In Brazil, the Government Walks a Fine Line With Military Deployment

By Allison Fedirka


Brazil, like most countries in South America, experienced an extended period of military dictatorship during the latter half of the 20th century. These regimes were notorious for their strict control over society and violent suppression of political opposition. Democracy was instated only a generation ago and military dictatorship is still a very sensitive topic in many of these countries. That is why the Brazilian government’s recent deployment of the military to step up security in the state of Rio de Janeiro after a spike in violence following Rio’s carnival festival has raised some eyebrows.





Understanding the military’s role in Brazil’s history, the government has been very deliberate in the way it has carried out the intervention. President Michel Temer proposed imposing Article 34 of the constitution that says the military can intervene in situations where national integrity and state control are under serious threat. There was considerable political support for the measure with the lower house of parliament voting 340 in favor and 72 against with one abstention and the senate voting 55 in favor, 13 against and one abstention. This is the first time since the 1988 constitution was introduced that this article has been implemented. The measure will be applied for one year and then re-evaluated. Although the military had previously carried out some security operations in Rio, now it will be in charge of security operations and local police forces.

A Critical Moment

The move comes at a crucial juncture in Brazil’s modern history. Brazil is a very young democracy. From 1964 to1986, the country was under military rule and its current constitution did not come into force until 1988. The first generation to be born under a democracy in Brazil is now reaching adulthood and becoming more involved in business, politics and security. Most adults over the age of 40 – nearly 38 percent of the country’s total population – will have memories of what life was like under military dictatorship.

Therefore, the possibility of military rule returning to Brazil is concerning for many Brazilians, though a small portion of the population sees it as preferable to modern party politics that are widely viewed as extremely corrupt. Since 2015, Brazil’s political system and institutions have come under a lot scrutiny, particularly since the impeachment of former President Dilma Rousseff. Rousseff’s downfall was just the tip of the iceberg and part of multiple massive corruption investigations that involved politicians at all levels and from all parties. This left the public disillusioned by politicians and the political system, and the government weaker than it had been for a decade.

At the same time, the country also experienced an economic crisis that was in part tied to the political upheaval. From 2015 to 2016, Brazil’s economy contracted by more than 7 percent, following a year of negligible growth in 2014. While the technical recession ended in 2017, the public hasn’t seen an improvement in living conditions. For many, the crisis continues. This ties in closely with the political crisis because the Workers’ Party, which was in power from 2003 to 2016, pursued populist policies that – in addition to corruption and falling commodity prices – were seen as largely responsible for the economic crisis.

The political turmoil coupled with economic decline resulted in a deteriorating security climate throughout the country. In Rio, homicides, street robberies and highway cargo robberies have been rising since 2012, particularly since 2015. The state government’s Public Security Institute reported a total of 6,731 homicides in 2017 and 40 violent deaths per 100,000 inhabitants. There were nearly 126,000 reported street robberies and 10,600 cargo robberies. In fact, cargo delivery is so risky that the national postal service now charges an extra fee just to deliver parcels in Rio.



It should be noted, however, that these are not historic highs for Rio. In 1994, the state had 8,631 homicides and a murder rate of 64.8 per 100,000 inhabitants. In 2002, there were 8,043 homicides and a murder rate of 54.3 per 100,000 inhabitants. In the past 25 years, Rio’s “best” year was 2012, when it still registered 4,666 homicides and a murder rate of 28.7 per 100,000.

Rio is a special case in terms of security for a few reasons. The total number of homicides in Rio is higher than in any other state in Brazil – although other states have higher murder rates than Rio. Rio, however, has a much higher international profile and more international tourism than other Brazilian states, making what happens there potentially damaging for the Brazilian government both domestically and internationally. The state is also a hub for drug trafficking and criminal groups.

Historically, there have been three groups – Comando Vermelho, Amigos dos Amigos and Terceiro Comando Puro – that compete for supremacy in Rio. But in the past year or so, Primer Comando Capital has tried to get a foothold. Unlike street gangs found in other parts of Brazil, these are highly sophisticated organized crime groups that have access to military-grade weaponry and control many areas in the state. This poses a much greater threat to the government and overall security environment.

No Margin for Error

But the deployment of the military in the state is due to factors beyond the general lack of security in Rio. Drug trafficking and organized crime have been a fixture in Rio for years and films like Cidade de Deus (2002) and Tropa de Elite (2007) depicted this reality to international audiences over a decade ago. But Rio state officials, security forces and programs like the Pacifying Police Units, or UPPs, have failed to improve the situation. The UPP were police-run programs that aimed to clear out drug dealers from neighborhoods and maintain a police presence in the area. While they generally succeeded in their first goal, they failed in their community outreach mission, often sparking bouts of violence. A lack of funding, poor training and deteriorating security of neighborhoods previously considered “successful” cases have resulted in these programs being re-evaluated and restructured.

Understandably, the public reaction to the military deployment has been mixed. A nationwide survey carried out by private polling group Parana Pesquisas showed that 74 percent of those surveyed said they supported the intervention, while just 20.5 percent opposed it. However, when asked about their opinions on military intervention in general in Brazil, 51.6 percent said they opposed it, while 43.1 percent said there were cases where they may be in favor. The firm also found that 67.9 percent of Brazilians felt security in their areas had deteriorated in recent years and 60.5 percent believed all levels of the government were responsible for solving this problem. But another poll published by Voz das Comunidades – a community group based out of Rio’s favelas – showed that only 40 percent of people favor intervention and 60 percent oppose it. Anecdotal evidence indicates that concern over military intervention is not about fear that military rule will return but about the belief that the military’s presence will lead to increased violence in their neighborhoods.

Though this situation isn’t quite as dire as imposing marshal law, the government and military are walking a fine line and, given the coinciding crises, have no margin for error. It is impossible to restore public security in Rio without engaging criminal groups, and this may lead to violence or even casualties. The first reports of mass casualties or regular abusive behavior will very likely spark a public backlash. The government is also making this move while much-needed economic, public spending and security reforms have yet to be implemented. These reforms are necessary for Brazil’s mid- and long-term development and cannot be put off indefinitely. But the government cannot legally move ahead with the reforms now that it has deployed the military. In one year – when the intervention is set to expire – Brazil will have a new government that will be left to deal with the issue. No matter how this turns out, the decision to deploy the military in Brazil marks a decisive moment in the country’s history that will greatly impact the future relationship between the military, public and government.

The Age of Abundance vs. the Abundance of Age

Many futurists believe that humanity is approaching a period of profound transformation as new technologies deliver new and inexpensive goods and services. Some call this dawning era “the Age of Abundance” because prices—even for goods and services considered luxuries today—will fall dramatically.


But at the same time, fear about the short-term consequences of AI and automation on employment is growing. Specifically, some futurists predict that new types of jobs won’t come into being fast enough to replace those that have been made obsolete.

The interesting thing about this gloomy prediction is that it has been repeated in every past period of innovation since the beginning of the Industrial Era. Nevertheless, mass unemployment has never come to pass as the result of technological progress.

Still, a lot of people think it’s going to be different this time. Innovation, they believe, is happening too rapidly for markets to adjust. Just about everybody agrees that in the long run, the future looks great. It’s the transition period that worries people.
 
Why I’m Not Worried About Mass Unemployment Due to Automation

My perspective is different. I don’t think we’re going to see mass unemployment caused by technological advances.

There are several reasons. One has to do with the historical ability of markets to adjust more rapidly than expected. Another is the failure of contemporary economics to deal with accelerating innovation.

Here’s one sign that they are missing something big: We frequently hear that real wages haven’t gone up in decades. This is true on the surface, as this Pew Research chart from 2014 shows, but it’s not the catastrophe many believe it is.



Wages don’t tell the whole story, because accelerating innovation has changed the way living standards improve. Though inflation-adjusted wages haven’t changed much, the quality of life has been transformed.

Since 1960, life expectancies have increased by more than a decade in the West. In other parts of the world, progress has been even speedier. Automobiles are safer, travel is cheaper, healthcare is far better, and most basic necessities have dropped in price compared to total income.

Food, for example, costs far less than it did a generation ago. Our grandparents spent more than twice on food (in terms of income percentage) than we do, and at the same time, our choices have broadened from a few bland ingredients to an international smorgasbord. Eating outside of the home, once a rare treat for all but the rich, accounts for about one-third of our food budgets today.

The Internet has revolutionized shopping and entertainment options even in rural areas. I occasionally remind my kids that most homes used to have only one phone… and it didn’t provide free navigation, games, music, or millions of videos. People can maintain real-time relationships with family and friends no matter where they’re located—an unimaginable luxury only a generation ago.

In short, neither wages nor the CPI reflect the immeasurable improvements in daily life we enjoy in the 21st century. More importantly, technologies in development now will further accelerate the reduction in price of new goods and services.

One consequence of cheaper goods and services is that people will have to work less in order to live a comfortable life as wages buy more of what they need and want.

The following chart from Business Insider uses Federal Reserve Economic Data (FRED) statistics of hours worked per year. The blue line, tracking hours worked from 1950 to 2013, shows that Americans worked about 36.7 hours per week in 1950, but only 32.6 hours in 2013.



Source: Business Insider


The French and German reductions are even more dramatic. The French worked 41.5 hours per week in 1950 and about 28.5 in 2013. The first German data, from 1970, shows an average work week of almost 38 hours. In 2013, it had fallen to about 27 hours.

In the early 20th century, a few optimistic economists proposed the emergence of a “backward-bending demand curve for employment.” They suggested that people would work fewer hours as their needs were satisfied with less money and effort. Traditional economists generally mocked the notion.

They were wrong, of course. As dollars (or any other unit of currency) buy more necessities, some workers choose to spend more time on other activities—which may, in fact, increase rates of health and happiness.

We should remember that innovation only takes place because it increases productivity and generates profits. The people who earn that wealth will either invest or spend it, which provides funds for startups and job creation.

Moreover, prices in market economies act as sophisticated signaling mechanisms, dissuading investments in technologies that would reduce consumer demand for products. A technology that destroys too many jobs will encounter powerful market and social resistance.

For all those reasons, I think those worried about machines destroying jobs are missing the big picture. But let’s imagine for a moment that they’re right—that automation will happen so fast that it outpaces entrepreneurial job creation.

Even if that happens, automation will produce cheaper goods and services, and that, in turn, will reduce the amount of time people need to work to afford them.

As a result, people will opt to work fewer hours and continue the trend that has been in motion since the middle of the last century. Businesses will adjust, as they always have, by hiring more people who work fewer hours. That is a legitimate form of job creation.

Falling Birthrates and the Job Market

Another often-ignored factor in the labor market is sub-replacement fertility rates. For the first time in history, the labor force is getting smaller.

A few countries, notably India, will continue to grow due to higher birth rates for a few more decades. However, the global labor force is already shrinking. Look at Japan, the most technically advanced and automated country in the world. There, automation is not keeping up with the growing labor shortage.

That doesn’t mean I’m not worried about the transition period. In fact, I occasionally lose sleep thinking about it. The reason is related to the falling birth rates I just mentioned.
  
If you’re familiar with my work, you know that the world is aging because of falling birth rates and longer life spans. As the non-partisan Congressional Budget Office (CBO) has pointed out, the rising healthcare costs associated with an aging population are the cause of growing US government spending. Moreover, the debt is becoming untenable, risking a catastrophic fiscal crisis.

You rarely hear this from the news media, but the people who study the economy understand our peril. Former Fed Chair Alan Greenspan has warned that the cost of age-related diseases will continue to throw the budget off balance.

Our last Fed Chair Janet Yellen, an Obama nominee, said shortly before leaving the post that the national debt "should keep people awake at night.” She also pointed to the cause of the soaring burden, saying that Medicare, Medicaid, and Social Security will grow more rapidly than tax revenues as the US population ages.

On the other side of the aisle, House Speaker Paul Ryan told FOX Business Network’s Maria Bartiromo, “That is the key driver of our debt in the future, which is demographically driven. It's a combination of demographics and healthcare inflation. You fix healthcare, you fix the debt crisis.”

Unless US healthcare is fixed, the debt could lead to a depression-style contraction. Such an event would derail, or at least postpone, the coming of the Age of Abundance.

Yet we shouldn’t focus only on America. The US has enormous advantages—including growing energy production and a birthrate that, while low, is still higher than those of most of the developed world.

Whether we like it or not, though, we’re all part of the global economy, which, according to the World Economic Forum, can’t bear the continuing deterioration of the worker-to-retiree ratio.

Japan, teetering under the weight of its aged population, accounts for about 6% of the global economy. Germany makes up 4.5%, and the UK is about 3.9%. All of them have greater entitlement problems than the United States, but in our interdependent world, economic crisis in one or more major countries can spread quickly, setting back technological progress for decades.

The solution to this threat is not tweaking the knobs on national healthcare programs. It is the introduction of regenerative medicine that extends healthspans and repairs crumbling old-age dependency ratios.

Many of the biotechnologies that can accomplish this are already working their way through labs and clinical trials. What keeps me awake at night is the possibility that institutional resistance will stall their deployment, destroying our chance at a smooth transition into the Age of Abundance.


The threat of regional conflagration in Syria

The demise of Isis threatens yet more dangerous times to come


The carnage caused by Bashar al-Assad's forces in El Ghouta has been of a more savage intensity even than the siege of Aleppo © EPA


Isis has been as deadly a proponent of asymmetric warfare as al-Qaeda, with an unrivalled propaganda machine that drew extremists from across the world. Its battlefield capabilities proved greater than any terrorist group has achieved. Yet the demise of the quasi-caliphate the group set up in Syria and Iraq is proving every bit as destabilising as its original rise.

Events during the past month have borne out what regional experts long warned: that the single issue approach to the civil war in Syria — focusing exclusively on eliminating Isis, pursued first by former US president Barack Obama and more recently by the administration of President Donald Trump — was at best short-sighted.

Beaten into retreat, Isis fighters are now restricted to a few pockets outside urban zones Yet, the past month has been one of the most deadly and dangerous in the war. Israel attacked Iranian positions and Iranian-backed paramilitaries from the sky; Russian mercenaries encroaching on US-backed Syrian rebels were killed in US air strikes; and the Turkish army pushed further into neighbouring territory in a bid to drive Kurdish militias backed by Washington further from its border.

Meanwhile, Bashar al-Assad has rained bombs, rockets and mortars on the rebel enclave of El Ghouta, a satellite of the capital under government siege since 2013. In a bid to snuff out the resistance there by insurgents, the regime has buried hundreds in rubble, destroyed medical centres and forced civilians to cower in basement bunkers with no electricity or food. The carnage has been of a more savage intensity even than the siege of Aleppo.

Without a common enemy, rival regional and global powers sucked into the civil war have been trading blows on multiple fronts indirectly and through a bewildering array of proxies. Each clash brings with it the danger of open confrontation as competing interests are brought into irreconcilable relief.

Israel has repeatedly stressed that it will not tolerate a permanent Iranian presence in Syria that would threaten its border. Yet the Iranians, through Hizbollah and other Shia paramilitary forces, are now deeply entrenched. This is a provocation not just to Israel, but also to the Sunni Arab world.

The contradictions inherent in the US position are no more tenable. Washington originally backed Syrian Kurdish militias because they were the most effective local force in the fight against Isis. But they are seen by Ankara as a proxy for domestic Kurdish insurgents. A miscalculation on the ground could now lead to direct fighting between Nato members.

It is difficult to see how even Moscow can recoup its blood-soaked investment in this mess. Last year, President Vladimir Putin felt confident enough to declare victory, having re-established Russia as a force to be reckoned with in the Middle East. In its current state, Syria is ungovernable, and its ruler, Mr Assad, as dependent as ever on Moscow and Tehran for his survival.

In this explosive context the 30-day ceasefire, which the UN Security Council agreed to on Saturday, is welcome. But it is little more than a sticking plaster, if it sticks at all. It might provide brief respite for civilians caught in the crossfire and pause the accumulation of atrocities carried out by the Assad regime and its backers in Moscow and Tehran. In the absence of an international forum through which a longer term truce might be pursued, it will do little to resolve underlying tension. Seven years after the start of the civil war, these threaten to turn what remains of Syria into an arena for a regional conflagration.


How Modern Medicine Changed the Way People Die

Haider Warraich discusses the scientific and philosophical implications of the modern way to die.


Death is as old as time itself. But it has also changed in modern times, with technology prolonging life, social media making death a shareable event, and most people checking out of this world in hospitals and nursing homes instead of at home.

Haider Warraich, a cardiologist at Duke University Medical Center, takes readers on a scientific and philosophical journey of the modern way to die in his new book, Modern Death: How Medicine Changed the End of Life. He recently joined the Knowledge@Wharton show on Sirius XM channel 111 to share insights from his practice.

An edited version of the interview appears below.



Knowledge@Wharton: What was it that drove you to research death in the first place?

Haider Warraich: As a physician, what really drove me to write this book was that I would find myself in situations all the time in which I was talking to patients and their loved ones about very, very serious things related to the end of life, and what kind of care they would want in those types of critical situations.

What struck me was a couple of different things. One was how little people knew about just how we pass these days. I feel like so many of the assumptions that people came in with were drawn from either popular culture or from depictions of how people used to pass away in old times. It was like they were in this new landscape, and they were completely lost. I wanted to draw a map for people such as them, and everyone who either has experienced some type of disease, or who has to take care of an elderly parent or loved one who is close to the end of life.

I wrote it for those people, as well as for myself — because as a physician, I had gotten very good at the logistics of what to do when people pass away, but there were many greater questions that I just didn’t have the answers to.

Knowledge@Wharton: One of the topics that you bring up is that death today is in many cases prolonged.

Warraich: That’s really one of the collaterals of the great advances in medical science that we’ve seen. If you look at surveys from, say, the city of Boston, from the 1800s, or from London during that time, people died mostly of three things: injuries, infections, or some types of nutritional deficiencies. Really, death was a very binary event, and it was very sudden.

For example, before the advent of medical technology, if someone had a heart attack or if someone had some type of abnormal heart rhythm such as ventricular tachycardia, they would almost certainly die, in many cases instantaneously, sometimes even in their sleep.

Now, with new technologies, what happens is we are able to help people through those potentially fatal episodes. But what happens is that now, people live longer, but with more chronic diseases. And especially closer to the end of life, many patients have multiple chronic diseases that we can at best manage, but that we can’t cure. They’re in and out of the hospitals.

In some ways, dying has become a phase of our life, instead of being just an instantaneous sort of flash event.

Knowledge@Wharton: One of the people you bring up as an example is [former U.S. Vice President] Dick Cheney, in light of the heart issues that he’s had, especially in the last several years.

Warraich: Cheney’s history is the most dramatic example of the advances in medical science we’ve seen. I start that story by talking about Warren Harding, who was a president, and who was depicted in the recent HBO show “Boardwalk Empire.” He had heart failure and basically died in a hotel room. There was no physician close to him, and it was almost instantaneous.

But Cheney had multiple heart attacks. He then had bypass surgery. Then he got a pacemaker.

Then he even got a mechanical heart, an LVAD [left ventricular assist device]. And then lastly, he ended up getting a heart transplant. So in essence, if Cheney had lived maybe a few decades ago, he could have very likely died from one of the four heart attacks that he had during his very young life. Yet he’s alive to this date, with the help of medical science.

Knowledge@Wharton: We have so much more technology and so many more options that can help extend life. But you also have people not wanting to extend their lives by these measures, which can lead to disagreements with their family members.

Warraich: The desire to extend life is probably one of our greatest strengths as a species. You want any organism to protect their life and to extend it for as long as possible, so that they can have an evolutionary advantage over other competitors. That’s wired into our DNA, so to speak.

Having said that, a lot of patients reach a certain point in which they personally may feel like more may not be what they want. And by more, I mean more procedures, more time in the intensive care unit, more CPR, or more mechanical ventilation, and so on. That’s why, even though we’ve had these great medical advances, you find many patients who at some point will say, “No more. I am done.”

At the same time, family members may not be on the same page — obviously, because they have different perspectives. They have a loved one and they want them to be around. They feel like they don’t want them to “give up.” They want to be their loved one’s source of strength at that time.

And also, importantly, they don’t want to have the guilt of feeling like they denied their loved one, or talked their loved one out of doing something that could have potentially prolonged their life. All of these things end up making it a very, very complicated situation for patients, family members, loved ones. And it affects how they interact with their medical teams.

Knowledge@Wharton: You grew up in Pakistan. I’d be interested to get your perspective on how death was viewed in that country when you were growing up.

Warraich: Coming from Pakistan to the United States, as far as the end of life is concerned, was like stepping into a time machine. In some ways, how people die in Pakistan is very similar to how people used to die here in the United States and other developed countries, before we had so many advanced technologies available. Death was very instantaneous. It was very mysterious. People didn’t know what people passed away from. And most people passed away at home.

As an example, when my grandmother passed away, she was having a meal with family. She started having some pain in her chest. Her son, my uncle, carried her in his arms to the hospital. And she died very quickly, within minutes. The most interesting thing about that tragedy was that that was the first time she’d ever been in a hospital. And that is not something that’s unique to her. So, having seen that, I had this different perspective.

Knowledge@Wharton: I’d like to hear your perspective on how culture influences all of this.

Warraich: Death, as a human experience, is very high yield and very high density, as far as cultural trappings are concerned. Even if you look at the origin of spirituality, the origin of religion, it’s always centered around death, and represented by burials, and other practices that have happened around that.

… We’ve moved death from our communities and homes to hospitals and nursing homes — four out of five Americans these days die in either a hospital or a nursing home. In this past century, we’ve had this big change — we had people dying at home, and now most of them die in the hospital. And many times, it’s the right thing to do. Because you want patients to be getting medical care when they’re close to death.

But all the culture and all the customs and rituals that existed around death in the community were not transferred. Even though the act of death was transferred, everything else surrounding it — the connection with the community, the customs that take place — was left behind. Which is why, I think, so many people feel so isolated at the end of life.

Knowledge@Wharton: To a degree, part of this is that people want to see their family members live longer, which is why they may be in a nursing home, or some facility like that. But part of it is also the fact that so many more people these days have to deal with sick family members, and having them in these facilities does take some of the burden off of the caregivers from that younger generation.

Warraich: Of course. And that younger person now, the caregiver, is actually not that young anymore. The average age of the caregiver is now in the 50s. The people taking care of elderly parents themselves are not young and strapping. They have their own medical problems. And there’s a lot of research that shows that being a caregiver for a patient actually increases your risk for having bad health outcomes. It’s a lot of work.

What’s happened, also, is that because of falling birth rates, the number of people who can help out has also gone down. And now, most people work, both women and men. What that’s led to is this epidemic of caregiver burden across our society. And caregiving is now becoming something that’s as ubiquitous as being a parent.

Knowledge@Wharton: You also talk about the fact that there’s a debate over what qualifies as dead. There is brain dead. And it’s a question that, in many minds, ends up being the tipping point as to whether or not to actually stop prolonging a person’s life.

Warraich: You know, that’s one of the things that has occurred over the past few decades. I feel like many people would think that, given that we have all this new knowledge, we would be able to be very, very clear and make very clear distinctions between who is alive, and who is dead.

But what’s happened is that now we have all these life support apparatuses that can support one, or a couple of organs at a time. We can do dialysis for kidneys, we have breathing machines for lungs, VADs (ventricular assist devices), which are pumps for the heart. But we really don’t have anything like that for the brain.

Which is why, when patients are critically ill, sometimes they can have support apparatuses keeping them breathing, keeping their hearts beating. But their brain may not actually be functioning. It’s one of those cases where, the more you know, the more you realize that things may not be as clear-cut as we would have previously imagined. Having said that, I want to make sure that listeners know that as far as brain death is concerned, the criteria for brain death are very consistent. They’re very good. And there has never been a documented case in which someone who was brain dead had some kind of reversal or meaningful recovery.

Especially when that diagnosis is made in a formal way.

But having said that, I think more people need to be involved in this very basic and human discussion about, what is, in fact, life? Is life just the fact that our organs are beating, or our cells are dividing? Or is death the loss of personhood that occurs in so many disease states? I think that’s a discussion not for just physicians, but for society as a whole.

Knowledge@Wharton: It does feel like the process of the decision is much harder these days.

Warraich: Oh, it’s definitely much harder. Again, it’s one of those things where the more you know, the more you realize things are complicated. Even as far as brain death is concerned — most patients do not have the amount of brain damage to reach the criteria for brain death.

Most patients, in fact, have extensive damage, to the extent that they can be classified as patients in vegetative comas. So even though they do not meet the criteria for brain death, they are not well enough to have any type of reasonable brain function.

That’s one of the reasons why I wrote the book. Because I realize that modern death is very complicated as a topic. But the more we shield it from everyday people, the more we make it a much harder terrain to navigate, which makes these situations so much more difficult. That’s perhaps the main reason. And the main hope I have for this book is that people will read it, and when they enter those rooms or they enter those situations in which they have to make these decisions, they feel armed with information. It won’t make the situation any better. But knowing what’s going on may at least help them come to a decision that they feel is something that they have thought out well enough.

Knowledge@Wharton: It makes me wonder whether or not people actually want to know this. You go along for so much of your life, and you don’t think about death.

Warraich: Sure. If you look at many cultures, especially many Southeast Asian cultures, or even my culture back in Pakistan, most people would not want to know. Most people would rather not know. Even if they have a terminal diagnosis, they would tell the doctor, “Don’t tell me. Just tell my family.” And the families will say, “Don’t tell the patient.”

But what’s happening now, especially in the United States and other developed countries, is that people do want to know. And one way to see that is by looking at the success of people such as Atul Gawande, who have written about this before. And the popularity of other books related to this. People want to be armed with information. People don’t want to just defer to their physicians. They want to work with their physicians. They want to consult with their physicians. They appreciate their input, but they don’t want to be blindsided because these things have very, very real consequences for their daily lives.

So many people now are taking care of elderly parents, who could fall sick at any given moment. And when that happens, the burden of decision-making falls right on you out of nowhere.

Knowledge@Wharton: You also bring up the impact of social media. It’s a common thing now that if a friend or family member has passed away, you post something on Facebook or Instagram, or whatever it may be. And I would guess, to a degree, it helps the grieving process, because it includes more people in the understanding of what you’re going through.

Warraich: One of the features of modern death is that it’s a very, very isolating process. People are not at home — they’re in hospitals. As we get older, we lose many of our friends and family.

What social media does for those who use it, especially close to the end of life, is that it gives them an outlet to just express what they feel like, because sometimes, even in a hospital, even though you’re surrounded by nursing staff and physicians, you can feel very alone.

Also, it helps people connect with loved ones, or those who have had a similar experience, who may not be able to visit, who may be far away. I think it’s one of the things that’s understudied, but I think in some ways, that connection can do more for improving a patient’s state of mind than any amount of medications or drugs or procedures that we can throw at them. So I do think that’s something we need to focus on, and physicians need to focus on — to provide patients outlets so that they can express themselves, and hopefully add to their experience.

Knowledge@Wharton: What do you think the next pieces to this puzzle are that will help make this an easier process to deal with?

Warraich: The biggest barrier — why this is such a huge issue — is that the fear of death is so prevalent in our society. And in some ways, it’s also the fact that death is so much more mysterious. We don’t understand it. We don’t see it because it doesn’t happen in our communities [but at the hospital or nursing homes]. And because the way death is depicted on TV or in pop culture is so not realistic, people I think fear death more today than they have at any other point.

Not only do they fear death, they also fear what it takes to die. Because it involves so many different procedures, surgeries, etc., that they are very, very fearful of. I think that’s the thing that we need to conquer. And I hope that one of the things that this book is able to do is just get people talking about death in a way that doesn’t send a chill down their spine.

 2018: The Year Of The Margin Call


Analysts disagree about which indicator is best for calling market tops, but the easiest to understand — and the most tragic — is probably margin debt.

This is money borrowed by (usually individual or “retail”) investors against their existing stocks to buy more stocks. Investors tend to do this when markets are rising and using leverage seems like an effortless way turbocharge their gains. But eventually the market turns down, leaving stock portfolios insufficient to cover related margin debt and generating “margin calls” in which brokers demand more money and/or start liquidating customer portfolios. This sends the market down sharply and indiscriminately, as fairly-valued babies are dumped along with overvalued bathwater. The result: a quick, brutal bear market.

Margin debt hit record highs several years ago and has just kept on going. From yesterday’s Wall Street Journal:

Investors’ Zeal to Buy Stocks With Debt Leaves Markets Vulnerable
Investors borrowing record sums to bet on stocks exacerbated this month’s selloff, after they were hit with calls to reduce those obligations and forced to sell shares to raise cash. 
If that debt, known as margin loans, continues to rise at the current pace, analysts warn that big selloffs and sudden bouts of volatility in the stock market could become more commonplace. 
Retail and institutional investors have borrowed a record $642.8 billion against their portfolios, according to the Financial Industry Regulatory Authority, as they try to pocket bigger gains by ramping up their exposure to stocks. 
So-called net margin debt was worth 1.31% of the total value of the New York Stock Exchange last year, according to Goldman Sachs data stretching back to 1980, eclipsing the previous peak of 1.27% reached in the buildup to the tech bubble in 2000. 
Lending against securities is a key profit center for brokerages, as firms charge interest on the money that is used and say they have found they better retain clients who take on the debt. These loans can also factor into brokers’ compensation, incentivizing many to extend money to clients regardless of whether they need it or not. 
Margin debt has been on the rise for years and is generally considered a gauge of investor confidence. The long-running stock rally has helped push debt levels higher since investors tend to be more willing to take loans against investments that are rising in value. However, it can also precipitate a steep market downturn as it did before the burst of the dot-com bubble and the financial crisis of 2008. 
The growing loan balances have caught the attention of Wall Street’s watchdog. Finra in January published an investor alert after the total value of margin loans broke $600 billion for the first time, saying investors may be underestimating the risks of trading on margin and may not understand how margin calls work. 

 
Many of the hardest-hit investors were those who had used exchange-traded products to wager that low volatility would persist and stock prices would remain stable. 

Harvey Hajiyan, a 35-year-old financial adviser who lives in Toronto and has been investing for more than a decade, assumed stocks would continue to grind higher this year, similar to the gains the Dow and the S&P 500 had posted for much of the past two years without a pullback. 
“All of the strategists agreed the market would go up,” said Mr. Hajiyan. 
At the end of January, he placed an ill-timed bet and used only margin to fund a large position in the ProShares Short VIX Short-Term Futures exchange-traded fund (SVXY), which rises as long as stock prices remain stable. When the S&P 500 fell into correction territory to erase one of its best starts in years, Mr. Hajiyan’s investment in the ProShares fund tracking expected market swings was nearly wiped out, forcing him to liquidate hundreds of thousands of dollars of securities to answer the margin call. 
“I was in denial,” said Mr. Hajiyan after he realized he lost about 600,000 Canadian dollars (US$472,260) worth of his C$1.1 million investment portfolio. 
Despite losing a sizable portion of his wealth, Mr. Hajiyan says the experience hasn’t soured him on using margin debt. “If I wasn’t using margin, I wouldn’t be at this level,” Mr. Hajiyan said of his profits before the pullback. “As my money grows, I’ll limit the amount of margin I use.”
Why This Matters

“So-called net margin debt was worth 1.31% of the total value of the New York Stock Exchange last year, according to Goldman Sachs data stretching back to 1980, eclipsing the previous peak of 1.27% reached in the buildup to the tech bubble in 2000.”

When an indicator exceeds its dot-com bubble extreme, it’s in mania territory. The reason equities seem relatively sedate this time around is that they’re just part of a much broader bubble. Bonds around the world are an historic bubble – one that may be starting to burst as interest rates rise. Real estate prices in trophy cities have exceeded their 2007 extremes. Debt levels in the developed world (and China) have blown through their previous cyclical peaks.

And of course cryptocurrencies are generating dot-com level excitement and fear of missing out. This “everything bubble” is completely unprecedented.

“The growing loan balances have caught the attention of Wall Street’s watchdog. Finra in January published an investor alert after the total value of margin loans broke $600 billion for the first time, saying investors may be underestimating the risks of trading on margin and may not understand how margin calls work.”

The “may not understand” part is, as usual at market peaks, an understatement. Towards the end of a long cycle like the current one, a whole new generation of investors emerges who, never having experienced falling prices, eagerly embrace tools that magnify their genius. This is a rite of passage that all investors have to go through on their way to cautious middle age, but with each new debt binge the stakes get higher. Now we’re talking total wipeout rather than painful but survivable life lesson, and systemic collapse rather than one or two bad years.