Friday Reads: A Brainy Break from the Village

Good Morning!

I thought I would treat you to some academics this morning starting with two well known economists and their thoughts on 2012. I figured we needed a break from the primary season insanity.  First up is Nobel Prize Winner Joseph Stiglitz on “The Perils of 2012”. The next two offerings are from Project Syndicate.

This year is set to be even worse. It is possible, of course, that the United States will solve its political problems and finally adopt the stimulus measures that it needs to bring down unemployment to 6% or 7% (the pre-crisis level of 4% or 5% is too much to hope for). But this is as unlikely as it is that Europe will figure out that austerity alone will not solve its problems.   On the contrary, austerity will only exacerbate the economic slowdown. Without growth, the debt crisis – and the euro crisis – will only worsen. And the long crisis that began with the collapse of the housing bubble in 2007 and the subsequent recession will continue.

Moreover, the major emerging-market countries, which steered successfully through the storms of 2008 and 2009, may not cope as well with the problems looming on the horizon. Brazil’s growth has already stalled, fueling anxiety among its neighbors in Latin America.

Meanwhile, long-term problems – including climate change and other environmental threats, and increasing inequality in most countries around the world – have not gone away. Some have grown more severe. For example, high unemployment has depressed wages and increased poverty.

While that was what appeared to be Dr. Gloom, here is Doctor Doom.  Dr. Nourielle Roubini writes that the global economy will be “Fragile and Unbalanced in 2012”.

Private- and public-sector deleveraging in the advanced economies has barely begun, with balance sheets of households, banks and financial institutions, and local and central governments still strained. Only the high-grade corporate sector has improved. But, with so many persistent tail risks and global uncertainties weighing on final demand, and with excess capacity remaining high, owing to past over-investment in real estate in many countries and China’s surge in manufacturing investment in recent years, these companies’ capital spending and hiring have remained muted.

Rising inequality – owing partly to job-slashing corporate restructuring – is reducing aggregate demand further, because households, poorer individuals, and labor-income earners have a higher marginal propensity to spend than corporations, richer households, and capital-income earners. Moreover, as inequality fuels popular protest around the world, social and political instability could pose an additional risk to economic performance.

Oops, I mentioned income inequality.  I must hate capitalism and be a collectivist.  Right?  Absolutely not!  After studying markets for as long as I have–and teaching others about them–I have a pretty good understanding about how they work and it’s not based on wishful thinking or trying to hide the woefully low amount of taxes I pay.  Oh, and I betcha that my dad created more jobs in his life time than Willard ever did.  I also know that income inequality is bad for every one and that includes the superrich. That’s why it’s good to ask “Why is Inequality Higher in America?”‘  Henry Farrell of GW–professor of political science–breaks down a study in a series of two articles.  The study looks at the increasing use of veto power by Senators and finds that problems happen as you increase the number of players with the ability to block laws.

Linz and Stepan argue that high numbers of electoral veto players are highly correlated with inequality, and that studies of other systems (Australia, Switzerland) suggests that more veto players create greater lags in introducing welfare systems and block reform (interestingly though, these cases involve referendums as a block to legislation rather than the kinds of vetos seen at the federal level in the US). However, they also claim that veto points are not destiny – the experience of reform in Brazil argues that Barack Obama could have instituted Senate reform and hence reduced down the effective number of veto players from four to one.

The original essay can be found at Cambridge Journals but the authors have published books on the topic as well.  The authors research is mostly in the area of countries transitioning to Democracies.  The Atlantic published an essay of theirs called “How Egypt Can Make Democracy Work” last February.

Regardless of who leads it, there are some things an interim government should not do. Judging by the transitions that we have studied, a successful democratic outcome stands the best chance if the interim government does not succumb to the temptation to extend its mandate or write a new constitution itself. The interim government’s key political task should be to organize free and fair elections, making only those constitutional changes needed to conduct them. Writing a new constitution is best left to the incoming, popularly elected parliament.

Most activists and commentators are now asking who will or should become the next president. But why assume that a presidential political system, headed by a powerful unitary executive, will be instituted? Of the eight post-communist countries in the European Union, not one chose such a system. All of them established some form of parliamentary system, in which the government is directly accountable to the legislature and the president’s powers are limited — and often largely ceremonial.

That was a wise decision. A presidential election at a moment of great uncertainty, and in the absence of experienced democratic parties or broadly accepted leaders, is filled with danger.

Archeologists are examining an interesting time in American history for clues of America’s  largest labor conflict between miners and coal mine owners. An unlikely coalition of people are trying to stop clear mining–and hence destruction–of the site. This article can be found in Archaeology Today.

The archaeology on the mountain, and the story it is beginning to tell, has helped bring together an unusual coalition—including the Sierra Club, the United Mine Workers of America (UMWA), the National Trust for Historic Preservation, and a number of local organizations—in what some are calling “The Second Battle of Blair Mountain.” It is certainly a fight over historic preservation, but for many involved, including local archaeologists and historians, the mountain is symbolic of much more—labor struggle, the social effects of resource extraction industries, and what they see as a century-long class conflict. The mountain’s loss to surface mining, they assert, would be personal, a major blow to Appalachian identity.

Coal mining has always been one of the most dangerous and difficult jobs, and the late nineteenth century in the southern coalfields saw it at its worst. There were few safety regulations for workers—undocumented European immigrants, African Americans, and poor Scots-Irish hill folk—and every aspect of their lives was controlled by their employers. They lived in company towns, bought their own equipment at company stores, and listened to company-approved sermons in company churches. As labor movements picked up elsewhere, even in coal regions to the north, they seemed to pass the southern coalfields by.

Nature reports on the attempts to tighten the use of antibiotics on farm animals.  Just like humans, animals and their diseases are showing an increased resistance to the current medicines.  A new rule will go into effect in April to try to slow down the trend towards increased resistance.  The EU already has stricter rules in place.

 In industrial farming, antimicrobials are commonly given to farm animals to treat infections, and prophylactically to prevent disease or spur growth. But there is growing concern that excessive use on farms is helping to breed antibiotic-resistant microbes, from Salmonella (see ‘Rising resistance’) to Escherichia coli, which are harder to treat when they infect people.
The US Food and Drug Administration (FDA) is now moving to protect key antibiotics known as cephalosporins, which are used in humans to treat a range of infections, including pneumonia. On 4 January, the agency said that it would prohibit certain uses of cephalosporins in farm animals including cattle, pigs, chickens and turkeys, because overuse of the drugs is “likely to contribute to cephalosporin-resistant strains of certain bacterial pathogens”. If cephalosporins become ineffective in treating human diseases, the FDA said, “doctors may have to use drugs that are not as effective, or that have greater side effects”.

The new rules, to come into effect on 5 April, restrict veterinary surgeons to using the two cephalosporin drugs specifically approved for food-producing animals — ceftiofur and cephapirin — and ban prophylactic use. In animals not listed in the FDA order, such as ducks or rabbits, vets will have more discretion to use the drugs.

Most antibiotic classes are used both in animals and in humans, so the FDA is also considering tightening controls on all classes of antimicrobials used on farms. It is reviewing comments on rules that would prohibit the use of any antimicrobial drug to promote animal growth, a move that would be welcomed by many vets. “We would support greater veterinary oversight of antimicrobial drugs,” says Christine Hoang, assistant director of scientific activities at the American Veterinary Medical Association in Schaumburg, Illinois.

Psychology Today has some interesting information on Deadly Mind Traps. Dr. Boomer knows these as cognitive errors.  Most of us call them self-defeating behaviors.

Intriguingly, research into this kind of self-defeating behavior shows that it is usually far from random. When we make mistakes, we tend to make them in ways that cluster under a few categories of screwup. There’s a method to our mindlessness. Most of the time, we’re on autopilot, relying on habit and time-saving rules of thumb known as heuristics.

For the most part, these rules work just fine, and when they don’t, the penalty is nothing worse than a scraped knee or a bruised ego. But when the stakes are higher, when a career is in jeopardy or a life is on the line, they can lead us into mental traps from which there is no escape. One slipup leads to another, and to another, in an ever-worsening spiral. The pressure ratchets up, and our ability to make sound decisions withers.

These cognitive errors are most dangerous in a potentially lethal environment like the wilderness or the cockpit of an aircraft, but versions of them can crop up in everyday life, too, such as when making decisions about what to eat, whom to date, or how to invest. The best defense? Just knowing they exist. When you recognize yourself starting to glide into one of these mind traps, stop, take a breath, and turn on your rational brain.

There’s a list of the classic errors and explanations in case you want to check it out.  Turning on your rational brain sounds like something the Republican presidential wannabes should do right now.  I think it would surprise every one, don’t you?

So, that’s your brainy break from the mainstream media.  What’s on your reading and blogging list today?