Finally, some sense about Mayor Mike's sugared-beverage-limitation scheme, from The New Yorker's James Surowiecki

"If all this sounds as if New York's soda consumers were about to become the subjects of an elaborate social-science experiment designed to reshape their behavior and desires, well, that's kind of true. But then we've been the subject of just such an experiment, run by beverage and fast-food companies, for the past forty years. If Bloomberg has his way, we may start feeling like we're white rats in a maze, but at least there's a good chance we'll be thinner rats."

-- James Surowiecki, in this week's New Yorker

by Ken

I know awhile back I was promising to talk about The New Yorker's James Surowiecki's "Financial Page" about banksters-gone-wild and the LIBOR mess. (His title was "Bankers Gone Wild.") I'd still like to get back to that, because as usual Surowiecki has the ability to make me understand money-related issues -- what the issues are and how they got to be issues, including who-done-what -- that few other writers can, or (I suspect) honestly try to. Meanwhile I would encourage you to check it out on your own. It's filled with sensible sense that actually makes sense, as for this explanation for why it's not really a fantabulous idea to allow the banksters to regulate themselves, not even with the threat hanging over them that they could -- gasp! -- damage their reputations by being fiscally irresponsible: "[I]f recent history has taught us anything, it’s that self-regulation doesn’t work in finance, and that worries about reputation are a weak deterrent to corporate malfeasance."

The obvious contrast is the "common sense" so often purveyed by right-wing propagandists, stooges, or outright malefactors -- or just plain morons like the Teabaggers. When those people talk about "common sense," they really mean non-sense, stuff that sounds pretty but is not only wrong but usually wrong in every particular. Which brings me to the Surowiecki "Financial Page" I would rather talk about today, "Downing Supersize," one of the few sane responses I've seen to poor Mayor Mike Bloomberg's plan to ban sales of sugared soft drinks in sizes larger than 16 ounces -- at least at outlets that fall under the jurisdiction of the city's Board of Health, which is to say restaurants, fast-food joints, food stands, and the like, but not supermarkets, grocery stores, or delis. (Say, did you notice how I worked in that sarcastic reference to "poor" Mayor Mike? Pretty sweet, right?)

I took a trip a couple of weeks ago which involved a bus trip that has a stop, roughly midway, where a lot of people get on the bus. Approaching the stop I had an empty seat next to me. Experience has taught me that there would likely be so many people boarding at that stop that I was unlikely to depart with a still-empty seat, and so the principal question was who exactly would wind up there. And then the people started boarding, and I was put into a state of terror. My God, the size of them! And I don't mean that they were tall. My goodness, what sort of race of humans have we become? (In case you're wondering, I lucked out something unbelievable. Amid the stomp of the jumbos, a barely visible, exceedingly slender young woman asked if that seat was taken. I think I may have used up my quotient of good luck for the decade.)

There have been two common dismissive responses tp Mayor Mike's scheme:

(1) How dare the little Jew interfere with personal freedom? What kind of friggin' nanny state is this? People should have both the right and the responsibility to make their own sugared-beverage-consumption decisions.

(2) What the hell is the little Jew smoking? Okay, so maybe Americans have gotten a little porky. You're not going to solve that by refusing to allow them to drink super-giant sugar water.

The answers, in order, are:

(1) Are you out of your friggin mind? Do you think for even a second before you open your moronic trap? Personally, I think 20 ounces would be a better limit, but about the principle, I have no problem.

(2) First off, these people are lying. The mayor isn't banning anyone from drinking as much sugar water as they like; they would just have to buy it in 16-ounce increments. But more than that, are these people simply too stupid or inobservant to be aware of the dimension of the obesity problem, or are they just obesity profiteers or sympathizers-enablers of obesity profiteers? Surely no one with a working brain could believe either that those sugar waters aren't contributing mightily to the problem or that you don't choose to do nothing simply because the available solutions won't solve the entire problem. How stupid or dishonest are these people? (Answers: plenty stupid, plenty dishonest.)

Fortunately, James Surowiecki has much better answers -- better answers even than people this stupid and dishonest are entitled to.

THE FINANCIAL PAGE
DOWNSIZING SUPERSIZE
by James Surowiecki
AUGUST 13, 2012

In an era of political polarization, Michael Bloomberg has the rare ability to come up with policies that enrage everyone. His latest pet project -- banning large sodas, as a way of fighting obesity in New York -- has been ridiculed by both Jon Stewart and John Boehner. And a recent Board of Health hearing on the plan saw Democratic and Republican politicians alike lining up to attack the idea, which would prohibit restaurants, delis, sports arenas, movie theatres, and food carts from selling any soft drinks larger than sixteen ounces. Critics dismiss the ban as yet another expression of Bloomberg’s nanny-state mentality and as a "feel-good placebo" that's doomed to fail. They're right that the ban is blatantly paternalist. But that doesn't mean it won't work.

It's true that the ban will be easy to circumvent: if you want to drink thirty-two ounces, you can just buy two sixteen-ounce servings. But Bloomberg's proposal makes clever use of what economists call "default bias." If you offer a choice in which one option is seen as a default, most people go for that default option. People who are automatically enrolled in a retirement plan, for instance, are more likely to stay with their original plan than those who choose plans for themselves. In countries where people have to choose to be an organ donor, most people aren't donors; in countries where people have to actively say they don't want to be an organ donor, most are donors. The soda ban makes sixteen ounces or less the default option for soda drinkers; if they want more, they'll have to make an extra effort.

An executive at the American Beverage Association has dismissed the plan, saying that "150 years of research finds that people consume what they want." Actually, the research shows that what people "want" has a lot to do with how choices are framed. In one well-known study, researchers put a bowl of M&M's on the concierge desk of an apartment building, with a scoop attached and a sign below that said "Eat Your Fill." On alternating days, the experimenters changed the size of the scoop -- from a tablespoon to a quarter-cup scoop, which was four times as big. If people really ate just "what they want," the amount they ate should have remained roughly the same. But scoop size turned out to matter a lot: people consumed much more when the scoop was big. This suggests that most of us don't have a fixed idea of how much we want; instead, we look to outside cues -- like the size of a package or cup -- to instruct us. And since the nineteen-seventies the portion sizes offered by food companies and restaurants have grown significantly larger. In 1974, the biggest drink McDonald's offered was twenty-one ounces. Today, that's roughly the size of a "small" drink at Burger King. In effect, the scoops have got bigger, and consumption has risen accordingly.

Of course, if you don't want the large soda, you needn't order it. Yet the mere existence of the supersize can change your idea of how much you want to drink. In a classic experiment by Itamar Simonson and Amos Tversky, people asked to choose between a cheap camera and a pricier one with more features were divided more or less equally between the two options. But when a third option -- a fancy, very expensive camera -- was added to the mix most people went for the mid-range camera. The very expensive camera made the middle one seem less extravagant. In the same way, the fact that a large soda is now forty ounces makes a twenty-ounce soda feel sensible. Bloomberg's ban is designed to flip this effect on its head: if the largest soda you can order is sixteen ounces, a can of Coke may start to seem like more than enough. Some food researchers doubt that this will work, since so many of us are used to the idea of large servings. But even our experience of feeling satiated is highly malleable. In one experiment, people ate meals of dramatically different sizes in the dark, and those who were given much less food did not feel hungrier than the others or rate their meals as much smaller. So once people have a few sixteen-ounce drinks they may find that sixteen ounces is plenty.

Many economists would say that, if we want to discourage soda consumption, taxing it -- the way we do alcohol and tobacco -- would be more efficient than a ban. Some European countries do have such taxes, but the idea has been a political non-starter in New York. In any case, perhaps the most cunning aspect of Bloomberg's proposed ban is that it would function as a kind of stealth tax on consumption, while leaving average-sized sodas untouched. Currently, on a per-ounce basis, large drinks are much cheaper than smaller ones -- which encourages people to supersize. The soda ban should shift this. Two sixteen-ounce servings are bound to be more expensive than one thirty-two-ounce serving, which creates another disincentive to drink more.

If all this sounds as if New York's soda consumers were about to become the subjects of an elaborate social-science experiment designed to reshape their behavior and desires, well, that's kind of true. But then we've been the subject of just such an experiment, run by beverage and fast-food companies, for the past forty years. If Bloomberg has his way, we may start feeling like we're white rats in a maze, but at least there's a good chance we’ll be thinner rats. ♦

[Boldface emphasis added.]

#