The next big social issue

Same-sex marriage is pretty much a settled issue by now, though of course it will probably take a few more years before all the appropriate laws are in place, and there will no doubt be a few noisy but futile rear-guard actions here and there in state legislatures. But since the under-40 group in this country is overwhelmingly in favor of allowing same-sex marriage, and since they are becoming the majority voting block in the nation, demographics will assure that it becomes the law of the land within a few years, even if the Supreme Court punts on the cases heard this week.

We have lived through the racial segregation battles, the women's rights battles, the abortion battles (not yet quite settled), and the gay/lesbian rights battles, culminating in the same-sex marriage battles. It is interesting to speculate about what will be the next big social issue we will face.

I suspect it will be a battle over assisted-suicide, the right of people faced with an incurable debilitating disease to choose legally to end their lives while they still have some acceptable quality of life, and for doctors to help them legally with this process. An aging population and the unsustainable costs of Medicare will help drive this issue. The aging population means we will have more and more people faced in their old age with incurable debilitating diseases that might decimate their finances and the emotions of their families, and which will strain the resources of hospitals and nursing homes. The Medicare issue is driven by the fact that about 40% of Medicare spending is on the last month of people's lives, providing very expensive but essentially futile medical care.

But it might be a battle over legalizing drugs, so as to take the money out of the drug business. The "war on drugs" has gone on for decades, at enormous cost, yet all it has accomplished is to nurture the growth of huge international drug cartels with finances exceeding those of small countries. Any student of history might have foreseen this, looking just at the history of alcohol prohibition in this country, where prohibition simply nurtured the growth of smuggling gangs, and did almost nothing to reduce alcohol consumption. The  invariant lesson of history is that prohibiting a thing which has a strong demand just makes it very profitable to smuggle it, and if it is an addicting substance, to addict more people to it.. The only real solution is to reduce the demand. Since the production cost of drugs is miniscule (marijuana was a roadside weed before all this began), legalizing production would drop the cost dramatically and deprive the cartels of their huge profits. Indeed, the drug cartels would no doubt pour a great deal of their illegal profits into politics and public relations to try to prevent legalization, for exactly that reason.

It will be interesting to watch.

Same-sex marriage and the political parties

It has been amusing to watch the parade of Democratic senators in recent days who have "gotten religion" about same-sex marriage and hurried to catch up with their constituents by coming out in favor of legalizing same-sex marriages. But it is hardly surprising, since for their largely urban, largely young political base this issue is clearly already settled. The only problem they face is dealing with their second-largest voting block, black Protestants, many of whom remain fairly conservative on this issue.

Republicans, on the other hand, face a serious dilemma. Same-sex marriage is a real hot-button issue to their base in the religious right, so they can't afford to alienate them. On the other hand, as the past few elections have proved, the religious right alone does not provide a large enough base to win national elections. As I have suggested before, the only Republican strategy that works is to shut up about contentious social issues (abortion, same-sex marriage, etc.), and shift the focus onto our fiscal problems and the need for fiscal sanity.  Whether the religious right is smart enough to let that happen, or so ideologically-driven that they will continue to hamper the Republican party by sabotaging any candidate moderate enough to get elected in a nation election remains to be seen.

The Supreme Court and same-sex marriage

The Supreme Court held oral arguments this week on two high-profile cases involving same-sex marriage, and the justices’ questions made it clear that they are somewhat reluctant to deal with this issue yet. Nevertheless, it is clear that same-sex marriage is now accepted by a majority of the public as a whole, and an overwhelming majority of those under 40. So irrespective of any religious objection, and whatever the Supreme Court rules in these particular cases, same-sex marriage will became legal throughout the US in the near futurr.

Public attitudes toward racial segregation in this country turned around in only about two generations, which is remarkably fast for such a deep-seated cultural standard. Public sentiment toward same-sex marriage has reversed in even a shorter time, which is really remarkable.

What will be interesting to watch is on what grounds the Supreme Court finally resolves these cases. They could rule that the definition of marriage is a matter for states to resolve, and the federal government has no business interfering.  That would be consistent with states’ rights. But it poses a difficult problem. If some states allow same-sex marriage and other don’t, what is the legal position of a same-sex couple married in one state but now living is a state that does not recognize same sex marriage?  And what is the legal position of that couple with respect to federal benefits?  The states’ rights position creates more legal problems than it solves.

On the other hand the Supreme Court could base their ruling on constitutional grounds, but such a ruling, either for or against same-sex marriage, would have to apply to the whole county. My guess is that this is the route the Court will eventually adopt, though perhaps not in these cases. It is the only route that ensures a consistent legal position in all states and in federal laws. 

It will be interesting to see how this plays out.

Criticism and science

I note that Nassim Taleb is coming in for a good deal of fairly personal criticism in some quarters from his new book Antifragile, which is perhaps not unexpected since he takes no pains in his book to hide his disdain for the work of some prominent public and academic figures.  I also note that these attacks, or at least the ones I have read thus far, make little or no attempt to refute his fundamental technical arguments.  Indeed, it not clear that some of the critics even understand the underlying technical arguments.

It reminds me again that science is essentially a community effort, not an individual effort. We tend to glorify a few scientists (Einstein, Newton, etc) as if they, and they alone, are responsible for the great advances in our knowledge. Individual awards like the Nobel prizes support this misguided view. But in fact science is the slow, painful, often tedious accretion of the work and findings of many, many, many people, few of whom ever get their moment in the public eye.  Kepler gets great credit in textbooks for formulating the laws of planetary motion, but he couldn't have done it without the years of astronomical observations, collected one cold night after another, by Tycho Brahe, who in turn owed his ability to collect those observations to legions of optical workers and budding astronomers who preceded him and refined telescope design by trial and error.

In this respect, criticism (at least when it isn't just a personal attack) is a critical part of the scientific system. Initial hypotheses are almost always wrong, if not completely than at least in details, and it is the unremitting criticism of peers that refines the hypothesis and surfaces the errors and inconsistencies. I assume that after the first flush of personal attacks are past, we will get some serious study and criticism of Taleb's mathematical underpinnings to his arguments that will advance the field yet further.

Recommended: The Signal and the Noise

Nate Silver runs FiveThirtyEight.com, the polling site most accurate in the last election.  His new book, The Signal and the Noise: Why Most Predictions Fail But Some Don't is a clear, well-reasoned, quite accessible book about the probabilistic nature of life.  He discusses why weather forecasting predictions have gotten better over the decades, but earthquake forecasting hasn't, and why the majority of studies in medicine and in many other fields are probably fatally flawed in their statistical interpretation of data.  Fundamentally the issue is one of separating signal from noise, of detecting the real signal (if there is one) and not being deluded by the meaningless noise that surrounds the signal.

This is a great book to read just after reading Nassim Taleb's recent book Antifragile, since both deal with much the same topic, how we humans misunderstand randomness and frequently misinterpret noisy data.

Recommended: Bitter Pill: Why Medical Bills Are Killing Us

Time magazine this month has a long article by Steven Brill entitled  Bitter Pill: Why Medical Bills Are Killing Us. I recommend it, though it will make your blood boil.  Even in our world of outlandish greed, the way hospitals charge patients who don't have insurance is unbelievably greedy!!

No doubt hospitals will hire spin doctors to refute this article and claim that all those excess charges go to help pay for the people they have to treat for free.  That would be more convincing if some of these supposedly non-profit hospitals were not racking up annual profits in the hundreds of millions, and paying their CEOs exorbitant salaries.

Clearly the incentives are all wrong in this business.

Propaganda

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”

- Joseph Goebbels, Reich Minister of Propaganda, Nazi Germany, 1933-1945

Propaganda is propaganda, whether or not one calls it by a more socially acceptable name, like advertising, political analysis, news, “spin”, or religious dogma.  And the only objective of propaganda is to convince people to believe something that isn’t true.

People are inherently gullible.  If they want to believe something, it is easy to convince them. If they want to believe a fancy overpriced automobile makes them more sexually attractive, it is easy to sell them such a car on that basis.  If they want to believe a pill can make them live longer, it is easy to sell them such pills. If they want to believe their party’s politicians (but not the other party’s), are high-minded selfless civil servants it is easy to get them to support the most ridiculous and self-defeating policies. If they want to believe a face cream can make them more beautiful, it is easy to sell them cosmetics. If they want to believe gambling in the stock market can make them rich, it is easy for a stock broker to turn them into customers and regularly churn their account.

We in the modern first world age live in a sea of propaganda. We have raised it to a high art, practiced in industrial proportions. Every TV program we watch is laced with propaganda (the ads, and sometimes the plot as well). Every movie we watch is laced with propaganda (Hollywood’s idealized world and idealized people). The news we watch or read is shaped by propaganda (the political bias of the outlet, and the need to sensationalize stories to draw and retain audience). The magazines we read are saturated with propaganda (all those ads promising marvelous things, sometimes just by association, from their products).  We are surrounded by people trying to sell us something – a product, an idea, a religion, a political position – that we often wouldn’t normally be inclined to buy or support or believe.

 As a friend of mine taught me about evaluating information, “always consider the source”.  If the source has something to gain from convincing you (and almost always they do), be skeptical, be very skeptical.

More on Talib's book Antifragile

I have finally finished reading Nassim Taleb's latest book Antifragile, including the technical appendices and the afternotes, which take some serious study to really understand. I have to say it has been one of the most important books I have read in years.  I have believed and argued for many of his assertions for years, but never really quite understood why I believed them.  His expositions have made the reasons clear to me.

For example, I have believed for years and written in this blog repeatedly about the difference between the original entrepreneurs who built a company (think Bill Gates or Steve Jobs or Henry Ford) and the hirelings who later become overpaid CEOs of the same companies. Now I really understand. The difference is that the original entrepreneurs had "skin in the game".  That is, they took substantial risks in starting their companies (the vast majority of new companies fail) and could have lost it all, so they deserve the rewards of success.  Later CEOs have almost no skin in the game.  The worst that can happen to them is that they eventually get fired with a golden parachute. For them, it is all upside (millions in potential pay and bonuses) and no downside.

Much the same can be said about the current political process. Politicians implement all sorts of laws and regulations and policies which affect everyone else but don't really impact them.  They have almost no "skin in the game".  If the policy is a disaster, they are largely spared the effects.

For example, I have known for years that lots of risk estimates are essentially meaningless. Now I really understand why. People "estimate" the risk of, say, a 100 year flood level or a simultaneous failure of three levels of safety backups in a nuclear plant.  But an "estimate" is meaningless without including an error bound (a measure of the probable error around the estimate).  But for rare events, hard enough as it is to estimate their probability, it is essentially impossible to define the error bound. So the estimate is essentially meaningless, except to give people a false sense of security (think Fukushima nuclear power plant).  And the further out on the distribution "tail"one goes (the rarer the event), the more a tiny error in the estimate produces massive changes in the probability.

And of course his central triad (fragile - robust - antifragile) is a profound new idea.  The difference between things that just manage to "survive" volatility (robust) and things that actually profit from and improve from volatility (antifragile) is a critically important distinction.  As is the observation that complexity and sophistication in design generally leads to fragility, while simplification and interfering less with the natural processes generally leads to antifragility.

I find fascinating his argument that most healthy systems stay healthy precisely because the stressors placed on them (up to a point) by randomness and volitility help to keep them healthy, and reducing or eliminating the volatility actually leads to a decrease in their robustness.  Considering that most of our public policy is aimed at reducing volatility (by, say, smoothing out business cycles, or regularly eating three meals every day), we are clearly headed in the wrong direction.

There are perhaps 20 or 30 other observations in his book which have produced similar enlightenment.  If you haven't read this book, do so.  But be prepared to work hard.  Many of his ideas run counter to "conventional wisdom", and it often takes work to understand the underlying logic of his arguments.  

Quotation of the week

"The worst problem of modernity lies in the malignant transfer of fragility and antifragility from one party to the other, with one getting the benefits, the other (unwittingly)  getting the harm, with such transfer facilitated by the growing wedge between the ethical and the legal."

Nassim Taleb, Antifragile

Now we see the real Obama...

Everyone agrees the sequester is dumb, because it blindly cuts everything (except, of course, the entitlements that are the real problem)  across the board. So the Republican House offered President Obama an opportunity (the Inhofe-Toomey proposal) to decide how to distribute the cuts, in order to make the cuts in a more rational way.

Guess what?  The President wasn't interested, because then he would actually have to decide what to cut and what to keep, and he didn't want to have to make those decisions, or live with the political heat that would come from them. Probably clever politics, but abysmal statesmanship! The president clearly would prefer to cut nothing, raise more taxes, increase spending some more , and ignore the ballooning debt.

I'm disgusted with Congress, as are most people,  but I'm getting disgusted with this president as well.

Recommended: Europe, Unemployment and Instability

George Freidman of STRATFOR has another good posting on the STRATFOR site: Europe, Unemployment and Instability. Well worth reading.

His argument is complex, centering on Germany's dominant position in the Euro zone, and it's dependence on an export economy, to the detriment of many of its neighbors. But the central idea is that the continuing high unemployment throughout Europe, created in part by the austerity programs put in place to prevent default on sovereign debt, are building a breeding ground for extremist political movements, which may ultimately lead to a wave of political instability of the form we are already seeing in Italy this month.

The real story....

There has been much fuss made over the "draconian" cuts that have just come into effect with the sequester. Of course every agency who was going to be effected has been spending the last month painting the worst possible picture of the consequences. And the press has slavishly reported all these "the sky is falling" stories without any critical examination at all. Never mind that the cut, in dollars, is about the same as government spending has expended during this administration, so that in fact the cut just takes us back more or less to the spending levels in place when President Obama took office.

Here is how total government spending looks for the years of the Obama administration, WITHOUT the sequester in 2013:
2009: $3.27 trillion
2010: $3.46 trillion
2011: $3.60 trillion
2012: $3.65 trillion
2013: $3.72 trillion

Nonetheless, it is a dumb way to make these cuts, primarily because the things that are the real long-term problem - Medicare and Medicaid - were exempted from the cuts. Instead we cut things that directly impact our future economic growth and competitiveness - things like basic research, education support and job retraining.

To see the real problem, look at the chart below, (from http://www.usfederalbudget.us/) built from the government's own figures, which shows how entitlement spending takes over in the coming decades.
 

The core things which both parties seem to have forgotten, but especially the Democrats, are

1) EVERYTHING rests on the strength of the economy. The only place to get the revenue to support all the nice things that everyone, Republican and Democrat alike, would like the government to pay for is from the economy. Poor economy = low tax revenue = no money for government programs. And all the populist ideas which the Democrats have been peddling - higher taxes, more regulations, higher minimum wages, required health care for employees, etc, etc - simply add to the cost of doing business and reduce the competitiveness of American companies in the world market.

2) The real long term problems are in the entitlements, especially health care. Until someone deals with those issues, politically explosive as they are, nothing else we do will make much difference in the long run.