Ripped from today's headlines

From the first page of the sports section of today's Chicago Tribune:

(In a story about the Masters golf tournament) Shark attack: The new groom (Mr. Chris Evert) and perennial bridesmaid (three second-place finishes) returns to Augusta for the first time since 2002 - and as the sentimental favorite

Yes, but who is it? The reader must guess.

And:

(In a story about yesterday's White Sox loss) The Sox were shut out 11 times last season, but they couldn't produce an extra-base hit after seizing a 4-2 victory on Jim Thome's dramatic three-run homer in Tuesday's regular-season opener.

This sentence is just a train wreck.

Any chance we can get John McIntyre, professional copy editor, to move to Chicago?

Goodbye, middle class

From about a month ago, Mark Thoma quotes an article by Stephanie Schorow:

Dramatic shifts in the U.S. labor market in the last 25 years are relegating older workers -- even those with a college education -- to lower-wage jobs, according to a research paper by MIT Economics Professor David Autor.

This trend appears likely to steepen in the current recession, as employers accelerate the rate at which they shed nonessential positions....

As the labor market "hollows out," workers who in a previous generation would have occupied middle-skill, white-collar positions must increasingly find their fortunes elsewhere -- either in high-skill, high-education professional, technical and managerial positions, or in less-educated manual labor and in-person service jobs. Autor's data indicate that since 1980, older workers with at least some college education are increasingly doing what was once thought of as "non-college" work, i.e. non-routine, but not highly skilled jobs.

I have certainly written before that the "college premium" is on its way downward, and this research supports my contention. We need to be cognizant of the implications of this idea, because it changes many of our long-held beliefs as to how we get ahead, and calls into question the commonly-held belief that more education is always better. I just don't know what it will take to get us to see that putting every young person on the college track and letting them fail into the vital (but non-academic) jobs is not a recipe for long-term survival.

Poor Larry

Richard Cohen in the Washington Post:

The recent headlines about Lawrence Summers had it all wrong. They announced with an implied breathlessness that he earned around $8 million last year -- much of it from the hedge fund D.E. Shaw. Here's what I would have written: "Man Takes More Than $7.9 Million Cut in Pay." Somewhere in the Diagnostic and Statistical Manual of Mental Disorders, the bible of shrinks, there should be an entry for "public servant." They are all, bless their hearts, a little nuts.

Dean Baker responds:

Arguably Richard Cohen is just best ignored as readership of the Washington Post oped pages rapidly approaches zero, but it is worth correcting the logic by which he decided that Larry Summers, one of President Obama's top advisers, is making a huge sacrifice by foregoing Wall Street millions.

All jobs carry a mix of pleasant and unpleasant aspects. Many people take relatively low-paying jobs, for example school teachers or social workers, because they believe that they are advancing a social purpose that they consider valuable.

Cohen does allow:

I don't mean to characterize these or other administration aides as the functional equivalent of Trappist monks, since they enjoy the attention, the power and -- above all -- the action. They are doing something substantive, important -- sometimes making life-or-death decisions and gaining, if they are lucky, a mention in a history book. It is not a life without any compensation.

I think both Cohen and Baker have forgotten something important, that it is the government service which, in many cases, enables the riches. To talk about Larry Summers' "sacrifice" without pointing out that he was one of Clinton's Secretaries of the Treasury is a major omission. Without his occasional forays into public positions, Summers stands as a major but by no means invaluable economist.

There is also the issue of access, that someone who has held the sorts of positions Summers has is more likely to have a voice in the halls of Congress. I obviously have no idea what he was doing that would induce a hedge fund to pay him more than $5 million last year, but it would be odd if some of that didn't come from his implied influence with politicians. And, when Summers is done working for Obama, there's a high probability that he will be that much more valuable, and able to command more money.

This is one of those classic fallacies of short-term thinking, similar to the idea that we can't restrict the pay of top bankers because "they'll take their talent elsewhere." That leads us to give failed financial wizards major dollars when they have most certainly not earned them, at least not lately. But no one is saying that their pay will be restricted forever, and the cachet that comes from turning around a bad situation will undoubtedly enhance their future prospects.

At least he won't mention me

Entertaining post by Jim Henley at Unqualified Offerings, Who Blogs Too Much? Henley contends that there are just some bloggers who are too busy. He captures well the challenge of keeping up with even those writers who are favorites:

Some of the people are folks whose writing I’ve long enjoyed but whom I’ve practically given up on reading because, when faced with a count of 30 items in Google Reader – since breakfast – the heart sinks and the mind quails. And if you’ve ever seen a sinking quail you know they make awkward, fluttering crashes. It’s much easier to just click the “Mark All Read” button and resolve to catch the next batch.

Wow, can I relate. I try to keep up with a fraction of the "big" bloggers, and Yglesias, Benen, and Sullivan alone are utterly exhausting. Then I fall behind, and Google Reader cuts off the posts after a month, and I feel that I'm missing something (even though it's just old news).

There does come a point where you kind of wish that these folks would put some general principles at the top of the page, then not write any posts that are covered by those principles (Yglesias: "I support congestion pricing and mass transportation" - that would eliminate some goodly percentage of his output).

Henley offers some suggestions of his own ("Most of you should average four to six posts a day"), but I fear nothing will work, at least not so long as blog posts = traffic = revenue.

The tragic comedy of visas

I've written before that I'm not categorically opposed to the H-1B visa program, that offering short-term employment to people from other countries in certain fields is not necessarily a bad thing. But I do insist that the various people who buy wholeheartedly into maintenance or expansion of the program be honest in presenting their reasons, and that just isn't happening. When Bill Gates testifies to Congress that the program needs to be expanded, he isn't speaking as a statesman or expert in immigration policy, he's doing so as a major stockholder in a company that will profit from that immigration.

We hear a lot about a study that claims that every H-1B application generates five to eight jobs. I've read the study, and it's rather poorly done. (You can tell that from the conclusion, which is preposterous; if it were true, we could hire interns to fill out applications that would never be approved, and, voila!, instant jobs.) It's a regression study, plain and simple, with no causative factors explored. I would guess that, were it to be redone today, we would see continued H-1Bs and a drop in technical employment. That result would be just as spurious ("H-1Bs Cost American Jobs, Study Says"), and just as dismissible.

I don't know what the "right" number of H-1Bs is, and neither does anyone else. Right now, it's 65,000 a year, plus 20,000 for applicants who have earned masters' degrees or higher. I see nothing wrong with attracting the best and the brightest (the term that is invariably used by supporters of the program), I just don't see the mechanism by which we ensure that we're actually getting them.

I also don't like the marginalization of those who question or oppose the program. There are a lot of concerns that H-1B fans don't want to address, and those peope tend to be powerful enough to demonize the questioners. If you want to discuss whether the program has the right limits, or whether it's being used as intended (the companies that use the largest number of these visas are Indian inshoring companies), or whether the workers are paid the "prevailing wage," or whether this amounts to a kind of indentured servitude that enriches corporate executives, you're either told that you don't understand the wonders of free trade, or that you're an immigrant-hating racist.

It's something I've written before, but it bears repeating. I, unlike many of the people who feel free to weigh in on this issue, have worked with quite a few H-1B holders. Some of them are very good; you'd want them on your team, in your company, in your country. Some of them are just terrible, and should be sent home and drummed out of the field. The vast majority of them are, well, OK, competent, but nothing special. And the percentages of the people who fall into these categories are not so very different from that of US citizens.

It's really hard to justify, in our current climate, the importation of the mediocre and the terrible when there are good, experienced workers out of a job. That doesn't mean that we should exclude everybody, just that we should find some way of distinguishing those who are truly outstanding from those who are not. It's not as easy as handing every college graduate a visa, as not every mope who drags him- or herself to four years of classes is necessarily best or brightest (this goes for Americans as well).

Rob Sanchez's Job Destruction Newsletter chronicles the issues surrounding this topic in thorough fashion. He is, probably, more anti-H1Bs than I am, but that's fine. What is scandalous is that the issues Sanchez writes about are rarely taken seriously by the CEOs and pundits whose single-minded focus is "American workers bad, H-1Bs good."

April 1 is the day that US Citizenship and Immigration Services begins accepting H-1B petitions, and Sanchez is staying on top of this. There is a deadline of five days for accepting these petitions, and you may be wondering what happens if the cap is reached in that time - how does our government determine these best and brightest?

I'll let Sanchez answer this:

In case you are wondering what happens after the cap is reached, the USCIS will hold a random drawing to determine which ones get visas to work in the USA, and which ones have to go back to India. So, in order to select the "best and brightest" whiz kids in the world who will be invited to take jobs that Americans either can't do or don't want, we will pull names out of a big hat.

Again, I'm not absolutely opposed to some kind of program like this, but random selection completely undercuts the contention of its supporters. We're not looking for the elite, we're just looking to bring in people to do our work. That is most certainly not the stated intention.

Note: I'm not ignoring one possibility. It is conceivable that proponents of the H-1B program have no problem with the random draw because they believe that any immigrant is superior to any American. If so, they should just say that, and clarify their thinking for us.

Review - Cross Country

Wow!

That's my initial reaction to the new Alex Cross detective novel, Cross Country (2008). James Patterson made his bones on the series featuring Washington detective/psychologist Cross in books like Along Came a Spider and Kiss the Girls. Those were riveting thrillers, Cross a fascinating character.

But Cross Country is dreck, amateurish and uninteresting dreck (what, you thought that was a good Wow? - no way). Here's the plot: someone close to Alex is killed; Alex gets mad, but can't stave off several more brutal killings; Alex decides to follow the killer to Africa; Alex is tortured; Alex gets out; Alex gets tortured; and repeat (if there's a reader alive who won't say, "Alex, don't go out for that run"...). There isn't a moment in this 406 pages that is believable or involving.

One hears about the James Patterson writing factory, how he churns out outlines at the beginning of the year, takes a couple for himself, parcels the rest out to other writers. While this may serve Patterson's goal of making big money, hitting the bestseller list several times a year, making appearances on television shows (ABC's Castle), it's done nothing for his writing.

To be fair, what I think happened here is that Patterson read about the horrific violence in Africa, particularly Nigeria, Sierra Leone, and the Sudan, and decided something needed to be done. And what better way of drawing attention to the violence, even genocide, than to involve his most popular character in it? But how do you get someone from Washington, DC, to sub-Saharan Africa?

A good writer would find a way that would be in the nature of the character and credible. Patterson didn't go that way, so Cross Country ends up being bad, so bad as to tarnish his main character. It will be hard to accept the Alex Cross we've come to know from the earlier books after witnessing his immense stupidity here.

I will say this, however. If you insist on reading this book (if only for completeness), it won't take long. The 406 pages feature so much white space and so many chapter breaks (there are 158 of them) that the book can easily be labored through in a couple of hours.

New places

I am not as diligent in managing my Other Places of Interest (move your eyes to the right) as I should be. There are places I go to that I haven't added, some because they're too ubiquitous to need my help (I'm talking about you, Sullivan and Yglesias), some because my feed reader obviates the need for me to click on my own places.

I'm also wary of doing too much pruning; it's easy to believe that some people are gone when they're only resting. One of my favorites, The Corporate Cynic, hasn't had any activity since last July; should I drop that? I don't, for two reasons: first, the stuff that's posted there is still worthwhile to read if you haven't seen it before; and second, these sites can come popping back into play at any moment. For example, I had pretty much figured that From ship to shore, an entertaining travel blog by a cruise ship hostess, was out of business when there had been no new posts in 14 months. But Jacky's back out on a round-the-world cruise, and she's posting again.

So I've added another couple this week, only fitting as I keep plundering them for posts. The Baltimore Sun copy editor John McIntyre writes a very entertaining and enlightening blog, You Don't Say, and I have added it to the list. Now you can easily go there directly instead of reading my rehashes of his work.

David Seaton is a journalist who now lives in Spain, and he has a pretty cynical (realistic?) take on the world. He expresses this on his News Links blog in which he chronicles the destructive trends he sees, and he spares nobody; he's not much a bigger fan of Obama than he was of Bush.

More math

Last Sunday I wrote a short piece on three concepts from mathematics that are frequently misunderstood, but have a great effect on our understanding of current events and what people are saying and writing about them. For the record, those are: so-called exponential growth, curve fitting, and nonlinearity.

It's occurred to me that I left one important math misunderstanding out, so I'll swing back and put in here. That concept is one from game theory, the idea of zero-sum vs. positive-sum vs. negative-sum games. These are words that are thrown around a lot, and, as invariably occurs when amateurs pick up the terms of a specialized field, they are abused a lot as well.

In short, the nature of the sum (zero, positive, negative) comes from the inherent nature of the game being played, and refers to the total resources of the players. (It's important to stress that the word "game" here has a specialized meaning, not restricted to fun activities, but to any human endeavor that has an uncertain outcome.)

Casino games are negative-sum games, at least for the players, because they never return as much to the players as the players put in. Two important points here: 1) Obviously, if one counts the casino as a player in the game, the money stays the same - it must be a zero-sum game - but it is customary to exclude the rule-setter as a player; and 2) The game is the whole system between player and casino, so it is not a refutation to point out that some players do walk away ahead.

Private poker games are, generally, zero-sum games. Each of five people walk in with $100, and, at the end of the evening, $500 walks out the door; we just don't know ahead of time in whose hands it will be. It is not impossible, but fairly unlikely, that everyone will leave with exactly what they came in with. That's why we don't see poker as a productive activity, even though in the usual case one or two people do walk away richer.

Now let's take the poker game, but add the idea that some wealthy person has decided to subsidize the action, say by throwing an extra dollar into each pot. If the players engage in 100 hands during the evening, the total they will walk away with will be $600. We have just defined a positive-sum game, one in which, theoretically, every player could come away better off (even if this doesn't ever actually happen).

Here's the thing. While everyone might come out better off, it's more likely that one person will walk away with $600, the other four all losing $100. Telling the latter four that it's a positive-sum game doesn't really do anything for them at all, they still lost all their money. In fact, they may even resent this game more, because there was an extra $100 up for grabs and they got none of it.

I'll give just one example of the way this is used in political and economic discussion, but there are others. Very often, someone will support free trade by saying, usually pretty smugly in an attempt to forestall further discussion, that free trade is a positive-sum game. The clear inference we're to draw is that everyone will be better off. But that's not what "positive-sum" means at all, it only means there will be more wealth in the system than there otherwise would have been - that's all.

It's the old question of growing the pie vs. splitting the pie, which is more of a political issue than an economic one. Free trade, for all of its pie-growing capabilities, is not "good" if it brings unacceptable distributional effects. Whichever you come down on that issue, it is clearly more complicated than citing "positive-sum" and sitting back, convinced the discussion is over. We need to be smarter than that.

Too much book-larnin'?

In the category of late to the party, I put a reference to an excellent Vanity Fair article by the reliable Michael Lewis, Wall Street on the Tundra. It chronicles, in painful detail, the way that Iceland messed up its economy. Essentially, the country became obsessed with finance, making scores of young people into untutored investment bankers.

There's too much here to summarize properly, you really have to read it for yourself, but, for me, a telling quote:

Back away from the Icelandic economy and you can’t help but notice something really strange about it: the people have cultivated themselves to the point where they are unsuited for the work available to them. All these exquisitely schooled, sophisticated people, each and every one of whom feels special, are presented with two mainly horrible ways to earn a living: trawler fishing and aluminum smelting. There are, of course, a few jobs in Iceland that any refined, educated person might like to do. Certifying the nonexistence of elves, for instance. (“This will take at least six months—it can be very tricky.”) But not nearly so many as the place needs, given its talent for turning cod into Ph.D.’s. At the dawn of the 21st century, Icelanders were still waiting for some task more suited to their filigreed minds to turn up inside their economy so they might do it.

Enter investment banking.

I do understand that one cannot compare Iceland to the United States (though Lewis certainly finds parallels to our high-flying world of finance), but it seems indicative of something that it is at least possible for a nation to have too much education. It demonstrates that the commonly-held idea that more education is always better is false, that its truth depends on a base that is considerably more complicated.

As I have pointed out before, the labor market is in many ways not a market at all. No one really cares if everyone has an SUV, or a big-screen TV, but we want everyone to be working. The employment market really only works in two cases: either there is so much demand for everyone that the supply mix is immaterial, or the demand has to pretty closely match the supply.

I would contend that, for a very long time, the first condition was true in America (generally, that is; I'm not forgetting the Great Depression). We were so productive and had such resources that we needed everyone, no matter what they did. And as classical economics would tell you, that situation leads to incomes being bid up, and that's just what happened, from CEOs to garbage haulers.

But our growth rate, for a host of reasons, is no longer what it was, even potentially. We're not China that can unleash pent-up demand and grow in the double digits every year. We've moved to a mature phase in which growth can come only from real innovation, and that will never be 10+% again.

So our labor market is in the second situation, that is, the people we're producing have to pretty well match up to the opportunities we have. That matching has to come out of the whole system we have. If we tell our young people (as we have) that agriculture is a dead end for the uneducated, so no one enters the field, but we still need, say, 1,000,000 people to work on farms, we can only get them from two places: from somewhere else, or from those who haven't succeeded in anything else.

That is the crux of the Iceland problem, that they can't paper over the mismatch by importing workers to do the fishing and smelting. There are structural reasons, most social, why that won't work. It also is not clear, if they did import workers, what Icelanders would then do, other than leave the country.

Now I hear the objection. What should happen, if Icelanders are extremely well-educated but have nothing to do, is they should become great innovators and creators. That's the assumption our experts make, that more education will lead our youth to make the future.

That's not wholly untrue. We have a far greater ability to assemble a critical mass of diverse-skilled workers to accomplish things, much more than does Iceland. If we overeducate some number of people, there is some probability that they will find something to do, and it may even be productive and lucrative (like Twitter...but I don't want to start on that).

But some is not 100%, and, in my opinion, it is possible to have too much education, and almost certain in specific fields. Which leads us to the Iceland case, one that I think serves as a cautionary tale for us. Instead of assuming that more education in any field is absolutely required to be a good thing, we need to start looking at the mix, and, perhaps, provide incentives for young people to enter vocations that we're actually going to need. More home health care workers, fewer software engineers.

Otherwise, we're left with the argument that supply inevitably creates its own demand, and we're pretty sure that's not an inviolable law at all.

New economics blog

Robert N. Stavins is a professor of Business and Government at Harvard, and he started a blog in February called "An Economic View of the Environment." Since I don't know too much about this subject, I'm going to follow it for a while and see what I can learn.

Stavins got off to an interesting start with a series of posts about myths concerning the way economists think (Mark Thoma pointed to these, which is where I found out about it). He cites four such myths:

1. Economists believe that the market solves all problems (discussed here)
2. Economists always recommend simple market solutions for market problems (here)
3. When non-market solutions are considered, economists use only market prices to evaluate them
4. Economic analyses are concerned only with efficiency rather than distribution (the last two here)

And as I'm reading these, and thinking that only in a fantasy world are these things myths, Stavins anticipates my feeling:

I want to acknowledge that my profession bears some responsibility for the existence of such misunderstandings about economics. Like our colleagues in the other social and natural sciences, academic economists focus their greatest energies on communicating to their peers within their own discipline. Greater effort can certainly be given by economists to improving communication across disciplinary boundaries. And that is one of my key goals in this blog in the weeks and months ahead.

This is good, but not sufficient. These myths apply to all economists, not just those studying the environment, and the communication needs to get out of the ivory tower. Because, whether non-experts are perpetuating these myths for personal reasons, or economists themselves are misrepresenting their work to fit a political orthodoxy, the reality must be exposed.

Of course, the reality is that economics has few definite answers, and that makes a lot of people uncomfortable. Nevertheless, if the profession is to maintain any credibility, it needs to be a lot more realistic about what we can expect from it.

Why the heck not?

A lot of media types are reacting negatively to the forcing out of GM CEO Rick Wagoner (he's comforted only by the $20 million retirement package). The argument, similar to that of the folks who argued the AIG bonuses weren't so bad, is that government shouldn't interfere this dramatically with the operations of a private company, and the CEO is just a fall guy for bigger problems; he alone doesn't make much of a difference anyway.

For the first objection, I would counter that GM (and AIG and...) is no longer a private corporation. If you can't survive without public money, you end up with obligations and accountability to the public at large. The day Wagoner hopped on the private jet to come to Washington with his hand out is the day he should have started to look around the office to see what he wanted to take home.

The second objection is, if anything, even more idiotic. GM has lost $82 billion over the past four years. Had they earned that much, Wagoner would be rolling in money and on the cover of every major news magazine. His leadership would be seen as significant.

At base, though, my feeling is this: why not get rid of him? If various pundits can ask the opposite, why bother getting him out, I can certainly ask the opposite. Had he any way to save GM, he presumably would have shown it well before now. Since the whole thing has become a crap shoot anyway, let's get another shooter in there.

H-1Bs and you

I suppose it's somewhat encouraging that The Numbers Guy (Carl Bialik) in the Wall Street Journal is at least writing something about the numbers surrounding the H-1B visa issue. (The link in the first sentence is to his blog post; his print article is here.)

It's not all to the good, as he tries for that false parallelism so common in journalism today ("Bob Franklin teaches his students that 2 + 2 = 5; some experts disagree"). As the subtitle in the print piece states, "Both Sides in the Debate Over Employee Immigration Policies Misuse Data to Advance Their Positions on the Issue."

He does expose the idiocy of Bill Gates' statement to Congress, "for every H-1B holder that technology companies hire, five additional jobs are created around that person," which comes from a "study" I have taken issue with before. That study, so flawed, seems to continue to rally the troops in favor of lifting the cap on H-1Bs. Bialik also points out that the study omits the biggest users of these visas, the Indian technology companies.

For balance, he tries to find fault with those who are against granting more of these tickets to employment. The evidence of statistical misuse is a lot more thin than the above, relying mainly on the premise that the number of actual jobs affected is less than some say. Citigroup says H-1Bs are "fewer than 1% of all employees," which may be true, but doesn't stand as much of a refutation of the larger issues.

Of course, the issue is way more complicated than this back and forth, and Bialik doesn't delve very deeply into it. But at least a mainstream publication is doing something more than parroting the standard drivel served up by those "statesmen" who, coincidentally, have something to gain from bringing in low-cost labor. Whatever statistics one wishes to cite, I'm still not convinced that we won't, someday, be looking at the H-1B program the way we now look (negatively) at the bracero program for agricultural workers of the 1940s and '50s.

The good, the bad...TIME edition

The current issue of TIME magazine is a disconcerting mix of good news, bad news, and something in between. The bad news is an article about four countries, Ireland, Spain, Taiwan, and Singapore, and how they're hurting in the current financial crisis. Ireland, for example, is suffering the bounce effect of globalization; many of the jobs that came there from the United States over the last decade are now moving again, to Eastern Europe. It would be good if someone could tell us where all the jobs will eventually land, then we could all move there - Abidjan, anyone?

There is little hope in any of these countries. Ireland hopes to use wind and water to get a toehold in renewable energy, Singapore's diversity is not protecting it against a systemic downturn, Spain is not certain of being able to employ anybody, and Taiwan may have to embrace the mainland to keep their economy going. Even countries that made many of the right choices are facing unpleasantness.

The in-between news is an essay with photos on the plight of Detroit. This once-proud city is now under a million in population, with a third of its land vacant. The items that cite its decline are by now familiar: the loss of jobs as the automakers have fallen, the corruption, the unemployment, and on and on.

The article tries to present hope, but I find it difficult to see how turning an auto body plant into a haven for artists will stem the tide. There are new hotels, and the state is offering massive tax breaks to Hollywood; various Detroiters are quoted as saying that the city is a canvas upon which new and wondrous things can be wrought.

But even in a piece that wants to fill us with optimism, the news is pretty bleak. Here is the end of the story:

As America's 11th largest city tries to mount a comeback, locals battling lean times are far from the only stakeholders. "The problems facing Detroit are definitely going to be cropping up in cities all over the country," says Hollander. "The kind of devastated postindustrial landscape we associate with the Rust Belt is starting to creep into the Sun Belt and may start to become a universal problem." Says Covington: "The rest of the world is just catching up to the hard times we've been experiencing." Which is why the world is now watching Detroit with interest--and waiting to see if it finds a way to rise from the ashes.

Pretty thin evidence for a potential comeback here.

The good news is the cover story, written by novelist Kurt Andersen. The cover features a red RESET button and the text, "The End of Excess: Why this crisis is good for America." The subtitle inside ends, "How a reset can make America a saner, better place."

And I've now told you pretty much everything you need to know about this think piece. It's the standard "we've put ourselves into a big hole, but what will emerge will be brighter and more wonderful than ever." Yes, Andersen cites the ant and the grasshopper. There are also pop-culture swings by Homer Simpson (old bloated America - bad!) and Road Runner cartoons, references to silver linings and exhortations to continue thinking big grand thoughts. Our young peope will move away from the crass, money-making interests of their elders, and dedicate themselves to the public good. We'll be able to do housing right, avoiding our soul-crushing, resource-wasting suburban sprawl. And, as an extra bonus, we'll stop paying attention to Paris Hilton.

Finally, somewhere on the fifth page of five, Andersen gets more serious and confronts some of the hard reality. And you'll be happy to know that even our putative economic competitor doesn't have to be a problem:

Twenty-first century China is the greatest country of the 20th century. Muscular industrialism gets you only so far. Further increases in productivity and prosperity require ingenuity and enterprise applied at the micro scale — digital devices and networked systems, biotechnology, subatomic nanotechnology. As China and other developing countries finally achieve the industrial plenty that we enjoyed 50 years ago, the U.S. can stay ahead once again by pioneering the next-generation technologies that the increasingly industrialized world will require.

That's right, it's more of the idea that a country that can find no jobs for people who want to work in technology will somehow take the lead in developing the next big thing (other than Twitter or Facebook).

The other pillar of Andersen's strategy is that we need to take in more immigrants. He does qualify it by saying we need to, "to encourage as many as possible of the world's smartest and most ambitious people to become Americans." That we have no idea how to identify which of the people who want to come here are smart and ambitious does not deter Andersen in the least.

So what this boils down to is a cleverly-written article right out of the Noonan/Friedman handbook. All inconvenient realities, any recognition of the ways in which the world has dramatically changed, the need to temper balloon-headed thinking about "American ingenuity," these are swept away in a tide of feverish excitement about our "reconstruction and reinvention."

Very little of it is convincing; cheerleading will not get the job done (see Detroit above). Even if this time did present an opportunity to get real about what America can be, we're unlikely to do the hard work necessary. One need only listen to the various leaders, who are pretty well unanimous that we will get through this time, then return to the fervid, profligate ways we "enjoyed" before.

On second thought, TIME doesn't have any good news at all...

"Can-do" attitude

I don't know exactly how I feel about what actions we should take concerning the Bush-Cheney torture activities. Truth commission, war crimes trials (if The Hague doesn't get there first), investigation followed by censure - which choice is best is something on which I have not been able to reach a conclusion.

Our nation has trouble dealing with bad things done in our name or by our representatives. White people certainly benefited from the destruction of the indigenous population, and our attempts to make it right have never seemed satisfactory. Ford pardoned Nixon, reasoning that the country had already been through enough; I can't say if the catharsis of a trial would have made things better.

The Clinton impeachment showed the alternative at its worst, as it devolved into a partisan witch hunt. (I should say more about this, because I think quite a few people shared my opinion. The Monica Lewinsky business was, yes, a personal matter that did not merit impeachment. But it was reprehensible for this activity to take place in one of our hallowed national places, the Oval Office. It demonstrated Clinton's recklessness and arrogance, and we should never forget that.)

So I don't have anything to offer as to what we should do about the perversion that was Bush-Cheney policy. I have this vague sense that we can't just leave it as it is, let it go while we deal with our pressing problems. To see these two men strutting around, Cheney in particular, proudly defending one of the shameful periods in American history, is an offense to everything I've ever believed was right about this country.

On the other hand, to allow the real business of the nation to be sidetracked while a Democratic Congress postures for the people back home seems a poor solution also. Letting the likes of Pelosi and Reid, sham public servants that they are, use such a proceeding as a means of gaining political capital disgusts me.

For now, then, I'll leave the discussion to others. Andrew Sullivan has written a lot about this issue, apparently believing that no stone should be left unturned in determining the truth and bringing everyone involved to account. In a Sunday post, he again takes up the case of Abu Zabaida, someone we tortured though we had evidence that he was a low-level al-Qaeda functionary. Apparently, whatever useful information he had, essentially names, he gave up before the torture actually began - there was no plot failed as a result of our "interrogation."

[Here's one thing I never quite understand. If you were running a terrorist outfit, and someone with critical information disappeared, wouldn't you then change your plans? "Hey, Osama's not in his cave any more. Well, maybe he's just on vacation, let's go ahead with those attacks exactly as planned." I know that some would say you extract the information before anyone knows he's gone, which is inevitably the situation on 24, but it doesn't appear that our post-9/11 procedures were restricted to that.]

Sullivan quotes an article from the Washington Post:

As weeks passed after the capture without significant new confessions, the Bush White House and some at the CIA became convinced that tougher measures had to be tried. The pressure from upper levels of the government was "tremendous," driven in part by the routine of daily meetings in which policymakers would press for updates, one official remembered. "They couldn't stand the idea that there wasn't anything new," the official said. "They'd say, 'You aren't working hard enough.' There was both a disbelief in what he was saying and also a desire for retribution -- a feeling that 'He's going to talk, and if he doesn't talk, we'll do whatever.' "

I think I understand the mindset that gave rise to this attitude. George W. Bush was in so many ways the epitome of a bad CEO. (This isn't surprising in that he was, in fact, a bad CEO.) I've worked for a few (fortunately, very few) people who adopt a credo that any failure is the result of not making sufficient effort, that something not getting done can be overcome by more hard work.

There are, of course, times when that's true. There are, of course, other times when that's not. A great deal of wisdom is understanding the difference.

Some things are impossible or infeasible. You can push someone to create faster-than-light speed travel by next week, and it still won't happen. You can insist on extracting information from someone who doesn't have any, and you may get information, but it won't be true.

When one works for someone who doesn't understand this, the negative effects go beyond the wasting of time. It creates a lack of trust up and down the chain of command. Imagine being the person who had to go into the Oval Office and say, "This guy clearly doesn't have anything more to give," and to be told, "You're wrong, go back again." Your boss is saying, in effect, that you're an idiot who doesn't know his work, doesn't have the ability to distinguish between the hard and the impossible. I can tell you, that makes for a very corrosive work environment.

Participation and democracy

John McIntyre at You Don't Say has begun another fascinating thread, which started in response to a blogger "rejoicing in the death of the newspaper." (McIntyre's second post on the subject is here.) David Eaves essentially makes this case:

• Participation leads to greater democracy.
• Old media is not participative, it's presented.
• New media is participative.
• Therefore, new media is more supportive of democracy.
• So, we should be happy that new media is replacing old media.

McIntyre does such a good job of dismantling this argument that I should probably leave it alone, but I won't.

He questions the first point, arguing persuasively that it is "accurate information" that leads to greater democracy. This seems right to me; I've never actually believed that mere participation was sufficient for democracy. I'm not one of those who thinks voting should be mandatory, that the votes of those who vote for the Irish name (or whatever criterion they use) should count as much as those who spend time evaluating candidates and issues (not that there should be a test, just that showing up is as close a proxy for knowledge as we're likely to get).

It's almost too easy to point out that participation as measured by blog comments or Wikipedia is a false democracy, as blather (or, all too often, hate) tends to permeate the "discussion":

Look at the news stories on sites that permit comments — a story followed by, say, 157 comments. After the first dozen, the responses become duplicative. Cranks arrive. If the comments are not mediated, there’s an excellent chance that the “conversation” will sink into vulgar abuse and the racists and anti-Semites will crawl out into the sunlight.

The second point above seems slightly more persuasive in an era of Fox News and other overtly partisan outlets. The profit motive has too often replaced judgment, but, and I think McIntyre would agree with me, the solution is not getting rid of old media, it's raising our expectations of it. He effectively argues that the old system has served us quite well, for the most part:

It has been the task of the newspaper to perform the functions necessary to permit such reflection and choice: investigation and reporting, selection of significant information, verification of its accuracy, and publication in a clear and compact form. And despite the sneers at our outdated 19th-century industrial model, with reporters answering to assigning editors and copy editors independently examining the texts, we can still do the job tolerably well.

I'll add one more thing: the argument laid out by Eaves depends on a hidden assumption, that new media and old media are independent, that one can replace the other with no loss. That is nonsense, if old media disappears, new media will have little raw material with which to work.

[I flipped McIntyre's title, Democracy and Participation. I'll leave it to the reader to determine what percentage of that is homage, what percentage laziness.]

Health care jobs

Let me add a bit more to my argument that President Obama, for all his good intentions to control health care costs through computerization, is missing some of the more important aspects of the transition. As I've written before, there seems to be a theory at the White House that pumping money into getting medical records from paper into the computer will: cut costs markedly, decrease life-threatening errors, and create (or, in the strange and unquantifiable term, "save") jobs.

I'll dispense with the second item first, if only to say that I have no idea to what extent computerization will save lives. It's pretty easy to posit situations in which that will help; for example, in caring for an elderly person who can't remember their drug sensitivities. This all sounds good, to imagine a system in which test results go directly from the lab into the Multivac, available for all downstream health providers to see.

Of course, there are also some massive security and policy issues, and I have no idea how we'll deal with that. As it is, we go to the doctor's office and routinely sign our HIPAA form, but with only the vague sense that we're giving access to the people in that office. How will we feel when we realize that we're letting anyone who has access to the system around the world see the details of our care? And we'll have to do that to make some of the more rosy scenarios come to pass. If we want the French paramedic to be able to treat us optimally at the scene of our car accident, they need to be able to look at our health history. (In a world where we allow offshored mortgage processors access to our financial statements, maybe this isn't so much of a concern.)

To put a financial value on this right now is almost impossible - our data is weak when it comes to understanding just how many people are injured or killed due to a lack of the information that would presumably be available. And I need to stress that, all things being equal, I'm very much in favor of this kind of initiative. I'm just trying to explore whether we can expect all the gains that have been promised.

As for my first and third points, at first blush they seem incompatible. We all know that the major component of any business expense is personnel (at least that's what we're told when the heads roll). If we're cutting costs while preserving or expanding jobs, then there must be some magic expense that's hidden in the health-care system that has nothing to do with people.

Because the money that will be saved comes directly from letting go of the people who handle the paper. I go to my doctor's office, and there are a whole lot of non-doctor people drifting around, more than seem necessary to answer the phones or take my blood pressure. Of course that's because many of them are handling paperwork, whether it be patient records or insurance forms. Automate that and, for better or worse, those people are gone.

The point might be raised that these people will transition into the new health care jobs that will be creating by this vast modernization project. And here's where the details get in the way of the theory.

I've been involved with several projects that take a paper-based way of accomplishing something and put them on the computer. Here are the jobs that come during this process: subject matter experts (SMEs) who create the specs for the new system, designers and developers who create the new system, and clerical support that somehow gets old records into the new system. There are some ancillary jobs, managers and testers and the like, but these would be the three major categories.

So we have two questions: where will the "old" people fit into this process, and who exactly will get jobs in each of these categories, that is, how much will this big-P project actually enhance the employment situation for Americans?

Unless there are some closet programmers in the ranks of the support staff at my doctor's office, their new jobs will have to come as SMEs or scanners. But there is no way that the staff to SME ratio is one-to-one, the SMEs will tend to come from the ranks of the most senior office staff. Because this is to be a national system, there will be relatively few experts enlisted in setting the specifications.

And few of these trained staff people will want to move to the scanners. That will be mind-numbing work, whether it consists of literally scanning in massive paper files or retyping a doctor's chicken scratches. (This is also the place where compromises will be made for time and cost considerations. Dead people are unlikely to get computerized records, and there may be an attempt only to get the last 10 or so years into the system.)

Furthermore, these jobs will either pay very little, or they will be outsourced (or, maybe, offshored?). This is public money, so there will be a lot of pressure to "Let Brown Do It," to ship boxes of medical records to a concrete-block building in North Dakota (or Bangalore or Manila) to be converted into a new file format.

Essentially, these jobs will be lost in the interests of efficiency, and that might be a good thing in terms of productivity. But it seems at odds with one of the major goals of the program.

Here is the place where I can reiterate my earlier point that even the hard-core IT jobs are unlikely to create a job boom for Americans. The offshore BPO (business process outsourcing) firms are reportedly already buzzing around this business, and I really don't see how we'll be able to withstand the cost differential. If I had to guess, I would say that very few jobs will actually be created in the U.S. to build the system. There will be a few - UPS may be able to add some people, and we'll need some technicians for installation and training - but it isn't even clear that the number will come close to the jobs that are lost.

Once again, we should embark on this effort; it only makes sense that a modern country has modern medical records, and there will undoubtedly be gains in safety and efficiency. But let's not fool ourselves that this can lead to a jobs boom, there is absolutely no evidence for that.

[Note: I have omitted other issues here, such as legal liability and the false certainty of "it's on the computer, so it must be right." These are potentially large, absolutely non-trivial, and perhaps they'll find their way into another post one day.]

A math primer

Not a very light topic for a Sunday, perhaps, but I like math so this post seems like fun to me. I'll try to keep it brief, but I think I need to pull together some of the myths that drive thinking about mathematical topics. I've written about one or more these before, but it's important to keep them in mind.

1) "Exponential" growth

One reads all the time about something that's experiencing exponential growth. Cell phone penetration, chip utilization, and so forth: many things are seen as following an inexorable growth of growth tendency.

Of course, that's not true, not possible, and I wrote about it about a year ago. But it bears repeating. Growth in any real situation more likely follows the logistic curve, the elongated S that features slow growth at the beginning, apparent exponential growth in its maturity, then a flattening as some kind of natural limit presents itself.

There is an upper limit on the number of cell phones we can possibly have; we can differ on that limit (I'd say 30 billion is higher than we will ever see), but it exists. Therefore, any business model or op-ed that depends on "exponential growth" is bound to be wrong. More importantly, at the middle of the S, the rate of growth begins to slow down. Finding this inflection point is vital to understanding the profile of the market in question.

2) Curve fitting

Much of the current discussion about what kind of recession we're having depends on historical precedent. Economists take what happened in the past and extrapolate it to the present, despite a lack of relevant data points (is our current situation like the Great Depression? Who knows, we've only had one?).

This attitude is typified by a recent post from Kevin Drum, where he argues:

If you want to know what's going to happen in the future, you should pay attention to what's happened before...."This time it's different" is probably the most dangerous phrase in the world. It's especially dangerous because every once in a while it's true. But not often.

Drum is arguing for a kind of determinism that is actually more dangerous than what he's saying. I'm not contending that one should accept convoluted arguments to ignore what is patently obvious, just that most real-world models are complex, made up of many components. Ignoring changes to assumptions or conditions has its own perils.

Some simple math. If you tell a student to fit a curve to data points (1, 2) and (2, 4), most will pretty easily come up with y = 2x. But here's what I can do, I can fit a slightly more complicated curve to these points: y = 2x + k(x - 1)(x - 2), where k is any number I want. This is a family of parabolas that pass through the two given points, but I can make one pass through any other point I want, simply by choosing the right k. (And there are literally an infinite number of other curves I could fit, including circles and squares and triangles.)

My point is, the fewer data points we have, the less likely we are to get a model that predicts anything. If I give you those two points, and ask you what y will be when x = 3, you may say 6, but I can make a model that will give any answer I desire. We need to be quite wary about using the past to predict the future.

3) Nonlinearity

[I'm going to be brief and imprecise here, give just enough detail to make my point.]

Nonlinear systems are, roughly, any real system of any complexity. They feature components that depend on one another, that are changed by the changes they themselves generate in other components. Weather is one such system. I suspect the global financial system is the same.

The main result of the study of such systems is that small changes in initial conditions can bring about huge changes down the road. One person decides to go out for a drive in Iowa, and the extra heat generated by burning the gas brings about a monsoon in Bangladesh. (That's an extreme example, and there is evidence that some systems, including weather, feature dampening effects that keep such extremes from happening, but the math is consistent with that.)

Therefore, it's virtually impossible to get a precise forecast of what any real nonlinear system will do. I would wager that we'll never have absolutely exact weather forecasts ("that corner will be 74º with 48% humidity and a NNE wind at 7.6 mph a week from Thursday").

By the same token we can't really predict what, for example, a given stimulus package will do. It is not impossible that an $800 billion package will work perfectly, creating jobs and improving GDP, while $801 billion will force the economy into a chaotic condition that will be worse than what we have now (and, oddly, $802 billion might lead to a perfect result again). But we don't know that ahead of time, and we can't.

So we need to take all the certainties and forget them, and just hope that we will move in the right direction. But we also need to be realistic and understand that...no one really knows.

Happy happy joy joy

There continues to be a prevailing attitude that a lot of our problems are simply the result of pervasive pessimism, that, if we could just perk up and feel good about what's going on, we would see a resurgence of financial strength and national pride. The media comes in for particular criticism here; they insist on talking about layoffs and unemployment and housing prices and dead 401(k)s, and they bring everyone down, and that creates a vicious cycle that makes things even worse.

Rob Horning discussed this in an item that ran about a month ago, where he parses an op-ed by Robert Shiller that replicates the idea of his book (with George Akerlof), Animal Spirits (which has given us one of the more blogged phrases of the past month), that "the Depression narrative could easily end up as a self-fulfilling prophecy." Horning:

If people invest, or spend, not out of strict need or want, but in accordance with how they feel about wanting, then the implication is that the media owes society some happy talk about the economy to keep up the “animal spirits”—Keynes’s term for the irreducible ambition that drives entrepreneurs regardless of their probability of success.

Akerlof has gone so far as to argue that government's role is one of countercyclical confidence: that it cut down people's confidence when times are good, and pump us up when times are bad. Horning quotes Will Wilkinson, who is not very pleased with this reasoning:

I’m extremely suspicious of what strike me as intellectually contentious, ad hoc interventions into the economy aimed at expectation management. Countercyclical economic mood-control initiatives seem to me inconsistent with the maintenance of a general framework of stable rules — that is, they don’t take the importance of expectations seriously enough — while also smacking of illiberal state propaganda.

A skeptical Horning concludes:

Delusional thinking about credit risk got us into this mess, so now the only thing to get us out is more widespread and more doggedly institutionalized delusional thinking? All right then! Not sure how this would help the “trust” and “faith in the system” components of animal spirits, but oh, well. Maybe if we perfect the dissemination of these delusions, we’ll be free at last from those ultimately irrelevant real economic conditions, and the state can just drop in to tell us what condition our animal spirits should be in.

I liken the Shiller-Akerlof attitude to our mental model of how football works. Conditioned by years of "Win one for the Gipper" and "Do you believe in miracles?," Americans have come to believe that any situation can be overcome by the right frame of mind and simply "wanting it more." All the economy needs to come back strong is the right halftime speech, and we will all be inspired to do anything necessary for success.

This seems compelling until we think about it for, say, 15 seconds or so. A football team made up of 160-pounders can be as inspired as we want, but, barring massive injections of PCP, is going to be crushed by the 300-pound linemen of a major college or pro team. No amount of "animal spirits" is going to change the reality that facts are facts. If you've lost your job, confidence doesn't permit you to believe you still have one.

Anyone who's worked in business for a while has seen an example or two of the person who brings very little competence, but a whole mess of confidence. Enthusiasm is confused with ability; that's possibly the result of management's own experience, that projection of a certain image can bring real results, whether in sales or the conference room.

But that should have nothing to do with hiring a programmer or an accountant, jobs where skills actually matter. You can trump up a theory that a positive attitude helps any team, and that may be true in the short run, but, eventually, management's regard for someone who can't actually do anything but be peppy corrodes the team.

The same is true of the economy as a whole. To say that everything's fine, just ignore those pesky media reports or the for sale signs, is to brand yourself as a nincompoop. It's possible to project long-term optimism while being realistic about today; that's something, I think, that Obama has done quite well (though I personally still find his outlook overly rosy). Irrational optimism, optimism that is at odds with actual on-the-ground, is foolish, and the purveyor of such ideas should not be listened to.

I have failed

I know that you, Gentle Reader, look to me for my opinions on issues of globalization. As such, I imagine that you are all anticipating my take on yesterday's Charlie Rose show, not the part on female desire, but the interview with Nandan Nilekani, co-chair of big Indian offshorer Infosys, who has a new book, and Thomas Friedman of the New York Times, who has the same old books to plug.

I wanted to watch and listen and give my impressions, to offer up some insights as to what I saw as flaws in the logic, on how these high priests of globalization would discuss changes to the model in light of the world financial crisis. Of course, I didn't expect them to take up basic questions of how American politicians justify visa policy or offshoring, but I could hope.

And then they launched into the interview, and the first thing they talked about was how Nandan gave Tom the idea for his Einsteinian revelation that, THE WORLD IS FLAT. It's a story that sums up the work of Friedman so well that I recreate it here (from the transcript on Rose's web site):

CHARLIE ROSE: The least. Just quickly, let’s review that. What happened? You were in India.

THOMAS FRIEDMAN: And Nandan was actually out of the country when I came over. And we had shot about 60 hours of film over 11 days. And over those 11 days, I was getting this sinking feeling that something really big had happened with globalization, and I had missed it. But I couldn’t quite put my finger on it.

And the last interview was with Nandan. He just came back. And the film crew was setting up in his office. I was sitting on the couch outside. Nandan came out, we sat down, I took out my laptop, as is my habit, and started interviewing him.

And at one point, Nandan said, “Tom, I’ve got to tell you, the global economic playing field is being leveled.” And it all just sort of -- I said global economic -- leveled -- and I wrote down in my notebook -- and we did the interview. But that just stuck in my head. And in the Jeep on the way back to the hotel, I just kept going over the global economic playing field is being leveled. I said the global -- but Nandan said global economic playing field is kind of being flattened. And then it just sort of popped into my head that what Nandan Nilekani, India’s premiere engineer-entrepreneur was telling me was that the world was flat, and that was a book.

And then we actually went over to his house that day. It was your birthday, I think, right?

You know, historians of the future are going to be so lucky. We have little idea how Tolstoy came up with the concept of War and Peace, but we have in laborious detail the story of how Tom Friedman came up with the flat world idea. And we will also know that Friedman was a very important man, because he dealt only with very important people, and was even invited to their homes on his birthday.

I don't want to belabor the infelicities that define the "thought entity" that was Tom Friedman (but I can't resist one; as David Smick showed in his book, the financial world is curved, even crooked; Friedman's flat world is a vinyl sheet laid on a non-smooth underfloor, and we're seeing the results of that now - it's a lousy analogy, and I'm royally tired of it), but, as he launched into this story for the umpteenth time, I couldn't take it any more. I grabbed the remote and turned to something, anything else.

You see, I could just tell how this interview was going to go. Friedman, there for no appreciable reason other than to give his NYT bestseller cred to his buddy's new book, was going to butt into the conversation whenever he could with yet another faux insight, and Rose would let him get away with it. Nilekani would likely get very little time to talk about his book, even though Charlie would hold it up a couple of times. The viewers would gain no insight into, well, anything. Then Charlie, Tom, and Nandan would head out to one of New York's finest steakhouses for a big piece of beef and a couple of bottles of wine, while Charlie and Nandan would wait around for another Friedman gem ("It's interesting that beef and wine are both red, and businesspeople love both of them, but they hate it when their numbers are in the red - there's a book there, and I'll call it "The Redding of Business.")

In the interest of serving my public, I went back today and checked out the transcript of the interview (mercifully, there isn't one of the steak dinner). And it went just as I said. Nilekani made some banal observations about the challenges facing India today - his book may be better than that, I don't know. Any attempt to dig deeper was interrupted by Friedman's usual drivel (six-lane superhighway, market and Mother Nature hitting a wall, sustainable living, we're not too big to fail - all the usual stuff that real people have been seeing for years, but comes as revelation to this Pulitzer winner).

What's sad is what's always sad. There is a real opportunity to ask Nilekani some tough probing questions. They don't have to be adversarial, they just have to be firm, recognizing the challenges that confront these two nations. Maybe he's dealt with them in his book, maybe he hasn't, but they are questions that won't be asked on any broadcast outlet in this country other than, possibly, PBS.

And Charlie Rose missed this chance, so busy was he offering hospitality just short of cigars and brandy. But it isn't polite to let Friedman ramble on in the same vein as he always does, it's a disservice to the viewers. Rose needs to emerge from what I like to call his Friedman fog; if Tom's presence isn't a help, get him off the show.

Martha and Bernie

I try to be philosophically consistent, or explain when it doesn't appear so. For example, I support making education better, but don't believe that we can try to educate everyone to the same level and then be surprised when we fail to see the outstanding kids do as well as we need them to do. Is this inconsistent, that education needs to be better but, for some students, we need to get them off the college track? I can see where some might think my logic doesn't hold up, but I've laid out my thinking in several posts and ask only for people to try to follow it, then evaluate it.

(At the same time, I don't find it consistent that people say we need to pay teachers more, but we also have to standardize the curriculum; so we're paying more money at the same time we're making teaching easier.)

Crises often present opportunities for great inconsistency. The problems are so large, and, clearly, no one orthodoxy is up to the task of making them better. It might seem incongruent to believe simultaneously in the power of the free market and in the Obama programs; if you believe both those things, you need to be prepared to explain yourself further.

David Letterman is going through such a time himself. He has been merciless in his treatment of "investor" Bernie Madoff, with a barrage of jokes and skits that can only make one believe that Dave has a few million dollars with the faux financier.

At the same time, better living guru Martha Stewart continues to get gentle handling on Dave's show. He has joked repeatedly (and somewhat tediously) about how, first, we can feel safer now that Martha's locked up, and now, how we should be worried that she's back on the streets (chortle, chortle).

But these crimes come out of the same sensibility. It's pat to argue that Bernie victimized people, while Martha's offense was "victimless." But, if you were one of the people who bought stock while tipped-off Martha was selling, you lost money just as surely as if you wrote Bernie a check. In fact, in some ways, her crime was worse; each of the people who signed up with Bernie had every opportunity to do due diligence, and they didn't. The other sides to the Martha trades had every right to believe that they possessed requisite information.

I'm not saying that the crimes were entirely proportional, and the relative prison terms strike me as roughly correct. But it's a much harder argument to claim that one case was unfair, the other fair. For both Martha and Bernie, the attitude of "something for nothing" was present, it informed their actions. And there were people on the other side of those trades who were hurt. Just because it's easy to see one group and not the other does not mean that we can't be bothered by both cases, and it doesn't mean that one perpretator should escape punishment.