Monday, January 30, 2012

Extremely Inconvenient Truths

When I was reading Freakonomics, one of the interesting and controversial arguments in the book was that the legalization of abortion led to a fall in the crime rate.  The logic was that unwanted children were more likely to wind up as criminals, and this legalizing abortion essentially caused those unwanted babies to be aborted before they could grow up into criminals.   

Shortly after the book was published, many people brought up serious objections.  In the end, the theory was largely debunked.  

However, it lives on as a powerful memes.  At some level, for certain types of people, it just makes sense, and when a theory matches expectations so strongly, people become extremely reluctant to validate it, much less challenge it.  Just based on that, I suspect that it will be a long time before this meme leaves the public consciousness.

Recently, though, I heard another argument that had some of the same feel.  I was discussing the European economy with some intellectual friends, and we were speculating on how it was possible that Germany could be so strong while other sections were so weak.  It is especially impressive given that Germany did the bail out of all bail outs when they absorbed East Germany as part of German unification in 1990 - estimated at 1.9 trillion dollars.

Germany has to deal with all of the "normal" problems of the other economies in Europe, including an aging population, relatively high unemployment, and a general entitlement culture.   Stat-wise, it seems there are no major differences...

So what is the difference?

In discussing this, there was a general sense that Germans are good workers, or have a German mindset, or german values or work ethic, or german engineering, and so on.  But this is just pushing the question down the road, making it OK, why do germans have that mindset?

At this point, a new point came up.  In the years leading up to world war II, the Nazi leadership of the country systematically went out to kill, deport, or otherwise remove everyone who they thought was inferior.  This included Jewish people, of course, but also included mentally ill, communists and socialists (and others who were not supportive of what the Nazi's considered the German way), homosexuals, prostitutes, homeless, immigrants, and "the unemployable".  It is difficult to get fixed estimates, but a safe estimate is that 10 million or more people were either killed, deported, or fled.  

So was this the determining event?  Did Germany become stronger by literally pruning off the weakest members of their population?  

Not surprisingly, it is difficult to find any kind of academic studies on this stuff.  There are many articles discussing the opposite issue - how Germany's persecution caused a brain drain of physicists and rocket scientists, and how this loss might have cost them the war.  And there is general anecdotal evidence that genetic diversity leads to a more robust population.  But there is also literature discussing culling in general, and how can be beneficial to improving the health of a herd.

We are the (healthy) 99%
A lot has been made of the fact that the richest 1% control almost 40% of the nation's wealth.  This in itself is not terribly surprising to me.  I mean, it is hardly news that rich people have money, and that it takes money to make money.   But for some reason, much less has been made of the similar statistic that the sickest 1% are responsible for 22% of all healthcare spending.  The sickest 5% are doing more than 50% of the spending.  With all of the talk about so-called "healthcare reform", are we going to see a similar backlash against the ultra-sick that we see against the ultra-rich? 

You might think that people will reject this simply because it should be obvious to anyone that only sick people spend money on healthcare, but I wouldn't count on that.  Logic rarely has play in these situations - emotion reigns supreme.  Consider the anti-corporate sentiment going on now.  I read an article recently lambasting the governor of Wisconsin for giving tax incentives for corporations to move there.  This was being characterized as a hand-out to the wealthy.  The logic that only corporations create jobs, and jobs are the only actual source of income for the populous just seemed completely lost on these guys.  Luckily for the seriously ill, most people are sympathetic to them in a way that they aren't with the millionaires.

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