and differs from community to community. Therefore, we shouldn’t expect it to be addressed by deficit-laden Ottawa or Victoria any time soon said Murphy.

What does that mean for us? With rentals in short supply (and disappearing yearly), developers only building higher-end units (and all that’s moving much more slowly – if at all- in a slow economy), prices still hovering in the $300 k range (unaffordable for most first-time buyers), and the issue being complex (spans geographical and political boundaries – Salmo, Castlegar, the Valley, Nelson are interconnected), are there any signs of hope?

To make matters worse, many of us who bought when things were cheaper (like me), are often oblivious of the issue. Or they believe we should raise the drawbridge and not let anyone else in. But if young families, and many of those who helped to build the vitality that we appreciate in Nelson (seniors, artisans, people who work in lower paid sectors that fuel much of our service-based economy) can’t afford to make this place home, we become a hollow boutique community. “The word is out,” said panellist Stacey Lock, community outreach worker, “Don’t move to Nelson unless you have accommodation.”

Some of the innovative solutions suggested were interesting: allow innovative non-profits to flourish (like years ago), provide land trusts (public owns the land, therefore units are more affordable) like they do in Europe (CBT was suggested as the catalyst), offer shared accommodation (in Philadelphia, trusts operate larger renovated houses accommodating 7-8 people), provide housing where a full range of services can be provided to the homeless (like Portland Hotel in Vancouver – panellist Michelle Mungall pointed out that it costs 33% less to house those in need than provide for medical, health, and justice services to the homeless. She also stated that one in five clients of emergency housing services locally are the working poor).

There were also some more affordable construction options offered; the new Castlegar seniors residence is coming in at 2/3rds of typical development costs, yurts (a fully insulated yurt for less than $20 k), supporting local builders (Mandala, Top Notch, etc.), or accepting more cheap modular (pre-fabricated) housing. Tata, the Indian manufacturer of a sub-$5,000 car, is selling out of its new basic $5,000 five hundred square foot pre-fabricated three story walk-up apartment units in the Indian housing market.

Nelson is going to have to get over its extreme Nimbyism (Not In My Backyard) if it wants to move forward on the issue concluded panellist Derek Murphy. He asked some provocative questions:

• Is Nelson willing to accept 40-60 unit multi-family dwellings (which we currently seem to oppose)?
• Are we willing to expand City boundaries to allow for more serviced land (and therefore more affordable units)?
• Are we willing to accept and push for more modularized homes (e.g. mobile homes and other pre-fabricated choices), getting over our hang-up for custom (more expensive) homes?

All food for thought and worth having a continued community conversation and respectful debate on. Closing our eyes and ignoring the issue won’t make it go away. Only good focussed leadership will help.

To follow the continuing discussion: http://ciel1.blogspot.com/

To listen to the café’s conversations, stay tuned in the coming weeks to KCR for the ‘100 Mile Ideas Diet’ and CIEL’s web-site (podcasts of the show).

Mike Stolte is the Executive Director of the Nelson-based Centre for Innovative & Entrepreneurial Leadership (CIEL – www.theCIEL.com).