Sunday, May 4, 2014

Blogging "The Collapse of Complex Societies" -- Part 6.

Tulum, Yucatan, Mexico

      This is the conclusion of my review and commentary of Joseph A. Tainter's The Collapse of Complex Societies (Cambridge Press, 1988). Here are the links to Part 1Part 2Part 3Part 4, and Part 5

      In Chapter 6 of his book, Tainter provides a comprehensive summary, ties together some loose ends, briefly discusses his theory's application to past collapses other than the three examples he detailed earlier, and, perhaps most significant for our interests, takes a look at contemporary (i.e., late 1980's) conditions. I do not intend to discuss his summary, etc., since it would be a repeat of my prior posts. I also do not intend to discuss his application to other ancient societies. My preference is to focus, instead, on his comments concerning contemporary conditions and add a few of my own thoughts. However, there are a couple points that he brings up as he ties the loose strands of his theory together that have significant implications for our futures.

      First, he observes:
Complex societies, it must be emphasized again, are recent in human history. Collapse then is not a fall to some primordial chaos, but a return to the normal human condition of lower complexity. The notion that collapse is uniformly a catastrophe is contradicted, moreover, by the present theory. To the extent that collapse is due to declining marginal returns on investment in complexity, it is an economizing process. It occurs when it becomes necessary to restore the marginal return on organizational investment to a more favorable level. To a population that is receiving little return on the cost of supporting complexity, the loss of that complexity brings economic, and perhaps administrative, gains .  ....
* * *
What may be a catastrophe to administrators (and later observers) need not be to the bulk of the population (as discussed, for example, by Pfeiffer [ 1977 : 469-7 1]). It may only be among those members of a society who have neither the opportunity nor the ability to produce primary food resources that the collapse of administrative hierarchies is a clear disaster. Among those less specialized, severing the ties that link local groups to a regional entity is often attractive. Collapse then is not intrinsically a catastrophe. It is a rational, economizing process that may well benefit much of the population.
(p. 198, underline mine).

      Second, Tainter maintains that a complex society can only collapse in a "vacuum"--that is, only if the surrounding societies are less complex; or, if it is one of several peers (peer polities), all of the peers collapse as well. He writes:
... Peer polities are those like the Mycenaean states, the later small city-states of the Aegean and the Cyclades, or the centers of the Maya Lowlands, that interact on an approximately equal level. As Renfrew and Price make clear, the evolution of such clusters of peer polities is conditioned not by some dominant neighbor, but more usually by their own mutual interaction, which may include both exchange and conflict.

In competitive, or potentially competitive, peer polity situations the option to collapse to a lower level of complexity is an invitation to be dominated by some other member of the cluster. To the extent that such domination is to be avoided, investment in organizational complexity must be maintained at a level comparable to one's competitors, even if marginal returns become unfavorable. Complexity must be maintained regardless of cost. Such a situation seems to have characterized the Maya, whose individual states developed as peer polities for centuries, and then collapsed within a few decades of each other (Sabloff 1986).

The post-Roman states of Europe have experienced an analogous situation, espe­cially since the demise of the Carolingian Empire. European history of the past 1 500 years is quintessentially one of peer polities interacting and competing, endlessly jockeying for advantage, and striving to either expand at a neighbor's expense or avoid having the neighbor do likewise. Collapse is simply not possible in such a situation unless all members of the cluster collapse at once. Barring this, any failure of a single polity will simply lead to expansion of another, so that no loss of complexity results. ....
(p. 201, emphasis in original).

      I'm not so sure that Tainter's second observation holds true in all cases. Obviously the Western Roman Empire was beset by Barbarians along its northeastern borders, with no other states along its western and southern periphery. But it still abutted the Eastern Roman Empire, which did not collapse. After the collapse of the Western Roman Empire collapsed, and as Tainter suggests would occur among peers, the Eastern Empire made some attempts to retake the Western Empire--i.e., the expansion of the East to fill the power vacuum. However, it was beyond the resources and capabilities of the Eastern Empire. Similarly, today, we have seen examples of "failed states," where, again, local powers do not seem to have the ability to expand into those states, and the larger, wealthier states lack the desire, so that the failed states are simply isolated. Thus, while I'm not suggesting that Tainter's second observation is false, I am suggesting that there may be some caveats.

      Of course, the real concern is where our own society stands. Tainter, writing in 1988, took note of the burgeoning survivalist and self-sufficiency movement, Rather than dismissing it, he observed that "[t]he whole concern with collapse and self-sufficiency may itself be a significant social indicator, the expectable scanning behavior of a social system under stress, in which there is advantage to seeking lower-cost solutions." (p. 210). I would note that in the mid- to late-1980s, when Tainter was writing his book, survivalism and self-sufficiency was still very much a fringe movement--perhaps an extreme fringe movement. Although still not "mainstream," it certainly is no longer at the fringe either.

       So, where are we. Tainter had noted that "[i]t is clear that at least some industrial societies are not experiencing declining marginal returns in several crucial and costly spheres of investment." (p. 211). Earlier in his book, he had explored this topic in depth, citing statistical evidence in education, research and development, medicine, and so on. He considers the economic principle of infinite substitutability--that as one resource becomes depleted or too expensive, another resource will be used to replace it--and dismisses it as to social complexity. "One problem with the principle of infinite substitutability is that it does not apply, in any simple fashion, to investments in organizational complexity." (p. 212). He also observes that in order to develop alternatives will take an increasing amount of R&D investment--that it will require significant reallocation of resources from other endeavors and, probably, a reduction in living standards. (pp. 212-213).

      But here is the crucial point that Tainter makes:
In fact, there are major differences between the current and the ancient worlds that have important implications for collapse. One of these is that the world today is full. That is to say, it is filled by complex societies ; these occupy every sector of the globe, except the most desolate. This is a new factor in human history. Complex societies as a whole are a recent and unusual aspect of human life. The current situation, where all societies are so oddly constituted, is unique. It was shown earlier in this chapter that ancient collapses occurred , and could only occur, in a power vacuum, where a complex society (or cluster of peer polities) was surrounded by less complex neigh­bors. There are no power vacuums left today. Every nation is linked to, and influ­enced by, the major powers, and most are strongly linked with one power bloc or the other . Combine this with instant global travel, and as Paul Valery noted, ' . . . nothing can ever happen again without the whole world's taking a hand' (1962: 1 1 5 [emphasis in original]).

Collapse today is neither an option nor an immediate threat. Any nation vulnerable to collapse will have to pursue one of three options: ( 1 ) absorption by a neighbor or some larger state; (2) economic support by a dominant power, or by an international financing agency; or (3) payment by the support population of whatever costs are needed to continue complexity, however detrimental the marginal return. A nation today can no longer unilaterally collapse, for if any national government disintegrates its population and territory will be absorbed by some other.
(p. 213). 
Peer polity systems tend to evolve toward greater complexity in a lockstep fashion as, driven by competition, each partner imitates new organizational, technological, and military features developed by its competitor(s) . The marginal return on such developments declines, as each new military breakthrough is met by some counter­ measure, and so brings no increased advantage or security on a lasting basis. A society trapped in a competitive peer polity system must invest more and more for no increased return, and is thereby economically weakened. And yet the option of withdrawal or collapse does not exist. So it is that collapse (from declining marginal returns) is not in the immediate future for any contemporary nation. This is not, however, due so much to anything we have accomplished as it is to the competitive spiral in which we have allowed ourselves to become trapped.  
Here is the reason why proposals for economic undevelopment, for living in balance on a small planet, will not work. Given the close link between economic and military power, unilateral economic deceleration would be equivalent to, and as foolhardy as, unilateral disarmament. We simply do not have the option to return to a lower economic level, at least not a rational option . Peer polity competition drives increased complexity and resource consumption regardless of costs, human or ecological .
(p. 214, emphasis in original). Thus, "[i]n the world today they will not be allowed to collapse, but will be bailed out either by a dominant partner or by an international financing agency." Id. That collapse is not imminent is not necessarily a reprieve. "As marginal returns decline (a process ongoing even now), up to the point where a new energy subsidy is in place, the standard of living that industrial societies have enjoyed will not grow so rapidly, and for some groups and nations may remain static or decline." (p. 215).

      This is not to suggest that collapse is impossible. Only more catastrophic. Tainter continues:
Peer polities then tend to undergo long periods of upwardly-spiraling competitive costs, and downward marginal returns. This is terminated finally by domination of one and acquisition of a new energy subsidy (as in Republican Rome and Warring States China), or by mutual collapse (as among the Mycenaeans and the Maya). Collapse, if and when it comes again, will this time be global. No longer can any individual nation collapse . World civilization will disintegrate as a whole. Competitors who evolve as peers collapse in like manner.
(p. 214, emphasis in original).

      We are now 2 and 1/2 decades beyond when Tainter wrote his book--at the cusp, if not beyond, what was the immediate future. Certainly, the 1980's and 1990's saw various third-world nations bailed out to prevent collapse; the recent few years have seen first-world European nations bailed out to prevent collapse and several third-world nations simply isolated. Even the Russian involvement in the Ukraine can be seen as the natural expansion into a collapsing state. But the capability to further bail out countries appears to be reaching an end.

      One of the significant factors that Tainter focused on was declining marginal returns in education. We are now at the point that we are seeing, not declining marginal returns, but negative marginal returns. Andrew J. Coulson, writing at The Washington Examiner, noted on April 28, 2014:
Since the early 1970s, the federal government has tracked the academic achievement of American 17-year-olds.

The results have been essentially flat despite the fact that per-pupil spending has more than doubled, even after adjusting for inflation.

... State-level academic trends can be estimated all the way back to 1972, and the results aren’t pretty. (See the charts that accompany this post).

The average state has seen a three-percent decline in math and verbal test scores, and a 120-percent increase in real spending per pupil.

The few states that improved their scores substantially tended to be those that were well below average to begin with.

Overall, the correlation between spending and achievement is among the lowest I have ever seen in social-science research: 0.08 on a scale from 0 to 1.

But what's the trick to measuring state academic trends when no ready-made test results exist? Back in 1993, a pair of clever education statisticians developed a method for adjusting SAT scores to account for differences in the test-taking population between states.

By extending and enhancing their technique, I was able to draw meaningful trends for all 50 states reaching back 40 years.

What those trends suggest is that every state in America has suffered an education productivity collapse.

Outcomes are generally stagnant or declining despite massive increases in expenditures. In the best cases, verbal and math skills have improved modestly, but those improvements have been outstripped by much more dramatic increases in real spending.

Perhaps even more telling, state achievement trends have proven to be just as unaffected by the rare multi-year periods of declining spending as they have been by periods of rising spending.
This report published in 2008 at the Heritage Foundation similarly concludes:
Many people believe that lack of funding is a problem in public education,[10] but historical trends show that American spending on public education is at an all-time high. Between 1994 and 2004, average per-pupil expenditures in American public schools have increased by 23.5 percent (adjusted for inflation). Between 1984 and 2004, real expenditures per pupil increased by 49 percent.[11] These increases follow the historical trend of ever-increasing real per-student expenditures in the nation's public schools. In fact, the per-pupil expenditures in 1970-1971 ($4,060) were less than half of per-pupil expenditures in 2005-2006 ($9,266) after adjusting for inflation.[12]

Federal spending on Education has also increased dramatically, as shown in Chart 2. Combined federal support and estimated federal tax expenditures for elementary and secondary education has increased by 138 percent (adjusted for inflation) since 1985. On a per-pupil basis, real federal spending on K-12 education has also increased significantly over time. (See Chart 3.) In 2005, the federal government spent $971 per pupil, more than three times its level of spending in 1970 ($311) after adjusting for inflation.

... A basic comparison of long-term spending trends with long-term measures of student academic achievement challenges the belief that spending is correlated with achievement. Chart 4 compares real per-pupil expenditures with American students test scores on the long-term National Assessment of Educational Progress (NAEP) reading examination from 1970 to 2004. While spending per pupil has more than doubled, reading scores have remained relatively flat.

High school graduation rates provide another historical barometer of American educational performance. According to the National Center for Education Statistics, the average freshman graduation rate for American public schools has remained relatively flat over time. In 1990-1991, the average graduation rate was 73.7 percent. By 2004-2005, the rate had increased modestly to 74.7.[13] However, the most recent estimate for the 2005-2006 school year shows that the national freshman graduation rate has dipped to 73.4 percent.[14]
This is not only limited to primary and secondary education. The cost of college tuition has increased nearly 1000% (adjusted for inflation) since 1960, even as students learn less. Factoring in student fees, the cost of a college education has increased 1,120% since 1978.

     Or, how about the huge amounts spent on health care and assistance payments? Robert Rector recently wrote at the Wall Street Journal:
On Jan. 8, 1964, President Lyndon B. Johnson used his State of the Union address to announce an ambitious government undertaking. "This administration today, here and now," he thundered, "declares unconditional war on poverty in America." 
Fifty years later, we're losing that war. Fifteen percent of Americans still live in poverty, according to the official census poverty report for 2012, unchanged since the mid-1960s. Liberals argue that we aren't spending enough money on poverty-fighting programs, but that's not the problem. In reality, we're losing the war on poverty because we have forgotten the original goal, as LBJ stated it half a century ago: "to give our fellow citizens a fair chance to develop their own capacities."

The federal government currently runs more than 80 means-tested welfare programs that provide cash, food, housing, medical care and targeted social services to poor and low-income Americans. Government spent $916 billion on these programs in 2012 alone, and roughly 100 million Americans received aid from at least one of them, at an average cost of $9,000 per recipient. (That figure doesn't include Social Security or Medicare benefits.) Federal and state welfare spending, adjusted for inflation, is 16 times greater than it was in 1964. If converted to cash, current means-tested spending is five times the amount needed to eliminate all official poverty in the U.S.
LBJ promised that the war on poverty would be an "investment" that would "return its cost manifold to the entire economy." But the country has invested $20.7 trillion in 2011 dollars over the past 50 years. What does America have to show for its investment? Apparently, almost nothing: The official poverty rate persists with little improvement. ....
Louis Woodhill also similarly wrote at Forbes:
Has the War on Poverty been a failure?  Well, of course it has.  If you devote 50 years and $21.5 trillion (in 4Q2013 dollars) to anything, and people are arguing about whether it was a success or a failure, then you can be sure that it was a failure. 
... The stated goal of the War on Poverty, as enunciated by Lyndon Johnson on January 8, 1964, was, “…not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”  Measured against this objective, the War on Poverty has not just been a failure, it has been a catastrophe.  It was supposed to help America’s poor become self-sufficient, and it has made them dependent and dysfunctional. 
This is fact is illustrated most vividly by the “Anchored Supplemental Poverty Measure Before Taxes and Transfers*” (ASPMBTAT).  This metric was devised to assess the ability of people to earn enough, not counting taxes and subsidies, to keep themselves and their dependent children out of poverty.  The income required to do this varies by family size and composition, but, for a family comprising two adults and two children, it is $25,500/year (in 4Q2013 dollars). 
The ASPMBTAT is the ultimate quantitative test of the success (or failure) of the War on Poverty, at least in terms of its stated objective.  Shortly after the War on Poverty got rolling (1967), about 27% of Americans lived in poverty.  In 2012, the last year for which data is available, the number was about 29%.

This result would be shocking, even if we had not spent $21.5 trillion “fighting poverty” over the past 50 years.  Here’s why.
Between 1967 and 2012, U.S. real GDP (RGDP) per capita (in 4Q2013 dollars) increased by 127.3%, from $23,706 to $52,809.  In other words, to stay out of poverty in 1967, the two adults in a typical family of four had to capture 26.9% of their family’s proportionate share of RGDP (i.e., average RGDP per capita, times four).  To accomplish the same thing in 2012, they only had to pull in 12.1% of their family’s share of RGDP.  And yet, fewer people were able to manage this in 2012 than in 1967. 
Rather than eradicate poverty, the various government programs have actually exacerbated the primary causes of poverty, such as the number of children born out of wedlock and raised in single-parent households, and disincentivised people from working. In addition, as Woodhill writes:
As Social Security and Medicare benefits were made more generous, people reduced their savings.  The Personal Savings Rate (which is calculated as a percent of disposable income) has fallen by more than half since 1967 (from 12.2% to 5.6%).  In other words, when people found that they didn’t need to save as much to avoid being poor in old age, they didn’t save as much.  Also, because of higher payroll taxes, workers had less money to save.
He observes that the reduced savings rates led to less economic development, which in turn made social security and medicare a greater burden on workers than it otherwise would have been.

      Stephen Green recently wrote that the median income for full-time working men peaked in 1973, when adjusting for inflation. He opines:
If I had to guess, the drop in private sector unionization hurt. Unions held monopoly power over labor in several important industries, which jacked up wages to unsustainable levels. That’s been “corrected” by automation and foreign competition. Also, industrial manufacturing just isn’t the big wealth creator it once was. It used to take a special kind of Western country to host a manufacturing base, but now almost anybody can do it.

But I’m going to go out on a limb here and guess taxes and regulation might be mostly to blame. Everything we make, buy, and sell is taxed multiple times from farm or factory to home. But before we can pay those taxes, we have to pay our income taxes. Regulation has made everything more expensive, while also nullifying the take-home pay gains of increased productivity. Our high capital tax rates have turned trillions of dollars effectively into dead capital. Or maybe “undead capital” might be a better term, if I may coin it. It sits in banks, it’s parked in bonds, it’s “trapped” overseas — doing not much for anybody, and certainly not trickling down to the middle class.

Bill Clinton’s Community Reinvestment Act diverted hundreds of billions — trillions? — of dollars of productive capital into houses, which are not a productive asset. The inevitable collapse wiped out a decade or more of wealth gains for the middle class, and virtually wiped out the first and second generation American black middle class. The Fed’s ZIRP and QE have compounded the damage, taking what should have been modest savings increases from the middle class and giving them to Wall Street and to Washington. It’s no coincidence that the Street has reached dizzying new heights just as Washington, our new imperial capital, is the centerpiece of the nation’s wealthiest newly-rich nation. Washington of course doesn’t actually produce anything — no software, no shipping, no mineral wealth, no energy, not even clever financial tools. What Washington mostly does is to make the job more difficult for those who do produce those things.
In February 2013, Glenn Reynolds wrote at USA Today:
There's also the fact that the sheer size of the government makes it hard to do anything well. Often two different parts of the government pull in different directions -- subsidizing cheese, say, while simultaneously telling us to eat less fat. The bigger the government, the more likely we are to see these kinds of problems. 
Nobel-prize-winning economist Ronald Coase made that point in a 1998 interview:
"When I was editor of The Journal of Law and Economics, we published a whole series of studies of regulation and its effects. Almost all the studies -- perhaps all the studies -- suggested that the results of regulation had been bad, that the prices were higher, that the product was worse adapted to the needs of consumers, than it otherwise would have been. I was not willing to accept the view that all regulation was bound to produce these results. Therefore, what was my explanation for the results we had? I argued that the most probable explanation was that the government now operates on such a massive scale that it had reached the stage of what economists call negative marginal returns. Anything additional it does, it messes up. But that doesn't mean that if we reduce the size of government considerably, we wouldn't find then that there were some activities it did well."
A government limited to relatively few things -- visible things, obviously relevant to the common good -- can probably do those things well. As a consequence, it is likely to be trusted and admired. A government that tries to do a lot of things, on the other hand, will probably do them badly and be less highly regarded. 
The problem, of course, is that a government that does a lot of things badly is more appealing to the political class: more opportunity for graft, and for exercising the inflated self-importance that probably drives politicians even more than graft. The question is whether the government exists for the country's benefit, or for the benefit of the political class. At present, the answer to that question is depressingly clear.
This Washington Examiner article notes a study that shows that Americans spend more on complying with government regulations than they do on healthcare, food or transportation-- a $14,974 "hidden tax" every year for the average U.S. household, representing 23 percent of the $65,596 annual average household income in America.(More on this at Investors Business Daily). The Washington Post recently carried the story of a former Congressman--David Bonior--who discovered that all those regulations he had at one time championed are actually undermining new businesses, such as the restaurants he has opened.
Bonior said if he had the power, he would lighten up on pesky regulations.

“It took us a ridiculous amount of time to get our permits. I understand regulations and . . . the necessity for it. But we lost six months of business because of that. It’s very frustrating.”
 Of course, Bonior had the money to survive those 6 months--most would be entrepreneurs do not.

      Reduced marginal return shows up on military expenditures as well. For instance, in 2000, it was observed that over the prior 12 years, the officer/enlisted ratio in the US military has slipped from one officer for every six enlisted; to almost one officer for five enlisted.  It was 1:10 during World War II. Costs of procuring military equipment also continues to increase, while the the marginal effectiveness has stagnated. In 2010, the Economist published an article on the phenomena:
Mr Gates is grappling with the conundrum faced by many of his predecessors: the rising costs of military manpower and equipment, which strain even America's gargantuan $700 billion defence budget (almost as much as the defence spending of the rest of the world put together). Just to keep up America's existing combat units, he notes, costs 2-3% more each year. But the annual budget is rising by only 1-2%. 
Mr Gates wants the Pentagon to save 1-2% a year in overheads. A study of defence bureaucracies by McKinsey, a global management consultancy, suggests that American forces, though the most potent in the world, are among the least efficient, at least in terms of the “tooth-to-tail” ratio, the proportion of fighting forces to support personnel (the best were Norway, Kuwait and the Netherlands). American forces deploy and fight globally, so need more support than those only defending national borders. Nevertheless, the study suggests there is flab to be trimmed.

Manpower in all-volunteer armies, as most Western ones are these days, is expensive. Pay has to be competitive. In America, moreover, a big burden is the cost of health-care programmes for current and former servicemen, and their families. “Health-care costs are eating the defence department alive,” complains Mr Gates. Yet he has a hard time restraining Congress's generosity to soldiers and veterans.
One response to high manpower costs is to rely on technology. But that does not come cheap. Study after study shows that the price of combat aircraft has been rising substantially faster than inflation, often faster than GDP. The same is true of warships. 
In a book published in 1983, Norman Augustine, a luminary of the aerospace industry, drafted a series of lighthearted “laws”. In one aphorism, he plotted the exponential growth of unit cost for fighter aircraft since 1910 (see chart 2), and extrapolated it to its absurd conclusion: 
“In the year 2054, the entire defence budget will purchase just one aircraft. This aircraft will have to be shared by the Air Force and Navy 3½ days each per week except for leap year, when it will be made available to the Marines for the extra day.” 
Nearly three decades on, Mr Augustine says, “we are right on target. Unfortunately nothing has changed.” These days Raptors go for $160m apiece ($350m including the cost of developing the jet), compared with $50m-60m for the venerable F-16. In the long run, high unit costs must limit numbers. Since 1970 America's fleets of combat aircraft and major warships have shrunk, even as defence spending rose (see chart 3).
* * *
Such are the ingredients for a spiral of cost and delay: technological stumbles hold up development; delay raises costs; governments postpone work further to avoid busting yearly budgets, incurring greater long-term costs. With time, technology becomes outdated, so weapons must be redesigned, giving the top brass a chance to tinker endlessly with requirements. In the end, governments cut the size of the purchase, so driving up unit costs further. There were supposed to be 132 stealthy B-2 bombers but only 20 were built. They cost $2 billion each.
Repeated reforms have failed to break this dire cycle. According to the last full report by America's Government Accountability Office (GAO), the cost of 96 of America's biggest weapons programmes in 2008 had risen on average by 25%, incurring an average delay of 22 months.

The article goes on to claim that the problem is even more acute in Europe. An LA Times article from 2013 noted that the cost of a single MRAP--a vehicle having the humble role of moving troops from point A to B on a road--cost a $1,000,000 each. Moreover, thousands of the vehicles are being cut up into scrap because it is cheaper to scrap the vehicles than to spend $250,000 to $450,000 to refurbish them. To further put things into perspective, Military Education has an infographic showing how much a single item of military equipment costs versus other things that could have been bought for the same amount.

      The TSA is a clear example of negative marginal return. Chris Edwards observed in this November 2013 article:
... TSA’s performance has been underwhelming. In the early years after 9/11, federal auditors found that the ability of TSA screeners to stop prohibited items from getting through security was no better than that of the previous private screeners.

In recent years, there have been head-to-head comparisons between federal and private screening because 16 U.S. airports are now allowed to use private contractors.

Studies have found that TSA’s screening results have been no better, and possibly worse, than that of the private screeners. And a House report in 2011 found that private screeners at San Francisco International Airport were far more efficient than the federal screeners at the Los Angeles International Airport.

The government has an important oversight role to play in aviation security, but the TSA’s near-monopoly on screening has resulted in it getting “bogged down in managing its bloated federal workforce,” as one congressional report concluded.

Another congressional report blasted TSA for having an “enormous, inflexible and distracted bureaucracy,” and even former TSA chief Kip Hawley noted last year that the agency is “hopelessly bureaucratic.”
The article specifically notes a Government Accounting Office (GAO) report on a particular TSA program--the Screening of Passengers by Observation Techniques (SPOT) program--had no “scientifically validated evidence” and provided no benefit. On that note, USA Today further reported:
TSA's program, Screening of Passengers by Observation Techniques (SPOT), which now has 2,800 workers, began in 2007 and has so far cost $878 million. The program's goal is to spot potential terrorists through behavioral clues, but it has been criticized for possible racial profiling.

The Department of Homeland Security's inspector general said in a 41-page report released Wednesday that the TSA doesn't effectively assess the program or have a comprehensive training program.

"As a result, TSA cannot ensure that passengers at United States airports are screened objectively, show that the program is cost-effective or reasonably justify the program's expansion," according to the report from Anne Richards, assistant inspector general for audits.
      The vaunted stimulus also reveals negative marginal return. This article from 2012 indicates that the job stimulus cost as much as $4.1 million per job created or saved. This article from the 2012 Washington Free Beacon specifically noted that in Pennsylvania, the cost was $247,000 per job created or saved.

      Perhaps one area where we are really seeing negative return is ObamaCare. The Review Journal recently observed:
The sad truth about Obamacare: It largely has resulted in a churning of the insured. The law forced the cancellation of coverage for millions of people, who were then forced to buy a new, more expensive, Obamacare-compliant policy. An extensive study released Tuesday by Rand Corp. backs that up, estimating that only about one-third of exchange sign-ups were previously uninsured.

The Rand study also estimates that, through March 28, 3.9 million people were covered through the federal and state Obamacare exchanges. That’s not exactly 7.1 million. Granted, the study doesn’t include a deadline surge of enrollees, but if it took from Oct. 1 until March 28 to get 3.9 million sign-ups, it stands to reason that there is no way an additional 3.2 million signed up between March 28 and March 31.

As for paid enrollees,’s Avik Roy used the Rand study and a report last month from management consulting firm McKinsey to determine that 76 percent of those who have paid their first month’s premium were previously insured, while just 24 percent were previously uninsured. A separate Forbes report estimates that 15 to 20 percent of enrollees haven’t paid. It’s safe to assume that many Americans who visited an exchange and selected a plan left it in their online shopping cart with no intention of ever purchasing it because the premiums, deductibles and other out-of-pocket costs were astronomical.

This was not what was promised. As Mr. Roy rightly notes, the Congressional Budget Office, in its original estimates, predicted that the vast majority of those eligible for subsidies on the exchanges would be previously uninsured individuals. Instead, the vast majority are previously insured people. The only notable achievement of Obamacare thus far is the expansion of Medicaid (5.9 million added, per Rand), which could have been accomplished without the law.
It is having other side-effects. Due to increasing regulations and costs, it is driving the single-physician practice into extinction. Although this article from Politico tries to explain it away, it is debatable whether more people have lost insurance than have gained insurance under ObamaCare. As the Washington Times recently observed, ObamaCare was supposedly for the purpose of extending insurance to 46 million people, but appears to have only enrolled 4.2 million. The Daily Caller has pointed out that ObamaCare will cost taxpayers $53,000 per newly insured. Of course, none of this includes the amounts already spent on the various federal and state exchanges, some of which, like Oregon's, have been dismal failures.

      My intent is not to argue the worthiness of some of the programs and expenditures mentioned above, but to show that not only are we currently well into the death spiral of declining marginal return, but have passed into the negative marginal return territory--it is costing us more than that benefit received. I would have picked other examples (such as solar or wind energy) to further illustrate this point. But, if collapse was a mathematical certainty when Tainter wrote his book, that certainly is more fixed today. And for those who think that they can avoid the collapse by fleeing to another country...well, as Tainter points out, this time the collapse will be the whole world. It may take years to work out, but it will involve everywhere.

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