Attack of the Clones
To the best of my knowledge, no where among the nearly 2,300 pages that is the Dodd-Frank Wall Street Reform and Consumer Protection Act and the hundreds of proposed new regulations is there anything restricting human cloning. And that, it turns out, might be a bad thing.
Recently, a nearly decade old paper on the economic effects of human cloning by a French economics professor has been getting some attention. The paper argues that rather than an army of low-level cloned workers or fighters as is predicted in Huxley’s Brave New World or Star Wars, cloning will lead to more and more higher skilled workers. That’s because the returns of cloning people who can make a lot of money will be higher than cloning average Joes. And when it comes to cloning, we’re in it for the money, just like everything else. What’s more, it will probably be only the rich who will be able to afford to clone themselves at the start.
The result, at least at first, will be a rapid rise in our already disturbing levels of income inequality. Clones will earn more and more money, and those of us who reproduce the old fashion way will likely have poorer and poorer offspring. Recently, Barbara Kiviat wrote two posts for this blog on how income inequality was a major contributor to the financial crisis. So you do the math. If cloning leads to income inequality and income inequality leads to financial crises, then we’ve got a problem. Here’s why:
One of the knocks on financial reform is that it is regulation through the rear view mirror. Lawmakers focus on stopping what caused the most recent financial crisis. So after the tech bubble, new rules were put into place to stop Wall Street from using analysts to push worthless stocks. The way Wall Street did IPOs came under scrutiny. And a whole set of rules were put in place to try to stop accounting frauds like Enron.
We all know now that none of those reforms did little to stop the latest financial crisis, which was driven not by stocks, but by housing prices, lax lending and unsound risk taking by Wall Street. So now we are putting reforms in place to reign in risky behavior at banks, and to regulate the derivatives that facilitate big hidden financial bets and add consumer protections that will eliminate the ability to make bad loans in the first place.
All good things. None of that though addresses the obvious real thing we should all be concerned about when it comes to financial crisises: Human Cloning. The paper, which was written by Gilles Saint-Paul, a professor at the Toulouse School of Economics in France, has a surprising amount of math for a topic such as human cloning, which to the best of my knowledge doesn’t yet exist. And it has some out there ideas, like the guess that surrogate mothers might soon have salaries that match Wall Street. If cloned babies have higher expected income levels, then people will pay more for them to be made. So birthing a clone equals cha-ching.
So how real is an economic threat is human cloning? Not much yet. Being that financial crisis as JP Morgan’s Jamie Dimon put it happen every five to seven years, we will have two or three more credit crunches before clones are walking the earth, if ever. But here’s the point, while we are doing a good job of addressing the problems on Wall Street that led to this financial crisis, we are doing very little to address the social ills that lead to financial crises in general.
Recessions, particularly severe ones, have a way of lowering income inequality. That’s what happened in the 1940s and 1950s. That doesn’t seem to be happening this time. New York City, as the NY Times reports today, and particularly its rich Manhattanites, is regaining its economic health faster than the rest of the nation. The key to leveling the income playing field is taxes and education. Taxes can move wealth down the income ladder. Education can allow people to move up. Until we address those two issues, we probably will have more economic crises to suffer in the future.