February 19, 2015 archive

Greece wants to save Europe, but can it persuade Europeans?

by Pavlina R. Tcherneva, Al Jazeera

February 18, 2015 3:40PM ET

Greek voters last month rejected continuation of an austerity program that has plunged their economy into depression, voting in a government determined to break out of the current terms on which Greece gets help from the Troika.

On Monday, it looked as if the negotiations had reached an impasse. Euro members refused to provide Greece with a bridging loan, demanding adherence to the austerity bailout terms negotiated under the previous government.

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European officials, so far, have refused to budge. They are betting that Greece will seek to avoid a default at all costs to dodge a possible banking crisis, which could inflict more hardship on the population and undermine confidence in the new government.

Default on its debts is not an appealing option to Greece, although the consequences of such a move may not be as dire as some expect. Greece currently runs a primary surplus, and may well have enough cash on hand to pursue its stimulus reforms for a while. But at some point, the funding problem will re-emerge. Greece is hoping that improvements to the economy, including rapid growth in employment, incomes and profits that would bring more tax revenue and reduce anti-poverty spending would be sufficiently swift to produce rapid short-term growth, all of which would improve Athens’ ability to borrow from private markets for long-term public investment projects. The fundamental problem, however, remains a loss of monetary sovereignty.

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Fears of a banking crisis in Greece in the event of a default, though, may be overstated. Greek banks are all already regulated by the European Central Bank (ECB). Continuing the U.S. analogy, would the Fed shut down Citibank if the state of Georgia went rogue and refused to pay its debts?

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Germany may be determined to hold the eurozone together, but on terms that enforce the conservative economic orthodoxy first championed by President Ronald Reagan and Prime Minister Margaret Thatcher across Europe. If, indeed, all parties at the table seek to make the EU a political union, Varoufakis will be arguing that cannot be achieved on the basis of the Troika recipe, but requires broad embrace of more progressive pro-growth principles.

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Greece takes to the negotiating table a desire to stem the humanitarian crisis created by austerity, while avoiding the go-it-alone option of ditching the euro and reintroducing the drachma. But convincing the powers that be in the eurozone, and the vested interests behind them, of the need for a fundamental policy re-orientation toward a more progressive consensus remains a tall order.

Obama Administration Throws Greece Under the Bus; ECB Leak Recommends Capital Controls; Greece Weighing Capitulation (Updated: Germany Rejects Greek Proposal)

by Yves Smith, Naked Capitalism

February 19, 2015

As we’ve said from the outset, as much as we’d liked to see Greece prevail in its efforts to restructure its relationship with its creditors, not just for its own sake but for the benefit of other periphery countries and the Eurozone project, it was unlikely to prevail unless it could rally support. One possible source was the anti-austerity and anti-Eurozone parties in the rest of Europe. Perhaps we’ve missed it, but we’ve seen nary a sign of Marine Le Pen in France or Spain’s Podemos, the two proximate threats to business as usual in the Eurozone, using the extraordinary hostility of the Eurogroup to economically rational proposals from Greece as a talking point.

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And as we pointed out at the time, the Administration had legitimate reason to try to push the recalcitrant Germans and northern countries to relent. The Eurozone is on utterly unsustainable foundatoins. It isn’t just that its structure is defective, with monetary integration but no Federal fiscal structure to allow for Eurozone-wide government spending to help equilbrate economic performance across regions. It is also that the design of the Eurozone is far too skewed to Germany’s advantage. Germany continues to run large trade surpluses with the rest of the Eurozone; they’ve even widened to a record 7.4% of GDP. Germany wants the impossible, to run persistent trade surpluses with its trade partners, yet not finance their purchases.

Unlike the Eurocrats, the Administration, along with most financial analysts, knows that persisting in this course of action assures a Eurozone breakup. And unlike Germany and its allies in the Eurogroup, it believes that a Grexit would pave the way for other countries leaving, and that the consequences of a Eurozone implosion would be catastrophic for Europe and not too pretty for the US either. So the intervention was hardly selfless. And our sources tell us Treasury did expend some effort on Greece’s behalf, although given the lack of movement from the Eurogroup side over the last week, we doubted how forceful a case was made.

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The Greek government should have imposed capital controls by now but was loath to do so, since any leak of that line of thought would increase the deposit run. While it could be done in isolation, simply as a protective measure to prevent deposits being moved out of the country and to reduce daily withdrawals. it would be entirely logical to see it as a step on the way to a Grexit. Anyone with an operating brain cell would want to minimize their exposure to having cash in the bank turned into less valuable drachmas.

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The irony here is that if Greece were willing to default, Germany would have turned an intended subjugation of Syriza into a devastating political wound to the ruling German parties. Refusing to extend the ELA any further, if it were to come to that, merely limits ECB losses. If Greece were to default, it would suddenly expose the size of the commitments to Greece through the Target2 system, the vehicle used to launder the bailout money from Greece to French and German banks. Most Germans have the inaccurate picture than the rescue funds went to stereotypically lazy Greeks, when 91% of the payments actually went to banks.

So this is a story I’ve told before but not with such detail and outrage.

The essence of the scientific method is that theories are disprovable (by contradictory experimental results) and that experiments are replicable.  The reason I call Economics no more than Shamen dancing around a corpse shaking rattles is that the theories are not disprovable (for the most part, since like all social sciences experiments to test the conclusion are impossible to arrange and only observation is feasable) and when examining the results of natural experiments (oh, say austerity in Greece) they are shown to be in direct contradiction of the predicted results.

It’s worse than that he’s dead Jim, Dead Jim, DEAD!

Not that this keeps the Shamen from shaking their rattles and dancing.  It’s FAITH you see and when we’re talking about WASP Christianity the firm belief that the elect, favored by God and predestined before birth to sit at his side on the big rock candy mountain in the sky by and by, display the benefits of God’s grace even in this mortal coil.

That’s why the rich are rich you know.  They deserve it.  And all you all expecting divine justice like some kind of after-life lottery don’t really understand that ‘so above as it is below’ and the opiate of justice is merely to numb your pain as you suffer and die for the benefit of your betters.

You think God wants to hang with you?  You wouldn’t know a pickle fork (two tines) from a dessert fork (three) unless a servant laid them out in the correct order (always good to wait until you can see what your host uses).

Which brings us to the Chicken Heart.  This is why I’m conflicted about Cosby.

My dear readers, you may disagree with my opinions, object to my theories, but when I talk about science I insist that my experiments are reproducible and consistent.

What pushes scientists to lie? The disturbing but familiar story of Haruko Obokata

John Rasko and Carl Power, The Guardian

Wednesday 18 February 2015 08.30 EST

The man in the middle of it all was Alexis Carrel, a brilliant and rather dapper Frenchman working at the Rockefeller Institute in New York. Carrel discovered that, if you remove some cells from the body, sit them in a nutritious broth and handle them correctly, they can not only survive, but thrive and multiply. Also, if you take some cells from one culture, you can start a new one and, with that, a third, and so on. The importance of this technique – know as cell “passaging” – can’t be overstated. With it, Carrel literally opened a new era in cell research. Unfortunately, he did so with an experiment that, while earning him international superstardom, proved to be a complete and utter train wreck.

On 17 January 1912, Carrel removed a chick embryo from its egg and cut out a small fragment of its still-beating heart with the aim of keeping it alive as long as possible. He had hardly begun this experiment when he announced to the world that his chicken heart culture was immortal, that immortality belonged potentially to all cells, and that death was only the consequence of how cells are organised in the body. In other words, the secret of eternal life is within us all, an attribute of our basic biological building blocks. It captured the public’s imagination and was soon accepted by the scientific community.

Carrel and his assistants kept – or claimed they had kept – that culture alive for 34 years, which is five times longer than the average chicken. For many years, around 17 January, journalists wrote birthday stories on the chicken heart and wondered how large it would have grown had Carrel nurtured every one of its ever-multiplying cells. (According to calculations, it swiftly dwarfed the Earth and filled up the entire solar system.)

The problem was, no one else could keep a cell culture alive indefinitely. Lab after lab tried and failed, decade after decade. Because Carrel was a giant in the field of cell research and a Nobel Prize winner, few dared to doubt him. Scientists blamed themselves when their cells died. They assumed that they lacked the master’s skill, that his lab had higher standards than they could reach, that they had somehow exposed their cells to infection or failed to keep them properly nourished. We now know that the reverse was true. Other researchers probably couldn’t duplicate Carrel’s results because they weren’t incompetent or dishonest enough.

It was only in the mid-60s – half a century after Carrel established his chicken heart culture – that the dogma of cell immortality came crashing down. That’s when Leonard Hayflick, an ambitious young researcher at the Wistar Institute in Philadelphia, discovered that ordinary body cells have a finite life span – or, more precisely, an average number of times they can multiply in vitro. This is their Hayflick number. For chickens, it is 35. In other words, a population of chicken cells can double about 35 times before they die, which usually takes several months.

By the time Hayflick proved this, Carrel was long dead and his “immortal” chicken cells discarded. Which means that we know Carrel’s most famous experiment was a sham, but not why. If it was fraud, it was one of the most outrageous cases in the history of science. However, the cause may have been carelessness rather than dishonesty. Carrel and his staff used “embryonic juice” as a culture medium and, if they prepared it badly, it might have contained live chick cells. In that case, instead of just feeding their culture, they re-seeded it. It’s an easy enough mistake, but to make it consistently enough to keep their chicken heart cells alive for 34 years suggests an astonishing degree of negligence.

Reproducibility is one of the cornerstones of modern science. Unless an experiment can be repeated again and again by different researchers, each time yielding similar results, it can’t be said to prove anything much. At least that’s the theory. Carrel’s chicken heart experiment shows how far science can stray from the scientific method. And the fault doesn’t just lie with Carrel and his laboratory. The entire scientific community shares some of the blame because it upheld the dogma of cell immortality for more than 50 years despite the fact that it was based on a single, sensational, irreproducible experiment.

Tha-thump.  Tha-Thump!  THA-THUMP!

So why is credibility so important to you ek?

I write pseudonymously.  I don’t delude myself that it protects me from various initialed government agencies, that’s not the point.  What it has done (so far) is keep my mail relatively spam free and save me from random strangers who want me to help them and people who fiercely disagree with me and would like to burn a cross on my lawn (kerosene just ruins the grass, you have to re-sod).

I can not expect you to accept my assertions merely on the basis of my expertise and reputation.  Test them yourself!

The law that entropy always increases holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell’s equations – then so much the worse for Maxwell’s equations. If it is found to be contradicted by observation – well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.

–Sir Arthur Stanley Eddington, The Nature of the Physical World (1927)

Science News and Blogs

• Slimy Microbes May Have Carpeted Earth 3.2 Billion Years Ago by Charles Q. Choi, Live Science
• New Horizons spots Nix and Hydra circling Pluto and Charon, By Emily Lakdawalla, The Planetary Society
• In a Curious Case for Astronomers, a Brown Dwarf Goes Missing, by Andrew Fazekas, National Geographic
• John P. Craven, Scientist Who Shaped Cold War Spying at Sea, Dies at 90, By WILLIAM J. BROAD, The New York Times
• Taps Start to Run Dry in Brazil’s Largest City, By SIMON ROMERO, The New York Times
• “I don’t think a guy would have made ‘Tampon Run'”: Salon talks with gaming girl wonders Andy Gonzalez & Sophie Houser, by Jenny Kutner, Salon
• I gave up social media for Lent, by Mary Elizabeth Williams, Salon
• Elon Musk Clarifies That Tesla’s Patents Really Are Free; Investor Absolutely Freaks Out, by Mike Masnick, Tech Dirt
• A close call of 0.8 light years, University of Rochester, EurekAlert
• The world’s new strongest natural material: Limpet teeth, by Michelle Starr, CNet

Science Oriented Video

Obligatories, News and Blogs below.