2009 - %3, May

No Progress? No Nookie!

| Tue May 5, 2009 10:05 AM EDT

Now there's a slogan!

The women of Kenya have gone Lysistrata on their do-nothing political husbands. Spurred on by Kenya's Federation of Women Lawyers, the Kenyan leaders' wives are being encouraged to cut their husbands off until a weeks-long political stalemate gets resolved:  "The boycott has been sparked by a feud between Mwai Kibaki, the president, and Raila Odinga, the prime minister, over who runs the government agenda in parliament."

So far, the Prime Minister's wife has joined the boycott. No word yet on whether Mrs. Kibaki will develop a blinding headache, but here's hoping.

Whatever works, right?

Bad as all the talk is of Michelle Obama's clothes, hair and arms, at least we don't have to deal with this.

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Credit Report

| Tue May 5, 2009 1:52 AM EDT

The latest on credit conditions:

Although credit conditions remain strained, an April survey of loan officers by the Federal Reserve found a smaller number of banks were tightening loan standards compared with a few months ago.

Glimmers of improvement were most notable in commercial lending. The Fed said 40% of the 53 domestic banks it surveyed between March 31 and April 14 said they tightened standards on commercial and industrial loans, a smaller percentage than the 65% that said in January that they tightened standards.

Other metrics apparently show the same thing: banks are still cutting back on lending, but they aren't cutting back quite as much as before.  In other words, the economy is still getting worse, but not quite as fast as it was earlier this year.  These days, that counts as good news.

Note to Self: Avoid Surgery in Georgia

| Mon May 4, 2009 8:32 PM EDT

Doesn't "wrong-site" surgery sound oh so much friendlier than "Oops, we removed the wrong breast?"

From the AJC:

A surgical team at Northside Hospital was supposed to remove one of the patient’s breasts — but performed a double mastectomy because of a mistake, state records show. At Atlanta Medical Center, a surgeon drilled into the wrong side of a patient’s head before discovering the error. At several Georgia hospitals, doctors circumcised the wrong babies, performing the procedure against their parents’ wishes in cases at Wellstar Kennestone Hospital and Cartersville Medical Center. At others, doctors mistakenly operated on the wrong hand, knee, hip, leg, hernia and other body parts.

In Georgia, wrong site surgeries apparently get reported once a month. And it's not just a problem in the South: Pennsylvania's even worse.

I wonder how many of these mistakes are related to sleep deprivation in doctors, don't you?

[H/T ProPublica.]

Quote of the Day - 5.4.09

| Mon May 4, 2009 7:34 PM EDT

From Paul Krugman, ruminating over the recent leaks about the results of the Treasury's stress tests:

Even Brad DeLong, who has been relatively sympathetic to the administration here, is disturbed by the idea that regulators are negotiating with the banks about the test results. Now it seems as if the report's contents may also be dictated by what, based on the response to leaks, the informed public is willing to swallow. ("Would you believe it if we say Citi is fine? OK, what if we say they need $5 billion? Not enough? How about 10?")

The source of the stress test leaks is mysterious, but it's the numbers themselves that baffle me more.  Most of the leaks, for example, suggest that Citigroup will be told it needs additional capital of $10 billion, a figure so low it would barely be worth bothering with.  Conversely, most of the numbers I've seen thrown around from independent analysts come to ten times that amount or more.  If it turns out that Citi really is short by only $10 billion, it means we can all breathe a sigh of relief and declare an end to the banking crisis.  I woldn't count on that, though.

Lovely, Lovely Pears

| Mon May 4, 2009 6:44 PM EDT

Taylor's Gold pears are back in my local supermarket!  Hooray!

The Bloated Financial Industry

| Mon May 4, 2009 6:27 PM EDT

James Surowiecki writes that the reason the financial sector has grown so spectacularly over the past couple of decades is because, compared to the boring 50s and 60s, the demand of modern businesses for capital has also grown spectacularly:

The financial sector’s most important job is channelling money from investors to businesses that need capital for worthwhile investment. But in the postwar era there wasn’t much need for this....Thomas Philippon, an economist at N.Y.U., has shown that most of the increase in the size of the financial sector [during the period 1980-1999] can be accounted for by companies’ need for new capital....Philippon suggests that, given the demands of businesses for capital, a normal financial sector would be about the size it was in 1996.

But this is only part of the story.  The need for capital may well have gone up considerably, but the combination of globalization, automation, and greater competition should also have made the finance industry far more efficient at providing it.  As Felix Salmon says:

One would hope and expect that between sell-side productivity gains and a rise in the sophistication of the buy side, any increase in America's financing needs would be met without any rise in the percentage of the economy taken up by the financial sector. That it wasn't is an indication, on its face, that the financial sector in aggregate signally failed to improve at doing its job over the post-war decades — a failure which was then underlined by the excesses of the current decade and the subsequent global economic meltdown.

Most information technology sectors — and finance is decidedly one of them — have become far more efficient over the past few decades.  They may be bigger in absolute terms, but the price per unit of whatever they're selling — MIPS, bandwidth, gigabytes, etc. — is far lower.  In the case of finance, the units they're selling are dollars of capital.  But has the per-unit cost of providing capital gone down substantially since, say, 1980?  If not, why not?

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Asian Mercury Crossing the Ocean

| Mon May 4, 2009 6:18 PM EDT

A fascinating new study documents for the first time how mercury gets from smokestacks in Asia to tuna on dinner tables in America. Scientists sampled Pacific Ocean water from 16 sites between Honolulu and Alaska, then constructed a computer model linking atmospheric emissions, transport and deposition of mercury, and ocean circulation.

Their findings published in Global Biogeochemical Cycles show how mercury originating from fossil-fuel-burning plants and waste-burning plants in Asia falls into the Pacific Ocean near the Asian coastline. The mercury-enriched waters are then carried by large ocean currents east towards North America.

The study documents for the first time something of the mysterious process by which mercury becomes methylmercury in the ocean. The simple version: Mercury rained down from the atmosphere is taken up by phytoplankton living in sunlit waters. When these plankton die they rain down into the depths where they're decomposed by bacteria. The process of decomposition turns mercury into methylmercury.

Methylmercury is an environmental neurotoxicant that rapidly bioaccumulates in the foodweb, eventually concentrating in top-tier predators like tunas and humans. Some 40 percent of human exposure to mercury in the US comes from eating tuna hunted in the Pacific Ocean. Pregnant women who consume mercury-laden seafood can pass on life-long developmental effects to their children.

Since the Industrial Revolution anthropogenic mercury levels in the atmosphere have risen threefold, with corresponding increases in terrestrial and aquatic ecosystems. This study found mercury levels in water samples rose an alarming 30 percent between the mid 1990s and 2006. That's hardly the end of it though. The authors predict another 50 percent increase in the Pacific by 2050 if emission rates continue as projected.

Yet another reason to we can't tread water on fossil fuels. Too bad Australia's Kevin Rudd just did a spineless jellyfish backflip on climate change. As if the economy is disconnected from the environment.
 

Shell Won't Have To Pay for Pesticide Mess

| Mon May 4, 2009 5:10 PM EDT

Taxpayers, get ready to spend more to clean up hazardous-waste sites. With a precedent-setting decision, the Supreme Court just made it a little easier for companies who are involved in environmental contamination to pass the buck to the government.

Here's what happened: Shell Oil sold millions of dollars worth of pesticides to an agricultural company called Brown & Bryant, which stored the chemicals improperly. Later, the company went out of business, and it was discovered that those cheicals had contaminated the nearby land, which was later designated a Superfund site.

Treehugger points out that this case raises some interesting (and potentially troubling) questions about corporate culpability:

...once a company sells hazardous chemicals, is it responsible for ensuring they're kept safe? Or is it out of their hands entirely? Should companies that lease land to businesses that have potentially dangerous environmental practices be responsible for the safeguarding of that land? Or should the government have to pick up the tab in unfortunate situations like this[?]

 

 

More on Religious Freedom and Same Sex Marriage

| Mon May 4, 2009 5:00 PM EDT

A la Kevin's earlier post, we really do have lots to think about in terms of the fall out from same-sex marriage. I'm a supporter, but I have to admit, I'm having a hard time thinking through the externalities. Which is exactly what we must all do. From the op-ed at issue:

Make Billionaires Pay Taxes? Say It Ain't So!

| Mon May 4, 2009 4:31 PM EDT

Republican members of Congress must enjoy pathetic approval ratings, because they're apparently already raising hell about President Obama’s call for a Congressional crackdown on offshore tax havens. And what could beat the populist appeal of standing up for thieving billionaires! Obama figures his get-tough approach (see below) could bring the Treasury an extra $210 billion over ten years. Obama, of course, is a pragmatist. Last time we touched base with Sen. Carl Levin, the Michigan Democrat, he was blaming the tax cheats for Treasury losses of $100 billion—per year.

As chair of the Permanent Subcommittee on Investigations, Levin was then looking into dubious dealings by international banking conglomerate UBS—where our old pal Phil Gramm served as a vice chairman soon after pushing through legislation that brought down the economy. Another investigative target was IGT, the Liechtenstein bank owned by that principality's royal family. "The IRS doesn't have the money, the time, or the legal tools it needs to stop offshore abuses," Levin told Mojo contributor Peter Stone, who wrote this piece on offshore tax shenanigans for our November/December 2008 issue.