Sunday, April 28, 2013

The Underground Economy: Are We Becoming Greece?

Several references have appeared in the media discussing an estimate that about $2 trillion went unreported as income last year. Have we become a nation of tax dodgers? Is this a sign of a decaying society? Are we finally in danger of becoming Greece?

James Surowiecki provides a good summary of the issues in an article in The New Yorker.

"When we all finished filing our tax returns last week, there was a little something missing: two trillion dollars. That’s how much money Americans may have made in the past year that didn’t get reported to the I.R.S., according to a recent study by the economist Edgar Feige, who’s been investigating the so-called underground, or gray, economy for thirty-five years.

One usually associates tax avoidance on such a large scale with organized crime syndicates.   That is not the case here.
"This unreported income is being earned, for the most part, not by drug dealers or Mob bosses but by tens of millions of people with run-of-the-mill jobs—nannies, barbers, Web-site designers, and construction workers—who are getting paid off the books."

The existence of this underground or shadow economy and its size helps explain why the economy appears to be healthier than one might expect given the persistently high rate of unemployment.

"....even though the percentage of Americans officially working has dropped dramatically, and even though household income is still well below what it was in 2007, personal consumption is higher than it was before the recession, and retail sales have been growing briskly....Bernard Baumohl, an economist at the Economic Outlook Group, estimates that, based on historical patterns, current retail sales are actually what you’d expect if the unemployment rate were around five or six per cent, rather than the 7.6 per cent we’re stuck with. The difference, he argues, probably reflects workers migrating into the shadow economy."

Although the recent recession has probably contributed to the growth of this shadow economy, it has always been around.

"The increasing importance of the gray economy isn’t only a reaction to the downturn: studies suggest that the sector has been growing steadily over the years. In 1992, the I.R.S. estimated that the government was losing $80 billion a year in income-tax revenue. Its estimate for 2006 was $385 billion—almost five times as much (and still an underestimate, according to Feige’s numbers)."

Most of the people working in this shadow economy are probably low-wage workers who are spending all that they earn. Much of the unpaid taxes can be thought of as an unplanned stimulus program. Of greater concern is the effect this growing trend has on society. There is a degree of unfairness associated with all who participate. While not paying taxes might be seen as a plus, one also loses the benefits that accrue from having been a taxpayer.

"....the damaging effects of this trend are clear. It’s hard for businesses to play by the rules if their competitors aren’t paying payroll taxes or workers’ comp. And off-the-books workers have no benefits or Social Security, and not much recourse if a boss decides to shortchange them."

The oft-quoted claim that we are about to become Greece is usually associated with concerns related to national debt and budget deficits. That is not the issue about which we should be worried.

The function of a society depends upon the vast majority of its citizens playing by the rules. People will tend to not break rules if they believe others are obeying the rules. Once the notion is propagated that many, or most, are not following the rules, then others will be encouraged to also break the rules. We can have a reinforcing virtuous cycle, or a reinforcing destructive cycle.

In Greece, the tax dodging, bribery, and other forms of corruption are so pervasive that it is a wonder that the society continues to exist. The Greeks have lost all trust in their fellow citizens and in their national institutions.

Is our growing shadow economy a trend suggesting that we might one day lose faith in our institutions and in our neighbors?

Perhaps a bit of perspective is in order. An article in Bloomberg Businessweek provided estimates of the size of shadow economies in a number of nations.

It would seem that by this metric we have a long way to go before we begin to resemble Greece. We also have a ways to go before we begin to resemble Canada.

It is appropriate to be concerned about this shadow economy, and it is important to create conditions whereby it can be limited in size. Rather than worry about lost revenue, we should be focused on the threat to the credibility of our society’s institutions.

The greatest threat arises not from tax dodgers, but from politicians who continually criticize our government and its efforts for political gain. People who continually hear outrageous claims by politicians parroted by what passes for media reporting will eventually begin to believe the nonsense. Then we really have a problem.

Friday, April 26, 2013

Transportation and Fuel: Trucks and Trains

Fracking for oil and natural gas has greatly expanded the domestic supply of both quantities. Analysts now see a day when we will reach energy independence and become a net exporter of both crude oil and natural gas. While the domestic price of oil is still determined by the larger international market, natural gas prices are set mainly be domestic supply and demand. These new sources have proved to be so effective that some are expressing concern that the supply of natural gas will drive prices so low that some drilling will no longer be cost effective.

A recent article by Diane Cardwell and Clifford Krauss in the New York Times suggests that new uses are growing that will limit any excess supply of natural gas and lead to cheaper and cleaner transportation options.

Natural gas driven vehicles have already made inroads in short-haul applications.

"Vehicle use of natural gas in the United States is still negligible but it has been growing. Among fleets whose vehicles travel shorter routes, like transit buses, refuse haulers and delivery trucks, use of compressed natural gas is much further along. Last year, more than half of newly purchased garbage trucks ran on compressed natural gas."

The big new development involves the investment in the infrastructure necessary to convert the long-haul diesel trucks to natural gas. This requires fueling facilities and cost-effective trucks capable of utilizing liquid natural gas (LNG).

"This month, Cummins, a leading engine manufacturer, began shipping big, new engines that make long runs on natural gas possible. A skeletal network of refueling stations at dozens of truck stops stands ready. Major shippers like Procter & Gamble, mindful of both fuel costs and green credentials, are turning to companies with natural gas trucks in their fleets."

"And in the latest sign of how the momentum for natural gas in transportation is accelerating, United Parcel Service plans to announce in the next few days that it will expand its fleet of heavy 18-wheel vehicles running on liquefied natural gas, or L.N.G., to 800 by the end of 2014, from 112. The vehicles will use the new Cummins engines, produced under a joint venture with Westport Innovations."

A significant move by truckers to LNG would have economic and environmental impacts.

"It is cheaper, saving truckers as much as $1.50 a gallon, and it burns cleaner, making it easier to meet emissions standards. The domestic fuel also provides some insulation from the volatile geopolitics that can drive up petroleum prices."

"The move could also cut the country’s oil import bill. There are currently about eight million heavy and medium-weight trucks consuming three million barrels of oil a day while traveling the nation’s highways. That is nearly 15 percent of the total national daily consumption and the equivalent of three-fourths of the amount of oil imported from members of the Organization of the Petroleum Exporting Countries. Roughly two-thirds of the diesel used as transportation fuel nationwide feeds three million 18-wheelers, the main trucks hauling goods over long distances."

The main issues limiting the move to natural gas are the initial cost of the LNG-driven vehicles and the availability of fueling stations. The trucks cost about twice as much as a diesel vehicle, so the economic viability depends on how long it takes to recoup that investment. Here, there is significant difference in opinion. The authors quote a representative of U.P.S. that claims it takes seven to eight years to break even. Note that U.P.S. seems to think that is a cost effective time frame for them, but may be limiting to others.

Another opinion comes from a long-time investor in natural gas for transportation: T. Boone Pickens. He has teamed with Chesapeake Energy to form the company Clean Energy Fuels. Representatives of that organization provided a more sanguine view.

"....Clean Energy executives say that the margin between the fuel prices is so wide that the time for recouping the investment is shortening — perhaps to as little as one to three years."

US energy officials are also projecting a rate of conversion to LNG.

"The federal Energy Information Administration last year projected that if enough L.N.G. filling stations were built and economic conditions were right, sales of heavy-duty natural gas vehicles could increase to 275,000 in 2035, equivalent to 34 percent of new vehicle sales, from 860 in 2010."

The provision of sufficient LNG fueling sites to make this work would seem to require a prohibitive investment if it is required to overlay the grid of available diesel sites. Fortunately, that is not necessary. Here is an optimistic projection:

"Mr. Pickens predicted that a majority of the nation’s long-haul truck fleet would be fueled by natural gas in seven years because 70 percent of the 18-wheelers operate in defined regional areas, and a natural gas truck can drive 600 miles on a single fill-up."

"’I promise you it will all fit together and the stations will be there,’ he said."

Pickens seems to be putting his money on the line—along with others.

"Clean Energy Fuels....has peppered major routes with 70 stations, many at truck stops operated by Pilot Flying J."

"Clean Energy has plans to complete 30 to 50 more by the end of the year. Shell has an agreement to build refueling stations at as many as 100 TravelCenters of America and Petro Stopping Centers while ENN, a privately held Chinese company, hopes to build 500 filling stations as well."

These developments should create new jobs, stimulate new private investment, lower emission of green house gases, lower transportation costs, and improve our balance of payments problem. It is difficult to not be enthusiastic about this development.

An article in The Economist also indicates there is encouraging news coming from another transport sector—one that we do not normally think of as either innovative or growing: trains.

"Europeans have long pitied Americans for their rotten passenger trains. But when it comes to moving goods America has a well-kept freight network that is the most cost-effective in the world."

Apparently, while few have been paying attention, the railroads have been gearing up for a profitable future.

"Since the Staggers Act of 1980 deregulated the sector....rail companies have invested about 17% of their revenues in their networks. This is about half a trillion dollars of private money over the past three decades. Even the American Society of Civil Engineers, which howls incessantly (and predictably) about the awful state of the nation’s infrastructure, shows grudging respect for goods railways in a recent report."

Even the present, with its hangover from the Great Recession, indicates a healthy industry.

"In 2011 the seven largest freight railways had operating revenues of $67 billion (up from $47.8 billion in 2009). Net income was $11 billion, with returns on equity averaging 11.1%."

This chart is provided to summarize the recent history of the railway freight industry.

The industry believes it will see increased demand for its services, and that it will better compete with long-haul trucking.
"By 2035 the demand for rail freight is expected to double. A great deal of new business is coming from shifting consumer goods. Containers are lifted off ships and trucks, loaded onto trains and whizzed to their destination. This business pays well and is growing fast."

"Tony Hatch, a rail analyst, says improvements in scheduling and timekeeping mean that trains are now winning business they might not even have bothered bidding for before. Although railways cannot deliver to your door, as lorries can, Mr Hatch says big-box retailers are making more use of them because it is the cheapest way to move bulky things long distances over land."

"Moving goods by rail is four times more fuel efficient than by road, and railways can increase their capacity in the future. So America’s trains may soon nibble at trucks’ market share—particularly for journeys that take longer than a day by road."

One of the issues with new sources of energy is that they are emerging in areas in which the infrastructure to move them to where they can be processed is not available. One might build new, intrusive pipelines, or one might take advantage of the existing rail routes.

"America could build more pipelines to move domestic oil, but the rail network is already there. In the last quarter of 2009 about 2,700 carloads of crude oil were moved by rail. This had grown to 81,100 in the last quarter of 2012. Whatever loads America needs to shift in the future, railways are well placed to do the job."

Here we have yet another development that promises lower fuel consumption and cheaper transportation costs.

Let’s appreciate good news when we are able to find some.

Sunday, April 21, 2013

Politics as History; History as Politics

Jill Lepore has assembled a remarkable collection of essays in her book The Story of America. Her essays all deal with our history and how that history has been presented to us by those who wrote about the events that make up our national heritage. She is troubled by the inevitable intertwining of history and politics, and the need to recognize the differences between the two.
"History is the art of making an argument about the past by telling a story accountable to evidence."

Note that she does not describe history as a collection of events, dates, and people. History is rather one person’s interpretation of the past in light of what that person knows about the present. History is an opinion.

Politics is the art of telling a story about the past in order to excite the imaginations of those living in the present. Both professions share an interest in the past, but they should be vastly different in intent.

"Politics involves elections and votes and money and power, but the heart of politics is describing how things came to be the way they are in such a way as to convince people that you know how to make things the way they ought to be."

"This is curious and worth pondering, because it reveals how much politics has in common with history. Politics is a story about the relationship between the past and the future; history is a story about the relationship between the past and the present."

To a great extent, what we believe about ourselves and about our nation is informed by what we are told is our history. Who gets to write history, and what they choose to include, is important then in determining the character of our nation.

"All nations are places, but they are also acts of imagination....The story’s plot, like the nation’s borders and the nature of its electorate, is always shifting....Who tells the story, like who writes the laws and who wages the wars, is always part of that struggle."

It would seem that collusion between politicians and like-minded historians is an unavoidable danger, and Lepore is correct in being concerned that the two remain intellectually separate.

She tells us this:

"Politics is accountable to opinion; history is accountable to evidence."

But is "evidence" really something that can be relied upon? The dynamics of a nation are so complex that it is inconceivable that anyone could monitor all the factors in play at any instant. As time and the nation rumble on, some evidence of what transpired is left behind, other evidence is obscured or destroyed. The data the historian has available to concoct her story tends to be random and incomplete. The historian then has much leeway in assembling the set of "evidence" that will be used in constructing a story. Another historian can assemble a different subset of "evidence" and arrive at a different story. Historians tend to sort these conflicting claims out by arguing among themselves until a majority line up behind one or another story and it is then assumed that tale is the correct one. It should be recognized that this approach is designed to damp out troublesome controversies when people tire of argument. It is by no means a determination of the "truth."

Politicians have a simpler method for resolving historical uncertainties: they can pick the version of history that is consistent with their preconceptions or prejudices.

This fungibility of history and its evidence is troublesome. One thing that experience has taught us is that researchers usually begin their work with a story in mind, and they tend to find evidence that supports that story. Whether the topic is economics, or psychology, or medical science, it is frighteningly easy for preconceptions to bias results. Why should history be any different?

E J. Dionne Jr. addresses this intersection between history and politics in his book Our Divided Political Heart. He recognizes the importance of the stories we tell about ourselves and attributes our current political polarization to our inability to agree on a single story.

"Americans disagree about who we are because we can’t agree about who we’ve been. We are at odds over the meaning of our own history, over the sources of our national strength, and over what it is, philosophically and spiritually, that makes us ‘Americans’."

He includes a chapter with the intriguing title The Politics of History: Why the Past Can Never Escape the Present.

"To say that the politics of the moment influences history is neither to justify the intentional distortion of our story for partisan purposes, nor to assert that one account is as ‘good’ or ‘valid’ as another, regardless of its factual basis. It is simply to acknowledge that the heart of the historian’s task lies ‘in explanation and in selection,’ as the scholar Morton White noted in his classic book Foundations of Historical Knowledge. In describing events, the historian ‘depends upon generalizations,’ White noted, and ‘because he records certain events rather than others, he may depend upon value judgments that guide his selection’."

Dionne then proceeds to provide the reader with an example of how biased reporting of history corrupted our society for a century.

"But in certain areas, the politics of history is especially raw and contentious. Nowhere is this more obvious than in how historians have dealt with our nation’s long struggle with race, and no aspect of our story has undergone a more thoroughgoing revision and counter-revision than our view of what happened during Reconstruction in the South after the Civil War."

The initial views of this time in our history would be determined by racial attitudes.

"But at the heart of the argument over Reconstruction, from the beginning and ever since, was the moral and political question of whether southern blacks would be offered rights genuinely equal to those of whites. Would African Americans be empowered to shape the decisions that determined their fate as individuals and as a community? Or would they be denied the basic rights of citizenship and treated as an inferior group?"

During Reconstruction the Republicans, then the party of Lincoln, essentially occupied the South and imposed equal rights for the blacks. The Democratic Party, then the home of the racists, fought back politically, and the southern whites fought back by instituting a reign of terror aimed at disarming blacks so they could not defend themselves and ignoring any voting rights the blacks had been granted. Eventually, the federal authorities withdrew and left the field to the southerners to do as they wished.

The historians who told the story of Reconstruction in the first decades of the twentieth century seem to have been captured by notions about the superiority of whites. Any attempt to raise blacks to the same level could then only be viewed as a misguided or corrupt political maneuver. Dionne reminds us that these were respected historians working out of some of our most highly-regarded universities.

"It is strange to our ears now, but the whites who overthrew the Reconstruction governments, imposed a color line, and stripped African Americans of their rights were known, proudly, as ‘redeemers’."

"The scholars who wrote the history of Reconstruction from the turn of the last century into the 1920s saw the foes of Reconstruction just that way in accounts offered when the nation’s inclinations turned conservative (one could also fairly say racist) on matters of civil rights. Works by James Ford Rhodes, William Dunning, John W. Burgess, and their students painted Reconstruction as a disastrous interlude. They described the Reconstruction governments as dominated by corrupt ‘carpetbaggers’ and ‘scalawags’ and accused them of imposing misrule on the South, partly by granting power to ‘ignorant’ freed slaves. Southern whites who used violence and fraud at the polls to overthrow the Reconstruction governments were defended, not condemned. Burgess called Reconstruction ‘the most soul-sickening spectacle that Americans had ever been called upon to behold.’ Rhodes called the work of the Radical Republicans ‘repressive’ and ‘uncivilized’ and cast them as politicians who ‘pandered to the ignorant negroes, the knavish white natives and the vulturous adventurers who flocked from the north’."

Dionne recalls encountering this picture of Reconstruction as an elementary school student. I also heard the same tale as a child and can still recall an image provided of a rather nasty looking individual carrying a carpetbag and meant to represent the "vulturous scalawags."

"Their accounts became the conventional wisdom of American history—and they were still affecting the presentation of the period in American history textbooks I first encountered in elementary school in the 1950s and early 1960s. These approaches to Reconstruction, in turn, reinforced racial attitudes that undergirded southern segregation."

Another era, and a century of learning that blacks were quite capable of determining their own future, led to the issuance of books and articles reconstructing Reconstruction and placing it in the context of well-meant, if not always wise attempts to both rebuild the southern economy and to provide civil rights to blacks who were demanding them.

Dionne refers to a massive study by Eric Foner, Reconstruction, issued in 1988 as being representative of these efforts. Ironically, Foner produced his history at Columbia University which had been at the forefront in producing the original picture of Reconstruction. Dionne quotes Foner’s description of the power of (bad) history.

"For it was at Columbia at the turn of the century that William A. Dunning and John W. Burgess had established the traditional school of Reconstruction politics, teaching that blacks were ‘children’ incapable of appreciating the freedom that had been thrust upon them, and that the North did a ‘monstrous’ thing in granting them suffrage. There is no better illustration than Reconstruction of how historical interpretation both reflects and helps to shape current policies. The views of the Dunning School helped freeze the white South for generations in unalterable opposition to any change in race relations, and justified decades of Northern indifference to southern nullification of the Fourteenth and Fifteenth Amendments."

Jill Lepore is correct in warning us about the danger of mixing politics and history. E. J. Dionne Jr. provides us with an excellent example of the damage that biased historians can cause.

Politicians and activists have learned the lesson of manipulating history well. The easiest way to defeat an opponent or an opposing idea is to rewrite history in order to make your enemy look evil, foolish, or ineffective.

Thursday, April 18, 2013

Gun Ownership and Regulation at the Birth of Our Nation

The Constitution provides little direct guidance on the issues related to gun ownership and gun restrictions, and what it does provide has been perplexing to subsequent generations of citizens. The Second Amendment is rather terse:
"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."

Taken alone, this statement could be understood as being focused on "well-regulated militias;" or it could be focused on the rights of the citizens to bear arms. For many years, the Supreme Court supported the former view. It wasn’t until 2008, in District of Columbia v. Heller, that the Court finally concluded that gun ownership by individuals is protected by the Second Amendment.

Adam Winkler has produced a fascinating review of the legal wrangling leading up to that 2008 decision. In the process he also provides the historical background required to understand the thoughts that might have been motivating our founding generation. Winkler is convincing in leading the reader to conclude that the right to bear arms was so obvious to the writers of the Constitution that it should have been beyond question. Winkler is equally convincing in making the case that placing restrictions on gun ownership in order to further the common good was also obviously assumed as a function of the government. Winkler’s book is titled Gunfight: The Battle Over the Right to Bear Arms in America.

The writers of the Constitution were of English descent. It is only natural that their view of personal rights would borrow heavily from those established in England.

"William Blackstone, the eighteenth-century jurist whose Commentaries on the Laws of England are still cited today as the authoritative account of old English law, described the English Bill of Rights as recognizing ‘the right of having and using guns for self-preservation and defense.’ The right to have arms, he said, was an ‘auxiliary’ right necessary to preserve the basic rights of man: ‘personal security, personal liberty, and private property.’ English court cases from the 1700s were in accord. Judges, like those in the 1744 case of Malloch v. Eastly, repeatedly recognized that it was ‘settled and determined’ law that ‘a man may keep a gun for the defense of his house and family’."

The occasion for the cementing of this right in the English Bill of Rights was the attempt by a Catholic king to confiscate the arms of potentially troublemaking Protestants. That king lost his job as a result.

Now consider what happened a century later when another English king tried to contain dissent in his American colonies by limiting access to firearms.

"In 1774, King George III ordered the cessation of all exports of firearms and ammunition to the colonies. The next year, he ordered British commanders to disarm certain provinces, especially in the north...."

"The American colonist had no standing army of their own, but had for decades formed militias composed of ordinary men to fight the Indians. These militias relied on the privately owned guns of the men called out to serve, in addition to stockpiled guns and gunpowder put away for times of need. The British began seizing these stockpiles to make it harder for the colonies to rebel—a move that only inspired the colonists to see to it that George III’s reign over them ended quickly."

It was an attempt by the British to confiscate arms being stockpiled in Concord that led to the confrontation that initiated the Revolution.

"It was the start of the American Revolution—a war ignited by a government effort to seize the people’s firearms."

After the successful revolution, the dependence on hastily formed militias was no longer sufficient. The response was not only to allow anyone to possess a gun, but to demand that they possess a gun. This was a mandate to purchase a commercial product no less. These guns had to be registered, kept in working order, and they were subject to confiscation by the government if necessary for the public good.

"With national defense becoming too important to leave to individual choice or the free market, the founders implemented laws that required all free men between the ages of eighteen and forty-five to outfit themselves with a musket, rifle, or other firearm suitable for military service....Every man of military age was legally mandated to acquire a militarily useful gun. This mandate was enforced at ‘musters,’ public gatherings held several times a year where every person eligible for militia service was required to attend, military gun in hand. At the musters, government officials would inspect people’s guns and account for the firearms on public roles—an early version of gun registration."

"If the government decided that a privately owned gun was needed, the founding fathers used a temporary form of gun confiscation known as ‘impressment’ to seize the gun from its owner. Ten of the thirteen colonies impressed privately owned firearms for the war effort against England."

Winkler tells us that at the time it was also assumed that privately owned guns would be available so the citizens could participate in combating crime.

"Not only did the founders lack a standing army; they also had no organized police departments. For decades after the Revolution, when crimes were committed, ordinary individuals were expected to respond to the ‘hue and cry,’ armed if necessary, and bring criminals to justice."

If there is yet any doubt that the right to bear arms was deeply imbedded in the psyche and structure of the nation when it was formed, Winkler provides this additional insight.

"Each of the fifty states has its own constitution that guarantees the fundamental rights of its citizens. Forty-three of the fifty state constitutions contain language that clearly and unambiguously protects the right of individuals to own guns. Several of these provisions date back to the founding....As the state courts have recognized since the early 1800s, such provisions directly protect the right of individuals to own guns for self-defense."

Winkler spends a comparable amount of his book detailing how gun restrictions have always been a part of our society.

"The right to bear arms in the colonial era was not a libertarian license to do whatever a person wanted with a gun. When public safety demanded that gun owners do something, the government was recognized to have the authority to make them do it."

Selective disarmament was recognized as within the government’s purview as blacks, free or slave, and people of mixed race were considered too dangerous to allow them to possess guns. And for a while in Maryland there was a law that barred Catholics from possessing guns.

An example more relevant to our times comes from Boston. City government was sufficiently concerned about fire hazards that they passed a law in 1783 fining anyone who kept or brought a loaded firearm into a building within the city.

"Yet there is no record of anyone’s complaining that this law infringed the people’s right to keep and bear arms. Even though the inspiration for this law was prevention of fires, not, say, protecting children from accidental shootings, the lesson remains the same: pressing safety concerns led Bostonians to effectively ban loaded weapons from any building in the city."

And finally, Winkler provides this conclusion:

"The founding fathers had numerous gun control laws that responded to the public safety needs of their era. While our own public safety needs are different and require different responses, the basic idea that gun possession must be balanced with gun safety laws was one that the founders endorsed."

The history of guns in our nation is misunderstood by both sides in the arguments over rights versus regulations. Winkler’s book should help clear up many misunderstandings.

Winkler’s history of how gun regulation has evolved over time is an interesting story also. It will, perhaps, be described in a subsequent article.

Tuesday, April 16, 2013

China Poisons the World

Many countries pursue environmentally harmful paths, but none has been accused of pollution on a scale that threatens the entire planet—at least until now. Thomas N. Thompson directs that accusation towards China in an article in Foreign Affairs: Choking on China: The Superpower That Is Poisoning the World.

China is known to be the largest emitter of greenhouse gases and thus the largest contributor to global warming. While this contributes to a worldwide problem, Thompson’s focus is on more immediate threats to health and prosperity.

"The dangers of China’s environmental degradation go well beyond the country’s borders, as pollution threatens global health more than ever. Chinese leaders have argued that their country has the right to pollute, claiming that, as a developing nation, it cannot sacrifice economic growth for the sake of the environment. In reality, however, China is holding the rest of the world hostage -- and undermining its own prosperity."

The danger pollution poses for China’s city dwellers has been widely reported, with most focus on high counts of particulates, the so-called PM2.5s. Particles with diameters less than 2.5 micrometers in diameter are small enough to damage lung tissue and enter the blood stream.

"According to the World Bank, only one percent of China’s 560 million urban residents breathe air considered safe by EU standards. Beijing’s levels of PM2.5s -- particles that are smaller than 2.5 micrometers in diameter and can penetrate the gas exchange regions of the lungs -- are the worst in the world. Beijing’s 2012 March average reading was 469 micrograms of such particles per cubic meter, which compares abysmally with Los Angeles’ highest 2012 reading of 43 micrograms per cubic meter."

The main source of these particulates is assumed to be the ubiquitous burning of coal. Does this particulate creation constitute a worldwide threat?

"In 2006, researchers at the University of California–Davis discovered that almost all of the harmful particulates over Lake Tahoe originated in China. The environmental experts Juli Kim and Jennifer Turner note in their essay "China’s Filthiest Export" that "by the time it reaches the U.S., mercury transforms into a reactive gaseous material that dissolves easily in the wet climates of the Pacific Northwest." At least 20 percent of the mercury entering the Willamette River in Oregon most likely comes from China. Black carbon soot from China also threatens to block sunlight, lower crop yields, heat the atmosphere, and destabilize weather throughout the Pacific Rim."

While not very many Californians are yet worried about pollution wafting over, China’s Asian neighbors are quite concerned. An article in the Washington Post by Michiyo Nakamoto provides background on the response by Japan.

"The new provisional guidelines, compiled by the environment ministry, recommend that people stay indoors if the average amount of air pollutant, PM 2.5, is projected to exceed 70 micrograms per cubic meter – or twice the ministry’s maximum permissible level of 35 micrograms a day. Beijing’s pollution regularly exceeds 10 times that level...."

"Since April 2012, levels over 70 micrograms per cubic meter have been recorded at six monitoring stations in Japan."

"Levels of PM 2.5 are being monitored at more than 500 stations across Japan but the government aims to increase that to 1,300."

Thompson indicates that the pollution being produced by China is imposed on other countries in multiple ways.

"Carbon dioxide emissions from cars in China are also growing exponentially, replacing coal-fired power plants as the major source of pollution in major Chinese cities. Deutsche Bank estimates that the number of passenger cars in China will reach 400 million by 2030, up from today’s 90 million. And the sulfur levels produced by diesel trucks in China are at least 23 times worse than those in the United States. Acid rain, caused by these emissions, has damaged a third of China’s limited cropland, in addition to forests and watersheds on the Korean Peninsula and in Japan. This pollution reaches the United States as well, sometimes at levels prohibited by the U.S. Clean Water Act."

China’s polluted rivers produce a regional problem.

"China has also completely botched its waste-removal efforts. Eighty percent of the East China Sea, one of the world’s largest fisheries, is now unsuitable for fishing, according to Elizabeth C. Economy, a China and environmental expert at the Council on Foreign Relations. Most Chinese coastal cities pump at least half of their waste directly into the ocean, which causes red tides and coastal fish die-offs. According to the World Wildlife Fund, the country is now the largest polluter of the Pacific Ocean."

Thompson also seems to suggest that China might also be considered a potential exporter of epidemics.

"Most recently, the country has been shaken by a mysterious virus, H7N9, which has already killed six people and has spurred health authorities to order the slaughter of thousands of pigeons, chickens, and ducks thought to carry it. In the United States, the Center for Disease Control and Prevention has begun work on an H7N9 vaccine."

This is a curious thought. While not generally considered a pollutant, a virus can be considered a form of poison. Is there something unique about China that might make it a likely breeding ground for dangerous viruses? An article by Florence Williams in the New York Review of Books provides some insight. It is titled How Animals May Cause the Next Big One. Williams is reviewing a book by David Quammen: Spillover: Animal Infections and the Next Human Pandemic.

Many recent threatening illnesses have been derived from infections that have moved from animals to humans. The spread of the SARS virus is perhaps the most intensely studied.

"Many of us will remember the virus SARS as a scary bug that flamed out quickly. But SARS is worth a long look for what it almost was. Quammen guides us back, step by unnerving step, to the time before eight thousand people were infected and 774 died. A seventy-eight-year-old Canadian grandmother delivered the virus to Toronto from Hong Kong in February 2003. Within weeks, it had arrived in the Philippines, Singapore, Vietnam, Thailand, and Taiwan."

"He describes how determined scientists eventually traced the SARS virus all the way back to Guangdong province....It turns out that Guangdong is ‘a province of ravenous, unsqueamish carnivores’ whose appetites fuel the biggest and most diverse live-animal markets in the world. Eventually, the culpable coronavirus was found in a civet cat, a mammal in the mongoose family, bound for a kitchen pot. More sleuthing showed that civets weren’t SARS’s main animal host. The civet had caught it from a horseshoe bat."

"How did the bat and the civet connect with each other? The gruesome live markets of southern China are an enterprising virus’s dream come true: such close quarters and all those stacked cages in a region where increasingly adventurous tastes demand a supply of exotic animals, including horseshoe bats."

Globalization entails more than the import and export of physical goods and the international exchange of financial instruments. As Thompson details, it involves the exchange of all the byproducts of human existence, including the noxious, the poisonous and the infectious.

Sunday, April 14, 2013

Brain Games: Can They Improve Intelligence?

Gareth Cook posted an article at The New Yorker titled Brain Games are Bogus. He was specifically referring to one approach to brain exercising focused on improving short-term memory.
"A decade ago, a young Swedish researcher named Torkel Klingberg made a spectacular discovery. He gave a group of children computer games designed to boost their memory, and, after weeks of play, the kids showed improvements not only in memory but in overall intellectual ability. Spending hours memorizing strings of digits and patterns of circles on a four-by-four grid had made the children smarter. The finding countered decades of psychological research that suggested training in one area (e.g., recalling numbers) could not bring benefits in other, unrelated areas (e.g., reasoning). The Klingberg experiment also hinted that intelligence, which psychologists considered essentially fixed, might be more mutable: that it was less like eye color and more like a muscle."

Klingberg took this idea and commercialized it. A number of companies are now providing such brain-enhancing aids. The goal is to improve short-term or "working" memory

"Cogmed and the other companies stake their claims on "working memory," the ability to keep information the focus of conscious attention, despite distractions—mental juggling, in other words. There is powerful, widely accepted evidence that working memory plays an important role in everything from reading ability and problem-solving to reasoning and learning new skills....Working memory is also closely related to "executive function," the brain’s ability to make a plan and stick with it, an active and fruitful area of psychology with broad social implications. Many psychologists consider working memory to be a core component of general intelligence. People who score highly on intelligence tests also tend to perform well on working-memory tests."

There have, of course, been a number of subsequent studies that corroborated Klingberg’s original conclusion, and a number of studies that conflicted with his finding. Cook claims that this state of confusion has been resolved by some researchers who have performed a "meta-analysis" of all the data.

"A pair of scientists in Europe recently gathered all of the best research—twenty-three investigations of memory training by teams around the world—and employed a standard statistical technique (called meta-analysis) to settle this controversial issue. The conclusion: the games may yield improvements in the narrow task being trained, but this does not transfer to broader skills like the ability to read or do arithmetic, or to other measures of intelligence. Playing the games makes you better at the games, in other words, but not at anything anyone might care about in real life."

Cook would have us conclude that such games are a waste of time. But before we succumb to this reasoning let’s think about what we have just learned. And let’s also remind ourselves that studies of human responses are extremely difficult and easily biased. As was reported in Education: Testing and Conditional Intelligence it is rather straightforward to purposely, or inadvertently, affect performance in taking an intelligence test.

What we could be observing here is nothing more than researchers performing studies that generally produce the results they set out to obtain. The subsequent meta-analysis that was assumed to resolve all issues was merely an analysis of the previous analyses. Someone decided which studies were accurate and applicable and which were not; then a grand summation of the acceptable data was performed and a conclusion drawn. If one takes an average of a bunch of biased studies, does the bias disappear? Are those who perform meta-analyses automatically rendered free of bias? Can anything be known for sure?

Cook may be correct in concluding that the specific approach he discussed has been hyped beyond any defendable level. But his statement seems to deny the utility of all attempts to use mental exercises to improve brain function. That is going too far. He implies that those who resort to such mental exercises are mainly:

"....ambitious parents with new assignments for overworked but otherwise healthy children."

There is much more at stake than the desires of "ambitious parents." While Cook correctly pointed out the importance of "executive functions" and the tie between working memory and performance on intelligence tests, Paul Tough provides another perspective on these subjects in his book: How Children Succeed.

"For a while now, we’ve known that executive-function ability correlates strongly with family income, but until recently, we didn’t know why."

Tough tells of a study by Gary Evans and Michelle Schamberg of Cornell University. They tracked 195 children from birth to age seventeen. Half the children originated in families then having incomes below the poverty line, and half from middle class families. The goal was to assess their working memory as they aged. The tool they used was essentially the old Simon game where a child was presented with a sequence of colored lights and asked to reproduce the sequence.

Their studies concluded that performance on this working memory test was, in fact, correlated to the amount of time spent living in poverty.

" who had spent ten years in poverty....did worse than kids who had spent just five years in poverty."

This finding is consistent with the correlation between executive function and income, but does not provide a mechanism for this effect.

These researchers had also sought to monitor physiological attributes of the children. In particular, they were concerned with the effects of stress.

"When the children in the study were nine years old, and again when they were thirteen....researchers took a number of physiological readings from each child, including blood pressure, body mass index, and levels of certain stress hormones, including cortisol. Evans and Schamberg combined these biological data to create their own measure of allostatic load: the physical effects of having an overtaxed stress-response system."

When they combined the physiological data with the poverty data and the working memory data, they concluded that the diminishment in working memory function was not due to poverty itself, but rather to the stress that could be induced by living in poverty. The subject of stress and physiological response was discussed in more detail in Poverty and Stress: The Ability of Children to Learn.

This research suggests that the ability of a child to utilize the brain he was born with is being compromised by physiological effects induced by his environment that effect brain function. These effects are best interpreted as interfering with the child’s ability to learn, rather than diminishing his intelligence.

"The part of the brain most affected by early stress is the prefrontal cortex, which is critical in self-regulatory activities of all kinds, both emotional and cognitive. As a result, children who grow up in stressful environments generally find it harder to concentrate, harder to sit still, harder to rebound from disappointments, and harder to follow directions. And that has a direct effect on their performance in school."

There is hope that these effects can be alleviated, if not reversed.

"The reason that researchers who care about the gap between the rich and the poor are so excited about executive functions is that these skills are not only highly predictive of success; they are also quite malleable, much more so than other cognitive skills. The prefrontal cortex is more responsive to intervention than other parts of the brain, and it stays flexible well into adolescence and early adulthood. So if we can improve a child’s environment in the specific ways that lead to better executive functioning, we can increase his prospects for success in a particularly efficient way."

There is too much at stake, and it is way too early to give up on the type of mental interventions that Gareth Cook so easily dismissed. Let’s let the researchers continue to contend with each other and hope that positive outcomes begin to emerge.

Thursday, April 11, 2013

Oil, Corn, and the Price of Gasoline

A great energy revolution is said to be taking place. New sources of oil are going to make the US energy independent and we will become a net energy exporter. If we are suddenly producing so much more oil, shouldn’t that allow the price of gasoline to drop? An excellent article in Bloomberg Businessweek by Asjylyn Loder, Mario Parker, and Matthew Philips addresses that issue.
"For the first time since 1995, the U.S. will likely produce more oil than it imports."

A greater supply of domestic oil and a fall in domestic demand for oil might be expected to lead to lower prices for gasoline.

"Even as fuel consumption has fallen to 16 percent below its 2007 peak, gasoline remains about a dollar higher than the average price over the past decade. So far this year, gasoline prices have risen 11 percent nationwide, to $3.65 a gallon."

Prices are being held high by a combination of market competition, logistics difficulties, and perverse effects of government regulation.

"Most of the surge in oil production has happened in places such as North Dakota, Wyoming, Colorado, and Oklahoma, far from refining hubs and big population centers. With competition fierce for limited pipeline capacity, producers have begun moving crude on barges and trains, adding as much as $17 a barrel to the price of domestic oil. That extra cost eventually makes its way to the price at the pump."

Once oil is refined to produce gasoline, it must still make its way from the refineries to the various domestic markets.

"Complicating the equation is a 1920 law called the Jones Act, which requires any cargo shipped between U.S. ports to be carried by vessels that are based in the U.S., made in the U.S., and crewed mostly by U.S. citizens. The law was intended to protect U.S. shipping interests but has made it more costly to move fuel between U.S. ports. This in particular hurts the Northeast, which is struggling to meet its fuel needs after several refineries closed in the last two years. According to Ed Morse, chief commodity analyst at Citigroup, those constraints add between $6 and $8 a barrel to transport costs."

As a result, abundant domestic oil supplies couple with expensive domestic transportation costs to make selling gasoline on the world market more profitable.

"’s often cheaper for a Gulf Coast refiner to send gasoline to Brazil than to New York."

Exports of refined oil products have been growing for a number of years. In 2011 the US became the largest exporter of such products.

"’The tools are in place for the U.S. to become an even bigger exporter of gasoline and diesel,’ says Stephen Schork, president of the Pennsylvania energy consulting firm Schork Group. ‘The U.S. has the most sophisticated network and the most technologically advanced refining system in the world, and it has access to a tremendous amount of domestically produced crude oil in a country where demand is stagnant at best’."

The article provides this chart to describe how these exports have grown over time and where they end up.

The refiners have a right to maximize their profits as they decide where to sell their products. They have that right because society gave it to them. Society is, in effect, agreeing to subsidize the profits by agreeing to pay a higher price for gasoline. Society can at least benefit from the flow of money into our economy from these exports and the lower flow of money out as the need to import crude oil diminishes.

The authors point out that there is one more regulatory cost to be discussed: the ethanol requirement. A law was passed in 2005 (and amended in 2007) that required ethanol to be mixed with gasoline in order to limit our dependence on imported oil.

"This year, the law requires U.S. refiners to blend 13.8 billion gallons of ethanol into the fuel they sell to domestic customers. In their calculations when crafting the bill in 2007, lawmakers assumed gasoline demand would continue to rise and that refiners would need all that ethanol to make up 10 percent of the fuel sold to motorists."

Our visionary legislators could not conceive of a situation in which demand for gasoline would fall.

"As a result, refiners don’t need all the ethanol the government forces them to buy. To make up the roughly 400 million gallon difference between the ethanol the industry needs and the amount the government mandates, refiners must buy credits called Renewable Identification Numbers, or RINs."

The cost of these RINs has been increasing. Therefore the cost of dealing with this excess ethanol problem will be borne by the consumer.

"If sustained, the increase may add as much as 10¢ to the retail price of a gallon of gasoline, says Bill Klesse, chief executive officer of Valero Energy, the world’s largest independent refiner."

The idea to convert plant product into ethanol is not a dumb idea—unless the plant stock chosen is a very inefficient one, and one that is also a critical component of the worldwide food supply. The decision to convert corn into ethanol was not only dumb, it was tragic.

World food prices have about doubled in the past decade. Withdrawing about half our corn production from the world market in order to make ethanol has not helped the situation. The decision to follow this path has raised food prices for everyone, including ourselves. This increase may not mean much to most people in the US, but it means a lot to those around the world for whom the purchase of food consumes the biggest portion of their income.

Now we learn that ethanol production is needlessly raising the price of our gasoline.

"The end result is that refiners have an even greater incentive to sell their fuel abroad, where it isn’t subject to U.S. ethanol requirements."

If politicians are really interested in smaller government and less regulation, this law and the associated regulations provide a good place to start whacking away.

Monday, April 8, 2013

The Psychopharmacological Assault on Our Soldiers

During the war in Vietnam our military leaders put the soldiers in their charge at risk from dangerous chemicals such as Agent Orange. In order to accomplish what they felt was their mission they created a generation of psychologically damaged and physically unhealthy veterans. Recent evidence suggests that the military may be repeating that mistake with the current cohort assembled to wage war in Iraq and Afghanistan. The dangerous chemicals being introduced this time around are not defoliants, but psychoactive drugs designed to alter brain function and control behavior. These drugs have only limited approval for use by the FDA for treatment of those suffering from mental illness.

One of the most disturbing trends within our military population is the increased incidence of suicide. More of our personnel died from suicide than from military action in 2012. This source provides recent data.

Note that the number of suicides has been increasing while the number of soldiers involved in military action has been decreasing.

Richard A. Friedman, director of the psychopharmacology clinic at the Weill Cornell Medical College, provided an article in the New York Times that notes the suicide issue and proceeds to accuse the Armed Services of misusing psychoactive drugs in an attempt to counter the results of stress experienced by soldiers.

"....according to data not reported on until now, the military evidently responded to stress that afflicts soldiers in Iraq and Afghanistan primarily by drugging soldiers on the front lines. Data that I have obtained directly from Tricare Management Activity, the division of the Department of Defense that manages health care services for the military, shows that there has been a giant, 682 percent increase in the number of psychoactive drugs — antipsychotics, sedatives, stimulants and mood stabilizers — prescribed to our troops between 2005 and 2011. That’s right. A nearly 700 percent increase — despite a steady reduction in combat troop levels since 2008."

"The prescribing trends suggest that the military often uses medications in ways that are not approved by the Food and Drug Administration [FDA] and do not comport with the usual psychiatric standards of practice."

Friedman points out that the military is supposed to carefully assess recruits and weed out those who might have psychological problems. Therefore one should expect less need for psychoactive drugs than exists in the general population. That is definitely not the case.

"The data suggest that military doctors may prescribe psychoactive drugs for off-label use as sedatives, possibly so as to enable soldiers to function better in stressful combat situations. Capt. Michael Colston, a psychiatrist and program director for mental health policy in the Department of Defense, confirmed this possibility. In an e-mail to me, Dr. Colston acknowledged that antipsychotic drugs have been used to treat insomnia, anxiety and aggressive behavior."

This experimental use of drugs on the soldiers is troubling to Friedman.

"The trouble is that we have no idea whether it’s effective — or safe — to use antipsychotic drugs on a continuing basis to treat war-related stress or to numb or sedate those affected by it."

Friedman uses treatment of post-traumatic stress disorder (PTSD) to illustrate the issues associated with these practices.

"Note that the military uses antipsychotic drugs to treat post-traumatic stress disorder, even though there is but weak evidence that these drugs effectively treat it. A recent randomized, controlled clinical trial involving nearly 300 veterans found that the antipsychotic risperidone was no better than a placebo as an adjunct in treating PTSD. Yet in 2007, PTSD was the most common off-label diagnosis for those, within the Department of Veterans Affairs, treated with psychoactive medications."

"In treating soldiers who have PTSD symptoms with antipsychotic medications, the military is violating its own treatment guidelines, which clearly state that S.S.R.I. antidepressants are the preferred first line of treatment for PTSD. The military medical leadership has, in fact, expressed concern about prescribing trends. In February 2012, the assistant secretary of defense for health affairs, Dr. Jonathan Woodson, wrote in a memo to the military’s leadership that the ‘greatest concern is the suspicion of the over-prescription of antipsychotic medications for PTSD’."

Dr. Woodson is correct in being concerned.

"Another reason to worry about liberal off-label use of antipsychotic medications is that they have long-term adverse health risks, including tardive dyskinesia, a potentially irreversible movement disorder."

"There are other disturbing prescription trends in the military. The number of prescriptions written for potentially habit-forming anti-anxiety medications — like Valium and Klonopin — rose 713 percent between 2005 and 2011. The use of sedating anticonvulsants — Topamax, Neurontin and Lyrica — increased 996 percent during this period. (Prescriptions for these three drugs increased 94 percent during the same period in the civilian population.)"

"None of these anticonvulsants are F.D.A.-approved for psychiatric use and none are without risk: anticonvulsants can impair short-term memory and fine-motor coordination, which would adversely affect combat performance."

Friedman is careful not to directly accuse the military doctors of unethical behavior, but he cannot help but issue these comments:

"It seems that the military favors quick-acting — and less effective — anticonvulsants and antipsychotics over antidepressants, which can take several weeks to work."

"There is an analogy, perhaps, between the military’s use of psychoactive drugs and the practice of pumping athletes full of steroids so they can continue to compete despite physical pain; athletes — and also soldiers — whose performance is chemically enhanced in this way may, however, unwittingly sustain more serious injuries as a result."

An article by Martha Rosenberg is less kind in evaluating the military and its drug prescribing practices. She points out that many of the drugs being discussed are known to increase the probability of suicidal behavior.

"One in six service members was on a psychoactive drug in 2010 and ‘many troops are taking more than one kind, mixing several pills in daily 'cocktails' for example, an antidepressant with an antipsychotic to prevent nightmares, plus an anti-epileptic to reduce headaches--despite minimal clinical research testing such combinations,’ said Military Times."

"The pills and pill cocktails many troops are prescribed are clearly linked to suicidal thoughts and behavior. Antidepressants like Prozac and Paxil, antipsychotics like Seroquel and Zyprexa and anti-seizure drugs like Lyrica and Neurontin all carry clear suicide warnings and all are widely used in the military. Almost 5,000 newspaper reports link antidepressants to suicide, homicide and bizarre behavior on the website The malaria drug Lariam is also highly correlated with suicide and its use actually increased in the Navy and Marine Corps in 2011, according to the Associated Press."

David Healy is a psychopharmacologist who occasionally arouses the ire of his colleagues by dredging up inconvenient historical data. He looked up suicide rates for schizophrenic patients before the age of medicinal treatment (1875-1924) and compared them to the rates that exist when current medications are used (1994-1998). He concluded that the use of modern antipsychotic medications—the ones being prescribed to our soldiers—increased the suicide rate among schizophrenics by a factor of 20.

Rosenberg seems to have a point.

Rosenberg takes yet another step and raises the issue of unethical behavior.

"Several powerful military psychiatrists and administrators are also consultants to Big Pharma who shamelessly enroll veterans in drug studies and promote the pills that drug companies pay them to promote. Who can say conflict of interest?"

If this statement strikes the reader as a bizarre dip into a conspiracy theory, the reader should remember that conspiracy theories are popular because, occasionally, conspiracies actually exist.

Let us turn now for some insight to Ben Goldacre and his book: Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients.

"....we will see that pharmaceutical companies spend tens of billions of pounds every year trying to change the treatment decisions of doctors: in fact, they spend twice as much on marketing and advertising as they do on the research and development of new drugs. Since we all want doctors to prescribe medicine based on evidence, and evidence is universal, there is only one possible reason for such huge spends: to distort evidence-based practice....Doctors spend forty years practising medicine, with very little formal education after their initial training. Medicine changes completely in four decades, and as they try to keep up, doctors are bombarded with information: from ads that misrepresent the benefits and risks of new medicines; from sales reps who spy on patients’ confidential prescribing records; from colleagues who are quietly paid by drug companies; from ‘teaching’ that is sponsored by industry; from independent ‘academic’ journal articles that are quietly written by drug company employees; and worse."

Drug companies do wondrous things at times, but in the field of interest here, mental illness, there is little science to go on, and what exists is mostly created by the drug companies themselves. That is a situation reeking with potential ethical issues.

Saturday, April 6, 2013

Russia’s Demographics: Stress and Health

Russia’s demographic issues have been a subject of considerable discussion. It has a rapidly declining population characterized by low birthrates as well as low life expectancies. Tony Wood takes a fresh look at Russia and its population in an article titled Russia Vanishes that appeared in the London Review of Books. Low fertility and high emigration rates are relatively easy to explain. But how does one create poor health and premature deaths in a modern society? Wood’s musings on how that might occur prompt another attempted explanation: one based on more modern research into the role stress can play in determining health outcomes.

Wood provides interesting background material. He reminds us that about a century ago Russia was expected to become a modern colossus.

"In 1929 Warren Thompson, one of the founders of demographic transition theory, predicted that ‘the growth of Russia during the next three or four decades will be one of the outstanding events of the modern world,’ and that "Russia may very well rival China and India in numbers by the year 2000’."

What is Russia’s population outlook in the twenty-first century?

"Since 1992, according to data from Rosstat, the state statistical agency, deaths have exceeded births by a cumulative total of 13 million, a figure far exceeding the numbers of immigrants. Russia’s population declined by an estimated 6.4 million between 1991 and 2009, an annual average drop of 337,000."

"Russia is still the ninth most populous country in the world, with 142.9 million inhabitants at the time of the 2010 census. But its demographic contraction is set to continue relentlessly: the UN Population Division envisages a drop to 136 million by 2030, and to 126 million by 2050; by the start of the next century it could be as low as 111 million. This decline – equivalent, by 2100, to more than a fifth of the current population – will push Russia down the global demographic hierarchy: the fourth most populous state in the world in 1950, by 2050 it will have dropped to 18th place, overtaken by Pakistan, Ethiopia and Egypt."

What the early demographers missed was the role that history would play in tormenting the Russian people. An unending sequence of catastrophes descended upon Russia. It began with the First World War, the revolution and civil war that followed, the era of Stalinist repression, and peaked with the slaughter associated with the Nazi invasion.

"This sequence of catastrophes, then, killed somewhere between 50 and 65 million Soviet citizens. The demographic consequences reached backwards as well as forwards in time: mass fatalities effectively cancelled out many of the childbearing efforts of previous generations, while the extermination of so many people obviously had an immediate impact on fertility levels. The Second World War killed 40 per cent of men between the ages of 20 and 49, and 15 per cent of women in the same bracket, removing at a stroke a large part of the child-producing population."

The postwar years have not been particularly easy either, with significant levels of political and economic turmoil. This history leads to easy explanations for why birthrates might fall and emigration might rise. But what is the mechanism that would cause people to die at a younger age?

Wood provides necessary background on the health of the Russian population.

"....from the mid-1960s Russian life expectancy entered a period of decline that lasted until the early 1980s – by a grim historical irony, a time when the country was being ruled by an increasingly gerontocratic Politburo."

"The arrival of Gorbachev coincided with a brief improvement: in 1986-87 Russian life expectancy equalled its Khrushchev-era peak. But then another phase of decline began, which turned into a headlong plunge after the collapse of the USSR: between 1991 and 1994, male life expectancy fell by six years, from 63.4 to 57.4; female life expectancy from 74.2 to 71. There has been some recovery since: in 2009, the figure for men was 62.7 and that for women 74.7. But overall life expectancy, at 68.7, was still below the level achieved in 1961."

"In the 1960s Russians could expect to live 23 years longer than those in the world’s ‘less developed regions’, but by 2010 their advantage was down to 1.9 years. Russian men can now expect to live 2.7 years less, on average, than men in the developing world – with shorter lifespans than men in India, Bangladesh or Ghana."

Attempts to correlate poor Russian health with a deficient healthcare system and poor personal habits have thus far fallen short of the target.

"What explains this terrible state of affairs? Among the factors are the astonishing prevalence of cardiovascular disease in Russia, the country’s notorious drinking culture, problems with child and adult nutrition, lack of healthcare expenditure, and the impact of the shocks of the post-Soviet capitalist transformation. Death rates from cardiovascular disease are four and a half times higher than in Western Europe, at 900 deaths per 100,000 according to figures from 2002. But this isn’t enough to account for the disparities in life expectancy."

"For many experts, having weighed all the factors, the continuing high mortality rates remain an enigma: in Eberstadt’s view, ‘the country is pioneering eerie new modern pathways to poor health’."

Wood suggests that the health of the population might be attributed to the horrible circumstances of World War II.

"In 1985, the German demographer Reiner Dinkel noted that the Second World War, as well as causing enormous and immediate loss of life, may also have had long-term effects on a population’s overall health. With a large proportion of a given country’s conscription-age inhabitants killed or wounded, the population left behind would have a lower average life expectancy. Is it far-fetched to imagine that a Soviet populace shattered by years of war, repression and famine might also suffer disproportionately from health problems, which would then be bequeathed to succeeding generations?"

Wood seems to be suggesting that killing off the healthiest members of the childbearing population in warfare would leave behind a relatively unhealthy segment of the population to reproduce and create the next generation. Genetic deficiencies leading to poor health could then propagated across generations.

Wood makes an interesting point. The death rates were high enough that if only the healthiest were killed a sort of "non-survival of the fittest" would ensue. Given that the deaths were high throughout the population during the war, including among civilians, it is not clear how selective this process might have been.

What might be more suggestive of an explanation resides in this statement: "Is it far-fetched to imagine that a Soviet populace shattered by years of war, repression and famine might also suffer disproportionately from health problems..."

Paul Tough has written about recent research into the effect of childhood trauma on health outcomes as an adult. Trauma in this context does not necessarily relate to physical injury, but rather to any situations in which high or persistent levels of stress are experienced. Years of warfare creates many opportunities to experience stress.

Tough discusses the issue of childhood trauma and its affect on educational prospects of children in his book How Children Succeed.

He provided a more general discussion of health issues in an article in The New Yorker: The Poverty Clinic. This article carried the lede:

"Can a Stressful Childhood Make You a Sick Adult?"

In the 1990s Kaiser Permanente initiated a survey of patients for whom it had a comprehensive health assessment. These people were asked to respond to a questionnaire about adverse childhood experiences (ACE). The type of experiences sought included:

"parental divorce, physical abuse, emotional neglect, and sexual abuse, as well as growing up with family members who suffered from mental illness, alcoholism and drug problems."

They discovered that the respondents, a rather typical middle class assemblage of around 17,000, had experienced many more of these adverse situations than expected. Of greater surprise was the fact that there was a direct and almost linear correlation between the degree of childhood adversity and poor adult health. The researchers constructed a rough "ACE score" for each of the respondents from the number of adverse experiences reported.

"....the higher the ACE score, the worse the outcome, on almost every measure, from addictive behavior to chronic disease. Compared to those who had no history of ACEs, those with ACE scores of 4 or higher were twice as likely to smoke, seven times as likely to be alcoholics, and six times as likely to have had sex before the age of fifteen. They were twice as likely to have been diagnosed with cancer, twice as likely to have heart disease, and four times as likely to suffer from emphysema or chronic bronchitis. Adults with an ACE score of 4 or higher were twelve times as likely to have attempted suicide than those with an ACE score of 0. And men with an ACE score of 6 or higher were forty-six times as likely to have injected drugs than men who had no history of ACEs."

Even when poor health habits as adults were factored out, the correlation persisted.

"The researchers looked at patients with ACE scores of 7 or higher who didn’t smoke, didn’t drink to excess, and weren’t overweight, and found that their risk of ischemic heart disease (the most common cause of death in the United States) was three hundred and sixty percent higher than it was for patients with a score of 0. Somehow the traumatic experiences of their childhoods were having a deleterious effect on their later health, through a pathway that had nothing to do with bad behavior."

Since this study was published the relevant pathway to poor health has been associated with the human body’s response to stress.

"The key pathway is the intricately connected system that our brain deploys in reaction to stressful events. This system activates defenses on many fronts at once, some of which we recognize as we experience them: it produces emotions like fear and anxiety, as well as physical reactions, including increased blood pressure and heart rate, clammy skin, and a dry mouth. Other bodily reactions to stress are less evident: hormones are secreted, neurotransmitters are activated, and inflammatory proteins surge through the bloodstream."

"As a response to short-term threats, the system is beneficial, even essential. But researcher like Bruce McEwen....and Frances Champagne....have shown that repeated, full-scale activation of this stress system, especially in early childhood, can lead to deep physical changes. Michael Meany....and his colleagues have found that early adversity actually alters the chemistry of DNA in the brain, through a process called methylation. Traumatic experiences can cause tiny chemical markers called methyl groups to affix themselves to genes that govern the production of stress-hormone receptors in the brain. This process disables these genes, preventing the brain from properly regulating its response to stress."

"When it comes to adult health, the most important element of the stress response is the immune system, which, during moments of acute anxiety, releases a variety of various proteins and other chemical signals into the bloodstream. In the short term, this process promotes resistance to infection, and prepares the body to repair tissues that might be damaged. After the short-term threat disappears, this inflammation subsides, unless the system gets overloaded, in which case these chemicals can build up, with toxic effects on the heart and other organs."

If one accepts the truth of these results, then one would also expect a generation of extremely unhealthy and dysfunctional adults to emerge from the cohort of Russian children of World War II. The trauma of having dysfunctional parents can then reproduce the poor health and dysfunction in another generation.

The idea that Russia’s population has been broadly affected by such a mechanism is intriguing, but it is pure hypothesis.

Paul Tough used the results of these studies to correlate health and learning problems with the type of traumatic experiences that children encounter in poverty-stricken communities. The notion that poverty and insecurity experienced in childhood can lead to poor adult health outcomes is on much firmer ground.

As poor nations become wealthier they are beginning to suffer from chronic ailments such as diabetes and heart diseases that are usually associated with the poor lifestyle habits of wealthier nations. What if personal habits are not the main causes, and the problem was determined decades ago through childhood experiences that included physical, social, and nutritional insecurity? That is something to ponder over. And that is something to worry about.

Wednesday, April 3, 2013

Is Our Government As Dysfunctional As It Appears? Can It Recover?

Two articles have recently appeared that provide insight into our manner of governing ourselves. Each was generated by a need to figure out if our nation was coming totally unglued, or was this just another saga in a long tale. Both highlight an aspect of our governance that we often overlook, and together they leave us with a bit more optimism about the future than might currently seem justified.

David Runciman provides a British perspective in a wonderful article in the London Review of Books with the engaging title: How Can It Work? He begins by reminding us that in the eyes of the world our country was always viewed as an implausible contrivance.

"American democracy is an amazing, fascinating, bewildering thing. There has never been anything else like it. Even now, as democracy becomes an ever more familiar feature of our world, there is still nothing like the American version. During the early years of the American republic, in the first half of the 19th century, what fascinated outsiders was its sheer implausibility. Could you really do politics like this, with such fractured and chaotic popular input? It seemed unlikely anything so ramshackle could last long. It was also implausible, especially to British eyes, for the simple reason that it was so clearly fraudulent: slavery made a mockery of it."

Runciman grants that the US has generated the successes that would normally be associated with a successful form of government, but suggests that its politics is too complicated to ever be able to understand, and thus one can never feel comfortable about its future.

"This is a system of politics that has held its ground under all manner of unpropitious conditions. It has been stress-tested almost to death. So does it work? You’d think we would know by now. But we don’t know. In a recent essay in the LRB (3 January), John Lanchester said the simplest summary of the state of knowledge in macroeconomics is ‘nobody knows anything.’ The same is true of macro-politics. In micro-politics, as in microeconomics, we are drowning in knowledge. The minutiae of the inner workings of American democracy are better understood than they have ever been, not least because many thousands of academics make a decent living studying them. But on the big question of whether it really makes sense to keep doing politics like this we don’t know."

Runciman, as do so many others, accords Tocqueville the prize for producing the greatest insight into how the US system actually functions. Tocqueville toured the country in 1831 as a young man.

"He got off the boat in New York, and like many first-time visitors was overwhelmed by what he found. His first impression was that it was a mess: stupid, chaotic, haphazard, impatient, relentless. He didn’t see how it could possibly work."

However, during his travels he concluded that the frenetic activity that surrounded him was deceptive in that it suggested it was incoherent and aimless. He described an overlaying opacity that shielded one from a view of activities occurring in depth.

"Tocqueville said of American democracy that more goes wrong, but more gets done as well, which means nothing bad lasts for long. Or as he put it elsewhere: more fires get started, but more fires get put out."

"He spotted the irony that it’s the openness of democracy that produces the opacity, because the excess of surface activity makes it hard to know what’s really going on....In a vibrant democracy the dissent, the noise, the anger, the incompetence are all readily apparent, yet out of this, over time, come stability and progress."

R. Shep Melnick provides insight into the process by which order seems to occasionally emerge from what is an apparently disorderly system. His article, The Gridlock Illusion, appeared in The Wilson Quarterly.

Our system of government was designed to make legislating difficult.

"Our unusually complex structure of government—one that combines separation of powers, bicameralism, and federalism—not only embeds numerous ‘veto points’ in the legislative process, but frustrates accountability by making it nearly impossible for voters to know whom to blame or reward for public policy."

Melnick addresses the "opacity" that Tocqueville referred to in arguing that the congressional contentions and discord at the national level block from our view the full suite of actions and legislative experiments being performed at other levels.

"The stalemate/gridlock argument is misleading not only because it ignores so many accomplishments, but also because it focuses so intently on just one small part of domestic policy, namely passage of major pieces of legislation at the national level. Lost in this picture are the daily decisions of administrators, judges, and state and local officials, as well as members of Congress engaged in the quotidian business of passing appropriations, reauthorizations, and budget reconciliation bills. Taken individually, these decisions might seem like small potatoes, but collectively they can produce significant policy change."

"Critics of the Constitution overlook the fact that by creating multiple ‘veto points,’ our political system simultaneously creates multiple points of access for policy entrepreneurs and claimants. Every ‘veto point’ that can be used to block action is also an ‘opportunity point’ that can be used to initiate or augment government activity."

For examples of how incremental activities can lead to broad policy positions he describes how a combination of court rulings, state and local legislation, and interactions between state, local and federal agencies can create policies and programs.

"How did affirmative action—highly unpopular with the American public—become embedded in so many federal programs? Slowly, subtly, and at times surreptitiously, a long series of court decisions, agency rules, and complex legislative provisions injected the presumption of proportional representation into federal civil rights programs. How did the federal government come to set national standards for state mental institutions, schools for the developmentally disabled, nursing homes, and prisons? Largely through litigation and consent decrees negotiated by the Department of Justice."

"To take another example, how did Congress manage to pass controversial legislation guaranteeing every disabled student a ‘free appropriate public education,’ complete with an ‘individualized education plan,’ provision of ‘related services,’ and a promise that each student would be placed in the ‘least restrictive environment’? The answer is that the courts acted first, suggesting (rather obliquely) that students with disabilities might have a constitutional right to an adequate education. This forced state governments to spend much more on special education, which led them to demand that the federal government provide the money needed to comply with this federal mandate, which led Congress to provide both more money and more federal regulation, which led to more litigation and more federal requirements, which led to state demands for even more money, and so on. This is a vivid illustration of how separation of powers and federalism can produce not gridlock, but a game of institutional leapfrog that results in a steady expansion of government programs."

Although the federal government has not been able to produce any legislation that is directed at the carbon management problem associated with global warming, that does not mean that no progress is being made.

"But state governments have acted. Nine northeastern states reached an accord promising to reduce power plant emissions by 10 percent by 2020. In 2006, California governor Arnold Schwarzenegger signed an agreement to curb global warming by capping certain emissions, declaring, ‘California will not wait for our federal government to take strong action on global warming’."

"More important, the Supreme Court has ordered the Environmental Protection Agency to regulate greenhouse gases. In response, the EPA has issued new rules that limit carbon dioxide emissions from industrial sources. This is just the beginning of its regulatory efforts. Given the structure of the Clean Air Act, it is unlikely that this will be a particularly effective or efficient form of regulation. But the worse the EPA proposal, the stronger the incentives for congressional action. After all, if Congress fails to act, the EPA’s flawed plan will go into effect."

Melnick’s discussion provides insight into how government policy has evolved in the past, and it explains why we can have some hope that progress will continue to be made in the future. But the past is not prologue to the future. And that brings us back to Runciman’s concern for our country.

While Melnick has provided some substance to Tocqueville’s claim that there is more going on than is apparent, it does not allow one to conclude that order will necessarily emerge from chaos when necessary. This belief that "things are not as bad as they seem" implies a faith in the workings of our democracy. This leads Runciman to pose a question.

"This is the dilemma facing American democracy now: how can anyone know how bad things are, given that they are rarely as bad as they seem?"

Faith alone does not guarantee salvation.

"The problem is knowing how much to take on trust at those moments when things really do seem to be going badly. The opacity of democratic life makes it tempting to think the most important thing is not to overreact. If you lose faith during the rocky times, there is a risk you will stifle the restless adaptability that enables the system to correct itself over time. But of course there is also the risk that this time things really are as bad as they look – that something has gone fundamentally wrong – and if you keep waiting, you will end up standing by as the ship goes down."

Runciman points out that the historical record actually provides little comfort.

"But it is too easy to suggest that, when the time is right, this flexible democracy will seize its moment to act decisively. The waiting is likely to get in the way of the seizing. Moreover, history suggests that the time will only be right when things have gone very badly wrong. Those golden moments many Americans and outsiders look to as examples of democracy at its best were also moments when it had just been at its worst: Lincoln could not have been Lincoln without the Civil War; FDR could not have been FDR without the Great Depression; LBJ couldn’t have got his civil rights programme through Congress without the assassination of JFK."

He suggests that more recent history may suggest a country that has grown more complacent and less resilient.

"The oil crisis of the 1970s wasn’t in the end bad enough to shake the faith, though it came close. The recent financial crisis wasn’t bad enough to engineer a fundamental rethink, at least not yet; the financial system, run by people who learned the lesson from past crises, has managed to patch itself together, for now. So what would it take? Another civil war? Another depression, with a quarter of the country unemployed and a third of output lost? Another assassination, taking place against a backdrop of seething racial discontent? Could present-day America really cope with any of these?"

Runciman does not claim to know the answer to that question, and he warns us to not believe that anyone else knows.

"Behind these questions lurks the basic reason we don’t know anything: history provides no sort of guide. There is, in fact, nothing to go on. America is still a fantastically rich, prosperous, dynamic society. Its military remains unmatched, its universities the envy of the world, its culture voraciously consumed, its currency the bedrock of global finance. We don’t know what happens when such a society goes into decline because it has never happened before."

While faith cannot be depended upon; despair definitely provides no help. We will just have to persevere and keep trying.
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