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tag:blogger.com,1999:blog-28012259160152331342015-03-27T02:28:57.690-07:00Let's Talk Books And PoliticsYou can learn a little about a lot of things or you can learn a lot about a very few things. Guess which is the most fun.Richhttp://email@example.com:blogger.com,1999:blog-2801225916015233134.post-71277545226335142462015-03-27T02:28:00.000-07:002015-03-27T02:28:57.716-07:00Alcohol and Addiction: The False Premise of Alcoholics Anonymous
Alcohol is a substance that can generate a craving that can lead to high levels of consumption and unhealthy consequences. The conventional wisdom about how to address abusive use of alcohol is informed more by folklore than evidence-based science.

Gabrielle Glaser provides an interesting summary of what is known about the condition and treatment of alcohol abuse in an article in The Atlantic: The False Gospel of Alcoholics Anonymous. For some reason the online version of the article was instead titled The Irrationality of Alcoholics Anonymous.

Glaser provides some history related to alcohol abuse and the founding of Alcoholics Anonymous (AA). In 1935, Bill Wilson, an extremely heavy drinker ("known to drink two quarts of whiskey a day"), managed to stop drinking for good. He viewed his experience as the model for others to follow, combined that with a healthy dose of man-as-sinner religiosity, and formulated the "12 steps" to follow to recovery.

"Alcoholics Anonymous was established in 1935, when knowledge of the brain was in its infancy. It offers a single path to recovery: lifelong abstinence from alcohol. The program instructs members to surrender their ego, accept that they are 'powerless' over booze, make amends to those they've wronged, and pray."

The approach provided by AA quickly became embedded in the national consciousness as the one and only path to follow in dealing with alcohol abuse.

"A public-relations specialist and early AA member named Marty Mann worked to disseminate the group's main tenet: that alcoholics had an illness that rendered them powerless over booze. Their drinking was a disease, in other words, not a moral failing. Paradoxically, the prescription for this medical condition was a set of spiritual steps that required accepting a higher power, taking a 'fearless moral inventory,' admitting 'the exact nature of our wrongs,' and asking God to remove all character defects."<o:p></o:p>

"Mann helped ensure that these ideas made their way to Hollywood. In 1945's The Lost Weekend, a struggling novelist tries to loosen his writer's block with booze, to devastating effect. In Days of Wine and Roses, released in 1962, Jack Lemmon slides into alcoholism along with his wife, played by Lee Remick. He finds help through AA, but she rejects the group and loses her family."<o:p></o:p>

In 1970 the federal government recognized alcoholism as a disease and passed an act (referred to as the Hughes Act) that set up funding for the study and treatment of alcoholism. The AA system was viewed as the model for treatment and other approaches that might have been suggested were discriminated against. The result was that people were now in a position to make money treating people who were having trouble controlling a drinking problem.<o:p></o:p>

"After the Hughes Act was passed, insurers began to recognize alcoholism as a disease and pay for treatment. For-profit rehab facilities sprouted across the country, the beginnings of what would become a multibillion-dollar industry. (Hughes became a treatment entrepreneur himself, after retiring from the Senate.) If Betty Ford and Elizabeth Taylor could declare that they were alcoholics and seek help, so too could ordinary people who struggled with drinking. Today there are more than 13,000 rehab facilities in the United States, and 70 to 80 percent of them hew to the 12 steps, according to Anne M. Fletcher, the author of Inside Rehab, a 2013 book investigating the treatment industry."

The problem is that there is no independent data to support AA's claim that:

"….AA has worked for 75 percent of people who have gone to meetings and 'really tried.' It says that 50 percent got sober right away, and another 25 percent struggled for a while but eventually recovered. According to AA, these figures are based on members' experiences."

Others have investigated this claim and have found no supporting evidence.

"In 2006, the Cochrane Collaboration, a health-care research group, reviewed studies going back to the 1960s and found that 'no experimental studies unequivocally demonstrated the effectiveness of AA or [12-step] approaches for reducing alcohol dependence or problems."

"In his recent book, The Sober Truth: Debunking the Bad Science Behind 12-Step Programs and the Rehab Industry, Lance Dodes, a retired psychiatry professor from Harvard Medical School, looked at Alcoholics Anonymous's retention rates along with studies on sobriety and rates of active involvement (attending meetings regularly and working the program) among AA members. Based on these data, he put AA's actual success rate somewhere between 5 and 8 percent. That is just a rough estimate, but it's the most precise one I've been able to find."

The sad part about this state of affairs is that there have long been other options available that allow people to control their drinking habits without the extremely difficult step of total abstinence for life.

"The 12 steps are so deeply ingrained in the United States that many people, including doctors and therapists, believe attending meetings, earning one's sobriety chips, and never taking another sip of alcohol is the only way to get better. Hospitals, outpatient clinics, and rehab centers use the 12 steps as the basis for treatment. But although few people seem to realize it, there are alternatives, including prescription drugs and therapies that aim to help patients learn to drink in moderation. Unlike Alcoholics Anonymous, these methods are based on modern science and have been proved, in randomized, controlled studies, to work."

To indicate how other countries have used science-based methods to obtain better results, Glaser went to Finland, a heavy drinking country, where the approach used is based on the work of the American neuroscientist John David Sinclair. Sinclair moved to Finland in the 1970s to take advantage of a unique opportunity:

"….the chance to work in what he considered the best alcohol-research lab in the world, complete with special rats that had been bred to prefer alcohol to water."

Perhaps Sinclair's most interesting finding was that people who developed an uncontrollable craving for alcohol were being driven by specific chemical processes in the brain.

"Sinclair came to believe that people develop drinking problems through a chemical process: each time they drink, the endorphins released in the brain strengthen certain synapses. The stronger these synapses grow, the more likely the person is to think about, and eventually crave, alcohol—until almost anything can trigger a thirst for booze, and drinking becomes compulsive."

He administered types of chemicals called opioid antagonists to his "alcoholic" rats and discovered that these drugs that block opiate receptors could limit the alcohol consumption in rats. The same effects were found in humans.

"Subsequent studies found that an opioid antagonist called naltrexone was safe and effective for humans, and Sinclair began working with clinicians in Finland. He suggested prescribing naltrexone for patients to take an hour before drinking. As their cravings subsided, they could then learn to control their consumption. Numerous clinical trials have confirmed that the method is effective, and in 2001 Sinclair published a paper in the journal Alcohol and Alcoholism reporting a 78 percent success rate in helping patients reduce their drinking to about 10 drinks a week. Some stopped drinking entirely."

Three clinics have been established in Finland, and one in Spain, based on Sinclair's methods.

"In the past 18 years, more than 5,000 Finns have gone to the Contral Clinics for help with a drinking problem. Seventy-five percent of them have had success reducing their consumption to a safe level."

"The most common course of treatment involves six months of cognitive behavioral therapy, a goal-oriented form of therapy, with a clinical psychologist. Treatment typically also includes a physical exam, blood work, and a prescription for naltrexone or nalmefene, a newer opioid antagonist approved in more than two dozen countries."

When Glaser asked what the cost of such treatment she was given a figure of about $2,500,

"….a fraction of the cost of inpatient rehab in the United States, which routinely runs in the tens of thousands of dollars for a 28-day stay."

So tightly fixed in the American mind is the efficacy of the AA approach that results of medical studies are largely ignored.

"….naltrexone has been found to reduce drinking in more than a dozen clinical trials, including a large-scale one funded by the National Institute on Alcohol Abuse and Alcoholism that was published in JAMAin 2006. The results have been largely overlooked. Less than 1 percent of people treated for alcohol problems in the United States are prescribed naltrexone or any other drug shown to help control drinking."

Even the drug companies seemed sufficiently intimidated by the conventional wisdom to forego marketing drugs that should have been good moneymakers for them.

"Stephanie O'Malley, a clinical researcher in psychiatry at Yale who has studied the use of naltrexone and other drugs for alcohol-use disorder for more than two decades, says naltrexone's limited use is 'baffling'."<o:p></o:p>

"'There was never any campaign for this medication that said, "Ask your doctor,"' she says. 'There was never any attempt to reach consumers.' Few doctors accepted that it was possible to treat alcohol-use disorder with a pill. And now that naltrexone is available in an inexpensive generic form, pharmaceutical companies have little incentive to promote it."<o:p></o:p>

Glaser hopes that the implementation of the Affordable Care Act (Obamacare) will force a reconsideration of treatments that can be supported in an environment where results and cost-effectiveness are critical.<o:p></o:p>

"The debate over the efficacy of 12-step programs has been quietly bubbling for decades among addiction specialists. But it has taken on new urgency with the passage of the Affordable Care Act, which requires all insurers and state Medicaid programs to pay for alcohol- and substance-abuse treatment, extending coverage to 32 million Americans who did not previously have it and providing a higher level of coverage for an additional 30 million."

"Nowhere in the field of medicine is treatment less grounded in modern science. A 2012 report by the National Center on Addiction and Substance Abuse at Columbia University compared the current state of addiction medicine to general medicine in the early 1900s, when quacks worked alongside graduates of leading medical schools."

Alcoholics Anonymous has helped many people, but its method is inappropriate as a first option when science has provided us with evidence that other approaches are more effective.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2015/03/alcohol-and-addiction-false-premise-of.htmltag:blogger.com,1999:blog-2801225916015233134.post-82242267468310629882015-03-22T12:20:00.000-07:002015-03-22T12:20:57.136-07:00Big Energy, the Abolition of Slavery, and Global Warming
The association of slavery with big energy companies and global warming might not seem to make sense, but there is a context in which it does. Christopher Hayes discussed the relationship in his article in The Nation: The New Abolitionism.

Hayes was particularly intrigued by a calculation reported by Bill Mickibben, the well-known author and environmental activist.

"….a fairly straightforward bit of arithmetic that goes as follows. The scientific consensus is that human civilization cannot survive in any recognizable form a temperature increase this century more than 2 degrees Celsius (3.6 degrees Fahrenheit). Given that we've already warmed the earth about 0.8 degrees Celsius, that means we have 1.2 degrees left—and some of that warming is already in motion. Given the relationship between carbon emissions and global average temperatures, that means we can release about 565 gigatons of carbon into the atmosphere by mid-century. Total. That's all we get to emit if we hope to keep inhabiting the planet in a manner that resembles current conditions."

The problem becomes obvious when we learn that proven, worldwide energy reserves are five times the amount that can be consumed within that temperature constraint. Hayes concludes that somehow the fossil fuel companies are going to have to be persuaded or coerced into leaving at least 80% of their wealth buried under ground. Placing a value on this fuel is difficult, but he suggests $20 trillion as an estimate.

Hayes then suggests that the only time such an enormous economic change was required was when the slave economy in the Americas was dismantled. He estimates that the economic value of the slaves relinquished in the United States alone would be equivalent to about $10 trillion in today's economy. Consequently he concludes that the economic consequences were similar in scope to eliminating access to fossil fuel reserves.

Slavery did not end easily in the United States. It took years of a civil war that was easily the bloodiest conflict the nation has ever participated in. While limiting the access of energy companies to their claimed wealth in fossil fuels may not lead to violence, Hayes claims it is no less radical an idea in our time and will likely not be accomplished without some level of strife.

"….the parallel I want to highlight is between the opponents of slavery and the opponents of fossil fuels. Because the abolitionists were ultimately successful, it's all too easy to lose sight of just how radical their demand was at the time: that some of the wealthiest people in the country would have to give up their wealth. That liquidation of private wealth is the only precedent for what today's climate justice movement is rightly demanding: that trillions of dollars of fossil fuel stay in the ground. It is an audacious demand, and those making it should be clear-eyed about just what they're asking. They should also recognize that, like the abolitionists of yore, their task may be as much instigation and disruption as it is persuasion. There is no way around conflict with this much money on the line, no available solution that makes everyone happy. No use trying to persuade people otherwise."

Hayes then goes on to question the business model that the energy companies seem to be following and suggests a path for climate activists to follow in contending with them.

"Fossil fuel extraction is one of the most capital-intensive industries in the world. While it is immensely, unfathomably profitable, it requires ungodly amounts of money to dig and drill the earth, money to pump and refine and transport the fuel so that it can go from the fossilized plant matter thousands of feet beneath the earth's surface into your Honda. And that constant need for billions of new dollars in investment capital is the industry's Achilles' heel."

The energy companies must keep their shareholders happy and they must act in such a way as to maintain the value of company shares and continue to have access to new capital. Hayes's plan is for activists to convince shareholders and other investors that the energy companies are pursuing a business plan that is doomed to failure.

"Investors, even those unmotivated by stewardship of the planet, have reason to be suspicious of the fossil fuel companies. Right now, they are seeing their investment dollars diverted from paying dividends to doing something downright insane: searching for new reserves. Globally, the industry spends $1.8 billion a day on exploration. As one longtime energy industry insider pointed out to me, fossil fuel companies are spending much more on exploring for new reserves than they are posting in profits."<o:p></o:p>

"Think about that for a second: to stay below a 2 degree Celsius rise, we can burn only one-fifth of the total fossil fuel that companies have in their reserves right now. And yet, fossil fuel companies are spending hundreds of billions of dollars looking for new reserves—reserves that would be sold and emitted only in some distant postapocalyptic future in which we've already burned enough fossil fuel to warm the planet past even the most horrific projections."<o:p></o:p>

"This means that fossil fuel companies are taking their investors' money and spending it on this extremely expensive suicide mission. Every single day. If investors say, 'Stop it—we want that money back as dividends rather than being spent on exploration,' then, according to this industry insider, 'what that means is, literally, the oil and gas companies don't have a viable business model. If all your investors say that, and all the analysts start saying that, they can no longer grow as businesses'."<o:p></o:p>

When Britain passed a law outlawing slavery in most of its possessions in 1833—and all lands soon thereafter—it was accomplished peaceably by offering slave owners financial compensation for their lost slaves. The former slaves did not go away necessarily. Most remained available as laborers, but laborers who had to be paid. The businesses affected could switch business models and resume activities in many cases. There is no similar backup plan for the energy companies at this point. <o:p></o:p>

There may be more to the energy companies' business model than Hayes suspects. It could be that part of the justification for continuing to search for energy reserves is the hope for eventual compensation for their inevitable loss.

It could also mean that big energy believes that human nature is on their side and they will be allowed to provide pollutants indefinitely into the future. There is little indication of mass movements to rein in the energy companies. In fact, there appears to be support being given to those who would experiment with geoengineering solutions in an attempt to counter the rising temperatures while eliminating the need to constrain fossil fuel consumption.<o:p></o:p>

The energy corporations seem to believe that preserving their stock market valuation must be their primary objective. The shareholders would probably agree with that as a strategy because they would rather have shares that they could sell if they wished and pay taxes at the capital gains rate rather than have dividends that are taxed at a higher rate as regular income. The wealth of the company is judged in terms of current income and possessed assets. If a company were to even hint that it was getting out of the energy exploration business, the stock price would likely plummet as shareholders jumped off a sinking ship.<o:p></o:p>

It would seem that the best way to end fossil fuel extraction is the traditional way—by making the demand for fossil fuels drop so low that it is no longer a viable business. The recent fall in the price of oil is often interpreted as being harmful to alternate energy solutions. It is not clear that that is a correct assumption. People and businesses will not necessarily consume more energy because it is cheaper. That usually makes no sense. There is the possibility that the switch to renewable energy sources may slow down a bit, but one lesson that should be learned from the recent price excursions is that fuel prices are very volatile and that what goes way down can also go way up. Long-term plans are unlikely to be much changed.<o:p></o:p>

It is interesting to note that while the price of fuel dropped dramatically, the level of demand was little changed. Price changes were based on projections into the future. The way to limit the activities of energy companies is to create a future projection of demand that will drive prices lower permanently—so low that future energy extraction becomes uneconomical. <o:p></o:p>

The technologies are already available to dramatically lower demand for fossil fuels. Just striving for greater efficiency in transportation and in heating and cooling homes and businesses can provide enormous savings. There are no wondrous breakthroughs required. We must merely speedup processes that are already underway. One such path to the near elimination of fossil fuel demand is described here.<o:p></o:p>

Activists' time would be better spent attacking demand rather than supply.<o:p></o:p>

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/03/big-energy-abolition-of-slavery-and.htmltag:blogger.com,1999:blog-2801225916015233134.post-11894786883726753052015-03-19T01:44:00.000-07:002015-03-19T01:44:22.579-07:00The War on Poverty Succeeded?
President Lyndon Johnson declared "unconditional" war on poverty in the United States in 1964. What has come to be known as the War on Poverty was a protracted conflict that, similar to the Vietnam War, extended over many years and ended up being considered by most as being of dubious value. Christopher Jencks produced an article for the New York Review of Books that provides a fresh view of what might have been accomplished by Johnson's initiative: The War on Poverty: Was It Lost?.

Jenks includes Ronald Reagan's famous 1988 quote on the subject:

"Some years ago, the federal government declared war on poverty, and poverty won."

He also describes polling that indicates Reagan's assessment has been accepted by the majority of the population.

"Asked about their impression of the War on Poverty, Americans are now twice as likely to say 'unfavorable' as 'favorable'."

Jencks article was occasioned by the publication of a collection of papers evaluating the long-term consequences of the programs initiated or augmented as part of this attack on poverty. This document suggests that the "War" was more successful than most people believe.

"Legacies of the War on Povertyis a set of nine studies, edited by Martha Bailey and Sheldon Danziger, that assess the successes and failures of the diverse strategies that Johnson and his successors adopted to reduce poverty. The chapters are packed with evidence, make judicious judgments, and suggest a higher ratio of success to failure than opinion polls do."

To put the collection of legislative efforts in perspective it must be recognized that Johnson did not put into action a complete slate of acts aimed at addressing poverty. What emerged over time were efforts that extended to the 1980s when Reagan took over the White House and the Democrats lost control of Congress.

"As a result, some of today's most important antipoverty programs, such as food stamps, Supplemental Security Income (a guaranteed minimum income for the elderly and disabled), and Section 8 rent subsidies for poor tenants in private housing, were either launched or dramatically expanded between 1969 and 1980. Had Johnson not put poverty reduction at the heart of the Democrats' political agenda in 1964, it is hard to imagine that congressional Democrats would have made antipoverty programs a political priority even after Republicans regained control of the White House."

Jencks promises a follow-up article is coming that describes the assessments of the various antipoverty programs. Here he is mainly concerned with the most commonly applied metric: has the rate of poverty actually decreased after all this effort. This is a quite complicated question. Poverty can be defined in many ways. Some people believe poverty exists only in the biblical sense where assistance is needed to avoid starvation. Others conclude that anyone in possession of a smart phone cannot be considered poor; therefore the number of poor is quite small. The federal government publishes a number estimating the percentage of people living below "the poverty line" using surveys conducted by the Census Bureau.

This poverty line is an income level in dollars that depends on whether an individual is an independent unit or a member of a family. Family incomes are compared to a number based on the size of the family and the age of its members. This was the way poverty was assessed in the 1960s, and the government uses the same metric today basing the change in poverty level on the change in the Consumer Price Index for All Urban Consumers (CPI-U).

The government figures indicate a poverty rate of about 19% in 1964 that dropped to around 11% in the early 1970s. Since that time the rate has fluctuated with changing economic conditions and stood at 14.5% in 2013. This apparent stagnation makes it easy to conclude that the various government efforts at addressing poverty have been failures.

The government's approach has the benefit of being consistent year-to-year, but consistency and accuracy are two quite different things.

"Given that the War on Poverty was a commitment to eliminating it, the most obvious measure of the war's success or failure is how the poverty rate has changed since 1964. Bailey and Danziger argue that just looking at changes in the poverty rate is a 'simplistic' approach to assessing the War on Poverty, and in one sense they are right. If you want to know how well programs like Head Start or food stamps worked, or how many full-time jobs they created, the reduction in poverty over the past half-century is not a sensible measure."<o:p></o:p>

"But Bailey and Danziger's argument is more fundamental. They object to using trends in poverty as a measure of the war's success because the prevalence of poverty depends not just on the success or failure of policies aimed at reducing it but also on other independent economic and demographic forces, like the decline in unskilled men's real wages and the rising number of single-parent families."<o:p></o:p>

Jencks illustrates just how inaccurate the government's approach can be by indicating some obvious changes that have taken place over the years that are not considered in the official poverty rate.

He first addresses the increase in unmarried but cohabiting couples who are considered "unrelated individuals" by the census bureau. The poverty line for an unrelated individual was $12,119 in 2013. An unmarried couple could have had a joint income of $24,238 and still be both counted as living in poverty. For a married couple the poverty line is a mere $15,600. This leads Jencks to conclude that the poverty rate is being over estimated by a change in social customs that the government's methodology refuses to recognize.

There are other failings that are more easily quantified. Jencks uses the term noncash benefits to represent goods and services that are provided to people that allow their cash needs to have decreased over the years.

"Noncash benefits now provide many low-income families with some or all of their food, housing, and medical care. Such programs were either tiny or nonexistent in 1964, and their growth has significantly reduced low-income families' need for cash. However, the Office of Management and Budget (<acronym>OMB</acronym>) does not allow the Census Bureau to incorporate the value of these benefits into the recipients' poverty thresholds. The President's Council of Economic Advisers estimates that even if we ignore Medicare and Medicaid, food and housing benefits lowered the poverty rate by 3.0 percentage points in 2012."

An even more egregious error is obtained by ignoring refundable tax credits as a component of income.

"As part of its effort to reform welfare by 'making work pay,' the Clinton administration persuaded Congress to expand the Earned Income Tax Credit (<acronym>EITC</acronym>) between 1993 and 1996. By 2013 the <acronym>EITC</acronym>provided a refundable tax credit of $3,250 a year for workers with two or more children and earnings between $10,000 and $23,000. Because the official poverty count is based on pre-tax rather than post-tax income, these tax "refunds" are not counted as income…. According to the Council of Economic Advisers, treating refundable tax credits like other income would have reduced the poverty rate by another 3.0 percentage points in 2012."

Estimating changes in the purchasing power of the dollar has always been difficult. Besides the CPI-U, there is something called "the chain-price index for Personal Consumption Expenditure" which Jencks refers to as the PCE index. This PCE index is thought to be more accurate in assessing changes in purchasing power.

"The Commerce Department's Bureau of Economic Analysis constructs this measure to calculate changes in the total value of all the consumer goods and services produced in the United States each year. The <acronym>PCE</acronym>index is therefore the largest single influence on government estimates of economic growth. If the poverty thresholds had risen in tandem with the <acronym>PCE</acronym> index rather than the <acronym>CPI</acronym>-<acronym>U</acronym> since 1964, the 2013 poverty line would have been 20 percent lower than it was, and the 2013 poverty rate would have been about 3.7 percentage points lower than it was."

Jencks does not try to estimate the cohabitation effect, but considering the three corrections with estimates included he draws the conclusion illustrated below.

Reasonable improvements in projecting a poverty level consistent with that determined in 1964 leads to a prediction of a poverty rate in 2013 that is not the official figure of 14.5% but a mere 4.8%. Jencks admits that there are uncertainties in his numbers as well, but this still allows him to argue that the suite of antipoverty efforts implemented since 1964 have actually worked much better than has been generally assumed.

Given this analysis, it is safe to conclude that many people classified as living in poverty today are probably living a better life than they would have if they were in the same situation in 1964. However, that conclusion depends on a specific definition of poverty that was defined in a different era. It is in no way clear that the same definition is relevant today—or that it was appropriate even in 1964.

Poverty is, in some ways of reckoning, a mental as well as a physical state. There is the notion that poverty is always relative. A family that has subsistence levels of food, clothing, and shelter may be locked into a declining economic lower class with no apparent means of escape for any of its members. Is that a state of poverty? Many would think it is.

Jencks does not claim that his number represents the number of people who should be considered to be living in poverty. He merely wishes to claim that Johnson's war and the actions of the government in fighting poverty were effective.

"…even if the true poverty rate was 6 or 7 percent in 2013, it would have fallen by about two thirds since 1964, putting it considerably closer to what Lyndon Johnson had promised in 1964 than to what Ronald Reagan had claimed in 1988."

This is an important point because it illustrates that the government is not necessarily "the problem" as claimed by Reagan. It can be—and often has been—the solution.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/03/the-war-on-poverty-succeeded.htmltag:blogger.com,1999:blog-2801225916015233134.post-50584100875857713622015-03-12T02:45:00.000-07:002015-03-12T02:45:29.928-07:00Israel, the Holocaust, American Jews, and Fundamentalist Christians
The decision by the Republican leadership to bypass President Obama and invite Israel's leader, Benjamin Netanyahu, to give to give a talk to Congress was rather startling. It was certainly indicative of the dysfunctional political state of affairs, but it also highlighted the special status Israel possesses in our national psyche. Pundits claimed that the invitation was issued partly to irritate the president, but mainly to gain applause from the Republican base. American Jewish organizations supported Netanyahu's visit. Jewish voting patterns suggest a distinctly liberal political tilt, yet they seem to support an Israeli government that appears determined to abuse and discriminate against a Palestinian minority in much the same way the Jews were abused and discriminated against for all those centuries in Christian countries. This curious state of affairs deserves some consideration.

Tony Judt discusses Israel and what he refers to as America's obsession with that nation in the book he produced in collaboration with Timothy Snyder: Thinking the Twentieth Century. Ultimately, he concludes that our nation's Jewish population has bought into the notion that Israel deserves special consideration because of the Holocaust, and deserves to be protected by us because it is under constant existential threat. No other country has produced the unreserved support that Israel has received from United States. Judt provides us with some necessary perspective.

Judt is Jewish, born in England in 1948 of parents of Eastern European origin. He was aware of the Holocaust his entire life, but it played little role in his life or that of his Jewish friends and relatives as he was growing up. In fact the term was not even used at that time. Today we think of the Holocaust as the defining event in Jewish history and a major justification for Israel's existence.

"It can be very difficult, particularly when teaching here in the United States, to convey how far the Holocaust was from the center of people's concerns or decisions during World War II….we cannot, if we wish to give a fair account of the recent past, read back into it our own ethical and communitarian priorities. The harsh reality is that Jews, Jewish suffering and Jewish extermination were not matters of overwhelming concern to most Europeans (Jews and Nazis aside) of that time. The centrality that we now assign to the Holocaust, both as Jews and as humanitarians, is something that only emerged decades later."

It is necessary to recall that the United States and the nations of Europe were all considerably more anti-Semitic in the middle of the last century than they are now. None of the allies thought it wise to make the systematic elimination of Jews a reason for fighting the war. Most chose to avoid the issue.

"….the history of American Jews is in many respects the story of a belated response—often delayed by a generation or more—to events in Europe or the Middle East. Consciousness of the Jewish Catastrophe—and its aftermath in the creation of the State of Israel—came well after the fact. The generation of the 1950s would much rather have continued to look the other way—something I can confirm from the different but comparable British experience. Israel in those years was like a distant relative: someone of whom one spoke fondly and to whom one sent a birthday card regularly, but were he to visit you and overstay his welcome, it would be embarrassing and ultimately an irritant."

The holocaust was not something around which a people could build national or ethnic pride. The prevalent image of Jews being led "like lambs to the slaughter" would have to be overcome.

"Americans, rather like Israelis in this respect, valued success, achievement, promotion, individualism, the overcoming of impediments to self-advancement and a dismissive unconcern with the past. The Holocaust, accordingly, was not an altogether untroubling story, particularly with the widespread view that Jews had gone 'like lambs to the slaughter."

"….I don't think the Holocaust fitted at all comfortably into American Jewish sensibilities—much less American public life as a whole—until the national narrative itself had learned to accommodate and even idealize stories of suffering and victimhood."

It would be the Six-Day War in 1967 that would allow Jews to re-imagine themselves and view Israel as something they should take pride in and as something precious that must be preserved at all cost. The Holocaust could then be elevated to its appropriate place as the central event in recent Jewish history, and it could become a means of rallying Jews and others to the aid of

Israel with the cry "never again."

Judt had spent summers living and working as a young and idealistic Zionist in the farms of Israel. He also volunteered to return and assist as the threat of war increased. The Six-Day War would be a period of great disenchantment as he discovered that the Israel of the rural farms where he had toiled had little to do with the Israel that actually existed. He was assigned as a translator to make use of his proficiency in English, French, and Hebrew. In this position he was able to become more familiar with Israeli soldiers and the actual nature of the State of Israel.

"….I had been indoctrinated into an anachronism, had lived an anachronism, and now I saw the depths of my delusion. For the first time I met Israelis who were chauvinistic in every meaning of the word: anti-Arab in a sense bordering upon racism; quite undisturbed at the prospect of killing Arabs wherever possible; frequently regretting that they had not been allowed to fight their way through to Damascus and beat down the Arabs for good and all; full of scorn for what they called the 'heirs of the Holocaust,' Jews who lived outside of Israel and who did not understand or appreciate the new Jews, the native-born Israelis."

"This was not the fantasy world of socialist Israel that so many Europeans loved (and love) to imagine—a wishful projection of all the positive qualities of Jewish Central Europe with none of the drawbacks. This was a Middle Eastern country that despised its neighbors and was about to open a catastrophic, generation-long rift with them by seizing and occupying their land."

The Israelis recognized that they could use the Holocaust to justify just about anything they chose to do. Peace was of little value because they gained more by being the little country permanently surrounded by threatening neighbors. The victimhood of the Holocaust provided them with an argument that the world owed them something, and continued turmoil kept alive the notion that a repeat of the Holocaust could occur if Israel was not properly supported.

"To my knowledge, no one in the Israeli political class—and certainly no one in the Israeli military or policy-making elite—has ever expressed any private doubt as to Israel's survival: certainly not since 1967 and, in most cases, not before then either. The fear that Israel could be 'destroyed,' 'wiped off the face of the earth.' 'driven into the sea' or in any other way exposed to something remotely resembling a re-run of the past, is not a genuine fear. It is a politically calculated rhetorical strategy."

Judt believes that this practice of continually "crying wolf" has already become counterproductive.

"Ever since Ben-Gurion, Israeli policy has quite explicitly insisted upon the assertion that Israel—and with it the whole of world Jewry—remains vulnerable to a re-run of the Holocaust. The irony, of course, is that Israel itself constitutes one very strong piece of evidence to the contrary….As a state, Israel—in my view irresponsibly—exploits the fears of its own citizens. At the same time it exploits the fears, memories and responsibilities of other states. But in so doing, it risks over the course of time consuming the very moral capital that enabled it to exercise such exploitation in the first instance."

Judt refers to the Holocaust as a Get Out of Jail Free Card for what Israel has become—a rogue state. The United States, and most other countries, seeks peace and stability in the Middle East. Israel's current leaders have no interest in either until their goals are attained. The United States has then been put in the position of having to provide unconditional support for a state, Israel, whose actions are harmful to its interests.

Given this bizarre state of affairs, how does Israel maintain its chokehold on the United States government? Consider the results of polling on attitudes towards Israel. Max Fisher provides a discussion in the Washington Post: 8 fascinating trends in how American Jews think about Israel. The data indicates that religion is an important factor in determining attitudes and allegiances.

"On one side are the reform and secular Jews who make up 65 percent of the U.S. Jewish population, sometimes joined by the 17 percent who identify with conservative Judaism. This group is more likely to worry about or criticize Israeli policies toward Palestinians. It's less likely to claim an emotional attachment to Israel and less likely still to argue that the country was promised to Jews by God."

"On the other side are the small minority of Orthodox Jews – about 10 percent of American Jews – joined by America's much larger community of white Evangelical Christians. This block is more likely to oppose an independent Palestinian state, to support settlements and to argue that Israel was promised to Jews by God. That last point is particularly important for how you view Israel-Palestine, as it could suggest that Israel should control all Palestinian land outright and permanently – and that seeing this through is a divinely mandated mission."

Orthodox Jews and white Evangelical Christians tend to support policies that are not in the best interests of their country. Orthodox Jews are becoming more numerous as they are breeding faster than more secular Jews in both this country and in Israel. It is not surprising that they would have the views that they do but what about Evangelical Christians? Where are they coming from?

Joe Bageant provides a startling introduction to fundamentalist Christians in our country in his book Deer Hunting with Jesus: Dispatches from America's Class War.

"But taken as a whole, fundamentalists have three things in common: they are whiter than Aunt Nelly's napkin, and, for the most part, they are working class and have only high school educations."<o:p></o:p>

"Yet some evangelicals stand apart from the mainstream in one important way: They would scrap the Constitution and institute 'Biblical Law,' the rules of the Old Testament, and they take the long view toward the establishment of a theocratic state. Others believe we are rapidly entering the End Times and the fulfillment of the darkest biblical prophesies….they see a theocracy of one sort or another as a necessary part of the End Times, and, though few publicly say so, some are not averse to nuclear war in the Middle East, ideally with the help of Israel."<o:p></o:p>

They see the founding of the modern state of Israel as the initiating event of End Times.<o:p></o:p>

"....the Messiah can return to earth only after an apocalypse in Israel called Armageddon, which a minority of influential fundamentalists are promoting with all their power so that The End can take place. The first requirement was the establishment of the state of Israel. Done. The next is Israel's occupation of the Middle East as a return of its 'Biblical lands.' Which means more wars. Radical Christian conservatives believe that peace cannot ever lead to Christ's return, and indeed impedes the thousand-year Reign of Christ, and that anyone promoting peace is a tool of Satan. Fundamentalists support any and all wars Middle Eastern...."<o:p></o:p>

Needless to say, such beliefs lead to political conclusions that are not helpful, including the following:<o:p></o:p>

"Israel is to be defended at all costs and even encouraged to expand, because the Bible declares that Israel must rule all the land from the Nile to the Euphrates in order for End Times prophecy to be fulfilled."

Aren't we fortunate that one of our two major political parties, the Republican, feels a need to pledge fealty to such people?

Was it really appropriate to describe Israel as a rogue state? Peter Beinart discusses the state of Israeli politics and the state of American Jewry in an article that appeared in the New York Review of Books in 2010: The Failure of the American Jewish Establishment.

Beinart describe the American Jewish establishment as one that fell in love with Israel when its existence was feared threatened in the Six-Day War. It viewed Israel then as a liberal state that would set an example for how to deal with minority populations within its confines. This image of Israel was rapidly proved false, but the leaders of politically powerful Jewish organizations have refused to acknowledge any shortcomings on the part of Israel and have continued to give it unqualified support. Meanwhile, their children, except for Orthodox Jews, have become more secular and less interested in Israel as a Jewish responsibility.

Beinart describes Israel as a country as polarized as ours. The secular Israelis are more flexible in their attitudes towards dealing with the Palestinians. Orthodox Israelis and other conservatives are not flexible at all. Consider this description by Beinart of Netanyahu's beliefs and his administration:

"In his 1993 book, A Place among the Nations, Netanyahu not only rejects the idea of a Palestinian state, he denies that there is such a thing as a Palestinian. In fact, he repeatedly equates the Palestinian bid for statehood with Nazism. An Israel that withdraws from the West Bank, he has declared, would be a "ghetto-state" with "Auschwitz borders." And the effort "to gouge Judea and Samaria [the West Bank] out of Israel" resembles Hitler's bid to wrench the German-speaking "Sudeten district" from Czechoslovakia in 1938. It is unfair, Netanyahu insists, to ask Israel to concede more territory since it has already made vast, gut-wrenching concessions. What kind of concessions? It has abandoned its claim to Jordan, which by rights should be part of the Jewish state."

Netanyahu has incorporated into his government individuals with similar views.

"Israeli governments come and go, but the Netanyahu coalition is the product of frightening, long-term trends in Israeli society: an ultra-Orthodox population that is increasing dramatically, a settler movement that is growing more radical and more entrenched in the Israeli bureaucracy and army, and a Russian immigrant community that is particularly prone to anti-Arab racism."

A political solution to the Israeli-Palestinian issues seems a faded, long-ago dream. The United States should at least learn to disassociate itself from the goals of what has indeed become a rogue state.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2015/03/israel-holocaust-american-jews-and.htmltag:blogger.com,1999:blog-2801225916015233134.post-55315269127509503252015-03-04T17:29:00.000-08:002015-03-04T17:29:43.093-08:00Facing the Facts about Mental Illness
T. M. Luhrmann is an anthropologist at Stanford University. One of her interests has been mental illness with a focus on schizophrenia. She has been writing about the need to consider what we label as mental illness as a psychological condition as well as a biological condition. She has been interested in reminding the world that there are means of treating—if treatment is necessary—behaviors that do not fit within society's definition of what is normal without resorting to dangerous medications.

Just as people are born with a range of intelligence, they are born with a range of responses to sorrow-inducing or threatening circumstances. If the magnitude of the response is deemed excessive, we have decided to describe those people as suffering from depression or anxiety. The range of such responses is continuous across individuals so the point at which one becomes "mentally ill" is absolutely arbitrary. In addition, people have a considerable degree of control over their responses. They can learn to deal better with sorrow and threats more effectively over time. That is why Luhrmann and many others suggest drug therapy as more of a last resort than the treatment of choice.

As an example of learning to cope, consider a fascinating article Luhrmann produced for The American Scholar: Living with Voices. She describes the discovery that people who are troubled by hearing voices, a certain path to a schizophrenia diagnosis, often find relief from confronting the voices and negotiating with them rather than fearing them or trying to make them go away. Forming a relationship with the voice seems to change the character of the voice, transforming it from a threat to something that can occasionally even provide encouragement. A movement has been formed promoting this approach. Many participants had previously been subjected to intolerable brain-altering medications aimed at making the voices disappear. They like to refer to themselves as "survivors of psychiatric care." More on the topic can be found here.

Luhrmann produced an article for the New York Times titled Redefining Mental Illness. She was encouraged by recent developments that seemed to indicate a greater acceptance for more flexible treatment of mental issues—and not treating all issues as illnesses.

"TWO months ago, the British Psychological Society released a remarkable document entitled 'Understanding Psychosis and Schizophrenia.' Its authors say that hearing voices and feeling paranoid are common experiences, and are often a reaction to trauma, abuse or deprivation: 'Calling them symptoms of mental illness, psychosis or schizophrenia is only one way of thinking about them, with advantages and disadvantages'."

"The report says that there is no strict dividing line between psychosis and normal experience: 'Some people find it useful to think of themselves as having an illness. Others prefer to think of their problems as, for example, an aspect of their personality which sometimes gets them into trouble but which they would not want to be without'."

It was particularly encouraging to find the report recommending that psychological approaches be made available as well as medicinal.

"The report adds that antipsychotic medications are sometimes helpful, but that "there is no evidence that it corrects an underlying biological abnormality." It then warns about the risk of taking these drugs for years."<o:p></o:p>

"And the report says that it is 'vital' that those who suffer with distressing symptoms be given an opportunity to 'talk in detail about their experiences and to make sense of what has happened to them' — and points out that mental health services rarely make such opportunities available."<o:p></o:p>

Luhrmann is also encouraged by new research funding guidelines announced by the National Institute of Mental Health (NIMH). Mental illness diagnoses have long been made by correlating a patient's symptoms with a list of symptoms collected in cookbook form by the American Psychiatric Association. This approach was not associated with any physical response or condition, and a given set of symptoms did not have a unique diagnosis. It was defining mental illness to be whatever a conclave of psychiatrists decided they wanted it to be.<o:p></o:p>

NIMH's director, Thomas Insel, was sufficiently embarrassed by this state of affairs that he decided the time had come to demand a better approach.<o:p></o:p>

"In 2013, the institute's director, Thomas R. Insel, announced that psychiatric science had failed to find unique biological mechanisms associated with specific diagnoses. What genetic underpinnings or neural circuits they had identified were mostly common across diagnostic groups. Diagnoses were neither particularly useful nor accurate for understanding the brain, and would no longer be used to guide research."<o:p></o:p>

"Under a program called Research Domain Criteria, all research must begin from a matrix of neuroscientific structures (genes, cells, circuits) that cut across behavioral, cognitive and social domains (acute fear, loss, arousal). To use an example from the program's website, psychiatric researchers will no longer study people with anxiety; they will study fear circuitry."<o:p></o:p>

Luhrmann is correct in identifying the new NIMH funding criteria as progress. However, if your main concern is seeing better balance between psychological treatment and medicinal treatment it is not clear how great the progress might be. Insel's funding focus still seems to be on determining physical mechanisms for brain malfunctions that are the causes for mental illness. The fundamental thrust is unchanged.<o:p></o:p>

And while the recommendations of the British Psychological Association seem spot on, the paper on psychosis and schizophrenia that came out recently is a partner publication to one that was issued in 2010 on bipolar disorder that basically came to the same conclusions and made the same recommendations. And that publication was an elaboration on a similar document prepared in 2000. The words are good, but where is the progress?<o:p></o:p>

The problem with good intentions in the healthcare arena is that they must be coupled with the means by which current stakeholders can continue to make money. Following the money with respect to mental illness can leave the sanest of us in a state of severe depression. <o:p></o:p>

The drug companies have an obvious interest in defining mental illness as broadly as possible and selling their products to as many people as possible and for as long a period as possible. They are in the business of providing treatments not cures. Any publication, such as Luhrmann's, can be swamped by any number of clinical studies, scientific publications, and television commercials promoting the benefits of their drugs. Their propaganda does not even have to be accurate; as long as they have someone who pretends to be a doctor endorsing their products they seem to acquire automatic credibility. A single "good" patient on a lifetime drug regimen can provide hundreds of thousands of dollars in revenue<o:p></o:p>

Many people with mental concerns go to their normal physician for care. These physicians are not trained in psychological therapy. The simplest thing for them to do is believe the drug company advertising. Psychological therapy is likely to be more expensive, seem more risky, and less likely to be covered by medical insurance.<o:p></o:p>

Psychiatrists in the United States have totally bought into treatment by medication. That is what they are taught in their professional education. It is also obvious that they can make a lot more money prescribing medications than spending a lot of time discussing issues with patients. Talk therapy requires devoting an hour to each patient with an unknown number of sessions required. Medicinal therapy allows them to see three or four patients per hour, and they are more likely to be fully reimbursed for their services by insurance companies.<o:p></o:p>

Medical insurance companies seem happier with drug therapy because it gives them a better method of estimating costs, and the endorsement of the psychiatrists and drug companies provides them cover for their actions. <o:p></o:p>

This alignment of economic interests has taken our country from a situation where disability from mental issues was rare and usually episodic to one in which disabling mental issues are common and chronic. The World Health Organization (WHO) and others have performed studies examining mental health outcomesin developing countries like India, where treatment is rudimentary at best, with outcomes in countries like the US and concluded that one's chances of recovering from an episode of mental illness is better in the developing countries. <o:p></o:p>

Something is terribly wrong here.<o:p></o:p>

Kudos to Luhrmann for continuing to fight the good fight!<o:p></o:p>

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/03/facing-facts-about-mental-illness.htmltag:blogger.com,1999:blog-2801225916015233134.post-8741361178333040232015-03-01T00:46:00.000-08:002015-03-01T00:46:09.245-08:00Increased Risks Associated with ADHD Diagnosis
Benedict Carey raised some interesting issues in a New York Times article titled A.D.H.D. Diagnosis Linked to Increased Risk of Dying Young. The acronym ADHD refers to Attention Deficit Hyperactivity Disorder. He reported on a study conducted in Denmark where medical records were studied for all children born there between 1981 and 2011.

"The team found that of 32,061 who had been given a diagnosis of A.D.H.D., 107 had died before age 33. That was roughly twice the rate of premature death among those without the disorder, after factors like age, psychiatric history and employment were taken into account."

This rate is about 3 out of 1000. Automobile and other types of accidents were described as the most common causes of death. It was also noted that many of those who died had behavioral problems such as "drug abuse or antisocial behavior" that would have made them more accident prone. Curiously, the study also concluded that the risk of early death was higher for those diagnosed with ADHD at age 18 or greater.

A psychiatrist was quoted concluding that it is ADHD that is dangerous and the study results led him to claim that it is now more important than ever to seek out children suffering from ADHD and begin treating them. However, that is inconsistent with what the study said. Carey had it correct in his title: the Danish data suggest that it is the diagnosis of ADHD that is dangerous. Any further conclusion is speculation.

Another study was performed by the Danes looking at other results that follow from an ADHD diagnosis. This work was performed in the same timeframe and was reported in The Copenhagen Post by Lawrence Shanahan under the title Danish ADHD study makes grim reading for trigger-happy diagnosis countries like the US.

"Children who take ADHD medication have twice the risk of developing heart problems, according to a study at the National Centre for Register-based Research at Aarhus University, reports Science Nordic."

"The study, which took data from 714,000 children born between 1990 and 1999, showed that the risk of developing heart problems rose from around 0.5 percent to nearly one percent among children who took ADHD medication."

Why should this be of special concern to the people of the United States?

"While only two percent of Danish children are prescribed ADHD medication, the rate is over three times as high in the States."

"Nearly nine percent of American children aged 4-17 are diagnosed with ADHD, of which 69 percent are then medicated, according to the American National Resource Center on ADHD."

"That amounts to a total of 3.5 million children taking medication that doubles the risk of developing heart problems."

Please take note of the following when considering the conclusion that an ADHD diagnosis at age 18 or greater is particularly risky.

"ADHD medications such as Ritalin and Adderall are also becoming increasingly popular among university students and young adults who use the drugs for binge-studying purposes."

This second report suggests that it is, in fact, the diagnosis and subsequent treatment that might be producing high risk among young adults. In particular, it points to the medications used in treating the condition as a potential contributor to the increased risk.

Should we be more concerned about the frequency with which these drugs are prescribed to young children? Alan Schwarz has produced a troubling article in the New York Times: Risky Rise of the Good-Grade Pill. Schwarz investigates the growing practice of teenagers who feel threatened by academic expectations to turn to amphetamines and methylphenidates as study aids. He provides this background on common ADHD medications which are classified by the Drug Enforcement Agency (DEA) as Class II drugs.<o:p></o:p>

"The D.E.A. lists prescription stimulants like Adderall and Vyvanse (amphetamines) and Ritalin and Focalin (methylphenidates) as Class 2 controlled substances — the same as cocaine and morphine — because they rank among the most addictive substances that have a medical use. (By comparison, the long-abused anti-anxiety drug Valium is in the lower Class 4.) So they carry high legal risks, too, as few teenagers appreciate that merely giving a friend an Adderall or Vyvanse pill is the same as selling it and can be prosecuted as a felony."

The physical response to these drugs is similar to that of cocaine, but providing it in pill form makes it less addictive because the chemicals reach the brain slowly (and after passing through the liver) producing a minimal high. Cocaine users prefer to snort, smoke, or inject the drug in order to give the brain a quick and strong jolt.

Schwartz focuses on use in older children as a study aid. A diagnosis of ADHD is trivial to acquire. Anyone who has prescription authority can conclude that an individual would be helped by drugs. There is no training required. Many students acquire the drug by feigning ADHD symptoms to obtain a prescription. They can then use the pills for their own purposes or sell the unneeded to others. Not surprisingly, many of the students taking the drug in an uncontrolled environment develop a dependency, or move on to other, more dangerous drugs.

For young children, even in a controlled environment, it would not be surprising to discover that a few might develop a dependency after years of consumption. One of the difficulties with drugs such as cocaine and versions of amphetamines (methamphetamine is also in this class) is that growth and familiarity will require greater doses to obtain the same effect. Even the best-intentioned administration of the drugs can go awry.

A list of issues associated with the common ADHD drugs can be found at this site provided by the National Institutes of Health (NIH). Plenty of warnings are provided about risks involved in taking the drugs, particularly if any cardiovascular irregularity exists in the patient or there is a family history of cardiovascular problems. A long list of "serious" potential side effects is also provided. Recall that the first study discussed referred to drug abuse and antisocial behaviors as risk factors for early death. Here are a few serious observed side effects (in addition to addiction) provided by the NIH that fall in the antisocial behavior category:

"motor tics or verbal tics<o:p></o:p>

believing things that are not true<o:p></o:p>

feeling unusually suspicious of others<o:p></o:p>

hallucinating (seeing things or hearing voices that do not exist)<o:p></o:p>

mania (frenzied or abnormally excited mood)<o:p></o:p>

aggressive or hostile behavior"<o:p></o:p>

Isn't it interesting that some behaviors that might lead to a diagnosis of ADHD can also be caused by the drugs used to control ADHD.

The drugs do provide behavior modification in most cases pleasing parents and teachers, but dosage must be increased over time. The drugs also cause withdrawal symptoms if usage stops too rapidly, convincing parents that the drugs were beneficial and should be resumed. This must be a terribly dangerous situation for untrained physicians who are merely trying to help distressed parents. The tendency is to prescribe ever larger dosages until "beneficial" behavior modification occurs. If side effects appear, then there are other pills to control these side effects. For modern psychiatry to work there must be a pill for each side effect. The drug companies have been quite happy to provide them.

But there is an even more serious issue with ADHD medications than side effects. There is data that suggest they have no long-term effect at all on behavior. L. Alan Sroufe has raised this issue in a New York Times article Ritalin Gone Wrong.<o:p></o:p>

"Attention-deficit drugs increase concentration in the short term, which is why they work so well for college students cramming for exams. But when given to children over long periods of time, they neither improve school achievement nor reduce behavior problems. The drugs can also have serious side effects, including stunting growth."

"Sadly, few physicians and parents seem to be aware of what we have been learning about the lack of effectiveness of these drugs."

Sroufe provides data to support the contention that they are ultimately ineffective.<o:p></o:p>

"To date, no study has found any long-term benefit of attention-deficit medication on academic performance, peer relationships or behavior problems, the very things we would most want to improve. Until recently, most studies of these drugs had not been properly randomized, and some of them had other methodological flaws."<o:p></o:p>

"But in 2009, findings were published from a well-controlled study that had been going on for more than a decade, and the results were very clear. The study randomly assigned almost 600 children with attention problems to four treatment conditions. Some received medication alone, some cognitive-behavior therapy alone, some medication plus therapy, and some were in a community-care control group that received no systematic treatment. At first this study suggested that medication, or medication plus therapy, produced the best results. However, after three years, these effects had faded, and by eight years there was no evidence that medication produced any academic or behavioral benefits."<o:p></o:p>

 This discussion began with data asserting that diagnosis of ADHD leads to a higher probability of early death. Psychiatrists will argue that this proves that one must be even more vigilant in rooting out behavioral problems in children (and adults) and treating them—predominantly with medications. One can also draw the opposite conclusion and demand that teachers, physicians and psychiatrists be extremely careful in prescribing dangerous medications. The data clearly support this later stance.<o:p></o:p>

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/03/increased-risks-associated-with-adhd.htmltag:blogger.com,1999:blog-2801225916015233134.post-36027222745567368892015-02-23T02:40:00.000-08:002015-02-23T02:40:52.362-08:00Geoengineering, Volcanoes, and Climate Change Experiments
We continue to pour greenhouse gases into the atmosphere and climate change becomes ever more apparent, yet we are unable to take the steps necessary to respond forcefully to the threat. There are many reasons for such a modest level of activity. Disruptive problems often require disruptive solutions. Those who benefit from the status quo will strive mightily to protect their investments and preserve their share of the economic pie. The biggest stakeholders in the current economic order who should be at risk are the companies that find and extract fossil fuels for consumption. It is well known that these organizations use their profits to support anti-climate-change groups and initiatives. Less well known is the fact that these people also support those who believe that carbon emission and the associated global warming is such an overwhelming effect that we are unable to respond to it. Instead, they suggest we should focus not on worrying about regulating carbon emissions, but concentrate on technologies that would cool the earth by regulating the amount of energy from the sun that is absorbed in the atmosphere. Or, as Naomi Klein has pointed out, to them:

"….anything is preferable to regulating ExxonMobil, including attempting to regulate the sun."

This notion of inevitable climate change is the subject of an article by Henry Fountain in the New York Times: Panel Urges Research onGeoengineering as a Tool Against Climate Change. The panel referred to was assembled by the National Academy of Sciences and was sponsored by a number of government agencies. The panel members recognized that the best solution to climate change was to stop polluting the atmosphere with greenhouse gases, and it also recognized that even small-scale experiments studying means of modifying the atmosphere carried significant risk.

Most proposals for potential global warming solutions either involve devising schemes for removing carbon dioxide from the atmosphere or reflecting sunlight away from the earth before it can heat the atmosphere.

"The panel said that while the first option, called carbon dioxide removal, was relatively low risk, it was expensive, and that even if it was pursued on a planetwide scale, it would take many decades to have a significant impact on the climate. But the group said research was needed to develop efficient and effective methods to both remove the gas and store it so it remains out of the atmosphere indefinitely."<o:p></o:p>

"The second option, called solar radiation management, is far more controversial. Most discussions of the concept focus on the idea of dispersing sulfates or other chemicals high in the atmosphere, where they would reflect sunlight, in some ways mimicking the effect of a large volcanic eruption."<o:p></o:p>

This notion that solar radiation management (SRM) can be compared to the effect of a volcano is important to both those who support such schemes as well as those are scared to death by them. As always, it is important that people choose their scientists carefully.<o:p></o:p>

Schemes employing SRM seem to assume that we would continue to pump carbon dioxide into the air indefinitely as we continually modify our cooling attempts.<o:p></o:p>

"The process would be relatively inexpensive and should quickly lower temperatures, but it would have to be repeated indefinitely and would do nothing about another carbon dioxide-related problem: the acidification of oceans."<o:p></o:p>

"This approach might also have unintended effects on weather patterns around the world — bringing drought to once-fertile regions, for example. Or it might be used unilaterally as a weapon by governments or even extremely wealthy individuals."<o:p></o:p>

If a viable approach capable of modifying the climate was inexpensive enough to be fielded by a private individual, one would have to think carefully about proceeding with research in that area.<o:p></o:p>

"But the panel said that society had 'reached a point where the severity of the potential risks from climate change appears to outweigh the potential risks from the moral hazard' of conducting research."

Naomi Klein discussed the relevant issues in her book ThisChanges Everything: Capitalism vs. The Climate. She focuses on the ethical issues involved in experimenting with SRM techniques. She argues that small scale experiments will not help in understanding what might ensue from such an application; only a program large enough to generate significant global effects will be able to quantify global effects

"Sulphur injections would need to be maintained long enough for a clear pattern to be isolated from both natural fluctuations and the growing impacts of greenhouse gases."

That implies a program that might have to last years before deducing a clear indication of what its effects might be.

"As Martin Bunzl, a Rutgers philosopher and climate change expert, points out, these facts alone present an enormous, perhaps insurmountable ethical problem for geoengineering. In medicine, he writes, 'You can test a vaccine on one person, putting that person at risk, without putting everyone else at risk.' But with geoengineering, 'You can't build a scale model of the atmosphere. As such you are stuck going directly from a model to full scale planetary-wide implementation.' In short, you could not conduct meaningful tests of these technologies without enlisting billions of people as guinea pigs—for years. Which is why science historian James Fleming calls geoengineering schemes 'untested and untestable, and dangerous beyond belief'."

Proponents of SRM schemes counter with the notion that what they propose is merely a reproduction of what occurs naturally when volcanoes erupt. They refer to their approach as the "Pinatubo Option." Pinatubo was a volcanic eruption that occurred in the Philippines in 1991. Does anyone remember 1991 as being a particularly disastrous year? Probably not, unless you happened to live in certain regions of the earth. One has to look carefully for effects in order to pull them out of the normal variations.

"A 2007 paper cowritten by [Aigio] Dai and Kevin Trenberth head of the Climate analysis Section at the Colorado-based National Center for Atmospheric Research, concluded 'that the Pinatubo eruption played an important role in the record decline in land precipitation and discharge, and the associated drought conditions in 1992'."

Klein also quotes Alan Robock:

"'You get the same story from every [eruption] you look at,' he said, adding, '….The global average precipitation went down. In fact, if you look at the global average precipitation for the last fifty years, the three years with the lowest global precipitation were after the three largest volcanic eruptions. Agung in 1963, El Chichon in 1982, and Pinatubo in 1991.' The connections are so clear, Robock and two coauthors argued in one paper, that the next time there is a large 'high latitude volcanic eruption,' policy makers should start preparing food aid immediately, 'allowing society time to plan for and remediate the consequences."

The same people who model climate change from increased greenhouse gas concentrations can attempt to model the effects of SRM schemes. Klein reports that what the models predict is that significant weather modification will exist and it will affect some regions more severely than others. In fact, the precise details of the particular SRM chemical release can determine which regions will be more severely affected. Recall now the concern expressed by Henry Fountain in his article that "it might be used unilaterally as a weapon by governments or even extremely wealthy individuals."<o:p></o:p>

It is difficult to believe that the modeling results and the historical data can allow anyone to conclude that climate modification would be straightforward or benign.<o:p></o:p>

Gillen D'Arcy Wood has produced a book titled Tambora: The Eruption That Changed the World. Wood has produced an interesting story about the effects of a volcano and its climate modification on the earth and the people living there. It can also serve as a cautionary tale suggesting what could happen should climate change experiments go very wrong.

Wood's book is discussed in an article in the London Review of Books by Thomas Jones.

"The eruption of Tambora on the island of Sumbawa in the Indonesian archipelago on 10 April 1815 was the most powerful volcanic explosion of the past thousand years, twice the magnitude of Krakatoa's nearly seventy years later."

As was the case with Pinatubo, the consequences of Tambora had been underestimated by a lack of detailed study.

"As recently as twenty years ago, Tambora's 1815 eruption could be dismissed as not especially consequential….But Wood, who intends no hyperbole in his subtitle, makes a convincing case for Tambora's role in causing 'the most catastrophic sustained weather crisis of the millennium'. Wood's isn't the first book on Tambora's aftermath, but it is the first to treat the event 'as a three-year episode of drastic climate change'…."

Jones provides some examples from Wood's work. The first is from the events in Yunnan in southern China which was at the time a prosperous agricultural region.

"In the summer of 1815, however, because of Tambora's ash cloud, the sun didn't come out. The wind blew from the north instead of the south-west. Heavy rains flooded the wheat, barley and bean fields. The rice paddies could have survived the rain, but not the cold. Snow, frost and freezing fog enveloped the land in July and August. Villagers were reduced to eating soil. The conditions persisted for three years. Wood doesn't give an estimate for how many people died, but 'mortality' was 'high'."

India has a fragile weather pattern depending on monsoon rains that are highly sensitive to climate conditions.

"The monsoon season usually starts in May, as the land heats up faster than the ocean and the colder, higher-pressure air blows in from the sea (the same thing happens on a much, much smaller scale in Torquay or Scarborough on warm summer mornings), bringing storm clouds and heavy rains. Three-quarters of Kolkata's annual rainfall – and more than twice as much as drizzles on London in a year – pours down between June and September. Without the monsoon, as Wood says, 'the land would be uninhabitable.' That year aerosol particles from Tambora, lingering in the stratosphere above the Bay of Bengal, blocked out enough sunlight to alter the weather pattern, 'inhibiting evaporation from the ocean and deflating the temperature differentiation of land and sea'. The 'crippling monsoonal break' of 1816, Wood writes, 'is the longest in the historical record of the Asian subcontinent'."

"Crops failed, wells dried up. When the rains came, too late, in September, they were 'ruinously extreme', bringing floods to the Ganges delta. The rains were early the next year: 'On 21 March, an unprecedented hailstorm destroyed the spring grain crop and tore up orchards of dates, bananas and papaya all across the fragile alluvial plain.' Two months later, people were dying of cholera."

There is circumstantial evidence, as well as recent genetic research, that suggest the cholera pathogen mutated significantly just prior to this 1817 outbreak. Whether it can be proven that the cholera pandemic that followed the outbreak in India was caused by Tambora is not critical. Changing the environment of pathogens can lead to mutations favored by the new environment, and, perhaps, making them more dangerous for humans. Let those who would cast the dice in modifying the earth's climate try to predict such consequences.

"The disease had always been endemic in Bengal, but the unseasonal outbreak in May 1817 was also unusually virulent – and this, too, appears to have been a consequence of Tambora's eruption. It spread across India, reaching Bombay within a year, then travelled southeast to Burma, Siam and Java in 1819-20, north to the Philippines, Japan and China, west to Persia, Russia, Europe and across the Atlantic, reaching North America and the Caribbean in 1832…."

Wood refers to the weather records kept by Luke Howard, a chemist in England.

"Recent research suggests that the 1810s were the coldest decade of the last five hundred years. Between 1807 and 1815, according to Howard's measurements, the average daily temperature in London was 50°F (10ºC). In 1816 it was 38°F (under 4°C). Across the country there were ferocious thunderstorms, hailstorms, gales, darkness at noon, snow on Helvellyn in July."

"Howard travelled on the Continent in the summer: 'From the sources of the Rhine among the Alps, to its embouchure in the German ocean, and through a space twice or thrice as broad from east to west, the whole season presented a series of storms and inundations.' Further north, however, in Scandinavia and around the Baltic, they were praying for rain. 'Crop yields across the British Isles and western Europe,' Wood writes, 'plummeted by 75 per cent and more in 1816-17.' There were food riots, authoritarian clampdowns, and mass starvation."

For a brief period Arctic ice coverage was dramatically reduced, even though the climate was generally colder.

"Tambora's overall suppression of global rainfall had reduced the flow of freshwater into the sea sufficiently to alter the ocean currents, increasing the flow of warm waters from the tropics to the Arctic."

"The temporary melting of Arctic ice two hundred years ago is often cited by 21st-century climate change deniers, who point to it as a reason not to worry too much about the disappearing ice caps now, ignorant as they are (wilfully or otherwise) of its particular cause."

Wood arrives at this conclusion:

"If a three-year climate change event in the early 1800s was capable of such destruction … then the future impacts of multidecadal climate change must be truly off the charts."

By drastically reducing our consumption of fossil fuels we have the possibility of perhaps limiting climate change to a tolerable level. If we continue on as we are the results can be catastrophic. If we attempt to concatenate one type of climate change on top of another we are headed into uncharted territory where the results could be quite inhospitable to human existence.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/02/geoengineering-volcanoes-and-climate.htmltag:blogger.com,1999:blog-2801225916015233134.post-2893359440183460102015-02-16T01:21:00.000-08:002015-02-16T01:21:49.149-08:00Taxation, Redistribution, and Social Insurance
Thomas Piketty provided many interesting revelations about economics and society in his book Capital in the Twenty-First Century. Some of the most fascinating were the insights provided concerning the development of a distinct middle class in the years after World War II. In particular, it was revealing to note that middle class wealth developed more readily in the high-tax welfare states that developed in Europe in the postwar years, than in the lower-taxed, less-regulated economy and society of the US. This phenomenon and Piketty's data were discussed in The Creation of the Middle Class.

Piketty uses a simple prescription to define economic class: the top 10% in terms of wealth comprise the upper class, the next 40% the middle class, and the bottom 50% make up the lower class. Prior to the tumultuous era spanning the two world wars and the Great Depression the upper class in Europe owned about 89% of the wealth, while the US was slightly more egalitarian with an upper class in possession of 81%. The fraction of wealth residing in the upper class bottomed out in both regions around 1970 at 60% in Europe and about 64% in the US. The data implies that the wealth possessed by the middle class in Europe increased from 5% to 35% over that period, while it increased from about 14% to 25% in the US.

An obvious question to ask of this data is why the middle class fared so much better in Europe than in the US. One is tempted to assume that the higher tax rates existing in Europe simply take money from the rich and distribute it to those in the middle and lower classes. The situation is much more complicated than that—and much more interesting as well. According to Piketty:

"….modern redistribution does not consist in transferring income from the rich to the poor, at least not in so explicit a way. It consists rather in financing public services and replacement incomes that are more or less equal for everyone, especially in the areas of health, education, and pensions."

All countries have their unique tax policies. Consider the situation in France where Piketty provides this description of the tax base:

"….a detailed study of French taxes in 2010, which looked at all forms of taxation, found that the overall rate of taxation (47 percent of national income on average) broke down as follows. The bottom 50 percent of the income distribution pay a rate of 40-45 percent; the next 40 percent pay 45-50 percent; but the top 5 percent and even more the top 1 percent pay lower rates, with the top 0.1 percent paying only 35 percent."

 The taxes are certainly high by US standards, but it would be difficult to describe them as a "soak the rich" scheme. It would actually be more accurate to describe the system as one that taxes most heavily those who benefit the most from the services provided by the taxation. There is an intriguing sense of fairness about this approach.

Tony Judt discussed the European welfare states in his book Postwar. He provided this insight:

"….although the greatest immediate advantage was felt by the poor, the real long-term beneficiaries were the professional and commercial middle class. In many cases they had not previously been eligible for work-related health, unemployment or retirement benefits and had been obliged, before the war, to purchase such services and benefits from the private sector. Now they had full access to them, either free or at low cost. Taken with the state provision of free or subsidized secondary and higher education for their children, this left the salaried professional and white collar classes with both a better quality of life and more disposal income. Far from dividing the social classes against each other, the European welfare state bound them closer together than ever before, with a common interest in its preservation and defense."

So, the French middle class pays the highest tax rates, but benefits most from the services provided by the state and comes out ahead, thriving under the system.

An outfit called Citizens for Tax Justice tallied the total tax rates (federal, state, and local) paid by income group for the US.

By this reckoning, the US middle class pays about 30% of their income in taxes. This compares with 45-50% in France. However, the French middle class has grown wealthier than that of the US by paying a 15-20% higher tax rate. How can this be?

What if an insurance company came to some US middle class household and made the following offer: "Pay us 15% (or 20%) of your salary and we will provide you and your family with a guaranteed income level, childcare, healthcare, education, and a pension at retirement that will allow you to maintain your lifestyle." Would that be considered a good deal? Remember that financial advisors are telling those in the US that they should be saving at least 10% of their income just for retirement expenses.

One could argue that the proposal does not add up; the services promised would cost more than the revenue provided by the insurance premium. The insurance representative would answer with the obvious reply that that is the way insurance is supposed to work. If everyone pays their 15%, different classes of people will receive different levels of benefits. Some will pay more and receive less, some will pay less and receive more, but all will pay the same rate and have the same access to benefits. The lower class may have most need of income support, but they will have the same access to healthcare and education as everyone else. The wealthy will have need for the services provided, but by paying about the same share they will have access to the services and support those who are less able to contribute. The people who will demand most in terms of services from the system—relative to their ability to pay—are the middle class. They will benefit the most.

This helps explain how Piketty's indirect redistribution works via provision of services, and also provides an explanation for why the European middle class has fared better. Casting taxation as a mechanism for providing social insurance that guarantees the services one might need as one goes through life seems more productive than thinking of it as a wasteful confiscation. Of course, the government would have to actually provide the services.

We in the US are, at present, paying taxes at a healthy rate, but receiving services at an unhealthy rate. Demanding lower taxes will not improve the service. We should be demanding better services—the government works for us, doesn't it?—and we should be willing to pay for them.

Greater prosperity through higher taxes—for everyone! It actually makes sense!

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/02/taxation-redistribution-and-social.htmltag:blogger.com,1999:blog-2801225916015233134.post-35799090840373558862015-02-11T00:13:00.000-08:002015-02-11T00:13:23.896-08:00Student Loans and the Revolution in College Financing
Kevin Carey provides a compelling argument to support his contention that federal student loan programs have transitioned to a more student-friendly form that should be recognized as a federal supplement to the traditional state support of public college education. His discussion appeared in the New York Times under the title A Quiet Revolution in Helping Lift the Burden of Student Debt.

The federal government began issuing loans to students through commercial banks in the 1960s. While the government provided subsidies to the banks to try to keep costs low, the banks had a good deal of discretion in the terms of repayment. The banks also insisted that these student loans they disbursed could never be settled in a bankruptcy. Over the years, the government has made changes in policy aimed at providing more generous options for students needing loans. Finally, in 2010 the Obama administration terminated the support of bank-issued loans.

"In the 1990s, President Clinton helped create a new loan option that allowed students to borrow directly from the United States Department of Education. If they did, they were eligible for an income-based repayment regime in which loan payments were limited to 20 percent of the borrower's income, after a deduction for basic living expenses. Any balance remaining after 25 years of payments was forgiven."

This program was little known and little utilized at the time. Further changes arrived in 2007 under the Bush administration when the Clinton program was modified to make it even more student-friendly.

"The 2007 law modified that idea and called it IBR (for Income-Based Repayment). Under the new program, the repayment terms were made more generous. Monthly payments were capped at 15 percent of income, rather than 20 percent, and the living expense deduction was raised significantly. The loan forgiveness threshold stayed at 25 years, with an important exception: Loan balances would be wiped clean after only 10 years for people who worked in public service jobs, broadly defined as anywhere in the government or nonprofit sectors."

In 2010, under Obama, government subsidy of bank-issued loans was terminated and new regulations were put in effect.

"Important changes to the income-based repayments were made, but because they were passed under the same legislation that created the Affordable Care Act, few people paid much attention to them. IBR had been made even more generous. Now borrowers had to pay only 10 percent of their income per month, even as the forgiveness threshold was lowered to 20 years. People who work in government or nonprofits are still eligible for forgiveness after a decade. Although it was originally slated to become effective in 2014, Obama administration lawyers found a way to effectively speed up the IBR start date by several years. Most important, all students would now borrow directly from the federal government and be eligible for the more favorable repayment terms."

Public college education has always been subsidized by taxes in order to keep tuition costs low so that that access would be available to as many people as possible. Attendance at a public college was implicitly considered to be a right for all qualified students. In recent decades college access has been threatened as state budgets have been unable to keep up with costs and legislatures have been unable or unwilling to raise taxes. Some governors have been explicit in referring to advanced education as not a right but a privilege—a privilege that one should be willing to pay for.

Carey argues that students have always paid for this privilege. Students who went to college earned more money and paid more taxes in their lifetime, thus returning the favor—perhaps many times over. Carey sees the current income based repayment plan as a mechanism by which the federal government is assuming some of the role of states in maintaining affordable public higher education.

"The historical social contract used to be straightforward. All citizens were eligible for generous government college subsidies in the form of low tuition at public colleges and universities. Graduates 'paid back' that subsidy in the form of larger tax payments — and in most states, higher marginal tax rates — on the additional income that their diplomas helped them earn."<o:p></o:p>

"By moving more students into IBR, the federal government is essentially replicating this arrangement. Once again, those who earn more pay more, returning the full amount of their loan, plus interest, before the 20-year forgiveness threshold is met. Those who earn less, for whatever reason, pay less. Nobody will ever default simply because they can't afford to pay."

Carey also indicates that the recent Obama proposal to provide students with two years of free community college education is an additional move in this same direction. The federal government will again provide a subsidy for state higher education.<o:p></o:p>

The IBR approach is a much fairer approach for students. It has essentially converted a loan program into an income-based tax of 10%. The tax at 10% is much less burdensome than traditional loan repayment, and the forgiveness period allows those with low incomes to eventually escape from the levy.<o:p></o:p>

Unfortunately, most of those burdened by student debt are frozen into the terms of earlier loans. There is also a certain moral hazard involved. The federal government is inviting state governments to relinquish some of their former funding responsibilities by lowering education funding or raising tuition on the assumption that the feds will make up the difference.<o:p></o:p>

Carey provides this conclusion:<o:p></o:p>

"In the long run, the signs point toward the federal government replacing states as the primary financier of American higher education. Given how much unnecessary financial hardship has been imposed on students, this is a welcome trend. The sense of pervasive student loan anxiety that characterizes much of the contemporary higher education conversation could become a relic of an older time."

It is sad that we must resort to such indirect means to assist students who wish to attend a college. Why can't we just agree to pay for the things we need to do?<o:p></o:p>

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/02/student-loans-and-revolution-in-college.htmltag:blogger.com,1999:blog-2801225916015233134.post-47496366347721380242015-02-06T01:17:00.000-08:002015-02-06T01:17:40.156-08:00Climate Change, Energy Poverty, Africa, and Electric Power
It is a given that we cannot continue to pump greenhouse gases into the atmosphere at the current rate and expect to not suffer severe consequences for what we think of as human civilization. The major driver for climate change is the extraction and burning of the various forms of fossil fuels to provide energy. Many observers believe that mankind will not willingly trade their current lifestyles for a more environmentally friendly one. They are the optimists. The pessimists believe that humans are genetically incapable of choosing long-term gains over short-term benefits.

The assumption in most evaluations of the future is that foregoing the consumption of coal, oil, and natural gas will lead to a poorer, less-pleasant world for all, particularly those already impoverished. Is it really a given that a world with vastly reduced burning of fossil fuels must be greatly different than the one which we enjoy today? Must we give up our cars and forego those vacation trips to far-off lands? It is often claimed that our economy cannot be run on renewable energy because it is too expensive, or there is not enough of it, or it is too unreliable. Fortunately, there are those who see climate change as an opportunity to do things differently, and to do them better. While most of us have had our attention focused elsewhere, many researchers and companies have been out there trying to outdo each other in developing new techniques and new products aimed at preparing for a world in which energy consumption will be vastly different.

Amory Lovins of the Rocky Mountain Institute has been the most outspoken prophet of a new order in energy production. He produced a fascinating article for the journal Foreign Affairs titled A Farewell to Fossil Fuels: Answering the Energy Challenge. He made this claim:

"....a U.S. economy that has grown by 158 percent by 2050 could need no oil, no coal, no nuclear energy, and one-third less natural gas -- and cost $5 trillion less than business as usual, ignoring all hidden costs. Today's fossil carbon emissions could also fall by more than four-fifths without even putting a price on them."

If that was not sufficient to attract your attention, how about this:

"This transition will require no technological miracles or social engineering -- only the systematic application of many available, straightforward techniques. It could be led by business for profit and sped up by revenue-neutral policies enacted by U.S. states or federal agencies, and it would need from Congress no new taxes, subsidies, mandates, or laws."

Lovins bases his prediction on the continued fall in price of renewable energy and the continued increase in its availability, but the critical component of his future is the increased efficiency with which we must use energy in the future. Companies have for decades been taking actions necessary to avoid wasteful spending on energy in order to maximize profit. That trend must continue and be encouraged to accelerate. Time is running out.

Lovins makes a reasonable case that enormous savings can be obtained from moving to extremely light-weight electric vehicles, more energy efficient buildings, and a more reliable and flexible energy grid. It is the latter that is of interest here.

"The United States must replace its aging, dirty, and insecure electric system by 2050 just to offset the loss of power plants that are being retired. Any replacement will cost about $6 trillion in net present value, whether it is more of the same, new nuclear power plants and "clean coal," or centralized or distributed renewable sources."

Renewable sources of energy are already competitive with massive, centrally located fossil fuel powered plants. What is needed is a new electric grid capable of taking advantage of smaller, more widely distributed sources inherent in an economy run on renewable energy. Think of every residence having rooftop solar panels. Think of every electric vehicle charging when energy is plentiful and contributing power back to the grid when energy is low.

The traditional grid centered on huge power plants is no longer economically efficient. These plants must be able to operate at peak energy demand even though average demand may be far less. This requires an investment in excess capacity that could have been avoided by a system with smaller, more plentiful sources that can move power efficiently from a low-demand region to a high-demand region. This is the kind of system that is inherent in a renewable energy economy.

"….U.S. and European studies have shown how whole continents could make 80 percent or more of their power renewably by operating existing assets differently within smarter grids, in markets that clear faster and serve larger areas."

"Diverse, dispersed, renewable sources can also make the grid highly resilient. Centralized grids are vulnerable to cascading blackouts caused by natural disaster, accident, or malice. But grid reorganizations in Denmark and Cuba have shown how prolonged regional blackouts become impossible when distributed renewables, bypassing vulnerable power lines (where most failures start), feed local "microgrids," which can stand alone if needed."

One of the issues that arises in the discussions of global warming is the role of developing countries with respect to carbon emissions. It is often assumed that such countries will insist on—or have no alternative to—modernizing in much the way the current developed countries modernized. That path required high energy consumption and high carbon emissions. If this assumption were correct then there would be little hope that catastrophic global warming could be avoided.

There is an interesting article in The Economist discussing the state of energy production at the current time. It included a section addressing development in Africa, a continent where many have lives that are restricted and harmed by the lack of a reliable source of energy.

"FOR THE WORLD'S 1.2 billion poorest people, who are facing a long and perhaps endless wait for a connection to mains electricity, solar power could be the answer to their prayers. A further 2.5 billion are "underelectrified", in development parlance: although connected to the grid, they can get only unreliable, scanty power. That blights lives too. The whole of sub-Saharan Africa, with a population of 910m, consumes only 145 terawatt hours of electricity a year—less than the 4.8m people who live in the state of Alabama. That is the pitiful equivalent of one incandescent light bulb per person for three hours a day."<o:p></o:p>

"In the absence of electricity, the usual fallback is paraffin (kerosene). Lighting and cooking with that costs poor people the world over $23 billion a year, of which $10 billion is spent in Africa. Poor households are buying lighting at the equivalent of $100 per kilowatt hour, more than a hundred times the amount people in rich countries pay. And kerosene is not just expensive; it is dangerous. Stoves and lamps catch fire, maiming and killing. Indoor fumes cause 600,000 preventable deaths a year in Africa alone. But candles or open fires are even worse—and so is darkness, which hurts productivity and encourages crime."<o:p></o:p>

The article refers to an "electrical revolution" that is now underway in Africa. It does not involve huge power plants gradually extending power lines to reach each remote village. Rather, it is based on the ever lower price for solar power. For lighting it is also assisted by the falling price of LED illumination. However, beyond that are a host of devices being developed to work in an environment where solar is the only source of power. Just as cell phones have leaped past the land-line phase of communication, solar power appears to be capable of leaping past the big power plant paradigm.<o:p></o:p>

"But lighting and charging phones are only the first rungs on the ladder, notes Charlie Miller of SolarAid, a charity. Radios can easily run on solar power. Bigger systems can light up a school or clinic; a "solar suitcase" provides the basic equipment needed by health workers. A Ugandan company called SolarNow has a $200 low-voltage television set that runs on the direct current (DC) used by solar systems. A British-designed fridge called Sure Chill needs only a few hours of power a day to maintain a constant 4ºC. A company in South Africa has just launched solar-powered ATMs for rural areas with intermittent mains power."

"Other companies offer bigger systems, for $1,500 and upwards, which can power "solar kiosks" and other installations that enable people to start businesses. Beefed up a bit more, these systems can replace diesel generators that will power stores and workshops, mill grain, run an irrigation pump or purify water. At an even larger scale they become mini-grids. A $500,000 aid-funded project in Kisiju Pwani, once one of the poorest villages in Tanzania, uses 32 photovoltaic solar panels and a bank of 120 batteries to provide 12kW of electricity, enough for 20 street lights and 68 homes, 15 businesses, a port, the village's government offices and two mosques."

Africa, as a continent, has enormous solar power potential. Eventually, as economies grow and living conditions improve regional electrical grids or a continent-wide grid will have to be established. Meeting the power needs with renewable energy sources will provide a healthier environment for both Africa and the rest of the world.

It is interesting that the world's most wealthy countries and the world's poorest countries all face a common problem: increasing their power efficiencies so that they can live in a world dominated by renewable energy sources. Both have the need to design electrical grids that efficiently manage these sources. Although they begin from quite different points, perhaps they can learn from each other's experiences.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/02/climate-change-energy-poverty-africa.htmltag:blogger.com,1999:blog-2801225916015233134.post-31155928626269544362015-01-30T02:10:00.000-08:002015-02-14T11:45:29.221-08:00Inflation, Debt, Return on Capital, and Inequality
One of the most striking conclusions to be drawn from Thomas Piketty's masterful work Capital in the Twenty-First Centuryis that the postwar era, from 1945 to the present, was an anomalous period economically, unlike any other period in history. Prior to 1910, the developed world experienced centuries of very slow per capita growth. That era came to an end with World War I, which was soon followed by the Great Depression and World War II. This catastrophic period destroyed much physical capital. It was necessarily followed by a period of great economic and social activity as the developed world strived to rebuild and reconstitute itself. Business was good and economic growth was high. Incomes grew quickly and a middle class emerged as a significant social and economic construct. However, since about 1970-1980 growth has been slowing down and appears to be returning to its low historical norm.

It is interesting to ponder what such a return to the norm might mean for the future. After all, most of us born prior to about 1980 grew up and formed our opinions and expectations during this unusual and abnormal era. More ominously, perhaps, economists formed their theories of how the world works during this period as well. We could be in for a nasty surprise.

Piketty points out that not only was high growth unique to this postwar period, but high inflation as well. He provides this plot of the rate of inflation since 1700 for four developed countries including the US.

The rate of inflation hovered around zero up to the time of the first world war, grew by various amounts during the war and postwar years, began to fall but experienced a significant blip around 1980, and then resumed its fall in all countries. One could examine this chart and conclude that we appear to be returning to the historical norm of very low inflation. An indefinite period of near zero inflation is not something we have experienced in our lifetimes. If we are entering such a period, it would be a good idea to ask what this might mean for our economies and for our societies.

Piketty provides some insight into the role inflation has played in the past and what role it might play in the future. In the following chart he discusses the history of British national debt and the role of inflation and government decisions.

Britain accumulated an enormous public debt in fighting the Napoleonic Wars, reaching almost 200% of GDP (national income is closely equivalent to GDP). The British government needed money to conduct these conflicts and chose to borrow it from its wealthy citizens, who could afford to lend it, rather than tax them to obtain it. The earnings on this national debt became the basis for a long and steady period of growth in wealth for the already wealthy.

Piketty defines two forms of capital (wealth), that with nominal value and that with real value. A government bond has nominal value and if the value of currency appreciates or depreciates this value remains constant. Real capital, such as real estate holdings or stocks in a company, will tend to follow the inflation rate. The British government debt was held as bonds with nominal value. Since inflation was around zero for the next hundred years this form of wealth retained its value and provided a steady income.

The British could have reduced their national debt by taxing the earnings from this debt. Instead it chose to shelter its wealthy from such an inconvenience, and practiced a century of austerity instead. Austerity generally means that the poorer you are the more you suffer from a decrease in government services.

"The most interesting historical example of a prolonged austerity cure can be found in nineteenth-century Britain….it would have taken a century of primary surpluses (of 2-3 points of GDP from 1815 to 1914 to rid the country of the enormous public debt….Over the course of this period, British taxpayers spent more on interest on the debt than on education. The choice to do so was no doubt in the interest of government bond holders but unlikely to have been in the general interest of the British people. It may be that the setback to British education was responsible for the country's decline in the decades that followed."

The British acquired an even greater public debt by the end of World War II. This time, however, inflation was running at around 4%, relatively modest for that period, and the national debt quickly disappeared. Nominal assets such as government bonds get clobbered by inflation and debts are quickly paid off with depreciated currency. The four countries in the first chart all benefited from historically high inflation in disposing of the wartime debts that had accumulated.

"Historically, this is how most large public debts were reduced, particularly in Europe in the twentieth century. For example, inflation in France and Germany averaged 13 and 17 percent a year, respectively, from 1913 to 1950. It was inflation that allowed both countries to embark on reconstruction efforts in the 1950s with a very small burden of public debt. Germany, in particular, is by far the country that has used inflation most freely (along with outright debt repudiation) to eliminate public debt throughout its history."

The fact that inflation has decreased considerably in recent years means that a significant fraction of the debt accumulated in countering the Great Recession will likely have to be repaid in the more traditional way: taxes and/or austerity. With European countries—and the US—possessing debts hovering around 100% of GDP:

"There is hope that European austerity might last only ten or twenty years (at a minimum) rather than a century. Still, that would be quite a long time. It is reasonable to think that Europe might find better ways to prepare for the economic challenges of the twenty-first century than to spend several points of GDP a year servicing its debt, at a time when most European countries spend less than one point a year on their universities."

The ease with which inflation allowed governments to finance large expenditures without acquiring burdensome debt left the impression that inflation was a social good that would allow an expansion of government services at little cost.

"In the twentieth century, a totally different view of public debt emerged, based on the conviction that debt could serve as an instrument of policy aimed at raising public spending and redistributing wealth for the benefit of the least well-off members of society….in the nineteenth century, lenders were handsomely reimbursed, thereby increasing private wealth; in the twentieth century, debt was drowned by inflation and repaid with money of decreasing value. In practice, this allowed deficits to be financed by those who had lent money to the state, and taxes did not have to be raised by an equivalent amount. This "progressive" view of public debt retains its hold on many minds today, even though inflation has long since declined to a rate not much above the nineteenth century's, and the distributional effects are relatively obscure."

Piketty regards the redistribution that occurred in the twentieth century due to inflation as a powerful mechanism for social change, but he warns that inflation is devastating only to certain types of wealth. Nominally-valued bonds held by the wealthy are affected of course, but so are the savings of the non-wealthy affected as well. Inflation only works when lenders have not prepared for it. Anticipation of inflation will now quickly drive up the interest lenders will demand for the purchase of government debt and any spending benefit from depreciating currency disappears.

It is possible that inflation might also have a redistributive effect in transferring wealth from those whose earnings come from investments to those whose earnings come mainly from wages. As it happens, wages and average return on capital tend to follow the increase in consumer prices. Modern wealthy investors now anticipate the effects of inflation and move their assets around to compensate. Assets that perform well in periods of low inflation can be converted to assets that perform well when inflation is high

"Some people think, wrongly, that inflation reduces the average return on capital. This is false, because the average asset price (that is, the average price of real estate and financial securities) tends to rise at the same pace as consumer prices….it is likely that inflation changes the distribution of this average return among individual citizens. The problem is that in practice the redistributions induced by inflation are always complex, multidimensional, and largely unpredictable and uncontrollable."

Piketty even surmises that inflation could act to benefit the wealthy because they are in a better position to gain access to the opportunities and expertise required to obtain higher than average rates of return on their capital. It takes wealth to accumulate wealth.

A future of low growth rates and low inflation would seem to involve stagnating wages and a healthy return on capital. That is what the past tells us. The past also tells us that if we wish to both retire national debt and redistribute wealth, the most efficient and fair way is to impose a small but progressive tax on wealth. That is the message Piketty has bequeathed to us.
Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2015/01/inflation-debt-return-on-capital-and.htmltag:blogger.com,1999:blog-2801225916015233134.post-34205731915595016992015-01-26T02:05:00.000-08:002015-01-26T02:05:59.371-08:00Climate Change and Capitalism: Must Everything Change?
Naomi Klein has produced one of the most provocative books yet on the evolving tale of our planet's inevitable warming: This Changes Everything: Capitalism vs. The Climate. She provides a detailed look at the roles the various participants have played in the global warming arena as we have edged ever closer to what appears to be a point of no return. Few are left unscathed.

We have the somewhat arbitrary goal of limiting emissions to the point that global warming will not exceed 2 degrees Celsius, but the world has no clear path to attaining that goal, and we are, in fact, on schedule to reach 4 degrees of warming by the end of this century.

"In Copenhagen, the major polluting governments—including the United States and China—signed a nonbinding agreement pledging to keep temperatures from increasing more than 2 degrees Celsius above where they were before we started powering our economies with coal. (That converts to an increase of 3.6 degrees Fahrenheit.)

Predicting exactly what effects a given temperature rise will cause is uncertain, but it is clear that major changes in the environment are on the way. Complex systems such as the earth's can produce nonlinear excursions that are difficult to predict and impossible to counter.

"In a 2012 report, the World Bank laid out the gamble implied by that target. 'As global warming approaches and exceeds 2 degrees Celsius, there is a risk of triggering nonlinear tipping elements. Examples include the disintegration of the West Antarctic ice sheet leading to more rapid sea-level rise, or large scale Amazon dieback drastically affecting ecosystems, rivers, agriculture, energy production, and livelihoods….' In other words, once we allow temperatures to climb past a certain point, where the mercury stops is not in our control."

"The World Bank also warned when it released its report that 'we're on track for a 4˚C warmer world [by century's end] marked by extreme heat waves, declining global food stocks, loss of ecosystems and biodiversity, and life-threatening sea level rise.' And the report cautioned that 'there is also no certainty that adaption to a 4˚C world is possible.' Kevin Anderson….of the Tyndall Centre for Climate Change Research….is even blunter; he says 4 degrees Celsius warming—7.2 degrees Fahrenheit—is 'incompatible with any reasonable characterization of an organized, equitable and civilized global community'."

Opinions vary as to how much time is left before action to curb carbon emissions will be too little and too late. Klein selects this one:

"….so much carbon has been allowed to accumulate in the atmosphere over the past two decades that now our only hope of keeping warming below the internationally agreed-upon target of 2 degrees Celsius is for wealthy countries to cut their emissions by somewhere in the neighborhood of 8-10 percent a year….this level of emission reduction has happened only in the context of economic collapse or deep depressions."

Given a situation so dire, how can so many people reside comfortably in a state of denial over humanity's role in climate change? Psychologists can provide many explanations for why people are able to ignore facts that counter firmly-held beliefs. Klein describes those whose beliefs are most threatened as those with the most to lose if global warming was accepted as truth: free-market capitalists.

"….their deep fear that if the free market system really has set in motion physical and chemical processes that, if allowed to continue unchecked, threaten large parts of humanity at an existential level, then their entire crusade to morally redeem capitalism has been for naught. With stakes like these, clearly greed is not so good after all. And that is what is behind the abrupt rise in climate change denial among hardcore conservatives: they have come to understand that as soon as they admit that climate change is real, they will lose the central ideological battle of our time—whether we need to plan and manage our societies to reflect our goals and values, or whether that can be left to the magic of the market."

"Climate change detonates the ideological scaffolding on which contemporary conservatism rests. A belief system that vilifies collective action and declares war on all corporate regulation and all things public simply cannot be reconciled with a problem that demands collective action on an unprecedented scale and a dramatic reining in of the market forces that are largely responsible for creating and deepening the crisis."

Klein also directs criticism at many of the traditional environmentalists—referring to them as "warmists"—who collaborate with climate deniers by propagating the belief that incremental measures can address our difficulties.

"So here's my inconvenient truth: I think these hard-core ideologues understand the real significance of climate change better than most of the 'warmists' in the political center, the ones who are still insisting that the response can be gradual and painless and that we don't need to go to war with anybody, including the fossil fuel companies."

In other words, if the free-market ideologues see global warming as an excuse for a social revolution, they are correct. Klein believes that social and economic revolutions are not only necessary, but also desirable.

Klein spends much of her book describing the ever more environmentally damaging attempts to gain access to ever more fossil fuel supplies—even as the earth bakes from past carbon emissions—as evidence that nothing of significance can be accomplished under our current oligarchic system. The energy companies have always created "sacrifice" zones where fuels were to be extracted. The environment could be destroyed and people harmed as long as such things took place in remote locations where the inhabitants were powerless. But now the whole world is in danger of becoming a sacrifice zone. Fracking takes place in our back yards. Canada has given over enormous sections of its wilderness to destruction in order to generate more excess fossil fuels. Companies wish to subject Arctic waters to the threat of oil spills.

Too many people now see their homes and livelihoods threatened and they have begun to fight back. Klein covers the protests that extreme extractive practices have generated among indigenous peoples and others around the globe. She sees within these growing protests a level of resolve that she believes could form the foundation for a social movement broad enough to enact the necessary changes.

"….only mass social movements can save us now. Because we know where the current system, left unchecked, is headed. We also know, I would add, how that system will deal with the reality of serial climate-related disasters: with profiteering, and escalating barbarism to segregate the losers from the winners. To arrive at that dystopia, all we need to do is keep barreling down the road we are on. The only remaining variable is whether some countervailing power will emerge to block the road, and simultaneously clear some alternate pathways to destinations that are safer. If that happens, well, it changes everything [emphasis mine]."

Global warming thus can be converted from a tragedy to an opportunity to remake society and correct its accumulated defects. Klein makes valid arguments that restricting globalized trade, moving from fossil fuel power to renewable power, and relying more on local production of food would entail dramatic change. Decentralizing economic power and distributing it to many more players could significantly alter the inequality that has characterized our current situation. However, Klein takes this notion of an opportunity for change quite a bit too far. She notes that major movements of the past have yet to reach their goals: decolonization, civil rights for minorities, feminism, and sovereignty for Indigenous peoples. She suggests that the remnants of these movements might coalesce into something truly productive.

"So climate change does not need some shiny new movement that will magically succeed where others failed. Rather, as the furthest-reaching crisis created by the extractivist worldview, and one that puts humanity on a firm and unyielding deadline, climate change can be the force—the grand push—that will bring together all of these still living movements. A rushing river fed by countless streams, gathering collective force to finally reach the sea."

Combining a well-constructed plea for dramatic action to battle global warming with a collection of social thrusts that appear orthogonal to the problem at hand seems like a ridiculous strategy. Many of those who might be convinced to become an activist on the issue of climate change would likely be turned off by one or more of the items on her version of a wish list. Most people would be uncomfortable with a movement that "changes everything."

Most reviewers of Klein's book justifiably give her credit for her research and the completeness of her assessment of the climate change issue. They part company with her when she gets to the point where she describes this grand social movement that will change everything. They have little faith that people will be willing to give up much in the way of customary creature comforts in order to save the planet and succumb to gloom and doom.

Klein is so exercised by the anticipated big-energy generated global havoc that she spends little time considering technical developments that could be critical in the global warming arena. She addresses the one thrust easiest to shoot down: the mad scientists who want to accommodate ever increasing levels of carbon dioxide by dimming the sunlight reaching earth. What could possibly go wrong there!

Klein also makes the mistake of equating capitalism as a system with capitalism as it currently exists—a system run by oligarchs to serve their wishes. Within the context of regulated capitalism and planned social goals, there is much that can be done to dramatically lower usage of fossil fuels.

Peter H. Diamandis and Steven Kotler have produced a book titled Abundance: The Future is Better Than You Think. They provide a tour through a number of promising technologies, some available now, some imminent, and some still far off. They make the point that energy generation, water usage, and food production are all areas that could look dramatically different in the near future. Whether or not these technologies will come to fruition and address climate change on a reasonable timescale is unclear, but these authors certainly believe they will.

An even more interesting approach has been documented by Amory B. Lovins in an article in Foreign Affairs: A Farewell to Fossil Fuels. His energy plan incorporates a continuing growth in renewable energy sources, but the main focus is on using energy, whatever the source, more efficiently. The potential energy savings are stunning. He points out that such savings have been taking place for decades driven by the motivations of capitalism.<o:p></o:p>

"Underlying this shift in supply is the inexorable shrinkage in the energy needed to create $1 of GDP. In 1976, I heretically suggested in these pages that this 'energy intensity' could fall by two-thirds by 2025. By 2010, it had fallen by half, driven by no central plan or visionary intent but only by the perennial quest for profit, security, and health. Still-newer methods, without further inventions, could reduce U.S. energy intensity by another two-thirds over the next four decades, with huge economic benefits. In fact, as Reinventing Fire, the new book from my organization, Rocky Mountain Institute (RMI), details, a U.S. economy that has grown by 158 percent by 2050 could need no oil, no coal, no nuclear energy, and one-third less natural gas -- and cost $5 trillion less than business as usual, ignoring all hidden costs. Today's fossil carbon emissions could also fall by more than four-fifths without even putting a price on them."

"This transformation requires pursuing three agendas. First, radical automotive efficiency can make electric propulsion affordable; heavy vehicles, too, can save most of their fuel; and all vehicles can be used more productively. Second, new designs can make buildings and factories several times as efficient as they are now. Third, modernizing the electric system to make it diverse, distributed, and renewable can also make it clean, reliable, and secure."<o:p></o:p>

"This transition will require no technological miracles or social engineering -- only the systematic application of many available, straightforward techniques. It could be led by business for profit and sped up by revenue-neutral policies enacted by U.S. states or federal agencies, and it would need from Congress no new taxes, subsidies, mandates, or laws. The United States' most effective institutions -- the private sector, civil society, and the military -- could bypass its least effective institutions. At last, Americans could make energy do their work without working their undoing."

Lovins's plan was described in an era of high energy prices. Should the current low prices persist, the motivation to move in this direction might diminish without the application of some sort of carbon tax. Such a tax, gradually increased, could also serve as the mechanism for shortening the time scale for implementing these energy efficiencies and thus addressing global warming in a more timely manner. The tax could also be used to encourage the transition with credits and subsidize those who might be temporarily harmed by higher energy prices.

And as for the energy companies who seem determined to burn every ounce of fossil fuel they can get their hands on, welcome to "creative destruction." It couldn't happen to a more deserving bunch.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2015/01/climate-change-and-capitalism-must.htmltag:blogger.com,1999:blog-2801225916015233134.post-35837250692003719012015-01-19T13:17:00.000-08:002015-01-19T13:17:42.395-08:00The Inexorable Growth of Wealth
There is truth in the oft quoted phrase "It takes money to make money." A more relevant manifestation of that sentiment might be "It takes wealth to make wealth." Everyone sees money flow through their hands, but it is only those who can accumulate more than they need to cover the fundamental needs of food, clothing, and shelter who are in a position to create wealth and use it to create more wealth. What is not immediately obvious is that wealth seems to grow even faster as it becomes larger, allowing significant fortunes to increase in an unbounded manner.

This dynamic is explained in Thomas Piketty's book Capital in the Twenty-First Century. Piketty has made his charts and tables available here. He defines capital as anything that has a market value, making the terms wealth and capital synonymous. His basic conclusion is that the rate of earnings from capital has always exceeded the growth in income (equivalent to the rate of growth in GDP) except in unusual circumstances where high rates of taxation were in effect. Consider this chart of the return on capital (pretax) in Britain over the past few centuries.

The "real" rate of return differs from the "observed" by Piketty's estimate of the cost of managing the assets earning income. What is startling is the constancy of this value of about 5% over time. At early times, wealth was mostly in the form of land when agriculture was a dominant component of the economy. Over time, agriculture diminished in importance and was superseded by real estate and financial instruments such as stocks and bonds, yet the rate of return remained relatively constant.

The anomalous period was the era of the Great Depression and the two world wars. Much wealth was destroyed in that calamitous period, but what wealth there was was highly valued. It was immediately after this era that periods of high economic growth were observed as regions devastated by war rebuilt themselves. High growth in GDP translates into high growth in incomes, allowing more people to pass that transition point where they earned enough to be able to save and accumulate resources. It can truly be said that this was the period in which a middle class began to be formed. Home ownership became more widespread and that became the dominant contributor to the growth of wealth in this middle class.

The growth of a middle class is the positive aspect of Piketty's economic history. The negative aspect arises from the historical fact that high rates of growth of GDP are an historical anomaly. Up until World War I the rate of economic growth was on the order of 1-2%. The higher rates that we have become accustomed to in the postwar years are apparently returning to the historical norm. Given that income growth will fall far behind growth in wealth from the higher income from wealth, we face a situation where the wealthy will become ever wealthier while the rest get left behind.

Consider this plot of the top income groups in the US over time (top 1%, top 1-4%, top 5-10%).

The volatility is in the income possessed by the top 1%. It peaks dramatically just prior to the stock market crash and the great depression, falls significantly during the high-tax and highly-regulated era associated with World War II and its aftermath, and then around 1980 the top 1% begins to again grow rapidly with time. There are a number of things operative that explain this increase: taxes were lowered, policies were put in place that favored the wealthy, and the rate of growth began to slow.

Remember that the media quotes total GDP whereas the number of interest is per capita GDP. If population grows by 1% and the quoted GDP grows by 1% there is no actual growth in average individual income. Consider this plot of per capita GDP growth in Western Europe and North America over time.

Western Europe with its high taxes and high social benefits has been, and still is, creating income at a greater rate than the more economically "liberated" new world. Note that the high-growth postwar years appear to be replaced by an extended period where growth is descending back to the historical norm.

Given this data we would expect to see growth in income inequality. In fact, it turns out the growth in inequality is even worse than one might imagine. Piketty tells us that not all wealth is equal. He concludes that the larger the amount of wealth possessed, the faster it will likely grow.

Piketty looked at two sources of information on how the investments of the very wealthy performed over time. The first involves the magazine Forbes and its annual ranking of the wealth of the world's billionaires. This is an imperfect source of information for detailed analysis, but it does allow him to draw a conclusion:

"….the largest fortunes grew much more rapidly than average wealth. This is the new fact that the Forbesrankings help us bring to light, assuming they are reliable."

Piketty provides a few specific examples.

"Between 1990 and 2010, the fortune of Bill Gates….the very incarnation of entrepreneurial wealth….increased from $4 billion to $50 billion. At the same time, the fortune of Liliane Bettencourt—the heiress of L'Oréal, the world leader in cosmetics…..increased from $2 billion to $25 billion, again according to Forbes. Both fortunes thus grew at an annual rate of more than 13 percent from 1990 to 2010, equivalent to a real return on capital of 10 or 11 percent after correcting for inflation."

"In other words, Liliane Bettencourt, who never worked a day in her life, saw her fortune grow exactly as fast as that of Bill Gates, the high-tech pioneer, whose wealth has incidentally continued to grow just as rapidly since he stopped working. Once a fortune is established, the capital grows according to a dynamic of its own, and it can continue to grow at a rapid pace for decades simply because of its size….money tends to reproduce itself."

There is nothing mysterious about this growth in wealth. It is simply due to the fact that the very wealthy have the resources to expend in wisely managing their wealth—another variation on the thesis that it takes wealth to make wealth. To make this point more clear Piketty looks at a more robust source: financial reports from university endowments—which range in size from the merely large to the astonishingly large.

"….US universities publish regular, reliable, and detailed reports on their endowments, which can be used to study the annual returns each institution obtains. This is not possible with most private fortunes. In particular, these data have been collected since the late 1970s by the National Association of College and University Business Officers, which has published voluminous statistical surveys every year since 1979."

Picketty's analysis of this data is summarized in this table:

Piketty draws two conclusions from this table. The first is that the rate of return for university endowments is considerably higher than that of wealth in general, and is consistent with the picture obtained from the Forbes surveys of personal wealth. The second conclusion is that the larger the endowment, the larger is the likely rate of return on investment.

"The higher we go in the endowment hierarchy, the more often we find 'alternative investment strategies,' that is, very high yield investments such as shares in private equity funds and unlisted foreign stocks (which require great expertise), hedge funds, derivatives, real estate, and raw materials, including energy, natural resources and related products (these too require specialized expertise and offer very high potential yields)."

"Concretely, Harvard currently spends nearly $100 million a year to manage its endowment. This munificent sum goes to pay a team of topnotch portfolio managers capable of identifying the best investment opportunities around the world."

Piketty also arrives at this interesting conclusion about investment risk and return on investment:

"….the year-to-year volatility of these returns does not seem to be any greater for the largest endowments than for the smaller ones….In other words, the higher returns of the largest endowments are not due primarily to greater risk but to a more sophisticated investment strategy that consistently produces better results."

The very wealthy also have options available to them to protect their wealth from both taxes and foolish children who might squander it, and thus preserve it for generations.

"….wealthy people are constantly coming up with new and ever more sophisticated legal structures to house their fortunes. Trust funds, foundations and the like often serve to avoid taxes, but they also constrain the freedom of future generations to do as they please with the associated assets. In other words, the boundary between fallible individuals and eternal foundations is not as clear-cut as sometimes thought."

We seem to have entered a long-term period of low growth which translates into small gains in income—at best—for the majority, while large fortunes have accumulated that are in a position to grow without bound. Piketty fears, as we should also, that this disparity in wealth will be a destabilizing factor in society.

Large fortunes have become nearly immune to taxation because most of the income is derived from capital rather than wages. Piketty's long-term solution would be a small progressive tax on wealth, one that would still allow wealth to grow, but not in so robust a fashion. If average income is to grow at 1-2% per year, it is hard to justify a situation where large fortunes—particularly inherited fortunes— grow at 10% per year.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/01/the-inexorable-growth-of-wealth.htmltag:blogger.com,1999:blog-2801225916015233134.post-41203753798906946362015-01-13T23:19:00.000-08:002015-01-13T23:19:29.182-08:00The Minimum Wage, Employment, and Social Choices
The standard explanation for why increasing the minimum wage will decrease employment is based on the assumption that labor participates in a perfect market where increased costs for labor will diminish demand. Thomas Piketty adds a little nuance to that argument and suggests that raising the minimum wage is the only way to increase income at the bottom of the pay scale. Piketty's reasoning is found in Capital in the Twenty-First Century. Piketty has posted the tables and figures from the book here.

"To an even greater extent than other markets, the labor market is not a mathematical abstraction whose workings are entirely determined by natural and immutable mechanisms and implacable technological problems: it is a social construct based on specific rules and compromises."

There is rarely a scarcity of low-skilled workers that might drive up wages at the bottom of the wage scale. Consequently, without a floor on hourly earnings, employers have little economic motivation to not lower wages as much as possible. A minimum wage provides that floor, but it can also act as justification for keeping wages at that floor value. There need be no implicit or explicit collusion among employers to establish a target salary, the minimum wage provides it for them and sets up a situation Piketty refers to as a monopsony.

If the established minimum wage is too high it can lead to a decrease in employment, but if it is too low it can also have a negative economic effect. Underpaid workers are not injecting sufficient demand back into the economy.

"….if a small group of employers occupies a monopsony position in a local labor market (meaning that they are virtually the only source of employment….), they will probably try to exploit their advantage by lowering wages as much as possible, possibly even below the marginal productivity of the workers. Under such conditions, imposing a minimum wage may be not only just but also efficient, in the sense that the increase in wages may move the economy closer to the competitive equilibrium and increase the level of employment."

"Various studies carried out in the United States between 1980 and 2000, most notably by the economists David Card and Alan Krueger, showed that the US minimum wage had fallen to a level so low in that period that it could be raised without loss of employment, indeed at times with an increase in employment….On the basis of these studies, it seems likely that the increase in the minimum wage of nearly 25 percent (from $7.25 to $9 an hour) currently envisaged by the Obama administration will have little or no effect on the number of jobs."

Piketty has looked at how the bottom 10% of wage earners have fared in both France and the US. It seems that only by increasing the minimum wage can the lowest paid keep up with the average increase in wages for the population as a whole.

"Inequalities at the bottom of the US wage distribution have closely followed the evolution of the minimum wage: the gap between the bottom 10 percent of the wage distribution and the overall average wage widened significantly in the 1980s, then narrowed in the 1990s, and finally increased again in the 2000s."

To make this trend clear, Piketty provides this plot of minimum wages in the US and in France, both represented in 2013 currency.

Note that until 1980 the US minimum wage was more generous than that in France and was maintained at a level roughly consistent with the $9 target set by Obama. After 1980 a sequence of Democratic presidents raised it and a sequence of Republican presidents held it down. When we have Republican presidents the poor do not fare well.

Piketty referred to the labor market as "a social construct based on specific rules and compromises." The same could be said for economic policies as a whole. They are not determined by "natural and immutable mechanisms," but by decisions made by voters and their representatives.

Consider this chart of the share of the top 10% of income ladder of the total income (or wages) over time.

Note that income inequality was lowered considerably in the period from the 1940s to the 1970s. Note also that 1980 was again a turning point. The ascendency of free-market mythology and the acceptance of it by Republican presidents changed our world. A new set of rules and compromises were put into place and the rich got richer and the poor got poorer. This is not economics; this is politics.

Until the Democrats get off their tails and come up with a counterrevolution to the counterrevolution of the 1980s and convince the nation that there is a better way, we are stuck with what we have now.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2015/01/the-minimum-wage-employment-and-social.htmltag:blogger.com,1999:blog-2801225916015233134.post-87803708645736658722015-01-09T23:41:00.000-08:002015-01-09T23:41:27.009-08:00Race and the Criminalization of Welfare
Welfare refers to the assistance a government provides to those who are in need. In most civilized societies there is a recognition that no one should have to live in abject poverty. It is unhealthy for the unfortunate individuals involved and it is unhealthy for society as a whole to allow such conditions to persist. Unfortunately, what passes for a welfare system in the United States has evolved to a state where those who must ask for assistance are assumed to be part of a defective underclass whose very existence is a threat to society. Those who dare apply for welfare are now treated with the same consideration accorded to a suspect in a criminal investigation.

Kaaryn Gustafson, a law professor at the University of Connecticut, published an article in the Journal of Criminal Law and Criminology in 2009 titled The Criminalization of Poverty. She later expanded that work into a book published under the title Cheating Welfare: Public Assistance and the Criminalization of Poverty. Her early article will be used as a source for this discussion.

Gustafson provides this opening to her paper:

"Lost in these contemporary understandings of welfare is the association of welfare with wellbeing, particularly collective, economic wellbeing. Many of the current welfare policies and practices are far removed from promoting the actual welfare of low-income parents and their children. The public desire to deter and punish welfare cheating has overwhelmed the will to provide economic security to vulnerable members of society. While welfare use has always borne the stigma of poverty, it now also bears the stigma of criminality. This change in perspective has under-examined implications for both welfare law and criminal law."

There has been a constant theme that has persisted throughout the past century with respect to social legislation: southern politicians have always sought to protect their right to treat blacks differently than whites. This began with the Social Security Act which the South would only vote for if traditionally black occupations such as farm labor and domestic help were excluded from coverage. They also insisted that distributions of welfare benefits were left to states and localities to manage in order to legally impose discriminatory policies. Over time, welfare became almost universally associated with poor black mothers; explicit racial themes were converted to fears about "welfare fraud" and discrimination became open and universal.

Gustafson provides a history of this evolution.

"The criminalization of welfare recipients entails a long historical process of public discourse and welfare policies infused with race, class, and gender bias. State and federal government aid programs developed in the first half of the twentieth century supported white, male workers and the white women and children dependent upon their wages while they excluded a huge segment of poor women of color and their children. The Social Security Act created Aid to Dependent Children (ADC), a program specifically designed for poor mothers and their children and originally intended to support the widows of working men."

The demographics changed between the end of the war and 1960 as the number of widowed mothers decreased in relative terms and the population of divorced and single mothers became much larger.

"Welfare offices in many states and locales adopted "suitable home and "substitute parent" rules, which were essentially morality standards, and which were arbitrarily and discriminatorily applied, and commonly excluded women of color from the welfare rolls, especially in the South….many welfare offices continued to engage in midnight raids on the homes of ADC recipients in order to police 'man in the house' rules. The stated reason for surprise visits was to catch men sleeping in the homes of women receiving welfare. Unmarried women with men in their beds were deemed morally unfit and their households therefore unsuitable for assistance….The unstated but underlying goals of the rules were to police and punish the sexuality of single mothers, to close off the indirect access to government support of able-bodied men, to winnow the welfare rolls, and to reinforce the idea that families receiving aid were entitled to no more than near desperate living standards."

Note that such midnight raids carried out without a warrant would be unconstitutional if welfare recipients were accorded the rights possessed by normal citizens. There was a time when the courts protected poor people from such activities, but over time it has been clearly stated that welfare investigators have the right to make unannounced searches of residences.

The practice of midnight raids continued through most of the 1960s. By that time welfare was firmly viewed as a "black problem."

"By the mid-1960s, low-income women of color were being blamed for all sorts of social problems. An oft-cited 1965 report by Daniel Patrick Moynihan promoted the idea that the problems of inner cities-poverty, joblessness, and crime—could be traced to a 'tangle of pathology' perpetuated by unmarried black mothers….In Moynihan's popular portrayal, low-income African-American mothers were a social threat because they gave birth to and raised sons who became the criminal, urban underclass."

In the 1970s and beyond the blather from neoliberal economists took hold and the idea of welfare as a social support system transitioned to welfare as wasteful counterproductive program for rewarding those unwilling to work. The real level of support was allowed to fall (along with the minimum wage), and the procedure for obtaining aid became more complex. The poorest and least educated segment of our society was required to keep detailed financial records, fill out complex forms, and navigate a bewildering bureaucracy. The goal was no longer to provide support, but to identify and punish those who might be abusing the system.

"Throughout the 1970s, '80s, and '90s, the value of the welfare grant, adjusted for inflation, declined dramatically. The weighted average maximum benefit per three-person family was $854 in 1969 (in 2001 dollars), but plummeted to $456 by 2001. It became increasingly hard for welfare recipients to cover their most basic expenses-food, clothing, and rent-with their welfare grants. Unable to survive on welfare checks and facing barriers to employment, many welfare recipients turned to other sources of income, whether help from kin or participation in underground labor markets, and attempted to hide those sources from the welfare office for fear of losing the small checks they received."

"Office caseworkers, hired to replace the social workers, processed the routine paperwork that welfare recipients regularly submitted to the office to document their continuing financial need. In a process known as "churning," the federal government increased the amount of information and paperwork required to determine welfare eligibility, and denied benefits to low-income families who failed to keep up with the paperwork. Income-eligible families were removed from the aid rolls for their failures to provide verification documents in a timely manner."

Then along came Ronald Reagan who would make a career out of race baiting in an attempt to capture white votes.<o:p></o:p>

"In the 1970s, the image of low-income mothers took a particularly negative turn….California Governor (later President) Ronald Reagan used the symbol of the 'welfare queen' to propel his ideas on limited government and increased crime control. Reagan used references to the welfare queen to portray an image of widespread depravity and criminality among low-income women of color. Despite the factual inaccuracies of Reagan's descriptions, the symbol of the welfare queen resonated with the public."

"….that is not to say that cheating welfare recipients did not exist. But rather than treat a few exceptional instances of criminal activity as theexceptions they were, politicians—and the media and public, as well—adopted these cases as typifying poor, African-American women onwelfare. These 'welfare queens' were treated not merely as stereotypes of poor black mothers on aid, but as archetypes—perfect examples of what welfare recipients become over the course of years on the dole."<o:p></o:p>

Reagan claimed to be focusing on reducing waste and fraud in government. However, he went about it in a curious manner One of his first moves after becoming president was to fire all the Inspectors General whose duties consisted of identifying waste and fraud in the various programs. The only program abuses he seemed interested in concerned welfare programs.

"Upon taking office, Reagan abruptly fired all of the Inspectors General. Rather than focusing on waste and fraud throughout federal government, President Reagan focused instead on welfare fraud, particularly on fraud committed by welfare recipients. In Reagan's view, the poor, and not the welfare bureaucracies, were the sources of fraud and waste….Despite the congressional concern about welfare fraud by recipients, the Washington Post reported that an audit of the Department of Health and Human Services (formerly Health, Education and Welfare) released shortly before Reagan fired its Inspector General found that '[t]he greatest cheaters ... are not individual welfare or health care recipients, but doctors and pharmacists and other providers of services who overbill the government'."

Let's make sure we understand how the system is intended to work. You take money away from those who need it, encouraging them to use unreported means to acquire enough cash to live on; then you use the money they were deprived of to investigate and prosecute those who you catch. Got it?

Then along came Bill Clinton. At this point we will switch to Matt Taibbi's description of the state of affairs in his book The Divide: American Injustice in the Age of the Wealth Gap. Taibbi provides a more colorful—and appropriately indignant—assessment of government abuse of welfare programs.

"All of this goes back to Bill Clinton. It is not a coincidence that radical welfare reform took place on the same watch that also saw a radical deregulation of the financial services industry. Clinton was a man born with a keen nose for two things: women with low self-esteem and political opportunity. When he was in the middle of a tough primary fight in 1992 and came out with a speech promising to 'end welfare as we know it,' he could immediately smell the political possibilities, and it wasn't long before this was a major plank in his convention speech (and soon in his first State of the Union address).

"Clinton understood that putting the Democrats back in the business of banging on black dependency would allow his party to re-seize the political middle that Democrats had lost when Lyndon Johnson threw the weight of the White House behind the civil rights effort and the War on Poverty."

"Bill Clinton's political formula for seizing the presidency was simple. He made money tight in the ghettos and let it flow free on Wall Street. He showered the projects with cops and bean counters and pulled the cops off the beat in the financial services sector. And in one place he created vast new mountain ranges of paperwork, while in another, paperwork simply vanished."

What was accomplished under Clinton was the obliteration of the notion that people of very low income have a right to income assistance. Income assistance is now available at the discretion of the government. And the government in control is not the federal government, it is the state government. There are therefore 50 arbitrary ways in which poor people can be helped or hurt by states according to their whims; centuries of discrimination were thus blessed by federal legislation. States were encouraged to vigorously prosecute welfare fraud. Situations that once would have merely required repayment of excess funds received, can now lead to criminal charges and felony convictions. Funds that could have been used to assist needy people are now being diverted to law enforcement. Social workers are being replaced by fraud investigators.

Gustafson provides details.

"Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act in 1996. The legislation eliminated the broad, federally-governed AFDC program and ended cash aid as a federal entitlement to all income-qualified families. Replacing AFDC entitlements, the federal government distributed state block grants through a federal program known as Temporary Assistance for Needy Families (TANF). The new welfare policies threatened that those who failed to play by the rules-by meeting mandatory work requirements, by abiding by behavior reforms, and by reporting all details of income and household composition-would be harshly punished with new penalties. In addition, states were allowed to place their own conditions upon receipt of welfare and could establish time limits even shorter than the federal ones. Those welfare recipients who failed to meet their obligations under the new system would be excluded from benefits and have the safety net pulled out from under them—in some cases permanently."

Being caught and punished for some violation of the rules (the most common of which seems to be missing a mandatory meeting at the welfare office) is referred to as sanctioning. States have the discretion of punishing an individual by limiting his or her access to funds or they can choose to punish an entire family for one member's sins with a full-family sanction.

"Sanctions are a routine occurrence. Researchers estimate that between 33% and 52% of TANF recipients have been sanctioned."

"….a study conducted by Yeheskel Hasenfeld found that approximately half of the sanctioned adults surveyed did not know they had been sanctioned.  For these families, the welfare system may seem so complex, arbitrary, and mystifying that they cannot determine why their benefits are fluctuating. This suggests that rather than creating a set of incentives that will 'make work pay,' the current welfare system is simply punishing people who cannot figure out how the system works."

Researchers have also determined some of the issues associated with state determination of policies.

"Schram has shown that those states that have instituted the punitive full-family sanctions are those with the largest populations of African Americans. Other researchers examining TANF sanctions found that 'limited education and being African American predict sanctioning when [one] control[s] for a wide range of other personal and demographic characteristics.' In short, it appears the 'carrot and stick' approach is overwhelmingly being used as a stick against some of the most marginalized and vulnerable populations—women of color and their children."

Welfare caseloads are falling. Does that mean the program is a success?

"While many people assume that transitions from welfare to work account for dramatic decreases in welfare caseloads, a number of studies indicate that sanctions actually account for much of the decline."

The decision to provide block funding to the states has also created some perverse incentives as caseloads have fallen.

"If that money is not spent, the states and counties lose it; rather than laying off government employees and losing the stream of federal funding, many counties are transferring former welfare caseworkers and civil fraud investigators into positions as deputized welfare fraud investigators."

"Second, the welfare fraud investigators are gaining political leverage. Welfare fraud investigators are unionizing.In many states they have formed associations and even hired lobbyists. These associations urge legislators to step-up efforts to investigate and prosecute welfare fraud and to move investigations from the civil to the criminal arena."

Welcome to the real United States of America.

Let us return to Matt Taibbi for an appropriate final comment. He refers often to the fact that the San Diego region is home to the most aggressive welfare enforcement tactics in the US, while at the same time having served as ground zero for the explosive mortgage fraud that nearly drove the world economy over the cliff.

"Now the political momentum in both parties traveled in the same direction. Both parties wanted to merge the social welfare system with law enforcement, creating a world that for the poor would be peopled everywhere by cops and bureaucrats and inane, humiliating rules. They wanted to put all the sharp edges of American life in that one arena, and they succeeded."

"And on the other hand, both parties wanted the financial services sector to become an endless naked pillow fight, fueled by increasingly limitless amounts of cheap cash from the Federal Reserve (literally free cash, eventually). If they turned life in the projects into a police state, they turned life on Wall Street into its opposite. One lie in San Diego is a crime. But a million lies? That's just good business."

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2015/01/race-and-criminalization-of-welfare.htmltag:blogger.com,1999:blog-2801225916015233134.post-28616888488954382112015-01-05T02:22:00.000-08:002015-01-05T02:22:38.302-08:00Banks and Their Debt Collection Fraud
The conventional wisdom has held that banks that issue credit cards must charge large rates of interest in order to cover losses on unpaid debts. It is presumably not cost effective to try and collect large numbers of small unpaid balances. That may have been true in the past, but never underestimate the ingenuity of those who are after a quick buck.

As an indication that something new has been afoot in the banking world, consider this article from Reuters (3/2013): States probing top U.S. banks over debt collection.

"The largest U.S. banks face a multi-state investigation into whether they helped debt collectors pursue faulty judgments against credit card customers, according to people familiar with the matter."<o:p></o:p>

"At issue is whether weak record-keeping by banks or a failure to pass accurate information to collection agencies harmed consumers."

"The allegations against the banks echo those central to last year's $25 billion federal-state mortgage settlement to resolve charges that the banks "robo-signed" documents and pursued foreclosures with faulty information."

"This latest probe targets the same banks, including Bank of America, JPMorgan Chase, Citigroup and Wells Fargo, said the sources who spoke on condition of anonymity because the investigations are continuing."

Matt Taibbi discusses the new mechanics of debt collection in his book The Divide: American Injustice in the Age ofthe Wealth Gap. In a chapter appropriately titled Big Frauds he considers the practices of Chase Bank and focuses on the story of Linda Almonte a former employee who was fired for pointing out to her supervisors that they were distributing data to debt purchasers that was incorrect.

"The law is, of course, supposed to be precise, and civil lawsuits are designed to be careful, evidenced-based determinations of right and wrong, liability and no liability. But the business of credit card litigation by its very nature has to be half-assed, brutal, reckless, and stupid. The business model just doesn't work otherwise. The giant consumer credit merchants like Chase who file lawsuits against card holders by the tens of thousands couldn't even begin to make real money, real margins, if they had to do anything like real legal work or meet anything like a real evidentiary standard."

Chase, and other banks, decided that by mass producing legal motions they could do essentially no work, legal or otherwise, and still win enough cases to turn a profit. They could pursue this path with their own collection of collaborating law firms, or resell the debt at a discount and let the debt purchasers play the game with their own herd of law firms.

"The system is really a game of mathematical probabilities that the companies have built around the high probability of obtaining uncontested legal judgments."

The first play in the game is to have a computer create an affidavit form based on whatever information exists in the bank's database.

"When a bank like Chase goes into court to sue a credit card holder, it must formally list the facts of the case: who owes what, how long the amount has been owed, when the account was opened, and so on. The procedures in every state are different, but at some point in the process, all states require an affidavit from the bank as asserting these facts. The same process holds true, incidentally, for foreclosure filings. The filings for all these court actions, be they credit card default suits or home foreclosures, include affidavits in which an ostensibly authoritative bank executive attests to the facts of the case."

Taibbi describes some of the things Linda Almonte learned when she was assigned to Chase's credit card litigation department. The first thing she noted was that the signers of these affidavits were not high ranking bank officers, they were low-paid employees whose main job was to falsify these affidavits by claiming that they were accurate even no check of accuracy was ever intended to be made. They were told to assign themselves a lofty title, but never use that title unless signing affidavits.

"She eventually learned that the whole system operated like a factory. At one end of the office, a paid-by-the-hour temp worker would generate an affidavit on a computer screen, using an automated program that created the legal document and automatically filled in the data from the customer account. Once the document was generated, the temp would print it out and then stick all the unsigned affidavits in a drawer."

"The robo-signers would then open the drawer, pick up hundreds of affidavits at a time, head back to their cubicles, and sign their names to them, one after another."

Technically, signing an affidavit implies that the information contained therein has checked for accuracy. But, of course, no checking had been done or could have been done. Almonte recounts the comment by one of the signers who was so proud of his productivity that he claimed "It was a six hour flight and I signed like two thousand affidavits."

The final step in the assembly line was for a notary to come in and claim that he had witnessed the signatures.

"Then, once they were finished, they would stick the stack of documents backinto the same drawer, where they would be retrieved (maybe that day, maybe later) by a notary, who would stamp the affidavits. The notaries, according to Linda, were almost never in the room when the documents were signed."

How accurate might this data be that was taken from cardholder files that were often many years old? Almonte was assigned to a project that was intended to release a large number (23,000) of records for which a legal finding in favor of Chase had supposedly been obtained. These would be the easiest to collect on and could be sold to a purchaser for a significant fraction of their face value. Since she was being asked to attest to the accuracy of the documentation, she decided to check the files to see if the claim of a legal finding was accurate.

"….there were many problems with the accounts Linda was seeing flowing in from places like California and Illinois. Some were not even judgments. In some files, the cardholders were not even delinquent. In still others, Chase actually owed the cardholders money. In still more, there were judgments, but the judgments weren't against the borrower—they were against chase itself."

She sent the following result of her investigation to her superiors:

"Upon completion of the California PAN files we have 11,472 accounts (including MRA's) with a total balance of $110,138,641.18. Between 50-60% of the files are missing judgments, or the judgment does not contain a date and signature."

She was told to not worry, it wouldn't make any difference. And her bosses were right. The beauty of the system from their point of view was that accuracy made little difference in the performance of the project as a money maker.

Taibbi explains:

"At one point in time that process also required significant legal due diligence and the transfer of documentation, but executives soon realized that in the overwhelmed modern court system, simply attesting to having the right documentation works just as well as really having it. This is the same realization that struck Bank of America when it found that saying it had foreclosure documents was almost as good as having them…."

The banks also know that the probabilities are in their favor. They know that about two-thirds of those whose cases go to court never show up to contest the case. Since a judge is not likely to review the bank's records, that is an automatic win for the banks or the purchasers of debt. Of the remainder, some will choose to pay the supposed debt and some will contest the case. The banks win in two of the three cases. It makes no economic sense for a bank or debt purchaser to get involved in an actual legal case, so those are usually dropped. The profit has already been made.

"What all this means is that the bulk of the credit card collection business is conducted without any supporting documentation showing up or being seen by human eyes at any part of the process. The meat of the business is collecting unopposed default judgments from defendants who either never receive a summons or receive one and never appear in court."

Defendants who never receive a summons? How could that be? Aren't summons presented face-to-face and don't they require a signature from the person being served?

"Thanks to intense state-by-state lobbying by companies like Chase and MBNA, it's usually enough to send a notice by mail to some old address, often the original mailing address when the account was opened, which might have been ten years earlier. In some states, banks and debt buyers can even make use of an automated online summons system, in which a few lines of customer data are entered (perhaps and perhaps not by an actual human being), and, get this, a postcard is then sent in the mail to whatever ancient address the company has on file."

In some locations serving of a summons to an individual by a live human being is still required.

"On paper, it's a simple and logical system, but here again the question of margin creeps in. Most of these process servers are paid bulk rates by the lawyers and make as little as four dollars per customer to serve notice.

"So what happens? Many process servers and law firms engage in a wink-wink-nudge-nudge business called gutter service or sewer service, in which the law firm hands the list of summonses to the server, and the server simply dumps them (in the 'gutter,' hence the name).

"In return, the process server hands the law firm an 'affidavit of service,' swearing that he properly served the customer. Process service once required a signature of the defendant to prove proper service; now all that is needed is the server's own word that he did the job."

If this leaves you slightly incredulous, Taibbi provides this information:

"Around the time that Chase was obtaining judgments against those 23,000 account holders, dozens of law firms and process servers in New York State alone were being accused of gutter service practices. William Singler, the head of a Long Island firm called American Legal Process, was arrested for gutter service in the spring of 2009…."

"Later on, several states would sue Chase, based in part upon information given by Linda, and some would mention the practice. A suit signed and filed by California attorney general Kamala Harris in the spring of 2013 would make particular note of it. 'Defendants, through their agents for service of process,' the state's complaint read, 'falsely state in proofs of service that the consumer was personally served, when in fact he or she was not served at all—a practice known as "sewer service"'."

So, it becomes more understandable why two-thirds of the people never show up in court. And what happens to these unfortunates?

"So how do you collect money from a cardholder who doesn't answer his or her summons? That's easy: you take it! The laws are different from state to state, but in most places in America, once the bank or debt buyer has that default judgment in hand, it can legally do just about anything to the cardholder. It can put a lien on his property, it can attach her salary, it can even take his car or her office furniture."

"In the state of New Jersey, for instance, the bank or debt buyer can basically take anything the cardholder owns, so long as it leaves him with the clothes he's wearing and maybe a little pocket change—technically, a thousand dollars worth of personal property. The state charges only a five-dollar fee to green-light the attachment of a bank account or the repossession of an automobile."

"'There are people out there who never knew they were served and taken to court,' says Linda, 'Then five years later they go to sell their house, and they find they can't do it because of a missed payment at Circuit City years ago'."

Taibbi's book is focused on comparing the way our society treats the wealthy and powerful as opposed to the way the poor and powerless are treated. His chapter on massive bank fraud is titled Big Frauds. He precedes it with a chapter called Little Frauds in which he describes how those who apply for welfare are assumed to be guilty of fraud unless an investigation renders them innocent. In the case of the welfare recipient who is deemed to have misreported information, loss of benefits and perhaps criminal charges are the options available. A simple mistake can lead to jail time. There are many people hired to search out a few dollars of welfare fraud. Few people seem to be concerned about bank fraud where billions of dollars are involved.

"Banks commit the legal crime of fraud wholesale; they do so out in the open, have entire departments committed to it, and have employees who've spent years literally doing nothing but commit, over and over again, the same legal crime that some welfare mothers go to jail for doing once. But they're not charged, because there is no political crime. The system is not disgusted by the organized, mechanized search for profit. It's more like it's impressed by it."

Chase eventually settled with Linda Almonte, and fired some lawyers and bank employees. Taibbi views it as mere public-relations fluff. More information can be found here.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2015/01/banks-and-their-debt-collection-fraud.htmltag:blogger.com,1999:blog-2801225916015233134.post-71424040127677692852014-12-30T11:45:00.000-08:002014-12-30T11:45:53.670-08:00Secular Religions: Marxism and Free-Market Capitalism
Religion provides comforts to believers at a number of levels. It provides a feeling of belonging to something bigger than themselves; it makes available a framework in which all things can be explained; decisions which otherwise might be difficult to make are predetermined. However, as history has so often illustrated, religious belief can also provide justification for discrimination and murder.

Tony Judt provides a discussion of the manner in which intellectuals can be caught up in secular belief systems that provide the same comforts and the same justifications for discrimination and murder as organized religion. What follows is based on the chapter Captive Minds in his book TheMemory Chalet.

The chapter title is taken from the book of the same name by the Polish writer Czeslaw Milosz.

"….in 1951 he defected to the West and two years later he published his most influential work, The Captive Mind. Never out of print, it is by far the most insightful and enduring account of the attraction of intellectuals to Stalinism and, more generally, of the appeal of authority and authoritarianism to the intelligentsia."

"Milosz studies four of his contemporaries and the self-delusions to which they fall prey on their journey from autonomy to obedience, emphasizing what he calls the intellectuals' need for 'a feeling of belonging'."

To make reasonable to the modern reader the notion of Marxism as a secular religion, consider this description from Wikipedia:

"According to Marxist analysis, class conflict within capitalism arises due to intensifying contradictions between highly productive mechanized and socialized production performed by the proletariat, and private ownership and private appropriation of the surplus product in the form of surplus value (profit) by a small minority of private owners called the bourgeoisie. As the contradiction becomes apparent to the proletariat, social unrest between the two antagonistic classes intensifies, culminating in a social revolution. The eventual long-term outcome of this revolution would be the establishment of socialism – a socioeconomic system based on cooperative ownership of the means of production, distribution based on one's contribution, and production organized directly for use. Karl Marx hypothesized that, as the productive forces and technology continued to advance, socialism would eventually give way to a communist stage of social development. Communism would be a classless, stateless, humane society erected on common ownership and the principle of 'From each according to his ability, to each according to his needs'."

When this sort of speculation is combined with the concept of Darwinian evolution, mere speculation can take on the appearance of a natural history of human development to those inclined to believe. Similar to religions based on a deity, it provides an end sufficiently desirable that just about any means to that end can be justified. In one case God is on our side; in the other, History is on our side.

In the postwar years when Milosz published his book, this capture of intellectuals by political and social theories was familiar to everyone. It had occurred with both communism and fascism. Judt began teaching Milosz to his students in the 1970s and watched how the appreciation of his students varied over the next few decades.

"….when I first taught the book in the 1970s, I spent most of my time explaining to would-be radical students why a 'captive mind' was not a good thing. Thirty years on, my young audience is simply mystified: why would someone sell his soul to any idea, much less a repressive one? By the turn of the twenty-first century, few of my North American students had ever met a Marxist. A self-abnegating commitment to a secular faith was beyond their imaginative reach. When I started out my challenge was to explain why people became disillusioned with Marxism; today, the insuperable hurdle one faces is explaining the illusion itself."

Judt suggests that his students—and the rest of us as well—are captured by a secular faith without even realizing it. He compares the status of free-market economics today with that of Marxism in the postwar era.

"Our contemporary faith in "the market" rigorously tracks its radical nineteenth-century doppelgänger—the unquestioning belief in necessity, progress and History. Just as the hapless British Labour chancellor in 1929-1931, Philip Snowden, threw up his hands in the face of the Depression and declared that there was no point opposing the ineluctable laws of capitalism, so Europe's leaders today scuttle into budgetary austerity to appease 'the markets'."

"But 'the market' like 'dialectical materialism'—is just an abstraction: at once ultra rational (its argument trumps all) and the acme of unreason (it is not open to question). It has its true believers—mediocre thinkers by contrast with the founding fathers, but influential withal; its fellow travelers—who might privately doubt the claims of the dogma but see no alternative to preaching it; and its victims, many of whom in the US especially….proudly proclaim the virtues of a doctrine whose benefits they will never see."

As with any religion, the believer is relieved of the need to justify the beliefs, and an end can be used to justify the means to attain that end.

"Above all, the thrall in which an ideology holds a people is best measured by their collective inability to imagine alternatives. We know perfectly well that untrammeled faith in unregulated markets kills: the rigid application of what was until recently the 'Washington consensus' in vulnerable developing countries—with its emphasis on tight fiscal policy, privatization, low tariffs, and deregulation—has destroyed millions of livelihoods. Meanwhile, the stringent 'commercial terms' on which vital pharmaceuticals are made available has drastically reduced life expectancy in many places. But in Margaret Thatcher's deathless phrase, 'there is no alternative'."

It is difficult to appreciate from today's perspective how powerful Russia and communism appeared after World War II.

"….it was because History afforded no apparent alternative to a Communist future that so many of Stalin's foreign admirers were swept into intellectual captivity. But when Milosz published The Captive Mind, Western intellectuals were still debating among genuinely competitive social models—whether social democratic, social market, or regulated market variants of liberal capitalism. Today, despite the odd Keynesian protest from below the salt, a consensus reigns."

Judt did not go there, but he could have continued the religious analogy by comparing university economics departments to cloistered monasteries where swearing belief in dogma is required for entry, and a lifetime is spent surrounded by people of identical beliefs. Once one accepts the dogma, to reconsider its validity is grounds for expulsion.

"One hundred years after his birth, fifty-seven years after the publication of his seminal essay, Milosz's indictment of the servile intellectual rings truer than ever: 'his chief characteristic is his fear of thinking for himself'."

The essays in The Memory Chalet were produced by Judt while he was dying of ALS (Lou Gehrig's disease). This malady gradually eliminates muscle control. He found himself at a stage where he was a quadriplegic. Fortunately, his mind remained clear and he obtained some satisfaction in spending the long nights of solitude reconsidering his life, his experiences, and his acquired knowledge. He said he discovered himself arranging these reminiscences into topics and finally into what might be called essays which he could dictate to an assistant during the day. This is a remarkable feat. The professor could not stop trying to educate his students…,his readers.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2014/12/secular-religions-marxism-and-free.htmltag:blogger.com,1999:blog-2801225916015233134.post-85690562897256919262014-12-15T15:18:00.000-08:002014-12-15T15:18:22.978-08:00The Creation of the Middle Class
The term "middle class" is ill defined. People on the top end of any wealth scale would prefer to be thought of as "upper middle class" when tax rates are apportioned. Those on the lower end are even more determined to be included; the alternative is to be considered "lower class." For statisticians and economists, a convenient formula is to define the top 10% as the upper class, the next 40% as the middle class, and the final 50% as the lower class. Thomas Piketty uses this classification to provide an interesting discussion of how wealth has evolved over time in his book Capital in the Twenty-First Century.

Wealth has been chosen as the quantity to track rather than income or some other attribute, because some degree of wealth is required in order to invest in one's future in an attempt to better oneself. Wealth is what you accumulate beyond what must be spent to meet daily needs. It can include savings, real estate, and financial investments. It is difficult to view a person as middle class if they are not able to reach a stage where they can save for the future. Note that Piketty defines capital and wealth as equivalent quantities that include anything that has a monetary value.

Piketty provides his figures and tables here. Consider this table that examines the wealth distribution in various regions and at various times.

Note the last column titled "Very high Inequality." This represents the conditions in Europe around 1910, a period of high prosperity just prior to World War I. The top 10% possessed 90% of the total wealth, with 50% going to the top 1%. What may be somewhat surprising is that what are referring to as the middle and lower classes each possessed 5% of the wealth. This led Piketty to conclude that there was effectively no middle class prior to 1910 in Europe. The situation was similar but a bit less extreme in the US with the upper class holding about 81% of the wealth.

Columns three and four compare the wealth distributions representative of Europe and the US at the current time (evaluated in 2010). The share possessed by the middle class has now risen to 35% in Europe and 25% in the US. The amount located in the lower class has remained constant over time at 5%. What these numbers suggest is that a portion of the wealth that had resided in the upper class has been transferred to the middle class. Or, more precisely, a middle class was created that could be distinguished from the lower class. If one assumes that the US had 5% residing in the lower class in 1910, then the middle class would have had about 14% of the wealth—a slightly more egalitarian distribution than that of Europe. However, this also indicates that the US middle class gained much less than that of Europe over the last century.

The figure below plots the share of wealth held by the top 10% over time for Europe and the US.

The wealth of the top 10% in both regions peaks in 1910 and falls to minimum in Europe around 1980, while the US share falls less far and bottoms out somewhere in the period 1950-1970. After 1910 came a continuous series of economic and social shocks: World War I, followed by the Great Depression, followed by World War II, and finally the postwar phase of rebuilding and otherwise responding to this sequence of events. World War I had little physical effect on the US, but it did require a great increase in spending and an associated rise in the level of taxation. With Europe experiencing large numbers of fatalities and disabled veterans, the European countries had to tax heavily to cover war costs and to begin assembling what are now referred to as "welfare states." The interwar years were difficult in Europe with debts to be paid, unstable economic conditions, and tumultuous political developments. The depression years of the 1930s were more consequential for the US as it needed to tax and spend heavily to support the needs of its population and begin its version of a welfare state. World War II was far more catastrophic for Europe than the earlier war, causing damage and social disruption on a scale that is barely imaginable to later generations.

Tony Judt provides insight into the effect of recent history on European thinking in his book Postwar.

"The 1960s saw the apogee of the European state. The relation of the citizen to the state in Western Europe in the course of the previous century had been a shifting compromise between military needs and political claims; the modern rights of newly enfranchised citizens offset by older obligations to defend the realm. But since 1945 that relationship had become increasingly to be characterized by a dense tissue of social benefits and economic strategies in which it was the state that served its subjects, rather than the other way around."

With postwar Europe in chaos it was necessary for a strong and active state to organize recovery. With the success of that recovery came a belief in the efficacy of state-determined policies.

"The state, it was widely believed, would always do a better job than the unrestricted market: not just in dispensing justice and securing the realm, or distributing goods and services, but in designing and applying strategies for social cohesion, moral sustenance and cultural vitality. The notion that such matters might better be left to enlightened self-interest and the workings of a free market in commodities and ideas was regarded in mainstream European political and academic circles as a quaint relic of pre-Keynesian times: at best a failure to learn the lessons of the Depression, at worst an invitation to conflict and a veiled appeal to the basest human instincts"

"The state, then, was a good thing; and there was a lot of it….The overwhelming bulk of the increase in spending went on insurance, pensions, health, education and housing."

This love affair with the state would lose some of its ardor over the years, but the social benefits have mostly remained in place; and the feeling of communalism—we are all in this together—has remained strong. The decline in the wealth share of the upper class was nearly linear over the period from 1910 to 1970. The post-apogee period of the European state saw a leveling off of this share followed by a gradual increase that continues to this day. The result was a share of the wealth for the middle class that increased from 5% to 35%.

The US followed a different path through these trying times. Spared war on its own turf, its greatest social and economic challenges arose from the Great Depression of the 1930s. It was in this period that it passed the Social Security Act that provided for a pension in retirement, unemployment insurance, aid to families with dependent children, and other welfare benefits that remain the core of the US version of a welfare state (access to healthcare would come much later).

Postwar, there was no rebuilding required except for a reallocation of resources from military production to commercial products—and business was good. There was, however, the need for a grateful and sympathetic nation to deal with the millions of returning servicemen.

Ira Katznelson provides some insight into these times in the US in his book When Affirmative Action Was White. Katznelson points out that all social legislation of the time required support by the southern Democratic senators for passage. In their zeal to insure that no assistance went to blacks, the Social Security Act precluded occupations that were readily available to blacks, and insisted that social welfare programs be administered at the state and local levels rather having national standards imposed.

"Across the nation, fully 65 percent of African Americans fell outside the reach of the new program; between 70 and 80 percent in different parts of the South. Of course, this excision also left out many whites; indeed, some 40 percent in a country that was still substantially agrarian. Not until 1954, when Republicans controlled the White House, the Senate, and the House of Representatives, and southern Democrats finally lost their ability to mold legislation, were occupational exclusions that had kept the majority of blacks out of the Social Security system eliminated."

These southern Democrats are still in power in the South today, they have just changed their labels from Democrat to Republican—and they still have influence over all legislation.

The social welfare legislation was designed not to produce prosperity, but to allow those who might fall into poverty to survive poverty. Surviving poverty is not the same as reaching a state where accumulation of assets can take place. It is difficult to see this social legislation as being successful in helping many people reach the middle class.

There is another social support effort that must be discussed, one whose aim was to produce prosperity, but only for a limited class of people. Katznelson refers to the GI Bill passed to support the returning military as a "social revolution" and claims it "created middle class America." Of course, the southern legislators again made sure that blacks were hindered from participating in this program; hence Katznelson's reference to race-based affirmative action in favor of whites.

About 16 million people had been mobilized for the war effort. The main features of the law were designed to provide time and resources to help those returning make the transition to civilian life. Katznelson provides this perspective:

"Even today, this legislation, which quickly came to be called the GI Bill of Rights, qualifies as the most wide-ranging set of social benefits ever offered by the federal government in a single comprehensive initiative....it reached eight of ten men born during the 1920s."

"One by one, family by family, these expenditures transformed the United States by the way they eased the pathway of the soldiers—the generation that was marrying and setting forth into adulthood—returning to civilian life. With the help of the GI Bill, millions bought homes, attended college, started business ventures, and found jobs commensurate with their skills....this legislation created middle class America. No other instrument was nearly as important."

The scale of the investment in human capital is staggering to those accustomed to today's parsimonious legislators.<o:p></o:p>

"More than 200,000 used the bill's access to capital to acquire farms and start businesses. Veterans Administration mortgages paid for nearly 5 million new homes. Prior to the Second World War, banks often demanded that buyers pay half in cash and imposed short loan periods, effectively restricting purchase to the upper middle class and upper class. With GI Bill interest rates capped at modest rates, and down payments waived for loans up to thirty years, the potential clientele broadened dramatically."

The government spent more on educating its returning soldiers than it spent on rebuilding devastated Europe.<o:p></o:p>

"By 1950, the federal government had spent more on schooling for veterans than on expenditures for the Marshall Plan....On the eve of the Second World War, some 160,000 Americans were graduating from college each year. By the end of the decade, this number had tripled, to some 500,000. By 1955, about 2,250,000 veterans had participated in higher education. The country gained more than 400,000 engineers, 200,000 teachers, 90,000 scientists, 60,000 doctors, and 22,000 dentists....Another 5,600,000 veterans enrolled in some 10,000 vocational institutions to study a wide array of trades from carpentry to refrigeration, plumbing to electricity, automobile and airplane repair to business training."

"For most returning soldiers, the full range of benefits—the entire cost of tuition plus a living stipend—was relatively easy to obtain...."

The numbers quoted above indicate the scale of the investment in a population that was a bit less than half of the nation's current population. Another way to examine the immensity of the program is by looking at expenditures.<o:p></o:p>

"By 1948, 15 percent of the federal budget was devoted to the GI Bill...."

Today, 15 percent of the federal budget would amount to about $600 billion per year. Such a program was truly large and ambitious, but did it create a middle class? It is difficult to believe that it would have made no difference, but the plot of wealth share by the upper class shows no effect in the postwar period. While the GI Bill was certainly a social event, it cannot be considered a revolution. Revolutions create a legacy. Where are the subsidized higher education and mortgages today? <o:p></o:p>

Where an effect is seen on the wealth distribution is in the 1930s when the Social Security Act was implemented to counter the effect of the Depression. That may have had more to do with the stock market crash than any wealth redistribution.<o:p></o:p>

It is clear that a significant amount of wealth has been accumulated over the last century by the 40% of the population that has been defined to be the middle class. How exactly has that happened? It is also clear that the bottom half of the population has been excluded from any gain in the share of wealth. Why is that so? Whatever the mechanism, it appears that Europe has been more effective at spreading the wealth. Its middle class saw its share rise from 5% to 35%, a gain of 30%. In the US, the middle class share went from about 14% to 25%, a gain of 11%.

Piketty clearly believes that taxation is the driving mechanism.

"….it is important to note that the effect of the tax on capital income is not to reduce the total accumulation of wealth but to modify the structure of the wealth distribution over the long run. In terms of the theoretical model, as well as in the historical data, an increase in the tax on capital income from 0 to 30 percent (reducing the net return on capital from 5 to 3.5 percent) may well leave the total stock of capital unchanged over the long run for the simple reason that the decrease in the upper centile's share of wealth is compensated by the rise of the middle class. This is precisely what happened in the twentieth century—although the lesson is sometimes forgotten today."

Since Europe has been more successful in building up its middle class, it should be of value to consider how they might have accomplished that.

Clearly one can modify a wealth distribution by confiscating that of one group and giving it to another, but that is not a sustainable scheme. Piketty explains the current approach:

"….modern redistribution does not consist in transferring income from the rich to the poor, at least not in so explicit a way. It consists rather in financing public services and replacement incomes that are more or less equal for everyone, especially in the areas of health, education, and pensions."

This concept of providing services "equal for everyone" could be the key. Europe was emerging from a series of catastrophes, but it also remembered that it had endured centuries of highly unequal societies.

Consider this input from Tony Judt:

"Why were Europeans willing to pay so much for insurance and other long-term welfare provisions, at a time when life was still truly hard and material shortages endemic? The first reason is that, precisely because times were difficult, the postwar welfare systems were a guarantee of a certain minimum of justice, or fairness."

The desire to put in place a system where there was equality of opportunity seemed to be paramount. A large amount of government spending was required to fund what was necessary. Different countries went about it in different ways. From Piketty:

"….a detailed study of French taxes in 2010, which looked at all forms of taxation, found that the overall rate of taxation (47 percent of national income on average) broke down as follows. The bottom 50 percent of the income distribution pay a rate of 40-45 percent; the next 40 percent pay 45-50 percent; but the top 5 percent and even more the top 1 percent pay lower rates, with the top 0.1 percent paying only 35 percent."

"….other states, such as Denmark, finance all social spending with an enormous income tax, the revenues from which are allocated to pensions, unemployment and health insurance, and many other purposes."

So we have a regressive tax system and a progressive tax system that both lead to a more prosperous middle class than exists in the US. Soaking the rich doesn't seem to be the motive, or even necessary. Perhaps the most important thing is the level of tax revenue and the types of services the revenue can provide.

Judt presents this insight into the benefits of the welfare state:

"….although the greatest immediate advantage was felt by the poor, the real long-term beneficiaries were the professional and commercial middle class. In many cases they had not previously been eligible for work-related health, unemployment or retirement benefits and had been obliged, before the war, to purchase such services and benefits from the private sector. Now they had full access to them, either free or at low cost. Taken with the state provision of free or subsidized secondary and higher education for their children, this left the salaried professional and white collar classes with both a better quality of life and more disposal income. Far from dividing the social classes against each other, the European welfare state bound them closer together than ever before, with a common interest in its preservation and defense."

Paying taxes begins to look like a good investment. Turn a block of your wages over to the government and you no longer have to worry about how you might survive a serious medical condition; you no longer have to spend a lifetime saving to pay for your children's education; and you no longer have another lifetime of worry about saving for retirement. You come out ahead and can accumulate savings for investing or whatever else you might desire. In addition, there is that mandated five or six weeks of vacation that you can enjoy with what is left of your income.

What seems to be happening is taxation as social insurance. As with all insurance schemes not everyone benefits equally. The poor see an income floor that protects them from disaster. The wealthy may pay in more than they get back, but there is value in what they do receive. The middle class family seems to be in the sweet spot where the return on investment is the greatest.

That is not such a bad way to run a nation.

And now it becomes clear how Europe developed a more prosperous middle class than the US.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2014/12/the-creation-of-middle-class.htmltag:blogger.com,1999:blog-2801225916015233134.post-73441694319881774492014-12-09T00:53:00.000-08:002014-12-09T00:53:45.606-08:00Life, Death, Feces, and the FDA's Dilemma
Emily Eakin provided a fascinating description in The New Yorker of the developments occurring in one of the most interesting and rapidly developing areas of medical science. It was titled The Excrement Experiment: Treating Disease with Fecal Transplants.

It has become clear that antibiotics can kill some or all of the bacteria that control functions occurring in our digestive system. While usually beneficial, antibiotics can cause both long-term and short-term changes in our microbial makeup (our microbiome) leading to chronic illnesses and, occasionally, immediate threat of death. Abnormal excursions in bacterial population can occur in cases that may not be associated with antibiotics and are suspected of causing other serious health problems. Since so little is understood concerning our microbiome, the most direct way to introduce a "healthy" distribution of bacteria into the digestive tract is via insertion of what has come to be known as a fecal transplant from a healthy person. This procedure has now received the more official descriptor fecal microbiota transplantation (FMT).

Although fast moving now, the idea of using human excrement to address intestinal issues was first addressed by a Chinese physician well over a thousand years ago.

"In the United States, the first description of FMT appeared sixteen centuries later, in 1958, when Ben Eiseman, a surgeon at the V.A. Hospital in Denver, published four case reports in the journal Surgery. Stool was then widely assumed to be mainly a source of disease; there was little empirical support for the notion that bowel bacteria were important for health. Several of Eiseman's patients had become deathly ill after the requisite preoperative course of antibiotics, however, and he concluded that the drugs were destroying normal gut flora. He sent a resident to collect stool specimens from a nearby maternity ward, reasoning that pregnant women were likely to be young and healthy and to have avoided antibiotics. The stool, transferred to Eiseman's patients, saved their lives."

What was probably occurring with Eiseman's patients was due to the nasty bug known as Clostridium difficile. This is a naturally occurring microbe in our digestive systems that is held in control by the array of other bacteria. However, when massive doses of antibiotics are applied, usually in hospital settings, C. difficile, can be the last microbe left standing since it is highly resistant to known antibiotics. Left alone it causes severe diarrhea and can be fatal.

"Scattered case reports in the medical literature described C. difficilepatients, some on their deathbeds, who received fecal transplants and recovered, often within hours. Then, in January, 2013, The New England Journal of Medicine published the results of the first randomized controlled trial involving FMT, comparing the therapy to treatment with vancomycin for patients with recurrent disease. The trial was ended early when doctors realized that it would be unethical to continue: fewer than a third of the patients given vancomycin recovered, compared with ninety-four per cent of those who underwent fecal transplants—the vast majority after a single treatment. A glowing editorial accompanying the article declared that the trial's significance 'goes far beyond the treatment of recurrent or severe C. difficile' and predicted a spate of research into the benefits of fecal transplants for other diseases."

For this application, a 94% success rate puts feces in the miracle drug category. It is not surprising that other applications for FMT would become of interest. Eakin points out that Eiseman's results were not totally ignored.

"For years, virtually the only proponent of FMT was Thomas Borody, a gastroenterologist in Sydney, Australia, who, in 1988, after reading Eiseman's paper, decided to try a fecal transplant on a patient who had contracted an intestinal ailment in Fiji. The patient recovered, and Borody estimates that he has since performed the procedure five thousand times, including, with stool supplied by his father, on his mother, who suffered from crippling constipation. In addition to C. difficile patients, Borody says that he has successfully treated people with autoimmune disorders, including Crohn's and multiple sclerosis."

It is not surprising that researchers have begun to postulate and investigate all sorts of disorders that might be associated with dysfunctions of the microbiome, from obesity to autism.

"The Cleveland Clinic named fecal transplantation one of the top ten medical innovations for 2014, and biotech companies are competing to put stool-based therapies through clinical trials and onto the market. In medicine, at any rate, human excrement has become a precious commodity."

It is also not surprising that with such a readily available product there is a lot of self medicating going on. Eakins goes into great detail providing the history of Tom Gravel who suffered from Crohn's disease which causes inflammation of a bowel section accompanied by pain and severe diarrhea. Gravel suffered through ineffective medical interventions for over three years before he decided to try self-administered fecal doses provided by a presumably healthy neighbor. Gravel was able to obtain relief in this way and intends to continue this procedure indefinitely.

On the one hand there are how-to books and YouTube videos demonstrating how individuals can try the procedure on their own; on the other hand you have the FDA which is legally bound to treat excrement as a drug.

"The agency defines a drug as any material that is intended for "use in the diagnosis, cure, mitigation, treatment, or prevention of disease." An exception has been written into law for body parts, including skin, bone, and cartilage, which are classified as tissue. But the statute excludes most human secretions from this category."

"Substances labeled drugs are subject to a rigorous approval process. Pharmaceutical companies typically spend many years and millions of dollars researching and testing a drug before submitting it to the agency for approval. Until the F.D.A. approved a fecal-transplant therapy, the procedure would be considered experimental. In order to offer it to patients, doctors would need to file an investigational new-drug application, or I.N.D., and obtain the agency's permission."

"I.N.D.s are intended to capture every aspect of a prospective therapy in exacting detail….one gastroenterologist said that it had taken her hundreds of hours to complete the paperwork. Many others lacked the resources and staff to devote to such a task."

The FDA is torn between the need to follow a lengthy process designed to insure patient safety and verify effectiveness of drugs, and evidence that thousands of sufferers could be provided immediate relief by a simple and inexpensive procedure.

"'What do we do with the fifteen thousand patients who are really desperate for something that works?' a doctor from the Mayo Clinic asked F.D.A. officials. 'If your mother shows up with severe or recurrent C. difficile, are you going to not offer something that you know how to do safely, effectively, and say, 'I can't do it because the regulatory agencies in the United States have decided that this requires a special licensure'?"

The FDA appears to be trying to be accommodating.

"….the F.D.A. declared an exception for doctors treating recurrent C. difficile:they would be allowed to perform fecal transplants without an I.N.D. In revising its position, the agency said that it would be exercising 'enforcement discretion'—a temporary measure. As an F.D.A. spokeswoman later explained in an e-mail, the directive did not reflect a change of policy; it was intended as an acknowledgment that 'there are often few or no other treatment options for these patients'."

There are good reasons for the FDA to follow the traditional path for drug approval. However, as Eakin points out, that encourages sufferers to try the procedure on their own. These people are, in fact, producing a wealth of clinical data that is going to be lost. A less onerous process that allows doctors to participate in administering doses while monitoring the patients and reporting the results would rapidly accumulate more data than drug manufacturers could ever produce.

The seemingly irreconcilable problem is that excluding excrement from the requirement that it be treated as a drug would require congressional legislation. Even if congress were so moved to act, it is unlikely that the pharmaceutical industry would ever give them permission to threaten a potentially large profit source.

Consequently, we are being forced to endure an expensive and lengthy process that only drug companies can afford to pursue. Eventually they will claim to have turned shit into gold and sell it back to us at as high a price as the market will bear.

The community has already decided on what to call these wonder pills when they finally emerge: crapsules.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2014/12/life-death-feces-and-fdas-dilemma.htmltag:blogger.com,1999:blog-2801225916015233134.post-63658731210722589292014-12-05T00:01:00.000-08:002014-12-05T00:01:32.294-08:00Education: Are International Tests Worth Anything?
Diane Ravitch is not a fan of international tests that compare the performance of students from different countries. She believes that the observation that US students, on average, perform around the middle of the pack has led to the conclusion that this is a national tragedy requiring strong corrective measures in our schools. Ravitch identifies the problem as being not with our school systems, but with our history of multigenerational poverty, and racial and ethnic discrimination. She expresses her views in her book Reign of Error: The Hoax of the Privatization Movement and the Danger to America's Public Schools.

Ravitch provides an interesting perspective on the issue of performance testing. She wishes us to conclude that striving to be at the top of the testing ladder is not a healthy strategy for a nation, and, in fact, is counterproductive. She introduces us to a study performed by Keith Baker who was a long-time analyst in the Department of Education.<o:p></o:p>

"He [Baker] reviewed the evidence and concluded that for the United States and about a dozen of the world's most advanced nations 'standings in the league tables of international tests are worthless. There is no association between test scores and national success, and, contrary to one of the major beliefs driving U.S. education policy for nearly half a century, international test scores are nothing to be concerned about. America's schools are doing just fine on the world scene."

Baker looked at the results of an early international student comparison performed in 1964.

"Baker looked at the per capita gross domestic product of the nations whose students competed in 1964. He found that 'the higher a nation's test score 40 years ago, the worse its economic performance on this measure of national health—the opposite of what the Chicken Littles raising the alarm over the poor test scores of U.S. children claimed would happen.' The rate of economic growth improved, he held, as test scores dropped. There was no relation between a nation's productivity and its test scores."<o:p></o:p>

How might this make sense? The goal of education is not just to provide a student with knowledge, it is to teach the student how to acquire knowledge on his/her own and to help them learn how to use knowledge effectively. Neither of these two things shows up on tests. <o:p></o:p>

"A certain level of educational achievement may be considered 'a platform for launching national success, but once that platform is reached, it may be bad policy to pursue further gains in test scores because focusing on the scores diverts attention, effort, and resources away from other factors that are more important determinants of national success'."

"The United States has been a successful nation, Baker argues, because its schools cultivate a certain 'spirit' which he defines as 'ambition, inquisitiveness, independence, and perhaps most important, the absence of a fixation on testing and test scores'."

Such a conclusion would certainly be remarkable. Let us look closer now at what Baker actually provided in his study Are International Tests Worth Anything?

Baker's paper was published in 2007. The early study he referred to was the First International Mathematics Study (FIMS).

"FIMS was administered in 1964 to samples of 12-year-olds in 11 nations. Today's world is largely a world created and operated by the now 55-year-old FIMS generation. If there is a connection between high test scores and national success, it will show up in looking at how well the 1964 FIMS scores predicted where nations are today. Among the 11 FIMS nations, the U.S. finished second to last (ahead of Sweden)."

The nations participating in this study were Australia, Belgium, England, Finland, France, Germany (FRG), Israel, Japan, Netherlands, Scotland, Sweden, and the United States. England and Scotland are combined in order for Baker to make his point. He wishes to evaluate how these nations have evolved between 1964 and 2002 in order to determine any correlation between test scores and national performance. He evaluates the quantities wealth, rate of growth, productivity, quality of life, democracy, and creativity. This is his conclusion with respect to wealth.

"First, and perhaps most important to a nation, is the creation of wealth. The best measure of generating wealth is per-capita GDP adjusted for cost of living differences, or purchasing power parity (PPPGDP). The wealth of nations scoring higher than the U.S. on FIMS averaged 73% of the per-capita income in the U.S. in 2002.  FIMS scores in 1964 correlate at r = -0.48 with 2002 PPP-GDP. In short, the higher a nation's test score 40 years ago, the worse its economic performance on this measure of national wealth…."<o:p></o:p>

What Baker seems to be saying is that since the US was wealthier than the countries whose students knew more about math than the US in 1964 and the US is still wealthier, then the poor test performance did not matter. But wouldn't the growth in wealth over the 1964-2002 interval be a more relevant comparison? Many of the countries in the study were still in a rebuilding mode trying to recover from the effect of World War II in 1964. Their wealth had been depleted, but their economic growth would have been strong.

It should be noted that GDP is more closely aligned with income than with wealth. Wealth and its growth will depend on tax and saving rates and could vary dramatically from country to country for reasons that have nothing to do with education or economic health. The accumulation of wealth in a nation might not even be considered a good thing, let alone be targeted as a measure of economic prowess. Consider this chart provided by Thomas Piketty in his book Capital in the Twenty-First Century.

Using the measure of private capital (wealth) divided by national income (essentially GDP) Italy would have to be considered the healthiest economy today. In any event, the results can change dramatically over time and the US is far from the dominant nation. Perhaps per capita GDP growth over time is better indication economic efficiency.

Baker chooses to address GDP growth, but he limits it to the decade before 2002. He apparently wishes to look at a time when the children of 1964 would be of an age where they might be expected to control their nations. That implies that the children of 1964 were somehow unique and different from those who came before or after—an unlikely assumption

"One can argue that since the U.S. had a big post-WW II economic lead over the rest of the world, the rate of economic growth is at least as important as GDP as an indicator of national achievement. The nations that scored better than the U.S. in 1964 had an average economic growth rate for the decade 1992-2002 of 2.5%; the growth rate for the U.S. during that decade was 3.3%. The average economic growth rate for the decade 1992-2002 correlates with FIMS at r = -0.24. Like the generation of wealth, the rate of economic growth for nations improved as test scores dropped."

One hopes that Baker used per capita GDP growth because most European countries, along with Japan, have experienced stagnant or decreasing populations, a factor that would decrease their GDP figures relative to that of the relatively fast-growing US population. Baker does not designate which data he used. Let us then turn to Piketty and his data again. He provides per capita GDP growth rates for North America and Western Europe that span the period of interest. The numbers for North America would be dominated by US values because of its large population.

Using per capita GDP growth as a metric for the efficacy of a given school system would seem to indicate that the higher scoring European nations of 1964 had better scores and better economies than the US at the time. Eventually, everyone appears to be headed for some common level of excellence. Trying to use economic factors to determine the strength of a given approach to learning is a highly uncertain process.

Baker wishes to make the case that the US has been better at fostering creativity because it has produced the most patents per capita compared to other countries.

"A good school system should foster creativity. The number of patents issued in 2004 is one indicator of how creative the generation of students tested in 1964 turned out to be. The average number of patents per million people for the nations with FIMS scores higher than the U.S. is 127. America clobbered the world on creativity, with 326 patents per million people."

Unfortunately, interpreting patent numbers also requires a number of qualifications. The race to produce patents can be more an indication of a nation's business composition and business practices than a direct indicator of creativity. In addition, most patents arise in technical fields where advanced degrees are required to attain competence. University technical departments in the US are typically heavily endowed with students from other countries. Many of the patents that Baker is so proud of are actually being produced by students educated by school systems that he would claim are inferior to ours because they perform well on international tests.

The gold standard in international testing is currently PISA (Program for International Student Assessment). It is an OECD project that has invited many non-OECD countries to participate. It tests 15-year-olds in math, reading, and science competency, and tries to deduce from the results which factors are effective in educating students. The PISA people also conduct surveys to deduce non-educational characteristics of those participating so that factors like income level can be assessed in comparing results between students of the varying countries. PISA also produces country assessments which explain what they believe to be relative lessons learned from the testing. The latest test was performed in 2012 and the results were released in 2014. The country rankings and the assessment of the US students can be found here.

The first PISA test was in 2000. It has been given every three years since. Baker had available early results with which to compare with his FIMS data. He drew these conclusions:

"On these indicators of success, the nations that scored at the PISA average generally outperformed those scoring either above or below average. For example, percapita GDP was $22,495 for the 11 nations scoring above average, $34,414 for the five average nations, and $16,375 for the 11 below-average nations. The same pattern holds for quality of life, democracy, and creativity as measured by patents."

"International comparisons on many factors show that Norway is the best place in the world to live, and, like the U.S., Norway scored right at the PISA average. Mediocre test scores correlate with better, more successful countries than do top scores (or lower scores). Mediocrity in test scores is, for nations, a good thing! This finding is highly counterintuitive. Why should it be

so?"

Baker provides interesting and compelling reasons why average test performance by economically developed countries might a good thing. There is more to life than studying for a given test. Even the Asian countries that do so well on PISA would agree that having children spend all day year after year preparing for a national test that will determine their future is an unhealthy environment, even if it makes them proficient in PISA.

Baker's explanation is presented again here.

"A certain level of educational achievement may be considered a platform for launching national success, but once that platform is reached, it may be bad policy to pursue further gains in test scores because focusing on the scores diverts attention, effort, and resources away from other factors that are more important determinants of national success."

This is a wonderful hypothesis, but like so many other explanations for academic performance it is just a hypothesis. His paper does not provide confirmation.

Since we are in the mode of evaluating hypotheses, here is another one for consideration.

It is not difficult to see how a country with a poor school system might still succeed economically. Such a country will produce a large number of intelligent, well-educated, and creative people in spite of general academic conditions. The important factor is providing sufficient numbers with the opportunity to use their skills in a productive manner. Knowledge, creativity and opportunity must come together. Countries that are efficient at providing opportunities to excel can prosper even if a large fraction of the population is poorly educated.

That is yet another way to view the US.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2014/12/education-are-international-tests-worth.htmltag:blogger.com,1999:blog-2801225916015233134.post-4326182958211375362014-11-25T15:38:00.000-08:002014-11-25T15:38:02.940-08:00Asia's Children Pay the Price for Test-Driven Education Systems: Myopia
Amanda Little has produced an interesting article on the Chinese education system in Bloomberg Businessweek. It has the intriguing title Fixing the Best Schools in theWorld. It focuses on Qiu Zhonghai who is the school principal at Qibao one of the highest ranking high schools in Shanghai.

"Shanghai public schools placed first worldwide on the recent PISA (Programme for International Student Assessment) exams, which are administered every three years by the Paris-based Organisation for Economic Co-operation and Development. The average scores of Shanghai students in reading, science, and mathematics were more than 10 percent higher than the scores of students in the legendary Finnish school system, which had been top-ranked until 2009, when Shanghai was first included in the testing, and about 25 percent higher than those of the U.S., which ranked 36th."

The notion of these being in need of fixing arises from the realization that preparing students to do well on a test is not the best way to build life skills in a nation's children. China has a long tradition of using a single examination to determine those worthiest to succeed in national life. Think of it as meritocracy taken to the extreme.

"Suicide is the top cause of death among Chinese youth, and depression among students is widely attributed to stress around high-pressure examinations, especially the dreaded gaokao, which seniors take to determine what university, if any, they can attend. The gaokao is like the SAT on steroids: eight hours of testing in math, science, Chinese language, and a foreign language, that takes place over two days, usually in June of a student's senior year. 'It commands the high school student's whole life….They spend 14 hours a day, six days a week, year after year, cramming their brains full of facts for this one test'."

One Chinese observer, Jiang Xueqin provided this quote:

"Forcing students to study for gaokao is essentially a form of lobotomy—it radically narrows their focus….The effects of chronic fact-cramming are something akin to cutting off their frontal lobes."<o:p></o:p>

The result is that parents who can afford to are beginning to move their children to private schools that are free from the gaokao system. The very wealthy have also been looking to send their children abroad, particularly to the United States, to get what they believe will be a more effective education.<o:p></o:p>

"A trend is emerging in which more and more elite students are opting for private schooling outside the gaokao system, says Jiang. If China doesn't want to lose its best and brightest to U.S. and European universities, eventually Chinese universities will also have to accept students who opt out of the gaokao."<o:p></o:p>

The daily schedule at Qibao indicates the intensity of this academic environment and suggests why a student might wish to escape to a place with more time for intellectual adventure.<o:p></o:p>

"Their day begins at 6:20 a.m. The 2,000 students at Qibao, half of whom live on campus, gather on an Olympic-size soccer field to the sound of marching band music booming from speakers. Wearing blue-and-white polyester exercise suits with zip-front jackets that serve as their daily uniforms, these 10th- to 12th-graders perform a 20-minute synchronized routine that's equal parts aerobics and tai chi. Group exercise is followed by a 20-minute breakfast and self-study period, and then, beginning at 7:40, a morning block of five 40-minute classes. Then there's an hour for PE and lunch, followed by an afternoon block of four 40-minute classes that ends at 4:30 p.m. Evening study hall is 6:30 p.m.-9:30 p.m., then it's lights out at 10. Of their 14 weekly courses, 12 cover the core national curriculum, which includes math, chemistry, physics, Chinese, English, Chinese literature, and geography. Two are elective courses—Qibao offers nearly 300, ranging from astronomy and paleontology to poetry, U.S. film and culture, visual arts, cooking, and a driving course with simulators."

This is actually a rather moderate schedule compared to some schools.

"The Qibao schedule is relaxed compared with the infamous Maotanchang High School, for instance, which requires its 10,000 students, all of whom board in a remote town in central China, to wake at 5:30 a.m. to begin their daily schedule of 14 classes—every one designed to optimize their gaokao scores—ending at 10:50 at night."

What was most troubling about Little's article was the indication that this regimen was not only unproductive as a national policy, but it was also physically harmful to the children.

"Twice a day at Qibao, at 2:50 every afternoon and 8:15 at night, classical flute music floats through the speakers of every classroom and study hall. It's a signal to students to put down their pencils, close their eyes, and begin their guided seven-minute eye massage. 'One, two, three, four, five, six, seven, eight. … One, two …' the teacher chants as students use their thumbs, knuckles, and fingertips to rub circles into acupressure points under the eyebrows, at the bridge of the nose, the sides of the eyes, temples, cheeks, the nape of the neck, and then in sweeping motions across the brows and eyelids."<o:p></o:p>

"The eye exercises are a government requirement in all Chinese public schools, a response to an epidemic of myopia caused by too much studying. By the end of high school, as many as 90 percent of urban Chinese students are nearsighted—triple the percentage in the U.S. There's debate about whether the massage exercises actually help, but the students look happy to take any breaks they can get."<o:p></o:p>

 An article in The Economist, Myopia:Losing focus, provides more background on this student myopia trend and points out that it pertains not only to Chinese students.

"The incidence of myopia is high across East Asia, afflicting 80-90% of urban 18-year-olds in Singapore, South Korea and Taiwan. The problem is social rather than genetic. A 2012 study of 15,000 children in the Beijing area found that poor sight was significantly associated with more time spent studying, reading or using electronic devices—along with less time spent outdoors. These habits were more frequently found in higher-income families, says Guo Yin of Beijing Tongren Hospital, that is, those more likely to make their children study intensively. Across East Asia worsening eyesight has taken place alongside a rise in incomes and educational standards."

Spending too much time studying indoors rather than having sufficient outdoor activity seems to be the problem.

"At the age of six, children in China and Australia have similar rates of myopia. Once they start school, Chinese children spend about an hour a day outside, compared with three or four hours for Australian ones. Schoolchildren in China are often made to take a nap after lunch rather than play outside; they then go home to do far more homework than anywhere outside East Asia. The older children in China are, the more they stay indoors—and not because of the country's notorious pollution."

"The biggest factor in short-sightedness is a lack of time spent outdoors. Exposure to daylight helps the retina to release a chemical that slows down an increase in the eye's axial length, which is what most often causes myopia. A combination of not being outdoors and doing lots of work focusing up close (like writing characters or reading) worsens the problem. But if a child has enough time in the open, they can study all they like and their eyesight should not suffer, says Ian Morgan of Australian National University."

In China, a short-sighted school system produces short-sighted children.

In the bizarre world of education theorizing, commentators in the United States bemoan the fact that we don't have a system that matches the Asians in test performance, while the Asians wish they could improve the education they provide by having a system more like that in the United States.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2014/11/asias-children-pay-price-for-test.htmltag:blogger.com,1999:blog-2801225916015233134.post-1177538392212539282014-11-20T23:59:00.000-08:002014-11-20T23:59:39.774-08:00Capitalism's Paradox: Too Much Profit, Too Little Demand
There are strange things going on in the economies of some of the most developed nations. Corporations in these countries seem to be earning more money than they know what to do with. An article in The Economist provides this chart:

The amount of funds that corporations are sitting on is enormous in these countries. To put this in perspective, the US has only about 11% of GDP banked in corporate savings, about $1.9 trillion. In the darkest hours of the Great Recession the federal government could only put up about $831 billion to save the economy from disaster. Now, with low growth still a problem, companies are sitting on more than twice that with no apparent intention to put it to use.

The problem is actually worse because many companies use their excess profits to buy back their own shares. There are two ways to attain growth in stock price. One is to demonstrate a business model that projects growth and even greater profits in the future, the other is to purchase your own shares on the market and drive the price higher. This sourceindicates that US corporations spent over $500 billion on these buy-backs in the past year, a near record amount.

What is peculiar about these findings is that high profits should be associated with a healthy economy that is providing incentive for expansion. If business is so good, why are not more companies seeking to reinvest their earnings and go for greater growth?

Marx thought that capitalism carried within it the seeds of its own destruction. Could we be witnessing capitalist economies wandering into some sort of dead end from which they cannot extract themselves?<o:p></o:p>

There are two obvious explanations for a situation in which large profits are earned yet there is no incentive to reinvest the profits in growth. In one case demand for products is low and there is no expectation that an improvement is forthcoming. In the second case the company has essentially a monopoly and does not anticipate any potential growth in customers.<o:p></o:p>

It is an interesting exercise to consider whether or not we have true competition in our major industries, or whether we have allowed a few large corporations to dominate in each arena and pretend to compete while tacitly agreeing that a huge market can be shared two or three ways and all can be wealthy. Much is said about the high tech competition between Apple and Samsung, and between Microsoft and Google, but is any one of these in danger of being seriously injured by competition from the other? They all have healthy market shares and enough money on hand to purchase any upstart who might choose to disturb the game. In a situation where no one is particularly interested in competing on price, how does profit get limited?<o:p></o:p>

The situation where no expectation of growth in demand exists does have a distinct Marxian flavor. Most corporation executives will claim that low demand is the reason why they are not investing more in their businesses. Lack of demand usually means there are too few consumers with money to spend. Coupled with healthy profits, this suggests that consumers lack money not interest, and would purchase more if they could. <o:p></o:p>

The article in The Economist focuses on the Asian countries where the cash holdings are incredibly large.

"Japanese firms hold ¥229 trillion ($2.1 trillion) in cash, a massive 44% of GDP. Their South Korean counterparts hold 459 trillion won ($440 billion) or 34% of GDP. That compares with cash holdings of 11% of GDP, or $1.9 trillion, in American firms. If East Asia's firms spent even half of their huge cash hoards, they could boost global GDP by some 2%."<o:p></o:p>

Consider the correlation between corporate earnings and wages for workers.<o:p></o:p>

"In South Korea, company earnings have grown faster than wages for more than a decade. In Japan wages fell 3.5% between 1990 and 2012, while prices rose by 5.5%."<o:p></o:p>

"And East Asia's economies have also suffered. If they had been paid more, Japanese consumers might have spent more. Korean households, struggling with rapidly-growing debt-burdens, have also been squeezed."<o:p></o:p>

The situation in the US is similar.<o:p></o:p>

The cash available for spending by most consumers comes from earned wages. However, earned wages have not been keeping up with prices of things they feel a need to purchase, and this has been going on for a very long time. Clearly this cannot go on indefinitely and consumption must inevitably plummet. Would corporations be in a healthier state if they had recycled more of their profits back into the economy?<o:p></o:p>

Are we approaching a Marxian moment when corporate greed will be its own undoing?<o:p></o:p>

Stay tuned.<o:p></o:p>

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2014/11/capitalisms-paradox-too-much-profit-too.htmltag:blogger.com,1999:blog-2801225916015233134.post-67110787798924858952014-11-17T00:14:00.000-08:002014-11-17T00:14:52.697-08:00Our Creativity and Productivity as We Age
Ezekiel J. Emanuel produced a rather interesting article recently in The Atlantic: Why I Hope to Die at 75. His title is a bit misleading; he does not actually wish to die at 75; rather, he believes that at that age he should not take measures to extend his life. From his view, at age 57, life at 75 would be sufficiently degraded that it would no longer be worth the effort to take measures that might extend his life.

"But here is a simple truth that many of us seem to resist: living too long is also a loss. It renders many of us, if not disabled, then faltering and declining, a state that may not be worse than death but is nonetheless deprived. It robs us of our creativity and ability to contribute to work, society, the world. It transforms how people experience us, relate to us, and, most important, remember us. We are no longer remembered as vibrant and engaged but as feeble, ineffectual, even pathetic."

This logic and his conclusion was rather surprising to those of us who are approaching or have already moved past that target age. In Aging: Why Would a 57-Year-Old Man Want to Die at 75? a counter argument was presented that pointed out that those who he described as "feeble, ineffectual, and even pathetic" seemed to believe that those years he didn't wish to live were actually the most contented of their lives.

What is of interest here is Emanuel's statement that aging "robs us of our creativity and ability to contribute to work." He makes these claims:

"Even if we aren't demented, our mental functioning deteriorates as we grow older. Age-associated declines in mental-processing speed, working and long-term memory, and problem-solving are well established. Conversely, distractibility increases. We cannot focus and stay with a project as well as we could when we were young. As we move slower with age, we also think slower."<o:p></o:p>

"It is not just mental slowing. We literally lose our creativity."<o:p></o:p>

"….the fact is that by 75, creativity, originality, and productivity are pretty much gone for the vast, vast majority of us."

He then seems to insult his academic colleagues who spend more time mentoring students in the latter years of their careers instead of focusing on their individual efforts. The implication is that this occurs because of an age-related decrease in capability, rather than as a logical career choice.

"Mentorship is hugely important. It lets us transmit our collective memory and draw on the wisdom of elders. It is too often undervalued, dismissed as a way to occupy seniors who refuse to retire and who keep repeating the same stories. But it also illuminates a key issue with aging: the constricting of our ambitions and expectations."<o:p></o:p>

"We accommodate our physical and mental limitations. Our expectations shrink. Aware of our diminishing capacities, we choose ever more restricted activities and projects, to ensure we can fulfill them."<o:p></o:p>

To support his contentions, Emanuel presents this chart attributed to Dean Keith Simonton a psychology professor at the University of California at Davis.<o:p></o:p>

Simonton does seem to be the preeminent scholar when it comes to understanding the aging and productivity of people who have demonstrated a significant degree of creativity. Let us see what he actually has to say on the subject. Simonton produced a short summary of relevant conclusions in bullet form here. A copy of one of his articles is provided in concise but slightly longer form here. The latter source will be used in the present article.<o:p></o:p>

Simonton tells us that we should be careful in interpreting charts such as the one utilized by Emanuel. They consist of averages over many types of activities, some of which have quite different time histories. He also suggests that using chronological age as the variable is misleading because it is the career itself that has a time dependence of its own. People who choose to pursue a particular creative activity starting later in life will follow a similar curve, but it will be shifted along the age axis.<o:p></o:p>

"….we introduce a central finding of the recent empirical literature: The generalized age curve is not a function of chronological age but rather it is determined by career age….People differ tremendously on when they manage to launch themselves in their creative activities. Whereas those who get off to an exceptionally early start may….find themselves peaking out early in life, others who qualify as veritable 'late bloomers' will not get into full stride until they attain ages at which others are leaving the race."<o:p></o:p>

This introduces the notion of a career trajectory that is more a function of career duration than physical age. The shape of this productivity dependence on career duration varies considerably from one creative activity to another.<o:p></o:p>

"The occurrence of such interdisciplinary contrasts endorses the conjecture that the career course is decided more by the intrinsic needs of the creative process than by generic extrinsic forces, whether physical illness, family commitments, or administrative responsibilities."<o:p></o:p>

Simonton provides some examples of differing productivity histories for various creative disciplines.<o:p></o:p>

"Especially noteworthy is the realization that the expected age decrement in creativity in some disciplines is so minuscule that we can hardly talk of a decline at all. Although in certain creative activities, such as pure mathematics and lyric poetry, the peak may appear relatively early in life, sometimes even in the late 20s and early 30s, with a rapid drop afterwards, in other activities, such as geology and scholarship, the age optimum may occur appreciably later, in the 50s even, with a gentle, even undetectable decrease in productivity later."<o:p></o:p>

Presumably, Emanuel would categorize himself as an academic scholar. If he had read Simonton carefully, he might have concluded that as such he had a right to expect a long and productive life rather than assume that the death of his creativity was imminent.<o:p></o:p>

Simonton provides us with another insight into age and productivity: even though less is produced at later stages of a career, the "quality ratio" is undiminished.<o:p></o:p>

"….if one calculates the ratio of creative products to the total number of offerings at each age interval, one finds that this 'quality ratio' exhibits no systematic change with age. As a consequence, the success rate is the same for the senior colleague as it is for the young whippersnapper. Older creators may indeed be producing fewer hits, but they are equally producing fewer misses as well."<o:p></o:p>

This allows Simonton to suggest this startling conclusion:<o:p></o:p>

"This probabilistic connection between quantity and quality, which has been styled the 'constant probability of success' principle….strongly implies that an individual's creative powers remain intact throughout the life span."<o:p></o:p>

In other words, the decrease in creative output as a career progresses can be caused by many factors other than age. Perhaps a professor at a university will choose to spend more time with students later in his career. That is, after all, what professors are supposed to do. Others may find a new creative outlet and gradually transition to a new discipline. Artists may try to improve their "quality ratio" by investing more time and effort into each piece.<o:p></o:p>

Simonton finishes with this conclusion:<o:p></o:p>

"….the career trajectory reflects not the inexorable progression of an aging process tied extrinsically to chronological age, but rather entails the intrinsic working out of a person's creative potential by successive acts of self-actualization."<o:p></o:p>

Damn! We might as well live as long as we can.<o:p></o:p>

Ezekiel Emanuel is director of the Clinical Bioethics Department at the U.S. National Institutes of Health and heads the Department of Medical Ethics & Health Policy at the University of Pennsylvania.<o:p></o:p>
Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2014/11/our-creativity-and-productivity-as-we.htmltag:blogger.com,1999:blog-2801225916015233134.post-71750436469349800732014-11-12T23:41:00.000-08:002014-11-12T23:41:31.684-08:00Evolution and the "Sharing Gene"
Sociobiology is the name given to the attempt to associate observed social traits in humans with genetically acquired traits favored by natural selection. Attempts to describe human social characteristics within this framework have been controversial, mainly because it is difficult to separate behaviors that might have been learned through social interaction from those that might be innate. It is also difficult to explain how social characteristics might have become genetically embedded by natural selection. While the behavior of an individual can certainly be affected by genetic dispositions, these can be characterized as a form of genetic noise leading to individual variation within the population, not a species-wide tendency. Those who take positions on the issue seem to be driven as much by philosophy as by science.

One of the difficulties faced by sociobiologists is the need to explain the observed altruistic behavior in humans. People docooperate even when the benefits of cooperation are unevenly distributed and it might not be in their immediate self-interest. People have been observed to sacrifice even their lives to protect the lives of others. How does one explain this type of behavior using natural selection?

The simplest Darwinian approach to evolution is based on the presumed desire for individual organisms to strive to insure that their genes are propagated forward into the gene pool. This is the "survival of the fittest" prescription. The fittest is the one who produces the most offspring that make it into the next generation. The mechanism of natural selection should then deselect any genetically-driven behavior in an individual organism that diminishes its opportunity to procreate and propagate its genes. Such a trait should then disappear. What is left is an arena in which individuals compete with each other to breed, to eat, and to control territory.

The situation becomes more complex when animals form kinship relationships and begin living in bands. All sorts of social constraints and other behaviors become operative, and they vary considerably from species to species. People seem to have little trouble believing that animal behavior is genetically based, but tend to resist the notion that human interactions are so constructed.

Humans live in groups that impose constraints on individual actions, and they have kin relationships that also impose constraints. However, from tribe to tribe and society to society, these social rules can vary dramatically. Consequently, the specific constraints cannot be genetic in nature; it must be the general willingness to live under a set of rules in order to enhance the survival of the band, tribe, or nation that might be genetic. If this is correct, then how exactly did natural selection propagate this characteristic?

Edward O. Wilson is the scientist most closely associated with sociobiology. In his book TheSocial Conquest of Earth, he postulates that human evolution was dominated by the need for bands of humans to compete with one another for resources. This is an extension of the "survival of the fittest" theme.

"Our bloody nature, it can now be argued in the context of modern biology, is ingrained because group-versus-group was a principle driving force that made us what we are. In prehistory, group selection lifted the hominids that became territorial carnivores to heights of solidarity, to genius, to enterprise. And to fear. Each tribe knew with justification that if it was not armed and ready, its very existence was imperiled. Throughout history, the escalation of a large part of technology has had combat as its central purpose."

"It should not be thought that war, often accompanied by genocide, is a cultural artifact of a few societies. Nor has it been an aberration of history, a result of the growing pains of our species' maturation. Wars and genocide have been universal and eternal, respecting no particular time or culture."

The groups that survive this competition are presumably those with the strongest social traits—those that allow its members to cooperate in battle even though some can expect to suffer more than others. Some advantage of group membership must compete with an individual's innate tendency to act selfishly to enhance its own survival. Wilson sees this conflict between individual and group benefits as an inevitable characteristic of human societies.

"An unavoidable and perpetual war exists between honor, virtue, and duty, the products of group selection, on one side, and selfishness, cowardice, and hypocrisy, the products of individual selection on the other."

However, genetic traits that support group collaboration within individuals must somehow get distributed to the group if group-beneficial behavior is to dominate. Or, the genetic content of the group as a whole must be selected by superior procreative performance versus less effective groups. Wilson refers to something called "multilevel selection." The process by which this occurs is a bit murky.

"Multilevel selection consists of the interaction between forces of selection that target traits of individual members and other forces of selection that target traits of the group as a whole. The new theory is meant to replace the traditional theory based on pedigree kinship or some comparable measure of genetic relatedness."

 Wilson's concept of human evolution being dominated by "universal and eternal" warfare was discussed in AreHumans Inherently Warlike? and found wanting. The supposition that humanity's characteristics were honed in group competition in the context of "universal and eternal" warfare may find some support in the brief moment that is recorded history, but what about the previous million years or so. In order to seek a genetic basis for subsequent evolution, one should look earlier in time to ascertain the reasons why people felt compelled to form groups in the first place.<o:p></o:p>

What characterizes humans, and differentiates them from the other apes, is the development of social skills. Chimpanzees are quite capable of conducting warfare with another band of chimps. In fact, when human soldiers want to conduct an operation silently they use hand signals that would easily be understood by a chimp. So why would warfare be a means of selecting the development of complex social skills?

Wilson provides his thoughts on the life of the early hunter-gatherer.

"Throughout their evolutionary past, during hundreds of thousands of years, they had been hunter-gatherers. They lived in small bands, similar to present-day surviving bands composed of at least thirty and no more than a hundred or so individuals. These groups were sparsely distributed."

"Between 130,000 and 90,000 years ago, a period of aridity gripped tropical Africa far more extreme than any that had been experienced for tens of millennia previously. The result was the forced retreat of early humanity to a much smaller range and its fall to a perilously low level in population….The size of the total Homo sapiens population on the African continent descended into the thousands and for a long while the future conqueror species risked complete extinction."

Early humans faced periods when resources were so scarce that they faced near extinction. Is this a situation in which one might expect starving people to go looking for someone to fight with? Might they not have more wisely looked for someone who would be able to help them?

Early hunter-gatherers lived from hand-to-mouth. They didn't have stockpiles of food that someone would try to steal. They were also subject to extreme variations in the success of their hunting and gathering. If a band was, on the average, finding just enough food to survive, then some individuals would have gathered less than necessary for survival, and some would have gathered more than necessary. If they had not learned to share food, eventually each individual would have an extended period of lean foraging, starve, and the band would disappear.

Sarah Blaffer Hrdy describes a study performed by observing the history of a present-day band of hunter-gatherers in her book Mothersand Others: The Evolutionary Origins of Mutual Understanding. It illustrates how even in relatively benign times sharing within a band was necessary.

"The sporadic success and frequent failures of big-game hunters is a chronic challenge for hungry families among traditional hunter-gatherers. One particularly detailed case study of South American forgers suggests that roughly 27 percent of a time a family would fall short of the 1,000 calories of food per person per day needed to maintain body weight. With sharing, however, a person can take advantage of someone else's good fortune to tide him through lean times. Without it, perpetually hungry people would fall below the minimum number of calories they needed. The researchers calculated that once every 17 years, caloric deficits for nonsharers would fall below 50 percent of what was needed 21 days in a row, a recipe for starvation. By pooling their risk, the proportion of days that people suffered from such caloric shortfalls fell from 27 percent to only 3 percent."

What is the purpose of living in a band if not to benefit from cooperation with other members?

The sharing of food is only one example of a benefit. Hrdy believes that one of the great advances made by humans occurred when women learned to share the responsibility for raising children. That allowed an individual mother more time to gather food and allowed her to give birth more frequently. This and other cooperative activities could only exist if humans developed the ability to interpret, understand, and empathize with the feelings and intentions of others.<o:p></o:p>

Hrdy believes this capability to share and cooperate has become hard-wired within us.

"From a tender age and without special training, modern humans identify with the plights of others and without being asked, volunteer to help and share, even with strangers. In these respects, our line of apes is in a class by itself."<o:p></o:p>

"This ability to identify with others and vicariously experience their suffering is not simply learned: It is a part of us."<o:p></o:p>

Evolution and survival of the fittest need not be viewed as a competition to reward the strongest; it can also be considered as a means of selecting those most effective at cooperating. Robert Trivers formulated an explanation for how repeated acts of altruism (or cooperation/sharing) could lead to natural selection of the tendency to perform those acts. The key is to realize that even the earliest of humans realized that self-interest should be a long-term issue not one of immediate gratification

"In a 1971 paper Robert Trivers demonstrated how reciprocal altruism can evolve between unrelated individuals, even between individuals of entirely different species…. As Trivers says, it 'take[s] the altruism out of altruism.' The Randian premise that self-interest is paramount is largely unchallenged, but turned on its head by recognition of a broader, more profound view of what constitutes self-interest."

One can follow Wilson and view humans as having been driven to their current state by "universal and eternal" warfare.

Or, one can view humans as having arrived at their current state via "universal and eternal" cooperation and sharing.

I know which view I prefer.

Richhttp://firstname.lastname@example.com://letstalkbooksandpolitics.blogspot.com/2014/11/evolution-and-sharing-gene.htmltag:blogger.com,1999:blog-2801225916015233134.post-18075943917148727362014-11-08T23:03:00.001-08:002014-11-08T23:03:55.411-08:00When a Woman's Fetus Has More Civil Rights than She Does
We recently discussed the lack of protection that the Federal Constitution provides citizens from abusive practices put into law by federal, state or local legislatures. The Bill of Rights is easily trumped by law. The origins of this imbalance and its ramifications were discussed in The Death of Justice and the Tyranny of Law. The focus there was on civil-forfeiture laws, which allow a person's assets to be confiscated without the need to prove guilt of a crime. The "Death of Justice" refers to the demise of the concept of trial by jury. Today, legislators, prosecutors, and judges have created a system by which those arrested can be rapidly processed and incarcerated without the need to ever prove anyone was guilty and deserved to go to prison. Over 95% of cases are plea bargained and never go to trial.

In the New York Times, Lynn M. Paltrow and Jeanne Flavin provided a look at another area in which egregious denials of civil rights are executed by law enforcement agencies: Pregnant, and No Civil Rights. The desire by many to criminalize abortion and promote fetal rights has led to numerous cases where the rights of the pregnant woman herself have been trampled on.<o:p></o:p>

"But it is not just those who support abortion rights who have reason to worry. Anti-abortion measures pose a risk to all pregnant women, including those who want to be pregnant."<o:p></o:p>

"Such laws are increasingly being used as the basis for arresting women who have no intention of ending a pregnancy and for preventing women from making their own decisions about how they will give birth."<o:p></o:p>

These examples are provided:<o:p></o:p>

"In Iowa, a pregnant woman who fell down a flight of stairs was reported to the police after seeking help at a hospital. She was arrested for 'attempted fetal homicide'."<o:p></o:p>

"In Utah, a woman gave birth to twins; one was stillborn. Health care providers believed that the stillbirth was the result of the woman's decision to delay having a cesarean. She was arrested on charges of fetal homicide."<o:p></o:p>

"In Louisiana, a woman who went to the hospital for unexplained vaginal bleeding was locked up for over a year on charges of second-degree murder before medical records revealed she had suffered a miscarriage at 11 to 15 weeks of pregnancy."<o:p></o:p>

"In [Florida]….a woman was held prisoner at a hospital to prevent her from going home while she appeared to be experiencing a miscarriage. She was forced to undergo a cesarean. Neither the detention nor the surgery prevented the pregnancy loss, but they did keep this mother from caring for her two small children at home."<o:p></o:p>

"Anti-abortion reasoning has also provided the justification for arresting pregnant women who experience depression and have attempted suicide. A 22-year-old in South Carolina who was eight months pregnant attempted suicide by jumping out a window. She survived despite suffering severe injuries. Because she lost the pregnancy, she was arrested and jailed for the crime of homicide by child abuse."

This case from Florida indicates how the rights of a pregnant woman can be taken away by the state.

"….a woman who had been in labor at home was picked up by a sheriff, strapped down in the back of an ambulance, taken to a hospital, and forced to have a cesarean she did not want. When this mother later protested what had happened, a court concluded that the woman's personal constitutional rights 'clearly did not outweigh the interests of the State of Florida in preserving the life of the unborn child'."

These types of events are not unique cases. They have been occurring for many years and are becoming more frequent.

"Last year, we published a peer-reviewed study documenting 413 arrests or equivalent actions depriving pregnant women of their physical liberty during the 32 years between 1973, when Roe v. Wade was decided, and 2005. In a majority of these cases, women who had no intention of ending a pregnancy went to term and gave birth to a healthy baby. This includes the many cases where the pregnant woman was alleged to have used some amount of alcohol or a criminalized drug."<o:p></o:p>

"Since 2005, we have identified an additional 380 cases, with more arrests occurring every week. This significant increase coincides with what the Guttmacher Institute describes as a "seismic shift" in the number of states with laws hostile to abortion rights."<o:p></o:p>

Those who would enshrine fetal rights into law can write that law in such a way that the fetus has a robust set of rights, while the poor pregnant woman has only an indifferent and archaic Constitution to protect her.<o:p></o:p>

The authors conclude with this plea:<o:p></o:p>

"We should be able to work across the spectrum of opinion about abortion to unite in the defense of one basic principle: that at no point in her pregnancy should a woman lose her civil and human rights."

Lynn M. Paltrow is a lawyer and the executive director of National Advocates for Pregnant Women, where Jeanne Flavin, a sociology professor at Fordham University, is the president of the board of directors.

Richhttp://email@example.com://letstalkbooksandpolitics.blogspot.com/2014/11/when-womans-fetus-has-more-civil-rights.html