Relevant and even prescient commentary on news, politics and the economy.

Time for some not very big data biotech

It appears that the US government has separated mothers and their children and doesn’t know how to get them back together again. In particular, this is extremely difficult if the children are under 2 and don’t know their family name (looking for someone identified only as “mommy” or “mia madre” is challenging.

I think a data company with some need to apologize to the world can make itself useful. It is not too hard to match 3000 children who are too young to speak and their mothers provided the mothers eagerly cooperate.

DNA fingerprinting is possible. Maternity and paternity tests are possible. taking all 6000 or so DNA fingerprints and matching parents and children requires a few person days at most of programming then a millisecond of the processing power available to, say, Facebook.

The problem of getting addresses for matched pairs of parents and children has been solved long ago provided one has permission from the parents.

If it isn’t done, it’s because they don’t care.

uodate: good news from a firm which needs some good publicity and is, for whatever reason, doing the right thing. I applaud MyHeritage . They are offering free DNA tests to get families back together.

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Pittsburgh Post-Gazette Cartoonist Rob Roberts Fired for Depicting the Real Trump

Cartoonist Rob Rogers was fired from the Pittsburgh Post-Gazette for refusing to do cartoons extolling the virtues and accomplishments of Trump. According to The Association of American Cartoonists; “Rob Rogers is one of the best in the country and his cartoons have been a wildly popular feature of the Post-Gazette. Readers looked forward each morning to opening their papers to see Rogers’ latest pointed commentary.”

Things changed for Rob when the Pittsburgh Post-Gazette hired Keith Burris as its Editorial Page Editor. Just weeks earlier and before Rob Rogers was let go, Editor Keith Burns had written about meeting a self-proclaimed classical liberal; ”To be a liberal: five principles

2) Free speech is essential.

Freedom of speech and expression is the sine qua non of tolerance and pluralism — the grammar of tolerance; the way we make the principle work.

Liberals fight for the right of every thinker and seeker to pursue his truth, to share it, and to be heard.

The greatest liberal thinker of the 20th century, Isaiah Berlin, said: “The first people totalitarians destroy or silence are men of ideas and free minds.”

Perhaps this rational by Mr. Burris did not apply to Rob Rogers and the Pittsburgh Post-Gazette had a different idea of what liberalism meant within the confines of its employment. One commenter to Burris’s editorial claimed “Keith wants us to be the ‘right’ kind of liberals” and another said “Keith Burris defining a liberal is like Donald Trump defining femininity.”

Keith Burris in an editorial for the Pittsburgh Post-Gazette came out in defense of Donald Trump calling some nations “shithole countries.” Entitled “Reason as racism,” Keith Burris argued that calling someone a racist is “the new McCarthyism” defending the sentiment behind President Donald Trump’s reported suggestion the United States take immigrants from an overwhelmingly white country such as Norway rather than “shithole countries” like Haiti or from continents such as Africa.

Representing 150 employees at the Pittsburgh Post-Gazette, the Newspaper Guild of Pittsburgh in a letter to the editor it was “collectively appalled and crestfallen by the repugnant editorial.”

It may be that Rob Roberts no longer meets the qualifications of being a cartoonists at the Pittsburgh Post-Gazette by not conforming to the political stance taken by Pittsburgh Post-Gazette’s Keith Burris and the publisher John Robinson Block. “Cartoonists are not illustrators for a publisher’s politics,” Rogers quips in reply to Blocks and Burris’s critique of his performance at the Pittsburgh Post-Gazette.

“If I drew Trump more often than Block would have liked, it was because I base my cartoons on the most urgent topics at hand. Sadly, Trump provides that fodder every day.”

Some recent cartoons by Rob Roberts the Pittsburgh Post-Gazette would not publish:

Originated and authored by Rob Roberts

Publisher John Robinson Block is a Trump supporter who said during a 2013 community forum on racism that people of color need to pull themselves up “by their bootstraps” like they did in the “old days.” Both Block and Burris met with Trump on his private plane at Toledo Express Airport in September 2016 after a campaign rally.

It is pretty obvious which way the wind blows today at the Pittsburgh Post-Gazette.

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Sessions Quoting Scripture to Us?

AG Jeffrey B. Sessions: “‘I would cite you to the Apostle Paul and his clear and wise command in Romans 13, to obey the laws of the government because God has ordained them for the purpose of order,’ he said. ‘Orderly and lawful processes are good in themselves and protect the weak and lawful.'”

I would quote back to the hypocrite Sessions.

Leviticus 19:33-34:

33 “When a foreigner resides among you in your land, do not mistreat them.
34 The foreigner residing among you must be treated as your native-born. Love them as yourself, for you were foreigners in Egypt.”

or perhaps?

Matthew 25: 41-45:

41 “Then he will say to those on his left, ‘Depart from me, you who are cursed, into the eternal fire prepared for the devil and his angels.’
42 For I was hungry and you gave me nothing to eat, I was thirsty and you gave me nothing to drink,
43 I was a stranger and you did not invite me in, I needed clothes and you did not clothe me, I was sick and in prison and you did not look after me.’
44 They also will answer, ‘Lord, when did we see you hungry or thirsty or a stranger or needing clothes or sick or in prison, and did not help you?’
45 He will reply, ‘Truly I tell you, whatever you did not do for one of the least of these, you did not do for me.’”

We were all once foreigners . . . except for Sessions, Trump and many politicians who despise Mexicans and others.

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Healthcare Insurance Companies Lose in Court on ACA Risk Corridor Program

Healthcare Insurers Lose in Court Over Risk Corridor Funds

I have written a couple of times about Sessions, Upton, Kingston, and Republicans sabotaging the ACA Risk Corridor Program with the insertion of Section 227 in the CRomnibus Bill signed in December 2014. Not only did Senator Sessions, Representative Upton (MI), and Representative Kingston (CO) block the funding of the Risk Corridor Program; with the insertion of Section 227 by Representative Kington, they blocked any transfer of funding from other programs as well. A rehash of the results of Republican sabotage shows, it caused a rise in premiums for the unsubsidized (others were picked up), Coops to go bankrupt, and insurance companies to withdraw from the healthcare exchanges.

Today a Federal Appeals Court ruled; “the U.S. government does not owe health insurers $billions in unpaid risk-corridor funds meant to offset losses during the early years (3 years) of the Affordable Care Act exchanges.

More than three dozen insurers claimed the federal government owed them more than $8 billion in risk corridor payments. Ruling 2-1 the COA determined the payments were not necessary since Congress deemed the program had to be budget neutral after the legislation was passed.”

In other words, the court decided a different Congress and/or the administration made up of different political interests can change the intent of another Congress or Administration.

A similar Risk Corridor Program exists in the Medicare Part D program for drugs which has no life time limit and was put in place by Republicans and Bush to cover any risk which may occur from getting too many higher cost insured.

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Some thoughts on Nuclear Proliferation

I present myself as an expert here, but may be confused. You should probably stick to Wikipedia.

I’m not sure the centifuges in North Korea are all that important.

North Korea doesn’t use centrifuges to make bombs. Like almost everyone (all except Pakistan and the thin boy made by the US& UK & dropped on Nagasaki) they use a nuclear reactor to make Plutonium then extract it using ordinary chemical processes.

Similarly, the Iranian Arak reactor (once under construction & whose reactor vessel is now full of concrete –thanks Obama) was a much worse threat than their centrifuges.

The idea that enriching Uranium is about as easy as extracting Plutonium is deadly. It is the reason Bush ended the Agreed Framework which stopped N Korean Plutonium extraction (or at least the excuse). They had intelligence showign N Korea bought centfigues from Pakistan (which I am sure is much more reliable than the intelligence showing Iraq had WMD and an active Nuclear program and was assisting al Qaeda). This was, in his own word, the hammer John Bolton needed to smash the agreement.

Since then no-one has heard of those centrifuges (which snark aside I guess are in N Korea). After Bush abbrogated the Agreed Framework, N Korea extracted Uranium from spent fuel and made bombs.

The crucial threat is graphite (or I think heavy water) mediated nuclear reactors. The speed of Neutrons is crucial. If slow they are absorbed only by Uranium 235 (causing fission) if faster by Uranium 238 which becomes Plutonium 239. That is the fissile material in all US nuclear weapons (it is much easier to make than highly enriched Uranium 235 & one needs much less of it). If the neutrons go even faster, some are absorbed by Plutonium 239 making Plutonium 240. This is an odd one unlike any nuclide found in nature. It fissions just on its own (doesn’t need to be hit by another neutron). So the spontaneus fission of Plutonium 240 means that one can’t make a bomb of mixed Plutonium 239 & 240 as the neutrons released by the 240 cause pre-detonation of both the 240 and the 239.

Plutonium 240 is the reason that the Osiraq reactor (bombed by the Israelis) couldn’t be used to make bombs. That was clearly Saddam Hussein’s plan when he bought it from the French, but they tricked him making a reactor which made Plutonium 240. Since he couldn’t admit he was trying to make a bomb, they could pretend he wanted electricity and build a reactor which generated electricity but whose spent fuel could not be used to make bombs. All of this was explained to Begin (also I assume by the Israeli’s who make atomic bombs) who had the reacto bombed anyway (Abu Nidal Abu Smidal a reactor is a reactor).

The conflation of Uranium 235 (not used for bombs except as first used in reactors to make Plutonium 239) and Plutonium 239 (the stuff in all our bombs) has caused great trouble. It is related (as an excuse not the true cause) to Bush’s decision which lead to North Korea having nuclear weapons. It confuses people about the Iran deal (they look at the minor quickly reversible part not the key less reversible part). It means people believe aluminium* tubes are a reason to go to war (not close even if they weren’t rocket casings).

I will now google to check how many centrifuges are believed to be in North Korea (I see quite a few — I didn’t know that when I began typing)

* I will not type “Aluminum” without quotation marks until our tariffs are eliminated.

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Sanction Trump not Bourbon

This post “America’s allies should respond to steel tariffs with targeted sanctions on the Trump Organization” by Matthew Yglesias is brilliant (even though he is mainly agreeing with the prior brilliant article by Scott Gilmore “Trade sanctions against America won’t work. Sanctioning Trump himself might.”

The proposal is so brilliant and the case for it so clear, that, I think, each title is enough to convey the idea.

Yglesias elaborates while quoting another Canadian

In light of the unusual combination of geopolitical absurdity and delicacy that the situation poses, at a press conference last week, Canadian Prime Minister Justin Trudeau reached into the bag of rhetorical clichés we normally see American officials deploy against authoritarian regimes abroad:

I want to be clear on one point: Americans remain our partners, our allies, and our friends. The American people [are] not the target of today’s announcement. [skip]

While it’s a good speech, the reality is that Trudeau’s policy countermeasures are aimed at the American people, [skip]

A better path would be to take Trudeau’s analysis seriously — America’s allies should come together and retaliate against Trump rather than retaliating against the American people.

So why are they missing trump and hitting Harley’s and Bourbon ?

The argument of Gilmore and Yglesias is obviously correct. Not only would sanctions directed at Trump be effective, they would also be fair. Bourbon distillers and motorcycle workers bear no guilt, so it is unfair to punish them (also standard practice in trade wars but still unfair).

I’m afraid that what this really shows is that in the struggles among the powerful, the little people are pawns. Sanctions on Trump personally would cause pain to fewer people (I think a (modest) majority of US citizens woud actually be pleased). They would be vastly more effective, because Trump is totally egocentric. But they would be, and are perceived to be, a dangerous escalation.

Directing the punishment at innocent peons is a way of showing it is nothing personal (while saying it is personal). Just a normal policy debate.

Sanctions on Trump personally would be less extreme in that they would directly hurt fewer people, but they would be perceived as very extreme, because the person hurt is present at the G-7 meeting.

Sanctions on individuals are not part of normal trade conficts. There are sanctioned individuals, but they are not members of the club (many are Iranian some are Russian).

after the jump, I move on to a 2 tweet long philosophical digression (which focuses on what I imagine to be the topic of Yglesias’s senior thesis).

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Investors Not Pleased With Italian Politicians

The extreme conflict between the establishment and the new natonal populist majority in Parliament has spooked investors. The difference between the Italian and German 10 year treasury rates just jumped up about 100 basis points.

This isn’t a crisis yet. I recall back when Italia caught a bit of Greek contagion (before ECB president Mario Draghi said “whatever it takes”) that the experts at the tesoro said they could handle interest rate spreads up to 7% (it got close back then)

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Carlo Cottarelli

Carlo Cottarelli was asked to try to form an Italian government by President Sergio Mattarella. There is no chance that Cottarelli will obtain the confidence of Parliament (parties including a majority of deputies have brought up the possibility of impeaching Mattarella for nominating Cottarelli).

Mattarella is using his extraordinary powers to fight populist nationalists who disrespected the Euro. Cottarelli is an odd choice for an anti-anti-globalist — he is currently a top official at the IMF. Nominating him is a declaration of absolute opposition to the current majority in Parliament.

My view is that the rise of populist nationalists in Europe is a terrible thing (not quite as bad yet as their taking power in the USA but getting there). I also think the blame mainly belongs to DG-EcFin and the Eurocrats who do not pretend to respect Democracy, who don’t see 11 % unemployment as relevant to macroeconomic policy making, and who are technically incompented technicians.

Being vain, I googled [waldmann stability and growth pact] to find out to what extent I could tell them I told them so. I found this worthwhile still relevant blog post by Roberto Tamborini. It denounces the application of the stability and growth pact and is well worth reading. But I was most struck by the references (which include the name Waldmann because Waldmann googled himself)

References

Cottarelli C. (2015), “Potential Growth Rates and the Working of SGP Fiscal
Rules”, Vox-EU, 2 March.

Fioramanti M., Waldamnn R. (2016), “The Stability and Growth Pact:
Econometrics and Its Consequences for Human Beings”, Vox-EU, 19 November.

It turns out that I agree entirely, completely, 100% with Carlo Cottarelli. He has been arguing against Brussels’s approach to austerity. He is much more able than I am to write for non-economists. He makes a very simple practical proposal which I entirely embrace — he says that structural unemployment not NAWRU should be used to calculate output gaps. This is actually very important. I am quite confident there is no counterargument based on econometrics or economic theory. It would have prevented the imposition of pro-cyclical fiscal policy. If they had listened to him, he might have been saved from the very unpleasant next few months.

But voters don’t know this, won’t learn, and wouldn’t care. The stability and growth pact NAWRU nuts have discredited Europe, the Euro, international organizations, economics, and time series econometrics. Italians won’t settle for demanding that output gaps be calculated with structural unemployment, after someone promised to demand that the European Central Bank fork over 250,000,000,000 Euros.

Good thing that insane devotion to austerity and a strong currency has never provoked really dangerous extremism in Europe.

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The Italian Crisis: La resa di Conte

(literally the surrender of Conte but a reference to The Big Gundown).

updated to comply with the Italian criminal code (which forbids vilifying the President of the Republic)

I have to write about Italian politics, because everyone is (and I live in Rome) but you don’t have to read it.

I will try one paragraph of background. In the last election angry Italians gave a very thin majority to two extremist parties the movimento 5 stell and La Lega Nord is a fairly far right party focused on expelling immigrants (I have a permesso di soggiorno so I’m not worried). It started as Northern separatist movement denouncing the central government. It has become nationalist, because racists will racist. The movimento 5 stelle is more exotic. They are very very angry about something but it isn’t clear what. The party was founded by a stand up comic and basically started as a blog (really). The two parties are very different in many ways, but both hate Eurocrats and reject austerity. They presented a program based on a flat tax and universal basic income (give all the money to the rich and the poor). They proposed that the European Central Bank pay for all this by giving Italy 250 billion Euros (this is not a joke, also don’t try this at home kids).

But the key stumbling block preventing implementation of this coherent reasonable program was that the Lega insisted on breaking with the past by nominating Paolo Savona, an 81 year old economist Minister of the Treasury. He has written that Europe should have a plan B which allows countries to stop using the Euro. This heresy was unacceptable Sergio Mattarella the President of the Republic who must nominate that cabinet (which must obtain the confidence of both houses of parliament). It is clear that Mattarella has the constitutional authority to refuse to nominate a minister. This veto power is rarely used and, in previous cases (eg Berlusconi trying to name his amazingly corrupt lawyer minister of justice) a compromise was reached. But the Lega & the 5 Selle are not the compromising types. Importantly, Mattarella does *not* have the authority to call early elections if there is a majority in parliament (which there is). Equally importantly, that just means he has to say he can’t find a majority and there will be early elections.

Mattarella decided to deal with the angry nationalists who must suspect him of undemocratic globalism by asking top IMF economist Carlo Cottarelli to form a caretaker government (you have got to be kidding me — next post (above) will be on Cottarelli, with whom I agree). Basically Italians will be asked to choose between austerity and obedience to unelected bureaucrats in Brussels, or semi-fascists, or the really crazy party. This is not an ideal situation.

The Quirinale (White House but much larger) explains Mattarella decision in a press release translated into English (although their English really reads as Eurenglish the English as a second language privileged by Eurocrats.

The key point is that the Euro is a core institution (like democracy, an independent judiciary and a free press ). Questioning the Euro is unacceptable to the President who is not supposed to meddle with policy, but to stick to protecting the fundamental institutions of the Republic (one of which turns out to be the Stability and Growth Pact).

IIRC the president of Portugal also refused to nominate a government with a majority because, he said, it was anti European Union. It’s almost enough to make me an anti-globalist.

There was, sadly, a long tradition of over-ruling parliamentary majorities which the alternative was to leave the gold standard. Somehow Europe has found its way back to the 20s and 30s. This time it probably won’t end so badly.

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