Monday, October 31, 2011

Humanity: A Gaian or a Medean Future?

It is a rather sad state of affairs when one feels it is necessary to bypass minor issues like the viability of the Eurozone in order to question the viability of humanity itself. Even the most optimistic observers would agree that the mankind as a whole is living in an unsustainable manner. There are issues related to water, food, and mineral supplies that must be addressed if mankind is to come into equilibrium with its environment. Changes in practices will have to occur and they will have to be global in scope. It will require the collaboration of all nations—a rare occurrence.

Tim Flannery addresses these issues in his book Here on Earth. Flannery is an adherent to the Gaia hypothesis which makes him rather optimistic about the future. The concept of Gaia was first proposed and popularized by James Lovelock. Flannery quotes Lovelock to provide a concise statement of its meaning.

"A view of the a self-regulating system made up from the totality of organisms, the surface rocks, the ocean and atmosphere tightly coupled as an evolving system...this system [has] a goal—the regulation of surface conditions so as always to be as favorable as possible for contemporary life."

In other words, the planet is trying to maintain an environment in which life can thrive. There are limits to what nature can do and mankind is on a path to exceed those limits. An optimist, such as Flannery, has to believe that mankind can change its ways.

There is also a diametrically opposed view that would claim that the earth proceeds along its own path and life responds as necessary. If the earth was so fond of life why have there been so many mass extinctions over its lifetime? For example, 250 million years ago there was what is referred to as the Great Dying.

"It was the Earth's most severe extinction event, with up to 96% of all marine species and 70% of terrestrial vertebrate species becoming extinct. It is the only known mass extinction of insects. Some 57% of all families and 83% of all genera were killed."

The precise causes of this event don’t seem to be well understood, but if Gaia was on duty she must have fallen asleep. Flannery himself provides us with other data that is also consistent with a view of Earth as cold, uncaring platform on which life struggles to maintain a foothold. He suggests that mankind had its own near-extinction event.

"Our own species’ near death experience, which occurred about 70,000 years ago, may have been caused by the eruption of the Toba volcano in what is now Indonesia. Based upon studies of the 1991 eruption of mount Pinatabu, it’s estimated that Toba altered our atmosphere so dramatically that the average surface temperature of Earth dropped by about four degrees fahrenheit, killing all but between one thousand and ten thousand breeding pairs of humans."

Volcanoes play a significant ecological role, but one would expect a less extreme application by a caring Gaia.

If the Gaians are true believers, then Peter Ward probably represents the agnostics. He wrote a book titled The Medea Hypothesis: Is Life on Earth Ultimately Self-Destructive? Medea was the mythological creature who got mad one day and killed her own children. The analogy was between Earth (Medea), and complex life forms (children).

"Ward thinks that life is equally bloody and self-destructive, arguing that species will, if left unchecked, destroy themselves by exploiting their resources to the point of ecosystem collapse. The medea hypothesis in fact suggests that ruthless selfishness is inevitably a recipe for the elimination of a species. It argues that if we compete too successfully we will destroy ourselves."

"Ward argues that the Medea hypothesis can explain the great extinction episodes of earth’s prehistory, and he sees the current destructive path of our human species as a continuation of that process."

Ward suggests where global warming can lead. His explanation for the Great Dying would start with excessive warming from green house gases followed by slower ocean circulation which limits oxygen concentrations at the greater ocean depths. Lower oxygen allows

"....sulphur bacteria (which don’t need oxygen to live) to proliferate. Eventually oceanic oxygen levels drop so low that the sulphur bacteria reach the sunlit surface waters where they release hydrogen sulphide into the atmosphere, destroying the ozone layer and poisoning life on land."

There are plenty of examples from the animal world to demonstrate that a population imbalance can grow to the point at which a species no longer has enough food sources to maintain itself and the population collapses. Flannery believes that mankind can avoid this fate. He quotes declining birth rates in developed countries as an indication that humanity is trending towards a more sustainable solution. While it is true that declining birth rates are occurring, it is not obvious that this has any element of altruism associated with it. It may be that individuals choose to limit the number of children they wish to support for entirely selfish reasons—for example, to enable themselves to consume more. While everyone seems to be predicting that world population will finally peak somewhat north of 9 billion people, the fact that this is occasioned by higher living standards indicates ever greater consumption of resources such as energy.

Flannery is not counting on lower birth rates as a solution. He argues that, in addition, the nations of the world must come together and collaborate on global solutions to limiting green house gases and other environmentally harmful toxins. He argues that small steps have been taken in this direction already, noting the elimination of chlorinated fluorocarbons that were depleting the ozone layer as an example. He chooses to believe (hope?) that mankind is capable of acting rationally and is capable of such high order cooperation.

He recognizes the difficulties in putting such a cooperative effort in place. Flannery reminds us that we evolved as creatures that placed great emphasis on instant gratification. He refers to this as "discounting the future." Given the choice of an immediate reward versus one in the distant future, we are programmed to focus more on the near term. This is logical for any species that evolved in a mode where the next meal was always in doubt.

It is hard to be optimistic about the future. The more one learns about the Earth and its potential for complex responses the more uncertain things become. We focus on carbon in the atmosphere, but read of enormous sources of methane that could play an atmospheric role. Now it seems we have to worry about sulphurous bacteria. Reality seems to be racing ahead of model predictions. There are known unknowns to worry about, but how many unknown unknowns are there? It is difficult to recognize the benign Gaian viewpoint when the world’s environment seems to be increasingly unstable.

Given that mankind still has time to reverse its course and rescue itself from its perceived fate, can it be accomplished? Can it collaborate and make the necessary sacrifices? Consider, for example, the economic crisis in Europe. The better part of two years has been spent nibbling on the problem rather than coming to a decision of shared sacrifice on a scale necessary to resolve the issue. If developed nations with rational leaders cannot address an immediate catastrophe expeditiously, how can we expect the world in entirety to address issues that always seem to be a decade or two in the future?

I don’t for a minute believe in the Gaia hypothesis, and it is difficult to believe mankind is capable of responding in time to avoid disaster. The outlook is rather depressing.

Friday, October 14, 2011

While I’m Away: My Top Ten

I will not be posting for the next two weeks—resuming a normal schedule around the first of November. There are over 300 articles from the last 18 months. I am sure you might have missed one or two. In that case I have tabulated the ten I most enjoyed writing. If you missed any, check them out.

Born Fighting by Jim Webb

Are Webb’s beloved Scots-Irish the foundation for our nation, or merely those who would join the Tea Party?

Outliers: the Story of Success by Malcolm Gladwell

A review is provided of Gladwell’s insights into education.

The War of the World by Niall Ferguson

Ferguson’s perspective on the violence of the first half of the twentieth century is memorable. It will alter your view of humanity.

God, Man, Evolution, and the Burgess Shale

Putting mankind in perspective with regard to the evolution of the planet.

Words Matter: Misquoting Gods and Prophets

Thoughts are presented on the difficulties inherent in translating and understanding the written word, both ancient and modern.

The Bible Unearthed: Archeology’s New Vision of Ancient Israel and the Origin of Its Sacred Texts by Israel Finkelstein and Neil Asher Silberman

The authors summarize what is known to have actually happened so long ago.

"The Good War:" Our Nuclear Shame—And It’s Not What You Think

The way we abused our own soldiers while testing the effects of nuclear weapons and then refused to admit what we had done is shameful.

Chemical Warfare: Vietnam and Agent Orange

The use of Agent Orange on the Vietnamese and on our own soldiers is the largest scale use of chemical warfare in history. Its effects continue to be felt today.

American Soldiers and Torture: Joshua E. S. Phillips

Phillips’ book provides a poignant view of the factors that contributed to the ease and the frequency with which soldiers could find themselves resorting to physical abuse in Afghanistan and Iran. He also discusses the effect such actions had on the soldiers themselves.

War and Remembrance: The Casualties of World War II

A discussion of how far humanity had descended in fighting a war with few, if any, moral limits.

Thursday, October 13, 2011

Foie Gras Illegal? Why Not Industrial Beef?

Animal rights activists are in an uproar about the force feeding of ducks and geese to produce those enlarged, fat-laden livers that are so exquisitely delicious. Clearly this approach can be done cruelly, but it also seems clear that it need not be that way. This article by Sarah DiGregorio takes on a tour of on such facility in New York State. 

An argument over whether the process is cruel or not is not the point of this essay. What is discussed here is the contention that if what we do to ducks is "inhumane," then what we do to cattle in preparing them for slaughter should elicit calls for the banning beef products. That is not likely to happen. Ducks look cute and helpless. A thousand pound cow does not. One can observe a duck being fed without getting one’s feet dirty. To observe a cow one would have to wade through the sea of manure the cow dwells in for months while it is fattened for slaughter.

Michael Pollan takes us on a tour of a CAFO (Concentrated Animal Feeding Operation) in his book The Omnivore’s Dilemma.

Cattle evolved as grass-eating animals. Most get to do just that for a while, but eventually they are shipped to a CAFO where large numbers of them can receive a regimen of corn, vitamin mixtures, synthetic hormones, and antibiotics. The idea is to fatten the cattle faster, and to produce fattier meats.

Cows have rumens where eaten grass is allowed to break down under bacterial action before being sent to the stomach for digestion. The acidity in the rumen of a grass-fed cow is neutral. The corn diet given cows makes the rumen acidic. This can cause a condition called "bloat" where gases build up in the rumen and can cause suffocation if not treated. The acidity of the material in the rumen also causes acidosis.

"....a kind of bovine heartburn that in some cases can kill the animal, but usually just makes him sick."

The logic of industrial beef production is to fatten the animal as fast as possible and feed it whatever is necessary to keep it alive as long as possible. It is a race because the diet will surely kill the cattle, eventually destroying their livers.

"Over time the acids eat away at the rumen wall, allowing bacteria to enter the animal’s bloodstream. These microbes wind up in the liver, where they form abscesses and impair the liver’s function. Between 15 percent and 30 percent of feedlot cows are found at slaughter to have abscessed livers; Dr. Mel told me that at some pens the figure runs as high as 70 percent."

"What keeps a feedlot animal healthy—or healthy enough—are antibiotics....Most of the antibiotics sold in America today end up in animal feed, a practice that is now generally acknowledged (except in agriculture), is leading directly to the evolution of new antibiotic resistant superbugs."

Comparing a CAFO to the process of producing foie gras, leaves me to conclude that, given a choice, I would rather be a duck than a cow. I will continue to eat foie gras—as long as I can afford it. I doubt if I will ever eat beef liver again.

Wednesday, October 12, 2011

The Myth of Small Business Job Creation

Charles Kenny tries to disabuse readers of the notion that the nation’s most prolific source of new jobs comes from small businesses. His article appeared in Businessweek. His subtitle summarizes the point he is making.
"Politicians may love to extol the virtues of small business, but big companies are still the key to growth."

There is quite a bit of data to support Kenny’s contention.

"In the U.S. in 2007 there were around 6 million companies with workers on the payroll. Ninety percent of those businesses employed fewer than 20 people, according to analysis of the latest census data by Erik Hurst and Ben Pugsley of the University of Chicago. Collectively, those companies accounted for 20 percent of all jobs. Most small employers are restaurateurs, skilled professionals or craftsmen (doctors, plumbers), professional and general service providers (clergy, travel agents, beauticians), and independent retailers. These aren’t sectors of the economy where product costs drop a lot as the firm grows, so most of these companies are going to remain small. And according to Hurst and Pugsley’s survey evidence, the majority of small business owners say that’s precisely their intent—they didn’t start a business for the money but for the flexibility and freedom. Most have no plans to grow."

"Looking at a sample of companies created from 2004 to 2008, Hurst and Pugsley found that only 3 percent added more than 10 employees during that time. An even smaller proportion had applied or were in the process of applying for patents. (So much for being seedbeds of innovation.) Many small businesses simply go bust after a few years."

There can be a large flux of jobs in small businesses as old ones fold while others start up, or if there is high employee turnover, but a flux of jobs is not the same as adding jobs to the economy.

"In 2009 economist Scott Shane at Case Western Reserve University surveyed the evidence on net job creation by each year’s cohort of new companies. He found that among small companies in their second year of business, more jobs were lost to bankruptcy than were added by those still operating. The same was true in years three, four, and five."

There are of course notable exceptions to this picture. Kenny mentions Apple, Google and HP as examples of small start-ups that took off. These companies are probably what the public thinks of when the reference is made to a dynamic small business community. But these don’t really fit the mold of "small business." All had grandiose plans and were only "small" in the sense that one has to start somewhere. Today a company trying to emulate the success of those big three would not gain much from typical fiscal policy initiatives such as tax breaks. They would need direct infusion of capital from a government grant or from venture capitalists. That puts them in a totally different category where "small business" does not apply. Greater precision in terminology is required.

From this Kenny concludes that if one is looking for a good job one had better hope that there is a large company with many employees, benefits, and a solid business plan in the neighborhood.

Kenny implies that the big corporations are the ones to look to for job growth, but how is this actually working out? Don Peck, in Can the Middle Class Be Saved, provides us with this insight:

"Yet for all their outsize presence, multinationals have been puny as engines of job creation. Over the past 20 years, they have accounted for 41 percent of all gains in U.S. labor productivity—but just 11 percent of private-sector job gains. And in the latter half of that period, the picture grew uglier: according to the economist Martin Sullivan, from 1999 through 2008, U.S. multinationals actually shrank their domestic workforce by about 1.9 million people, while increasing foreign employment by about 2.4 million."

Yes size matters, but there is more than that at play here. Google, Apple, and HP are enormously successful companies, but Google has generated very few jobs in comparison to the wealth it has generated. Also consider that every time you buy a product from Apple and HP, you are shipping a good deal of that money to someone overseas. Your fancy new toy is sucking money out of the economy.

It would seem that the old fashioned method of creating wealth by making things—in this country—is still the best way to increase employment. Reestablishing a manufacturing base is a good first step. The best way to create jobs immediately is to invest in upgrading our infrastructure. Recently I have encountered about a half dozen articles promoting that notion. One cannot have a solid economy without a solid infrastructure. That’s the way it is, so why not get started?

Tuesday, October 11, 2011

Job Training Programs: Here and in Germany

Job training programs in the US have always seemed to be more of an afterthought than a focused national initiative. When implemented, they become easy targets for detractors who will claim little economic impact and a waste of money. Supporters will say that this is the right thing to do so we have to do it, but the apparent results are often more consistent with wishful thinking. Drake Bennett has provided a great article in Businessweek that addresses the issues associated with job training efforts: Do the Unemployed Get a Second Act?

Even if one is dubious about past results, Bennett presents some numbers that will get one’s attention and suggest that perhaps it is time to make these programs effective. There are at least 14 million people looking for jobs, yet there are 3.2 million job openings yet unfilled.

"In surveys by Gallup and the McKinsey Global Institute, corporate CEOs and small business owners report difficulties finding workers with the right skills. Silicon Valley companies fight over software engineers; Union Health Service and the Harvard hospital system complain it’s hard to find nurses and technicians; manufacturers like Caterpillar and Westinghouse can’t hire enough welders and machinists to keep their state-of-the-art lathes running. Estimates of the size of the mismatch vary widely, but a May International Monetary Fund paper put it at a quarter of the 9.1 percent unemployment rate. Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, has suggested it accounts for a full third of the unemployment rate."

Bennett first provides some data to put matters in context. The US does not invest much in job training. In 2009 we spent 0.05% of our GDP on training, or about $7.5B. Let us take Germany as being representative, funding-wise, of our Western Europe look-alikes. Germany spent 0.35% of GDP on training—equivalent to seven times more than us. The European nation we seem most like in terms of training investment is Greece.

There is $2.7B in the 2011 budget for Workforce Investment Act (WIA) funding. This includes funding for youth/student programs, those aimed at disadvantaged adults and those for displaced/unemployed adults. If the past is prelude to the present, how might these efforts fare?

"The most exhaustive training study to date was authored by three economists: Carolyn Heinrich of the University of Texas at Austin, Peter Mueser of the University of Missouri, and Kenneth R. Troske of the University of Kentucky. They examined 160,000 participants who entered WIA programs from July 2003 to June 2005—a much healthier economic climate than today’s—along with a comparison group of 3 million. What they found was that among poor workers who used training to gain a foothold at the low end of the wage scale, there were gains. Employment rates were higher among the trained than the comparison group, and pay was better by a couple of thousand dollars a year. For displaced workers, however, the study found that ‘gains from participation are, at best, very modest’."

Bennett provides examples of training initiatives that seem to work reasonably well. All involve significant participation by industry, the ultimate consumer of the trained individuals. Consider the complaint that companies cannot find people who can run state-of-the-art lathes. How is one to acquire such training? Can a community college be expected to have such equipment on campus, along with qualified teachers? Not in today’s economy. A new technology arises and appears to be an area where job growth is expected. It will take a year for a college to take note, another year to get funding, and another year to prepare a curriculum, and then two years to produce a graduate. That is five years to respond—when technologies can become obsolete in less time. Even if the technology persists, the tools and training needed to participate will have been transformed. It is industry itself, and only industry, that is in a position to know what training and skills are needed at a given time.

Fortunately, the people in charge of WIA spending are beginning to take note and now refer to "sector-based training," which envisages a partnership of some sort between schools, industry, and government. The example of Germany is provided as inspiration and also as warning. In Germany

"....53 percent of high school students opt for something called the "dual system," splitting their time between classroom coursework and apprenticeships in German companies. The system isn’t limited to manufacturing; it extends to white-collar jobs such as finance and insurance, too. The classroom component is structured around the job track the student has chosen. Employers help design the curriculum and cover two-thirds of the program’s €41 billion cost."

Industry in Germany has apparently decided that whatever is in the best long-term interests of the country, is also in the best-long-term interests of industry. This is truly a foreign concept.

This article in The Guardian provides more insight into the German system. Although it has been very efficient in providing workers for industry, it has social implications that would not be popular here.

Germany begins binning children at age ten into a three-tiered education structure. The highest is aimed at a college or university education, the two lower tracks are focused on eventual vocational training. First of all, ten years is too young to begin determining a child’s fate based on tests. Germany is also a land with a significant foreign-born population. Children for whom German is not the native language are immediately placed at a disadvantage and tend to fall predominantly in the lower categories.

What is most impressive is the extent of industry participation.

"The so-called dual system of vocational training was devised to provide some sort of equality of opportunity to young people who leave school with basic or no qualifications. Employers guarantee to provide apprentices with three years of training towards a nationally recognised vocational diploma. Apprentices spend three to four days a week in workplace-based training and the rest of the time at a further education college, or Berufschule. They receive a small salary - typically £300-£450 a month."

"Although the system is expensive - it costs employers around €18,000 (£12,000) to train one person, over 200,000 companies offer apprenticeships in around 350 different careers to over 800,000 trainees."

Germany has about one-fourth the population of the US. Scaling up these numbers, the equivalent size effort here would involve 800,000 companies and 3.2 million trainees. We’re talking educational revolution here.

We could probably use a program of this scale and it would be much less expensive than keeping people on unemployment indefinitely. The key, of course, is getting companies to participate. One would hope that they would be willing to quit complaining and do something about the situation—but hopes are frequently dashed.

Sunday, October 9, 2011

Autism and the Chemicals That Cause It

It is not an exaggeration to describe the increasing incidence of autism as an epidemic. The number of diagnosed cases has grown by about a factor of seven over the last decade, and now the probability that a newborn infant will be so diagnosed is about 1%. Is it possible to increase another factor of seven? Is there a point at which people would consider not having children? Something is causing this increase, and some way of controlling it must be found.

There appears to be a genetic component to autism susceptibility. There is also mounting evidence that there are environmental conditions involved, with exposure to certain chemicals early in pregnancy identified as increasing risk. In fact, genetics and environment must be coupled in some way. Genetics alone cannot explain the dramatic rise in occurrence without postulating some sort of social selection process creating mating patterns that enhance susceptibility. Some have suggested such a process might exist, but it is highly unlikely that events on such a scale could be explained.

Recent data places more emphasis on environmental factors during pregnancy, particularly in the first trimester. A recent study of twins indicated that fraternal twin showed a considerably higher dual incidence of autism than one would expect from siblings born at different times. This suggests something occurred in womb during this pregnancy. Another study has indicated that the risk of autism increases by about a factor of four when the mother has used a common class of antidepressant medication during the first trimester. There is evidence that other chemicals play a role also.

Dr. Philip Landrigan reports on a study planning to track the health histories of 100,000 newborns for the next twenty years. The hope is that by tracking health outcomes and correlating them with prenatal exposure histories some concrete conclusions can be drawn regarding causation of autism and other conditions afflicting our children.

Landrigan is a believer in the importance of environmental factors and chemical exposures.

"But the most powerful proof-of-concept evidence derives from studies specifically linking autism to exposures in early pregnancy – thalidomide, misoprostol, and valproic acid; maternal rubella infection; and the organophosphate insecticide, chlorpyrifos. There is no credible evidence that vaccines cause autism."

"Expanded research is needed into environmental causation of autism. Children today are surrounded by thousands of synthetic chemicals. Two hundred of them are neurotoxic in adult humans, and 1000 more in laboratory models. Yet fewer than 20% of high-volume chemicals have been tested for neurodevelopmental toxicity."

Landrigan mentions a direct correlation between autism and exposure to four chemicals early in pregnancy. Let’s see what is known about these chemicals and the likelihood of exposure.

We find here some information on chlorpyrifos.

"First registered in 1965 and marketed by Dow Chemical Company under the tradenames Dursban and Lorsban, chlorpyrifos was a well known home and garden insecticide, and at one time it was one of the most widely used household pesticides in the US. Facing impending regulatory action by the EPA, Dow agreed to withdraw registration of chlorpyrifos for use in homes and other places where children could be exposed, and severely restricted its use on crops. These changes took effect on Dec. 31, 2001. It is still widely used in agriculture, and Dow continues to market Dursban for home use in developing countries. In Iran, Dow claims Dursban is safe for people, and its sales literature claimed Dursban has ‘an established record of safety regarding humans and pets’."

There seems to be plenty of opportunity for exposure if it was widely used in homes until 2001. It is still commonly used on food crops such as corn, almonds, apples and oranges. And of course any chemical that is used enters the environment and will show up in water supplies. We will save a discussion of the ethics of Dow’s marketing ploys for another day.

Valproic acid is also a fairly common drug.

"Valproic acid (VPA) is a chemical compound that has found clinical use as an anticonvulsant and mood-stabilizing drug, primarily in the treatment of epilepsy, bipolar disorder, and, less commonly, major depression. It is also used to treat migraine headaches and schizophrenia. VPA is a liquid at room temperature, but it can be reacted with a base such as sodium hydroxide to form the salt sodium valproate which is a solid. The acid, salt or a mixture of the two (valproate semisodium) are marketed under the various brand names Depakote, Depakote ER, Depakene, Depacon, Depakine, Valparin and Stavzor."

It has long been known that this drug is extremely dangerous to take during pregnancy. One would think that this would eliminate it as a risk factor. Unfortunately it is widely used in treating mental health issues. As is the case with antidepressants, it is often used in combinations with other psychoactive drugs as psychiatrists experiment with combinations in order to damp out the various side effects produced by individual drugs. So while epilepsy is relatively rare, the need for anticonvulsants is much larger. The level of use of antidepressants and other psychoactive drugs is astonishing. Robert Whitaker, in his book, Anatomy of an Epidemic, makes this claim:

" in every eight Americans takes a psychiatric drug on a regular basis."

So upwards of one in eight people are taking drugs that could be harmful to a fetus. With that incidence, what is the probability that a woman becomes pregnant inadvertently while on these drugs? How many young women are told that there is a danger during pregnancy from the drugs she has been prescribed, but that it has to be balanced by the danger from her mental condition? One suspects that most would choose to battle the devil they know.

Information on misoprostol can be found here.

"Misoprostol is a drug that is used for the prevention of non steroidal anti inflammatory drug (NSAID) induced gastric ulcers, for early abortion, to treat missed miscarriage, and to induce labor. The latter use is controversial in the United States. Misoprostol was invented and marketed by G.D. Searle & Company (now Pfizer) under the trade name Cytotec....but other brand-name and generic formulations are now available as well."

It is interesting to note that this drug has specific uses during pregnancy. It has been known to be dangerous to take during pregnancy, raising the threat of birth defects. Presumably, it is not widely used—or hopefully, it is not widely used.

"The drug is available through physicians only, not pharmacies, in the United States."

It is interesting that thalidomide is making a comeback. It has been found useful in treating painful conditions associated with leprosy, and it appears that it may have a role in combating cancerous tumors. Protocols are in place in an attempt to make sure it is not used during pregnancy. However, the World Health Organization (WHO) came to this conclusion:

"The WHO does not recommend the use of thalidomide in leprosy as experience has shown that it is virtually impossible to develop and implement a fool-proof surveillance mechanism to combat misuse of the drug."

The WHO has it correct this time. The leprosy connection occurred when a physician broke the rules and experimented with the drug even though its use was banned. So much for protocols! Who is to say it would not happen again. In addition, the mere fact that thalidomide is being manufactured and used means it will enter the environment with unknown consequences. Let the pharmaceutical companies find a better way.

Landrigan mentioned four chemicals for which exposure during pregnancy increased the risk of autism. The data on antidepressants came out after he had made his comments. That makes at least five, and there are thousands more to test. If one wants to subscribe to the environmental hypothesis, there is quite a bit of supporting data.

The damage during pregnancy from direct exposure can be addressed by more aggressive approaches to limiting access by pregnant, or potentially pregnant, women. But what does one do if the levels of chemicals encountered in the water we drink and the food we eat can also be a risk factor. We already know that antidepressants and other chemicals are at sufficient concentrations to harm fish. What level of exposure is required to damage a fetus? How would one even know?

One hopes Landrigan’s study is successful, but twenty years is a long time. We may not have that much time to spare.

Saturday, October 8, 2011

Our Poisoned Waterways: Endocrine Disruptors, Intersex, Fish, and Humans

Alex Prud’homme provides a comprehensive overview of the issues associated with our water supplies in his book: The Ripple Effect. Of particular concern is the buildup of chemicals, both medical and industrial, in our water systems. Prud’homme points out that essentially every chemical used ends up in our water supplies. Every time we take a shower or flush a toilet we are adding to a chemical stew that is accumulating. Every storm washes fertilizers, pesticides, manure, and industrial chemicals from our streets and fields into our water sources. We know very little about how most of these chemicals affect our health, and almost nothing about how they might work in combinations. He provides this context.
"....consider that over sixty thousand different types of chemicals are used in America each year, yet the EPA has assessed the toxicity of only a few of them. By 2000 the EPA’s list of regulated chemicals had steadily climbed to ninety-one, but then the list suddenly stopped growing. Since then, roughly seven hundred new chemicals have been introduced to the marketplace every year, but the agency has not added a single new substance to its restricted list."

It is becoming clear that these chemicals are attaining concentrations where effects can be observed. Prud’homme tells of a condition known as intersex that is becoming increasingly common in fish.
"Intersex, in humans and other animals, is the presence of intermediate or atypical combinations of physical features that usually distinguish female from male."

Prud’homme tells of investigators trying to understand fish kills in the Potomac River.

"When they sliced open the testes of the bass....discovered clusters of immature eggs nestled where only sperm should be. This known as intersex."

Intersex can occur in both humans and animals. In this case they found that nearly all the male smallmouth bass in the Potomac and its tributaries suffered from the condition. Something in the water had to be causing it. In 2009 the USGS studied 16 types of fish in 111 locations across the country. The only place where they did not encounter fish suffering from intersex was in the Yukon basin in Alaska where there are few people and little of their waste materials.

What could cause such transformations? The evidence points towards endocrine disruptors, chemicals that can cause a great deal of damage.

"Endocrine disruptors are chemicals that interfere with endocrine (or hormone system) in animals, including humans. These disruptions can cause cancerous tumors, birth defects, and other developmental disorders. Specifically, they are known to cause learning disabilities, severe attention deficit disorder, cognitive and brain development problems, deformations of the body (including limbs); sexual development problems, feminizing of males or masculine effects on females, etc. Any system in the body controlled by hormones, can be derailed by hormone disruptors. The critical period of development for most organisms is between the transition from a fertilized egg, into a fully formed infant. As the cells begin to grow and differentiate, there are critical balances of hormones and protein changes that must occur. Therefore, a dose of disrupting chemicals can do substantial damage to a developing fetus (baby). Whereas, the same dose may not significantly affect adult mothers."

Prud’homme suggests many possible sources for the chemicals affecting fish.

"....a prime suspect is high levels of estrogen in the water....Synthetic estrogens come from pharmaceuticals such as birth control pills, or agricultural runoff loaded with pesticides, or industrial runoff laced with plastics. Also, a group of compounds are known as estrogen mimics, the chemical structure of which allows them to act like estrogen. These range from herbicides to personal-care products such as antibacterial soap, and even perfume. Indeed, so many chemicals show varying degrees of estrogenic activity that methods to identify them are still being developed."

The evidence is persuasive, but still circumstantial. It prompted a Karen Kidd and her collaborators to perform an experiment in a lake in Canada set aside for these kinds of studies. They doped the lake with a component common in birth control pills. The concentration was tuned to reproduce the levels of such compounds found in waterways. The results:

"We conducted a 7-year, whole-lake experiment at the Experimental Lakes Area (ELA) in northwestern Ontario, Canada, and showed that chronic exposure of fathead minnow....led to feminization of males through the production of vitellogenin mRNA and protein, impacts on gonadal development as evidenced by intersex in males and altered oogenesis in females, and, ultimately, a near extinction of this species from the lake. Our observations demonstrate that the concentrations of estrogens and their mimics observed in freshwaters can impact the sustainability of wild fish populations."

Prud’homme is moved to ask this question.

"....if these chemicals are affecting the endocrine systems of fish, which are basically the same as the endocrine systems of humans, then couldn’t we face some of the same negative health effects as fish?"

A good question indeed! We are seeing a number of conditions beginning to grow more common in our children: Autism, other psychological disorders, asthma, obesity, food allergies.... If exposure to chemicals at the observed levels can cause harm to fish, couldn’t they also cause harm to a tiny fetus in the process of constructing a new human?

It is time to begin worrying more about these issues. Instead of threatening the EPA for taking actions, we should be demanding that it become more proactive. Our children are at risk.

Friday, October 7, 2011

The United States and Its "Medieval" Homicide Rates

We recently discussed Elizabeth Colbert’s article in The New Yorker, Peace in Our Time: Steven Pinker’s history of violence. The purpose of the article was to investigate Pinker’s claim that mankind was tending to a less violent existence and this correlated with fundamental changes in our behavior. In the process, violent death rates were tabulated to the degree possible.

Data seems to indicate that prehistory was rather dangerous with evidence of violent deaths in the 10-50% level. These numbers were obtained from examining ancient burial grounds. Data for European cities date back to medieval times.

"An examination of English court records showed that in the fourteenth century London’s homicide rate was around fifty-five per hundred thousand, and Oxford’s a hundred per hundred thousand. A study of coroners’ records found that in the fifteenth century the homicide rate in Amsterdam hovered around fifty per hundred thousand, and a recent survey of medical records from Italy suggests that in the late sixteenth century Rome’s homicide rate ran to between thirty and seventy per hundred thousand."

These cities now have homicide rates around 1-2 per 100,000. As Colbert suggests

"Western Europe is not only the safest place to live in the world today; it is probably the safest, most peaceful place in the history of humankind."

One of the contrasts Colbert draws to question Pinker’s thesis is the rate of homicides in the United States. The data would indicate that we are not a very homogeneous country when it comes to violence. Our equivalent numbers vary considerably. But we do have some cities that are positively "medieval" in terms of violent deaths (per 100,000 in 2010).

New Orleans   49.1
St. Louis         40.5
Baltimore        34.8
Detroit             34.5
Newark            32.1

On the other hand we have large cities that are relatively peaceful, although far from European standards.

New York     6.4
Los Angeles 7.6
Denver          3.6

One of the more surprising data points comes from El Paso where a value of 0.8 homicides per 100,000 people is tallied. Why is this surprising? El Paso is just across the border from Juarez. Ed Vulliamy, in his book, Amexica, describes Juarez as

"....the world’s most murderous city, with 192 homicides per 100,000 citizens."

One would believe, from politicians pontificating and the press passing on whatever it is told, that lives of border citizens are endangered by the violence in Mexico. Either the data on El Paso is incorrect, or what we are led to believe is just not true.

It would seem that many of our cities are closer to Juarez in terms of violent acts than to the peaceful European cities. There are certainly many explanations that can be offered to explain our large number of homicides, and presumably, each city has its own story to tell, but the net result is rather depressing.

Thursday, October 6, 2011

Why We Need the EPA: Lead Poisoning, Intelligence, and Crime Rates

Hardly a day passes when there is not yet another report warning of the potential harm from chemicals we are adding to our environment. Our children seem to be the most at risk as conditions such as autism become more common. Yet, the Republicans continue to threaten to defund or even eliminate the Environmental Protection Agency (EPA), bellowing claims that environmental regulations increase costs and cause the loss of jobs. These assertions always involve ignoring the total cost of a given action. Jobs lost because of increased costs are easy to count, but the costs incurred because a person became sick, disabled, or died due to exposure to hazardous materials are never considered.

I recently came across an interesting reminder of the decision to phase out lead in gasoline beginning in the 1970s. It must have been a very expensive proposition for the country in the short-term, but it may have been one of our smartest long-term decisions. Children were particularly sensitive to lead exposure; exhibiting developmental disorders, impaired intelligence, and increased aggressive responses. Consider this reference to work performed by Dr. Philip Landrigan.

"In the early 1970s, he studied the IQs of children in El Paso, Texas, where a lead smelter was operating. His results showed 60% of those children had lead poisoning, and that even low-level lead poisoning was causing irreparable harm to their brains. His research prompted Congress to crack down on lead pollution, banning or reducing its use in gasoline, paint and ultimately toys and other products. Those actions have reduced lead poisonings in America by 90%, raised American children's IQs by an average of six points, and injected $200 billion annually into the economy that had been lost to diminished economic productivity."

Can one think of an easier path to raising IQs by six points?

One tends to think of the issue of removing lead from the environment as a thing of importance in the past, but I recently encountered a reminder that the decision made in the 1970s may be a gift that just keeps on giving. The Economist published an article discussing the continuing fall in US crime rates. This graph was provided.

The author was particularly interested in the fact that the crime rate continues to fall even during the current difficult times when so many are in need. A number of suggestions were presented to possibly explain this consistent decline since about 1990. One involved the research of the economist Jessica Wolpaw Reyes.

Reyes published a paper in 2007 that drew a connection between exposure to lead and crime rates. This is from her abstract.

"Childhood lead exposure can lead to psychological deficits that are strongly associated with aggressive and criminal behavior. In the late 1970s in the United States, lead was removed from gasoline under the Clean Air Act. Using the sharp state-specific reductions in lead exposure resulting from this removal, this article finds that the reduction in childhood lead exposure in the late 1970s and early 1980s is responsible for significant declines in violent crime in the 1990s, and may cause further declines into the future."

Violent crimes tend to be committed by young adults. If there was a correlation between crime and lead exposure, then there would be approximately a twenty year time lag between childhood exposure and criminal response. Her analysis produced this graph.

This may not provide conclusive proof of the correlation, but it certainly is suggestive. And it is certainly pleasant to entertain the notion that crimes will continue to diminish in the future.

We need to protect ourselves from the poisoning of our water, food, and air. So protect the EPA and give it more people and money!

Wednesday, October 5, 2011

Atrociology: Are We Becoming Less Violent?

Elizabeth Kolbert provides an interesting article in The New Yorker that discusses the thesis of Harvard psychology professor Steven Pinker that the long-term perspective of history indicates that the propensity for violent action is on the decline.

Pinker’s contentions are to be found in his book: The Better Angels of Our Nature: Why Violence Has Declined. Kolbert uses the term atrociology to cover the types of studies that would attempt to tally violent deaths throughout history. There are, in fact, data to support Pinker’s thesis.

Prehistoric tallies of violent deaths come mostly from examining remains found in prehistorical burial grounds. Kolbert mentions examples of studies that indicate violent death rates of 10-50%. A more firm set of data comes from records that survive for cities going back to medieval times. Kolbert quotes results from a number of European cities for the period extending from the fourteenth to the sixteenth centuries that indicate a murder rate of about 50-100 per 100,000 of population. The homicide rate in the same cities today is about 1-2 per 100,000.

Clearly, fewer murders are being committed now than in the past, and there is a definite downward trend. Pinker strives to explain this decline.

"Pinker doesn’t just want to prove that rates of violence have fallen; he wants to explain why. By his own reckoning his theory features ‘six trends, five inner demons, four better angels, and five historical forces’."

Kolbert tries her best to give a short summary of what Pinker is proposing. The major elements changing mankind’s behavior are associated with the processes of socializing the human animal into organizational structures that by force, or by peer pressure, can constrain individual behavior. This is the standard story of social evolution from small groups to tribes, to cities, and to states. Pinker seems to believe this process of socialization will generate fundamental changes in the nature of human response. He is quoted as saying:

"One would expect that as collective rationality is honed over the ages, it will progressively whittle away at the shortsighted and hot-blooded impulses toward violence, and force us to treat a greater number of rational agents as we would have them treat us."

Pinker provides a service by collecting and presenting interesting data, but there is nothing new in the declaration that violence has decreased over the years. That is obvious. To justify a 700 page book he has to convince the reader that "the better angels" are really more in control of mankind now than they were in the past.

Kolbert easily discredits Pinker’s assertion that mankind has already changed, or is in the process of fundamentally changing its nature. She points out that while Europeans were learning how to behave at home, they were quite willing to go to their colonies and visit murder and mayhem on the local populations. She also suggests that World Wars I and II were not to be explained away as historical bumps in the road, generated by a few reckless individuals.

While it is true that socialization can constrain behavior, it is unlikely that a few generations of socialization can so easily suppress genetically wired impulses produced by thousands of generations of evolution. A more correct view of the lessons of World War I and II would be that war forces men to commit violent acts, but by removing the constraints of society, it also allows them to be violent. The chaotic situation in Eastern Europe after the outbreak of the Second World War could be described as primeval tribal warfare as the various ethnic groups tried to kill each other off while organized armies marched back and forth. This ethnic violence only stopped after the war when the Allies marched people back behind their national boundaries and reestablished the control of society. This was behavior that is not indicative of any great fundamental progress on the part of humanity.

To take an example closer to home, consider the findings of Joshua Phillips in his book, None of Us Were Like This Before: American Soldiers and Torture. Phillips concluded that well-behaved, well-trained, and well-intentioned young men—when released from the normal societal constraints—can and did resort to violence in dealing with citizens of Iraq and Afghanistan. He showed that abuse and torture were wide-spread and not associated with any personal threat to the soldiers, nor to any direct orders. Giving men absolute power over other men will generate spontaneous acts of violence that can be triggered by mere boredom or frustration. Having the opportunity—with no threat of consequences—seems to be all it takes. This does not make our soldiers evil, but it does indicate that they are human beings—animals that need to be constrained.

The benefits of modern society in creating a safe environment for its citizens should be appreciated, but beware the day when society falters.

Tuesday, October 4, 2011

What the Internet Does to Us

Many books and articles have been written of late about the effect the instant information and instant diversions of the internet have on our lives, on our thoughts, and on our brains themselves. Opinions vary from concluding the internet has had a terrible effect and it will only get worse, to contending the internet has been fantastic and it will only get better. Adam Gopnik has written a very entertaining and perceptive revue of a number of the recent books on the topic in an article in The New Yorker: The Information: How the internet gets inside us.

The doomsters are the more interesting. One author claimed that the use of the internet, and its ability to rapidly switch from one topic to another, was rewiring his brain leaving him with an addiction to this rapid access to information. Others, more convincingly, focus on the issue of attention span. Many of us have eureka moments when the solution to a problem pops into our mind almost out of nowhere. But these moments only come because we have concentrated at length on all aspects of the problem, retired exhausted, and consigned the issues to our subconscious—which seems to be a lot smarter than we are. The valid argument is made that using the internet as a source of knowledge deprives us of the quiet solitude that is necessary to think deep thoughts, and is necessary to ingest, to savor, and to lay claim to the meaning of the written word.

The cheerleaders tend to focus on the mind-extending potential the internet provides. The claim is made that having near instantaneous access to more information than we could possible control ourselves will make us more productive and intellectually more powerful.

The enthusiasts seem to be overhyping the potential, and the doomsters are, perhaps, too worried. Only a small percentage of the population has ever been interested in pursuing knowledge intently once freed of academic demands. They will continue to find their knowledge one way or another. Those who fritter away their lives on the internet are the same who frittered away their lives in other modes pre-internet.

We are reminded of the danger and futility of apocalyptic projections. Socrates claimed that the invention of written language would cause atrophy of the memory and diminish cognitive capability. The invention of the printing press was expected to unleash a torrent of mindless documents that would distract all from the study of the classics. And then there was television, supposedly the greatest destroyer of minds.

So life goes on, and, as always, technical evolution is better for some and worse for others. Gopnik points out that the real change induced by the internet is the manner in which we comport ourselves while on it.

"What we live in is not the age of the extended mind but the age of the inverted self. The things that have usually lived in the darker recesses or mad corners of our mind—sexual obsessions and conspiracy theories, paranoid fixations and fetishes—are now out there: you click once and you can read about the Kennedy autopsy or the Nazi salute or hog-tied Swedish flight attendants. But things that were once external and subject to the social rules of caution and embarrassment—above all, our interactions with other people—are now easily internalized, made to feel like mere workings of the id left on its own. (I’ve felt this myself, writing anonymously on hockey forums: it is easy to say vile things about Gary Bettman, the commissioner of the N.H.L., with a feeling of glee rather than with a sober sense that what you’re saying should be tempered by a little truth and reflection.) Thus the limitless malice of Internet commenting: it’s not newly unleashed anger but what we all think in the first order, and have always in the past socially restrained if only thanks to the look on the listener’s face—the monstrous music that runs through our minds is now played out loud."

So we log in and become who we really are, not who we pretend to be? There is some truth to that, but there are some who think that there are advantages to being unleashed on the internet. This article describes a teacher’s experience.

"Ms. Davidson herself was appalled not long ago when her students at Duke, who produced witty and incisive blogs for their peers, turned in disgraceful, unpublishable term papers. But instead of simply carping about students with colleagues in the great faculty-lounge tradition, Ms. Davidson questioned the whole form of the research paper. ‘What if bad writing is a product of the form of writing required in school — the term paper — and not necessarily intrinsic to a student’s natural writing style or thought process?’

So a bumbling, incoherent student can become a clever, witty, and eloquent writer on the internet when freed from the shackles of academic pursuits. Poor students everywhere rejoice, you need only drop out and start a blog.

Before I started writing posts for this blog I never wrote much of anything. I was surprised at how clever, incisive, and eloquent I seemed to be. There was definitely no prior evidence that this might be the case. I thought perhaps I had been possessed by one of those Muse things, or perhaps it was the wine I sipped while I wrote. It is rather disappointing to think that the transformation was merely due to anonymously dwelling on the internet.

In any event, all the above is speculation. There are some hard facts about the effects of sitting in front of a computer for hours navigating around the digital world. Roni Caryn Rabin reports in the New York Times on some recent research.

"The latest findings, published this week....indicate that the amount of leisure time spent sitting in front of a screen can have such an overwhelming, seemingly irreparable impact on one’s health that physical activity doesn’t produce much benefit."

"The study followed 4,512 middle-aged Scottish men for a little more than four years on average. It found that those who said they spent two or more leisure hours a day sitting in front of a screen were at double the risk of a heart attack or other cardiac event compared with those who watched less. Those who spent four or more hours of recreational time in front of a screen were 50 percent more likely to die of any cause. It didn’t matter whether the men were physically active for several hours a week — exercise didn’t mitigate the risk associated with the high amount of sedentary screen time."

It may come as a surprise to some, but evolution did not place much value on the ability to sit still for long periods of time. That was a skill that contributed little to survivability, so it is not too surprising that our bodies might respond in unexpected ways to that modern practice.

"One possible mechanism, demonstrated in animal studies, is that being sedentary may affect lipid metabolism. Prolonged inactivity appears to sharply reduce the activity of an important enzyme called lipoprotein lipase, which is responsible for breaking down circulating blood lipids and making them available to muscles for energy, Dr. Stamatakis said. Lowered enzyme activity leads to higher levels of fats and triglycerides in the blood, and to a higher risk of cardiovascular disease. Exercise has very little impact on the enzyme’s activity, he said."

Scary stuff! I wonder how many people died because they spent hours sitting with a book in hand. How many people did Proust kill?—or Tolstoy? Perhaps the age of the mobile device will save us from an early grave—unless many are run over while diverted by a brief moment of enlightenment.

Monday, October 3, 2011

Why We Need Manufacturing Jobs

There has been a focus by the Obama administration on creating more activity in the manufacturing sector. A number of items in the initial stimulus package were essentially long-term technology investments aimed at establishing a stronger economic base. For a variety of reasons, criticism has been levied at the notion of long-term investments and at the focus on manufacturing. Some thought the money could have produced more jobs and quicker if spent in other ways. Others were unhappy at the notion of the government picking areas in which effort should be focused. Manufacturing has been viewed as a no-win area in our economy where investments would be wasted. The administration has persisted in pushing for funds to encourage manufacturing as a means by which jobs can be created. Is this a proper strategy?

Geoff Colvin produced a column in which he delivered a resounding "No" for an answer. His claim is that the focus should be on service industries. He rightly claims that manufacturing is driven by ever increasing efficiency and increasing productivity, and that the number of jobs per unit of activity has gone down and will continue to go down even if manufacturing continues to grow.

"But one thing we know for sure is that the more advanced that manufacturing becomes, the fewer people it employs. At a time when the country desperately needs more jobs, manufacturing is obviously not the place to look for them. As the President meets with his Jobs and Competitiveness Council, listen carefully to what he says. A delusional policy for America's No. 1 problem is the last thing we need."

There are several things wrong with Colvin’s suggestion that the administration ignore manufacturing and focus on services. While manufacturing can be characterized as directly creating few jobs, it has to be allowed that it creates relatively well-paid jobs. At the same time the service jobs that are well paid are very few. Finance creates wealth but not much employment. Most service jobs being created are low-paying positions.

Jon Gertner addresses Colvin’s concerns in an article in the New York Times aptly titled Does America Need Manufacturing? Colvin’s focus is the initiative to make the US competitive in advanced battery manufacture for the electric cars of the future.

"On both sides of the world, the fundamental appeal of expanding manufacturing is jobs. It is a curiosity of modern life that information companies can create extraordinary social disruptions and vast shareholder wealth but relatively few jobs. Facebook has about 2,000 employees worldwide. Google has about 29,000. Even in its new, slimmed-down state, General Motors, a decidedly less valuable company, has about 200,000 employees. What’s more, that number represents only a fraction of the people behind the production of a G.M. car. ‘When you’re manufacturing anything, even if the work is done by robots and machines, there’s an incredible value chain involved,’ Susan Hockfield, the president of M.I.T., says. ‘Manufacturing is simply this huge engine of job creation.’ For batteries, that value chain would include scientists researching improved materials to companies mining ores for metals; contractors building machines for factory work; and designers, engineers and machine operators doing the actual plant work. By some estimates, manufacturing employs about 65 percent of America’s scientists and engineers."

Colvin makes the mistake of ignoring the peripheral activities that make manufacturing possible and my not show up as a "manufacturing" job. In particular he fails to recognize the cumulative beneficial effects of growing new technologies and intellectual capital in order to produce competitive manufactured products. Gertner refers to an influential article by Harvard professors Gary Pisano and Willy Shih.

"Pisano and Shih maintain that U.S. corporations, by offshoring so much manufacturing work over the past few decades, have eroded our ability to raise living standards and curtailed the development of new high-technology industries."

"When I spoke with Pisano, he noted that industries like semiconductor chips — the heart of computers and consumer electronics — require the establishment of ‘an industrial commons,’ the skills shared by a large, interlocking group of workers at universities and corporations and in government. The commons loses its vitality if crucial parts of it, like factories or materials suppliers, move abroad, as they mostly have in the case of semiconductors. At first the factories leave; the researchers and development engineers soon follow."

"The most punishing effect, however, may be the one that can’t be measured — the technologies and jobs that aren’t created because the industrial ecosystem is degraded."

We seem to have drifted into a stage where we could be creative in conceptualizing and designing high-value products that could take advantage of cheap labor overseas without losing anything in the marketplace. The cheap labor has now become more expensive and the countries we would ship our designs to for production are now in a position to compete with us in R&D and design. If we do not reestablish a healthy domestic manufacturing base, we may find ourselves in a position where we need them but they don’t need us.

Gertner describes our entry into the battery business as requiring us to purchase the technology in total from South Korea.

"When I asked Jason Forcier, the head of A123’s automotive division, why the company went to Asia to make its products, Forcier said he had no choice. ‘That’s where the supply base was,’ he said. "That’s where the know-how was — it was nonexistent in the U.S.’"

"Repatriating a high-tech manufacturing plant to the United States is not simply a matter of hiring the local talent. It requires good-old foreign know-how. ‘We call it "copy exact,"’ Forcier said. ‘We bought a company in Korea that had the technology around this type of battery and had developed the manufacturing process there. We basically brought that here, copied it exactly and scaled it up.’ A123 also brought a team of six Korean engineers to help transfer the technology to the U.S. and sent a team of Americans to Korea to learn."

The battery initiative may not directly produce a number of jobs sufficient to make a dent in our unemployment rolls, but it will establish a technical base that can be applied in other areas, and it will have kept many billions of dollars in circulation in this country rather than being shipped to other countries. Lessening the amount of funds that are bled out overseas will do wonders for our economy and for the job picture.

As for Colvin’s idea of focusing on service activities, if we have to choose between providing one $24 an hour job or three $8 an hour jobs, which choice is best for the country? I will vote for the former. I would rather create one family-sustaining job, than three that will require assistance from Food Stamps, Medicaid, and the Earned Income Tax Credit for survival.

Sunday, October 2, 2011

Post-Recession Growth and Faith-Based Economics

If a person says "I cannot prove what I believe, but I choose to believe it anyway," he may be describing his religious faith. If a person says the same thing about his economic beliefs, who might you be talking to?—a Republican of course. The current urgency associated with job creation has again caused the two parties to separate into fact-based and dogmatic camps. The Democrats say job creation is lagging because demand is lagging. It has been revealed to Republicans that job growth is lagging because cash-laden corporations are uneasy about the future due to the fear and uncertainty associated with government regulation.

Lawrence Mishel addresses this issue with an article on the Economic Policy Institute site: Regulatory uncertainty: A phony explanation for our jobs problem. Mishel easily demolishes the Republican revelations and demonstrates that this recovery has many of the same characteristics as recent recessions. In terms of job creation, the weakest recovery of all was from the 2001 recession under the Republican, antiregulatory Bush administration.

Mishel provides us with this graph of investment activity covering several recessions.

"The data show that investment has increased more in this recovery than in the prior two recoveries and roughly the same as that of the 1980s recovery. It is interesting to note that there was no growth in investments (as a share of GDP) in the George W. Bush recovery. That means that this recovery, with Obama regulations pending, is far more investment-led than the recovery under the deregulatory Bush administration."

This graph presents data on job growth subsequent to the ends of the given recessions.

"The three recoveries since 1991, however, had very little job growth, at least at first, and all have been referred to as "jobless" recoveries. There was much faster employment growth in the 1980s recovery—mostly because the Federal Reserve had much more room to support this recovery through lower interest rates than it has had during the post-1980s recessions (and the 2000s recoveries in particular). There is certainly nothing special about job growth in the current recovery that stands out from the 1991 and 2001 recoveries to indicate a special regulatory-caused job problem."

"The most unusual aspect of this recovery is that government jobs have declined by roughly 600,000 (2.6 percent), whereas government jobs grew in the prior recoveries. Obviously, the loss of government jobs is not the consequence of fears of regulation. Despite the loss of government jobs in this recovery but not the last one, there has been more job growth overall (public- and private-sector) in the first 25 months of this recovery (up 0.5 percent) than in the corresponding period in the 2001 recovery (when jobs fell 0.4 percent)."

Given the fact that this recovery is tracking other recent recoveries—why all the angst? It is because many people still do not realize, or choose to admit, that this, the Great Recession, was a Republican-orchestrated catastrophe causing economic damage on a scale not seen since the Great Depression. The magnitude of the event was made clear by Businessweek in this graph.

If you are unhappy with the current situation, blame it on the high priests of Republican orthodoxy who created this mess, not the current administration which seems to be performing about as well as possible. Dogma and facts have never gotten along well. All we know for sure is that faith-based economic policies will inevitably lead us to another disaster.

Saturday, October 1, 2011

Grameen Bank Comes to the USA—It Goes Where the Poor Are

There was an interesting article in The Economist describing the lack of traditional banking services available to the poor. The claim was made that one in four US households either have no banking means or they combine traditional banks with other financial service providers. Alternatives to banks are generally much more expensive, hitting hard those who can least afford the cost.
"Small wonder that non-bank services are booming. Each year Americans buy $75 billion in money orders from outlets other than banks or post offices, and cheque-cashers convert some $60 billion. Revenues from pre-paid cards, remittances, money orders, cheque cashing and payday lending were $338 billion in 2010 and may well rise to $520 billion by 2015. Big-box retailers are getting in on the act, too: K-Mart, Best Buy and Walmart all offer bill-paying stations to their unbanked customers. Walmart also offers reloadable pre-paid credit cards and cheque-cashing, which costs $3 for a cheque up to $1,000 and $6 for cheques between $1,000 and $5,000."

There seems to be quite a bit of money in play here, but the traditional banks don’t seem particularly interested in capturing a large number of small accounts. It is rather easy to turn people away with minimum balance requirements and the various fees that are often waved for wealthier customers.

What was of particular interest in the article was to discover that the Grameen Bank began setting up business in the US in 2008 under the name Grameen America. Grameen was initially set up in Bangladesh to bring banking to those who were ineligible for loans and services from established sources. The beauty of the system Grameen founded was the way that was established to provide collateral for loans to people who had no physical assets. It accomplished this by establishing social collateral. Each person who applied for a loan had to team with a number of others desiring loans. One person received a loan with the understanding that the others would not receive theirs if the first one defaulted. This creates peer pressure on the first to perform well, and provides a network for support if problems arise. The system worked amazingly well and provided the originator of the concept, Muhammad Yunus with the 2006 Nobel Peace Prize. One would have thought that it deserved the economics prize as well. It is hard to recall any concept as useful as this coming out of academic studies in the field.

The article starts with the tale of a person named Sabina in Queens who sold flowers from a street cart. With a Grameen loan of $1500 she has now moved into a store front and appears to be thriving. Grameen seems to be filling a need as great in the US as it was in Bangladesh.

"Since opening its first American branch in January 2008, Grameen has found fertile ground. It has lent more than $25m to 7,300 borrowers. At 15%, interest rates are high, but far less than a loan shark or payday lender would charge (the annualised interest on a payday loan is typically 400%, sometimes twice that), and there are no other fees or collateral required. Grameen America’s repayment rate is around 99%. It now has branches in four of New York’s five boroughs, and plans to open in Washington, DC, North Carolina and California. It also has one in Omaha and Indianapolis."

Loans are provided for the purpose of starting or expanding a small business venture like Sabina’s. Savings plans and other financial services are also provided. A similar method of developing social capital as collateral has been utilized.

This makes a fascinating example of globalization in action. Although we probably lose more than we gain, occasionally there are some good things that can be identified. Wanting to leave on a positive note, let’s see how Sabrina is doing.

"Having moved from shopping trolley to shop-front, Sabina has built a website advertising her flower-arranging and bought a refrigerator to keep the flowers fresh. She hopes to buy a delivery van next year and eventually to open another shop in the suburbs. Sometimes macrodreams start with microloans."
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