July 4, 2006


  • July 4, 2006

    Editorial

    Teachers Matter



    The No Child Left Behind education act, passed by Congress four years ago, was intended to correct the corrosive inequality that has plagued public education from the start. It was with that goal in mind that Congress specified for the first time that in return for federal education dollars, states would have to end the destructive practice of staffing schools serving poor and minority children with disproportionate numbers of inexperienced and unqualified teachers.


    The U.S. Department of Education soft-pedaled the teacher quality requirement in the early years, probably because of pressure from the states. But as of this month, states and districts that wish to keep receiving federal school aid must file plans with the Department of Education explaining how they intend to reach the teacher quality goal. Meanwhile, the importance of that goal was just underscored by a nonpartisan Washington think tank, the Education Trust, in a study on the effects of teacher training and experience on student performance.


    Skeptics have often expressed doubt that good teachers would make any difference in the lives of the country's poorest students, who typically show up in first grade not at all prepared to learn. The Education Trust study, which draws on a treasure-trove of data from several states, clearly refutes this notion. The most important data set comes from Illinois, where researchers scrutinized the work and qualifications of 140,000 teachers, all of whom were assigned quality ratings based on several indicators, including where they attended college and how much experience they had.


    The Illinois study found teacher quality mattered a great deal in high-poverty high schools, where students with highly rated teachers were about twice as likely to meet state standards as similarly situated students elsewhere. Teacher quality even trumped course content, and it did not take paragons of achievement to make the difference. For example, students who took Algebra II at schools with average teacher quality ratings turned out to be better prepared for college than students who had completed calculus at schools with low teacher ratings.


    Taken together, the multistate data cited in the study show that teacher experience makes a profound difference in student performance, as do teacher literacy levels. The facts are especially clear when it comes to the crucial areas of math and science, where teachers who have majored in the subject areas generate better student performance than those who majored in outside areas.


    To improve student performance, the states need to play a much stronger role in teacher training and certification — and in making sure that qualified teachers are evenly spread across their school districts. Breaking with the bad old status quo won't be easy. But it's the only way for the country to improve the educational picture for the poor and minority students who will make up such a large part of the work force of the future.





     


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July 2, 2006


  • July 2, 2006


    Déjà Vu, Again and Again




    Pat Shapiro is a vibrant woman of 77, with silver hair, animated blue eyes and a certain air of elegance about her. She lives with her husband, Don, in a white two-story Colonial in Dover, Mass., a picturesque town set on the Charles River east of Boston. After 56 years of marriage, Pat and Don have a playful repartee that borders on "Ozzie and Harriet," and her still-sharp mind is on display in their running banter. "Don, we haven't had an 'icebox' in years," she'll say, interrupting one of his winding stories. "It's called a refrigerator."


    Her short-term memory isn't quite what it used to be, she says, but it's nothing that impacts her life. "Her long-term memory is meticulous," Don says. "She can remember details from our trips to Europe years ago that I can't."


    One day last December, however, an odd thing happened to Pat Shapiro. She was sitting in a car outside of a store with her daughter Susan, while another daughter, Allison, shopped inside. From the front seat Pat noticed a woman who seemed intensely familiar getting into a nearby car with a baby. "I saw her last time I was here," Pat remarked. "That baby did that exact same thing."


    Looking up, Susan thought the comment strange; it seemed odd even that her mother had been to this store recently. Then Pat noticed another woman, smoking and chatting on a cellphone. "There's that woman who was smoking a cigarette, with the scarf on," she said.


    This time, Susan protested. "Ma, the chances of the other woman, who doesn't know that woman, coming to the parking lot, smoking a cigarette —"


    "No, they were there last time," Pat insisted. She couldn't place when exactly she'd been there before, but she felt positive she'd seen the women.


    Allison returned, and as they left, Pat noticed two nuns on the sidewalk. They, too, she said, had certainly been there before.


    "Mom, are you O.K.?" Susan asked.


    "I feel fine," Pat replied.


    Worried, Susan called her father later that day and asked if Pat had ever claimed to recognize strange people or places. "Oh, it happens every once in a while," he said. Susan asked if the episodes bothered him. "Only when she is determined to make me think that something has gone on that way," he said.


    Later, though, Pat admitted to Susan that she was having such experiences frequently. As often as several times a day, in fact, she was struck with what sounded to Susan like an intense sensation of déjà vu, a familiarity with a place or situation that — logically, at least — she couldn't have encountered before. She would claim to recognize details of restaurants she'd never been to, and occasionally greeted total strangers as if she'd met them before. To Pat, in such moments, the familiarity didn't feel like déjà vu. It just felt like a memory. Like reality.




    Take a moment to remember what happened during your day yesterday. Images and sounds begin to flash through your mind: people you spoke to, places you went, meals you ate. One scene cues up another, leading you on vivid tangents as you cycle through the day. Now ask yourself: how do you know that you are remembering those images as they happened, not altering or inventing them? The question sounds inane at first; you were there, after all. But what is it about those images that makes them authentic to you? Try inserting a completely false memory into your day, say that of running into a celebrity. You can picture it, sure, but it doesn't feel real. Why not?


    Memory, like most systems we depend on continually, tends to fade into the background when it's working properly. Only when it fails or misleads us do we begin to ponder its mechanisms. The structure of memory has for centuries been one of psychology's most intractable mysteries. To the extent that science claimed to understand it at all, memory was seen as a kind of filing cabinet in which recollections were neatly stored, retrieved on demand and occasionally misplaced.


    The research of the last three decades, however, has shattered that metaphor. The Canadian cognitive psychologist Endel Tulving struck a significant blow in the 1970's, when he postulated a distinction between episodic memories — our recollections about our own experiences — and semantic ones, involving facts and concepts. Knowing the capital of France is a semantic memory, for example; recalling your trip to Paris, an episodic one. When we access episodic memories, Tulving further observed, we don't just call up raw information. We actually re-experience the events themselves, and that feeling of recollection is part of what tells us that the memory is real. "Remembering," Tulving summarized in 1983, "is mental time travel, a sort of reliving of something that happened in the past."


    Tulving and a group of fellow cognitive scientists — aided by advances in neuroimaging technology — began to tease apart the relationships between recollection and consciousness. They showed episodic memories to be a product of a complex network of signals, scattered across the brain and then reassembled, ad hoc, when the moment arises. Some of those signals, centered in an area of the brain's temporal lobes called the hippocampus, are now thought to be vital in creating the recollective experience that Tulving described.


    Simultaneously, psychologists began to demonstrate the myriad ways in which memories can and do go wrong — not only when we forget, but also when we incorporate distorted or false information. At the University of California at Irvine, Elizabeth Loftus conducted an important series of studies in the 1990's, in response to a wave of "recovered memory" child-abuse cases, showing that false memories could be induced in research subjects. In 1995, researchers at Washington University in St. Louis demonstrated that people who were read a list of words like bed, rest, awake, dream, wake and slumber, when tested later, would often definitively remember hearing the word sleep. Research into post-traumatic stress disorder found that PTSD sufferers can be tortured by distorted memories of traumatic events. All of this work converges today on an ominous question: How is it we can be fooled by memories that are simply wrong? The answer lies not necessarily in the content of our memories but in the experience of reassembling and recalling them.


    One way to try to understand that experience is by examining memory's tricks and illusions. "Memory doesn't just depend on a storehouse of knowledge, like putting cherries in a bowl and pulling out a cherry for each memory," says Morris Moscovitch, a prominent episodic-memory researcher at the University of Toronto. "What these unusual cases do is draw your attention to something that we only get a hint of in real life. This is a philosophical conundrum that has been struggled over for centuries: how is it that we distinguish ongoing experience from memory, and waking experience from dreams?"




    Pat's daughter Susan began to scour the Internet, looking for information about her mother's repeated déjà vu episodes. She eventually came across the work of Chris Moulin, a neuropsychologist at Leeds University, in England. Moulin and several colleagues had published two scientific papers describing something they called persistent "déjà vécu" — literally translated, the feeling of having "already lived through" something. The cases seemed to match Pat's condition, and Susan sent Moulin an e-mail message asking for help.


    Chris Moulin's office is located on the top floor of the psychology department at Leeds, in an oddly asymmetrical brick building at the center of campus. The room is cramped but spare, with a small collection of books in one corner, a pair of soccer cleats stashed under a chair and a set of framed Tintin cartoons on the wall. Moulin is 32 years old, with red, close-cropped hair, a matching beard and glasses and a penchant for jeans and sneakers. Today he's one of only a handful of scientists studying déjà vu-like illusions, but like most of us, he once thought of déjà vu as just an occasional, odd event in his own life. Translated literally from the French as "already seen," déjà vu can be, for some people, a strange and unsettling experience; for others, thrilling or even spiritual. Occurring at seemingly random times, lasting from a few seconds to a few minutes, it often comes with a feeling of approaching premonition. Not only does the situation feel familiar, but a vision of the future also seems just beyond the searchlights of your conscious mind.


    The accepted scientific definition of déjà vu, put forth in 1983 by a Seattle-based psychiatrist named Vernon Neppe, is "any subjectively inappropriate impression of familiarity of the present experience with an undefined past." Beyond the definition, however, the scientific understanding of this "inappropriate familiarity" remains murky. Religion and parapsychology have offered their own explanations, citing déjà vu as evidence for everything from clairvoyance to past lives. Because the phenomenon is difficult if not impossible to reproduce in a laboratory, though, researchers like Moulin have traditionally had limited means to dispel the conventional wisdom. At the beginning of his career, he says, "I didn't know anything about déjà vu, and it didn't really interest me."


    In December 2000, Moulin was a postdoctoral student in neuroscience at the University of Bristol, working at a memory clinic in a hospital nearby in Bath, when he received a strange referral letter from a local doctor. It described an 80-year-old Polish immigrant whose wife said that he was suffering from "frequent sensations of déjà vu." The doctor had suggested to the man — a former engineer identified by his initials, A.K.P. — that he set up an initial appointment at the memory clinic. A.K.P. responded that he had already gone and didn't see the point of going back. The problem was, as the doctor knew, he hadn't actually ever been there.


    Intrigued, Moulin started visiting A.K.P. and his wife at home. "He was very witty and articulate, able to look after himself," Moulin recalls. But A.K.P.'s wife was frustrated by his déjà vu, and he experienced other mental problems, including memory loss and confabulation, the use of subconsciously invented stories to cover memory deficits. His déjà vu episodes seemed to be "practically constant," as Moulin and colleagues outlined in a 2005 paper in the journal Neuropsychologia:


    He refused to read the newspaper or watch television because he said he had seen it before. However, A.K.P. remained insightful about his difficulties: when he said he had seen a program before and his wife asked him what happened next, he replied, "How should I know, I have a memory problem!" The sensation. . .was extremely prominent when he went for a walk — A.K.P. complained that it was the same bird in the same tree singing the same song.. . .When shopping, A.K.P. would say that it was unnecessary to purchase certain items, because he had bought the item the day before.


    Searching the modern scientific literature, Moulin found one case that echoed A.K.P.'s, that of an 87-year-old woman, who, according to a brief journal article from 2001, "reported that she was continuously reliving the past and felt that a significant part of her daily experiences had happened before." Moulin's mentor, Martin Conway, a pioneer in the understanding of episodic memory, also recalled a paper by the Harvard psychologist Daniel Schacter in the mid-1990's. Schacter had described B.G., a man in his 60's, who claimed to recognize people and situations he'd never encountered.


    Those cases persuaded Moulin that A.K.P. was more than an anomaly, and the clinic began sending him any patients with conditions that sounded similar. A month later, a referral letter arrived for M.A., a 70-year-old woman with what the doctor described as pervasive déjà vu. M.A. also found newspapers and television overwhelmingly familiar, and had even quit playing tennis, claiming that she knew the outcome of every rally. Moulin quickly discovered that in contrast to ordinary déjà vu experiences, in which the sensation instantly seems misplaced, neither A.K.P. nor M.A. recognized that something odd was happening. To them, the experiences simply felt like memories. "When we have déjà vu, we don't act on it," Moulin says. "But these people refused to watch television, they stopped reading the newspaper." The patients were what cognitive scientists call "anosagnosic" — unaware of their condition. They also found situations to be more than just familiar; they believed that they were really recalling them, so much so that they invented memories to justify that belief. They were, to use Tulving's phrase, time traveling to a reality that had never existed.




    The history of déjà vu is as much a literary tale as it is a scientific one. Writers and poets have long proved more astute observers of it than scientists, and mentions of déjà vu-like sensations date to St. Augustine, who wrote of "falsae memoriae" in A.D. 400. Sir Walter Scott described it as "a sense of pre-existence," and Dickens, Tolstoy and Proust each explored it in prose.


    Among scientists, déjà vu has traveled under a variety of names, including "paramnesia" and "phantasms of memory." The first flurry of research on the topic occurred in France in the 1890's, when prominent psychologists debated fine distinctions between various paramnesias. At a scientific meeting in 1896, the neurologist F. L. Arnaud proposed that scientists unify their descriptions under a single term, "déjà vu." He also recounted the unusual case of Louis, a 34-year-old who had recovered from cerebral malaria. Louis, as the Cambridge psychiatrist German Berrios wrote in a summary of Arnaud's work, "showed 'the first symptoms characteristic of déjà vu' when he started claiming that he could recognize certain newspaper articles that he said he had read previously." Louis felt that he "recognized" nearly every experience, a sensation he described as "I am living in two parallel years." Arnaud even took Louis to a funeral (Louis Pasteur's, as it happened) to see if he would claim to have remembered it. He did.


    With the rise of behaviorism in the 20th century, déjà vu research largely faded into obscurity. Freud postulated that the sensation was caused by the similarity of a present situation to a suppressed fantasy but declared the phenomenon too confusing to investigate. What studies have been done rely on questionnaires about past déjà vu experiences. Such surveys show that between 30 and 90 percent of people experience déjà vu at some point in their lifetime. Alan Brown, a psychologist at Southern Methodist University and the author of "The Déjà Vu Experience," the most comprehensive book on the topic, pegs the proportion at about two-thirds of the population.


    Researchers suggest that déjà vu isn't experienced until the age of 8 or 9 at the earliest, indicating that the phenomenon may require a certain level of brain development to either experience or describe. But once déjà vu begins, it becomes more frequent through our teens and 20's, and is more likely to happen when we are tired or stressed. Surveys show that the episodes then decline with age, although scientists are uncertain why — and the experience of Moulin's patients demonstrates that sometimes the condition actually increases in old age.


    In his book, Brown identifies as many as 30 plausible scientific explanations for the phenomenon, divided into "dual processing," "neurological," "memory" and "double perception" theories. Dual-processing explanations assert, essentially, that two normally separate brain processes are activated at wrong times. Imagine two heads of a tape player, one recording memory and the other playing it back. If the brain begins playing back while it's recording, the present might feel like a memory. Neurological explanations involve small electrical signals gone awry. If two signals carry information from the senses to the brain, the theory goes, a delay in the second signal might cause it to feel like a memory.


    So-called memory explanations involve the brain's misunderstanding a similarity between the present situation and an actual, true memory. Encountering a chair that resembles one from your grandmother's living room, for example, could trigger a feeling that a new place is somehow familiar. Under "double perception" explanations, finally, the brain is momentarily distracted after it has already taken in part of a scene. When its attention returns to the scene fractions of a second later, it suddenly feels like a memory.


    There's no guarantee that all déjà vu episodes have a single cause, and several of Brown's categories overlap. He says that, as with a condition like a stomachache, he "could easily be comfortable with four or five mechanisms." The essential feature in any déjà vu theory, though, is explaining the sensation. After all, déjà vu is much more than just familiarity. "You probably came into my office and thought, I've seen a desk lamp a bit like that," Moulin told me. "But it doesn't give you anything like déjà vu. You just think, Ah, yes, that's familiar. There's no startling sensation."




    It was precisely that startling sensation that A.K.P. and M.A. seemed to lack during their déjà vu-like experiences. Moulin and Conway concluded that the patients must not be experiencing ordinary sensations of déjà vu, but what the researchers termed persistent déjà vécu. Their hypothesis rested on the understanding, established in the wake of Tulving's research, that episodic memories consist of two aspects: the information content, or "memory trace," and an accompanying experience of recollection. It's that experience, a little bit of consciousness attached to a memory, that lets us know that we are calling up something from the past. If someone experienced that feeling constantly, without any memory trace attached, they would feel — as Conway describes it — as if they were "remembering the present." In other words, déjà vécu.


    Moulin set up a series of experiments to test the theory. In one, A.K.P., M.A. and 19 control subjects were shown a series of photos, some of random people and others of well-known celebrities. Later they were shown another series, containing a mixture of the old photos and new ones, and asked if each photo pictured either a famous person or someone they had been shown before. In another, subjects were read a series of words, followed by a mixture of those same words and new ones, and then asked which they had heard previously. The results were what Moulin had expected: compared with the control subjects, M.A. and A.K.P.'s false-positive rates were off the charts. They nearly always claimed to recognize faces and words they hadn't seen or heard. More important, they claimed not only to find the pictures and words familiar but also to actually remember seeing them. Often they even confabulated stories to justify those recollections. A.K.P. claimed that one random face was that of a local painter. "I know," he said, "because his tie is lower than it should be."


    Brain scans of A.K.P. and M.A. revealed abnormal levels of atrophy, or cell death, in their temporal lobes. Moulin knew that epileptics whose seizures are centered in their temporal lobes often experience a minutes-long "dreamy state" similar to déjà vu prior to their seizures. Moulin and Conway concluded that their patients' déjà vécu was similarly located in the temporal lobes, in a "recollective experience circuit" that regulates the process of remembering. If the circuit was "continuously active," it would keep feeding the brain that feeling of recollection, without any real memory attached.


    Could ordinary déjà vu be a minor version of the same thing, a brief misfire in a temporal-lobe circuit that sets off the feeling of remembering? "Somebody like A.K.P. shows that there is this sensation that is separate from memory," Moulin told me. "If his can go chronically wrong, ours can go momentarily wrong."




    After hearing Pat Shapiro's story from Susan, I visited the Shapiros at their home in Dover. Pat warmly ushered me inside, and we sat in the couple's formal living room. She told me that her déjà vécu-like experiences started in the last two years, coming and going with no apparent pattern. Once, a nurse had come to the house to conduct a physical for insurance purposes. "The first thing I said," Pat told me, "was: 'So nice to see you! I haven't seen you in a long time!' " She laughed — as she did following a half-dozen other such tales — recalling that only later did she realize she'd never met the woman before. Generally, she said, such episodes didn't bother her.


    I heard markedly similar accounts from a college counselor in Glasgow, Scotland, named Pam. Two years ago, Pam's 82-year-old mother began saying that the BBC was repeating television programs. She even called a repairman to examine her set. Soon she was complaining about the newspaper and eventually all kinds of situations. The week before I met with Pam at her office in Glasgow, she and her mother had been sitting in a cafe when a child began crying. "Mum said, 'She's always here, and always crying,' " Pam said. "I let it go, because I know it's not the case, and we go to the same place every week."


    Like Pat, Pam's mother is in otherwise good health. "It's sad and frustrating, because I can't do anything for her," Pam said. "The only thing that I can do is research it and tell her that she is not the only one." Like Pat's daughter Susan, Pam found Moulin's papers and corresponded with him. Both women said that talking to their mothers about the research seemed to reduce both mother's and daughter's anxiety.


    Moulin regularly receives e-mail messages from people experiencing something like déjà vécu, or from their relatives. The stories themselves begin to take on a familiar ring: the woman who turned in her library card because she felt she'd read everything on the shelves, the man on his first trip to Paris who felt he'd been to every part of the city. Moulin says there may be many other persistent déjà vécu sufferers, afraid to tell their doctors for fear of sounding crazy. The Bath clinic alone has found six new patients for a continuing study.


    When it comes to linking those patients to run-of-the-mill déjà vu, however, Moulin's work is not without objections from the small community of researchers with an enduring interest in the subject. The psychiatrist Vernon Neppe, founder of the Pacific Neuropsychiatric Institute, says that he believes that Moulin's patients are not actually experiencing déjà vécu, claiming that they don't conform with the definition of déjà vu, of which déjà vécu is a subset. "The Moulin research is difficult because there is so much confabulation," he told me. "It's a different type of inappropriate familiarity."


    Moulin says that he now regrets initially using the term déjà vu to describe the patients, as opposed to déjà vécu, the "ongoing" and "chronic" sensation. Still, he says, "That's what people come to their doctor and say: their husband or wife has got permanent déjà vu." Firmly establishing the experience of recollection that his patients exhibit, he says, will provide the theoretical underpinning for explanations of déjà vu — regardless of whether it is a real fragment of memory or a purely neurological glitch that sets it off.


    Another objection comes from Art Funkhouser, a psychologist based in Switzerland who conducts déjà vu research and from whom Moulin and Conway borrowed the term déjà vécu. Funkhouser, who is currently analyzing data from a thousand respondents to an online déjà vu questionnaire, has complained to Moulin that using the word "chronic" will stigmatize déjà vu as a disease rather than a quirk of the human mind. "The people he is dealing with are being affected by various forms of dementia," he says. "I just wish that he would be a bit careful in how he talks about it, so that he doesn't give the impression that anybody who has this must be sick."




    Moulin and Conway say that the sensation of memory that déjà vécu so aptly illustrates is just one of many "cognitive feelings," sensations that help us prioritize and act on our own thoughts. When those feelings go awry, they produce strange sensations. His latest experiments are designed to induce jamais vu — translated literally as "never seen" — the feeling that something familiar seems alien. Or take the aha! moment, a feeling you get upon solving a complicated problem. Aha! moments, which a team of researchers recently traced to activity in the temporal and frontal lobes of the brain, help us recognize a flash of insight. When we get the same feeling of insight without actually solving anything, we experience what's called presque vu, or "almost seen" — a misplaced sensation that everything makes sense. "I remember having it for cleaning my teeth," Moulin recalls, "thinking, Ah, yes, at the end of every day I clean my teeth! That just seems to have import. Like all life is cleaning teeth."


    Trivial as they may sound, such cognitive feelings often guide our behavior, and glitches in them can have profound consequences. In his 2001 book, "The Seven Sins of Memory," the Harvard psychologist Daniel Schacter explores the phenomenon of "misattributed memory," in which you remember some aspect of an event correctly but mistakenly recall the origin of the memory. Misattributions, says Schacter, "have been involved in a number of cases of wrongful conviction of individuals based on eyewitness testimony." The same subjective feeling of memory that led A.K.P. to believe his déjà vécu was real can trick eyewitnesses into believing flawed identifications, or fool research subjects into believing induced memories.


    Conway also studies PTSD, in which patients are tortured by traumatic memories that may be laced with distortions that can serve to compound feelings of guilt and helplessness. Accident victims might distinctly remember a moment in which they could have turned the car just to the left and avoided a collision, even if such a moment never occurred. "The recollective experience is the glue that sticks this all together," Moulin says. "People don't think they are making up these images. They think they are remembering them." Cognitive therapists, by understanding the recollective experience evidenced by déjà vécu, may be able to help persuade such patients that many of their negative images aren't real. The same is true for obsessive-compulsive disorder. "In order to cure those people, you have to train them about their memory," Moulin says. "They keep going back and checking the door, for instance, because they don't remember well enough having locked it. You have to say: 'Well, your memory isn't like that. It's just not that good.' " In other words, there's a limit to what you can expect from your memory.


    All of which naturally raises the question: Why are humans cursed with such imperfect memories? "Human cognition is incredibly, incredibly complicated," Conway says, "and you are bound to get glitches along the way. The question really is, How costly are those glitches? In terms of survival, having experiences of déjà vu now and again probably isn't such a big deal. But if you have a déjà vu all the time, then, like A.K.P., you can't operate effectively in the world."


    Such small glitches might even have proved evolutionarily valuable, giving us insight into our own minds. "One of the things about déjà vu in your daily life," Conway says, "is it does leave you wondering for about three weeks afterward what happened." Ordinary déjà vu is so striking precisely because our intellect is fighting against the feeling of recollection. "It's an immutable feeling," Moulin says, "but it's not immune to reason."




    Salman Rushdie once observed that memory has its "own special kind" of truth. "It selects, eliminates, alters, exaggerates, minimizes, glorifies and vilifies also," he wrote in "Midnight's Children," "but in the end it creates its own reality, its heterogeneous but usually coherent version of events; and no sane human being ever trusts someone else's version more than his own." To what extent persistent déjà vécu itself constitutes a challenge to a person's sanity, or even counts as a disorder, seems to vary. A.K.P. and M.A. eventually withdrew from the world, stopped watching television or even leaving their homes. But they also suffered from other age-related cognitive disorders. Moulin is still seeking an effective treatment for such patients, as both anti-Alzheimer's and antipsychotic drugs have shown no effect. But he suspects that the condition could be helped by therapeutic techniques. Preparing déjà vécu patients for novel situations they are about to encounter, he says, could actually help reduce the feeling that they've already experienced them.


    Ordinary déjà vu, of course, isn't a disease, and even déjà vécu-like conditions seem to vary in severity. "I think the persistent or continuous déjà vu that Moulin is looking at is found in people with normal function who are not disturbed or out of mainstream," Alan Brown says.


    Pat Shapiro, to all appearances, is such a person. She lives a rich life, her mind intact, and she claims to be mostly unbothered by her condition. Her daughter Susan worries that the episodes tire her mother out, as she tries to puzzle out when she has been somewhere or met someone in the past. Mostly, the family tries to laugh about the incidents. "We're lucky that she can have a sense of humor about it," Susan says.


    One afternoon in Dover, in the midst of relating her déjà vu experiences, Pat Shapiro paused and took off her glasses, looking at me intently. "I have to say, you look so much like my grandson," she said. "He has a little bit longer hair, but you look so similar. When I saw you get out of the car I just thought, Oh!"


    "But wait," I asked, "couldn't that have just been a déjà vu?"


    "No, it was just that you looked so much like him," she said. My face must have betrayed a hint of skepticism, and she quickly moved on.


    Don came in a few minutes later, and soon he, too, paused. "I have to tell you one other thing," he said. "You look so much like our grandson, it's amazing." I looked at Pat, who smiled knowingly. Later, at Susan's house, she showed me a photo of the grandson in question. It was like seeing an image of myself, from a time that never happened.


    Evan Ratliff is a writer in San Francisco and the co-author of "Safe: The Race to Protect Ourselves in a Newly Dangerous World." This is his first article for the magazine.


     


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June 28, 2006


  • Ellison rescinds $115 million Harvard donation


    GIFT WOULD HAVE BEEN SCHOOL'S LARGEST


    By John Boudreau

    Mercury News

    Oracle Chief Executive Larry Ellison decided against making a $115 million donation to set up a research center at Harvard University after Harvard President Lawrence Summers decided to resign, an Oracle spokesman said Tuesday.


    Instead, the Oracle chief is planning to announce another major gift ``in the next few weeks,'' Oracle spokesman Bob Wynne said.


    Ellison started talking publicly in 2005 about giving $115 million to Harvard -- which would have been the school's largest gift ever -- to create a research center on global health.


    Three senior managers for what would have been the Ellison Institute for World Health were hired, then laid off recently, even though Ellison never formally agreed to the gift, Wynne said. The center planned to hire 20 research fellows and 130 staff members by next summer and had already chosen its board of trustees.


    ``It was Larry Summers who was really the brainchild of this whole concept, and it was Larry Summers with whom Larry Ellison had the relationship,'' not the university, Wynne added. ``There was never any formal agreement.''


    They were discussing the creation of an institute that would study and rank the effectiveness of government health programs around the world. After months of campus controversy surrounding his leadership, Summers announced in February that he would resign. His last day is Friday.


    As the controversy intensified, Ellison reconsidered his plan to fund the institute, Wynne said.


    ``Larry Summers developed an economic model to get at this question,'' he said. His impending departure caused Ellison to ``change his decision to make his contribution to Harvard.''


    Wynne would not provide details about Ellison's next philanthropic move, though he said it could be a donation to an academic institution.


    Separately, Oracle said Monday that Ellison is giving $100 million to the Ellison Medical Foundation of Bethesda, Md., over the next five years to settle a shareholder lawsuit claiming he improperly sold $900 million of company stock in 2001.


     


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June 26, 2006

  • From Robert Reich's blog . . .


     


    Saturday, June 24, 2006



    On Turning 60




    I'm sixty years old today. So is Cher.

    That's old as hell, but not as old as it used to be. In 1946, when I was born, life expectancy in the United States was 62.9 years. So I'm glad I'm sixty now and not then. Eligibility for Social Security began at 65 then, which made Social Security a rather unsatisfactory deal for the majority of the population who never became old enough to enjoy it.

    I'm at the early edge of the baby boom bomb that started when Ed Reich and millions of other returning GI's impregnated their wives. By 1964, when the boom ended, 76 million boomer babies had been born. Now I and my other early-edge boomer colleagues are seven years away from collecting Social Security, five years away from getting Medicare. In actuarial terms, we'll live until we're about 80.

    You don't have to be a math wizard to see the problem. The economy will probably grow fast enough to keep the Social Security trust fund adequate to the task, but Medicare will go bust unless the nation does something to reign in rising health-care costs. That something is actually three things: (1) reduce the huge administrative costs of health care, which include soaring advertising and marketing expenses designed to identify and sign up young and healthy people and avoid older and sicker people; (2) slow the growth of new spending on new medical and pharmaceutical technologies, which are also driving up costs; and (3) devise some system to limit medical spending on extremely sick elderly people who would, at most, have their lives prolonged for only a few months anyway.

    While I'm at it, happy 60th birthday (soon) to Bill Clinton, George Bush, Laura Bush, and Ken Starr. Also, happy 60th birthday today, Cher. I know what you're going through.

     

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June 25, 2006

June 23, 2006


  • June 22nd, 2006


    Ellison gift to Harvard absent


    $115 MILLION PLEDGE FOR HEALTH INSTITUTE STILL NOT FULFILLED


    By Michelle Quinn

    Mercury News

    Oracle Chief Executive Larry Ellison has yet to follow through on a verbal promise to give Harvard University $115 million to set up a research center for the study of global health, although what exactly happened between Ellison and Harvard remains unclear.


    As a result, plans for the Ellison Institute for World Health at Harvard are on hold, and three senior managers who had already been hired have been dismissed. The center planned to hire 20 research fellows and 130 staff members by next summer and had already chosen its board of trustees.


    ``As of today, the gift agreement hasn't been signed,'' Sarah Friedell, a spokeswoman with Harvard's Office of Alumni Affairs and Development, said in an interview Wednesday.


    But why it hasn't been signed remains a mystery.


    Ellison surprised the philanthropy world in May 2005 when he began to talk publicly about the $115 million gift, which would have been the biggest in Harvard's history. The university has an endowment of $25.9 billion.


    But at the time, Harvard did not confirm that an agreement had been reached with Ellison.


    People familiar with Ellison's ideas for the project said the idea for the center came from conversations Ellison had with Lawrence Summers, Harvard's president and a former U.S. secretary of the treasury. The two men discussed the center as an economic research project, using database technology to track improvements in world health. Summers, who is an economist, would have played a role in shepherding the project.


    But for the past 18 months, Summers' tenure at Harvard has been rocky, with internal clashes with professors, a legal scandal involving a friend and colleague and a firestorm over comments he made about women and science. In February, Summers announced he would resign June 30. According to some people familiar with the discussions over the center, without Summers, the deal lost momentum.


    According to the Financial Times, which first reported the story Wednesday, officials at Harvard say that Ellison made the promise to give the money in March 2005. Ellison's associates then told Harvard it would begin to see the money after Ellison settled an insider trading suit brought by Oracle shareholders.


    In November, Ellison settled a shareholders suit in San Mateo County court by agreeing to donate $100 million to charity.


    But Harvard has not heard directly from Ellison since November, according to the Financial Times.


    ``This happens, but it is very rare,'' said James Ferris, director of the Center on Philanthropy and Public Policy at the University of Southern California. ``There's a dance that goes on.''


    Ellison has been involved in another donation controversy. In 2001, Ellison talked with Stanford University about giving $150 million to create an institute to study technology's effect on politics and economics. Then Harvard began to vie for the money. So far, neither university has announced the creation of a center.


    An Oracle spokesman declined to comment.


    Ellison has created a name for himself in the medical world with the Ellison Medical Foundation, based in Bethesda, Md., which funds biomedical research into the understanding of the aging processes and age-related diseases and disabilities.


    ``The innovation and creative impact of the Ellison Institute has moved the field in aging research,'' said Barry Bloom, dean of Harvard's School of Public Health, who is also a board member of the Ellison Medical Foundation.


    Bloom says he has not been involved with the funding of the Harvard center. His work on the board of Ellison's foundation would have created a conflict of interest, he said.


    Although projects sometimes get started before the financing arrives, Bloom said he was surprised that Harvard counted on the money and began to recruit people before the agreement was signed.


    ``I hope to hell they have learned their lesson,'' he said.


     


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  • June 23rd, 2006


    Editorial


    A Look at Republican Priorities: Comforting the Comfortable



    Two weeks ago, the Senate killed an effort to repeal the federal estate tax on multimillion-dollar fortunes. The "no" votes were a stand for budget sanity and basic fairness. But the pro-repeal camp doesn't want to take no for an answer.


    Yesterday, the House of Representatives passed an estate-tax cut that is a repeal in everything but name. The so-called compromise would exempt more than 99.5 percent of estates from tax, slash the tax rates on the rest and cost at least $760 billion during its first full decade. Of that, $600 billion is the amount the government would have to borrow to make up for lost revenue from the cuts, which would benefit the heirs of America's wealthiest families, like the Marses of Mars bar and the Waltons of Wal-Mart Stores. The remaining $160 billion is the interest on that borrowing, which would be paid by all Americans.


    No lawmaker who voted for the compromise gets any points for moderation. Like the earlier full repeal bill, this one is unfair and grounded in intellectual dishonesty. The goal is not to pass good legislation, but to get this top priority for big-shot constituents nailed into law before the November elections produce a legislature that's more responsible on fiscal matters.


    In an attempt to rally support, House lawmakers have included in the bill another, totally unrelated, tax cut — for timber companies, worth $900 million over the next three years. The measure, based on the theory that American timber companies are at a disadvantage in the global marketplace, is essentially a special-interest giveaway that would encourage every business with international competitors to demand its own tax break. There is much to reform on the competitiveness front, but it should be done comprehensively, not on the basis of who has the senators best positioned to carve out a special deal.


    The timber provision is a blatant attempt to extort "yes" votes out of four Democratic senators who have supported the timber industry in the past, but who have opposed estate-tax repeal: Senators Maria Cantwell and Patty Murray, both of Washington, Mark Pryor of Arkansas and Mary Landrieu of Louisiana. The idea is that if a few Democratic opponents can be enticed to vote for the estate-tax cuts, Republicans who have previously broken with their party over the issue might also go along, notably Senators George Voinovich of Ohio and Lincoln Chafee of Rhode Island.


    All this effort for a bill that would put $760 billion in new debt on the backs of Americans in the name of making a handful of extremely rich people even richer. Congressional leaders may know how to count votes, but otherwise their math is pathetic.


     



    June 23, 2006

    Editorial

    A Look at Republican Priorities: Afflicting the Afflicted



    At the same time that Republicans are fighting to exempt the richest estates from taxes, they are blocking a raise for the nation's poorest workers.


    Senate Democrats tried unsuccessfully this week to raise the federal minimum wage, which stands at just $5.15 an hour. It has not been increased in nearly a decade, and at its current stingy level, the rate flies in the face of Americans' belief that those who work hard and play by the rules will be rewarded. A minimum-wage worker earns just $10,700 a year, nearly $6,000 below the poverty line for a family of three. Since the minimum wage was first adopted, there has been a long tradition of bipartisan support for regular raises. Presidents Dwight Eisenhower, Richard Nixon and George H. W. Bush all signed increases into law. Americans across the political spectrum strongly support the minimum wage, and believe it should be significantly higher. A recent poll by the nonpartisan Pew Research Center found that 83 percent of Americans favored increasing the minimum wage by $2.


    Nevertheless, since 1997 minimum-wage increases have regularly been blocked in Congress. The restaurant industry and other low-wage employers that make heavy campaign contributions have thrown their weight around with great success. A bill sponsored by Edward Kennedy, Democrat of Massachusetts, to increase the minimum wage by $2.10 over two years drew the support this week of 52 senators, including eight Republicans, but Republican leaders threw up procedural barriers. And in the House, Republican leaders are not letting a minimum-wage increase come to a vote, apparently because it would pass.


    Just 23 percent of Americans approve of the job Congress is doing, according to a recent New York Times/CBS News poll. These dismal ratings are no surprise when Congress's highest economic priority is handing out tax cuts to millionaires and oil companies, and its one point of fiscal restraint is protecting employers from having to pay a decent wage to factory workers and waiters.


     


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June 20, 2006





  • Bombay's Boom

    Brash, messy and sexy, India's biggest city embodies the nation's ambition. How Bombay is shaping India's future--and our own



    The streets are wet with the dew of the coming monsoon as Rajeev Samant unveils his latest enterprise in midtown Bombay. The Tasting Room is a softly lit tapas bar built into a high-end furniture store in the old textile district. The idea is to showcase Samant's range of Indian wines in a space that oozes class and cash--with bottles costing twice the average Indian weekly wage, it's meant to be exclusive. Tonight the guests include local investment bankers, venture capitalists and a group of students from the business school in Fontainebleau, France, on a two-week trip to India to see what all the buzz is about. Over Chenin Blanc and Reserve Shiraz, the patrons swap investment tips and gossip about recent sightings of Richard Gere and Will Smith. "You're so lucky to be here now," says Samant, 39. "This is an incredible time. It's all happening. Right here, right now."


    He's right. If you want to catch a glimpse of the new India, with all its dizzying promise and turbocharged ambition, then head to its biggest, messiest, sexiest city--Bombay. Home to 18.4 million people and counting, the city, formally known as Mumbai, is projected by 2015 to be the planet's second most populous metropolis, after Tokyo. But it's already a world of its own. Walk down its teeming streets, and you'll encounter crime lords and Bollywood stars, sprawling slums and Manhattan-priced condos, and jam-packed bars where DJs play the music of the Punjab, bhangra--a pulsating sound track familiar to clubgoers in London and New York City. Bombay is where Wall Street gets equities analyzed, where Kellogg, Brown & Root sources kitchen staff for the U.S. Army in Iraq, and where your credit-card details may be stored--or stolen. It's where a phone operator who calls herself Mary (but is really Meenakshi) sells Texans on two-week vacations that include the Taj Mahal and cut-rate heart surgery. Chances are those medical tourists will touch down in Bombay, since 40% of international flights to India land here, delivering thousands of new visitors every day--an increasing number of whom are staying for good. The reason is simple: to know Bombay is to know modern India. It's the channel for a billion ambitions and an emblem of globalization you can reach out and touch, a giant city where change is pouring in and rippling out around the world.


    But if India's biggest city is its great hope, Bombay also embodies many of the country's staggering problems. The obstacles hampering India's progress--poor infrastructure, weak government, searing inequality, corruption and crime--converge in Bombay. Although India boasts more billionaires than China, 81% of its population lives on $2 a day or less, compared with 47% of Chinese, according to the 2005 U.N. Population Reference Bureau Report. That class divide is starkest in cities like Bombay, where million-dollar apartments overlook million-population slums. For all its glitz, Bombay remains a temple to inefficiency. In 2003 it had one bus for every 1,300 people, two public parking spots for every 1,000 cars, 17 public toilets for every million people and one civic hospital for 7.2 million people in the northern slums, according to a report for the state government by McKinsey & Co. At least one-third of the population lacks clean drinking water, and 2 million do not have access to a toilet.


    Whether Bombay's entrepreneurial energy can be directed toward lifting more of its people out of despair will help define the nation's future. The country's pro-growth Prime Minister, Manmohan Singh, has said he dreams that Bombay will someday make people "forget Shanghai"--China's financial capital, whose modern gleam is a reminder of the gap between India and its eastern rival. Right now it's not much of a contest. India's GDP (gross domestic product) growth was 8.4% last year vs. 10% for China, while foreign investment in India was an estimated $8.4 billion, compared with $72.4 billion in China.


    But India does possess one indispensable asset, which has sustained its democracy and catapulted it to the cusp of global power: the ingenuity of its citizens. And nowhere is it in greater supply than in Bombay. "Things just happen here," says Sanjay Bhandarkar, managing director of investment bank Rothschild's India. "Because people have to make things work themselves." The rise of China has been the product of methodical state planning, but India's is all about private hustle, a trait that Americans can appreciate. Rakesh Jhunjhunwala, a billionaire trader in Bombay, says initiative represents Bombay's--and India's--advantage over its competitors. "It's people who make countries," he says, "not governments."


    BOMBAY HAS BRIMMED WITH COCKY entrepreneurs since the Portuguese took possession of seven malarial islands off the west Indian coast in 1534 and called them Good Bay, or Bom Baia. Big talk attracts big crowds, and five centuries of migration have made Bombay the largest commercial center between Europe and the Far East. Nobody actually comes from Bombay. Even families who have lived there for generations still refer to an ancestral village 1,000 miles away as home. That sense of a place apart is reinforced by geography and architecture. You cross the sea or an estuary to reach downtown. And once there, you find a tropical British city of Victorian railway stations, Art Deco apartment blocks and Edwardian offices. Christabelle Noronha, a p.r. executive who has lived in the city all her life, says the sense of being in a foreign land gives Bombay an uninhibited air. "If everyone is a stranger, then everyone is free," she says.


    As the subcontinent's New York City, Bombay is built not on tradition but on drive. "Pull anyone out of any part of India, and put them in Bombay," says Rothschild's Bhandarkar, "and he'll acquire that sense of purpose." India's great industrialists--the Tatas, the Ambanis, the Godrejs--all began in Bombay. The city's stock exchanges account for 92% of the country's total share turnover, and the nation's central bank and hundreds of brokerages and investors have set up their Indian headquarters there, including such global powerhouses as HSBC, JPMorgan Chase and Bank of America. Bombay's port handles half of India's trade, and its southern business district is one of the centers of the global outsourcing boom. India's music industry and much of its media are based in Bombay, as is India's Hindi film industry, Bollywood. Such a concentration of business activity breeds a sophisticated, cosmopolitan outlook--hence Bombay has India's best hotels, bars, restaurants and nightclubs. And every day, according to the official census, hundreds move to the city to seek their fortune.


    To migrants from India's poor states, the metropolis is known as Mayanagri, the City of Dreams. To its slums come people from India's villages, hitching rides and dodging train fares, prepared to sell spicy peanuts at traffic lights for a few cents a day and pay $1 a month to live in a tin hut. For some of them, the principal opportunity the city offers is a life of crime--running bootlegging operations or gambling dens--or renting out the hovels in which millions of Bombay's inhabitants live. Just as for Bombay's gilded élite, the city is the place to be. "I came from nothing," says a Bombay gangster who grew up in Bihar, India's poorest state and owns 30,000 huts in four slums. "Now I have money, phones, cars, houses, a wife and two girlfriends. If you were me, you'd love Bombay too."


    That not to say it's easy to love. If you judge Bombay by governance, it sounds as though the city is falling apart. In a calamity last July that was mercifully forgotten with the advent of Hurricane Katrina weeks later, heavy monsoon rains flooded Bombay for a week as the city's 150-year-old drains and sewers collapsed. At least 435 people died. The infrastructure bears other scars of neglect. In the city's small and ancient stock of trains, each is crammed with an average of 4,500 people, although most have a capacity of 1,750. As a result, passenger groups say, an astonishing 3,500 travelers die every year on the tracks, hundreds simply falling from the trains. City rent controls have kept the price of its swankiest apartments almost unchanged since 1940, encouraging landlords to let them crumble--as several blocks do, fatally, every year. Visitors to the most prestigious offices in the country in south Bombay run a gauntlet of homeless people outside. Movie director Shekhar Kapur, who returned after years in London and Los Angeles, says living in Bombay means confronting the class divide daily: "This must be one of the few places on earth where the rich try to work off a few pounds in the gym, step outside and are confronted by a barefoot child of skin and bones begging for something to eat."


    Those urban extremes can be hard to take, but locals pride themselves on their pluck and self-reliance. When the floods hit last year, rescue workers were nowhere to be seen, but shanty dwellers sheltered businessmen, slum children rescued film stars, and untouchables saved holy men. "There was a feeling that went through people," says film producer and director Mahesh Bhatt, who is suing the city for its alleged mishandling of the crisis. "We realized no one was going to descend from the heavens to solve our problems, and we were going to have to do it ourselves." The same is true of Bombay's economy. "On the face of it, the city's screwed," says wine impresario Samant. "Look at the traffic, the bureaucracy, the sewage, so much poverty next to so much money. You'd think the place would erupt." Yet look at how nimbly the city negotiates those obstacles, he says. "There's no better place to be in business right now."


    Five centuries after the first foreigners arrived, Bombay is once again attracting fortune seekers from far away. Yana Gupta's journey began in Brno, Czechoslovakia, in 1988 when she was 9 and her mother Dedenka stitched money and jewelry into her two daughters' clothes and took them on vacation to Croatia. "On the bus on the way back to Czechoslovakia," remembers Gupta, "we got down somewhere and went into some forest. The idea was to get to Germany. But the border guards caught us." The next year, Vaclav Havel led Czechoslovakia's revolution. But Gupta's mother had sown the seeds of escape deep in her daughter. By 15, Gupta was modeling in Prague. By 17, it was Milan. And by 19, she was sharing a models' flat in Tokyo. "It was a great experience," she says. "I was learning English and making money. And when I was 21, I came to India for a vacation, met someone in an ashram, and in two months I married him."


    Gupta later separated from her husband. But she stuck with Bombay, and the city quickly became attached to her. She did her first fashion shoot in January 2001, and within three months she was signed as the face of Lakme cosmetics. Today she is India's top model, representing Christian Dior, 7Up and Kingfisher Airlines. She has an annual calendar and a song-and-dance show, and is a fixture on the gossip pages; a book and an album are up next.


    Gupta is the most prominent of the foreigners who have moved to Bombay yet is far from alone. The last official count in 2005 estimated that there were just 30,000 foreigners working in India, but that number is rocketing. Delhi-based market researcher Evalueserve says an additional 120,000 are needed by 2010 to fill the skills shortage in the IT industry alone, and Bombay real estate agents report that foreigners are fueling a run on luxury properties. The reason for the influx, says Gupta, is that anyone in any profession can rise faster and higher in Bombay than almost anywhere else. The author E.B. White said, "No one should come to New York to live unless he is willing to be lucky," which could just as easily be said of Bombay today. Says Gupta: "That's the thing about Bombay. It's the place of possibility."


    That promise is luring others home. When Samant left school 20 years ago, any Indian with ambition and means got out, and Samant followed a well-trodden path to Stanford and on to Oracle in California's Silicon Valley. Then in 1991 Singh, at the time the country's Finance Minister, began to open up India, dismantling a creaking socialist command economy that had chained India to poverty and stagnation since independence. Samant returned home with a mad new plan: to make wine in a country where alcohol was taboo and the closest thing to sophisticated intoxication was hooch. Thirteen years later, Samant runs Sula, one of India's largest vintners, producing more than a million bottles a year. And he lives large, employing a chauffeur and a butler, vacationing in Europe and California, and partying every night in Bombay.


    India's great hope runs on hope itself. Hope is the reason Gupta stays in Bombay, despite falling ill from diesel fumes each time she crosses the city. Samant says it's why, unlike in New Orleans, the people didn't disintegrate with their city after the floods. Hope brought Bombay together and keeps it together. "Look at Dharavi," he says of the city's notorious slum, the biggest in Asia. "The place has a GDP of $1 billion a year. Dharavi makes you realize everyone has a stake in keeping Bombay going." One day all those millions of expectations will have to be satisfied. But for now, the City of Dreams is living up to its name.



     


     





    India Awakens

    Fueled by high-octane growth, the world's largest democracy is becoming a global power. Why the world will never be the same



    Even if you have never gone to India--never wrapped your food in a piping-hot naan or had your eyeballs singed by a Bollywood spectacular--there is a good chance you encounter some piece of it every day of your life. It might be the place you call (although you don't know it) if your luggage is lost on a connecting flight, or the guys to whom your company has outsourced its data processing. Every night, young radiologists in Bangalore read CT scans e-mailed to them by emergency-room doctors in the U.S. Few modern Americans are surprised to find that their dentist or lawyer is of Indian origin, or are shocked to hear how vital Indians have been to California's high-tech industry. In ways big and small, Indians are changing the world.


    That's possible because India--the second most populous nation in the world, and projected to be by 2015 the most populous--is itself being transformed. Writers like to attach catchy tags to nations, which is why you have read plenty about the rise of Asian tigers and the Chinese dragon. Now here comes the elephant. India's economy is growing more than 8% a year, and the country is modernizing so fast that old friends are bewildered by the changes that occurred between visits. The economic boom is taking place at a time when the U.S. and India are forging new ties. During the cold war, relations between New Delhi and Washington were frosty at best, as India cozied up to the Soviet Union and successive U.S. Administrations armed and supported India's regional rival, Pakistan. But in a breathtaking shift, the Bush Administration in 2004 declared India a strategic partner and proposed a bilateral deal (presently stalled in Congress) to share nuclear know-how. After decades when it hardly registered in the political or public consciousness, India is on the U.S. mental map.


    Among policymakers in Washington, the new approach can be explained simply: India is the un-China. One Asian giant is run by a Communist Party that increasingly appeals to nationalism as a way of legitimating its power. The other is the largest democracy the world has ever seen. The U.S. will always have to deal with China, but it has learned that doing so is never easy: China bristles too much with old resentments at the hands of the West. India is no pushover either (try suggesting in New Delhi that outsiders might usefully broker a deal with Pakistan about Kashmir, the disputed territory over which the two countries have fought three wars), but democrats are easier to talk to than communist apparatchiks. Making friends with India is a good way for the U.S. to hedge its Asia bet.


    Democracy aside, there is a second way in which India is the un-China--and it's not to India's credit. In most measures of modernization, China is way ahead. Last year per capita income in India was $3,300; in China it was $6,800. Prosperity and progress haven't touched many of the nearly 650,000 villages where more than two-thirds of India's population lives. Backbreaking, empty-stomach poverty, which China has been tackling successfully for decades, is still all too common in India. Education for women--the key driver of China's rise to become the workshop of the world--lags terribly in India. The nation has more people with HIV/AIDS than any other in the world, but until recently the Indian government was in a disgraceful state of denial about the epidemic. Transportation networks and electrical grids, which are crucial to industrial development and job creation, are so dilapidated that it will take many years to modernize them.


    Yet the litany of India's comparative shortcomings omits a fundamental truth: China started first. China's key economic reforms took shape in the late 1970s, India's not until the early 1990s. But India is younger and freer than China. Many of its companies are already innovative world beaters. India is playing catch-up, for sure, but it has the skills, the people and the sort of hustle and dynamism that Americans respect, to do so. It deserves the new notice it has got in the U.S. We're all about to discover: this elephant can dance.


     


     

June 16, 2006

  •  



    Robert Reich's Blog


    Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley. This is his personal political-economic journal.





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    Thursday, June 15, 2006



    There's No "Inflation Genie."




    I've spent much of the day on the phone, talking with financial reporters about inflation and the "consensus" view on Wall Street that Bernanke and the Fed must raise short-term rates again in order to stop the inflation genie from getting out of the bottle. Wall Street is wrong. It's still haunted by the double-digit inflation of the late 1970s. It forgets the double-digit depression of the 1930s.

    The fact is, this economy is not at all like the economy of the 1970s. Labor unions don't have nearly the power they did then to demand wage increases. Big companies don't have nearly the power they did then to raise prices. Globalization and computer software have radically increased wage and price competition. So the inflation genie won't get out of the bottle. The price rises we're seeing now are due to energy and raw-material commodity price increases, which are NOT being driven by excessive demand by American consumers and NOT being driven by inflationary expectations. They're the result of soaring increases in demand for energy and raw materials by China and India, and by uncertainties over energy supplies from the Middle East, Nigeria, Russia, and Venezuela.

    In addition, productivity has grown enormously in the US during the last five years. Wages have not. Wages comprise 70 percent of the costs of business. One last thing: There's still lots of unemployment in the US. The payroll survey shows only small increases in hiring. A smaller proportion of adults are employed now than in 2000. The ranks of people too discouraged to look for work are very large.

    So forget the inflation genie. Worry more about the 1930s. I don't mean to suggest a full-fledged depression is on the horizon. But I do worry that the economy is slowing. Consumers are reaching the limit of their capacity to go deeper into debt. Their one cash cow -- the value of their homes -- is in poor shape. To make matters potentially worse, not only is the Federal Reserve Bank raising interest rates too high, so are central bankers all over the world. Take a look at long-term interest rates and you see how worried lenders are about the economy overall. If the Fed keeps raising short-term rates we're heading for a major downturn.

    Me thinks Bernanke wants to show Wall Street he's a tough guy. But tough guys often over-estimate the importance of acting tough.

    In the end, the people who get clobbered when the Fed raises rates and the economy slows are those at the end of the job line -- people who need jobs, or are in low-paying ones. They're the first to be let go. At a time when the number of working poor in America are already ballooning, and the ranks of the impoverished are growing, it's not only economically wrong for the Fed to go on raising rates. It's ethically wrong.

     

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June 14, 2006


  • The American Way of Debt







    Published: June 11, 2006


    Americans are awash in red ink. Consumer indebtedness is soaring, the savings rate is down to zero and people are filing for bankruptcy at record rates. To many observers, these are symptoms of cultural decline, from sturdy thrift to flabby self-gratification — embodied in the current obesity epidemic. The fattest nation on earth is also the greediest consumer of global resources and now is borrowing more than ever to satisfy its appetites. There is a large core of truth to this indictment.



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    Robert W. Kelley/Time Life Pictures/Getty Images



    Magazine



    Off to the Races Again, Leaving Many Behind

    The Money Issue
    America's scariest addiction is getting even scarier.

    But as the history of debt in America shows, condemnations of extravagance can obscure more than they illuminate. The equation of debt and decline assumes that once upon a time Americans lived within their means and saved for what they bought. This is fantasy: there never was a golden age of thrift. Debt has always played an important role in Americans' lives — not merely as a means of instant gratification but also as a strategy for survival and a tool for economic advance.


    Yet our moral traditions have concealed this complexity. "Owe no man anything," St. Paul warned, and from the New England Puritans forward, legions of Protestant ministers made this their text. Indebtedness signified a sin against the Protestant ethic of self-control; it also threatened the ideal of independent manhood that underwrote the founders' vision of a virtuous republic. The indebted man "must smile on those he hates, he must extend his hand where he would strike, he must speak pleasantly with a curse in his throat," a Harper's contributor wrote in 1894. "He wears dependence like a yoke." Benjamin Franklin coined similar lessons in aphorisms later memorized by generations of Victorian-era schoolchildren: "The Borrower Is a Slave to the Lender." "Be frugal and free." The link with lost freedom was more than metaphorical: you could still be imprisoned for debt in many places (including New York City) down to the early 1900's.


    Still, the case against debt was more principled than practical. Every generation of moralists imagined the same fall from financial rectitude. In their novel "The Gilded Age" (1873), Mark Twain and Charles Dudley Warner mourned the disappearance of the antebellum "horror of debt" amid the speculative borrowing of the post-Civil War years.


    In 1924, the editor of The Saturday Evening Post complained that "the firmly rooted aversion to debt in any form which prevailed a generation ago has almost completely evaporated." In 1958, John Kenneth Galbraith noticed that "there has been an inexplicable but very real retreat from the Puritan canon that required an individual to save first and enjoy later."


    In fact, debt is as American as cherry pie. For George Washington and Thomas Jefferson, debt was the price they paid to participate in the world of big-spending Southern planters. Among plainer rural folk, through most of the 19th century, cash was scarce, and country-store ledgers carried local peoples' debts for years, sometimes forever. Factory workers and laborers used debt to make ends meet, resorting to pawnshops, loan sharks, relatives and friends.


    Even moralists admitted distinctions between good ("productive") debt and bad ("consumptive") debt. The other side of debt, after all, was credit — "Beautiful credit! The foundation of modern society," as Twain and Warner called it in "The Gilded Age." They had a point. The root of credit was credo — "I believe" — and faith was a necessary component of most transactions in an expanding economy. Borrowing money was "getting trusted," in the argot of Victorian commerce. Among businessmen, indebtedness was a sign that you were "a man of importance in the community," as a euphoric young John D. Rockefeller said after he was "trusted" by a Cleveland bank for $2,000. Not financial obligations but the failure to meet them was what made you "good for nothing."


    Among the failures in the late 19th century were farmers, whose crop prices fell while they struggled to pay for threshers and combines. Desperate for relief from creditors, they demanded an expansion of the money supply through the free coinage of silver. The "money question" peaked in the election of 1896, when the Northeastern creditors' candidate, William McKinley, defeated William Jennings Bryan, the spokesman of the agrarian South and West. Those last two regions, a writer for The Atlantic Monthly observed, had "nothing in common but a lack of thrift." Imprudent borrowers took on debt "with only a speculative opportunity to pay" — and this, the magazine charged, violated the trust required to maintain the credit system. This rhetoric of "sound money" concealed a clash of interests between bankers and farmers, Wall Street and Main Street. It would not be the last time that moralism would mask class conflict in debates over monetary policy.


    After 1900, the proliferation of mass-marketed products encouraged a more open tolerance for consumer debt. By the 1920's, millions of middle-class Americans bought durable goods on time payments — sewing machines, washing machines, radios, automobiles, houses. Lenders acquired legitimacy, reinforced by reassuring names like Household Finance Corporation or General Motors Acceptance Corporation. "Acceptance" implied membership in a national community of responsible borrowers. Indebtedness could discipline workers, keeping them at routinized jobs in factories and offices, graying but in harness, meeting payments regularly. Good consumers would be good producers. The economist who proposed this idea was Simon Nelson Patten, in "The New Basis of Civilization" (1907). By providing new sanctions for spending, Patten helped create a cultural landscape where consumer debt could find a decent suburban home. He predicted that workers' desires for things would not undermine their capacity for disciplined achievement, as generations of moralists had claimed; rather, the multiplication of wants would become part of the civilizing process, as workingmen and their wives would broaden their horizons and take pride in their accumulating possessions. Patten's New Basis began the project that E.R.A. Seligman would complete in "The Economics of Installment Selling" (1927) — the abolition of the distinction between "productive" and "consumptive" debt.







    Patten was onto something. The disciplining power of debt was undeniable. Even during the Depression, while Americans cut back on new borrowing, they also denied themselves food and clothing to avoid repossession of refrigerators or real estate. "Oh, the tension in the house," one of Studs Terkel's informants recalled in "Hard Times," "when Pa used to scramble around trying to get enough money to pay that installment loan. That was the one degrading thing I remember." In 1932, a Harper's contributor observed that the middle-class homeowner "no longer has possessions but only obligations." This homeowner did not exactly represent an ethos of self-gratification.

    The true fulfillment of Patten's vision depended on an economically secure working population. These conditions awaited the rise of strong industrial unions and the comparative prosperity of the post-World War II era. The acquisition of appliances, cars and houses was often financed on the installment plan or with the assistance of government agencies like the Federal Housing Administration. Thanks largely to union power, more fortunate workers could depend on steady wages that allowed them to pay off big-ticket items over time. Patten would have been pleased.


    The upward spiral of earning and spending survived until the 1970's, when the midcentury ideal of corporate citizenship evaporated in the harsher climate of renewed international competition. Fearing foreign rivals, American business ended its implicit social contract with unions by seeking cheap labor in overseas markets. During the 1980's, while real income continued to stagnate for most Americans, the ascendancy of Ronald Reagan gave government sanction to unprecedented consumer spending. Reagan's rhetorical refusal of limits combined with the deregulation of the lending industry to detach dreams of luxury from previous constraints. As money worship mounted, job security disappeared and inequalities widened, pundits spoke of a new Gilded Age. By the 1990's, bloated icons of affluence proliferated: the gargantuan pseudo-military vehicle, the 10,000-square-foot hacienda. A bigger standard package of household goods demanded deeper debt and accelerated the pace of the consumer treadmill. No one wanted to look like a "loser."


    But for many borrowers, debt has not been just about keeping up appearances. Less-affluent Americans have resorted to borrowing for groceries as well as cars. Public policies have intensified their plight. The freezing of the minimum wage, the tightening of unemployment insurance and workmen's compensation programs, the shifting of the tax burden from the rich to the rest — these changes have starved public services while leaving ordinary Americans more dependent than ever on debt. One of the most consistent statistical findings of recent years is that about half of all personal bankruptcies have been caused by medical bills. Whatever else our current indebtedness may signify, it is hardly a riot of hedonism.