Freakonomics with a stethoscope

 kw: book reviews, nonfiction, medicine, economics, motivation, biases

You're 48 years old. You have a pain in your gut. Over the next few days it gets worse, and you begin to have diarrhea. You see a doctor, who says it might be an ulcer and suggests an OTC antacid. That seems to help, but not 100%. Being an agreeable sort, and in the midst of a demanding career, you carry on for several months. The diarrhea and pain come and go, come and go. Then the pain gets worse, and the diarrhea gets worse, and gets darker, even tarlike. What now?

This happened to a young friend's mother, and "What Now? meant seeing her doctor quickly, getting a colonoscopy at age 49, and dying of colon cancer a month later.

Now suppose the age above was not 48 but 52. The fourth sentence and what follows is likely to read, "You see a doctor, who orders a colonoscopy. Cancer is confirmed, and removed in an operation. Several months of chemotherapy follow, and you live many more years."

When I had gut pain at age 53, the doctor should have ordered a colonoscopy, but didn't. Why? The insurance industry scores doctors badly who order too many of the more costly tests! I eventually did have a colonoscopy, but I had to order it myself! I soon had a serious operation, half a year of chemotherapy, and now I am 78. Had I waited for this rather passive doctor to get around to ordering the test, I'd have died 25 years ago. I didn't go back to that doctor. There's a further wrinkle in this, which I'll return to.

What's the difference between age 48 and age 52? I could have used 49 and 51. The cutoff for "elevated risk of colon cancer" is age 50. Not only is it hard to get the insurance company to pay for a colonoscopy if you are "too young", the guidelined cutoff is a mental barrier for your doctor, who probably just won't think of investigating more deeply.

Such cognitive biases and blind spots are the subject of Random Acts of Medicine: The Hidden Forces that Sway Doctors, Impact Patients, and Shape Our Health, by doctors Anupam B. Jena and Christopher Worsham. Dr. Jena is host of the podcast Freakonomics, M.D., and the book takes an approach similar to that in Freakonomics and Superfreakonomics by Steven Leavitt and Stephen J. Dubner, two books I have close at hand. Together, these three books emphasize that at its root, economics is the study of motivation, of why people do things.

In the dozens of cases reported in the book, the doctors and their associates plumbed the databases of Medicare and the CDC for information that allows them to winkle out the little anomalies that reveal biases such as the "first digit bias" that puts age 48 or 49 into the "forties" bin and 51 or 52 with the "fifties". Untimely deaths can and do result form such biases.

If these two doctors stepped into the waiting room and you had the chance to choose one of them to perform your yearly physical, which would you choose? (The image was generated using Leonardo AI)

Granted, neither you nor I will be offered the chance to choose a doctor "on the spot," but if you were…? Here's the wrinkle from above: Fifty years ago I would have been more inclined to choose the man, not because of race but because he's male. Since then I've had to change doctors a number of times because of my moving or doctors moving elsewhere or retiring (or the passive doctor I "fired"). I've had both male and female doctors. By age forty, a man starts getting the "digital prostate exam", sometimes called the "golden finger". Having been probed by both male and female doctors, I found that I really prefer a doctor with long, slender fingers! A female musician who happens to be a doctor fits the bill perfectly. I've also learned that women are more willing to take an extra few minutes, and more likely to think sideways in case there is a second factor, not just "the diagnosis". My current doctor is female, and is tied for best doctor I've ever had.

What do doctors Jena and Worsham have to say about that? They studied Medicare records of 1.5 million hospitalizations, and gathered information about the outcome of care by 58,000 doctors, of which 32.1% were women. The criteria were thirty-day survival and rate of readmission. After the data were normalized to eliminate confounding things, here are the key facts:

• 11.3% of the patients died within 30 days of being hospitalized.
• For women internists, mortality was 11.1% and readmission rate was 15.0%.
• For men internists, mortality was 11.5% and readmission rate was 15.6%.

Are these differences small enough to be negligible? No. More than 10 million seniors are hospitalized for medical conditions (excluding accidents) yearly. The doctors conclude, "…if male internists were performing at the level of women, there would be thirty-two thousand fewer deaths…each year." 32,000. That's 80% of the death toll from highway accidents.

Earlier in the book, we find that the month a child is born influences the likelihood of getting a flu shot during yearly pediatric exams. That influences the number of kids that get the flu. Why? The new flu shots become available in autumn, preparing to deal with the surge of influenza in the wintertime. A parent of a youngster whose checkup is in May or June is told to return to the doctor in October for a flu shot. Less than half do so. Some may take the child to a drug store clinic or instant clinic, but that is a small percentage. So kids with birthdays in the spring or fall, or even late winter, are less likely to be vaccinated, and more likely to get the flu, or to get a bad case.

The last chapter of the book dwells on the COVID-19 pandemic, and the role of politics in medicine. Humans have been called "the political animal"; politics gets into everything! The struggle for power is the source of the world's greatest evils. I'll leave it up to you to read their insipid take on the matter (sorry, docs!). Instead I'll riff on the experiences of myself and my wife.

We were reluctant to get the mRNA agent that was being called a vaccine. We learned some stories of people who survived the disease well enough, but had "Long Covid" and in some cases were debilitated for months. That tipped the scales; we decided to get the shots, which we did in April 2020. We were generally compliant with things like masking and "social distancing". By the time various "boosters" were announced, we'd done sufficient research to realize that the "vaccine" was usually useless and often harmful. Here is a point I wish the doctors had put in the book: The yearly number of serious adverse reactions to the mRNA agent is just a little greater than the sum total of serious adverse reactions to all other vaccines combined!

How many remember in the middle of the controversy, Dr. Anthony Fauci saying, "I AM Science!" He had already admitted to lying a couple of times, and had been caught in a few other lies. Here he lost all remaining credibility. He doesn't understand science, not even a little bit!

Here is what the mRNA agent does: It induces your body to create a particular protein found on the spike of the SARS-Cov-2 virus. That protein triggers the immune system to create antibodies to that single protein. It is a two step process. By contrast, a vaccine consists of broken-up viruses or proteins extracted from them, which triggers the immune system to create antibodies to most or all of the proteins in the vaccine. The extra step that came before increases the variability:

• Different people have different levels of response to a "foreign" protein. One person's immune system may produce ten or one hundred times as many antibodies as another's. This is why vaccines aren't 100% effective. Flu vaccines in particular show this effect.
• Different people have different levels of response to the mRNA agent. One person may wind up with ten or one hundred times the level of "spike protein", which in turn is subject to the range of variable response noted above.

A good portion of my career I used the statistics of distributions. I'll save you the agony of figuring out any equations. Rather, let me just say that when you have two distributions, the mathematical tool used is called convolution. The final, overall distribution is very wide indeed. In this case, a range of a few thousand to one. Also, you may have heard of the "Gaussian distribution", also called the "Normal curve", a smooth curve with a symmetrical hump in the middle. That's not what we have here. The response distributions here are more likely Lognormal distributions, which have a small number of large values and a much larger number of small values. Convolving two of these yields an extra-wide distribution, but heavily weighted toward very few powerful responses, a large-ish number of "middling" ones (centered on the "target" response the pharma company aimed for), and an overwhelming number of small to almost nonexistent responses. These small responses led to the "breakthrough" cases of COVID-19 disease among those who took the shots. For some people, the shot may as well have been distilled water.

My wife and I count ourselves lucky. We had mild reactions to the mRNA shots, a little stronger than the "sore arm" we get from a flu shot, but not too bad. The same-day response was to the mRNA itself, and the next day's soreness was in reaction to the protein thus created. We learned later that some people dropped dead on the spot! These must have been those with a super-strong response in both steps of the process. Their immune responses overwhelmed the body.

I have several friends who are doctors. One of them, because of his work, was doubly treated; he received both the Pfizer and the Moderna mRNA agents. He has since had COVID twice. But before that, he and I worked out a strategy to deal with the infection: Stop eating for a couple of days. Those who died from the infection actually died from pneumonia, which was caused by the body's overreaction to the virus. The ones with the strongest immune systems died first! What is the gooey junk that fills the lungs during pneumonia made from? Sugar. This is why diabetics have the highest risk. What happens when we skip meals? Blood sugar is reduced. It drops a lot. This hinders pneumonia.

Secondly, the two "Democrat-hated" drugs, Hydroxychloroquine and Ivermectin, are useful not because they are anti-viral. They aren't. It is because they tamp down the cytokine reactions that lead to pneumonia. HCQ works in the first day or two, and Ivermectin later on. My doctor friend obtained supplies of both medications for himself and for my wife and me.

At the end of August, 2022, I caught COVID. Here I found out that the joke was on me. The primary symptom I had was powerful nausea. I threw up everything, and I couldn't even drink water! So I couldn't take HCQ!! I went to the one clinic in the area with antivirals on hand, and was given those plus anti-nausea pills so I could swallow the meds and keep them down. Although I'd moved to the spare bedroom the day I woke up sick, my wife got sick a week after I did. She had a very sore throat, making it painful to take any pills. She went to the clinic and also got the antiviral. Both of us recovered quickly. By the way, I had lingering low appetite, my kind of "long Covid", and I took advantage of it to lose some weight, around 30#.

A year and a half later, the above scenario was repeated. Same symptoms, same need to get the antivirals, same quick recovery. I was able to lose another 15#, and I learned what it takes to hold my weight. So I count SARS-Cov-2 my friend!

Another year or so has passed. My family doctor is in agreement with what we've done and with my determination never to get a "booster." They're too dangerous.

That is a long digression from a wonderful book. Doctors Jena and Worsham show how and why doctors make certain kinds of errors, and discuss ways these errors are being mitigated. Reading this book is useful to all of us as patients, so we have the mental tools to work with our doctor(s). We can't replace them, but we can either help or hinder their work. We all know that something will get us sooner or later. Together we can make "later" be even later, and thrive in the meantime.

Mangled Message of a Misleading Missive

 kw: book reviews, nonfiction, economics, book summaries

You may know that Elon Musk, for one, publicly promotes increasing the world's population more rapidly. He claims it is the key to increased global prosperity. I recently read a review of a book that elaborates on the idea: Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet by Marian L. Tupy and Gale L. Pooley, published in 2022. I looked for the e-book, and found only a summary by Alexander Cooper, so I bought that, hoping it would be a useful condensed version.

The Summary is 39 pages, three of which detail the credentials of Messrs. Tupy and Pooley. The print book is 580 pages. I was far from impressed. A big problem with reviewing a summary: To whom do I attribute issues? Does it appear that the summarizer fairly expressed the authors' concepts and arguments?

The Summary has 5 chapters—I am sure the book has dozens, perhaps in 5 sections—and Chapters 4 and 5 deal with "The Tupy-Pooley Framework", a mathematical treatment for forecasting the progress of prosperity (or its opposite). I got that far into it before I realized that the text was generated, automatically summarized, and at best lightly edited. Perhaps Mr. Cooper used a LLM-based product such as Quillbot or Scribbr, or any of a dozen or so spinoffs of ChatGPT. I have used older tools such as Copernic Summarizer and the summarizer built into Microsoft Word. These in particular have the virtue of gathering key sentences and phrases without revision. 

The new LLM-based summarizers try to extract meaning and concept information and rewrite most of the sentences. That can be OK for summarizing narrative text, but it fails spectacularly to correctly interpret mathematical statements expressed in words. 

I found by experience that useful summaries such as by Copernic need to be 15% to 30% the length of the original text. This summary is 6.7%, which I think is quite inadequate. Cliffs Notes versions of books run in the 12%-15% range, and they are written by skilled humans.

The T-P Framework (I'll avoid the obvious pun, because the original may not be all that bad) uses 13 equations in the areas of Personal Resource Abundance, Population Resource Abundance, and Flexibility. The authors had to invent a bunch of terminology, or repurpose economics terminology, to do this. When I began to read it, every "equation" (they should have used actual equations) had some kind of blunder, even putting "times" for "divided by" or stringing together terms without the operators. The summarizing software ignored + – × and ÷ or /, pretty consistently. I can lay the blame for this squarely on Mr. Cooper, who should have at least proofread the text. Evidently not.

Almost anyone will be able to handle the first factor of the 13, the Time Cost. It goes like this: about a century ago, during the depression, a can of beans may have cost a nickel, and a loaf of bread 7-10 cents. Similarly, in the 1950's I remember buying gasoline for 25¢/gallon. So today, the can of beans may be a dollar or two, and bread ranges from $2.50 to $4.00, while we're paying $3.50 (where I live) to twice that in parts of California for a gallon of gas. But how long did it take an "ordinary person" (I haven't met one yet!) to earn the money for the purchase? The authors wrote of banana prices. 

• Scenario 1: Bananas cost 50¢/lb (that's about 4 bananas, so they're 12½¢ each), and you earn $10 per hour. So you need to work 3 minutes, or 1/20th of an hour, to pay for the bananas. 
• Scenario 2: Prices have risen, but so has your pay. Bananas are now 60¢/lb, but your pay has risen to $18/hr. That works out to 2 minutes, or 1/30th of an hour. So although the dollar cost of bananas is higher, the Time Cost to you is lower.

They never mention that some people's pay didn't rise that much. Bananas are currently 29¢ each, or about $1.16/lb, at Trader Joe's. Someone making the new minimum wage in many states earns $15/hr, and their Time Cost for bananas is about 4.6 minutes. Five years ago we got bananas for 15¢, or 60¢/lb, and in most states minimum wage was $7.25. Time Cost for bananas was just under 5 minutes. So this figure has improved just a bit. But in that same period, the cost of a Big Mac almost tripled, and people who were already making more than minimum wage didn't see even a doubling of their pay, so the time cost of most commodities has increased. People in America, at least, are nearly all less prosperous than they were in 2018 or 2019.

I also take issue with that word pair in the title, "infinitely bountiful". Authors, no matter how much you want to hype your message, don't go that far! Presently, humans make up about 1/9000th of the total biosphere, most of which is plants. If a near-miraculous technology allowed us to increase population so that humans made up 5% of the biosphere, and all else was plants, that would be a 7,500-fold increase in the number of humans, from 8 billion to 60 trillion. Neither Elon Musk nor the authors of Superabundance nail down an ideal growth rate, but others have proposed 1% to 2% per year. With those as sideboards, how long will it take to fill the earth? I won't put the equation here; it's not hard to look up. The results:

• At a 2% rate of increase, it would take 451 years.
• At a 1% rate of increase, it would take 897 years.

That's all. Not all that infinite. Furthermore, the land area of Earth is 148 million km². Divide by 60 trillion, and you get about 405,000 persons per square km, with each one having 2.47 square meters to move around in. Would you like to live there? A twin size bed takes up 1.55 m². Obviously, to leave about half the land area for agriculture, the rest would need to be a solid mass of high-rise apartment structures at least 20 stories high, so each person has 24.7 m² of living space, about the size of an Independent Living unit in which many seniors live. Read Stand on Zanzibar by John Brunner or Caves of Steel by Isaac Asimov for portrayals of living situations that are less odious than that, but not by much.

Just call me "Malthus on steroids". 

Finally, the authors make much of the notion that a larger population will mean there are more bright people in total, with more bright ideas. That can't be taken too far. For bright minds to get new ideas they need to be educated. History shows that the more educated people are, the fewer children they raise. It is expensive and hard work to raise a child to be a useful citizen. Education helps a person understand just how costly and just how hard. And when the educational system starts going downhill, as it has been in America for 50+ years, the young people learn enough to understand the downside of raising big families, without learning the skills they'd need to do it well. This is why in many countries half the members of the Y and Z generation doesn't even date any more, and the numbers who either marry or cohabit is dropping. Not worth it, they think. They look at the society that Left is creating in more and more nations, and they don't want to have progeny who live in the society they expect.

I may get the full book, but considering that I disagree with the authors' premises, at the moment I don't consider it would be time well spent. But for sure, don't bother with the Summary. It's too badly done to be worth much. You're welcome.

Are you an Econ? Don't bet on it!

kw: book reviews, nonfiction, psychology, economics, errors, behavior, behavioral economics, memoirs

John Maynard Keynes developed early theories of economics and markets, and made a distinction that later economists neglected and then forgot. He stated that the actions people take are frequently prompted by "animal spirits", which he defined as "a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities." [Keynes, 1936: The General Theory of Employment, Interest, and Money] In other words, people do not always, or even usually, thoroughly calculate or deliberate upon their decisions.

Fast-forward forty years, from 1936 to 1976. Milton Friedman has become the twelfth Nobel laureate in Economic Sciences. Economic theories have been developing, even proliferating. Men (no woman won until 2009) labored for years to wring a new formula out of the growing mass of theory, a few became Nobelists, and the edifice thus built was indeed founded on the analysis of "quantitative benefits…" and so forth. Social scientists other than economists were beginning to protest that the "rational" decisions that were required for economic theory to work could not be realistically made by genuine human beings. Policies were arising that assumed everyone was capable of making near-instantaneous decisions using the very calculations that Nobel Prize-winning economists had labored for years to discover.

Friedman poured oil upon the roiled waters by invoking the "as if" argument, using an expert billiards player as an example. To summarize, an expert, or even pretty good cueman, does not calculate the outcome of a series of Newtonian physics collisions, but plays as if such calculations had been made. But others, who for the time being mostly kept their thoughts to themselves while they sought tenure (!), realized that this implied all of us have Olympic-level skills when we make economic decisions. Don't I wish!

One of these others was Richard H. Thaler, who began to use the term "Econs" to describe the fictitious super-rational beings (who could out-Spock Mr. Spock) upon which economic theory depended. He distinguished Econs from Humans, a term referring to genuine human beings, who are indeed not Vulcans, but have emotions, proclivities, life histories, and only in the most extreme cases act with unvarnished Reason. Econs never err. Humans seldom fail to err. Extracting useful theories from the reliable errors of Humans has been a major element of Dr. Thaler's work, as described in his memoir Misbehaving: The Making of Behavioral Economics.

Dr. Thaler might be a somewhat unusual economist, because he has befriended and worked with a number of psychologists, including Daniel Kahneman, whose book Thinking, Fast and Slow I reviewed a few months ago. Perhaps most economists fear too much exposure to psychology, because Humans are so complex. Yet it is that very complexity that must be studied, for policy that does not take it into account cannot succeed.

The main "policy" way to get people to do something is to tell them. If the matter is important, perhaps sanctions such as fines will be enacted. A simple example might be (Ladies, avert your eyes) putting a sign in the Men's Room, above the urinals: "Please Aim Accurately. Excess Cleaning is Costly". Such a sign is likely to result in even greater need for cleanup. What to do? Economics is the study of incentives as one aspect of motivation. What motivates Human males? Exhortations typically just rile them up. Of course, if there were no Humans, only Econs, no sign would be needed. Econs never miss. Humans seldom miss if they have an enticing target. Some years ago in Holland something new was tried: to etch the image of a fly just above the drain of the urinal. "Excess Cleaning" needs were reduced by 80%. Don't be surprised if you see a "fly" in a public urinal.

The title Misbehaving refers to anomalies that Dr. Thaler has been collecting for decades, anomalies that could not exist or persist if we were all Econs. The fly-target is just the simplest example. Others include violations of the "Efficient Market Hypothesis" (EMH). The most glaring is a case in which 3Com acquired Palm, then years later sought to divest it by a partial sale of stock, to be followed by successive sales until the whole was sold off. Early sales of Palm shares indicated that, if EMH were true, investors considered the residual value of 3Com to be negative, because the value of all Palm stock at that price would exceed the value of the combined company! This is a small example of a bubble. The existence of bubbles, such as the U.S. housing bubble that burst in 2008, is a huge anomaly contrary to EMH. Bubbles imply that things are wrongly priced, and so does all the talk on morning "business segment" shows about whether a "correction" is imminent. Econs never suffer bubbles or corrections. For them, the price is always right. Always. For Econs, the price they are willing to pay or receive for an equity exactly mirrors all the expected future value of the company and its dividends and even closure costs when it comes to an end. Econs are the ultimate Seers!!

Maybe at work you have access to a 401(k) retirement savings plan. Do you contribute? Does your company pay a matching contribution of the first few percent? For years, taking advantage of a 401(k) required filling out some paperwork, selecting a level of participation, and perhaps selecting one or more funds (including company stock and a few mutual funds) to put your money in, for the next 20-40 years. Making changes was not simple. Participation was low.

I guess I am more of an Econ than usual. I jumped at the chance, starting with 6% (which we could barely afford to sock away, but the company matched the first 6%, so it was like getting free money). Each time I got a raise, I added a percent or two, until I maxed it out. But I knew one guy who put in his 6% each year, but took it back out the following year and spent it. He got his free money, but was only accumulating half as much as someone who saved 6% and left it there with its match. I bet he wasn't nearly as well prepared to retire at 66 as I was. Even more puzzling, in those years, even with 3% or even 6% company matching, more than half of my co-workers never started their 401(k).

A dozen or so years ago, Dr. Thaler and others began convincing companies to switch from this opt-in method to an opt-out one. Employees were informed they would be automatically enrolled in a 401(k), with 3% of their earnings and 3% of company matching funds going into some default investment, usually a money market fund or company stock or a mix of both. If they really didn't want it, they had to sign a certain form and send it to the payroll office. Participation rates increased greatly. Then they devised a follow-on program called Save More Tomorrow: Each time an employee received a raise, half of it (or a different proportion that could be chosen) would be added to their participation rate, maybe raising an initial 3% to 4% or 5%, then to 6% after the next raise, and so forth, up to a ceiling such as the maximum allowed amount. Some companies, not wanting to write extra software to couple the payroll system with the retirement system, opted instead to simply add half a percent yearly to each participating employee's savings rate, unless, again, they sent in a form with differing instructions.

If you have access to a plan such as this, and it has resulted in your saving more toward retirement than you used to, you have Dr. Thaler and other "economics renegades" to thank. Reading such an entertaining, informative book, I was quite encouraged that, finally, some economists are looking at us as genuine Humans, who do things because we like to rather than because of some lengthy, Nobel-worthy calculation; who make decisions when we are happy or sad or mad that are often different from what we'd decide in a calmer mood; who wear green today and blue tomorrow and can't decide what color shirt to wear after that, so we ask our spouse, who likes mauve but we hate it so we grab an apricot-and-chartreuse print and wear that. Don't be surprised if the decision which house or car to buy is backed up by no more thought than that print shirt! We are Humans!!

Their own special brand of creativity

kw: book reviews, nonfiction, economics, creativity, human behavior

E. W. Marland, founder of the Conoco Oil Company, and a Governor of Oklahoma, once wrote, "Who knows why people do what they do? I spent money like water on my town and my people, and they thrived and prospered." So during the Great Depression, at least Ponca City, Oklahoma had a thriving economy. But if you aren't an oil billionaire, how do you make life better, for at least some people? Better yet, how do you figure out what is keeping them from thriving, and induce them to better themselves?

Those questions came to me from time to time as I read Think Like a Freak: The Authors of Freakonomics Offer to Retrain Your Brain, by Steven D. Levitt and Stephen J. Dubner. As they make clear in all their "Freak" books, Economics is not really about money. It is about incentive. Economics seeks to answer, in all ways possible, Marland's question, of why people do what they do.

We all respond to our given environment by adjusting our behavior to maximize our own advantage. Thus, in earlier books by these authors we learn why most drug dealers have to live with their Moms, and why it makes sense for the highest-ranking Sumo wrestlers to occasionally throw a match against a lesser opponent. We find the possible link between the Roe vs Wade decision of 1973 and the dramatic drop in crime rates that began a decade or two later. In this book we learn of a toddler who, offered M&M's as a bribe for more consistent toileting "performance", quickly attained exemplary bladder control, using it to extract maximum candy for minimum excretion; and why advertising executives dared not perform a simple experiment to determine which advertisements were more effective…or whether any of them had any effect at all!

If you're paying attention as you read—and why wouldn't you?—you'll gather new ways to think about many things. For example, the first sentence in the prior paragraph is the word "advantage." We might react to that sentence with, "What is the 'advantage' of self-destructive behavior? Not just taking drugs (the incredible 'high' is incentive enough for an addict), but things like cutting, or like pulling out, not just a hair or two but nearly all of it?"

That last behavior, sometimes called Trichotillomania, afflicted a woman my wife and I knew when we lived in California. She was so embarrassed by her baldness that she always wore a scarf, yet whenever she wasn't paying attention, she'd pull out a few hairs at a time, over and over, clearing a square inch or two in a matter of minutes. She didn't dare to read for pleasure, lest she get lost in the story and find herself with a lap full of pulled hair half an hour later. Unfortunately, we moved away and never learned if she found any clue to this absent-minded impulse or a way to change it. But you can be sure it was fulfilling some kind of internal need. Humans do nothing that doesn't fulfill a need. Call it Freak Rule 1.

Cutters are usually more transparent. A cutter may be extra-sensitive to begin with, but is typically a shy person in a situation of learned helplessness, where nobody "in authority", no parent nor teacher nor minister nor school counselor, and also no friend, pays attention to any kind of request for attention or understanding, overt or otherwise. Such a person feels that nothing can possibly make things better. While cutting causes a little pain, it also brings an odd kind of relief, "At least there's something I can do that has an effect." If the way typically impervious parents react to finding blood on their child's clothes is to go into full panic mode and "get help", it sets up a feedback mechanism: "This kind of attention is better than none at all." It can spiral into unintended suicide.

But more prosaically, why didn't the ad executives dare to suggest an experiment such as stopping all ads in, say, 20% of their market regions? All they could think of was some board member retorting, "What?? Do you propose cutting company revenue by 20%????" Worse, if they were to get backing for the experiment, and revenues were unaffected, then what? You got it: The same board member, now shrieking, "What?? We've been spending millions on you jerks and it makes no difference at all????" NO, No no, the devil you know is ever so much better than the devil you don't know! They may not have been happy with the status quo, but could think of no better alternative.

A Freak is not just an economist. An Economist is ideally data-driven; a Freak is data-obsessed. And, late in the book we learn the most valuable Freakish lesson. Know when to quit. Yup. Got a good thing going? Do you expect it to run on autopilot, like, forever? Even if you watch it like a hawk, can you deal with everything that comes along? When times change, do you?

I retired from DuPont Co. several years ago. It's be nice if their pension lasts longer than I do. What are the chances that it won't? Actually, large enough to worry me a little. The company brass is under attack by Nathan Peltz, for one, and I have little confidence that the kind of people he wants on the board of directors will fully fund the pension fund. But even more to the point, the company is 213 years old. In a year, perhaps less, it may be no more. My brother texted me yesterday, "I hope you have a lot of DuPont stock…" This was just after the news broke that DuPont and Dow are talking "merger". The stock's recent price has been about $66.50. Yesterday it jumped to $74 and has stayed in that neighborhood. That's an 11% hop, which ain't bad if I want to cash in on some profit taking.

But in case you didn't notice, there is no DuPont Chemical Co. any more. They spun off the rest of the "hot" chemical products (those made the old way, using strong agents like acids) into Chemours earlier this year, and are fully invested now in a mix of agricultural and bio-engineered products, talking of "plants as plants", meaning to make stuff by putting the genes for the "stuff" into a plant and just harvesting it. I envision a future "DuPont/Dow Bioproducts Corp." (or Dow/DuPont...). Give it 5-10 years, and both the Dow and DuPont names are likely to vanish in favor of some acronym like DDB. Who remembers that AT&T used to be called American Telephone and Telegraph? The acronym remains, decades after the telegraph vanished from everywhere but the local museum.

So, things change. You can't predict the future, so you adapt when the future throws you curve balls. I have a term for what happens next: Psychological Hysteresis. Hysteresis, as an engineering term, is the tendency of a magnetic material to resist being re-magnetized in a different direction. As the applied magnetic field increases, the induced field lags behind, until at some threshold, it suddenly switches, and almost totally matches it. As you may imagine, there is some energy released when this happens. Now imagine a magnet in a continually reversing field. If the field peaks out strong enough, this switching pulse will occur at both ends of every cycle. Metals used for power transformers in AC power circuits are chosen to have very high switching thresholds, and the smallest possible lag, and the transformer is designed so that the threshold is not approached in normal operation. Otherwise, the transformer core will heat up rapidly, and can explode. As it is, power transformers run rather warm anyway, from the unavoidable level of hysteresis (lagging) even below the threshold. Psychologically, we find that we have a similar resistance to change, but if the stress is too great, we "break". Even when we don't, changing takes energy, emotional and physical energy. Continual change also makes the psyche "run hot".

Now, here you are, livin' your life, doin' pretty good. Things change. You don't, at least not right away. What has worked well for you for a long time, doesn't work as well. Do you:

A) Try harder?
B) Panic?
C) Call your best friend "who's always so together"?
D) All of the above?

Maybe it is best to think like a Freak and

E) Experiment.

If you try a little harder, does it help? If not, think about what might help. Do a little test. One that won't be catastrophic if it fails. And if it does fail? Do you have the guts to quit on that one, think some more, and try something yet different? Thomas Edison once said he and his lab helpers tried more than 1,000 substances before they found one that worked in his first practical light bulb. Someone asked, "How can you endure such a string of failures?" He said, "Failure? Not at all. I learned of 1,000 things that aren't good for making light bulbs!"

Here's an example a lot closer to home. The infertility business makes a lot of doctors rich. Desperate couples, mainly the unfortunate women, undergo many difficult, painful, and expensive "procedures" that the doctor recommends to determine the cause of infertility. One test is almost never done at the behest of an infertility clinic: Thyroid hormone levels, a set of 3 or 4 blood tests that involves no more than a needle stick and costs $100 or $200. More than 1/3 of infertile women have a low thyroid hormone level. Taking a daily hormone supplement that costs a few cents daily will result in fertility for nearly all of those women. For the other 2/3? Very many of them would benefit from getting a suite of endocrine hormone level blood tests in addition to thyroid. Treating endocrine imbalance is also not too costly. Then the greater effort could be focused on the smaller number who need more dramatic intervention to get pregnant.

In my wife's case, her thyroid problem was discovered almost by accident, and the hormone supplement led to pregnancy within a few months. But she was already 42. We have a healthy son, thank God, who is now 27. But it was too late to have any more children. That inexpensive blood test could've been done when she was 30 or 32…

If I wanted to do a truly Freaky analysis of infertility "treatment" in America, I'd gather lots of data on which tests are done and in what order. Whattaya bet the ones that bring the most bucks to the doctors are being done first?

All kinds of situations are amenable to Freaky analysis. I once heard of a law that was passed in a few European countries. The usual suite of environmental legislation is well known to be rather ineffective. The new law did not fill a 2,000 page tome. It simply stated, "An enterprise that takes fresh water from any natural source must emit any and all wastewater from all its processes at a point upstream of all its water inlets." It is a slightly nicer way of saying, you'd better clean up your wastewater, because you're going to be drinking it. Now, I can think of a way to get around this. If the outfall is pretty far upstream, even raw waste could get diluted, so that a smaller waste-amelioration plant next to the inlets might make that water usable for the company's processes. There's probably some optimum, where a little "treatment" of effluent, and further "treatment" of influx, would be the cheapest. So now that practice would have to be outlawed. I can imagine pitched battles in government courts over how much "influent treatment" is justifiable and how much is "effluent cleanup avoidance". And so it goes.

Experimentation is all in knowing how far to go and when to quit. Got a good conclusion? Is it well defensible? Good enough. Find another system to study.

One Freak's rule is that we all remember bad stuff longer and more vividly than good stuff. Forget all the fables about nostalgia and the "good old days". For every "good old day" there was an enemy or two who done you wrong. It took a concerted effort for me to take myself to the Fiftieth anniversary party at my high school. I made a plan, because I'd actually gotten along much better with the teachers than with most of the students (these days it is called terminal Nerdism). I went to the event that some of the teachers would attend. Two of my favorites did attend, but one was too demented to hold a conversation. The other, only six or seven years older than I, was a delight to re-connect with, and was very gratified that his teaching had borne fruit, at least in me (and I am sure in many others. He was very good). And you know what? The enemy or two that I remembered with the most dread didn't show. Things often work out that way! But think of this as the "it all averages out" principle. Not all the good was as good as you remember, and not all the bad was all that bad. And over time, things average out. But a Freak knows that nearly everyone around is driven more by fears than by anticipation, and learns to adjust for that.

It is a basic law of human nature. You get the behavior that you reward. A Freak will figure out, by experiment if needed, what different people actually consider to be a "reward." Then you'll know how to get the behavior you want. And even if you're not so much into actually setting policy and changing behaviors, thinking like a Freak can be quite entertaining. I mean, it would be very hard to change the system of Sumo rankings, but it is sure fun to figure out each wrestler's "thrown match" ratio.

And sometimes you can approach something with suspicion and be happily surprised. We seem to fear dying in a plane crash much more than dying in a car crash. That is in spite of the fact that 30,000+ Americans (and many more elsewhere, about a million) die in car crashes every single year. But the total number who have died in plane crashes, worldwide, since 1918 (end of WWI) is about 125,000, or four years of American auto crashes. But the Freak's mind is churning, "How about we check those death rates by the mile, or the hour?" Here are some facts I've been able to dig up on short notice:

• 1,088 airplane deaths in 2014 worldwide, and an average of around 1,000 yearly since 2000.
• 1,300,000 auto accident deaths in 2013 worldwide.
• In 2006, 2 billion air passengers made 28 million flights. 
• Air travel grows 5% yearly.
• 3 trillion miles driven on all roads yearly (3.15 trillion in 2014).

We have to boil these down to some useful averages, however rough:

• Relatively few roads permit high speed driving. Most of those 3 trillion miles were at speeds averaging 30 mph.
• Most commercial travel is by jets averaging more than 500 mph.
• I have no figures for the average flight length, so I'll analyze for 1,000 and 5,000 miles. The real amount is almost certainly somewhere between.
• 3 trillion mi. ÷ 30 mph = 100 billion hours of driving.
• 100 billion hrs ÷ 1,300,000 deaths = 77,000 hours per auto death.
• 3 trillion mi. ÷ 1,300,000 deaths = 2.3 million miles per auto death.
• 1,000 mi. × 28 million flights = 28 billion miles flying. (for high estimates)
• 5,000 mi. × 28 million flights = 140 billion miles flying. (for low estimates)
• 28 or 140 billion mi. ÷ 500 mph = 56 or 280 million hours flying.
• 28 billion mi. ÷ 1,000 deaths = 28 million miles per airplane death. High estimate.
• 56 million hrs ÷ 1,000 deaths = 56,000 hours per airplane death. High estimate.
• 140 billion mi. ÷ 1,000 deaths = 140 million miles per airplane death. Low estimate.
• 280 million hrs ÷ 1,000 deaths = 280,000 hours per airplane death. Low estimate.

We can now turn these figures upside down, and conclude:

• Per billion miles of driving, 435 people die.
• Per million hours of driving, about 13 people die.
• Per billion miles of flying, between 7 and 35 people die. This is much lower than for driving.
• Per million hours of flying, between 4 and 18 people die. A figure surprisingly close to that for driving.

What do we conclude? Since "between 4 and 18" probably means something like 8 or 9, it is almost certainly safer to fly than to drive, even calculating on an hourly basis rather than miles covered. But not by as much as we might have thought at first! I trust you can do your own analysis for U.S. domestic flying (zero flying deaths for about five years except two in 2013).

Trust the data. Oh, by the way. This book is required reading for anyone with pretensions of actually thinking.

Mental structures that lead us astray

kw: book reviews, nonfiction, psychology, economics, errors, systems 1 and 2

On a recent episode of Star Talk, the latest offering by Neil deGrasse Tyson on the National Geographic Channel, he discussed his interview with Penn Jillette of Penn and Teller. At one point Penn presented this scenario:

Suppose you're a 3-foot hominid such as Lucy, and you hear a rustling in the grass. If you think about it, there are two causes: the wind, or an approaching predator. If you assume it is a predator and run, but it really was the wind, you have lost little but some energy and sweat. But if you assume it is the wind and it is a predator, you're lunch. So it is safer to assume it is a predator, because even if you are wrong, you are alive.

I would add, if you take the time to think about it and weigh the "wind or predator" question, you are probably lunch also. That is why our defensive mechanisms work so fast, moving us out of harm's way before we have thought about it.

So we have two ways of thinking, fast and slow. The fast, reactive system is tuned to keeping us alive. The slow, contemplative system is tuned to revising our model of the world and to informing the faster system how to work more accurately, in a way that keeps us up-to-date more efficiently than waiting for evolution to re-tune our reactions. Daniel Kahneman calls these System 1 and System 2 in his new book, Thinking, Fast and Slow. Though Dr. Kahneman is a psychologist, his Nobel Prize is in Economics.

This is a good spot to emphasize that economics is about how people make choices, not just about how we use money. At several points in the book, the author mentions how psychology and economics, as disciplines, can each inform the other, though historically they are "stovepiped", with too little cross-communication.

The handful of folks who actually "follow" this blog may have wondered where I've been for more than two weeks. I have been reading this book with more than usual care. It is a big book, with the main text totaling 418 pages, but two large appendices (reprints of the seminal articles he and Adam Tversky wrote) and extensive end notes stretch that to 481. A book this big will naturally take me a while to finish. A book this good takes even longer! It has more fine ideas per pound than any other I've read in the past few years. The book is structured around three big ideas, and a host of subsidiary ideas are thus engendered. I really have space only to summarize the Big Three.

Idea 1: System 1 and System 2. These are our Reactive System and our Contemplative (or Calculative) System. System 1 in action: during our courtship, my future bride and I were walking in a park and strolled over to sit on some monkey bars. Such seating is none too secure, and I said, "Don't push me." She did push me, before I finished the sentence, and I grabbed a couple of handholds during the word "me". Her S1 was operating to focus my attention, and my S1 instantly kept me from falling. This was followed by some S2 activity: She grinned to emphasize her playful mood, and I took that in and boosted my "how lovable she is" score a notch. Human courtship, operating as it has for millennia.

• Our S1 does the things no computer does well: recognize who or what is around us, evaluate each on a hazard/help axis, and frequently prompt us to action, all within one or two tenths of a second. 
• Our S2 struggles to do things a computer does well: put together the puzzle of our existence and map the world around us, carry out calculations (Quick! What is 27x17?), and feed new insights back to S1. If you could do that "simple" multiplication (partial sums: 340 and 119; add to 459) in less than five seconds, your "horseback arithmetic" skills are at expert level.

I had a conversation a few years ago with a professor of philosophy. He talked a bit about his work on "formal errors of logic", such as broken syllogisms (look it up; it'll save time). I said at one point that I was quite interested in errors of informal logic. He snapped, "That isn't real philosophy," rather pettishly, I thought. His expertise was threatened by the chance the conversation would turn to an unfamiliar area, and his S1 snapped to attention to maintain dominance over me. I retained my integrity by walking off to find a more congenial conversationalist. My S2 intervened just quickly enough to prevent my S1 from answering rashly.

I was fascinated by Dr. Kahneman's reports of ways our body and mind work together. In one experiment, students were asked to work a page of simple arithmetic problems, all the while holding a pencil in their teeth so it stuck out both sides of the mouth. Another group did the same problems, but held the pencil by its eraser with their lips, so it pointed out the mouth. The first group, forced by the pencil to smile, did the problem sheet much faster and more accurately than the other group, forced by the pencil to frown. This gives credence to the adage, "Fake it 'til you make it." We smile, not only to reassure others we are with of our good intentions, but to reassure ourselves that all is, or soon will be, well. This is just one example of many.

Idea 2: Econs and Humans. Much of the theory of Economics is based on the notion of a Rational Actor. People are expected to make choices rationally, unaffected by emotional considerations. The work of Dr. Kahneman and others demonstrates that this is probably the unlikeliest foundation upon which to found a theory.  Our grandmothers knew we act without thinking, and we think—with some modicum of rationality—only when forced, even backed into a corner. Most of us pass most of the day without having one rational thought pass through our head. It is how you get to work, or back home, "on autopilot", particularly when you intended to run an errand on the way home, but arrived at your door wondering what it was you forgot.

Behavioral economist Richard Thaler calls the mythical Rational Agent an Econ, in contrast to the real agent that we all are, a Human. Econs do automatically what Humans typically cannot. I considered this analogy, which I make to distinguish faith from religion: A Religion is a checklist that you can hang on your wall. A robot could perform it all perfectly; you cannot. A Jewish friend told me of his study, in his youth, of the 611 laws in Leviticus, and how he sorted them into, "No problem", "Oh, maybe this is a bit sketchy", and "Who in his right mind would think this is possible?!?" In the wholly secular world, we are often told to "Count to ten first," but we find we've done something we can't undo before getting from one to two. A certain policeman is in the news these days, for shooting a youngster 16 times in 15 seconds, while six or seven of his colleagues were content to watch the young fellow from a step or two away and persuade him to put his little knife down and have a nice chat. Guess who belongs in quite a different line of work? And guess whose emotions take over some 10 to 100 times as quickly as more ordinary folk?

It seems every time someone designs an experiment to ferret out our rational and emotional responses to a situation, the rational mind is pretty hard to find. Later in the book, the author tells of ways to set up a situation so that we are more likely to give ourselves time for rationality, but he acknowledges that they are far from perfect. And he's been studying these things for 30+ years! What hope have we of any bit of rational behavior? Well, some hope, anyway, for we are Human after all, not Econ, and it is in our nature to hope, to try again, and sometimes to succeed a little.

Idea 3: Two Selves. Our memory, called here our Remembering Self, draws different conclusions from our experiences than our Experiencing Self does. The experiment here could not be more clear. Water colder than about 60°F hurts a little, and below 50°F it can hurt a lot, and quickly. A basin of water held at 57°F was provided, and students (nearly all experiments are done on college students! They come cheap) were asked to hold their hand in the water for 60 seconds. Then they reported how painful it was on the familiar ten point scale. After time to warm up, they were asked to repeat the experiment, but to hold their hand in the water for 90 seconds. After 60 seconds, water that was a few degrees warmer was let into the basin. Rather than report on a 1-to-10 scale, they were asked which experience was more painful. Nearly all reported that the first, shorter experience was more painful, even though they had endured a longer period of "torture" in the second experiment (It takes a few seconds for the warmer water to "take over"). The Experiencing Self may be queried during an experience and give you an accurate read on what things feel like "Right Now", but after the fact, the Remembering Self primarily remembers the last part of the experience more than all the rest. It's why we are advised to "go out with a bang"…as long as it is a favorable "bang"!

I suspect if the experiment were repeated in reverse, there would be a different outcome. I'd try this: Session 1, 60 seconds at 55°F. Session 2, 45 seconds at 60°F followed by 15 seconds as 52°F water is added. Maybe the exact temperatures would have to be tuned a little, but I am sure the Remembering Self would report the second session as more painful, even though the sum-total-torture was less. By the way, some experiments done for the Mythbusters TV program were done using a basin in which ice was floating, to hold the temperature at 32°F, and the duration was "as long as you can hold it", with a maximum of three minutes (180 sec.). Some participants held out the full three minutes, and lifted out their hand with ice sticking to the skin. So you can see that temperatures in the 50-60°F range will do no damage.

We think we are better at planning than we really are. All three of these things come together when we commit the Planning Fallacy. Chapter 23 of the book is entirely devoted to it. It is most evident in corporations that are having trouble. A new CEO will call together a team to "plan", and perhaps the plan will even be carried out to some extent. Do profits rise? Wonderful. The CEO gets a bonus. Does business remain "flat"? What a pity, the employees are defective and didn't carry out the plan as intended. Does business go down? Oh, my, "external factors" such as shifting currency ratios or a new and unexpected competitor must be to blame. Does the company tank? The CEO's "golden parachute" is activated, (s)he is booted out with a $10 million handshake, and a new CEO is brought in to repeat the process. As Yogi Berra said, "Predicting is hard, especially about the future." And Donald Rumsfeld warned us of the "Unknown unknowns", for which he was reviled, and then forgotten. Do you know anybody anywhere who strives to ferret out what "unknown unknowns" might become a factor, so as to deal with them?

One clear message of the book is that System 2 is lazy, pathologically lazy. It (we) typically accepts whatever "explanation" or "solution" is offered up in the instant that System 1 takes to perform its heuristic evaluation. Thinking is work, and we'd rather do almost anything else. And we typically do. My, it is a wonder that anything gets done!

The best time to read a book

kw: book reviews, nonfiction, economics, philosophy, blogs

It didn't occur to me that Freakonomics authors Steven D Levitt and Stephen J Dubner would be writing a blog. Duh! Everyone has a blog!! So I've lost out on several years of fun and intelligent daily reading.

I got sort-of caught up by reading When to Rob a Bank…and 131 More Warped Suggestions and Well-Intended Rants. If the title count is accurate, and they've been contributing to the blog at least a couple times weekly over ten years' time, the 132 items in this book make up about one-tenth of their blog over its history. According to Sturgeon's Principle, 90% of everything is crud (his word). So it makes sense to glean the top tenth and present that to the world. Of course, having perused the Freakonomics blog before starting this review, I'd have to say that the other 90% is pretty good crud!

So, what have we here? Without giving a total spoiler, I have to say that the blog post of the book's title is a trick. What kind of trick? Read the post, on pages 248-251. One thing too cute to conceal: robbing a bank early in the day will yield more cash, but very few banks get robbed in the morning (that tells you when it is the safest to visit your local branch). Dubner wrote in this post, "Maybe if they were able to wake up earlier and go to work, they wouldn't have to rob banks?" But that doesn't answer the title question.

As in the Freakonomics books, the authors look at things differently from most of us. An economist doesn't guess (not a good one anyway), an economist uses data and lest the conclusions draw themselves. But having presented the data, sometimes it is both fun and instructive to consider the Why of it. For example, they looked into the dangers of recreational horse riding. Not much research was required, because a report by the CDC tells us, "The rate of serious injury per number of riding hours is estimated to be higher for horseback riders than for motorcyclists and automobile racers." So possible reasons why are considered. The one that makes the most sense to me is the one they list first, that most horse riding accidents occur on private property, not on the public streets, and typically only the rider is injured. Motorcycle and drag-racing accidents are just so much more public.

Another post asks, "Is Cheating Good for Sports?" It seems so, and not only does the public simply lap up stories about doping, about taping opponents' supposedly private practices, or about balls that were under-inflated, the sports-fan public goes totally gaga over sports stars who have done wrong and 'fessed up and followed up with a lot of kiss-and-tell stories about who else is cheating. Even folks who seldom watch any games will pay attention when the news is about this or that cheating star or coach, and what happened next. We do love our soap operas.

Sometimes they post a question, and one question, "Why are we eating so much shrimp?" garnered more than a thousand responses. They then analyzed the responses to see how many people focused on the demand for shrimp and how many on the supply. An economist thinks of supply factors, such as the falling price of shrimp now that shrimp farmers have gotten a handle on their trade. Most everyone else looked at greater demand such as people getting more conscious of their health. As the post closes, there is a follow-up question: Tuna consumption is falling; is that due to changes in supply or demand? I'd have answered, "Mercury". I suppose that is a supply answer.

A troubling subject has the title, "Is the Endangered Species Act Bad for Endangered Species?" The short answer: usually Yes. Because of the public review provisions of the Act, if the EPA publishes its intention to consider listing a species, those who own the piece of forest or stream or whatever are likely to hurry up and do what they were planning to do, before the listing is effected. Thus, the potentially endangered species is more likely to become an extinct species before the EPA finishes its review.

The study of human motivation yields a never-ending fund of surprising insights. I predict that these fellows will be in business for a long while yet.

Bigger goes along with better

kw: book reviews, nonfiction, history, economics, sociology

I remember my father telling me, when I was a pre-teen or early teen, his theory of "why kids are getting bigger" and in particular, why new Olympic records were still being set, after generations of competition. "Better food and better medicine. When kids don't get sick as much, they can get bigger and stronger and faster and smarter."

Another memory. Valley Forge, maybe five years later. A park guide said, "General Washington was like Goliath to the British. The average 'redcoat' was about 5-foot-2, and Washington was 6-4. He rode the biggest horse he could find, and it scared the crap out of the British." He exaggerated a little—Washington was 6'-2" (187 cm), and as the chart below shows, British recruits just prior to 1800 were about 5'-6" (167 cm)—but the point is accurate. He was the tallest man most of them had ever seen. Of course, most of his own men were similar in stature to the British, and he scared the crap out of them also.

This chart illustrates a "Waaler Surface". It is from page 60 of The Changing Body: Health, Nutrition, and Human Development in the Western World Since 1700 by Drs. Roderick Floud, Robert W. Fogel, Bernard Harris, and Sok Chul Hong. The chart is rather complex, so take a moment to peruse it, and then I'll explain.

For Americans, refer to these tables:

Height
160 cm = 63.0" ≈ 5'-3"
170 cm = 66.9" ≈ 5'-7"
180 cm = 70.9" = 5'-11"
190 cm = 74.8" = 6'-3"
(to convert cm to inches, divide by 2.54)

Weight
40 kg = 88 lbs
60 kg = 132
80 kg = 176 lbs
100 kg = 220 lbs
(to convert kg to lbs, multiply by 2.2046)

The Iso-BMI curves—the dashed lines—set a foundation. The heavy curve shows minimum risk of dying in the next ten years. To the left is underweight, and to the right is overweight. Now, the iso-mortality-risk curves—the thin solid lines—show relative risk of dying within ten years, gleaned from a study of middle and late middle aged Norwegian men, and correlated with the sketchier records of the past 300 years throughout Europe. The curve labeled 1.0 passes through the minimum-risk curve at 1.675m (66") height. At that point, the healthiest weight is 72 kg (168 lbs). But a person taller than 1.84m (72.4"), weighing about 80 kg (176 lbs) has a 30% lower mortality risk!

Hmm. I am 6'-0" and 207 lbs (1.83m and 94 kg). That puts my relative mortality risk at 0.9. That is 15-20% worse than the optimum for my height. More properly, among a group of men just my size, 20% more of them are likely to die in the next ten years, compared to those at optimum weight/BMI. That is according to this Waaler surface.

But the little circled × and + signs mark the important historical message of this chart. Throughout most of the past 300 years, the French were shorter than the British, and less healthy. However, the trend through time has brought the two populations to near parity, with average heights of about 1.77m (just under 5'-10"), and though the British tend to be heavier, their mortality risk is the same (they are on the same iso-mortality-risk curve).

A little further along in the book, Table 2.5 on page 67 lists the average height for men in six European countries, as it has changed since 1750. I converted the data into this chart:

A quarter-century marked 18-IV, for example, refers to the years 1875-1899. That is the range of dates during which men in a particular cohort reached physical maturity.

I am not sure what happened in Denmark since 1975, but for three of the other five countries the height scoops up toward the 1.8m range, then slows down approaching the year 2000. The last data point is missing for Hungary, and we see that France is apparently a little behind England and the Scandinavian countries, perhaps lagging by 25 years (It is tempting to speculate that the different lines will converge on some optimal average height, but only time will tell).

This is something the authors remark upon, that in the richer western countries the trend of increasing height seems to be slowing down. Perhaps there is a genetically-determined maximum height for each family, and as barriers are removed, through better nutrition, better medical care and less need for very heavy labor, that maximum is being reached by a larger and larger number in each generation.

The book is a textbook for a socio-economics course. Thus it is very dense with figures and tables and discussions of the sources and assumptions and calculations needed to reach the authors' conclusions. In a way, the plethora of illustrative material shortens the reading substantially. Reading a text-only book of this density, of 374 pages, would have taken somewhat longer than the 12 days it took me! I can swallow up a page-size table quicker than I can read a page of scientific text. I would say that the first 80% of the book is devoted to "confidence building": presentation of the facts and sources and so forth, so that the later conclusions will be more readily accepted. If the authors choose to write a more popularized version, I'd expect something quite a bit more brief.

But this book is quite valuable as it is, for those willing to slog through it. All that data on size and weight and purported health are fine, but what has caused it? And are we really healthier? Not all agree that we are. Much of the work discussed, work done by the authors and many colleagues, and by others, including those who may draw different conclusions, is intended to tease out mortality and morbidity as they have progressed through time. Prior to about 1930, when the first effective antibiotics were developed, we see that average size and health were already increasing. The "Third World" is presently living an 18^th-Century life, nutritionally and medically, and it shows; average adult male heights for most groups are near 1.65m, plus or minus 5 cm or so.

However, the discussions do not dwell only on averages. One large section deals with distributions of caloric intake, compared to the basal metabolic requirement plus "maintenance", which is necessary to stave off long-term starvation. Throughout the 1700s and into the early 1800s, 15-30% of the poorest didn't have enough to eat, and were starving. Even those just a little better off had little energy to work. Did you ever wonder why the beggars in poor countries (and poor areas of richer ones) do little more than sit around begging? I am not talking about panhandlers on American city streets, but the truly destitute. It is because they eat so little they have no energy left for any kind of work.

For example, if a man of a certain size could sleep all day, his basal metabolism might require 1,600 calories (AKA kcal). Yet he needs to awake from time to time to, at least, eat and eliminate. Also, his body uses some energy replacing worn out tissues. These maintenance activities bring his caloric requirement to 2,030 (an added 27%, or 430 kcal). Just walking around takes about 3 times as much energy as sitting still (2x for the walking and 1x for basal). This factor of 3 is a Physical Activity Ratio, or PAR; a 24-hour walk would require 4,800 kcal (the exercise plus the basic) plus 430 (maintenance) for a total of 5,230. Of course, a full-time panhandler won't walk 24 hours, but may walk a few hours a day. If we assume 4, the total caloric requirement is 2,030 plus about 530, or 2,560 kcal. If this person does anything else except lie around quietly, more calories are needed.

At the high end of the scale, assuming a farmer can eat all he needs to, the PAL for most farm labor is about 5. Farmers work long days; 10 hours or more is quite common, 7 days per week. Then many around-the home activities have a PAL around 2. A farmer's energy budget may resemble this:

• sleep 8 hr: 530
• labor 10 hr: 3,330
• family interaction 3 hr: 400
• read, talk, etc. 3 hr: 300
• body maintenance: 430

That all adds up to 4,990 kcal that he needs to eat. The next time you are at a café that farmers or farm hands frequent, don't be surprised by their enormous breakfasts! However, for those without such ready access to abundant food, such as the lower classes in 18^th Century Europe, undernourishment was the norm. Dad was underfed and couldn't work hard enough to earn much, Mom was underfed and so had undersized babies; she had a scant milk supply and after being weaned the youngsters frequently went hungry. They grew up short and scrawny. Then, being undernourished made them all less able to fight off disease, which also takes energy. Their lives were short and hard, and other charts in the book show how size correlates with social class. Simply put, the aristocrats were taller because they could afford sufficient food, and being better nourished means they were less often ill.

The epigenetic effects of such a history can't be shrugged off in a single generation. The 300-year chart above shows how gradual the change was. Increasing food supplies came first, and it took a few generations for size changes to follow. 300 years represents 12-15 generations.

Now we can consider life expectancy. At this point, data for women was also available. This chart, from page 148, shows the increase just through the 20^th Century. The bars represent average remaining life expectancy. Thus, for 65-year-olds, only a dozen or so years remain, meaning that on average they can expect to live to age 80 (men) or 85 (women; for the 2000-2002 figures).

From the bottom, note that at age 0 compared to age 1, there is quite a difference in 1900, but very little in 2000, though for both there are great increases from 1900 to 2000. Infant mortality was so great in 1900, that a 1-year-old, who had already survived a few "childhood diseases", could expect on average 5-6 years more life than a newborn.

As an aside, two years ago we visited a cemetery in Missouri, where some of my ancestors are buried. I was sobered by the large number of tiny gravestones for infants and children under 5, who had died between about 1830 and 1930. The gravestones for those who survived to ages in the range 70 and up were very few. I think my great-grandfather was the only 90-year-old buried there. When he was 65, in 1935, his average life expectation was to live to about 77. He beat that, but most didn't. My father, who was 88 when we went there, had given me a list of men to look for, in the nearby town, men he had known as a child. I reported later that I found them all—in the cemetery. Dad is the last survivor of his generation from that town.

Today, it is considered unusually tragic to have a child die. Prior to 1900 it was tragically common. So perhaps the age-15 figures tell the best story. At age 15, in 1900 a young man might expect to live another 48 years, to 63. By 1950, it was 53 or 54, to almost 70, but by 2000, a 15-year-old has an average remaining expected lifetime of 62 years, to age 77. For young women, add 3-4 years to all these figures.

Now we come to the last figure I wish to show, Figure 6.8 from page 341:

The squares on the dotted lines are for Union soldiers who'd survived the American Civil War, measured and weighed at ages 40-59, and their dates of death from military pension records. The circles on solid lines are from modern non-Hispanic Americans, measured and weighed at ages 40-59 in the 1980s (61,000 of them). In both data sets, the relative mortality risk is for the succeeding decade. The simple message is clear. Being shorter is riskier, and being too skinny is also riskier. The "sweet spot" for the Civil War veterans is about 1.9m tall and BMI near 24 (87 kg: 6'-3" and 192 lbs). For the recent cohort, it is about the same height, but optimum BMI is nearer 26 (94 kg or 207 lbs).

Both BMI charts show that risk rises gradually upwards of 26, and picks up faster after 30, the criterion for "obese". However, a Waaler chart such as the one above is needed to ferret out whether being short and heavy is better or worse than being tall and heavy. Look at the Waaler surface above: at any BMI between 19 and 31 or 32, being over 1.8m tall is better than being 1.6m tall at any weight!

But this introduces a new and sobering realization. In the west we have gone from being undernourished to overnourished. In America 30-40% are now obese, and the European nations are following closely behind. Mortality and morbidity (chronic debilitation from illness) are increasing again. The number of morbidly obese (BMI more than 40) is the most rapidly increasing segment of American society. I'd be morbidly obese at 295 lbs, or 134 kg. These days I know lots of folks over 300 lbs, and a few in the 400-plus category.

As the authors of Changing Body show, there has been an amazing run of three centuries, with improving nutrition, public health, medical care, that have led to taller and heavier and stronger and even smarter people throughout the west. But we are going over the top. Now we spend about as much for weight loss programs and products as we do for food. How long will it be, until, if nothing else, those who most easily grow exceedingly obese are culled from the gene pool?

Economics that is beyond me

kw: book reviews, nonfiction, economics, politics, polemics

Tranche: Transaction documentation usually defines tranches as different "classes" of notes, each identified by letter (e.g. Class A, Class B, Class C securities) with different bond credit ratings. The equity ("first-loss") tranche absorbs initial losses, followed by the mezzanine tranches which absorb some additional losses, again followed by more senior tranches. Equity is riskier than mezzanine, and so forth.

A simple statement like that above (cribbed from a Wikipedia article), early in the book, would have saved me a lot of puzzlement when I was reading Unintended Consequences: Why Everything You've Been Told About the Economy is Wrong by Edward Conard. A glossary would have been even better, because those few terms bolded above are just the tip of the iceberg of specialized jargon Conard uses. It is really too bad. The back cover has six blurbs of high praise; all are from economists, who of course would understand the book without further education. For the rest of us, the book is quite inaccessible.

Of course, I have spent two weeks with this book, gradually unscrambling the inscrutable, so I can evaluate it better. In the main, I like the author's analysis, which was a relief to me: he is a former partner in Bain Capital and colleague of Mitt Romney, and I am also a financial and political conservative. Here is a synopsis of what I did understand. Bottom Line: The cause of the 2008 Financial Crisis was a classic bubble, in real estate rather than in banking as the media have stated (repeatedly!). The collapse of the bubble led to the collapse of major banks, and we'll get into that.

In the first of three sections, "What Went Right", he outlines the parts played in a national economy—on a global stage—by Investment, the Trade Deficit, and Incentives.

• Investment: There are three things you can do with money that comes your way, consumption, savings, or investment. Here, "consumption" includes charity and any other use of money besides saving and investing, and "saving" means putting money into a bank account, money market account or CD. "Investment" means different things depending on your rôle. For most of us, it is trying to beat the bank rates by putting some money into mutual funds or stocks or bonds. It can also mean investing in more education. For a business owner, it means money spent towards innovation, to increase the competitiveness of the business, or even better to create new and lucrative products.
• The Trade Deficit is seen as a positive, a way to export labor costs. This both drives consumption and reduces its costs. It's a nice idea to "Buy American", but it doesn't make economic sense for a poor or lower-middle-class family to purchase only products manufactured by workers who earn an average $17/hr, when available products of equivalent utility were manufactured for 75¢/hr: that's a labor cost of just 4.4%, effectively zero, so you can afford a lot of transportation cost and still pay much less. This is a major reason most American jobs are in the service sector. You can't export plumbing or auto repair to China. (By the way, make sure your college student also learns a trade; more likely to pay off.)
• Incentives have two sides. A businessperson who invests is likely to compete better, and may get lucky with a blockbuster product. This will bring a great increase in income, and increased status. A businessperson who does not invest, or does so meagerly, will not do as well, and will also suffer a loss of status for failing to grow the business.

These three factors were working together and had led to the superior American economy leading up to 2007. European and Japanese firms invested less, some were protectionist, and they taxed successful businesses more heavily, so while America produced AOL, Google, FaceBook, Microsoft, Intel, and Apple, the rest of the West produced nothing of that scale.

Incentives in particular are misunderstood by most Americans, especially in the face of a steady drumbeat of Liberal propaganda that "the rich" are "oppressing" the poor and "taking advantage of the 99%". Let's be frank. Suppose the combined governments in the U.S. were to have a super-flat tax, meaning you can earn up to, say, $30,000 per year tax-free, and then the tax rate is 100% for every dollar above that point (divided somehow among Federal, state and local governments). Do you think Andy Grove or Bill Gates or Warren Buffet would have built their businesses, or even remained in the country? At a much, much lower level, I observed this: When one of my co-workers had been at a particular salary grade a few years, he or she would begin taking on more and harder projects, hoping to impress management and receive a promotion (with its extra 5-10% pay boost). If a promotion was not forthcoming within a year or two, the same person would get discouraged and begin slacking off, and perhaps even drop in productivity to a level lower than a few years before. It is a well known business proverb: you get what you incentivize.

Now, I get pretty bothered when a company executive attains a salary that works out to a few thousand dollars per hour. I don't think anybody is worth that kind of salary. However, when a business owner takes financial risks to grow the company, and happens to hit it big (like Bill Gates, everybody's first example), it may rankle folks that he becomes "worth" millions or billions of dollars, but he hasn't attained that by putting an inflated salary into the bank. What he is "worth" is the market value of that portion of the business that he owns.

I can use a friend of mine as an example. His family-owned business was worth a few million dollars when he took over its management in his 30s. He built the business, investing deeply but wisely, so that it grew a thousandfold. A few years ago he was said to be "worth" about $20 billion. The Financial Crisis has been worldwide. Although most of his company's assets are overseas, they were affected by the recession, and his current "worth" is about $2 billion. In all this time, though, he has been paid the same executive salary of a few hundred thousand, in terms of $US. And let's consider what would happen if Bill Gates or my friend were to attempt to cash out his holdings. There is hardly anybody who can afford to buy all of Bill Gates's stock in Microsoft, and probably no institution that is willing to do so. He'd have to sell the stock over time, and it would depress the market for that stock and possibly bankrupt the company, because the precipitous drop in its value would make capital purchases more difficult or impossible.

So as much as we may envy the rich, for the most part they are enjoying the rewards of their risk-taking luck. Incentives are a necessary part of a robust economy.

There was, of course, a fly in the ointment, long before 2007. As outlined in the second part, "What Went Wrong", regulators loosened regulations on the way banks write home mortgages, administration officials and lawmakers began to put pressure on banks to make mortgages more affordable to lower-income people, the credit rating agencies rated "tranches" of bundled mortgages (as defined above) more liberally than they should have, and banks and short-term investors soon got caught up in the speculative frenzy, driving up home prices.

Continually falling interest rates, led by the Federal Reserve, played a big rôle. If the homes in Suburb A all sell for $100,000, and mortgage interest drops from 8% to 4%, you can get a loan for just over half the payment. But the price won't stay put. Someone paying $587 monthly on a $80,000 mortgage finds he can get almost twice the money for the same payment. He figures, so can someone else with a cheaper house who wants to upgrade, so he puts his home on the market for $125,000, amplifying his $20,000 of equity into nearly $38,000 after paying his realtor. Now, since he can borrow more than $120,000, he buys a house for $160,000 (ignoring the fact that it was valued at $125,000 a few years earlier). Prices spiral upward.

There is a second effect. Banks got more confident in making "subprime" loans, which are loans with smaller or zero down payment, made to buyers who are near the bottom of the "qualified" credit-score window. In a price spiral, they knew that a $100,000 home, financed at full price, would gain in price (not necessarily value!), and be "worth" $150,000 in a few years. Once the homeowner has equity in the home (the $50,000 rise in price), the bank judges he is not likely to default, making the loan no longer subprime. But something happens the bank didn't expect. The homeowner got an equity loan for $50,000 and bought a boat, took a vacation, and paid some college tuition. Now the combined loans are subprime, equity is near zero, and the smallest dip in the market (they happen every few years), makes the homeowner "under water", owing more than the house is worth. This is a fragile situation. Anything even a little unfortunate—a medical bill, a falling tree that damages the roof—puts the homeowner in the position of skipping a mortgage payment so he can buy food or gas for the car. Skip a few payments and the bank forecloses. They don't really want to, because they are going to lose money auctioning off the home, but it is better than waiting to see if this particular homeowner gets back in the black. So they foreclose, the homeowner has to move, and if house prices are still down, is able to rent a home similar to the one he just left for less than he was paying earlier.

The housing market got overheated, and then cooled off, as they always do. Too many subprime loans collided with too many underwater loans, and foreclosures climbed. Some of the loans had balloon payments, leading to more foreclosures. On average, the housing market dropped 30% in value. Even a bank with a conservative loan portfolio (there were very few), meaning there was a 20% buffer of equity, found their entire portfolio at least 10% underwater, as evaluated by the short-term lenders they'd been relying on for capital. That includes people with their money in savings accounts. The short-term lenders bailed. There was a run on the banks. Banks became insolvent, and some went under.

Here is where it gets hard to follow. When I was watching this happen in 2008, Treasury Secretary Henry Paulson announced that we had to bail out the biggest banks to the tune of some $700 billion, because they were "too big to fail". The bailout couldn't save them all, and a few went under. The next year, with companies laying off workers due to a lack of capital—they couldn't borrow money enough to run at full capacity and cover cash flow variations—, a new administration proposed spending more than $800 billion on "shovel-ready" jobs in infrastructure repair, to stimulate the economy. They did it so badly the economy simply got worse, and it turned out nothing was shovel-ready anyway. But now such "stimulus" funds are a permanent part of federal expenditures (and just try to find out where the money is going!), making up more than half the Federal deficit every year since. It is a big reason the national debt went up by $6 trillion since 2008.

In the third section of the book, "What Comes Next", Conard outlines a great number of suggestions for improving the economy. This was hardest to follow, but the general tenor is, he is trying to get lawmakers to take a long-term view, something that is flatly impossible to do. Every one of his suggestions goes against human nature, particularly for a politician who must get elected. Now that roughly half the country's citizens obtain significant Federal support, there is a built-in majority who will never vote for a candidate who promises to make even the smallest dent in their own paycheck!

As much as I hate to say it, here is what we really need (and this is me talking, not the author): We need a Presidential Candidate who lies persistently, baldly, and totally, about "taking care" of "the people". One with sufficient charisma and inspirational power to bring a large number of lawmakers along on his coat-tails into office. He, or perhaps she, will have exactly one term, and perhaps only two years, to enact a flurry of actually intelligent legislation. The bills could be quite simple, of the order of

HB1234 and SB321, also known as The Stupid Ugly Fleece-the-Public Act, is revoked in its entirety. All expenditures authorized under the Act are to end immediately.

The trouble is, I suspect it would require jailing the entire cadre of lobbyists for lawmakers to do so. And here is another problem. Last year's $3.6 trillion federal payout supported about 15 million people plus 2 million military personnel. To cut it back to $2.2 trillion, and thus eliminate the deficit, would put about 6.6 million federal workers (probably including some military folk) out of work. So perhaps Conard's way will work better. He suggests returning to the laws and regulations of the late 1990s, in effect, with more conservative bank loan standards. He suggests limiting the "soak the rich" tenor of the country so business owners will find it worth taking investment risks to foster innovation.

This chart came late in the book, but could have done good service in Part 2. It shows that as median earnings increase, so do those of the poorest 20%. I dug into this chart. The trend line has an exponential slope of about 1.2, which is good news for the poor in a growing economy. It means that if median income goes up by factor X, the income of the poorest goes up by X^1.2. For example, if median income doubles, (X=2), the income of the poorest 20% increases by a factor of 2.3; if X=10, the factor for the poorest is nearly 16! (P.S. I'd like to find out what country is represented by that dot above and to the right of the U.S.!)

Ronald Reagan was not the first to say, "A rising tide lifts all boats". This diagram illustrates that the smallest boats rise most, contrary to what you hear in the media. So to simplify Conard's point even more: The country that innovates the most will have the strongest economy. Investing for innovation is the best use of our money, even if it risks the occasional bubble.

Fiscal gentle slide

kw: politics, economics

I say, let the Fiscal Cliff happen. Then maybe (barely) the legislators and our paper-tiger President will be motivated enough to pass some tax laws, and perhaps even some spending cut laws, because they can always make the retroactive. Right?

This charade is actually going to go on for another 364 days, at the very least.

Anybody that voted for an incumbent: This is all YOUR DAMN FAULT.

It's the money, stupid!

kw: book reviews, nonfiction, economics, economists, textbooks

It weighs about a kilogram and contains 104 chapters in 331 pages (plus apparatus): The Economics Book: Big Ideas Simply Explained, edited by Niall Kishtainy and written with six other contributors. It is a great reference book, if used with a few caveats in mind.

Firstly, it is best to read through once. Then keep it handy to browse as needed. The ideas presented are in historical order, beginning with Aristotle's promotion of private property and ending with Charles Goodheart's analysis of the boom and bust cycle as it is mirrored, and typically forecast, by the housing market. A key element of the apparatus is the Directory of persons, 2-3 column inches about 37 of the most important figures in historical and contemporary Economics. The "Key Thinker" behind each chapter is usually also limned in a mini-biography of 200-300 words.

Secondly, the ideas are presented with very little value judgment, though with some indication of their level of controversy. It took me a while to determine that many of them contradict one another. For example, many influential economic ideas have been based on the consumer or investor as a rational being, while more recent work in the psychology of economic decision-making makes it clear that nearly any pronouncement with the word "Efficient" in it is incorrect, and possibly disastrously wrong.

An example of this is the excessively random nature of stock market valuations. I say "excessive" because most economists define "random" to mean that the expected variations follow a "Normal" or "Gaussian" distribution. In The Black Swan, Nassim Taleb claims that these variations follow a Cauchy distribution, in which the probability of extreme events is much, much greater than you would expect from a Normal distribution. Thus, the 1929 crash, in which the entire market lost half its value in a single day. Based on the variation seen over the prior several decades, you would expect a 50% variation to have a probability of once per several million years, and a 25% variation—remember 1987?—to occur once in many thousands of years. But 1987-1929 is only 58 years.

My own analysis does not support a Cauchy distribution, but it does indicate a "fat tailed" distribution somewhat closer to Cauchy than Gauss. Based on realistic analysis, the 35% drop over a few weeks in 2009 (22 years after 1987) should have been no surprise. But it caught everybody who wasn't simply lucky. Investors expect Normal randomness, but can't deal with excessive randomness.

I like how the book is laid out. Most chapters, and many "in between" essays, are introduced with cool clip art. This item illustrates "The Last Worker Adds Less to Output Than the First," first analyzed by Anne-Robert-Jacques Turgot in 1767. This maxim applies to many assembly-line operations, but not, for example, to the work of teams. In extreme cases, if any team member is missing, the work cannot proceed at all.

Every chapter is introduced by a gray section outlining the progress of ideas surrounding the key idea by the key thinker. The layouts often include capsule flowcharts that illustrate how a concept was derived (You'll need to click on this image to be able to read any of it). And this example also shows a capsule biography of Léon Walras (1834-1910), who studied the stability of free markets.

The book is worth having around to review and compare and contrast the various ideas. Modern economic trends are quite different from those that held sway even in the recent past, but they owe a lot to who and what has gone before. Those who still believe Karl Marx was right about abolishing private property (even my toothbrush?) may number in the single digits (most of them named either Castro or Kim), but the sharpness of ideas that contradict Marx has been honed by reaction to his writings.

Economics is presented as a science. I would say, "Not yet." Certain scientific skills are used and various equations are created to explain economic activity at all levels. But that also goes for some really crackpot notions, such as that today we were supposed to get wiped out by an asteroid or volcano or something. Fortunately, economics is not crackpot (though some economists clearly were). At its root, it is the study of incentives and how humans react to them. This is most clearly brought out by Levitt and Dubner's Freakonomics books. The clearest message of those books and of this one is that we are individuals, and different people react differently to the same incentive. However, as long as we react independently (a huge assumption), certain average behaviors emerge. Modern economics is just beginning to get a handle on some of the ways we actually react, dependently and co-dependently and so forth.