Saturday, November 19, 2016

What Business Are You In?

I have been following the antics of the current MIT President and his moves into various venues. The last one was setting up a VC fund. Now I noted then that if the Institute chooses winners and losers then it may very likely have a deleterious effect. After all it is the real money folks who do that. I have walked away from dozens of deals before I select one to spend time with.

Now the next venture is Real Estate. As MIT notes:

On Tuesday, the U.S. General Services Administration (GSA) announced that the federal government has made “the initial selection of Massachusetts Institute of Technology (MIT) as the Exchange Partner for the Volpe Project. The next step of the process will be the joint selection of the Design Team by the federal government and the Exchange Partner for the new federal facility.”

Now the Volpe Center was a consolation prize for Massachusetts after President Johnson moved NASA to Houston. Probably a good idea, last thing Cambridge needed was another Government infrastructure. But now it appears that MIT with the East Campus and now Volpe will get into real estate. Where is Donald Trump when he is needed! Oh, forgot, it is that fear thing.

However real estate is real risk. Real big risk. If you want fear have a $750,000,000 development fall flat. Or have a 100% over-run. Can a University manage anything like this? Look at Harvard's endowment.

 Also perhaps one should look at NYU which bought up old buildings. But with MIT the intent is to totally renovate the area. What about the asbestos in the building folks, Remember Building 20!

Tuesday, November 15, 2016

A Health Care Proposal

Back in 2009 amidst the spinning of Health Care Plans we proposed an alternative plan that both provided universal coverage and cost less. Of course it did not provide every possible benefit paid by those not getting any and it did not mandate unmanageable overhead increases, and yes it did not have Washington dictate each move. It assume physicians had some understanding of providing Health Care and that Government employees were, shall we say clueless?

Now we have the same folks who thought we were all "stupid", from that school in Cambridge, what is it called? Ah yes, perhaps the Marxist Institute of Technology; close but no cigar. The individual was the one whose credibility was allegedly called into question when caught on camera states in the Party paper of record:

So Mr. Trump would not only continue the insurance discrimination that plagued the country before the Affordable Care Act but even make it worse. In fact, there is simply no Republican replacement for the act that wouldn’t leave millions of Americans at serious financial risk. The single most important accomplishment of the Affordable Care Act was to bring the United States into line with the rest of the developed world, as a place where people were not one bad gene or one bad traffic accident away from bankruptcy. Mr. Trump and other Republicans can discuss kind-sounding alternatives as much as they like, but they can’t hide the fact that repealing the fundamental insurance protections that are central to the act would be a cruel backward step.

But given this individual's prior record as  noted on his statements why should we believe him now? Just a question.

You see the analysis I did some almost eight years ago assumed universal coverage, no per-conditions but it also assumed that the patient would have some part of the process. Namely if one smoked, was obese, drank excessively, or in any other way was involved in a high health risk behavior then they paid more, and they had to pay more. 

Physicians would be back in control of providing health care, not Government GS-9s or even MIT economics or business school PhD, and especially not Harvard economists.

CRISPR and Humans

Nature discusses the first application of CRISPR technology to humans. It was in China. They state:

On 28 October, a team led by oncologist Lu You at Sichuan University in Chengdu delivered the modified cells into a patient with aggressive lung cancer as part of a clinical trial at the West China Hospital, also in Chengdu. Earlier clinical trials using cells edited with a different technique have excited clinicians. The introduction of CRISPR, which is simpler and more efficient than other techniques, will probably accelerate the race to get gene-edited cells into the clinic across the world, says Carl June, who specializes in immunotherapy at the University of Pennsylvania in Philadelphia and led one of the earlier studies....June is the scientific adviser for a planned US trial that will use CRISPR to target three genes in participants’ cells, with the goal of treating various cancers. He expects the trial to start in early 2017. And in March 2017, a group at Peking University in Beijing hopes to start three clinical trials using CRISPR against bladder, prostate and renal-cell cancers. Those trials do not yet have approval or funding.

They note that this may become a race comparable to the space race of the 1960s. We have been following this for about three years now and the potential is significant but CRISPR Cas 9 still has the DSB problem of reassembly as well as the targeting specificity.

Who Are These Folks?

What is happening to my old Alma Mater, whoops I used a Latin phrase, perhaps that is now banned in Cambridge. Yet I do not know what the new in word must be. Let it pass.

Well, I get an email from some character who states:

Many of you have reached out to us to express concern about the recent outcome of the United States presidential elections. For us, that your outreach came from all corners of the world is a testament to the potential we have to build a world that is even more connected. Differences in our views do exist, with many of them existentially important, but over the long term we find progress through education and community. They are our ships for the seas of uncertainty.  

Then this character includes the letter from the President bemoaning the election. It appears as if this fellow is actually getting paid by the Academy as well. For what? That I cannot figure out.

Not only did I not reach out to him, I did not know he even existed, and worse yet that we are paying for him!

I truly believe that we may have in some cases gone over the cliff in "sensitivity" training and expression. And we wonder why tuition is exploding.

Saturday, November 12, 2016


I recall a New Hampshire License plate which said WASNTME. My wife thought that was hilarious. So many people use that excuse. Like the five year old with chocolate frosting all over their face saying it was not them who ate the cake.

Today we get the best of the WASNTME, see the NY Times.

By the way, if you can take a trip to New Hampshire, you will have a wonderful time reading license plates!

Harvard and Assumptions

As expected a Harvard Professor believes that those without a proper education led to what occured this week. He states:

....back in July, I noted that the Brexit vote was strongly correlated with education. The recent presidential election shows the same pattern: "College graduates backed Clinton by a 9-point margin (52%-43%), while those without a college degree backed Trump 52%-44%."  The graph below shows that it is unusual for the more educated and less educated to be in such substantial disagreement.

I know a lot of PhDs, Ds, DDS, DMD etc who may disagree. As one somewhat trained in the sciences, engineering is close, we all too often ask, why? Why did this occur. We also note that the polls were totally off. Why? The conclusion reached above may be nothing more than the "echo chamber" effect. Look at the evidence. Then ask, why? If the PhDs, MDs, etc did vote other than how they do at Harvard, why?

Frankly I do not have an answer but after eight years writing the blog I have learned that a lot that comes out of the Yard is oftentimes truly "echo chamber" in character. After all if my next door Professor thinks that way why not all the world?

But what of the folks in West Virginia, where frankly coal has killed a lot of jobs. What do they think? Should all decisions be made by PhDs? I know I have made a few bad judgements and I am not even an economist!

Do I believe the graph alluded to? Not after this past election.

Friday, November 11, 2016

Treasury Spreads

From time to time it is worth watching Treasury spreads. The chart below is the yield curve for several dates including yesterday.
Note yesterday has the highest short term rate. The curve is flattening as well.
The above is the spread of 30:30, the maximum spread. It hit a low a few weeks ago, almost 0,40 and now is up again. Remember that a negative yield curve has been seen back in the late Carter days.
The above is the 10 year and 90 day spread. It is quite low but more importantly we see the spike in the short term yields. Remember that the Treasure hols a lot in that category and thus it drives up Government costs.

Fear, and Trembling?

Fear seems to be a major theme from the left on the new Administration. Fear is a powerful word. I fear the dentist. Why? Simply, pain and cost. Dentists are still 11th century practitioners. They use early medieval instruments to tear, pull, extract, drill, and whatever. So, one can consider fear of a Dentist as real. Now there is also fear of flying. Not the sex type stuff, but the real stuff of being packed in some contraption operated by some low paid pilot whose training was at some school for flying aside some, well what shall we call them?

Now along comes Nature[1], a credible journal, entering the fray of US politics and collecting some "scientists" and discussing the "fear" in science about the new Administration. I guess the folks who control "Left Wing Speak", I now believe there are such people, things really don't happen simultaneously, have selected the operative opposition phrase as "fear". Oh, yes, and Nature calls these folks "nine experts". So, I guess we better take their word ex cathedra, got that one folks. But remember, Science is supposed to be all questioning, seeking truth. Yet for Nature and these experts, we should just take their word for it. Not one of them seems in my opinion to present a single fact, but after all they are "experts'.

First the comment:

Then there’s the US REGROW Act. This seeks to lower standards for cell therapy products — such as stem-cell treatments — and has been stalled in a Senate committee since this spring. Major scientific groups have issued statements opposing the act, including the International Society for Stem Cell Research, the International Society for Cellular Therapy, and the Alliance for Regenerative Medicine. The bill’s prospects had seemed grim. Substantive amendments in recent months had, for instance, removed an alarming call for Congress to prohibit the FDA from requiring phase III clinical trials, typically the final hurdle for therapies to be approved for market for most investigational cell therapy products. Now, under a Republican-dominated government, its dim chances seem to have brightened.

"seem" is the operative phrase. "seem" to whom and based upon what evidence? Oops, I am speaking like a scientist about a scientist. I am only a humble engineer, with a few other areas of expertise, but alas, this is an "expert".

Then we have:

Clean-energy projects generate more jobs than do the coal and natural-gas sectors. With solar and wind projects creating energy prices between 2.5 and 4 ¢ per kilowatt-hour, the economic case is compelling — as is the argument for these technologies being the fastest way to provide energy access to the global poor, boosting their economic opportunities and capacity.  The economic benefits of clean energy are even more profound if combined with domestic manufacturing of electric vehicles, which bring new research growth to the high-tech sector. Renewable-energy options, in some cases supported by natural gas, are a faster route out of energy and economic poverty than are coal-energy projects.

Here we have another set of statements that make no sense. 2.5 to 4 cents per KWh? Is that at the wind farm output point? What is the basis for that number? Many of these units are idle all too frequently. They are unreliable and frankly are both environmental hazards, ever seen all the dead birds, and ugly as sin. But the clincher is the above-mentioned cost. It has yet to be proven in on a national basis. One may fine an installation here and there but no when looking at a totality.

Now for something I spent time on when in Washington. They state:

I have two concerns about defence policy. First, I’m not optimistic that the White House will understand the negative humanitarian and strategic consequences posed by lethal autonomous weapons systems. The Obama administration took the views of the scientific community seriously in formulating foreign and military policy. Secondly, I fear for the Comprehensive Nuclear-Test-Ban Treaty, one of the pillars of global nuclear non-proliferation  policy. Trump has disparaged the Iran nuclear agreement to limit that country's nuclear programme; the deal is widely supported by arms-control experts. He has said that he has no objection to allowing several countries in Asia and the Middle East to have nuclear weapons. He has announced his intention to retaliate with nuclear weapons against a terrorist attack by ISIS (where, exactly, would he detonate them?).

Lethal Autonomous Weapons Systems, LAWP, are drone that target people and then just go and wo whatever. Frankly that is wrong and subject to substantial review. So, put that aside. However, on the nuclear side, nuclear weapons are world ending, period. I spent years on CTBT discussions and years in and out of Russia. We both can agree on that. The problem however is Iran and North Korea, neither a signatory to the aforementioned agreement. So why mention it. Perhaps a poor rhetorical argument but easily rejected. Iran and its agreement are separate from a CTBT set of agreements. Russia and china know what the consequences. India and Pakistan should but we frankly should be concerned about Pakistan. But the real issue is Iran and North Korea. North Korea should be China's problem. If they want good trade deals, then resolve that issue now. Iran is now our issue. We broke it and now we own it.

Now for the best one:

Trump’s success is the crescendo of a long devaluation of the Enlightenment idea that facts are the rightful basis of action. Reason itself is under fire. This mistrust of expertise is a serious threat to the sciences and the humanities. Science is in the business of making knowledge. History is founded on the principle that informed reflection is superior to ignorance. Devaluing evidence and manufacturing doubt can be a powerful strategy — as climate-change deniers and the tobacco industry have shown. Their push for short-term gain threatens our health and environment. The history of science, broadly construed, must shoulder some of the blame. Perhaps the central insight of my field in the past 40 years is that facts are socially constructed. Truth has a social history. But even the most extreme social constructionists still value expertise; they are not the ones trying to destroy the fabric of reality. This subtlety has been lost on the wider public, and to some extent on scientists. The rift between the arts and sciences — the pillars of the university — now threatens all who value reason.

The Enlightenment. A great deal has been written on the subject and our Constitution is based upon the ideas that the movement engendered. Especially the Scottish Enlightenment. "reason itself is under fire". Really? What is the basis for your statement? That is logic and logic precede science. In fact, Galen insisted that physicians be trained in logic before taking on what little science we know about the human body. "truth is a social history" What does that mean? Truth is distinct from falsehood. Is it true that the area of a circle is πr2? Yes, but not just by definition. Truth is more that social history, it is what is done in science. It is true that genes generate RNA and that RNA generates proteins. It is true that proteins can control a lot of things. But so, can methylation, acetylation, and other intermediaries. The simplicity of a Watson and Crick, their "truth" has evolved. Science is ever evolving. Cancer is genetic, it is also epigenetic. Both are true, neither are social history.

So, what should we fear? "Fear itself?" That seemed adequate for FDR. And he was a Democrat.

Happy Veteran's Day

The Constitution in Boston. Thanks to all veterans, then and now. Also remember family members like Harold McGarty with DSC in Okinawa in 1945 and Michael McGarty with DSC in France in 1918.

Thursday, November 10, 2016

The Academy

In the late 1960s I was a Grad student and Instructor at MIT and my office was adjacent to the ROTC offices in the old WW II Rad Lab wooden building, Building 20. Many nights as I worked there were threats of bombs from the students opposing the Vietnam War. For a variety of reasons I also saw it as a nightmare, having lost a few class mates in the process.

Today we have a Presidential election as an event which may or may not change our society, for the better or the worse. And today the current MIT President sends out a letter saying:

As I saw this afternoon, students have wrapped the six great columns in Lobby 7 with huge sheets of paper. Three ask that you "Share Your Hopes," three to "Share Your Fears." They are covered with handwritten responses. People are lingering to read and add their own. Many say they fear for the future of the country, some for their personal safety, for their civil rights or that "my values no longer matter." Others fear that their peers will never take the time to understand why they voted for the winner. One hope struck me in particular: "I hope to understand the 48 percent of Americans who disagree with me." Nearly all the writers express some kind of pain. Yet together they have created a wonderful example of mutual respect and civil dialogue.

Pain? Pain in 1968 was being blown apart by a War that had no reason. Over 50,000 people died, in a bloody conflict. Those whom we fought are now "allies". Not that it is different. But in 1969 Jerry Wiesner was President, and he let the students express concern but at the same time we had a semblance of order, at least until Kent State, when US Troops executed unarmed students. You want pain, then there was pain as we saw students in pools of blood on a college campus.

Today there is the question of a change. That is the election process we have in our Constitution. Usually almost half like the result and half do not. But saying:

Nearly all the writers express some kind of pain

Begs the question; both the winners and losers had "pain". One must ask; how is their existence to change? Are they to be drafted and sent off to a war? We have a Constitution and a legal system which for better or worse seems to function. Perhaps leaders should lead and not whine with the crowd. Wiesner was a leader, I wonder what we may have at this time?

Now on the MIT Admission site there is some student blog that list the fears: 

I'm afraid for the ENVIRONMENT
I'm afraid for all the people I love
Honestly my fears do not really grow. It is just a new day, and we should be able to go through. The only fear that has been there for a while may be that this country seems separating. But this is not caused by Trump. The US is just as separating as it has been. but Trump may have made it more explicit.
That this will turn people against each other instead of educate them as to WHY we need progress. It's not the time to block or delete people - that won't help us win 2020
I fear that fear will continue to hinder progress.
That persuasion and loving, rational discourse doesn't work in America anymore.
That inequality will grow/deepen, and that we will be a more polarized nation.
I'm afraid of war with Russia.
that we still be stuck playing the blame game
that I don't really have a home, because America clearly doesn't want or love me
I fear because misogyny, sexism, racism and xenophobia are no longer closet feelings.
What do I tell my daughter? 

Now I look back a generation or two. Seventy-two years ago my father was in Leyte Gulf, one third of his crew blown to bits by a combination of Japanese and American friendly fire. They fought to  keep the destroyer afloat and then in a few months back into battle until August 1945 and then months in Japan on Occupation. Then 100 years ago my Grandmother, who was a leader in Socialist Party in New York, ran for Congress, and petitioned Wilson for the Women's Vote. Talk of fear. Wilson had her and six other women, The Lorton 7, sent to Lorten prison, force fed with hoses, and drenched with cold water every day. Yes, that was the Democrat Wilson.

What is the role of an Academy President?  Besides raising money. It is leadership. Wiesner was a leader. I wonder about the current incumbent. Leadership does not play to the crowd. It looks forward, reaches upward, sets positive goals and visions. It appears that many of the current "leaders" seem to respond the the crowd. One must then look at the Governments from whence they came perhaps and ask how well they have done. Leaders set visions, they must look above the chaff of the young voices and understand what American stands for, opportunity equal for each individual. Whether Locke, Montisque or Ockham, it was centuries of understanding equality, the individual, and opportunity. If they can keep that vision then they are doing their job. Fear and pain from privileged youth when there is none palpable based on some physical phenomenon just plays into a theme that we have seen has sent those South American countries into centuries of upheaval.

So pain, fear? Bombs, Vietnam, Leyte, Okinawa, Lorton, Iraq, Syria. So what do I tell my granddaughters? The same as grandsons; that they are individuals, they have the same rights, the same risks, and make sure they accept that and not be intimidated. Don't whine; work, achieve, produce, contribute, respect, help.

Now, let's all get back to work!


World War II ended over seventy years ago. I do not remember the event but I remember my father's return. Thus for some of us it is a real memory. For those decades the US has been used as the cornerstone of European defense. All the while Europe prospered and used what would have been defense money to pursue their own social goals.

The threat was a Soviet invasion. Now the threat is a Russian invasion, at least that is what they think. But Europe has suffered more deaths from internal "invasions" than Russian troops. Perhaps it is time for them to rethink a great deal.

In the European Socialist site The Syndicate a Belgian writes:

Europe has been only too happy to make life easy for itself. For the past century, transatlantic relations have adhered to a perverse, unspoken dynamic, whereby the more active the US has been, the more Europe has dozed off. When the Americans have intervened abroad – as they did in Iraq – Europe has responded with grandstanding lectures about “imperial overstretch.” And when the Americans have failed to intervene, or intervened late or ineffectively – as in Syria and Libya – Europeans have demanded more American leadership. That era is now over. Trump knows that the EU has the money, technology, and know-how to be a global power equal to the US, and it is not his problem that Europe lacks the political will to harness its full potential. We Europeans have assumed for too long that it is cheaper and safer to let the US solve our problems, even in our own backyard. With Trump’s election (and given America’s checkered foreign-policy legacy), we must discard this belief. 

Europe has a duty to defend itself. Frankly it is about time they grew up and decided what they want. The US has its own issues, and in a sense Russia should not be viewed as an enemy but as a counter balance to China. And China is an ever growing economic power that Europe should itself address.

This election in a strange way is truly a realignment of Global concerns. The US is looking inwards to examine how it wants to behave outwardly.  The old cliches should and must be re-examined. Russia is still fundamentally and extraction economy. We never see "Made in Russia" in Walmart. Then again we are seeing less and less of "Made in China" in Walmart and more and more in Defense elements. We rely upon Russia for Space launches and as the Arctic opens we may rely on them for Arctic Circle fiber connections as well.

Germany has the money and capability. Poland has taken steps to defend itself. It remembers the last German advance, and the Russian one before that. So let France, Italy, Germany, Belgium, Denmark, and even the Czech Republic step up to the table and do what the US has been doing for over seventy years.

Friday, November 4, 2016

CBO and Budget

The CBO has published a report on the Budget and losses going forward.
Going forward we see an ever increasing deficit as a percent of GDP.

 The above are the outlays as a percent of GDP. This of course assumes the GDP grows as projected. If it does not, which seems to be the case going forward the numbers explode. Worse look at Net Interest. Now it is just above 1% growing to 2.6%. If we have slower GDP growth and higher interest rates then this could easily double or worse!

Now the components of Federal Spending are as follows:
These are % Projected GDP which as we have said is very uncertain. The spending amounts are not! In Fact they most likely are more. Note:

1. Net Interest is exploding
2. Social Security is not too bad.
3. Health Programs are going nuclear!
4. All else is dropping, especially Military

Finally look at age groups.
The percent over 65 is growing considerably and the number over 75 is truly explosive. Imagine 60 million people over 75 who have smoked, drank, and were morbidly obese and what their future costs are!