December 2010 – Page 3 – artdiamondblog.com

The Psychology of How Power Corrupts

(p. B1) Being in a position of power . . . may make people feel that they can do no wrong. In recent experiments, Dana Carney, a psychologist at Columbia University’s business school, has found that acquiring power makes people more comfortable committing acts they might otherwise be reluctant to commit, like lying or cheating. As people rise to a position of power, she has shown, their bodies generate more testosterone, a hormone associated with aggression and risk-taking, and less cortisol, a chemical that the body generates in response to stress.

“Having power changes you physiologically, reducing your body’s internal feedback that tells you which actions are good or bad,” says Prof. Carney. “Power temporarily intoxicates you.”

For the full commentary, see:
JASON ZWEIG. “THE INTELLIGENT INVESTOR; What Conflict of Interest? How Power Blinds Us to Our Flaws.” The Wall Street Journal (Sat., OCTOBER 16, 2010): B1.
(Note: ellipsis added.)

Measuring Inflation by Internet Prices

Source of graphs: online version of the WSJ article quoted and cited below.

(p. A5) Economists Roberto Rigobon and Alberto Cavallo at the Massachusetts Institute of Technology’s Sloan School of Management have come up with a method to scour the Internet for online prices on millions of items and then use them to calculate inflation statistics for a dozen countries on a daily basis. The two have been collecting data for the project for more than three years, but only made their results public this week.
. . .
In countries where the apparatus for collecting prices is limited, or where officials have manipulated inflation data, the economists’ indexes might give a clearer view. In Argentina, for example, the government has been widely accused of massaging price figures to let it pay less interest to holders of inflation-indexed bonds. President Cristina Fernández has defended the government data. For September, the government’s measure of prices rose 11.1% from a year earlier. The economists’ measure in that period: up 19.7%.

For the full story, see:
JUSTIN LAHART. “A Way, Day by Day, of Gauging Prices.” The Wall Street Journal (Thurs., NOVEMBER 11, 2010): A5.
(Note: ellipsis added.)
(Note: the online version of the article is dated NOVEMBER 10, 2010.)

Science Can Contribute “Diligent Experimental Habits” to Technology

(p. 101) Nothing is more common in the history of science than independent discovery of the same phenomenon, unless it is a fight over priority. To this day, historians debate how much prior awareness of the theory of latent heat was in Watt’s possession, but they miss Black’s real contribution, which anyone can see by examining the columns of neat script that attest to Watt’s careful recording of experimental results. Watt didn’t discover the existence of latent heat from Black, at least not directly; but he rediscovered it entirely through exposure to the diligent experimental habits of professors such as Black, John Robison, and Robert Dick.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

After Being “Nasty and Unruly for Decades” Henry Becomes a Father at Age 111

“TUATARA. The tuatara, scientists have learned, is in some ways a so-called living fossil.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. D1) . . . the animal that may well be New Zealand’s most bizarrely instructive species at first glance looks surprisingly humdrum: the tuatara. A reptile about 16 inches long with bumpy, khaki-colored skin and a lizardly profile, the tuatara could easily be mistaken for an iguana. Appearances in this case are wildly deceptive. The tuatara — whose name comes from the Maori language and means “peaks on the back” — is not an iguana, is not a lizard, is not like any other reptile alive today.

In fact, as a series of recent studies suggest, it is not like any other vertebrate alive today. The tuatara, scientists have learned, is in some ways a so-called living fossil, its basic skeletal layout and skull shape almost identical to that of tuatara fossils dating back hundreds of millions of years, to before the rise of the dinosaurs. Cer-(p. D2)tain tuatara organs and traits also display the hallmarks of being, if not quite primitive, at least closer to evolutionary baseline than comparable structures in other animals.
. . .
Tuataras are living fossils in more than one sense of the term. Through long-term capture, tag and recapture studies that were begun right after World War II, researchers have found that tuataras match and possibly exceed in attainable life span that other Methuselah of the animal kingdom, the giant tortoise. “Tuataras routinely live to 100, and I couldn’t tell you they don’t live to 150, 200 years or even more,” said Dr. Daugherty.
They live, and live it up. “We know there are females that are still reproducing in their 80s,” said Dr. Daugherty. At the Southland Museum and Art Gallery in Invercargill, New Zealand, a captive male tuatara named Henry, a local celebrity that had been nasty and unruly for decades until a malignancy was removed from his genitals, mated with an 80-year-old female named Mildred, and last year became a first-time father — at the age of 111.

For the full story, see:

NATALIE ANGIER. “Basics; Reptile’s Pet-Store Looks Belie Its Triassic Appeal.” The New York Times (Tues., November 23, 2010): D1 & D2.
(Note: ellipses added.)
(Note: the online version of the article is dated November 22, 2010.)

Harvard Economists Find that Spending Cuts Lead to Expansions and Tax Increases Lead to Recessions

(p. A19) Economic history shows that even large adjustments in fiscal policy, if based on well-targeted spending cuts, have often led to expansions, not recessions. Fiscal adjustments based on higher taxes, on the other hand, have generally been recessionary.

My colleague Silvia Ardagna and I recently co-authored a paper examining this pattern, as have many studies over the past 20 years. Our paper looks at the 107 large fiscal adjustments–defined as a cyclically adjusted deficit reduction of at least 1.5% in one year–that took place in 21 Organization for Economic Cooperation and Development (OECD) countries between 1970 and 2007.
. . .
Our results were striking: Over nearly 40 years, expansionary adjustments were based mostly on spending cuts, while recessionary adjustments were based mostly on tax increases. And these results would have been even stronger had our definition of an expansionary period been more lenient (extending, for example, to the top 50% of the OECD). In addition, adjustments based on spending cuts were accompanied by longer-lasting reductions in ratios of debt to GDP.
. . .
The evidence from the last 40 years suggests that spending increases meant to stimulate the economy and tax increases meant to reduce deficits are unlikely to achieve their goals. The opposite combination might.

For the full commentary, see:
ALBERTO ALESINA. “Tax Cuts vs. ‘Stimulus’: The Evidence Is In; A review of over 200 fiscal adjustments in 21 countries shows that spending discipline and tax cuts are the best ways to spur economic growth.” The Wall Street Journal (Weds., November 23, 2010): A19.
(Note: ellipses added.)

A version of the Alesina and Ardagna paper that is downloadable online is:

Alesina, Alberto, and Silvia Ardagna. “Large Changes in Fiscal Policy: Taxes Versus Spending.” 2009.

The published version of the Alesina and Ardagna paper is:
Alesina, Alberto, and Silvia Ardagna. “Large Changes in Fiscal Policy: Taxes Versus Spending.” In Tax Policy and the Economy, edited by Jeffrey R. Brown. Chicago: The University of Chicago Press, 2010, pp. 35-68.

Telomerase Can Reverse Aging Ills in Mice

“Two mice involved in an experiment on age-related degeneration. Mice whose telomerase gene was activated, left, showed notable improvements.” Source of caption: print version of the WSJ article quoted and cited below. Source of photo: online version of the WSJ article quoted and cited below.

(p. A3) Scientists have partially reversed age-related degeneration in mice, an achievement that suggests a new approach for tackling similar disorders in people.

By tweaking a gene, the researchers reversed brain disease and restored the sense of smell and fertility in prematurely aged mice. Previous experiments with calorie restriction and other methods have shown that aspects of aging can be slowed. This appears to be the first time that some age-related problems in animals have actually been reversed.
The study was published online Sunday in the peer-reviewed journal Nature.
“These mice were equivalent to 80-year-old humans and were about to pass away,” says Ronald DePinho, co-author of the paper and a scientist at Dana-Farber Cancer Institute in Boston. After the experiment, “they were the physiological equivalent of young adults.”

For the full story, see:
GAUTAM NAIK. “Aging Ills Reversed in Mice; Scientists Tweak a Gene and Rejuvenate Cells, Raising Hopes for Uses in Humans.” The Wall Street Journal (Mon., NOVEMBER 29, 2010): A3.
(Note: online version of the article is dated NOVEMBER 28, 2010.)

Source of graphic: online version of the WSJ article quoted and cited above.

A Key to Scientific Truth: Nullius in Verba (“On No One’s Word”)

(p. 68) . . . scientific understanding didn’t progress by looking for truth; it did so by looking for mistakes.

This was new. In the cartoon version of the Scientific Revolution, science made its great advances in opposition to a heavy-handed Roman Catholic Church; but an even larger obstacle to progress in the understanding and manipulation of nature was the belief that Aristotle had already figured out all of physics and had observed all that biology had to offer, or that Galen was the last word in medicine. By this standard, the real revolutionary manifesto of the day was written not by Descartes, or Galileo, but by the seventeenth-century Italian poet and physician Francesco Redi, in his Experiments on the Generation of Insects, who wrote (as one of a hundred examples), “Aristotle asserts that cabbages produce caterpillars daily, but I have not been able to witness this remarkable reproduction, though I have seen many eggs laid by butterflies on the cabbage-stalks. . . .” Not for nothing was the motto of the Royal Society nullius in verba: “on no one’s word.”

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: first ellipsis added; italics and second ellipsis, in original.)

“A Really Nice Story about Adaptability of Our Life Form”

“Felisa Wolfe-Simon takes samples from a sediment core she pulled up from the remote shores of 10 Mile Beach at Mono Lake in California.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) Scientists said Thursday that they had trained a bacterium to eat and grow on a diet of arsenic, in place of phosphorus — one of six elements considered essential for life — opening up the possibility that organisms could exist elsewhere in the universe or even here on Earth using biochemical powers we have not yet dared to dream about.

The bacterium, scraped from the bottom of Mono Lake in California and grown for months in a lab mixture containing arsenic, gradually swapped out atoms of phosphorus in its little body for atoms of arsenic.
Scientists said the results, if confirmed, would expand the notion of what life could be and where it could be. “There is basic mystery, when you look at life,” said Dimitar Sasselov, an astronomer at the Harvard-Smithsonian Center for Astrophysics and director of an institute on the origins of life there, who was not involved in the work. “Nature only uses a restrictive set of molecules and chemical reactions out of many thousands available. This is our first glimmer that maybe there are other options.”
Felisa Wolfe-Simon, a NASA astrobiology fellow at the United States Geological Survey in Menlo Park, Calif., who led the experiment, said, “This is a microbe that has solved the problem of how to live in a different way.”
This story is not about Mono Lake or arsenic, she said, but about “cracking open the door and finding that what we think are fixed constants of life are not.”
. . .
(p. A4) Caleb Scharf, an astrobiologist at Columbia University who was not part of the research, said he was amazed. “It’s like if you or I morphed into fully functioning cyborgs after being thrown into a room of electronic scrap with nothing to eat,” he said.
Gerald Joyce, a chemist and molecular biologist at the Scripps Research Institute in La Jolla, Calif., said the work “shows in principle that you could have a different form of life,” but noted that even these bacteria are affixed to the same tree of life as the rest of us, like the extremophiles that exist in ocean vents.
“It’s a really nice story about adaptability of our life form,” he said. “It gives food for thought about what might be possible in another world.”

For the full story, see:

DENNIS OVERBYE. “Microbe Finds Arsenic Tasty; Redefines Life.” The New York Times (Fri., December 3, 2010): A1 & A4.
(Note: ellipsis added.)
(Note: the online version of the article is dated December 2, 2010.)

If the Feds Want an Effective Stimulus, They Should Spend to Reduce the Patent Backlog

In my seminar on the Economics of Technology on Tuesday night (11/30/10), Gauri presented some interesting information on intellectual property. At one point she summarized that the lag in processing patents is about three years, but it takes, on average, only about 18 hours to process a patent once the processing has begun.
Later in the seminar, we talked about a brief article by Amar Bhidé on whether large economic stimulus programs have worked in the past, and will work in the present. Bhidé was skeptical, and I am too.
But it occurred to me that one modest economic stimulus expenditure might help. Why not make the highest stimulus spending priority to hire and train enough patent examiners to reduce the patent lag from three years to, say, three weeks?

The Bhidé article mentioned above is:
Bhidé, Amar. “Don’t Believe the Stimulus Scaremongers.” Wall Street Journal, (Tues., February 17, 2009): A15.

Castro’s Reform: Private Restaurants May Now Have Up to 20 Seats

“Restaurants, . . . , offer limited menus.” Source of caption: print version of the WSJ article quoted and cited below. Source of photo: online version of the WSJ article quoted and cited below.

(p. A18) HAVANA–A package of capitalist reforms from President Raúl Castro is creating something new for many Cubans: uncertainty.

Since 1959, when Fidel Castro rode into Havana atop a tank, the Cuban state has promised its people the certainty of a job, food, education and health care. No one expected to get rich under the arrangement; the old joke here is that people pretend to work, and the government pretends to pay them.
. . .
On the island, where many Cubans have taken to using the word “changes,” rather than “reforms,” to refer to the restructuring, people remain cautious. Some suspect that once the economy recovers and small businesses begin to grow, the Cuban government will tighten the noose on entrepreneurs with stricter regulation and steep taxes.
A restaurant on Calle Animas offers an example of such frustrations. Opened in 1996 after an effort by Fidel Castro to jump-start the domestic economy after the collapse of the Soviet Union, it has never expanded, because of a law that limits privately owned restaurants to only 12 seats. “It’s the rules, you live by them,” the owner says.
Prices are high–about $20 for a lunch with fish from the fixed menu–largely, the owner says, because she can’t find ingredients anywhere except in underground markets, where prices are steep. Under the new rules, private restaurants will be permitted to have up to 20 seats. Still, the owner complains that state-run restaurants in the tourist district, which don’t face such restrictions, have many more than 20 seats.

For the full story, see:
A WSJ Staff Reporter. “Cubans Dip a Toe in Capitalist Waters; As State Cuts Half a Million Jobs, Future Looks Murky to Some; ‘We’re Being Left to Fend for Ourselves’.” The Wall Street Journal (Weds., October 6, 2010): A18.
(Note: ellipses added.)