Sunday, March 25, 2018

Global Warming and the Resurrection of Dormant Diseases

When one thinks of climate change and its consequences, images of floods and droughts come to mind, soon followed by those of rising seas that engulf coastlines and cities.  These events are, of course in the future.  It is necessary that we be reminded that although climate change is a gradual thing, its effects are evident here and now.  Areas in southern Florida are already seeing chronic flooding at high tides.  The disappearance of sea ice on Alaska’s coast is destroying the habitat for those who live there.  The more extensive melting of permafrost with rising temperatures is causing a great deal of damage to the state’s infrastructure.  An article in Harper’s Magazine, Cursed Fields, by Noah Sneider points out that melting permafrost can do more than just ruin the foundation of a building or a road, it can release the agents of diseases that have long lay dormant in the ice.

Sneider tells of an incident that occurred on the Yamal Peninsula which extends north from Russia’s northern border.  This area has long been inhabited by a people who have based their existence on tending herds of reindeer.  The products harvested from these animals provide food, clothing and shelter, as well as articles for trade.  In the long cold winters, the region freezes solid.  During the summer months the temperature can get up to about 60 degrees Fahrenheit.  However, warming of the environment is proceeding faster at the northern reaches of our planet and in 2016 a troubling event occurred.  The summer of 2016 was especially warm with temperatures reaching to about 100 degrees Fahrenheit.  This causes much more than normal melting in the surface permafrost layer.

“Normally, the upper layer of permafrost melts about twenty to thirty centimeters; in 2016, it receded more than a meter and a half in certain areas of Yamal.”

These unusual conditions were accompanied by an illness that began killing reindeer.  The Russian government sent experts up to investigate.  What they discovered was that the animals were dying from anthrax, a disease that they thought had been eradicated from the region because its last known instance occurred about 75 years ago.  Anthrax is a nasty, durable, bacterial spore that can lie dormant for long periods.  It was once a major threat to herd animals until Louis Pasteur developed a vaccine that was effective against it.  In Yamal, vaccination is difficult and expensive and fell out of practice.

“In Yamal, the authorities were certain that they had defeated anthrax long ago. The last major outbreak took place in 1941. Surveys of some 250,000 soil samples over the past twelve years had revealed no signs of dormant spores. The regional government had stopped vaccinating reindeer in 2007 — it was a costly process that required wrangling the vast herds across a territory larger than France. ‘An extended period of good fortune leads people to let their guard down, their sense of worry and danger disappears, and they think that since everything has been good, it will continue to be good,’ mused Yuri Selyaninov, the microbiologist whose laboratory confirmed the anthrax diagnosis.”

The official explanation for the reemergence of anthrax in the region places the blame on climate change and the warming of the local environment.

“Climate change also lies behind the most credible explanation for anthrax’s return. You might call it the zombie theory. It goes something like this: The corpses of reindeer infected with the disease decades or centuries ago were preserved in the upper layers of the peninsula’s permafrost, keeping the resilient spores alive. As temperatures have soared, the permafrost has begun to thaw ever deeper, exposing the ancient grave sites and giving the spores a pathway back to the surface, where they can once again rise up to infect the living.”

Sneider points out that a warning was issued in 2011 that this sort of event was likely to occur.  Boris Revich, an environmental epidemiologist at the Russian Academy of Sciences made this statement.

“As a consequence of permafrost melting, the vectors of deadly infections of the eighteenth and nineteenth centuries may come back, especially near the cemeteries where the victims of these infections were buried.”

In case one chooses to ignore events occurring in the farthest reaches of northern Russia, Sneider points out that excessive melting of permafrost is also happening in Alaska, and numerous scientists and agencies are concerned.

“Recent research has uncovered a number of specific threats. From mass graves in the Alaskan tundra, scientists have uncovered fragments of the virus that caused the 1918 outbreak of the Spanish flu. In 2013, the French microbiologists Jean-Michel Claverie and Chantal Abergel discovered still-active viruses in a 30,000-year-old slice of Siberian permafrost. Though their sample could not affect humans, their study suggests that other, more infectious viruses may be lurking. Some frozen microbes may even carry diseases that our immune systems no longer know how to fight. Specialists also caution that devastating eradicated diseases such as smallpox could be preserved in the ice. Many researchers see the Yamal outbreak as a sign of things to come. ‘It’s a warning of sorts that the situation with preserved infections infiltrating our modern world may get much worse if we do not address the problem,’ argued Boris Kershengoltz, the chief of research at the Russian Institute for Biological Problems of the Permafrost Zone.”

The Spanish Flu of 1918 has been of particular interest because it was so deadly.  Gavin Francis provides some relevant background in an article in the London Review of Books: The Untreatable.

“This year marks the centenary of Spanish flu, the most deadly pandemic in human history. It is estimated that five hundred million people contracted it – a third of the global population in 1918 – and that between fifty and a hundred million of them died. Asians were thirty times more likely to die than Europeans.”

“The spread of Spanish flu was quickened by the railway and steamer lines that girdled the planet, starkly illuminating global inequalities in security, nutrition and access to medical care. In India 6 per cent of the population died; in Fiji 5 per cent; in Tonga 10 per cent. In Western Samoa, for reasons that aren’t entirely clear, more than 20 per cent of the population died. Even harder hit were the Alaskan Inuit, with a death rate between 25 and 50 per cent: in some small Alaskan communities everybody died.”

There has long been interest in studying this flu virus and trying to understand why it was so incredibly contagious.  The logical place to look for samples of the virus was within corpses of those who had died and been buried within Alaska’s permafrost.  Finally, success came and scientists could study it in detail.

“….a Swedish-Iowan pathologist, Johan Hultin, travelled to Alaska and sampled lung tissue from graves at Brevig Mission, one of the Inuit communities badly affected by Spanish flu. The graves were relatively well preserved in permafrost….[he] exhumed an obese woman whose lungs had been preserved in fat. Enough flu virus was recovered from the lungs to be sequenced, and the results, published in Nature in 2005, suggested that the 1918 virus was avian in origin, but that a mutation had rendered it fatally adept at infecting mammals.”

Curious scientists would also wish to verify the virus’s lethality.

“When the reconstituted virus was given to mice under barrier conditions the mice lost 13 per cent of their body weight and produced forty thousand times more infectious particles than mice with ordinary seasonal flu. Six days after infection, all the mice were dead.”

The deadly virus is now being stored at a facility in Atlanta, Georgia.  Should it reemerge in the population, modern healthcare would limit its effects, but tens of millions of people are estimated to die.

“The virus is currently held in a high-security facility in Atlanta, Georgia. In 2016, around 1.7 million people died from tuberculosis, around a million from HIV/Aids, and around half a million from malaria. Computer modelling suggests that if the 1918 H1N1 virus were to break out of the facility in Atlanta it would cause around thirty million deaths.”

There are two things one should take from this discussion.  First, influenza is dangerous, and it is only a matter of time before a similarly lethal strain arises.  Second, climate change is already having serious consequences.

The interested reader might find the following articles informative:

Global Warming Comes to Alaska

Putting Climate Change in Perspective

Ground Zero for Sea-Level Rise: South Florida

Global Warming and the Holocaust’s Warning: It Can Happen Again

Disease and the Human Outbreak

Tuesday, March 20, 2018

Can India Solve Its Youth Problem?

While China has controlled its population and will see a drop in the near future, India has not and will continue to see growth.  This leaves China with a declining number of workers relative to the number of elderly who will be leaving the workforce and needing pension and healthcare support as they age.  This will be a major economic trial for China.  On the other hand, the fertility in India remains quite high and it is most significantly burdened by an undereducated and often malnourished population of young people who must be provided education and employment if social stability is to be maintained.  Economists like to refer to India’s youth-oriented population as a “demographic dividend,” meaning that it will provide a large number of working age people who can promote economic growth and still save and pay the taxes needed to maintain their dependent elderly.  However, if this crush of new “workers” are not provided an opportunity to participate in the economy of the future, India could continue to have hundreds of millions of under-educated and under-employed people wandering their streets for the indefinite future—more of an economic catastrophe than a dividend.

Anja Manuel writes of these issues for both China and India in her book This Brave New World: India, China, and the United States.  Her discussion of China was partially presented in Can China Solve Its Ageing Population Problem?  Here, the focus is on India.

“As China greys, India faces the opposite problem.  It is struggling to create sufficient education and job opportunities to keep its young adults gainfully occupied.  The Modi government knows that if it misses this demographic dividend, the Indian economic juggernaut may stall and a new generation of hundreds of millions of Indians will be trapped well below the middle-class life they aspire to.  To take advantage of a youth bulge, India will need decent schools.  It will also need to create labor-intensive jobs in manufacturing and bring in more foreign direct investment.  India must slow population growth in some states so that its youths are not working solely to feed their own many children.  As the population gets wealthier, the ‘bulge’ will also increase demand for electricity and water and put more strain on India’s creaking infrastructure.”

That paragraph lists a number of heroic tasks that India must complete before it can join the ranks of “wealthy” nations.  The first is population control.  It is often assumed that because China could manipulate its society and create a more modern economy and society, then India can do the same.  However, India is decades behind China in making progress, and it may be too late to try to reproduce what China accomplished.

Historically, populations fall when they become wealthier and when women become sufficiently empowered to expect a future beyond that of a breeder of children and a household servant.  Mao made numerous disastrous decisions when he attained power in China, but he at least recognized that “women support half the sky.”  The status of women improved in China as it eventually grew in wealth.  The infamous “one-child rule” is often indicated as the reason for the decline in China’s birth rate, but fertility was already declining when it was implemented.  While it is true that the rule continued the tradition of generating a surplus of baby boys relative to baby girls due to abortions and infanticide, it also boosted the position of women.  Many parents would decide that if they could only have one child, and it turned out to be a female, that girl would be provided whatever advantages the family could afford.  In China today, women aspire to a college education and a career in the economy.  They compete with men for positions in government and industry.  India will take generations to get to where China is today.  It will not limit its population until it manages to deal with its gender inequalities.

India performs dismally on the UN’s gender equality index, while China’s ranking is even higher than that of the US.

“Domestic violence and rape are just some of the problems India’s women face.  The country ranks an appalling 127th out of 187 countries on the UN Development Program’s 2013 gender equality index (this compares to China’s impressive 37th place, followed by the United States’ 47th).  Wealthy and high-caste women do better than their poorer sisters.  Yet fewer Indian women of all social classes work outside the home than in other Asian countries.  When they do it is often in agriculture and as servants, so they are poorly paid and get no benefits.  At home, girls are valued less than boys, partly because of the large dowries their families must pay to marry them off.  As a result, parents invest less in girls’ education, and many female fetuses are aborted (as in China).  Violence against women is common.”

“The treatment of women in India is a tragedy for human reasons.  In cold economic calculus, it also retards India’s growth.  The Organization for Economic Co-operation and Development (OECD) estimates that enlarging opportunities for women could raise India’s GDP growth by around two percentage points per year….”

Some pundits have argued that India will eventually exceed China in its economic prowess because, as a Democracy, it will be wiser than China and its planners.  So far, the data indicates that China is far ahead of India in providing social benefits such as education, decreased mortality, and gender equality to its population, while India still struggles to compete with states like Bangladesh in providing such benefits.

It is difficult to avoid noting the accomplishments of India’s scientists, engineers, and industrialists who are amazingly successful around the world.  Yet India’s education system is a disaster.  After independence the decision was made to develop a few excellent engineering-focused universities (Indian Institutes of Technology, or IITs), but this left less funding for general education.

“Unfortunately, educated Indians are an exception.  From elementary schools to graduate degrees, the education system is underresourced and creaking.  The Delhi slum school I visited crammed twenty kids into each twelve-by-twelve-foot, furniture-less classroom.  Children sat on the brown floor and wrote with stubs of donated pencils….To contrast with the glittering world of Indian engineering stars, India has by far the most illiterate adults in the world.  Nearly 300 million adult Indians cannot read, more than a third of the total illiterate population on earth.”

India is trying to improve school attendance and has had some success, but it is far from keeping up with progress in its major competitor China.

“In the 1980s, only 60 percent of Indian youths could read; now the number is over 90 percent.  But Indian children still receive far fewer years of schooling than Chinese or American children—only a bit over five years on average.  If they make it through high school, very few Indians receive any vocational training.”

And those who manage to get an advanced education, even a university diploma, find it difficult to find employment.

“For the lucky Indian teens who manage to finish high school, their prospects are not rosy.  A vast majority of them cannot get jobs even if they finish university.”

“As many as 83 percent of engineers graduating from Indian Universities in 2013 could not find jobs, due to poor English language and other skills.  The call center company 24/7 Customer Pvt. Ltd. Hires only three out of every one hundred Indian applicants and now recruits in the Philippines and Nicaragua, where the qualifications are better.”

What the education system desperately needs are well-trained teachers.

“Although it has improved enrollment, India faces chronic problems because there are not enough teachers, some existing teachers are unskilled, and others chronically miss work.  India needs a sobering 1-2 million (!) new teachers for the bulge of children who are entering its creaking school system.  Minister Sibal told me in 2012 that India has to train several hundred thousand teachers a year to teach the 200 million school children.  He added that in the United States, there are about 3,000 teachers per million people, but in India there are only 456.”

One of India’s problems is the fact that it has a poorly organized economy that makes collecting taxes and allocating them to critical needs nearly impossible.

“About 90 percent of Indian workers are in the unorganized sector—everything from the small shops that don’t pay taxes, to day-wage construction workers, and the waste pickers I met in eastern Delhi.  As a result, even if India wanted to build a comprehensive pension scheme, it would be nearly impossible for people to contribute some of their paychecks to this effort.  There are no paychecks.”

Manuel indicates that India plans to focus on jobs in “labor intensive” manufacturing, but if India plans on reproducing China’s path by providing numerous manufacturing jobs for its young, that train may have already left the station.  China followed that path decades ago and while its people and its environment suffered mightily from the strain of being a low-wage manufacturer, it did increase the nation’s wealth and lift a great fraction of its population out of poverty.  But China has already moved on.  It now has the resources and infrastructure to compete with anyone in the world in manufacturing.  Competing on wages is no longer desirable or possible.  If India wishes to become a dominant maker of things, it must either follow the high-tech, highly-automated path China is already on, or compete with low-wage states like Bangladesh and Vietnam in Asia, or the poorer nations of Africa.  Neither path is likely to provide the hundreds of millions of living-wage jobs needed for its youth.

It should be noted that in addition to all its internal problems, India is surrounded by countries with which open hostilities could break out at any moment.  It must maintain a large military force to patrol its long borders with China and Pakistan.  To maintain the image of a growing international power, it must project that power both militarily and economically.  The idea of India contributing economic aid to other nations when it cannot care for its own people seems a bit absurd.

All nations are at risk from climate change.  India is one of the countries most at risk.  Any change to the annual monsoon rain pattern could be catastrophic.  Neighboring Bangladesh is most at risk from rising sea levels.  It is virtually surrounded by India.  India could soon face a situation where it must decide whether to close that border completely or allow tens of millions of climate refugees to pour into its country.

India is often lauded as the largest democracy on earth.  It is encouraging that it has maintained a democratic system in spite of all its social and economic problems.  However, having a democratic system is not the same as having an effective system of democratic representation in government.  Some cynical Indians would claim that what India has is actually a psephocracy.  That is not a very common term, but what it seems to mean is that India has a valid ballot system for electing representatives to office, but the elected only pay attention to their voters during election season and once in office devote their efforts to partisan politics and various forms of corruption.

So, after all that, what does the future hold for India: demographic dividend, or demographic disaster?

The interested reader might find the following articles informative.

India: Demographic Dividend or Demographic Catastrophe?

India’s Democracy and China’s Central Planning: Which Works Best?

Can China Solve Its Ageing Population Problem?

The Population of China and Absurd Economic Projections

India and Its Psephocracy

Thursday, March 15, 2018

Trump and His Associations with Russians and Criminals

Two recent articles delve into Donald Trump’s business and political activities and produce a troubling picture of the man who is the president of the United States.  The first is an article in The New Yorker by Jane Mayer: Christopher Steele, the Man Behind the Trump Dossier.  Much of Mayer’s piece deals with the astonishing sequence of events in which the FBI spent the months before the 2016 election publicly discussing Hillary Clinton’s emails and whether any classified material might have been exposed, while at the same time investigating Donald Trump as a possible agent acting in the interests of Russia and saying nothing about it to anyone.  That cluster-&#!! is best understood by reading her article. 

What is of interest here is the background provided on Christopher Steele, the ex-M.I.6 member who researched and produced the contentious dossier that first tied Trump to Putin and Russia.  He emerges as a man of skill and impeccable integrity who came to grief because he tried to do the right thing for the United States.  And what he learned needs to be heard by everyone.

Steele was well-known in US intelligence circles, having run the British agency’s Russia desk from 2006 to 2008.

“The British Secret Intelligence Service is highly regarded by the United States, particularly for its ability to harvest information from face-to-face sources, rather than from signals intelligence, such as electronic surveillance, as the U.S. often does. British and American intelligence services work closely together, and, while Steele was at M.I.6, British intelligence was often included in the U.S. President’s daily-briefing reports. In 2008, Michael Hayden, the C.I.A. director, visited the U.K., and Steele briefed him on Russian developments. The following year, President Obama visited the U.K., and was briefed on a report that Steele had written about Russia. Steve Hall, a former chief of the C.I.A.’s Central Eurasia Division, which includes Russia, the former Soviet states, and the Balkans, told me, ‘M.I.6 is second only perhaps to the U.S. in its ability to collect intelligence from Russia.’ He added, ‘We’ve always co√∂rdinated closely with them because they did such a great job. We’re playing in the Yankee Stadium of espionage here. This isn’t Guatemala’.”

In 2008, Steele decided to retire and form an investigative company with a colleague, Christopher Burrows.  They would call the company Orbis Business Intelligence, and its focus would be on their area of expertise: Russia and its dealings.  Surprisingly, two of their earliest cases involved criminal activities by people based in Trump Tower. 

“Steele’s first client after leaving M.I.6 was England’s Football Association, which hoped to host the World Cup in 2018, but suspected dirty dealings by the governing body, FIFI. England lost out in its bid to Russia, and Steele determined that the Kremlin had rigged the process with bribes.”

In the course of this investigation, it had been determined that corruption in FIFA was a world-wide issue.  Steele decided that what had been discovered should be followed up and expanded to include the entire organization.  He turned to the FBI as the only single agency with the resources to proceed.

“In 2011, Steele contacted an American agent he’d met who headed the Bureau’s division for serious crimes in Eurasia. Steele introduced him to his sources, who proved essential to the ensuing investigation. In 2015, the Justice Department indicted fourteen people in connection with a hundred and fifty million dollars in bribes and kickbacks. One of them was Chuck Blazer, a top FIFA official who had embezzled a fortune from the organization and became an informant for the F.B.I. Blazer had an eighteen-thousand-dollar-per-month apartment in Trump Tower, a few floors down from Trump’s residence.”

There was no reason to connect Trump to the FIFA business.  However, Steele encountered Trump Tower once again in a subsequent investigation when the FBI asked Steele to help in an investigation of a gambling and money-laundering ring.  In this case the target was a Russian identified as a member of organized crime in his home country.

“Several years ago, the F.B.I. hired Steele to help crack an international gambling and money-laundering ring purportedly run by a suspected Russian organized-crime figure named Alimzhan Tokhtakhounov. The syndicate was based in an apartment in Trump Tower. Eventually, federal officials indicted more than thirty co-conspirators for financial crimes. Tokhtakhounov, though, eluded arrest, becoming a fugitive.”

Could this association with Trump Tower be another coincidence?  That possibility became much less likely when Tokhtakhounov showed up seated near Trump at the Miss Universe contest in Moscow in 2013.  Steele was moved to make this comment.

“’It was as if all criminal roads led to Trump Tower,’ Steele told friends.”

One shouldn’t forget that Paul Manafort, known to Trump since the 1980s, and Trump’s one-time campaign chairman, showed up with a bunch of cash and began getting involved in Manhattan real estate.  In 2006, Manafort set up shop in Trump Tower.

One of the suspicious things about Trump’s relations with the Russians was that Trump repeatedly approached the Russians about joint business deals, but nothing seemed to come of it.  Was this the trait of a persistent real-estate entrepreneur, or was this a case of a businessman pursuing a hidden agenda?

Steele was well-aware of Russian actions attacking the institutions of other countries.

“Even before Steele became involved in the U.S. Presidential campaign, he was convinced that the Kremlin was interfering in Western elections. In April of 2016, not long before he took on the Fusion assignment, he finished a secret investigation, which he called Project Charlemagne, for a private client. It involved a survey of Russian interference in the politics of four members of the European Union—France, Italy, the United Kingdom, and Germany—along with Turkey, a candidate for membership. The report chronicles persistent, aggressive political interference by the Kremlin: social-media warfare aimed at inflaming fear and prejudice, and ‘opaque financial support’ given to favored politicians in the form of bank loans, gifts, and other kinds of support. The report discusses the Kremlin’s entanglement with the former Italian Prime Minister Silvio Berlusconi and the French right-wing leader Marine Le Pen. (Le Pen and Berlusconi deny having had such ties.) It also suggests that Russian aid was likely given to lesser-known right-wing nationalists in the United Kingdom and elsewhere. The Kremlin’s long-term aim, the report concludes, was to boost extremist groups and politicians at the expense of Europe’s liberal democracies. The more immediate goal was to ‘destroy’ the E.U., in order to end the punishing economic sanctions that the E.U. and the U.S. had imposed on Russia after its 2014 political and military interference in Ukraine.”

When Steele was tasked by Fusion GPS to investigate Trump’s ties to Russia, the Project Charlemagne work naturally provided a focus on political issues.  What he discovered frightened him.

“Steele’s sources claimed that the F.S.B. [the former KGB] could easily blackmail Trump, in part because it had videos of him engaging in ‘perverted sexual acts’ in Russia. The sources said that when Trump had stayed in the Presidential suite of Moscow’s Ritz-Carlton hotel, in 2013, he had paid ‘a number of prostitutes to perform a “golden showers” (urination) show in front of him,’ thereby defiling a bed that Barack and Michelle Obama had slept in during a state visit.”

“More significant, in hindsight, than the sexual details were claims that the Kremlin and Trump were politically colluding in the 2016 campaign. The Russians were described as having cultivated Trump and traded favors with him ‘for at least 5 years.’ Putin was described as backing Trump in order to ‘sow discord and disunity both within the U.S.’ and within the transatlantic alliance. The report claimed that, although Trump had not signed any real-estate-development deals, he and his top associates had repeatedly accepted intelligence from the Kremlin on Hillary Clinton and other political rivals. The allegations were astounding—and improbable. They could constitute treason even if they were only partly true.”

Hopefully, Special Counsel Robert Mueller will sort through all of this and come to some conclusion that will be convincing to the US public. 

Mueller’s investigation into related affairs seems to have delved into Trump’s business activities as well.  Little is known about where that aspect of the investigation is headed.  However, a second article appeared a few days ago in the San Francisco Chronicle that might shed some light: Russian criminals’ links to Trump could compromise him.  The article was written by Tom Adams and Dennis Aftergut.

“Tom Adams and Dennis Aftergut are retired attorneys. Adams, a founding partner of Adams Broadwell Joseph & Cardozo, has experience doing due diligence analysis for real estate transactions. Aftergut was a federal prosecutor and chief assistant city attorney of San Francisco.”

What the authors produce is a list of some of Trump’s major real estate projects and who his co-developers were.  The results are enlightening for the common reader.  One can only wonder what Robert Mueller thinks of all this.

“Connect the dots in public reporting on Trump’s financial dealings, and a business model comes to light, one based on association with crooks, money launderers — and lots of Russians.”

“Take Trump’s Panama tower. The project’s lead broker, Alexandre Henrique Ventura Nogueira, was a criminal; in 2009, he admitted to money laundering.”

“All-cash deals for condos — a red flag for money laundering — were commonplace at Trump Panama. Convicted drug-money launderer Colombian David Helmut Murcia Guzm√°n bought 10 condos. Suspected Russian money launderers Andrey Bogdanov and Ivan Kazanikov bought a dozen others. A former financial crimes prosecutor in Panama, Mauricio Ceballos, called Trump Ocean Club Panama ‘a vehicle for money laundering’.”

Trump was at one time heavily invested in casinos, a favorite place for money launderers to exchange tainted money for clean money.  Because of that, the US Bank Secrecy Act requires strict record keeping in the gambling industry.

“The Trump Taj Mahal casino in Atlantic City, N.J., once paid a $10 million fine for willful violations of that act. It admitted doing it on purpose!”

The associations with crooks and Russians only deepened when Trump began licensing its name for use in real-estate projects.

“Trump’s partners in its SoHo project in Manhattan, as in other deals, were crooks. Felix Sater, a Russian, had pleaded guilty to money laundering and stock manipulation and a stabbing with the stem of wine glass. The FBI considered partner Tamir Sapir part of a Russian mob. Financing for that hotel came from an Icelandic bank close to Russian President Vladimir Putin. Three-fourths of the sales were all-cash.”

“At Trump Tower Toronto, the Trump Organization first partnered with Leib Waldman, who had fled the United States after pleading guilty to bankruptcy fraud and embezzlement. Then a Russian-born Canadian, Alex Schnaider, replaced Waldman. Shnaider had made fast money in the former Soviet Union and dealt with a Russian bank connected to Putin. Another foreign bank, accused previously of acting as a conduit for Russian money laundering, financed the project. The project incurred excessive construction costs — a trademark of money laundering — and went bankrupt while 400 other similar condo towers in Toronto succeeded.”

“In 2012, the Trump Organization partnered with a family referred to as ‘the Corleones of the Caspian,’ after the fictional Mafia family in ‘The Godfather’ films, to launch a hotel-condo project in Azerbaijan. Duffel bags of cash were used to pay contractors. Was money laundering during construction its real purpose? One thing’s for sure: No one who intended a luxury hotel to succeed would ever locate it on the wrong side of the tracks, where this one stood. It never opened.”

“The FBI is investigating Ivanka Trump’s role in the Trump Tower in Vancouver, British Columbia. Surprise: Tony Tiah Thee Kian, the financial backer of that project, is a crook. He pleaded guilty in 2002 and was fined $783,000 for submitting a false report to the Malaysian stock exchange. Tiah was forced to quit as CEO of his firm and barred from corporate boardrooms for five years.”

Having extensive business dealings with criminals doesn’t necessarily prove criminality on Trump’s part, although it behooves Mueller to look into this activity.  The authors claim that their goal in reporting these suspicious instances was to alert us that our president could be compromised not only because of election-related activities, but also because of a long history of business-related projects.

“A global trail of evidence suggests Russians and other foreign powers may know enough about crimes to compromise the president. Crimes by our leaders endanger our democracy and undermine America’s standing in the world.”

“Are Russians and others using their knowledge to compromise the president at our expense? We need to know.”

How true!

Sunday, March 11, 2018

Can China Solve Its Ageing Population Problem?

Many countries face a similar issue: How to provide the social amenities promised to senior citizens while their number grows faster than the working population.  Birth rates have fallen below the replacement line in many of the wealthier nations while demographic surges and increases in longevity have increased the fiscal pressures on national pension plans.  Many of these plans are ostensibly on a firm foundation as workers are expected to contribute enough to cover the costs of their future retirement.  However, most plans were implemented long before the necessary accumulation of resources was available: the first pensioners had to be accommodated before they had contributed much of anything.  This left systems continually trying to catch up with current workers’ contributions being partially used to fund those already retired.  For this type of approach to work, a given number of workers is required to fund the pension needs of the retired population.  With lower birth rates and an increasing fraction of the population reaching retirement age, the necessary number of workers are no longer available, and changes will be required to maintain fiscal stability of the system.  The pension system will require more funds and eventually someone will have to pay more in taxes.

Wealthy nations have the resources to deal with this issue if only there was the political will.  How they address it is not at all clear; the political problems are daunting.  Japan and Germany either have falling populations or will soon have them.  They are being forced to plan for this future.  However, the nation with perhaps the biggest problem is China.  Because of the need and the desire to limit its population, it will experience a rapid increase in the number of retirees and a drop in the number of workers before it has even had the opportunity to initiate a stable universal pension system.  Anja Manuel provides perspective on China’s issues in her book This Brave New World: India, China, and the United States (2016).

“Almost 200 million Chinese are over sixty years old (compared to just 60 million Americans), and that number will nearly double by 2030.  China’s working-age population will peak within the next several years, and decline thereafter.  By 2030, only about 47 percent of Chinese people are expected to be of working age.”

China is facing a dramatic growth in the number of retirees when it has yet to establish a universal pension system.  Rural people, from the time of Mao, were expected to live off the land, while children cared for their elders.  The nonrural and government workers were expected to be supported by their employers or by the government when they were old.

“Rural retirees expected very little.  Urban Chinese who worked in state-owned companies or for the government implicitly relied on the ‘iron rice bowl’: the idea that workers stayed at one place throughout life and that the enterprise would take care of them in old age.  The iron rice bowl has become untenable as China moves toward a market economy—in fact, the bowl is nearly empty and many retirees have to rely on their children to survive.”

The tradition of children supporting parents is collapsing as children go off to schools and jobs wherever they are available.  They can send money home to support parents, but a couple who were single children with no siblings could have four parents and up to eight grandparents to care for.  There is neither the money nor the physical space to accommodate such a responsibility.

China has recently promised to create a universal pension system for their elderly by 2020.

“The task China is attempting now is comparable to the United States creating
Social Security virtually from scratch in the 1990s, with the baby boomers retiring without having paid anything in.”

China has only recently taken steps to set up a pension system.  What exists has been far from universal.

“The Chinese retirement edifice is shaky.  It is a patchwork of thousands of state and local pension funds with no real central oversight.  The rural pension scheme….is not very generous.  Since 2009, when China created the system, some 325 million Chinese have been promised retirement benefits—almost as many as the entire population of the United States.”

“Chinese government workers are the only ones who receive a relatively generous retirement, a fact that many private sector workers resent.  In 2011, government workers received about 40 percent of their working pay (about $4,000 a year), even though they never had to pay into the system.  By contrast, workers in large private sector companies have to contribute eight percent of their wages.  After they have contributed for fifteen years, they are entitled to approximately $2,900 a year.”

However as in most systems, the individual contributions must be raided to make the payments for existing retirees.  This, in effect, creates a gap between what future retirees will need and what the pension system can provide.  Unless changes are made this shortfall will become enormous.

“This gap will rise to $128 trillion (yes, trillion) by 2050, according to the Chinese Academy of Social Sciences.  It sounds very much like the problems we have in the United States, only, like most things in China, on an even more epic scale.”

China seems to have many familiar political obstacles to overcome as they attempt to refashion their system into one that is fiscally viable and more universal in nature

“Beginning in October 2015, 40 million Chinese public servants must now contribute 8 percent of their income to their retirement to address the shortfall of funds, just as private sector workers do.  This was of course unpopular with public employees, so the Ministry of Human Resources and Social Security agreed to give all public servants a pay raise that same year.  However, this risks undermining the reform.”

Retirement age in China has been fifty-five for women and sixty for men.  These generous ages might have been appropriate in Mao’s time, but they are lower than in most developed countries, and are lower than China can afford.  In 2016, it was announced that retirement age would be raised.  A scheme would be developed and announced in 2017.  As of yet, no such announcement has been noted.  Politics matters—even in China.

China’s Social Security problem is much bigger than that of the Unites States.  Based on past performance, it is likely that China will survive this challenge and move into the future with an ever-smaller population, but a more sustainable future.  Meanwhile, the United States will likely continue to contend with the same tired arguments over what the government’s role should be in providing social services—accomplishing little, if anything.

Sunday, March 4, 2018

The Generation Gaps in Political and Social Views

There will be an important midterm election this year and pundits are making predictions daily.  The results will be critical for the Democratic Party.  It must regain control of at least one house of Congress if democrats are to have any leverage on events in the subsequent two years of Trump’s term.  Should they move to the center on political issues and to the right on social issues in an attempt to recapture blue collar workers who have turned republican?  Or should they stick to their long-term agenda and hope that history is on their side?  A recent summary of polling performed by the Pew Research Center, The Generation Gap in American Politics, suggests that the latter option might be the best bet.  The report provides this these summary comments.

“Generational differences have long been a factor in U.S. politics. These divisions are now as wide as they have been in decades, with the potential to shape politics well into the future.”

“From immigration and race to foreign policy and the scope of government, two younger generations, Millennials and Gen Xers, stand apart from the two older cohorts, Baby Boomers and Silents. And on many issues, Millennials continue to have a distinct – and increasingly liberal – outlook.”

Before discussing the data that supports those comments, it is necessary to know how the various generations are defined in the report.

The Post-Millennial generation consists of those born in 1997 or later.  These are voters aged 18-21 in 2018.  They contribute 5% of the adult population, and they are 53% non-Hispanic white.

The Millennial generation consists of those born from 1981 to 1996.  These are voters aged 22-37 in 2018.  They contribute 28% of the adult population and are 56% non-Hispanic white.

Generation X consists of those born from 1965 to 1980.  These are voters aged 38-53 in 2018.  They contribute 26% of the adult population and are 61% non-Hispanic white.

The Baby Boom generation consist of those born from 1946 to 1964.  These are voters aged 54-72 in 2018.  They contribute 29% of the adult population and are 72% non-Hispanic white.

The Silent generation consists of those born from 1928 to 1945.  These are voters aged 73-90 in 2018.  They contribute about 11% of the population and are 79% non-Hispanic white.

The full article provides a wealth of graphs and charts to illustrate how the different generations view various topics.  Only a few examples will be presented here.  There is a general trend that emerges: The Millennials are considerably more liberal in their views than the other generations, while Generation X through the Silent generation trend from liberal to conservative.

The chart below plots the party voting preferences of the major generations as expressed in recent midterm elections.

Note that Millennials have always had a liberal lean as long as their preferences have been recorded.  The Generation X seems to have drifted to the left beginning in 2014.  The Boomer generation indicates no particular trend, although it, like all the others, saw a slight Democratic shift in 2006, presumably, due to Iraq War.  The Silent generation shows a small but definite shift in preference to the Republicans.  This is presumably related to the rise in white unease at the cultural shift implied by a black president.  Obama’s assumption of the presidency initiated a dramatic growth in hate groups, armed militias, and so-called “Patriot” groups as tallied by the Southern Poverty Law Center.  One could argue that it was the response to Obama that made possible the election of Trump.

Just as Obama’s presidency hardened white cultural concerns, the ascendency of Trump has hardened the concerns of the younger generations driving them toward the democrats.  The chart below illustrates the degree to which Trump has polarized the generations.

The Millennials have had a liberal inclination as long as they have been around.  The other three generations have tended to move similarly in their judgement of presidents until Trump’s arrival which seems to have moved Generation X farther away from the republican path as well.

Social issues are important in determining voting patterns.  Numerous studies have indicated that racial bias, anti-immigrant attitudes, and firm religious beliefs are strong indicators of a republican voter.  The PEW report tallies generational attitudes on relevant issues. 

The chart below addresses the issue of whether or not blacks have been disadvantaged by white racial attitudes.

The younger Millennials lead the way in accepting this preference, but in recent years Generation X and the Boomer generation have also begun to accept this notion.  It could be that the republican response to the election of Obama and their tolerance of Trump has made clear to more people that racial prejudice is alive and well in this country.

The next chart illustrates the views f the various generations on whether immigration is beneficial to us as a nation.

The change in attitudes is not as dramatic as in the case of race, but it seems the republican intolerance of the Obama years may have generated a greater tolerance for others in the general population.  In any event, tolerance of immigrants is increasing in spite of the best efforts of Trump and his republican enablers.

The last chart addresses the question of whether religiosity and the living of a moral life need be correlated.

Changes here are not as dramatic as with other issues, but in recent years Millennials have indicated they are becoming less likely to see religion as a necessary component of their lives.

People like to speculate on why voters vote the way they do.  Popular assumptions are that people become more conservative as they grow older, that young people to assume the political attitudes of their parents, and that young people form their political views based on the issues that are critical as they come of voting age.  There is probably a bit of truth in all those generalizations.  However, an analysis of just the data presented here suggests that political preferences can change over time and political parties better remain flexible if they wish to remain relevant.

For the republicans, the clock seems to be ticking as they are on a furious race to the bottom.  For the democrats, they seem to be on the right side of history, at least for now.  It is not clear that they are responsible for their positive position, but if they wish to return to political power they better figure out a way to take advantage of the momentum history and demographics have provided them.

The interested reader might find the following articles informative:

The Decline in Support for Democratic Institutions: Use Them or Lose Them

The Obama Effect: A Plague of Haters, Antigovernment "Patriots," and Militias

Lets Talk Books And Politics - Blogged