Archive for November 13th, 2009
Barry Schwartz has an interesting column in Business Week in which he shows how incentives do not work because they cannot work. It’s a good column, but for a really thorough treatment, get Alfie Kohn’s Punished By Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes. That link is to Amazon, so you can read about it, but you can get secondhand copies quite cheaply.
Schwartz’s column begins:
Sounds like a very interesting book, here reviewed by Chris Farrell in Business Week:
How Markets Fail:
The Logic of Economic Calamities
By John Cassidy
Farrar, Straus & Giroux; 390 pp.; $28
Economist John Maynard Keynes had a weakness for rhetorical flourishes. At the end of his classic The General Theory of Employment, Interest, and Money, he wrote: "Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." To author John Cassidy, it’s a quote that applies to the practical decision-makers of our own time—and that explains the roots of our own Great Recession.
In his ambitious How Markets Fail: The Logic of Economic Calamities, Cassidy, an economics writer for The New Yorker, offers a powerful argument that the current generation of investors and policymakers has been manacled by what he calls the "utopian" free-market school of economics. In an effort to debunk that "ideology," which he sees as holding sway in academia and among policymakers in recent decades, Cassidy marshals a deep understanding of economic intellectual history, deftly explaining the principal ideas of such towering figures as Adam Smith, Friedrich von Hayek, Léon Walras, Kenneth Arrow, Milton Friedman, and Robert Lucas. This long view allows him to place in context the free marketers’ notion that self-interest and competition "equals nirvana." In the author’s words: "Between the collapse of communism and the outbreak of the subprime crisis, an understandable and justified respect for market forces mutated into a rigid and unquestioning devotion to a particular, and blatantly unrealistic, adaptation of Adam Smith’s invisible hand." And it was this faith, he goes on to say, that led Alan Greenspan, among others, to turn a blind eye to what was happening in the real world of money and business.
Cassidy has his intellectual heroes, too. They are the advocates of what he calls "reality-based economics"—grappling with market failures, disaster myopia, speculative frenzies, and other economic complexities. John Maynard Keynes, the great scholar of economic-crisis management, is one such thinker. So are the experimental psychologists Amos Tversky and Daniel Kahneman, the mathematician Benoit Mandelbrot, and Hyman Minsky, the expert on financial manias. "Reality-based economics … affords the concept of market failure a central position, recognizing the roles that human interdependence and rational irrationality play in creating it," writes Cassidy. "If further calamities are to be avoided, policymakers need to make a big mental shift and embrace this eminently practical philosophy."
How Markets Fail is a nuanced book. That’s a major attraction in an era when …
Very interesting article by Catherine Arnst in the current issue of Business Week:
Seven hundred billion dollars. That’s a ballpark estimate of how much money is wasted in the U.S. medical system every single year, according to a new Thomson Reuters (TRI) report. A sum equal to roughly one-third of the nation’s total health-care spending is flushed away on unnecessary treatments, redundant tests, fraud, errors, and myriad other monetary sinkholes that do nothing to improve the nation’s health. Cut that figure by half, and there would be more than enough money to offer top-notch care to every one of America’s 46 million uninsured.
None of the health-care reform bills on the table in Washington do anything meaningful to address that wasted $700 billion. Nor do they call for changes in the underlying flaw that drives much of the waste—the fee-for-service system that pays doctors and hospitals for the amount of medical care delivered rather than for its quality. Under fee-for-service there is no financial incentive for doctors to eliminate waste, since they wouldn’t pocket any of the resulting savings. They would just earn less.
By leaving this perverse reward system in place, Congress is virtually guaranteeing that health-care reform legislation, if passed, will do nothing to "bend the curve" of rising health-care costs, as President Barack Obama originally set out to do. Even the few cost-cutting efforts that the bills do include won’t go into effect until at least 2013. As a result, U.S. health spending is on track to double over the next 10 years, to $5.2 trillion, about 21% of the gross domestic product.
Or possibly not. Politicians may be reluctant to rein in the medical-industrial complex, but the private sector is forging ahead. Faced with health-care costs that keep rising 6% to 7% every year—even during this year of negative overall inflation—plenty of insurers, hospitals, employers, and communities are figuring out how to offer better care for less money. They are willing to take experimental leaps in an attempt to solve some of the health system’s most intractable problems.
I think Steve C. and Scott F. will be very interested in this article by Jim Giles in New Scientist:
THE signs of the digital photography revolution are hard to miss, from cameras embedded in our cellphones to gigabytes of images stored on hard drives. But if you thought the revolution finished with the death of chemical film, think again. Computational photography promises equally dramatic changes, turning even the most ham-fisted of snappers into veritable Cartier-Bressons.
We are on the cusp of a new era in which every camera comes with a sophisticated built-in computer, says Ramesh Raskar of the Massachusetts Institute of Technology, who delivered a presentation on advances in computational photography at an imaging technology conference in Monterey, California, this week. Low-cost processing and memory combined with new digital sensors will deliver richer images created by fusing elements from multiple shots and even video.
Hints of the changes to come can be found in cameras such as Casio’s EX-F1, which launched last year and has been dubbed the first computational camera. In poor light, photographers face a difficult choice: use a flash, which can produce a harsh illumination, or go for a long exposure, where the risk of image blur increases. The EX-F1 offers a third option. It shoots a burst of images at long exposures and its computer merges the shots into a single image, reducing the blur as it does so. The process may not yet outperform established anti-blur techniques, such as using a tripod, but its existence is a significant advance in itself.
In labs around the world, researchers are developing a slew of other computational tricks for cameras. "We’re creating images that people have never been able to produce," says Marc Levoy at Stanford University in California.
Many of the new techniques tackle the old problem of …
People in general seem to be incredibly stupid. Take a look at this:
Times are tough for tuna. The guidance of scientists that advise groups that manage tuna stocks is falling on deaf ears.
The International Commission for the Conservation of Atlantic Tunas meets this week in Brazil to set catch limits. ICCAT’s scientific advisers have told it that stocks of the giant bluefin tuna are plummeting towards collapse. Catches in 2008 were at three times the ICCAT limit, which is itself more than what its scientific advisers consider sustainable (see "Tigers of the sea"). "It’s like the year before the collapse of the northern cod," says Dan Pauly at the University of British Columbia, Canada. In 1992 the Newfoundland cod fishery collapsed. It never recovered.
Giant bluefin tuna stocks are plummeting, like the year before the collapse of the northern cod
As stocks fall in the Atlantic, the tuna fishing fleets are targeting the Indian Ocean. So far, stocks of several tuna species there appear in good shape, with the exception of the yellowfin. According to the scientists advising the Indian Ocean Tuna Commission (IOTC), stocks of yellowfin are being overfished. The panel of scientists will meet later this month to discuss the available data, but it may prove futile: the IOTC’s member nations rejected the panel’s recommended catch limits in April. And in September, India launched a new ocean-observing satellite. It will be used to spot plankton blooms, which attract small fish and, in turn, tuna – so the fishing boats will know where to go.
So those who depend on the tuna for their livelihood have decided that the best course is to fish the tuna to extinction, probably within three or four years.
OTOH, we still have many people who begin smoking cigarettes after all that we know about them. You can see why I believe that humanity will fail to address global warming until the body count from that is multiple millions a year (at which point it will be too late, of course).
Very interesting article in the New Scientist. The intro:
This month marks the 150th anniversary of the most influential piece of popular science writing ever published. A few years ago, New Scientist listed reading On The Origin of Species as one of the 100 things to do before you die. To do so is to experience the extraordinary sensation of having a scientific genius enter your mind to guide you through his most important theory. Now we have asked the geneticist, evolutionary thinker and author Steve Jones to summarise and update the book for the 21st century – and, we hope, to inspire readers to experience Darwin’s astounding, world-changing writing first-hand
UNIQUE among scientific theories, evolutionary biology finds its roots in a popular book by a single author. The grey-bearded genius presented a new and radical view of existence: that life has changed over time and space, in part through a simple process called natural selection.
Charles Darwin called his work "one long argument". To a 21st-century reader it seems lengthy indeed, with only a single illustration to enliven its 150,000 words. But Darwin was a clear thinker and the book is an impressive piece of advocacy, moving from the familiar – how animals on farms have changed – to the less so, embryos and instinct included.
As for your doctrines I am prepared to go to the Stake if requisite… I trust you will not allow yourself to be in any way disgusted or annoyed by the considerable abuse and misrepresentation which unless I greatly mistake is in store for you… And as to the curs which will bark and yelp – you must recollect that some of your friends at any rate are endowed with an amount of combativeness which (though you have often and justly rebuked it) may stand you in good stead – I am sharpening up my claws and beak in readiness. — Thomas Henry Huxley
Darwin also shows how what might seem to be problems for his argument, such as the uncanny perfection of complex structures like the eye, are in fact part of the solution, and how apparent weaknesses in his case – the incomplete nature of the fossil record included – can easily be explained. Now and again he was wrong, as when, unaware of Gregor Mendel’s work on genetics, he claimed that inheritance is based on the mixing of bloods, but mostly he was right.
Darwin described the process of evolution as "descent with modification". Today that might be rephrased as "genetics plus time". Offspring resemble their parents because they inherit DNA from them, but the copying process is not precise. Every round has errors, or mutations, and although they are individually rare – with perhaps one or two mutations in working genes each generation in humans – they can soon build up vast diversity. A copy of a copy is always imperfect, and for that reason alone, evolution is inevitable.
Interesting article in the Economist (click graph to enlarge):
THE Green Relief “natural health clinic” in a bohemian part of San Francisco doesn’t sound like an ordinary doctor’s surgery. For those who wonder about the sort of relief provided, its logo—a cannabis leaf—is a clue. Inside, in under an hour and for $99, patients can get a doctor’s letter allowing them to smoke marijuana in California with no fear of prosecution. In a state that pioneered bans on smoking tobacco, smoking cannabis is now easier than almost anywhere in the world.
California, with its network of pot-friendly physicians, offers the most visible evidence of a tentative worldwide shift towards a more liberal policy on drugs. Although most countries remain bound by a trio of United Nations conventions that prohibit the sale and possession of narcotics, laws are increasingly being bent or ignored. That is true even in the United States, where the Obama administration has announced that registered cannabis dispensaries will no longer be raided by federal authorities.
From heroin “shooting galleries” in Vancouver to Mexico’s decriminalisation of personal possession of drugs, the Americas are suddenly looking more permissive. Meanwhile in Europe, where drugs policy is generally less stringent, seven countries have decriminalised drug possession, and the rest are increasingly ignoring their supposedly harsh regimes. Is the “war on drugs” becoming a fiction?
Reformers are in a bold mood. Earlier this year a report by ex-presidents of Brazil, Colombia and Mexico called for alternatives to prohibition. On November 12th a British think-tank, Transform, launched a report* setting out ideas on how drugs could be legally regulated. For every substance from cannabis to crack, it suggests a form of regulation, via doctors’ prescriptions, pharmacy sales or consumption on licensed premises.
It’s conventional wisdom that the legal "wall" between intelligence and law enforcement was one of the reasons we failed to prevent 9/11. The 9/11 Commission evaluated that claim, and published a classified report in 2004. The report was released, with a few redactions, over the summer: "Legal Barriers to Information Sharing: The Erection of a Wall Between Intelligence and Law Enforcement Investigations," 9/11 Commission Staff Monograph by Barbara A. Grewe, Senior Counsel for Special Projects, August 20, 2004.
The report concludes otherwise:
"The information sharing failures in the summer of 2001 were not the result of legal barriers but of the failure of individuals to understand that the barriers did not apply to the facts at hand," the 35-page monograph concludes. "Simply put, there was no legal reason why the information could not have been shared."
The prevailing confusion was exacerbated by numerous complicating circumstances, the monograph explains. The Foreign Intelligence Surveillance Court was growing impatient with the FBI because of repeated errors in applications for surveillance. Justice Department officials were uncomfortable requesting intelligence surveillance of persons and facilities related to Osama bin Laden since there was already a criminal investigation against bin Laden underway, which normally would have preempted FISA surveillance. Officials were reluctant to turn to the FISA Court of Review for clarification of their concerns since one of the judges on the court had expressed doubts about the constitutionality of FISA in the first place. And so on. Although not mentioned in the monograph, it probably didn’t help that public interest critics in the 1990s (myself included) were accusing the FISA Court of serving as a "rubber stamp" and indiscriminately approving requests for intelligence surveillance.
In the end, the monograph implicitly suggests that if the law was not the problem, then changing the law may not be the solution.
James Bamford comes to much the same conclusion in his book, The Shadow Factory: The NSA from 9/11 to the Eavesdropping on America: there was no legal wall that prevented intelligence and law enforcement from sharing the information necessary to prevent 9/11; it was inter-agency rivalries and turf battles.
Interesting article by Lisa Belkin in the NY Times:
Just as voters in Maine were rejecting the legalization of gay marriage in the state, researchers from Massachusetts to California were releasing data showing that families led by same-sex parents are becoming mainstream.
The demographer Gary Gates of the Williams Institute at the University of California, Los Angeles, released his analysis of 2008 census data, which shows that 31 percent of same-sex couples who identify themselves as spouses are raising kids, compared with 43 percent of heterosexual couples. This is a jump even from the 2000 census, which showed that 1 in 5 male couples and 1 in 3 lesbian couples were raising children, and a huge leap from 1990, when 1 in 20 male couples and 1 in 5 lesbian couples had children under the age of 18.
Are the parenting styles of these couples and the psychological development of their children different from families led by heterosexual couples? There is an increasing body of data about this, too, compiled and analyzed in a new book by Abbie Goldberg, an assistant professor of psychology at Clark University in Worcester, Mass. In an essay in the magazine this weekend, I explore that question and conclude that in some ways same-sex parents have a lot to teach the rest of us.
Here’s an excerpt from the article:
CVS (a cut-rate, bad-service drugstore chain) bought out Longs (our previous store, a high-quality California chain). We immediately noticed a big drop in quality of merchandise and, especially, quality of service. And now this in the Consumerist:
The NY AG’s office says that CVS will pay an $875,000 settlement to end legal action against them over the sale of "expired products – including over-the-counter drugs, baby formula, milk, and eggs – at stores across New York State."
The AG’s office says (emphasis ours):
The agreement with CVS is the result of the Attorney General’s statewide, undercover investigation of all major drug store chains in New York State. The probe uncovered an egregious pattern at two of the largest chains: CVS and Rite Aid. Statewide, the Attorney General’s investigation revealed that 142 CVS and 112 Rite Aid stores in over 41 counties sold expired products. This reflects 60 percent of the CVS stores visited and 43 percent of the Rite Aid stores visited. At the CVS stores, undercover investigators found that some items were being sold more than two years past their expiration dates.
Subsequent inspections by the Attorney General revealed that both CVS and Rite Aid continued to sell expired products even after the Attorney General’s advisory.
CVS also agreed to refrain from selling expired products, commit to procedures designed to prevent the sale of expired products, obtain approval from the Attorney General before making material changes to such policies and procedures, and train CVS employees in identifying and removing expired products from store shelves. There will also be signs posted in aisles containing over-the-counter drugs, infant formula, milk, and eggs warning consumers to check the expiration dates.
I guess he thought that just trusting the business to do the right thing wouldn’t work.
Interesting article by Kerri Smith at Scientific American:
Two tiny changes in the sequence of one gene could have helped install the mechanisms of speech and language in humans.
In 2001, a gene called FOXP2 was found to underlie a rare inherited speech and language disorder. It encodes a transcription factor called FOXP2, a protein ‘dimmer-switch’ that binds to DNA and helps to determine to what extent other genes are expressed as proteins.
Experiments have now revealed that the human version of FOXP2, which has two different amino acids compared with the version carried by chimps, has differing effects on genes in the brains of the two species. These differences could affect how the brain develops, and so explain why only humans are capable of language.
To find out whether these changes in FOXP2 had a biological function, a team led by Daniel Geschwind of the University of California, Los Angeles, inserted the two versions into human brain cells and looked at expression of the genes that the protein regulates. They found that the human version increased the expression of 61 genes and decreased the expression of 51 genes compared with the chimp version of the protein. To double-check that the same was happening in real brains, they looked at the expression of these genes in human and chimp brain tissue and found similar expression levels as in the cells. Their study is published in Nature…
In an email from the Center for American Progress:
When the first cases of the H1N1 virus (swine flu) were confirmed in America back in April, the Centers for Disease Control and Prevention advised that sick individuals stay home from work or school. "Influenza is thought to spread mainly person-to-person through coughing or sneezing of infected people," the CDC said. "If you get sick, CDC recommends that you stay home from work or school and limit contact with others to keep from infecting them." However, for many Americans, staying home from work due to illness — or to care for a sick child — is an impossibility because of a lack of job-protected paid sick days. In response to the threat posed by H1N1, Rep. George Miller (D-CA) has proposed legislation that would "guarantee five paid sick days to employees at businesses with 15 or more workers who are directed to stay home by management." However, Miller’s plan sunsets in two years and gives employers, not employees, the right to decide when leave is taken. Plus, under Miller’s plan, employees cannot use leave time to care for a sick child. The Healthy Families Act (HFA), which is also before Congress, would guarantee seven paid sick days per year to all workers at firms with 15 or more employees. "Paid sick days has always been a good, common sense idea, but, in light of the recent H1N1 epidemic, it has also become a necessary one," said Rep. Rosa DeLauro (D-CT), an HFA sponsor. "Right when more and more workers are feeling economically vulnerable and afraid to even miss one workday, we face an extraordinarily serious health risk that spreads much more quickly if the sick do not stay at home." Last week, the Obama administration officially agreed, and endorsed the HFA.
Terrorism is rare, far rarer than many people think. It’s rare because very few people want to commit acts of terrorism, and executing a terrorist plot is much harder than television makes it appear. The best defenses against terrorism are largely invisible: investigation, intelligence, and emergency response. But even these are less effective at keeping us safe than our social and political policies, both at home and abroad. However, our elected leaders don’t think this way: they are far more likely to implement security theater against movie-plot threats.
A movie-plot threat is an overly specific attack scenario. Whether it’s terrorists with crop dusters, terrorists contaminating the milk supply, or terrorists attacking the Olympics, specific stories affect our emotions more intensely than mere data does. Stories are what we fear. It’s not just hypothetical stories: terrorists flying planes into buildings, terrorists with bombs in their shoes or in their water bottles, and terrorists with guns and bombs waging a co-ordinated attack against a city are even scarier movie-plot threats because they actually happened.
Security theater refers to security measures that make people feel more secure without doing anything to actually improve their security. An example: the photo ID checks that have sprung up in office buildings. No-one has ever explained why verifying that someone has a photo ID provides any actual security, but it looks like security to have a uniformed guard-for-hire looking at ID cards. Airport-security examples include the National Guard troops stationed at US airports in the months after 9/11 — their guns had no bullets. The US colour-coded system of threat levels, the pervasive harassment of photographers, and the metal detectors that are increasingly common in hotels and office buildings since the Mumbai terrorist attacks, are additional examples.
To be sure, reasonable arguments can be made that some terrorist targets are more attractive than others: aeroplanes because a small bomb can result in the death of everyone aboard, monuments because of their national significance, national events because of television coverage, and transportation because of the numbers of people who commute daily. But there are literally millions of potential targets in any large country (there are five million commercial buildings alone in the US), and hundreds of potential terrorist tactics; it’s impossible to defend every place against everything, and it’s impossible to predict which tactic and target terrorists will try next.
According to The Associated Press, Eric Holder will announce later today that Khalid Sheikh Mohammed and four other 9/11 defendants will be brought from Guantanamo to New York to stand trial, in a real criminal court, for the crimes they are accused of committing. This is a decision I really wish I could praise, as it’s clearly both politically risky and the right thing to do.
An open criminal trial under our standard system of justice, accompanied by basic precepts of due process, is exactly the just and smart means for punishing those responsible for terrorist attacks. It announces to the world, including the Muslim world, that we have enough faith in our rules of justice to apply them equally to everyone, including to Muslim radicals accused of one of the worst crimes in American history. Numerous family members of the 9/11 victims have long argued that real trials for the accused perpetrators are vital to providing real justice for what was done — I expect to have an interview later today with one of those family members — and holding the trial in New York, the place where 3,000 Americans died, provides particularly compelling symbolism. So this component of the Obama administration’s decision, standing alone, is praiseworthy indeed.
The problem is that this decision does not stand alone. Instead, it is accompanied by this:
Last week, 176 House Republicans joined with 64 Democrats in voting for the so-called Stupak amendment, which could “could effectively stop many employer-provided health insurance plans from covering abortions for tens of millions of Americans” and restrict any private plan in the insurance exchange from offering abortion coverage. However, Politico reports today that the RNC’s own employee health care plan covers elective abortion — “a procedure the party’s own platform calls ‘a fundamental assault on innocent human life’”:
Federal Election Commission Records show the RNC purchases its insurance from Cigna. Two sales agents for the company said that the RNC’s policy covers elective abortion.
Informed of the coverage, RNC spokeswoman Gail Gitcho told POLITICO that the policy pre-dates the tenure of current RNC Chairman Michael Steele.
“The current policy has been in effect since 1991, and we are taking steps to address the issue,” Gitcho said. [...]
According to several Cigna employees, the insurer offers its customers the opportunity to opt out of abortion coverage — and the RNC did not choose to opt out.
Recently it was also revealed that the health insurance plan used by the right-wing, anti-choice organization Focus on the Family also covered “abortion services.”
UPDATE: The RNC has announced that it will no longer offer employees an insurance plan that covers abortion. "Money from our loyal donors should not be used for this purpose," Chairman Michael Steele said in a statement. "I don’t know why this policy existed in the past, but it will not exist under my administration. Consider this issue settled."
Very interesting article in The Guardian by Terry Macalister:
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
The allegations raise serious questions about the accuracy of the organisation’s latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.
In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.
Now the “peak oil” theory is gaining support at the heart of the global energy establishment. “The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. “The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.
“Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” he added.
A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad,” he added.
The IEA acknowledges …
Continue reading. Peak Oil is here.
Very interesting post on the More Intelligent Life blog by Gary Moskowitz:
Long before we debated what real punk-rock was, what true hip-hop was, or what made indie-rock authentic, jazz heads grappled with what is and isn’t jazz music. Now, the debate is whether jazz is dying off or not.
Not long ago Jae Sinnet, a jazz drummer, composer, educator and radio personality, told NPR that jazz is dying because people are falling out of love with it. Hip-hop, Sinnet says, stole jazz’s thunder. He also blamed club owners for removing pianos from their venues to save space over the years.
Sinnet’s claims are not unfounded. The Wall Street Journal‘s Terry Teachout reported in August that the audience for America’s great art form was withering away, based on data in the latest survey of public participation in the arts. According to the report, America’s jazz audience is not only shrinking, it’s aging. Attendance at jazz performances has dropped 30% since 2002. The median age of concert patrons in 2008 was 46; in 1982 it was 29.