5. The Democrats say they are not going to give the administration a blank check, but there’s a lot of pressure to do something. What sort of conditions should be attached to a bailout?
The Democrats have a strong hand. The voters weren’t born yesterday; they understand that it’s a Republican administration in power. Some of the problems are difficult to solve. Executive compensation is clearly a legitimate concern; it’s incredible that Lehman Brothers set aside a $2.5 billion bonus pool as it was going into bankruptcy. On the other hand, what do you do about it? If you tell these people they have to work for $400,000 a year–that’s a lot of money to you and me, but a lot of them are going to say, “See you on the ski slopes, pal.” But what Congress can do is make sure the companies have to turn over any information that the Treasury wants from the companies, including the computer code. If the government is going to buy assets of dubious value, it needs to know that the companies aren’t selling it the worst of the worst, just as you have the right to inspect a used car before buying it.
6. How long is it going to take to fix the situation? And what about the bigger financial crisis?
There’s nothing that can put this right in six months. No bailout can achieve that, but the difference between three years and ten years is important. The Treasury is going to end up with a large portfolio of properties. The government needs to set up the equivalent of draft boards in communities to make a review of properties and see how to keep people in their homes: offering them sustainable payments or converting mortgages into rental contracts, or simply demolishing homes that have been wrecked or that have fallen into irreparable disrepair.
Many are concerned with the fiscal implications of this bill, so let me turn to that question. Despite the common use of language, the capital cost of this bill does not involve “taxpayer dollars.” It authorizes a financial transaction, exchanging good debt (U.S. Treasury bills and bonds) for bad debt (the “troubled assets”). Many of those troubled assets will continue to earn income for some time, perhaps a long time. The U.S. Treasury commits itself to paying the interest on the debts it issues. The net fiscal cost — which is also the net fiscal stimulus — of this bill is the difference between those two revenue streams. Given the very low rate of interest presently prevailing on Treasury bills, this is likely to be somewhere between $20 billion per year and zero from the beginning, even if the Treasury were to issue all $700 billion in new debt at once. It is a mistake, in short, to count the capital cost as a “cost to the taxpayer.” This is not the war in Iraq. In the longer run, of course the Treasury will incur capital losses on the assets it acquires. The entire purpose of the bill is to overpay for bad assets, so as to give financial institutions a chance to recapitalize themselves.
Disturbing a sleeping box of old cassettes the other day, my hand brushed an album by Chab Hasni, and memories rushed in, fluent as music, of the Algerians I’d known in Paris in the early 1990s – particularly my friends Qader and Kamel.
In Algeria these two had been hittistes. That’s a real Algerian word: a French ending tacked onto the Arabic hayit, meaning wall. The hittistes were the youths who spent their time leaning against walls, bored, angry and stoned. They had no jobs and no housing – those who were employed often slept in their workplaces. Otherwise, they spent their time dodging the fearsome police force.
Life as clandestin illegal immigrants in France was not much easier. There too they had to negotiate checkpoints. I remember Kamel spending a fortnight in prison for being stopped “without papers”. When at liberty, they peddled hashish in Pigalle and sold the cassettes they stole from shops. (Still, there was honour among thieves. Qader once knocked down a fellow Algerian for stealing from an old man on the metro. “So what if he’s French?” he growled. “He could be your grandfather!”)
Let me explain now in more detail why we are now back to the risk of a total systemic financial meltdown…
It is no surprise as financial institutions in the US and around advanced economies are going bust: in the US the latest victims were WaMu (the largest US S&L) and today Wachovia (the sixth largest US bank); in the UK after Northern Rock and the acquisition of HBOS by Lloyds TSB you now have the bust and rescue of B&B; in Belgium you had Fortis going bust and being rescued over the weekend; in German HRE, a major financial institution is also near bust and in need of a government rescue. So this is not just a US financial crisis; it is a global financial crisis hitting institutions in the US, UK, Eurozone and other advanced economies (Iceland, Australia, New Zealand, Canada etc.).
And the strains in financial markets – especially short term interbank markets – are becoming more severe in spite of the Fed and other central banks having literally injected about $300 billion of liquidity in the financial system last week alone including massive liquidity lending to Morgan and Goldman. In a solvency crisis and credit crisis that goes well beyond illiquidity no one is lending to counterparties as no one trusts any counterparty (even the safest ones) and everyone is hoarding the liquidity that is injected by central banks. And since this liquidity goes only to banks and major broker dealers the rest of the shadow banking system has not access to this liquidity as the credit transmission mechanisms is blocked.
NEARLY 3,000 YEARS after the death of the Greek poet Homer, his epic tales of the war for Troy and its aftermath remain deeply woven into the fabric of our culture. These stories of pride and rage, massacre and homecoming have been translated and republished over millennia. Even people who have never read a word of “The Iliad” or “The Odyssey” know the phrases they have bequeathed to us – the Trojan horse, the Achilles heel, the face that launched a thousand ships.
Today we still turn to Homer’s epics not only as sources of ancient wisdom and wrenchingly powerful poetry, but also as genuinely popular entertainments. Recent translations of “The Iliad” and “Odyssey” have shared the best-seller lists with Grisham and King. “The Odyssey” has inspired works from James Joyce’s “Ulysses” to a George Clooney movie, and an adaptation of “The Iliad” recently earned more than $100 million in the form of Wolfgang Petersen’s “Troy” – a summer blockbuster starring Brad Pitt as an improbable Achilles.
The ancient Greeks, however, believed that Homer’s epics were something more than fiction: They thought the poems chronicled a real war, and reflected the authentic struggles of their ancestors.
Neuroscientists have shown that the way our eyes constantly make tiny movements is responsible for the way concentric circles in Isia Leviant’s painting ‘Enigma’ (see image, right) seem to flow before onlookers’ eyes.
Susana Martinez-Conde and her team from the Barrow Neurological Institute in Phoenix, Arizona, tested whether the effect was down to tiny, involuntary jerks of the eyes, known as microsaccades. Their purpose is not fully understood, but the rate of these movements is known to vary naturally.
In the team’s experiment, while three subjects viewed Enigma, cameras recorded their eye movements 500 times every second. The subjects were asked to press a button when the speed of the optical “trickle” of the illusion appeared to slow down or stop, and release it when the trickle seemed faster.
Accounting for the reaction time required to press the button, the results showed that the illusion became more pronounced when microsaccades were happening at a faster rate. When the rate slowed to a stop, the illusion vanished.
Those results go against earlier findings that suggested eye movements were not responsible for the effect.
There are some people who might just benefit from the current turmoil in the financial markets. One probably won’t surprise: lawyers. The other might: sex workers.
In the late 1990s, New York and other large American cities witnessed the rise of a so-called indoor sex-work trade. Women either left the streets for strip clubs and escort services, or they started their own businesses by advertising on the Internet or cruising hotels and corporate centers to find clients. You may recall “Kristen” (aka Ashley Dupré), the young woman whose tryst with Eliot Spitzer helped bring down the New York governor. “Kristens” might earn $1,000 per evening, which places them toward the higher end of the indoor sex market.
I came across these women when I began studying New York’s sex industry at the end of the 1990s. Mayor Rudy Giuliani, in an effort to clean up Manhattan’s neighborhoods, forced sex off the streets of Times Square and other Midtown neighborhoods. In the process, his administration created a new economic sector. I’ve been following the lives of more than 300 sex workers—in New York and Chicago, in high and low ends of the income spectrum since 1999.
Romantic science? Did not William Blake fulminate against ‘Bacon and Newton sheathed in dismal steel, their terrors hanging like iron scourges over Albion’? Didn’t John Keats say that Newtonian optics had unwoven the magic of the rainbow? Isn’t the great Romantic-Gothic novel, Mary Shelley’s Frankenstein, an indictment of science’s hubristic capacity to destroy us all, a prophecy of the time we are now nearing, when a human clone fashioned in the laboratory will turn against its creator?
It is this story of the opposition between the Romantic poets and the science of their time that Richard Holmes sets out to undo. No one could be better qualified for the task than the biographer of the two Romantics who showed most interest in science, Samuel Taylor Coleridge and Percy Bysshe Shelley. Building on a generation of revisionist scholarship that has been barely visible beyond the groves of academe, Holmes triumphantly shows that the Romantic age was one of symbiosis rather than opposition, in which scientists such as Sir Humphry Davy were also poets and poets such as Coleridge had a shaping influence on scientists – we discover indeed that it was Coleridge who was responsible for the early 19th-century invention of the term ‘scientist’ as an alternative to the older nomenclature ‘natural philosopher’.
Whether you are trying to make sense of the latest health news or you have a diagnosis of a serious illness, the basic rules of health research are the same. From interviews with doctors and patients, here are the most important steps to take in a search for medical answers.
Determine your information personality.
Information gives some people a sense of control. For others, it’s overwhelming. An acquaintance of this reporter, a New York father coping with his infant son’s heart problem, knew he would be paralyzed with indecision if his research led to too many choices. So he focused on finding the area’s best pediatric cardiologist and left the decisions to the experts. Others, like Amy Haberland, 50, a breast cancer patient in Arlington, Mass., pore through medical journals, looking not just for answers but also for better questions to ask their doctors. “Knowledge is power,” Ms. Haberland said. “I think knowing the reality of the risks of my cancer makes me more comfortable undergoing my treatment.”
The goal is to find an M.D., not become one.
Often patients begin a medical search hoping to discover a breakthrough medical study or a cure buried on the Internet. But even the best medical searches don’t always give you the answers. Instead, they lead you to doctors who can provide you with even more information.
Couric asked her a smart question about the proposed $700 billion bailout of the American financial sector. It was designed to see if Palin understood that the problem in this crisis is that credit and liquidity in the financial system has dried up, and that that’s why, in the estimation of Treasury Secretary Hank Paulson and Fed chairman Ben Bernanke, the government needs to step in to buy up Wall Street’s most toxic liabilities. Here’s the entire exchange:
COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries; allow them to spend more and put more money into the economy instead of helping these big financial institutions that played a role in creating this mess?
PALIN: That’s why I say I, like every American I’m speaking with, were ill about this position that we have been put in where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health-care reform that is needed to help shore up our economy, helping the–it’s got to be all about job creation, too, shoring up our economy and putting it back on the right track. So health-care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans. And trade, we’ve got to see trade as opportunity, not as a competitive, scary thing. But one in five jobs being created in the trade sector today, we’ve got to look at that as more opportunity. All those things under the umbrella of job creation. This bailout is a part of that.
This is nonsense–a vapid emptying out of every catchphrase about economics that came into her head. Some commentators, like CNN’s Campbell Brown, have argued that it’s sexist to keep Sarah Palin under wraps, as if she were a delicate flower who might wilt under the bright lights of the modern media. But the more Palin talks, the more we see that it may not be sexism but common sense that’s causing the McCain campaign to treat her like a time bomb.
More here. [Thanks to Tasnim Raza.] I thought the Tina Fey parody of Sarah Palin on Saturday Night Live was unbelievably brilliantly performed and written. What I didn’t realize was that the writers didn’t really do much, and most of the parody was just actual transcripts of Palin’s interview with Katie Couric! It is truly astounding. Check out the SNL skit if you haven’t seen it yet:
And here’s part of the real interview with Couric:
“the point is…this is exactly what happened in Vietnam…a technological solution to a human problem…”
– Joe Penhall, Landscape with Weapon (2007)
If you were a physicist in the 1920s and 30s, all roads led to Copenhagen’s Blegdamsvej 15. This was where Niels Bohr’s Institute of Theoretical Physics was located. The Ukrainian-born physicist George Gamow recalled that “the Institute buzzed with young theoretical physicists and new ideas about atoms, atomic nuclei, and the quantum theory in general”. 
He was a superb footballer and had played to near professional level as a young man. But in physics the tall, softly-spoken Niels Bohr was in a league of his own. German physicist Carl Friedrich von Weizsäcker said after meeting Bohr: “I have seen a physicist for the first time. He suffers as he thinks.”  Together with Ernest Rutherford, Bohr had mapped the structure of the atom, and later, in the 1920s, he helped shape the quantum revolution, despite strong resistance from its founder, the former patent officer from Bern – Albert Einstein. Einstein’s debates in the late 1920s with Bohr on quantum theory were like a scientific clash of the Titans. Einstein could never accept the indeterministic quantum mechanics that grew out of his own 1905 paper on the photoelectric effect.
Bohr’s annual conference, to which he invited about thirty physicists, was the highlight of the physics’ year. From the 3rd to 13th April 1932, the brightest minds in physics gathered together in Copenhagen. In a few years’ time, many of these same physicists would be working on the atomic bomb. But for now, they still had time for a little light-hearted play acting.
Each year the conference ended with what George Gamow called a “stunt pertaining to recent developments in physics”.  The year before, Gamow had rounded up proceedings with a cartoon history of quantum mechanics, starring Mickey Mouse in the lead role.  In 1932, as it was the centenary of Goethe’s death, they decided to stage a version of the German writer’s greatest play, Faust.
Written when the industrial revolution was transforming Germany, Goethe’s Faust raises key questions regarding science and technology, questions such as what is the purpose of knowledge, and how can we have progress without increasing human suffering?
Goethe’s Faust is a proto-scientist (the word ‘scientist’ was not coined until 1834), whose desire to know nature’s deepest secrets, leads him to strike a fateful bargain with Mephistopheles. In the sixteenth century, the story of Faust had been used by the Church to frighten people about the dangers of forbidden (i.e. non-Christian) knowledge. Goethe’s play re-works the classic theme for the modern age. His Faust celebrates the spirit of inquiry, while highlighting the dangers of misapplied knowledge. True scientific understanding, Goethe suggests, is life-affirming and creative, not destructive and exploitative.
The 1932 Faust was re-written and, of course, greatly abridged by the younger scientists at Bohr’s conference. Their literary skills were no doubt boosted by the products of Copenhagen’s other claim to fame – the Carlsberg Brewery, which also happened to be one of Danish science’s most generous benefactors. Max Delbrück, who would later become a central figure in the post-war revolution in molecular biology, did most of the writing.
The play is re-worked into what is essentially a humorous skit at the expense of the leading physicists of the day. Goethe’s characters were replaced with contemporary physicists, their younger colleagues donning masks to play them on stage. Mephistopheles became the irascible Austrian Wolfgang Pauli, while Faust became Paul Ehrenfest, a close friend of Einstein. The role of God was reserved, appropriately enough, for their host, Niels Bohr.
Wolfgang Pauli’s rudeness was legendary. In the play he bluntly tells the painfully polite Niels Bohr (aka God) that his latest theory is “Crap”.  But their gentlemanly host, Niels Bohr, is also gently mocked. His almost pathological fear of being too critical becomes the motto of the play, emblazoned on the text’s cover: “Nicht um zu kritisieren” (Not to criticize). Even Einstein doesn’t escape unscathed. His flawed unified field theory, which had created a media storm of interest when it was published in 1929, is lampooned by his young colleagues as the son of a flea.
Faust is depicted as a proud, even vain, figure, one who is deeply dissatisfied by what he has learnt and what physics can offer. Mephistopheles tries to tempt Faust by convincing him to accept one of the more outlandish theories in quantum physics – Pauli’s own idea of the neutrino, a particle without mass or charge. If once he can make Faust say to such a theory “Verweile doch! Du bis so schön!” (Stay! You are so beautiful!) then he has won his wager with God.
At times the play is anarchic, even Dadaist, in its celebration of the bizarre world of quantum theory. But in the 1930s the new physics was itself full of weird and wonderful notions. Niels Bohr once greeted one of Pauli’s theories with the comment: “We are all agreed that your theory is crazy. The question, which divides us, is whether it is crazy enough to have a chance of being correct. My own feeling is that it is not crazy enough.” 
The physicists transform Faust’s death scene at the end of Goethe’s play into a moment of supreme bathos. Mephistopheles ushers a press photographer on stage and it is this that is Faust’s undoing. Paul Ehrenfest utters Faust’s famous dying words, just as he is about to be immortalized by the photographer:
“Faust (highly excited, he takes a pose for the press photographer)
To this fair moment let me say:
‘You are so beautiful – Oh, stay!’
A trace of me will linger ’mongst the Great,
Within the annals of The Fourth Estate.
Anticipating fortune so benign,
I now enjoy the moment that is mine!” 
Although humour was the last thing in Goethe’s mind as he penned this poignant scene, in the physicists’ version of Faust it becomes a wonderfully witty moment, albeit with serious undertones. The younger physicists are making fun of their colleagues’ vanity and self-importance. Indeed, by highlighting the theme of fame, they were making an important point: in the coming years nuclear physicists would indeed enter the public eye and feature ever more frequently in the media.
After Hiroshima and Nagasaki were destroyed by the new scientific superweapon, the public would come to view scientists such as Einstein and Oppenheimer with both respect and fear. Eventually, as they were drawn ever closer to the government and the military, the price physicists would pay for their Faustian bargain was to be immortalized as Dr Strangelove, the ultimate doomsday man.
At the end of the play, a physicist who had entered the media spotlight in 1932 made a brief appearance as Faust’s over-ambitious famulus, Wagner. James Chadwick is portrayed by his fellow physicists as “a personification of the ideal experimentalist”. He walks on stage after Faust’s death scene wearing the scientist’s trade-mark lab coat and balancing a black ball on one finger.
This rather sinister looking figure announces an extraordinary discovery, one of which Faust himself would have been proud. James Chadwick had found one of the basic constituents of matter: the third elementary particle after protons and electrons, the neutron.
The discovery of the neutron, just before the Copenhagen conference, was a seminal achievement for modern nuclear physics. Its discovery made possible Leo Szilard’s idea in the following year of a self-sustaining chain reaction. Indeed there are Faustian echoes here too. For in 1932 Szilard read HG Wells’s novel The World Set Free about a Faustian scientist discovering how to release the energy locked in the heart of the atom.  Szilard’s discovery helped open the door to the atomic bomb.
1932 was an important year as regards the science of the superweapon. Wernher von Braun was hired by the German army to design rocket engines, the first step on the path towards ICBMs. In the same year Harold Urey announced the discovery of a new hydrogen isotope known as deuterium. This would become the fuel for the hydrogen bomb. These are powerful reminders that the tragedy of Goethe’s Faust was about to be played out on a world stage. Clearly, the lessons of the play and of Goethe’s science were still profoundly relevant.
In Part II, Act 2 of Goethe’s Faust, Wagner (Chadwick in the 1932 performance) uses alchemy to create not a neutron but a homunculus, a miniature man. In this scene Goethe criticizes what he considered to be a misguided approach to science. Wagner’s alchemistic attempt to create the homunculus combines allusions to both Paracelsian recipes and contemporary advances in chemistry, such as Friedrich Wöhler’s synthesising of urea in 1828.  But significantly Wagner only succeeds because Mephistopheles is present. Goethe highlights the fact that Wagner’s approach to science is flawed and supernatural intervention is required to make it work.
Faust has turned his back on alchemy and the knowledge of books at the beginning of the play. As Faust discovers, neither words, books nor instruments alone lead to true knowledge. His passionate desire to grasp ‘the inmost force / That bonds the very universe’ (ll.382-3, “was die Welt / Im Innersten zusammenhält”) is a scientific and philosophical goal Faust pursues tirelessly throughout his life, regardless of the cost to himself or others around him.  But he too has much to learn about science and knowledge. For Goethe, one of the most important lessons was that the route to scientific knowledge and self-knowledge was a parallel process. As he wrote in 1823: “The human being knows himself only insofar as he knows the world; he perceives the world only in himself, and himself only in the world.” 
At the end of the play Goethe highlights the dangers of the misapplication of scientific knowledge. Thanks to the temptations of Mephistopheles, Faust has lost touch with the insights he has gained into both nature and himself. His overambitious attempt to reclaim land from the sea, a hasty and hubristic act which results in the deaths of the old couple, Baucis and Philemon, represents Goethe’s fears about the misuse of science and technology. It is one thing to understand the laws of nature – the forces that bind the universe – and to be able to control these laws. It is something else entirely to be able to use this power wisely.
By performing Faust in 1932, the physicists created some intriguing parallels between Wagner and Chadwick, as well as the neutron and the homunculus. Goethe used the scene in Wagner’s laboratory both to belittle alchemy’s supposed achievements and to criticize mechanistic science for its hubristic attempts to play god. What, one wonders, would Goethe have made of Chadwick’s discovery of the neutron?
Goethe’s notion that scientific knowledge and self-knowledge should evolve hand-in-hand, is a deeply suggestive theme when one looks at the history of twentieth-century science. What is the point of knowing nature’s deepest secrets, Goethe asks, if humankind never attains self-knowledge? The Faustian physicist might control the forces of nature but he does not understand, let alone control, himself.
It is fascinating that the atomic physicists gathered at Bohr’s Institute in spring 1932 chose to perform Goethe’s play at this pivotal moment in the history of science. Six years later, one of the twentieth century’s greatest playwrights began a work that would raise profound questions about the purpose of science in the atomic age. After many revisions, the final version of Bertolt Brecht’s Life of Galileo was first performed in 1955. By then, as Oppenheimer said, the scientists had known sin and the world was living in fear of an imminent nuclear holocaust. This hugely influential play reflected the widely-held view that twentieth-century science was in crisis.
Brecht’s Galileo is a Faustian character, who initially boasts that he would happily live out his life in a dark, windowless prison if he could but discover the secret of light. But at the end of his life, under house arrest and – like the aged Faust – nearly blind, Galileo has realised that science is about more than describing the laws of nature.
Brecht believed that, as a human activity, science had a moral dimension that was increasingly ignored. In the midst of the cold war, as the superpowers and their scientists transformed the laws of nature into ever more terrible weapons of mass destruction, Brecht called for a more human-centred science, a point he makes by paraphrasing Galileo’s contemporary Francis Bacon: “I believe that the sole objective of science consists in reducing the drudgery of human existence.” According to Brecht, the alternative is that each advance in scientific knowledge results in “progress away from humanity”. The scientists’ shrieks of Eureka! will one day be greeted by “a universal cry of horror” because of the ever more lethal technologies their discoveries make possible. 
Goethe would no doubt have been flattered that a century after his death some of the world’s most gifted physicists performed a version of his greatest play. He would, however, have been appalled to discover that soon scientists such as these would create weapons that could incinerate tens of thousands of people in an instant. Would he have been surprised though? I doubt it.
Today, despite the myriad distractions of an increasingly technologized culture, the lessons of Goethe’s Faust remain profoundly relevant to us all. As Brecht so eloquently put it in the final scene of Galileo:
1. George Gamow, Thirty Years That Shook Physics, 1966; repr Mineola, N.Y., 1985, 51.
2. Cited in Richard P. Feynman, Don’t You Have time to Think?, London, 2005, xii.
3. Gamow, 167.
4. John Canaday, The Nuclear Muse: Literature, Physics and the First Atomic Bombs, Madison, 2000, 268, n.
5. The Blegdamsvej Faust is on microfilm 66 of the Archive for the History of Quantum Physics (American Philosophical Society). An English version, together with the illustrations, is in Gamow, 165-218.
6. Bohr cited in Robert Ehrlich, Eight Preposterous Propositions, Princeton, 2005, 5.
7. Gamow, 210.
8. H.G. Wells, The World Set Free: A Story of Mankind, 1914; repr. as The Last War, Lincoln, 2001.
9. P.D. Smith, ‘Scientific Themes in Goethe’s Faust’, in Paul Bishop, ed., A Companion to Goethe’s Faust, Rochester, N.Y., 2001, 198-99.
10. See ibid., 194–220.
11. “Der Mensch kennt nur sich selbst, insofern er die Welt kennt, die er nur in sich und sich nur in ihr gewahr wird. Jeder neue Gegenstand, wohl beschaut, schließt ein neues Organ in uns auf.” Goethe, “Bedeutende Fördernis durch ein einziges Geistreiches Wort” (1823), Werke, Hamburger Ausgabe, 1981, vol 13, 38; tr. Douglas Miller: Goethe, Scientific Studies, Princeton, 1995, 39.
12. On Brecht and Bacon see P.D. Smith, Metaphor & Materiality: German Literature and the World-View of Science 1780-1955 (Oxford, 2000), 304; all quotes in this paragraph from Brecht, Life of Galileo, scene 14.
13. Life of Galileo, Scene 15; tr. Charles Laughton (Penguin, 2008).
At a meeting in Oslo in August, Incentives for Global Health, a nonprofit organization directed by Aidan Hollis, professor of economics at the University of Calgary, and Thomas Pogge, professor of philosophy and international affairs at Yale, launched a radical new proposal to change the incentives under which corporations are rewarded for developing new medicines. They suggest that governments contribute to a Health Impact Fund that would pay pharmaceutical companies in proportion to the extent to which their products reduce the global burden of disease.
The fund would not replace existing patent laws, but would offer an alternative to them. Pharmaceutical companies could continue to patent and sell their products as they do now. Alternatively, they could register a new drug with the Heath Impact Fund, which would set a low price based on the drug’s manufacturing cost.
Instead of profiting from sales at high prices, the corporation would become eligible for a share of all payments made by the fund over the next ten years. The size of the share would be calculated by assessing the contribution the drug has made to reducing death and disability.
The beauty of the scheme is that it gives economic support to the idea that all human lives are of equal value. For products that drug companies register with the Health Impact Fund, corporations would get the same reward for saving the lives of Africans living in extreme poverty as they would get for saving the lives of wealthy citizens of affluent nations.
The most potentially lucrative targets would become the diseases that kill the most people, because that is where a breakthrough drug would have the biggest impact on global health.
At issue here is the oldest unresolved dilemma in economics: are market economies “naturally” stable or do they need to be stabilized by policy? Keynes emphasized the flimsiness of the expectations on which economic activity in decentralized markets is based. The future is inherently uncertain, and therefore investor psychology is fickle.
“The practice of calmness, of immobility, of certainty and security, suddenly breaks down,” Keynes wrote. “New fears and hopes will, without warning, take charge of human conduct.” This is a classic description of the “herd behavior” that George Soros has identified as financial markets’ dominant feature. It is the government’s job to stabilize expectations.
The neo-classical revolution believed that markets were much more cyclically stable than Keynes believed, that the risks in all market transactions can be known in advance, and that prices will therefore always reflect objective probabilities.
Such market optimism led to de-regulation of financial markets in the 1980’s and 1990’s, and the subsequent explosion of financial innovation which made it “safe” to borrow larger and larger sums of money on the back of predictably rising assets. The just-collapsed credit bubble, fueled by so-called special investment vehicles, derivatives, collateralized debt obligations, and phony triple-A ratings, was built on the illusions of mathematical modeling.
Liberal cycles, the historian Arthur Schlesinger thought, succumb to the corruption of power, conservative cycles to the corruption of money. Both have their characteristic benefits and costs.
But if we look at the historical record, the liberal regime of the 1950’s and 1960’s was more successful than the conservative regime that followed. Outside China and India, whose economic potential was unleashed by market economics, economic growth was faster and much more stable in the Keynesian golden age than in the age of Friedman; its fruits were more equitably distributed; social cohesion and moral habits better maintained. These are serious benefits to weigh against some business sluggishness.
Groeling’s work is one of the few studies to quantify partisan bias in the media, a subject notoriously difficult for social scientists to research and discuss. These scientists work with theories such as the socalled hostile media effect to predict that ardent supporters of a cause will view media as slanted for the other side, and they have conducted hundreds of studies that have revealed imbalances in the ways journalists frame news on topics ranging from AIDS to the war in Iraq. But there is not a cohesive literature on media bias. Maxwell McCombs of the University of Texas at Austin, who pioneered agenda-setting theory, one of the leading paradigms on news media, says that a researcher would need a few years to make sense of existing data and develop an approach to study media bias. Like many scholars, McCombs sees “bias” as a loaded term, preferring to speak of journalists’ “predilections.”
“Scholars hate the word ‘bias’ because they feel like they’re entering the ideological fray,” says S. Robert Lichter, head of the Center for Media and Public Affairs (CMPA) at George Mason University, who prefers the term “tone.” Despite his efforts, Lichter himself got sucked into that fray. His content analysis of the transcripts of TV news broadcasts at the statement level is a respected and widely adopted methodology. This past summer, just as the view that journalists were going softer on Barack Obama than on John McCain was becoming widely accepted, CMPA issued a report showing that 72 percent of the statements in TV news reports about Obama in late spring and early summer were negative, whereas 57 percent of the statements about McCain were negative. When Fox News commentator Bill O’Reilly attacked Lichter’s method during a radio interview, saying it would embolden liberal bias, Lichter responded, “You can take all my studies or none of my studies”—an allusion to past uses of his work to support conservative views.
At their best, the late paintings can give a pure optical hit. There is a black on black work where the graduations of tone are so subtle that the eye, adjusting to the darkness, sees it deepen and fade inexplicably. But that painting, No 1, is scaled to the proportions of the human body, like the best of the earlier work. The bigger Rothko gets – and some of the murals are as big as billboards and pitched as high on the wall – the more diluted their strength.
People often speak of the turbulent emotion of the late works, associating their darkness with Rothko’s future suicide. But how can they possibly tell? Whatever emotion the paintings may have absorbed from his anguished inner life is subsumed in their gloomy permutations, one after another, narrow to wide, darker to lighter, vivid to blunt, just going through the weary motions.
Strength sapped, inspiration drained: that is the feeling that comes off the walls. Even in the paint itself, the cracks are beginning to show. Rothko drives on and on, prolific to the end, but compared to the riches of the previous decade, when the paintings could still sing, the interpenetration of colours remained mysterious, the stained and glazed and scumbled surfaces could still entrance the eye, these works are dispiritingly ordinary.
Via Andrew Gelman, Max Blumenthal on Pollster.com’s interactive poll tracking tools:
A little over two years ago, we launched Pollster.com with a mission of providing a complete compilation of poll results, expert analysis and graphical tools to help readers make sense of polling data. Today, after two long years of development, our commitment to interactive graphical tools takes a quantum leap…
At a moment when the political world is swimming in a flood of polling data, we are pleased to announce a new, fully interactive Flash chart application that will plot all of the poll charts here on Pollster.com. The new charts allow you to:
Select or limit the polls used to draw trend lines and calculate polling estimates with the “filter” tool. If you don’t like a particular pollster, just un-click and take them out (yes…really).
Toggle between the display of the default trend line and alternatives that are more or less sensitive using the “smoothing” tool — these are essentially the same as the “steady blue” and “ready red” trend lines often used by Charles Franklin.
The administration is once again holding a gun at our head, saying, “My way or the highway.” We have been bamboozled before by this tactic. We should not let it happen to us again. There are alternatives. Warren Buffet showed the way, in providing equity to Goldman Sachs. The Scandinavian countries showed the way, almost two decades ago. By issuing preferred shares with warrants (options), one reduces the public’s downside risk and insures that they participate in some of the upside potential. This approach is not only proven, it provides both incentives and wherewithal to resume lending. It furthermore avoids the hopeless task of trying to value millions of complex mortgages and even more complex products in which they are embedded, and it deals with the “lemons” problem–the government getting stuck with the worst or most overpriced assets.
Finally, we need to impose a special financial sector tax to pay for the bailouts conducted so far. We also need to create a reserve fund so that poor taxpayers won’t have to be called upon again to finance Wall Street’s foolishness.
If we design the right bailout, it won’t lead to an increase in our long-term debt–we might even make a profit. But if we implement the wrong strategy, there is a serious risk that our national debt–already overburdened from a failed war and eight years of fiscal profligacy–will soar, and future living standards will be compromised.
From Die tageszeitung, over at signandsight. “Andreas Dresen talks to Birgit Glombizta about geriatric love and sex, and his new film ‘Wolke 9′”:
Cloud 9″ takes 30 to 40-year-olds into their parents’ bedrooms and confronts them with scenes that sons and daughters would never want to think about in too much detail. Is this supposed to be enlightening in some way?
Yes, but that’s not my main concern. After all it’s a film about love, not sex. But the main character has no idea about this at the beginning. She is just wandering the streets in a daze when suddenly she finds herself on the rug of a man she barely knows. Then she tries to run away from these newly awakened feelings. At some point she gives in, realises she has to live this new love somehow. Even when none of this should be happening, after 30 years of marriage. If you think of the cinema as a strange dark box from which to examine the world and the human soul, then this subject should be in there too.
Allotments by the railway, choir practice, German folk-pop. Your earlier film “Halbe Treppe” was set in similar surroundings. Why are you so set on staying with the “common people”.
Most old people live like this and not upper middle class lives. We wanted to talk about normal people. Inge, Werner and Karl are not badly off, their lives are not beset by social crisis, and they are more or less contented. The fridge is full, the coffee percolator is gurgling away. Things could just go on as they are. And then catastrophe strikes, bang smack in the centre of this middle class, petty bourgeois world.
Along with dark matter and dark energy, astronomers can now add dark flow to the lexicon of cosmic mysteries. Researchers have discovered that 700 distant clusters of galaxies, gas, and dust are all being pulled in the same direction, apparently toward something invisible and possibly very large, confounding current cosmological models. So far, what that “something” is remains speculative, but it could turn out to be a vestige of the universe’s earliest days.
Shortly after the big bang occurred some 13.7 billion years ago, cosmologists think, the universe underwent a brief period that defied current physical laws. The theory goes that during this time, called inflation, space itself expanded at a rate much, much faster than the speed of light. As a result, some of the matter formed with the big bang was pulled more than 13.7 billion light-years away–so far that its light hasn’t reached us yet. As a result, that matter can’t be observed–or at least, so cosmologists thought.
But now a team led by astrophysicist Alexander Kashlinsky of NASA’s Goddard Space Flight Center in Greenbelt, Maryland, has unearthed what could be indirect evidence of inflation. The researchers had been surveying the motion of 700 clusters of galaxies to test an unrelated astronomical phenomenon when they made a startling discovery: All 700 clusters are flowing basically in the same direction and at speeds of as much as 1000 kilometers per second–or more than 30 times faster than Earth revolves around the sun. As the team reports in this week’s online edition of Astrophysical Journal Letters, the clusters, which appear headed toward a region of the sky where the constellation Centaurus resides, are moving faster than they should be if their acceleration were due only to dark energy, the mysterious force discovered a decade ago that is slowly ripping the cosmos apart.