Links 9/24/10

Workers unearth huge fossil cache in California BBC (hat tip reader John M)

Zeroing in on Cancer American Scientist (hat tip reader Roger Bigod). Be sure to read the last four paragraphs.

FDA will Ban Food Makers from Telling the Truth about Non-GMO Foods Natural News (hat tip reader furzy mouse)

Patient confidentiality? Not in Texas Joe Paduda (hat tip reader Francois T)

So A Blogger Walks Into A Bar… TechCrunch (hat tip reader Skippy). On collusion and price fixing.

Solar Roads Fix The Grid And Crumbling Pavement Wired (hat tip reader Francois T)

Downhill With the G.O.P. Paul Krugman

Japan to Release Chinese Boat Captain, Citing Bilateral Ties Bloomberg

China Is Blocking Minerals, Executives Say New York Times

Chinese navy embarks on charm offensive ABC (hat tip reader Skippy)

Close Yes, Comfy No for Sino-U.S. Trade Ties Andy Xie, Caixin (hat tip reader Don B)

Muslims Report Rising Discrimination at Work New York Times

Social Security Trust Funds: Why Solvency = Discounted Interest Only Loan Bruce Webb, Angry Bear

Texas, Iowa Attorneys General Open GMAC Foreclosure Probes Bloomberg

Antidote du jour:

Picture 8

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  1. Richard Kline

    (So Yves, I put this comment in the thread on you earlier post on rare earth embargos, but I’ll pull it up here. I fully expected the Chinese national to be released, and here it is jiffy-quick. The speed at which the US and Japan backed down here only highlights just how stupid an action this actually was.)

    So Yves (and to comments from Glen et. al.), this is actually _not_ a minor issue at all, the squabble over detentions at Diaoyu group. Nor is it a Japanese-Chinese tiff: it is US-Chinese proxy shadow-boxing.

    China’s policy over the extensive continental shelves in the East and South China Seas has been very clear for a generation: “We own it.” Many of those claims are disputable, yes, although in many cases, and with the Diaoyu more than most, the best claim lies with China likely. That doesn’t matter really. Issues of resource secruity and national sovereignty (after a century of extractive colonialism) are paramount. I would say that these issues of securing their claim to the adjacent seas are _as important to China as Taiwan_. I don’t think I’m exaggerating there. All policy makers in Japan and the US know this. These claims have been revisited multiple times over thirty years in spats in one place and another, always bringing sharp action from the Chinese, with the individual issues swiftly moved to the back-burner by all parties. No one really wants any wars here. No regional party has a remote chance of disputing any of these claims bilaterally with the Chinese. The US doesn’t really have much of a feasible means to exploit any of these areas themselves. But by stirring up locals, the US has chosen to use the _disputability_ of Chinese claims as a pressure point to use on the Chinese at American pleasure.

    This particular tiff started in March 2009 when, in effect, Japan invited the US to recognize Japanese claims to this particular groups, and the US said, more or less, I’m glad you asked that, because we thought they were yours. There is no way that Japan would have broached this issue without prior coordination. There is no way the Japanese would have ‘arrested’ Chinese nationals here without prior coordination with the US. They are our military protectorate after all, and specifically asked if that protection extended to issues in this group in March 2009. (Not that a ‘fishing boat’ from China would be doing anything in this area without Chinese governmental and security snooping directly involved, either.) Hilary Clinton’s remarks earlier this year that ‘the US has vital strategic interests involved in territorial claims in the South China Sea’ were HIGHLY provocative, and part of what is clearly an organized policy of the Obama Administration to use these pin pricks to pressure China. The US has very little leverage to get Chinese economic policy to change given US economic weakness, so it is readily apparent that this is the kind of fools-move elbow-to-the-ribs methods which are being resorted to. And the Chinese clearly understand given the direct and major kind of reply they’ve shown in cutting off rare earth exports. “You hit us; we raise you _three_ and hit your lackey-state and you.” What we are seeing is exactly the way a ‘pressure China on their currency’ line plays out: this.

    If there is ever a ‘World War’ over the continental shelves off East Asia, it will be started BY THE UNITED STATES. China doesn’t need one to gain there objectives. Nobody else can don anything to resist that. Are we stupid enough to start that? Likely not. Are we clumsy enough to start that? Case closed.

    Regarding ‘a major shift by Taiwan’s population,’ Glen, it’s all over there already. The indigenous Taiwanese, ethnically Polynesian, will never be reconciled to mainland control, but they are a small minority. A plurality on Taiwan are already pro-Mainland. But neither really matters because the financial and industrial elite of Taiwan are all-in big time in investing in Mainland China. Where did the capital and expertise come from to ramp-up the industrialization of Maritime China come from? The Chinese Diaspora, with a hefty share of that from Taiway. Economic integration has already happened, it’s an established fact. Yes, many bars remain, and those on the losing end of this are going kicking and screaming, but it’s all over. This is one reason why the US is resorting to clumsy, petty, proxy squabbles over sea-rocks, Taiwan is slipping away while we watch. And regarding Chinese-Russian joint exploitation of Siberia, that’s much, much farther along than you are crediting. At the low end, a significant share of consumer non-durables sold in Siberia already come from China: they’re closer, cheaper, and Chinese merchants are everywhere. There are major, government faciliated operations of great geostrategic import underway too such as natural gas and eventually oilpipelines from Central Asia exporting to China. These involve what are in effect Russian proxy or protectorate governments, and these projects are clearly directly promoted by the Russian government; in effect, Russian-Chinese exploitation. And don’t discount that money talks in Russia with endemic industrial capital corruption and cronyism. One should anticipate that Chinese-controlled _capital_ is already heavily at work in Siberia even if nothing is put down on paper.

    The changes you suggest Glen are not future changes: they’ve been underway for 10-20 years and are beginning to mature. While our idjit powers that be in the US have been waging low-intensity genocide up back-of-beyond valleys in the ‘Stans where there is no money to be made and no friends of ours ever, China has already lapped the field on the issues of geostrategic importance for their reestablishment as a principal power. (Not that I have a problem with that, but that’s another comment.) The US is reduced to getting our flunkies to blow spitwads at the Chinese to try to influence Chinese policy. Don’t bet on us getting anything useful or successful out of dumbass moves like this.

    Will this particular dispute in the Diaoyu group ‘get big fast?’ No way. These are always swept under the rug, and Obamaclinton are jabbing the knitting needle without meaning to push this anywhere, just making a point. Which is rather what Russia thought it was doing with Austria-Hungary using Serbia as the irritant. That went well, didn’t it? The continental shelf of East Asia is NOT the place for pressure points in my view. And the US only hazards this because we think we are just too . . . exceptional ever to have any blowback reach our front porch. Until it does. And I guarantee most Americans just won’t have a clue why it happens when it does. But we are watching why, right now.

    1. Skippy

      I’m reminded of a tale bespoke to me by a friendly Gurkha whilst he was stationed on the periphery of Taiwan to China.

      To whit said 人民解放軍 member swam the distance from his island to the Gurkha’s base, where they were involved in a game of basketball…only to become part of it, and when ask to the purpose of his visit he replied…too occasion my brothers.

      Skippy…damn…you have a nasty set of

      PS. he swam back and history did not notice his passing…delights.

    2. Doug Terpstra

      Very impressive analysis, Richard. It is a disappointing look at the now familiar seamy reality of US intrigue. It seems the hidden dragon is rising while the empire follows its unexceptional, preordained course of overreach and decline. Thanks for your insight.

      It is quite interesting, if entirely coincidental, that four beasts feature most prominently in Revelation prophecy: the bear, the red dragon, the lion, and the eagle (Russia, China, UK, US)in addition to the whore of Babylon (US ruled Iraq)—and the kicker: it is the dragon that rises to global rule. Hmmm, St. John’s acid trip now seems rather lucid.

      Speaking of *-Stans, TomDispatch says the troops will be coming home from Afghanistan before long in “One and a Half Cheers for American Decline.” He notes the American people are way ahead of their visionless leaders.

      1. DownSouth

        Thanks for the link.

        Tom Englehardt, along with Andrew Bacevich and Kevin Phillips, are three of my favorite writers who comment on military matters. All three agree that the US is a great empire in decline, a theory to which I subscribe to wholeheartedly.

        If the United States could somehow forego its imperial pretensions it could save itself and most of its citizens a great deal of suffering. But pride perseveres even after the money and physical prowess have long disappeared.

    3. Glen

      Great post, and you are correct, this has been on-going for quite some time. The MSM never reports and American public remains blissfully unaware.

      Friends who travelled to Vladivostok over ten years ago, looking for work opportunities in logging (Japan exporting raw logs which had been seriously shut down in the Pacific NW) commented that everybody seemed to be driving relatively new Japanese cars (which failed emissions testing in the US). Even then, Japan was working hard to develop Siberian resources. China must be doing the same.

      With regard to Taiwan, what amazes me is how much we (America) seems to have little to no MSM news about events.

      America’s foreign policy took a tragic and perhaps fatal wrong turn with the Bush war on terror. If only the American public was ever told how many times we came “this close” to real nuclear annihilation during the Cold War, perhaps public opinion would have prevented such an idiotic reaction to the horrific events on 911. Or perhaps a more honest discussion with the American of our national dependence on oil could have produced more fruitful and realistic policies at home and abroad.

      As it is, we have taken our eye off the ball with regard to China and Russia, much to China’s and Russia’s delight.

      1. Sundog

        Those Japanese cars in the Russian Far East are from Japan, not the US. Japanese industrial policy dictates that cars over ten years old are subject to prohibitively expensive “safety inspections” in order to generate demand for new vehicles and keep the nation’s fleet fairly current with regard to emissions technology.

        As for Americans taking their eye off the ball with regard to China, I believe the vast majority of ordinary citizens (at least those living outside the Boston-to-DC nexus) have been observing the hollowing of US industry with consternation. True, these people are rarely solicited to write op-eds for influential publications.

        1. Glen

          You are correct – I missed typed. It would be nice to have an edit feature since it seems I generally submit a comment and find mistakes.

    4. Kevin de Bruxelles

      I’m always happy when I see your comments Richard. I’ll just try to add some perspective from a slightly different point of view.

      US grand strategy has to not only counter current threats, it also has to fight back against the weight of historic time. Ever since the process of civilization was initiated somewhere in Mesopotamia some 12,000 years ago, the people of the Eurasian landmass (with the occasional addition of the Mediterranean coast of North Africa) have dominated the world. The Americans, Oceania, and sub-Saharan Africa have almost always lagged behind Eurasia and served as the global equivilant of stagnant backwaters. But amazingly America, a nation from one of these geographic global ghettoes, has risen for more or less the past 65 years and found itself in the position of being both the first state, and more importantly, the first non-Eurasian state to hold the preeminent position in the world.

      The US got there because the endemic divisions within Eurasia finally grew to a fatal level, arguably during WW1, but certainly in WW2. Much as a small wealthy elite currently dominates America on the national scale, a relatively small wealthy elite from a periphery backwater, the United States, dominates to this day on the global scale. And the basis of this domination is as old as civilisation itself, and is strongly grounded in fundamental human nature: divide and rule. In other words for the US to remain global hegemon Eurasia should stay fatally divided.

      But on the subject of division, all may not be well within the US itself. Post WW2 and up until the recent past, the holy trinity of power in the US: the Military Industrial Complex (MIC), Big Oil, and Finance have worked together in harmony. This coordination is personified in many of the key players in the post WW2 intelligence world in general and the Bush family in particular. But is the American pie starting to get too small to avoid for much longer the prospect of the MIC and now suddenly Huge Finance starting to cross forks over it?

      Eurasia consists of five major continental and two lesser island power nodes. The five continental are the EU, Russia, China, India, and the Arab States. The two lesser island powers are Japan and the UK. It goes without saying that the more the US can stir up trouble between these players–and given the long history of mankind this is rather easily accomplished with little to no effort–the longer the US will thrive as the global hegemon. In any case the two lesser island powers are critical to US power as these represent huge unsinkable battleships just off the shores of Eurasia, and therefore they must stay within the US’ orbit.

      Your reports of cooperation between Russia and China are then not good news for the US. But then again, with five major powers it is inevitable that some will work together. The key here is for the US is to keep the others, especially the EU, from joining this rump group. In addition, any tensions created by Muslim immigration to the EU, along with Islamic separatism in Russia and China, only helps ensure the separation of the critical Arab States from Eurasia. This is not to say that the US is necessarily behind all these recent problems. The point is that the US not only has absolutely no interest in stopping these trends whatever bullshit you may hear about in the War on Terror, and in fact the US has every interest to fan these flames.

      In this light it is clear that the territorial disputes in the East and South China Seas between Japan and China only furthers US interests. It is even better for the US that China has the better claim; this means they will be unlikely to change their policy anytime soon for larger strategic reasons. Combine this with the fact that it will be many years before they have the military power to enforce their claim, and the US has a long-term scab it can pick any time it needs. This East Asian conflict combined with the recent Euro crisis that was undoubtedly exaggerated by American players certainly helps reinforce the rather minimal goals of keeping the minor island powers on either side of the Eurasian landmass firmly in the US camp. Taiwan is less critical. While the US would never allow an invasion it would probably allow a peaceful transition as this would not fundamentally change the US global position.

      The quick release of the Chinese fishing boat is no surprise – and no great victory for China. Japan was never going to put these men before a show trial or even demand half a million dollars in ransom. If China restarts exporting the rare earth raw materials in response then I would have to say they lost this round. Their grand economic strategy is obviously to move up the global food chain so if they have any brains or balls they will make their raw material export ban permanent. They know full well the rich nations have no desire to start the dirty job of mining these resources. If China manages to make stick the idea of only exporting their rare earth resources within manufactured products then in that case this round does indeed go to them.

      The Chinese Threat vs. Chimerica represents the fault lines over which Huge Finance and the MIC will battle during the next ten years. The military, outside of a few intellectual middling officers who read too many COIN books, were never overly excited about the small wars in Iraq and Afghanistan. They have every interest to build up The Chinese Threat to help beef up their future conventional warfare budgets. But will they get their money in a world of spending cuts? After all, there is a new kid in town, and the budget to support Huge Finance and the damage done by its Chimerican monster is ever-growing and soon, perhaps very soon, will start to encroach on the MIC’s budgets. The idea of exporting well paid high skilled jobs is in obvious contradiction to the idea of building up a modern defence force to stop The Chinese Threat. Or is it? One compromise solution I suppose would be to outsource to China the building of the armada that will once and for all deal with the ever-growing Chinese Threat.

      1. Glen

        Man, some great comments here. I’ll drop in a few observations.

        The hardware guys deep in the heart of the DOD/DOE viewed the R&D and industrial base required to support the DOD as fatally dead and off shored all the way back on the late seventies and early eighties when key technology made in Silicon valley left the country. Papers and presentations were making the rounds at the national labs.

        How much is protecting Wall St financial firms considered “necessary” for the “defence” of the country? I don’t know, I wish the financial types would kick in on this. Along with opinions as to the “reality” of an ongoing “economic war” with China.

        As a single entity, the US military is the world largest consumer of oil (and therefore the world’s largest producer of greenhouse gases). All US foreign policy actions and national energy policy actions are tinged by the need to feed the beast.

      2. EmilianoZ

        As you say, for a long time Eurasia dominated the world. But while it dominated the world it was never united. Even as European countries were colonizing the whole world they were fighting each other. That’s how the French came to support the American Revolution (bankrupting themselves in the process). Cooperation would of course be better but I don’t see that as a necessary condition.

        As regards the encirclement of China, having some bases in Afghanistan might not be a bad idea. You have a good view of China’s west from there. The US already have some bases in the ex-Soviet republics in Central Asia (also west of China). But you never know. The Russians are known to have tried to foment some coups there. You never have enough bases.

        1. Sundog

          “Encirclement” is the PLA’s rallying cry. They claim it’s being applied to China but I would suggest recent news out of Pakistan and Myanmar, not to mention the activation of border disputes, and the “string of pearls,” suggests it is being directed at the world’s largest democracy.

          In place of “you never have enough bases” I would rather say “you never have enough allies” and the US is pursuing this with regard to ASEAN and the South China Sea. However, the extent to which State and USAID have been subsumed by DoD could well preclude this from gaining any real traction, given US armed forces are essentially the armed wing of Millenarian Dominionism.

  2. rjs

    its fine to innovate to compete for a prize, but it would be interesting to see EROEI numbers on that “single parking lot paved with solar panels — even one where cars are parked —(that) could power the big box store it serves”

  3. ex-PFC Chuck

    What a way to start the day! The first link was cool, but the next one pissed me off. Then ditto for the next three, each one more than its predecessor, putting my teeth on edge. Do I dare to click on number five?

  4. Richard Kline

    Andy Xie’s summary of China’s economic and trade configuration is very good and quite thorough, maybe the best summary I’ve seen from him. I agree with nearly all his conclusions, including the rank infeasibility of any _serious_ trade dispute between these two countries. Which is one reaosn why I find US policy toward the challenges China presents as so incalcuably obtuse and a losing hand to boot. We have much to gain from NEGOTIATING a modus vivendi with the Chinese, but we can’t bring ourselves to actually *cough* negotiate legitimately with, with ‘_those_ people.’ So we bluster. The Chinese aren’t necessarily nice, wholly fair, or wholly honest—but then we assuredly aren’t any of those things, so what’s to bitch about? I could say more, but I’ll stop there.

    The one point where I have some differences of observation from Andy Xie regards the reputed massiveness of the property bubble in China. I say observation because I certainly don’t feel I have secure conclusions—or that anyone does. Is there a bubble there? In many markets, patently yes. The meaning of that _in the Chinese context_ is less clear. Many in China have excellent reason to doubt that currency and equities will maintain the valuations they have now. In rapidly developing national economies, there are typically large movements, often large swings, in such instruments. —But the land won’t go away. Sure, buying the equivalent of a stripmall in podunk Qinghai is likely to lose you money on net over a ten year period. And Xie and others have very releveant, on the ground observations of useless construction being performend in places (not least because the government had been pushing the banks to push credit to as a stimulative policy measure, i.e. unintentional malinvestment). Buying quality residential in Shanghair or Wuhan may well turn out to be a winning bid ten years on even if there’s a big swing at the five year point. The issue to me here is that not all bubbles function alike even if they are all bubbles. There is a great deal of hot money floating around in China, and the smart part of it is looking to get a hard asset that won’g go away in a place where there have been few hard assets on the market even fifteen years ago. Some of those hard assets are worth having before the hot ‘play money’ hears Cinderellas Bell: I think this is a significant driver of speculation, cashing out speculative soft slosh while folks can, thogh there is no easy, sure, or clean way to that end. I do think Xie’s points regarding the risk of destabilizing capital outflows from China in the event of a property bust are very germane however. That to me is a bigger worry than where real estate prices index at a bubble-bust plus one year.

    1. Yves Smith Post author

      The arguments you are making regarding Chinese real estate are virtually identical to the ones I heard defending Japanese real estate prices in the later 1980s.

  5. Brett

    Hello Yves,

    Does your publisher have any plans to do an audio book for your book Econned? I think there would be some interest in such a thing. I was disappointed to find it isn’t available on audible while books like Simon Johnson’s 13 Bankers and Nouriel Roubini’s Crisis Economics are listed.

  6. LeeAnne

    “FDA will Ban Food Makers from Telling the Truth about Non-GMO Foods Natural News”

    This news makes me sick.

  7. gf

    @Zeroing in on Cancer

    Laughing all the way through it.

    Do we still think that some Gene therapy will solve cancer.
    Will someone with lung cancer be cured with therapy if they continue to smoke? Let me think about this.

    When will we start thinking education and prevention?
    Oh wait we will be electing the retards in November, My Bad.

    GMO’s the same story, cannot wait for that to blow up, what stupidity.

    Looking more and more like Marx will be proven correct.

    1. eric anderson

      gf, based on the performance of the Harvard educated “brain trust” we elected in 2008, I prefer electing some dumber people with common sense. Actually, they aren’t really idiots, just because you call them a name. As a Tea Partier, my choice for governor this year, an independent African-American candidate, won the state fair chess competition. Hardly a retard. He’s also completely out of sync with what Obama, progressives, or Yves Smith seem to advocate. It remains to be seen whether that is wise or stupid.

      I wonder if our representatives in Washington are not viewed by the general public as retarded. Maybe they’ve heard the word a lot in town halls this year. Could that be why they passed a law redefining “mentally retarded” as an “intellectual disability.” When I write my Congressman to complain about his votes in the past two years, I will be sure to use the politically correct appellation.

  8. sherparick

    I found this on Barry Ritholz’s blog today (the whole blog is great today, particularly a description of Volker going Postal on the Banks and the Administration for its half-hearted, way to complicated, “reform” attempt), but I was drawn to entry by Professor Treadway, because I think it is a great example of way myths/memes come to dominate our discourse:

    In singing the praises of the gold standard he tells the following fairy tale.

    “What is wrong with this system is that there is no automatic economic adjustment process as there was under the pre-1914 gold standard. Economists and politicians can argue all day long about what the correct level of exchange rates is. Or how many jobs, if any, will come back to the United States were the renminbi to be revalued. Nobody really knows the answers. The point is that only a system where adjustments are compelled by market forces can come up with the real answers. In today’s world where no one country can force its will on others, political resolution of economic decisions is a highly imperfect solution. Politicians will always argue their own country’s perceived interests. Under the pre-1914 gold standard, the so-called advanced world had one currency—gold. All major currencies were freely convertible into gold at rates that did not change. Economies did the adjusting. Capital flowed freely. The markets ruled. Inflation was almost nonexistent. Prosperity reigned.”

    Where did he get this fairy tale? Well, surprisingly, Lord Keynes deserves a fair amount of responsibility due to his popular essays in the twenties describing the wonders of the pre-1914 economic system. George Dangerfield’s “The Strange Death of Liberal England” presented a reality far different (near civil war, both between classes (huge strikes), and between parties (Irish ?), and between sexes (Women suffrage). Things were not that different in the U.S. where in 1912 the Socialist Candidate, Eugene Debs got 6% of the vote, and the Republican Taft only got 23% (apparently “free enterprise” was not so popular back in the day). It has been 65 years since WWII. I think if you compare the 65 years prior to 1914, it does not look so bad. Between 1850-1914 there were four major financial panics followed by long, severe recessions/depressions, a severe bout of war related inflaiton (1860s), and persistent deflation during periods when gold discoveries failed to keep up (thereby grow the money supply) to accommodate the expanding industrial economy. Both were periods of amazing economic growth (given the spread of industrial power and machines and the transformation of huge amounts of peasant subsistence labor to industrial production and whole continents going from wilderness to industrial civilization from 1850 to 1914, how could it not be?) But the pre-1914 world was a very imperfect one, filled with unnecessary suffering and lots of bad economic policy, not a golden age. But since those who actually lived through it are now dead, it can serve as mythic golden age for Conservatives and other adherents who support the “Financial Interest” as Econospeak calls it.

    By the way, I actually agree with Professor Treadway that one of the basic structural problems of the last 30 years is that the dollar is chronically overvalued (hence the chronic trade and current account deficit). I just don’t think we have to tell myths to support the argument.

    1. Jim Haygood

      ‘a severe bout of war related inflaiton (1860s), and persistent deflation during periods when gold discoveries failed to keep up (thereby grow the money supply) to accommodate the expanding industrial economy.’

      This sequence was not caused by the gold standard; it was caused by going OFF the gold standard during the Civil War. Remember Lincoln’s greenbacks in 1863? Fiat currency is, and always has been, a mechanism of war finance.

      The error was compounded by restoring the gold standard at the previous par value, forcing the wartime inflation to be sweated out during the 5-1/2 year recession (the longest ever) of 1873-1879. This was completely unnecessary — the dollar could have been repegged to gold at its postwar, depreciated value — and probably would be today, when deflation is more feared than it was then.

      1. Yves Smith Post author

        You need to read Jim Hamilton on this. The gold standard is way oversold as a panacea, there’s plenty of evidence (empirical) to support that view. You saw highly variable rates of price changes year to year (just look at the record for, say, England, you would see swings of 2% deflation to 5% inflation the next year). How can you function as a business when inflation rates change so much, so fast? That in turn was a driver of the panics, the real economy can’t function all that well with those kind of changes.

        Moreover, countries go off and on the gold standard all the time. Cheating is endemic.

        Keynes’ Bancor is a far better solution.

  9. CingRed

    Solar Roads. I don’t want to rain on their parade but they have more than a few very big obstacles to deal with. For one they need to learn some math. Current pricing on placing a 12′ x 12′ x 4″ section of asphalt is about $650 not $6900 they are using as a cost equivalent comparison. You will still need to install road base to have a stable road with either system. Wear is a huge thing on road surfaces. Neither concrete or asphalt last for very long and glass won’t do much better. Then you have traction. Glass? Think about the friction coefficient of wet glass. If you make it rough enough for it to provide the needed traction then it will wear down to a smooth, very slick surface. Then you have panel tilt to deal with. Today they bind concrete road panels together with a bunch of large steel dowels to keep them from tilting as cars and trucks pass over them. The solar panels are going to have to deal with some tremendous forces caused by panel tilt, the kind that even breaks up 8 inch steel reinforced concrete. I’ve built roads during my life and I don’t think these folks have a clue about the engineering issues involved. They are trying to mix to very different technologies that do far better standing alone but maybe we really could have submarine aircraft carriers.

  10. Jim Haygood

    ‘Are the Special Treasuries that make up the Social Security Trust Funds real? Absolutely.’ — Bruce Webb

    Ah ha ha hah … one wonders whether keyboard commando Webb ever took Accounting 101. Social Security is a wholly owned subsidiary of Usgov. When consolidated with it (as it should be), the Trust Fund disappears as the fictitious, deliberately misleading parent-subsidiary accounting device that it is. Gov-worshiper Webb actually capitalizes ‘Special Treasuries’ [sic], when the technical term is ‘non-marketable Treasuries.’

    Why do partisan flakes such as Webb waste their time, trying to cloak their bankrupt nanny-state ideology in fancy accounting legerdemain?

    Never mind about conforming to ERISA standards of prudent reserving — now Webb and the Social Security trustees are defining deviancy downward so that a threadbare one year worth of reserves will qualify as short term solvency. Hell, even Bernie Madoff kept that much cash around!

    Angry Bear is basically running interference for the fedgov fraudsters, who have a hell of a mess on their red hands. Since Webb improbably claims there IS a free lunch, I’m asking for him to deliver a pizza to my door to prove it.

  11. Roger Bigod


    Do we still think that some Gene therapy will solve cancer.

    There are lots of cured people already, as a result of understanding how altered genes cause cancer. It isn’t clear what you mean by “solve”, but most people would settle for getting rid of a diagnosed cancer.

    Will someone with lung cancer be cured with therapy if they continue to smoke?

    Will someone’s injuries from an auto accident remain cured if they continue to drive?

    1. Pelle Schultz

      Sounds like someone (gf) is using the term “gene therapy” without having a clue as to what it actually means.

      This latter part of this quote from the article is true (sort of), but is a bit wrong in terms of cause-effect and timing: “This calculation [by big Pharma] may explain the absence of the spectacular cures that were predicted to follow the deciphering of the human genome.”)

      In reality, the ‘spectacular cures’ that were expected were based on the premise (at the time when the human genome sequence was roughly complete 10 years ago) that most diseases were a consequence of the accumulation of multiple relatively frequent lower risk genetic variants in humans. If this had generally been the case–as it sort of is for some common conditions like type II diabetes–there would be likely be many more genomics-based treatments in late-stage clinical by now. Companies were founded on this premise (e.g. the recently bankrupt deCODE). Most of these drugs developed under this scenario would have had large target populations and relatively small effects (both intended and otherwise). In other words,a big Pharma wet dream.

      But that premise turned out to be largely untrue. Instead, much of human disease is due to rare high-risk variants. This wasn’t known until recently (last 2-3 years). So while it is true that potential drugs will have small target populations, that reflects the underlying biology more than anything else.

      Where the big advances have taken place is in screening. In a way, this is to the detriment of big Pharma, because the ‘trial-and-error’ non-molecular profiling approach the medical profession has generally performed for the last 40-50 years. Put more simply: the way a cancer is diagnosed generally is that a pathologist examines its physical characteristics via histology and then recommends treatment. If one chemotherapeutic agent doesn’t work, they try another. But molecular screening is far more accurate as a predictor of response to different chemotherapeutic agents than histology, and the advances that have occurred as largely a consequence of genome sequencing.

      Penicillin is an extremely poor comparison, as anyone (who isn’t allergic) will benefit, much like vaccines.

  12. Tertium Squid


    “So the clear and present danger isn’t that the G.O.P. will be able to achieve its long-run goals. It is, rather, that Republicans will gain just enough power to make the country ungovernable, unable to address its fiscal problems or anything else in a serious way. As I said, banana republic, here we come.”

    This sort of myopic partisanship would seem quaint if it weren’t so insidious. We have “ungovernable, unable to address…fiscal problems or anything else in a serious way” RIGHT NOW.

    I say vote for anyone that doesn’t have D or R next to their name. A 3rd-party revolt wouldn’t succeed, but I think threatening the duopoly would at least have some beneficial effects and provoke meaningful reform of “the way things are”.

    1. Hugh

      Seriously? You weren’t persuaded by Krugman’s argument that we should not place the economy in the hands of idiot Republicans but rather idiot Democrats?

  13. Neil

    @Zeroing in on Cancer: Article was of average quality. Last four paragraphs gloss over some important issues.

    Biopharmaceuticals, and drugs in general, are expensive because they are the most heavily regulated products on the planet. Current estimates (coming from investigations into cost effectiveness of biosimilars) are that it takes 10 years of clinical trials and 1 billion dollars to get a new drug to market, and takes a company 12 years to break even on the development costs. This is even with the high prices that Pharma companies charge for their products. In my opinion these complaints about cost/lack of innovation are entirely due to the appalling ignorance of pundits on how much regulation there is and the cost of that regulation. This is doubly ironic when it shows up on a financial blog…an industry that has done a lot of damage to the world economy due to a lack of regulation, which they oppose because it would stifle innovation and increase costs…

    Also ignored is the fact that the FDA has a process for “orphan drugs” – drugs for rare diseases. This reduces the regulatory burden and thus encourages companies to overcome the issue of “highly effective drugs that never reach market because the illnesses they alleviate are rare.” This regulation could likely be improved but it is interesting that the author does not mention that it exists.

    I also am amused by the irony of this article next to the GMO article. In the cancer article the risk-adverse, safety-before-everything nature of the FDA is causing high prices and the author is complaining about it. In the second article the same risk-adverse, safety-before-everything organization is dangerously releasing “frankenfoods” into the environment without labels. Hmmm….something doesn’t add up there does it?

    As a rule of thumb, any article that uses the prefix “franken-“ can be safely ignored as a source of information on GMOs. This prefix is only used by people that are employing fear to achieve a political anti-corporate aim and they generally have a very poor grasp of the science behind GMOs. We have using “unnatural” methods to genetically modify crops since the beginning of the Green Revolution, e.g. the use of radiation to randomly mutate seed varieties is a common technique and theoretically way more dangerous than the more direct “GM” methods that have been developed in the last 15 years. All new seed varieties have to pass food safety standards. Since “GM” foods past these standards they are safe, thus trying to make them look dangerous is at best a cynical marketing ploy. The FDA is correct to stop that practice.

    And don’t get me started on the stupidity of even trying to label milk “hormone-free”.

    1. Hugh

      Your own take seems as unnuanced as what you are criticizing. What may be a desirable trait from a commercial point of view may not be from an environmental one. Making some plants resistant to some herbicides and pesticides can also turn them into poorly controllable weeds and can kill off beneficial insects like honey bees. Then there are the claims by GM manufacturers that they own the seeds of GM crops. This plays havoc in developing countries where subsistence farmers use some of the seeds from each harvest as the basis of the next crop. And referring back to the weed issue. If GM seeds get out into the countryside, wouldn’t it be, under the theory of their ownership, the responsibility (and liability) of the GM manufacturers to police and contain their creations?

      As for drugs, Big Pharma is much more likely to come out with the 10th tweaking of an SSRI than a completely new drug. Nor is it so much about cost as profit. There have been shortages of some kinds of penicillins. This is not because they are expensive. They are dirt cheap to produce. It’s that there is no profit margin in them. Much the same can be said about vaccines. You give them once or twice and you’re done. In the case of flu vaccines, you have to reformulate them each year. How different (and more profitable) an anti-cholesterol or blood pressure agent that can be prescribed through all the years of its patent protection?

      “All new seed varieties have to pass food safety standards. Since “GM” foods past these standards they are safe”

      This is just laughably wrong. Look at drugs that have been approved for general use. There is still an adverse reaction reporting protocol that covers them and every year we see numerous instances where popular drug X gets pulled or its use restricted. GM foods should at a minimum be similarly monitored.

      1. Neil

        An “unnuanced blog comment” is a bit of a tautology .

        The GMO article was in relation to the addition of (bogus) safety warnings on foods. My understanding is that food safety labeling comes under the review of the FDA. The issues you raise are environmental (resistance to herbicides), legal (liability, ownership) and economic (subsistence farmers unable to buy seeds). These issues may be real but have nothing to do with food safety. I am a proponent of good food safety standards that are applied to ALL food no matter how it is manufactured. If the standards are not good enough, such that some safety issues are arising, then improve the standards and enforce them on ALL manufacturers – organic, conventional, GM etc. It’s the oldest (dirty) trick in book for established industries to scare people about “the new technology in town” and then try to destroy its competitive advantages with onerous regulations that ONLY the new technology has to follow – even though the old technology has equivalent risks.

        Big Pharma is desperately racing to find novel effective therapies for cancer and other diseases. This is expensive and it takes many years for a success to happen, but it is the “holy grail” of the business model. To keep money flowing it is easier to improve on current therapies and easier to expand the markets in which they can be used – easier because you have more knowledge about the therapy and the regulatory agencies are more familiar with the therapy. This, however, is no substitute for true development and any Big Pharma that has that as it’s core business model will fail or be forced to change. I see the recent merging between Big Pharmas and biotech as an example of how Big Pharma failed and is now trying to catch up with the new technology.

        And right now there is no “one-dose cure” for cancer. Don’t worry, Big Pharma is not holding out on you, it just doesn’t exist.

        As for the adverse reaction comment: It’s not unusual for clinical trials on novel therapies to involve 1,000-10,000 patients which costs 50-500 million dollars. Even though that is a lot of people to put into a trial, it is not many when it comes to detecting adverse effects that may happen in 1/100 or 1/1000 people. That’s just the reality of the numbers. Sure you could increase the number of people in the trial…but then you increase the cost that needs to be recouped by the company. There has to be a balance. How much risk would you find acceptable?

        Realize also that there are significant post-launch pharmacovigilance requirements for novel therapies, which is lik

        1. Yves Smith Post author

          You basically blew off the comment on safety. I know people (biomedical engineers, ex NIH) who are simply appalled at the foisting of GM products on the populace with what they consider to be grossly insufficient investigation of safety (and these are not granola heads, they eat burgers and hot dogs). They are tested only over a very short time frame; the real risk is longer term effects that then prove to be difficult to parse out (witness increased hermaphrodization of newborns, falling sperm counts in men, early onset puberty in women. Some argue it’s due to hormones in food, and now in water, others due to plastics).

          1. Chris

            Just as insidious is the fact that if Monsanto crops crossbreed with non-GMO crops, the hybrids become the intellectual property of Monsanto. One corporation controlling the future of food is far, far more evil than the potential health effects, although that’s scary as well.

          2. Neil

            Well, let me address the safety issue more directly then.

            The fallacy of the GMO critics is that they compare GM food to some utopian standard and then highlight where it falls short. Any technology will fail that test. A more realistic comparison is to compare the risks of GM technology to the technology currently used and accepted. Interestingly this sort of comparison is difficult to find. But let me give you two examples – and feel free to run these by your biomedical engineers and ex-NIH people to see what they think.

            First, as I mentioned in my original post, we have been using random mutation to produce high yielding crop varieties for decades now. This involves taking a large number of seeds, exposing them to radiation (which will make thousands of random genetic changes), planting them and then examining the morphology (appearance) of the crops that survive. Those that appear the same as the parent and have higher yields are the new crop strain. It is very common for these mutants to be genetically unstable and they lose the high yield property after a couple of harvests (requiring the farmer to go back to the company and buy more). Remember: This is a standard method used throughout the Green Revolution and the crop varieties produced are used to make convention AND organic crops.

            Contrast this to GM technology where a DNA sequence of known function is inserted into a plant. That is: the role of every single base pair of DNA inserted into the crop is well understood. This is riskier?

            I mean, it is theoretically possible for you to get the same plant genome using these two techniques. Obviously the probability of this happening is vanishingly small, but it is theoretically possible. And if that happened, what the critics of GM would say is that if you use the GM method to get there, then it is incredibly dangerous and needs 20 years of testing before release, whereas if you use the random, who-knows-what-the-f^&k-is-going-on method, then you can grow organic crops with it right now…..

            But that pales in comparison the second example. Bt products.

            Bacillus thuringiensis (Bt) is a spore forming bacteria that is used as a pesticide in organic farming. Sorry, did I say “pesticide”? I meant “biological control” (because organic farmers don’t use pesticides). So the crop is sprayed with the bacteria and one of the many (hundreds? thousands?) of proteins in the Bt organism kills the pests. Sure the crop washed, etc, but if you think that will remove all of the Bt spores, ummm….well, it won’t. Along comes the evil Monsanto and takes the DNA code for the single effective Bt protein and inserts it into the crop. One protein of known function, the toxicology of which is well established. And that now requires incredible amounts of testing because it may cause some unspecified disease in twenty years? I mean, any argument for the GM crop being dangerous can be equally applied to the organic crop.

            To summarize: spraying crops with viable spores of a bacterial pathogen is the paradigm of food safety. But genetically engineering crops to make a specific protein from that pathogen is somehow incredibly dangerous. Hmmm….seems there is a serious logical fallacy there, doesn’t it? What am I missing?

            And for the record, I don’t work for a agricultural company or own stocks in one, so I have no dog in this fight – except the (idealistic) drive to expose appalling hypocrisy when I see it. I do have a background in chemical engineering and molecular biology however, so I do understand the technology better than most.

    2. Roger Bigod

      I thought Zeroing In on Cancer had a good recap of the history. He made it clear that cancer is now understood as a multiplicity of genetic diseases, with corresponding requirements for multiple treatments.

      I agree he glossed over the issues. For a treatment to be available the resources have to be allocated for research, development and treatment. Financial considerations will always be important in the allocations. But many people think they play an unhealthy role at present. He’s tapping into that dissatisfaction without getting specific.

      Still, there was an interesting contrast between the order, insight and hopefulness of the science and the ugly conflicts of the payment process. Sometimes the real world is like that.

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