Postings from July 2002
[Note: Some now-dead links have been removed from archived items.]

YES, MICKEY: To answer the question from Kausfiles, yes, the Chinese Gini coefficient is rising. But just try getting that little fact into the NYT, where you can't even assume readers know what a mode is. (That's the mysterious "peak" of the distribution to which I referred in my column, baffling everyone who actually knows anything about statistics.) And while I appreciate all the credit I'm getting for the column in blogland, I didn't do the research. Xavier Sala-i-Martin of Columbia and NBER did. People who want to know the full story should download his papers here and here; click on the title above the abstracts to get the full paper. Having taken econometrics for dummies, I'm not exactly qualified to construct "kernal of kernals" distributions. [Posted 8/16.]

BLOGGING AND ME: I'm posting a bunch of stuff today. But contrary to my radio friend Hugh Hewitt's latest column on blogs, it takes a lot more than 10 minutes to keep mine up. In addition to the writing (and, in my case, coding), it requires a lot of reading and thinking—about things that don't have much to do with aesthetics—and you also get a lot more email. Unlike that superhuman multitasker James Lileks, I'm too easily distracted to blog and concentrate on my book at the same time. And I've got a final chapter to write in just a couple of weeks. (The previous ones have taken months apiece, but there shouldn't be a lot of research involved in the conclusion.) I've got a few more items to post in the next few days, but barring big news, I expect to be AWOL until September.

I'll be on Hugh's show on August 28, as part of his new weekly blogger feature. The David Gergen World At Large show with David Brooks, Russell Banks, and me is scheduled for August 24 in NYC. I'm guessing it will be this Friday evening in South Carolina (it was supposed to be last Friday, but my mother says it wasn't), which is its sponsoring home. Other than that, you'll need to check local listings. You can see a tiny photo of us here. [Posted 8/15.]

PROGRESS AND POVERTY: My NYT column today looks at the problems with claims that the "rich are getting richer and the poor are getting poorer" worldwide. [Posted 8/15.]

KIRK OUT: I've got no particular grudge against former Dallas mayor Ron Kirk, and I may even vote for him for Senate on the grounds that Gridlock is Good Government. But the recent puff pieces in The New Yorker and Time missed a huge, obvious part of the Kirk story. In electing fiscal gadfly Laura Miller his successor, the voters rocked the downtown establishment that adored Kirk, thoroughly repudiating his legacy of big, showy, expensive projects in favor of basic services like better roads. Plus the city now has a shortfall of $95 million and is facing tax hikes and service cuts. That's hardly a ringing endorsement of the outgoing regime. [Posted 8/15.]

OPTION VALUE: I weighed in on some of the more thoughtless proposals to regulate stock options in my NYT column last month. If you want to understand the economics of whether companies should expense options, the best explanation I've seen is Hal Varian's Economic Scene column from May. The bottom line: In calculating earnings per share, options belong in the denominator not the numerator. (Varian is a terrific columnist and an economist's economist. You can find his other columns here.)

Intel's Andy Grove, who qualifies as America's leading corporate statesman, is holding out against the option-expensing bandwagon. Don Clark reported in the WSJ (subscription required):

Mr. Grove argues that the "deafening rhetoric" is doubly misplaced in the case of a company like Intel, whose broad distribution of stock options has had the effect of spreading wealth generated by the company to secretaries and factory workers as well as top managers.

While options represented a hefty 11.4% of total shares outstanding at the end of last year, Intel's top five executives accounted for just 2% of options granted through Dec. 31, compared with 18% to nearly 30% at some companies, he says.

Moreover, Mr. Grove and Andy Bryant, Intel's chief financial officer, assert that the current expensing fad could actually wind up making things worse. Among other things, Mr. Bryant predicts that companies will simply urge investors to look at earnings before option expenses—a move back toward nonstandard "pro forma" measures at a time when many companies are trying to shift to generally accepted accounting principles.

What's most depressing about the debate on this issue is how little interest the politicians show in anything other than symbolism. That wouldn't be so bad if the laws they adopt had only symbolic consequences, but we'll live with the incentives they create for a long time. (On a positive note, John McCain's truly inane proposal died a quick death.)

More than Zero has had great coverage of stock-market issues. Take a look through the July archives. [Posted 8/15.]

STEM CELLS: In other Andy Grove news, the Intel founder has pledged $5 million to fund stem-cell research at UC-San Francisco. Unfortunately, according to the UCSF press release (downloadable as a .pdf file) the money will only match contributions of at least $50,000. Otherwise, I'd suggest that everyone send a check.

If you'd like to contribute money to further lobbying efforts on behalf of such research, you can send a check to the Coalition for the Advancement of Medical Research at 2120 L Street, NW, Suite 850, Washington, DCÊ20037. (Contributions are not tax-deductible.) CAMR capably spearheaded the opposition to making therapeutic cloning a crime. The issue will be back, and CAMR will need all the financial support it can get. [Posted 8/15.]

MUSCLES FOR LIFE: My buddy Charles Oliver sends a link to this Philadelphia Inquirer story with a note saying, "You know what this means? Hulk Hogan will never retire." The story's implications go way beyond aging wrestlers.

You know all those steroid-laced sluggers, blood-doped swimmers, and hormonally enhanced weightlifters who people worry are ruining sports?

They're just minor-league fears.

The real nightmare is lurking inside tiny cages in a University of Pennsylvania basement.

There, genetically engineered mice and rats, some of them the equivalent of 80-year-old humans, display rippling, well-toned muscles that neither aging nor a lack of exercise can diminish.

Injected only once with a synthetic gene created by researchers in Penn's physiology department, these ripped rodents are as much as 60 percent stronger than untreated ones. When injured, they recover with remarkable speed. And their muscles don't weaken with age.

"The muscle properties of the mice really never changed from when they were young to as old as we could get them," said Dr. H. Lee Sweeney, who heads the Penn study, funded by the National Institutes of Health. "The potential for its use in athletics is very high. Combined with a normal training protocol, athletes will get more out of their work, will recover from injury more quickly, and... the number of years they will be competitive will increase immensely."...

The Penn study's initial aim was to explore muscle deterioration in the elderly. A virus was created that produced a synthetic version of the gene that alerts muscles to the need for repair and growth.

It does so with a substance called IGF-1 (Insulin Growth Factor-1). By injecting mice, and later rats, with the gene, Sweeney and his team ensured that the rodents' IGF-1-triggering devices would be constantly switched on.

"We thought if we kept that signal on all the time, anytime the muscle got damaged, it would repair itself faster and maybe even bigger," Sweeney said. "It turned out that with that signal turned on all the time, the animals did not get weaker as they got older. And they kept their speed as well as their strength throughout their lives."...

And, in the rodents at least, there have been no damaging side effects.

"We haven't seen any," Sweeney said. "Of course, we know that if humans have high levels of IGF-1, it can cause cardiac problems and a number of other problems. But by having the muscle produce it within the muscle, none was getting into the blood. It was all being trapped in the muscle."

The younger the animal was injected, the more it increased its strength. Young adult mice quickly became 15 percent to 25 percent stronger and maintained that level throughout their lives, typically 2 1/2 years. Even those treated in middle age grew stronger, too.

The strength of one mouse, dubbed "He-Man," improved by 60 percent, and he was able to carry three times his weight.

The article appeared in the sports section, so I'll forgive the writer's parochialism. But anyone who thinks athletes are the only folks who'd like stronger muscles that stay fit indefinitely is missing the big story. If this technique works on people, everyone will want it—for themselves and for their children. Why have a frail old age when you don't have to? And, barring unpleasant side effects, why not be as strong in your youth as you can be?

As this gene therapy illustrates, the line between enhancement and cure is a blurry one. The technique is being developed as a way to help restore deteriorating muscles. But deterioration comes "naturally" with old age. Is it a disease? Or is it simply a condition we don't like? And if it's the latter—whic seems like a more useful category to me—why limit its treatment to the old? [Posted 8/15.]

VIAGRA FOR THE BRAIN: On a similar note, thanks to a change in FDA categories, drug makers can now seek approval for what David Stipp of Fortune calls what "the thinking person's Viagra—memory medicines that really work." Stipp explains in an article from last fall:

Bring up memory lapses with your doctor, and he or she will probably say that these minor midlife brain cramps are rarely a sign of imminent Alzheimer's. Instead, physicians describe non-elderly people with memory complaints as the "worried well." But that expression, while meant to be reassuring, has an implication that isn't comforting at all: "Well" simply means you're losing it at the usual rate.

Here's the hard truth: Average scores on memory tests decline steadily after age 25, says Thomas H. Crook, a former National Institutes of Health researcher who now runs Psychologix, a firm he founded to offer computerized cognitive assessment. Midlife memory erosion is unsurprising, given that by late middle age we're losing, on average, about 1% of our brain volume each year. We compensate, of course, with endless variations on tying a string around a finger. Falling back on habits and experience to reduce the need to absorb new information helps too.

But when it comes to total brainpower—the kind that's increasingly in demand in the info age—well, you may as well put on sneakers and try to literally outsprint the hungry young lions circling your job as to out-cogitate them. Tests that mimic practical memory tasks, such as associating names with new faces and remembering phone numbers after a short delay, suggest that by age 55 most of us are only about 75% as good at learning and recalling new things as we were at 25.

You'd think that by now every major drug company would have mounted a crash effort to develop the thinking person's Viagra—memory medicines that really work. Says Crook: "If a patient with presbyopia [the normal loss of close-up vision in middle age] complained to his physician, 'Doc, I'm having trouble reading the newspaper,' he wouldn't be told, 'That's what nature intended, so just go home and read less.' " But memory pills haven't happened, and the main reason is simple: Until last spring drugmakers didn't have a well-accepted diagnostic target to aim at.

Now that has changed. Spurred by progress in the fight against Alzheimer's, doctors have begun to embrace a kind of early-warning diagnostic category called mild cognitive impairment, or MCI—a state of fuzziness that falls between ordinary midlife memory loss and the devastating cognitive decline of Alzheimer's. When the Food and Drug Administration last spring effectively endorsed MCI as a diagnostic category, it opened a "totally new landscape for developing memory drugs," says Harry M. Tracy, publisher of NeuroInvestment, a Rye, N.H., newsletter.

MCI sounds like the kind of fuzzy category that drives critics of the medicalization of everything crazy. Is it a disease or just a normal state of life? If we define "disease" as a biologically phenomenon we don't like, it's a disease. But it's also normal. We're lucky hair color doesn't require a diagnosis of "age-related pigmentation loss," along with a prescription for highlights. [Posted 8/15.]

MIRACLE DRUG: Speaking of conditions you don't want, long-time readers of this site know that I'm plagued with migraines. Or at least I used to be. I finally got a prescription for Imitrex three months ago and haven't had a full-blown migraine since. Ordinarily I would have had between three and ten.

Migraines are the sort of condition we used to just live with. Now we don't have to. [Posted 8/15.]

TOLD YOU SO: From one of my first postings, January 12, 2001:

VERTICAL DISINTEGRATION: The AOL-Time Warner scares the bejesus out of those who fear media concentration. They shouldn't worry. This behemoth makes no business sense. There's no particular reason for all these businesses to be under one roof, rather than contracting with each other in the marketplace. The merger is just the first stage of restructuring. Look for lots of spinoffs over the next few years. Oh yeah, and as a long-time and soon to be former customer, I have no long-term faith in AOL. Bad customer service and too many annoying features. They were a great entryway, but depending on newbies and inertia won't work as a long-term strategy.

More early skepticism here (unfortunately minus the now-dead link to the Sloan column) and here. [Posted 8/15.]

READ COASE: In working on my book, I've reread Ronald Coase's 1960 article, "The Problem of Social Cost," which is truly one of the most brilliant and subtle economic works ever, as well as the most cited. (Here's the NYT column I wrote on Coase and "visual pollution.") In typical Coase fashion, it also works in some dry jokes. The following quote is practically an aside, but it's keeping in mind, no matter what your view of the relationship between markets and law.

A second feature of the usual treatment of the problems discussed in this article is that the analysis proceeds in terms of a comparison between a state of laissez faire and some kind of ideal world. This approach inevitably leads to a looseness of thought since the nature of the alternatives being compared is never clear. In a state of laissez faire, is there a monetary, a legal, or a political system, and if so, what are they? In an ideal world, would there be a monetary, a legal, or a political system, and if so, what would they be? The answers to all these questions are shrouded in mystery and every man is free to draw whatever conclusions he likes. Actually, very little analysis is required to show that an ideal world is better than a state of laissez faire, unless the definitions of a state of laissez faire and an ideal world happen to be the same. But the whole discussion is largely irrelevant for questions of economic policy since, whatever we may have in mind as our ideal world, it is clear that we have not yet discovered how to get to it from where we are. A better approach would seem to be to start our analysis with a situation approximating that which actually exists, to examine the effects of a proposed policy change, and to attempt to decide whether the new situation would be, in total, better or worse than the original one. In this way, conclusions for policy would have some relevance to the actual situation.

GREAT NEWS: The most heartening article I've read in a long time is this piece on how a diesel-powered food processor is transforming life in Mali. [Posted 8/15.]