1. A first sustainability conference for the Freeport Apollo Group (FLAG) near Pittsburgh:
   

   Notable speakers on historic preservation, outdoor recreational tourism, stormwater management, urban forestry, green building practices, and locally grown food and agriculture are at the crux of a “sustainability conference” being hosted by the Freeport Leechburg Apollo Group.

   Also interesting is that they’re including a panel on historic preservation, which I’ve always thought belongs in discussions of sustainability, because it helps people connect with their (cultural) environment better.

2. Professor John Sterman of MIT interviewed on sustainability:
   

   But the perspective of those of us at the S-Lab is that sustainability is much broader than just an ecological concept. We think of sustainability as encompassing not just ecological issues but economic issues, social issues, political and even personal issues. You can’t have a sustainable ecosystem if there’s extreme poverty, if there’s no opportunity for people to meet basic human needs and realize their potential. And of course you can’t have a healthy economy if the result of that economic activity is the degradation of the environment.

   Framing this as loggers versus spotted owls, growth versus green, economy versus environment—as opposition—doesn’t work and isn’t right. These things are fundamentally aligned. And I think people are hungry for that alignment.

3. Paul Krugman’s NY Times piece on building the green economy:
   

   Like the debate over climate change itself, the debate over climate economics looks very different from the inside than it often does in popular media. The casual reader might have the impression that there are real doubts about whether emissions can be reduced without inflicting severe damage on the economy. In fact, once you filter out the noise generated by special-interest groups, you discover that there is widespread agreement among environmental economists that a market-based program to deal with the threat of climate change — one that limits carbon emissions by putting a price on them — can achieve large results at modest, though not trivial, cost. There is, however, much less agreement on how fast we should move, whether major conservation efforts should start almost immediately or be gradually increased over the course of many decades.

   In what follows, I will offer a brief survey of the economics of climate change or, more precisely, the economics of lessening climate change. I’ll try to lay out the areas of broad agreement as well as those that remain in major dispute. First, though, a primer in the basic economics of environmental protection.

   It really is a good overview on the basics of the economics of climate change mitigation.

4. The American Society of Landscape Architecture (ASLA) notes the creation of the SEED standard from Harvard’s Graduate School of Design:
   

   A group of architects, designers, activists, and community leaders interested in “public interest design” came together in 2005 at Harvard University Graduate School of Design and conceived of a set of principles and tools that would feature a greater focus on the social and economic facets of buildings and neighborhoods. Five years later, a team has launched a new standard called SEED (Social Economic Environmental Design). SEED is designed to provide guidance, evaluation, and certification on the social, economic, and environmental aspects of buildings and neighborhoods.

   Engaging local stakeholders is critical in the SEED process:

   SEED maintains the belief that design can play a vital role in the most critical issues that face communities and individuals, in crisis and in every day challenges. To accomplish this, the SEED® process guides professionals to work alongside locals who know their community and its needs. This practice of ‘trusting the local’ is increasingly recognized as a highly effective way to sustain the health and longevity of a place or a community as it develops.

5. The ASLA’s Dirt blog also highlights Cuba’s big strides in sustainable agriculture following the collapse of the Soviet Union and their economic aid twenty years ago:
   

   Farmers and agronomists responded to economic isolation by localizing food production, which has now taken off across Cuba’s urban areas. In fact, urban farms in “vacant lots in the capital, Havana, and a network of producers across the country” now provide 80 percent of the country with local, organic produce and helped turn Cuba into an “unintentional leader of the green movement,” says Solutions. CBS News adds that most urban farms where organic produce is grown are walking distance from residents.

   The fall of the Soviet Union meant the end to external support, and green agricultural practices had to be scaled up quickly. In the early 1990’s, ”agricultural production in Cuba, dominated by sugar cane production for export, following Spanish colonial practice, shrank from 88.1 Million Metric Tonnes in 1990 to around 2.2 MMT in 1993. Supplies of corn, Cuba’s other main product and a staple of the Cuban diet, fell by 70 percent. In Havana, the average caloric intake over the same period fell from 3,052 calories per day to 2,099. Some reports suggest that many were surviving on only 1,500 calories a day.” To save Cubans from starvation, agronomists and farmers pushed for the decentralization of agriculture, an end to collective farms.

Jack Webb Shilling for Fatima Cigrarettes

This audo advertisement (click the Fatima picture for the audio) for Fatima cigarettes originally aired on April 15, 1954 during a Dragnet episode called “The Big Pug.”  Fatima, a Liggett and Myers tobacco company brand, was the sponsor of the episode and ran similar ads as “public service announcements” at the start, middle, and end of the episode.  This is the ad from midway during the show.  It’s about a minute and a half long.

While listening to this old episode of Sgt. Friday doing his “Just the facts, ma’am” Dragnet best, I was struck by how bold the assertions were during these ads.  ”It’s wise to smoke Fatima cigarettes” is their constant refrain.  This particular ad features a woman who works as a late-night news journalist at a big-time news agency.  In this ad she equates working longer with smoking more.

A paper by Professor David Rosner of Columbia University I recently read about the role that historians have been playing in pending law suits against tobacco companies made me think about whether people who became addicted to cigarette-delivered nicotine in past decades were aware of the health risks of smoking.  A great many consulting historians are arguing for their tobacco company employers that people were indeed aware of these risks and have been submitting histories of their awareness as evidence in these court cases.  Ads like this one suggest that smoking was not only a normal part of life, but also a routine part of life as successful hard-working career men and women.

According to the 1870 federal census, one percent of the people owned 72 percent of all the wealth in the great industrial city of Pittsburgh.  What’s more, just half of these wealthiest one percent (0.5% of the population) owned 59 percent, well more than half of all the wealth in historic Pittsburgh.  In fact, all of the net wealth in the city was held by just ten percent of the city’s population.  Simply put, the top ten wealthiest people in Pittsburgh owned nearly fifteen percent of the city that was at the time the heart of the nation’s growing industrial might.

There are those who have more than others.  True then and true now.  According to the World Institute for Development Economics Research, the wealthiest two percent of people globally own more than half of all the household wealth on the planet.  Half of those (just 1%) own more than 40% of global assets, while fully 85% of those global assets are held by the wealthiest top ten percent of us.  Within the United States, a similarly unequal distribution of wealth continues to exist.  The wealthiest 400 Americans (.001% or one thousandth of the population) own about 2.5% of U.S. wealth.  The wealthiest ten percent of Americans own 70% of the wealth in this country, and the top tenth of those (1% of U.S. population) hold 35% of the nation’s wealth.  In the dry language of the Census Bureau, this wealth inequality is described like this:

The distribution of wealth in the United States has a large positive skew, with relatively few households holding a large proportion of the wealth.

While it’s true that there is more economic equality within the United States today than there was in late nineteenth century Pittsburgh, and inequality within the United States is less than the inequality between the world’s wealthiest and the planet’s poorest, it remains staggeringly unequal.  Among developed nations, only Switzerland bests the United States in the percent of a nation’s wealth owned by the wealthiest ten percent of the population with its top ten percent owning 71% of Swiss wealth.  In the UK, the top ten percent own 56%, and in neighboring Canada, the top ten percent own 53% of the country’s wealth.

We read about the staggering fortunes of the most wealthy among us every year about this time when Forbes magazine releases its annual Forbes list of the wealthiest people in the world.  The global news media trumpets the jostling transitions of those at the top.  Headlines blare:

Gates Edged Out as World’s Richest Man

and

Mexico’s Slim a Born Wheeler and Dealer

and

Meet the World’s New Richest Man

As interesting and insightful as these facts about the wealthiest among us, what about those at the lower end of the ladder?  What about the 85% of the 1870 population in Pittsburgh that had no net worth, or the 80% of contemporary Americans who own only 15% of the wealth in the country, or indeed about the 50% of the global population who own less than 1% of its wealth?

The Insight Center for Community Economic Development recently released a report that examines the net worth of those 85% of Americans with less wealth combined than the top quintile of Americans.   By examining the 2007 Survey of Consumer Finances, they found that African-American women in the United States during their prime working years between 36 and 49 have a median net worth of only $5.  Yes, that’s right.  The 36-49 year old African-American woman at the very middle of the distribution from the poorest to the wealthiest of 36-49 year old African-American women has a net worth of less than the cost of a Venti Frappuccino at Starbucks.  While half have more wealth than that, half have even less.

Reports like these almost never make the news, although my hometown Pittsburgh Post-Gazette newspaper’s Tim Grant did write about it :

In a groundbreaking report released Monday by a leading economic research group, social scientists turned a spotlight on the grave financial challenges facing an often overlooked group of women, many of whom could not take an unpaid sick day or repair a major appliance without going into debt.

“The popular image is they spend too much, which is the reason they are running up credit card and consumer debt, but the cost of living has risen faster than income, and they need to go into debt for basic daily necessities,” Ms. Lui said. “It’s compounded because unemployment is twice as high in the black community than it is in the white community.”

For all working-age black women 18 to 64, the financial picture is bleak. Their median household wealth is only $100. Hispanic women in that age group have a median wealth of $120.

There aren’t more mainstream media stories written about reports like these that call out the staggering inequality in America, because they make everyone feel badly.  Who wants that?

In fact, recent research suggests that, whether we read about it in the news or not, we do badly, all of us, because of it.  Epidemiologists Richard Wilkinson and Kate Pickett show in a well-reviewed work that all sorts of woes from social ills like drugs and violence to health problems like obesity and mental illness affect everyone in highly unequal societies more than those in less unequal societies.

Figure 1: Income inequality is the ratio of the wealth of the top 20% compared to the lowest 20% in each country. Health and social problems is an index of mental illness, trust, life expectancy, infant mortality, obesity, educational performance, teenage birth, homicide, imprisonment, and social mobility.

The chart in Figure 1 shows that there is a very clear relationship between social and health problems in a country and the extent of economic inequality within that country.  In Canada, for instance, where the top ten percent own 53% of the country’s wealth, health and social problems are significantly lower than in the United States where the top ten percent own 70% of the country’s wealth.  In Norway, where the top 10 percent hold a still substantial but lower 50% of the country’s wealth, social and health problems are lower still.  Even more importantly, however, is that the distribution of wealth in countries like the UK, Canada, and Norway is not only less concentrated at the top of the scale, it is also less diluted at the bottom end of the scale through strong social safety nets.

Figure 2: There is no relationship between a nation's wealth and social and health problems.

Further, what isn’t  indicative of fewer social and health problems is more wealth.  Figure 2 shows this same index of social and health problems plotted against national income per person.  As you can see, there is no relationship between the wealth of a nation and the social and health problems of its people, while there is a strong relationship between the extent of economic inequality within a nation and the social and health problems there.  As you can see from Figure 2, the United States clearly has the most wealth and the most health and social problems.  Portugal, on the other hand, is not far behind in the index of health and social problems in second place, but has the lowest national income per person.  What Portugal does share with the United States, as seen back in Figure 1, is a very high degree of economic inequality.  Norway, however, has the second highest amount of national income per person and yet ranks third lowest on the index of social and health problems.  Unsurprisingly, Norway also has the third lowest extent of income inequality as seen in Figure 1.  Clearly, there is no relationship between the wealth of a nation and the social and health problems of its people.  Just as clearly, there is a strong relationship between economic inequality in a country and the amount of health and social problems occurring there.

Figure 3: National mental illness rates and income inequality are related

This relationship is also apparent for the individual components like mental health of the social and health index.  Once again, Figure 3 shows the United States leading the pack in both income inequality and this time in the percent of its population with mental illness.  Countries like Belgium with significantly lower income inequality or Japan with the lowest extent of inequality both rank near or at the bottom of the scale for the percent of their population with mental health problems.

Is there some sort of confounding variable present in seemingly disparate countries like Belgium and Japan that isn’t present in the United States and Portugal that could possibly explain these disparities better than economic inequality could?  Is there, as they say, something in the water?  If so, there is no evidence to support that or anything else.  There is, however, this strong evidence that economic inequality does significantly impact the extent of social and health problems in a society.

Why is this? Why does economic inequality make everyone in a society do worse than they would otherwise?  What are the mechanisms by which inequality drives social and health problems?  Wilkinson and Pickett suggest three of them based on documented scientific insights.

First, humans are by nature cooperative.  Of course, we aren’t always cooperative, and some of us are more cooperative than others.  Nevertheless, we are as a species far more cooperative than others and a comparison with our closest relatives highlights just how cooperative we naturally are.

Consider the gestural point.  Sticking your index finger out and perhaps extending your arm towards a distant object is universally understood by humans from a very early age to signify that the person pointing is pointing at something that he or she wants the other person to notice.  Everyone knows this “Hey, look at that delicous cake” meaning of pointing, including, interestingly, your dog.  I can point to the piece of toast that my daughter has dropped on the kitchen floor, and my dog will easily understand that this means that I’m pointing to food that she can eat.  But no other species besides our dogs and ourselves know that that is what we are communicating when we point like that.  If you were to point like that to a chimpanzee, maybe by pointing towards a bunch of bananas in your grocery store bag, the chimpanzee would not understand what you meant.

This has nothing to do with prior training, but instead has to do with the fact that chimpanzees and other non-human primates are not cooperative.  The chimpanzee would not realize that there were those bananas in that bag until you began to grab them yourself.  In order to understand the declarative pointing gesture, you must first be able to assume that the pointer is trying to cooperate rather than compete with you.  Your dog gets this.  An infant human already knows this, but a non-human primate will never understand this.

Figure 4: Trusting others and income inequality are inversely related.

Humans (and our best friends) are uniquely cooperative.  As Naomi Eisenberger and Matthew Lieberman’s recent research at UCLA has shown, when we experience social exclusion, the same neural network is activated in our brains that is activated by physical pain.  Broken hearts and hurt feelings are real social forms of pain to humans.  Unequal societies have more of this social pain, less social support, and, as Figure 4 shows, less of that cooperative trust than more equal societies.

Secondly, even though we are considerably cooperative, we are also quite social.  Like other primates, we strive for status and part of us would relish being top dog.  We measure our own standing against that of others.  Consider that all of the graphs and discussion of the distribution of wealth in societies just in this article alone are essentially all ways of measuring people against one another socially.

Our self-esteem is linked to the ways in which other people rank and measure us.  We’d all like to be so self-assured that winning and losing didn’t matter, but the reality is that these things matter a great deal to all of us.  It’s part of life as a human.  Over two hundred scientific experiments have been conducted on the amounts that levels of cortisol, one of the primary stress hormones, rise in response to specific stressors, and it has been found by Sally Dickerson and Margaret Kearney at UCLA that performance judgements that threaten our social status or self-esteem and over which performance we have little or no control, such as running late to an important sales meeting but being stuck in traffic, “provoked larger and more reliable cortisol” than any other kind of stress.  We’ve all been in situations in which our performance was important, but no matter how hard we tried, we could never measure up.  These are stressful situations while we’re experiencing them, and afterwards often become depressing memories we’d rather not remember.

As Robert Sapolsky’s and many others’ research has shown, these high cortisol levels from psychological stress take an enormous toll on our bodies.  Elevated cortisol levels raise blood sugar and blood pressure.  While under the psychological stress of avoiding being eaten by a big stalking lion on the African savanna, these physiological changes are highly adaptive, enabling us to run faster and jump higher.  While sitting at a desk in an office worrying about taxes or retirement, these elevated cortisol levels lead to obesity and heart disease.

Quite simply, we want to be as good as those around us, and when we can’t, it stresses us out, which leads to a whole host of social and health problems from early onset puberty to drug use to violence to mental illness, several of which, because cortisol passes through the placental barrier, are passed on from mothers to children in utero.

Of course, we employ strategies like working hard to reach the top of the social ladder or at least avoid the bottom rungs.  Consequently, as several studies have shown, people work longer hours in more unequal societies.  We also know that, whether through birth, skin color, or simple luck, sheer hard work does not always correspond well to economic success or social status.  Does the Wall Street banker or Hilton heiress work harder than the Midwestern roofer?  People in more unequal societies also tend to borrow more on credit than those in more equal societies as an alternative strategy to keep up with the Joneses.  That keeping up is a whole lot easier when the Joneses of society are more rather than less like us.

Figure 5: There is a strong relationship between teen pregnancy and economic inequality.

Thirdly, Jay Belsky of Penn State, Laurence Steinberg of Temple, and Patricia Draper of Penn State found that when people learn as children that others are “opportunistic and self-serving and [that] resources are scarce and/or unpredictable,” they reach puberty earlier, become sexually active earlier, form more short-term relationships, and make less of an investment in their own parenting.  By contrast, those who learn as children that “others are trustworthy, relationships are enduring and mutually rewarding and resources [are] more or less constantly available” reach puberty later, defer sexual activity longer, form more long-term relationships, and make a greater investment in their own parenting.  As seen in Figure 5, a comparison of teen pregnancy rates across countries with more or less economic inequality bears this out.

All of the social and health problems that comprise Wilkinson and Pickett’s social and health index are certainly well-known and much-discussed topics in the United States.  It certainly isn’t an issue of a lack of awareness of these problems.  Rather, as Wilkinson and Pickett state:

Every problem is seen as needing its own solution — unrelated to others.  People are encouraged to take exercise, not to have unprotected sex, to say no to drugs, to try to relax, to sort-out their work-life balance, and to give their children ‘quality’ time.  The only thing that many of these policies do have in common is that they often seem to be based on the belief that the poor need to be taught to be more sensible.  The glaringly obvious fact that these problems have common roots in inequality and relative depravation disappears from view.

Throughout the late nineteenth and early twentieth centuries, Pittsburgh was filled with advice on how the grinding poverty, high crime, and excessive mortality experienced by the majority of the city’s residents could be cured by stopping the idleness of its working classes and teaching them self-improvement.  They had filthy habits, played too much baseball, and drank too much beer.  Instead, they should, reformers insisted, strive for refinement and betterment through walks across green fields, literature reading, and art appreciation.  So, Andrew Carnegie and others in the top one-half of one percent of Pittsburgh’s wealthiest built libraries, museums, and garden parks for those toiling for pennies in their mills and foundries twelve hours a day seven days a week.

Pittsburgh’s wonderful public libraries, stunning museums, and beautiful city parks are indeed valuable additions to civic life in the city.  Yet, we also know that the root of many of these social and health problems lies not in a lack of refinement and beauty, but in a lack of equality.  There are those who have more than others.  True then, true now, and likely to be true throughout our future.  However, it is not the existence of a gap between the richest and the poorest that appears to matter most, it is the extent to which that gap gapes that affects us all.  Certainly, much more could and should be done to make life more secure and less stressful for those on the bottom, because doing so would benefit us all.

Outsourced to James Kwak of the excellent Baseline Scenario blog who writes that Yves Smith in ECONned :

describes how trading in CDOs built out of mortgage-backed securities drove mortgage lending, and not the other way around. In the conventional account, unscrupulous lenders and investment banks were the creators of those toxic assets; in Smith’s account, at the peak in 2006, it was traders who were shorting the housing market who provided the equity that funded all those subprime mortgages.

But there’s another point that Smith makes that I found particularly memorable. She tells the fictional story of XCrop, a new, bioengineered food that is nutritionally complete and cheap to produce — a solution to malnutrition and obesity all in one. But twenty years after becoming popular, and after having become the mainstay of the food system (replacing today’s current staples), XCrop is found to have serious harmful effects on human health. Shifting back to today’s foods would be healthier, but it would be difficult and expensive.

Recent financial technology, Smith says, is like XCrop. The point she is making is that our policy objective should not be to get us back to the good old days of cheap mortgages and widespread securitization as quickly as possible so we can return to the outsized consumption of the past decade. We need to have a healthier financial system, and to get there we have to give up the wonder food that turned out to be so harmful to the economy. Instead, however, Smith argues that much of the government has been captured by the financial services industry — the inventors and manufacturers of XCrop. And so, at the end of the day, and despite the central role that free market economic orthodoxy played in producing the crisis, the problem we face is ultimately one of politics. (emphasis mine)

Of course. We’re in the worst economic crisis since the Great Depression, but Exxon Mobil still pumps out the dough:

Exxon Mobil Corp. set a quarterly profit record for a U.S. company Thursday, surging past analyst estimates.

Exxon Mobil (XOM, Fortune 500), the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items.

The company’s prior record was $11.68 billion in the second quarter of 2008.

Some more good local economic news:

The Pittsburgh region added 7,000 new jobs year-over-year in September, and saw its unemployment rate drop to 5.4 percent, the state reported Tuesday.

From the Post-Gazette:

Another airline is objecting to the big fee increases being proposed at Pittsburgh International Airport next year to offset the effects of fewer flights, particularly by US Airways.

My family has a long and largely happy history with MSA, and it’s good to hear some positive economic news for a change these days:

Safety products maker Mine Safety Appliances said its third-quarter sales were the highest in the company’s 94-year history, with profits jumping 75 percent, excluding a one-time gain a year ago.

A big part of this problem is that the “Green Revolution” brought the need for synthetic fertilizer to the developing world. This is but one of the consequences.

From the Washington Post:

As shock waves from the credit crisis began to spread around the world last month, China scrambled to protect itself. Among the most extreme measures it took was to impose new export taxes to keep critical supplies such as grains and fertilizer from leaving the country.

About 5,700 miles away, in Nairobi, farmer Stephen Muchiri is suffering the consequences.

It’s planting season now, but he can afford to sow amaranthus and haricot beans on only half of the 10 acres he owns because the cost of the fertilizer he needs has shot up nearly $50 a bag in a matter of weeks. Muchiri said nearly everyone he knows is cutting back on planting, which means even less food for a continent where the supply has already been weakened by drought, political unrest and rising prices.

While the world’s attention has been focused on rescuing investment banks and stock markets from collapse, the global food crisis has worsened, a casualty of the growing financial tumult.

This is absolutely huge news. How does McCain get to 270 now? Pennsylvania and Wisconsin are his last bets to pick up a sizable (sorry NH) Kerry state. Unfortunately for McCain, neither of those are at all trending in his direction. In fact, he’ll have a lot of trouble holding Florida, Ohio, Virginia, Colorado and North Carolina if the latest poll numbers hold. On top of which is that he’s already given up Iowa and New Mexico, which Bush won. Ouch! This has got to hurt Team McCain.

Jonathan Martin has a huge piece of news:

John McCain is pulling out of Michigan.

Just weeks ago, that state seemed like the key battleground, and McCain’s best bet (save New Hampshire) to pick up a Kerry state.

Now, McCain needs a win in states like Pennsylvania and Wisconsin, as the pressure on him to run the table grows and his winning scenarios narrow.