Burglar Gets 15 Years in Federal Prison for Possessing Shotgun Shells

We've all heard of criminals getting off on a technicality, but what about getting a long prison term for a technicality? That’s what happened to Edward Young, 43 years old, a convicted burglar who tried to reform himself. When Young was released from state prison in 1996 (where he served time for burglary charges), Young told his grandmother that he would turn his life around. He married, went to work, and with his wife raised 4 children in Chattanooga, Tennessee.

As reported in the New York Times (and more critically in timesfreepress.com), Young’s life took a sharply downward turn beginning in 2011. Young’s troubles came from a combination of virtuous and immoral behavior. On the virtuous side, Young helped a neighbor widow dispose of her husband’s belongings. Young kept the widow’s chest of drawers at his place. In this chest of drawers were seven shotgun shells. Young put them away so his children couldn't find them. He claims not to have known that it is illegal for convicted felons to possess ammunition.

About the same time as his helping the neighbor widow, Young regressed to his previous criminal behavior. He allegedly stole tools, tires, and weightlifting equipment from vehicles and a business warehouse. He brought his son with him one time during a crime spree. This behavior brought the police to his house to conduct a search, during which they found the shotgun shells.

Young confessed to the burglaries and faced a few years in state prison, with the possibility of parole and probation, which seems a reasonable punishment for the crime. The possession of the shotgun shells, however, allowed the U.S. Attorney to prosecute Young under the “Armed Career Criminal Act”. His 20-year-old burglary convictions counted against him, something that is unique to this law. Young never used a firearm in any of the crimes he was convicted of, and although possessing shotgun shells, he had no gun. Nevertheless, Young got 15 years for possessing the shotgun shells, which is the minimum sentence under the federal law. This sentence allows for no possibility of parole, and no discretion in sentencing. The judge, sympathizing with Young, compared the situation to a Charles Dickens novel.

The federal government will spend $415,000 over 15 years to incarcerate Young. His children, ages 6 to 16, will grow up without a father. Is this in society’s best interest? High incarceration rates have reduced the crime rate, but this comes at a high cost. In 1978, the United States had 307,000 inmates in state and federal prisons. In 2012, the number had quintupled to 1.57 million. 1 in 100 adults are now in prison or jail nationwide. The average cost to incarcerate someone in state and federal prison is about $30,000 per year. Multiplied by 1.57 million, this amounts to $47 billion per year.

Beside money, another societal cost is children growing up without fathers. Due to disability, Young was a stay-at-home father for his four young children. Now his children will have to be raised by their mother alone. Single parenting is a societal concern that causes an elevated risk of children’s experiencing cognitive, emotional, and social problems. The number of children living in single parent households has nearly doubled in the last 50 years. One in three children are now raised without a father. Not all children raised by a single parent have problems, but children are more likely to have problems compared to children raised by two parents. Boys in particular are more likely to have conduct and academic problems if their father is absent.

There are many reasons why more children today are raised by single parents. One common reason is that the father abandons the child. This can happen to married or unmarried parents. The mother may not want to marry the father for some reason, or if they are married, she may want to divorce. Many fathers are unemployed or employed in menial jobs, not making them attractive candidates for marriage. Some fathers are alcoholics or drug addicts, and may be violent and abusive.

In the case of Edward Young, these reasons aren't relevant. He got married, had 4 children with his wife, was involved in the children’s upbringing, and both he and his wife wanted to stay married and raise the children together. In this case, the government removed Young from his family and will incarcerate him for 15 years, for having shotgun shells with no shotgun. Young was not a perfect father. He had a history of burglaries when he was younger, and was a convicted felon. More importantly, he recently resumed criminal behavior, and involved his son. At age 43, and a father of 4, it’s unlikely but possible that Young would become a habitual criminal. Most criminals are young people. Young men are more impulsive and prone to criminal behavior than middle aged or older men. I think that a conviction and sentence of one or two years in prison would be enough of a deterrent to make him avoid any further misdeeds.

We need to rethink mandatory sentencing and mass incarceration. Mandatory sentencing usually kicks in when someone has a long history of criminal behavior. The problem is that longer sentencing for older men makes no sense, since older men are less likely to commit crimes. Mandatory sentencing and mass incarceration are expensive in terms of monetary and societal costs. They are a major cause of family breakdown, especially in low-income neighborhoods. Mass incarceration is one reason why so many American children are raised by single parents. The incarceration rate is 1% in the U.S., and much higher in low-income neighborhoods. Many states have moved away from mass incarceration, including New York and Texas. It’s time for the federal government to rethink laws like the Armed Career Criminal Act and restore common sense and the public interest to sentencing.

Parents Denied Information on Their Children's Mental Health Care

Imagine being a parent of a child with serious mental illness. You’re anxious about your child’s well-being. You’re concerned about his future. You feel stressed out having to cope with his mood swings, meltdowns, tantrums, antisocial or violent behavior, etc. You’re disappointed that your child’s future isn't as bright as you once imagined. On top of these sources of anguish, what you don’t need is a mental health system that denies you information on your child’s treatment. This is what many American parents of mentally ill people are faced with, according to a recent Wall Street Journal article.

The article describes several parents of violent mentally ill men. Suzanne Lankford's adult son allegedly knocked her out with a blow to a head, participated in an armed robbery of a mall, and assaulted a nurse and law enforcement officer. He has exhibited paranoid symptoms, phoning in reports of people stalking him, and barricading himself inside a room to ward off imaginary assassins. Ms. Lankford is unable to get any information on her son’s treatment, due to privacy concerns.

Pat Milan's adult son, diagnosed with paranoid schizophrenia, had cut his throat and dug his own grave in his backyard. His son was admitted to a treatment facility in 2011, but released eight days later despite protests from his father. Professionals at the treatment facility noted homicidal and suicidal ideation, and that he had a suicide plan. Pat Milan was denied access to these treatment records. After being brought home, Mr. Milan’s son attached a shotgun shell to a steel pipe, put the combination in his mouth, and exploded the shell via a fuse (the article didn't say if he died).

Being denied access to treatment information isn't only a problem for parents of adult children. Pennsylvania has a law that allows a child as young as 14 to prevent his parents from receiving information about his care. Quoting Rep. Tim Murphy (R, Pa.), "So you have a seventh- or eighth-grader making decisions on their mental illness. I wouldn't let a 14-year-old decide much of anything."

What is the reasoning behind this denial of access to information about immediate family members? Ira Burnim of the David L. Bazelon Center for Mental Health Law, a Washington, D.C., advocacy group, says that confidentiality is vital to ensure that patients seek treatment. According to Burnim, "the current system discourages patients" from seeking care because of the stigma of mental illness. HIPAA is the legal framework that restricts access to protected mental health care information.

The article also talks about the obstacles to involuntary commit mentally ill individuals to treatment. Five states don’t allow involuntary mental health treatment at all, Nevada has a bill pending that would allow it in some circumstances, and the other 44 states have stringent requirements for involuntary treatment.

E. Fuller Torrey, founder of the Treatment Advocacy Center, estimates that 216,000 of the homeless population, or about 1/3, are adults with severe untreated mental illness. He also estimates that there are 400,000 untreated mentally ill adults in jails and prisons.

I think that immediate family members should by default have access to health information. Parents should be given access to their adult children’s mental health treatment records. This access should only be taken away if the child specifically requests it. There’s no reason to deny parents information. In most cases, parents are trying to do their best for their children. They need to be informed to either make decisions on behalf of their children, or assist their children in making the correct decision. Mental illness impairs judgment and rational decision making. People with mental illness need all the help they can get from their family.

I have a personal example to relate about this. When I was a freshman in college, I had some serious mental health issues. I saw someone at the student health center, who referred me to an outside therapist. To pay for this therapy I would have had to tell my parents about it, since I needed their financial assistance. I didn't want them to know about my problems, so I decided not to pursue treatment. I have no idea whether or not therapy would have been helpful at the time. But the rational decision would have been to try treatment, even if it meant that my parents would know that I was having problems. The problems eventually got worse, and my parents found out about them anyway.

Involuntary treatment is another issue. The article combines mental health information and involuntary treatment, but I see them as separate. I used to be in favor of involuntary treatment for the mentally ill. That was when I believed that drug treatment was effective and safe. I don’t believe that any more, after reading Anatomy of an Epidemic (which I review here). Drug treatment has never been proven to be long-term effective for psychiatric disorders. Depending on the drug, side effects can be severe and debilitating. Antipsychotics have some of the worst side effect profiles, with the older ones causing movement disorders like tardive dyskinesia, and the newer ones causing metabolic disorders like weight gain and type-2 diabetes. The people most likely to be involuntary committed are those with schizophrenia and other psychotic disorders. They are almost guaranteed to be prescribed antipsychotic drugs. I don’t think that people should be coerced to take drugs that have never been shown to improve their long-term functioning, and which have such serious side effects.

In conclusion, let’s allow parents to be informed about their adult children’s mental health treatment, but let’s not allow parents to involuntarily commit their children to forced drugging and hospitalization.

Bipartisan Push for Better Mental Health Care Won’t Be Helpful

In the aftermath of the shootings at Sandy Hook Elementary School, with memories of the Aurora movie theater shooting, the Gabby Giffords shooting, and the Virginia Tech shootings still in mind, people demanded that the U.S. Congress do something. These shootings, along with many others, were perpetrated by mentally ill individuals. Liberals wanted more gun control. Conservatives wanted more armed guards and armed civilians to take down the shooters. The divided congress was unable to pass a gun control measure. But apparently liberals and conservatives were able to agree on one thing, according to a recent New York Times article: better care for the mentally ill. According to the article, “[t]he emerging legislation would, among other things, finance the construction of more community mental health centers, provide grants to train teachers to spot early signs of mental illness and make more Medicaid dollars available for mental health care.” There would also be support for children who faced trauma, and suicide prevention initiatives. Approximately 1.5 million additional people with mental illness would be treated each year.

This is a good, thing, right? What’s there to complain about more mental health treatment? There’s nothing to complain about, if one believes in the current drug-based model of care. Treatment in this context will be primarily psychoactive drugs. The community mental health center will recruit and encourage people to see a doctor and get a prescription for a psychotropic medication. Teachers will spot early signs of ADHD, depression, and bipolar disorder in children, and put the children on the road to chronic stimulant, antidepressant, and antipsychotic drug treatment. Medicaid is notorious for drugging up the children who rely on it for health care. Suicide will be prevented by prescribing antidepressant drugs. The vast majority of the 1.5 million additional treated people will be prescribed drugs.

After reading Anatomy of an Epidemic (which I review here), I stopped believing that psychotropic drugs are an effective long-term solution for most mental disorders. The evidence is just not there. Some drugs, such as antipsychotics and benzodiazepines, are effective short-term solutions to psychotic or anxious symptoms. The problem is that they don’t help the patient function better over the long term. While the evidence isn’t clear that drugs caused the explosion of debilitating mental illness in recent years, they certainly haven’t helped prevent it. Drugging of children in particular (for ADHD or bipolar disorder) has likely led to poor long-term outcomes, including mental (psychotic disorders, increased suicide rate, rapidly-cycling bipolar) and physical (extreme weight gain and type 2 diabetes for children taking atypical antipsychotics).

I would have preferred to see congress pass a gun control measure. The mentally ill and guns go together like North Korea and nuclear weapons. People with mental illness should not be allowed to purchase firearms. They should not have access to them in their homes. Adam Lanza’s mother was tragically irresponsible for having guns in her home. Her son used these guns to kill her in her home, then 26 people at Sandy Hook Elementary, including 20 children.

I have lived with serious mental illness for some 30 years. Mine has been under better control than many people. I have never been hospitalized for mental illness. I have never had to quit or leave a job due to mental illness. But I would never trust myself with owning or having possession of a gun. The reason is that there are times when my emotions become extreme or difficult to control. In those times, I don’t want access to a gun. It only takes one mistake for a personal or public tragedy to occur.

Gun sales and ownership should be banned for anyone who has been treated for a psychiatric disorder—I mean anyone treated at any time in their life. This would be a major change from current American law, and would require confidential records being unsealed, but it is for the greater good. Anyone living with someone who has been treated for mental illness should be required, if they own a gun, to keep it locked and inaccessible. The NRA will be furious and scream that we are becoming Nazi Germany, but tough. The NRA’s refusal to consider any type of gun control legislation, and their control of most Republican legislators, have allowed these preventable tragedies to happen.

If the government wants to spend money, what should it spend it on, if not treating mental illness? What about research? The problem with research is that the biochemical / drug paradigm still dominates psychiatric research, decades after it’s been clear that the chemical imbalances that drugs supposedly treat don’t exist. The drugs themselves cause chemical imbalances, but after millions of dollars and decades of research, no one has been able to show that any psychiatric disorder is caused by a chemical imbalance. Any government research money will be wasted on new drugs, new brain imaging, new tests, and other things that won’t do anything to improve the lives of the mentally ill. Research on alternative treatments would be more promising, but only a tiny fraction of any allocated funds would go into this type of research.

I’d like to see the government spend its money on providing a solution to the homeless problem. Current policy is to leave the homeless to their own resources. If they want to live on the street, or in a public park, fine. Short-term treatment with medication is useless, since they go off the medication as soon as they leave the hospital or treatment center. Many homeless are afflicted with mental illness and substance abuse. The fact that they are living on the streets is an indictment of the entire drug-based psychiatric paradigm. Deinstitutionalization began in the 1960’s, a half-century ago. Drugs were supposed to provide the severely mentally ill the stability and mental resources to live outside the hospital. But, as I've said above, drugs are not an effective long-term solution for most mental disorders. Thus many deinstitutionalized patients were not able to control their problems, and live independently on their own. Those without financial or family resources to fall back on ended up on the streets. They are the government’s responsibility, and the fact that they are still on the streets decades after deinstitutionalization began is a sign of abject public policy failure.

I have a recent personal experience with the homeless problem in Salt Lake City. On a rainy night, I stopped in at the city library. The Salt Lake City Library is an architectural masterpiece. Here are some pictures of it:

The city library may be a masterpiece of modern architecture, but it’s a leaky masterpiece. There were many containers filled with leaking water that rainy night. This indicates that beautiful and practical architecture are not equivalent. More relevant for the current discussion is that on every floor of this spectacular library there were homeless people. They were sitting on the chairs, using the Internet, and using the bathrooms. One of the homeless guys camped out in the handicapped stall, prompting a man in a wheelchair to complain. The city library is basically a homeless shelter. This is an insult to the taxpayers who support it, to the patrons who want to enjoy its resources, and to the homeless themselves. They should have a permanent home, and the government should provide it.

During most of my lifetime, American homelessness was largely a problem of mentally ill and substance abusing people. Recent years has seen more short-term economic homelessness. What we need to do is to separate out those who are capable of being employed, and those who aren't. Programs for the short-term economic homeless should focus on getting them a temporary residence, and preparing them to get a job. Even better, prevent them from being homeless in the first place by having available state-supported short-term housing for them if they become evicted from their homes. The long-term homeless, those who are too physically or mentally disabled to work, should have permanent state-subsidized housing. This housing must provide care for their disabilities. They should not have the option to be homeless. If they don’t like the state-subsidized housing, let them show that they can independently live in regular housing, or can live with friends or relatives.

Commitment laws need to be changed. This doesn't mean that mentally ill people should be committed to short-term hospitalization, to undergo forced drugging. It means that homeless mentally ill people should be committed to long-term housing. In some cases, those who are most impaired, this will mean state hospitalization.

This change to our homeless policy will be expensive. It can be paid for with reduced entitlement spending (Medicare and Social Security), reduced defense spending, and increased taxes. The benefits will be enormous—we can reclaim our public spaces, our libraries, parks, and streets, and the homeless will no longer be homeless. It would be a much better use of state funds than expanding mental health drug treatment.

David Brooks on American Politics

David Brooks has an interesting perspective on American politics and public policy. A New York Times Op-Ed columnist, his viewpoint can be described as moderately conservative (a vanishing breed in contemporary American politics). His commentary is informed by a humanities and social sciences perspective that is rare among political analysts today. I earlier blogged about his criticism of the current American meritocracy. I want to talk today about two of his recent columns that provide an interesting perspective on what’s wrong with our political thinking. While he doesn’t provide specific solutions, he talks about some failings among both parties, along with how we need to change our thinking about what we want government to do. As we enter the election year 2012, in which Americans will choose between the same tired and failed alternatives, it’s important to think about our political problems in a different way, as Brooks does.

His first article entitled The Two Moons, is named after Samuel Lubell’s concept of a “political solar system.” Lubell, writing in the 1950’s, proposed the idea that at any moment there’s a Sun Party (the majority party) and a Moon Party (the minority party). The Sun Party drives the agenda, and the Moon Party (which shines by reflecting the Sun’s rays) opposes the Sun Party. During the New Deal, the Democrats were the Sun Party. During the Reagan Revolution, the Republicans were. Between 1996 and 2004, the two parties were tied. This was a transition time, in which from historical experience a Sun Party usually emerges. But no Sun Party emerged. No party was able to take the lead; they both are now Moon Parties. Both Republicans and Democrats have record low approval ratings. “Neither party has been able to rally the country behind its vision of government.”

Having two simultaneous minority parties leads to strange outcomes. Both parties embrace minority mentalities. Democrats feel oppressed by big business and big finance, while Republicans feel oppressed by big government and the big liberal establishment (the media, academics, judges, artists, Hollywood, etc.). Neither side wants to compromise, feeling that the outside world, and especially members of the opposing party, are hostile. They instinctively protect their special interests (labor unions, the poor, the old, and minorities for Democrats; the rich, big business, big finance, and evangelicals for Republicans), and refuse to engage or try to convert outsiders. Neither party engages in serious internal debates, and moderates are no longer welcome.

The Two Moon era is volatile. Voters reject one party, then two years later reject the other party. That happened in the 2008 and 2010 elections, which had a historically large shift from Democrat to Republican. Usually, minority parties suffer a string of election defeats, promoting modernization and revision. The Republicans’ defeats in 2006 and 2008 did help promote internal change via the Tea Party. But rather than owning up to the failures of their neoconservative ideology, and moving more to the center, Tea Party Republicans pushed the party to an extreme libertarian agenda. The Republicans’ 2010 victory encouraged them to act like a Sun Party, trying to force their Tea Party agenda, but were stymied by the fact that they were not a true majority party, and that Democrats controlled the Senate and Presidency. The Democrats’ defeat in 2010, along with subsequent Republican intransigence, is making the Democrats become more extreme. Even if they win big in 2012, however, they do not have the broad-based support to become a Sun Party.

How will the Two Moon era become resolved? Brooks suggests either a third party or a crisis. A third party faces enormous obstacles in the American political context, as discussed in this article. A third-party presidential run has always lost, but sometimes (e.g. Teddy Roosevelt in 1912, or Ross Perot in 1992) can spoil an election. Even in the unlikely event that a third-party candidate can win the election, he’ll have to govern with a Congress in which almost all members are Republicans or Democrats. For a third party to make fundamental changes in government, it needs to control both the executive and legislative branch, which the American political system makes virtually impossible.

This leaves a crisis as a way to break the Two Moon deadlock. It’s possible that a financial panic and/or war will force some major political change. Exactly how the events will unfold and what the responses will be are impossible to determine, but the American political system will have to undergo a radical (and painful) transformation for the Two Moon deadlock to become resolved.

* * *

Brooks’ second article is entitled Midlife Crisis Economics. Brooks criticizes the Obama’s administration’s historical accuracy. When the administration first came to power in 2009, it compared the current situation to the 1930’s, and promoted a second New Deal. Obamacare was a product of this thinking, a successor of ambitious social legislation like Social Security. The problem is that the public’s perception of government has radically changed since the New Deal. “Today, Americans are more likely to fear government than be reassured by it.”

The Obama Administration then switched historical analogies from the New Deal to the progressive era at the beginning of the 20th century (e.g. Obama’s “Roosevelt Speech” in Kansas). There are some similarities between today and a century ago. “Then, as now, we are seeing great concentrations of wealth, especially at the top.” But the differences outweigh the similarities. The economy was much different back then, a vibrant jobs machine at the height of the industrial era. The information age we live in today is not a jobs machine. The industrial decline and elimination of jobs due to outsourcing/offshoring/automation was taking place well before the current recession. Factories that used to employ 1000 workers can now produce more products while employing fewer than 100 workers.

Inequality, while due partially to government policy, has a structural economic component that would be difficult to reverse (short of communism). Inequality is growing in all developed countries, including ones (e.g. Sweden and Germany) that have much more generous welfare states.

Brooks succinctly summarizes the essential differences between today and a century ago: “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.” A century ago there were few or no government agencies, institutions, or regulations to protect workers, the sick, the disabled, the old, children, minorities, etc. Today, we have more than enough government; the challenge is to make government more effective. We need to reform existing programs to make them deliver more services at less cost.

Brooks also talks about the moral differences between today and the progressive era. The beginning of the twentieth century was still a time of Victorian culture, with its strict moral code. Individuals and the government taking on debt that they had no hope of repaying would have been considered sinful. Illegitimacy and divorce were culturally prohibited and very rare.

These moral differences have major practical consequences. It’s obvious today what harm the contemporary embracing of public and private debt has caused our economy. Subprime and other risky mortgages led directly to the 2008 financial crisis and subsequent recession. Deficit financing that the American federal government has been doing routinely for decades has led to a buildup of unsustainable debt, and is preventing the government from responding in an appropriate way to the magnitude of the current crisis. The fact that 40% of American children are born out of wedlock leads to a number of social and mental health problems that were unknown a century ago. These problems, including crime, juvenile delinquency, drug abuse, dangerous neighborhoods, failed schools, etc., forces the government to intervene in family life and child upbringing, and spend billions of dollars that it otherwise would not have had to spend.

My favorite quote from this article is the following: “One hundred years ago, we had libertarian economics but conservative values. Today we have oligarchic economics and libertarian moral values — a bad combination.” It’s important to understand that the last (and only) time that libertarian economics was ever practiced, during the late nineteenth and early twentieth centuries in America, Britain, and (to a lesser extent) in other Western European countries, was a time of strict conservative Victorian morality. There is no historical example of a combination of libertarian economics and libertarian morality. There is no contemporary example of libertarian economics. Contemporary countries with strong, rapidly growing, export-oriented economies, e.g. China, are anything but libertarian.

Ron Paul’s fans need to understand that they are advocating an experimental system, something never before tried. They also need to understand that the rise of American government deficit spending, regulation, waste, inefficiency, and all the other things they complain about occurred during a time of increasing libertarian morality. It was the 1960’s embrace of individual social liberty, of personal and sexual freedom from authority, of licentiousness, that represented a cultural revolution, something unique in history. The trend for increasing individual social freedom and autonomy has only increased since the 1960’s. During that period, government deficit spending, regulation, litigation, interference with the economy, waste, fraud, and incompetence has also increased. The two are clearly correlated; it’s impossible to prove whether libertarian morality caused the explosion of government spending and regulation.

Note that Brooks said that we have “oligarchic economics” in America today, not “socialist economics.” The distinction is important. It implies that libertarian ideas did in fact influence not only social and cultural life, but also the economy. Instead of moving toward the libertarian ideal of limited government, however, we moved toward a corrupt, oligarchic form of government, one in which the rich and powerful use a bloated government to become more rich and powerful. The most egregious example is explosion in growth of the financial sector, which occurred after libertarian-inspired deregulation. The investment banks won the freedom to gamble on risky mortgage-based securities, a gamble that led to the 2008 crisis. Unlike in a truly free market, they felt secure enough to make these gambles knowing that the government would bail them out.

As usual, Brooks has no specific solutions to the problems he talks about. “The job is to restore old disciplines, strip away decaying structures and reform the welfare state. The country needs a productive midlife crisis.” I’d agree with that, but how is it going to happen? How can we reform an oligarchic government while maintaining libertarian moral values? How can people from different socioeconomic status, intelligence, race, age, ethnicity, culture, sexual orientation, political beliefs, religious beliefs, etc. come together and agree on anything, when libertarian morality tells them to pursue their own self interest no matter the social cost? Will they be willing to make sacrifices for the common good, whether it take the form of accepting fewer government benefits, more taxation, or a combination of the two? I doubt it. My view is that the “productive midlife crisis” our country needs must include a serious re-evaluation of the permissive morality that has been dominant since the 1960’s.

How Greed and Ideology are Endangering America’s Financial and Mental Health

I just watched the excellent documentary Inside Job about the financial crisis. Its main point is that the 2008 crisis and subsequent Great Recession were a consequence of deregulation of the financial sector. This deregulation (primarily in the United States, but also in other countries like Iceland and Ireland) led to an explosion of trading in risky investments like CDO’s, that in turn led to the housing bubble and crash. The tragic thing about this crash is that if we had kept the regulations in place that came about after the 1929 crash and Great Depression, we would never have had the recent crisis. Protections such as separation of savings and investment banks, restrictions on leverage, and enforcement by the SEC and other regulatory agencies of securities and fraud laws were stripped away in recent decades. Also, the financial services industry created new exotic “financial weapons of mass destruction” and successfully lobbied to keep them unregulated.

How did this unstable and risky situation develop? Inside Job argues that a combination of greed and free market ideology led to the housing bubble and bust. The greed came about from the enormous profits generated by the deregulated post-1980 financial services industry. This money flowed to traders in the form of multi-million dollar bonuses, to politicians in the form of lobbying and campaign contributions, and to academic economists in the form of consulting fees. The free market ideology, promoted by right-wing think tanks, politicians, and academic economists, provided a rationalization for the government to deregulate the financial services industry. This ideology argued that allowing an unfettered financial services industry to generate incredible amounts of wealth, and to make riskier and riskier investments, was good for the economy. This attitude is best summarized by Gordon Gekko’s memorable line in the first Wall Street movie: "Greed, for lack of a better word, is good."

While the free market ideology is seductive, and I admit that I was once an enthusiastic follower, it clearly failed as a rationale for financial services deregulation. While it’s easy to blame the government for everything bad that happens, and the government did promote home ownership for people who should have been renting, the leaders of the Wall Street investment banks were the main culprits. They knowingly and deliberately invested their client’s savings in risky mortgage securities, sometimes while simultaneously betting against the securities (i.e. betting that their own clients would lose money). It was Wall Street money that bid up housing prices, that promoted subprime mortgages, that paid the ratings agencies to give ridiculously high ratings to what was basically junk, and that led to the worst financial crash and recession since World War II. Some foreign banks also were to blame, as they did the same thing that the Wall Street banks did. Ireland and Iceland are two egregious examples of investment banks destroying their economies. The executives in charge of the investment banks got greedy, and even after their companies lost billions and needed to be bailed out, they got to keep their multi-million dollar bonuses and salary. The most disgusting thing is that not one of them has been prosecuted (in the U.S.) for fraud or securities violations.

When an ideology fails in the real world, people who believe in it have two options. One is to accept reality, and stop believing in the ideology. The other is to continue believing in the ideology, and abandon reality. Most Democrats, who in the past (especially in the Clinton administration) joined with Republicans in eagerly stripping away financial services regulation, realized after the crash that they made a grave error. When they were in charge of Congress, they passed the Dodd-Frank bill to improve regulation of Wall Street. These regulations, while inadequate, were better than doing nothing. These regulations are now law, but as Paul Krugman writes in an article, they are in danger of not being enforced. The reason for this is that Republicans have chosen to keep their free market ideology, while abandoning reality. Republicans are now in charge of the House, and Republicans don’t believe in regulation in any form. Since they control the funds, Republicans can prevent the SEC and other agencies from doing any regulating and investigating. Wall Street will then be free to create more bubbles and more crises.

Why do people continue believing in an ideology when it has clearly failed? To answer this, consider the historical example of Communism. Within a few years after the 1917 Bolshevik revolution, it was clear that Communism was failing in its ability to provide goods and services that people wanted. That’s when the scapegoating started. It wasn’t Communism’s fault, it was the fault of the capitalists (or the kulaks, or the imperialists, or the fascists, etc.). That scapegoating continued for decades, until finally no one believed the ideology any more, and all that was left was greed and corruption.

In the case of Republicans, the scapegoat is the government. Wall Street didn’t do anything wrong, it was government intervention in the economy that caused the crash and recession. The fact that the financial services companies made many risky investments and bad decisions, not just in the U.S. but also overseas, is also a result of U.S. government intervention. If the government hadn’t provided guarantees and bailouts, the companies wouldn’t have made these risky investments.

In the context of a mixed economy, with an internationally-linked market, the government needs to regulate the financial markets. If Republicans get their way, and repeal or refuse to enforce the new regulations, another crash will happen. We’ll then be in the same situation in which the choice will be government bailouts or a second Great Depression. Blaming the government for all our problems is similar to the Communists blaming the capitalists for all their problems. The free market ideology has failed the reality test vis-à-vis financial regulation, and continuing to adhere to it is a sign of either delusion or greed. Regarding the latter motive, Wall Street continues to utilize its vast wealth to lobby politicians to weaken and gut regulations.

Now let me turn to mental health and psychiatry. While watching Inside Job, I was struck with the parallels between the financial services industry and the psychiatric-pharmaceutical industry. While the free market ideology is used by the financial services industry to justify deregulation, the chemical imbalance ideology is used by psychiatists to justify their prescribing drugs to patients. The chemical imbalance ideology states that schizophrenia is caused by too much of the neurotransmitter dopamine, and that depression is caused by too little serotonin. These imbalances can be treated by antipsychotic and antidepressant drugs, respectively. Patients who take their drugs restore balance in their brains, become symptom free, and function better than patients who are unwilling or unable to take drugs.

This chemical imbalance ideology doesn’t fit the facts. As Robert Whitaker describes in his book Anatomy of an Epidemic (which I reviewed in a previous blog post), after many millions of dollars of research money, and enormous time and effort spent, this theory remains unverified. Scientists haven’t made much progress in understanding the cause or pathophysiology of mental illness. Diagnosis is still based on symptoms due to a lack of any reliable or valid lab tests. Drugs that seem to help patients in the short term, have a much more problematic long-term outcome. As newer drugs began to be prescribed more frequently, patients seemed to function worse than they ever did before, many of them becoming permanently disabled and unable to work.

Just as the free market true believers identify the government as an all-encompassing scapegoat, the chemical imbalance true believers come up with their own scapegoat: the disease. The reason why juvenile bipolar disorder prevalence skyrocketed, why so many children were being diagnosed and treated with drugs, and becoming permanently disabled, wasn’t due to drugs they were being prescribed. It was due to something else in the environment causing a psychiatric epidemic. It’s almost comical reading Whitaker’s description of how bipolar disorder was “discovered” in children. Before psychiatric drugs were widely used, children never got bipolar disorder. The fact that stimulant and antidepressant drugs induce manic episodes, and that many more children were taking stimulants and antidepressants than ever before, was conveniently ignored. Since many children taking antidepressant drugs became bipolar, some researchers argued that the drugs were an effective diagnostic tool, unmasking the bipolar disorder that was hidden underneath. Diagnostic boundaries for juvenile bipolar disorder were expanded to include irritable and antisocial children, and these children were given drug cocktails that led to functional impairment and serious physical and mental side effects.

Another similarity between the financial services industry and the psychiatric-pharmaceutical industry is greed. When the ideology has cracks, fill in the gaps with cash. Just as academic economists receive thousands of dollars from the financial services industry in consulting fees, academic psychiatrists receive thousands of dollars from the pharmaceutical industry. This money provides an incentive for economists to spout free-market/deregulation dogma, and psychiatrists to promote drugs.

This ideology-greed connection becomes self-perpetuating. Academic economists promote deregulation and free markets, which leads to more profits for Wall Street, which means more consulting fees, which means more economists promote deregulation, etc. Academic psychiatrists promote the chemical imbalance theory and drug treatments, which means more profits for the pharmaceutical industry, which means more consulting fees for the psychiatrists, which means more psychiatrists promote drugs, etc.

What can be done to emerge from these vicious circles of greed and failed ideology? Reform from within isn’t an option. Both the financial services and psychiatric-pharmaceutical industries are too hopelessly corrupt to reform or regulate themselves. The only institution powerful enough to take on the economic and ideological might of these two industries is the federal government. But the government is itself corrupted by Wall Street and Big Pharma money. The government must be spurred into action by grassroots advocacy groups.

Any advocacy group needs to have a clear, specific goal in mind. The American Tea Party had a vague goal of opposing big government and bailouts. It has now been hijacked by libertarian/free market extremists.

The group that takes on Wall Street should have these goals: Phase 1 should be to pressure the government to fully fund all the regulatory agencies involved in enforcing Dodd-Frank. In addition, the government should prosecute bank and financial executives who committed fraud and securities violations during the housing boom and bust. Phase 2 should be to make even more ambitious reforms to curb the power, influence, and money of the financial services industry.

The group that takes on Big Pharma should begin with pressuring for congressional hearings. Robert Whitaker and other people who criticize the psychiatric-pharmaceutical industry should be allowed to speak, along with academic psychiatrists, drug company representatives, and parents and patients. If it turns out that there’s not enough evidence to demonstrate that drugs do long-term good (the burden of proof is on the pro-drug people to show that they work), then Phase 2 should be a major overhaul of psychiatric drug regulation. This can include banning drug advertising, banning off-label prescribing, banning prescribing the drugs to children, and extending clinical trials to several years (from the current 6 weeks).

Did America’s Economy Implode Because the Rich Are Too Wealthy? A Review of “Aftershock” by Robert B. Reich

The Great Recession has forced Americans to confront political and economic issues that have been ignored for decades. Since around 1980, middle class real wages have stagnated, both personal and government debt have increased to unsustainable levels, infrastructure and education have declined—and both Democrats and Republicans are to blame. The optimism, pragmatism, “can-do” attitude, and belief in continual progress that characterized America for most of its history (with some notable exceptions, including the Civil War and Great Depression) have been shattered. Americans have grown increasingly pessimistic that their children and grandchildren can achieve the “American Dream.”

Robert B. Reich, former secretary of labor under Bill Clinton, writes about the causes of America’s economic problems in his book Aftershock: The Next Economy and America’s Future. His central message is that the concentration of wealth at the top of the income ladder results in insufficient domestic demand for products and services, which leads to economic stagnation, anemic recoveries, and deep recessions.

There’s no question that income has become more concentrated the last 30 years. In the late 1970’s, the richest 1% of the country took in less than 9% of the nation’s total income. By 2007, the richest 1% took in 23.5% of the nation’s income, or more than double what it was before. Real wages of a typical American worker, however, stagnated during the same time period. If the gains of the American economy had been more equally distributed during the last 30 years, a typical person would be making 60% more now than he did then.

The problem with the rich becoming too wealthy is that they don’t spend enough. They live too modestly compared to what they can afford. The overall demand for goods and services shrinks because the rich invest most of their income. If more of the nation’s wealth went to the middle class, who spend a greater percentage of their income than the wealthy do, demand would increase, businesses would expand and hire more, and the economy would grow.

Reich writes approvingly of the period of the “Great Prosperity”, the years 1947 through 1975, in which American implemented a “basic bargain”: workers made enough to buy what was produced, resulting in complementary mass production and mass consumption. Wages of lower-income Americans grew faster than those at or near the top, doubling over these years. Productivity also doubled, giving the lie to those who argued that large inequality was needed for economic growth. It’s true that high income and wealth is an incentive for entrepreneurial and executive achievement, but how high does this income and wealth have to be? Even though CEO’s made only 30 times the typical worker salaries during the Great Prosperity (as opposed to 300 times today), they seemed motivated enough back then to do their jobs well.

The Great Prosperity also included powerful unions, generous health and pension benefits, minimum wage and overtime laws, unemployment insurance, Social Security, Medicare and Medicaid (in 1965), and interest deduction on mortgages. The G.I. Bill and expansion of the public university system helped make college affordable for the middle class. The interstate highway system became the most ambitious public works program in American history. The Cold War resulted in continued high military spending, which (via the “military-industrial complex”) led to the invention of the transistor, laser, computer, jet engine, and Internet. Unlike today, there was a societal consensus that this high level of government spending had to be paid for. The top marginal income tax rates in the 1950’s were 91%, and were 77% as late as 1969.

After the late 1970’s, the Great Prosperity ended and America began a period of increasing inequality. Reich recognizes that both globalization and automation led to the loss of high-paying manufacturing jobs. New jobs that were created, mainly in the service sector, didn’t pay as well as the jobs lost. At the same time that the middle and working classes had to accept lower wages, however, business executives and Wall Street traders saw their incomes skyrocket.

Government could have enforced the basic bargain, and reversed these trends leading to more wealth concentration at the top. For example, it could have given employees more bargaining power to get higher wages, especially in industries sheltered from foreign competition. It could have enlarged safety nets, financed Medicare for all, and forced industries laying off large numbers of workers at once to pay a year’s severance, along with training them for new jobs. It could have raised taxes on the rich and cut them for the poor. Instead, it did the opposite. Under the influence of libertarian, free-market economists, the government deregulated, privatized, cut taxes, and shredded the safety nets. It allowed companies to bust unions, slash jobs and wages, cut benefits, and move factories and jobs overseas. Government deregulated Wall Street while insuring it against major losses. This changed the finance industry from the servant to the master of American industry. Wall Street demanded short-term profits over long-term growth. “Between 1997 and 2007, the finance sector became the fastest-growing part of the U.S. economy” (p. 56). Finance and insurance companies’ share of American corporate profits increased from 10% to 40%.

It’s true that confidence in government began to decline toward the end of the Great Prosperity, with events such as the Vietnam War, Watergate, oil shortages and double-digit inflation. This confidence has continued to decline since. Reich attributes this decline to deterioration of government services and explosion of deficits, both of which were caused by the tax cuts. Also important was the increasing appeal of free-market dogma, which came through think tanks, books, media and ads that were largely financed by the rich and powerful.

Middle class Americans developed three “coping mechanisms” to help mitigate the effects of their declining economic status. These mechanisms included:

1. Women moved into paid work. In 1966, 20% of mothers with young children had jobs outside the home. By the late 1990’s, this had risen to 60% of mothers. While women with college degrees were able to land high-paying jobs, most women worked low-wage jobs to try to prop up stagnant and declining family income.
2. Everyone worked longer hours. By the 2000’s the typical American family worked 500 hours, or 12 weeks longer per year than it had in 1979.
3. People saved less and borrowed more. During the Great Prosperity, the American middle class saved about 9% of their after-tax income each year, and their debt averaged 50 to 55%. The savings rate declined to 2.6% in 2008, while debt exploded to 138%. Reich sees this indebtedness not as a moral failing, but as a way to try to maintain their previous lifestyle. When the debt bubble burst during the Great Recession, people were unable to continue borrowing.

The wealth inequality today is similar to what it was in 1928, just before the Great Depression, and Reich draws parallels between the two eras. There were high levels of private debt, especially mortgage debt, in both the 1920’s and 2000’s. Richer Americans speculated on a limited range of assets, resulting in stock market and real estate bubbles. The 1920’s even witnessed a Florida real estate boom, similar to recent times.

After the Great Recession that began in 2007, the U.S. government kept interests rates near-zero, bailed out the banks, and printed a great deal of money. This helped avert a second Great Depression, but left the federal government with vastly increased debt and deficits. Unlike during the Great Depression, in which the Roosevelt administration created a new economic order through its New Deal policies, the post-Great Recession Obama administration has done very little fundamental reform. The problem of widening inequality will likely continue. Reich predicts many years of high unemployment, middle class economic insecurity, and economic stagnation. From this Great Recession “aftershock”, we’ll see either a major political backlash against both big business and government, or large-scale reforms.

Some reforms that Reich would like to see implemented include:

• A reverse income tax that supplements the wages of the middle class.
• Higher marginal tax rates on the wealthy.
• A carbon tax, to promote the development of “green” technologies.
• A redesign of the unemployment system, making it a “reemployment system” that smoothes the transition to a new job.
• Replacing spending on public schools with vouchers based on family income, which would force wealthy suburban schools to take in lower and middle-income students.
• Making tuition free in all public colleges and universities, which will be financed by requiring that all graduates pay a fixed percentage of their taxable income for the first 10 years of full-time work.
• An expansion of Medicare to all Americans (replacing the current private insurance system).
• Expanding government spending on public goods such as transportation, parks, recreational facilities, museums, and libraries, making them free for all.
• Strengthening campaign-finance laws, funding elections publically, and limiting issue advertising.

Reich’s agenda for change makes sense in a nation in which there’s a consensus for government activism, high taxation, and social programs, in which people respect and admire politicians and bureaucrats, and are confident in the competence and ability of government to follow through on its promises. Such a nation doesn’t have anything in common with contemporary America. Reich’s laundry list for change has no chance for passage.

Reich’s views are similar to those of Nobel Prize-winning Princeton economist and New York Times columnist Paul Krugman. The Reich/Krugman viewpoint can be classified as “Liberal Democrat” and “Keynesian”. Unlike Thomas Friedman, who focuses on competitiveness and tries to appeal to both ends of the political spectrum (see my review of his book The World is Flat), Reich and Krugman focus exclusively on the demand side of the economy, and their appeal is mainly to liberals.

Was the Great Recession caused by too much wealth possessed by the rich? The speculative real-estate boom that led to the Great Recession was a world-wide phenomenon. Lax regulation certainly contributed to it. I’m not sure that American wealth inequality was a direct cause, although it may also have contributed to it. European countries have much less wealth inequality than America, yet they also suffered from the recession. The fact that the rich invest most of their money has led to more speculation and greater influence and power of Wall Street.

Regarding Reich’s point that the economy would be doing better if there was less inequality, I don’t agree with that. The American economy grew enormously during the (relatively) laissez-faire period of 1870-1928. This graph shows how real per capita GNP in the U.S. more than doubled. During that period, there were significant inventions and technological advances that improved the standard of living of many Americans, including electric power, electric lights, bicycles, telephones, automobiles, airplanes, widespread use of railroads and steamboats, medical advances, improved public sanitation, central heat, air conditioning, appliances, and radio. While there were few government social programs, and little military spending, America emerged from the ashes of its Civil War to become the world’s premier economic power. So I don’t agree that government programs are necessary to have a robust, vibrant economy, or to have a higher standard of living for the majority of people.

On the other hand, contrary to what many conservatives and libertarians say, a mixed economy with substantial military and social welfare spending, along with high marginal taxes, isn’t inimical to economic progress. Reich and Krugman are correct that the Great Prosperity (1947-1975) period in America was a time of enormous economic and technological progress, along with an improved standard of living for the majority of people.

Both liberals and conservatives agree that the last 30 years has been a period of economic decline in America. They’re in sharp disagreement, however, over the causes. Liberals such as Reich and Krugman argue that the decline was due to tax cuts and subsequent reduced government investments in social programs and infrastructure, along with deregulation, leading to wage stagnation among the middle class, concentration of wealth at the top, and increased deficits and debt. Conservatives argue that government social welfare and entitlement spending, regulation, and litigation exploded, leading to increased taxes, deficits, debt, and economic decline.

Both sides are right. Liberals are correct that the tax cuts have largely benefited the wealthy. Infrastructure has been neglected. Deregulation led to the housing boom and bust. Conservatives are correct that social welfare and entitlement spending has increased, along with some types of regulation and litigation (especially connected to employment, discrimination, and civil rights).

I think the problem isn’t the level of government spending or taxation, but fundamental disagreements between the two parties that has led to gridlock. Both periods of growth and progress, the laissez-faire one of 1870-1928, and the mixed economy one of 1947-1975, were a time of general consensus. While there were people and groups who opposed the consensus, they were an insignificant minority. During both periods, there was a long-term vision, and large investments in infrastructure and education. The infrastructure and education investments during the laissez-faire period were largely private; during the mixed economy period they were mostly public and military. The private versus public nature of the infrastructure and education investments is less important than the fact that they get done. They haven’t been getting done the last 30 years—existing American infrastructure and education has not been well maintained, and new investment is virtually nonexistent.

The Great Depression and World War II eras (1929-1945) were a transition time from a laissez-faire to a mixed economy. Reich argues in this book that the Great Depression was caused by income inequality, leading to inadequate demand. Conservatives would counter that the Great Depression was caused by government meddling in the economy, both before (income tax, antitrust regulation, the Federal Reserve), and after (New Deal regulations and programs, increased taxation). I would argue that the laissez-faire consensus was lost during the Great Depression, and the fact that the consensus was lost led to the length and severity of the depression. The crisis of World War II created a new consensus for big government, and led to the mixed economy Great Prosperity of 1947-1975. It was a combination of the transmutation of liberalism from a strictly economic philosophy to a combination economic-social philosophy in the 1960’s and 1970’s, along with the religious and libertarian conservative backlash that began with the Regan administration in the 1980’s, that led to the demise of the Great Prosperity consensus.

As further evidence of the importance of consensus to economic progress, consider contemporary China. It’s difficult to characterize the political-economic situation there—part Communist, part mixed-economy, part laissez-faire—but it’s undeniable that whatever they are doing, is working. The consensus there is produced partly by a dictatorship that tolerates no dissent, but this dictatorship, unlike the Maoist one, isn’t based solely on fear and ideology. The people in China are seeing their standard of living improve—millions have achieved middle class status, and the general progress there is perhaps the greatest economic miracle of our time. Compared to how other countries have fared in the Great Recession, especially America, China has weathered the downturn well.

This Chinese success story directly contradicts both the liberal and conservative perspectives. As Reich notes in his book, most of Chinese government spending is devoted to production, not consumption. Chinese people have virtually no safety net—spending on social services is about 6% of the economy, compared to an average of 25% in most developed nations. China isn’t following the Reich-Krugman vision of a demand-oriented, socially-generous nation. It also isn’t following the conservative/libertarian vision of “free minds and free markets.” The basic political system is a Communist dictatorship that arrests and jails dissidents, limits families to one child, and suppresses religious expression. Contemporary China bears little resemblance to past or present America. Yet its economy is one of the fastest-growing in the world. This chart shows China’s explosive GDP growth since 1990, 5 times America’s growth during the same period.

Since neither Reich’s liberal agenda, nor a libertarian/conservative agenda can be enacted in the current political climate of gridlock, what can be done to achieve a new consensus that will allow America to grow and prosper again? One possibility is for centrists like Thomas Friedman, David Brooks, Fareed Zakaria, and others to bring the two sides together and come up with a workable compromise. The problem is that the two sides have been trying to compromise for 30 years, and the compromises haven’t been working:

• Conservatives cut taxes and increased defense spending, while liberals increased social welfare and entitlement spending. This has led to skyrocketing deficits and debt, along with declining infrastructure and education.
• Conservatives deregulated the financial industry, while liberals used the government to insure against poor investments and losses. This led to the financial crash and bailout of 2008.
• Conservatives tried to keep some private sector, free market elements in the American health care system, while liberals tried to expand the public sector options and give more people access to care. The conservative influence has produced a supposedly competitive private insurance sector that fails to control costs, and the liberal vision has produced a public sector that provides all the benefits of socialized medicine (free and unlimited health care for seniors and the disabled) without any of the cost controls (i.e. rationing). The result is the most expensive health care system in the world that provides mediocre results. We have the highest infant mortality among the world’s industrialized nations, and our life expectancy is shorter than 40 other nations.
• Conservatives promoted school choice, especially private schools, while liberals maintained the status quo in the public schools. The result has been that most students today attend mediocre public schools, while a few lucky or rich kids attend charter or private schools.
• Conservatives promoted oil drilling and other fossil fuel development, while liberals advocated for conservation and green technology. The result has been that we’ve had no energy policy, and we’re almost twice as dependent on foreign oil today than we were at the time of the first oil crisis in 1973.

These differences and failed compromises on economic issues are only part of the bad blood between conservatives and liberals. The other part is the profound differences over social issues. Since the 1970’s, liberals have become more secular and hostile to traditional religion, as exemplified in their using the courts and legislation to legalize abortion, to restrict public religious expression, and promote alternative lifestyles such as homosexuality. At the same time, conservatives have embraced fundamentalist Christianity, seething at the godless liberals and their secular-humanistic agenda. For many liberals and conservatives, these differences are more important than the economic ones.

The over 30-year marriage of modern liberals and conservatives has failed. The two sides have spent most of the time attacking and criticizing the other, neglecting their duty to promote the public good. It’s unlikely that centrist marriage counselors like Thomas Friedman can do anything constructive to bring the two sides together. It’s time for a divorce.

I propose that the country split into two, a predominantly liberal Coastal America, and predominantly conservative Middle America. Coastal America would include most of the “Blue” states. Some states in the middle portion of the country would likely join, such as Illinois. Some states in the Southeast, such as South Carolina, would likely not join. Middle America would include most of the “Red” states. My guess is that the capitol of Middle America would be in Texas, the most heavily populated among the “Red” states. Splitting the country this way would cause major logistical and transportation issues, since some state borders would transform into international borders. If, for example, Kansas joins Middle America, and Missouri joins Coastal America, many commuters in the Kansas City metro area would have to cross an international border to get to work. Also, the “marriage settlement agreement” (i.e. splitting the assets and debts between the two countries) would be a source of contention. Would both sides get nuclear weapons? There would be a possibility of military engagement between the two sides (perhaps leading to civil war, as it did 150 years ago).

While not an ideal situation, and one with many obstacles and pitfalls, it’s the best of several bad alternatives. One alternative is to continue the way we’ve been going. This will lead to continued economic decline, neglect of infrastructure and education, growing frustration at government, and the increased possibility of widespread political unrest or civil war. Another alternative is to wait for some crisis or external threat to bring the sides together. Even in the unlikely event that some unifying crisis will happen, such as the 9/11 attacks, this crisis won’t change the fundamental differences. Just as with the 9/11 attacks, after the crisis is over the status quo will resume. Another alternative is for one side to establish a dictatorship, imposing its ideas on the other. That’s the only way that either the liberal Reich or the conservative/libertarian agenda can be achieved in an intact America. An American dictatorship would be impossible without first a civil war, a major economic disaster, or both.

Reich’s agenda has a good chance for passage in Coastal America. While there would be some conservatives there, they wouldn’t be numerous or influential enough to stop the liberals from passing the legislation, and a President Obama or some other liberal President from signing it. Reich, Krugman, Obama, Hillary Clinton and others can transform Coastal America into a European-style welfare state, complete with high taxes, universal Medicare, and, most importantly, public investment in infrastructure and education. Their model would be the Great Prosperity America of 1947-1975, along with contemporary European countries. One thing liberals need to understand is that the aging of America, along with foreign competition, forces them to be much less generous with social welfare and entitlement spending than they were in the past.

Rush Limbaugh, Glenn Beck, Sarah Palin, Ron/Rand Paul, Newt Gingrich and others can transform Middle America into a Libertarian-Christian utopia, using as their model the laissez-faire U.S. from 1870-1928. They can promote private investment and free markets in health care, infrastructure and education. Since American today is closer to the 1947-1975 model than the 1870-1928 model, and many people depend on social welfare and entitlement programs, the conservatives would have a harder time enacting their agenda. One thing that conservatives need to understand is that the America of 1870-1928 had very little defense spending (with the brief exception of World War I). If Rush, Glenn, Sarah and the others want to cut taxes to pre-1930 levels, or eliminate the income tax, they’ll need to radically cut defense spending.

The good thing about a split America is that neither the Coastal nor Middle parts would have any pretensions about being a superpower. There would be no need for (or ability to fund) the level of military spending we have now. We wouldn’t be able to send troops to a future Iraq or Afghanistan to try to perform nation building. We would have to sell off or destroy much of our military hardware, and send most of our troops back to private life. Our military would transform from being the world’s policeman to being a self-defense force.

Like with West and East Germany between World War II and the destruction of the Berlin Wall, Coastal and Middle America can be seen as a large-scale political-economic experiment. If one is vastly more successful than the other, as West Germany was compared to East Germany, then perhaps the failed one will eventually agree to accept the system adopted by the successful one. Like with the reunification of Germany, America may then become reunited again. On other hand, if both are successful, or neither one successful, then perhaps America may remain divided for a long time.

In conclusion, Aftershock has some good examples of how our country has become more economically unequal in the last 30 years. The middle class has struggled while the rich have gotten much richer. The coping mechanisms that those in the working and middle classes have used to try to maintain their standard of living, including having both spouses work, increasing their work hours, and increasing their level of debt relative to income, have been exhausted. The money going to the rich, unlike that going to the middle class, is usually invested, not spent, which helps out Wall Street but not Main Street.

I don’t agree with Reich’s argument that a massive increase of government social welfare spending and taxation is needed to grow America’s economy. While such a policy will lead to more equality, there are other ways to promote economic growth and improved standard of living that rely more on stimulating production than consumption. These alternatives include laissez-faire economics that America utilized in the late 19th and early 20th centuries, along with a mix of Communist dictatorship and capitalism that contemporary China uses. Reich’s agenda can only be achieved in a Coastal America that results from splitting the country into two. Such a split is the best of a number of bad alternatives that face America today, a result of a failed marriage between modern liberals and conservatives.

Are American Educators Living in a Fantasy World? A review of “Real Education” by Charles Murray

I enjoy reading books by Charles Murray. Although he identifies himself as a libertarian conservative, he’s an independent thinker. His books The Bell Curve and Human Accomplishment are examples of his unique perspective. A central point of the The Bell Curve is that intelligence, which is determined by genes and early childhood experience, is a major factor in determining who succeeds in life and who doesn’t. Since whether a man is intelligent or not is outside of his control, there’s no basis for the libertarian argument that those who are financially successful have “earned” their money. A less intelligent person can work just as hard as a more intelligent one, sometimes harder, but only make a fraction of what the smart person is making. In Human Accomplishment, which celebrates past creative achievements in the arts and sciences, Murray doesn’t find any correlation between political/economic freedom and rate of achievement. I’d expect a conservative writer to argue that living in a free and democratic society promotes achievement, but that would ignore the facts of history. Most great achievement occurred by men living in monarchies and aristocracies that had very little freedom or liberty in the modern sense.

In his latest book, Real Education: Four Simple Truths for Bringing America’s Schools Back to Reality, Murray again stakes out an independent position. While one would expect a conservative writer to extol the virtues of George W. Bush’s “No Child Left Behind” initiative, Murray is very critical of it. Murray also is realistic about the limitations of conservative initiatives such as school choice, charter schools, and tuition vouchers.

Murray’s 4 simple educational truths are:

1. Ability varies
2. Half of the children are below average
3. Too many people are going to college
4. America’s future depends on how we educate the academically gifted

I’ll discuss Murray’s arguments for each of these truths. In the case of “ability varies,” Murray focuses on academic ability, which correlates highly with intelligence. The simple truth is that “half of the children are below average” in academic ability. Research has shown that there’s a normal (“bell curve”) distribution of academic ability. It follows that half the children will be on the left side of the bell curve, i.e. below average.

Murray next argues that there’s not much that schools can do to improve performance of below-average ability children. This is much more controversial than the statement that half of the children are below average. Murray presents actual questions from standardized tests that below-average ability children have problems answering. These are pretty simple questions, and it’s surprising that so many children have difficulties with them. The fact that they can’t answer them, however, could be indicative of a problem with the schools, not their lack of intelligence.

Murray then discusses various programs designed to improve students’ test scores, including preschool programs (Abecedarian Project and Infant Health and Development Program), and elementary/secondary school programs (Title I and No Child Left Behind). His conclusion is that these programs produced little to no improvement in student achievement. His case is bolstered by the results of the Coleman Report, which studied the effects of inequality of educational opportunity on student achievement. The Coleman Report found that quality of schools explains almost nothing about differences in academic achievement. Family background is more important a determiner of student achievement than any educational measure. What about the terrible quality of many American public schools, including chaotic and sometimes violent classrooms, incompetent teachers, low standards, and dearth of teaching resources such as textbooks and computers? Murray states that these “worst of the worst” inner-city schools only affect about 2 to 3 percent of all students. Based on the failure of programs to improve test scores, the results of the Coleman Report, and the small percentage of students attending failing public schools, Murray says that “[t]o continue to assert that major improvements are possible in the academic test performance of the lower half of the distribution through reform of the public schools is more than a triumph of hope over experience. It ignores experience altogether. It is educational romanticism” (p. 62).

I have a few criticisms of Murray’s argument. The first has to do with the way the book is structured. In a chapter that focuses on below-average students, Murray makes his case that schools can’t do much to lift student achievement. Murray separately discusses gifted children in another chapter. He doesn’t have much to say, however, about average and above-average (but not gifted) children. Wouldn’t better schools help improve scores of average and above-average students? Wouldn’t these students have more potential to achieve than below-average students?

I’m also not convinced that schools can’t do better for below-average students. Murray says that failing public schools only affect 2 to 3 percent of all students. But these are the “worst of the worst”, the most extreme examples of poor schools. Is he implying that no other public schools have problems with lack of discipline, gangs, violence, incompetent teachers, and low standards? In other words, that 97% of American public schools today have absolutely no problems? I think that many schools have similar problems, but not just as extreme as the worst of the worst inner city schools. Students in these moderately bad schools can perform better if their schools had higher standards.

In a book on education, it’s surprising that Murray ignores international comparisons. I constantly read articles and charts showing how poorly American students compare to students in some other countries. Based on his argument that schools can’t do much to lift ability, it follows logically that the reason why Singaporean students perform so much better than American students is that their students are a lot smarter than ours are. This might be true, but I would have liked to see Murray discuss this in his book. Is the fact that Singaporean public schools have very high standards, excellent teachers, a demanding curriculum, and no discipline problems completely unrelated to the fact that Singaporean students score higher than American students? I find it hard to believe.

Murray’s next educational truth is that too many people are going to college. He makes some good arguments that many people, including some who have the ability to get a bachelor’s degree, would do better in some other type of post-secondary education. He uses an example of a young man deciding whether to become an electrician or white-collar manager. He’s smart enough to get his bachelor’s degree in business, but is this the right choice? He has special small-motor and spatial skills that would make him a good electrician. He’d probably be an average manager. Based on his abilities, interests, and future career opportunities (mediocre managers are much more likely to be laid off than top electricians), becoming an electrician would be a good option. In fact, skilled technicians and artisans are in high demand even in this recession, while many white collar jobs have been downsized and outsourced.

There are many students such as the one described in the above paragraph, who choose a 4-year college over other options (e.g. technical school, community college, or apprenticeship). The reason why they choose college is that their parents, teachers, and guidance counselors push them in this direction. The reason why adults push children into college is that our society has made the bachelor’s degree a requirement for professional success. Murray questions this cultural worship of the bachelor’s degree. There are some for whom college is appropriate. This includes good math and science students who major in engineering and the hard sciences. It also includes good students who want to study pre-med or pre-law. But for the vast majority of students, especially those who become liberal arts or business majors, college is not the best option. It’s not good for their personal development, as they don’t learn much self-discipline or self-restraint with their light workload or partying lifestyle. It’s not good for their professional development, as their BA degree doesn’t give them the specific skills to get good jobs after they graduate. When I graduated college over 20 years ago, I was basically a liberal arts major with no job skills. My first job out of college was a management trainee at a shoe store. I eventually got a job at a computer help desk, which gave me my start in IT, but it was at near-minimum wage. Today, it’s even tougher for liberal arts majors. The recession has hit them especially hard, leaving them with a lot of student debt and little opportunity for a good job.

Murray next discusses education of the gifted. America’s future depends on the (unelected) intellectual elite, those who have risen to the top jobs that directly impact the nation’s culture, economy, and politics, along with those who influence smaller communities. “The members of the elite are drawn overwhelmingly from the academically gifted. We had better make sure that we do the best possible job of educating them” (p. 107).

Gifted children should be allowed to advance at their own pace, not be held back by their peers. This could include skipping grades, or getting advanced material within their age-appropriate grade. I found myself unchallenged as a gifted public school student, and would have been better off being pushed to take more demanding classes.

Murray focuses on training the gifted to be good citizens. This training should continue through college. “We need to structure their education so that they have the best possible chance to become not just knowledgeable but wise” (p. 112). Murray’s wisdom training of the gifted includes improving their verbal skills, teaching them how to make sound judgments, teaching them how to think about ethical issues, and teaching them humility. I’ll discuss each of these points below:

• Verbal skills—SAT-Verbal scores never recovered from their decline in the late 1960’s and 1970’s. SAT-Math scores did recover, indicating that educational priorities led to a toughening of the math and sciences curriculum. These priorities didn’t result in improvement in humanities and social sciences education, fields that depend heavily on verbal skills. Part of this failure to teach verbal skills is a result of the progressive education movement, which emphasized creative self-expression over correct spelling and grammar. When I was in high school in the early and mid-1980’s, my school had very good math teachers, but mediocre English and social sciences teachers.
• Sound judgments—Members of the elite make decisions all the time, judgments that affect the culture and nation. The Bush administration’s decision to invade Iraq still impacts us eight years later. When music company executives decide to sign a gangster rap artist, and ignore a quality musician, they weaken our culture a notch. When the FDA approves a psychiatric drug for children that has been inadequately tested, it jeopardizes our children’s mental health and development. Some components of sound judgment are unteachable, such as intuition and common sense. A teachable component includes how to evaluate data, especially the knowledge of basic statistics. Another one is pattern recognition, including knowledge of history. Personal and vicarious experience is also important in being able to see patterns in different situations.
• Ethical issues—Schools used to teach morality and virtue. Today, there is a widespread moral vacuum at all levels of education. This moral vacuum leads to nonjudgmentalism and ethical illiteracy. While there is more tolerance today than ever before, this tolerance extends to behavior that should not be acceptable in any society, including greed, selfishness, dishonesty, irresponsibility, and intemperance. It’s the function of the intellectual elite to help promote ethical behavior by example, by policy, and by writing and speaking. The default of the elite in this area has led to anomie and anarchy. We need to teach the gifted about virtue and ethics. This can be done by using examples from the great religious traditions and secular philosophers. These traditions and philosophies are in remarkable agreement on core issues (e.g. “the golden rule”).
• Humility—The self-esteem and individual rights movements have led to a widespread decline in student humility and personal responsibility. If a student gets a bad grade, it’s not his fault, but the fault of his teacher. The teacher is violating his “right” to a good grade. Students are supposed to feel good about themselves, no matter what they do or how well they perform academically. Criticism should be avoided at all cost. Research has shown that improving self-esteem doesn’t raise grades, promote good achievement, or have any positive effect. While there’s nothing wrong with praising gifted children for their successes, there’s nothing wrong with criticizing them for their failings, either. Many parents and teachers do the former, but not the latter. To gain perspective, and acquire humility, the gifted need to be challenged enough so that they fail sometimes. A little humility goes a long way in promoting sound judgments and ethical behavior.

In conclusion, Real Education provides a different and valuable perspective on the failings in American schools. We need to be more realistic about the capabilities of below-average students, we need to offer more students an alternative to college, and we need to provide better wisdom-training of the gifted. I feel that Murray is too pessimistic about the capability of public schools to improve student academic performance, especially for average and above-average students. I recommend this book as an independent perspective on American education.

How Did “The Land of the Free and the Home of the Brave” Become the Land of Lawyers and the Home of Bureaucrats? A Review of “Life Without Lawyers” by Philip K. Howard

In these recessionary times, Americans are divided along partisan lines on many important issues, such as whether to give tax breaks to the rich versus extending unemployment benefits. Democrats and Republicans argue about government spending, taxation, health care reform, immigration, foreign wars, and a host of other issues. But away from the spotlight of media attention and political debate is a cancer that has gnawed away at the social fabric of American society. This cancer has been growing for the last four decades, and shows no signs of improvement. I am speaking about the litigation and regulation explosion that has reduced Americans' ability to take risks, exercise authority, fire incompetent employees, maintain discipline in schools, and to take responsibility for their actions. The tragic part of this is that there is a bipartisan consensus for reform that is stymied by self-serving special interests such as trial lawyers and public-sector unions. Philip K. Howard takes up this issue in his latest book Life Without Lawyers: Restoring Responsibility in America

Howard, author of the best-selling The Death of Common Sense, has talked about the issue of excessive and nonsensical lawsuits and regulation in previous books. Since the problem hasn’t gotten any better, Howard revisits these issues, presenting newer examples, but also suggesting solutions. He also is trying to improve things via his organization Common Good.

There are two main points in the book. One, is that there are too many rules prescribing how to do things. These rules derive from the assembly-line mentality that arose from the Industrial Revolution. While some rules are necessary in any complex endeavor, such as a business, government, or school, our society has gone overboard with rules and organization. Too many rules stifle individual initiative and decision making. Howard presents many examples of this in the public schools. Teachers in New York City are forbidden from calling on students who raise their hands during the first part of class. A mother of a third grader, who arrived with a supply of birthday cupcakes, was turned away because there is a rule against parents in the classroom. Teachers write out detailed course plans every week that no one ever reads. Loudspeakers constantly blare out announcements, interrupting classes and making it impossible for teachers and students to concentrate. No Child Left Behind made things worse by focusing on standardized testing. Teachers’ union contracts dictate hours worked, limit teacher duties, and make it virtually impossible to fire incompetent teachers. Paint crumbles at the top of walls in some New York City schools because unions prohibit painting walls higher than ten feet.

The second main point is that since the 1960’s individual rights have trumped concerns over the common good. “Let any individual who feels aggrieved bring a legal claim for almost anything” (p. 23). This mindset arose from a desire to remedy abuses due to racial and gender discrimination. The problem is, however, that “[u]nlike constitutional rights, which shield citizens from state power, these new rights gave citizens a sword against other free citizens” (p. 23). It isn’t hard to find examples of how citizens utilize lawsuits as swords against other citizens. In 2007, a Washington, D.C. lawyer sued his dry cleaner for $54 million because he claimed that they lost a pair of pants. This idiotic and absurd case, which should have been immediately dismissed, was allowed to go on for more than two years, costing the family owning the dry cleaner over $100,000 in legal fees. While they won the case, they ended up having to close the store. Another example is a medical malpractice case. A dermatologist advised a patient to remove skin based on a biopsy indicating malignancy. The patient got a second opinion which indicated no malignancy, and didn’t get the skin removed. After getting terminal cancer several years later, the patient sued the first doctor on the basis that the doctor should have been more insistent about getting the skin removed. While the doctor prevailed in the case after seven years of legal battling, it could hardly be called a victory.

The result of out-of-control lawsuits is that Americans don’t trust the justice system anymore. They become defensive in their behavior, refusing to take risks out of fear of being sued. The most familiar and costly example of defensive behavior is in the field of medicine. Unnecessary care accounts for 30% of total health care spending. Nursing homes send dying ninety-year-olds to intensive care units, so that they can’t be sued for negligence in the person's death. Doctors have to document everything, in case they have to justify their decisions in court. Minor surgeries require expensive and unnecessary preoperative tests to prevent the providers from being sued.

The threat of lawsuits, combined with burdensome regulation, has eroded discipline in public schools. In a 2001 survey, 43% of high school teachers said they spent more time maintaining order than teaching. One in seven teachers in urban schools has been physically assaulted by his students. In New York City more than 60 steps and legal considerations are required to suspend a student for over 5 days. “Just sending a disruptive student out of the classroom requires layers of bureaucratic compliance” (p. 104). A violent autistic child in Hartford, CT, was kept in a regular classroom because his parents, exercising their rights under federal law, refused to allow him to be transferred to special ed. The school had to institute formal legal proceedings and receive a judge’s order to remove the disruptive child. After 2 years of hearings and thousands of dollars of expense, the school finally received the order to move the child.

Howard uses the “broken windows” analogy to explain how this erosion of discipline has harmed schools. If broken windows in a building aren’t fixed, the tendency is for vandals to break more windows, and eventually break into the building. After a few unchecked incidents, disorder takes over a school. “Young people aren’t known for their maturity, and pushing the envelope becomes a sport” (p. 105). Zero tolerance rules, which were supposed to counteract school disorder, only make things worse. The problem with these rules is that they can’t distinguish trivial from severe infractions. In 2001, a National Merit scholar in a Florida high school was suspended because of a small kitchen knife found in the back seat of her car on school grounds. “Instead of bolstering school authority, zero tolerance rules have become a symbol of lack of authority to do what’s right” (p. 106).

The fear and distrust of authority that began in the 1960’s was a major factor that led to our current legalistic mess. We tried to outlaw any type of discretion by people in positions of authority—teachers, administrators, managers, and government executives—by replacing this discretion with a tangle of rules and threats of litigation. But there is no substitute for good judgment, and good judgment relies on subjective and intuitive factors. Having to prove the correctness of decisions in legal proceedings leads to worse decisions. It’s true that people can explain why they did something, but only to a point. These explanations rarely rise to the level of legal proof.

“The alternative to absolute rights is not absolute discretion” (p. 58). Legislatures can establish clear public goals, and give officials the responsibility to achieve these goals. But meeting these goals requires the use of individual judgment, such as the decision that a student is too violent to be mainstreamed. People in power will at times make mistakes, and they should be held accountable for their mistakes. But trying to prescribe decisions by legal rule is a self-defeating way to organize our society.

Some specific reforms that Howard advocates include:

1) Judges must draw legal boundaries of reasonableness as they pertain to lawsuits. The “lost pants” type of lawsuit should be immediately dismissed. For other suits that aren’t obviously ridiculous, judges need to take into account whether a claim might undermine reasonable activities of people not in the courtroom. For example, the threat of lawsuits has resulted in playgrounds being stripped of fun equipment. Many schools have eliminated recess, and parents are afraid to allow their children to engage in unstructured play. As a result of these changes, children today spend much of their time in front of television and computer screens. This lack of exercise is one important factor in the obesity epidemic plaguing our nation’s youth. By trying to eliminate risky behavior among children, we’ve succeeded in making many of them fat, a health problem which will eventually cause much more suffering and death than an occasional accident.

2) Special courts are needed for medical malpractice claims. The problem isn’t the setting of standards of care. The problem is finding courts that are trusted to uphold these standards. Allowing medical malpractice claims to be heard in regular courts, with greedy trial lawyers manipulating clueless juries, has led to an explosion of defensive medicine. Special courts for medical malpractice would have the following characteristics: judges dedicated to health care claims, written judicial opinions rather than jury verdicts, neutral experts in place of hired guns, and expedited proceedings with incentives for early settlements.

3) Abandon the due process model for social services, especially public schools. Daily choices in schools and other public institutions need to be made by teachers and administrators with the freedom to use their judgment, without fear of lawsuit. These choices should not be determined by burdensome detailed regulation. In successful private and charter schools, teachers and principals are free to do what they think is best for their students. For public schools to succeed, their teachers and principals need the same freedom. This freedom includes the freedom of school administrators to fire incompetent teachers.

4) Don’t tolerate disorder in public schools. Principals and teachers need the authority to promptly remove disruptive students without worrying about following regulations or being sued by parents. Some students are too disruptive or violent to be mainstreamed, and they need to be removed from the regular classroom. Allowing individual students to disrupt classes makes it very difficult to properly educate the other students. While one student and his parents may win, everyone else loses. This individualistic and selfish model needs to change.

5) Discrimination cases should only be allowed for systematic practices of discrimination. This was the original purpose of discrimination laws, which since the 1960’s have been corrupted by greedy trial lawyers and irresponsible minority advocates. If a minority feels he’s being discriminated against, his lawsuit would be dismissed unless he can present evidence that the employer discriminates against minorities in general. Individuals should not be allowed to bring claims only on behalf of themselves. An exception is for individual claims of sexual harassment, but only if they rise to the level of quid pro quo.

6) Washington needs to be fixed from the outside. Partisan politics and special interests have made it impossible for our representatives to achieve any important changes in the areas that Howard talks about. As with the No Child Left Behind law, they just pile layers of legal concrete on people and institutions that are already crushed by law. We must form a national coalition of citizen leaders, a shadow government, to propose an overhaul of government. The models for this are the base-closing commissions in the 1990’s, or the current deficit-reduction commissions. To effect change, public opinion must be mobilized in a way that it hasn’t been since the 1960’s. “America doesn’t need a new Constitution, just a healthy spring cleaning and a practical approach to making public choices without crushing us under endless law” (p. 177).

The only problem with this book is that it lacks an index. I don’t remember ever reading a nonfiction book without an index.

Due to excessive regulation and litigation, America in the early 21st century is a shell of its former self. We’ve become afraid to take risks, afraid to use our judgment, and afraid to do what we think is right. Is this the type of mentality that motivated the early pioneers, people who risked everything to settle an unknown and sometimes hostile country? Is this the type of mentality that motivated the great American inventors, entrepreneurs, and other creative people? Would Edison have invented the light bulb if he was afraid of being sued by the candle makers? Would Tesla have invented A/C electric power if he was afraid of being sued by the family of the rare person who was electrocuted? Would railroads, cars, and planes have been invented and made available to the masses if companies were afraid of being sued due to accidents? Would America have risen to a leadership position among nations if its public schools were always in the sorry shape they are in today? Would a legal and political system have been a model to the world if it allowed a greedy scumbag to sue his dry cleaner for $54 million dollars?

The problems that Howard describes in his book are not the only problems that America faces. Obviously, we need to be concerned about other things, including the recession, our government’s long-term fiscal health, and the threat of terrorism. But overregulation and overlitigation, although less publicized, nevertheless affect Americans in their daily lives—in their schools, workplaces, doctors offices, hospitals, and even their homes. The cost in money, worry, wasted time, and unhealthy behavior is severe. I recommend “Life Without Lawyers” to all Americans.