Ignoring the evidence: politics as usual

I have not had time to write a new post of my own for some time because real life has intervened, partly in the form of my day job (a project I am working on is nearing completion, and I am also preparing several seminar talks and grading a student's thesis), and partly in the form of other inconvenient distractions (writing job applications for next year, trying to find a new apartment and so on).

I hope to find some time to rectify this in the near future, but in the meantime I thought I would reblog a post by Simon Wren-Lewis, titled When policy ignores evidence: badgers and austerity. As you can guess from the title, it deals with just two examples demonstrating the apparent incompatibility of evidence-based rationality and politics. In fact, these examples seem to show politicians not so much failing to account for the scientific evidence as deliberately ignoring it.

This is a theme I wrote a bit about here. If that piece sounded rather cynical, well, things like this are the reason why.

 When policy ignores evidence: badgers and austerity: [...] Badgers get, and spread, TB. As a result, the UK government is about to begin a large scale cull of badgers in Gloucestershire and Somerset. No one likes the idea of killing badgers. But cattle (or occasionally alpacas) dying from TB is no fun either. So the badger cull is just one of those necessary bad things that have to be done to prevent something even worse happening. Environmentalists are up in arms, but that is just because badgers look cute and cattle do not.

Except that is not what the evidence suggests. Following various small scale randomised badger culling trials, the UK government set up an independent group of scientists (the ISG) to evaluate the evidence. In 2007 the government published the report (pdf). It concluded as follows:

“The ISG’s work – most of which has already been published in peer-reviewed scientific journals – has reached two key conclusions. First, while badgers are clearly a source of cattle TB, careful evaluation of our own and others’ data indicates that badger culling can make no meaningful contribution to cattle TB control in Britain. Indeed, some policies under consideration are likely to make matters worse rather than better. Second, weaknesses in cattle testing regimes mean that cattle themselves contribute significantly to the persistence and spread of disease in all areas where TB occurs, and in some parts of Britain are likely to be the main source of infection. Scientific findings indicate that the rising incidence of disease can be reversed, and geographical spread contained, by the rigid application of cattle-based control measures alone.”

On Sunday 30 eminent UK and US scientists published a letter in the Observer. They write: “As scientists with expertise in managing wildlife and wildlife diseases, we believe the complexities of TB transmission mean that licensed culling risks increasing cattle TB rather than reducing it.” One of the signatories described the government’s policy as crazy, and suggested vaccination and biosecurity was a better solution. The Guardian reports the chair of the ISG as saying “I just don't know anyone who is really informed who thinks this is a good idea." The current government chief scientist said: "I continue to engage with Defra [the relevant government ministry] on the evidence base concerning the development of bovine TB policy. I am content that the evidence base, including uncertainties and evidence gaps, has been communicated effectively to ministers." In other words, ministers know what scientists are saying and have decided to ignore them.

So what is going on? One of the strongest pressure groups in the UK is the National Farmers Union (NFU) [...] The NFU are convinced that culling badgers will reduce the incidence of TB in cattle, and government policy is following that belief, rather than the scientific advice it commissioned. (For more details, see George Monbiot here.) The BBC reports Defra Minister David Heath as saying "No-one wants to kill badgers but the science is clear that we will not get on top of this disease without tackling it in both wildlife and cattle." Dare I say weasel words.

[...] With austerity we did not have randomised trials: we had one almost globalised trial, starting in 2010, and one eighty years earlier. The evidence this time round is becoming clear: the harmful effects are much greater than many had assumed.

[...] perhaps the two cases are not so different. The problem with austerity is that too many people of influence just know that high government debt is always and everywhere a bad thing. Too many think it is just obvious that when a country has difficulties in selling debt that must imply cutting it back as quickly as possible, in the same way that it is obvious that killing badgers must reduce the spread of TB. And perhaps too many people see badger culls as part of a battle between farmers and environmentalists, just as austerity is a weapon in a battle over the size of the state.

Maybe we are just naive in thinking that as the evidence against austerity accumulates, and as those that were once for it change their mind, the policy will change. As Wolfgang Munchau writes (FT): “As hordes of frustrated European economists know only too well, macroeconomic analysis in general does not play a role in eurozone policy making.” So the policy goes on, in both the UK and the Eurozone, and I do not like to think about what might happen in the US if Romney wins. While I would never advocate a totally uncritical acceptance of the views of scientists, we are an awfully long way from that position, as unfortunately many badgers are about to find out.

Calling on Germany

In the New York Review of Books, George Soros has written an excellent long piece on the future of the European Union in light of the Eurozone economic crisis. If what happens in the EU in any way affects your life (and it almost certainly does), you should read it. There is a lot to ponder over in there, including a brief history of European cooperation, an astute diagnosis of the economic problems, and a bold call for action that is unlike anything that has been said anywhere else. It is also written from the perspective of a heartfelt supporter of the idea of a united Europe.

It is that call for action that gathered the most attention in the press, making several newspaper headlines. Soros is quite blunt: he says straight out that at every stage in the crisis, Germany's intention has been to do the absolute minimum required to avert disaster — with the end result that no resolution has been reached, and the can is just a few metres further down the road.

The policies pursued under German leadership will likely hold the euro together for an indefinite period, but not forever. [...] If and when the euro eventually breaks up it will destroy the common market and the European Union. Europe will be worse off than it was when the effort to unite it began, because the breakup will leave a legacy of mutual mistrust and hostility. The later it happens, the worse the ultimate outcome. That is such a dismal prospect that it is time to consider alternatives that would have been inconceivable until recently.

In my judgment the best course of action is to persuade Germany to choose between becoming a more benevolent hegemon, or leading nation, or leaving the euro. In other words, Germany must lead or leave.

Strong words indeed, and not an angle I have seen advocated (explicitly) by anyone else yet. He then goes on to explain a bit more.

Since all the accumulated debt is denominated in euros it makes all the difference who remains in charge of the euro. If Germany left, the euro would depreciate. The debt burden would remain the same in nominal terms but diminish in real terms. The debtor countries would regain their competitiveness because their exports would become cheaper and their imports more expensive. The value of their real estate would also appreciate in nominal terms, i.e., it would be worth more in depreciated euros.

The creditor countries, by contrast, would incur losses on their investments in the euro area and also on their accumulated claims within the euro clearing system. The extent of these losses would depend on the extent of the depreciation; therefore creditor countries would have an interest in keeping the depreciation within bounds.

The eventual outcome would fulfill John Maynard Keynes’s dream of an international currency system in which both creditors and debtors share responsibility for maintaining stability. And Europe would escape from the looming depression. The same result would be achieved, with less cost to Germany, if Germany chose to behave as a benevolent hegemon. That would mean (1) establishing a more or less level playing field between debtor and creditor countries and (2) aiming at nominal growth of up to 5 percent, in other words allowing Europe to grow its way out of excessive indebtedness. This would entail a greater degree of inflation than the Bundesbank is likely to approve.

Whether Germany decides to lead or leave, either alternative would be better than to persist on the current course. The difficulty is in convincing Germany that its current policies are leading to a prolonged depression, political and social conflicts, and an eventual breakup not only of the euro but also of the European Union. How to persuade Germany to choose between either accepting the responsibilities and liabilities that a benevolent hegemon should be willing to incur or leaving the euro in the hands of debtor countries that would be much better off on their own? That is the question I shall try to answer.

As I said, go and read the full argument.

One thing that is generally accepted by everyone is that the ultimate resolution of the Eurozone crisis can only come about through a relative decrease in the wages and prices in debtor countries (Spain, Italy, Portugal et al.) compared to Germany, in order to restore their competitiveness. This can happen in one of two ways: slightly higher inflation in Germany than in other countries, or deflation in other countries and stable prices in Germany. Most people also agree that achieving this entirely through deflation in debtor countries is not only highly unlikely to work, but also exacts a terrible and unnecessary human cost.

This is why Soros argues for Germany to make the sacrifice and accept moderate inflation. He accepts that this is a very hard pill for the Germans to swallow:

[T]he Bundesbank remains committed to an outmoded monetary doctrine that is deeply rooted in German history. Following World War I, Germany had a traumatic experience with inflation; consequently it recognizes only inflation as a threat to stability and ignores deflation, which is the real threat today.

The genuineness of this fear of any inflation is not in doubt. Nevertheless, if you think about it, it is a little bit strange. It is often argued that the Weimar inflation was one of the driving factors behind the rise of the Nazis, and that this contributes to the national psychological scarring. But surely this is the wrong historical lesson. As a few people have argued before, the period of the most dramatic growth in the Nazi share of the vote — from 2.6% in 1928 to 37.8% in 1932 — was long after the awful inflation, and coincided almost exactly with the Great Depression, during which the deflationary policies of Chancellor Brüning dramatically increased unemployment and lowered national income. If we must bring the Nazis into it, we should at least draw the right conclusions.

Thankfully, since Soros wrote his piece, events have moved quickly in Europe and it looks as though a combination of the ECB, the German courts, Spanish firmness and Angela Merkel's surprising new attitude have gained the upper hand over the president of the Bundesbank. Which is just as well, because as Kevin O'Rourke pointed out two years ago, looking at the massive unemployment, civic unrest and success of extremist parties in Europe today would not otherwise leave much room for optimism.

Be very, very afraid

Paul Krugman cannot believe the lack of terror among German politicians about the spectre of a Greek exit from the Euro. Do they really think that if Greece is forced out, Spain will not be forced to follow?

In fact the disturbing news from Germany has got most economists spooked — or at least most economists who aren't willfully blinkered. Some time ago, I noted here that Simon Wren-Lewis was holding out some hope for the survival of of the Euro, because he felt sure Eurozone officials would eventually see that hard-line moral posturing was detrimental to their own interests (apart from being wrong). Sadly, it appears not even he is so optimistic any more:

Sometimes it seems as if Germany and its supporters are like a poker player with a very weak hand, who has managed to convince all the other players that their hand is much stronger than it is. But there is a danger that you may get so good at playing this bluff, that you may stop looking at your cards and actually believe you have a strong hand. Or worse still, that although your hand is weak, you deserve to have the better cards, and therefore you do have the better cards.

The situation with German public opinion is now so dire that although he is careful not to explicitly say so, I think Wren-Lewis now agrees with Greek economist Yanis Varoufkis' assessment that Germany actually doesn't want to solve the Eurozone crisis.

Which brings us back to Krugman's take on the foolish lack of terror.

Tim Duy agrees, asking whether a panic button even exists in Europe:

I doubt we will need to wait much longer to learn the outcome of Grexit. But the devastating train that is the debt crisis keeps rolling right along, currently crashing through Spain's economy.

And make no mistake, European policymakers have learned nothing from the Greek experience. One gets the sense that policymakers think the prescription was correct, but that the patient was simply unwilling to take the medicine. Where Greece failed, Spain will succeed, or at least so it is hoped [...] Spain is doing the right thing, apparently. It's just the markets that have it all wrong [...] And in return for this bailout, Spain will be pushed further down the same path of never ending recession as Greece. Because if once you don't succeed, try, try again. European policymakers will pursue the same path because they know of no other [...]

In my view, the lack of panic is downright scary. Is Europe completely devoid of new ideas? Or is everyone simply on vacation?

Surely, you feel, we will wake up soon and learn this was all a dream? Surely somebody will remember which country's banks it was that lent the money to Greece, Spain, Ireland, Italy, Portugal et al. in the first place, and which country's banks therefore stand to lose most if they collapse? Surely someone will remember who was "the sick man of Europe" before the introduction of the Euro helped turn their economy around?

But no. The words 'face', 'spite', 'chop' and 'nose' come to mind.

Things To Read, 16th July

When I first decided to start collecting together links to interesting things on the internet and putting them into one blog post per week, I was envisaging something like a less frequent version of this. Instead these posts have become something slightly different: longer, because I like to add short comments on the articles I link to; and perhaps more selective. This meant that these posts were becoming a little too much work! I also don't always find enough physics links to highlight each week.

So I have decided to embrace the change: these posts will remain a regular feature, but no longer necessarily a weekly feature. Instead I shall put them out as and when I have collected enough items I'd like to point out and briefly comment on. The title of the series will also be amended to reflect this.

Anyway, since I have already started writing something for today, I will include a few items:

1. I was particularly interested in this little post by Julianne Dalcanton at Cosmic Variance, about the employment chances for physicists who choose to, or for whatever reason have to, leave the world of academia. The statistics — at least in the US — appear to be relatively encouraging, and somewhat better than for "lab-based" biologists or chemists. Julianne has her speculations as to why this should be so; I suppose they sound quite plausible.
   I think the other point she makes is really important too — students enrolling for physics PhD programmes really ought to be aware that the odds against them ever getting a permanent academic position equivalent to that of their advisor are very small. Say the average professor sees one student through to a PhD every two years. Over a career of 40 years, that's 20 completed PhDs, and yet when that professor retires, only one permanent faculty position becomes available. Odds like that mean that, unlike the UK government, every sensible PhD student should be aware of the need to have a Plan B. This applies also to those of us who have been lucky enough to get a foot on the ladder in the form of a post-doc job (though I don't seem to have taken my own advice yet!).
   
2. Tucked away in the Guardian, I saw this report on the treatment in Pakistan of Nobel-Prize-winning particle theorist Abdus Salam, both before and after his death in 1996.
3. Anyone who has been following the US Presidential elections will know that there has been some amount of kerfuffle recently about who was in charge of which company when. You could see this for a little perspective, or doubtless there are countless other places you could read about it. Anyway, that's not what interests me: I don't have a vote in this election, and if I did, I wouldn't need stories about Bain Capital to know that Romney is a ridiculous candidate.
   Instead, I think the significant occurrence from the last week was this quote from Barack Obama:

[I]f you’re a head of a large private equity firm or hedge fund, your job is to make money. It’s not to create jobs. It’s not even to create a successful business – it’s to make sure that you’re maximizing returns for your investor. Now that’s appropriate. That’s part of the American way. That’s part of the system. But that doesn’t necessarily make you qualified to think about the economy as a whole ...

Phew. At last some politician has come out and said something sensible. I would have thought it was fairly obvious that the analogy between running a country and running a business was completely wrong — after all, I doubt there is a company anywhere in the world that sells its product primarily to its own employees — but still most politicians continue to treat people like idiots. This is not restricted to the US: in Britain the analogy used by the Tories is different — that government budgets are like family budgets, complete with credit cards and tightening belts — but the underlying fallacy is basically the same (which family buys goods and services primarily from itself?). I don't know exactly what rhetorical devices politicians use in Germany, Spain, Greece and the like, but from the utter mess they have made of the Euro, one can surmise that they must be equally stupid. So one-and-a-half cheers for Obama for attempting to right that trend.

LftW: 9th July

Physics links:

• Update: Another link worth highlighting this week is a background piece on the Higgs by Steven Weinberg from the New York Review of Books, taken from the introduction to a book due to be published next month. As ever, Weinberg is clear, precise and interesting.
• Perhaps inevitably given the momentous nature of the results announced at CERN last week, there has been much discussion about who should be awarded the Nobel Prize for (a) the discovery of the Higgs and (b) the theoretical prediction of the Higgs around 50 years ago. Of course, the existence and future discovery of the Higgs was regarded as so certain that (b) has already been a topic of much debate for several years. For those who have not already read it, Frank Close's book The Infinity Puzzle provides an excellent summary, and (somewhat surprisingly) Mark Thoma's economics blog quotes some of the relevant sections. Summarised in a sentence, the problem is that six theorists including Peter Higgs can claim to have predicted the mechanism by which the Higgs boson gives mass to elementary particles, but the Nobel can only be awarded to three at most, leaving a complex decision for the committee to make. Close has recently been reiterating his recommendations and urging haste, since Nobels cannot be awarded posthumously. Already only five of the six survive.
• The problem of who should get the prize for (a) is perhaps even more difficult. Although it is hard to imagine anything more Nobel-worthy than the discovery of a new elementary particle, Nobel Prizes can only be awarded to individuals, not collaborations, and most commentators seem to agree that it would be hard to single out any especially deserving individuals from the excellent team efforts of ATLAS or CMS. (This has been done before, for instance when John Mather and George Smoot got the 2006 Prize for their roles in COBE, but the choice now is less clear-cut.) Peter Woit wants the rules to be changed so the prize can be awarded to both complete groups and also CERN engineers, which I suspect is unlikely to happen. He would also like the award to be made this October, which is probably also unlikely, given that the detailed papers on the discovery will not even be submitted to a journal until the end of this month. (And I would guess it is even more unlikely for a theory prize to be awarded in October as Frank Close wants, since strictly speaking it isn't yet proven that the discovered particle is the Standard Model Higgs boson. But of course mine is a relatively uninformed opinion!) 

Other links:

• I recently came across a nice mathematics/computing/physics blog called bit-player (now highlighted in the right-hand panel), which has several interesting posts. I particularly enjoyed the latest one, on Methuselah's choice, and one from a few months ago, on experiments in stacking magnetic balls.
• Noah Smith: The liberty to pee
• Nicolas Pelham: How Morocco dodged the Arab Spring
• Paul Krugman: Europe's Great Illusion. I find Krugman's analysis always convincing, and his predictions generally depressingly borne out by subsequent events. Which is why reading his take on the economic situation in Europe makes me feel like this:

LftW: 2nd July

Physics links:

• The important physics event of the next week will be the CERN press conference on the Higgs search analyses coming up on Wednesday at 9 am CEST. Peter Woit provides a preview, summarising what we might expect to hear. At Quantum Diaries, Aidan Randle-Conde explains why we might not want to combine the significances of detection obtained from ATLAS and CMS in order to obtain the magical "5 sigma" standard for detection. The official results probably won't provide a combined significance for this reason, but doubtless various bloggers and others will do so.
• On the day itself, this blog will not be the best place to get your news. Instead, you might wish to go here, or to one of the other links down the right-hand panel.
• On Friday, there was an intriguing paper uploaded to the arXiv, proposing a new type of dark matter detector made out of gold foils and single-stranded DNA. I don't know what to make of this paper: it sounds a little crazy, but then I don't know much about the molecular biology of using ssDNA. Two of the physicist authors — Katherine Freese and David Spergel — are well-known, serious scientists. I presume the other authors are biologists.
• Peter Coles put up a nice set of "order-of-magnitude" physics problems to have a go at, including for instance "How much brighter is sunlight than moonlight?"

Other links:

• David Bromwich is very disappointed with Obama.
• On the other hand, Obama won a victory in the US Supreme Court last week on his healthcare reforms. Who benefits? Ask Paul Krugman.
• Other big news this week was that Germany finally conceded a little ground to Spain and Italy in Eurozone rescue talks. How significant was this? Some opinions here, here, and — interestingly, just before the concession occurred — here.
• Martin Wolf: What was Spain supposed to have done? (See also here.)
• Mark Thoma: Laughing at the Laffer Curve (and follow-up)
• A Manifesto for Economic Sense (that's behind a paywall, so you can read it here instead)
• 'Science' Without Falsification: Noah Smith and others
• This response to a New York Times op-ed piece is one of the funniest things I read all week. I think Americans might call it a "smack-down".
• And finally, something I missed out last week: for Paul McCartney's 70^th birthday on the 18^th of June, the Guardian ran a nice interactive feature with original reports from important moments in his life. I thought the most interesting one was this report from 1969, with a story of how fans from the US kept ringing a "magic telephone number" in England in order to speak to Mr. Billy Shears ...

Victor Keegan's Guardian report on mysterious phone calls from the US ... 

Grexit or not?

(Update: The Tim Duy post I linked to below has now been superseded by this report from him on the outcome of the meeting of Eurozone officials yesterday. He's still not happy!)

Over the last few months I have been following the continuing chaos in the Eurozone, much like everybody else in Europe who has a TV, radio or internet connection, I suppose. The spectre of a Greek exit from the Euro seems to have been dominating the front pages a lot more just recently, but most (or certainly most American) economists have been predicting this since about late 2010.

Anyway, this is a subject way outside my personal expertise, so I'm not going to make any comment of my own other than to say I find it darkly amusing that irresponsible borrowing is generally regarded as a far greater moral sin than irresponsible lending. What I will do is to provide some snippets of more expert opinions and share some links where you can read stuff to help you make sense of what's likely to happen in the next couple of months.