Archive for the ‘Economics’ Category

COVID-19: How much is a life worth?

March 22, 2020

Watching news reports about the economic devastation, my wife said the unsayable: “This isn’t worth it.”

The economic disaster is not from people falling ill, but the aversive measures. They’re hurting huge numbers very badly. Is this worth it? Would it entail less suffering to just let COVID-19 run its course? Many millions would get sick, but for the vast majority it would be minor. Only a fairly small percentage would die. Common flu annually sickens tens of millions and kills tens of thousands.

Dr. Fauci (a real hero) was asked why we’re taking extreme measures for COVID-19, but not for common flu. He didn’t have much of an answer — basically that common flu is, well, common, and COVID-19 is not. It’s also called “novel coronavirus.” Novelty grabs attention that the familiar doesn’t.

Suppose, if unchecked, COVID-19 would kill a million Americans, even several million. Fighting it costs many trillions. Governments will lose tax revenues and spend several trillion on bailouts and economic aid. Individuals, collectively, will lose even more in reduced incomes; personal wealth is already shredded. A trillion is a million million. So the fight is costing us quite a few million for every life saved.

How much is a life worth? That might sound like a crass question, or an unanswerable one. But in reality we answer it all the time, in many contexts. For example, when juries decide what dollar damages to award in “wrongful death” lawsuits. More pertinent here, public policy is forced to answer it when weighing the costs of any health and safety measures against the benefits.

Take pollutants. We might be able to remove 99% of a pollutant at a cost that’s pretty reasonable for every resulting life saved. But to get the last 1% out might cost a lot more — too much in relation to the few additional lives that would save. We recognize that lives have value, but not infinite value.

That’s not callous but rational simply because resources are not infinite either. The money spent to eradicate that last 1% of a pollutant would mean less money for other things — which could save more lives. Imperfect humans don’t always make these choices with perfect rationality, but we intuitively grasp the point and act accordingly in at least a general way.*

Economists can analyze all these instances in which, explicitly or implicitly, we put a value on a human life, and calculate a number. It’s been done. The answer seems to be somewhere in the range of a million or two.

But are some lives worth more than others? One could note that most COVID-19 deaths are elderly and frail, not long for this world anyway, so the loss is arguably much less than for a youngster with many years ahead. Wrongful death cases often entail estimating what the deceased might have gone on to earn. This was taken into account by the 9/11 compensation fund. But for all the logic of trying to put a number on a life’s value, such an earnings-based approach seems faulty. That views lives as economic assets for others. Whereas the value of people’s lives is primarily to themselves.

A homeless person’s life is not worth less to them than a billionaire’s. And don’t be quick to say the latter derives more enjoyment from living. Many homeless people are happier than many billionaires.

What I’ve written here is shaped by my humanist philosophy. Which tells us to apply reason to human problems. And that human life (as Vince Lombardi said of winning) “is not the most important thing, it’s the only thing.”

Those two precepts might seem to clash in a dilemma like COVID-19. That’s far from unique in human affairs. The value of human life — of any single human life — is ultimately an ineffable thing. But respect for it is the cornerstone of humanism. That is why we are doing what we are doing to contain COVID-19. We cannot do otherwise, even if the cost seems disproportionate.

With common flu (and all other normal threats to life), we’re set up to provide medical care to those who need it; recognizing that some will die even with everything done for them. We’re not similarly equipped to deal with a spike of COVID-19 victims in the millions. Hospitals and medical personnel would be overwhelmed, unable to cope. Great numbers of people would die simply for lack of care. A horrific scenario that would sear all our souls. To avoid that is why we’re trying to “flatten the curve,” so everyone will at least get proper medical help. We may yet actually fail.

This is about who we are as a society, as human beings. We cannot let ourselves say that the lives of some people — frail aged people — are of lesser value, and we can just kiss them off. That would put us on a road whose destination we know all too well.

* Economist Robert Frank has said there’s actually an optimal amount of dirt in your house. Up to a point, cleaning is worth it, but the effort to banish the last speck of dirt is not.

American Nightmare — Sanders versus Trump

March 1, 2020

American Nightmare” is The Economist’s latest cover story. This is an authoritative, extremely serious, sober publication, not given to hysteria. But this editorial is strong stuff. I copy it below, with some editing by me, mainly for brevity:

Sometimes people wake from a bad dream only to discover that the nightmare goes on. This is the prospect facing America if Democrats nominate Sanders against Trump. An appalling choice with no good outcome.

Sanders is so convinced he is morally right, he has a dangerous tendency to put ends before means. And, where Trump has whipped up politics into a frenzy of loathing, Sanders’s election would feed the hatred.

He is not a cuddly Scandinavian social democrat who would let companies do their thing and then tax them to build a better world. Instead, he believes American capitalism is rapacious and needs to be radically weakened. He puts to shame Jeremy Corbyn [hard-left British Labour party leader who recently led his party to electoral disaster] proposing to confiscate not 10% but 20% of the equity of companies and hand it over to workers [actually, the government]. On trade, Sanders is at least as hostile to open markets as Trump is. He seeks to double government spending. With unemployment at a record low and wages in the bottom quarter growing by 4.6%, his call for a revolution in the economy is an epically poor prescription for what ails America.

Sanders displays the intolerance of a Righteous Man. He embraces perfectly reasonable causes like reducing poverty, universal health care and decarbonising the economy, and then insists on the most unreasonable extremes in the policies to achieve them. Like banning private health insurance (not even Britain, devoted to its National Health Service, goes that far). He wants to cut billionaires’ wealth in half over 15 years. A sensible ecologist would tax fracking; Sanders would ban it outright. Making college cost-free is a self-defeating way to alleviate poverty, because most of the subsidy would go to people who are, or will be, relatively wealthy. Banning nuclear energy would stand in the way of his goal to create a zero-carbon economy.

His ideological bent gives him a habit of indulging autocrats, like in Cuba and Nicaragua, so long as they claim to be “socialist.”

Last is the effect of a President Sanders on America’s political culture. The country’s political divisions helped make Trump’s candidacy possible. They are now enabling Sanders’s rise. Leftist activists find his revolution thrilling. They seem to have almost as much hatred for his Democratic opponents as for Republicans.

This speaks to Sanders’s political style. When asked how he would persuade Congress to eliminate private health insurance (which 60% of Americans oppose), Sanders replies that he would hold rallies in the states of recalcitrant senators until they relented. Traveling around the country holding rallies for a far-left program he could not get through Congress would widen America’s divisions. Political realities blocking his revolution would frustrate his supporters. On the right, an actual socialist in the White House would generate even greater fury.

The mainstream three-quarters of Democrats have begun to tell themselves that Sanders would not be so bad. Some say he would not be able to do many of the things he promises. This sounds worryingly familiar. Trump has shown that it is unwise to dismiss what a man seeking power says he wants to do with it.

If Sanders becomes the Democratic nominee, America will have to choose between a corrupt, divisive, right-wing populist, who scorns the rule of law and the constitution, and a sanctimonious, divisive, left-wing populist, who blames a cabal of billionaires and businesses for everything wrong with the world. All this when the country is as peaceful and prosperous as ever. It is hard to think of a worse choice. Wake up, America! 

Postscript (this is Frank writing): Sanders could not be nominated were Obama still alive. Everything he worked for faces destruction. His weighing in would have huge impact. Yet he is inert. One commentator discussing this stressed the word “caution.” Reminds me of Obama’s anemic foreign policy. There are times for caution and times for taking a stand. This time, right now, is the latter.

 

 

Is inequality really worsening?

February 28, 2020

Rising inequality is a fixture of left-wing polemics. Sanders harps on it. Lamenting a widening gap between the richest and the rest. A lot of numbers are invoked — the top X%’s wealth share has grown from Y% to Z% over such-and-such a time span. As if such numbers are simple facts.

They never are. A recent in-depth lead article in The Economist explored all the assumptions and difficulties behind any such calculations. It casts much doubt on the “rising inequality” narrative, at least within rich countries.

Globally, inequality has indisputably been falling. That’s because economic growth rates in developing countries have greatly exceeded those in mature economies, narrowing that gap.

We keep hearing about “exporting jobs.” When we then import the goods produced from, say, China, cheaper than we can make them ourselves, that savings actually makes Americans collectively better off, even while some Americans who lose jobs are worse off. That job shift is a wealth transfer from richer nations to poorer ones — again, decreasing global inequality. Indeed, the numbers of people in extreme poverty have plummeted. Which progressives should welcome, no?

The Economist addresses four pillars of the “rising inequality” narrative: top earners snare a greater share of income; middle class incomes have stagnated; this is because labor’s share of rising productivity has fallen relative to capital’s; thus wealth has been concentrating at the top.

In each respect, you get very different results depending on how the numbers are parsed. It’s complicated: you must take into account not just raw income data but also taxes and government transfer programs, and fringe benefits, especially increasingly valuable medical benefits. And demographic factors — “household income” is often the focus, yet households grow smaller as marriage rates fall, with more single parenthood, thus income is divided among more “households.”

Results also greatly depend on how you adjust for past inflation. It’s widely acknowledged that government inflation numbers are too high, failing to properly account for, among other things, technological changes. For example, they actually disregard the valuable benefits from smartphones. When you chart pay levels over time using overstated inflation estimates, you can show pay falling even while the quality of life people get from it is rising.

The Economist also notes that while “returns to capital” (that is, to owners of corporate shares) have grown, a lot of that actually flows to the middle class because an increasing chunk of the stock market is owned by pension funds. Furthermore, as far as wealth is concerned, the effect of shareholding is actually eclipsed by the long-term rise in the value of home ownership, again mostly benefiting the middle class. This is another (usually overlooked) counter to the idea of rising wealth concentration at the top.

But on the other hand — showing how complex all this is — at the bottom of the income scale, educational inequality looms large. Kids born poor tend to stay poor because of lousy education. That’s largely because of where they live. Rising home values tend to lock them out of better locales. Moreover, higher house prices go with areas where good jobs concentrate. Everything is interconnected.

Meantime, when we say the top 10% or 1% of Americans’ wealth share has risen, we imagine we’re talking about the same people in Year X as in Year Y. Life doesn’t work that way. Those in the top groups in 2020 often differ from those who comprised those groups in 1990 or 2000. At the beginning, your income and wealth may be low because you’re a student or just starting out. The picture changes greatly in your peak earning years. So people move in and out among income groups at different stages of life. Students will of course appear very unequal vis-a-vis middle agers. Differences like that are a huge part of “inequality.”

So where does all this leave us? “Inequality” is almost surely not growing in the way many scream about. That doesn’t mean all is fine. A dynamic complex economy — and society— like ours will always have inequities of one sort or another, and we must constantly seek to diagnose and combat them.

I’ve mentioned one big example, educational inequity. Another factor is our allowing some businesses to be protected against competition. But we have to be clear on what the problems really are, and what they are not.

One thing that’s not a problem is people being rich. They’re not the cause of others being poor. Our focus should be not bashing the rich but lifting up the poor, giving more people opportunities to earn enough to live decently. And worldwide, thanks to globalization, capitalism, and free trade, that’s been happening a lot. A real social justice revolution.

Broken politics and rule-of-law augur U.S. decline

February 20, 2020

Trump boasts about the strong economy. What makes it strong? Certainly not his “policies,” like stupid trade wars, and curbing immigration, very harmful. But if the government pumps a trillion dollars a year into it, you’ll have a good economy. That’s the big story: huge budget deficits, mostly borrowed money. Mortgaging tomorrow to live high today.

America does still have a lot of genuine economic strengths. Our free-market capitalist system is a great machine for producing wealth and human welfare. But that, Steven Pearlstein recently wrote in the Washington Post, will be undermined by the political division paralyzing government, and Trump’s war on rule of law.

Back in antediluvian 2013, I reviewed a book by Thomas Friedman and Michael Mandelbaum, That Used to Be Us. A can-do nation that could come together, tackle challenges, bite bullets, and do big things. If that seemed moribund in 2013, it’s a lot worse now.

The book talked about deteriorating infrastructure; shrinking investment in research and development; virtually ignoring climate change; a broken immigration system that shuts out legions of motivated brainy people we desperately need; an education system inadequate for the competitive high-tech globalized marketplace. Instead of all that, we spend resources on a military to re-fight WWII, farm subsidies, burgeoning pensions, overly expensive healthcare, and other “entitlements.”

And we’re not paying even for those, as already noted, going deeply in debt to finance them. Testing the limits on how much we can borrow. We’re OK as long as interest rates stay rock bottom and the market still has great confidence in America. If it decides our game is up, we’ll be like Wile E. Coyote in the old cartoons — running off a cliff till he realizes nothing holds him up. Then he drops like a stone.

But our supervening problem, Friedman and Mandelbaum said, is our political dysfunction, blocking action on all the rest. A partisan tribal war on every issue which, in a closely divided nation, neither side can really win. It’s gotten worse since.

Back to Pearlstein: he says what “really distinguishes a successful economy from a failing one” is “the quality of institutions — the laws, rules, norms and policies that create the framework in which any economy operates.” And broken politics are degrading the quality of U.S. institutions. Pearlstein cites the same familiar challenges as Friedman and Mandelbaum, saying a “working political system would . . . embrace the obvious compromises, building on what works and fixing what doesn’t.”

But instead, Americans “deny the problem, demonize those with whom we disagree and ostracize anyone who dares to compromise.”

And today’s great tragedy is Trump’s destruction of even those institutions that were still continuing to function. For all our political conflict, we still operated under strong rule of law, with a basic level of civic decency, and acted as the responsible global leader.

Rule of law is a truly great human achievement and a bulwark for a society working well. A key underpinning for a dynamic economy. People must be able to make investments knowing the law will be there for them. Recall Putin’s regime jailing a big oil entrepreneur to steal his company. Pearlstein writes, “perhaps the greatest threat to the U.S. economy is the deterioration in the rule of law that has become a hallmark of the Trump presidency.”

We see it lately in the cases of Roger Stone and Michael Flynn, convicted of serious crimes; then political interference trying to get them off the hook. While Trump critics are targeted. The Justice Department’s credibility is now in shreds.

Trump flouts such basic norms at every turn. No tax transparency. Exploiting the presidency for personal gain. Abusing tariffs to punish longtime allies who annoy him. Abusing pardons to reward supporters. Undermining institutions like the FBI with lying accusations. Firing diplomats and civil servants who thwart his illicit aims. Dismissing uncooperative judges as political hacks. Calling journalists who report the truth “enemies of the people,” any investigation of wrongdoing a “witch hunt,” and calling a liar anyone who unmasks his own lies. Breaking the law to hold up vital military aid to an ally to extort a bribe in the form of smearing a political opponent, trying to cover it up, lying about it, and trying to block Congress from investigating it.

And getting away with it all. That’s what acquittal by a feckless Senate majority, in the impeachment debacle, signifies. The death of accountability and rule-of-law. Our economy will not eternally be immune from the effects.

As Friedman and Mandelbaum wrote, America had crises before, which we overcame. Like the Civil War, and the Depression. Trump’s presidency is truly just such a crisis — a crisis of the very soul of this nation. Voting him out could be at least a start on repairing the damage. But if we can’t even see clearly enough to do that . . . .

A vote for Sanders is a vote for Trump

January 29, 2020

Four years ago, Democrats nominated the one candidate Trump could beat. Will history repeat?

Four years ago, I didn’t think my then-fellow Republicans would be crazy enough to nominate Trump. Then I watched in horror as, like lemmings, they plunged en masse off that cliff.

I’d underestimated Trump fans’ reckless passion, and the resulting momentum. A similar dynamic could propel Sanders. Though while winner-take-all Republican primaries enabled Trump to rack up delegates, Democrats instead mostly use a proportional system. Sanders could “win” most primaries with, like, 30% of the vote, yet lose the nomination. That would enrage his fans, kneecapping the Democratic campaign.

Meantime Trump tries to paint Democrats as dangerous crazy radicals. Sandernistas seem determined to help him. They fantasize the moment has arrived for their “social justice” revolution. Revved up for years with demonizing capitalism, they imagine “socialism” is somehow a viable alternative, even romanticizing the word.

Sanders himself has long worn the “socialist” badge as a puckish provocateur. This won’t be indulged by the wider American electorate. It will be a leaden albatross around his neck, in November. He’ll be called a communist. And why not? He honeymooned in that socialist paradise, the USSR.

He and his supporters are actually either confused or disingenuous about what “socialism” means. We’re told that if you like publicly provided roads, schools, libraries, etc., why, that’s socialism! No. It’s simply government performing normal governmental functions. Socialism is government taking over functions that in a free society are the purview of the private sector.

Sanders talks of “democratic socialism,”  as if such government monopolization of power is democratic. It isn’t. History proves — as one might expect — such concentration of power is fundamentally antithetical to democracy.

He invokes as models the Nordic countries (Sweden, Norway, Denmark, Finland). Another misconception. These nations do have strong social safety nets, but not socialist economies. In fact they’re more free-market capitalist than America. That produces a lot of wealth, which they tax heavily, to fund their social spending.

Class war is central to Bernie’s candidacy. He’s all about the idea that the rich and corporations are screwing everybody else, and taking them down is the way to a fairer, better society. But such class war rhetoric puts off most Americans, for good reason: it’s wrong.

The idea that corporations and the affluent get their profits and wealth at the expense of the rest is a fallacy. Steve Jobs got rich not by ripping people off but by giving them products they valued above their cost. Improving, not worsening, societal welfare. That’s what productive effort does in a free market economy.

Americans who do well are not the cause of others doing less well. What’s happening instead is technology changing the economic landscape ever faster, with many Americans not positioned to benefit. Often because their education is crap. What’s needed is not tearing down businesses and successful people, but equipping more people for success.

Moreover, this country is being torn apart and wrecked by increasingly bitter political polarization. We desperately need some way out of this, restoring common purpose. Not class war politics further enflaming societal divisions. And those divisions make that class war unwinnable for Sandernistas. Even if he somehow got elected (unlikely), his program would unleash a firestorm of conflict.

All this is why Bernie’s candidacy augurs disaster. Nominating him will bring us not to a socialist Jerusalem, but more likely destruction of the American idea with four more years of a depraved, deranged, and out-of-control monster.

 

The Omnivore’s Dilemma, Part II — Is it OK to eat animals?

January 8, 2020

I eat meat; not a lot, but am troubled by the ethics. Michael Pollan too, discussing this in depth in his book, The Omnivore’s Dilemma. Like me, he’d like to be able to justify meat eating. While recognizing that bias.*

Descartes saw animals as just machines without feelings. We know better. Pollan quotes Jeremy Bentham in 1789, that the question isn’t animals’ mental abilities, but can they suffer? (Note, we’re really talking about higher animals; seafood creatures don’t have much inner life to fret over.) However, Pollan notes, pain and suffering are different things. Humans suffer from pain in great part due to the mental constructs we form around it, which animals generally cannot do. (Having no conception of death or really, even, the future.)

Eating them is defended on the basis of nature. We evolved to do so, part of the overall natural schema of predators and prey. Certainly the ubiquitous animal predators think nothing of eating other animals alive. Ethics is indeed a purely human thing, evolved to regulate relations among ourselves, and absent in the rest of nature.

So we don’t treat other humans like animals, don’t eat our weaker kin. Just because they’re “humans” and animals are not? Thusly privileging humans in a way denied to other animals is called “speciesism.”

Its basis is dubious. As Peter Singer (the leading animal rights thinker) argues, most of us subscribe to an ethic of human equality. But that’s a moral, not a factual, idea. We recognize humans vary greatly in, say, intelligence, yet hold everyone’s lives and interests nonetheless entitled to equal consideration. Hence you may not exploit another for your own ends. Why then are humans entitled to thusly exploit animals — those that are sentient, feeling, and certainly possessed of lives with interests?

While cynics and pessimists deny it, humanity has in fact made great moral progress over time. Yet again, read Pinker’s The Better Angels of Our Nature. People used to accept practices — like slavery — now condemned morally. Will that one day be true of meat eating?

Pollan suggests, however, that Singer is looking at the matter from the standpoint of an individual animal, but he urges a wider species-oriented perspective, positing that species have interests too. The domesticated animals we eat actually represent a mutualism or symbiosis between their species and ours — rooted in an opportunistic aboriginal deal with us, enabling them to survive and prosper better than if on their own. And their populations are now vast, while those in the wild have shriveled. So the deal is advantageous even while individual animals do die. Which of course is true of all individuals in any case. “As a rule,” Pollan says, “animals in the wild don’t get good deaths surrounded by their loved ones.”

(One might counter that a species has no consciousness; only its individual members do. So a species cannot value enjoyment of life as an individual can, and its having larger numbers serves no moral value.)

But meantime, also looking at the big picture, Pollan deems it “doubtful you can build a genuinely sustainable agriculture without animals to cycle nutrients and support local food production.” He doesn’t think it’s practicable for all of us to become vegetarians. A totally plant-based food chain would consume even more fossil fuels and chemical fertilizer, and might actually kill even more animals as collateral damage. If our goal is the fewest animal deaths, we should all eat the largest possible ones grazing the least cultivated land.

But all this assumes animals, before and during slaughter, are at least treated humanely. Finally returning to Bentham’s suffering point. Whatever else can be said about our overall interspecies relationships, inflicting suffering on innocent sentient beings is indefensible. And while it can be avoided, as Pollan’s reportage about a model farm showed, our vast industrial American meat-producing machine tends to sacrifice such niceties to economic efficiency. Though it’s true that absent that industry, the animals would not even exist, their existence is no boon either to them as individuals or to their species when it’s an existence of misery.

Consistent with the book’s title, for Pollan this issue remains a dilemma. He does not advocate vegetarianism. He sees the problem as our simple obliviousness to the reality, modern consumers being thoroughly insulated from how food gets to us.** Transparency is his answer; if only we really knew, we wouldn’t tolerate the animal suffering. Producers would have to heed consumer qualms. Making meat costlier. We’d eat fewer animals, and “with the consciousness, ceremony, and respect they deserve.”

When pigs fly.

And what about me? Giving up meat entirely is hard; making ethical distinctions among meats even harder. Being human, my morality is imperfect. I live with that, perhaps consoled by being at least above average. Of course, everyone thinks that.

However, right after I finished Pollan’s book came an article in The Economist (“Fake Moos”) about great strides in developing plant-based imitation meat. It doesn’t yet taste quite the same, and costs more, but both problems are on track for resolution. So maybe we can have our cows and eat them too.

* He quotes Franklin that the great advantage of being a reasoning creature is that you can always find a reason for whatever you want to do.

** Unwilling to eschew his inner carnivore, Pollan decides he’s honor-bound to, at least once, eat something he’s personally killed. His successful wild pig hunt is detailed at length, with much nuanced meditation on what it all means. Initial atavistic elation mixes with later disgust and shame. But here too Pollan arrives at no definitive conclusion.

What we eat: The Omnivore’s Dilemma (Part I)

January 2, 2020

Michael Pollan is a food thinker and writer. Not a restaurant reviewer; he looks at the big picture of what we eat in The Omnivore’s Dilemma. (Carnivores eat meat; herbivores eat plants; omnivores eat both.)

The book is a smorgasbord of investigative reporting, memoir, analysis, and argument. Pollan does have a strong point of view; cynics, pessimists and misanthropes will find much fodder here. But Pollan is no fanatical purist ideologue. We saw him on a TV piece summing up with this core advice: “Eat real food, not too much, mostly plants.” Seems pretty reasonable.

He’s a lovely writer. Here’s a sample, concluding the first of the book’s three parts, talking (perhaps inevitably) about McDonald’s:

“The more you concentrate on how it tastes, the less like anything it tastes. I said before that McDonald’s serves a kind of comfort food, but after a few bites I’m more inclined to think they’re selling something more schematic than that — something more like a signifier of comfort food. So you eat . . . hoping somehow to catch up to the original idea of a cheeseburger, or French fry, as it retreats over the horizon. And so it goes, bite after bite, until you feel not satisfied exactly, but simply, regrettably full.”

I might disagree with his evaluation, but man, this guy can write.

That first third of the book is all corn. In fact, if “you are what you eat,” we are all corn (well, mostly). Don’t think you eat much corn? Think again. As Pollan explains, a high proportion of our food is derived from corn; even our meat, the animals being mostly corn-fed. Pollan argues that, rather than humans domesticating corn, corn domesticated us. Viewed biologically, that species exploits us to spread itself and increase its population.

Pollan sees food industry economic logic driving us toward a kind of craziness. When the government started intervening in farm produce markets, the aim was to support prices by preventing overproduction. Remember farmers paid not to grow stuff? But in the 1970s that reversed, with the system now incentivizing ever higher yields, aided by technological advances. The resulting glut, in a free market, should drive prices down, signaling producers to cut back. However, if farm prices fall below a certain floor, the feds give farmers checks to make up the difference. Thus their incentive now is to just grow as much as possible, no matter what.

But, even with that government guarantee, Pollan shows, most farmers can barely eke a living, after costs. The bulk of the profit from corn actually being swallowed by the big middleman corporations like ADM and Cargill.

Meantime it’s a challenge to market all that corn. That’s why so much goes to animal feed. The industry has also cajoled the government to require using some in gasoline (ethanol), which actually makes neither economic, operational, nor environmental sense. But it does eat up surplus corn.

Part of the marketing challenge is that while for most consumer goods you can always (theoretically at least) get people to buy more, there’s a limit to how much a person can eat. So with U.S. population growth only around 1%, it’s hard for the food industry to grow profits by more than that measly percentage. But, in Pollan’s telling, it’s been fairly successful in overcoming that obstacle. This contributes, of course, to an obesity epidemic.

The abundance and consequent (governmentally subsidized) cheapness of corn figures large here. It goes into a lot of foods like soft drinks (yes, full of corn too!) that also attract us by their sweetness. Unsurprisingly, lower income consumers in particular go for such tasty fare that’s also cheap — buying what provides the most calories per budgetary dollar.

But the main driver of obesity is simple biology. We evolved in a world of food scarcity, hence with a propensity to load up when we could, against lean times sure to come. Thus programmed to especially crave calorie-rich sweet stuff. But it being no longer scarce, indeed ubiquitous, no wonder many get fat.

Pollan extensively discusses “organic” food. Largely a victim of its own success. “Organic” is a brilliant marketing ploy, it sounds so good. And farming that conforms to the original purist vision of what “organic” should mean may be environmentally cuddlier than conventional farming (though there are tradeoffs, one being greater acreage required). However, in practice, stuff in stores labeled “organic” is not produced all that differently. A key reason is that once “organic” took off and became big business, producers had to use many of the same large-scale industrial practices of conventional farming. Small operators can’t compete. Another is that the USDA rules for “organic” labeling were lobbied hard by producers to give them more leeway. Pollan cites, for example, a rule saying cows must have “access to pasture.” Sounds nice, but if you think about it, what does it really mean? If anything? Here, and in much of the rulebook, there aren’t real rules.*

Pollan muses that salad might seem our most natural kind of eating. But it gives him cognitive dissonance when considering the complex industrial processes that actually put it on our plates. An organic salad mix takes 57 calories of fossil fuel energy for every calorie of food. If grown conventionally, it would be just 4% more. Bottom line: by and large, “organic” is a pretty meaningless label. (Wifey take note.)

However, Pollan chronicles his stint at one actual farm that might be called beyond organic. This read to me like one of those old-time utopia novels. And that farm is actually extremely efficient. But its model doesn’t seem scalable to the industrial level needed to feed us all. Also, it’s extremely labor- and brain-intensive. Few farmers today are up for that.

The farmer profiled there opined that government regulation is the single biggest impediment to spreading his approach. It gives USDA inspectors conniptions. Pollan shows how the whole government regulatory recipe is geared to bigness. One example: a slaughtering facility must have a restroom reserved for the government inspector alone.

The book also delves deeply into the ethics of eating animals, a fraught issue. I will address that separately soon.

* Well, there are some, like no antibiotics. Today’s organic farming is a sort of kludge — Pollan likens it to trying to practice industrial agriculture with one hand tied behind your back.

Teaching kindergarten in Somaliland

December 23, 2019

When we set out for a humanist event in Syracuse, I didn’t imagine the road would take us to Somaliland.

But at the dinner, sitting beside us was one Jonathan Starr, which led to our involvement in his Somaliland education project. I’ve written about it,* and about the country.** Broken free of Somalia, it’s not internationally recognized. My wife and I traveled there with Jonathan, joined by daughter Elizabeth (resident in Amman).

Took 36 hours to get there; 42 getting home.

The capital, Hargeisa, is a dusty desert town (and I do mean dusty). In 1988, in the civil war, Hargeisa was bombed and 90% destroyed by Somalia’s dictator Siad Barre. It’s risen from the ashes, but the words “ramshackle” and “hardscrabble” come to mind. Most structures are single-storey and wretched, though there are some incongruous first-world-like pockets.

Thomas Friedman writes about “the world of order” versus one of disorder. Somaliland is mostly in the latter category, epitomized by a great trash blight. There’s no public sanitation nor any ethic against littering. We sat in on a student brainstorming session about the issue.

Typical dwelling

But Somaliland is not the heart of darkness; it’s poor, but thriving. Its people have positive attitudes. Women in particular are almost all well dressed (fully covered in this Muslim country). And there are lots of cars. Steering wheels on the right, yet they challengingly drive on the right. Many roads are paved, though often it’s hard to tell. No street signs; indeed, no street names. Terrible traffic. So, unsurprisingly, wrecked cars abound. No way to remove them. Another traffic hazard is zillions of goats wandering everywhere. I asked Jonathan how owners keep tabs on them. “Good question,” he replied.

Restaurant, with goats, we visited

There are myriads of tiny businesses, especially hole-in-the-wall restaurants, and — no surprise — numerous car parts sellers. Hargeisa is one giant bazaar. It was great to see so much enterprise. Government regulation being largely nonexistent, Somaliland might be a model of that bugaboo, “unfettered laissez faire capitalism.” Except that government’s absence also means scant rule-of-law protections, so any ambitious business is vulnerable to predation, greatly inhibiting economic development. An important point often lost in arguments over “unfettered capitalism.” Nevertheless, Somaliland’s enterprise culture begs comparison against countries like Cuba or Venezuela whose socialist fetish suppresses businesses. Result: impoverishment.

Me with our team

Was it safe? It’s actually a very peaceable place, with little crime or violence. Nevertheless, as apparently required by law, all our excursions were accompanied by two soldiers carrying AK-47s.

In one respect at least, Somaliland is actually more advanced than America. Most payments are made through a user-friendly system of instant smartphone transfers.

There is no tourism and white faces are novelties. I enjoyed waving to people, especially kids, out of our vehicle window, and getting waves and smiles back. Though once, walking in the street, a passing man said, “Fuck your mother.”

Yes, English is widely spoken. Education is highly valued here, and many little enterprises are schools. Though quality may be doubtful. I saw one sign for a “secendary” school offering English language instruction!

Partial view of Kaabe construction

Which brings me to Jonathan’s schools, with contrastingly high standards. Our first stop was the Kaabe School, which we helped finance, nearing completion as the prototype for an eventual national chain of primary schools. It’s an expansive complex, far better built than Somaliland’s norm, ultimately to educate around 700 students. Project leader Harry Lee does a fantastic job.

Next day we proceeded to the original flagship Abaarso School of Science and Technology, a high school, nearly an hour’s drive outside Hargeisa. (Why that location? Jonathan explained that when he’d started in Somaliland, naive, he’d been tricked.) Abaarso too is quite an extensive campus. Its new head is Trudy Hall, formerly leading Troy’s elite Emma Willard School. I was extremely impressed by what she’s doing here. We stayed in a little guest house; a plaque said it was funded by the generosity of the American people through USAID.

Saturday was “project day.” Wife Therese led an intensive poetry workshop. I delivered a powerpoint lecture on the Enlightenment (view it at www.fsrcoin.com/3.html). Trudy was great in stimulating discussion in the Q&A. A topic arose that’s central to daughter Elizabeth’s current work — using communication to change mindsets.

Elizabeth leading discussion

She had a relevant powerpoint on her laptop, so later gave an impromptu presentation and led a discussion. It was wonderful seeing her masterful performance.

Sunday we visited a sanctuary for cheetahs, rescued from poachers; then Hargeisa’s art and cultural center, modest but quite nice.

Photo by Harry Lee

On Monday we could now see Kaabe’s first classes, of kindergartners, in session. I didn’t really teach, but did help out, assisting one boy making English words with plastic letters, and some girls with block puzzles. The children seemed to have progressed amazingly in just a few months. This school is clearly a great thing, and to have helped bring it about was extremely gratifying.

On Tuesday I set out alone — well, with a driver and the obligatory soldiers — back to Hargeisa to get a microwave for the Abaarso teacher’s mess. I wasn’t sure this could be accomplished, but after a tortuous peregrination, including a change of car and escorts, I finally managed it, returning just in time for an important event:

Trudy. Jonathan, & DPW honcho

A visit to Abaarso by a top level delegation from Dubai Ports World, preparatory to announcing a swathe of scholarships and funding another school on the Kaabe model in Berbera.

On Wednesday, Jonathan, Therese and I had a 45-minute private meeting in the Presidential Palace with Somaliland’s President Musa Bihi Abdi. Democratically elected in 2017, Bihi, 71, was a Somali air force pilot who became a top commander in the civil war against Siad Barre. A soft-spoken man, dignified without pomposity, a wise and decent human being (unlike certain presidents I could name).

With President Bihi (photo by J. Starr)

He spoke of the desirability of cooperation among different religious groups — a real issue for Jonathan’s project, still facing attacks on this score. And he was very strong about educating girls, understanding its importance for a country like his. During the meeting we were served delicious lemonades.

I’ve done a lot of foreign travel, but this was — like much else on this trip — a unique and thrilling experience.

Then we travelled an hour north on a “road” (hardly deserving the name) through a fairly desolate scrubland typical of the country. Passing many goats, camels, and giant termite mounds. With passengers squeezed in tight on this very bumpy ride, one of the soldiers volunteered to travel on the vehicle’s roof.

Barwaaqo

The destination was the other anchor in the schema, Barwaaqo University, a teachers college for girls, to eventually staff the Kaabe schools. Another impressive large campus; looked like a military base. A highlight was the debate club where Therese and I joined one of the teams. The question, chosen by the girls, was whether snacks in the school store should be free. Those girls were feisty debaters.

Somaliland certainly — like every society — has challenges. But its people have what it takes to overcome them. My lecture there ended by expressing the belief that Somaliland can rise to become a “developed” country, and that my student hearers can make it happen in their lifetimes.

Finally: how many wives would (while suffering from an illness no less) enthusiastically join in an intrepid expedition like this? (Jonathan’s soon-to-be-ex-wife never did.) Therese and I have a true marriage in that word’s deepest sense. A blessing for which I’m boundlessly grateful.

* Here: https://rationaloptimist.wordpress.com/2018/09/30/a-non-ugly-american-in-somaliland-jonathan-starrs-abaarso-school/

**Here: https://rationaloptimist.wordpress.com/2019/06/11/somaliland-the-country-that-was-left-for-dead-a-country-doing-everything-right/

How conservatives and liberals both miss the boat on poverty

December 3, 2019

Ask Americans about “poor people” and they’re generally sympathetic. About “people on welfare?” Not so much.

Those on the right tend to see social spending as basically taking from deserving people and giving to the less deserving. Who are thought mainly responsible for their poverty. It doesn’t help if they’re less white.

For the left “inequality” is a cri de couer. But while “poverty” used to be one too, that’s actually largely forgotten. They seem obsessed not about the poor but the rich, and how much they have (with big dollops of resentment and envy). That’s their inequality concern. And also their focus is less on the poor than the middle class. Where their own bread happens to be buttered; but it makes political sense too because that’s where the votes are. Poor people are smaller in numbers and they don’t vote much.

We could argue over how the middle class is actually doing. But, even with admitted challenges, they’re able to live a life that’s, well, middle class. Which in a rich 21st century country, historically speaking, is quite decent. It’s the poor — around 15% of the population, depending how you measure — anyway, those on the bottom — who are obviously in tougher shape. Tougher, indeed, than the corresponding population slice in other advanced countries. This is a special American problem. Concerning our fellow human beings.

“Inner city poverty” was long seen as a thing. But as a recent report in The Economist highlights, “outer-city poverty” has become a bigger thing. Poverty too has been moving to the suburbs. While a lot of the non-white poor do remain urban, the suburban poor includes more whites and Hispanics. And it’s harder to deal with, because while big cities can deploy resources, smaller non-urban jurisdictions tend to be cash-strapped and lacking the necessary public infrastructure.

Sneering at poor people as responsible for their plight is easy when you’ve been handed all the advantages. Mostly, people are poor because they’ve been dealt lousy cards. Poverty is heritable: growing up in a poor family, especially in a poor neighborhood, messes you up in a thousand ways that make it much much harder to achieve the American dream. One pilot study showed that just moving a family from a poor neighborhood into a more affluent one results in 31% higher income for their kids in adulthood.

So let’s focus on children. You cannot argue that children, at least, who are in poverty are somehow personally responsible for that. And even put altruism aside. The fact is that a person who grows up into lifelong poverty costs us all a huge amount — for all the welfare, social services, health services, and don’t forget the cost to society of the crime that goes with the territory. Compared against one who becomes a contributing member of the community, holding a job that grows societal wealth, and pays taxes.

So doesn’t it make sense to invest in kids, so they’ll grow into the latter, not the former? The payoffs would vastly exceed the costs. One California study calculated that the cost to end deep child poverty by simply handing out enough cash would be a quarter of what the state spends on prisons. Not doing this was deemed “insane” by the study’s author.

Education looms large here. America’s poverty scandal is mainly an education scandal. Rather than investing to lift children out of the poverty trap, we disinvest, actually giving poor children inferior education.

Liberals won’t face up to this. They assail charter schools for “draining” money from public schools, which they idealize — as though public schools were providing decent service to underprivileged kids. They are not. Many parents in poor neighborhoods see charter schools as their only hope of escaping the school-to-prison pipeline.

School segregation is a big factor. Poor minority children do poorly when ghettoed in their own schools; better when educated with middle-class kids, whose schools tend to be fine. It’s because those, their own schools, are fine that liberals battle for public schools and against charters. And while liberals notionally endorse integration, they seem oblivious to the reality that America’s schools in recent decades have grown ever more segregated.

That segregation is partly a consequence of high rents in better areas with better schools. “Affordable housing” is another liberal cry. Yet their prescription for it is snake oil: rent control. Sure, it’s tempting to regulate rents to prevent gouging by greedy landlords. But it doesn’t take an economic genius to realize rent control disincentivizes landlords from maintaining apartments and building new ones. This results in housing supply shortages which of course actually drive up rents. Keeping poor people poor — and out of decent schools.

Conservatives meanwhile say all this talk about education is futile because the real problem is families. A kid won’t do well in school if his family situation is dysfunctional. And conservatives blame parents for that, being again averse to helping people whose problems are perceived as their own fault. So for the kids: tough luck. While liberals, for their part, are unwilling to see anything to criticize concerning single motherhood.

So what’s the answer? We have to get past our ideologies and do what it takes to get kids born into poverty onto a better track. This does mean attention both to schools and to family. But that’s not some utopian fantasy. An excellent model for it is Harlem Children’s Zone, a private effort spearheaded by Geoffrey Canada, which has produced great results.

America is a very rich country and can amply afford to do this. We really can’t afford not to; it would actually make us even richer, with every dollar spent coming back many times over. And anyhow, the cost would be far less than what we spend on welfare for the rich.

Medicare for All: a critical look

November 21, 2019

Bill Hammond gave a talk on this to the Capital District Humanist Society. He’s the Empire Center’s Director of Health Policy, and is critical of the single payer concept. CDHS members being mostly well to the left, Hammond was received like a skunk at a picnic.

He started by quoting Bernie Sanders that “Health care must be recognized as a right, not a privilege.” Which Hammond said nobody really disputes; but Sanders and his fans equate it to a “single payer” system. (The “single payer” — seems they’re afraid to say this plainly — would be government, responsible for all health care.)

Hammond noted that a “right to health care” would have been unintelligible to our founders. Health care itself was not even a concept; he described how George Washington was really killed by the medical “care” he received. We’ve advanced a lot since. But meantime they saw “rights” as things the government should notget involved with, whereas for Sanders backers a right means an entitlement. And his “Medicare for All” plan goes even beyond a “universal access” model (e.g., schools, libraries, and indeed existing Medicare), with only government being allowed as a payer for health services.

Hammond also saw equality of access as a big part of it; the idea that people should get the same care regardless of income. This, he said, is a kind of extreme egalitarian moral reasoning we don’t apply in any other sphere (for example, food).

He presented some figures illuminating the status quo. Private insurance penetration is 67%, the bulk of that employment-based. Most of the rest is public coverage — Medicare and Medicaid. Medical costs are paid roughly half from private sources and 42% from taxes. Nine percent is self-pay and charity care.

Major flaws in the existing landscape include millions uninsured; out-of-pocket costs too high even with insurance; a fragmented, poorly integrated delivery system; and health care is 17% of our economy, an excessive burden far above other countries’, with no corresponding benefit in health outcomes. Hammond said “single payer” would not tackle the latter two problems.

He also cited some misconceptions. First, that our private insurance model is the cause of high costs, with too much profit. One audience member, a friend of mine, insisted no one should be allowed to profit providing something as vital as health care. I would turn it around: why should anyone be forced to provide her with any service (let alone one so vital) without compensation? People get paid for their work (she does). Those who expend effort to set up, invest in, and operate health care systems surely deserve compensation in the form of profits too.

But are they excessive? Hammond presented numbers showing that while compared to other countries, our health care overheads, including all administrative costs, arehigher, they’re only about 8% of total outlays, with the bulk of the cost difference being what we actually spend on care. And that’s not for more or better care but, rather, in the prices paid for care — mostly due to much higher salaries for medical professionals than in other advanced countries.

It’s also often asserted that all other advanced nations have single payer systems. Not so. Most actually have mixed systems (which ours is), but are more tightly regulated (hence their lower price levels). Obamacare was a step toward convergence with those other countries. But Hammond noted that even in Britain, which does basically have a single payer system, you’re still allowed to buy private insurance, which many Brits do. Sanders (and Warren) would disallow that.

Another notion is that their plan would merely be an expansion of the existing and successful Medicare system. Hammond pointed out that existing Medicare actually entails a lotof cost sharing; it’s far from free*, and there are out-of-pocket costs at point of service too.

He also discussed the proposed New York Health Act, seemingly on the verge of passage. In Hammond’s telling, this would be a “Medicare for All” plan on steroids; a “carte blanche” with the state simply paying allhealth related costs for all residents. He presented various studies attempting to estimate the costs. While there might be some cost savings, increased demand for health services would likely raise overall spending levels. Total taxation would have to double or triple. Hammond acknowledged that a majority of New Yorkers would probably come out ahead after higher taxes are set against lower health bills. But this would require richer people paying dramatically more. (A notion garnering vocal approval from attendees; but it was pointed out that rich people could simply leave the state.)

A comparable federal plan would, he said, entail similar ramifications. [Though presumably richer people would be less apt to leave the country than the state — FSR.] Hammond cited an Urban Institute estimate that over ten years, $34 trillion in higher federal taxes would be required, replacing $27 trillion in current outlays.

Questioners from the audience gave Hammond a rough time. My own question said I agreed with him about single-payer, but that we’re a rich country and can afford to somehow make sure every citizen gets a minimum level of basic care. (This elicited applause!) Hammond responded that actually this can be achieved with modest tweaks to our existing system. In particular, the Medicaid program already aims to do it for low income people; a problem is that many of those eligible simply don’t sign up for it. [Also, Medicaid requires money from states; red state Republican regimes hate it and try to limit it — FSR.]

Hammond concluded with a story about Fidelis Care, a New York health insurer run by the Catholic Church, which received a $3.75 billion buyout offer. Long story short, Gov. Cuomo figured out a way to get control of $2 billion of that, which he used as a kitty to hand out goodies to favored entities in the health care industry; in return for which he glommed unprecedently large political contributions.

Hammond said that single payer advocates seem to imagine that having the entire health care industry under government control would be a good thing. They idealize government. But the Fidelis story is a cautionary tale about how things really work; tending to be run for the benefit of insiders; and big players in this industry have tremendous clout to make it work for them.

After his talk, Hammond was taken outside, where he was tarred and feathered.

* My own monthly Medicare payments were high enough that I opted out.