Detailed Abstractions

If you read enough media reports about “science” and their predictions, you like I are probably struck by three things:  we seem to invest lots of money on things we already know, we also seem to invest lots of money in things which are stupid, and I still don’t have my flying car.

As with most things, there is real science in the world, just woefully lack of reporting.  Here’s two things that are sure to benefit society over the long run:

• via Marginal Revolution, insurance companies are beginning to use data analysis to pro-actively tell insurers medical tests they should contemplate (here):

In Hawaii, Kaiser Permanente has started a pilot project that churn through its database of patient data to predict which patients might need which tests – and then sends individuals email alerts suggesting they come in for a test or checkup….

Now this of course could be fraught with potential privacy concerns, but the technology is available, with independent audits, to allow this process without allowing the company access to specific individuals and their specific risks.  It’s a start though and oddly enough, it didn’t require the federal government.

• & via Popular Science, a true miracle, beer without hangovers (here):

…A new study suggests that we could quite easily engineer our tipple to help us break down alcohol faster, reducing that morning-after sensation of intense pain (or intense regret) by simply adding more oxygen to our booze….

Of course societies aversion to others using drugs isn’t a pragmatic one, but a belief in the morality of those who don’t partake versus the immorality of those who do.  So my guess is that if this turns out to be true, they will attempt to outlaw as reducing negative consequences can only lead to more immoral behavior.

For an example of this thinking:  via Reason.com FDA to Ban Electronic Cigarettes.  According to the FDA:

Our concern is that this might introduce nonusers to nicotine use.

Jacob Sullum’s (the author) obvious question:

And what if it did? Separated from the dangers of smoking, nicotine use is not a big health concern.

Let’s hope the government will not interfere with either of these innovations.

• I think there is still a health care debate even though the bully pulpit isn’t wanting to increase attention to this, but writer Michael F. Cannon from the Cato Institute diligently continues to shed light on the issue.  As one of the best writers on the subject I recommend everything he has written or papers he has published on the subject.  For now, he has a three part series worth the time for anyone interested in learning more: Questions for Thoughtful Obama Care Supporters (Part I, Part II, Part III)

• It might not matter, the health care bill hated by all might be pushed through with various legal and procedural maneuvering.  here via Cato

• Interesting medical research showing correlation: As girth grows, risk of sudden cardiac death shrinks.  I question their use of BMI to identify normal/underweight as as 6’4” person can weight as little as 160 and still be normal (chart), but hopefully it will help them understand that stats are useful tools, but for things such as medicine…. due to the unique nature of us all, the future is individually built therapies, not government programs to change the BMI of an entire nation.

• John Stossel writing Reform Does Not Mean More Rules in response to Senator Chris Dodd’s proposed overhaul of financial regulation:

The New York Times headline says Dodd’s Bill “Adds Layers of Oversight”.

Just what we need: 1,336 pages of additional “layers.”  Senator Dodd is as ignorant as he is arrogant.

• Lending credence to Mr. Stossel’s position, How the Fed slept through Lehman via Rueters

• Cornell MBA student says bet against Warren Buffett (here via WSJ).  Not saying I agree, but I do agree with WSJ – always nice to see someone attempting to break conventional wisdom.

• Proving once again that fascism isn’t just a word, Italy (here via Economist) gave three Google executives six-month suspended sentences for “allowing a clip of an autistic boy being bullied to be viewed on Google Video, which the judge said broke Italy’s privacy laws. “

Just to clarify, I’m not pro-autistic-bullying and would think a civil trial isn’t out of the question, but jail?

• Fannie Mae needs more cash, but just 15 billion… from the taxpayer of course (here via RTTN News).   Seems like people might not agree with this (here via WSJ):

The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday….

Probably why the decision was made over the holidays.

• Crazy fundamentalists blame the Golden Girls for homosexuality (here via ChristWire).

• Democrats & President Obama, all firmly against the Patriot Act after signing it, vote to  prevent all measures from lapsing (here via Wired) for the next full year.

• Harvard intellectual tells us why allowing corporations to spend money on politics is bad (here):

…To understand why, it is important to focus on the individuals who make decisions for companies. When corporations decide which politicians to support, what kind of messages to send, and which political outcomes to seek, their general investors are not consulted. Rather, such decisions are likely to reflect the preferences and objectives of the insiders who manage the companies, ostensibly on shareholders’ behalf….

A little interlude for a thought experiment.  Change which politicians to support and which political outcomes to seek to which charities to support and which cultural outcomes to seek.  Or try reality and change it to, which lobbyists to support and which regulatory outcomes to seek.  But of course, he defines the problem for us:

…And politicians that benefit from corporate spending and access to corporate resources will have an interest in serving the insiders’ preferences and objectives….

Which presupposes politicians already don’t have this interest, presumes it will get much worse, and last, but not least; for spending to have any affect at all, voters have to be swayed to vote against their interests.

It seems the default assumption of every perceived risk these days is simply this:  there can never be too many laws when trying to protect people from themselves.

• CalTech researchers say the brain is wired for equality (here):

…Specifically, the team found that the reward centers in the human brain respond more strongly when a poor person receives a financial reward than when a rich person does. The surprising thing? This activity pattern holds true even if the brain being looked at is in the rich person’s head, rather than the poor person’s….

Oddly enough, the Freakanomics blog posted this with little comment (here) proving environmental factors such as working for the NY Times can affect even innovative economists.  I’ll admit there might be more, but from what they’ve shown, the results do not necessarily say anything about equality at all.  A perfectly reasonable answer is one of need: a rich person doesn’t need a windfall as much as a poor person.

CalTech’s reasoning:

…It’s long been known that we humans don’t like inequality, especially when it comes to money. Tell two people working the same job that their salaries are different, and there’s going to be trouble…

Conflating the thinking that comes with social status and worth when compared to colleagues and equality of results.  It could be in a lot of cases, the person making less might think they work harder and deserve more, not equal.

• & finally, via the Hill.  Did Nanci Pelosi really say that

…”They’ve had plenty of opportunity to make their voices heard,” she said on CNN’s “State of the Union” Sunday morning. “Bipartisanship is a two-way street. A bill can be bipartisan without bipartisan votes. Republicans have left their imprint.”…

What are the odds that a government agency tasked with identifying research priorities, research performance management, and reviewing the impact of completed research will come up with a solution that doesn’t involve the government?

Today & tomorrow the EPA are meeting for just this reason (@eScienceNews):

…The goal of the meeting is to develop a collaborative framework to ensure future research and development dollars are spent wisely and in a coordinated manner….

Of course it doesn’t really matter what the answer is, because “spent wisely in a coordinated manner” is almost mutually exclusive to good R&D.  As should be expected by now, the EPA is wasting money on answering a question for which recent literature already exists.

Back in 2001, a Jack Welch underling, W. James (Jim) McNerney, Jr was hired as 3M’s CEO.  In the fanfare associated with being a protege of Mr. Welch, when Mr. McNerney joined 3M, investors had high expectations of pushing some of the GE magic onto the 3M culture.

One of the first and most prominent of these culture changes Mr. Mcnerney instituted was a heavy does of SixSigma.  From the beginning, leading business thinkers were asking whether pushing a very creative culture into the narrow focus of SixSigma might not work.  Or at least, it should not include the whole company.  Sure, use SixSigma for accounting procedures, but leave out R&D.

Of course proponents of SixSigma disagreed.  If it can help manufacturing and then be translated to service related products, why not R&D?

Regardless of the writing public, 3M went forward with implementing a SixSigma policy that included training all workers to a Green-belt level and use SixSigma methodology for every department, including R&D.  How’d it fare?

As you’d expect, the results are mixed.  But asking former 3M scientists, engineers, and the like?  Overwhelmingly they tend to agree it wen too far (@DesignNews):

…While 3M emerged financially stronger from the McNerney era, many long-time 3M researchers, engineers and scientists chafed under the strictures of Six Sigma. Critics argue that excessive metrics, steps, measurements and Six Sigma’s intense focus on reducing variability water down the discovery process. Under Six Sigma, the free-wheeling nature of brainstorming and the serendipitous side of discovery is stifled. Proponents contend such methodologies’ rules keep researchers on track and accountable for producing. Striking the right balance between the application of Six Sigma and unencumbered research is often seen as key….

In fact, a then board member and the former 3M scientist who developed Post-It Notes stated that he believes that in the SixSigma environment, Post-It Notes would simply never have been developed.

History is also rife with examples.  In the book, Sex, Science and Profits: How People Evolved to Make Money,  written by Terence Kealey (review @ Reason.com):

…Kealey shows in nearly every case the crucial inventions of the past two and half centuries were called forth by markets, not invented by scientists working from ivory towers. These include the steam engine, cotton gin, textile mills, railroad engines, the revolver, the electric motor, telegraph, telephone, incandescent light bulb, radio, the airplane—the list is nearly endless…

In fact, a government-funded research paper showed public money can hurt innovation.  Mr Kealey writing about it(@AllBusiness.Com):

…n fact, the evidence shows otherwise. In 2003, the Organisation for Economic Co-operation and Development published The Sources of Economic Growth in OECD Countries, reporting on a comprehensive regression analysis of the factors that might explain the different growth rates of the world’s 21 leading economies between 1971 and 1998. This indicated that only privately funded R&D led to economic growth, and that publicly funded R&D did not. Worse, the public funding of R&D crowded out private funding, and thus slowed economic growth…

No worries though, I’m sure the government will tell you, that this time is different.   Just ask them.  They completely understand it’s failed many times before, but what you (read: citizens) are too ignorant to understand, is that those failures were under other people and not the worldly, brilliant, omniscient, and yes, even death-defying leaders of today.

& if that doesn’t work for you, remember that it’s “Green”, which we all know are now established unqualified goods.  As such, regardless of how much money taxpayers have to spend to subsidize “green” stuff, the end results are worth it.

Last, but certainly not least, if both of these arguments don’t work to mitigate your concerns, welcome to the club: Disgruntled Americans Against Government Stupidity (DAAG)

That giant economic think-tank known as Google just announced their 3Q numbers.  Not only were the results good, but they had wonder news for all those worrying:  the recession has bottomed out:

SAN FRANCISCO, California — Google on Thursday declared the worst of the recession over and paved the way for a return to heavy spending on expansion as it reported a surprisingly strong 8 per cent jump in net revenues in its latest quarter….

Fear not friends – they aren’t basing this just on themselves, but all that economic data they have:

The optimism reflected what the company said was an across-the-board recovery in online advertising, with even the struggling financial services sector showing a return to growth….

Apparently though, Google forgot to tell Bank of America about its wonderful news (BoA 3Q):

CHARLOTTE, North Carolina (Reuters) – Bank of America Corp posted a $1 billion third-quarter loss as consumer credit woes eclipsed investment banking earnings, underlining why the bank remains on a government respirator….

I’m sure they just missed that… wonder what a really big blue chip company might be doing?  GE?:

General Electric’s third-quarter results showed just how fragile the U.S. economy remains, as its troubled financial unit dragged down earnings 44 percent, despite gains in divisions that make wind turbines, household appliances and broadcast television shows….

Not only are GE, BoA, and the 9.8% unemployed unaware of this great news, but even Google insiders don’t seem to know.  Looking at the public record, Google Insiders Sales, shows recent transactions for all senior officers dropping approximately 5% of their current Google holdings just last month.

Call me a raving skeptic if you will, but I’m thinking that you need to evaluate your decision making skills if you take your economic news directly from Google press releases.

Don’t get me wrong here, they make a great product and innovate better than almost anyone.   They are and will continue to be a force in computing for sometime to come because of their agile nature combined with some of the best minds in the world.  & I remember webcrawler… wow things are sooooo much better.

Regardless of their product however, it seems their investments into economic modeling & research in respect to business cycles is limited to zero.  I would add that if you’re an investor, that’s a good thing.  Better to let them do what they do best.

Why the press release then?  The only ones who know are those who drafted the press release and those with editing decisions prior to its release.  Without any information directly from one or more of these people, then reasoning is simply impossible to prove.

We can however ask some questions to try to find the likely answer.

(To be fair) The first possibility is simple honesty & stupidity.  Someone might have intended the “recession worst over” as a marketing technique to further enhance their aim to be seen as a very smart company.  All without realizing that overly simplistic analysis, based mainly upon very recent stock market activity and their profits do not make for effective proof.  Really, it’s just another anecdote that Google’s employees share.

Another, far more concerning possibility is their politics and desire to wish to see the President do well.  For years they have given most of their political donations to one particular party.  In 2008, Democratic candidates received 5 times more money than their Republican counterparts from Google.  Their employees, including top executives, gave 10 times more money to Democrats the Republicans.

Additionally, their search site has self-imposed constraints for arbitrary reasons.  For instance, Google refuses to allow gun dealers to advertise.   As a little experiment, slip over there real quick and run a quick search on swords or strippers.  Take note of the small advertisements to the right side of your search results.  Now do the same for guns and see what ads show up… I’ll wait.

They state their policy is to not allow advertising of weapons, but I think swords should qualify.

That could be an outlier, so let’s move forward assuming their ban on gun adverts is a true policy against weapons in general.

Then why did they also restrict advertising by Pro-life groups until forced by a judge to change their policy:

After a legal conflict between Google and The Christian Institute, filed when one the of religious foundation’s ads were rejected from the Google Adwords system, Google has changed their religious advertising policy to allow pro-life advertising to appear along with their secular and pro-choice advertising…

They did change their policy, but only after being sued.  Even giving them some credit for reversing their decision, their originally stated policy reeks of political and personal opinions:

The decision changes the former Google policy which excluded any ad containing a combination of “abortion and religion-related content“…. [emphasis added mine]

Putting all of this together, it’s hard not to reach the conclusion that Google is using its outstanding press relations due to their history as a vibrant and smart company to help those with which they agree.

Which is completely and totally their right.  It’s their right to put their money where they wish, to make internal policies as they see fit, and to accept contracts for advertising from those they want for any reason they want.  None of this freedom for me, but not for thee crap.  Let them do as they will I say.

Just make sure your informed and know who you’re doing business with as well.

PS:  If you’re not doing anything on a Saturday night and there’s positively nothing on TV including uninteresting infomercials about idiots unable to use blankets, then you can check out some pretty heavy economic think tanks.  First and foremost, the recognized economic powerhouse, generally recognized as the institution who makes the call on things like, when is it a recession?  When did it start?  When did it end?

NBER, or the National Bureau of Economic Research, has long been the a standard bearer in economic research in all kinds of aspects of life ranging from health care to labor studies.  They are the largest non-profit economic research organization in the US and boasts about the great minds working there.  In fact, 16 of the 31 American winners of the Nobel Prize in Economics, have been associates NBER, including one of my heroes: Milton Friedman.

PSS:  They could turn out to be right.  The luck of life sometimes means you can do the wrong thing and end with the correct result and vice versa – you can do the right thing and end with the wrong result.  Therefore, to correctly analyze thought patterns over time, any one result isn’t necessarily a deterministic factor.

For more than 20 years now, with legislation leading back almost 40 years, the United States government has been pushing the idea that every citizen should have a home.

Based upon several studies showing high correlations with positive societal behavior for homeowners, politicians, leaders, non-profits, lots of people pushed for easier access to affordable housing.  In a Federal Reserve report published in 1999, they state:

A number of recent studies attempt to measure whether there are nontraditional benefits to homeownership, such as increases in the success of children (Green and White [5]), citizenship (DiPasquale and Glaeser [3]), and a variety of family outcomes and attitudes (Rossi and Weber [11])….

This is only 1/2 the story of course.  What these studies, our politicians, our leaders, & the rest of them  can’t conclude from this data is whether home ownership actually affects any of these additional traits.  The study itself hints at this:

…Because of the preferential tax treatment accorded homeowners, particularly low-income homeowners, and the large degree of wealth accumulated in housing, these authors argue that it is important to know the full range of homeownership benefits and costs. However, given the difficulty of credibly assigning causality to housing externalities, it is not surprising that such factors have been previously ignored.

In one such paper, Green and White [5] find a strong statistical correlation between homeownership and the likelihood of dropping out of school or becoming pregnant. Yet a reasonable interpretation of their result is that of omitted variable bias. Clearly, homeowners are different from renters along a variety of dimensions. As a result, those factors that are latent in their work, such as parental skills, interest in the educational process, wealth, and family stability, potentially bias upward any homeownership effect….

In other studies, they show correlations between home ownership & wealth accumulation, to help give more force to the “everyone needs a home” meme (study dated 2004):

For many years the federal government has promoted homeownership as an important goal for low-income families. A primary motivation of this policy goal is the concept that owner-occupied housing can be an important means of wealth accumulation, particularly for those lower-income and minority families that are able to purchase homes….

They as well admit the difficulty with this assessment:

…However, very little has been done in the housing literature to determine the importance of housing and non-housing sources of wealth accumulation. This determination has been difficult to address for three reasons. First, detailed wealth information on families is seldom available on a consistent basis. Second, such information on wealth is even less likely to be available over time so that changes in wealth can be observed. Third, the process of housing wealth accumulation is dynamic. Housing wealth accumulation depends critically on how soon a family that is renting becomes a homeowner, whether or not the family graduates to more highly valued owned units over time, or becomes a renter again and never regains homeownership….

With the current practice of press & political standards however, you might be hard pressed to find any evidence that assigning non-traditional benefits to home ownership is anything but an unqualified good.  The majority of reports dealing with low income housing stimulus are positive  (here & here).

In some cases, overly emotional logic is used (here):

After business dried up in May, Jodi Morris’ employer, an insurance agent, stopped sending paychecks.

Since then, the 43-year-old single mother has had to sell almost all of her furniture – her kitchen table and chairs, bed frames, dresser and armoire, and living room set – to pay the bills.  Morris and her 7-year-old daughter, Karly, now sleep on mattresses on the floor of their two-bedroom Ahwatukee apartment. And with no table, the two eat dinner on their cream-colored couch.

An eviction notice that arrived this month threatened to put Morris and Karly out on the street.  But Morris could be the first Phoenix resident to receive a lifeline from the federal government that seeks to rescue those on the verge of homelessness….

& without exception, our government is not immune.  The US government is right now, before the housing crisis even fully contracts (I wrote about it here), spending money to help low income families purchase homes.

Even before the housing crisis though, economists, experts, non-profits, were asking whether home ownership should be considered an unqualified good.  Unfortunately, reports questioning these basic assumptions are a very low percentage compared to the constant noise.

In some cases, even questioning the wisdom of subsidizing low income home ownership has resulted in kill the messenger attacks from non-profit groups, community leads, and even Democratic leadership, by leveling charges of racism.  With a simple misdirection trick, questioning the basic assumptions is anti-low income & since low-income households are generally minorities, questioning these assumptions must be due to institutional racism.   Politicians and leaders everywhere have a grand ole time setting up straw men in a fields of hay while standing by with gasoline and matches, but we should expect more.  We should expect to be able to ask all relevant questions we can and to get answers to as many questions as possible.  Lastly, we should let the data lead to its natural conclusion.

Assuming we truly want the best answers we can get and the best progress we can have, we must be willing to ask tough questions and live with the answers reality presents.

Anything less is little better than just allowing random superficial rhetoric to control policy.  It’s almost like we never moved away from the world Richard Feynman spoke about in 1974:

…But even today I meet lots of people who sooner or later get me into a conversation about UFOS, or astrology, or some form of mysticism, expanded consciousness, new types of awareness, ESP, and so forth. And I’ve concluded that it’s not a scientific world.

President Obama, among other distinguished guests, got together at the UN for a conference on Climate change.

This pressing issue, that Mr. Obama cares so much about – that issue which his party fights for daily was so important, that his words must have been strong and firm on our commitment to the environment, right? (here):

…”I have been in office for just nine months, though some days it seems a lot longer. I am well aware of the expectations that accompany my presidency around the world. These expectations are not about me. Rather, they are rooted I believe in a discontent with a status quo that has allowed us to be increasingly defined by our differences, and outpaced by our problems. But they are also rooted in the hope that real change is possible, and the hope that America will be a leader in bringing about such change.

“I took office at a time when many around the world had come to view America with skepticism and distrust. Part of this was due to misperceptions and misinformation about my country. Part of this was due to opposition to specific policies, and a belief that on certain critical issues, America has acted unilaterally, without regard for the interests of others. This has fed an almost reflexive anti-Americanism, which too often has served as an excuse for our collective inaction.”…

Ok – so unilateral action in our interests are different from other unilateral actions other countries make how?  And should we care why?

I know, this again will make me be seen as heartless and I do understand that we have to act in a way that is semi-consistent with international laws, but it’s not our job nor is it our responsibility.  I would like to think that when despots are killing their own citizens, we can act unilaterally if we wish.

Please understand; I’m not for an expansion of foreign entanglements mind you, I’m only saying that when something is a just cause and others are unwilling to do anything, then unilateral action is the moral response.

But, he did go on to say that he wouldn’t apologize for defending the nation’s interests.  So there’s that… but this as well:

…”We know the future will be forged by deeds and not simply words. Speeches alone will not solve our problems. It will take persistent action. So for those who question the character and cause of my nation, I ask you to look at the concrete actions that we have taken in just nine months.

“On my first day in office, I prohibited — without exception or equivocation — the use of torture by the United States of America. I ordered the prison at Guantanamo Bay closed, and we are doing the hard work of forging a framework to combat extremism within the rule of law. Every nation must know: America will live its values, and we will lead by example.  “…

Maybe the President is out the loop or something, but GITMO remains open, and without knowing the specific interrogation techniques which are now being allowed, “not allowing torture” is a joke.  I think it’s obvious that both President Bush and Vice President Cheney didn’t believe they were “allowing torture”, but maybe he meant something else – like;

“I started a committee to look into closing GITMO, but I still support the Patriot Act, sending prisoners to other nations who torture, and really, most of my predecessors policies, with the exception of the committee and DOJ investigation.”

But this is politics, so he continues:

…”We have set a clear and focused goal: to work with all members of this body to disrupt, dismantle, and defeat al Qaeda and its extremist allies — a network that has killed thousands of people of many faiths and nations, and that plotted to blow up this very building. In Afghanistan and Pakistan, we — and many nations here — are helping those governments develop the capacity to take the lead in this effort, while working to advance opportunity and security for their people.”…

Where’s Iraq?  Oh, here:

…”In Iraq, we are responsibly ending a war. We have removed American combat brigades from Iraqi cities, and set a deadline of next August to remove all of our combat brigades from Iraqi territory. And I have made clear that we will help Iraqis transition to full responsibility for their future, and keep our commitment to remove all American troops by the end of 2011.:…

Well, that’s not really true.  We’re pulling back troops and have a date to leave, but the Iraqi government can ask us to stay and we would likely oblige… but even without that, does this match the campaign promise?

Hmmm….:

…On Tuesday, Obama introduced the “Iraq War De-escalation Act of 2007,” which calls for a goal of all U.S. troops to leave Iraq by March 31, 2008, in a phased redeployment worked out with military commanders….

It’s almost becoming too easy to poke holes in damn near anything he says, but remember first and foremost that this was a UN Conference on Climate Change.

To be fair, he did get there.  Out of roughly 1000 words spoke, he spent 46 words on climate change.  For an administration that recently published a report described as this:

…The report describes in vivid detail how our urban infrastructure will be placed in peril from intense hurricanes and storm surges, how heat waves, poor air quality, and insects will increase, and how a rapidly intensifying climate change will make it difficult for both society and the natural resources we possess to adapt….

His discussion on the world stage leaves a lot to be desired.

For real climate change discussions and solutions: I highly recommend the Copenhagen Consensus.