Tuesday, December 27, 2011

What I Read Today - Tuesday December 27, 2011

From: The New York Times Monday December 26, 2011

Midlife Crisis Economics

By DAVID BROOKS


The members of the Obama administration have many fine talents, but making adept historical analogies may not be among them.

When the administration came to office in the depths of the financial crisis, many of its leading figures concluded that the moment was analogous to the Great Depression. They read books about the New Deal and sought to learn from F.D.R.

But, in the 1930s, people genuinely looked to government to ease their fears and restore their confidence. Today, Americans are more likely to fear government than be reassured by it.

According to a Gallup survey, 64 percent of Americans polled said they believed that big government is the biggest threat to the country. Only 26 percent believed that big business is the biggest threat. As a result, the public has reacted to Obama’s activism with fear and anxiety. The Democrats lost 63 House seats in the 2010 elections.

Members of the administration have now dropped the New Deal parallels. But they have started making analogies between this era and the progressive era around the turn of the 20th century.

Again, there are superficial similarities. Then, as now, we are seeing great concentrations of wealth, especially at the top. Then, as now, the professional class of lawyers, teachers and journalists seems to feel as if it has the upper hand in its status war against the business class of executives and financiers.

But these superficial similarities are outweighed by vast differences.

First, the underlying economic situations are very different. A century ago, the American economy was a vibrant jobs machine. Industrialization was volatile and cruel, but it produced millions of new jobs, sucking labor in from the countryside and from overseas.

Today’s economy is not a jobs machine and lacks that bursting vibrancy. The rate of new business start-ups was declining even before the 2008 financial crisis. Companies are finding that they can get by with fewer workers. As President Obama has observed, factories that used to employ 1,000 workers can now be even more productive with less than 100.

Moreover, the information economy widens inequality for deep and varied reasons that were unknown a century ago. Inequality is growing in nearly every developed country. According to a report from the Organization for Economic Cooperation and Development, over the past 30 years, inequality in Sweden, Germany, Israel, Finland and New Zealand has grown as fast or faster than inequality in the United States, even though these countries have very different welfare systems.

In the progressive era, the economy was in its adolescence and the task was to control it. Today the economy is middle-aged; the task is to rejuvenate it.

Second, the governmental challenge is very different today than it was in the progressive era. Back then, government was small and there were few worker safety regulations. The problem was a lack of institutions. Today, government is large, and there is a thicket of regulations, torts and legal encumbrances. The problem is not a lack of institutions; it’s a lack of institutional effectiveness.

The United States spends far more on education than any other nation, with paltry results. It spends far more on health care, again, with paltry results. It spends so much on poverty programs that if we just took that money and handed poor people checks, we would virtually eliminate poverty overnight. In the progressive era, the task was to build programs; today the task is to reform existing ones.

Third, the moral culture of the nation is very different. The progressive era still had a Victorian culture, with its rectitude and restrictions. Back then, there was a moral horror at the thought of debt. No matter how bad the economic problems became, progressive-era politicians did not impose huge debt burdens on their children. That ethos is clearly gone.

In the progressive era, there was an understanding that men who impregnated women should marry them. It didn’t always work in practice, but that was the strong social norm. Today, that norm has dissolved. Forty percent of American children are born out of wedlock. This sentences the U.S. to another generation of widening inequality and slower human capital development.

One hundred years ago, we had libertarian economics but conservative values. Today we have oligarchic economics and libertarian moral values — a bad combination.

In sum, in the progressive era, the country was young and vibrant. The job was to impose economic order. Today, the country is middle-aged but self-indulgent. Bad habits have accumulated. Interest groups have emerged to protect the status quo. The job is to restore old disciplines, strip away decaying structures and reform the welfare state. The country needs a productive midlife crisis.

The progressive era is not a model; it is a foil. It provides a contrast and shows us what we really need to do.

Thursday, December 22, 2011

What I Read Today - Thursday December 22, 2011

The Wall Street Journal - December 22 2011

The GOP's Payroll Tax Fiasco


How did Republicans manage to lose the tax issue to Obama?.Article Video Comments (1171) more in Opinion

GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.

House Republicans yesterday voted down the Senate's two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%. They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year's tax holiday has demonstrated. The entire exercise is political, but Republicans have thoroughly botched the politics.

Their first mistake was adopting the President's language that he is proposing a tax cut rather than calling it a temporary tax holiday. People will understand the difference—and discount the benefit.

Republicans also failed to put together a unified House and Senate strategy. The House passed a one-year extension last week that included spending cuts to offset the $120 billion or so in lost revenue, such as a one-year freeze on raises for federal employees. Then Mr. McConnell agreed with Senate Majority Leader Harry Reid on the two-month extension financed by higher fees on Fannie Mae and Freddie Mac (meaning on mortgage borrowers), among other things. It passed with 89 votes and all but seven Republicans.

Senate Republicans say Mr. Boehner had signed off on the two-month extension, but House Members revolted over the weekend and so the Speaker flipped within 24 hours. Mr. Boehner is now demanding that Mr. Reid name conferees for a House-Senate conference on the payroll tax bills. But Mr. Reid and the White House are having too much fun blaming Republicans for "raising taxes on the middle class" as of January 1. Don't be surprised if they stretch this out to the State of the Union, when Mr. Obama will have a national audience to capture the tax issue.

If Republicans didn't want to extend the payroll tax cut on the merits, then they should have put together a strategy and the arguments for defeating it and explained why.

But if they knew they would eventually pass it, as most of them surely believed, then they had one of two choices. Either pass it quickly and at least take some political credit for it.

Or agree on a strategy to get something in return for passing it, which would mean focusing on a couple of popular policies that would put Mr. Obama and Democrats on the political spot. They finally did that last week by attaching a provision that requires Mr. Obama to make a decision on the Keystone XL pipeline within 60 days, and the President grumbled but has agreed to sign it.

Senate Minority Leader Mitch McConnell speaks at a news conference as House Speaker John Boehner listens.

But now Republicans are drowning out that victory in the sounds of their circular firing squad. Already four GOP Senators have rejected the House position, and the political rout will only get worse.

One reason for the revolt of House backbenchers is the accumulated frustration over a year of political disappointment. Their high point was the Paul Ryan budget in the spring that set the terms of debate and forced Mr. Obama to adopt at least the rhetoric of budget reform and spending cuts.

But then Messrs. Boehner and McConnell were gulled into going behind closed doors with the President, who dragged out negotiations and later emerged to sandbag them with his blame-the-GOP and soak-the-rich re-election strategy. Any difference between the parties on taxes and spending has been blurred in the interim.

After a year of the tea party House, Mr. Obama and Senate Democrats have had to make no major policy concessions beyond extending the Bush tax rates for two years. Mr. Obama is in a stronger re-election position today than he was a year ago, and the chances of Mr. McConnell becoming Majority Leader in 2013 are declining.

***

At this stage, Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly. Then go home and return in January with a united House-Senate strategy that forces Democrats to make specific policy choices that highlight the differences between the parties on spending, taxes and regulation. Wisconsin freshman Senator Ron Johnson has been floating a useful agenda for such a strategy. The alternative is more chaotic retreat and the return of all-Democratic rule

Tuesday, December 20, 2011

What I Read Today - Tuesday December 20, 2011

From:  The New Yorker - September 26, 2011

Letter From Nucla, Colorado

Dr. Don

The life of a small-town druggist.

by Peter Hessler

In the southwestern corner of Colorado, where the Uncompahgre Plateau descends through spruce forest and scrubland toward the Utah border, there is a region of more than four thousand square miles which has no hospitals, no department stores, and only one pharmacy. The pharmacist is Don Colcord, who lives in the town of Nucla. More than a century ago, Nucla was founded by idealists who hoped their community would become the “center of Socialistic government for the world.” But these days it feels like the edge of the earth. Highway 97 dead-ends at the top of Main Street; the population is around seven hundred and falling. The nearest traffic light is an hour and a half away. When old ranching couples drive their pickups into Nucla, the wives leave the passenger’s side empty and sit in the middle of the front seat, close enough to touch their husbands. It’s as if something about the landscape—those endless hills, that vacant sky—makes a person appreciate the intimacy of a Ford F-150 cab.

Don Colcord has owned Nucla’s Apothecary Shoppe for more than thirty years. In the past, such stores played a key role in American rural health care, and this region had three more pharmacies, but all of them have closed. Some people drive eighty miles just to visit the Apothecary Shoppe. It consists of a few rows of grocery shelves, a gift-card rack, a Pepsi fountain, and a diabetes section, which is decorated with the mounted heads of two mule deer and an antelope. Next to the game heads is the pharmacist’s counter. Customers don’t line up at a discreet distance, the way city folk do; in Nucla they crowd the counter and talk loudly about health problems.

“What have you heard about sticking your head in a beehive?” This on a Tuesday afternoon, from a heavyset man suffering from arthritis and an acute desire to find low-cost treatment.

“It’s been used, progressive bee-sting therapy,” Don says. “When you get stung, your body produces cortisol. It reduces swelling, but it goes away. And you don’t know when you’re going to have that one reaction and go into anaphylactic shock and maybe drop dead. It’s highly risky. You don’t know where that bee has been. You don’t know what proteins it’s been getting.”

“You’re a helpful guy. Thank you.”

“I would recommend hyaluronic acid. It’s kind of expensive, about twenty-five dollars a month. But it works for some people. They make it out of rooster combs.”

Somebody else asks about decongestants; a young woman inquires about the risk of birth defects while using a collagen stimulator. A preacher from the Abundant Life Church asks about drugs for a paralyzed vocal cord. (“When I do a sermon, it needs to last for thirty minutes.”) Others stop by just to chat. Don, in addition to being the only pharmacist, is probably the most talkative and friendly person within four thousand square miles. The first time I visited his counter, he asked about my family, and I mentioned my newborn twin daughters. He filled a jar with thick brown ointment that he had recently compounded. “It’s tincture of benzoin,” he said. “Rodeo cowboys use it while riding a bull or a bronc. They put it on their hands; it makes the hands tacky. It’s a respiratory stimulant, mostly used in wound care. You won’t find anything better for diaper rash.”

Don Colcord was born in Nucla, and he has spent all of his sixty years in Colorado, where community-minded individuals often develop some qualities that may seem contradictory. Don sells cigarettes at his pharmacy, because he believes that people have the right to do unhealthy things. He votes Democratic, a rarity in this region. He listens to Bocelli and drives a Lexus. At Easter, the Colcord family tradition is to dye eggs, line them up in a pasture, and fire away with a 25-06 Remington. A loyal N.R.A. member, Don describes shooting as essentially peaceful. “Your arm moves up and down every time you breathe, so you control your breathing,” he says. “It’s very similar to meditation.” He was once the star marksman of the University of Colorado’s rifle team, and for many years he held a range record for standing shooting at the Air Force Academy.

Calmness is one reason that he has such influence in the community. He’s short and slight, with owlish glasses, and he seems as comfortable talking to women as to men. “It’s like Don looks you in the eye and the rest of the world disappears,” one local tells me. Faith in Don’s judgment is all but absolute. People sometimes telephone him at two o’clock in the morning, describe their symptoms, and ask if they should call an ambulance for the two-hour trip to the nearest hospital. Occasionally, they show up at his house. A few years ago, a Mexican immigrant family had an eight-year-old son who was sick; twice they visited a clinic in another community, where they were told that the boy was dehydrated. But the child didn’t improve, and finally all eight family members showed up one evening in Don’s driveway. He did a quick evaluation—the boy’s belly was distended and felt hot to the touch. He told the parents to take him to the emergency room. They went to the nearest hospital, in Montrose, where the staff diagnosed severe brucellosis and immediately evacuated the boy on a plane to Denver. He spent two weeks in the I.C.U. before making a complete recovery. One of the Denver doctors told Don that the boy would have died if they had waited any longer to get him to a hospital.

At the Apothecary Shoppe, Don never wears a white coat. He takes people’s blood pressure, and he often gives injections; if it has to be done in the backside, he escorts the customer into the bathroom for privacy. Elderly folks refer to him as “Dr. Don,” although he has no medical degree and discourages people from using this title. He doesn’t wear a nametag. “I wear old Levi’s,” he says. “People want to talk to somebody who looks like them, talks like them, is part of the community. I know a lot of pharmacists wear a coat because it makes you look more professional. But it’s different here.” He would rather be known as a druggist. “A druggist is the guy who repairs your watch and your glasses,” he explains. “A pharmacist is the guy who works at Walmart.”

He keeps watch-repair tools behind the counter, and he uses them almost as frequently as he complains about Walmart, insurance companies, and Medicare Part D. Since 2006, the program has provided prescription-drug coverage for the elderly and disabled, insuring that millions of people get their medication. But it’s also had the unintended effect of driving rural pharmacies out of business. Instead of establishing a national formulary with standard drug prices, the way many countries do, the U.S. government allows private insurance plans to negotiate with drug providers. Big chains and mail-order pharmacies receive much better rates than independent stores, because of volume. Within the first two years of the program, more than five hundred rural pharmacies went out of business. Don gives the example of a local customer who needs Humira for rheumatoid arthritis. The insurance company reimburses $1,721.83 for a month’s supply, but Don pays $1,765.23 for the drug. “I lose $43.40 every time I fill it, once a month,” he says. Don’s customer doesn’t like using mail-order pharmacies; he worries about missing a delivery, and he wants to be able to ask a pharmacist questions face to face. “I like the guy,” Don says. “So I keep doing it.” Don’s margins have grown so small that on three occasions he has had to put his savings into the Apothecary Shoppe in order to keep the doors open.

He is, by the strictest definition, a bad businessman. If a customer can’t pay, Don often rings up the order anyway and tapes the receipt to the inside wall above his counter. “This one said he was covered by insurance, but it wasn’t,” he explains, pointing at a slip of paper on a wall full of them. “This one said he’ll be in on Tuesday. This one is a patient who is going on an extended vacation.” Most of his customers simply don’t have the money. Each year, Don writes off between ten and twenty thousand dollars, and he estimates that he is owed around three hundred thousand dollars in total. His annual salary is sixty-five thousand dollars. Over the course of many days at the Apothecary Shoppe, I never saw a customer walk in whom Don doesn’t know by name.

“It’s just a cost of doing business in a small town,” he says. “I don’t know how you can look your neighbor in the eye and say, ‘I know you’re having a tough time, but I can’t help you and your kid can’t get well.’ ”

Settlers originally came to this remote place because they desired an alternative to capitalism. During the eighteen-nineties, a group called the Colorado Co-operative Colony hoped to build a utopian community in the region. Its Declaration of Principles explained that market-oriented competition makes it “almost impossible for an honest man or woman to make a comfortable living, and that a co-operative system, if properly carried out, will give the best opportunity to develop all that is good and noble in humanity.” (The history of the colony and its values is described in a 2001 dissertation by Pamela J. Clark at the University of Wyoming.)

At the end of the nineteenth century, socialist communities weren’t uncommon in the West. The arid landscape required extensive irrigation systems, and principles of shared labor made sense to people who were inspired by the theories of Karl Marx and Robert Owen. Anaheim, California, was settled through a coöperative water venture, as was nearby Riverside. Others failed but left idealistic names on the map: Equality, Freeland, Altruria. The Colorado Co-operative Colony published a newspaper called the Altrurian, which tracked the progress of the colony’s founding project, an eighteen-mile irrigation ditch that was intended to carry water from the San Miguel River. Settlers also planned to do away with debt, interest, and rent. The Altrurian dreamed of a glorious future: “If a small colony of outlaws and refugees could build Rome and maintain the state for twelve hundred years, who could guess what a well organized colony of intelligent Americans may accomplish.”

Within a year, they held their first purge. Ten members were expelled for being too communistic, and after that the newspaper often published aphorisms that clarified theories. (“Communism may be co-operation, but co-operation is not necessarily communism.”) By the winter of 1898, settlers were running out of food. (“Competition is a product of Hell; Co-operation will make a paradise of earth.”) In 1901, a member of the board revealed that the colony was bankrupt. A former president committed suicide. (“So long as you think of yourself alone, you cannot be a good cooperator.”)

Eventually, the settlers abandoned the principle of shared labor and contracted out to private work crews. In 1904, water flowed through the completed ditch; six years later, they decided on the name Nucla, after “nucleus.” The socialist dreams were never realized, but the irrigation canal continues to function today. And there’s still a Colorado Cooperative Company, which employs a full-time “ditch-rider” to monitor the system. His name is Dean Naslund, and both his father and his grandfather worked on the ditch. Like most Nucla residents, Naslund doesn’t talk about his ancestors in terms of sociopolitical theories. (“They called him Daddy Joe. He kinda cowboyed. He liked to hop around. Maybe play cards all week sometimes and then work a little.”)

Nucla has a reputation as a tough town. It boomed in the nineteen-fifties and sixties, when the region’s uranium mining and processing thrived. But the nuclear industry collapsed after the Three Mile Island accident, in 1979, and the population continues to drop in Nucla and its sister town of Naturita, which is four miles away. In both these towns, the per-capita income is less than fourteen thousand dollars a year, a little higher than half the state figure, and only eight per cent of the adult population holds a college degree. This year, the school board decided to switch to a four-day school week, because of lack of funds. There’s only one restaurant in Nucla, one hamburger joint in Naturita, and one bar for both towns. It’s called the 141 Saloon, named for the state highway that passes through Naturita. On a Thursday night I’m the only customer, and the bartender, a woman named Casey, tells me that she just bought a three-bedroom house in Nucla for fifty-three thousand dollars. That’s a mortgage of two-fifty a month.

“Only problem is the siding is asbestos,” she says.

“Is that a big problem?”

“It’s not a problem as long as you don’t touch it. Asbestos lasts forever.” She leans on the wooden bar. “What’ll it be?”

“What do you have on tap?”

She smiles and says, “Only thing we got on tap is Jägermeister.”


By the time Don Colcord was eight years old, he knew that he wanted to be a druggist. He grew up in Uravan, a mining town near Nucla, and his mother was a clerk in the pharmacy, where Don liked to hang around and watch the druggist. As a teen-ager, he began breaking into the place. Along with some friends, he stole beer, Playboy, and condoms. (“The condoms went to waste.”) When the boys finally got caught, they were forced to pay for the goods by working at the store for twenty-five cents an hour. “Everybody knew why you were there,” Don says. “It was probably the best thing that happened to me.”

During his teen-age years, Don shared a room with his brother Jim, and one day he found a magazine hidden under the bed. It featured photographs of naked men. When Jim came home, Don asked, “Is this yours?”

“Yes,” said Jim, who didn’t seem embarrassed. He took the magazine back, and neither of them mentioned it again.

Jim was three years older than Don. He was six feet three and well built, but he didn’t enjoy sports or hunting, like most local kids. He spent a lot of time by himself, and in high school he became an excellent student. He was a source of disappointment to his father, who nagged at Jim to behave like a normal boy. In 1972, a couple of years after Jim left for college, he sent his family a letter explaining that he was gay and that he knew his father would never accept it. He asked them not to look for him; he was leaving Colorado for good. And for the next twelve years nobody heard from Jim.

At the age of eighteen, Don married his high-school girlfriend, Kretha; eventually, they settled in Nucla and opened the Apothecary Shoppe. In 1983, Don’s father died, and one of the first things his widow did was hire a private investigator. The detective found Jim in Chicago, where he was a clerk in the county court. He said he’d had a feeling that something had happened back home.

The following year, Jim made a four-day visit to Nucla. He went for long drives with his mother, who told him that she had always known he was gay and that she was sorry she hadn’t been able to change his father’s attitude. In the evenings, Jim and Don sat up late talking. One night, Jim told Don that he had been infected with H.I.V., and that his doctor said he was likely to develop full-blown AIDS. Jim told Don where he wanted his ashes scattered. And he asked him to visit Chicago, where Jim lived with his longtime boyfriend.

That year, they talked frequently on the phone. But whenever the topic of a Chicago visit came up there was always a reason Don couldn’t go: he was too busy at the store; his son and his daughter had school activities. Kretha tried to persuade him to make the trip, but he never did.

When Jim died, one of his colleagues telephoned with the news. She sent the ashes in a box, with a copy of Jim’s will, some awards from work, and a few photographs. One of the pictures was taken at Wrigley Field, where Jim stands with his boyfriend in front of a “Go Cubs” sign. When Don looked at the photograph, he realized that he knew virtually nothing about his brother. He had seen Jim for all of four days in the past decade; he didn’t even know his boyfriend’s name. And he understood the real reason that he hadn’t made a trip to Chicago. “I was angry with myself for not being comfortable in a house where two men were sleeping together,” he says. “I didn’t want to see two men kissing each other. It wouldn’t bother me now, but it did then. I really regret it.”

Along with his mother and his younger sister, Don scattered Jim’s ashes at the juncture of the San Miguel and the Dolores Rivers. The Dolores flows from the south, where it crosses the great salt dome of Paradox Valley, and the water is saline and has no fish. If you swim there, you float as if you were in the ocean, a thousand miles away.

The last doctor in Naturita died fifteen years ago. There’s a small health clinic, and recently it contracted with a doctor in another part of Colorado to visit two days a week. But the mainstay is Ken Jenks, a physician’s assistant who is on call twenty-four hours a day. Jenks has lived in rural Colorado for a decade, and during that time he has learned that electrical tape is harder to remove from a wound than duct tape. Twice he has had patients suffer cervical fractures and drive themselves into the clinic rather than wait for an ambulance. It’s not unusual for somebody to sign out of the clinic A.M.A.—against medical advice. A couple of times, Jenks has told heart-attack victims that they needed to be evacuated by helicopter, only to have the patients decline because they believed they could get there cheaper. Jenks signed the forms, unhooked the I.V.s, and the patients got into their pickups to drive the two hours to a hospital. “And they made it,” Jenks says. “So they were right!”

Jenks grew up in Salt Lake City, but he has spent most of his working life in small towns. “Maybe I can describe it this way,” he says. “I like to play chess. I moved to a small town, and nobody played chess there, but one guy challenged me to checkers. I always thought it was kind of a simple game, but I accepted. And he beat me nine or ten games in a row. That’s sort of like living in a small town. It’s a simpler game, but it’s played to a higher level.” Jenks says that he is forced to have “a working relationship” with local methamphetamine users, treating their ailments in confidence. He explains that small towns might have a reputation for being closed-minded, but actually residents often learn to be nonjudgmental, because contact is so intense. “Someday I might be on the side of the road, and the person who pulls me out is going to be a meth user,” Jenks says. “The circle is much tighter.” He believes there is less gossip than one would assume, simply because so much is already known.

One morning, a young woman arrives at the Apothecary Shoppe after spending the weekend in jail. She had an argument with her husband, who called the police; Colorado law requires officers to make an arrest whenever they respond to a domestic dispute. The law is intended to protect women from being coerced into dropping charges, but in this case the husband claimed that he had been attacked. In the drugstore, the woman is approached by half a dozen neighbors who have read about the arrest in the local newspaper.

“It’s not what it sounds like,” she tells one elderly woman. “He’s lying about the whole thing, and he’s going to get in trouble for that.”

They stand at the pharmacy counter. “It’s terrible when I have the criminal element in the store,” Don jokes.

The young woman reads the police blotter in the newspaper. “He said I attacked him with a frying pan. He said I hit him in the arm. If I’d attacked him with a frying pan, I’d a hit him in the head.”

“Let me tell you what you should do,” the old woman says. She is in her seventies, with curly white hair and a sweet, grandmotherly smile. “Get you some wasp spray,” she says. “It’ll put their eyes out.”

“I can’t even have Mace, because it’s a weapon.”

With the wisdom of age, the elderly woman explains that wasp spray is not classified as a weapon and is thus available to people who are out on bail. “It’s better than pepper spray,” she says.

A while later, I see the young woman cutting out the arrest listing. “This way, if I’m ever stupid enough to think about taking him back, I’ll look at this,” she tells me. “I’ll keep it in my scrapbook.” (Eventually, all charges were dropped, and they divorced.)

At the store, Don never discusses anyone’s situation with a third party, but he frequently mentions his own problems. Twenty years ago, Kretha was diagnosed with a rare degenerative form of spina bifida, and now she rarely leaves home. Their oldest son flies F-16s for the Air Force, but their daughter has struggled with alcoholism. After she had difficulties caring for her son, Gavin, Don and Kretha took custody of the boy. Don often mentions such issues to a customer. “If I’m dealing with somebody who has an alcoholic in the family, it helps for them to know about my daughter,” he says. “You can’t pretend that your family is perfect. My daughter is not perfect, but she’s trying.” He continues, “Almost all druggists in a small town will tell you the same thing. You are part and parcel of the community. Nobody’s better, nobody’s worse.”

In Nucla, Wednesday is bowling league night. The local alley shut down to the public long ago, because there are so few people left, but the facility opens twice a week for community leagues. The alley was built in 1962 and all its equipment is original, with an exuberant use of steel that you don’t see anymore: long, shiny Brunswick ball racks, dining tables with heavy flared legs. Scorecards advertise businesses that have been dead for decades: Miracle Roofing and Insulation, Sir Speedy Instant Printing Center (“Instant Copies While You Wait!”). Don is the league’s president, and he certifies the lanes every year. He took a course in Montrose in order to be licensed to use a bowling-lane micrometer.

Don’s collection of certifications is impressively esoteric. He has taken CPR courses, and he’s qualified to use an electric defibrillator. He has a pyrotechnics-display license, so that Nucla can have fireworks on the Fourth of July. When he heard about a new type of hormone therapy, he flew to California to attend two days of classes, and now he compounds medicine for four transgendered patients who live in various parts of the West. Every three months, Don talks with them on the phone and prepares their drugs; he finds this interesting. On Friday nights, he announces Nucla High football games. They play eight-man ball, although if a bigger school comes to town they switch numbers with every possession, so that each side can practice its plays. When Nucla is on offense, it’s eight-on-eight, but it becomes eleven-on-eleven when the other team has the ball. Occasionally, somebody gets confused, and Don’s voice rings out over the loudspeakers: “There’s eleven white guys and eight blue guys, and that won’t work.” The football might not be first-rate, but the players’ names are a novelist’s dream. Nucla has Seth Knob, Chad Stoner, and Seldon Riddle. Dove Creek has a player named Tommy Fury. Blanding has Talon Jack and Sterling Black, Tecohda Tom and Herschel Todachinnie. Shilo Stanley, Terrance Tate, Dillon Daves: if alliteration ever needs an offensive line, recruiting should begin around the Colorado-Utah border.

When outsiders come to town—loners, drifters—they often find their way to Don. A number of years ago, a man in his seventies named Tim Brick moved to Naturita and rented a mobile home. He placed special orders at the Apothecary Shoppe: echinacea, goldenseal, chamomile teas. He distrusted doctors, and often had Don check his blood pressure. It was high, and eventually Don persuaded him to get on regular medication. Soon, he was visiting every four or five days, mostly to talk.

Don referred to him as Mr. Brick. He had no other local friends, and he was cagey about his past, although certain details emerged over time. His birth name had been Penrose Brick—he was a descendant of the Penrose family, which came from Philadelphia and had made a fortune from mining claims around Cripple Creek. But for some reason Mr. Brick had been estranged from all his relatives for decades. He had changed his first name, and he had spent most of his working life as an auto mechanic.

One day, his mobile home was broken into, and thieves made off with some stock certificates. Mr. Brick had never used a broker—to him, they were just as untrustworthy as doctors—so he went to the Apothecary Shoppe for help. Before long, Don was making dozens of trips across Disappointment Valley, driving two hours each way, in order to get documents certified at the bank in Cortez, Colorado. Eventually, he sorted out Mr. Brick’s finances, but then the older man’s health began to decline. Don managed his care, helping him move out of various residences; on a couple of occasions, Mr. Brick lived at Don’s house for an extended stretch. At the age of ninety-one, Mr. Brick became seriously ill and went to see a doctor in Montrose. The doctor said that prostate cancer had spread to his stomach; with surgery, he might live another six months. Mr. Brick said he had never had surgery and he wasn’t going to start now.

Don spent the next night at the old man’s bedside. At one point in the evening, Mr. Brick was lucid enough to have a conversation. “I think you’re dying,” Don said.

“I’m not dying,” Mr. Brick said. “I’m just going to pray now.”

“Well, you better pray pretty hard,” Don said. “But I think you’re dying.” He asked if Mr. Brick needed to see a lawyer. The old man declined; he said his affairs were in order.

Don found a hospice nurse, and within two days Mr. Brick died. Don arranged a funeral Mass, and then he went through boxes of Mr. Brick’s effects. There was a collection of old highway maps, an antique cradle telephone, and a Catholic prayer stand. There were many photographs of naked men. Don found checkbooks under four different aliases. There were letters in Mr. Brick’s handwriting asking friends if they could introduce him to other men who were “of the same type as me.” But he must have lost courage, because those letters were never mailed. Don also found unopened letters that Mr. Brick’s mother had sent more than half a century ago. One contained a ten-dollar bill and a message begging her son to make contact. The bill, from the nineteen-forties, still looked brand-new, and seeing that crisp note made Don feel sad. Years ago, he had sensed that Mr. Brick was gay, and that this was the reason he was estranged from his family, but it wasn’t a conversation they ever had.

In his will, Mr. Brick left more than half a million dollars in cash and stock to the local druggist. After taxes and other expenses, it came to more than three hundred thousand dollars, which was almost exactly what the community owed Don Colcord. But Don didn’t seem to connect these events. He talked about all three subjects—neglecting his dying brother, offering credit to the townspeople, and helping Mr. Brick and receiving his gift—in different conversations that spanned more than a year. He probably never would have mentioned the money that was owed to him, but somebody in Nucla told me and I asked about it. From my perspective, it was tempting to apply a moral calculus, until everything added up to a neat story about redemption and reward in a former utopian community. But Don’s experiences seemed to have taught him that there is something solitary and unknowable about every human life. He saw connections of a different sort: these people and incidents were more like the spokes of a wheel. They didn’t touch directly, but each was linked to something bigger, and Don’s role was to try to keep the whole thing moving the best he could.

Don Colcord’s birthday is the Fourth of July. That’s also when Nucla celebrates its annual Water Days, which commemorates the completion of the town’s irrigation system. Today, the theme is “Where the Past Meets the Future,” and Don announces the floats for the parade down Main Street. After that, he helps out at the barbecue in the park, and then he prepares to set off the town’s fireworks. All these events are sponsored by the Lions Club. When Don joined the club, in 1978, he was the youngest member, and he still is. Soon, the Lions Club will be disbanded because of lack of members.

In the evening, we drive to the top of Nucla Hill. The view is spectacular in all directions: westward, the slate-blue La Sal Mountains, and the Uncompahgre Plateau to the east, where the feathered tops of cottonwoods mark the long line of the irrigation ditch. Three remaining members of the Lions Club are here, along with some volunteer firemen. Trucks and cars arrive from town and park at the bottom of the hill to watch the show. When darkness falls, the Lions prepare the fireworks in metal tubes, and Don ignites them one by one. After it’s over, we watch the pairs of headlights glide in a neat line back up Main Street, dispersing as drivers turn off toward home. Our attention drifts upward—now that the fireworks and the headlights are gone, the stars seem brilliant, clustered together like the lights of some faraway city. Don passes around a few bottles of beer. “I don’t care if it is a small town, we got good fireworks,” he says. He sips his beer and gazes up at the Milky Way. “When you see them from here, they look so close together,” he says. “It’s hard to believe they’re millions of miles apart.” ♦

Monday, December 12, 2011

What I Read Today - Monday December 12, 2011

From: The New York Times - David Brooks

The Life Report: Byron R. Wien


The following Life Report was submitted in response to my column of Oct. 28, in which I asked readers over 70 to write autobiographical essays evaluating their own lives.

My life has turned out so much better than I ever thought it would that I only wish it could go on forever. I am 78 years old and still working full time in a demanding job with considerable travel and I enjoy every minute of it. I have had a lot of bad breaks and good luck along the way. First, timing is everything, and I was born in Chicago during the Depression when fewer people had children, making it easier to get into a good college and get a good job. As for the first bad break, I was a teenage orphan. My father was a doctor, but he died when I was nine and my mother when I was fourteen. They both had weak hearts from childhood rheumatic fever. During the last two years of my mother’s life her unmarried sister came to live with us as a caregiver, and after my mother’s death the two of us moved to a smaller, less expensive apartment in the same neighborhood so I could continue at the same inner city high school. My father’s insurance provided enough money for rent and food, but at fifteen I went to work every day after school as an office boy for a company in downtown Chicago to earn some spending money so I could live a reasonably normal life.

In the fall of my senior year I was summoned to the principal’s office, which was never a good thing. The principal wasn’t there, but the guidance counselor was. He asked me if I owned a suit and I told him I did. He then asked me if I had ever heard of Harvard and I told him I did. He told me that Harvard was looking for smart kids from public high schools to balance the many private school kids in the student population. Harvard had written to my school asking them to send one student to talk to an admissions officer who would be traveling to Chicago. He then said, “You’re our pick, and when you go down there, don’t make a fool of yourself.”

I went to Harvard and it changed my life. I was interested in science and that was my area of concentration, but I never intended to pursue a career in the field. I wrote for The Harvard Crimson and liked that. In the beginning I felt like an outsider at Harvard. I was a nerdy middle class Jewish kid from a public school and not likely to be asked to join a final club. The Crimson during the 1950s was a true meritocracy, where any day you could find some future major journalist like Jack Rosenthal, David Halberstam or Tony Lukas. It was a pressured but stimulating refuge and I learned a lot there. When I was a senior I realized I wasn’t trained for anything and had to go to graduate school. I spent a few days at the Medical, Law and Business schools. Only the latter interested me. I fell asleep in a law school class, which I interpreted as a bad sign. I enrolled in the Business School and focused on marketing, thinking I would work in advertising where I could do some writing.

I got a job in an advertising agency, but didn’t like it. I went into the Army for two years and when I got out I took a job with a management consulting firm. They had a project in Nigeria that nobody wanted to do, but the idea of going to a relatively unknown African country appealed to me and I have been interested in the Third World ever since. My next job moved me to New York, where a Business School classmate remembered me as a smart kid and invited me to join his small but successful investment management firm. I was to be a security analyst but I had no training for this. Initially I did poorly and was almost fired. Eventually I developed the necessary skills and became a partner of the firm. The lesson here is that you shouldn’t try to decide what you want to do for the rest of your life when you are a teenager. Pursue your passion in college and the rest of your life will take care of itself.

In 1984 Morgan Stanley offered me a job as U.S. Strategist. The job involved writing a weekly essay and traveling around the world (at the time I had never been to Asia) to see clients. It was perfect for me, but I never thought about seeking it out. When they approached me they said that the research department, the firm management and the sales force had decided I would be perfect for the job; I later found out I was the seventh person they had wooed with that line. When giving career advice to young people, I tell them there is a perfect job out there for everyone, but most people never find it. Keep looking. I worked at Morgan Stanley for 21 years and now I have a similar role at Blackstone where I advise the firm and its clients on social, economic and political trends. I have been to China five times in the past two years, the Middle East twice, Latin America once, and Europe many times, as well as all over the United States.

My first marriage ended in divorce. I have been married for 33 years to Anita and we have many common interests. While I have had no children (a regret) I have eight godchildren and several nephews, many of whom I am close to. My first wife was a school teacher during the day and didn’t want to have to deal with kids at night as well. Anita had not been married before and felt she was too old and too involved in her successful career for motherhood.

I have had five jobs, two of which I took because they were attractive financially. Both of those turned out to be mistakes. The jobs I took because I thought they would be enjoyable turned out to be extremely rewarding financially as well. This is ironic because I took a pay cut in both cases when I joined the firms. I have made more money than I ever thought possible and now spend part of my time trying to give it away effectively.

I still ski, play tennis, sail and make love, although my skills at all of these have deteriorated. We have a home in the Hamptons where on weekends we cook and read. I am at an age when my friends are dying around me and that inspires me to make every remaining minute count. I still wake up each day with enthusiasm and hope that continues until the end of my life.

In my job I’m expected to understand what is happening in the world and to identify secular change. It seems clear that the United States and Europe are mature, overleveraged economies with dysfunctional governments. Since growth will be slow, unemployment will be high and the standard of living for many people will decline. Opportunities for young people will be fewer than the ones I could take advantage of. There will be more social unrest. I was born in the Depression and lived through the glorious years for America after World War II. The future for these born now is not so bright.

When my parents died, I decided God was not looking out for me and pulled away from organized religion. I had a reasonable amount of religious training in my youth. I do not attend church or synagogue and give little thought to spiritual matters. This does not seem to detract from my enjoyment of life.

Not having children is one regret, as I said. Another is that I am estranged from my older brother to whom I loaned a large amount of money when my financial circumstances were marginal. He never paid it back and lied to me throughout the process. We talk only on our birthdays.

Tuesday, December 6, 2011

What I Read Today - Tuesday December 6, 2011

From: The New York Times - December 5, 2011


The Wonky Liberal

By DAVID BROOKS

Republicans have many strong arguments to make against the Obama administration, but one major criticism doesn’t square with the evidence. This is the charge that President Obama is running a virulently antibusiness administration that spews out a steady flow of job- and economy-crushing regulations.

In the first place, President Obama has certainly not shut corporate-types out of the regulatory process. According to data collected by the Center for Progressive Reforms, 62 percent of the people who met with the White House office in charge of reviewing regulations were representatives of industry, while only 16 percent represented activist groups. At these meetings, business representatives outnumbered activists by more than 4 to 1.

Nor is it true that the administration is blindly doing the bidding of the liberal activist groups. On the contrary, the White House Office of Information and Regulatory Affairs and its administrator, Cass Sunstein, have been the subject of withering attacks from the left. The organization Think Progress says the office is “appalling.” Mother Jones magazine is on the warpath. The Huffington Post published a long article studded with negative comments from unions and environmental activists.

If you step back and try to get some nonhysterical perspective, you come to the following conclusion: This is a Democratic administration. Many of the major agency jobs are held by people who come out of the activist community who are not sensitive to the costs they are imposing on the economy. President Obama has a political and philosophical incentive to restrain their enthusiasm. He has, therefore, supported a strong review agency in the White House that does rigorous cost-benefit analyses to review proposed regulations and minimize their economic harm.

This office, under Sunstein, is incredibly wonky. It is composed of career number-crunchers of no known ideological bent who try to measure the trade-offs inherent in regulatory action. Deciding among these trade-offs involves relying on both values and data. This office has tried to elevate the role of data so that every close call is not just a matter of pleasing the right ideological army.

Over all, the Obama administration has significantly increased the regulatory costs imposed on the economy. But this is a difference of degree, not of kind.

During the final year of their administrations, presidents generally issue tons of new rules. Nineteen-eighty-eight, under Ronald Reagan, 1992, under George H.W. Bush and 2008, under George W. Bush, were monster years for new regulations. In his first years, Obama has not increased regulatory costs more than Reagan and the Bushes did in their final years.

Data collected by Bloomberg News suggest that the Obama White House has actually reviewed 5 percent fewer rules than George W. Bush’s did at a similar point in his presidency. What has increased is the cost of those rules.

George W. Bush issued regulations over eight years that cost about $60 billion. During its first two years, the Obama regulations cost between $8 billion and $16.5 billion, according to estimates by the administration itself, and $40 billion, according to data collected, more broadly, by the Heritage Foundation.

That’s a significant step up, as you’d expect when comparing Republican to Democratic administrations, but it is not a socialist onslaught.

Nor is it clear that these additional regulations have had a huge effect on the economy. Over the past 40 years, small business leaders have eloquently complained about the regulatory burden. And they are right to. But it’s not clear that regulations are a major contributor to the current period of slow growth.

The Bureau of Labor Statistics asks companies why they have laid off workers. Only 13 percent said regulations were a major factor. That number has not increased in the past few years. According to the bureau, roughly 0.18 percent of the mass layoffs in the first half of 2011 were attributable to regulations.

Some of the industries that are the subject of the new rules, like energy and health care, have actually been doing the most hiring. If new regulations were eating into business, we’d see a slip in corporate profits. We are not.

There are two large lessons here. First, Republican candidates can say they will deregulate and, in some areas, that would be a good thing. But it will not produce a short-term economic rebound because regulations are not a big factor in our short-term problems.

Second, it is easy to be cynical about politics and to say that Washington is a polarized cesspool. And it’s true that the interest groups and the fund-raisers make every disagreement seem like a life-or-death struggle. But, in reality, most people in government are trying to find a balance between difficult trade-offs. Whether it’s antiterrorism policy or regulatory policy, most substantive disagreements are within the 40 yard lines.

Obama’s regulations may be more intrusive than some of us would like. They are not tanking the economy.

Friday, December 2, 2011

What I Read Today - Friday December 2, 2011

From: The New York times December 1, 2011


The Spirit of Enterprise

By DAVID BROOKS

Why are nations like Germany and the U.S. rich? It’s not primarily because they possess natural resources — many nations have those. It’s primarily because of habits, values and social capital.

It’s because many people in these countries, as Arthur Brooks of the American Enterprise Institute has noted, believe in a simple moral formula: effort should lead to reward as often as possible.

People who work hard and play by the rules should have a fair shot at prosperity. Money should go to people on the basis of merit and enterprise. Self-control should be rewarded while laziness and self-indulgence should not. Community institutions should nurture responsibility and fairness.

This ethos is not an immutable genetic property, which can blithely be taken for granted. It’s a precious social construct, which can be undermined and degraded.

Right now, this ethos is being undermined from all directions. People see lobbyists diverting money on the basis of connections; they see traders making millions off of short-term manipulations; they see governments stealing money from future generations to reward current voters.

The result is a crisis of legitimacy. The game is rigged. Social trust shrivels. Effort is no longer worth it. The prosperity machine winds down.

Yet the assault on these values continues, especially in Europe.

Over the past few decades, several European nations, like Germany and the Netherlands, have played by the rules and practiced good governance. They have lived within their means, undertaken painful reforms, enhanced their competitiveness and reinforced good values. Now they are being brutally browbeaten for not wanting to bail out nations like Greece, Italy and Spain, which did not do these things, which instead borrowed huge amounts of money that they are choosing not to repay.

The estimated costs of these bailouts vary enormously and may end up being greater than the cost of German reparations after World War I. Germans are being browbeaten for not wanting to bail out Greece, where even today many people are still not willing to pay their taxes. They are being browbeaten for not wanting to bail out Italy, where future growth prospects are uncertain.

They are being asked to bail out nations with vast public sectors and horrible demographics. They are being asked to paper over fundamental economic problems with a mountain of currency.

It’s true that Germans benefited enormously from the euro zone and the southern European bubble, and that German and French banks are far from blameless. It’s true that the consequences for the world would be calamitous if the euro zone cracked up. It’s true that, in a crisis, you do things you wouldn’t otherwise do; you do things that violate your everyday values.

But our sympathy should be with the German people. They are not behaving selfishly by insisting on structural reforms in exchange for bailouts. They are not imprisoned by some rigid ideology. They are not besotted with some semi-senile Weimar superstition about rampant inflation. They are defending the values, habits and social contract upon which the entire prosperity of the West is based.

The scariest thing is that many of the people browbeating the Germans seem to have very little commitment to the effort-reward formula that undergirds capitalism. On the one hand, there are the technicians who are oblivious to values. For them anything that can’t be counted and modeled is a primitive irrelevancy. On the other hand, there are people who see the European crisis through the prism of some cosmic class war. What matters is not how people conduct themselves, but whether they are a have or a have-not. The burden of proof is against the haves. The benefit of the doubt is with the have-nots. Any resistance to redistribution is greeted with outrage.

The real lesson from financial crises is that, at the pit of the crisis, you do what you have to do. You bail out the banks. You bail out the weak European governments. But, at the same time, you lock in policies that reinforce the fundamental link between effort and reward. And, as soon as the crisis passes, you move to repair the legitimacy of the system.

That didn’t happen after the American financial crisis of 2008. The people who caused the crisis were never held responsible. There never was an exit strategy to unwind the gigantic debt buildup. The structural problems plaguing the economy remain unaddressed. As a result, the United States suffers from a horrible crisis of trust that is slowing growth, restricting government action and sending our politics off in strange directions.

Europe’s challenge is not only to avert a financial meltdown but to do it in a way that doesn’t poison the seedbed of prosperity. Which values will be rewarded and reinforced? Will it be effort, productivity and self-discipline? Or will it be bad governance, now and forever?

Thursday, December 1, 2011

What I Read Today - Thursday December 1, 2011

From: The WSJ

What Tim Tebow Can't Do

By JASON GAY
He cannot fly. He cannot see through walls. He cannot talk to the animals, not even cats. He's never picked up an automobile and tossed it across the road. He's failed to publish poetry in Russian. He can't explain Ryan Reynolds.

These are just a few of the many things Tim Tebow can't do.

Every day we are reminded of more things Tim Tebow can't do. He cannot throw a proper pass. He cannot stand still in the pocket. He can't run a conventional offense. He runs, but he doesn't run gracefully. He runs upright and frantic. He runs like he's stealing a toaster from the mall.

He's a cavalcade of failures. Why the Denver Broncos give him a paycheck, nobody knows.

Because Tim Tebow never lets you relax. He never puts a football game away in the first quarter. He forces you to watch the whole thing, with commercials and no fast-forwards. It's never pretty.

He doesn't put up Tom Brady's numbers. He doesn't put up Tom Brokaw's numbers. He's not impressing Broncos legend John Elway. John Elway acts as if he'd let the Broncos bus abandon Tim Tebow at a rest stop.

"Oh, where's Tim?" John Elway would say forty miles down the road. "Hmmm, that's too bad."

You can see why Elway's unconvinced. Tim Tebow can't do it the normal way. Tim Tebow can't get through an interview without mentioning his faith. Or giving credit to his teammates. Tim Tebow never sounds full of Tim Tebow.

He doesn't even get mad when people say nasty things about him. When people say Tim Tebow needs to improve, Tim Tebow says he needs to improve. Who does that?

Nothing seems to rattle him. He smiles and doesn't sulk. When Tim Tebow is bummed, he doesn't pull down the blinds, blast the Fleetwood Mac and drink red wine out of a Mason jar, like everybody else does. He's a total weirdo.

Do you know what else Tim Tebow has never done?

Tim Tebow has not climbed all Seven Summits. He's never built an invisible jet or hosted the Country Music Awards. If he has solved the mystery of Loch Ness, or washed dishes at The French Laundry, it's never been written about. Tim Tebow's portrait does not hang in the Louvre. Sandra Bullock has never made a Tim Tebow movie. Tim Tebow has never made a Sandra Bullock movie.

Sure, Tim Tebow has been on the cover of Sports Illustrated, but has he been on the cover of Dwell or Bon Appetit? That's right: no. Loser!

Do you know that Tim Tebow has never hosted a late-night talk show in Denmark? That he's never been the CEO of The Gap? That he wasn't a serious candidate to be manager of the Red Sox? Tim Tebow has never won a professional motocross race. He's never even come in second in a professional motocross race. Tim Tebow did zero to solve the NBA lockout. Zilch.

Here is a small list of other things Tim Tebow has never won:

Wimbledon, a MacArthur "Genius" grant, "Project Runway," "The Price is Right," the Nathan's Famous hot dog eating contest, the Booker Prize or a Grammy for best spoken-word album.

That's embarrassing. Why do people care about him?

Yes, Tim Tebow beat the Miami Dolphins, the Oakland Raiders, the Kansas City Chiefs, the New York Jets and the Chargers of San Diego. But Tim Tebow has not beaten the Detroit Lions. Or the Detroit Pistons. Or the Detroit Red Wings. Or Manny Pacquiao. Or Dara Torres. Or Real Madrid. Or Gary Kasparov.

Tim Tebow doesn't fight the law, but if he did, the law would surely win. Okay, maybe not.

Despite all of these issues, people still like Tim Tebow, which is mystifying. It's as if they can't recognize his flaws. They're blinded by hype. They're willfully ignorant. They want to believe in a myth.

One day they will see all of Tim Tebow's shortcomings. How he's never once sang O Canada at a Vancouver Canucks game. How he's never captured a live dinosaur. How he's too chicken to run for President.

Tim Tebow never, ever makes everybody happy. He can't really do anything besides win football games. Since when did anyone care about that?

Monday, November 28, 2011

What I Read Today - Monday November 28, 2011

From: The New York Times

The Politics of Economics in the Age of Shouting

By BILL KELLER


I share a virtual neighborhood with a legion of Times reporters, editors and columnists who know more than I will ever know about business and economics. (Look! Right over there: a Nobel-prize-winning economist!) In this humbling company, on this intimidating matter, who am I to tell anyone what to think? And so my plan was, frankly, to avoid the subject.

But while there are things a columnist can ignore (if Kim Kardashian ever features in this column, just shoot me), our failing economic ecosystem is not one of them. So for the past several weeks my airplane and bedside reading has consisted of sexy documents like “A Roadmap for America’s Future” and “The Way Forward” and “The Moment of Truth” and “Restoring America’s Future” and “Living Within Our Means and Investing in the Future.” I’ve also reached out to a few economists respected for the integrity of their science and their patience with economic illiterates.

The first thing I gleaned from this little tutorial will probably not surprise you: There really is a textbook way to fix our current mess. Short-term stimulus works to help an economy recover from a recession. Some kinds of stimulus pay off more quickly than others. Once the economic heart is pumping again, we need to get our deficits under control. The way to do that is a balance of spending cuts, increased tax revenues and entitlement reforms. There is room to argue about the proportions and the timing, and small differences can produce large consequences, but the basic formula is not only common sense, it is mainstream economic science, tested many times in the real world.

So what’s the problem? Why is our system so fundamentally stuck? Partly it’s a colossal, bipartisan lack of the political courage required to tell people what they sort of know but don’t want to hear. Partly it’s a Republican Party that, for its own cynical reasons, wants no deal with this president. Partly it’s moneyed, focused lobbies that swarm in defense of specific advantages written into the law; there is no comparable lobby for compromise, let alone sacrifice.

But also, I’ve come to think something is rotten in the state of economics. The dismal science, as Thomas Carlyle called it, has been ravaged by the same virus that has corrupted the rest of our national discourse.

Back in the very pre-digital days, the writer A. J. Liebling famously remarked that freedom of the press was guaranteed only to the man who owned one. Nowadays, of course, freedom of the press belongs to anyone with Internet access, from the information guerrillas of WikiLeaks to the blogger next door. The democratization of media has diminished the authority once held — and sometimes abused — by a few big newspapers and broadcasters. In many ways this has enriched society, creating a great global buffet of information and opinion, pooling the knowledge of the masses and providing an almost instantaneous reality check on the conventional wisdom.

The consequences have not all been happy, though. The easiest way to stand out in such a vast crowd of microbroadcasters is to be the loudest, the angriest, the most outrageous. If you want that precious traffic, you stake out a position somewhere in oh-my-God territory and proclaim it with a vengeance. Global warming is a hoax! Vaccines make you sick! Obama is a Muslim! In vanquishing the conventional wisdom, sometimes it seems we have vanquished wisdom itself.

Economists don’t live in caves, so there is no reason they should be immune to the centrifugal politics of this noisy world. Thus serious scholars are tempted to sign onto ideas that stretch their own credulity, and lesser economists are thrust forward for their moment of fame as witnesses on behalf of dubious claims. Economists cluster in ideological think tanks that promote political conformity rather than intellectual rigor. Politicians, with no generally accepted consensus to challenge them, can get away with plucking data out of context to bolster assertions that are based more on faith than on reality. Tax cuts pay for themselves! Protectionism saves jobs! It’s all the Fed’s fault! Deficits don’t matter! Obama is a socialist! Say it often enough and before long it’s a serious discussion on cable TV, in which the proven and the preposterous get the same respectful chin-wagging.

“Nobody who is taken seriously as an economist is going to say ‘cancel the Fed,’ ” said Glenn Hubbard, the dean of Columbia Business School, chairman of the Council of Economic Advisers under George W. Bush, and now Mitt Romney’s chief economic adviser. “I find it very disturbing that the media is giving equal time to some ideas that are just crazy.”

The Web site PolitiFact, the Pulitzer-winning fact-checking service, recently did a thorough debunking of Republican claims that Obama’s 2009 stimulus program created, quote, “zero jobs.” In fact, the checkers established, using still-trustworthy sources like the Congressional Budget Office, that the stimulus created or saved a couple of million jobs. Case closed? No, the Republicans just went on repeating the claim.

“The talking points drive the discourse,” said Bill Adair, the editor of PolitiFact. “They repeat the talking points so often I think they start actually believing them.”

In the Internet age, anyone can be an expert, and anyone who says otherwise is an elitist.

The other day House Speaker John Boehner put out a list of 132 economists who signed a statement endorsing a Republican menu of spending cuts, tax cuts and deregulation. All of these are legitimate things to propose, but the statement claimed the Republican list “will do more to boost private-sector job growth in America in both the near-term and long-term than the ‘stimulus’ spending approach favored by President Obama.” Reputable number-crunchers like Moody’s Analytics and some top-tier economists of both parties said Boehner’s statement would have little or no impact on the short-term employment problem. So who were these 132 economists? With a few exceptions they were academics from off-the-beaten-path colleges (no offense to Dakota State University), bloggers (the Calafia Beach Pundit?) and economists from devoutly libertarian think tanks. But the news had the right-wing tom-toms beating with excitement.

“I’ve never in my professional life seen the disjunction between the political debate about economics and the consensus of economists be as large as it is today,” said Justin Wolfers, a Wharton School economist who favors Democrats, and who tweeted withering commentary on the list of 132.

Surely this dilution of authority contributes to our national paralysis. At the very least it befogs the discussion and fosters a pervasive cynicism.

Columbia’s Hubbard says the way to weed out the quackery is for serious economists to speak up when silly ideas get a political foothold. He’s right, but once a mainstream economist has settled comfortably into a party-line think tank or joined a candidate’s brain trust, or even enjoyed the adulation at partisan cocktail parties, a degree of self-censorship takes hold.

Of course, there have always been economists who leaned right or left — and some outright snake-oil salesmen — but until recently the public debate about economics pretty much stayed within the boundaries of accepted science. Friedrich Hayek and Milton Friedman have become conservative icons, John Maynard Keynes and Paul Samuelson are stalwarts of the liberals, but in their lifetimes they all had a reverence for evidence (even if their acolytes did not).

Rereading some of the alternating, left-right weekly columns Samuelson and Friedman wrote for Newsweek in the 70s, I’ve been struck by their shared assumptions, and by the fact that the tone was so civil. It’s not hard to imagine both men signing on to the kind of grand bargain that keeps eluding Congress now. But if they were getting started in today’s media market, they would probably be obliged to amp up the vitriol, to sound like the old “Saturday Night Live” “Point-Counterpoint” parody:

“Paul, you pompous ass!”

“Milt, you ignorant slut!”

Tuesday, November 22, 2011

What I Read Today - Tuesday November 22, 2011

From:  Tax Vox - The Tax Policy Center Blog

It’s Time Stop Squabbling about the Bush Tax Cuts


Howard Gleckman
Posted on November 22, 2011, 1:53 pm

As long as politicians keep squabbling about what to do about the Bush era tax cuts, we are doomed. There will be no serious deficit reduction. There will be no tax reform. There will be nothing but the same old partisan arguments. Don’t believe me? Just listen to the chatter coming out of the failed deficit super committee.

That’s why it is time to reframe this debate. Rather than bickering endlessly about whether what they are doing is a tax cut or a tax increase compared to a law first passed a decade ago, lawmakers should start talking about what a fair and economically efficient tax code should look like. They ought to just decide how much tax revenue they need and then figure out how to raise it.

Much as I’d love to take credit for this brilliant new insight, it is hardly original. The chairmen of the 2010 White House deficit reduction commission, Erskine Bowles and Alan Simpson, proposed rewriting the entire tax code from scratch and fixed a revenue target for the new law of 21 percent of Gross Domestic Product. House Budget Committee Chairman Paul Ryan (R-WI) did much the same thing when he called for a bottom’s-up tax reform that produces 18 or 19 percent of GDP in federal taxes.

Of course, pols will—and should– argue loudly and often about what the right revenue target should be. But unlike the pushing and shoving over the 2001/2003/2010 law, that debate might actually lead somewhere. Besides, the public might be able to understand it, in contrast to Washington’s current incomprehensible incantations over current policy and current law baselines.

An editorial in this morning’s Washington Post, for example, contained the following description of one of the plans proposed in the super committee: “Some Republicans began the process of accepting the need for new tax revenue, offering up a package that would total $300 billion more over the next decade than would be collected if the Bush tax cuts remained in effect.”

Does any normal human being have any idea what that means?

Without an agreed-upon revenue goal, tax reform is impossible. In 1986, reform happened only after President Reagan and both parties in Congress agreed the new tax law would raise neither more nor less revenue than the code it was replacing. Similarly, lawmakers will have to agree this time on how much they want to collect before they can decide how they want to collect it. Not a change relative to somebody’s favorite baseline, but how much money they want to raise.

Will reframing the tax debate in this way break the logjam? I honestly don’t know. But I do know that endless wrangling about the Bush era tax cuts got us nowhere in 2010 when, after much angst, Congress and President Obama extended the law for another two years but resolved nothing. It got us nowhere during the hideous debt limit battle last summer, and it got us nowhere in the super committee that fell apart over the same old argument. Remember the definition of insanity: Doing the same thing over and over again and expecting a different outcome.

I get the politics of all this: The existing formulation allows Democrats to accuse Republicans of wrecking the economy to protect the tax cuts of their fat cat pals. And it lets Republicans claim Democrats are raising taxes on “job creators” and heartlessly throwing millions on the unemployment rolls. I get it. But I’m tired of it.

What I Read Today - Tuesday November 22, 2011

From: The New York Times - November 21, 2011


The Two Moons

By DAVID BROOKS

In 1951, Samuel Lubell invented the concept of the political solar system. At any moment, he wrote, there is a Sun Party (the majority party, which drives the agenda) and a Moon Party (the minority party, which shines by reflecting the solar rays).

During Franklin Roosevelt’s era, Democrats were the Sun Party. During Ronald Reagan’s, Republicans were. Then, between 1996 and 2004, the two parties were tied. We lived in a 50-50 nation in which the overall party vote totals barely budged five elections in a row. It seemed then that we were in a moment of transition, waiting for the next Sun Party to emerge.

But something strange happened. No party took the lead. According to data today, both parties have become minority parties simultaneously. We are living in the era of two moons and no sun.

It used to be that the parties were on a seesaw: If the ratings of one dropped, then the ratings of the other rose. But now the two parties have record-low approval ratings together. Neither party has been able to rally the country behind its vision of government.

Ronald Brownstein summarized the underlying typography recently in The National Journal: “In Allstate/National Journal Heartland Monitor polls over the past two years, up to 40 percent of Americans have consistently expressed support for the conservative view that government is more the problem than the solution for the nation’s challenges; about another 30 percent have backed the Democratic view that government must take an active role in the economy; and the remaining 30 percent are agnostic. They are open to government activism in theory but skeptical it will help them in practice.”

In these circumstances, both parties have developed minority mentalities. The Republicans feel oppressed by the cultural establishment, and Democrats feel oppressed by the corporate establishment. They embrace the mental habits that have always been adopted by those who feel themselves resisting the onslaught of a dominant culture.

Their main fear is that they will lose their identity and cohesion if their members compromise with the larger world. They erect clear and rigid boundaries separating themselves from their enemies. In a hostile world, they erect rules and pledges and become hypervigilant about deviationism. They are more interested in protecting their special interests than converting outsiders. They slowly encase themselves in an epistemic cocoon.

The Democrat and Republican parties used to contain serious internal debates — between moderate and conservative Republicans, between New Democrats and liberals. Neither party does now.

The Democratic and Republican parties used to promote skilled coalition builders. Now the American parties have come to resemble the ideologically coherent European ones.

The Democrats talk and look like a conventional liberal party (some liberals, who represent, at most, 30 percent of the country, are disappointed because President Obama hasn’t ushered in a Huffington Post paradise). Meanwhile, many Republicans flock to Herman Cain or Newt Gingrich because they are more interested in having a leader who can take on the mainstream news media than in having one who can plausibly govern. Grover Norquist’s tax pledge isn’t really about public policy; it’s a chastity belt Republican politicians wear to show that they haven’t been defiled by the Washington culture.

The era of the two moons is a volatile era. Independent voters are trapped in a cycle of sour rejectionism — voting against whichever of the two options they dislike most at the moment. The shift between the 2008 election, when voters rejected Republicans, and the 2010 election, when voters rejected Democrats, was as big as any shift in recent history.

Sometimes voters even reject both parties on the same day. In Ohio last month, for example, voters rejected the main fiscal policy of the Republican governor. On the same ballot, by 31 points, they rejected health care reform, the main initiative of their Democratic president.

In policy terms, the era of the two moons is an era of stagnation. Each party is too weak to push its own agenda and too encased by its own cocoon to agree to a hybrid. The supercommittee failed for this reason. Members of the supercommittee actually took some brave steps outside party orthodoxy (Republicans embraced progressive tax increases, Democrats flirted with spending cuts), but these were baby steps, insufficient to change the alignment.

In normal circumstances, minority parties suffer a series of electoral defeats and then they modernize. But in the era of the two moons, the parties enjoy periodic election victories they don’t deserve, which only re-enforce their worst habits.

So it’s hard to see how we get out of this, unless some third force emerges, which wedges itself into one of the two parties, or unless we have a devastating fiscal crisis — a brutal cleansing flood, after which the sun will shine again.

Tuesday, November 15, 2011

What I Read Today - Tuesday November 15, 2011

From:  The New York Times - November 14, 2011


Let’s All Feel Superior

By DAVID BROOKS

First came the atrocity, then came the vanity. The atrocity is what Jerry Sandusky has been accused of doing at Penn State. The vanity is the outraged reaction of a zillion commentators over the past week, whose indignation is based on the assumption that if they had been in Joe Paterno’s shoes, or assistant coach Mike McQueary’s shoes, they would have behaved better. They would have taken action and stopped any sexual assaults.

Unfortunately, none of us can safely make that assumption. Over the course of history — during the Holocaust, the Rwandan genocide or the street beatings that happen in American neighborhoods — the same pattern has emerged. Many people do not intervene. Very often they see but they don’t see.

Some people simply can’t process the horror in front of them. Some people suffer from what the psychologists call Normalcy Bias. When they find themselves in some unsettling circumstance, they shut down and pretend everything is normal.

Some people suffer from Motivated Blindness; they don’t see what is not in their interest to see. Some people don’t look at the things that make them uncomfortable. In one experiment, people were shown pictures, some of which contained sexual imagery. Machines tracked their eye movements. The people who were uncomfortable with sex never let their eyes dart over to the uncomfortable parts of the pictures.

As Daniel Goleman wrote in his book “Vital Lies, Simple Truths,” “In order to avoid looking, some element of the mind must have known first what the picture contained, so that it knew what to avoid. The mind somehow grasps what is going on and rushes a protective filter into place, thus steering awareness away from what threatens.”

Even in cases where people consciously register some offense, they still often don’t intervene. In research done at Penn State and published in 1999, students were asked if they would make a stink if someone made a sexist remark in their presence. Half said yes. When researchers arranged for that to happen, only 16 percent protested.

In another experiment at a different school, 68 percent of students insisted they would refuse to answer if they were asked offensive questions during a job interview. But none actually objected when asked questions like, “Do you think it is appropriate for women to wear bras to work?”

So many people do nothing while witnessing ongoing crimes, psychologists have a name for it: the Bystander Effect. The more people are around to witness the crime, the less likely they are to intervene.

Online you can find videos of savage beatings, with dozens of people watching blandly. The Kitty Genovese case from the ’60s is mostly apocryphal, but hundreds of other cases are not. A woman was recently murdered at a yoga clothing store in Maryland while employees at the Apple Store next door heard the disturbing noises but did not investigate. Ilan Halimi, a French Jew, was tortured for 24 days by 20 Moroccan kidnappers, with the full knowledge of neighbors. Nobody did anything, and Halimi eventually was murdered.

People are really good at self-deception. We attend to the facts we like and suppress the ones we don’t. We inflate our own virtues and predict we will behave more nobly than we actually do. As Max H. Bazerman and Ann E. Tenbrunsel write in their book, “Blind Spots,” “When it comes time to make a decision, our thoughts are dominated by thoughts of how we want to behave; thoughts of how we should behave disappear.”

In centuries past, people built moral systems that acknowledged this weakness. These systems emphasized our sinfulness. They reminded people of the evil within themselves. Life was seen as an inner struggle against the selfish forces inside. These vocabularies made people aware of how their weaknesses manifested themselves and how to exercise discipline over them. These systems gave people categories with which to process savagery and scripts to follow when they confronted it. They helped people make moral judgments and hold people responsible amidst our frailties.

But we’re not Puritans anymore. We live in a society oriented around our inner wonderfulness. So when something atrocious happens, people look for some artificial, outside force that must have caused it — like the culture of college football, or some other favorite bogey. People look for laws that can be changed so it never happens again.

Commentators ruthlessly vilify all involved from the island of their own innocence. Everyone gets to proudly ask: “How could they have let this happen?”

The proper question is: How can we ourselves overcome our natural tendency to evade and self-deceive. That was the proper question after Abu Ghraib, Madoff, the Wall Street follies and a thousand other scandals. But it’s a question this society has a hard time asking because the most seductive evasion is the one that leads us to deny the underside of our own nature.

Friday, November 11, 2011

What I Read Today - Friday November 11, 2011

From: The New York Times - November 10, 2011


The Inequality Map

By DAVID BROOKS

Foreign tourists are coming up to me on the streets and asking, “David, you have so many different kinds of inequality in your country. How can I tell which are socially acceptable and which are not?”

This is an excellent question. I will provide you with a guide to the American inequality map to help you avoid embarrassment.

Academic inequality is socially acceptable. It is perfectly fine to demonstrate that you are in the academic top 1 percent by wearing a Princeton, Harvard or Stanford sweatshirt.

Ancestor inequality is not socially acceptable. It is not permissible to go around bragging that your family came over on the Mayflower and that you are descended from generations of Throgmorton-Winthrops who bequeathed a legacy of good breeding and fine manners.

Fitness inequality is acceptable. It is perfectly fine to wear tight workout sweats to show the world that pilates have given you buns of steel. These sorts of displays are welcomed as evidence of your commendable self-discipline and reproductive merit.

Moral fitness inequality is unacceptable. It is out of bounds to boast of your superior chastity, integrity, honor or honesty. Instead, one must respect the fact that we are all morally equal, though our behavior and ethical tastes may differ.

Sports inequality is acceptable. It is normal to wear a Yankees jersey, an L.S.U. T-shirt or the emblem of any big budget team. The fact that your favorite sports franchise regularly grounds opponents into dust is a signal of your overall prowess.

Church inequality is unacceptable. It would be uncouth to wear a Baptist or Catholic or Jewish jersey to signal that people of your faith are closer to God. It is wrong to look down on other faiths on the grounds that their creeds are erroneous.

Income inequality is acceptable. If you are a star baseball player, it is socially acceptable to sell your services for $25 million per year (after all, you have to do what’s best for your family). If you are a star C.E.O., it’s no longer quite polite to receive an $18 million compensation package, but everybody who can still does it

Spending inequality is less acceptable. If you make $1 billion, it helps to go to work in jeans and black T-shirts. It helps to live in Omaha and eat in diners. If you make $200,000 a year, it is acceptable to spend money on any room previously used by servants, like the kitchen, but it is vulgar to spend on any adult toy that might give superficial pleasure, like a Maserati.

Technological inequality is acceptable. If you are the sort of person who understands the latest hardware and software advances, who knows the latest apps, it is acceptable to lord your superior connoisseurship over the aged relics who do not understand these things.

Cultural inequality is unacceptable. If you are the sort of person who attends opera or enjoys Ibsen plays, it is not acceptable to believe that you have a more refined sensibility than people who like Lady Gaga, Ke$ha or graffiti.

Status inequality is acceptable for college teachers. Universities exist within a finely gradated status structure, with certain schools like Brown clearly more elite than other schools. University departments are carefully ranked and compete for superiority.

Status inequality is unacceptable for high school teachers. Teachers at this level strongly resist being ranked. It would be loathsome to have one’s department competing with other departments in nearby schools.

Beer inequality is on the way down. There used to be a high status difference between microbrews and regular old Budweiser. In academic jargon, beer had a high Gini Coefficient. But as microbrews went mainstream, these status differences diminished.

Cupcake inequality is on the way up. People will stand for hours outside of gourmet cupcake stores even though there are other adequate cupcakes on offer with no waiting at nearby Safeways.

Travel inequality is acceptable. It is perfectly normal to have separate check-in lines and boarding procedures for airline patrons who have achieved Gold, Platinum, Double Ruby or Sun God status.

Supermarket inequality is unacceptable. It would not be permissible to have separate checkout lines at the grocery store for obese frequent buyers who consume a lot of Twinkies.

Jock inequality is unacceptable if your kid is an average performer on his or her youth soccer team. If your kid is a star, then his or her accomplishments validate your entire existence.

Vocation inequality is acceptable so long as you don’t talk about it. Surgeons have more prestige than valet parkers, but we do not acknowledge this. On the other hand, ethnic inequality — believing one group is better than another — is unacceptable (this is one of our culture’s highest achievements).

Dear visitor, we are a democratic, egalitarian people who spend our days desperately trying to climb over each other. Have a nice stay.

Friday, November 4, 2011

What I Read Today - Friday November 4, 2011

From: The New York Times (published November 3, 2011)

Shale Gas Revolution

By DAVID BROOKS


The United States is a country that has received many blessings, and once upon a time you could assume that Americans would come together to take advantage of them. But you can no longer make that assumption. The country is more divided and more clogged by special interests. Now we groan to absorb even the most wondrous gifts.



A few years ago, a business genius named George P. Mitchell helped offer such a gift. As Daniel Yergin writes in “The Quest,” his gripping history of energy innovation, Mitchell fought through waves of skepticism and opposition to extract natural gas from shale. The method he and his team used to release the trapped gas, called fracking, has paid off in the most immense way. In 2000, shale gas represented just 1 percent of American natural gas supplies. Today, it is 30 percent and rising.

John Rowe, the chief executive of the utility Exelon, which derives almost all its power from nuclear plants, says that shale gas is one of the most important energy revolutions of his lifetime. It’s a cliché word, Yergin told me, but the fracking innovation is game-changing. It transforms the energy marketplace.

The U.S. now seems to possess a 100-year supply of natural gas, which is the cleanest of the fossil fuels. This cleaner, cheaper energy source is already replacing dirtier coal-fired plants. It could serve as the ideal bridge, Amy Jaffe of Rice University says, until renewable sources like wind and solar mature.

Already shale gas has produced more than half a million new jobs, not only in traditional areas like Texas but also in economically wounded places like western Pennsylvania and, soon, Ohio. If current trends continue, there are hundreds of thousands of new jobs to come.

Chemical companies rely heavily on natural gas, and the abundance of this new source has induced companies like Dow Chemical to invest in the U.S. rather than abroad. The French company Vallourec is building a $650 million plant in Youngstown, Ohio, to make steel tubes for the wells. States like Pennsylvania, Ohio and New York will reap billions in additional revenue. Consumers also benefit. Today, natural gas prices are less than half of what they were three years ago, lowering electricity prices. Meanwhile, America is less reliant on foreign suppliers.

All of this is tremendously good news, but, of course, nothing is that simple. The U.S. is polarized between “drill, baby, drill” conservatives, who seem suspicious of most regulation, and some environmentalists, who seem to regard fossil fuels as morally corrupt and imagine we can switch to wind and solar overnight.

The shale gas revolution challenges the coal industry, renders new nuclear plants uneconomic and changes the economics for the renewable energy companies, which are now much further from viability. So forces have gathered against shale gas, with predictable results.

The clashes between the industry and the environmentalists are now becoming brutal and totalistic, dehumanizing each side. Not-in-my-backyard activists are organizing to prevent exploration. Environmentalists and their publicists wax apocalyptic.

Like every energy source, fracking has its dangers. The process involves injecting large amounts of water and chemicals deep underground. If done right, this should not contaminate freshwater supplies, but rogue companies have screwed up and there have been instances of contamination.

The wells, which are sometimes beneath residential areas, are serviced by big trucks that damage the roads and alter the atmosphere in neighborhoods. A few sloppy companies could discredit the whole sector.

These problems are real, but not insurmountable. An exhaustive study from the Massachusetts Institute of Technology concluded, “With 20,000 shale wells drilled in the last 10 years, the environmental record of shale-gas development is for the most part a good one.” In other words, the inherent risks can be managed if there is a reasonable regulatory regime, and if the general public has a balanced and realistic sense of the costs and benefits.

This kind of balance is exactly what our political system doesn’t deliver. So far, the Obama administration has done a good job of trying to promote fracking while investigating the downsides. But the general public seems to be largely uninterested in the breakthrough (even though it could have a major impact on the 21st-century economy). The discussion is dominated by vested interests and the extremes. It’s becoming another weapon in the political wars, with Republicans swinging behind fracking and Democrats being pressured to come out against. Especially in the Northeast, the gas companies are demonized as Satan in corporate form.

A few weeks ago, I sat around with John Rowe, one of the most trusted people in the energy business, and listened to him talk enthusiastically about this windfall. He has no vested interest in this; indeed, his company might be hurt. But he knows how much shale gas could mean to America. It would be a crime if we squandered this blessing.

Tuesday, November 1, 2011

What I Read Today - Tuesday November 1, 2011

From:  The New York Times (published October 31, 2011)

The Wrong Inequality

By DAVID BROOKS


We live in a polarizing society, so perhaps it’s inevitable that our experience of inequality should be polarized, too.

In the first place, there is what you might call Blue Inequality. This is the kind experienced in New York City, Los Angeles, Boston, San Francisco, Seattle, Dallas, Houston and the District of Columbia. In these places, you see the top 1 percent of earners zooming upward, amassing more income and wealth. The economists Jon Bakija, Adam Cole and Bradley Heim have done the most authoritative research on who these top 1 percenters are.

Roughly 31 percent started or manage nonfinancial businesses. About 16 percent are doctors, 14 percent are in finance, 8 percent are lawyers, 5 percent are engineers and about 2 percent are in sports, entertainment or the media.

If you live in or around these big cities, you see stores and entire neighborhoods catering to the top 1 percent. You see a shift in social norms. Up until 1970 or so, a chief executive would have been embarrassed to take home more than $20 million. But now there is no shame, and top compensation zooms upward.

You also see the superstar effect that economists have noticed in the income data. Within each profession, the top performers are now paid much better than the merely good or average performers.

If you live in these big cities, you see people similar to yourself, who may have gone to the same college, who are earning much more while benefiting from low tax rates, wielding disproportionate political power, gaining in prestige and contributing seemingly little to the social good. That is the experience of Blue Inequality.

Then there is what you might call Red Inequality. This is the kind experienced in Scranton, Des Moines, Naperville, Macon, Fresno, and almost everywhere else. In these places, the crucial inequality is not between the top 1 percent and the bottom 99 percent. It’s between those with a college degree and those without. Over the past several decades, the economic benefits of education have steadily risen. In 1979, the average college graduate made 38 percent more than the average high school graduate, according to the Fed chairman, Ben Bernanke. Now the average college graduate makes more than 75 percent more.

Moreover, college graduates have become good at passing down advantages to their children. If you are born with parents who are college graduates, your odds of getting through college are excellent. If you are born to high school grads, your odds are terrible.

In fact, the income differentials understate the chasm between college and high school grads. In the 1970s, high school and college grads had very similar family structures. Today, college grads are much more likely to get married, they are much less likely to get divorced and they are much, much less likely to have a child out of wedlock.

Today, college grads are much less likely to smoke than high school grads, they are less likely to be obese, they are more likely to be active in their communities, they have much more social trust, they speak many more words to their children at home.

Some research suggests that college grads have much bigger friendship networks than high school grads. The social divide is even starker than the income divide.

These two forms of inequality exist in modern America. They are related but different. Over the past few months, attention has shifted almost exclusively to Blue Inequality.

That’s because the protesters and media people who cover them tend to live in or near the big cities, where the top 1 percent is so evident. That’s because the liberal arts majors like to express their disdain for the shallow business and finance majors who make all the money. That’s because it is easier to talk about the inequality of stock options than it is to talk about inequalities of family structure, child rearing patterns and educational attainment. That’s because many people are wedded to the notion that our problems are caused by an oppressive privileged class that perpetually keeps its boot stomped on the neck of the common man.

But the fact is that Red Inequality is much more important. The zooming wealth of the top 1 percent is a problem, but it’s not nearly as big a problem as the tens of millions of Americans who have dropped out of high school or college. It’s not nearly as big a problem as the 40 percent of children who are born out of wedlock. It’s not nearly as big a problem as the nation’s stagnant human capital, its stagnant social mobility and the disorganized social fabric for the bottom 50 percent.

If your ultimate goal is to reduce inequality, then you should be furious at the doctors, bankers and C.E.O.’s. If your goal is to expand opportunity, then you have a much bigger and different agenda.