Tag Archives: United States

Idea Soup

The Demise of Upward Mobility

Robert J. Samuelson paints a sobering picture of the once credible and seemingly attainable American Dream — the generational progress of upward mobility is no longer a given. He is the author of “The Great Inflation and Its Aftermath: The Past and Future of American Affluence”.

[div class=attrib]From Wilson Quarterly:[end-div]

The future of affluence is not what it used to be. Americans have long believed—it’s part of our national character—that our economic well-being will constantly increase. We see ourselves as a striving, inventive, and pragmatic people destined for higher living standards. History is a continuum of progress, from Robert Fulton’s steamboat to Henry Ford’s assembly line to Bill Gates’ software. Every generation will live better than its predecessors.
Well, maybe not.

For millions of younger Americans—say, those 40 and under—living better than their parents is a pipe dream. They won’t. The threat to their hopes does not arise from an impending collapse of technological gains of the sort epitomized by the creations of Fulton, Ford, and Gates. These advances will almost certainly continue, and per capita income—the average for all Americans and a conventional indicator of living standards—will climb. Statistically, American progress will resume. The Great Recession will be a bump, not a dead end.

The trouble is that many of these gains will bypass the young. The increases that might have fattened their paychecks will be siphoned off to satisfy other groups and other needs. Today’s young workers will have to finance Social Security and Medicare for a rapidly growing cohort of older Americans. Through higher premiums for employer-provided health insurance, they will subsidize care for others. Through higher taxes and fees, they will pay to repair aging infrastructure (roads, bridges, water systems) and to support squeezed public services, from schools to police.

The hit to their disposable incomes would matter less if the young were major beneficiaries of the resultant spending. In some cases—outlays for infrastructure and local services—they may be. But these are exceptions. By 2025 Social Security and Medicare will simply reroute income from the nearly four-fifths of the population that will be under 65 to the older one-fifth. And health care spending at all age levels is notoriously skewed: Ten percent of patients account for 65 percent of medical costs, reports the Kaiser Family Foundation. Although insurance provides peace of mind, the money still goes from young to old: Average health spending for those 45 to 64 is triple that for those 18 to 24.

The living standards of younger Americans will almost certainly suffer in comparison to those of their parents in a second crucial way. Our notion of economic progress is tied to financial security, but the young will have less of it. What good are higher incomes if they’re abruptly revoked? Though it wasn’t a second Great Depression, the Great Recession was a close call, shattering faith that modern economic policies made broad collapses impossible. Except for the savage 1980-82 slump, post-World War II recessions had been modest. Only minorities of Americans had suffered. By contrast, the Great Recession hurt almost everyone, through high unemployment, widespread home foreclosures, huge wealth losses in stocks and real estate—and fears of worse. A 2012 Gallup poll found that 68 percent of Americans knew someone who had lost a job.

The prospect of downward mobility is not just dispiriting. It assails the whole post–World War II faith in prosperity. Beginning in the 1950s, commentators celebrated the onrush of abundance as marking a new era in human progress. In his 1958 bestseller The Affluent Society, Harvard economist John Kenneth Galbraith announced the arrival of a “great and unprecedented affluence” that had eradicated the historical “poverty of the masses.”

Economic growth became a secular religion that was its own reward. Perhaps its chief virtue was that it dampened class conflict. In The Great Leap: The Past Twenty-Five Years in America (1966), John Brooks observed, “The middle class was enlarging itself and ever encroaching on the two extremes”—the very rich and the very poor. Business and labor could afford to reconcile because both could now share the fruits of expanding production. We could afford more spending on public services (education, health, environmental protection, culture) without depressing private incomes. Indeed, that was Galbraith’s main theme: Our prosperity could and should support both.

To be sure, there were crises of faith, moments when economic progress seemed delayed or doomed. The longest lapse occurred in the 1970s, when double-digit inflation spawned pessimism and frequent recessions, culminating in the 1980-82 downturn. Monthly unemployment peaked at 10.8 percent. But after Federal Reserve chairman Paul Volcker and President Ronald Reagan took steps to suppress high inflation, faith returned.
Now, it’s again imperiled. A 2011 Gallup poll found that 55 percent of Americans didn’t think their children would live as well as they did, the highest rate ever. We may face a crimped and contentious future.

[div class=attrib]Read the entire article after the jump.[end-div]

[div class=attrib]Image: Ascending and Descending by M.C.Escher. Courtesy of M.C.Escher.[end-div]

Idea Soup

The Exceptionalism of American Violence

The United States is often cited as the most generous nation on Earth. Unfortunately, it is also one of the most violent, having one of the highest murder rates of any industrialized country. Why this tragic paradox?

In an absorbing article excerpted below, backed by sound research, Anthropologist Eric Michael Johnson points to the lack of social capital on a local and national scale. Here, social capital is defined as interpersonal trust that promotes cooperation between citizens and groups for mutual benefit.

So, combine a culture that allows convenient access to very effective weapons with broad inequality, social isolation and distrust, and you get a very sobering picture — a country where around 70 people are killed each day by others wielding guns (25,423 firearm homicides in 2006-2007, based on Centers for Disease Control statistics).

[div class=attrib]From Scientific American:[end-div]

The United States is the deadliest wealthy country in the world. Can science help us explain, or even solve, our national crisis?

His tortured and sadistic grin beamed like a full moon on that dark night. “Madness, as you know, is like gravity,” he cackled. “All it takes is a little push.” But once the house lights rose, the terror was lifted for most of us. Few imagined that the fictive evil on screen back in 2008 would later inspire a depraved act of mass murder by a young man sitting with us in the audience, a student of neuroscience whose mind was teetering on the edge. What was it that pushed him over?

In the wake of the tragedy that struck Aurora, Colorado last Friday there remain more questions than answers. Just like last time–in January, 2011 when Congresswoman Gabrielle Giffords and 18 others were shot in Tucson, Arizona or before that in April, 2007 when a deranged gunman attacked students and staff at Virginia Tech–this senseless mass shooting has given rise to a national conversation as we struggle to find meaning in the madness.

While everyone agrees the blame should ultimately be placed on the perpetrator of this violence, the fact remains that the United States has one of the highest murder rates in the industrialized world. Of the 34 countries in the Organisation for Economic Co-operation and Development (OECD), the U.S. ranks fifth in homicides just behind Brazil (highest), Mexico, Russia, and Estonia. Our nation also holds the dubious honor of being responsible for half of the worst mass shootings in the last 30 years. How can we explain why the United States has nearly three times more murders per capita than neighboring Canada and ten times more than Japan? What makes the land of the free such a dangerous place to live?

Diagnosing a Murder

There have been hundreds of thoughtful explorations of this problem in the last week, though three in particular have encapsulated the major issues. Could it be, as science writer David Dobbs argues at Wired, that “an American culture that fetishizes violence,” such as the Batman franchise itself, has contributed to our fall? “Culture shapes the expression of mental dysfunction,” Dobbs writes, “just as it does other traits.”

Perhaps the push arrived with the collision of other factors, as veteran journalist Bill Moyers maintains, when the dark side of human nature encountered political allies who nurture our destructive impulses? “Violence is our alter ego, wired into our Stone Age brains,” he says. “The NRA is the best friend a killer’s instinct ever had.”

But then again maybe there is an economic explanation, as my Scientific American colleague John Horgan believes, citing a hypothesis by McMaster University evolutionary psychologists Martin Daly and his late wife Margo Wilson. “Daly and Wilson found a strong correlation between high Gini scores [a measure of inequality] and high homicide rates in Canadian provinces and U.S. counties,” Horgan writes, “blaming homicides not on poverty per se but on the collision of poverty and affluence, the ancient tug-of-war between haves and have-nots.”

In all three cases, as it was with other culprits such as the lack of religion in public schools or the popularity of violent video games (both of which are found in other wealthy countries and can be dismissed), commentators are looking at our society as a whole rather than specific details of the murderer’s background. The hope is that, if we can isolate the factor which pushes some people to murder their fellow citizens, perhaps we can alter our social environment and reduce the likelihood that these terrible acts will be repeated in the future. The only problem is, which one could it be?

…

The Exceptionalism of American Violence

As it turns out, the “social capital” Sapolsky found that made the Forest Troop baboons so peaceful is an important missing factor that can explain our high homicide rate in the United States. In 1999 Ichiro Kawachi at the Harvard School of Public Health led a study investigating the factors in American homicide for the journal Social Science and Medicine (pdf here). His diagnosis was dire.

“If the level of crime is an indicator of the health of society,” Kawachi wrote, “then the US provides an illustrative case study as one of the most unhealthy of modern industrialized nations.” The paper outlined what the most significant causal factors were for this exaggerated level of violence by developing what was called “an ecological theory of crime.” Whereas many other analyses of homicide take a criminal justice approach to the problem–such as the number of cops on the beat, harshness of prison sentences, or adoption of the death penalty–Kawachi used a public health perspective that emphasized social relations.

In all 50 states and the District of Columbia data were collected using the General Social Survey that measured social capital (defined as interpersonal trust that promotes cooperation between citizens for mutual benefit), along with measures of poverty and relative income inequality, homicide rates, incidence of other crimes–rape, robbery, aggravated assault, burglary, larceny, and motor vehicle theft–unemployment, percentage of high school graduates, and average alcohol consumption. By using a statistical method known as principal component analysis Kawachi was then able to identify which ecologic variables were most associated with particular types of crime.

The results were unambiguous: when income inequality was higher, so was the rate of homicide. Income inequality alone explained 74% of the variance in murder rates and half of the aggravated assaults. However, social capital had an even stronger association and, by itself, accounted for 82% of homicides and 61% of assaults. Other factors such as unemployment, poverty, or number of high school graduates were only weakly associated and alcohol consumption had no connection to violent crime at all. A World Bank sponsored study subsequently confirmed these results on income inequality concluding that, worldwide, homicide and the unequal distribution of resources are inextricably tied. (see Figure 2). However, the World Bank study didn’t measure social capital. According to Kawachi it is this factor that should be considered primary; when the ties that bind a community together are severed inequality is allowed to run free, and with deadly consequences.

But what about guns? Multiple studies have shown a direct correlation between the number of guns and the number of homicides. The United States is the most heavily armed country in the world with 90 guns for every 100 citizens. Doesn’t this over-saturation of American firepower explain our exaggerated homicide rate? Maybe not. In a follow-up study in 2001 Kawachi looked specifically at firearm prevalence and social capital among U.S. states. The results showed that when social capital and community involvement declined, gun ownership increased (see Figure 3).

[div class=attrib]Read the entire article after the jump.[end-div]

[div class=attrib]Image: Smith & Wesson M&P Victory model revolver. Courtesy of Oleg Volk / Wikpedia.[end-div]

Idea Soup

Re-resurgence of the United States

Those who have written off the United States in the 21st century may need to thing again. A combination of healthy demographics, sound intellectual capital, institutionalized innovation and fracking (yes, fracking) have placed the U.S. on a sound footing for the future, despite current political and economic woes.

[div class=attrib]From the Wilson Quarterly:[end-div]

If the United States were a person, a plausible diagnosis could be made that it suffers from manic depression. The country’s self-perception is highly volatile, its mood swinging repeatedly from euphoria to near despair and back again. Less than a decade ago, in the wake of the deceptively easy triumph over the wretched legions of Saddam Hussein, the United States was the lonely superpower, the essential nation. Its free markets and free thinking and democratic values had demonstrated their superiority over all other forms of human organization. Today the conventional wisdom speaks of inevitable decline and of equally inevitable Chinese triumph; of an American financial system flawed by greed and debt; of a political system deadlocked and corrupted by campaign contributions, negative ads, and lobbyists; of a social system riven by disparities of income, education, and opportunity.

It was ever thus. The mood of justified triumph and national solidarity after global victory in 1945 gave way swiftly to an era of loyalty oaths, political witch-hunts, and Senator Joseph McCarthy’s obsession with communist moles. The Soviet acquisition of the atom bomb, along with the victory of Mao Zedong’s communist armies in China, had by the end of the 1940s infected America with the fear of existential defeat. That was to become a pattern; at the conclusion of each decade of the Cold War, the United States felt that it was falling behind. The successful launch of the Sputnik satellite in 1957 triggered fears that the Soviet Union was winning the technological race, and the 1960 presidential election was won at least in part by John F. Kennedy’s astute if disingenuous claim that the nation was threatened by a widening “missile gap.”
At the end of the 1960s, with cities burning in race riots, campuses in an uproar, and a miserably unwinnable war grinding through the poisoned jungles of Indochina, an American fear of losing the titanic struggle with communism was perhaps understandable. Only the farsighted saw the importance of the contrast between American elections and the ruthless swagger of the Red Army’s tanks crushing the Prague Spring of 1968. At the end of the 1970s, with American diplomats held hostage in Tehran, a Soviet puppet ruling Afghanistan, and glib talk of Soviet troops soon washing their feet in the Indian Ocean, Americans waiting in line for gasoline hardly felt like winners. Yet at the end of the 1980s, what a surprise! The Cold War was over and the good guys had won.

Naturally, there were many explanations for this, from President Ronald Reagan’s resolve to Mikhail Gorbachev’s decency; from American industrial prowess to Soviet inefficiency. The most cogent reason was that the United States back in the late 1940s had crafted a bipartisan grand strategy for the Cold War that proved to be both durable and successful. It forged a tripartite economic alliance of Europe, North America, and Japan, backed up by various regional treaty organizations such as NATO, and counted on scientists, inventors, business leaders, and a prosperous and educated work force to deliver both guns and butter for itself and its allies. State spending on defense and science would keep unemployment at bay while Social Security would ensure that the siren songs of communism had little to offer the increasingly comfortable workers of the West. And while the West waited for its wealth and technologies to attain overwhelming superiority, its troops, missiles, and nuclear deterrent would contain Soviet and Chinese hopes of expansion.

It worked. The Soviet Union collapsed, and the Chinese leadership drew the appropriate lessons. (The Chinese view was that by starting with glasnost and political reform, and ducking the challenge of economic reform, Gorbachev had gotten the dynamics of change the wrong way round.) But by the end of 1991, the Democrat who would win the next year’s New Hampshire primary (Senator Paul Tsongas of Massachusetts) had a catchy new campaign slogan: “The Cold War is over—and Japan won.” With the country in a mild recession and mega-rich Japanese investors buying up landmarks such as Manhattan’s Rockefeller Center and California’s Pebble Beach golf course, Tsongas’s theme touched a national chord. But the Japanese economy has barely grown since, while America’s gross domestic product has almost doubled.

There are, of course, serious reasons for concern about the state of the American economy, society, and body politic today. But remember, the United States is like the weather in Ireland; if you don’t like it, just wait a few minutes and it’s sure to shift. This is a country that has been defined by its openness to change and innovation, and the search for the latest and the new has transformed the country’s productivity and potential. This openness, in effect, was America’s secret weapon that won both World War II and the Cold War. We tend to forget that the Soviet Union fulfilled Nikita Khrushchev’s pledge in 1961 to outproduce the United States in steel, coal, cement, and fertilizer within 20 years. But by 1981 the United States was pioneering a new kind of economy, based on plastics, silicon, and transistors, while the Soviet Union lumbered on building its mighty edifice of obsolescence.

This is the essence of America that the doom mongers tend to forget. Just as we did after Ezra Cornell built the nationwide telegraph system and after Henry Ford developed the assembly line, we are again all living in a future invented in America. No other country produced, or perhaps even could have produced, the transformative combination of Microsoft, Apple, Google, Amazon, and Facebook. The American combination of universities, research, venture capital, marketing, and avid consumers is easy to envy but tough to emulate. It’s not just free enterprise. The Internet itself might never have been born but for the Pentagon’s Defense Advanced Research Projects Agency, and much of tomorrow’s future is being developed at the nanotechnology labs at the Argonne National Laboratory outside Chicago and through the seed money of Department of Energy research grants.

American research labs are humming with new game-changing technologies. One MIT-based team is using viruses to bind and create new materials to build better batteries, while another is using viruses to create catalysts that can turn natural gas into oil and plastics. A University of Florida team is pioneering a practical way of engineering solar cells from plastics rather than silicon. The Center for Bits and Atoms at MIT was at the forefront of the revolution in fabricators, assembling 3-D printers and laser milling and cutting machines into a factory-in-a-box that just needs data, raw materials, and a power source to turn out an array of products. Now that the latest F-18 fighters are flying with titanium parts that were made by a 3-D printer, you know the technology has taken off. Some 23,000 such printers were sold last year, most of them to the kind of garage tinkerers—many of them loosely grouped in the “maker movement” of freelance inventors—who more than 70 years ago created Hewlett-Packard and 35 years ago produced the first Apple personal computer.

The real game changer for America is the combination of two not-so-new technologies: hydraulic fracturing (“fracking”) of underground rock formations and horizontal drilling, which allows one well to spin off many more deep underground. The result has been a “frack gas” revolution. As recently as 2005, the U.S. government assumed that the country had about a 10-year supply of natural gas remaining. Now it knows that there is enough for at least several decades. In 2009, the United States outpaced Russia to become the world’s top natural gas producer. Just a few years ago, the United States had five terminals receiving imported liquefied natural gas (LNG), and permits had been issued to build 17 more. Today, one of the five plants is being converted to export U.S. gas, and the owners of three others have applied to do the same. (Two applications to build brand new export terminals are also pending.) The first export contract, worth $8 billion, was signed with Britain’s BG Group, a multinational oil and gas company. Sometime between 2025 and 2030, America is likely to become self-sufficient in energy again. And since imported energy accounts for about half of the U.S. trade deficit, fracking will be a game changer in more ways than one.

The supply of cheap and plentiful local gas is already transforming the U.S. chemical industry by making cheap feedstock available—ethylene, a key component of plastics, and other crucial chemicals are derived from natural gas in a process called ethane cracking. Many American companies have announced major projects that will significantly boost U.S. petrochemical capacity. In addition to expansions along the Gulf Coast, Shell Chemical plans to build a new ethane cracking plant in Pennsylvania, near the Appalachian Mountains’ Marcellus Shale geologic formation. LyondellBasell Industries is seeking to increase ethylene output at its Texas plants, and Williams Companies is investing $3 billion in Gulf Coast development. In short, billions of dollars will pour into regions of the United States that desperately need investment. The American Chemistry Council projects that over several years the frack gas revolution will create 400,000 new jobs, adding $130 billion to the economy and more than $4 billion in annual tax revenues. The prospect of cheap power also promises to improve the balance sheets of the U.S. manufacturing industry.

[div class-attrib]Read the entire article here.[end-div]

[div class=attrib]Image courtey of Wikipedia.[end-div]

Idea Soup

Offshoring and Outsourcing of Innovation

A fascinating article over at the Wall Street Journal contemplates the demise of innovation in the United States. It’s no surprise where it’s heading — China.

[div class=attrib]From the Wall Street Journal:[end-div]

At a recent business dinner, the conversation about intellectual-property theft in China was just getting juicy when an executive with a big U.S. tech company leaned forward and said confidently: “This isn’t such a problem for us because we plan on innovating new products faster than the Chinese can steal the old ones.”

That’s a solution you often hear from U.S. companies: The U.S. will beat the Chinese at what the U.S. does best—innovation—because China’s bureaucratic, state-managed capitalism can’t master it.

The problem is, history isn’t on the side of that argument, says Niall Ferguson, an economic historian whose new book, “Civilization: The West and the Rest,” was published this week. Mr. Ferguson, who teaches at Harvard Business School, says China and the rest of Asia have assimilated much of what made the West successful and are now often doing it better.

“I’ve stopped believing that there’s some kind of cultural defect that makes the Chinese incapable of innovating,” he says. “They’re going to have the raw material of better educated kids that ultimately drives innovation.”

Andrew Liveris, the chief executive of Dow Chemical, has pounded this drum for years, describing what he sees as a drift in engineering and manufacturing acumen from the West to Asia. “Innovation has followed manufacturing to China,” he told a group at the Wharton Business School recently.

“Over time, when companies decide where to build R&D facilities, it will make more and more sense to do things like product support, upgrades and next-generation design in the same place where the product is made,” he said. “That is one reason why Dow has 500 Chinese scientists working in China, earning incredibly good money, and who are already generating more patents per scientist than our other locations.”

For a statistical glimpse of this accretion at work, read the World Economic Forum’s latest annual competitiveness index, which ranks countries by a number of economic criteria. For the third year in a row, the U.S. has slipped and China has crept up. To be sure, the U.S. still ranks fifth in the world and China is a distant 26th, but the gap is slowly closing.

[div class=attrib]Read the entire article here.[end-div]

Idea Soup

America: Paradoxical icon of the new

[div class=attrib]From Eurozine:[end-div]

Blaming the American Way of Life for the ills of post-industrial European society is a poor excuse for Europeans’ own partiality to consumer pleasures, writes Petr Fischer. On a positive note, American individualism could teach Europe a thing or two about social solidarity.

“Business–Answer–Solution” reads the advertising banner of the subsidiary of a foreign company in the centre of Prague. At first sight, the banner is not particularly interesting, in this case meaning that it is not particularly surprising. Surprising things are those that capture our attention, that shock us in their particular way. This corporate motto repeats the famous, infinitely repeated mantra of aggressive global capitalism, its focus purely pragmatic: give us a problem and we will come up with a solution that profits both you and us. “Win-win capitalism”, one could say in today’s international newspeak.

What is interesting – in other words disconcerting – is the fact that the banner covers the window of a small shop situated directly behind the National Museum, a building that – as in every other European city – symbolizes a certain perception of historicity cultivated on the old continent at least since the nineteenth century. The National Museum preserves the history of the Czech nation, and the people who work in it analyse and reflect on Czech national existence, its peculiarity, uniqueness, difference or connectedness. This activity is not governed by the pragmatic slogan of performance, of completed things, of faits accomplis; rather, it is ruled by a different three words, directed at thinking and its incessant, uncertain movement: Discussion–Question–Searching.

Both slogans represent two sides of the same coin of western civilization, two sides that, so far, have been more or less separate. The first represents the straightforward American way, leveraging everything along the way, everything at hand that can help business; the latter represents the difficult, reflective way of the old continent, left by its American child so that it could later be changed according to America’s picture. The fact that the multinational company’s motto is located just “behind” the building that, synecdochically, expresses the basic historic orientation of all European nations, is symbolic. “Behind”, meta in Greek, describes, in the European tradition, something that transcends everything we can arrive at though normal reasoning. In Aristotle’s canon, so the philosophical legend has it, such was the name of the texts found in the library behind the thinker’s treatise on physics. However metaphysics has since come to signify a system of thought that transcends the world of tangible facts and things, that represents some invisible internal order of the world. Business–Answer–Solution, the catchword of American pragmatism, is, as its location behind the National Museum suggests, perhaps the only really functioning metaphysics of today’s world.

New is always better

Since its discovery, America has been referred to as the New World. But what exactly is new about it for the Europeans? In De la démocratie en Amérique, Alexis de Tocqueville – one of the first to systematically analyse American institutions, republican political systems, and above all what today is called the “American way of life” – concluded that the newness of America consist mostly of a kind of neophilia, a love of all that is new.

“The Americans live in a country of wonders, everything around them is in incessant motion, and every motion seems to be progress,” says de Tocqueville. “The image of the new is closely connected with the image of the better. They see no limits set by Nature on man’s efforts; in American eyes, that which does not exist is what no one has yet tried.” In this extension of the purest Enlightenment optimism, the new is associated with a higher, moral quality. The gaze of the man turns toward the future, the past ceases to be important because, in the rush towards the new, the better, it loses its value, becomes inferior. The essential is what will be, or rather, what part of the future can be realized “now”.

[div class=attrib]More from theSource here.[end-div]