The Atlantic

At 8:07 a.m. on January 13, 2018, every smartphone screen in Hawaii lit up with a single message, in all caps: “BALLISTIC MISSILE THREAT INBOUND TO HAWAII. SEEK IMMEDIATE SHELTER. THIS IS NOT A DRILL.” In fact, it was a false alarm triggered by a Hawaii Emergency Management Agency worker who mistook instructions he had received during an unscheduled emergency drill for a real attack. Nevertheless, motorists drove erratically as they raced to park their car inside a freeway tunnel. Spectators fled sporting events, and college students ran to campus tsunami shelters. Some people called or texted their loved ones to say goodbye.

It was not until 8:38 a.m. that the State of Hawaii issued a correction on its emergency-alert system. It took nearly half an hour, the governor later confessed, because he could not remember the login for his official Twitter account. The White House issued no communication until later in the day, when a deputy press secretary said in a statement that the president had been briefed on the incident and that “this was purely a state exercise.”

From the safety of my apartment in Oakland, California, I had two thoughts: First, I was glad to be headed to the farmers’ market that Saturday morning—and glad not to be serving as secretary of homeland security anymore. Second, it was clear that the incident, however bizarre it appeared on the surface, revealed systemic failures far more serious than any being discussed in the media. What if this had been not an accident, but a hack by a hostile actor intended to cause chaos not only in one American city or state but in many? What if the goal had been to distract Americans and provide cover for another type of attack? What if public panic caused traffic accidents or heart attacks? A breakdown in public order?

In the four years I led the Department of Homeland Security, I learned from the inside that the greatest threats to our safety play out differently from how political speeches and news reports might have us believe. True security means educating the public about which dangers are real and likely and which are not. Hours after a man killed more than four dozen people in two mosques in Christchurch, New Zealand, President Donald Trump downplayed the threat of violence by white-supremacist groups—and went on to contend that the United States is under “invasion” from the south. In fact, mass shootings are genuine security problems. Natural disasters and cyberattacks are genuine security problems. Undocumented immigrants supposedly running over an open border by the millions and attacking Americans on the streets are not.

In a huge and open nation, there will never be enough money, gates, guns, or guards to run down every potential threat. Homeland security works when we adhere to proven principles of law enforcement, national security, and disaster management, and when we integrate those principles with the best data science and other technological innovations available and update them constantly. We get into trouble when political ideology is thrown into the mix. A stubborn or willful misreading of the threat environment leads to poor management of resources and results in failure. And in this regard, I regret to say, we are backsliding terribly.

Border protection is one such area. Vetting travelers primarily by nation of origin, as President Trump’s ban on travelers from certain predominantly Muslim countries does, is not a very effective way of catching terrorists. While offering the illusion of toughness, the ban misdirects our efforts. Rather than directing Customs and Border Protection to fend off every traveler from, say, Syria or Yemen, the agency’s resources are better spent when focused on people who, regardless of which passport they use, have suspicious connections and a pattern of traveling to suspicious places.

Meanwhile, meat-ax policies such as Trump’s ban provide propaganda points to adversaries and antagonize our allies in the Islamic world—governments whose cooperation has, in the past, helped us immensely. They become, as a result, less reliable partners in endeavoring to mitigate threats to the United States on their soil before those threats mature on ours. We become a go-it-alone nation in protecting our own security rather than working with partners. Similarly, the border wall between the United States and Mexico threatens to waste money, attention, and political capital and antagonize Mexico, our neighbor and ally. In 2013, Mexican intelligence helped the United States foil a plot by an Iranian American who tried to recruit a Mexican drug cartel to bomb a Washington, D.C., restaurant where the Saudi ambassador to the United States dined. We would like Mexico to continue helping us in this way.

The choice is not between an open border and a wall. To promote security and the rule of law, we should focus on smart, cost-effective solutions to securing the border. There are far more effective measures involving technology and hybrid approaches combining physical barriers, surveillance, and the presence of agents that can secure the border.

We are also moving backwards on immigration enforcement. Even before the mayhem caused by the separation of families at the southern border, the Trump administration’s often draconian deportation policy deepened a culture of fear in immigrant communities throughout the United States. Already, many undocumented immigrants will refuse to cooperate with local law enforcement when they are witnesses to—or victims of—a crime. Others do not seek health care (increasing emergency-room costs and undermining preventive care, such as vaccines) or dare to present themselves to the DMV to obtain a driver’s license. None of this advances the security of our communities.

The ongoing ambiguity regarding the Deferred Action for Childhood Arrivals (DACA) program—for undocumented immigrants who were brought to the United States as children—represents another waste. It is a waste of human capital and of government resources to hunt down and deport law-abiding DACA participants instead of focusing on criminals and border crime.

Meanwhile, some of the gravest threats facing us lie elsewhere. As the false alarm in Hawaii showed, technological advances bring both the ability to advance security and the possibility of doing great harm in unpredictable ways. Lost and troubled young people will keep searching for combat weapons they can buy over the counter or for violent causes to join on the internet. A solid containment plan for infectious-disease pandemics eludes us still.

Climate change is the ultimate threat—one largely unaddressed by the Trump administration. This is homeland-security malpractice. By withdrawing from the Paris Agreement in 2017, the United States now finds itself isolated, in the same company as Syria and Nicaragua, the only other countries in the world not to ratify the global accord to limit global warming to well below 2 degrees Celsius above preindustrial times.

To safeguard the American people, as my former department’s mission demands, we must also look beyond the nominal limits of “homeland” security. We should repair the alliances and partnerships that are essential to our homeland security in an ever more dangerous world. We should help alleviate the conditions in Central America that cause so many to flee to the United States. We should inventory all of our existing intelligence-sharing agreements so that we can identify gaps to fill and areas that need strengthening. We should challenge the community of nations to work collectively to establish enforceable standards governing cybersecurity. The United States must reengage and reassert our leadership position in the world.

Our current path is built on a false security narrative—security theater run amok. And Americans are left in a state of unbearable anxiety, seeing threats in the wrong places and ignoring others in front of their eyes.

The Conversation

The recent massacre of 50 Muslim worshippers at two mosques in Christchurch, New Zealand is the latest confirmation that white supremacy is a danger to democratic societies across the globe.

Despite President Donald Trump’s suggestion that white nationalist terrorism is not a major problem, recent data from the United Nations, University of Chicago and other sources show the opposite.

As more people embrace a xenophobic and anti-immigrant worldview, it is fueling hostility and violence toward those deemed “outsiders” – whether because of their religion, skin color or national origin.

Transnational violence

Most of the Western world – from Switzerland and Germany to the United States, Scandinavia and New Zealand – has witnessed a potent nationalist strain infecting society in recent years.

Driven by fear over the loss of white primacy, white nationalists believe that white identity should be the organizing principle of Western society.

“Every people in the world can have their own country except white people,” the American Freedom Party’s William Daniel Johnson told the Chicago Sun Times after the New Zealand attack. “We should have white ethno-states.”

In researching our upcoming book on extremism – our joint area of academic expertise – we found that hate crimes have risen alongside the global spread of white nationalism. Racist attacks on refugees, immigrants, Muslims and Jews are increasing worldwide at an alarming rate.

Scholars studying the internationalization of hate crimes call this dangerous phenomenon “violent transnationalism.”

In Europe, white violence appears to have been triggered by the sudden increase, in 2015, of refugees fleeing war in Syria and elsewhere in the Middle East.

Ultra-nationalists across the continent – including politicians at the highest rungs of power – used the influx as evidence of the imminent “cultural genocide” of white people.

White nationalism is a US export

This disturbing international trend, in its modern incarnation, was born in the United States.

Since the 1970s, a small, vocal cadre of American white supremacists have sought to export their ideology of hate. Avowed racists like Ku Klux Klan wizard David Duke, Aryan Nations founder Richard Butler and extremist author William Pierce believe the white race is under attack worldwide by a cultural invasion of immigrants and people of color.

The United States is diversifying, but it remains 77 percent white. White supremacists, however, have long contended that the country’s demographic changes will lead to an extermination of the white race and culture.

The “alt-right” – an umbrella term describing modern online white supremacist movement – uses the same language. And it has expanded this 20th-century xenophobic worldview to portray refugees, Muslims and progressives as a threat, too.

Alt-right leaders like Richard Spencer, extremist Jared Taylor and the Neo-Nazi Daily Stormer editor Andrew Anglin also use social media to share their ideology and recruit members across borders.

They have found a global audience of white supremacists who, in turn, have also used the internet to share their ideas, encourage violence and broadcast their hate crimes worldwide.

“The hatred that led to violence in Pittsburgh and Charlottesville is finding new adherents around the world,” Jonathan Greenblatt of the Anti-Defamation League, a civil liberties watchdog, told USA Today after the New Zealand attack.

“Indeed, it appears that this attack was not just focused on New Zealand; it was intended to have a global impact.”

Rising racist violence

We know the alleged New Zealand mosque shooter’s hatred of Muslims was inspired by American white nationalism – he said so on Twitter.

His online “manifesto” includes references to cultural conflicts that the author believed would eventually lead the United States to separate along ethnic, political and racial lines.

The alleged attacker also wrote that he supports President Donald Trump “as a symbol of renewed white identity.”

Trump and other right-wing politicians like French presidential candidate Marine Le Pen and Dutch opposition leader Geert Wilders have blamed the very real problems of modern life – growing economic instability, rising inequality and industrial decay – on immigrants and people of color.

That narrative has added further hostility into the existing undercurrent of intolerance in increasingly multicultural societies like the United States.

Hate crimes against Muslims, immigrants and people of color have been on the rise in the U.S. since 2014.

In 2015, the Southern Poverty Law Center documented 892 hate crimes. The next year, it counted 917 hate crimes. In 2017 – the year Trump took office stoking nationalist sentiment with promises to build walls, deport Mexicans and ban Muslims – the U.S. saw 954 white supremacist attacks.

One of them was a violent clash between counterprotesters and white nationalists over the removal of a confederate statue in Charlottesville, Virginia. The 2017 “Unite the Right” rally, which killed one person and injured dozens, amplified the ideas of modern white nationalists nationally and worldwide.

Last year, white nationalists killed at least 50 people in the United States. Their victims included 11 worshippers at a Pittsburgh synagogue, two elderly black shoppers in a Kroger parking lot in Kentucky and two women practicing yoga in Florida.

The years 2015, 2016 and 2018 were the United States’ deadliest years for extremist violence since 1970, according to the Anti-Defamation League.

All perpetrators of deadly extremist violence in the U.S. in 2018 had links to white nationalist groups. That made 2018 “a particularly active year for right-wing extremist murders,” the Anti-Defamation League says.

Nationalist terror is a danger to the domestic security of the United States and, evidence shows, a global terror threat that endangers the very nature of global democratic society.

The New York Times

“Everything the light touches is our kingdom.”

It’s a line from Disney’s “The Lion King,” spoken by Mufasa to young Simba as they sit atop Pride Rock. And on Wednesday morning, just after midnight on the East Coast, it seemed to describe the Walt Disney Company itself, as the conglomerate closed its $71.3 billion acquisition of 21st Century Fox assets. It is now an entertainment colossus the size of which the world has never seen.

The ripple effects may not become clear for years. Analysts say that Disney could force smaller studios to merge as they scramble to compete. It will have greater leverage over theater owners when it comes to box office splits. And Disney’s plans to use Fox content to forcefully move into streaming could slow the growth of Netflix.

“This deal definitely reshapes the landscape,” said Michael Nathanson, a leading media analyst.

Disney now owns most of Rupert Murdoch’s former empire, including the 20th Century Fox movie and television studio, which includes the “X-Men,” “Avatar” and “Simpsons” franchises; Blue Sky, the “Ice Age” animation studio that is based in Connecticut; the National Geographic and FX cable networks; most of the streaming service Hulu; and Star, a fast-growing television-service provider in India.

Disney had been a mere behemoth, dominating sports television through ESPN, controlling the global theme park business and running Hollywood’s No. 1 movie operation, with studios that include Marvel, Pixar and Lucasfilm. But the company decided that it needed to bulk up even more as the tech giants aggressively moved into Hollywood. The competition now includes Apple, which is scheduled to unveil its television and movie plans on Monday.

“This is an extraordinary and historic moment for us,” Robert A. Iger, Disney’s chief executive, said in a statement on Tuesday.

Mr. Iger has staked his legacy on this deal, and he had to fend off an aggressive play by Comcast on two continents to gain control of Mr. Murdoch’s trove. (Mr. Iger ultimately lost Sky, the British pay-television company.) The acquisition is the largest in Disney’s 96-year history, dwarfing even the 1995 purchase of Capital Cities / ABC. That cost $19 billion (about $32 billion in today’s money) and, because it included ESPN, served as a growth engine for Disney for two decades.

The Fox assets are meant to do the same for Disney in the years ahead. Disney is now trying to become less dependent on cable channels like ESPN, which are in slow, steady decline owing to cord-cutting. Instead, Disney has decided to move into the rapidly growing realm of online video, a direct-to-consumer business defined by Netflix. Mr. Iger believes that the Fox assets will enhance that plan, which includes a streaming service called Disney+ later this year.

“The pace of disruption has only hastened,” Mr. Iger told The New York Times in an interview when the deal was announced. “This will allow us to greatly accelerate our direct-to-consumer strategy, which is our highest priority.”

The challenges are daunting. Mr. Iger and his lieutenants need to persuade investors to start viewing Disney more like a technology company, where near-term financial turbulence is often overlooked. Integrating the Fox assets will bring headaches that include substantial layoffs — analysts project more than 3,000 — and the melding of two starkly different corporate cultures. When the deal was announced in December 2017, James L. Brooks, a creator of “The Simpsons,” posted an image on Twitter that showed an angry Homer Simpson strangling Mickey Mouse.

To win approval from antitrust regulators around the world, Disney had to agree to modest concessions.

It is already deep in the process of selling Fox’s 22 regional sports channels, a move required by the Justice Department. The Yankees teamed with Amazon this month, for instance, to buy the YES Network, which serves the New York metropolitan area, for roughly $3.5 billion. To appease European regulators, Disney agreed to divest a stake in A+E Networks, which include the History channel. (Disney will retain 50 percent ownership of the division in the United States; Hearst owns the other half.)

The final sticking points came from Brazil and Mexico. Regulators in those countries are forcing Disney to sell Fox Sports, a competitor to ESPN that holds extensive rights to televise soccer matches. Brazil’s antitrust regulator, Cade, said in a statement that operating both channels would give Disney too much control of the sports TV market in the country. Mexico’s telecommunications regulator, IFT, held a similar view and added stipulations about Disney’s ownership of the National Geographic and Nat Geo Wild channels.

At Disney’s annual meeting this month, Mr. Iger said the 20th Century Fox and Fox Searchlight labels — trumpet fanfares included — would continue to exist. That decision pleased Hollywood, but it could lead to consumer confusion since Mr. Murdoch retained ownership of the Fox broadcast network, a chain of local Fox television stations and his crown jewel, Fox News. Those businesses, along with the FS1 sports channel, were rolled into a new publicly traded company, Fox Corporation, on Tuesday.

Paul D. Ryan, the former Republican congressman from Wisconsin who served as speaker of the House from October 2015 to January 2019, joined the Fox board on Tuesday. Other board members include Mr. Murdoch and Roland A. Hernandez, a former chief executive of Telemundo. Mr. Murdoch’s oldest son, Lachlan, serves as the new company’s chief executive.

The Murdochs are expected to receive roughly $12 billion in proceeds from the Disney deal, according to Bloomberg. Shareholders in the assets that were sold to Disney had the option to accept Disney shares or cash out. Disney said on Friday that, based on initial results of that process, holders of about 52 percent of shares asked for cash and 37 percent asked for Disney shares. The balance did not make a request.

Bloomberg

As the Lion Air crew fought to control their diving Boeing Co. 737 Max 8, they got help from an unexpected source: an off-duty pilot who happened to be riding in the cockpit.

That extra pilot, who was seated in the cockpit jumpseat, correctly diagnosed the problem and told the crew how to disable a malfunctioning flight-control system and save the plane, according to two people familiar with Indonesia’s investigation.

The next day, under command of a different crew facing what investigators said was an identical malfunction, the jetliner crashed into the Java Sea killing all 189 aboard.

The previously undisclosed detail on the earlier Lion Air flight represents a new clue in the mystery of how some 737 Max pilots faced with the malfunction have been able to avert disaster while the others lost control of their planes and crashed. The presence of a third pilot in the cockpit wasn’t contained in Indonesia’s National Transportation Safety Committee’s Nov. 28 report on the crash and hasn’t previously been reported.

The so-called dead-head pilot on the flight from Bali to Jakarta told the crew to cut power to the motor in the trim system that was driving the nose down, according to the people familiar, part of a checklist that all pilots are required to memorize.

By contrast, the crew on the flight that crashed the next day didn’t know how to respond to the malfunction, said one of the people familiar with the plane’s cockpit voice recorder recovered as part of the investigation. They can be heard checking their quick reference handbook, a summary of how to handle unusual or emergency situations, in the minutes before they crashed, Reuters reported, citing people it didn’t name.

Lion Air spokesman Danang Prihantoro declined to comment on the role of a third pilot, saying, “All the data and information that we have on the flight and the aircraft have been submitted to the Indonesian NTSC. We can’t provide additional comment at this stage due the ongoing investigation on the accident.”

The Indonesia safety committee report said the plane had had multiple failures on previous flights and hadn’t been properly repaired.

Airline mechanics tried four times to fix related issues on the plane starting Oct. 26, according to the Indonesia preliminary report. After pilots reported issues with incorrect display of speeds and altitude in the two prior flights, workers in Denspasar, Bali, replaced a key sensor that is used by the Boeing plane to drive down its nose if it senses an emergency.

Flight data shows the sensor, called the “angle of attack” vane, which measures whether air is flowing parallel to the length of the fuselage or at an angle, was providing inaccurate readings after that.

However, the pilots on the harrowing Oct. 28 flight from Bali to Jakarta didn’t mention key issues with the flight after they landed, according to the report.

Their request for maintenance didn’t mention they had been getting a stall warning since about 400 feet after takeoff as a result of the faulty angle-of-attack sensor. It was still giving false readings the next morning on the flight that crashed, according to flight data.

Representatives for Boeing and the Indonesian safety committee declined to comment on the earlier flight. Boeing rose 1.1 percent to $377.59 at 12:03 p.m. in New York. The company’s market value tumbled about $28 billion through Tuesday after the Ethiopian Airlines crash.

The safety system, designed to keep planes from climbing too steeply and stalling, has come under scrutiny by investigators of the crash as well as a subsequent one less than five months later in Ethiopia. A malfunctioning sensor is believed to have tricked the Lion Air plane’s computers into thinking it needed to automatically bring the nose down to avoid a stall.

Boeing’s 737 Max was grounded March 13 by U.S. regulators after similarities to the Oct. 29 Lion Air crash emerged in the investigation of the March 10 crash of Ethiopian Airlines Flight 302. In the wake of the two accidents, questions have emerged about how Boeing’s design of the new 737 model were approved.

The Transportation Department’s inspector general is conducting a review of how the plane was certified to fly and a grand jury under the U.S. Justice Department is also seeking records in a possible criminal probe of the plane’s certification.

The FAA last week said it planned to mandate changes in the system to make it less likely to activate when there is no emergency. The agency and Boeing said they are also going to require additional training and references to it in flight manuals.

A software update will prevent a single sensor from activating the Maneuvering Characteristics Augmentation System. The data from both sensors will be considered.

“We will fully cooperate in the review in the Department of Transportation’s audit,” Boeing spokesman Charles Bickers said in an email. The company has declined to comment on the criminal probe.

After the Lion Air crash, two U.S. pilots’ unions said the potential risks of the system, known as the Maneuvering Characteristics Augmentation System, or MCAS, hadn’t been sufficiently spelled out in their manuals or training. None of the documentation for the Max aircraft included an explanation, the union leaders said.

“We don’t like that we weren’t notified,’’ Jon Weaks, president of the Southwest Airlines Pilots Association, said in November. “It makes us question, ‘Is that everything, guys?’ I would hope there are no more surprises out there.’’

The Allied Pilots Association union at American Airlines Group Inc. also said details about the system weren’t included in the documentation about the plane.

Following the Lion Air crash, the FAA required Boeing to notify airlines about the system and Boeing sent a bulletin to all customers flying the Max reminding them how to disable it in an emergency.

Authorities have released few details about Ethiopian Airlines Flight 302 other than it flew a “very similar” track as the Lion Air planes and then dove sharply into the ground. There have been no reports of maintenance issues with the Ethiopian Airlines plane before its crash.

If the same issue is also found to have helped bring down Ethiopian Airlines Flight 302, one of the most vexing questions crash investigators and aviation safety consultants are asking is why the pilots on that flight didn’t perform the checklist that disables the system.

“After this horrific Lion Air accident, you’d think that everyone flying this airplane would know that’s how you turn this off,” said Steve Wallace, the former director of the U.S. Federal Aviation Administration’s accident investigation branch.

The combination of factors required to bring down a plane in these circumstances suggests other issues may also have occurred in the Ethiopia crash, said Jeffrey Guzzetti, who also directed accident investigations at FAA and is now a consultant.

“It’s simply implausible that this MCAS deficiency by itself can down a modern jetliner with a trained crew,” Guzzetti said.

MCAS is driven by a single angle-of-attack sensor near the nose even though there are two of the sensors on the plane. Boeing is planning to alter the system to rely on both sensors to reduce the chances of a malfunction.

NPR

"Khosh amadee!" Omaid Sharifi, co-founder of ArtLords, an art collective, says as he invites us into his house in a manner that reflects true Afghan hospitality—with grace, a smile and open arms.

The phrase is in the local language of Dari. Used to mean "welcome," it literally translates to "come with happiness" – which is a bit ironic because in the newly released World Happiness Report, Afghanistan is ranked as the third least happy country in the world. Only the Central African Republic and South Sudan are deemed unhappier.

But on this particular night, it's hard to think of Afghanistan as an unhappy place. Our host welcomes us to his beautifully decorated house with its large garden. The house is older than the first wars that plagued the country 40 years ago and that often define the nature and personality of the country.

Sharifi is hosting one of his famous soirees. His guests include well-known personalities like news anchors and politicians as well as social workers, corporate workers and artists, among many others.

The invitees greet each other with a handshake and a kiss on the cheek as they take seats on the toushaks — Afghan cushions for floor seating — placed around the very large living room. In Afghan architecture, living rooms are specifically designed to be big enough for crowded gatherings.

"In the West, people often go barhopping after a long day's or week's work to unwind, de-stress and spend quality times with friends, but in Afghanistan where we don't have too many social public spaces, we go 'house-hopping,' " says Sharifi, as he walks around the large room, socializing and attending to the needs of the constant flow of people. There's cheerful chatter and laughter – and a diverse playlist of Afghan music, Western pop and Bollywood songs.

This scene is a stark contrast to the widespread image of Afghanistan as a war-torn country, often imagined in the West to be gray and dusty, a place of repression and misery. This image was further strengthened by the 2019 happiness rankings, produced by the Sustainable Development Solutions Network and based on data gathered from reports across 156 countries on how happy their citizens perceive themselves to be.

While there are a variety of factors determining unhappiness, the report focused on how information technology, governance and social norms influence communities. "There has been a widespread recent upward trend in negative affect, comprising worry, sadness and anger, especially marked in Asia and Africa, and more recently elsewhere," the report notes, observing that countries with a lower happiness ranking also "suffered some combination of economic, political and social stresses."

The report is what brought us to the party this past Monday night. We wanted to interview Afghans to hear their perception on their relative happiness and unhappiness. Many of the people we interviewed did not dispute that Afghanistan has its woes.

"The last few years have been extremely difficult for all Afghans. We have suffered so much, and so many personal losses, it is understandable that there is a sense of frustration," admits Maryam Atahi, an Afghan social activist and communications manager at Save the Children. Atahi lost a close friend and a family member in insurgent attacks over the past year.

Agreeing with her, Sharifi adds that while Afghans are exposed to a lot of negativity owing to the increasing conflict — Afghanistan had more deaths from terrorism than any other country in 2017 according to the Global Terrorism Index.

"There is so much negative energy that has been building around the country in a cycle of violence that has continued for the last 40 years," he says. "Everyone is transmitting that anger and discontent — all Afghans including the children are angry."

And yet he does not despair. "Afghans find spaces and opportunities to break that cycle of violence and anger," he says, explaining why he hosts social gatherings. Sharifi holds at least two such events in a week, which feature traditional music and dancing, poetry recitation, bonfires and barbecues.

"Everyone is welcomed here, at any time, any day," he says. "If they need to talk, listen to music, or dance, we are always hosting."

Sharifi isn't alone in keeping the Afghan culture of hospitality alive. Since Fridays are a weekly day off — the Afghan Sunday — Thursday nights in Kabul and other communities around the country are set aside for socializing.

But the events are often held behind closed doors and thick walls. There is a lack of public space for celebratory gatherings – and there's also concern about the strong disapproval from the deeply conservative Afghans who disapprove of such parties because men and women fraternize.

Indeed, there was a time in Afghanistan not that long ago, during the Taliban regime of the late 1990s, when music, dance and entertainment of any kind was banned. But even the fear of harsh punishment didn't stop Afghans from celebrating back then, even if it meant doing so discreetly and underground.

The World Happiness Report asserts that governments and the caliber of their social services are directly responsible for a lack of happiness.

In Afghanistan, the change in the government since the fall of the Taliban regime in 2001 has had little influence on Afghanistan's relationship with happiness, at least according to the report's rankings.

The Afghans we interviewed said that their government is not providing the kinds of resources that lead to happiness. But they are sympathetic to the situation of the current government with its many issues to address, like managing the ongoing conflict with the Taliban and bringing the Taliban to peace negotiations.

And Afghans understand all too well that true happiness cannot be found in a fractured society. In a study on psychosocial well-being in Afghanistan currently being conducted by Martha Bragin, associate professor of social work at Hunter College, City University of New York, and Bree Akesson, associate professor of social work at Wilfrid Laurier University, spoke to 440 participants from the provinces of Kandahar, Mazar, Herat and Kabul.

Bragin, an American who has worked on research and mental health projects in Afghanistan since 2002, told us that many indicators of well-being were different for men and women, but there were some commonalities. Peace, security and justice were the most important points for both men and women to be psychologically and socially well."

Bragin further observed that the Afghans she has interviewed say they seek to participate in community affairs to seek well-being. "Afghans get great satisfaction from religious and cultural participation," she says, adding that "no one is told how to practice his or her faith."

Afghans told us that they find various paths to happiness.

"Happiness is strongly linked to satisfaction and the satisfaction I derive from the work I do in Afghanistan is incomparable to anything else," says artist Kabir Mokamel.

Reflecting the findings of Bragin, he emphasizes the importance of community in helping Afghans stay happy. "Being part of the community is very important to Afghans. Solitude is a foreign concept to Afghans," he says, adding that sharing emotions — joy or sorrow— helps Afghans find a sense of happiness.

"Even when you take a taxi, the driver will greet you like his own family," Mokamel says. "The conversations can get very personal very quickly, and you will completely forget about your stressful day. I haven't seen such interaction anywhere else I have lived," he says.

Save the Children employee Atahi agrees that recent happy memories were made in association with the community. "I was thrilled when Rashid Khan [the Afghan cricketer] played in all the big leagues around the world. I get so excited when I see my friend Farazana anchor a news segment on TV. A lot of my happiness comes from my connection to my community and my country," she explains.

Mokamel also credits the unpredictability of life in Afghanistan as a reason why Afghans live to the fullest. "Surviving an attack, for instance, adds a sense of appreciation for being alive, a reason to be happy. I can't describe it, but it is a feeling that elevates me," he says.

There is, to be sure, a toll taken by trauma. In their paper, Bragin and Bree note that attacks and threats to life have become all too normal: "The negative effects of the unrelenting conflict on individuals, families, communities, institutions and the culture itself continue," they write.

Hadi Rasooli, a psychologist from Herat, believes that many of the mental health issues in Afghanistan are "direct or indirect effects of wars and conflicts."

"Our people experience high levels of negative emotions such as worry, pain, stress and sadness, and also effects of "hidden violence" within families," he explains. He counsels patients on such issues but notes that seeking help for mental health issues carries stigma across the country.

Afghans are acutely aware of this paradox of searching for happiness in times of war and conflict. "When we don't get along with each other and fight with each other, [when] we face issues like terrorism and even poverty, as a result Afghanistan becomes an unhappy place," Sangari says.

Yet that does not keep people from having happy moments and memories, even in the third least happy country in the world.

The Atlantic

In 1886, clark bell, the editor of the journal of the Medico-Legal Society of New York, relayed to a physician named Pliny Earle a query bound to be of interest to his journal’s readers: Exactly what mental illnesses can be said to exist? In his 50-year career as a psychiatrist, Earle had developed curricula to teach medical students about mental disorders, co-founded the first professional organization of psychiatrists, and opened one of the first private psychiatric practices in the country. He had also run a couple of asylums, where he instituted novel treatment strategies such as providing education to the mentally ill. If any American doctor was in a position to answer Bell’s query, it was Pliny Earle.

Earle responded with a letter unlikely to satisfy Bell. “In the present state of our knowledge,” he wrote, “no classification can be erected upon a pathological basis, for the simple reason that, with slight exceptions, the pathology of the disease is unknown.” Earle’s demurral was also a lament. During his career, he had watched with excitement as medicine, once a discipline rooted in experience and tradition, became a practice based on science. Doctors had treated vaguely named diseases like ague and dropsy with therapies like bloodletting and mustard plasters. Now they deployed chemical agents like vaccines to target diseases identified by their biological causes. But, as Earle knew, psychiatrists could not peer into a microscope to see the biological source of their patients’ suffering, which arose, they assumed, from the brain. They were stuck in the premodern past, dependent on “the apparent mental condition [his emphasis], as judged from the outward manifestations,” to devise diagnoses and treatments.

The protracted attempt to usher psychiatry into medicine’s modern era is the subject of Anne Harrington’s Mind Fixers: Psychiatry’s Troubled Search for the Biology of Mental Illness. As her subtitle indicates, this is not a story of steady progress. Rather, it’s a tale of promising roads that turned out to be dead ends, of treatments that seemed miraculous in their day but barbaric in retrospect, of public-health policies that were born in hope but destined for disaster.

Some of the episodes Harrington recounts are familiar, such as Egas Moniz’s invention of the lobotomy, which garnered him a Nobel Prize in 1949, at just about the same time that the psychiatrist Walter Freeman was traveling the United States using a surgical tool modeled on an ice pick to perform the operation on hapless asylum inmates. She has retrieved others from history’s dustbin. In the 1930s, for example, insulin was used to render mental patients comatose in hopes that they would wake up relieved of their psychoses. And in at least one case—the deinstitutionalization of mental patients in the 1960s and ’70s—she has given an old story a new twist. That movement, she argues convincingly, was spearheaded not by pill-happy psychiatrists convinced that a bit of Thorazine would restore their patients to full functioning, but by Freudians. They saw the antipsychotic drugs invented in the 1950s as a way to render patients suitable for the outpatient treatment that psychoanalysts were equipped to provide.

From ice baths to Prozac, each development Harrington describes was touted by its originators and adherents as the next great thing—and not without reason. Some people really did emerge from an insulin coma without their delusions; some people really are roused from profound and disabling depressions by a round of electroconvulsive therapy or by antidepressant drugs. But in every case, the treatment came first, often by accident, and the explanation never came at all. The pathological basis of almost all mental disorders remains as unknown today as it was in 1886—unsurprising, given that the brain turns out to be one of the most complex objects in the universe. Even as psychiatrists prescribe a widening variety of treatments, none of them can say exactly why any of these biological therapies work.

It follows that psychiatrists also cannot precisely predict for whom and under what conditions their treatments will work. That is why antipsychotic drugs are routinely prescribed to depressed people, for example, and antidepressants to people with anxiety disorders. Psychiatry remains an empirical discipline, its practitioners as dependent on their (and their colleagues’) experience to figure out what will be effective as Pliny Earle and his colleagues were. Little wonder that the history of such a field—reliant on the authority of scientific medicine even in the absence of scientific findings—is a record not only of promise and setback, but of hubris.

That word does not appear in Mind Fixers, despite its repeated accounts of overreach by enthusiastic doctors who are often the last to recognize the failure of their theories. As Harrington tells us at the outset, she is committed to restraint. “Heroic origin stories and polemical counter stories may give us momentary emotional satisfaction,” she writes. But the result—“tunnel vision, mutual recrimination, and stalemate”—is not very useful. By presenting a just-the-facts narrative of the attempt to find biological sources of mental suffering, particularly in the brain, she hopes to get the “fraught” enterprise of psychiatry back on the path to progress.

Harrington is right to sigh over what has too often proved to be a yelling match between equally deaf opponents—members of an ambitious profession convinced that psychiatry is making strides toward understanding mental illness, and critics who believe it is at best a misguided attempt to help suffering people and at worst a pseudoscience enabling social control at the expense of human dignity. Indeed, since the sides first squared off, more than half a century ago, they seem to have learned little from each other.

As Harrington ably documents, a series of fiascoes highlighted the profession’s continued inability to answer Clark Bell’s question. Among them was the 1973 vote by the American Psychiatric Association declaring that homosexuality was no longer a mental illness. The obvious question—how scientific is a discipline that settles so momentous a problem at the ballot box?—was raised by the usual critics. This time, insurers and government bureaucrats joined in, wondering, often out loud, whether psychiatry warranted their confidence, and the money that went along with it.

The association’s response was to purge its Diagnostic and Statistical Manual of Mental Disorders (DSM) of the Freudian theory that had led it to include homosexuality in the first place. When the third edition of the DSM came out, in 1980, its authors claimed that they had come up with an accurate list of mental illnesses: Shedding the preconceptions that had dominated previous taxonomies, they relied instead on a theoretical descriptions of symptoms. But as Harrington points out, they did have a theory—that mental illness was no more or less than a pathology of the brain.

In claiming not to, she argues, they were being disingenuous. They believed that biological … markers and causes would eventually be discovered for all the true mental disorders. They intended the new descriptive categories to be a prelude to the research that would discover them.

The DSM-3’s gesture at science proved sufficient to restore the reputation of the profession, but those discoveries never followed. Indeed, even as the DSM (now in its fifth edition) remains the backbone of clinical psychiatry—and becomes the everyday glossary of our psychic suffering—knowledge about the biology of the disorders it lists has proved so elusive that the head of the National Institute of Mental Health, in 2013, announced that it would be “re-orienting its research away from DSM categories.”

The need to dispel widespread public doubt haunts another debacle that Harrington chronicles: the rise of the “chemical imbalance” theory of mental illness, especially depression. The idea was first advanced in the early 1950s, after scientists demonstrated the principles of chemical neurotransmission; it was supported by the discovery that consciousness-altering drugs such as LSD targeted serotonin and other neurotransmitters. The idea exploded into public view in the 1990s with the advent of direct-to-consumer advertising of prescription drugs, antidepressants in particular. Harrington documents ad campaigns for Prozac and Zoloft that assured wary customers the new medications were not simply treating patients’ symptoms by altering their consciousness, as recreational drugs might. Instead, the medications were billed as repairing an underlying biological problem.

The strategy worked brilliantly in the marketplace. But there was a catch. “Ironically, just as the public was embracing the ‘serotonin imbalance’ theory of depression,” Harrington writes, “researchers were forming a new consensus” about the idea behind that theory: It was “deeply flawed and probably outright wrong.” Stymied, drug companies have for now abandoned attempts to find new treatments for mental illness, continuing to peddle the old ones with the same claims. And the news has yet to reach, or at any rate affect, consumers. At last count, more than 12 percent of Americans ages 12 and older were taking antidepressants. The chemical-imbalance theory, like the revamped DSM, may fail as science, but as rhetoric it has turned out to be a wild success.

Harrington’s dispassion as she chronicles the rise and fall of various biological theories of mental illness will make this book of value to historians of medicine. It may even allow critics and advocates of biological psychiatry alike to gain a deeper appreciation of the historical stream in which they are swimming, and to stop trying to drown one another. But her restraint carries a risk: that she will underplay the significance of the troubles she is reporting.

Modern medicine pivots on the promise that portraying human suffering as biological disease will lead to insight and cures. Inescapably, this enterprise has a sociopolitical dimension. To say which of our travails can (and should) come under medicine’s purview is, implicitly if not explicitly, to present a vision of human agency, of the nature of the good life, of who deserves precious social resources like money and compassion. Such questions, of course, aren’t always pressing; the observation that a broken leg is a problem only in a society that requires mobility seems trivial.

But by virtue of its focus on our mental lives, and especially on our subjective experience of the world and ourselves, psychiatry, far more directly than other medical specialties, implicates our conception of who we are and how our lives should be lived. It raises, in short, moral questions. If you convince people that their moods are merely electrochemical noise, you are also telling them what it means to be human, even if you only intend to ease their pain.

In this sense, the attempt to work out the biology of mental illness is different from the attempt to work out the biology of cancer or cardiovascular disease. The fact that the brain is necessary to consciousness, added to the fact that the brain is a chunk of meat bathing in a chemical broth, does not yield the fact that conscious suffering is purely biological, or even that this is the best way to approach mental illness. Those unresolved, and perhaps unanswerable, moral questions loom over the history that Harrington traces here. The path she has chosen may require her to steer clear of such knotty concerns as the relationship of mind to brain or the relationship of political order to mental illness. But her account doesn’t just skirt the polemics she decries. It also overlooks the consequences of psychiatrists’ ignoring those questions, or using scientific rhetoric to conceal them.

At the risk of being polemical, let me suggest that Harrington’s word disingenuous fails to describe the cynicism of Robert Spitzer, the editor of the DSM-3, who acknowledged to me that he was responding to the fact that “psychiatry was regarded as bogus,” and who told me that the book was a success because it “looks very scientific. If you open it up, it looks like they must know something.” Nor does ironic accurately describe the actions of an industry that touts its products’ power to cure biochemical imbalances that it no longer believes are the culprit. Plain bad faith is what’s on display, sometimes of outrageous proportion. And like all bad faith, it serves more than one master: not only the wish to help people, but also the wish to preserve and increase power and profits.

Harrington ends her book with a plea that psychiatry become “more modest in focus” and train its attention on the severe mental illnesses, such as schizophrenia, that are currently treated largely in prisons and homeless shelters—an enterprise that she thinks would require the field “to overcome its persistent reductionist habits and commit to an ongoing dialogue with … the social sciences and even the humanities.” This is a reasonable proposal, and it suggests avenues other than medication, such as a renewed effort to create humane and effective long-term asylum treatment. But no matter how evenhandedly she frames this laudable proposal, an industry that has refused to reckon with the full implications of its ambitions or the extent of its failures is unlikely to heed it.

The Verge

Apple’s focus is shifting. In recent years, iPhone sales have begun to plateau, and now Apple’s services business — which encompasses everything from the App Store to licensing deals — is being positioned as its next big frontier for revenue growth. More than ever, Apple wants to sell people constant, ongoing subscriptions for things they can do on their phones.

That new direction is going to be thrust into the spotlight next week at Apple’s “It’s Show Time” event, where the company is expected to unveil two big new subscription services: a TV service for original shows and movies, and an Apple News service that will bundle together premium news sources and magazines.

Apple’s services business brought in over $10.9 billion during the most recent quarter, setting records in “every geographic segment” in the process, according to Apple CEO Tim Cook. Cook also said that Apple is on track to double its services business from 2016 to 2020. Last quarter saw a 19 percent increase year over year.

It’s a substantial figure compared to Apple’s other business segments: services already brings in more per quarter than the Mac ($7.4 billion last quarter), iPad ($6.7 billion), or the collected “Wearables, Home, and Accessories” group of products ($7.3 billion). And that balance will likely only continue to shift as Apple starts to push services harder and introduces new services to which people can subscribe.

Apple Music is arguably the highest-profile entry in Apple’s new services business, due to it being one of the most modern (it launched in 2015, after Apple bought and rebranded Beats Music) and one of the most interesting (sorry, extended warranty programs).

The music subscription service had 56 million customers as of December 2018, according to the Financial Times. For comparison, Spotify had 96 million paid customers as of February 2019.

It’s unclear how many of Apple Music’s customers are actively paying. The company offers free trials, and its service also comes bundled with some Verizon wireless plans.

Assuming all customers are paying $10 per month (with family plans, annual discounts, bundles, and student deals, they’re not, but this is ballpark numbers here), that puts Apple Music at a high-ball estimate of $6.7 billion per year brought in.

Cost: $10 per month ($5 per month for student plans, $15 per month for family plans)

How Apple makes money: Subscription fees, carrier partnerships.

Probably one of the biggest contributors to Apple’s revenue is the massively popular App Store, which was estimated as of May 2018 to have seen upward of 170 billion downloads in its 10-year history.

Most of those aren’t straight-up paid purchases — a massive percentage of the App Store’s revenue comes from in-app purchases in free-to-play games like Fortnite and Candy Crush and subscription apps like Netflix, Tinder, and YouTube. According to App Annie’s latest estimates, every single one of the 50 top grossing apps on the platform is either a major service that relies on subscription fees or a free-to-play game. Even the most popular paid apps like Minecraft or Facetune just don’t make the same kind of money as free apps that rely on in-app purchases, even with in-app purchases to help bolster their numbers. And Apple takes a cut of each of those in-app purchases and subscriptions.

Those “free” apps have resulted in some pretty big sales: as of June 2018, Apple had paid out $100 billion to developers from the App Store. If you work off of Apple’s 70 / 30 revenue split (which is usually, but not always, the cut it takes from purchases), you get total sales of roughly $142 billion, with $42 billion of that going to Apple in the decade it’s been running the App Store.

That said, Apple has recently come under fire for the App Store model in the past few months: the Supreme Count is hearing an iOS App Store antitrust lawsuit that alleges Apple has an unfair monopoly on iPhone apps. And Spotify has filed another antitrust complaint over Apple’s 30 percent cut with the European Union, complaining that it gives Apple an unfair advantage when promoting its own streaming service, Apple Music.

Cost: Depends on content purchased.

How Apple makes money: in-app purchases in games, app sales, app subscriptions.

Theoretically, every single Apple customer who owns an iPhone, iPad, or Mac is an iCloud user, because Apple gives a paltry 5GB of storage to all customers for free. But for revenue, the important part here is the paid plans, which give users additional storage for a monthly cost.

iCloud may not have the same brand recognition as Dropbox or Google Drive when it comes to storing and sharing files, but it does have some big advantages in getting users to subscribe: it’s the only way to back up iPhones and iPads to the internet. And that storage pool counts toward nearly everything on your phone. Take too many pictures, for example, and your phone stops backing up, which creates a real incentive to shell out for more than the scant 5GB Apple gives for free.

Apple seems to know that, too: the cheapest iCloud plan is just 99 cents per month for 50GB of storage, making it an easy sell to users, but that $12 per customer per year starts to add up across the billion-plus iOS devices out in the world, even if only a fraction of them subscribe. A 2016 interview with Apple SVP Eddy Cue revealed that at the time, there were 782 million iCloud users, but Cue’s comments referred to all users — Apple has never broken out how many paid subscribers it has.

Cost: $0.99 per month (50GB), $2.99 per month (200GB), $9.99 per month (2TB). The 200GB and 2TB plans can be shared as a family plan.

How Apple makes money: subscription fees.

The iTunes store isn’t the juggernaut it once was — with streaming services like Spotify, Apple Music, Netflix, and Hulu, people just tend to buy fewer songs, TV shows, and movies nowadays. But it still does bring in money: it’s a one-stop-shop for a huge range of content, and like all of Apple’s other services, it’s front and center on all its devices. Want to rent a movie on your Apple TV for a movie night? iTunes is right there, ready and waiting. And with Apple expanding iTunes to other devices, like Samsung smart TVs, it seems like iTunes is still a big part of Apple’s revenue strategy going forward.

Also included here is Apple Books, which is basically iTunes, but for books. Apple Books has the issue of Amazon and its massive Kindle library as competition, which Apple infamously tried to solve in a price fixing scandal that cost the company $450 million. Even so, it’s still one of the biggest ebook stores around, and is another easy source of service revenue.

Lastly, iTunes also includes Apple’s less popular iTunes Match subscription service, which costs $25 per year and syncs users’ iTunes music across their devices, sort of like a private cloud music service where you have to buy all the music.

Cost: Depends on content purchased; $24.99 per year for iTunes Match (iTunes Match is included with Apple Music).

How Apple makes money: Purchased content, subscription fees.

Apple Pay is Apple’s overarching payments system — it includes using Apple Pay to make purchases on websites and inside apps, conducting contactless payments at retail stores, and sending money using Apple Pay Cash (Apple’s Venmo-style person-to-person payment system).

Apple says it doesn’t charge “users, merchants, or developers” to use Apple Pay, but reports indicate that it still receives a small fee from each transaction. That cut appears to come from the bank that issued the card with which Apple Pay is being used. Reports from 2014, when Apple Pay launched, said the fee for US banks was 0.15 percent, or 15 cents on every $100 spent.

Last quarter, Apple said there were 1.8 billion Apple Pay transactions, more than twice as many as the same quarter a year earlier.

Apple also makes money off of Apple Pay Cash. The service is free to use when sending money with a debit card, but it charges a 3 percent fee for any funds sent using a credit card.

Cost: Three percent of any funds sent using Apple Pay Cash tied to a credit card.

How Apple makes money: Transaction fees from users, banks.

AppleCare+ is Apple’s extended warranty service: it lets customers get longer and more comprehensive warranties for their Apple products, usually with things like discounted screen or device replacements, depending on the device.

AppleCare+ is also included as part of the monthly cost of Apple’s iPhone Upgrade Program. Like many of the other Apple services, the company hasn’t said how many users opt to buy the extended warranty.

Cost: Depends on product, ranges from $129 to $199 for iPhones, $249 to $369 for MacBook laptops, and $99 to $249 for iMac and Mac desktops.

How Apple makes money: Warranty fees.

LICENSING

This isn’t quite a consumer-facing service like everything else on this list, but it’s a big business. Apple sells licenses to companies to get their services built into iOS, like how Google is the default search engine or The Weather Channel provides weather data. That kind of front row real estate on all of Apple’s devices is worth a lot, and it provides a big chunk of Apple’s services revenue.

Cost: Nothing, unless you prefer Bing for search.

How Apple makes money: Licensing payments from companies like Google to be featured on Apple products.

MAPS, SIRI, FREE ICLOUD

This is where things get weird: As of its most recent quarter, Apple now takes part of the sale price of every iPhone, iPad, and Mac and converts it into money for services, which it then spreads out across multiple quarters. Basically, Apple counts “free” services like Maps, Siri, and parts of iCloud (like iMessage), and considers them to be built into the cost of its devices.

Cost: Free? But also you’re technically paying for it when you buy your iPhone.

How Apple makes money: Hardware purchases.

Morningstar

Narratives have been used to lure investors for centuries. Simple, compelling stories tap into our emotions, hijack our ability to think rationally, and persuade us to pursue investments that are unlikely to perform well. Persuasive narratives are prevalent with thematic exchange-traded funds. These funds attempt to capitalize on the growth of popular trends like cybersecurity or the spending habits of millennials, but they face several obstacles that might prevent them from delivering attractive performance.

Compelling Stories Drive Speculation

The South Sea Company of early 18th century England exemplifies how a well-spun narrative can cause investors to ignore facts and disrupt their ability to make sound investment decisions. The British government awarded the company exclusive trading rights with South America, a new land that was home to an abundance of gold, silver, and other exotic commodities. But its ability to capitalize on these rights faced a big hurdle. Many South American ports were controlled by Spain, which enforced quotas and taxes on the amount and value of goods that the British could import.

Despite this impediment, the company's directors engaged in a scheme intended to boost the stock's price and make them wealthy in the process. They championed the South Sea Company by emphasizing its trading rights and spread rumors that Spain might relax the import constraints. The tales the directors told were compelling. Promises of immense wealth drove speculators to buy the stock at a frenzied pace. New issues were filled within hours, and the company's stock price moved higher and higher.

But the stories spread by the directors were exaggerations at best. Spain never intended to relinquish its position, and it never did. Ultimately, imports from South America added little to the revenue of the South Sea Company. The excessive appreciation of its stock price far outpaced the tepid growth of its underlying business and proved unsustainable. Its share price collapsed, leaving speculators with a fraction of their original investment.[1]

Why We Ignore Facts and Buy Stories

Speculators in the South Sea Company were victims of an enticing story. Narratives like those used by the directors relied on simplicity, plausibility, and dramatic emotional connection to exert a powerful pull on the public, causing them to make decisions based on emotion and reaction rather than logic and reflection.

Plausibility is part of what makes a well-crafted narrative compelling and credible, even if the circumstances aren't factually true. The South Sea Company's potential to profit from its exclusive trading rights seemed reasonable, which was all that was required. When a story is plausible, the potential for truth bypasses logical thought processes, causing speculators to assume that the story is true rather than confirm the truth.[2]

Stories build on their believability with simple emotional connections. I asked Sarah Newcomb, a senior behavioral scientist at Morningstar, to provide her insight as to why stories exert such a strong pull on our emotions. She responded that "stories are really powerful to us because they're easy to remember. They're small and easy for our minds to understand. A story is a self-contained thing that has meaning in our lives. Our brains love self-contained things that have meaning."

Stories can also exert their influence by accessing our emotions through excitement. "Generally, in a story we're able to make an emotional connection to what's happening. Emotions solidify memories and add salience to an experience," Newcomb added. "So, if something is emotionally charged, we're more likely to remember it and place higher importance on it."

Thematic ETFs are modern-day investment strategies that rely on simple, catchy stories to attract investors. They access our collective fascination with a wide range of niche topics, offering the potential to capitalize on the growth of something popular or trendy. Examples include ETFMG Prime Cyber Security ETF (HACK), Global X Millennials Thematic ETF (MILN), and Loncar Cancer Immunotherapy ETF (CNCR).

The stories used to pitch these funds, and thematic ETFs broadly, are reminiscent of those used to sell the South Sea Company. The timeliness of these themes makes them relevant and familiar to people, instilling a sense of plausibility that tapping into them might lead to superior investment performance. Their stories are simple and easily remembered. Characteristics like these put them in a position to bypass our logical thought processes and provoke an emotional response.

But get past the story, and these funds lack some of the basic traits that are associated with great investments. Exhibit 1 lists the three thematic ETFs mentioned before, along with their expense ratios, diversification metrics, and price/book ratios. All of these funds charge considerably higher fees, are less diversified than Vanguard Total Stock Market ETF (VTI), and trade at higher multiples, which increases risk and makes it harder for them to outperform.

Fees and diversification aside, thematic investments have another problem. The narratives used to pitch these funds imply that investors are making a single bet, one tied to the growth of a specified theme. But investors are actually making three bets. To capitalize on the success of a theme with one of these ETFs, investors first need to bet that their chosen theme will grow as expected. Second, they need to correctly bet that the companies held in the fund are positioned to profit from the growth of that theme. And third, they must bet that profit growth will translate into attractive stock returns.

The third bet is likely the most difficult. For high growth to translate into market-beating returns, it must exceed the expectations embedded in stock prices. The market's collective wisdom is pretty good at pricing expected growth. So while it is easy to find fast-growing companies, it is more difficult to identify stocks with undervalued growth. The fastest-growing companies tend to trade at higher valuations and don't typically offer the highest returns. And growth expectations aren't always realized. HACK's expected long-term earnings growth in November 2014 was 10%. But its actual earnings growth over the past few years was only 3.5%.

Growth aside, the problem with making multiple bets is that the overall probability of success is the product of the underlying probabilities associated with each bet. As an example, let's say the probabilities of an investor successfully choosing a theme, the stocks in a thematic ETF profiting from the growth of that theme, and those stocks actually providing a payout are each 75%. The investor's overall probability of success is then 0.75 x 0.75 x 0.75, or roughly 42%. So the investor's actual chances of winning in this scenario are much lower than the 75% success rate associated with the theme itself.[3] Furthermore, the probability of being right says nothing about the size of the potential payout.

If You Must

Given their higher fees, concentrated portfolios, and multiple bets, the simple recommendation is to avoid thematic funds. But given the power that narratives hold over us, it doesn't seem reasonable to expect that everyone will. Those unable to resist the siren song might want to check out a recent paper written by my European colleagues Kenneth Lamont and Hortense Bioy titled "Picking Your Dream Theme."[4]

Their study looked at a wide selection of thematic ETFs listed in Europe and offered recommendations for investors that wish to venture into the thematic investing world. The study has not been replicated in the United States, but many of the takeaways also apply here. They suggest investors should take time to understand the risk/reward trade-offs. Some thematic ETFs are simply a play on a known factor or sector, so a cheaper alternative may be available. For example, MILN had almost 80% of its portfolio invested in technology and consumer cyclical stocks as of November 2018, which contributed to its strong growth orientation. Funds like these are best used as satellites because of their concentration.

Washington Post

Surprise: Apple quietly introduced new AirPods, iPads and iMacs this week, just days ahead of a splashy launch event at its headquarters on March 25.

Translation: You can probably hold onto your wallet.

Apple sometimes puts out smaller updates without a big to-do, but usually not for three days in a row before a big scheduled event. Next Monday, Apple is expected to unveil new ways to get your money: subscription services for news and entertainment. By getting the hardware out of the way in advance, Apple is signaling how important services are becoming to its business in an era when upgrades don’t generate much buzz.

Apple’s newest products are incremental. None of the changes dramatically reinvent the design or capabilities of the products. The biggest happy news is for people who’ve been holding out on buying an iPad Mini and iMac — they’re both getting a welcome speed boost. The updated AirPod headphones will offer better battery life, but disappoint on other fronts.

The unsung winners from this week’s announcements: People who buy last-generation and used Apple products. Any time there are new Apple products, the older stuff that still works great gets cheaper. Check eBay and sites with refurbished products such as Backmarket.com for some spectacular deals in the weeks ahead.

So how do you figure out if it’s time for an upgrade? Here’s a rundown on what’s good — and what’s still missing — from each of this week’s updates.

Over the past two-and-a-half years, AirPods have grown from the butt of jokes (“Are those Q-Tips hanging out your ears?”) to the favorite product of commuters and people who spend all day on the phone. But the 2019 update (priced $159 to $199) doesn’t move the needle much on simplicity — or make them work for more people.

What’s good: The battery in the second-generation AirPods promises an hour more of talking time, thanks to a more-efficient processor. This is useful if the primary purpose of your AirPods is making calls, but it probably won’t matter much for listening to music. (Even the first-generation AirPods could last up to five hours at a time for streaming music.)

A nice to have: For $40 more, you can now get AirPods in a case that charges wirelessly. To take advantage of this, you’ll need to have access to wireless charging pads — which are still few and far between. You can use first-generation AirPods with the new wireless-charging case, sold separately for $79.

And Apple superfans will like that the new AirPods listen out for the command “Hey Siri” to take your voice commands. The feature is an echo of Scarlett Johansson’s in-ear artificial intelligence in the 2013 film “Her.” But it’s not clear how much additional utility you get out of talking to Apple’s not-always-so-intelligent AI in your ear, as opposed to through an iPhone, Apple Watch or HomePod.

What’s missing: Apple is sticking with its one-size-fits-all design with its second-generation AirPods, but the reality is not all human ears are the same. Would it kill Apple to make small, medium and larger versions? I have no problem keeping AirPods in place while jogging ... or headbanging. But many readers have told me AirPods simply won’t stay put. Competitors’ products, such as Samsung’s $130 Galaxy Buds, come with different-size plastic tips, but you’ll have to buy those in the aftermarket if you want custom-fit AirPods.

Also missing: noise-canceling capabilities and color options other than white. And if Apple wanted to prove its commitment to the environment, it could have included a replaceable battery. Products with sealed-in Lithium batteries are built to self-destruct after two to three years — and pose a significant fire concern for recyclers and trash collectors.

Finally, Apple two years ago promised a wireless charger called AirPower that could charge the iPhone, Apple Watch and AirPods at the same time. This product, however, is still MIA.

Apple’s iPad lineup has never been larger or most confusing.

What’s good: A favorite reading device for many, the 7.9-inch iPad Mini is looking strong again. The new $399 Mini, last updated about two years ago, is now much faster, featuring the A12 processor also found in the iPhone XS and XR. The Mini also works with the Apple Pencil stylus, which you can use to doodle and take notes. The question is: Now that so many people have an iPhone XR or XS Max with a gigantic screen, does the Mini still hold much appeal?

Apple’s also bringing back the $499 iPad Air as a faster, 10.5-inch version of its basic $329 iPad. The new Air is a good alternative to the $799 11-inch iPad Pro, given that the two devices are close in size and have the same processor.

What’s missing: None of the new iPads adopted Face ID or the smaller-bezel design of last year’s iPad Pro. Most people won’t miss those elements, but it does contribute to these new products feeling old right out of the box.

The $400 price on Mini is also surprisingly high, given that the larger-screen basic iPad is just $340.

iMacs

Apple’s classic desktop computer is getting faster, but not really evolving.

What’s good: The iMac, priced $1,099 and up, is getting Intel’s 9th-generation processors and new graphics options, which could help if you need to edit videos and photos. Apple claims that in some circumstances, the new iMacs are twice as fast.

What’s missing: Macs have been behind the curve in getting upgrades that come to other Apple products. These new iMacs still don’t have TouchID for entering passwords and making payments, even though it now comes on many Mac laptops. In 2019, shouldn’t the iMac have FaceID, and the ability to automatically log in to the account of the person it recognizes?

And Apple lags far behind Microsoft (yes, Microsoft!) in reimagining the form of a desktop computer. Microsoft’s Surface Studio offers a big screen that’s touch and pen enabled, and can also swivel down so you can work on top of it. Who says the desktop computer is dead?

WAMU

The solar panels would be spread across 10 square miles, 1.8 million of them, soaking up the sun’s rays, transforming them into electricity and pumping that power into nearby transmission lines. It would be the largest solar farm east of the Rocky Mountains — and the fifth largest in the nation.

Depending on who you ask, it’s either a dangerous eyesore that will destroy the character of rural Spotsylvania County, or a win-win, boosting the local economy and the environment.

In this county of civil war battlefields, farms, and timberland a fight is raging over the future of energy in Virginia, and in the Eastern U.S. The heart of the solar resistance is in a gated community called Fawn Lake. Stately homes surround the manmade lake. There’s also a golf course, a country club, and simmering anger that an industrial-scale solar farm could be the next neighbor.

“I mean we live at a resort, essentially,” says Dave Walsh, who moved to Fawn Lake to retire about eight years ago.

At the end of a cul-de-sac near the lake, he points through the trees behind an unbuilt lot.

“All that area is clear cut where solar panels are going to be,” Walsh says. “And it’s on a hill — there’s no way you can disguise that.”

Walsh is one of the many Fawn Lake residents organizing against the planned solar farm. One corner of the massive project would butt up against the back of the gated community. Walsh says he supports solar, in theory, but not here.

“It’s not in keeping with the type of setting that people bought houses here — they wanted to be out in the woods essentially.”

Opponents have a long list of arguments against the project. For one thing, it’s too big.

“This is just the wrong scale,” says Fawn Lake resident Kevin McCarthy, who has helped organize residents in a group called Concerned Citizens of Spotsylvania. “If you want to start solar in Spotsylvania, we should start small.” Opponents also worry the project would make their property values plummet.

Supporters, on the other hand, point to the millions of dollars in tax revenue the project would generate over its 35-year lifespan. It would create $17 million in revenue, according to the company proposing the solar farm, compared to the $1 million that would be paid by the current landowner, a timber company which uses it for logging.

Local public hearings that would ordinarily draw a dozen or so residents attracted hundreds to testify about the project. The board of supervisors had to move its meetings to progressively larger venues.

This local fight has gained national attention, with stories on Fox News, and a mention by host Sean Hannity. Hannity linked the project to the Green New Deal proposed by Democrats in Congress (even though the solar project was in the works well before the election of Green New Deal architect Rep. Alexandria Ocasio-Cortez, D-N.Y.)

‘This Is The Harbinger’

The vitriol of national politics seems to have infected local politics in Spotsylvania County. Board of supervisor meetings on the project have dragged late into the night, and they’ve gotten heated. One speaker was gaveled off the podium for lewd language and personal attacks; opponents of the project jeered when supporters spoke.

“I don’t know Spotsylvanians to act like that,” says supervisor Greg Benton, who represents the area including Fawn Lake. “But this thing has gotten so contentious that it’s happened.”

The state has already approved the solar project. Now it’s up to the county board of supervisors, but they’ve repeatedly put off voting. Benton says they’ve been deluged with emails and letters. “Just stacks and reams of paper,” he says.

Benton says the fierce opposition took him by surprise — initially, he thought it would be the easiest decision he’d ever make. The solar plant, after all, would pay millions in county taxes, but use virtually no county services.

“No schools, no teachers, no fire trucks, no ambulances, no traffic on the road. I mean how much easier can you get?”

A private developer called sPower is behind the solar project — most of the energy will be sold to Microsoft to power its enormous cloud data centers in Northern Virginia. Solar has taken off in Virginia over the past five years — the total solar output in the Commonwealth has increased from just 17 megawatts in 2014 to more than 320 megawatts as of August 2018. The 500-megawatt solar facility planned in Spotsylvania would more than double Virginia’s total solar output.

The demand is driven in part by demand from corporations. Amazon has six large solar farms around the state. It’s also driven by demand from the government: last year the Virginia General Assembly passed legislation aiming to increase solar capacity in the state to 5,000 megawatts.

Demand for solar will only grow, says Scott Sklar, who directs the Environmental and Energy Management Institute at George Washington University.

“This is the start. This is the harbinger of what I call a real maturing industry now,” says Sklar, who has been involved in solar since the 1970s.

As solar continues to grow, conflicts like those in Spotsylvania will become ever-more frequent. Opponents have some valid concerns, Sklar says, but they are things that can be addressed through the approval process — for example, increasing the size of forested buffers to hide the project.

“You really have to look at the bigger picture here,” says Sklar, referring to climate change. “If you do not move in this pathway fast and ambitiously you are going to have way more problems than having some gleaming solar panels.”

Climate scientists with the U.N.’s Intergovernmental Panel on Climate Change say we have just a decade or so to drastically reduce carbon emissions to prevent some of the worst of global warming. And starting small won’t cut it, says Sklar.

“We need a lot of energy,” Sklar says. “We’re an industrialized country, in fact, we use more energy per capita than almost any country in the world. We’re going to have to do something different, and it’s going to have to be huge.”

When Green Energy Means Clear-Cutting Forests

Solar opponents in Spotsylvania say the “green” technology is actually bad for the environment — causing the loss of acres of carbon-reducing trees. In fact, thousands of acres have already been clear-cut in preparation for the project (by the current owner, a timber company, getting ready to sell).

“They cut every tree down except for where the border line is for the property,” says Michael O’Bier, who lives right next to the project. He stands along the row of trees separating his driveway from what’s now a vast clearing, as far as the eye can see.

“They set the timber cutter right on the line,” O’Bier says.

Once the project is finished, O’Bier’s property will be separated from solar panels by at least 100 feet, which will be replanted with trees and vegetation. According to sPower, the vast majority of neighbors will not be able to see the solar panels.

Regardless of the aesthetics, O’Bier still worries about being so close to so much solar. “They don’t know the side-effects of this thing. I got cancer. What’s it going to do to my cancer?”

Many of the opponents’ arguments are the same ones put forward by groups that deny human-caused climate change. For example, opponents say solar panels could leach toxic chemicals — an idea that’s been debunked by research.

Many of the opponents of solar in Spotsylvania also question whether humans really are causing climate change. “I think the climate is changing,” says Fawn Lake resident Sean Fogerty. “The contribution people have to it; I don’t know the answer to that.” He says he thinks it’s a good idea “to start looking at carbon,” but doesn’t believe there’s any great urgency.

Anyway, Fogerty says, there are better ways to go carbon-free besides massive solar farms. “Where are you going to live if you’ve got this everywhere?” he says, gesturing toward the area that has already been clear-cut. “You got to get a lot of this to get to 100 percent renewables, and you got to do that all across the country.” He suggests a mix of fuels would be better, including nuclear power plants, which do not directly emit carbon dioxide.

‘It’s A Blessing’

Support for the solar farm has been less vocal than the opposition. But 67 percent of county residents favor the project, according to a poll commissioned by sPower, while just 26 percent oppose it.

“The people in the Fawn Lake area, they’ve put out this false information, and some people in the county believe it,” says Daniel Pemberton, a lifelong Spotsylvanian who lives several miles from the proposed site. He and his wife Helen have 40 solar panels in their backyard. In a sunny year, the panels cover all the couple’s electricity needs. Pemberton says he’d love to have the sPower solar project right next door. “I’d rather have the panels here than homes,” he says, pointing at the open fields neighboring his property.

“It’s a great blessing, it’s a blessing for the whole county,” says Helen Pemberton.

David Wilson lives on 11 acres, right next door to the sPower project. While some say they’ll leave if the project happens, Wilson says he’ll leave if it doesn’t happen.

Wilson moved to Spotsylvania from D.C. 26 years ago.

“From Washington D.C. this was the first place I came to where there was actually affordable land,” he says. Now his neighbor, a timber company, wants to sell. “So I started weighing the differences — what’s going to happen here in my backyard?”

Wilson says he’s not a liberal, or a Democrat, or a big solar advocate, but he’d rather have solar panels next door than a housing development.

“You wouldn’t be in the country anymore. Then you’d be back into another urban jungle basically.”

Wilson has a good view of the clear-cut trees from his back deck. But he says that’s not so unusual: the land behind him and on the side of him has been clear-cut four times since he’s lived there.

Ben Saunders is a project manager for sPower. In terms of climate change, the company says the solar installation will do more to reduce carbon in the atmosphere than the woods it will replace.

“This is not some 100-year forest where we’re placing the facility,” Saunders says. “This is an active pine plantation that is routinely clear-cut.”

The solar project would offset approximately 825,000 metric tons of carbon dioxide each year, according to the company, equivalent to emissions from 176,094 vehicles.

A Frustrating Choice

The solar project’s fate is still up in the air, in the hands of the county board of supervisors. Supervisor Greg Benton says he’s torn.

“I’ve gotten to that point where I don’t know how I’m going to vote. I want to support my constituents, but when it’s gone so far beyond keeping it safe, I don’t know.”

The debate over the solar farm has been so contentious and exhausting, Benton says he may not run for reelection. He wants to represent the people who voted him into office, but he also doesn’t want to kill a project that could be good for the county.

He doesn’t think the government should be telling a landowner what they can and can’t do with their property, as long as they’re not harming anyone.

“If Fawn Lake wanted this land and wanted to have a protected area — buy it,” says Benton. “I’m coming across very curt here, but I’ve worked very hard on this project, and I thought I’d gotten to where it was going to be safe and people were going to be protected.”

“I’m just frustrated.”