After All That it May Not Work

Investing billions of dollars in an effort to rescue failing businesses is not a guarantee that those businesses may not still fail. That is the message we glimpse as more and more information flows in about the performance and problems of recipients of government bailouts.

U.S. Pressed to Add Billions to Bailouts is a New York Times article with some sobering news for Americans. Despite a 150 billion dollar commitment to American International Group (AIG) the company is in trouble. Automakers are facing severe difficulties after billions were alloted to help them.

Nationalizing businesses may have an ideological appeal to the far left but it is no business panacea. History has shown that government ownership of business leads to further lack of competitiveness, not the opposite. Eastern Europe and some western European nations provide textbook examples in recent decades. Sadly it looks like common Americans will pay for this flawed political and economic strategy for years to come.

The Political Power of Labels

Do Something, Anything is the title of this linked Viewpoint article. The first paragraph caught my attention. RLC writes:

The Democrats "stimulus" bill is, in large part, a spending and welfare bill being foisted on the American people under cover of fear and disingenuousness. Even Senate Majority Leader Harry Reid acknowledged that only 58% of the bill is geared to creating jobs, and he was probably exaggerating. That three Republican senators - Arlen Specter, Olympia Snowe, and Susan Collins - would go along with this charade is inexplicable, at least to one who wants to give his elected representatives the benefit of the doubt that they have good reasons for voting the way they do.

If only 58% (I agree this is likely to be an inflated number) of the bill is believed to have an economic stimulus effect then why is the bill touted as a stimulus bill? Why are many non-stimulus expenditures included within a stimulus bill? The answer to that lies in the first sentence. Fear mongering was used to pass the bill and that provided opportunities to include pork and other favored spending projects within a bill sure to pass. In other words the stimulus factor was exploited to ram through non-stimulus policies. Such is the power of a word. Most people do not look past the label of a bill to see if the bill in fact lives up to its name.

Mythology Breeds Repetitive Errors

The opinion piece titled Cheering for Obama Stimulus Buys Into 1930s Myth, which was written by Amity Shlaes, speaks to what can happen when history becomes shrouded in myth rather than portrayed realistically. Shlaes notes parallels between today's circimstances and those that existed during FDR's presidency but the parallels are not the ones Obama supporters are likely to focus on. The New Deal did not bring on a speedy recovery. The full recovery awaited World War II and its aftermath. This article quote was particularly revealing of the historic reality in my view:

Nor did FDR’s maneuvering cause a speedy bounce-back. The Dow waited until the mid 1950s to regain its 1929 peak. You can’t imagine Obama suggesting that his New Deal would be successful if it got the Dow back to its autumn 2007 high in 2030.

If we had to wait until 2030 before the Dow fully recovered how many people would label current strategies a good approach?

I also found informative the company Commonwealth & Southern's intent to fulfill lighting needs in the South. Credit for that went to the government enterprise known as the Tennessee Valley Authority whose accomplishments came with taxpayer funding and at the expense of businessmen. So the question is: could and would the same outcome have been achieved through private companies? That approach would have spared the federal treasury.

What Does the Future Hold for Mexico and China?

Intelligence Expert: China Faces Chaos in Coming Decades While Mexico Will Be World Power is the intriguing title of this linked article. George Friedman is an author and founder of Stratfor, a company which gathers and anlayzes intelligence. Friedman believes that later in this century Mexico will become a leading power in the world. The article indicates that Mexico currently has the 13th largest economy in the world.

Social instability is predicted to be a problem for China. China is still largely a third world country heavily dependent on exports to the United States. Problems with the American economy can severly impact China. Friedman's views about the future of China and India contrast with other prognosticators who have a much rosier view of the prospects of those two nations.

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Pyrrolysine (Pyl)

Pyrrolysyl-tRNA synthetase–tRNAPyl structure reveals the molecular basis of orthogonality is the title of a papaer published in Nature and authored by Kayo Nozawa, Patrick O'Donoghue, Sarath Gundllapalli, Yuhei Araiso, Ryuichiro Ishitani, Takuya Umehara, Dieter Söll and Osamu Nureki (doi:10.1038) (nature07611); Published online 31 December 2008). The paper is focused on the 22nd amino acid which is less well known than the canonical 20. It is called pyrrolysine (Pyl) and its corresponding codon is UAG. The related transfer RNA is dubbed tRNAPyl and the pyrrolysyl-tRNA synthetase (PylRS).

As the paper notes organisms known as methanosarcinaceae produce Pyl and have Pyl-containing methyltransferases. A functional correlate for PylRS exists. It is found in organisms which "utilize utilize methylamines as energy sources." A special aaRS–tRNA interaction surface, relevant to Pyl, characterizes molecular orthogonality.

Dangers of Protectionism

Smoot, Hawley, & Pelosi is a blog entry at Greg Mankiw's Blog which refers to a Washington Post source. The newspaper reported the fact that the House version of the stimulus bill includes a provision requiring that funds, used to purchase iron and steel for infrastructure projects, buy only from U.S. sources. I favor American products when spending my own money but requiring the government and its contractors to purchase only American products is a bad idea. Why? This quote from the Washington Post at Mankiw's blog provides the answer:

But most damaging, critics say, would be the "protectionist message" attached to imposing such barriers on foreign companies.Nations including China and many in Europe are preparing to spend billions of dollars of taxpayer money on stimulus projects. American companies are angling for a piece of those pies, and retaliatory measures against U.S. companies, executives argue, could significantly complicate those efforts. This week, a European Commission spokesman threatened countermeasures if the Buy American provisions are approved.

I would add that the steel industry is not one of our strongest industrial sectors. This is the bailout mentality with strong sectors of the economy supporting the weaker sectors. We risk the very strength of our economy in an attempt to bolster underperforming industries. Retaliatory measures by foreign nations would adversely impact exporters from stable companies who employ more Americans than the steel industry. We've been down this road before. Smoot, Hawley may have done more to bring about a world wide depression than any other factor. American policy makers are ignoring the lessons of history; an unwise and inexcusable ommision.

Research on Bee Vision

New insight into how bees see is a Biology News Net piece revealing results of research from Monash University in Australia. Dr. Adrian Dyer is a reknown bee expert in Australia. His research, alluded to in this article, indicates that honeybees have the ability to learn to recognize human faces from different vantage points.

A reward and punishment system was used to test bee capabilities. A sugar reward was given for correct choices and a bitter tasting solution for incorrect ones. Faces were shown on a vertical screen and bees learned which face was the correct one to choose from. Dr. Dyer explains: "Bee brains clearly use image interpolation to solve the problem. In other words, bees that had learnt what a particular face looked like from two different viewpoints could then recognise a novel view of this target face. However, bees that had only learnt a single view could not recognise novel views."

The research results, published in PLoS ONE, may enable advances in artificial intelligence which has had a record of poor performances in face recognition. Imaging technology also was mentioned as possibly benefiting from the research. I can see possible benefits in the security field as well.