Friday, August 29, 2014

No realistic economic model predicted Bush's tax cuts would "pay for themselves"

Free Republic - 'Dynamic' Scoring Finally ends Debate on Taxes, Revenue
(As published by Alan Murray in the Wall Street Journal)

 This piece published back in 2003 reviews how a Republican economist working at the White House was given the directorship of the Congressional Budged Office, a non-partisan bureau. While there, he used a new method called "Dynamic Scoring", rather than the standard "Static" method, to assess the effects of the GW Bush tax cuts under EGTRRA. The static method apparently assumes that raising taxes has no effect on economic growth, while the dynamic one takes into account various assumptions about the effects that changes in the tax code will have on economic growth, the budget deficit, and so on. The dynamic scoring method was undertaken on the Bush tax cuts and showed that this method also does not come close to providing evidence that tax cuts provide enough increases in taxable income to balance out the loss of government revenues. Under one set of assumptions, the budget deficit actually did decrease. The assumptions were as follows:
1. Taxes revert back to their pre-EGTRRA rates in 2013 (as scheduled)
2. People realize this and increase their incomes as much as possible prior to 2013
Dynamic scoring, like static scoring, finds that tax cuts have yet to provide enough economic stimulation to increase government revenue.

Thursday, August 28, 2014

Salt isn't as bad for you as they think

USA Today - Americans' salt intake unchanged for 50 years
and
Business Insider -THE TRUTH ABOUT SALT: It's Not As Scary As The Government Says It Is

Researchers did a meta-study on studies that measured people's salt intake going as far back as 1957 up to 2003, making it the largest study about salt intake. The finding: in the US, salt intake as been about the same over this time period, at ~3,700mg/day. This is well above the CDC-recommended  2,300mg/day, despite the increases in processed foods and heart disease since 1957. Another study looked at a 24-year period across 33 diverse countries with roughly 20,000 participants and came up with the same salt intake: ~3,700mg/day. The second article takes a tougher stance than the first, insisting that the evidence from which the CDC recommendation is based is poor and oriented toward the short-term. However, there are some studies showing that very high amounts of salt intake increase production of a certain white blood cell that can be responsible for auto-immune disorders, like MS or Type 1 Diabetes. The over all conclusion seems to be that those with high blood pressure or obesity or other ailments may do better by lowering salt intake, but for most people the CDC number is unreasonably low.

Wednesday, August 27, 2014

Historical studies show only a small disincentive to earn income when taxes rise

NYT - That Wishful Thinking About Tax Rates

This slightly dated piece was written by economist Christina D. Romer, who studies the effects of income tax cuts and increases. There are a few (oft-repeated) beliefs about taxes, incentives, and revenues that she discussses:
Belief 1: Tax increases will decrease the incentive to earn more "at the margins", in short, decreasing economic activity. While this seems to be common sense, history shows very little correlation, if there is one at all. Of course, increases may indeed cause a decrease in incentive but if so, that effect is made up for by other factors. This economist's particular study was for a period between WWI and WWII, where tax rates went up on the super-rich: reported income decreased but only slightly. In other words, the rich didn't stop working because their marginal tax rate went up from 63% to 79%.
Belief 2: Tax cuts will pay for themselves by stimulating economic activity and thereby raising incomes to be taxed (albeit at a lower base), creating equal or greater revenues. Historical data again do not show this to be anywhere near the case. In fact, reported income seems only mildly sensitive to tax cuts.
The conclusion of this piece suggests that modest tax increases may have a modest affect on reported income, but not one that isn't tolerable in order to fund government.

Tuesday, August 26, 2014

Adrenaline is best guess for extraordinary feats

LiveScience - How Powerful is Willpower?

There are stories of ordinary people performing incredible feats of strength/endurance that they would ordinarily be unable to do. How is this possible? The experimental evidence is underdeveloped, so this article just lays out the basic structure that scientists believe enable such performance. Under normal circumstances, the "motor units" in muscles needed for a given task are the only ones activated; when adrenaline stimulates the nerve endings & muscle groups, more muscles are able to respond. Furthermore, adrenaline reduces fear and therefore the risk assessment of an activity, enabling someone to perform what they ordinarily wouldn't. Researchers use the "fight or flight" response to refer to the collection of physical changes that take place and allow incredible feats. 

Monday, August 25, 2014

Those afflicted with the gamblers fallacy may actually get the hot hand

Business Insider - Researchers Tested The 'Gambler's Fallacy' On Real-Life Gamblers And Stumbled Upon An Amazing Realization

Two researchers looked at historical records of online betting on sporting events like animal racing or soccer matches. What was surprising was that the "hot hand" effect, or the increased probability of success after previous successive successes, was actually discernible. The opposite effect was also observable: a "losing streak" also existed for these kinds of bets and gamblers. One possible explanation is that this is a market which can reward skill in wagering-- it's inefficient. Researchers seemingly ruled this out by looking at the overall winnings of gamblers who had winning streaks vs the control who never had such a streak: the amounts of money each group made (on average) was nearly identical. Thus the gamblers who had winning streaks didn't seem to get it from skill, since over the course of their careers they won/lost the same amounts of money (as those without a streak). Researchers then examined the odds taken in bets being made on both winning and losing streaks. It appeared gamblers who were in the middle of a winning streak took bets with shorter odds, while those with losing streaks took bets with longer ones. In other words, those in the middle of a winning streak thought their luck might be nearing the end and got more conservative, while those in a losing streak thought their luck was about to turn around. This classic "gamblers fallacy" is correlated with the observed occurrence of the "hot hand"/"losing streak" effects.

Thursday, August 21, 2014

Eliminate central banking for greater systemic stability (Opinion)

Ludwig von Mises Institute - Don't Blame the Federal Reserve

This opinion piece doesn't so much critique central banking as propose a positive account of the outcomes when eliminating it and letting the free market of loan demand be the money supply. After railing against regulatory reformers and those who propose an alternate system, the author goes on to offer an alternate system. The first charge is that the central bank can't stop the boom/bust cycle through its instruments, and further that regulation is ineffective since regulators are captured by the industry they regulate. The second argument is that regulation "dulls the conscience" since market players would abide only by the letter of the law, not the spirit. 
The positive account claims that money, just like most other commodities, doesn't need to be created "top-down" by central banks, but instead be supplied "bottom-up" by its demand within the market. The primary harm the author identifies from central bank operations is currency devaluation through allowing inflation. Eliminating the central bank would (most likely) return the money to being based on some sort of commodity, like gold. Author believes this would stabilize it against other currencies and against inflation. The second upshot of eliminating central banking would be that commercial banks couldn't use fractional reserve banking, meaning that they loan out more money than they take in. Therefore, banks wouldn't take on additional risk, but of course the money supply would contract significantly. Author believes that the shadow banking system would then take its place, with private equity, bond issuance, and other non-banking investments supplying for loan demand. This would greatly reduce systemic risk to the credit system. In essence, this is a call to separate "money from credit creation".

Wednesday, August 20, 2014

On-duty police can be filmed in public and private places

Washington Post/Volokh conspiracy - First Amendment right to videotape police extends even to probationers, and to one’s own home as well as public places

This is a report from a case recently held where a police officer went to search a suspect's home, and during that time, the suspect recorded the search. The officer had a right to search the home since the suspect was on "searchable probation" [presumably, allowing her to be searched at any time for whatever reason]. During the search, the suspect informed the officer that she had her laptop on and was recording the search of her residence. The police officer told her recording wasn't allowed, and took away the laptop and deleted the video. The suspect filed suit that her first amendment rights were violated. The court agreed. While most cases have involved the right to film the police during prosecution of their duties in a public place (as long as such filming doesn't interfere), this court extended the right into the private residence of the individual as well, with the proviso that the individual has a right to be in that residence.

Tuesday, August 19, 2014

Food cravings and mood might be influenced by gut bacteria

ScienceDaily - Do gut bacteria rule our minds? In an ecosystem within us, microbes evolved to sway food choices


It seems this study is more of a theoretical postulation with a bit of evidence here and there that is consistent with it, yet the conclusion seems obvious: the bacteria that inhabit the human gut try to influence their host (the human) into eating more of whatever that bacteria likes to eat. The bacteria within the human gut are collectively called the "gut microbiome", and they are important in digestion and nutrient intake. Scientists theorize that it's through the vagus nerve, which connects the gut to the base of the brain, that microbes send signaling molecules and chemicals to the brain to try to influence it to take in more of the foodstuffs that the microbes consume. There is some evidence that intake of probiotics can influence human mood, and that some bacteria in the body can increase anxiety in mice. [This is a far cry from proof of microbiome influence, but it is at least consistent with it.] Furthermore, there is a good case to be made that bacteria that can influence the intake of their hosts would gain an evolutionary advantage. Interestingly, the rate of change in the microbiome is rapid; changes in its composition occur on a daily basis, based partially on what the human is eating. Thus humans have their own independent ability to influence their gut microbiome, and thus create either a virtuous or vicious circle of feedback.

Monday, August 18, 2014

At 34 weeks, a fetus can recognize oft-heard sounds

Reuters - Evidence suggests babies in womb start learning earlier than thought: study

A common way that scientists assess whether a pre-linguistic child has "learned" is how quickly the child gets bored after seeing/experiencing something. If the child is bored quickly, the stimulus is not considered novel by the child, and the conclusion is that the child retains some form of the information (even if she can't use it yet). This was a study of pregnant women who were instructed to read a particular new nursery rhyme out loud 3 times a day for 6 weeks, starting at the 34th week of pregnancy. After repeated readings, the scientists measured the heart beat of the fetus while the mother read the rhyme again. After a few weeks, the fetus' heart rate decreased during the reading, compared to the control group (which had not been regularly read to previously). The decrease in heart rate is believed to reflect a kind of familiarity, or ease, with the rhyme. In contrast, the control (no previous exposure to the rhyme), experienced a slight increase in heart rate, suggesting stimulation of something novel. After a break in reading the rhyme, the mothers again read it aloud and the fetus still had a decrease in heart beat, suggesting retention.

Friday, August 15, 2014

Low-standards, for-profit schools show the essence of the US' degree-for-debt education system

The Atlantic - The Law-School Scam

This long-form article focuses on three for-profit law schools run by a private equity firm. The firm, Sterling Partners, bought three law schools as many as 10 years ago and have since then ramped up the number of admitted students, tuition prices, and lowered admission standards. The author makes the case that policy-making enabled this kind of reckless offering: the Federal Direct PLUS Loan Program, which allowed nearly unlimited loan-making from the US federal government to students for all expenses relating to higher education, was extended in 2006. The program effectively allowed colleges to raise costs and assume their students will just take more PLUS loans to cover them, while the loans themselves won't be owed to the college but to a third party (the US government). The other side of the article looks at the prospects of  graduates from these particular for-profit law schools, using both actual and projected data. The likelihood of many of the graduates passing the bar is low, and the actual reported data about employment is very discouraging (over 25% unemployment). The American Bar Association has recently (within the past 4 years) required posting employment data of their graduates 9-months past graduation. However, some schools game this requirement by providing their graduates with 9-month post-graduation "jobs", usually funded by the school (i.e. students' tuition). Thus a small-scale pyramid system whereby current students support recently graduated ones in order to entice more students to matriculate! The article ends by pointing out the structural similarities between these featured for-profit institutions and many middle- to bottom-rung non-profit ones. Ultimately the kind of federal loan structure that enabled the for-profit ones is enabling traditional higher education as well.

Thursday, August 14, 2014

Gender differences in cognition may persist even after equal opportunity

 International Institute for Applied Systems Analysis - Gender disparities in cognition will not diminish

This study used data from Europe that measured the cognitive abilities of aged 50+ adults using three different tests: episodic memory, "numeracy" or mathematical ability, and categorization-ability (e.g. naming as many animals as you can in 60 seconds). Coupled with these tests were demographic, economic, and educational background data. Differences in the tested abilities were found between men and women, but the differences changed (narrowed or widened) due to differences in educational background and general living conditions where the participants grew up. Researchers found that differences between men and women in categorization was equivalent when educational & economic background was roughly equivalent. However, in episodic memory women continued to outperform men even when they all had similar educational opportunities and came from regions with improving living conditions. Men with better living conditions and educational opportunities outperformed women from more impoverished conditions in numeracy, but when women's conditions were raised to equivalence, the gap narrowed (but was not entirely eliminated). Note well that this is a macro-study, broadly considering regions with better or worse living conditions and educational opportunities.

Wednesday, August 13, 2014

Yes, temperatures cooled since 1998. No, that doesn't refute global warming

PhysOrg -Global warming 'pause' since 1998 reflects natural fluctuation, study concludes

A recent study applied a long-term statistical model to historical sampling from pre-industrial sources like tree rings, ice cores, and lake sediment to show that there are regular fluctuations in average climate temperature every 20-50 years seemingly independent of human activity. The period of slight cooling from 1998-2013 (that has befuddled some models that predict constant global warming) can therefore be placed into a larger context of periods of fluctuation that the earth undergoes. The study also pointed out that between 1992-1998 there was a more rapid increase in global temperature than the global warming models predicted as well. It seems the study used some sort of long-term statistical model that accommodates periods of alternating heating and cooling, but on an order of magnitude far below the historical increases in average temperature. This combined with a previous study that concluded, with 99% certainty, that the warming in global temperatures from 1880 onwards are too large to be a result of "natural fluctuations" in the earth's temperature.

Tuesday, August 12, 2014

Time passes differently for the depressed

Scientific American - Depression Makes Time Estimates More Accurate

In a small study, students who were mildly depressed and ones that were not were asked to judge the length of a sound (tone) that lasted between a few seconds to just over a minute. They were then asked to reproduce the tone length. In general, the non-depressed students (who are comparatively happier) would overestimate (by 16%) the length of time the tone lasted, and then, when asked to reproduce it, produced a time that was 13% shorter. The depressed students underestimated the tone length by only 3% and then when they had to reproduce the tone, over-did it by only 8%. Depressed subjects were more accurate with their judgments of time passing (if anything, perceiving it to pass more quickly), while healthier ones considered time to pass more slowly. [The trouble with slow/fast descriptors with the perception of time is that it is easy to get confused. I think it is perhaps more accurate to say that healthy people perceive time as more "full" than depressed ones, who perceive it more accurately, but perhaps as more "thin".] The attitude of "depressive realism" (more accurate perceptions when depressed) may be seen not just to apply to self-perception but also other phenomena like time. Finally, researchers speculated that being more "mindful" of the present and not focusing on the passing of time may be a partial treatment for depression.

Friday, August 8, 2014

Get anti-oxidation through hostile plants, not supplements

Outside Magazine - Poison Yourself-- It's Good for You

Despite the provocative title, this article focuses on comparing anti-oxidant supplements to plants and other foods that naturally stimulate the anti-oxidation process in humans. The idea here is that some plants (especially those that survive in "harsh" conditions) create chemicals that are meant to discourage insects and other creatures from eating them (the chemicals are named "antifeedants"). When humans eat the plants and therefore the chemicals, the body reacts as though it has been mildly stressed (or poisoned) and creates antioxidants and goes through other antigen-fighting processes. Thus stressing the body slightly creates an opponent-process "xenohormesis" that builds the body's natural defenses.

Thursday, August 7, 2014

Long-Term Potentiation is a memory mechanism

Brain Blogger - Memories are Made of These

Scientists have been looking for stronger evidence that Long-Term Potentiation (LTP) is a mechanism constitutive of memory. LTP is a brain-behavior whereby two (or more) neurons will come to activated synchronously when they are continually stimulated synchronously. In other words, neurons come to be associated with one another (by improving their transmission between each other) when they are activated repeatedly synchronously. In this study, scientists created a fear of a bell in rats by associating it with a shock to the rats' feet. Scientists understand a fear response in lab rats because they "freeze" when afraid. Soon, the bell itself induced the freezing. Scientists conducted a similar training with a blue light instead of a bell, again eventually inducing the fear response to the blue light alone. The blue light stimulated a portion of the rats' amygdala that had been previously altered so as to create pathways in the brain based on light-sensitivity. The stimulated portions of the amygdala then showed evidence of LTP. Perhaps even more interestingly, when scientists used light to counter the effects of LTP (a mechanism called Long-Term Depression), the fear response was not observed. Thus a strong connection between behavioral memory (fear) and LTP is established. This study further strengthens the case that LTP is a critical mechanism underwriting memory.