Sunday, July 20, 2014


Americans and Class


Americans do not like to think about class. If you raise a class issue, conservatives will accuse you of preaching class war. The left lumps all different classes together under the label all the "99%". Very important differences between different segments of the American population are thereby being obscured and ignored.
College graduations still being in recent memory, I can draw my illustrations from different college graduates. There are the young men and women whose family have a bit of disposable income. After they graduate college, they could look around for work they really want to do. They can spend a year or two trying to make a documentary, or perhaps traveling widely. They can accept unpaid internships in Washington, D. C. that may pave the way to interesting future employment but leave them, in the present, depending on money from their parents.
Compare them to other college graduates who have been studying and working part-time or even full-time jobs and have always been on the edge of being flat broke. I recall a student who explained his absence from class by saying that payday was still two days away when he ran out of gas money. He didn't have the money to drive to school. These students must get as well-paying a job as possible as soon as they graduate. Whether it is work they like to do is clearly secondary, as long as it pays a decent salary. No unpaid internships for them.
Then there are the students who failed to graduate because halfway through their college years, major illness or unexpected unemployment in the family demanded that they get a full-time job immediately and therefore end their studies.
Different again are the young people who do not only struggle with very limited finances but also confront by racial hostilities and distrust. Many of them have to struggle with family and social challenges unknown to some of the other groups. Their rate of unemployment tends to be much higher than that of more affluent white young people as is the likelihood that they spend time in prison.
These are just a few examples of the distinctions between different class groupings in our population. They grow up with very different ranges of opportunities. Their needs are different from those of the other groups, as are their problems and what they can hope for. The young men and women who aspire to a political career or to work in the public sector can move in that direction if they can afford to work for nothing as interns. Those with more limited finances or those faced by racial prejudices are more likely to advance themselves by entering the military. If they survive, their future may be more stable than that of their parents but "fulfilling work" is still very hard to come by.
Seeing the diversity of the American people clearly is extremely important in many different contexts. It serves to show up the dishonesty of our politicians who constantly talk about "what the American people want" or ho lump all of us together as the "middle class." Different parts of the American people want very different things because their lives are affected by the problems of belonging to different class segments.
Hence also projects to create more jobs, for instance, by cutting taxes on the rich, are badly thought out. These different class segments tend to have different sorts of jobs. Different kinds of jobs are created in different ways. There is no way in which we can simply "create more jobs." We need to be clear for whom jobs are to be created.
Crime rates fluctuate. When they go up, politicians will come up with crime-fighting projects. But those have very different effects on different classes. They tend to come down hardest on the people whose lives are most difficult and leave those whose life prospects are better relatively unaffected. There are no crime-fighting projects that affect all citizens equally.
Yes, there are these small number of Americans who own large chunks of the economy and then they are the rest of us. But the life chances among the rest of us are very different for different groups. The likelihood that we may have some influence on the political process is very different for different groups. The probability that the government will alter institutions in our favor is very different for different class segments. The likelihood that we will have jobs that are satisfying to us, is very different for different class sections. The likelihood that we can live pretty autonomous lives rather than be constantly supervised by parole officers, social workers, and other government employees are much better for some of us than for others.
Lumping the 99% together obscures the many different and very real ways in which different subgroups experience their fiscal and social lives. If justice is your concern, you need to pay close attention to the many divisions in our populace.

Monday, July 14, 2014


What free market?

A significant number of the elderly suffer from macular degeneration, a gradual destruction of the retina of the eye ending in blindness. As persons age, more blood vessels develop in the retina and disturb the eyes' visual functioning.
In some cancers, similarly, new blood vessels develop to enhance the growing cancer. Pharmaceutical researchers have developed some medications that stop this development of blood flow to the growing cancer. Virtually the same drug in much smaller doses, has proved useful to retard the progress of macular degeneration. It inhibits the progressive loss of visual acuity in the patient.
All of this is an encouraging story of the contribution of pharmaceuticals to maintaining the quality of life in the elderly.
This story is also interesting from an economic point of view. It turns out that one of the big Pharma firm, Genentech, sells the drug that is to be injected into the eye at 100 times the price of what they charge for the same drug to be used, in much larger doses, on cancers. Yes, you read that right: for virtually the same medication, this company charges 100 times the price for an application to the eye from what it charges when the drug is used in combating cancer. The anti-blindness injection may cost as much as $2000.
As a consequence, Medicare is said to spend between one and $2 billion a year for this treatment, "roughly 10% of Medicare part B drug expenditures." (JAMA, Journal of the American Medical Association, July 2, 2014).
How can they get away with that?
Here is the story economists tell us about free markets: in a free market everybody competes with everyone else to get a high return on the capital they have invested in their business. If someone has an exorbitantly high rate of profit, someone else will enter this same line of business and so will more entrepreneurs until the profits in this particular business are at just the same level as anywhere else in the economy. Extraordinary profits are temporary phenomena, soon to be cut down to prevailing profit rates through competition.
But pharmaceuticals are not sold in a free market. To begin with you cannot sell medications without government approval. In other words entry into a particular market is restricted by government protections for consumers. You may be the only firm able to sell this drug because no one else has the FDA permit. In that case you can do what Genentech does and charge absolutely outrageous prices.
In addition, medications are protected by patents. Competitors who would like to ride the same gravy train as Genentech, will have to develop a drug that does not violate Genentech's patents. It must be essentially the same drug but enough different to avoid patent problems. In the pharmaceuticals trade that's known as a “me-too” medication.
Both FDA supervision and patent protection are eminently sensible. But they create a situation where medications are not sold in a free market.
None of this has to be a terribly difficult problem. The bulk if not all of the macular degeneration medicines are paid for by Medicare. Medicare is therefore in a very strong position to negotiate a more sensible price for these medicines. After all if Medicare said: these macular degeneration drugs are much too expensive. We we can no longer afford to pay for them, Genentech would lose most if not all of its business. It is very much in their interest to come to an accommodation with Medicare.
Other countries such as Canada or some of the European health services regularly negotiate favorable prices for the medicines they buy in very large quantities.
The problem with that approach is that Congress, in its infinite wisdom, and ignorance of the most basic features of our economy, explicitly forbade Medicare to negotiate drug prices. That, they thought would harm the free market.
That's how much Congress knows, or how much of our representatives were paid to allow the pharmaceutical companies to continue to make sky high profits.
As long as our representatives are, in fact, for sale, large companies, such as drug companies, will be able to rob the taxpayers blind for the sake of their own stockholders.
That's robbery, not the free market.

Saturday, July 5, 2014


Equality



About 180 years ago, in the early 1830s, Alexis DeTocqueville, a French aristocrat, came to the United States to watch a democracy being constructed from scratch. A new country was being built by immigrants mostly from western Europe. They were indebted to their home countries but were also much more independent in constructing a new society than were the Europeans who remained behind.
This country, DeTocqueville found, was obsessed with the idea of equality. Because all were equal, everyone's decision had the same weight. Everyone was entitled to participate in collective decision-making. Decision-making was democratic and everyone was busy participating. DeTocqueville keeps commenting on the "hustle and bustle" of American life. Everyone came to meetings; between meetings everyone was talking about local improvement projects or issues of national policy. A new country was being built and everyone participated.
The level of participation in our country has changed a great deal for many different reasons. But obviously equality is still a major concern, witness the struggle for racial equality, for gender equality and now for equal treatment regardless of sexual preferences. Equality is not only a central theme of our national life. It remains a continuing challenge. We all know that.
But equality does not only promote democracy, it also promotes conformism, the strong pressure for everyone to have the same opinion, to live their life along the same patterns, to embrace the same values and opinions. The high value placed on equality producers the tyranny of the majority. Wherever there is a disagreement over policy, over morality, over the rules governing individual behavior, the majority will feel justified in criticizing and rejecting what a minority of citizens believes.
The high value placed on equality therefore moves us in contradictory directions. On the one hand, it encourages everyone to participate in public affairs. On the other hand, it disenfranchises any views which are not those of the majority.
This pressure for conformity in America used to be a topic of public conversation. Sinclair Lewis documented it in novels such as Main Street (12920) and Babbit (1922). During the 1950s a number of widely read books like The Man in the Gray Flannel Suit occasioned much public complaint about the pressures for conformity.
Interestingly enough that concern about the pressure to conform was quite halfhearted. While conformism was a topic of public conversation, conservatives conducted a successful campaign for rooting out Communists and other leftists from government service, academia, the movie industry. No one regarded this campaign to eradicate one kind of political view as an example of the tyranny of the majority.
It is not hard to see why the high value placed on equality produces such contradictory phenomena. Yes, we are all equal and therefore entitled to our own beliefs and values. But the community has a right to not only disapprove of certain values and behaviors but also to prohibit and punish them. While each of us has the right to shape our lives as we see best, our community has the obligation to prohibit certain kinds of behavior. Molesting small children, defrauding unsuspecting investors with securities that are worthless, overworking and underpaying one's employees and many other destructive behaviors are unacceptable and should be punished.
But that only intensifies the internal contradictions of an egalitarian society. As a group we have an obligation to protect our children, or to protect the elderly against fraudulent investment counselors. Is the rooting out of communists a legitimate exercise of community self-government? What about the laws passed in many states which defined marriage as between one man and one woman? When is a community exercising its political rights at legislating acceptable behavior and when is it illegitimately imposing the opinions of the many on smaller groups who have a perfect right to choose for themselves how to act and how to live?
This is the dilemma a country experiences when it values equality above everything. DeTocqueville proved himself very perceptive when he identified this dilemma.
At the same time the problem is not insurmountable. In a democracy public debates not only concern the policy issues of the day, but also the very meaning of equality. Specifically, citizens must decide in what respects we are all equal. The Tocqueville, for instance, speaks in laudatory terms about "universal suffrage" in the United States, oblivious to the fact that, at the time, only white men were allowed to participate in political decision-making. We have since then, after a great deal of conflict,--a good deal of it bloody-- decided that everyone, irrespective of race or gender, should be able to vote and run for political office. Similarly, what areas constitute a person's private domain, and what areas are to be regulated and supervised by public authorities, must be decided by a people which allows everyone equal rights of political participation.
The central task equality imposes on all of us is to define what that equality means which we regard as so important.
Many Americans ranging from ordinary citizens to presidents and their cabinet members do not understand this. High government officials from the United States regularly travel abroad and urge other countries to adopt an electoral democracy like ours. But if we took the idea of equality seriously, surely we would understand that other countries must decide for themselves how they will govern themselves. That is what a democratic stance demands. But we act as if equality meant that everybody must be like us, that we must all be the same.
It is time for us to be serious about equality and to acknowledge that it allows different people to lead their lives in different ways. We can all agree that terrorism is an unacceptable policy choice. But we must recognize that electoral democracy is not for every one. If we value democracy we must allow others to govern themselves, and to do that in ways of their own choosing.

Tuesday, June 24, 2014

                     Hunger Games



        A recent movie, Hunger Games, portrays an imaginary country in the future where one lives luxuriously in the country’s capital while the farmers and miners in the remote provinces are literally starving to support the high style of the central city.

        This unequal system is maintained by public spectacles, the so-called Hunger Games included. In these annual games young persons selected by lot from every part of the country are let loose in dark forests with plenty of weapons but little else. The victor is the person who emerges alive after killing all the competitors.

        A recent story about seating on airplanes echoes the future society of the Hunger Games. Many airplanes have seating in the cabin, in business class, and in first-class. First-class passengers are likely to pay 10 times the price of passengers in the cabin class. There the airlines keep shrinking the space allotted to each passenger. In first-class, on the contrary, seats will now convert to flat beds for a comfortable night's sleep. Passengers are fed by renowned chefs and tranquilized with expensive champagnes.

        I have no problem with people who pay 10 times what I paid for my flight being pampered in ways barely imaginable to me. But then I start thinking where the money comes from to pay for these luxurious seats. A large portion of these fancy Dan seats are paid for by businesses. It is not only the 1% that pays for such excessive luxury but the treasuries of large corporations who pamper their CEOs and other chief employees.

        How can the corporations afford this? Are they not supposed to be "lean and mean"? What happens in the airplane, happens at work. This CEO gets a seat that costs 10 times what the employee in cabin class pays. The CEO flies in luxury; the employee sits in a cramped seat. At work the employee gets paid as little as possible. Their benefits continue to be reduced. Their job security continues to be diminished. The CEOs paycheck gets fatter.

        As a consequence, the Corporation makes money hand over fist and can pay for luxury seating on the airplane for the CEO. It's Hunger Games all over. The luxury in the capital is made possible by starvation in the countryside. Here the luxury in first-class is made possible by the real discomfort in cabin class and the Corporation can pay for excessively expensive seats for the CEO by continuing to squeeze their workers. (Those squeezed the most travel by bus; they do not even get on the  airplane.)

        Hunger Games is not about the future. It is about our world today.
What keeps us going are not fights unto death on television but the increasingly bitter struggle for any work at all, let alone for decent work. A significant number of college graduates are doing minimum-wage work. The unemployment rate is going down because more and more people stopped looking for work. Business interests are putting up a major fight against raising the minimum wage to $10.50 an hour. A living wage is not even under consideration.
As in the world of the Hunger Games the majority in ours is made to lead starkly difficult lives for the sake of luxury for the few.

Tuesday, June 17, 2014

One Nation Indivisible……

Do you remember the images from the end of World War II? The enormous crowds in  New York City’s Times Square. Sailors and random women kissing. Everyone jubilant because the War was finally over.




Do you remember the end of the war in Iraq? Probably not. On December 8, 2011 the last US soldiers left Iraq. The then Secretary of Defense, Leon Panetta, declared in Baghdad that the freedom of Iraq was well worth the lives of many American and Iraqi soldiers as if an American bureaucrat were God himself able to weigh the worth of human lives. But today that freedom is once again in acute peril.

More importantly, for America at large, the end of the war in Iraq passed without notice. When World War II ended, America celebrated because that war was waged by everyone. The war in Iraq, on the contrary, was a private experience for, on the one hand, powerful politicians, like VP Cheney and Secretary of Defense Ashcroft and, on the other, the soldiers and their families. For the rest of America the war in Iraq was clearly secondary to much else that happened.

(There is no reason to think that the war in Afghanistan and its end later this year will be any different.)

The Pledge Of Allegiance speaks of our country as "one nation indivisible" but that has stopped being true a long time ago. Yes, brief blossomings of national unity occur such as after 9/11 but they don't last. Soon everybody crawls back into their partisan and narcissistic corners unconcerned about what happens to everyone else.

There is a widespread belief that the war in Iraq has been fought by the poor of this country. African Americans and young men and women from rural areas are overrepresented among enlistees after 9/11 . (The Heritage Foundation has waged a spirited war against this widely held opinion.) Regardless of who is right in this controversy,  no doubt exists that the Iraq war was very much the concern of a very small percentage of the American citizenry. For the rest of us it mattered only in its early years. But as the war dragged on, most Americans lost interest.

A nation united has common goals. It's citizens participate in common efforts. Everyone is animated to participate in projects considered supportive of the common good. Wars are one of those shared projects. They are entered in with widespread popular support. They are conducted by everyone, each doing their job to contribute to what they chose to undertake. Behind these common projects stands a nation united in support of striving for common goals.
Where a nation works in unison, democracy is strong. It does not just consist of occasional balloting but is renewed every day as each citizen makes their contribution to the common undertaking.

But for us there are no more common projects. Democracy has degenerated into partisan bickering for individual advantage.

When the end of a war slips by without much public notice, we see only too clearly the decay of the nation.

Sunday, June 8, 2014


Ready for robots?


A Japanese billionaire unveiled a robot called Pepper who supposedly reacts to human emotions. The robot not only perceives that someone is sad or happy or troubled but also responds appropriately. The robot has been developed in cooperation with a French firm, Aldebaran. Similar efforts are underway in the United States. They will sell you a robot to babysit your children for $300.
A 2012 movie “Robot and Frank” anticipates these technological innovations but with a humorous twist. A one time burglar, now old and at times forgetful, is given a robot to attend to him. The old man trains the robot to be a splendidly competent cat burglar. Could Pepper do that?
Not surprisingly reactions to these developments vary a good deal. Some people are appalled. Others see a large number of opportunities where emotional robots – mechanical creatures that perceive human emotions and react appropriately – could do a great deal of good. They could be babysitters, they might mind children in study hall. If your child is sick, you don't need to stay home from work. Get the robot to sit with your feverish child. After you retire and, like Frank you are becoming forgetful, and you are lonely and depressed, no problem. Bring in the empathetic robot to make appropriate clucking noises when you sit in your chair with tears rolling down your cheeks as you think of good times long ago.
Personally, the project gives me the creeps. It reminds me of a movie George Lucas made when he was still a student, called THX 1138. It is a science fiction film depicting a future dictatorship where human beings, heavily drugged, do work and not much else. Their sexual impulses are suppressed by drugs. Love between human beings does not exist. At the end of the day, the workers may stop off at a therapy booth, which looks suspiciously like an old phone booth. One can go in and talk about what troubles one and a sympathetic voice will respond with "tell me more" or "that must feel really bad." The camera moves back so that you do not merely see the worker but also the back of the booth. A tape player is attached. The sympathetic murmurings are random messages from a tape machine.
The therapy booth is a machine. It produces sounds that seem appropriate but it does not in any sense respond to emotions. Today's robot is a great deal more sophisticated. The technology is in many ways very impressive. But the robot is not human.
The robot lacks an inner life of its own. There is a great deal of difference between responding appropriately to someone else's emotions and having emotions of one's own. Human beings, unlike these robots, do not always respond appropriately. We get tired of whiny children. We feel that all the children want from us is more affection but they are not giving very much back and we ourselves also feel isolated and underappreciated. It is not always possible to respond sympathetically to your demented parents about whom you have harbored ambivalent feelings for much of your life. Some days they just make you very angry and you yell at them.
The sympathetic robot does not do that. It is quite saintly. As programmed it will be sympathetic when you are sad.
It is however not human sympathy.
That is what makes all this so creepy. Caretaking and caretakers are in short supply in our society because it is very difficult to make money off taking care of children and the elderly. What does not make money tends to be neglected in our society because making money is our main occupation.
A mechanical babysitter that costs $300 soon pays for itself. The economic outlook for robots, currently priced at less than $2000, is quite brilliant for taking care of mom or dad when they get really old.
It promises to be one more area of life where we sacrifice our humanity for the sake of making money.

Sunday, June 1, 2014


What Is to Be Done?


            In my last blog I pointed out that Memorial Day is an annual opportunity for misrepresenting our history. We regularly claim that the very many wars we have fought during our 225 years that the United States existed were intended to defend our freedom. In reality our wars were fought to enhance our power in the world.
Pres. Obama made this very clear when he said in his recent graduation address at West Point that “America must always lead on the world stage.”
While I was writing that, an inner voice criticized: 'all you ever do is complain. Don't you have any ideas of what we should be doing?' That criticism stung because it has some truth to it.
Here is a proposal.
Instead of desperately trying to maintain our position as the most powerful nation on earth, we should put our own house in order.
Recently Congress appropriated $600 billion for the military. That was actually more money than the Pentagon had asked for. The motive behind this generosity for the military was not only a dedication to America's military greatness but also a concern for jobs. A good deal of our economy depends on our saber rattling, our wars, our going around the world as the big bully, arming a series of reprehensible dictators.
If we want to forswear playing that role, we should cut the military budget in half. The $300 million saved would have to be spent putting the people to work who lost their jobs making weapons or giving support in various ways to our bloated military.
Fortunately there is plenty of work to be done. There are roads and bridges to be repaired before they collapse. There are schools to be rebuilt, teachers to be trained and put to work to improve our schools. We need more social workers to keep track of children who live in troubled families. There is a crying need for detox programs for drug addicts. A recent report states that 40,000 houses in Detroit are dilapidated and need to be torn down. Someone needs to do that, and do it soon. The list of pressing domestic needs goes on and on.
How will we pay for that? Well we just happen to have $300 billion saved from military appropriations. That money should go a long way towards creating jobs – decent jobs – for all the people no longer employed in war industries. We should hope that some of that money will also serve to put people to work who have been unable to find employment since the 2008 economic collapse.
In addition that money will not be blown up in ammunition to bring death to people in foreign countries, but it will be used to make a better life better for many people here at home.
Once we give up the bizarre notion that we need to keep going to war in order to keep the peace, we may be able to make ours a better country by making life better for many Americans.
Here is one proposal to satisfy my inner voice.