Follow up: "When consequences are bad"

Chapter 2

The Reinhart-Rogoff analysis has set off a firestorm, at least among “insiders,” and that's a problem in and of itself. The real question for most of us who are not economists, statisticians or think tank specialists is will there be some positive outcome as a result of this uproar?

The only truthful response is that it's hard to say at this point in time. In America at least, most of us, rich and poor, have been uncomfortable talking about “class war.” It has however been the monster in the closet or the crazy aunt in the attic for most of our history, especially after the Civil War ended in 1865.

Paul Krugman in a recent NYT article (The 1 Percent's Solution) said that, “What, after all, do people want from economic policy? The answer, it turns out, is that it depends on which people you ask.”

There have been a flurry of articles about Reinhart-Rogoff. Jared Bernstein, a well known economist currently at the Center on Budget and Policy Priorities, in a recent article in Salon (How to prevent future Reinhart-Rogoff melt downs) said—without actually saying it—that economics is not real science. No it's not and never has been. For those interested in learning more about the Reinhart-Rogoff analysis and what it means from the arcane to the general see 'Additional Reading.'

What have we learned

This story, like so many others, is really about that we all have some responsibility for what happened. Of course we ought to develop a keener skepticism about what “experts” claim (far different from cynicism), demand better informed journalists and commentators, demand a more rigorous intellectual process in the field of economics, demand that public officials have a degree of integrity and knowledge and ultimately demand a citizenry (at least a significant portion) that is not so uninformed and disinterested as to be mere impediments to change. This story will continue (globally) for some time to come.

Additional Reading:

the numbers

Reinhart and Rogoff:Responding to Our Critics

Reinhart/Rogoff and Growthin a Time Before Debt

Comparing the Two Analyses

in general

There's no need for all thiseconomic sadomasochism

How much unemployment didReinhart and Rogoff's arithmetic mistake cause?

Rogoff and Reinhart should show some remorse and reconsider austerity

When consequences are bad

Knowledge is a public good and increases in value as the number of people possessing it increases.

(John Wilbanks, vice president of science at Creative Commons)

The issue

Let's call it the Reinhart-Rogoff brouhaha, which virtually no one knows about, well, almost no one knows about it, except some economists, public policy types and maybe some literate politicians. It turns out to be important however because it impacts probably the majority of Americans as well as a lot of non-Americans throughout the world.

Carmen Reinhart and Kenneth Rogoff are two well known Harvard economist that have exerted considerable influence on the economic policy of the U.S. and likely in Europe as well. Their influence has been on the side of economic austerity rather than economic stimulation, beloved by not just conservatives and assorted ideologues.

The Reinhart-Rogoff “law” (it's not) states that once a country's gross debt to GDP ratio crosses the threshold of 90 percent, economic growth slows. Debt therefore becomes terrifying, a monster to be avoided, a nightmarish scenario that will destroy civilization. Uh-huh.

(For a clear explanation of the Reinhart-Rogoff controversy see Paul Krugman's article in the NYT, 4/18/13, entitled The Excel Depression).

The science thing and the problem with Reinhart-Rogoff

What we call the modern scientific process had its beginning in the 17^th century. It gradually began to systematize knowledge about the natural or physical world and constructed the elements of the scientific process. It has generally worked remarkable well, in part because it's transparent and concerned with HOW things work.

If you take the spectrum of science today you might go from physics to chemistry to biology to medicine to the social sciences, no one area more or less valid than the other—in terms at getting at the “Truth”--but the degree of quantitative validation and specific proof is more demanding in physics, for example, than probably any other area, at least for the moment.

What seems to stand out as you learn the basics of the Reinhart-Rogoff study, which was first published in 2010, is how sloppy the original analysis actually was, in many ways making it easier for those individuals who wanted to to jump on the austerity bandwagon.

It turns out that data was missing, questionable statistical procedures were used and an important coding error was made. Correlations were suggested in the study but those are not the same thing as “cause.”Hypotheses were seemingly offered as facts, but the long and short of the study is that there was never a “90 percent threshold.”

No, economics by any stretch of the imagination can not be called “hard” science at the present time, but the subject could use a far more rigorous process in determining the validity of many of its key concepts, especially in light of its central role in public policy and the impact on individuals. Alan Greenspan, former head of the Federal Reserve Bank, said back in 2008 that, “We were wrong quite a good deal of the time.” Greenspan was a master of understatement.

In fairness, as Paul Krugman has pointed out, there were economists that were skeptical of the original study but it took a 28 year old graduate student from the University of Massachusetts more than two years later to drive a stake through the mystical dogma of the Reinhart-Rogoff study. Reinhart and Rogoff finally allowed researchers to look at their original spreadsheet and—the results couldn't be replicated, replication of course happens to be a basic early step in the scientific process.

Searching for a conclusion

The Reinhart-Rogoff study appears to be a fairly deceptive piece of work, which most likely has led to some unsound economic policies for the United States and some unwanted consequences overseas. Yet, it probably raises some larger questions as well.

If, as we Americans proclaim, at least officially, a democratic society of some kind requires a reasonably informed and engaged citizenry … well, which way are we going?

Second, beware of the “temple priests,” be they from the public or private domain, setting themselves up as the guardians and protectors of our knowledge. We can find them almost everywhere today, classifying documents of one kind or another, claiming patent protection for virtually everything and stifling open inquiry whenever possible—in the name of the public good of course. What will we ultimately decide to do? It requires some effort.

Additional Reading:

Does High Public DebtConsistently Stifle Economic Growth? A Critique of Reinhart andRogoff (Hendon, Ash, Pollin analysis of the Reinhart-Rogoff study, Univ. of Massachusetts, 2013)

The Conscience of a Liberal: Paul Krugman's blog   

A new perpetual motion machine

Laura Snyder, a science historian and professor of philosophy, has stated that the word “scientist” was used for the first time 180 years ago at a meeting of the British Association for the Advancement of Science, on June 24, 1833. Has it been only 180 years?

Prior to this time those who pursued “scientific” endeavors, mostly gifted amateurs, called themselves natural philosophers. All this gradually changed as deductive reasoning ( testing hypotheses and theories) became a key component of science, along with the creation of new scientific institutions, external funding for scientific projects and a growing belief that science ought to be for the public good.

Patenting of nature

Fast forward 180 years and we currently have a case before the U.S. Supreme Court that deals with the very structure of life itself. It's unlikely that the majority of Americans and most people on the planet for that matter have the slightest idea what is being debated and the potential outcome, regardless of the Court's ultimate decision.

In simple terms, the case before the Supreme Court is whether or not a company can patent human genes. This is a case that could effect everyone—because it involves DNA, the blueprint for life.

What constitutes a new gene? Will research be stifled and the flow of information impeded? How does a company recoup its investment, sometimes millions of dollars? Who will have access to affordable new tests and procedures as a result of any genetic breakthroughs? These are only a few of the questions that will have to be debated--publicly--and which go way beyond the U.S. Supreme Court.

The Joe Barton's rule

Joe Barton, a conservative Republican congressman from Texas and strong supporter of the fossil fuel industry, once apologized to BP (the company that caused the worst oil spill in U.S. history) because the White House demanded that the company pay millions of dollars for the clean up of the Gulf.

While the congressman claims that climate change does exist, he has consistently denied that there is any human connection to climate change. He cites the great flood in the Old Testament, before humankind burned hydrocarbons, as proof that the climate certainly changes, but humans have nothing to do with it.

Congressman Barton clearly has every right to his beliefs and he can certainly cite the Old Testament as “proof,” but it has nothing to do with modern science, and that is a big problem and not just for Americans.

Magical thinking

If you were to Goggle “perpetual motion machines” you would uncover a colorful history going back to at least the Middle Ages. Hope springs eternal. The pmm is a machine that continues to do work forever without acquiring energy from an external source. The problem is that it violates all the laws of known physics, like conservation of energy, thermodynamics and Newton's laws of motion. But people keep trying. It's the Joe Barton rule and that is a big problem.

The ecological economist Herman Daly has said that it's “politically impossible to stop growth,” while at the same time it's “biophysically impossible to continue it ad infinitum.” We may need another 180 years.

Planet of the mice

“Humans are here by the luck of the draw,” remarked the late paleontologist and evolutionary biologist, Stephen Jay Gould.

The escape

It only requires some imagination: In 2012 twenty so-called "super mice" escaped from an animal research lab in upstate New York. Eight of the youngest adults had human glial cells grafted into their brains as newborn mice. Scientists believe these cells play an important role for humans in both intellectual and cognitive processing capabilities.

Researchers demonstrated that the mice had "improved" cognitive capabilities, which included memory, learning and adaptive conditioning. The remaining twelve mice included 6 that had had their mysostatin gene shut down, resulting in increased muscle mass and strength. The other six had undergone therapy resulting in changes in slow-twitch (fatigue-resistant) and fast-twitch (bursts of power) muscles.

These mice could run about an hour longer than the 90 minutes a normal mouse can run before fatigue sets in. A house mouse is able to run approximately 900 meters or slightly more than half-a-mile, while these enhanced mice proved to be capable of running some 1,800 m, more than a mile. Along with their endurance, these particular mice were also resistant to weight gain because of an increase in fat-burning muscle. Is all of this science or pseudoscience?

The 20 escaped mice is fiction, but the particular experiments have in fact been done in research laboratories and reproduced, replicated and undergone peer review, all part of the scientific process.

The best of all possible worlds

Mid Missouri Public Radio recently had a piece on Kevin Wells, a scientist at the University of Missouri—Columbia. Wells has been studying genetics in animals for more than twenty years and he is well aware of the scientific possibilities, such as making animals resistant to swine flu, along with the potential concerns, such as the human health impact, animal welfare and yes, animals escaping.

It's quite likely we'll have a genetically engineered Atlantic salmon on the U.S. market fairly soon, breakthroughs for better treatment of human brain disorders not far off and possibly even “enhanced” Homo sapiens sooner than we think.

Some sort of genetic future has already arrived. What are we willing to do in terms of genetic engineering and what kind of public policy debate shall we engage in? If we have a scientifically illiterate society and a disengaged citizenry, are we capable of making rational choices and understand those that we've made?

But back to our 20 missing mice. The year is 2100, 87 years from now. A certain percentage of our super mice from 2012 survived and produced off springs. Might they have evolved faster than humans? Will they look far different from the average house mouse of today and how big could they get? Could technology out pace our ability as humans to understand what we have set in motion?

The Theory of Evolution does not say that life moves inexorably toward a higher level of complexity and maybe our mice will not, but it is about the “luck of the draw.”