Hepatitis potato not ready for prime time

I have some thoughts which belong at this 20 hits a day blog (maybe) but not a the 800 hits a day fistfulofeuros where I am guest blogging.

First the issue is edible vaccines. There is some hope that eating proteins which are found on viruses will give some immunity to the viruses. Since plants can be engineered to produce the desired proteins, it would be possible to make self reproducing edible vaccines.

A hint of the potential of this approach is provided by the hepatitis potato. A potato which produces a hepatitis B surface antigen. Some of the people who ate this potato showed some increase in immunity to hepatitis B.

Now this is one case of the general problem that we digest proteins. Lots of otherwise wonderful proteins are of limited medical use because they have to be injected. I have some vague and unreliable recollections of special mechanisms used so that proteins in mother's milk are absorbed before they are digested.

My current understanding is that the protein in question is IgG, an antibody. It is useful because mom loans her immunity to the kid. Sad to say, I don't know if this works with humans. I know it works with rats. I will now attempt a major contribution to rat health which might or might not be relevant to human health.

This mechanism is active in the very young breast feeding pup (or maybe infant). This means that it is likely to be useful mostly for vaccines. Now a serious problem is that the body does not make an immune reaction to an antigen that already has IgG stuck to it. This is a fact and it makes sense, since it would normally imply that the immune system is already fighting away.

So it would be nice to make a plant that produces an antigen and produces a IgG antibody which sticks to that antigen such that the IgG falls off once the complex is absorbed. I just thought of a way to do that.

The idea is to make a hybrid protein which consists of the target antigen fused with a normal human protein -- say albumin (incidentally there is also an mechanism to bring albumin from the gut to the blood stream so maybe this is enough right there). Then (maybe) make the plant make IgG which sticks to albumin. The hope is that pulling in this antibody, the system will pull in the attached antigen albumin hybrid. Then in the blood there is lots of human albumin which will compete with the antigen albumin hybrid for the antibody causing the antibody to fall off. Then the antigen albumin hybrid will be recognised as a foreign protein which is unknown to the immune system -- that is as a vaccine.

Sure Can Pick em

In the February 23 Times JOHN F. BURNS and DEXTER FILKINS report that Ahmed Chalabi is no longer aiming to be Prime Minister. Now I find reflecting on the choice between Ibrahim al-Jaafari, an Islamist who wants family law for Moslem couples to be based on Sharia or Ahmed Chalabi who is Ahmed Chalabi is as pleasant as reflecting on the choice of Bush or Berlusconi. Still given the alliance between the secular Chalabi and Moqtada al Sadr, I am relieved.

However, not everyone is convinced that the endorsement of an alliance with 51% of the seats ends the matter. Now Ayad Allawi, who follo0wed Chalabi as the Bush administration's favorite Iraqi, is following Chalabi in questioning whether a mere election can over rule such an annointment. Recall his party came in 3rd with 14% of the vote. One might imagine that this would settle the matter, but Allawi is still trying to form a government.

Dr. Allawi predicted that settling the issue of who would lead the new government could take weeks, and hinted that the battle could be bitter. He said he had heard rumors that the alliance leaders had consulted with Iran's ruling ayatollahs, and had been told that Dr. Allawi, a secular Shiite with close ties to the United States that go back at least 15 years, would not be acceptable to Iran as prime minister in the new transitional government. "I have heard that they don't want me," he said. "Why, God knows."

The brazenness is impressive. This guy's party just won 14% of the vote and he claims that that is no problem, but that the problem is Iranian interference in the will of the Iraqi people as expressed through George W. Bush. Why would alliance leaders have asked Iranians if they could step aside and make a political rival who they just crushed in an election prime minister ? At least the 45 minutes claim (also due to Allawi) was plausible.

Why would Allawi say such a crazy thing ? JOHN F. BURNS and DEXTER FILKINS
violate the play dumb rule of objective journalism to explain

Any suggestion that Iran has played a role in the alliance's choice of prime minister would be politically explosive in Iraq, particularly among the Sunni minority population that was Iraq's traditional ruling group for decades until the overthrow of Mr. Hussein. That, in turn, could re-energize the Sunni-led insurgency that has paralyzed much of the country in the 23 months since the American-led invasion, blighting hopes that key Sunni groups with links to the insurgents - including tribal leaders who have met secretly with Dr. Allawi in recent months - might agree to help curb the insurgency and join the political process.

That is, they suggest that Allawi's claim to power is that, if he isn't given at least a share of power, he will make sure that the Sunni insurgency is very bloody.

This is two out of two. The first Iraqi chosen by the Bush administration clearly is motivated only by personal ambition to the extent that he is now allied with the murderous Moqtada al Sadr, one of America's worst enemies in Iraq and one of the blights on the Iraqi people. The second Iraqi chosen by the Bush administration appears to be threatening to form an alliance with the rest of America's worst enemies in Iraq. Again what is bad for the USA is bad for Iraq too.

I can only conclude that the most dangerous threat to the USA and Iraq is George Bush.

D to the 4th


The Dsquared DeLong Debate

Brad DeLong writes "For those who have difficulty learning to speak the language that is mathematics like a native, how to teach them science in a world where it is a fact that the underlying bones of reality are profoundly mathematical--for that is the conclusion Eugen Wigner's "The Unreasonable Effectiveness of Mathematics in the Natural Sciences" leads us to? Call this the "Friends of Wigner" problem."

"Dsquared" comments "Ach. Mathematics isn't a language and provides you with surprisingly little insight into anything other than mathematics. Once someone can divide up a restaurant bill, diminishing returns has set in with a vengeance;"

I wonder if "Dsquared" is Daniel Davies. Doesn't matter. I think Dsquared missed the key phrase "*Natural* Sciences." The fact that Brad is an economist and the examples chosen by Dsquared seem to suggest that Dsquared is thinking of attempts to use mathematics in *Social* sciences, especially in economics. Stipulate that mathematics has only been a distraction for economists. This tells nothing to someone who wants to teach physics, chemistry, astrophysics, meteorology, population biology or ecology. Try to explain physics without using mathematics (Blogger *does* allow comments). Sometimes mathematics is show and obfuscation. Sometimes it is a necessary tool. That something has been misused does not mean it is useless. A hammer and chisel was used to deface Michelangelo's Pieta, but, on the whole chisels have made a useful contribution to sculpture.

Note I didn't mention cellular and molecular biology. If you glance at Science and Nature you will notice that these fields of natural science have taken over most of it (for a simple economic reasons which can be explained with 3 letters and a word NIH grants). Many people can not grasp how little math is involved. Let me just say Michelangelo used more.

enormous potential for blackmail.

Sidney Blumenthal writes here and here about Jeff Gannon/Jim Guckert

"dozens of photographs of "Gannon" in dramatic naked poses. One of the sites was still active this week.

Thus ... [Gannon] was unmasked not only as a hireling and fraud but as a gay prostitute, with enormous potential for blackmail."

That euphemism is new to me. Am I going to start getting Spam advertizing guaranteed herbal "potential for blackmail" enlargement pills ?

An ad Homonym attack on Matthew Yglesias

Matthew Yglesias is a genius, a national treasure and a guy who can't avoid typos which are homonyms. When I was six I decided that English spellling was sily so I wouldn't lern it. Sad to say I ran into spell checkers which screen out all errors which are not homonyms.

Yglesias argues that this is his problem. He claims that he learned to write after spell checkers and before grammer checkers (I personally am still writing before grammer checkers because they get on my nerves). Also he notes that his blog does not have an editor.

However American Prospect Online should have an editor and that editor (if any) missed this boo-boo in Yglesias' absolutely brilliant demolition of social security privatisation (sorry personalisation) and the Cato institute.

"The debt, however, won't ever go away unless some huge some of money is found elsewhere"

Oh a bit of substance. Yglesias' though experiment cheats a little in a way similar to the Bush administration's cheats (boy that was harsh). He considers partial privatization based on a simple opt out. The Bush non plan clearly involves a 3% (real) offset. That is, in exchange for paying one third less in payroll taxes to the SSA one gets a two thirds reduction of the guaranteed benefit. That extra third penalty is the huge sum of money to be found in the pockets of suckers who, demographers say, are born every minute.

The reason that this is just slightly cheating is that much of the 3%-2% = sucker tax will go to financial services corporations not the SSA.

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Never say never.

Josh Marshall argues cogently and eloquently as always that the Democrats should not present a plan for shoring up Social Security "There seems little doubt that it doesn't pass the political test. As long as the president is floundering in a debate that is almost entirely confined to his own party, what sense is there for Democrats to throw him a lifeline, especially when the president has all the force of the executive and the legislative arrayed on his side?"

Very well argued but I disagree. I think there is a plan for shoring up social security so excellent as public policy and so popular as populist politics that it should be irresistable. The proposal is to keep pèromised benefits exactly as they are and to eliminate the payroll tax ceiling. I think it is clear that anyone who denounces the Presidents tax cuts for the rich (for example Josh Marshall) should consider this good policy. As to politics look at the polls quoted below.

Let me attempt a Marshallian metaphor. Generally in the boxing ring, if your opponent is beating himself silly you should leave him alone. However, very occasionally you opponent leaves his head wide open while pounding his own kidneys. In such cases it is simple charity to knock him out and get it over with.

Un'inchiesta del Sole-24 ore e del Financial Times svela
la "pista italiana" seguita dagli ispettori delle Nazioni Unite
Lo scandalo 'Oil for food' in Iraq: l'Onu indaga su Formigoni

It is suspected that Roberto Formigoni, the conservative and extremely catholic governor of Lombardi, received large gifts from Saddam Hussein in the form of rights to purchase Iraqi oil under the oil for food program. This should come as a shock to almost everyone except for the e 200 or so who have ever read fantapolitica (my other blog). On May 31st 2004 I reported my suspicion that Formigoni had received such a gift based on, get this, information www.freerepublic.com got from a newspaper associated with Ahmed Chalabi in fantapolitica

Was I 8 months ahead of UN investigators ?

How could social security privatisation cause increased economic efficiency ?

This is an attempt to explain the post immediately below.

Michael Kinsley argues (brilliantly as usual) that the claims Bush makes for “personal accounts” can’t possibly be true. He summarizes these claims as 1) people who invest in personal accounts will gain financially and 2) no one will suffer financially. He argues that, for this to be true, personal accounts would have to either increase national savings or increase the efficiency of allocation of capital. If the argument is translated into standard economic theory, the case is somewhat stronger, since increasing savings makes you richer in the future at the expence of less consumption in the present and doesn’t count as “gaining financially”. There is also no good reason to think personal accounts will cause people to save more.

I want to present a model in which personal accounts can improve the efficiency of allocation of capital. The point is that the CEA confidently asserts that this model is nonsence and that, therefore, Bush’s claims are nonsense. I find this amusing.

The story (see post below) is very simple. There is a mysterious equity premium – the return on stock is higher that in should be given the risk unless people are absurdly risk averse. In other words stock is cheaper than it would be if people were rational. This sends a misleading signal to industrial firms. The amount of investment which is in the short term interests of shareholders is less than the amount which is socially efficient. The key words are “short term”. If firms paid lower dividends and invested more and shareholders were forced to hold on to their shares, they would be angry, but would benefit in the long run. The solution to the underpricing of stock is to force people to buy stock. This would drive up the price of stock and make high investment (low diviidend payout) attractive even in the short run. Here the problem is the equity premium which causes inefficient allocation of capital and the solution is to get rid of the equity premium. Oddly the CEA insists that the equity premium is here to stay in any case. This seems to me to imply that personal accounts can’t help anyone without hurting someone else. That is the CEA claims seem to me (as argued by Kinsley) to be contradictory.

Now I want to present a sketch of a formal model. There are various ways do write such a model but all must involve a choice of how to allocate capital. I will assume that there are two types of firms safe firms and risky firms. The expected return on capital in risky firms is higher but it comes with an idiosyncratic disturbance term (is stochastic or partly random so is risky). The key word here is idiosyncratic, that is, firm specific. It means that the average return on all risky firms is not at all risky and is just higher than the average return on safe firms. I will assume that for each risky firm the return on capital takes two values high and zero. For each safe firm the return is low and absolutely predictable.

Everyone would be better off if the safe firms just shut down and everyone invested their wealth in a balanced portfollio of risky firms. Unfortunately people are real real dumb and don’t understand this. They look at the risk they would face if they bought the stock of one single firm and assume that this is the same risk they would face if they bought a balanced portfollio. This means that they demand an equity premium which makes no economic sense. I actually believe this is the reason there was an equity premium which might or might not have vanished allready.

Finally there are no banks. Firms are financed with stock and or short term bonds. Safe firms sell bonds promising to pay the safe low return. Thus they can raise as much money as they want and never go bankrupt. Investors rationally know the bonds are perfectly safe and accept the low return.

Risky firms can’t sell bonds. If their return on capital is zero they can’t redeem the bonds. I assume that the crazy investors invoke chapter 7 of the bankruptcy code and the firm goes into ignominius and costly bankruptcy. This makes bond financing totally impossible for risky firms.

The risky firms can finance themselves by selling stock which has a higher expected return than the low safe return on bonds. However, the crazy investors don’t want to buy the stock because they don’t know about the law of large numbers. Instead they demand an even higher expected return making it unprofitable for the risky firms to sell stock.

Thus the economy has only safe firms and a low return on capital.

If the state forces people to buy a balanced portfollio of stock however, the risky firms can sell stock and operate. This means that the economy has a higher expected return on capital. By the law of large numbers all the risk is diversified and so the reluctant investors get a higher return for no cost. The way this works is that they are forced to pay more than they want to for stock. The orignal problem was that they underestimate the value of stock.

This simple model has three key features. Investors who don’t understand diversification are required bo buy diversified portfollios, investors who do not want to buy stock are forced to buy stock, and this drives up the price of stock and drives down the return on stock. The last feature is the whole point. For the risky firms, the return on stock is the cost of capital Driving it down is the whole point of the exercise.

Now this model obscures a few key points. A balanced portfollio of stock is not a totally safe investment and investing in stock involves transactions costs which are quite high. That is, in the real world, even if personal accounts drive down the equity premium, they would probably (almost certainly) be socially undesireable anyway.

However, the claim that the equity premium will not be affected and someone will gain and no one will suffer is obviously total nonsense.

The CEA asserts that social security privatisation no I mean private accounts no no I mean personal accounts will, on average benefit no one while, of course, creating un-necessary administrative costs and allowing foolish people to bear diversifiable risk.

Bush claims that those who choose them will benefit financially from personal accounts. Many intelligent people have asked where the money will come from. The Bush administration has almost admitted that there are two possibilities. First I might be obtained by taking money from those near retirement (with price not wage indexation). Second the financial gain might be illusory wealth in the form of more treasury bills. Many intelligent people have asked where else the financial gain could come from.

I have a conceivable answer but it is based on my assumption that the CEA is totally wrong. I am, as usual, cribbing from Brad Delong whose blog seems to be a bit down right now. He quotes the CEA as predicting that the return investors rwill require on equities will remain high while economic growth will slow down. He notes that this can only happen if profits increase enormously as a share of GNP (very very unlikely) or the price of equities collapses.

This is relevant to the question of wether financial gains can be paid for. The way this could happen is the following :1) Stock is underpriced because people are silly 2) if you force them to buy a little stock they will be a little mad but better off 3) if you force them to buy a lot of stock they will be really mad because that drives up the price and drives down the return but they will still be better off (because stock is a great buy now) 4) the increase in the price of stock/decline in the return on stock means that corporations can raise money for less (the divicend yield is their marginal cost of capital) 5) so they will invest more 6) so everyone will be richer in the future.

The idea is that the economy without forced stock purchases is grossly inefficient because people are clueless about the true value of equity. The point is that the only way that social security privatisation could improve efficiency is by reducing the return on equity towards the level rational investors would require. If, as the CEA claims, the return on equity won't change, there is no way the plan can increase efficiency so the gains to some would have to come at the expence of others.

Wobegone Bush

This poll just made my day. I love the part about how most Americans think they are better investors than most Americans

Those responding to the poll indicated they have more confidence in their own investment skills than in those of most Americans.

Thirty-seven percent said they thought most Americans would get lower benefits if allowed to invest through personal accounts (30 percent said the benefits would be higher).

But I really really love the main point.

Poll: Wealthy should bolster Social Security

Bush has convinced his countrymen that it is time to soak the rich.

This is not a Porn Site

I stress that this post is a purely theoretical discussion of ethical issues related to the regulation of pornography.

I pretend to feel the need to point this out, since one of the very few referrals to this blog was from an AltaVista search for "porn site's" on which it placed *second*. I am delighted but more sure than ever that I will continue to use google. Also note the importance of proper punctuation in porn procurement.

Check this out over at pollingreport

Americans are concerned about the solvency of the social security trust fund but they don't seem to be willing to do anything about it (no suprise) but wait there is one solution that Americans love -- soaking the rich. 69% of registered voters support " raising this $90,000 income cap to help bring more money into the Social Security system?" As I have mentioned from time to time, I agree with the majority of my fellow citizens on this one. Now can someone please try to explain why the Democrats are not pushing this. Increasing the progressivity of the tax system is good policy and excellent politics. Why aren't any politicians running on it ?

Quinnipiac University Poll. Jan. 25-31, 2005. N=2,100 registered voters nationwide. MoE ± 2.1 (for all adults).
						.
"Which of these statements do you think best describes the Social Security system: it is in a state of crisis, it has major problems, it has minor problems, or it does not have any problems?"
						.
		Crisis	Major Problems	Minor Problems	No Problems	Unsure
		%	%	%	%	%
	1/25-31/05	17	50	27	3	2
						.
"Do you support or oppose raising Social Security taxes to help bring more money into the Social Security system?"
						.
		Support	Oppose	Unsure
		%	%	%
	1/25-31/05	35	60	5
						.
"Do you support or oppose increasing the age to qualify for Social Security benefits to help bring more money into the Social Security system?"
						.
		Support	Oppose	Unsure
		%	%	%
	1/25-31/05	30	67	3
						.
"Do you support or oppose reducing Social Security benefits to help bring more money into the Social Security system?"
						.
		Support	Oppose	Unsure
		%	%	%
	1/25-31/05	16	81	3
						.
"Under the current system people pay Social Security taxes on their income only up to the first $90,000 they earn. Do you support or oppose raising this $90,000 income cap to help bring more money into the Social Security system?"
						.
		Support	Oppose	Unsure
		%	%	%
	1/25-31/05	69	27	4
						.
"Do you support or oppose allowing individuals to invest a portion of their Social Security taxes in the stock market?"
						.
		Support	Oppose	Unsure
		%	%	%
	ALL	51	43	6