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Monday, May 31, 2010

Climate: Living in Denial: How Corporations Manufacture Doubt

A coalition of US coal and electricity companies set the tone in the 1990s with the creation of the Information Council on the Environment (ICE). It's purpose: to "reposition climate change as a theory not a fact".

ICE hired a PR firm to create advertising messages. These ranged from the ridiculous - "Who told you the Earth was getting warmer... Chicken Little?" - to the blatantly false - "If the Earth is getting warmer, why is Minneapolis getting colder?" But the focus groups found them effective, and that is all that mattered.

ICE also hired scientists to sign querulous opinion-page articles and PR agencies to harass journalists. Today, journalists - embattled, overwhelmed and committed to "balance", no matter how spurious - are useful conduits for spreading doubt.

Other corporate tactics include the creation of phoney grass-roots organisations. The pioneer was The Advancement of Sound Science Coalition (TASSC), set up in 1993 by a group of tobacco, nuclear energy, agribusiness, chemicals and oil companies. TASSC's stated goal was to "encourage the public to question - from the grass roots up - the validity of scientific studies."

From Living in Denial: How Corporations Manufacture Doubt by Richard Littlemore, May 20, 2010.

Mind: Empathy Dropped 40% in College Students Since 2000

College students who hit campus after 2000 have empathy levels that are 40% lower than those who came before them, according to a stunning new meta-analysis presented to at the annual meeting of the Association for Psychological Science by University of Michigan researchers. It includes data from over 14,000 students.
Without unstructured free time with playmates, children simply don't get to know each other very well. And you can't learn to connect and care if you don't practice these things Free play declined by at least a third between 1981 and 2003--right when the kids who hit college in 2000 and later were growing up.
Another factor is the "self esteem movement" and its pernicious notion that "you can't love anyone else until you love yourself." Today's kids grew up with parents who were taught by therapists and self help groups attended by millions that caring too much for other people or having your happiness tied to theirs was "co dependence,"--and that people should be able to be happy on their own, needing no one.
Perhaps an even larger factor is the merging of the left's "do your own thing" individualism with the right's glorification of brutal competition and unfettered markets. You wind up with a society that teaches kids that "you're on your own" and that helping others is for suckers. A country where the mystical new age "Secret" is that the rich deserve their wealth and got it by being positive and good--while the poor, too, get what's coming to them because they didn't try hard enough.

For more, see Shocker: Empathy Dropped 40% in College Students Since 2000 by Maia Szalavitz, May 28, 2010.

Humor: Color Wheel

From Color Wheel, but for the truth, see Color Survey Results (which also contains a few good laughs).

Religion: What Scientists Really Think About Religion

Rice University sociologist Elaine Ecklund offers a fresh perspective ... in "Science vs. Religion." Rather than offering another polemic, she builds on a detailed survey of almost 1,700 scientists at elite American research universities -- the most comprehensive such study to date. These surveys and 275 lengthy follow-up interviews reveal that scientists often practice a closeted faith. They worry how their peers would react to learning about their religious views.

Fully half of these top scientists are religious. Only five of the 275 interviewees actively oppose religion. Even among the third who are atheists, many consider themselves "spiritual."

From "Science Vs. Religion" Discovers What Scientists Really Think About Religion by Josh Rosenau, May 30, 2010.

Sunday, May 30, 2010

Politics: A Tea Party Motivation

A one-percentage-point decline in growth leads to a one-percentage-point increase in the vote share for right-wing or nationalist parties.
Our main finding is that higher per capita GDP growth is significantly negatively linked to the support for extreme political positions. While estimates vary between specifications, we find that roughly a one percentage point decline in growth translates into a one percentage point higher vote share of right-wing or nationalist parties. Moreover, we find that the amount of income inequality in a country affects the role that growth plays. Highly unequal countries display a lower growth effect than more equal countries. For countries with a more equal distribution of income, a one percentage point drop in the growth rate may increase the vote share of far right parties by up to two percentage points.

Our results therefore make clear that countries should not expect right-wing parties to get majorities unless growth declines quite as much as in the 1920s. Nevertheless, even with a less significant fall in economic growth rates, a rise in support for extreme parties is likely to change political outcomes — for example through their impact on incumbent parties’ political platforms.

Our more recent research on the vote shares of other groups of political parties points out that smaller growth rates mostly benefit right wing and nationalist parties — and not so much the communist parties. One explanation for this asymmetry may be that voters perceive right wing parties as generating more individual income uncertainty.

See The OECD's Growth Prospects and Political Extremism by Markus BrüCkner Hans Peter GrüNer, May 16, 2010.

Economics: Greece May Yet Have to Restructure Its Finances

Standard & Poor's said in late April that investors could expect to recover 30% to 50% of their money [if Greece defaults].
Right now, Greece needs to borrow to help pay for the daily operations of government, like salaries for government workers. So it needs to keep creditors happy. In fact, in 2009, the country was already €20 billion in deficit before it forked out for interest payments.

But by 2012 that so-called primary deficit will flip to a surplus of about €2.4 billion, according to IMF estimates. That means Greece will be generating enough money to fund itself, and instead would be borrowing just to fund its interest payments, a precarious cycle.

In that situation, it could better afford to restructure and presumably anger lenders. [Emphasis mine]

For more, see Greece May Yet Have to Restructure Its Finances by Charles Forelle and Tom Lauricella, May 28, 2010.

Mind: Drilling for Certainty

The Gulf oil well blowout inspired this ...

If there is one thing we’ve learned, it is that humans are not great at measuring and responding to risk when placed in situations too complicated to understand.

In the first place, people have trouble imagining how small failings can combine to lead to catastrophic disasters. At the Three Mile Island nuclear facility, a series of small systems happened to fail at the same time. It was the interplay between these seemingly minor events that led to an unanticipated systemic crash.

Second, people have a tendency to get acclimated to risk. As the physicist Richard Feynman wrote in a report on the Challenger disaster, as years went by, NASA officials got used to living with small failures. If faulty O rings didn’t produce a catastrophe last time, they probably won’t this time, they figured.

...

Third, people have a tendency to place elaborate faith in backup systems and safety devices. More pedestrians die in crosswalks than when jay-walking. That’s because they have a false sense of security in crosswalks and are less likely to look both ways.

On the Deepwater Horizon oil rig, a Transocean official apparently tried to close off a safety debate by reminding everybody the blowout preventer would save them if something went wrong. The illusion of the safety system encouraged the crew to behave in more reckless ways. As Malcolm Gladwell put it in a 1996 New Yorker essay, “Human beings have a seemingly fundamental tendency to compensate for lower risks in one area by taking greater risks in another.”

Fourth, people have a tendency to match complicated technical systems with complicated governing structures. The command structure on the Deepwater Horizon seems to have been completely muddled, with officials from BP, Transocean and Halliburton hopelessly tangled in confusing lines of authority and blurred definitions of who was ultimately responsible for what.

Fifth, people tend to spread good news and hide bad news. Everybody wants to be part of a project that comes in under budget and nobody wants to be responsible for the reverse. For decades, a steady stream of oil leaked out of a drill off the Guadalupe Dunes in California. A culture of silence settled upon all concerned, from front-line workers who didn’t want to lose their jobs to executives who didn’t want to hurt profits.

Finally, people in the same field begin to think alike, whether they are in oversight roles or not. The oil industry’s capture of the Minerals Management Service is actually misleading because the agency was so appalling and corrupt. Cognitive capture is more common and harder to detect.

So it seems important, in the months ahead, to not only focus on mechanical ways to make drilling safer, but also more broadly on helping people deal with potentially catastrophic complexity. There must be ways to improve the choice architecture — to help people guard against risk creep, false security, groupthink, the good-news bias and all the rest.

For more, see Drilling for Certainty by David Brooks, May 27, 2010.

Saturday, May 29, 2010

Economics: Debt by President

From Gross Federal Debt as a Percent of GDP.

Misc: Mexico Vs. United States: Mexican Immigration Laws Are Tougher

A detailed description of the strictness of Mexico's immigration laws is at Mexico Vs. United States: Mexican Immigration Laws Are Tougher by Factreal, May 8, 2010.

Government: Investigation of the Minerals Management Service

From an investigation of activities of part of the Minerals Management Service prior to 2007. The MMS regulates off-shore oil drilling.

RESULTS IN BRIEF

We initiated this investigation after receiving an anonymous letter, dated October 28, 2008, addressed to the U.S. Attorney’s office in New Orleans, LA, alleging that a number of unnamed Minerals Management Service (MMS) employees had accepted gifts from oil and gas production company representatives. The complainant specifically suggested that MMS employees be investigated for accepting gifts, including hunting and fishing trips, from the Island Operating Company (IOC), an oil and gas production company working on oil platforms regulated by the Department of the Interior (DOI).

During the course of our investigation, a number of MMS employees at the Lake Charles, LA district office admitted to attending sporting events prior to 2007 in which oil and gas production companies sponsored teams, as well as receiving lunches and accepting gifts. Through numerous interviews, we found that a culture of accepting gifts from oil and gas companies was prevalent throughout the MMS Lake Charles office; however, when MMS supervisor Don Howard, of the New Orleans office, was investigated and later terminated in January 2007 for his gift acceptance, this behavior appears to have drastically declined.

During our investigation, two MMS employees at the Lake Charles office admitted to using illegal drugs during their employment at MMS. We also found that many of the inspectors had e-mails that contained inappropriate humor and pornography. Finally, we determined that between June and July 2008, an MMS inspector conducted four inspections on IOC platforms while in the process of negotiating and later accepting employment with the company. We presented our findings to the U.S. Attorney’s Office for the Western District of Louisiana, which declined prosecution. We are providing a copy of this report to the MMS Director for any administrative action deemed appropriate.

From Investigative Report Island Operating Company Et Al by United States Department of the Interior, Office of Inspector General, March 31, 2010. Also see Read the Govt's Report Blasting Drilling Regulators on Ethics, Drugs and Porn by Marian Wang, May 25, 2010.

Friday, May 28, 2010

Politics: Oil Spill Means We Should Drill More?

Q4 Does the oil spill in the Gulf of Mexico make you more or less likely to support further drilling for oil off the American coastline, or does it not make a difference to you?

More likely..................... 21%
Less likely .................... 43%
Makes no difference ....... 36%

See Obama at Majority Approval by Public Policy Polling, May 11, 2010.

Security: New U.S. Strategy Focuses on Managing Threats

On the U.S.'s new national security strategy document ...

... to Mr. Obama’s team, it is a document that recognizes the world as it is and ends a era of illusion in which Washington confused projecting power with achieving results. “We are no less powerful,” Secretary of State Hillary Rodham Clinton said Thursday at the Brookings Institution. “We are shifting from mostly direct application and exercise of American power,” she said, to one of indirection, that requires patience and partners, and gets results more slowly.

For much more, see New U.S. Strategy Focuses on Managing Threats by David E. Sanger and Peter Baker, May 27, 2010.

Misc: Apple Passes Microsoft as No. 1 in Tech

Times change ...

Wednesday ... Apple, the maker of iPods, iPhones and iPads, shot past Microsoft, the computer software giant, to become the world’s most valuable technology company.
As of Wednesday, Wall Street valued Apple at $222.12 billion and Microsoft at $219.18 billion. The only American company valued higher is Exxon Mobil, with a market capitalization of $278.64 billion.

The companies have comparable revenue, with Microsoft at $58.4 billion and Apple at $42.9 billion. But in their most recent fiscal years, Apple had net income of $5.7 billion, while Microsoft earned $14.6 billion.

Microsoft has more cash and short-term investments, $39.7 billion, to Apple’s $23.1 billion, which makes the value assigned by the market to Apple, essentially a bet on its future prospects, all the more remarkable.

From Apple Passes Microsoft as No. 1 in Tech by Miguel Helft and Ashlee Vance, May 26, 2010.

Thursday, May 27, 2010

Politics: Ronald Reagan's Pragmatism

While many in the GOP choose to remember Reagan as a doctrinaire conservative who might have supported the Tea Party movement, they conveniently forget the pragmatism that underlined his conservative principles. An avowed budget hawk, he nonetheless ran up huge deficits in order to finance a military buildup to intimidate the Soviet Union. The Americans for Tax Reform organization was founded in 1985 at his urging, and today a multitude of Republican candidates and officeholders sign their “Taxpayer Protection Pledge’ to oppose any and all tax increases. Reagan, however, raised taxes at multiple points during his tenure as Governor of California – in order to balance the state budget – and as president – partly in order to both simplify and broaden the tax code.

See Reagan Was No Tea Partier by Clifton Yin, April 26, 2010.

Mind: The Moral Life of Babies

The Moral Life of Babies by Paul Bloom, May 3, 2010 is a long article with many surprising facts about how babies think.

Wednesday, May 26, 2010

Government: The Limits of Policy

... ethnicity correlates to huge differences in how people live. Nationally, 50 percent of Asian-American adults have a college degree, compared with 31 percent of whites, 17 percent of African-Americans and 13 percent of Hispanics.

Asian-Americans have a life expectancy of 87 years compared with 79 years for whites and 73 years for African-Americans.

...

The region you live in ... makes a gigantic difference in how you will live. There are certain high-trust regions where highly educated people congregate, producing positive feedback loops of good culture and good human capital programs. This mostly happens in the northeastern states like New Jersey and Connecticut. There are other regions with low social trust, low education levels and negative feedback loops. This mostly happens in southern states like Arkansas and West Virginia.

If you combine the influence of ethnicity and region, you get astounding lifestyle gaps. The average Asian-American in New Jersey lives an amazing 26 years longer and is 11 times more likely to have a graduate degree than the average American Indian in South Dakota.

When you try to account for life outcome differences this gigantic, you find yourself beyond narrow economic incentives and in the murky world of social capital. What matters are historical experiences, cultural attitudes, child-rearing practices, family formation patterns, expectations about the future, work ethics and the quality of social bonds.

It is very hard for policy makers to use money to directly alter these viewpoints. In her book, “What Money Can’t Buy,” Susan E. Mayer of the University of Chicago calculated what would happen if you could double the income of the poorest Americans. The results would be disappointingly small. Doubling parental income would barely reduce dropout rates of the children. It would have a small effect on reducing teen pregnancy. It would barely improve child outcomes overall.

So when we’re arguing about politics, we should be aware of how policy fits into the larger scheme of cultural and social influences. Bad policy can decimate the social fabric, but good policy can only modestly improve it.

See The Limits of Policy by By David Brooks, May 3, 2010.

Government: Congress Presses Forward on Improper Payments

Improving government ...

Today, the House passed the Improper Payments Elimination and Recovery Act (IPERA), legislation that will help rein in improper payments and save taxpayer dollars.
This legislation, sponsored by Congressman Patrick Murphy of Pennsylvania, would do the following:
  • Put into law a monetary and percentage threshold for defining a program as susceptible to significant improper payments and make that threshold more rigorous over time.
  • Reduce the monetary thresholds that define what agencies and programs must conduct payment recapture audits from $500 million to $1 million. Payment recapture audits are investigations in which specialized private sector auditors use cutting-edge technology and tools to scrutinize government payments and then find and reclaim taxpayer funds made in error or gained through fraud. These auditors can be compensated based on the amount of improper payments they identify that are then reclaimed — providing a powerful incentive to find every error;
  • Expand the payment recapture audit requirement beyond contract payments to include benefit, grant, and loan payments;
  • Add sanctions for programs that are deemed non-compliant with the law; and
  • Allow OMB to conduct pilots to test accountability mechanisms with appropriate incentives and consequences tied to success in eliminating and recovering program errors.

See Congress Presses Forward on Improper Payments by Peter R. Orszag, April 28, 2010.

Wednesday, May 19, 2010

Politics: Tea Party Bears Beck's Imprint

More opinion due to the April 5-12 NYT/CBS poll ...

... tea-partiers are disproportionately attached to, and perhaps influenced by, FOX News. And they are particularly enamored of Glenn Beck.

See Tea Party Bears Beck's Imprint by Nate Silver, April 16, 2010 and Poll Finds Tea Party Backers Wealthier and More Educated by Kate Zernike and Megan Thee-Brenan, April 14, 2010.

Science: The Search for Genes Leads to Unexpected Places

An interesting article ...

Edward M. Marcotte is looking for drugs that can kill tumors by stopping blood vessel growth, and he and his colleagues at the University of Texas at Austin recently found some good targets--five human genes that are essential for that growth. Now they’re hunting for drugs that can stop those genes from working. Strangely, though, Dr. Marcotte did not discover the new genes in the human genome, nor in lab mice or even fruit flies. He and his colleagues found the genes in yeast.
The scientists took advantage of a peculiar feature of our evolutionary history. In our distant, amoeba-like ancestors, clusters of genes were already forming to work together on building cell walls and on other very basic tasks essential to life. Many of those genes still work together in those same clusters, over a billion years later, but on different tasks in different organisms.

See The Search for Genes Leads to Unexpected Places by Carl Zimmer, April 26, 2010.

Economics: Berating the Security Raters

[A Senate subcommitte released Wall Street] email messages ... from employees at the credit rating agencies, which bestowed AAA ratings on hundreds of billions of dollars’ worth of dubious assets, nearly all of which have since turned out to be toxic waste. And no, that’s not hyperbole: of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent--93 percent!--have now been downgraded to junk status.

What those e-mails reveal is a deeply corrupt system. And it’s a system that financial reform, as currently proposed, wouldn’t fix.

The rating agencies began as market researchers, selling assessments of corporate debt to people considering whether to buy that debt. Eventually, however, they morphed into something quite different: companies that were hired by the people selling debt to give that debt a seal of approval.

The Senate subcommittee has focused its investigations on the two biggest credit rating agencies, Moody’s and Standard & Poor’s; what it has found confirms our worst suspicions. In one e-mail message, an S.& P. employee explains that a meeting is necessary to “discuss adjusting criteria” for assessing housing-backed securities “because of the ongoing threat of losing deals.” Another message complains of having to use resources “to massage the sub-prime and alt-A numbers to preserve market share.”
Paul McCulley of Pimco, the bond investor (who coined the term “shadow banks” for the unregulated institutions at the heart of the crisis), recently described it this way: “explosive growth of shadow banking was about the invisible hand having a party, a non-regulated drinking party, with rating agencies handing out fake IDs.”
It’s comforting to pretend that the financial crisis was caused by nothing more than honest errors. But it wasn’t; it was, in large part, the result of a corrupt system. And the rating agencies were a big part of that corruption.

See Berating the Raters by Paul Krugman, April 25, 2010.