The General Social Survey, produced over the period of the last forty years, reports that the United States is suffering from a “crisis of trust”:

Since 1972 the Chicago-based General Social Survey (GSS) has been asking whether most people can be trusted, or whether “you can’t be too careful” in daily life. Four decades ago Americans were evenly split. Now almost two-thirds say others cannot be trusted, a record high. Recently the Associated Press sought to add context to the GSS data, asking Americans if they placed much trust in folk they met away from home, or in the workers who swiped their payment cards when out shopping. Most said no.

That crisis may be the single most important factor in our politics:

This is America’s real problem with trust. The country faces a crisis of mutual resentment, masquerading as a general collapse in national morale. Sharply-delineated voter blocs are alarmingly willing to believe that rival groups are up to no good or taking more than their fair share. Polls describing America as a hell-hole of corruption are not to be taken literally. They are a warning. America is not a low-trust society. But it risks becoming one.

A start might be to stop imputing bad motives to people with whom you disagree.

What is it about Chinese culture that makes them want to build walls? As Steve Chapman points out, China’s latest wall, their “air defense identification zone” serves both to wall them in and to wall the other countries in the region (plus the United States) together.

When I read this remark by Colin Powell, to the effect that the United States should adopt some soft of universal healthcare as is present in every other developed country:

Former Secretary of State Colin Powell said universal health care should be available to all Americans. He was speaking at a charity event for prostate cancer survivors in Seattle.

Powell told the audience that countries in Europe, Canada and South Korea offer universal, single-payer health care and said he often asks why the United States has not implemented the same system.

“Whether it’s Obamacare, or son of Obamacare, I don’t care,” Powell said. “As long as we get it done.”

it brought some questions to mind. Is universal healthcare primarily a cause or an effect? Why doesn’t the United States have a system of universal healthcare? It is politically easier to adopt such a system in countries with higher social cohesion?

I’ve favored some sort of universal healthcare in the United States for decades and have wracked my brain to understand why we don’t have one. My tentative conclusion is that universal healthcare is not primarily a cause of lower healthcare costs but that universal healthcare and lower costs share a common cause. The Scandinavian countries, famous for their cradle-to-grave welfare states, have scaled them back as they have become less socially cohesive as has France. To a certain extent the same is the case in the United Kingdom.

Since the United States is the least socially cohesive major economy, it makes a certain amount of sense that social programs would be more difficult for us to adopt.

The PPACA does not effect a system of universal care. It doesn’t even effect a system of universal insurance. Its advocates hope that, buoyed by the PPACA’s successes, we will be moved to expand on it and implement a system of universal care.

At this moment it appears that, if anything, the effect of the PPACA will be to put an official imprimatur on a tiered system of care with a lower level of care being available to people on Medicaid and those covered under the individual insurance market and a higher level of care available to those insured by Medicare or large group plans.

Today I’m full of questions. My first question has to do with Iran. George Will says that containing Iran would be better than war with Iran:

The logic of nuclear deterrence has not yet failed in the 64 years since the world acquired its second nuclear power. This logic does not guarantee certainty, but, says Pollack, “the small residual doubt cannot be allowed to be determinative.” His basic point is: “Our choices are awful, but choose we must.” Containment is the least awful response to Iran’s coming nuclear capability.

I agree. How does he define containment and does the agreement being negotiated with Iran satisfy that definition?

Off-hand I would say that Iran’s influence is greater today than it was five years ago and was greater five years ago than it had been twenty years ago. North Korea is contained. It’s largely self-containing. Nobody is giving the “North Korean economic model” a try and North Korean troops aren’t propping up affiliated regimes. The North Koreans don’t appear to be fomenting terrorist attacks on four continents.

How contained is Iran and does the agreement further promote that containment?

Buried at the bottom of the New York Times editorial page today there was one op-ed by a Japanese scholar that mentioned Japan’s attack on our base at Pearl Harbor on December 7, 1941, the “day that will live in infamy”. The op-ed was mostly about Japan’s modern foreign policy challenges, notably its issues with an increasingly assertive China. That’s it. Although several columns at the Washington Post might have mentioned it, they didn’t. I presume it was the same for the U. S.’s other major newspapers. It’s clear that as the last frail, elderly veterans fade from the scene it’s not considered pertinent enough or interesting enough for attention.

What should we remember about December 7? I think there are three things.

The first, far too often forgotten by Americans, is that it is terribly difficult and expensive to make war against us. The Japanese leaders knew that and hoped to remove us from the game with a single, devastating masterstroke. The stroke failed as they learned to their sorrow. We riposted and it’s not too great an exaggeration to say that we ended their civilization for it. Japan of today bears only a superficial resemblance to the Japan of 70 odd years ago. You can injure us with an attack, as we were reminded not too long ago, but making war against us is an enormous task.

That’s the reason we spend so much on our military. The other great powers of the Western Hemisphere—Mexico, Brazil, Argentina, and so on—cannot project power the way that we can. Some years back the Argentines learned that they couldn’t even make war against the remnants of a great European empire just off their shores.

The second is that the “Second World War” as we call the war into which we were drawn in response to the attack that occurred 72 years ago today was the greatest mass mobilization of productive capacity and manpower in history and will probably be the last such mass mobilization. We might as well call it the “Last World War”.

It’s not that there will be no more wars. I’m not as arrogant as those who predicted that nearly seventy years ago or almost a century ago. It’s that we will no longer fight wars in that way. When, after the attacks on New York and Washington on September 11, 2001, President George W. Bush somewhat infuriatingly and frustratingly advised us to “go shopping”, it was a confession that although war remains expensive it is no longer waged through that sort of mass mobilization.

That there are some who look back nostalgically on that mobilization as “the good old days” is almost too awful to contemplate. It was a terrible, frightening time.

The final thing I think we should remember is that in response to the attack that took place 72 years ago a hundred million Americans uprooted their lives, millions served in uniform, and nearly a half million Americans perished, giving what Lincoln called about another horrific American war the “last full measure of devotion”. And, as G. K. Chesterton noted in another context, they uprooted their lives, served in uniforms and gave their lives not primarily because they hated what opposed them but because they loved what they were defending.

Their sacrifices created the world we’re living in today and that day that will live in infamy should be remembered for that reason.

I’ve been mulling over how I should react to Nelson Mandela’s death. I thought Max Boot’s comments were worth passing along:

I can remember growing up in the 1980s when there was widespread suspicion among conservatives in the U.S.–including many in the Reagan administration–that if the African National Congress were to take over, South Africa would be transformed into another dysfunctional dictatorship like the rest of the continent. That this did not come to pass was due to many reasons including F.W. de Klerk’s wisdom in giving up power without a fight.

But the largest part of the explanation for why South Africa is light years ahead of most African nations–why, for all its struggles with high unemployment, crime, corruption, and other woes, it is freer and more prosperous than most of its neighbors–is the character of Nelson Mandela. Had he turned out to be another Mugabe, there is every likelihood that South Africa would now be on the same road to ruin as Zimbabwe. But that did not happen because Mandela turned out to be, quite simply, a great man–someone who could spend 27 years in jail and emerge with no evident bitterness to make a deal with his jailers that allowed them to give up power peacefully and to avoid persecution.

Mandela knew that South Africa could not afford to nationalize the economy or to chase out the white and mixed-raced middle class. He knew that the price of revenge for the undoubted evils that apartheid had inflicted upon the majority of South Africans would be too high to pay–that the ultimate cost would be borne by ordinary black Africans. Therefore he governed inclusively and, most important of all, he voluntarily gave up power after one term when he could easily have proclaimed himself president for life.

Mandela was certainly a great leader and model for South Africa in particular and Africa more generally. Those who see his primary role as liberator are overlooking his greatest achievement which was as reconciler. That’s something we should all wish to emulate.

Many years ago I did a study of bowling alleys. I went all over the country, surveying sites, interviewing proprietors and the staffs, observing operations, analyzing what made them tick. At the time there were about 10,000 bowling alleys nationwide and about half of them were very small. There were a few large chains, a significant number of small chains, and a lot of single unit operations.

One of the things that I observed was that there appeared to be a natural limit to the size of a small chain—something around six to eight stores. I don’t think that’s unique to bowling. I think it’s a sort of practical rule of thumb. That’s just about the limit that a single individual can operate as a hands-on manager.

Above that number requires professional management and specialization. There’s another plateau at a couple of dozen stores.

You’ll never get rich with a single bowling alley. Or book store or restaurant. You might be prosperous with a small chain but it’s an enormous amount of work. No, to make a lot of money you need to have a lot of stores.

My point in all of this is that it’s not just the income of the owner that varies among a single unit operation, a small chain, and a large chain or franchise operation. It’s the ambitions and preferences of the owner or owners. That was brought home to me quite powerfully in conversation with a guy who’d started what by the 1980s was a Fortune 500 company on his kitchen table in the 1950s. There were big differences between running a small company and running a big one, in particular what the owner did. Jeff Bezos’s ambitions are different from those of a guy who owns a single bookstore.

That’s what came to mind when I read this article by Daniel Gross about a small chain of restaurants in Detroit that’s paying $12 an hour to its employees:

Around the country Thursday, fast-food workers and their allies demonstrated to call attention to the plight of low-wage service workers. One of the demands is that highly profitable, massive enterprises like McDonald’s and Burger King should pay employees $15 an hour, which is more than double the legally-required minimum wage in most parts of the country.

Many observers regard such a suggestion as absurd on its face— “economic fantasy at its most delusional and counterproductive,” as my colleague Nick Gillespie put it here on Wednesday. These are low-end jobs in a generally free labor market. Nobody is forcing anybody to work at McDonald’s for $7.50 an hour. Besides, these companies couldn’t function if their labor costs were to double. I mean, who can make money on fast food while paying $15 an hour?

But if you look hard enough, you can find some enterprising souls who are doing just that. I first wrote about Moo Cluck Moo this spring, when the high-quality fast-food burger-and-chicken joint on a hardscrabble location in Dearborn Heights, Micighian, was paying $12 an hour. Even in a weak labor market, with plenty of people willing to work for less, the owners decided they’d construct their business model so that they would pay significantly above the market. In September, Moo Cluck Moo raised wages to the unthinkable level of $15 an hour.

I think there’s definitely a niche for Moo Cluck Moo but, frankly, I’m skeptical that we’ll ever see a sign over a Moo Cluck Moo store reading “Over 6 billion sold”. Unless the ambitions and preferences of the owners and operators of the store change in ways of which I suspect Mr. Gross would disapprove, there will be limits to its growth.

The article does touch nicely on the critical success factors for a restaurant. The first is location. The second is controlling your rent. You can’t operate a store with a low price point in neighborhood in which the rent is prohibitively expensive.

Controlling wages comes after that somewhere. Interestingly, the cost of food is even lower—that’s why so many restaurants offer huge portions. There isn’t that much difference in cost between four ounces and eight ounces and large portions convince many people that they’re getting a good deal on what is actually pretty insipid food.

McDonalds is an exception to that rule. They’re obsessive about inventory and portion control. I suspect it’s to control shrinkage and they know their employees better than I do.

There are two contrasting posts on income inequality that you might want to read for perspective. The first is from Ben Domenech at The Federalist. My eyes glazed over during his criticisms of Obama except for this part:

Income inequality is not primarily an economic problem. It is a problem of societal decline and the breakdown of family structures, accelerated by government but not solely by government. Barack Obama the family man could’ve made a difference in this regard, but decided not to. Instead, he embarked on an agenda which has been great for corporate America, Big Banks, and Wall Street, and generally terrible for wage growth and working families. Evan Soltas has a little piece here, frustrated that people are looking to get rich off Obamacare, wringing his hands about how “the expected increase in health-care profits has a whiff of rent about it.” What do you expect to happen when you make it illegal not to buy a corporation’s product which drives these profits?

That rings true to me. The parts about marriage as protection against poverty are interest, too. “Ironic” isn’t a strong enough word to cover the reality that those who can least afford to eschew marriage are doing so. Finishing high school, avoiding drugs and alcohol, not having children before marriage, and getting married remain a solid groundwork for avoiding poverty. Why aren’t more people doing it?

One of the reasons may be that stress early in life can produce lifelong patterns of lack of impulse control and the inability to delay gratification. It’s also the case that television, that great educator, conveys images of married life to which many people cannot aspire. There aren’t many Kramdens or Evanses on television these days. Nowadays on television single people live in apartments and married people own houses. It might be the case that people who are have low or no incomes do not perceive that they can afford to get married when the opposite is more nearly the case. They can’t afford not to get married.

The observed tendency for women to “marry up” (hypergamy) paired with the decline in the number of jobs available to men might be a factor as well.

The other post is by Robert Reich. In it he urges an increase in the Earned Income Tax Credit:

One way we already redistribute is through the Earned Income Tax Credit, a wage subsidy for the working poor, which, at about $60 billion a year, is the nation’s largest anti-poverty program. It’s like a reverse income tax — larger at the bottom of the wage scale (now around $3,000 for incomes around $20,000) and gradually tapering off as incomes rise (vanishing at around $35,000).

The EITC subsidy should be enlarged and extended further up the wage scale before tapering off.

characterizing it as “redistribution”. I wish he’d taken the next step and quantified the increases he was talking about. My guess is that increasing the EITC by the amount he’d propose would do very little to change the patterns of income and inequality and that he’d be horrified at the measures that would be required to raise the EITC to a level that would address the problem.

I agree with him though that it’s unrealistic to subsidize the wealthy and not expect more income inequality. Too bad he doesn’t extend that to individuals as well as to corporations. He does make a tiny sideswipe at the home mortgage deduction, the preponderance of whose benefits go to the highest income earners. I guess that’s something.

There are a lot of panic-stricken teachers in Illinois right now. A week ago they were looking forward to a very comfortable retirement, indeed. Today not so much. They’ll still have retirements that are better than those of most Americans but, frankly, they’ve had a significant amount of money snatched away from them and they’re reasonably nervous about that.

That the pension reform law passed by both houses of Illinois’s legislature, which would take effect on July 1, 2014, will receive an immediate court challenge goes without saying. Despite judges having been exempted from the law’s provisions there is still such a thing as the state’s constitution and precedent and both are against the law.

That the law leaves the significant number of Illinois public retirees who have retired on pensions above $500,000 per year largely unscathed is a scandal and an outrage. My modest proposal would be to cap Illinois public pensions at three times a teacher’s Tier 2 cap or about $325,000, indexed to inflation. To say that will cause suffering to anyone is to torture the definition of “suffering” beyond recognition.

Of course, that wouldn’t pass constitutional muster, either, but if we’re casting law and precedent to the winds why stop where the new law does?

Update

The statement of the coalition of public employee unions opposing the law is here. Here’s the most relevant quote:

Senate Bill 1 is attempted pension theft, and it’s illegal. Once overturned, its purported savings will evaporate, and the state’s finances and pension systems will be left in worse shape.

“Our coalition has been consistently in contact with our attorneys, and today we directed them to prepare to file suit. We will challenge SB 1 as violating the constitution and ask for a stay of the legislation’s implementation pending a ruling on its constitutionality.

SB1, as I’ve said for some time, is certainly in violation of the plain text of the state constitution.

It’s too bad the unions involved didn’t address this problem long, long ago. Issues like double-dipping, outrageous pensions being paid, pensions being paid for phantom service, and so on all should have been dealt with years ago.

Will public employee union members oppose legislators who voted for this law? I seriously doubt it. I believe it’s already too late for primary challenges. Think that’s a coincidence?