Old People—An Export Commodity?

A fellow named Jack A. Goldstone wrote an article titled The New Population Bomb in the January/February 2010 issue of Foreign Affairs. He describes the population problem not as an overwhelming number of mouths to feed, but as a growing imbalance in population growth between developed and developing countries. Of particular interest to us is the growth in the senior citizen population relative to the number of working-age adults in the advanced countries. Most of what is discussed in the article is not new, but the author does advance one notion that I had not heard considered before. He suggests balancing the inevitable migration of young people from the developing countries to the developed countries with a reverse migration of old people retiring to the developing countries.
"If older residents of developed countries took their retirements along the southern coast of the Mediterranean or in Latin America or Africa, it would greatly reduce the strain on their home countries entitlement systems. The developing countries involved, meanwhile, would benefit because caring for the elderly and providing leisure and retirement services is highly labor intensive."The motivation is clearly to save money on health care costs. I am not sure this makes sense unless excess medical costs in the home country exceed retirement income and life savings. You would be removing a lot of money from the home economy in the hope of making it back in health care savings. So we would save Medicare some money, but that money would still leave the economy. Understanding how the economics would play out will take some more thought.

Meanwhile, as a certifiable "old person," and a patriot willing to sacrifice for the good of my country, I am intrigued enough to ponder some possibilities. Could we get AARP to act as bargaining agent in negotiating deals with the prospective host countries? What about tax breaks, restaurant discounts—perhaps a colonial charter? With the European Union sinking fast, could we establish a colony in Provence? Hmmm......

Another Big Short?

I came across a quote attributed to Steve Eisman. Eisman was one of the main characters in the book The Big Short by Michael Lewis. He was one of those who made a financial killing by investing short against the subprime loan mess in the housing market. Having just read that book it was of interest to find out what Eisman is up to now. The quote is:
"I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry. I was wrong. The for-profit education industry has proven equal to the task."I saw the quote in the June 7-June 13 issue of Bloomberg Businessweek. There was no story to go with it. The quote apparently was from a speech Eisman gave at a conference in May of this year. The title of the speech was "Subprime Goes to College." The presentation was referred to on Mother Jones.

Eisman believes that the for-profit schools for higher education, such as ITT, Phoenix, and others that are heavily advertised, have been excessively profitable and are now headed for a fall. These schools are heavily dependent on taxpayer funds provided to students either in the form of grants or guaranteed student loans. Some are approaching the legal limit of having 90% of their funds coming from government sources.

There are a number of analogies to the subprime mortgage market. Deregulation during Bush years allowed these schools to be more aggressive in marketing themselves and more efficient in gaining access to federal funds. A good reference is an article in Businessweek entitled "Hardselling the Homeless" These schools have gone so far as to visit homeless shelters in order to recruit students—analogous to talking poor people into taking out mortgages they could not afford—these schools descend on the most vulnerable of our citizens and encourage them to take out student loans in order to cover their exorbitant tuitions. As one might expect, the dropout rate is enormous and the taxpayer ends up footing the bill. Federal aid to students at these for-profit schools was $4.6B in 2000 and $26.5B in 2009. Here are some quotes from the Businessweek article.
"The privately held Drake College of Business, which trains people to be medical and dental assistants, relied on taxpayers for 87% of its revenue in 2007. Almost 5% of the student body at its Newark (NJ) branch is homeless.....Late in 2008, it began offering a$350 biweekly stipend to students who show up for 80% of classes and maintain a ‘C’ average.....’Its basically known in the community: if you’re homeless and you need some money, go to Drake’ says Carmella Hutson, a case manager at the Goodwill Rescue Mission in Newark.....Operating margins averaged 21% in 2009; schools typically charge $10,000 to $20,000 a year, well above comparable programs at community colleges....The industry is now fully mainstream. Goldman Sachs owns 38% of the for-profit Education Management Corp."These abuses have been noticed. Eisman believes that new government regulations are forthcoming that will severely limit the profitability of these outfits and drive their stock prices way down. In other words, he is shorting them. It will be interesting to see how this all plays out.

American Racism and Nazi Anti-Semitism

Niall Ferguson has written an exceptionally interesting history of the twentieth century, The War of the World. It is a long and detailed book crammed with fascinating details. I suspect it will be the source of several more posts. What I was struck by here was his contention that our legal system had built-in racial biases, based both on racial hatred and on what we would consider today to be bizarre scientific theories, that Hitler would use as a "template" in assembling his campaign to isolate and vilify Jews and other minorities. While our country and Germany were on different paths, it is disconcerting to realize that we had similar starting points and that the Nazis looked to us for inspiration.

"It was the Southern states whose legal prohibitions on interracial sex and marriage provided the Nazis with templates when they sought to ban relationships between ‘Aryans’ and Jews."While the Southern states were the worst offenders, they were not alone.

"In any case, the United States could hardly claim to be a model of racial tolerance in the 1930s. As late as 1945, thirty states retained constitutional or legal bans on interracial marriage and many of these had recently extended or tightened their rules. In 1924, for example, the state of Virginia redefined the term ‘white person’ to mean a ‘person who has no trace whatsoever of any blood other than Caucasian’ or ‘one-sixteenth or less of the blood of the American Indian and....no other non-Caucasian blood.’ Henceforth even a single ‘negro’ great-grandparent made a person black. It was not only African-Americans and American Indians who were affected; some states also discriminated against Chinese, Japanese, Koreans, ‘Malays’ (Filipinos) and ‘Hindus’ (Indians). How profound were the differences between a case of ‘racial defilement’ in 1930s Hamburg and a case of miscegenation in 1930s Montgomery? Not very. Was it so very different to be in a mixed marriage in Dresden and to be in one in Dixie? Not really. Moreover the influence of eugenics in the United States had added a new tier of discriminatory legislation that was not only similar to that introduced in Germany in the 1930s, but was also the inspiration for some Nazi legislation. No fewer than forty-one states used eugenic categories to restrict marriages of the mentally ill, while twenty-seven states passed laws mandating sterilization for certain categories of people. In 1933 alone California forcibly sterilized 1278 people. The Third Reich, in short, was very far from the world’s only racial state in the 1930s. Hitler openly acknowledged his debt to US eugenicists."The United States was the first major country to introduce immigration quotas in the 1920s. This legislation was aimed at keeping out "inferior stock."

"Symptomatically, a bill to admit 20,000 Jewish children to the United States was rejected by the Senate in 1939 and again in 1940."More on the United States’ love affair with Eugenics and its fear of "dysgenics" can be found here. It makes for interesting and unsettling reading.

Some Immigration Data

I was reading Howard Finemen’s book The Thirteen American Arguments and came across this quote in his chapter on immigration.

"At the start of the twenty-first century, the largest tide of immigration in a century—some 40 million souls arriving in a one decade period, a third of them illegally—was inundating Virginia and the rest of America."That figure of 40 million in a decade seemed way too large.

Fortunately, the Census Bureau provides data for corroboration. You can go here to find data on numbers of various groups of the "foreign born" (not born in the United States, independent of current status). As of 2007, out of a population of 302M, the number of foreign born was 38M. The number of foreign born is an integral over time. If you go here you will find that the number of immigrants from 1990-2000 was approximately 10M, with an estimated 2.25M "unauthorized."

Fineman’s claim of 40M immigrants in a decade seems consistent with the 38M of integrated foreign born. Elsewhere in his chapter he quotes numbers that are consistent with Census Bureau figures. Is there an accepted literary term equivalent to having "misspoken?"

Meanwhile, this exercise provided an opportunity to dredge up some other interesting numbers related to the issue of immigration. The number of foreign born in the 2007 tabulation was equal to 12.6% of the population. The fraction of foreign born that was Hispanic is 48% or 18M. The number of the foreign born Hispanics from Mexico was 11.7M. The oft quoted number of "as many as 12M illegal aliens" leads one to believe that all of them are people pouring over the Mexican border. It seems highly unlikely that every person who entered this country from Mexico is undocumented. I have not yet been able to find a reference to what fraction of the undocumented immigrants might be from countries other than Mexico. Roughly 35% of the foreign born Hispanics come from countries other than Mexico. The undocumented among these may also be using the Mexican border for crossing into our country.

An estimate of the number of undocumented immigrants (under the age of 65) can be found here. This document quotes a number referred to as "residual foreign born migration (includes unauthorized migrants)" of 9.98M as of the year 2000. This number could easily be extrapolated to the quoted 12M number, however, this designation also includes people who are here legally but whose paperwork is still in process, so it should be treated as an upper limit. The fraction of the people in this category who are from Mexico is 44.5%.

The number of Hispanics in this country as of 2007 is 45M. If you take the worst case and assume that 12M illegal immigrants are in the country and they are all Hispanic, then one out of four Hispanics is here illegally. Or, you can turn that around and assume that over 33M legal residents of this country are at risk of being hassled by the authorities if they live in or travel to Arizona. How would you feel if you were one of the 33M?

One more point to consider: it is often stated that minorities will soon become the majority in this country. This conclusion apparently comes from these numbers.

"The proportion of the total population that was White, not Hispanic was 83 percent in 1970 and 76 percent in 1990. By 2007, 66 percent of the total population was White, not Hispanic."The rate of decline of the White, not Hispanic population seems to be accelerating over time and within a few decades should cross the 50% line. There are now more Hispanics (45.4M) in the population than Blacks or African Americans (36.7M), and there is a healthy Asian population (13.1M).

Early Christians and the Feminine Element

Given some sensitivity enhancement following the reading of America’s Women, I discovered some interesting history related to women’s role in the early Christian communities. The source of this new insight was Elaine Pagel’s book The Gnostic Gospels.

Pagels discusses the available documents relating to writings created in the first two centuries after Christ. They present a picture of a Christian community harboring a wide array of beliefs as to what Jesus’ message was and thus what it meant to be a Christian. One gets the impression that Jesus’ followers were left with no clear path forward after his death, unleashing a Darwinian clash of opposing notions. Many people wrote "gospels," often attributing them to various apostles, in order to promote a point of view. Each seemed able to produce sayings attributed to Jesus that supported their position.

Simplifying matters somewhat, for the purposes of this brief comment, one could say that by the time of the critical second century, there were two views as to how Christianity should be practiced. One, the ultimate winner, was what the author referred to as the "orthodox" view. This path insisted on a strict, almost military, rule of discipline and chain of command. The fundamental tenet was that Jesus passed on his legacy to the apostles to be interpreters of the "faith." All church leaders and all church decisions then had to emanate from this apostolic succession. This would become the Roman Catholic Church. It would treat any alternate view as heresy and try to destroy any written document it did found objectionable.

People who chose to follow the second path might loosely be referred to as "Gnostics." These formed diverse groups who had similar beliefs to the orthodox Christians, but who believed in a more personal interaction with their God. There was much emphasis on a spiritual communion between an individual and God leading to greater levels of enlightenment. This view was often in conflict with the orthodox contention that the apostolic successors were the intermediaries between God and the people. The Gnostic approach has some similarities to that of current evangelical sects.

The point of all this is to note that the two views allowed for quite different roles for women in society and in the practice of religion. It turns out that Genesis Chapters 1 and 2 can be interpreted quite differently. Chapter 2 is the text emphasized by the orthodox view—the traditional Hebrew interpretation: God created man (male animal), and from the male created the female, clearly giving the impression of the female as a subspecies. Now consider the wording in Chapter 1.
"And God said, Let us make man in our image, after our likeness…..So God created man in his own image, in the image of God created he him; male and female created he them."One should be moved to wonder who is/are "us," and what does "our image" mean. Pagals points out that there were those who believed that the God of the Hebrews was so ornery and capricious that it was difficult to associate Jesus with him. Genesis Chapter 1 provided a possible resolution of this dilemma by indicating there were really two aspects to God—or perhaps two persons. Given the wording, there must be a male and female aspect or person.

One could go off in many different directions from this starting point, including the notion that the female aspect/person must be the dominant. According to Pagels, many Gnostic Christians were sympathetic to the Chapter 1 interpretation, allowing for a much more equal treatment of women.
"We can see, then, two very different patterns of sexual attitudes emerging in orthodox and gnostic circles. In simplest form, many gnostic Christians correlate their description of God in both masculine and feminine terms with a complementary description of human nature. Most often they refer to the creation account of Genesis 1, which suggests an equal or androgynous human creation. Gnostic Christians often take the principle of equality between men and women into the social and political structures of their communities. The orthodox pattern is strikingly different: it describes God in exclusively masculine terms, and typically refers to Genesis 2 to describe how Eve was created from Adam, and for his fulfillment. Like the Gnostic view, this translates into social practice: by the late second century, the orthodox community came to accept the domination of men over women as the divinely ordained order, not only for social and family life, but also for the Christian churches."How fascinating is the study of history! The orthodox community had the better game plan, thus they won, but so many things could have turned out so differently.

Justice: What's the Right Thing to Do? by Michael J. Sandel

Michael Sandel is a professor of government at Harvard University. What he presents here is presumably equivalent to his undergraduate level course in moral philosophy—reputed to be one of the most popular at Harvard. The book, Justice, has the flavor of an academic course. It includes a description and discussion of the major theories that evolved concerning the concept of justice in a society. The discussion generally takes the form of a critique of the implications of the theory for actual or contrived situations. The progression is chronological except for the treatment of Aristotle and his philosophy. It turns out, to the author’s way of thinking, that the old master was in many ways closer to getting it right than some of the more current thinkers.

Sandel concludes with his own thoughts on how questions of justice should be approached in our society. In spite of the subtitle of the book, the reader is not going to learn "what’s the right thing to do." The author’s intent is to suggest a framework, or vantage point from which to view your opinions and those of others on complex issues. Most contentious issues do not have solutions that all people will find satisfactory. The author hopes the readers will develop the habit of making morally defensible arguments, while respecting the moral defensibility of the opinions of others.

Sandel provides interesting discussions of many complex situations in order to illuminate and evaluate various conceptions of justice. He concludes that these discussions

"....revolve around three ideas: maximizing welfare, respecting freedom, and promoting virtue. Each of these ideas points to a different way of thinking about justice."The author’s first stop is at the classical Utilitarianism espoused by Jeremy Bentham (1748-1832). To Bentham, maximizing welfare is cast in terms of maximizing "utility," which to him meant maximizing whatever produces pleasure or happiness, and minimizing whatever produces pain or suffering. Bentham believed that all moral considerations should emanate from considerations of maximizing pleasure, and rejected any attempt to enter predetermined moral descriptions into the discourse of "utility." The author had an easy time undermining Bentham’s theory with examples that highlighted its disregard for the type of value judgments and personal liberty allowances that have become standard in society.

Sandel next visits libertarianism as an approach based on respecting the freedom of individuals. There did not seem to be one dominant proponent or intellectual leader whose views would efficiently define this concept. Instead it seems to be a philosophy popular with rich people, with people who liked to hang around with rich people, and with people who hope to be rich one day. It is a philosophy that persists today and is actively promoted by a small number of ardent supporters. Sandel summarizes its main tenets as follows.

"Libertarians oppose laws to protect people from harming themselves (no paternalism)....Libertarians oppose using the coercive force of law to promote notions of virtue or to express the moral convictions of the majority (no morals legislation)...The libertarian theory of rights rules out any law that requires some people to help others, including taxation for redistribution of wealth."Or, in other words

"Their central claim is that each of us has a fundamental right to liberty—the right to do whatever we want with the things we own, provided we respect other people’s rights to do the same."Fortunately for us, this not the way stable societies work. In fact, it is not the way any organization works. Try to imagine a libertarian family. For a family to work, the members have to be willing to restrict their freedoms. If you think a little harder you realize that the term family includes relatives. And it also turns out that one gets along better with neighbors, colleagues, and even strangers encountered on the street, if one is willing to reign in his liberties. Sandel waits until the end of the book to make the point that the demands of community will, and should, trump many individual liberties.

Sandel presents a lengthy discussion of Immanuel Kant and his philosophy. He attributes to Kant lofty accomplishments.

"Immanuel Kant (1724-1804) offers an alternative account of duties and rights, one of the most powerful and influential accounts any philosopher has produced....it depends on the idea that we are rational beings, worthy of dignity and respect....it offers a powerful basis for what the eighteenth century revolutionaries called the rights of man, and what we in the early twenty-first century call universal human rights."
"Daunting though Kant’s philosophy may seem at first glance, it actually informs much contemporary thinking about morality and politics, even if we are unaware of it. So making sense of Kant is not only a philosophical exercise; it is also a way of examining some of the key assumptions implicit in our public life."Kant’s idea that all rational beings deserve to be treated with respect is the precept upon which he attempts to build a theory for how to view the issue of justice. Sandel claims that because Kant did not wish to be guided by a moral (religious) prescription, but a "rational" one, independent of prescription, that Kant based his theorizing on the notion of individual liberty. Although Kant would not agree, one could argue that he was, in effect, pushing his readers to think in terms of a communal morality, and thus trying to maximize "virtue." Kant’s dependence on the rational beings to make "rational" decisions seems a bit naive considering what we now know about brain function. This is a trap Sandel falls into also.

Perhaps we view Kant from too distant a time. Perhaps it is difficult to judge his contribution without studying enough of the evolution of philosophical thought to be able to evaluate him in a perspective appropriate to his era. The statement, "we are rational beings worthy of dignity and respect," seems so obvious that it should not need volumes of theorizing to form a "basis" for it. On the other hand, no matter how tortuous his logic, his philosophy does represent progress.

The work of John Rawls (1921-2002) is addressed next. Rawls, like Kant, starts with a general notion of what drives justice, and makes an important contribution to the evolution of the conception of justice. His attempt at converting his general precept into a decision-making prescription is less successful.
Rawls major contribution is what he refers to as "the difference principle," which the author describes in this manner.

"....only those social and economic inequalities are permitted that work to the benefit of the least advantaged members of society."Much of the discussion involving Rawls work consists of trying to justify this social and economic constraint without appearing to impinge excessively on anyone’s basic liberties. I prefer to think of Rawls general conception of justice, as exemplified in his "difference principle," as another step in the development of a "communal" view of justice. That is to say that one has to consider the interactions of individuals in the context of their membership in a society. This is where Sandel is headed, but since he is an academic, the student must get there the hard way.

The author finally comes to a discussion of Aristotle. This is not so much because his ideas and Aristotle’s are so nearly identical, but because Aristotle bases his thoughts on a concept that Sandel needs to accumulate in order to justify his own philosophy.

"Modern theories of justice try to separate questions of fairness and rights from arguments about honor, virtue, and moral desert. They seek principles of justice that are neutral among ends, and enable people to choose and pursue their ends for themselves. Aristotle (384-322 B.C.) does not think justice can be neutral in this way. He believes that debates about justice are, unavoidably, debates about honor, virtue, and the nature of the good life. "Not all of Aristotle’s conclusions about "the good life" translate to a modern society, but his "ancient" notion that the good of society is a critical component of decisions of justice is what is important.

"....the highest end of political association, which for Aristotle was to cultivate the virtue of citizens. The end of the state is not ‘to provide an alliance for mutual defense...or to ease economic exchange and promote economic intercourse.’ For Aristotle, politics is about something higher. It’s about learning how to live a good life. The purpose of politics is nothing less than to enable people to develop their distinctive human capacities and virtues—to deliberate about the common good, to acquire practical judgment, to share in self-government, to care for the community as a whole."It is this reference to "community" that allows Sandel to shed his cover of objectivity and reveal his own philosophy.

"Having wrestled with the philosophical arguments I’ve laid before you, and having watched the way these arguments play out in public life, I do not think that freedom of choice—even freedom of choice under fair conditions—is an adequate basis for a just society. What’s more, the attempt to find neutral principles of justice seems to me misguided. It is not always possible to define our rights and duties without taking up substantive moral questions; and even when it is possible it may not be desirable."

"If we understand ourselves as free and independent selves, unbound by moral ties we haven’t chosen, we can’t make sense of a range of moral and political obligations that we commonly recognize, even prize. These include obligations of solidarity and loyalty, historic memory and religious faith—moral claims that arise from the communities and traditions that shape our identity. Unless we think of ourselves as encumbered selves, open to moral claims we have not willed, it is difficult to make sense of these aspects of our moral and political experience."
"Justice is inescapably judgmental....questions of justice are bound up with competing notions of honor and virtue, pride and recognition. Justice is not only about the right way to distribute things. It is also about the right way to value things."As was stated earlier, the author does not provide answers. What he provides is, ultimately, a way of posing our internal and external debates such that we can more effectively pursue the goal of consensus or compromise. He gives props to Obama for reintroducing issues of religion and morals into public discourse.

"If liberals offered a political discourse emptied of religious content, they would ‘forfeit the imagery and terminology through which millions of Americans understand both their personal morality and social justice.’....Religion was not only a source of resonant political rhetoric. The solution of certain social problems required moral transformation."We are members of a community, and each of us has a different set of loyalties, commitments, and views on societal virtue. It is no longer a question of determining a formulation of justice. It is a question of how one reconciles these competing views without causing great harm to society as a whole or to undeserving individuals. This is Sandel’s parting advice.

"A more robust public engagement with our moral disagreements could provide a stronger, not a weaker, basis for mutual respect. Rather than avoid the moral and religious convictions that our fellow citizens bring to public life, we should attend to them more directly—sometimes by challenging and contesting them, sometimes by listening to and learning from them. There is no guarantee that public deliberation about hard moral questions will lead in any given situation to agreement—or even to appreciation for the moral and religious views of others. It’s always possible that learning more about a moral or religious doctrine will lead us to like it less. But we cannot know until we try."

"A politics of moral engagement is not only a more inspiring ideal than a politics of avoidance. It is also a more promising basis for a just society."The author has provided us with a short history of moral philosophy and we end up feeling enriched by the experience. We can skim over the fact that he tells us that everyone he made us read about was wrong. We can even forgive him the 37 pages on Kant. The discussions of the many and varied moral dilemmas, where we were compelled to look at issues from a variety of viewpoints, were instructive and, hopefully, developed in us some good analytical habits. The author hopes we have learned to consider the opinions of others with respect, as appropriate. The sections on affirmative action and abortion were particularly thought provoking and illumnating.

Progressives Take Note: Job Creation

The monthly employment numbers came out today. An estimated 431,000 jobs were created in May. This is the highest monthly figure in 10 years. It was viewed as a disappointing number because most of the jobs were temporary positions participating in the census. Clearly, the European meltdown, the oil spill in the Gulf, and the threat of conflict between the Koreas did not instill confidence in the economy. One can interpret this result in relation to our economic prospects in a number of ways. One thing that is clear is that the growth in jobs will be slow with respect to regaining the number of jobs that are lacking.

People quote a number of 125,000 jobs per month as being required to keep up with population growth. That is equivalent to 1,500,000 jobs per year just to hold our own. This number is consistent with about a one percent growth rate. Over the eight years of the Bush administration we gained less than 4,000,000 jobs, meaning we fell behind by about 8,000,000 jobs while Bush was in office. The point I am trying to make is that the economy was not healthy before the current series of crises.

The Obama Administration has been criticized for not focusing more closely on immediate job production. A straightforward dumping of money into the current economy will only create, at best, a return to the same ineffective state we were in before. They have chosen to support job creation by devoting part of the stimulus funds towards developing new economic drivers like education, infrastructure, renewable energy, and green jobs. I think that is the correct strategy and we have to stick with it and support the politicians who are on board with this effort. If you get depressed, just ponder what would be happening with McCain and Palin in the White House.