Thursday, February 28, 2013

Capitalism, Education, and Inequality

The lead article in the latest issue of Foreign Affairs is written by Jerry Z. Muller and is titled Capitalism and Inequality. Muller’s intention is to provide a history of the development of capitalism that leads to the conclusion that economic inequality and insecurity are inevitable byproducts. Muller then argues that people of all political persuasions must recognize this inevitability and take steps to ensure that the inequality does not exceed the bounds at which social unrest becomes possible.
"Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it -- because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords. Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism -- because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large."

"Contemporary capitalist polities need to accept that inequality and insecurity will continue to be the inevitable result of market operations and find ways to shield citizens from their consequences -- while somehow still preserving the dynamism that produces capitalism's vast economic and cultural benefits in the first place."

Note the comment stating that inequality is exacerbated by attempts to counter it. Is this claim fact or opinion? Is it meant to enlighten the reader or is it just another component of the campaign to convince readers that inequality is not as bad as it appears?

Muller’s description of the development of capitalism and the side effects of inequality and uncertainty is crisp and compelling. However, he injects some conclusions about the causes and degree of economic inequality that seem more like personal observations than history. In particular, his description of the role played by the education system seems designed to convince the reader that our schools are doing the job of rewarding those most capable, therefore we need not worry about the unequal educational outcomes.

He makes this statement about the attributes required for success, which he refers to as human capital.

"All of this has been taking place during a period of growing equality of access to education and increasing stratification of marketplace rewards, both of which have increased the importance of human capital. One element of human capital is cognitive ability: quickness of mind, the ability to infer and apply patterns drawn from experience, and the ability to deal with mental complexity. Another is character and social skills: self-discipline, persistence, responsibility. And a third is actual knowledge. All of these are becoming increasingly crucial for success in the postindustrial marketplace."

Note that he uses the term equality of access to education, not equality of educational opportunity. He will later confuse those two quite different things.

Muller seems to believe that we are operating in a perfect meritocracy where the more capable are rewarded and the less capable are not. He concludes that education, by providing equality of opportunity, serves to enhance the inequality of outcomes.

"The fact is, however, that the greater equality of institutional opportunity there is, the more families' human capital endowments matter. As the political scientist Edward Banfield noted a generation ago in The Unheavenly City Revisited, ‘All education favors the middle- and upper-class child, because to be middle- or upper-class is to have qualities that make one particularly educable.’ Improvements in the quality of schools may improve overall educational outcomes, but they tend to increase, rather than diminish, the gap in achievement between children from families with different levels of human capital. Recent investigations that purport to demonstrate less intergenerational mobility in the United States today than in the past (or than in some European nations) fail to note that this may in fact be a perverse product of generations of increasing equality of opportunity."

The mechanism by which the middle and upper classes produce more exceptional outcomes is partly by genetic heredity, but also by being better at creating human capital. Muller points to the family as the main site for capital development.

"The role of the family in shaping individuals' ability and inclination to make use of the means of cultivation that capitalism offers is hard to overstate. The household is not only a site of consumption and of biological reproduction. It is also the main setting in which children are socialized, civilized, and educated, in which habits are developed that influence their subsequent fates as people and as market actors. To use the language of contemporary economics, the family is a workshop in which human capital is produced."

Muller concludes that attempting to counter this inequality in educational outcomes is destined to fail.

"Even if some or all of these measures might be desirable for other reasons, none has been shown to significantly diminish the gaps between students and between social groups -- because formal schooling itself plays a relatively minor role in creating or perpetuating achievement gaps."

Nothing one might due to try to modify the unequal outcomes, or, to use the phrase Muller prefers, achievement gaps, will work because the child enters school preordained for a certain level of success.

"The gaps turn out to have their origins in the different levels of human capital children possess when they enter school...."

This is a rather astounding statement given his earlier claim that human capital is developed in the family and it includes social attributes and knowledge as well as cognitive capabilities. One would not expect "self-discipline, persistence, responsibility" to have been imprinted already in a five-year-old.

Muller lists a few programs such as Head Start and the Harlem Children’s Zone project as showing some potential to alleviate this gap in human capital in kindergarten, but writes them off as being ineffective, incompatible with scaling to large sizes, or, incredibly, as being not worth the investment.

"Many programs show short-term gains in cognitive ability, but most of these gains tend to fade out over time, and those that remain tend to be marginal. It is more plausible that such programs improve the noncognitive skills and character traits conducive to economic success -- but at a significant cost and investment, employing resources extracted from the more successful parts of the population (thus lowering the resources available to them) or diverted from other potential uses."

Muller seems to be assuming that cognitive skills, things that can be tested and graded, are the only things that are important in education. He admits that non-cognitive skills (self-discipline, persistence, responsibility) can be developed outside the family environment, and that they are beneficial for success, but then seems to suggest that they are too expensive. But how does one take advantage of cognitive skills without having learned self-discipline, persistence, and responsibility?

Muller seems willing to throw away the intelligent children that come from a disadvantaged background and lack those noncognitive skills that he says are so important; or, perhaps, he assumes that if they come from a disadvantaged background they can’t be intelligent—the meritocracy would have already promoted their genes to at least middle class status.

There is emerging a school of thought that claims the non-cognitive traits—the ones Muller agrees can be taught—are the ones most critical for success. An article in The Economist reviews the content of a book by Paul Tough: How Children Succeed: Grit, Curiosity, and the Hidden Power of Character.

"The problem, he writes, is that academic success is believed to be a product of cognitive skills—the kind of intelligence that gets measured in IQ tests. This view has spawned a vibrant market for brain-building baby toys, and an education-reform movement that sweats over test scores. But new research from a spate of economists, psychologists, neuroscientists and educators has found that the skills that see a student through college and beyond have less to do with smarts than with more ordinary personality traits, like an ability to stay focused and control impulses."

"So non-cognitive skills like persistence and curiosity are highly predictive of future success."

The task then becomes one of learning how to develop these character traits. This seems a much more hopeful and realistic outlook to build a future on. In this view, the attributes of "self-discipline, persistence, responsibility" that Muller sees being generated in his middle-class homes, are even more important than he indicates.

Muller’s contention that our educational system provides equal access or equal opportunity is a perversion of the reality of our educational process. We discussed a number of ways in which our system of education seems designed to magnify inequality of outcomes rather than to equalize opportunity in Education and the Propagation of Inequality.

Muller’s notion that our capitalist system thrives because it operates in concert with a meritocratic society is either hopelessly naive or a mere genuflection before the established power structure. As Christopher Hayes so eloquently detailed in Twilight of the Elites: America After Meritocracy, what we think of as a meritocracy will always evolve to a system that works to preserve and pass on privilege. Those who are successful will do what is necessary to preserve their status and pass it on to family and friends.

After the last financial crisis, can anyone still believe that the best and the brightest are really in charge?


JERRY Z. MULLER is Professor of History at the Catholic University of America and the author of The Mind and the Market: Capitalism in Western Thought.

Tuesday, February 26, 2013

The Decline in Marriage Among Blacks: What Does It Portend?

Marriage rates seem to be in decline throughout the world. As the roles and choices available to women evolve in each society, it seems logical that the function of marriage would evolve also. 

Within the United States the decline in number of marriages persists throughout society, but the decline has been far greater within the black population than within that of other segments. An article in The Economist on the subject provided this chart.

Ralph Richard Banks has written a book investigating this phenomenon: Is Marriage for White People? The title comes from a comment delivered to Banks by a young black student. When Banks wished to discuss issues related to marriage, this young person apparently thought such events were sufficiently rare that the topic was rendered uninteresting. A better representation of the book’s contents is found in the subtitle: How the African American Marriage Decline Affects Everyone. Banks main interest is in evaluating the factors that are affecting marriage rates among middle-class blacks. He suggests that many of these same factors are at work in the white population and could eventually lead to similarly low marriage rates in that group.

The data in the chart above indicates that the marriage rate among blacks was much closer to that of whites in 1970 where the data begins. Banks goes back further and states that the marriage rate among black women was about 90% back in the 1950s. The steeper decline within the blacks indicates that societal factors contributing to a general decline apply to them, but there must be factors specific to them at work as well.

"....the African American marriage decline is not limited to the poor. It now encompasses the middle and upper-middle class, too, a grouping that I refer to simply, for the sake of convenience, as the middle class. Indeed, by some measures the racial gap in marriage is actually wider among the prosperous than among the impoverished."

"College-educated black women are twice as likely as their white counterparts to be unmarried."

Increased wealth should lead to an increase in probability of being married among men, but blacks do not follow that trend.

"For white men, as income increases so does the likelihood of marriage. But a black man who earns more than a hundred thousand dollars per year is less likely to have ever married than a black man who earns seventy-five thousand dollars per year. The highest earning black men are more than twice as likely as their white counterparts never to have married."

The society-wide factors affecting the marriage rate seem to be associated with the changing role of women in our society and a general diminishment in the perceived utility of marriage as an institution. Marriage had been a vehicle for establishing an economic and a childbearing relationship. In recent decades the emphasis has become more on establishment of a personal relationship between two individuals.

"The primary purpose of marriage, in the view of most Americans, is the establishment of a mutually fulfilling relationship, one in which understanding and emotional intimacy prevail. Marriage is now less a means of building a life and more a means of enjoying one’s life. More finish line than starting gate...."

Banks provides a succinct summary of what effect this changed view of marriage has had on the relationship market.

"Doctors used to expect to marry nurses; now they look to marry other doctors."

What is it specifically that affects marriage in the community of economically sufficient blacks?

"Black women confront a tighter relationship market than any other group of women because there are too few black men for them to marry."

Consider the relationship market faced by a college-educated black woman who is employed and economically independent. What does the market look like to her?

Finding a black man of equal education has become difficult.

"In 1970, roughly equal percentages of black men and women had graduated from college. By 1990, black women had moved ahead."

Banks is unable to pinpoint any simple explanation for this decline in black college males, but the mass incarceration of blacks clearly limits the number of young males who might have participated.

The net effect is huge.

" women vastly outnumber black men in college, where there are more than 1,400,000 black women, but fewer than 900,000 black men. Not only do more black women enter college, they outperform the men once they get there....Each year black women earn twice as many bachelor’s degrees as black men....In postgraduate education black women outnumber black men more than two to one."

The population disparity of equivalently educated males and females is bad enough, but two other factors make the situation even worse.

Marriageable males tend to disappear from the marriage market by marrying white women, while black women have resisted marrying whites. The number of interracial marriages by black males is significant, and the probability of interracial marriage increases with the education and economic status of the black male.

"....interracial marriage severely diminishes the pool of black men available to college-educated black women....Black men are between two and three times as likely as black women to marry someone of a different race. Estimates are that more than one out of five black men marry interracially, whereas fewer than one out of ten black women do."

Let’s use these numbers and derive a typical college-educated black male population faced by a black woman. If we start with 100 women, there are only 50 men. If 10% of the women marry out of their race and 25% of the males, then we are left with 90 women and 38 men. There are simply way too few men to go around. If these women are to find partners, they will have to look downward on the cultural and economic scales.

Recall that wealthy and well-educated black males are particularly unlikely to marry. Given the female-to-male ratio, it would seem there is little incentive to settle for a single relationship when there is the option for several satisfying relationships—all concurrent. Banks provides evidence that if a black woman wishes to have a relationship with a desirable black man, she may have to be willing to share him with others.

An educated, economically self-sufficient black woman faces a numerical obstacle that she shares with white women: the growing male to female divergence in educational and economic attainment. However, the significant interracial leaking of marriageable men is unique to black women. The disincentive for males to marry depends on a large overabundance of females, a situation far worse for blacks than whites.

Banks has suggested that the marriage trends in the black community might be precursors for the same developments in the white community. Although each segment of the population will develop unique social characteristics, just as those enumerated for the black community, the dominant driver seems to be the extent of the female to male ratio. Banks could be correct if males continue to slide relative to females.

This source provides college attendance data from 2007-8. The ratio of females to males is 59/41 for blacks, 53/47 for whites, 58/42 for Latinos, 51/49 for Asians, and 54/46 for all groups combined.

The overall female to male disparity on campuses is not as large as it is for blacks, but it is apparently large enough to have caused both males and females to alter their expectations in terms of the kinds of relationships they expect to have while in school. Banks discusses the evidence of this effect and others have described it as well. If these new experiences of college women become reproduced in the broader society, then Banks is likely to be correct.

If this is truly "the end of men and the rise of women," then there will be major changes in our society.

On the other hand, the Latino data suggests we might expect to see Latino marriage rates fall precipitously as well, but the chart above does not indicate that—yet.

Stay tuned.

Sunday, February 24, 2013

Trying to Measure the Value of Preschool Education

The notion that all four-year-olds should be able to participate in preschool class in preparation for entry into kindergarten is excellent. Unfortunately, this idea soon becomes subject to the standard cost-benefit analysis: what benefits accrue from the investment. In order to perform this analysis, one must have something to measure. And, of course, the easiest measures to obtain are the results from standardized tests. The author of an article in The Economist attempts to follow this path and is left rather perplexed.

The attempt is made to evaluate this data on the efficacy of preschool education produced by the OECD (Organization for Economic Cooperation and Development). Notice that the study explores the effect of greater than one year of preschool compared to no preschool. The data utilized are the reading proficiency results from an international test given to fifteen-year-olds in 2009.

A quick glance at this chart would suggest that in most countries preschool education has a rather large beneficial effect. A lingering glance would hopefully notice that the three countries in which little benefit is observed are the US, South Korea and Finland. The problem with interpreting this graph is that the students from Finland and South Korea are among the very best performers on this international test. Some explanation is therefore required. And what might these results mean for the US? Why is its experience so different from that of the majority of countries?

The danger in trying to draw conclusions from such a chart as this is that educational attainment is a function of many variables: preschool preparation, quality of teachers and curriculum, parental support, peer pressure from other students, and cultural importance attributed to education. If one is to plot years spent in preschool versus reading proficiency, one has to begin by assuming that all preschools are equal. This is followed by the assumption that either all the other variables are equal or that they are all unimportant for each student. Finally, one has to assume that all students in a country are equivalent in order that a meaningful average might be taken. The OECD people apparently tried to sort through some of these issues, but it is, ultimately, too difficult a task.

Consider the case of Finland. Finland does not even have the same concept of preschool as that dominant in the US. They relegate their children to a play and recreation curriculum , what we would call nursery school, until age six. Six-year-olds then enter a form of kindergarten in which they are encouraged to be inquisitive and taught how to "learn how to learn." Formal schooling begins at age seven. Reading instruction begins at age seven. This system works quite well for the Finns. Can one then conclude that preschool is unnecessary? No! What Finland’s system emphasizes is the importance of socialization in childhood development. It tries to insure that each child enters the school program with a similar rich experience base so that each has an equal opportunity. Finland also recognizes that not all children are equally mature at age five; waiting until age seven gives them a more equal chance to progress.

While Finland takes a relaxed approach and does not give standardized tests to their children until they approach high school age, South Korea seems to be very results oriented and is very demanding of its students in applying a "fiercely competitive exam culture." Perhaps, any differences in student performance at entry into the school system are overwhelmed by this highly competitive environment.

The peculiar results for the US may be nothing more than a matter of statistics. The OECD data relates to a test of fifteen-year-olds in 2009. These students would have had to be in preschool in 1998. State-supported preschools back then probably covered fewer than 10% of children. Those most likely to be in preschool at that time were those whose parents could afford a private school and the poor. The parents of the former group will take care of their children’s education, so it is not surprising that for them preschool might not make a great difference. One might expect a bigger effect for the poor who might be participating in the Head Start Program. One must remember that preschool is only one component of an education. If children from poor families receive benefits from Head Start, for those benefits to persist the children must then be provided an adequate learning environment in later years, a highly uncertain prospect in our country. Again, a great benefit from preschool may not be observed.

One must also recognize that most countries listed in the chart above are relatively small and culturally homogeneous. The US by contrast provides 50 different school systems in almost as many different social and cultural environments. These disparate systems produce disparate results. The best state systems produce students that test as well as those of any country in the world; the worst school systems test as poorly as the lowest ranked countries of the world. Conclusions based on averages over this ensemble are risky.

What do we learn from this discussion?

Preschool is important, but it must be part of a career of quality education provided in a supportive environment. The most important contribution of preschool might be, as Finland has recognized, to level the playing field so that all children can at least start out from the same point.

Wednesday, February 20, 2013

The Evolving Labor Market: Hiring Trends

Economists still insist on discussing the labor market as if such a thing exists in the form found in ancient textbooks: increase the cost of labor and unemployment will rise; decrease the cost of labor and employment will rise. Given the current glut of unemployed people looking for work, employers seem to have become more inventive in filtering out applicants using factors not directly related to cost. It is a buyer’s market and they seem determined to take advantage of it. These are trends that could render a large class of people unemployable.

Peter Cappelli has an article in the Wall Street Journal: Why Companies Aren’t Getting the Employees They Need. He warns us that we should not take too seriously the oft-heard claim that companies have jobs, but there are no qualified people to fill them.

"With an abundance of workers to choose from, employers are demanding more of job candidates than ever before. They want prospective workers to be able to fill a role right away, without any training or ramp-up time."

"In other words, to get a job, you have to have that job already. It's a Catch-22 situation for workers—and it's hurting companies and the economy."

This is a fundamental change in the way companies have traditionally conducted business. Cappelli uses the dot-com boom of the 1990s to make his point. At that time any warm body that could tap on a keyboard was considered an acceptable hire.

"Only about 10% of the people in IT jobs during the Silicon Valley tech boom of the 1990s, for example, had IT-related degrees."

Paul Krugman likes to use World War II to make the same point. All the trained people were sucked up by the Armed Forces, leaving behind the old, the young, and women—all mostly untrained. This "second string" managed the incredible surge in war material output.

Catherine Rampell provides an article in the New York Times: It Takes a B.A. to Find a Job as a File Clerk. She discusses the trend towards using a college degree as essentially a character filter. If one has what it takes to complete a four year college program then that person has probably demonstrated the characteristics companies are looking for in new employees.

"The college degree is becoming the new high school diploma: the new minimum requirement, albeit an expensive one, for getting even the lowest-level job."

"Economists have referred to this phenomenon as "degree inflation," and it has been steadily infiltrating America’s job market. Across industries and geographic areas, many other jobs that didn’t used to require a diploma — positions like dental hygienists, cargo agents, clerks and claims adjusters — are increasingly requiring one, according to Burning Glass, a company that analyzes job ads from more than 20,000 online sources, including major job boards and small- to midsize-employer sites."
"This up-credentialing is pushing the less educated even further down the food chain, and it helps explain why the unemployment rate for workers with no more than a high school diploma is more than twice that for workers with a bachelor’s degree: 8.1 percent versus 3.7 percent."

When there are hundreds of applicants for positions, employers can afford to be highly selective.

Peter Coy has produced an article in Bloomberg Businessweek: The Sting of Long-Term Unemployment. He points out that having a college degree and experience providing a perfect fit for a given position may still not be good enough. Coy discusses another disturbing trend: disdain for the long-term unemployed.

"The rate of short-term unemployment—six months or less—is almost back to normal. In January it was 4.9 percent of the labor force. That’s only 0.7 percentage point above its 2001-07 average. But the rate of long-term unemployment, 3 percent in January, is precisely triple its 2001-07 average, according to a Bloomberg Businessweek calculation based on Bureau of Labor Statistics data. (Those two rates—4.9 percent and 3 percent—add up to the overall unemployment rate of 7.9 percent.) A striking statistic: The long-term unemployed make up 38 percent of all workers without jobs, double the average share and just a few notches down from the 2010-11 peak of 45 percent."

Those unemployed for less than six months seem to be able to find jobs. Those unemployed for more than six months are having a difficult time finding work. Isn’t that interesting? Coy reports on the investigation by Rand Ghayad and William Dickens, economists from Northwestern University.

"Ghayad sent out fictitious résumés to employers in 50 metro areas to see how they reacted to long spells of unemployment. He found that an "applicant" out of work more than six months had little to no chance of being called back. The résumés of those out of work for less than six months drew more interest when they showed the applicants had relevant industry experience. At more than six months of no work, having industry experience didn’t help at all, Ghayad found."

Employers seem to be deciding that anyone unemployed for more than six months might have a problem that would make them a risky hire. If someone else wouldn’t hire them why should I? If there are plenty of others to choose from, why not take the easy way out.

All of these trends in hiring are legal and consistent with companies acting in their best interests.

But, now that corporations are people, couldn’t they show a little more respect for their fellow humans?

Sunday, February 17, 2013

It Is Time for Universal Preschool Education: The Markets Have Spoken

President Obama’s call for an initiative to provide high quality preschool education was startling. First: it was an absolute surprise. Second: it was audacious to suggest a major new program in the midst of all the political acrimony over spending and existing government programs. Third: it was exciting to think, at least for a moment, that perhaps the most useful investment the nation could make might come to pass. 

A number of articles have appeared in the last few days that make useful contributions to the consideration of this initiative. Let us begin with a column by Gail Collins in the New York Times that reminds us of some history: the Congress in 1971 passed a bill to set up universal preschool education. Collins discussed the present and the past with Senator Walter Mondale, one of the bill’s sponsors.

"In 1971, when he was a senator, Mondale led the Congressional drive to make quality preschool education available to every family in the United States that wanted it. Everybody. The federal government would set standards and provide backup services like meals and medical and dental checkups. Tuition would depend on the family’s ability to pay."

"And it passed! Then Richard Nixon vetoed it, claiming Congress was proposing ‘communal approaches to child rearing.’ Now, 42 years later, working parents of every economic level scramble madly to find quality programs for their preschoolers, while the waiting lines for poor families looking for subsidized programs stretch on into infinity."

Collins then reflects on what might have been.

"Mondale’s Comprehensive Child Development Act was a bipartisan bill, which passed 63 to 17 in the Senate. It was an entitlement, and, if it had become law, it would have been one entitlement for little children in a world where most of the money goes to the elderly."

"People, think about this for a minute. We have no bigger crisis as a nation than the class barrier. We’re near the bottom of the industrialized world when it comes to upward mobility. A child born to poor parents has a pathetic chance of growing up to be anything but poor. This isn’t the way things were supposed to be in the United States. But here we are. "

"Would it be different if all the children born over the last 40 years had been given access to top-quality early education — programs that not only kept them safe while their parents worked, but gave them the language and reasoning skills that wealthy families pass on as a matter of course?"

"We’ll never know."

David Brooks chimed in with some thoughts from a skeptical conservative in his column in the New York Times.

"....on this subject, it’s best to be hardheaded. So I spent Wednesday and Thursday talking with experts and administration officials, trying to be skeptical.....Is the president trying to organize a bloated centralized program or is he trying to be a catalyst for local experimentation?"

"So far the news is very good. Obama is trying to significantly increase the number of kids with access to early education. The White House will come up with a dedicated revenue stream that will fund early education projects without adding to the deficit. These federal dollars will be used to match state spending, giving states, many of whom want to move aggressively, further incentive to expand and create programs."

"But Washington’s main role will be to measure outcomes, not determine the way states design their operations. Washington will insist that states establish good assessment tools. They will insist that pre-K efforts align with the K-12 system. But beyond that, states will have a lot of latitude."

The New York Times also provided this graphic that indicates the percentage of four-year-olds participating in state supported preschools in each state. The plot is interactive at the Times’ website.

While the notion of support for preschool education has usually been associated with the political left, a number of rather conservative states have been aggressive in providing these programs. Georgia is at 59% participation, South Carolina, 41%, Arkansas, 44%, Louisiana, 33%, Oklahoma, 76%, Texas, 52%, and West Virginia, 58%. All of these states exceed the national average of 28% participation. Also, there is Alabama which is only at 6% today, but has stated the intention to expand their program to cover everyone who wants it.

It would seem that conservatives, those with their boots on the ground working, have decided that state-supported preschool education works for their children. It also appears that conservatives, those with their heads up in the thin air, are ready to reject the notion. Michael Shear provides some background on this skepticism in another article in the New York Times.

"Despite the outlines of a plan that White House officials said would use federal money in support of state-based preschool programs, conservatives said they were suspicious that it would be a foot in the door toward more big government. They also said there was little evidence that large-scale preschool programs do much good for children in the long run. Advocates, who said that quality preschool education makes a significant difference in children’s lives, were bracing for a fight in Congress."

"’It just doesn’t make any sense,’ said Andrew J. Coulson, the director of the center for educational freedom at the Cato Institute, a libertarian group. ‘Why would you want to very expensively expand the programs like this if the evidence of effectiveness is not really sound’?"

The programs the states are initiating have mostly demanded that the teachers of preschool children in state-supported programs be as educated and as qualified as teachers they hire for the advanced grades. That has not always been the case. In education, as in most other things, you get what you pay for.

There have been a few small studies of poor children that extended for decades and indicated that students who received a quality preschool education were more successful in later life than those that did not. The results were rather astonishing in terms of the potential benefits from better educational outcomes. A more successful child ends up a more successful adult who pays more taxes, is less needy of social support, is less likely to end up in prison, and is more likely to successfully raise his/her own offspring.

These burgeoning state programs are beginning to generate their own data, and the states have found the data supports expanding their efforts. Sharon Lerner provides an excellent discussion of the efficacy of preschool education in an article in The American Prospect. She also provides a thorough summary of Oklahoma’s experience in initiating a universal program for four-year-olds.

The first estimates of what such a federal program might cost are actually rather modest considering the potential return on investment.

"W. Steven Barnett, the director of the National Institute for Early Education Research at Rutgers University, estimated that the president’s plan could cost between $3 billion and $20 billion a year. He called the plan "the biggest proposed change in American education since Brown v. the Board of Education," the court case that integrated schools. By comparison, the federal government spent about $108 billion last year on all education programs, according to Jason Delisle of the New America Foundation. That sum includes Education Department grants, Head Start and student-loan subsidies, among other programs."

Another estimate from the Center for American Progress placed the cost at an average of $9.8 billion per year over the next ten years.

It would seem that the educational marketplace has moved in the direction of providing broadly available preschool education as a way of growing more productive citizens.

There is another market at work that also provides some perspective. The wealthy of New York City, those who are supposed to be the best and the brightest, those most likely to contribute to the Cato Institute and conservative legislators, have bid up the price of private preschool education for their children to $30,000 a year and more. Competition for spots in the best preschools is said to be more intense than that involved in gaining entrance to Harvard. If money talks, this money is shouting:


Friday, February 15, 2013

Young Voters: A Counterrevolution?

When young voters exhibited an unusual amount of interest in the 2008 election and voted heavily for Obama, many, including not a few Democrats, thought that it was a temporary case of infatuation with an attractive young candidate. It was certainly assumed by most Republicans that the young people would have lost their enchantment with a candidate who might have been seen as a bit of a disappointment. That is not what happened. While the overwhelming majority again voted for Obama over the Republican candidate, the margin was a bit smaller. Of more interest was the fact that the young voters continued to turn out in large numbers. The fraction of voters in the youngest age group increased from 18% in 2008 to 19% in 2012.

A report from the Pew Research Center provides some interesting data. This chart indicates just how important those young voters were for Obama and the Democrats, and how voting preferences vary as a function of age.

Of perhaps even greater significance is the degree to which the young voters (18-29) distanced themselves from the voting pattern of their elders (30+).

The young have usually tracked closely the voting preferences of the Democratic voters as a whole. However this is the third straight election in which there has been a significant divergence between the young and the older groups. One must go back to the Vietnam War era to see a similar divergence.

Vietnam and the other momentous occurrences of the 1960s heralded a period of significant political change as the young became disenchanted with the war and the constraints that they felt society was placing upon them. The political power heading into the 1960s resided in those continuing to carry forward the lessons learned from the New Deal. Many thought that the helping hand of the Great Depression had transitioned to the heavy hand of the postwar era. A variety of factors combined to lead a resurgence of conservative sentiment, with not a small amount of libertarianism blended in. Could the political activity of the youth of today portend another such shift?

It should not be surprising that the young should become more politically active. It is they who are bearing the greatest burden from the dysfunctional economy of recent years. Employment prospects are dreadful, and they are forced to accumulate enormous debt burdens in order to attain degrees that don’t seem to mean much anymore. Long-term prospects look decidedly grim.

Could it be that it is time for the pendulum to swing back in the other direction? Is there again a need for the government to extend a helping hand again? Sheryl Gay Stolberg investigated this idea in a rather unlikely location: Missoula, Montana. Her findings appeared in an article in the New York Times: A Growing Trend: Young, Liberal and Open to Big Government.

"This funky college town, nestled along two rivers where five mountain ranges converge, has long been a liberal pocket, an isolated speck of blue in a deeply red state. Now Montana is electing more politicians who lean that way, thanks to a different-minded generation of young voters animated by the recession and social issues."

The people interviewed for the article, mostly students, seem driven not so much by party affiliation as by a recognition that something has to be done. Therefore, they had better vote for those who seem interested in addressing the issues important to them.

"It is no secret that young voters tilt left on social issues like immigration and gay rights. But these students, and dozens of other young people interviewed here last week, give voice to a trend that is surprising pollsters and jangling the nerves of Republicans. On a central philosophical question of the day — the size and scope of the federal government — a clear majority of young people embraces President Obama’s notion that it can be a constructive force...." "’Young people absolutely believe that there’s a role for government,’ said Matt Singer, a founder of Forward Montana, a left-leaning though officially nonpartisan group that seeks to engage young people in politics. ‘At the same time, this is not a generation of socialists. They are highly entrepreneurial, and know that some of what it takes to create an environment where they can do their own exciting, creative things is having basic systems that work’."

Minorities are more heavily represented in the ranks of young voters so it is not surprising that there is a tilt towards issues of concern to those groups. Another chart from the Pew report details the alignment of young voters’ sentiments on several topics.

What has this activism meant for what should be a safe Republican state?

"Here in Montana, a state that backed John McCain in 2008 and Mr. Romney last year, voters under 30 have helped elect two Democratic senators and a new Democratic governor. Nationally, young voters have since 2004 been casting their ballots for Democrats by far wider margins than previous young generations — a shift that could reshape American politics for decades."

Pay attention if the young are truly on the move. They have much at stake, they have a lot of energy, and they are going to be around for a very long time.

Wednesday, February 13, 2013

Defining Poverty: A Conservative Perspective

Deciding who does and who does not live in poverty is an important and complicated question. The answer to that question has both a moral and a political dimension. Modern societies have generally decided that people so poor that they cannot provide food, clothing, and shelter for themselves will not be allowed to die in the streets. In other words, to die in the streets qualifies one as having lived in poverty. That is the easy part. The political issue derives from the need to ascertain who is sufficiently impoverished to be in need of public assistance and how best to provide that assistance.

Neil Gilbert makes an attempt to address the political dimension of poverty in an article in The American Interest: Retroview: What Poverty Means. He will provide a view that has become popular with political conservatives.

From a broad historical perspective, the issue of poverty was raised to the national political level by the Great Depression and resulted in the social welfare legislation of the New Deal. The war years and the postwar prosperity precluded significant public activity on the issue. Poverty was revived as a national concern by the publication of Michael Harrington’s The Other America in 1962.

"Harrington’s "other America" was a bleak place where at least half of the elderly could not afford decent housing, proper nutrition and medical care, and where low-income farm families suffered from "hunger in the midst of abundance." According to his calculations, about 25 percent of the American people were poor. So powerful was Harrington’s impact that in his wake a host of publications sought to raise national awareness about poverty in the United States."

The impact of this book produced legislative initiatives under President Lyndon Johnson that might be categorized as a "war on poverty." The result, driven by the progressive left, was a major increase in social welfare spending, including direct cash transfers.

Gilbert points out that there was even a study that recommended a guaranteed minimum income.

"....the blue-ribbon National Commission on Technology, Automation, and Economic Progress reported in favor of a guaranteed national income in 1966...."

This is an idea that some countries seem to have made work; one that deserves more consideration than it has received.

Gilbert identifies Hayek as the source of the corresponding view of the problem from the conservative pole. Hayek was of the opinion that a growing economy with opportunity for all to participate would best address the problem.

Given that we all now know that a rising tide does not lift all the boats, Gilbert feels a need to resort to a misuse of the liberal icon John Kenneth Galbraith for assistance in justifying a conservative opinion. In so doing, he presumably believes he is successfully mocking progressives. He quotes Galbraith from his book The Affluent Society written in 1958 prior to the publication of Harrington’s book.

"Harvard Professor John Kenneth Galbraith argued that in a society where the median family income was $3,960, poverty "can no longer be presented as a universal or massive affliction. It is more nearly an afterthought." Galbraith described what remained of American poverty as falling into two broad categories: insular poverty, which stemmed from living in economically depressed regions like Appalachia, and case poverty, rooted in personal handicaps such as ‘mental deficiency, bad health, inability to adapt to the discipline of modern economic life, excessive procreation, alcohol, and insufficient education.’ But in neither instance, he argued, could poverty be remedied by government transfers of income to lighten the hardships and increase the consumption of the poor."

Gilbert admits that Galbraith had changed his mind about how to address poverty by the time a new edition of his book was issued in 1998, and suggested an even greater effort was needed. This is a "curious shift" as described by Gilbert, who wishes to couple Hayek with the original Galbraith to arrive at the desired conclusion.

"At least as far as the "working poor" are concerned, therefore, it seems that some combination of Hayek’s view about "lifting all boats" and Galbraith’s social spending is responsible for the vast reduction of poverty between the late 1950s and the dawn of the twenty-first century. Between increasing affluence and the growth of Federal spending, both direct and indirect, on welfare since around 1964, the tangible signs of material deprivation faded."

The case Gilbert wishes to make is that the problem has essentially been solved. The few remaining truly deprived are generally incapable of participating in the economy and should be addressed as such. The current statistics on poverty include people who are at such a high state of material well-being that they no longer deserve our concern. Gilbert provides some interesting numbers to support his contention.

Poverty in this country is defined as having an individual or family income below a given level. Poverty by that definition is a relative phenomenon and, by Depression-era standards, those in poverty today are rather well-off.

Gilbert begins by reminding us that the poverty level incomes do not include the transfer of funds from various support programs.

"First, there is a huge gap in the data between what the poor earn and what they spend. The excess of spending over reported income has grown dramatically since the early 1970s, from 139 percent of income to about 212 percent today. Actual consumption of goods and services may be even higher than out-of-pocket spending suggests, since these figures exclude public benefits to low-income households available through eighty income-tested programs such as school breakfast and lunch programs, nutrition programs for the elderly, housing vouchers, legal services, home energy assistance and day care."

He then points out that although the official poverty level is around 15% right now, that number will include many who are merely passing through while they endure a temporary decline in income before returning to a higher level of prosperity.

"....the official measure of poverty relates to a temporal dimension. Many households endure brief spells during which their incomes fall beneath the poverty line, just as many people experience periods of unemployment. Chronic poverty, though, is relatively rare. Thus, for example, between 1996 and 1999 the household income of 34 percent of the population dipped below the poverty threshold for two months or more, while only 2 percent of the population remained below the poverty line for the entire period. Similarly, from 2004 to 2007 the income of 31.6 percent of the population fell below the poverty line for two or more months, but just 2.2 percent of the population remained under the poverty threshold for the full four years. In 2009, 7.3 percent of the population was under the poverty line for the entire year, even as unemployment hovered around 9 percent."

And, as it turns out, the poor aren’t actually very poor at all.

"....the range of material possessions enjoyed by people living below the poverty line provides a final reason for questioning what the official measure claims to represent. As with the household expenditure data, these amenities reflect higher than expected levels of consumption. Thus, for example, at the height of the recession in 2009, 40 percent of the families officially designated as poor owned their own homes, which were mainly single-family units and had a median value of $100,000."

"Moreover, 92 percent of poor households had microwaves, 76 percent air conditioning, 50 percent computers, 64 percent a clothes washer, 99 percent a refrigerator (23 percent an additional freezer), 98 percent color televisions (70 percent more than one television) and 77 percent owned a car, truck or van (22 percent owned two or more vehicles). This describes a level of material well-being that corresponds with neither public perceptions of poverty nor Biblical dictates to aid the needy."

Gilbert’s conclusion is that there are not many people who are truly poor, and those that do live in continual poverty are mostly beyond redemption.

"Various estimates put the current rate of chronic poverty at 2–7 percent. At the middle range, if 5 percent of the population is chronically poor, we’re talking about roughly 15.5 million people. Just a fraction of the official poverty rate, this relatively small percent nevertheless signifies a huge number of people living in distress. As with the homeless, a large proportion of this group suffers from mental illness, addictions and other disabilities."

And finally, the people who are deemed to be living in poverty and are not incapable of working are doing just fine because they have clothes to wear, food to eat, and a shelter in which to live, and that is all anyone has a right to expect.

"When we look more closely, we see a genuine poverty problem restricted largely to people with physical and psychological conditions that make it difficult to be productive. From this perspective, not only does the size of the problem become more manageable, but the solutions take on a very different hue from those mainly seeking to provide additional cash for low-income people. A closer look also reveals that low-income people (as well as many above their level) who struggle daily to make ends meet are in truth engaged in a battle to match resources with modern appetites for material consumption. They are not in a battle to put a roof over their heads, clothes on their back and food on the table."

When conservatives argue that poverty is not such a great problem, the goal is usually to create the impression that the growing income inequality is not important—and therefore nothing need be done about it. Gilbert finally arrives at that conclusion.

"This focus on redistribution to achieve economic equality does little to alleviate the disabilities of the chronically poor. It does not develop opportunity, strengthen family life, educate children, or encourage the civic virtues that are independent of market capitalism. It does nothing to address the acute suffering of those afflicted by case poverty. Instead, it conveys an image of the good society as one dedicated to increasing private consumption."

Everyone would agree that using incomes as a fraction of the median to determine poverty is a crude approach. Countries use that methodology because it is easy to implement and because it is consistent with the belief that poverty is not an absolute state, but a relative state. Wealth provides economic and political power. Lack of wealth tends to deprive one of economic and political power. If one does not have the resources to compete for a good education and access to a well-paying job, then that person is living in poverty.

The resources needed to compete in society are not merely financial; social capital is just as important as economic capital. The social and cultural environment in which a child is raised has as much to do with his/her ability to compete as the wealth of the parents. In Poverty in the United States we indicated that areas of persistent high poverty are associated with specific socio-economic groups: southern whites and blacks, borderland Hispanics and whites, and urban blacks and Hispanics. Poverty has persisted in these regions because of a complex mix of economic, cultural and social factors.

The fact that these people might possess cars and TVs and dishwashers does not lift them out of poverty. And the fact that they are living in poverty does not mean that most are suffering from "mental illness, addictions and other disabilities."

There are better sources for learning about poverty. What is frightening is that there are so many people who believe what Gilbert has written.

Sunday, February 10, 2013

Poverty in the United States

Deriving an accurate definition of poverty is not an easy task. Poverty is related to financial resources, but it is also involved with social and cultural resources. To counter poverty and attempt to eliminate it, all three factors must be addressed. In order to obtain a precise, but not necessarily accurate, tally of poverty, most countries associate it with income level. A standard prescription is to define poverty as an income below some fraction of the median income in a given country. The OECD tallies the poverty level based on an income less than 40% of the median after taxes and income transfers. The OECD would include Food Stamps, welfare payments, tax credits like the Earned Income Tax Credit (EITC) and other such transfers as income. By that reckoning, the US would have a poverty rate of about 11%. The US uses a slightly more complex formula and ignores income from transfers. It would quote a poverty rate of about 15%.

An article on poverty in the US appeared in The Economist and provided this chart:

This was derived using OECD numbers and methodology. It would seem that the only developed country with a poverty rate greater than the US is Mexico, and no other country comes near to the US in producing the quantity of poor people. This is a rather disturbing result for a country that likes to think of itself as the richest in the world.

It is of interest to consider the effect of government income transfers on the poverty rate. Each country will have different policies that will produce changes in the effective poverty rate. A second article from The Economist provided an interesting way to look at the effect of these transfers and compare the US policies with those of other countries. What is tallied here is the Gini coefficient, a measure of income inequality, both before and after the inclusion of income transfers. The larger the Gini coefficient, the greater is the inequality.

There are several countries, such as France and Finland, with an income inequality about as great as the US, but they have policies that are much more effective at diminishing the inequality. Could it be that the US just does not devote enough resources to such issues?

Bruce Bartlett, in his book The Benefit and the Burden, provides us with more OECD data on the amount of funds (as a fraction of GDP) that OECD countries devote to social issues. This would include direct spending and indirect transfers such as those considered in the poverty definition.

It seems the US devotes a considerable fraction of funds to social purposes. While spending less than France, it spends considerably more than Finland, and is well above the OECD average.

The obvious interpretations of these numbers are that the US is either less efficient in alleviating income inequality (and thus poverty), and/or is more interested in other social issues. It is not for lack of funds.

There is another instructive way to examine poverty in the US: geographically. The first article from The Economist also provides these breakdowns of the poverty rate by county.

The snapshot data from 2010, a time of broad economic distress, indicate a widespread distribution with some concentration in the southern and southwestern regions. The long-term poverty data indicate a definite focus on southern states and regions that share their border with Mexico.

It is interesting to note that the areas of persistent poverty are mostly found in the states that traditionally vote for Republican legislators. Of perhaps more significance is the apparent persistence of poverty in two different socioeconomic groups: southern whites and blacks, and the Hispanic and non-Hispanic whites in the border regions. There is also a third persistent socioeconomic group that does not show up in the county-level data, the urban blacks and Hispanics who live in poverty.

The US is a large and diverse country. The fact that long-term poverty is concentrated in three groups with distinctly different histories and cultures suggests that there is not a unique and simple solution that would eliminate poverty. There is more involved here than just transferring funds in order to increase incomes. It is likely that each of the three groups will require different types of assistance if they are to extract themselves from their low income status. There is no indication that mere increased economic growth and lower unemployment would alleviate these endemic conditions.

On a positive note, the US is already spending more on social manipulation than most would believe. If it chose to address poverty in a coherent fashion, the funds would be there.

Poverty in the US is a topic that deserves much more discussion than it has been receiving.

Wednesday, February 6, 2013

Are Our Schools Biased Against Boys?

There are several recent books that warn—or threaten—that women are going to take control of the economy and all else because evolution has made them better adapted to the current demands of our society. Men therefore are falling behind and they are not likely to ever catch up. The data that is quoted most often in support of this notion is based on academic achievement. Girls, in fact, do better in school. Their graduation rates at all levels are higher than for males with the possible exception of doctorates where it is still close.

Since much of the evidence for this growing female dominance comes from our school systems, it seemed worthwhile to consider whether there were elements of our educational process that could be contributing to a bias in favor of girls over boys.

While schools are often viewed as an equalizer between students from different economic and social classes, they are quite capable of creating and propagating inequality in educational outcomes. In Education and the Propagation of Inequality we discussed how social and economic factors create biases in educational performance. In Birth Date, Education, Ability Grouping, and Accomplishment we discussed how the age of a child at the beginning of school can produce a performance bias that persists up to at least the university level, and perhaps beyond.

When a child begins school at the age of five, it will be in an age segregated group in which the ages will vary from five to six based on birth date. That means that some children will be 20% older than others, and likely to be proportionately more mature and more capable of performing in a school environment. Unless the education system is very careful, this early advantage will be accentuated by teacher encouragement, and the assignment of better teachers, and more demanding courses.

Could there be a similar bias that operates on the basis of sex rather than birth date? Consider input from Maryanne Wolf, director of the Center for Reading and Language Research at Tufts University. She has written an interesting book called Proust and the Squid: The Story and the Science of the Reading Brain. Performance in school in areas such as reading requires the brain to be capable of integrating complex audio and visual data and interpreting it. Wolf tells us that it isn’t until about age five that the brain matures to the point where it is capable of that.
"Although each of the sensory and motor regions is myelinated and functions independently before a person is five years of age, the principle regions of the brain that underlie our ability to integrate visual, verbal, and auditory information rapidly—like the angular gyrus—are not fully myelinated in most humans until five years of age and after."

So we are starting our children in school and measuring and rewarding their accomplishments at a time when some are physically less mature than others, even at the same age. How does this relate to gender differences?

Wolf claims that girls mature faster than boys and begin to read earlier. She further states that she has observed perceptual differences between the two sexes up to about age eight.

So, boys beginning school will, on the average, be disadvantaged with respect to girls, and that bias towards girls is likely to be propagated throughout their educational experience. The way to avoid this is by not grouping by ability until the maturation differences are left well behind. Some school systems with high performance on standardized tests, such as in Finland, forbid ability grouping until a much higher age.

Now we have boys and girls progressing through the various grades. Are there other factors at work?

Everyone is aware that boys tend to be more restless, and need more physical activity than girls. Girls are better adapted to situations that require sitting still and listening for long periods than are boys. This means that the two sexes interact with the teacher differently, with girls being easier to deal with. Could this be a source of educational bias? Christina Hoff Sommers and some researchers at the University of Georgia and at Columbia University certainly believe it is.

Sommers produced an article for the New York Times in which she discussed various ways in which education can be biased against boys. Consider the results of one study.

"Teachers of classes as early as kindergarten factor good behavior into grades - and girls, as a rule, comport themselves far better than boys."

"The study's authors analyzed data from more than 5,800 students from kindergarten through fifth grade and found that boys across all racial groups and in all major subject areas received lower grades than their test scores would have predicted."

"The scholars attributed this "misalignment" to differences in "noncognitive skills": attentiveness, persistence, eagerness to learn, the ability to sit still and work independently. As most parents know, girls tend to develop these skills earlier and more naturally than boys."

The claim is that the data shows teachers will reward "good" behavior (girls) with better grades, and punish "poor" behavior (boys) with lower grades.

Sommers points out that teacher bias is not the only problem that has developed for boys.

"....boy-averse trends like the decline of recess, zero-tolerance disciplinary policies, the tendency to criminalize minor juvenile misconduct and the turn away from single-sex schooling. As our schools have become more feelings-centered, risk-averse, collaboration-oriented and sedentary, they have moved further and further from boys' characteristic sensibilities."

Sommers also reports that other nations have identified underachieving boys as a problem and have taken steps to try to correct the situation.

"WHAT might we do to help boys improve? For one thing, we can follow the example of the British, the Canadians and the Australians. They have openly addressed the problem of male underachievement. They are not indulging boys' tendency to be inattentive. Instead, they are experimenting with programs to help them become more organized, focused and engaged. These include more boy-friendly reading assignments (science fiction, fantasy, sports, espionage, battles); more recess (where boys can engage in rough-and-tumble as a respite from classroom routine); campaigns to encourage male literacy; more single-sex classes; and more male teachers (and female teachers interested in the pedagogical challenges boys pose)."

Females may be in the ascendency, but victory should not be ceded to them until we have done more to level the playing field.

Christina Hoff Sommers is a resident scholar at the American Enterprise Institute and the author of "The War Against Boys."

Monday, February 4, 2013

The Constitution, the Supreme Court, Politics, and We the People

One easily becomes cynical at the predictability of our Supreme Court Justices and the inevitable manner in which their decisions seem to align with political predispositions. Was this what the Founders had planned? Of course not! At the birth of our nation there was no equivalent of our current political parties. There was also no reference to just about anything that we encounter in our daily lives: education, retirement plans, mortgage deductions, healthcare, women’s equality.... Yet the country continues on "guided" by our Constitution. How does that actually happen?

Consider this image of the first page of the original copy of the Constitution:

What was intended to leap off the page is the phrase: "We the People." Those are the first words of the preamble to the Constitution.

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

That statement makes clear the fact that the Constitution ultimately is to belong to and be for the people. Can we claim that to be true? Does the will of the people get represented in Supreme Court decisions? Definitely yes! Efficiently, no! Recall that there was a time when the Court seemed determined to declare all the New Deal legislation unconstitutional, but eventually they blinked under the pressures of the times and public needs and conceded.

Jeffrey Toobin produced an excellent little article in The New Yorker that reminds us that the political predispositions that guide Supreme Court Justices are, in fact, representative of our own political leanings: The People’s Choice.

Toobin takes the opportunity of the fortieth anniversary of Roe v. Wade to remind us of the torturous path taken to justify the will of the people to allow, under certain conditions, medically safe abortions to women who would choose to have one. There is obviously no mention of such an issue in the eighteenth-century document that guides us, but there are a lot of words. Some would have to be chosen to justify this wish of the people.

Toobin tells us that before he became a judge Harry Blackmun was the general counsel at the Mayo Clinic. In that role he acquired a healthy respect for physicians. That background served to bias his interpretation of the Constitution.

"In keeping with his predilection for his former colleagues, he emphasized the rights not of women but of doctors: "’The attending physician, in consultation with his patient, is free to determine, without regulation by the State, that, in his medical judgment, the patient’s pregnancy should be terminated.’ The word ‘physician’ appears in Roe v. Wade forty-eight times, the word ‘woman’ forty-four times."

In 1992, Roe v. wade was reaffirmed, but this time using the following argument:

"That decision focussed on the provision of the Fourteenth Amendment which says that no state shall ‘deprive any person of life, liberty, or property, without due process of law.’ The Justices said that a woman’s decision to terminate a pregnancy was within the ‘realm of personal liberty which the government may not enter’."

In a more recent decision four Justices put forth yet another justification:

"....Ruth Bader Ginsburg, joined by three other Justices, offered still another constitutional justification for a woman’s right to choose, under a different part of the Fourteenth Amendment: the equal-protection clause. Undue restrictions on the right to abortion, Ginsburg wrote, violate ‘a woman’s autonomy to determine her life’s course, and thus to enjoy equal citizenship stature’."

Lest we leave the impression that manipulation of the Constitution to further the will of segments of the population is a left-wing liberal phenomenon, we should recall the reinvention of the Second Amendment. Jill Lepore provides a description of that process in an essay, We the Parchment, in her book The Story of America.

This is the Second Amendment:

"A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed."

That’s it. That is all there is.

"Before the scholars had commonly understood the Second Amendment as protecting the right of citizens to form militias—as narrow a right as the protection provided by the Third Amendment against the federal government forcing you to quarter troops in your house."

"As late as 1989, even [Robert] Bork would write that the Second amendment works ‘to guarantee the right of states to form militia, not for individuals to bear arms’."

However, there was a well-organized and determined group that wished to counter that interpretation and turn it into an unlimited right for individuals to possess weapons.

"Beginning early in the 1970s, lawyers employed by the National Rifle Association [NRA], eager to overturn gun-control laws passed in the wake of the assassinations of Martin Luther King Jr. and Robert F. Kennedy, began arguing that the Second Amendment protects the right of individuals to bear arms."

A near continuous wave of articles, speeches, and political pronouncements created a constituency for this interpretation, and it finally had its view entered into law.

"In 2008, the NRA’s argument about the second amendment was made law in The district of Columbia v. Heller, which ruled as unconstitutional a gun-control law passed in DC decades earlier."

As with most written documents, the Constitution means whatever those given the right to interpret it wish it to mean. Does that mean the people are completely at the mercy of nine unelected Justices?

There are times in which personal preferences are overridden by the demands of society. The New Deal decisions are a case in point. Some interpret Chief Justice Robert’s unexpected support of the healthcare mandate as a desire on his part to not "be on the wrong side of history."

The most important way in which the people exercise their will over the meaning of the Constitution is by the decision for whom to vote. Toobin reminds us of this.

"It’s tempting to be outraged by the close correlation between the outcome of Presidential elections and the outcome of cases before the Supreme Court. Aren’t Justices supposed to be independent of politics—isn’t that one reason they have life tenure? Aren’t judges different from politicians? Not really, and that’s nobody’s fault; when it comes to interpreting the majestic generalities of the Constitution, there is no such thing as apolitical decision-making. So, in a time of great polarization between the parties, Democratic and Republican judicial appointees see the world, and the law, in very different ways. It’s true that Justices do surprise and exceptions do happen. But not often."

"On the fortieth anniversary of Roe v. Wade, it is worthwhile to celebrate a landmark of what is, in the truest sense, women’s liberation. But it’s important to remember, too, that it wasn’t the Supreme Court Justices alone who made sure that Roe survived. The judicial texts have evolved from odes to doctors to paeans to liberty and to defenses of equality. But it is the voters and the President they elect who will decide whether abortion rights survive for the next four decades."

In an inefficient, contentious, often ugly, and usually tardy manner, the will of the people does become the determinant in Constitutional interpretations. The poll of the people’s will is the presidential election, so if one has issues that are important, then political activism is required, with turning out to vote as the minimum.

It is difficult to overestimate the importance of political participation. If one advocacy group loses a political argument with another advocacy group, it cannot depend on the Constitution to be there to protect it.

Friday, February 1, 2013

The Boeing 787 Dreamliner: Learning the Wrong Lessons from Globalization

Boeing’s new 787 Dreamliner is currently grounded due to problems that have arisen. Difficulties with new versions of planes are not unusual, particularly when the plane is carrying so many new technologies. It is too early to know if the issues are serious or not. In the meantime, numerous articles have appeared suggesting that Boeing’s aggressive use of outsourcing may have been a source of the difficulties, and certainly was a source of cost overruns and schedule delays. 

A number of companies that earlier had sent their manufacturing operations overseas are now beginning to return home, especially those heavy into technology and light on labor costs. The reasons given for this decision usually involve difficulties in ensuring quality control, delays in development and delivery, worries about protecting proprietary information, and, recently, excessive costs. A less publicized reason involves the decay of capability. Once one begins to outsource production, one eventually forgets how to produce. If one no longer knows how to produce the product, one certainly no longer knows how to produce it well.

If the design, engineering, and production are all eventually outsourced, the company no longer has an agent working for it, it has a partner—one over which it may have little control. While today companies are running from that dependence, Boeing embraced it in organizing its 787 project, and thought it was the wave of the future.

The most interesting of the recent articles seems to be a short piece by James Surowiecki: in The New Yorker: Requiem for a Dreamliner? He tells us how Boeing came to make some decisions at the outset of their 787 project that came back to haunt them.

The Boeing engineers had a winning concept for their new project.

"It’s built largely of carbon-fibre composites rather than aluminum, which makes it significantly lighter than other planes. Its braking, pressurization, and air-conditioning systems are run not by hydraulics but by electricity from lithium-ion batteries. It uses twenty per cent less fuel than its peers, and so is cheaper to run, yet it also manages to have higher ceilings and larger windows. It is, in other words, one of the coolest planes in the air."

The wisdom of this design is apparent from the enormous number of orders that have been placed for the plane.

Surowiecki places the beginning of the problems with the 787 back in time to the purchase by Boeing of its last domestic competitor, McDonnell-Douglas, in 1997.

"Technically, Boeing bought McDonnell Douglas. But, as Richard Aboulafia, a noted industry analyst with the Teal Group, told me, "McDonnell Douglas in effect acquired Boeing with Boeing’s money." McDonnell Douglas executives became key players in the new company, and the McDonnell Douglas culture, averse to risk and obsessed with cost-cutting, weakened Boeing’s historical commitment to making big investments in new products."

When the Dreamliner had to be sold internally, it had to meet the demands of both the ambitious engineers and the risk-averse financial types. A compromise was arrived at that would provide the desired features, while limiting Boeing’s up-front costs and risks—supposedly.

"So the Dreamliner’s advocates came up with a development strategy that was supposed to be cheaper and quicker than the traditional approach: outsourcing. And Boeing didn’t outsource just the manufacturing of parts; it turned over the design, the engineering, and the manufacture of entire sections of the plane to some fifty "strategic partners." Boeing itself ended up building less than forty per cent of the plane."

These companies Boeing was dealing with were often partners in the truest sense. They would risk their own funds to the development process in return for a share of the returns from the sale of the plane.

A graphic from the Washington Post indicates how diverse and worldwide this partnership became.

It is not surprising that such a project would encounter difficulties. Boeing had to announce seven delays adding up to a three year slip in delivery schedule, and the project was billions of dollars over budget.

Fielding a new aircraft design is enormously complex and expensive. If for some reason the 787 should prove to have a serious design defect or safety problem, the entire market could be lost to Airbus which is developing a slightly less ambitious competitor. Such an occurrence could be an existential threat for Boeing. This leads one to ponder over what the Boeing executives might have been thinking as they decided on what the assumed was a low-risk path.

"....there hasn’t been a fatal airliner crash in the United States in almost four years. The safer we get, the safer we expect to be, so the performance bar keeps rising. And this, ultimately, is why the decision to give other companies responsibility for the Dreamliner now looks misguided. Boeing is in a business where the margin of error is small. It shouldn’t have chosen a business model where the chance of making a serious mistake was so large."

There are number of interesting conclusions one could draw from Boeing’s experience. One might be that if you have a complex technical project, it is probably not a good idea to let bean counters tell you how to avoid risk. If you are an airplane manufacturer and you fear the risk of developing a new plane, then perhaps you are in the wrong business.

A second take involves the decision-making process in general. Analysts are beginning to evaluate the great era of outsourcing and are concluding that much of what companies were doing was following a fad, rather than making serious, in-depth analyses of the consequences of their actions.

One as to wonder about the type of analysis the Boeing executives put into their decision-making process. Were they merely following the herd overseas, or were they afraid of the risk, or did they just not understand their own business?
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