Wednesday, June 30, 2010

Government Employees

There is a frightening trend in the economy, especially now. There are more Government employees now than ever before and they are getting paid far more than those in the private sector.

I did a simple calculation, albeit limited, and asked the question, how much money must I have in the bank to make a salary based on Treasury interest to equal a government employee. That gives a measure of what the problem is.

First I did it assuming we use a 10 year Treasury, and you need about $12 million, twice what you did a few years ago.

Now 10 years is a long risk period, say we do 3 months. Look below!

We are now down to $100 million but it had gotten as high as $500 billion.

An interesting metric, and salaries that are hard to meet in the private sector. And yes you cannot get fired, you get great benefits and pay no Social Security!

Pretty soon we will have one Government employee per real person working.

Sunday, June 27, 2010

Economics, Economists and What's Hard?

In a recent paper by one of the staff of the Richmond FED, one Kartik Athreya, the author states:

For my part, seventeen years after my first PhD coursework, I still feel ill at ease with my grasp of many issues, and I am fairly confident that this is not just a question of limited intellect....So far, I’ve claimed something a bit obnoxious-sounding:

that writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy.

Taken literally, I am almost certainly wrong. Some of them have great ideas, for sure. But this is irrelevant.

The real issue is that there is extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by -- dynamic considerations and feedback effects,-- will offer anything new. Moreover, there is a substantial likelihood that it will instead offer something incoherent or misleading.

I find this amazing! Dynamic Considerations and Feedback! How about uncertainty, after all Keynes wrote a whole book on that part, he struggled with what he meant by it...and he may not have reached a good conclusion.

Let me offer some comments:

1. Macroeconomics in a Keynesian sense is a top down analysis. It was forced to be that way since the tools to do otherwise were not available. It is akin to dimensional analysis in hydrodynamics and fluid flow. It is not a science as much a way to collect, coordinate, and correlate data. The underlying "physical processes" are either not understood or not even conceived of.

2. Having an economist take the mantle of dynamic systems and control, as if they never heard of WW II and fire control systems, the very beginning of feedback, and Norbert Wiener! Amazing, in fact I have found macro-economists falling into two camps; (i) the one which has discovered the theory and then are want to be mathematicians and spend all their time flipping equations with total gross neglect of what the reality is that their equations are to reflect, and (ii) those who have no clue of the complexity of their equations and just move forward in elegant bliss.

3. Consider the concept of inflation, it is in may ways an amalgam of monetary structure and human expectations. The Government can print tons of money but if people have no trust in the Government it may never get spent and thus never result in inflation. Perhaps that is what we are seeing now. That strange phenomenon of human interaction has been poorly modeled, and perhaps will always be such, that people and their actions often control what will happen. Perhaps also that is why Krugman is so much of an Asimov fan, the Foundation novels, where a small set of academic types can foresee all of society and act to control its evolution. In reality what is found is that whatever the ruling class does there is always another class which seeks to undo it! That is the game of civilization.

4. The sign of an effective methodology is its ability to predict future events or happenings, like the structural stability of a bridge, and a methodology upon which such a predictability can be agreed upon, like Newton's laws and the laws of statics, dynamics, and the strength of materials. Namely, we can have civil engineers gather about a table and generally reach a consensus. They can take Professional Engineer exams and agree on the answers. Now note what the author states as the basic qualification in order to opine, PhD coursework in a decent economics department (and passed their PhD qualifying exams, and I would argue that one such department differs dramatically in fundamentals from another, it is not the quality of teaching as much as the belief in fundamentals. Such a situation opens the discussion open to anyone with a brain, not someone who has "passed ...qualifying exams"). In fact my quals at MIT were a shocker. I had already written my first book, started my first company, written a dozen papers, and had been teaching at MIT as a junior faculty member, and had all the equations and theories down pat. Bob Gallager then asked to to tell them how a phased locked loop worked and do not use a single equation! I was terrified but it changed my life, I realized that until I could do such a feat I truly understood nothing, and I was was working on something and did not reach that point of understanding it was not understood. Thus to this young man, you have not yet reached that point.

5. Now consider one of my favorite areas, that of externalities. By definition I would argue it is a personal or political decision and there can never be truly a theory to deal with it. Coase proposes a solution based upon the somewhat well founded belief that the Government will distort any decision reached between parties. Pigou will make a decision which assumes the Government is the ultimate arbiter and is a benevolent one. He further assumes the collection of a tax has a positive effect. One can and does argue that taxes take funding from the creation of new jobs, especially if one is an entrepreneur. Thus all of the discussions around these areas are ad hoc propiter hoc arguments, the classic be the Baumol Willing theorem in telecommunications. They are all theories manipulated to prove a belief! That is one of the major faults of the macro-economists,

The author continues:

The question is: can they provide you, the reader, with an internally consistent analysis of a dynamic system subject to random shocks populated by thoughtful actors whose collective actions must be rendered feasible? For many questions, I and my colleagues can, and for those that the profession cannot, the blogging crowd probably can’t either. You might say, “you’re telling us to leave everything to the experts, so why should I believe you are adequately policed?” This is a fair question, but as someone who has worked for a decade to publish in leading academic journals (with some, but hardly overwhelming, success), I now have the referee reports to prove that I live in a world where people are not falling over themselves to believe my assertions.

All too frequently we are dealing with Government and governing. That means the people do have an input. You the brilliant macro-economist may have your position but the people may want something else. Guess what happens, it is like one of those science fiction moves, things just do not turn out the way we always want them to.

However I really did find this posting a bit arrogant. Perhaps people with experience making things happen, creating jobs, analyzing and building complex dynamic feedback control systems, may bring some insight to the world of the macro economist...then again perhaps they will never listen!

Having come back after after a day of work, I read Scott Sumner's blog regarding the aforementioned paper and I agree with some if not most of his points. I do however strongly disagree with his statement:

I don’t recall ever reading a ... post that I didn’t feel knowledgeable enough to write. On the other hand I’ve read lots of ... posts that I didn’t feel clever enough to write. That’s an important distinction. ... is a great economist in the “scientific” tradition, and he’s a great blogger—but for completely different reasons.

He is referring to the eminent Harvard economist whose positions on the Pigou's tax and recent position on the soda tax I take significant umbrage towards. As I responded to the soda tax with my recent White Paper on Obesity and Type 2 Diabetes, there are times when an economist steps beyond their knowledge base. It is not that they could extend themselves, they may be just too lazy to do so since the position they posit may be too much of their liking that the facts may just get in the way. You see what I did was based upon some forty years of experience went back to the literature and created a compelling argument that the Professor was wrong, reducing carbs, reducing weight, will have a positive effect in reducing demand. The Professor did what we call on Cape Cod, "shingling the roof in the fog.." where there is a point when you find there is not roof under you.

You see the problem is not just knowing the catechism of macroeconomics, but having the knowledge that is applicable to doing something that is repeatable and works. The problem with macroeconomics is much more sever than what its practitioners would ever admit, it lacks stringing rules of verifiability. Imagine if medicine were practiced that way, malpractice insurance rates would be multiples of the GDP.

I believe that this paper will evoke much more comment since it raises the issue of verifiability and projectability. Just because some economist got it right once, is not proof of the method. Just go to the track!

The author from the Richmond FED also continues:

"Why should anyone accept uncritically that Economics, or any field of human endeavor, for that matter, should be easy either to process or contribute to? To some extent, people don’t. Would anyone tolerate the equivalent level of public discussion on cancer research? Most of us readily accept the proposition that Oncology requires training, and rarely give time over to non-medical-professionals’ musings. Do we expect advances in cell-biology to be immediately accessible to anyone with even a college degree? Science journalists routinely cite specific studies that have appeared in specific journals. They generally do not engage in passing their own untrained speculations off as insights. But economic blogging and much journalism largely does not operate this way."

The field of oncology has both clinical and scientific elements. On the clinical side one learns more from experience than research and the more academic approach. On the scientific side one may often find an amalgam of expertise coming together to better understand the problem. One need look no further than the best academic institutions and see systems modelling of the genetic pathways in cancer development and then using that to ascertain therapeutic options. To practice clinical oncology is akin to practicing neurosurgery. There is an outcome or set pf outcomes and you are judged accordingly. The patient lives or dies. The well educated professional who has added to the base of scientific knowledge can continue to expand their knowledge to encompass expanding fields. I remember my fi9rst genetics course with Watson's first edition of The Molecular Biology of the Gene. Still on my shelf along with 45 years more knowledge. I now am intrigued with micro RNA and their control of pathways whereas then their existence was non existent. The point is that the author is quite simplistic in the statement that a vetted academic degree is the sine qua non, for one may have a PhD from a first ranked institution but that does not gurantee anything other than hopefully the ability to follow, get ahead, and expand. Practicing clinical oncology is hard, understanding and contributing to the body of knowledge of clinical oncological pathways using one's expertise in an adjacent area is what researchers do. Thus the author sets up artificial walls when the author should be breaking them down.

Thus if I am asked if the comment in Seeking Alpha that reading this will not make you dumber, then the answer is yes it will if I believe what the author purports to convey. For the Seeking Alpha piece reiterates my thoughts quite well"

"...the real problem we moronic bloggers have with economists is twofold: 1) they prove REPEATEDLY that their models are ill equipped to handle reality, largely because 2) human behavior cannot be modeled like the other inputs can...."

You see an oncologist has a scientific base upon which to build, albeit a bit shaky at times, and they also have outcomes to deal with. The macro types have to deal with humans, not a reliable entity to analyze without difficulty.

Within one day this posting by the FED employee has caused the predicted firestorm. Yglesias goes on and states:

But now to Athreya. His essay seems to partake of the conceit that what economic policymakers do is just economics and that for political pundits to second-guess their decisions would be on a par with me trying to second-guess someone doing particle physics. Completely apart from the fact that the “science” of economics is a good deal less developed than what you see in real sciences, the fact is that economic policy is economics plus politics.

One must strongly agree. Economics is as much politics and public policy as it is some pristine science, if science at all. If I were a particle physicist, and doing that research lead to no harm, then science would be science. But all one must do is look back at the recombinant DNA work of the early 1970s which became a policy debate. The biologists welcomed the public into the debate, they did not wrap themselves in some cloak of defense, and look down upon the people. They were forced to explain what they were doing and why it was important and how they would protect humanity. And this was real science, yet there was some uncertainty, infinitesimal as compared to economics.

Saturday, June 26, 2010

Prostate Cancer Genetic Analysis

The MSKCC in New York has just published a genetic analysis of prostate cancer which will help in identifying which prostate cancers need aggressive treatment and which do not. This is an achievement which I have been discussing for the past several years. The article is in the current Cancer Cell.

An excellent analysis is presented in Eureka as follows:

"Genomic studies in other cancer types have resulted in new drug targets and strategies to classify patients into clinically meaningful subgroups that improve treatment decisions," said senior study author Charles Sawyers, Chair of the Human Oncology and Pathogenesis Program at MSKCC and a HHMI investigator. "This first -ever database of its type brings us one step closer to achieving that goal in prostate cancer."

The study, published early online on June 24 in the journal Cancer Cell, provides a previously unavailable genomic analysis whose scope and size offers new insight leading to more effective diagnostic tests as well as future treatment options for prostate cancer patients.

"We have used all of our expertise and resources to complete a large-scale study of the changes in the genomes of patients' prostate cancers," says Dr. Sawyers, who explains that prostate tumor cells are very difficult to work with despite the fact that prostate cancer is the most common cancer in men. Consequently, there have been fewer genomic studies in prostate cancer compared to other tumor types such as lung cancer. "The ability to collect and analyze these tumor samples is a testament to the collaboration and expertise across many disciplines."

The MSKCC team, composed of members of the Human Oncology and Pathogenesis Program, urology, medicine and genitourinary oncology services, pathology, computational biology, and statistics departments, used an integrated, comprehensive approach to analyze 218 primary and metastatic samples and 12 cell lines. All samples were procured from patients treated by radical prostatectomy at MSKCC. The analysis revealed a much higher frequency of alterations in the androgen receptor pathway than previously suspected. Also, the pattern of DNA copy number alterations identified defined subsets of low-and high-risk disease beyond what is revealed by Gleason score.

"One of the holy grails of prostate cancer is to identify which tumors need to be aggressively treated and which don't," said Dr. Sawyers. "Ultimately, what we have learned could lead to the creation of a genetic-based test to determine which prostate cancers might become more virulent and require aggressive treatment and which tumors may not." According to Dr. Sawyers, "This data clarifies the role of several known cancer pathways and provides important clues into others. We have gained insight into the importance of androgen receptor status—and why some men respond to hormone therapy and others don't."

The MSKCC portal for the gene analysis is located at the following. This is a major step forward. The challenge will be in getting the clinical physicians to test this as well as getting the CMS to accept it as well. It will result in great reductions in morbidity and mortality.

The NCI also has an excellent summary as well

Researchers at Memorial Sloan-Kettering Cancer Center (MSKCC) have completed the largest genomic analysis of prostate tumors to date. The results, based on clinical and genomic information collected from 218 patients, provide an overview of the common genetic changes in the disease and point to new directions for research, including a way to potentially differentiate aggressive tumors from those that are not life threatening. The researchers have made the data available to the community through a public Web site, and a summary of the results appeared online last week in Cancer Cell.

“We now have a much better picture of the common genetic alterations in prostate cancer,” said lead investigator Dr. Charles Sawyers. Although more samples need to be analyzed, he continued, the results could provide a roadmap for designing future clinical trials in this disease. “When it comes to developing and testing targeted cancer drugs, you need to be able to subclassify patients, and you can’t do this intelligently until you know what the alterations are.”

The authors continue:

The analysis also revealed a striking association between changes in DNA copy number and the risk of recurrence after surgery, and this association could not be explained entirely by Gleason score. “This was one of the most exciting findings from the study,” said Dr. Scardino. “It offers the possibility of a biomarker that could be used to characterize the aggressiveness of prostate cancer, which is something we greatly need.”

Doctors currently do not have a way to distinguish between prostate cancers that require aggressive treatment and those that will cause no harm if left alone. Consequently, many men receive treatment unnecessarily. Genomic tests can provide prognostic information in breast cancer, for example, but none yet exists in this disease.

The new findings, if confirmed, represent a prototype for developing these kinds of prognostic tests for prostate cancer, said Dr. Jonathan Simons, CEO and president of the Prostate Cancer Foundation. “This would change how doctors talk to patients about the disease and the need for adjuvant therapy or not, which is why this finding is so exciting,” he added.

Dr. Scardino runs the Specialized Program of Research Excellence (SPORE) in prostate cancer at MSKCC, and his group has launched follow-up studies. The current work was done using frozen tumor specimens collected during prostatectomies. The researchers will now see whether copy-number changes are informative using paraffin-embedded tissues. If the answer is yes, they will test cells obtained from a needle biopsy.

The genome analysis also revealed that some patients whose tumors include a fusion of the genes TMPRSS2 and ERG are also missing part of chromosome 3. This fusion gene occurs in about half of all prostate cancers, and researchers have suspected that other genes also play a role in these cases.

“This deletion on chromosome 3 appears to be very strongly associated with the fusion,” said Dr. Sawyers. “The next steps are to see which genes in the region that is deleted are involved in the disease. We have a clear path forward.”

The TMPRSS2-ERG fusion was discovered in 2005 by University of Michigan researchers supported by NCI’s Early Detection Research Network. At the time, fusions were thought to be limited to cancers of the blood, but it is now known that these alterations are present in common cancers as well. About two dozen have been identified in prostate cancer.

I have tested it for PTEN and the results are:

Gene Set / Pathway is altered in 15.65% of all cases.
  • Pathway: Prostate cancer pathway (280 genes)
  • Total number of input genes: 1
  • Case Set: Prostate All: All prostate cancer samples (230 samples)
  • Total number of cases selected: 230

Mutation Details:

PTEN: [Mutation Rate: 0.87%]
Case ID Mutation Status Mutation Type Validation Status Sequencing Center Amino Acid Change Predicted Functional Impact** Alignment Structure
LNCaP No matched normal frameshift_del Valid MSKCC K6fs

LNM971 No matched normal frameshift_del Valid MSKCC K6fs

Friday, June 25, 2010

Obesity and Type 2 Diabetes

We have prepared a White Paper, which is the early draft of a book, on Obesity and Type 2 Diabetes using primary clinical research. The paper ties together the linkages between the two and follows the sequelae and their costs. We then look at a Coasian versus Pigouvian approach to managing the negative externalities. Perhaps this may be useful for the economists and opinion writers who have difficulty with the obvious nexus that exists.

Wednesday, June 23, 2010

Micro RNA and Diabetes

Micro RNA is becoming an interesting element of gene expression. In a recent Science article they show how one of the micro RNAs controls HDL in the metabolic syndrome an off shoot of Type 2 Diabetes.

The article states:

In humans, insulin resistance is a hallmark of metabolic syndrome, which is provoked by obesity. In addition to hyperinsulinemia, hyperglycemia, and fatty liver, cardinal features of metabolic syndrome include an increase in plasma triglyceride levels, owing to elevated very-low-density lipoproteins (VLDL), and a decrease in plasma HDL.

Low HDL is believed to contribute
to the increase in coronary heart disease in these subjects. Evidence suggests that the hypertriglyceridemia is caused by the insulin-induced increase in SREBP-1c mRNA and protein.

it possible that the reduction in HDL is caused by a decrease in ABCA1, owing to the increased production of miR-33b from the insulin-stimulated SREBP-1c gene? Unfortunately, this question cannot be answered by study of hepatic miR-33b in the usual models of insulin resistance in obese rats or mice, because the SREBP-1c genes of these model animals lack miR-33b.

This is consistent with the observation
that obese insulin-resistant mice manifest all of the cardinal features of metabolic syndrome except a reduction in HDL. Here is a situation where geneticists may come to the rescue, by searching for mutations in miR-33b in patients with metabolic syndrome who manifest inappropriately elevated HDL. Alternatively, the hypothesis can be tested by treating metabolic syndrome subjects with agents that antagonize miR-33b and testing for increased HDL.

One suspects that the simple Watson and Crick model may have to be dramatically changed to handle all of these micro RNA changes. The micro RNAs may very well become the research focus of the next decade.

Calorie Counting

The NEJM today came out with an article regarding calorie counting. It states:

Tucked away on page 455 of the 906-page health care reform act (Public Law 111-148) is a provision for listing calorie counts on the menu boards of chain restaurants or adjacent to
each food offered in vending machines and in retail stores. Establishments with 20 or more
locations nationwide must post calories “in a clear and conspicuous manner,” along with “a
succinct statement concerning suggested daily caloric intake” — presumably the 2000-kcal-per-day standard that the Food and Drug Administration (FDA) uses for the “Nutrition Facts” on packaged foods.

When the Nutrition Labeling and Education Act of 1990 went into effect in 1994, it required that nutrition labels be placed on food products but exempted restaurants. The new law removes that exemption. The advocacy group Center for Science in the Public Interest
(CSPI) organized support for this measure after having issued a 2003 report arguing that nutrition labeling would help to control the rising rates of obesity.

The report summarized evidence that more people eat meals away from home than ever before, that U.S. children consume twice as many calories at restaurants as at home, and that nearly everyoneunderestimates the calorie content of restaurant meals. In 2004, an FDA Obesity Working Group report, “Calories Count,” recommended providing nutrition information at the point of sale in restaurants. The FDA asked the nonprofit Keystone Center to review the status of such

As we have argued there is truly a need to drop the obesity problem by one way or another.

We are near completion on a short book on Obesity and Type 2 Diabetes. We argue in its conclusion as follows:

The intent of this document was to demonstrate that the research and knowledge to date is adequate to show that obesity is primarily caused by excess carbohydrates, that obesity in turn is the primary cause of Type 2 Diabetes, and that Type 2 Diabetes has sequelae of chronic diseases that resulting long term and high intensity care and thus costs, and that the total costs of these sequelae are now more than 12% of the total health care expenditures and are growing at an almost exponential rate for the foreseeable future in the US and worldwide.

We believe that we have achieved that goal, by use of primary research, and that the conclusion is both obvious and readily extensible.

We started this task because of recent assertions regarding the tax on soda and that such a tax would have de minimis effect on the costs resulting therefrom. In addition the Professor asserts that we should be taxing fuel as a means to control both consumption and reduce green house gases, yet taxing or in some way obtaining related costs from kcal consumption is inappropriate, if I read him correctly.

We contend that to the contrary, the costs of controlling Type 2 Diabetes far exceed those of all energy usage and indeed the costs of Type 2 Diabetes are growing at a substantially greater rate. Furthermore we contend that the taxing of carbs, in reality the establishment of a fee on carbs which will then be used to pay for the sequelae of excess use, is a more fair tax and in fact can be done extra the Government as agent and furthermore can be done in a pure Coasian manner, in direct contrast to Pigou and the Professor.

Let us compare the two "taxes" that the Professor discussed in light of what we have demonstrated about Type 2 Diabetes. We compare a tax on Energy paid to the Government versus a fee on carbohydrates paid to a fund to pay the expenses for Type 2 Diabetics and their sequelae. This comparison is highly enlightening in view of the current cap and trade proposals as well as how the new health care plan functions in its total disregard for demand control. The approaches by both parties seem to be one of having the Government control everything either directly or via a tax. Both are excerpts from the Progressive movements of a century ago. One can see this by comparing the proposal herein for Type 2 Diabetes control and the Cap and Trade type tax on energy.

Monday, June 21, 2010

A Summer Feat: The Bloom and Rebloom

Thought his may be of interest. It is a daylily in bloom and another bloom.


Sunday, June 20, 2010

Success and Failure Factors

In thinking of the current BP issue I am reminded of what I wrote in the mid 1980s in my book, Business Plans (Wiley 1988). This was a discussion of success and failure factors. Namely I had spent a few years doing "turn arounds" and what one sees in doing that is the failures of people, the multiple failures that the initial management team was blind to but if they had thought about it up front and if they had prepared for it they could have stayed of a disaster. I said:

At the completion of the development, how do we know if we have a business? We may have reached our goals but we also need success as well as failure factors. One final element in the development plan is the development of the success and failure factors. Once we have established our goal, we must carefully and in a detailed fashion state what success is. In a similar fashion, we must have well defined failure factors. The failure factors are those factors that we use to terminate the effort. They are critical to articulate because that can save a great deal of suffering and expense. All too often businesses do not attain success but they continue to bleed money for a long period. If there had been hard and fast failure factors, this would have been eliminated.

The success factors and the failure factors are those elements of the business that if measured at the end of the development cycle will provide a measure of the future success of lack thereof of the business. These will oftentimes be factors that relate to the financial viability of the business.

Thus in the BP case, there appears to have been an almost total disregard for the downside, assumptions made that one could always get closer and closer to the edge and never have to pay the piper. This was the story of almost all the collapses which have occurred recently. No one ever thought of the down side risks!

Friday, June 18, 2010

Medicare to Drop 21% Today

The Mass Med Society reports on today's dropping of Medicare reimbursements by 21%. This was a result of the tricks done by Congress in passing the health care bill this year, yet the problem is that physicians cannot afford to treat Medicare patients when the reimbursements drop well below cost.

As the Mass Med post states:

Earlier today, Sen. John Thune (R-SD) proposed 2.0 % update for the remainder of 2010 and all of 2011 and 2012, following by a steep payment cut of well over 30 percent and an additional statutory cut of 4 percent. The Thune amendment also included medical liability caps on non-economic damages and other traditional tort reforms. Thune’s pitch was that it was less costly and would start to close the budget deficit. That failed, 41-57.

The latest bill on the table is a six-month reprieve. It has a 2.2% update, and imposes the 21% cut on December 1. A communication from the AMA tersely noted, “This package may still lack the bipartisan supported needed to reach the 60-vote threshold.”

Clearly there is a great deal of game playing but the burden will be upon the elderly, especially those with chronic problems.

This was the direct result of trying to get the bill through CBO scoring by not including the true costs. The net result with be chaos for the next few months!

Thursday, June 17, 2010

"Small People"

As the NY Times states today:

Mr. Svanberg, looking somber as he left the White House, confirmed to waiting reporters that the president seemed “frustrated because he cares about the small people.” But he added: “People say that large oil companies don’t care about the small people. But we care. We care about the small people.”

The “small people” comment set off an immediate uproar in the blogosphere and elsewhere from people who said it showed BP’s indifference to those harmed by the spill. A BP spokesman called the remark a “slip in translation” by Mr. Svanberg, who is Swedish. Later Wednesday Mr. Svanberg apologized, saying he was “very sorry” he had spoken “clumsily.”

The poor fellow, he probably only speaks three or four languages and he tried to make a sympathetic comment and then the Americans dropped the hammer on him.

Having spent parts of two decades in other countries and having a modicum of facility in six languages I can appreciate how this can happen. I have done it in French many times, and in Italian my Sicilian dialect from Staten Island has gotten me in trouble many times in Florence, even though I was trying. In Greece, my Greek is better than my Italian but I have had from time to time use both with a taxi driver from the airport. Then in Russia I often wonder what I have told my driver, I have some reasonable facility but when you wander into local colloquialisms you often get in trouble.

Having done this and having some capability I can appreciate the problem. My Spanish is New York and when in Spain they think I sound like some creature from Mars. My French I have been told is Mauritanian, and that I would not touch with commentary. Yet I try out of respect for the people in the country in which I operated. Americans in Europe, and Asia, are often morbidly obese, wearing a t-shirt with some statement of abuse on both front and back, having some sneaker type foot wear, carrying about their girth a fanny pack, and wearing the universal baseball cap with the home team. And that is not an affront to the locals?

Wednesday, June 16, 2010

Bending the Curve: On the Back of the Patients

and Emanuel (the other one) today presented their reasons why the new health care plan will "bend the cost curve" in NEJM. They state:

Yet “bending the curve” of health care inflation also requires a more direct change in the way health care is delivered. Health care costs are unevenly distributed: 10% of patients account for 64% of costs. Many of these are patients with chronic conditions, such as congestive heart failure, diabetes, and hypertension. Sustained cost control will occur only with more coordinated care that prevents avoidable complications for patients with chronic illness. As Stanford’s Victor Fuchs has noted, coordinated care requires three “I”s: information, infrastructure, and incentives.

As we have noted before the truly bend the curve one must address the demand function as well. The above statement reflects costs as the control mode whereas for the chronic illnesses one should focus equally if not more so on the demand curve, not the supply curve only. Diabetes is nearly preventable, at least the Type 2 variety. We have argued that for well over a year now despite the attempts by economists to deny what the literature states. Yes 10% of the patients take up 64% of the costs and those 10% have chronic disease which is properly motivated are preventable. The current bill does little is anything top address that issue.

They then continue:

The most important institutional change in the ACA, however, is likely to be the establishment of the Independent Payment Advisory Board (IPAB), an independent panel of medical experts tasked with devising changes to Medicare’s payment system. Beginning in January 2014, each year that Medicare’s per capita costs exceed a certain threshold, the IPAB will develop and propose policies for reducing this inflation. The secretary of HHS must institute the policies unless Congress enacts alternative policies leading to equivalent savings. The threshold is a bit complex; initially, it is a combination of general and medical inflation, but in 2018 and thereafter, the cap is set at general inflation plus 1%.

This will be a system of price controls. It will drive many physicians out of the Medicare system unless the Government mandates that they participate. We have already see the change occur. Medicare payment controls will also result in the reduction of care in the event of mandated coverage because the more the provider provides the more they lose. Thus the less they will do if so mandated.

It will be another three to five years before we see the disasters start to pile up but let it not be said that the people were not warned.

Observation on Amazon Reviews and Microsoft

I like Microsoft Office 2007, it was a bear at first but soon I adapted. It was different. But it is useful. Thus when Office 2010 was announced I got it, yesterday, the day it was released.

I tried to load it on my computer, you see I have been doing this stuff since 1962 so I think I know something. But alas, like so many Microsoft products, it bombed out. It tells you that you must remove Office 2003 first. But I never had Office 2003 and there is no way to remove something I never had. I even checked with the Help function, no luck, read all the files, again no luck, and on and on. Alas I sent it back.

I then wrote a review on Amazon about the problem, the only negative review and the only one written by a person who had not been working on the Office 2010 Beta versions. Then the hounds of hell came loose. Negative reviews by the bucket load.

I started to think that perhaps there is some clan of Microsoft junkies that if something gets a negative review, albeit a little negative review since I never even got it started, that somehow it would be disregarded. Not these guys. I am willing to bet that there must be some Microsoft Watch Group which looks over what is said on Amazon and then slams them hard. I did get one positive along with a thank you comment, but it was clear that he was not a Beta user.

So what all does this lead to. Reviews. Yes, and the term professional reviews. I always use my real name, if anyone has a beef they can then contact me. Most of the bloggers I follow and link to do that. You can check them out and then determine if the review has merit. The problem with negative comments is that they come from unknowns and you cannot vet the comment from the source.

For the most part the reviews are helpful. However, I also suspect, in my opinion, that for the most part products protected by large players have groups with agendas that may not be in the interest of all, but it is just a suspicion, I have no facts, just the observations herein.

Tuesday, June 15, 2010

Genetic Testing

In today's NEJM there is an article regarding the use of genetic testing by Drs. Hamburg and Collins of the FDA and NIH respectively. It raises the issue regarding the use of these tests in the future for personalized medical treatment.

The authors state:

Genetic tests are not perfect, in part because most gene mutations do not perfectly predict outcomes. Clinicians will need to understand the specificity and sensitivity of new diagnostics. The agency's goal is an efficient review process that produces diagnostic–therapeutic approaches that clinicians can rely on and allows companies that invest in establishing the validity and usefulness of tests to make specific, FDA-backed claims about benefits.

Patients should be confident that diagnostic tests reliably give correct results — especially when test results are used in making major medical decisions. The FDA has long taken a risk-based approach to the oversight of diagnostic tests, historically focusing on test kits that are broadly marketed to laboratories or the public (e.g., pregnancy tests or blood glucose tests); such kits are sold only if the FDA has determined that they accurately provide clinically significant information. But recently, many laboratories have begun performing and broadly marketing laboratory-developed tests, including complicated genetic tests. The results of these tests can be quite challenging to interpret. Because clinicians may order a genetic test only once, getting the results right the first time is crucial.

There are reports of problems with laboratory tests that have not had FDA oversight: women were erroneously told they were negative for a mutation conferring a very high risk of breast cancer; an ovarian cancer test, marketed before the completion of an NIH-funded study,2 gave false readings that reportedly led to the unnecessary removal of women's ovaries; and flawed, mishandled data underlying a test for Down's syndrome were discovered only days before the test was to go on the market. Through a process that includes opportunities for public input, the FDA will work to ensure the quality of key diagnostic tests, helping to protect patients and giving clinicians confidence that personalized medicine will lead to real health improvements.

In addition, the NIH will address the fact that there is no single public source of comprehensive information about the more than 2000 genetic tests that are available through clinical laboratories. On the recommendation of a federal advisory committee, the NIH — with advice from the FDA, other Department of Health and Human Services agencies, and diverse stakeholders — is creating a voluntary genetic testing registry to address key information gaps. Readily available information about these tests, including whether they were cleared or approved by the FDA, will help clinicians and consumers make informed decisions about using the tests to optimize health care. The registry will also support scientific discoveries by facilitating the sharing of data about genetic variants.

The issues regarding these tests can be characterized as follows:

1. Screening: The use to determine the predilection of an individual towards a certain disease. This is useful if and only if there is something that can be done to reduce mortality or morbidity. Just telling a person they may have a disease at some uncertain future date may be useless information and in fact harmful. Thus the mass genetic tests which seem commercially common may be resulting in harm rather than good.

2. Staging: There are millions of biopsies performed every year and the results sent to other physicians and in turn transferred in some manner to the patient. For example in a skin biopsy, if melanocytes have moved from the basal layer to the upper layers then this may be a sign for melanoma in situ. Thus what should one do? Standard practice is wide area excision but if one knew what pathways were activated in the cell one may have a better path to follow. Yet at this time such tests are not performed. The same could be said about cases of prostatic intraepithelial neoplasia, will it go to prostate cancer and if so will it be a virulent form? Knowing this via personalized medicine would save billions.

3. Treatment and Prevention: These steps are to some degree already underway.

Thus it is strange that we have the latter steps in progress and the initial high gain steps still at best in a formative stage. It would be useful for the FDA and NIH to look at a broader array of applying these new genetic personalized medical treatments.

"You will keep your current plan!"

The promise was that you can keep your current health care plan if you like it. Well that is highly unlikely since to be grandfathered as a plan which does not change you must meet all of the added Government mandates and that means that almost all plans will be changed, namely there will be mandated additions, you pay even if you do not want it.

This is akin to auto insurance where you pay the same fee as if you had a Bentley and you drove drunk all the time.

The NPR reporter states:

Republicans, however, were quick to point out that by the department's own estimates, many insurance plans would not qualify to remain unchanged.

Despite repeated promises by President Obama to the contrary, said Senate Minority Leader Mitch McConnell. R - Ky., "the government is about to change the plans most Americans have. Here's one more promise the administration has broken on health care and one more warning Republicans issued on this bill that's been vindicated."

What Republicans don't say is that plans that do have to change will have to offer more, rather than fewer, benefits and consumer protections. That includes things such as free preventive services and guaranteed direct access to obstetrician/gynecologists for women.

The problem that this reporter fails to understand, and I believe she truly does not have a clue, is that adding new mandates will cost more and people who take care of themselves will be paying for those who do not.

My favorite issue is obesity and Type 2 Diabetes and its sequellae but the same applies for drug users, cigarette smokers, heavy drinkers and the lot. The philosophy is to remove any and all personal responsibility and have each person pay equally. It is akin to the George Bernard Shaw view of socialism where everyone gets the same pay no matter what! Except now we have everyone pay the same. Perhaps we could apply this to taxes! Just a thought.

On the Light (and short) Side

This appeared in the Telegraph today about President Sarkozy. Just a bit of humor. One wonders how many men, people, of position, have such quirks.

French President Nicolas Sarkozy has been accused of banning tall workers from attending a factory walkabout – because they will make him look too short.

The 5ft 5ins tall leader is alleged to have sent aides to the plant ahead of an official visit, to stop anyone over 5ft 6 ins from appearing alongside him.

The claims come just a week after Mr Sarkozy was reported to have banned tall bodyguards from his presidential protection team.

Mr Sarkozy, who wears platform heels to disguise his size, is due to visit the Turbomeca areonatics factory near Toulouse on June 22.

Monday, June 14, 2010

Individualism vs Neo Progressivism

The following is a draft of the introduction on a book I am preparing on Neo-Individualism and Neo-Progressivism. It may be of some interest.

There has been a continuing tension between those who believe in the sanctity of the individual versus those who view the amorphous entity called society as the compelling form of convergence. In a governmental structure we have three elements; the individual, the society, and the state.

The individual is clearly the well defined articulation of each and every person, having certain rights and in turn responsibilities. There is no ambiguity or lack of clarity in determining who or what is an individual. Then there is the society, the social amalgam which makes up the group, oftentimes the majority, and just as oftentimes the minorities, separately or in collusion with one another. The society has fluidity in that it presents the view of the group to all others, and in a democracy or a republic it is often the majority or the ruling party.

The state then is the embodiment of the ruling society formed according to the rules then current. For example it may be the party in power and the President, or Congress, or Prime Minister. The state is the reflection of the society's ruling class. In some cases it may be the minority group which may have attained power through military control. In other cases the state may be a conflicted collection of entities as if found in the US where the element of checks and balances is at play.

We look at two groups of political thinkers, the individualists and the progressives and then we look at their current successors. In simple terms the individualists are those who cherish the individual and the individual rights even to the extent of considering them as natural rights. The second class we call the progressives, and we use that term in the context in which it was used in the late 19th century and early 20th because in many ways the progressives were a societal movement where the individual was subsumed to the group, the society.

The individualists can be viewed simply as a group who firmly believe in the sanctity of the individual, with the extreme being the individual supreme to the group, yet there being a group, and the individual being alone, anonymous if necessary, with the right to be left alone as Brandeis was wont to state in his famous paper on privacy.

In contrast the essence of the progressive movement is that it contains two elements as underpinnings. First, the group, the society as defined by this group, can determine what is the norm for all, and second can then via the power of a central government enforce its will on all. This group centered defining of standards, whether they be how property is handled, how pollution is dealt with, how health care is provided, is the cornerstone of the progressive mindset. The individualist would let the individual make the decision whereas the progressive will have the group, the society in charge, make the decision, and then have the Government enforce it.

There is a conflict of visions on the political front that is driving the economic agenda in the United States which in many ways is a confrontation of two views of the country which have been around for over two centuries. The views are those of the Individualists who were basically the Founders and their followers and the Progressives and their followers. Simply they are visions which on the one hand respect the individual and the individual's rights versus the "community" and its rights. Progressivism was a result of the change in industrial structure as well as an overall economic restructuring following the Civil War.

It was a middle class movement which in many ways paralleled the development of socialist movements which had migrated from Europe. In contrast the Individualists are those who maintain the ideas which led to the original Constitution, a view focused on individualism and the minimalist view of the Federal Government. This paper looks at these two movements, as they were at their conception and now as they seem to be competing with each other in the public market place of political thought.


Individualism is the basic belief in the rights, dignity, and social sanctity of the individual per se. That is the individual exists and that any society is nothing more than an amalgam of individuals, that is groups a transient entities assembles for the purpose at hand and generally have little if any sustaining capabilities.

Individualism is built around the Bill of Rights, that portion of the Constitution that expressly states what the individuals rights are at a minimum, and that the Bill of Rights is an open set of individual rights built around an expansive view of the natural law.

Individualism does not deny the existence and benefits of groups or associations.

Individualism is also based upon the concept of contracts, expressed or implied, between individuals or persons through which commitments are made between or amongst individuals for specific purposes with mutual obligations and mutual benefits accruing therefrom.

Individualism is not conservative or libertarian.

Individualism believes that the individual through their efforts can obtain value and that such accrued value is by definition property which the individual can protect, use, and transfer for something of value.

Individualism believes that the purpose of the state, the government, is primarily to protect the rights of the individual in their property and to take all reasonable means as a government to defend the country against any foreign aggressors.

Individualism makes no claims upon any individual in terms of their obligations to other individuals. Such claims may be made in a democratic manner, through personal and individual choice or as a result of some form of religious belief.

Individualism does not consider the existence of any minorities and thus minority rights as compared to majority rights are non-existent. However Individualism believes in individual rights, and every individual having the same set of rights, thus the need for group, minority, protected class, gender, or any other such segmented rights are unnecessary and in fact are conflicting.

Individualism believes that the costs of externalities between individuals based upon actions taken by one party resulting in a cost to a second party can be remedied via remediation via the Coasian method of inter-party litigation, and that it is the duty of the Government to enforce those resulting claims.

Individualism believes in individual responsibility and liability for harm caused by any individual upon others. It is the purpose of the Government to remedy these claims.

Conservatives and Libertarians take these positions and modify, expand, or delimit them. Thus Individualism may find itself in the confines of many camps.

Individualism as we define it herein is not the individualism that Hofstadter applies in his diatribe against Social Darwinismii. It is not a laissez faire view of a society. In fact it is just the opposite. It assumes an equality amongst individuals and a preservation of those individual rights and a process of remediation for any diminution or infringement on those rights. The purpose of the Government in an society of Individualism is to ensure the rights of equality and to take any and all means as may be necessary to protect them on a pari passu basis.

Thus the concerns of Hofstadter would be without merit in a true sense of Individualism. There is no theory of survival of the fittest, no principles of allowing the most aggressive to prevail, and in fact aggressive that in any way delimits individual rights would be dealt with by direct Government intervention. The Government is there to protect the rights of each individual, no interfere with them and not to allow others to do so.

Individualism is not the strict equality of the theory of distributive justice. Individualism admits the differences amongst people but establishes the underpinning of the individual rights, rights that protect individuals from what could be termed unjust expropriation of their rights and property.


Progressivism can be viewed historically and a movement on the later 19th century driven by the excesses of business and the changes occurring in the middle class or as an ongoing movement wherein the role of Government and citizens as a society rather than individuals are what is essential to the people. As Weinstein states(iii):

"Progressives are strongly attached to the government; they tend towards state intervention. Yet, they also believe in citizen participation and grassroots action. Perhaps more than any other political classification, progressives hold onto the ideal of direct democracy. They heartily embrace the tensions between what Isaiah Berlin called negative and positive freedoms, or freedom from and freedom to, respectively. For Berlin, the freedom from hindrance, or “negative” liberty, trumps the freedom to self-actualize, but progressives disagree. Today’s progressives might argue that, while liberty is important, it is incoherent without entitlements. The state must provide social, political, economic, and cultural assistance to those who are denied access to an equal playing field. Progressives claim that one cannot have liberty without cultivating capabilities."

In many ways this is the most telling definition of Progressivism. Nugent gives a simple definition of Progressivism(iv):

"…there were many varieties of Progressivism…they held in common, however, a conviction that society should be fair to its members…that governments had to represent "the people" and to regulate "the interests"… It went without saying that there was such a thing as "society"…Progressives…shared a belief in society, a common good, and social justice, and that society could be changed into a better place."

There are several elements capsulated in the above:

1. There exists a "Society": This was a key element of Progressivism. It was not the individual, it was the society, and the problem was that the society as it was defined was frequently exclusive. It is also not clear what the difference was between society and people. Were they the same or was society a subset of those with interests.

2. Government had to Represent "the people": The Progressives are firm believers that one cannot defend one's own interest but that the role of defender rests solely on the Government. In a sense this would imply that Tort laws would eventually be unnecessary because there would be a Government regulation for everything and a Government agency for everything.

3. Common Good: Progressives believed in the existence of a common good to be sought after by the society for all people. It denies the existence of the individual and the individual good, especially if such a good contradicts what those who have defined the common good have determined.

4. Social Justice: Social justice is the concept of applying justice, in its broadest possible meaning, including the establishment of a level field in socio-economic areas, rather than individual justice. It is justice across a Progressive society not the justice one seeks as an individual in court. It is a justice mandated by Government as a matter of course, not a justice as a result of a remedy. It was part of the Progressive plan supported by Father Ryan and others with the publication of Ryan's book, Distributive Justice. Whereas Social Justice is justice in some manner across society, distributive justice is the same amorphous principle applied across the purely economic realm, namely the assurance of what could be called the equitable distribution of wealth. Ryan focused on the issue of a minimum wage.

We may further clarify Progressivism. Quoting from John Dewey we have(v):

"Liberty in the concrete signifies release from the impact of particular oppressive forces; emancipation from something once taken as a normal part of human life but now experienced as bondage. At one time, liberty signified liberation from chattel slavery; at another time, release of a class from serfdom. During the late seventeenth and early eighteenth centuries it meant liberation from despotic dynastic rule. A century later it meant release of industrialists from inherited legal customs that hampered the rise of new forces of production. Today it signifies liberation from material insecurity and from the coercions and repressions that prevent multitudes from the participation in the vast cultural resources that are at hand ."

In further clarification, the Center for American Progress ("CAP") states(vi):

"Progressives argued that rigid adherence to past versions of limited government had to be discarded in order to promote genuine liberty and opportunity for people at a time of concentrated economic power. Progressives challenged excessive individualism in social thought and politics, promoted an alternative to laissez-faire economics, and replaced constitutional formalism with a more responsive legal order that expanded American
democracy and superseded the economic status quo with a stronger national framework of regulations and social reforms."

The replacement of "constitutional formalism" is the destruction of individual rights. The Progressives assume that there is a benevolent Government which looks out for the citizens and that the citizens belong in some way to this Governmental society. However is you were to believe differently, if you were to believe in the Constitution, if you were to believe in individual rights, then you would be victimized by those who believe differently.

The CAP further states:

"Progressives sought above all to give real meaning to the promise of the Preamble of the U.S. Constitution—“We the people” working together to build a more perfect union, promote the general welfare, and expand prosperity to all citizens. Drawing on the American nationalist tradition of Alexander Hamilton and Abraham Lincoln, progressives posited that stronger government action was necessary to advance the common good, regulate business interests, promote national economic growth, protect workers and families displaced by modern capitalism, and promote true economic and social opportunity for all people."

To the Progressive, it is the Government which by regulating business will create the common good. But business is in many ways the individual, the entrepreneur who takes risk, creates value, hires people, and creates wealth.

The Progressives reject the Constitution, and they view it at best as a platform upon which to build their world view. As Herbert Croly is quoted in CAP(vii):

Herbert Croly denounced the static, conservative interpretation of the Constitution in Progressive Democracy as retrograde and insufficient for the modern age: “The particular expression of the conservative spirit to which progressivism finds itself opposed is essentially, and, as it seems, necessarily doctrinaire and dogmatic. It is based upon an unqualified affirmation of the necessity of the traditional constitutional system to the political salvation of American democracy.”

The denouncement of the Constitution is an arrogant expression that these "select" people have been granted a vision of what is right and proper. The fundamental flow of the Progressive mantra is that it is the Government which then controls individuals, and the control is based upon some changing philosophy and as the Government changes so too does the philosophy.

Progressivism has morphed into neo-Progressivism. It has kept the essential elements of the Progressivism of a century ago; governmental control, society over individual, social and distributive justice, common good versus individual benefit. Yet now the drivers for this plan are not monopolies but the banks, not the slaughter houses but CO2, not the wealth trust owners but the money hungry Wall Street bankers. It is not the new immigrants in tenements but illegal aliens wandering US cities.


i See they state in this article the following summary of Coase: "Although considered heresy at the time, Coase’s article began a wholesale rethinking of the Progressive paradigm that had dominated political thought since the turn of the century. By the 1980s, Coase’s ideas had gone from radical to mainstream. Free market advocates, then in the ascendancy, embraced such Coasian principles as:

(1) The existence of a market failure or externality does not in and of itself justify government intervention; indeed, government is often the underlying cause of the problem.
(2) Government intervention is seldom either administratively efficient or politically neutral; to the contrary, it often results in what Coase called the “mal-allocation” of resources.
(3) Government control of the economy is a threat to political liberty; for example, government control of the broadcast spectrum has consistently been used to limit free speech."

ii In Hofstadter SD he sets up the straw man of social Darwinism and Darwinian individualism as the example of individualism as he defines it to be the sine qua non of all individualist principles and then proceeds to tear it down.


iv See Nugent, Progressivism, p. 5.

v John Dewey, “Liberalism and Social Action.” In Jo Ann Boydston, ed., The Later Works of John Dewey, 1925-1953, Volume 11: 1935-1937 [electronic edition] (Carbondale, IL: Southern Illinois University Press, 2003), p. 35-6.

vi See

vii Croly, Progressive Democracy, p. 20.

China: Trade with Taiwan and Gas Pipe Lines

China is close to announcing a trade pact with Taiwan. This can be considered a monumental move. As China Daily states:

The first round of the Economic Cooperation Framework Agreement (ECFA) talks took place in Beijing in January, followed by the second round two months later in Taipei. Both the mainland and Taiwan have expressed a willingness to sign the ECFA before the end of June.Regarded as a landmark trade pact, signing the ECFA is a crucial bid to normalize cross-Straits economic relationships, as well as a significant step toward building trust to resolve political and military differences.

It is not all positive since the Taiwan opposition states:

However, critics of the pact, including the pro-independent Democratic Progressive Party (DPP), claimed a flood of cheap mainland imports could destroy Taiwan's economy and view the deal as paving the way for a political takeover by the mainland.

Tang and several senior mainland officials have repeatedly stressed that the ECFA is "purely an economic issue", in which the mainland will benefit substantially less than Taiwan.

This could open the gates for significant equalization of relationships, which has been building for a while.

A second report is the announcement of an eastern looking gas pipeline.

China and Kazakhstan have signed a deal to build and finance a natural gas pipeline and deepen their cooperation on nuclear energy, extending the two countries' ties on resources. Under the agreement signed on Saturday during a visit by Chinese President Hu Jintao, the two countries will build a 1,400-km gas pipeline. It will link with an existing gas pipeline running between China and Central Asia. The project will help meet gas demand in southern Kazakhstan. Feasibility studies will also be undertaken, looking at increasing gas exports to China from the Caspian Sea area and other Central Asian countries through the pipeline, China National Petroleum Corp (CNPC) said on Sunday.

Analysts said the deal underlines the importance of energy cooperation between China and central Asian countries, which are rich in natural resources. "These countries will play an increasingly important role in China's overseas energy strategy," said Xia Yishan, an expert at the China Institute of International Studies.

China signed a deal with Uzbekistan last Wednesday to buy 10 billion cubic meters of natural gas per year from the country. Both countries also signed a memorandum of understanding to expand their cooperation on gas.

The issue here is that gas now will head eastward and may divert flows that are now going to Europe. It may pose a flow threat to European users.