Why ending the war on drugs may have unintended consequences

Imagine you have very limited or no legal employment opportunities. Or perhaps you have some opportunities, but they pay poorly.

Dealing drugs may be a semi-rational choice then. American jails are famously nasty, but if you can avoid prolonged incarceration and drug trade violence you can earn money.

If we end the failed war on drugs though, those income opportunities vanish. Walmart and Philip Morris take the profits, and distribution becomes another high-competition minimum wage option.

Ending the war on drugs, without providing an answer to mass disability, may have unintended consequences.

We might do better to keep drugs illegal, but reform prisons -- turn them into enhanced skills development programs.

Why I love app.net (ADN)

I joined App.net ($5/month or $36/year) about five months ago. Although it's fundamentally a messaging infrastructure it's currently marketed as an ad-free social network.

I paid $50 at launch, and my account was extended when the cost dropped. That was money well spent; I expect to subscribe as long as they are in business. I love App.net because ...

• It has a very robust ecosystem of tools and services including multiple Mac and iOS clients and multiple web apps. I use Wedge, Netbot, NoodleApp and Appnetizen and will soon try Felix. There are multiple integration points to my Pinboard feed, including IFTTT support. Most of my posts start with Reeder.app [1] then go to Pinboard and turn into App.net posts via IFTTT.
• The community I interact with on app.net is exceptional. More on that below.
• I love the mission: a public (pay) communications infrastructure and related services that I purchase. I love paying for things I use.
• The app.net development team is delightful. I mean that literally; it's a joy to see them play and build on the platform - like @duerig's early stage Google Reader Share alternative, Patter-app rooms and private messages (EdChat) and vidcast shared video commentary.
• 128 characters is stupid. 256 is not twice as good, it's eight times better. (Though URL characters count, so I use URL shortener services)
• I'm 50+ and this is a relatively young community (though plenty of 40+ too). I'm old enough to enjoy that. The only young people I otherwise interact with are my kids (10-15) and their friends.
• I have the (illusion) of helping build something good without, you know, actually having to do anything. (Hence the illusion bit.)
• No advertising. Of course that doesn't mean no marketing; it means I choose the marketing I want)

The real hook for me, however, is the community. I follow a very smart and mutually respectful group of people. The conversation reminds me of Google Reader Shares, some of the BBS forums I joined via packet switching networks before there was public net access, but most of all it reminds me of my undergraduate conversations.

 

During my undergrad days I got to know 4 institutions, partly because I wanted to escape from the one I graduated from, partly because in Quebec everyone went to "junior college" (CEGEP) after grade 11. Whether they were elite or accessible I found great conversations everywhere.

 

There were good conversations at graduate school, medical school and residency as well (I spent a long time in school), but the undergrad conversations were the most interesting. App.net reminds me of the best of those. It is, for example, the only place I can learn from the insights of a (gasp) republican.

 

The group I follow is a pretty tough bunch. If I'm sloppy, I get called on it. I love that -- it makes my thinking better. I learn things.

 

App.net won't last forever -- nothing does. But it's a good place now; it succeeds where Twitter failed me. 

 

If you'd like a free trial let me know at jgordon@kateva.org or in comments below -- I can share 3 invites.

[1] Alas Reeder.app may have been sunset. It's very unstable on the iPhone 5. Fortunately there are alternatives I can explore.

See also:

• The Economist's Babbage on two of my favorites: Pinboard and App.net. The Economist doesn't use bylines, but I suspect this is by @glennf.

Supporting sports teams - what I do now

Over the past ten years I've been the manager for a variety of hockey and baseball teams. Along the way I've tried a variety of technologies to try and support the teams, including blogs, wikis, traditional web sites and the like.

I've gradually settled on a handful of overlapping technologies that seem to work well for a diverse audience using Facebook and Google services.

Here's what I use now:

Communication - Gmail and Facebook both

Gmail

I prefer Gmail because of ease of access at work, home and on my phone.

I manually build a group of correspondents; this typically takes a few weeks to get right but then changes little over the course of a season.

I have one structured email for each team I support; I use the last email sent as template for the next. I use a large font and ample white space - not least because I'm 50+ myself. I use a consistent footer with links to a Google Docs team page, Photo album (if any), Team Calendar, and Facebook Page.

The primary limit to email is personal/work access issues and the global problems many people have with email in 2013. Many subscribers do not use email at home, and some do not have work access.

Facebook Team Page

I use Facebook because that's where our people are -- both athletes and families. They don't do blogs, they may have limited email access, but most use Facebook in one way or another [1]. Facebook Pages are always Public, and so web accessible for non-members -- albeit with an obnoxious popup pushing Facebook. Many athletes get SMS notices with Page activity, so it can be a quick way to notify of weather cancellations and the like.

I create a Facebook Page for each team. The UI for managing these pages is awkward and confusing, but by now I'm familiar with it. It takes me about ten minutes to setup a Page.

I copy paste emails into Page status updates, it takes only a minute or so to do that.

It's awkward to associate persistent links with a Facebook Page, but if you play around a bit you can make them show in the Page header; that's where I put links to our Team Page and Calendar.

Reference Page - Google Docs

I've recently started using a Google Doc "Team Page" with basic reference information including a simplified roster (no private information). There's no authentication, I share it using the "secret" URL but typically these pages get indexed one way or another.

Google Docs is easy to update and produces documents suitable for print or web access. It is the current version of the "personal web page".

Roster - Google Spreadsheet

I maintain the team roster in Google's Spreadsheet. Access requires authentication as this can contain private information including email and phone numbers.

Calendar - Google Calendar

I setup a Google Calendar for each team. I don't know of any alternatives. My family subscribes to the team calendar on our phones and devices, but most simply view it online.

Photo sharing - Picasa vs. Facebook

Historically I've shared using Google Picasa web albums and emailing the "secret" URL. I don't think these albums get a lot of access however, which is disappointing since the photos are not trivial to prepare. I liked the idea of full resolution downloads but in ten years I doubt more than twenty images have been downloaded.

I've recently started experimenting with Facebook's improved Albums and these seem to get much more team traffic.

I don't put any namers or other identifying information into shared albums -- just the images.

[1] They don't do G+ either, but then nobody does.

How did the American South feel about losing the Civil War?

The second son asked me: "How did the American South feel about losing the Civil War?".

My first thought was that the South was deeply unhappy, but I immediately realized that wasn't true:

The 1860 Census and Slavery in the United States | Suite101

... Deep South states held the most slaves and this is where most of the larger plantations existed. Mississippi’s slave population stood at 55% out of a total population of 791,305. South Carolina’s slave population represented 57% of the total population. These percentages decrease with upper South states like Virginia (31%), Tennessee (25%), and Kentucky (20%). Border States like Maryland accounted for the lowest numbers (13%)."...

So the correct answer is that most Mississippian's were relatively pleased, if not joyful, that the South lost the war. On the other hand, Kentuckians were mostly unhappy.

White southern abolitionists, aka "Scalawags", would also have had mixed feelings. I couldn't locate percentages, but based on studies of human response to external evils [2]I'd expect about 10% of Southern Civil War whites would be at least somewhat pleased that their society was coming to an end. If I add those numbers to black Southerners then the answer would be "mostly unhappy, but many pleased, especially in Mississippi and South Carolina".

Incidentally, when Americans equate "Scalawag" with German opponents to Naziism [1], we will know the Civil War is coming to its end.

[1] The analog is somewhat stretched, the Nazi response to opposition was far more lethal than the Southern suppression of abolitionism.
[2]  There are always about 10% of humans that seem to resist evil, even when it is a societal norm.

Welcome to the 21st century: The primary themes

To be plausible, I've read, a novel must avoid reality.

What novel, for example, would start the 21st century with al Qaeda's attack on America? What novel would have an American President spend a trillion dollars and hundreds of thousands of lives attempting to recreate Grenada in Iraq while tossing aside the Laws of War?

Reality is not as cautious as writers. And so the 21st century began with the end of American exceptionalism. More than a decade later, we've got the feel of it. Not of the whole century for the whole world, but at least of the years from 2010 to 2040 for America.

What are the main themes? I'm sure I've missed a few, and of course there will be surprises, but here's my starter list: 

• Demographics 1: From 2010 through 2040 America will be divided between an increasingly senile, largely white protestant, cohort born before 1964 and a relatively diverse and secular cohort born after 1964. The many "fiscal cliff" fights to come will reflect this shift.
• Demographics 2: Even Hispanic birth rates are falling. The relative cost of children will continue to increase even as 93% of income growth goes to the top 1%. Given Demographics 1, American will have to attract millions of new immigrants -- even as the American brand struggles to recover from the Bush regime.
• We are in the post-AI era of both great wealth and mass disability.
• China and India - whether they thrive or struggle or both it's their story now.
• Nuclear proliferation: More nuclear weapons, more launch systems, more hackable targets. Iran, North Korea, Pakistan, India ... and so on. [1]
• The cost of havoc will continue to fall. I was really torqued about this in the months after 9/2011; I didn't see how we'd avoid turning into a surveillance society (at best) or an authoritarian state. Well, on the one hand we did turn into a surveillance society, but on the other hand we haven't seen any home-brewed bioweapons yet (except for this one of course)[2]. I still think this problem is not going away, and neither is the surveillance state. 
• Innovation gap: AI aside, there's something wrong with the engines of our ingenuity. Maybe we've done all the easy stuff, maybe it's the NIH and the scientific-industrial complex, maybe it's because so much talent is wasted playing finance games, maybe it's the triumph of the Corporation and its IP laws, maybe it's all of the above and more. This gap is a bigger threat to our future than social security or even  health care expenses.
• Winner take all: It is insane that growth in our economic output is going to such a thin slice of our population -- 37% going to 15,000 households.
• The triumph of the mega-corporation: For better and for worse, but mostly for worse, the large centrally-planned Corporation will rule the American economic landscape for decades to come. Elephants have made the ecosystem of the African Plains, and Corporations have made the laws and accounting systems of America. Citizen's United will shape the decades to come.
• Weather adaptation: The big devastation from CO2 emissions is probably in Book Two, but Book One will have big enough problems. We will eventually adopt carbon taxes; driven both by need to raise revenues (see above) and by the slow acceptance that we've whacked the Earth pretty hard.
• Good enough health care: After exhausting every other option, the US will come to accept good enough health care.
• No more big US wars: Being old and worried about budgets is not all bad.

It's a daunting list, but it's a list of challenges and fixable problems, not of disasters. Spicy food, chewy and a bit green on the edges, but edible with a bit of chewing. It could be worse.

 

- fn -

[1] There are two strong arguments for supernatural entities. One is the arrow of time (entropy low at t=0). The other is that we have not yet had a true nuclear war - despite all our close calls.
[2] Oh, yeah, and what novel would have a bioweapon attack follow 9/11, be used to justify a major war, and then be completely forgotten? 

The Post-AI era is also the era of mass disability

Is Stephen Hawking disabled?

Obviously this is a rhetorical question. Hawking is 70 and retired from the Lucasian chair, but he remains a tenured professor. He is a bestselling author of multiple popular books, has been married twice, and has three children.

He is clearly not disabled.

Is a physically strong male with an IQ of 65 disabled in Saint Paul, MN? Yes, of course. Forty years ago, however, there were many jobs that would pay above minimum wage for a strong back and a willingness to do tedious work. Heck, in those days men earned money literally pumping gas.

Would Stephen Hawking have been disabled in 1860? Yeah, for the short duration of his 19th century life.

Disability is relative to the technological environment. Once a missing leg meant disability, now it rules out only a small number of jobs. Once a strong back meant a job, now it means little.

Technology changes the work environment; it makes some disabled, and others able. It's an old trend, automated looms put textile artisans out of work 200 years ago.

Those artisans had a rough time, but workers with similar skill sets have done well since. Economic theory and history teaches us that disruptive technological transformation can produce transient chaos, but over time resulting economic growth will benefit almost everyone. More or less.

But history only repeats until it doesn't. Economic benefits don't have to be evenly distributed. If fewer jobs require strong backs, then people whose primary talent is the strength of their spine may earn relatively less. If supply exceeds demand, the price of labor will fall below the "zero bound" of the minimum wage. Some backs won't find work; those workers are disabled.

Most people can play in more than one game, but the competition is getting tougher and the space for human advantage is shrinking in the post-AI era. The percentage of the population who are effectively disabled has been rising along with national income and the Gini coefficient. It's not just the pioneers now, Respectable economists are wondering about tipping points.

So enter The Wolverine...

 

Krugman acts as though he's just started thinking about the post-AI economy, but he isn't fooling anyone. We know he grew up on Asimov and the Three Laws. Now that the election is done, and he doesn't have to be a strict non-structuralist any more [1], he's started writing about what the post-AI era means for income inequality using the phrase "Capital-biased technology". He has recently promised us a "future" column on policy implications.

Future - because he's trying to break it to us gently. I, of course, have no such qualms. A year ago I wrote about the policy implications of the Post-AI era (emphases added) ...

The AI Age: Siri and Me

... Economically, of course, the productivity/consumption circuit has to close... If .1% of humans get 80% of revenue, then they'll be taxed at 90% marginal rates and the 99.9% will do subsidized labor. That's what we do for special needs adults now, and we're all special needs eventually...

Or, in other words, "From each according to his ability, to each according to his need". In the post-AI era we will need to create employment for the mass disabled.

See also:

• Baumol's cost disease: medicine, education and post-AI disruption 10/2012
• Life in the post-AI world. What's next? 9/2011
• Google's A.I. recognizes cats. Laugh while you can. 6/2012
• The AI Age: Siri and Me 12/2/2011
• Causes of the Great Recession: China, GPSII and RCIIIT. Now for Act III. 4/2010
• Unemployment and the new American economy - with some fixes 1/2011

 and from the K (NYT):

• Rise of the Robots
• Capital-biased Technological Progress: An Example (Wonkish)
• Policy Implications of Capital-Biased Technology: Opening Remarks
• Is Growth Over? (K responds to Bob Gordon's essay that deprecates the impact of IT. FWIW, I think Gordon has no idea how much IT has already disrupted, and what is yet to come.)
• Robots and Robber Barons

elsewhere

• Artificial intelligence: Difference Engine: Luddite legacy | The Economist 11/2011

- fn -

[1] Clark Goble made me read a critique of my team's champion. I found hurt feelings (K has claws), but no substantive critiques. That's a shame, I've long wanted to see somebody like Mankiw (who was once readable) engage K on his denial of structural factors in 2009-2012 unemployment. I suspect K has always known of ways to argue the structural case despite the persuasive low global-demand data. I wonder if he was disappointed that nobody dared challenge him. 

Tis the season of the apocalypse - Cambridge Center for Existential Risks and the Preppers.

It's not just the Mayan lunacy afflicting China and Russia. It's also the Cambridge Centre for the Study of Existential Risk and The American Prepper Movement. Not to mention Ishtar and the Solstice and David Brin's Existence.

We could use some more sunlight. Economic growth would be good too.

For Gordon's contribution to the festive spirit, see SETI Fail/Fermi Paradox Future Filters and a 2004 summary. OTOH.

PS. The Economist on end-of-the-world predictions since 250 AD.

See also:

• The Fermi Paradox in science fiction: a review 8/2008
• Fermi Paradox: life is extremely rare 10/2009
• The limits of disaster predictions: complex adaptive systems 2/2007
• Gamma ray bursters and the Fermi paradox: Earth has 1 billion years left 10/2005. When I look at pretty astronomy pictures, I see billions dying. I think later research was more reassuring.
• The Pentagon prepares for the climate crash, but there's more fun ahead in the 21st century ... 9/2004 doom and gloom

Tax bullets to pay for better mental health care

We tax cigarettes to offset some of the social costs of tobacco use. This is type of Pigovian Tax.

We could tax bullets to offset the direct costs of America's weapons glut, but it's hard to make up for murder. 

Better to prevent the murders.

So tax bullets to pay for better mental health care.

All psychiatrists, social workers and primary care physicians know what a train wreck American psychiatry mental health care is. Rich state, poor state, it's a train wreck everywhere. Families don't know what to do for impaired loved ones - because, often, there's nothing available.

There are many things that could be done. We lack will, and we lack money.

The money problem is easy to solve.

Tax the bullets.

See also:

• Be the Best You can Be: Violence and the natural history of Autism - so what do we know? 3/2009: We known almost nothing. Looking at this case history, I suspect "Andrew" had a childhood history of Asperger's followed by late adolescent onset of schizophrenia; atypical because of his preexisting connectopathy. In truth, however, our 21st century psychiatric classifications are the equivalent of 19th century medical classification.
• Gordon's Notes: Aurora - the rational response is better schizophrenia management 7/2012: Ebert and Collins links are, of course, just as relevant today. Same with my 7/12 posts.
• NRA Sets 1,000 Killed In School Shooting As Amount It Would Take For Them To Reconsider Much Of Anything | The Onion - America's Finest News Source 5/2012. Yep.
• When My Crazy Father Actually Lost His Mind - NYTimes.com 6/2012. A typical tour of American mental health. Nothing unusual about it.
• App.net thread on this topic, with appreciation to Clark G.

Google Reader Shares and the history of the feed.

Google killed Reader Shares on October 31, 2011 ...

Gordon's Notes: Dapocalypse now: Google's day of infamy

I shared thousands of articles through Google Reader.

They were a part of my extended memory. I often searched that repository.

This evening they are gone....

These days I share on app.net, but app.net is a development platform and a better version of Twitter; it's not a GRS replacement. I miss Google Reader Share -- and I miss the GoogleMinus that built it.

It seems I'm not the only one. Today Rob Fishman tells the story of Google Reader Shares, and of RSS/Atom as well. (Confusingly, he refers to Google Reader rather than Google Reader Shares or Google Reader Social. Google Reader is still around. For now, anyway.)

Google's Lost Social Network

... In the beginning, the best word I can use is that Google tolerated the project. Then, they gave it — support is too strong a word. They gave it some thought,” Wetherell told me of Reader’s early days. “It was kind of like The Dirty Dozen, that movie, where we would meet people in the hall, and we’d kind of mention it and they’d give us a nod and join. ..

... a sign in the Reader offices ... said “DAYS SINCE LAST THREAT OF CANCELLATION.” The number was almost always zero. ..

... Shih found out in the spring that Reader’s internal sharing functions — the asymmetrical following model, endemic commenting and liking, and its advanced privacy settings — would be superseded by the forthcoming Google+ model. Of course, he was forbidden from breathing a word to users... Shih left Google in July....

 Between the article and comments several GRS-like products are mentioned:

• The Old Reader: in beta
• HiveMined: not yet available
• Newsflock: public beta promised early 2013
• NewsBlur: in production, and has clear similarities to GRS. You can import feeds from Google Reader. Ominously, NewsBlur doesn't appear to have a blog.

 Incidentally, one commenter tells us that it would have been quite hard to save GRS once Buzz was killed ...

Christopher Barth: Reader social was too interconnected with the Buzz API. Lashing it slowly into the +/API was the only choice once the plug was pulled on Buzz - that transition was horrible due to how underdeveloped the +/API was at the time. +/api had only people, comments, and activity when G+ opened. Sort by magic required the Buzz 'like' (+1), which was not available in the +/API.

I haven't signed on with any of the GRS replacements yet -- I'm focusing on app.net for a time. I'll be tracking them though.

Minnesota DFL phone spam - might not be what it seems

Since the election we've received a nightly phone call with a Caller ID of MN DFL party and a return number of 651-251-6300. As others have noted, that is indeed the phone number for the Minnesota DFL Party.

I assumed it was simply a fund-raising robocall. We are good Commies and donate to the Party, so it's not surprising that they'd harass us. It has been, however, oddly persistent. So tonight I actually answered the phone -- but I heard only a few meaningless sounds. Nobody was there.

I wonder if this were really a DFL call, or if someone is spoofing their number. That would be a nasty trick; a small donation to the right offshore resources could paralyze a fund-raising program.

If so, it might be that the villains don't know the election is over. Or the nighty calls could simply be a malfunctioning robocall system. I'll try to contact the DFL and ask what's up (I'll need to disable some of my DFL email spam filters to get a response). Even if it's not a dirty trick in this election cycle, it's a sure-fire strategy for the next one. Just another way that the era of switched network voice telephony is over. We will need caller-authentication with reputation-based call triage.

I'll update this with what I hear from the Minnesota DFL.

Update 12/8/2012: It seems to be incompetency, not malevolence. It seems the DFL really is spamming our home nightly.

Internet Trends 2012 (Meeker, KPCB)

KPCB annual internet trends presentation is online. KPCB does this yearly under the "Meeker" brand. The online version isn't displaying correctly today, but there's a link to the PDF version.

There's a lot of fluff in the report. These were the parts I thought were mildly interesting:

1. Nigeria: 28% of popn has net access, 5th fastest growing access
2. US: 20% of popn still no access (will require govt action to close that gap I bet)
3. Android is awesome. (I sold my soul to Apple years ago btw)
4. Almost 30% US adults have Tablet/eReader (I wonder if they count iPhones though)
5. Mobile doesn't made ad money, so ad supported net sites are in deep trouble.
6. Ad supported Apps look good.
7. Internet ad revenue surpassed newspaper 2010 (assume FAR behind TV)
8. Public has given up on privacy.
9. Aggregate market cap global public companies is 36 Trillion. (So only 72 Apples?). Note this excludes privates like Aramco, etc.
10. Advertisers want access to us while we're in the Car.

Hey Republicans: If you want to cut ObamaCare, try wellness programs

Few people will have noticed new rules around corporate "health-contingent wellness programs" (emphases mine):

Administration Defines Benefits Under Health Law - NYTimes.com

... The rules also give employers new freedom to reward employees who participate in workplace wellness programs intended to help them lower blood pressure, lose weight or reduce cholesterol levels. The maximum permissible reward would be increased to 30 percent of the cost of coverage, from the current 20 percent.

The rules would further increase the maximum reward to 50 percent for wellness programs intended to prevent or reduce tobacco use.

Rewards could amount to several thousand dollars a year, officials said, because total premiums in employer-sponsored health plans now average more than $5,600 a year for individual coverage and nearly $16,000 for family coverage...

The Hill's Healthwatch has more details. It is remarkable that CNBC can have a general freakout about an increase in marginal federal tax rates for persons earning over $250,000 a year, but say nothing about a program that costs middle-class workers $2,000-$3,000 a year.

Let us take a moment to contemplate this curious silence.

Yes, I said costs, because the money for these programs has to come from somewhere. In this case it comes out of take home pay - either as a direct benefit cost or as a reduction in future income. In some cases the money might come out of ACA mandated health insurance premium rebates ...

Health Insurance Refunds May Stall in Employers’ Hands - NYTimes.com

... while some employers are returning the money directly in paychecks, or planning “premium holidays” that increase take-home pay, others are weighing different options, benefits consultants said, like reducing next year’s premium, or spending the refund on so-called wellness programs that reward workers who lose weight or quit smoking.

Yeah, that's a bad sign.

In theory the money we're losing now might be offset by reduced healthcare costs over time, which might in theory reduce insurance costs and maybe one day the lost income might trickle back down again.

*cough*

Right. That's not going to happen.

It is also possible that, regardless of impact on health care costs, and after considerable administrative overhead is deducted, these programs will make some workers healthier than they might otherwise be. In that sense they might be considered a form of social transfer; all employees pay for improved health habits for some employees.

That wouldn't be so bad - if we knew the programs worked. But we don't know that; these programs were launched with very little research. What little I could find showed some surprises ....

New Research Shows That Prevention Is Key To Reducing Health Care Costs For All Employees, Even Those With Chronic Conditions - New York Times

... while a reduction in employee health risks leads to immediate cost savings, the accumulation of additional health risks soon leads to substantially higher medical and pharmacy costs...

I don't know why corporations are so keen on these programs, but I suspect there are sound business reasons. They may not be obvious; I'm reminded that Walmart liked defined contribution plans because they discriminated against unhealthy (and costly) spouses. I have read that some states offer tax credits for the programs, and I assume that the $2,000 a year or so I'm paying for our corporate program is treated as a tax deductible health care benefit.

Which brings me to the GOP. They're looking to cut money from the ACA. Why not do something useful and ask about corporate wellness programs?

Right. I bet this is one of those things that made it into the ACA as a sop to the GOP...

See also:

• Gordon's Notes: The Walmart healthcare memo: You DO need to read the original 11/2005
• Wellness Tax Credit (a curious unlaunched astroturf site)
• Workplace wellness - Wikipedia, the free encyclopedia
• Corporate Wellness Programs | American Institute for Preventive Medicine

Baumol's disease and the demographic transition: Productivity asymmetry means children are increasingly expensive

There have been a flurry of articles lately on the cost of raising an American child, including a NYT blog post. This old news to students of demography, I remember reading about this back in the 80s. In agricultural societies children are a net economic gain, in industrial societies the gain is less, and in post-industrial societies they are a net negative for parents.

I should add, by the way, that traditional evaluations of the cost of children underestimate the cost. They assume a healthy neurotypical child. A special needs child is vastly more expensive, and approximately 5-10% of post-industrial children are relatively disabled by 'autism' (whatever that is), low average IQ, schizophrenia, affective disorders and the like.

So this is old material, but I don't recall a theoretical framework explaining why child raising takes a larger and larger proportion of income as a society becomes wealthier. The answer, of course, is Baumol's cost disease.

Child raising is one of those tasks with minimal productivity increases. Indeed, as output requirements rise to meet the narrowing demands of a post-labor economy, productivity may be negative over time. Certainly much of the cost is related to education and health care, two domains with notoriously slow productivity growth. Baumol's work teaches us that as overall productivity and wealth increase, relatively low productivity labor will consume increasing fractions of total income.

This seems to be an obvious insight, but a cursory Google search didn't find any articles or posts connecting demographic transitions with Baumol's Cost Disease. Until now.

Corporate growth and the unexpected triumph of central planning

The American Economic Review tells us large corporations are taking up a larger share of our GDP ...

The American Economic Review, Vol. 21, No. 1, pp. 10-42

The Growth in the Relative Importance of the Large Corporation in American Economic Life

...  If recent rates of growth were to continue, 80 per cent of non-financial corporate wealth would be in the hands of 200 corporations by ...

... Six industries can boast of one or more "billion dollar" companies ...

Yeah, that said "billion", not "trillion". The article was published in March 1931, so it was presumably written after the crash of '29 but before the full horror of the Great Depression was recognized.

81 years later the Economist has an update:

Free exchange: Land of the corporate giants | The Economist 11/2012

... Businesses have also been getting bigger. A snapshot of the American economy shows huge dispersion in firm size: around a third of American workers are employed by one of the 6m small firms with fewer than 100 workers, and another third are employed by one of the 980 large firms that have over 10,000 workers. But the long-run trend seems to be towards bigger companies. In a 1978 paper Robert Lucas of the University of Chicago documented how average firm size in America had increased over a 70-year period (see left-hand chart)...

... In the past 15 years the assets of the top 50 American companies have risen from around 70% of American GDP to around 130% (see right-hand chart). All of the top ten American firms have been involved in at least one large merger or acquisition over the past 25 years...

...  If size does not keep driving down costs, why do big firms keep expanding? One possibility is that they are seeking to boost profits not by driving down costs but by raising prices. Buying up rivals softens competition and enables firms to charge more...

Accelerated consolidation seems like a predictable outcome of very low interest rates and very high risk aversion [1]; an unintended consequence of economic stimulus and at the zero lower bound. If so, it's a winner-take-all result in a political-economic tax, law and accounting environment fashioned by large corporations for large corporations.

Size can be used to purchase competitors, but it has many more non-market advantages. Size allows, for example, the capture of regulators and the purchase of legislators. Those advantages allow corporations to grow beyond the bounds of classic microeconomics.

And that,  surprisingly, is how we end up with the unexpected triumph of central planning. 

Central planning triumphs because, even if we ignore regulatory capture and senatorial acquisition, corporations are only capitalist on the outside of the cell membrane. Inside the corporation there are no contracts, no currencies, and no markets. Inside the corporation, we have the hallmarks of Soviet central planning - goals and quotas and commissars and imaginary numbers and dictates from the central commission.

Central planning, of course, has its issues. Persistent and eventually fatal issues. When very large corporations fail though, they take a lot of things down with them. If there are truly systemic dysfunctions associated with corporate size, and if large corporations now subsume a large portion of national economic activity, the impact of these weakened monsters may be considerable. 

See also:

• The Modern Firm - a review 4/2012
• Why do corporations (firms) exist? - Coase and the theory of the firm 10/2010
• Gordon's Notes: Global finance and parasites 9/2009
• The origins of corporate mediocrity - promoting the best 7/2009 - game theoretic limitations to corporate competence
• The Corporation - what next? 8/2010 - links to prior posts
• Troubled capitalism: The corporate entity 8/2010 - science fiction socialists attack
• Ants, corporations and the great stagnation 12/2011
• Speculation: The corporate ecosystem and American stasis 11/2010
• After the crash: The future of the publicly traded corporation 8/2008
• Self sustaining entities: corporations and the Spanish Inquisition 6/2006
• Malice, incompetence, and happy accidents 5/2011 - Classic Dilbert
• Kristof: The market failure of CEO Compensation 3/2004
• SBA.GOV document on small business recover (pdf) 1/2012

[1] Given the way American health care has worked, an aging population may also support increased corporate size.

The Right will drop Climate Change Denialism within the next six months

My prediction for 2013 - the American Right will effectively drop Climate Change Denialism by April of 2013. They'll never admit it of course. They'll act as though they always accepted that human activity was warming the earth and that effete Liberals have been responsible for all inaction.

This is a good thing.

Some may wonder how this could happen so quickly. I used to think it would take longer myself but I've changed my mind.

A year ago I thought this would only happen after a crushing GOP victory, but since then we've seen the GOP make a complete policy reversal on immigration. We've seen Christian evangelicals purge all record of decades of anti-Mormon sentiment. We've seen a hard-right primary candidate morph into an Obama-clone, and his base act as though nothing had changed. We've realized that the GOP elite often believe what they say, and believe they've always believed whatever they now believe.

If you are not anchored to data, and to reality, then it's not hard to change direction. The  U.S. military's preparation for climate change disruption (and climate engineering wars) will be tied to budget requests, and it's hard for the GOP to say no to increasingly large sums of military money. The combination of military requests, electoral defeat, and Sandy are sufficient to precipitate radical realignment.

Don't be shocked if a Carbon Tax, in one form or another, makes it into the 2016 budget process.