from the world's big
The Government Saves the Banks—Without Conditions
Simon Johnson is a Professor of Entrepreneurship at MIT Sloan School of Management. He is a co-founder of the economic blog BaselineScenario.com, and the former Chief Economist at the International Monetary Fund. He is the co-author, with James Kwak, of "13 Bankers," a recent book that assesses the U.S. financial sector's role in the economic crisis.
Simon Johnson: I was the chief \r\neconomist at the International Monetary Fund through August of 2008 and \r\nwhen the crisis broke really intensely in September, James Kwak and I \r\nset up a blog, Baseline Scenario, where we follow the crisis, we wrote \r\nabout what was happening, we made policy proposals. We did the kind of \r\nthing that I had done at the IMF, but in a completely open source, \r\nprivate sector way for free over the web. And as we wrote and as we were\r\n engaged in this analysis we were quite horrified by how well the banks \r\nwere being treated and the bankers were being treated despite the fact \r\nthat they had messed up so massively. And it really came together for us\r\n in this meeting of 13 bankers at the White House in March of 2009. We \r\nfelt that that meeting represented a lot of what had gone wrong with \r\npolicy towards banks and more broadly, in this country and we wrote the \r\nbook really to try and urge people in Washington and more broadly to \r\nreconsider and to change that policy.
This was a key moment, \r\nobviously. The Obama Administration had come in. They'd made some \r\ninitial announcements about how they would deal with the financial \r\nsector, but nothing had really come together very clearly. Nothing was \r\nreally believed in very much by the markets. They pulled these bankers \r\ninto the White House and they had, at that point, the government, the \r\nadministration, had the upper hand. They have, remember, the resources. \r\nThey’re the only people with the resources to save the day in that kind \r\nof financial crisis. They can dictate the terms, completely.
Now,\r\n you can argue that perhaps you shouldn’t be too heavy-handed in this \r\nsituation, but they erred completely on the other side. They said, “You \r\nwill get to keep your banks, complete, as they currently exist,” and \r\neverything about your belief system and your incentive system—I mean, \r\neverything that got us into trouble remember, everything that caused \r\nthis massive financial crisis—will remained undisturbed, at least for \r\nthe time being. That’s extraordinary. That is, I think actually, almost \r\nunprecedented in the history of financial crises. For a government to \r\nsave the day so decisively without conditions, without changing anything\r\n about the problems and the structures that have created the crisis. It \r\ndidn’t make sense then, it doesn’t make sense now, and has created many \r\nproblems that we have to deal with going forward.
Question:\r\n Why did the government act in that way?
Simon Johnson:\r\n What they say is "We were scared of what would happen if we acted \r\notherwise." What we point out in the book in chapter two is these very \r\nsame people, these highly experienced, very well-qualified policy makers\r\n in the U.S. had, in the 1990’s, advised other countries who got into \r\ncrisis to do something quite different. They were always on the side of \r\nsaying, “No, as you seize the moment to turn around the economy and to \r\nprevent the crisis from getting worse, you must deal with some of the \r\nunderlying structural problems. If you don’t then all your efforts of \r\nrecovery will fail or all short-term benefits will prove illusory. You \r\nwill have more difficulty again.” It’s a very hard message to deliver, \r\nbut they delivered it repeatedly to other countries. They just couldn’t \r\napply it to the United States.
Question: Why is the \r\nderegulation of banks responsible for what we’re dealing with now?
Simon\r\n Johnson: Well, it is all about the deregulations, some which \r\nstarted, I would say, in the 1970’s, but the Reagan revolution was \r\nreally a big push for this. Reagan, himself, did not make that much \r\nprogress, partly because the Congress was in democratic hands. The big \r\nmove, though, came in the 1990’s when the Democrats had the White House \r\nand the spirit of Congress, both in its more Democratic and it’s more \r\nRepublican phases, was very pro-finance.
So, there are many \r\nmoments you can point to, particularly around the failure to regulate \r\nover-the-counter derivatives, which was a key decision made in 1998 and \r\n1999 and 2000 there was some legislation. That really tipped the whole \r\nthing over. But, this process and this change has been building up for a\r\n considerable period of time and that of course is one of the things \r\nthat makes it hard to address quickly and to really deal with fast, \r\nbecause we’re dealing with a problem that’s built up over 30 years.
Between\r\n the 1930’s and the mid-1980’s the banks were fairly well controlled. \r\nThere were tight regulations. Glass-Steagall Act actually had some teeth\r\n and some bite, so commercial banks could not go too much into \r\ninvestment banking, more speculative activities and the same was true \r\nwith the reverse as well. That was a good 50 years; it broke down from \r\nmid-1980’s. We need to go back to that post-World War II period when \r\nbanks were really held accountable.
Question: Can we \r\nramp up existing legislation or do we need to start from scratch?
Simon\r\n Johnson: Well, there is, of course, reform legislation on the \r\ntable. We think that could have gone in a much better direction. We \r\nthink what is likely to happen will be largely meaningless in terms of \r\nmaking the system less risky and addressing the too big to fail problem,\r\n the fact that these banks are just out of control. So, it will take \r\nlegislation. This legislation almost certainly will not do it; we’re \r\njust going to have to do it again.
Question: How much \r\nregulation do you think is likely?
Simon Johnson: \r\nWell, I think we will see some better protection for consumers and \r\nthat’s a good thing and we support that, but in terms of constraining \r\nthe size, limiting the activities of these massive banks that are seen \r\nby the markets as too big to fail and as a result, have this huge, \r\nunfair competitive advantage. They can borrow, by some estimates, 75, 80\r\n basis points, that’s 0.7, 0.8 of a percentage point, cheaper than other\r\n banks can borrow—that’s a huge difference in today’s market. We think \r\nthere will be nothing at all or make a difference to that perceived (and\r\n probably true) implicit government guarantee in backing those banks.
At a White House gathering in early 2009, the administration bailed out the banking system without addressing the problems on Wall Street that caused the financial meltdown.
Want help raising your kids? Spend more time at church, says new study.
- Religious people tend to have more children than secular people, but why remains unknown.
- Conversely, having a large secular social group made women less likely to have children.
Be fruitful and multiply<p>Scientists in the United Kingdom collected data on more than 13,000 mothers and their children. Most of them were religious, but 12 percent were not. The data included information on their church habits, social networks, number of children, and the scores those children achieved on a standardized test.</p><p>In line with previous findings that religious women have more children than secular women in industrialized countries, a connection between at least monthly church attendance and fertility was confirmed. However, religious parents showed they could avoid the pitfalls that having more children can bring. </p><p>Typically, more children in a family leads to reduced cognitive ability and height in each <a href="https://academic.oup.com/ije/article/37/6/1408/729795" target="_blank">child</a>. Some studies find that children do less well in school for each <a href="https://link.springer.com/article/10.1007/s13524-016-0471-0" target="_blank">additional sibling they have</a>. This makes a kind of intuitive sense, as parents with more children would have to divide their time, energy, and resources among more people as families expand. One would expect that the larger families would also lead to things like lower test scores. </p><p>Despite the expectation, the children of religious parents didn't have lower scores on standardized tests. There were small positive relationships between the size of the mother's social network, the number of co-religionists helping out, and the children's test scores. However, this association was small, didn't show up in all of the testings, and was unrelated to other variables. </p> These effects might be explained by the size and helpfulness of the social networks around the more religious. Women who went to church at least once a month had more extensive social networks than those who never go or who attend yearly. These social networks of co-religious people mean that there are more people to turn to for help with child-rearing, a point also demonstrated in the data. The amount of aid women got from their fellow churchgoers was also associated with a higher fertility rate. <br> <br> Conversely, an extensive social network was associated with fewer children for secular women. This finding is in line with <a href="https://journals.sagepub.com/doi/10.1207/s15327957pspr0904_5" target="_blank">previous studies</a> and suggests that the social networks comprised of co-religious individuals differ from those found elsewhere.
So, how quickly should I join a local religious group?<div class="rm-shortcode" data-media_id="6RrmYM8M" data-player_id="FvQKszTI" data-rm-shortcode-id="9eb4740a7d1e10108a75fd2ed627a90f"> <div id="botr_6RrmYM8M_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/6RrmYM8M-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/6RrmYM8M-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/6RrmYM8M-FvQKszTI.js"></script> </div> <p>The study is not without its faults, and more investigations into the relationship between fertility, childcare, ritual, and social networks are needed.</p><p>These findings all show correlation, not causation. Though it might be said the results point towards causation, various alternative interpretations of the data are apparent. The authors note that most religions are explicitly pro-natal. It is possible that religious women have internalized these values and simply choose to have more children than secular women do.</p><p>This idea is similar to a potential interpretation of why large social networks have the opposite effect for secular women. The authors suggest that, in some cases, these more extensive social networks are associated with work and exert an anti-natal influence. Again, the people who build such networks may be people unlikely to have large families under any circumstances.</p><p>However, the researchers' hypothesis endured. The help religious women get from their church-based social networks allows them to have larger families than those who lack these support systems. In some instances, these support systems also prevent the adverse effects of larger families. </p>
The community religion offers<p>As we've mentioned <a href="https://bigthink.com/culture-religion/what-is-secular-humanism" target="_blank">before</a>, religion offers a community, and a community provides social capital. As religion continues to decline in the West, the social bonds of faith communities that used to tie social communities together begin to decay. However, as has been noted by a variety of observers for the last few decades, fewer and fewer new organizations appear ready to replace religion as a source of community in our lives.</p><p>While many different organizations might offer social support that religion once provided the whole of western society, this study shows that different social circles can differently affect the people in them. This finding must be considered by those trying to find new communities to join or the authors of future research. </p><p>The community offered by religious groups provides real benefits to those who join them. As this study shows, having the support network religious community offers allows some parents to avoid pitfalls that bedevil those lacking similar support. It suggests that previous studies demonstrating that group ritual offers benefits like increased amounts of <a href="https://journals.sagepub.com/doi/10.1177/0956797612472910" target="_blank">group trust</a> and <a href="https://journals.sagepub.com/doi/10.1177/1069397103037002003" target="_blank">cooperation</a> are onto something and that those benefits have a variety of applications. </p><p>While this study is not without its blind spots, it offers a strong starting point for further investigations into the nature of ritual in our modern lives and how local support networks remain vital in our increasingly globalized world. </p>
- Modern antibiotics can effectively treat bubonic plague, which spreads mainly by fleas.
Bacteria under microscope
needpix.com<p>Today, bubonic plague can be treated effectively with antibiotics.</p><p style="margin-left: 20px;">"Unlike in the 14th century, we now have an understanding of how this disease is transmitted," Dr. Shanthi Kappagoda, an infectious disease physician at Stanford Health Care, told <a href="https://www.healthline.com/health-news/seriously-dont-worry-about-the-plague#Heres-how-the-plague-spreads" target="_blank">Healthline</a>. "We know how to prevent it — avoid handling sick or dead animals in areas where there is transmission. We are also able to treat patients who are infected with effective antibiotics, and can give antibiotics to people who may have been exposed to the bacteria [and] prevent them [from] getting sick."</p>
This plague patient is displaying a swollen, ruptured inguinal lymph node, or buboe.
Centers for Disease Control and Prevention<p>Still, hundreds of people develop bubonic plague every year. In the U.S., a handful of cases occur annually, particularly in New Mexico, Arizona and Colorado, <a href="https://www.cdc.gov/plague/faq/index.html" target="_blank">where habitats allow the bacteria to spread more easily among wild rodent populations</a>. But these cases are very rare, mainly because you need to be in close contact with rodents in order to get infected. And though plague can spread from human to human, this <a href="https://www.healthline.com/health-news/seriously-dont-worry-about-the-plague#Heres-how-the-plague-spreads" target="_blank">only occurs with pneumonic plague</a>, and transmission is also rare.</p>
A new swine flu in China<p>Last week, researchers in China also reported another public health concern: a new virus that has "all the essential hallmarks" of a pandemic virus.<br></p><p>In a paper published in the <a href="https://www.pnas.org/content/early/2020/06/23/1921186117" target="_blank">Proceedings of the National Academy of Sciences</a>, researchers say the virus was discovered in pigs in China, and it descended from the H1N1 virus, commonly called "swine flu." That virus was able to transmit from human to human, and it killed an estimated 151,700 to 575,400 people worldwide from 2009 to 2010, according to the Centers for Disease Control and Prevention.</p>There's no evidence showing that the new virus can spread from person to person. But the researchers did find that 10 percent of swine workers had been infected by the virus, called G4 reassortant EA H1N1. This level of infectivity raises concerns, because it "greatly enhances the opportunity for virus adaptation in humans and raises concerns for the possible generation of pandemic viruses," the researchers wrote.
A neuroscientist argues that da Vinci shared a disorder with Picasso and Rembrandt.
The study<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODc3Mjc2NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MTA4MDg2NH0.T-98YvLjS9mUCQkgqHyV43Q7h_JIiubrev-Fp_0j4Pg/img.jpg?width=1245&coordinates=0%2C38%2C0%2C579&height=700" id="58346" class="rm-shortcode" data-rm-shortcode-id="674799ba34e115a2e9a3e94c366bfc26" data-rm-shortcode-name="rebelmouse-image" />
Vitruvian Man, by Leonardo da Vinci created c. 1480–1490<p><a href="https://www.city.ac.uk/people/academics/christopher-tyler" target="_blank">Professor Christopher Tyler</a> of the City University of London's optometry division analyzed six pieces of Renaissance art by or held to be images of Da Vinci, including the famous <em>Vitruvian Man. </em>By looking at the paintings, drawings, and statues and applying the same techniques optometrists use on patients, Tyler was able to conclude that the eyes of the men depicted were misaligned.</p><p> He concluded that, if the images he analyzed were truly reflective of how Da Vinci looked, that the great artist had a mild case of exotropia. </p>
How would this have helped him paint?<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="b221010aa7688734d4d6a41f0df5933f"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/j6F-sHhmfrY?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p><a href="https://shileyeye.ucsd.edu/faculty/shira-robbins" target="_blank">Shira Robbins</a>, a professor of ophthalmology at the University of California at San Diego, who was not involved with the project, explained to <em><a href="https://www.washingtonpost.com/news/morning-mix/wp/2018/10/19/leonardo-da-vincis-genius-may-be-rooted-in-a-common-eye-disorder-new-study-says/?utm_term=.d3f44ed91c16" target="_blank">The Washington Post</a> </em>how individuals with exotropia often turn to additional information to help understand the world around them:</p><blockquote>"What happens in some people is when they're only using one eye . . . they develop other cues besides traditional depth perception to understand where things are in space, looking at color and shadow in a way that most of us who use both eyes at a time don't really appreciate." </blockquote><p>Dr. Robbins agrees that, if the artworks analyzed accurately depict Da Vinci, then he probably had exotropia.</p><p>If Da Vinci did have a mild form of the condition, which would allow him to focus with both eyes when concentrating and with one when relaxed, Tyler asserts that the famed artist could have viewed the world in two or three dimensions at will, showing him the world exactly as he would need to recreate it on a flat surface. Quite the superpower for an artist.</p>
Does this mean Da Vinci would have been a hack if he had normal eyesight?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODc3MjY5NS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyMjYwOTgxOH0.eSu3YBpCuaDj59-4lzSeZ1WgwtV2ETGiWHqczzW3how/img.png?width=980" id="9c323" class="rm-shortcode" data-rm-shortcode-id="edd4e9e9d9c1156a53242df6288d7cc0" data-rm-shortcode-name="rebelmouse-image" />
How can we know this? He has been dead for five hundred years.<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="c26fc51b0aebbcd6905593015fec79e5"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/LRAptNtN9-A?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>There are reasons to be cautious anytime we make claims about people who are long dead. In this case, we have the bonus problem that we aren't 100 percent sure that the images used are supposed to look like Da Vinci. </p><p> That is the major caveat of the idea; all of the images used as evidence of his condition are assumed to look like him. While some of the images, like the <a href="https://en.wikipedia.org/wiki/David_(Verrocchio)" target="_blank"><em>David</em> by Andrea del Verrocchio</a>, are generally agreed to be based on Leonardo the other pictures are claimed to be reflective of him based only on his statement that "[The soul] guides the painter's arm and makes him reproduce himself, since it appears to the soul that this is the best way to represent a human being." </p><p>Tyler also argues that the portraits he claims are based on Da Vinci share similarities with the images generally accepted to be portraits of him; including similar hair and facial features. This lends weight to the idea that the artist incorporated his own traits into his artwork, including his vision problem. </p><p>Leonardo da Vinci was undoubtedly one of the greatest geniuses of all time. If he had exotropia, then it was merely a minor addition to his artistic skills. It does, however, give us a literal example of how people who look at the world differently can use that vantage point to their advantage to create things we all can appreciate. </p>
The word "learning" opens up space for more people, places, and ideas.