Thursday, December 31, 2009

Wall Street Is Next

by Richard Crews
The picture we hold of the economic aspects of community life has propelled civilization to new heights. What new heights? Communication, transportation, and trade have become worldwide and facile. Science and technology have enormously expanded our understanding and manipulation of the natural world. Human rights have become enhanced, and their abuses more subject to scrutiny and outrage. Civilization has indeed advanced to new heights in recent years, and its advance continues.

What are the modern economic aspects of community life on which the advance of civilization depends?

Many people who labor--who till their fields, or build or transport or otherwise expend their life energies for the shared benefit of others--largely consume their rewards: they and their families eat, live in, wear, or otherwise dispose of the benefits that accrue from their life activities.

But as communities have become larger and more complex, they have developed communication and protection mechanisms that enable people to labor in increasingly varied and specialized ways, thereby multiplying their productivity or "reward ratios," that is, increasing the amount of value they reap for the efforts they expend. Thus many people have become wealthier.

As people become wealthier, what lies beyond survival and maintenance? Savings (and increased safety, for example protection against a poor harvest or ill health), comfort (and luxury), and expanded influence (that is, power); beyond these also lie expanded identification with aesthetic and humanitarian values (manifested economically as patronage and philanthropy).

Some institutions of society function explicitly to leverage wealth. For example, people put money in banks so it can be pooled and loaned out to others. Similarly, when people buy stocks, they essentially lend their money to entrepreneurs so those entrepreneurs can expand the scope and cleverness of their activities on society's and investors' behalf.

The custodians and administrators of institutions that leverage wealth must earn our trust. But, just like us, they are human beings, so they are subject to greed (and other distortions of their activities from self-interest) and complacency (boredom, and short-cutting for convenience). Therefore, their activities on our behalf must be transparent, that is, these individuals must keep clear track of what they do (by using standardized accounting procedures) and be responsible (or "accountable") to empowered regulatory authorities who are independent (in other words, who do not have the same conflicts of interests as the people and institutions they oversee).

Leading up to the financial debacle of late 2008, several of these basic principles were ignored or violated. Accounting (for example, of credit default swaps and of derivatives of derivatives) was not clear and available for regulatory scrutiny. Regulatory (including rating) agencies had conflicts of interests--in some cases they were supervised by the very people and organizations they oversaw; in some cases their fees depended on the decisions they made. Moreover, they were under-staffed and under-empowered, and in pursuing their responsibilities, they were under-aggressive; people wanted to believe that markets self-regulate (for the convenience of complacency); optimism and denial reigned.

In July 2009 the Obama administration proposed a series of corrective regulations--increased transparency of accounting; increased staffing, empowerment, and autonomy of rating and regulatory agencies; requirements for increased capitalization and decreased leverage; etc. However, over the ensuing five months there were two significant developments--Congress became preoccupied with health-care legislation (which Obama at first insisted they complete before leaving for their August break), and the financial sector recovered--even boomed--following federal bailouts and hand-holding.

As a result no substantial financial regulatory legislation was passed, and now that return to the problem is imminent, banks and other financial institutions are in a reawakened, restrengthened position to resist any significant reform. Moreover, now that the 2010 elections are on the horizon, Congress is increasingly susceptible to campaign-finance arm-twisting.

This problem--that is, passing legislation to provide expanded financial regulations--will present an interesting and severe next challenge for the Obama administration.

Tuesday, December 29, 2009

Health-Care Reform--Light and Dark Sides

by Richard Crews
Health-care reform legislation (now in conference to reconcile the House and Senate bills) is a great step forward. Although we do not know the final details, it appears--

(1) It will be illegal to deny Americans health-insurance coverage based on pre-existing conditions.
(2) There will a cap on an individual's out-of-pocket health-care expenses.
(3) Small businesses will be able to buy health-care insurance from a national exchange, giving them increased buying power.
(4) A new benefit will allow workers to buy into a plan that will provide them a cash benefit if they become disabled and need in-home care.
(5) Access to Medicaid will be increased to people making 130% (or perhaps 150%--the two bills differ) of the poverty level.
(6) There will be limits on insurance company profits, requiring that 85% of revenues be spent on delivering health care; if insurance companies exceed these limits and more than 15% goes to administrative expenses, advertising, lobbying, profit, etc., the companies would be required to pay rebates to those they insure.
(7) The Senate bill requires that insurers cover preventive health services such as immunizations, colonoscopies, and HIV testing.
(8) Insurers would not be allowed to rescind a policy because someone gets expensively sick.
(9) State and federal regulators would review any and all rate increases and determine if they are justified.

These requirements represent a robust set of health-care insurance reforms. But there are some problems in the two bills:

(1) Most importantly the Senate version contains no public option which is an important key to establishing competition between insurance companies (to provide greater choice and lower premium costs). The final version will not have a public option, although it will have important (though watered-down) substitutes.

(2) Both bills require most people to get health insurance (which assures better continuity of ongoing care and takes enormous pressure and cost off of emergency services) but even with the subsidies that are proposed, some of the poorest families might be required to pay up to 20% of their income. The availability of government subsidies for the poor should be fixed.

(3) Both versions impose archaic restrictions on women's health care. This has been a long battle--since the Middle Ages really, but coming into acute focus in First World countries over the past few decades. Childbirth is still the number one cause of death in both mothers and children around the world, and large "families" (with not 2 or 3, but with 6 or 8 or 10 children) is the main cause of hunger, the malnutrition diseases (the greatest causes of death in childhood), and persistent inculturated poverty (including lack of education, career opportunities, and even-handed justice).

(4) For extra funds, the Senate version taxes super-fancy health plans; the House version imposes a small income tax surcharge on the very wealthy. I believe both approaches should be employed.

(5) Insurance companies--for curious historical reasons (plus expensive lobbying)--are still exempt from anti-trust laws that protect against monopolies and price-gouging. The House bill finally fixes this; the Senate bill does not.

It will be interesting to see the final health-care reform package that emerges from the House-Senate compromise negotiations over the next few weeks.

Monday, December 28, 2009

Executive Discretion

by Richard Crews
Because of the partisan paralysis of the legislature--which is a polite way of saying the misrepresentations and obstructionism by the Republicans, particularly in the Senate--the executive branch has had to assume expanded power in order to get the work of governing the country done. For example, in the absence of responsible climate legislation, the Environmental Protection Agency has declared that carbon dioxide is a health hazard and therefore falls under its jurisdiction--no new legislation is needed to set pollution standards for internal combustion vehicles (cars and trucks) and smokestack industries.

The executive branch--that is, the president--actually has enormous independent power. As President Andrew Jackson once said after the Supreme Court had ruled against his abusing the civil rights and treaties of Native Americans, "Marshall [the Chief Justice] has made his decision--now let him enforce it!"

Obama has moved furtively in many areas; he has responsibly courted legislative guidance and support. But failing any responsible checks and balances of the executive branch by the legislative branch, Obama actually has considerable flexibility and prerogatives in implementing legislation that he has in hand and that gets passed through to him.

It will be very interesting, for example, to see what the elaborate and complex health-care reform bill looks like when the president is done with "signing statements" and other implementation procedures. Happily these will be hard to follow--they will largely be done away from the glare of partisan political rhetoric. (Even the invaluable intrusion of investigative journalism has been greatly reduced in recent years by the shift from paper to electronic news.)

The partisan paralysis and excessive special-interest lobbying power in Washington have to be fixed. But fortunately the federal government is structured so that it can function (as a defacto benevolent dictatorship) in the meantime. It is not a perfect solution--it certainly is not "the American way"--but I guess that in the absence of responsible "loyal opposition," it will have to do. We are fortunate to have Obama rather than a Jackson (or a Bush) in the White House.

Sunday, December 27, 2009


by Richard Crews
Although we often think of memory as a single mental process, there are clearly many different aspects or parts--the processes, for example, we call "remembering," "recognizing," "memorizing," and "recalling."

Psychologists differentiate three kinds of memory. The quickest is "sensory memory." It happens inadvertently and lasts a fraction of a second. We are all familiar with it. For example, there is an explosive sound; instantly we seem to listen to it again: "What direction did it come from?" "How far away was it?" "Was it a gun shot? The backfire of a car? A clap of thunder?" This is sensory memory in action.

"Short-term memory" lasts a little longer--up to a few minutes. It enables us, for example, to carry on a conversation. But we have to focus our minds on the sensory input in a certain way--we have to "pay attention"--in order to gather the onward-marching parade of experiences into short-term memories.

Finally, psychologists speak of "long-term memory." This consists of stories and images that have special emotional weight or that we have practiced a lot. We may be able to recall them for days, weeks, or months--perhaps even for a lifetime.

What are the memory difficulties of old age? (At 72 this is the question that particularly concerns me.)

Laying in long-term memories is surely more difficult. I can recite a poem I learned in high school, remember principles of chemistry I learned in college, but learning comparable material now so that I can recall it days or weeks later is much harder. I learn lines for a play by going over them a hundred times; when I was 20 or 30, a few repetitions would have sufficed. There are mnemonic tricks I can use such as finding rhymes or obscene associations, but even with all the help I can give myself, it takes much longer these days to file something into long-term memory so that I can recall it days or weeks later. (Periodic practice recalling the material at intervals of days and weeks is important, but it always was.)

Short-term memory seems, perhaps, to be affected less than long-term. I can confidently remember, nearly as well as I ever could, a shopping list of six or eight items as I head out the door (without writing them down), or a name or telephone number for a few minutes. I am confident that a scheduled event a few hours or a few days away will pop into my head when needed, though I am careful to put extra effort into getting it--and keeping it--on my mental calendar.

The encroaching deficit of sensory memory is subtle. I notice it most in a phenomenon I have experienced more and more in recent years, a phenomenon I call "absurd associations" or "false recognitions." Perhaps you have noticed this too. For example, as I am driving, I pass a sign that seems to say (in the glance I get), "Slats." In the first instant I am satisfied with this, but then immediately puzzled (and perhaps amused): it is unreasonable that a sign should read "Slats." If I can, I look back to study the sign more closely--it says "Stable." I believe this mis-reading results from a deficit of sensory memory. A few years ago I would have had half or three-quarters of a second to replay the glance I got and compare it with an array of imagined possibilities, that is, to measure it against a series of words (and contexts) and select a more reasonable reading. Now I do not seem to have enough time; perhaps the length of time allowed for sensory recall is briefer, or perhaps the evaluative associations are slower--I don't know.

Are there "cures" (or at least "treatments") for the memory deficits of advancing years? Yes and no. First and foremost is acknowledgment of the problem--recognition and acceptance that cognitive decline and other mental and physical changes in old age are inevitable. But with this, one should accept or appreciate that old age is an honorable state: after decades of competitive hustle one has earned the right to sit on the mountaintop and enjoy the view.

On the other hand it can be useful to know that the brain is plastic and adaptable throughout life. Further, that one tends to lose mental skills one does not practice: practicing memorizing or problem solving can preserve--even enhance--ones abilities.

In addition to practicing mental skills, particularly in social or emotionally stimulating situations, there is an "attitude" one can practice that minimizes memory and other cognitive deficits. I call it "hyper-vigilance." In younger years we learned that when we had to drive a car under the influence of alcohol, we should be extra careful, extra attentive--extra vigilant. And one can practice using that same mental state in daily life to counteract some of the effects of mental aging. Another analogy (to the driving-while-tipsy experience) occurs to me since I am presently Christmasing with family near Lake Tahoe. The hyper-vigilance of which I speak is like the extra care and attention one takes when walking on ice or hard-packed snow. One can practice using this mental attitude all the time.

Monday, December 21, 2009

Has Obama Disapointed Us?

by Richard Crews
When President Barack Obama came into office a year ago, he came with heavy billing. He was clearly one of the most intellectually brilliant men who had ever held the office--belonging in the first ranks with Thomas Jefferson, John Quincy Adams, Woodrow Wilson, and Bill Clinton. His lionesque charisma and rhetorical acrobatics had brought the Democratic Party and then the American voting populace to their knees. He had an unprecedentedly cosmopolitan background--bred from interracial stock, raised here and there around the world, self-elevated from poverty and obscurity. He had an impossible constellation of training and experience--he had been editor of the Harvard Law Review and spent ten years teaching constitutional law; he had both grassroots experience as a community organizer and skill in riding the exploding technological crest of the Internet. And finally just as important--though perhaps more subtle--he seemed to have a strong moral compass: the sorts of humanitarian social values that are supposed to pervade our American perspective seemed to lie firmly behind his every word.

Heavy billing indeed!

And when he took his seat at the desk in the Oval Office, his in-basket was full: He inherited two wars, a worldwide economic meltdown, impending global ecological disaster, and a dysfunctional--nigh paralyzed--national legislature.

Truly a bursting in-basket!

He went hard to work. He created a world-class team of advisers--several teams, in fact, in different specialty areas. He uncorked a storm of federal spending--some very unpalatable but essential like bailing out the national (and by contagion, international) financial system; some artfully remedial like beginning to rebuild the country's decrepit infrastructure; some shamelessly progressive like jump-starting a green-energy economy. In the international arena, he reopened diplomatic doors that circumstances and prior administrations had slammed shut.

A year has passed. Obama has accomplished a great deal--and attempted even more. There are some reasons to feel disappointed: Wars rage on--nation-building attempts appear unavoidable but frustrating; Civil rights abuses persist--apparently we still hold in miserable confinement Afghan shepherds who will never be brought to trial and never be set free; Paralyzed legislative entrenchment continues--Democratic Party fringes must be bought by pork while Republican misrepresentation and obstructionism has congealed and hardened; And the economic recovery is jobless.

The overall assessment? History is slow. Politics is intractable. Public opinion is near-sighted. We are very fortunate to have Barack Obama at the helm of our leaky boat in these stormy seas.

Thursday, December 17, 2009

Multiplying Big Numbers in Your Head

by Richard Crews
In response to a storm of inquiries* I hereby reveal my best discovery for multiplying two 2-digit numbers in your head.

First step: it's relatively easy to square a 2-digit number, right? Like 40 squared is 1600 and 70 squared is 4900, but also 35 squared is 30 squared (900) plus 5 squared (25) plus two times 30 x 5 (2 x 150 = 300) so 35 squared is 900 + 25 + 300 which = 1225.

So squaring any 2-digit number in your head isn't that hard if you practice it a little.

Now, suppose the starting numbers are different--we're not just squaring some number. If both the starting numbers are odd (or both are even) they "surround" some number, that is they are the same distance from it. Like 35 and 45 surround 40--they are each 5 away from it.

But 39 x 41 comes out to one less than 40-squared.
And 38 x 42 comes out to 4 less than 40-squared.
And 37 x 43 comes out to 9 less than 40-squared..
And 36 x 44 comes out to 16 less.
And so on--it's always the square of the distance from the number surrounded.

So to multiply 35 x 45 you square 40, the number they surround (which is easy, it's 1600) and subtract 5-square which is 25 (which is also easy: 1600 - 25 = 1575).

Voila! 35 x 45 is 1575.

It gets a little harder if the number that is surrounded is not so easy to square. Like take 29 x 41. They surround 35 (each is 6 away from 35). So 35 squared is 1225 (as above) and then minus 6-squared (which is 36)--so 1225 minus 36 is 1189.

Et voila! 29 x 41 is 1189.

Some people might not find it easy to subtract 36 from 1225 in your head, but since 36 is just 11 more than 25, all you really need to do is subtract 11 from 1200.

It gets a little harder (it might take 20 or 30 seconds) when the two starting numbers are not close to one another, and when one is odd and the other is even. But it's doable, in fact, there are some other tricks you can use.

When it comes to multiplying larger numbers (like 4123 x 7809), you just do them as smaller sets (a problem like this might take 2 or 3 minutes)--
4100 x 7800 (in other words, 41 x 78 and then followed by 4 zeroes, that's 31980000), plus
23 x 7800 (that's 23 x 78 followed by 2 zeroes, 179400), plus
4100 x 9 (with 2 zeroes, 36900), and plus
23 x 9 (with no zeroes, 207).

So 4123 x 7809 = 31980000 + 179400 + 36900 + 207 = 32196507

The hard part is remembering the intermediate results as you go along so that you can add them up when you get to the end of the problem. That's where my mnemonic system comes in. Ask me about it if you care.

I like to check my results as I go along using check-sums or "casting out nines." That's an interesting process too.


* OK, so no one actually asked me--so sue me.

Saturday, December 12, 2009

Obama Defines Our Path

by Richard Crews
Sometimes things that are all around us are too close or too big for us to see clearly. Sometimes, although we see them and know they are important, they are too new and too diffuse for us to bring onto sharp focus. Sometimes the difficulty with our vision--with our ability to frame these important patterns and questions in ways that convey their true weight--is that we are missing the philosophical breadth, the practiced cognitive skills, or the verbal artistry to encompass them, sort them out, and package them meaningfully. And finally, sometimes--even if all three of these difficult challenges can be overcome--no single, heroic individual comes forward who has the personal dignity and weight of authority to herald our attention.

On the historic occasions when all four of these vectors come together, humanity has a chance to catch its breath; to see revealed, looking back, its footsteps and the path it has been on; to view the landscape around it; and to cast its sights forward--knowing, anew, which way IS forward--having, anew, an accurate map, a true compass, and restrengthened souls fit for the journey ahead.

Such is our moment if we see it and seize it.

Over the past several years, as Barack Obama has come into public focus and made his way to the presidency of the U.S., he has provided a series of epochal formulations: refocusing our vision and re-framing the key questions of our day--the ones, in fact, on which our magnificent but teetering and fragile civilization will stand or fall--the ones, in fact, on which the habitability of the world our children and grandchildren will inherit depends.

I am referring to his speeches on--

politics (democratic governance and populist participation),

race (with its magnificent potential and terrible dangers),

peace (with, nonetheless, strength and determination to act when necessary),

global ecology (and the dark clouds of nuclear annihilation and industrial pollution that hang over it),


We live at a time of profound and rapid technological changes coupled with worldwide population overflow. To deal with these effectively, we will need more than the vast scientific data we are accumulating. We will even need more than the powerful knowledge that can be extracted from these data. We will need three higher derivatives--the wisdom to enfold this knowledge in clear and accurate historical perspective, the leadership to show us the way, and the strength and determination to act individually and in concert.

Can we do it? The future of humanity and of the planet we inhabit--the physical, emotional, and spiritual habitability of the world we leave our children--depend on it.

It was said of Gandhi, although many could not see it at the time, that "future generations will stand in awe that such a man walked among us." I believe the same is true of Barack Obama.