Merry Christmas To All

1.              factum est autem in diebus illis exiit edictum a Caesare Augusto ut describeretur universus orbis

2.              haec descriptio prima facta est praeside Syriae Cyrino

3.              et ibant omnes ut profiterentur singuli in suam civitatem

4.              ascendit autem et Ioseph a Galilaea de civitate Nazareth in Iudaeam civitatem David quae vocatur Bethleem eo quod esset de domo et familia David

5.              ut profiteretur cum Maria desponsata sibi uxore praegnate

6.              factum est autem cum essent ibi impleti sunt dies ut pareret

7.              et peperit filium suum primogenitum et pannis eum involvit et reclinavit eum in praesepio quia non erat eis locus in diversorio

8.              et pastores erant in regione eadem vigilantes et custodientes vigilias noctis supra gregem suum

9.              et ecce angelus Domini stetit iuxta illos et claritas Dei circumfulsit illos et timuerunt timore magno

10.          et dixit illis angelus nolite timere ecce enim evangelizo vobis gaudium magnum quod erit omni populo

11.          quia natus est vobis hodie salvator qui est Christus Dominus in civitate David

12.          et hoc vobis signum invenietis infantem pannis involutum et positum in praesepio

13.          et subito facta est cum angelo multitudo militiae caelestis laudantium Deum et dicentium

14.          gloria in altissimis Deo et in terra pax in hominibus bonae voluntatis

15.          et factum est ut discesserunt ab eis angeli in caelum pastores loquebantur ad invicem transeamus usque Bethleem et videamus hoc verbum quod factum est quod fecit Dominus et ostendit nobis

16.          et venerunt festinantes et invenerunt Mariam et Ioseph et infantem positum in praesepio

17.          videntes autem cognoverunt de verbo quod dictum erat illis de puero hoc

18.          et omnes qui audierunt mirati sunt et de his quae dicta erant a pastoribus ad ipsos

19.          Maria autem conservabat omnia verba haec conferens in corde suo

20.          et reversi sunt pastores glorificantes et laudantes Deum in omnibus quae audierant et viderant sicut dictum est ad illos

1 And it came to pass in those days that a decree went out from Caesar Augustus that all the world should be registered.

2 This census first took place while Quirinius was governing Syria.

3 So all went to be registered, everyone to his own city.

4 Joseph also went up from Galilee, out of the city of Nazareth, into Judea, to the city of David, which is called Bethlehem, because he was of the house and lineage of David,

5 to be registered with Mary, his betrothed wife, who was with child.

6 So it was, that while they were there, the days were completed for her to be delivered.

7 And she brought forth her firstborn Son, and wrapped Him in swaddling cloths, and laid Him in a manger, because there was no room for them in the inn.

8 Now there were in the same country shepherds living out in the fields, keeping watch over their flock by night.

9 And behold, an angel of the Lord stood before them, and the glory of the Lord shone around them, and they were greatly afraid.

10 Then the angel said to them, “Do not be afraid, for behold, I bring you good tidings of great joy which will be to all people.

11 For there is born to you this day in the city of David a Savior, who is Christ the Lord.

12 And this will be the sign to you: You will find a Babe wrapped in swaddling cloths, lying in a manger.”

13 And suddenly there was with the angel a multitude of the heavenly host praising God and saying:

14 “ Glory to God in the highest, And on earth peace, goodwill toward men!

15 So it was, when the angels had gone away from them into heaven, that the shepherds said to one another, “Let us now go to Bethlehem and see this thing that has come to pass, which the Lord has made known to us.”

16 And they came with haste and found Mary and Joseph, and the Babe lying in a manger.

17 Now when they had seen Him, they made widely^[d] known the saying which was told them concerning this Child.

18 And all those who heard it marveled at those things which were told them by the shepherds.

19 But Mary kept all these things and pondered them in her heart.

20 Then the shepherds returned, glorifying and praising God for all the things that they had heard and seen, as it was told them.

Weber's Law

Weber's Law is an interesting Law" observed in various fields. It states that to observe some phenomenon in a background the ratio of the smallest perceptual change in a stimulus that can be observed is given by:

Delta S = k S ( Background)

Namely that there exists some constant k for which on can observe a change from an average Background stimulus level.

For example we as humans if we are used to say 70F room temperature may be able to recognize a 3.5F change, so that k is 20. This "law" may extend over some region with the same k.

Now we can think of using Weber's Law in such diverse areas as Economics, namely what level of improvement in say unemployment would be perceived as goo if the total were 10%. Does it hold at a background of 5%. In global warming what change in F would be ascertainable at a background of say 70F?

Apparently cells function this way at the gene product level as well. See the paper by Ferrell. Worth a thought.

Microarrays and Too Much Data

In a recent article by Spector at Stanford the author tells how for little money one can develop their own tests for genetic markers. She states:

So it takes years of hard work and serious cash to create one of these “simple” tests, right? Not anymore. “All you really need is a computer browser and Excel,” says computer scientist Purvesh Khatri, PhD, who, working with Atul Butte, MD, PhD, associate professor of systems medicine in pediatrics, identified telltale chemicals (aka biomarkers) for three types of cancer all in the span of one year. How was this possible? By analyzing some of the vast amount of genetic information from tumor cell samples that has been amassed over the past decade in free, publicly accessible databases, and by outsourcing the lab work. “We say ‘outsource everything except the genius,’” says Butte. “You come up with the question and the target, and let everyone else do the work.”  As Khatri walked me through the discovery process, I learned there’s a little more to it than that. Some work and cash is involved, not to mention high-school level biology. And basic statistics will be a big help. But with those tools, skills and about five days’ work, plus $4,000 to confirm through blood tests, you’re on your way.

 

Yes, for just a few dollars and a few hours of time you too can develop a genetic profile. In contrast a set of papers by Detours and colleagues raises some doubts about this.

The problem is that it is all too easy to get correlations of almost anything with anything. They are not markers unless we have a system with verifiable causality. This was discussed in the work of Dougherty. What Dougherty has observed is that one must have a system underlying the process, with causality, and that what one then looks for are the coefficients which define that system. From that we can ascertain if the result is true and consistent.

Recently Detours has addressed this issue in PLOS and he and his co-authors have demonstrated that the plethora of markers for say breast cancer can be shown to be nothing more than almost random choices, my words not theirs. Namely one may be able to find correlates almost anywhere.

From the Detours note in The Scientist we have:

Ethic guidelines drastically limit experiments on human subjects. Hence, the fundamental mechanisms of human diseases are mostly studied in vitro or in animal models. These are only substitutes for understanding human physiology and disease. Proving that a mechanism responsible for disease progression in a model system is also relevant to human diseases—not to mention then translating it into a new therapeutic—is a major bottleneck in biomedicine. In the end, only clinical interventions on human will bridge models and human disease.

One approach is to look for correlations. If you can show that patients with tumors expressing, for example, stem cell markers have a much worse prognosis than those without them, that would suggest that stem cells are involved in human disease progression. This line of thinking has long been popular in oncology because you need only access surgical specimens, some mRNA or protein marker, and a follow up of patients. And with the recent advent of efficient microarray screens, this approach has become all the rage, reducing the discovery of signatures, i.e. multi genes markers, to a nearly automatic procedure.

In their PLOS paper Venet et al state:

Hundreds of studies in oncology have suggested the biological relevance to human of putative cancer-driving mechanisms with the  following three  steps: 1) characterize  the  mechanism  in  a model system, 2) derive from the model system a marker whose expression changes when the mechanism is altered, and 3) show that   marker   expression  correlates  with  disease  outcome   in patients—the last figure of such paper is typically a Kaplan-Meier plot illustrating this correlation.

Detours continues:

The signatures’ prognostic potential can then be tested instantly in genome-wide compendia of expression profiles for hundreds of human tumors, all available for free in the public domain. Besides stem cells markers, signatures linked to all sorts of biological mechanisms or states have been shown to be associated with human cancer outcome. Indeed, several new signatures are published every month in prominent journals.

But such correlations are not all that they seem. The accumulation of signatures with all sorts of biological meaning, but nearly identical prognostic values, already looked suspicious to us and others back in 2007. It seemed that every newly discovered signature was prognostic. We collected from the literature some signatures with as little connection to cancer as possible. We found, for example, a signature of the blood cells of Japanese patients who were told jokes after lunch, and a signature derived from the microarray analysis of the brains from mice that suffered social defeat. Both of these signatures were associated with breast cancer outcome by any statistical standards.

In PLOS they state:

 Our   study  questions  the   biological  interpretation   of  the prognostic value of published breast cancer signatures, but  has no bearing on their  usefulness in the  clinic: a marker  may  be accurate without yielding interesting biological insight regarding the mechanism of disease progression. Nevertheless, the  prominence  of proliferation should be  taken  into  account  in  future clinical research. Are there transcriptional signals in breast cancer that are prognostic, but independent of proliferation?

 

And they conclude:

In  conclusion, we  have  shown  that  1) random  single- and multiple-genes expression markers have a high probability to be associated  with   breast   cancer   outcome;   2)  most   published signatures are  not  significantly more  associated with  outcome than random predictors; 3) the meta-PCNA  metagene integrates most of the outcome-related information contained in the breast cancer transcriptome; 4) this information is present in over 50% of the transcriptome and cannot be removed by purging known cell-cycle genes from a signature.

As Detours concludes in his short piece in The Scientist:

It took us four years and six rejections to get this work finally published in a computational
biology journal (PLoS Comput Biol, 2011)—not the most efficient venue to reach the oncology community. Meanwhile, a  steady stream of studies confounded by proliferation rates has appeared. This has to be said, one  can no longer stay silent about the rather limited self-correction capability of the top tier  publishing system (Cell, Nature Genetics, PNAS, etc.), which promoted these studies in the first  place. The oncogenomic-based literature has forgotten the pitfalls of non-specific effects and the value  of negative controls. It is not enough to show that a signature is prognostic; biological  conclusions may be drawn only if its prognostic value is specifically driven by the mechanism/state  under  investigation. Importantly, we question prognostic signatures as specific research tools, not  as clinical guides: smoke does not drive fire, yet it is powerful indicator of when and where a fire is burning.

His point is well taken. The challenge is to determine the intra-cellular and inter-cellular pathways as defined as dynamic distributed systems, and to do what Dougherty and others suggest, namely understand what is happening and why and then seek to identify the system. Failure to have a viable a provable model of the system will lead to volumes of data which are far from prognostic. In fact they may be very well deadly to the patient.

Intelligence Failure?

The NY Times has a piece saying that the failure to publicize the death of the North Korean Head of State was somehow an intelligence failure is rather off. As they state:

Asian and American intelligence services have failed before to pick up significant developments in North Korea. Pyongyang built a sprawling plant to enrich uranium that went undetected for about a year and a half until North Korean officials showed it off in late 2010 to an American nuclear scientist. The North also helped build a complete nuclear reactor in Syria without tipping off Western intelligence. 

 Now good intel is not shared. This is so for several reasons and let me list two:

First, by keeping intel secret one sees what the other side says and does. There is great value in that.

Second, by keeping it quiet one protects one's own sources. By revealing it one may reveal a source. That may result in compromising the source.

Simply good intel is never published. It sits quietly and is used accordingly. Perhaps the authors should consider that alternative as well.

Mandatory Health Insurance

There is a continuing argument regarding mandatory universal health care. A recent posting in the WSJ makes a rather convolved argument for and against it ultimately suggesting some tax policy to make it work.

The author makes the following argument:

The most common case for an individual mandate is the free-rider argument. Imagine a community in which everyone dutifully pays monthly health-insurance premiums, except Joe. Then one day Joe gets sick and finds he cannot pay the full costs of his medical care. So the rest of us chip in and pay for the remainder of Joe's care. The upshot: When he was healthy, Joe got to consume all his income instead of paying premiums, and after he got sick he managed to "free ride" on everyone else's generosity. 

Ethically, Joe is getting an undeserved benefit paid for by others, who bear an undeserved cost. Economically, he is imposing an external cost on others. If we let him get away with this, others might emulate his example and the cost for the rest of us could grow.

So is the solution to mandate that everyone have health insurance? On average, people without health insurance consume only about half as much health care as everyone else. Of the amount of care they consume, they pay for about half. Thus the "free ride" for the average uninsured person is about one-fourth of what everyone else spends on health care.

Forcing Joe to buy insurance that pays for the same amount of care everyone else gets would be neither fair nor equitable. To get Joe to pay his own way, we need to take from him an amount of money equal to about one-fourth of the average health-care spending of insured people and either distribute it to everyone else or put it in a fund to pay for the care eventually required by Joe and others like him.

It is worth reflecting again on some of the issues:

1. As a society we have gotten to the point that is someone is ill then we take care of them and if they do not have insurance they are "free riders" on the system, it is akin to the  auto insurance issue of having an uninsured motorist pool. Namely we assume that there will always be some few individuals without auto insurance and that the risk of them getting in an accident is higher than most so we tax all law abiding folks for the risks presented by those not abiding by the law. In fact we generally do not even penalizes those breaking the law.

2. As we have argued many times there is no reason the government should be in the middle of this in any way and that includes tax breaks. Frankly paying for anything should be without a tax advantage but at lower rates. One should pay for health care after tax to fully understand the costs. Costs are the modulator of demand. It is demand we want to modulate.

3. There are free riders who smoke and are obese, now amounting to some 60% of the population. They cost $360B in 2011 and it grows at 40% per annum and yet we allow them the same rates, as we do with drug users, to some degree with smokers, and those with STDs.

4. Thus the "only" logical solution is that we should and "must" individually purchase health care, not through a company plan, but akin to auto and home insurance with no tax benefit. We get auto and property insurance by our lonesome and without any tax advantage. We can choose what plan we want.

5. If you do not buy health insurance, and there should be an opt out with a cost however, then when you become ill and if it costs the people one cent you are then penalized n cents for every cent of costs, then it becomes an immediate mandate. If however you can pay on your own then you have a free ride on your pennies

6. Mandated coverage should be at most catastrophic, like having liability only on a car, collision or comprehensive is not mandatory. The problem with the current Government Plan is that some obese GS 12 dictates what you should have and the result is a massive increase in costs! There should be at most a mandate for catastrophic coverage.

Yes, demand would decrease and costs would go down.

Pigou and Potato Chips

Frances Woolley has presented an interesting question which we have examined in depth before. She has presented an exam question regarding the externalities of obesity framed in terms of a potato chip tax.

Frances states:

"Pigouvian taxes" are imposed to make people take into account the full impacts of their actions. The classic example is a carbon tax. Whenever people produce or consume carbon-based fuels they harm other people, from those who breathe in exhaust fumes to future generations affected by climate change. A carbon tax makes people recognize the full cost of their consumption and production choices, thus creates incentives for people to change their behaviour. 

The potato chip example, however, is different: the chip eater in the exam question isn't harming other people. The bad skin, weight gain, and depression is experienced by the chip eater himself. It is not obvious that a Pigouvian tax is needed to make chip eaters take into account the harms that they causing - why not just tell people that potato chips cause bad skin, and if people think the chips are worth the zits, let them munch away? They're only harming themselves.

Now let me rephrase her issues a bit. Perhaps as in the US we may have a slightly different economic framework than Canada but I believe we have a parallel.

First, as we have demonstrated many times, obesity in the US will cost us $350B this year alone of our $2.5T health care costs. How is this paid for, well Medicare, Medicaid, and insurance. Namely we are all taxed equally for the costs of a few.

Second, we have a country where over 60% have a BMI in excess of 25 and well over 40% are outright obese. Frankly I wonder who is "hungry" with all these fat people but I leave that question to the side.

Third, we know that obesity is the prime driver for Type 2 Diabetes, well in excess of 95% is a result of weight, and Type 2 Diabetes causes many sequellae from neuropathy, nephropathy, retinopathy, cardiomyopathy and the like. We can draw a straight line from caloric consumption to costs. This is unlike the carbon claim of Woolley where I would argue the nexus is tenuous at best.

Thus as to her assumptions as above:

1) I disagree with the first regarding carbon. The line is broken by hypothesis and not fact connecting cause and effect.

2) The line between a calories and a cost is well established. We can actually say what every excess calorie costs. Not bad for an engineer! But that is nothing more than what Chem Es do for a living. We know what the cost of every 0.1 above 25.0 costs society. The issue then is do we tax the input or the output to cover their externalities, namely their added costs. Namely, do we tax the food or the person's weight?

I believe that Frances may have missed an interesting example if she had carried it a bit further. We have substantial data on disease incidence by BMI level and we have costs with each disease. I have gone through this analysis a few years ago in the large regarding health care costs. Perhaps the "devil is in the details" but that is where economists perhaps should seek truth if not just the facts.

Perhaps also this may just be one of my hot buttons. Frances has an interesting point but I believe that it requires more depth. This was a point which I had a strong disagreement with Greg Mankiw for he is a proponent of a Pigou tax on gasoline but opposes a Pigou tax on carbs. My opposition of the Pigou tax on gasoline is driven by the fact that demand is inelastic. Namely if workers have to drive to their place of employment the tax is not a disincentive but merely another way for the Government to take funds out of the economy. On the other hand a carb tax is used in a much more elastic environment, just look at cigarette taxes, and the funds become not only a disincentive but a cost balancing means.

Thus my argument with Frances is that this is an interesting but complex problem with the data available to actually perform a detailed analysis. In addition it is a pressing problem for many countries, for it is not just acne but the development of one of the most pandemic disease epidemics known. In fact the main problem with Type 2 Diabetes and the sequellae is that they can be managed for a long time per patient but at an ever growing cost per patient per year. In contrast lung cancer just kills you off before you become too much of a burden!

Third Birthday

It has been three years since I started this and about eight months since I counted countries. This Blog has managed to get 59% from the US and remainder from around the world, 101 countries since April alone. I want to thank the readers for dropping by and hope they have gained some insight. The last three years have been exciting and as many may have observed the Blog has been idiosyncratic, a bit of everything.

If anyone ever has any questions or issues please feel free to email me your concerns. I made the decision early on not to have comments and I am glad I have done so seeing other blogs.

The upcoming year should present a wealth of new thoughts. Merry Christmas and Happy New Year to all.

Hitchens: Some Thoughts

On the death of Hitchens I am reminded of several facts. First many of my European friends ended early their lives as a result of self inflicted hard lives. Second when asked what his favorite poem was he remarked If by Kipling:

If you can keep your head when all about you

Are losing theirs and blaming it on you;

If you can trust yourself when all men doubt you,

But make allowance for their doubting too;

If you can wait and not be tired by waiting,

Or being lied about, don't deal in lies,

Or being hated, don't give way to hating,

And yet don't look too good, nor talk too wise:

If you can dream -- and not make dreams your master;

If you can think -- and not make thoughts your aim;

If you can meet with Triumph and Disaster

And treat those two imposters just the same;

If you can bear to hear the truth you've spoken

Twisted by knaves to make a trap for fools,

Or watch the things you gave your life to, broken,

And stoop and build 'em up with worn-out tools;

If you can make one heap of all your winnings

And risk it on one turn of pitch-and-toss,

And lose, and start again at your beginnings

And never breathe a word about your loss;

If you can force your heart and nerve and sinew

To serve your turn long after they are gone,

And so hold on when there is nothing in you

Except the Will which says to them: "Hold on!"

If you can talk with crowds and keep your virtue,

Or walk with kings -- nor lose the common touch,

If neither foes nor loving friends can hurt you,

If all men count with you, but none too much;

If you can fill the unforgiving minute

With sixty seconds' worth of distance run --

Yours is the Earth and everything that's in it,

And -- which is more -- you'll be a Man, my son!

Employment Factors

It is worth a review of some of the recent economic data regarding employment. First the chart above looks at the actual data to the Romer projections. It is clear that no matter how much we may have improved we are still way off from where the projections said we would be. This should be a continuing concern especially as regards to what any economist says about anything.

The above is a measure of the errors and we see the growth in what we should have seen with the recovery. The problem is that the variance from the projected recovery is widening.

This is the difference in percent from what was projected and we see a 30-35% difference. Not surprising despite the trillions spent. In fact one should understand that the payroll tax cut is simply not charging working folks for their Social Security, a loss in some $300 billion in revenue! Consider the almost $300 billion in unemployment insurance and we see almost all of the trillion we are off.

The above is the difference in employment from 2005 to the present. Growth is in Government and Medical/Education, essential Government, with some in professional. Construction and manufacturing are all down.

The above is the growth rates for those slower segments. They are at best about 1-2% pa, well below any reasonable level.

The above is the growth for construction as well. There is some growth in mining.

The above shows the percent of the population employed, and we see it remaining well below what we had before the recession. It demonstrates no material change in employment. In fact the unemployment using the 2006 base is still above 12% not the 8.6% stated by the Government.

This chart above is thus the essential one to watch and it still shows a sustained unemployment.

Community Colleges

There was an interesting piece this week in the Harvard Crimson on Community Colleges. They state:

Student attendance at community colleges has surged during the last decade. Enrollment now stands at 8.2 million, a 2.2 million hike in the last two years. In Texas, 79 percent of students who enroll in a public university begin at a community college. Even during the recession, the national rate of enrollment at community colleges leapt forward at a pace three or four times greater than that of four year institutions.

For all our Nobel Prizes, it’s increasingly clear that investment in higher education gets the most bang for the buck when it’s put into community colleges, not Ivies. There are two reasons why community colleges should be a top priority for anyone who cares about higher education.

 It continues:

Granted, community colleges often don’t provide a great education. Their graduates are less likely to occupy top spots in the nation or world. But one lesson of American history is that sometimes mass education is more important than elite education. In the 19th century, European countries offered first-rate schools for the upper class but scrimped on education for all. In contrast, the United States promoted mass education—first, widespread literacy and primary education, and then in the 20th century high school education for the great majority of children, and finally higher education for a large share of the public. America’s best schools were often inferior to Europe’s best schools, but what turned out to matter most was that mass education was better in America than in Europe—and that gave us the jump on economic productivity and technological innovation.

 Now I have first hand knowledge of the community college. I spent the past semester taking Organic Chemistry at County College of Morris, a nice place on a hill west of New York City some fifty miles or so. Now I did not go to an Ivy League university, MIT never considered itself so endowed as say Harvard, but on the same hand I have unlike the author never found a non-American university on a par with any top ranked American one.

Now to Community Colleges. I tracked the MIT course and indeed we kept pace. The exams were comparable. What was different was how the faculty treated the students. At MIT we were treated as potential peers, and expected to perform and excel in such a manner. At CCM we are treated as High School middle of the roaders. Now the top 20% are comparable to many MIT students, but they have little money, are first generation immigrants, and recent immigrants, and are returnees. In effect they are what can and should become our entrepreneurial class. Yet the role of the Community College appears to be "training" not education. The administration focuses on taking attendance so as to ensure that if the drop out rate is too high they do not get blamed. They do not push the students, there is no research path to show the way, there is no networking, and in fact the administration seems to be o par with any public high school.

Thus the students in many ways could I believe compete on par with many at MIT, but the fire to excel has been crushed despite the fact that they keep pushing ahead. Thus the challenge is not more money per se but a better attitude, a respect for the student and a linking of the student with their potential.

It always helps to be part of the system to understand it.