GOVERNMENT DECISION MAKING AND TYPE II ERROR BIAS

It has long been affirmed by economists that the FDA’s drug approval process suffers from type II error bias. This results in fewer drugs coming to the market that could improve the well being of millions. In the April 2006 journal Public Choice Russel Sobell and Peter Leeson explain that type II error bias played a role in the delayed response of the federal government after hurricane Katrina. In the next few posts I plan to explain type I and type II errors, and type II error bias in government decision making.

Bt COTTON AND ENVIRONMENTAL HEALTH

Because Bt cotton and Bt corn provide pest protection in the plant( a gene is expressed that is toxic to lepidoptera species of insects) there is no need for the less effective broad spectrum application of insecticides. As a result only insects that feed directly on the plant are affected. This is a great stride in protecting diversity and beneficial insect populations. In addition it reduces worker exposure to pesticides (with regards to both conventional and organic production). For example, in China, 400-500 deaths per year are attributed to pesticide poisoning. Since the introduction of Bt crops in China, pesticide applications have decreased by 75%.

The Bt plant genetics essentially displace the manufactured synthetics. According to research from Dr. Roger Leonard at the LSU Agricultural center and Dr. Ronald Smith at Auburn University, 1.04 million fewer pounds of insecticide are applied each year as a result of the reliance on Bt genetics in cotton alone. As a result about 2 million gallons of fuel are saved each year from decreased manufacturing and distribution of chemical pesticides. In addition, 2.41 million gallons of fuel and 93.7 million gallons of water are saved on the farm from fewer insecticide applications.

Sources: Dr. Roger Leonard, LSU Agricultural Center. Dr. Ronald Smith, Auburn University. Gregory Conko “The Benefits of Biotech” Regulation Spring 2003.
Gerald C. Nelson Genetically Modified Organisms in Agriculture: Economics and Politics San Diego Academic Press 2001.

ECONOMISTS VS CLIMATOLOGISTS

When an economist is asked about a policy such as increasing the minimum wage, he is able to abstract from mathematical models and explain to the laymen the potential effects. In addition, in explaining these effects, he will often introduce contradictory models and discuss their strengths and weaknesses. In many cases he has empirical evidence to offer to support his theoretical analysis. While an economist may make what appears to be a one sided argument, he is often able to offer reasons why competing theories are off base.

It does not appear to me that climatologists are able to do this. At least not as presented in the media. Climate models are no more complex than an economists comparative statics, differential equations, or econometrics. The media certainly expounds on the facts that global temperatures have risen by about 1 degree since the early 19th century, and that CO2 emissions have at the same time increased 30%. Immediately man's connection to global warming is made, and with a few quotes from the IPCC, the prestige of science is granted to movies such as "An Inconvenient Truth" and "The Day After Tomorrow." You seldom hear about competing ideas. When you hear about a skeptic, they are immediately discredited and lumped in with Holocaust deniers ( which is the same as resorting to personal attacks vs. arguing facts).

QUOTES

These are some great quotes from our founding fathers. I obtained them from the website of economist Walter E. Williams of George Mason University.

In 1794, when Congress appropriated $15,000 for relief of French refugees who fled from insurrection in San Domingo to Baltimore and Philadelphia, James Madison stood on the floor of the House to object saying, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." -- James Madison, 4 Annals of congress 179 (1794)

"Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated." --Thomas Jefferson, Letter to Albert Gallatin, 1817

"Whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force."-- Thomas Jefferson, Draft Kentucky Resolutions, 1798. The Writings of Thomas Jefferson, (Memorial Edition) Lipscomb and Bergh, editors, ME 17:380

"I cannot find any authority in the Constitution for public charity. [To approve the measure] would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded." -- President Franklin Pierce's 1854 veto of a measure to help the mentally ill.

"I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit."-- President Grover Cleveland vetoing a bill for charity relief (18 Congressional Record 1875 [1877]

ADVANCES IN BEEF PRODUCTION: HUMAN AND ENVIRONENTAL HEALTH

Since I’ve covered some of the major objections to beef production ( hormones, feeding grain to cattle(see “ETHANOL AND CORN FOR FOOD ”), and antibiotic use) I’m ready to talk about the health and environmental benefits that consumers have derived from the scientific advances in beef production.

In 1990, there were only 9 cuts of beef that could be classified as ‘lean’ (< 10 grams of fat/serving). Now there are 29 cuts, including the tenderloin, sirloin, and 95% lean ground beef.
These cuts have less than 10 grams of total fat, 4.5 grams or less of saturated fat and less than 95 milligrams of cholesterol per 3-ounce serving. On average 20 of the 29 lean beef cuts have, only 1 more gram of saturated fat than a skinless chicken breast per 3-ounce serving.

I read this info from the National Cattlemans Beef Association web site, and thought to myself is this really true. All it took was one trip to Kroger’s meat section and some packaged beef/chicken comparisons and I was convinced. The media, past experience, and general consumer ignorance made me think that beef was an unhealthy product in general. I could not have been more wrong ( but I liked it anyway). In additon. beef is not only low fat, but also very nutrient-rich. Compared to a skinless chicken breast, beef has eight times more vitamin B12, six times more zinc and two and a half times more iron.
In addition, the advances in nutrition, management, and genetics has made beef more productive. Beef production per cow has increased from about 185 pounds since the mid-1960s to 585 pounds per cow in 2005. More food per pound of grain equates to a lesser impact on the environment.

HORMONE FREE BEEF

There is no such thing as hormone free beef. Conventionally produced beef with hormone (estrogen) implants contains about 1.9 nano-grams of estrogen per 3 oz serving of beef. Even organic ‘hormone free’ beef contains 1.6 nano-grams of estrogen per 3-oz serving.

This is just over a difference of ½ of a nano-gram. These amounts are enough to provide improved feed efficiency in beef production, but too little to have any response in the human body.


In contrast, a 3-oz serving of soybean oil contains 168,000,000 nano-grams of estrogen. The average human produces about 136,000 nano-grams of estrogen on a daily basis.

These claims are is just another example of a marketing strategy for ‘natural’ and ‘organic’ production.

It is also an example of food fears born out of politics and rhetoric vs. science.

SOURCES: Sources: Food and Drug Administration; Hoffman and Evers; Scanga et al.; FSIS-USDA; Dr. Harlan Ritchie, Michigan State University

ETHANOL AND CORN FOR FOOD

Should we be concerned that demand for corn for ethanol will lead to increased prices of corn based food products for consumers?

I'm more concerned with the corn used for animal feed vs. human consumption (as in Corn Chips). Corn raised for direct human consumption is a very small part of the total market for corn. It's production and cost functions are quite different from other types of corn. The different types of corn are not likely close substitutes in production. (even soybeans and corn for feed are likely better substitutes) I'm not sure if most corn producers grow more or less corn for human consumption based on demands for ethanol or livestock feed since it's not the same corn (this is also a strong rebuttal to those who laud the comment 'eat a steak starve an African').

Although I agree if corn for ethanol and animal feed becomes profitable enough, some producers may retool and switch to producing commodity grade corn, causing increased price pressures in the food markets as indicated in the previous post.
But for now I think we'll see greater ramifications from the livestock markets and meat prices. We'll see more corn acres grown at the expense of soybeans, driving up their prices as well.

From the livestock producer's perspective, a good policy question would be, why should government be legislatively creating demand for ethanol and creating a boom market for one industry segment, while increasing the costs (in corn and feed prices) in another. Of course there is debate and on going research being done related to how this is actually going to affect livestock producers.

BEEF: ANTIBIOTICS OR ANTI-SCIENCE?

Marketing Myth: Overzealous use of antibiotics in beef production is contributing to resistance to antibiotics essential to human health.

This line of thinking is leading many to advocate possibly ‘outlawing’ the use of feed grade antibiotics. Demonstrable rates of gain can be made by adding low levels of antibiotics to feed rations. These antibiotics are not the same drugs used to fight infection in humans.

Most antibiotics used in the livestock industry are used for treating, controlling, and preventing disease. Only 13% are used to improve nutritional efficiency and enhance growth. Despite fears related to antibiotic use in livestock and resistance in humans, no scientific link has been found.

In fact the health consequences of reducing antibiotic use in animals could have far more serious implications. This may sound counter intuitive to what’s reported in the media. However, in Denmark where some feed grade antibiotics have been banned, an increased reliance on therapeutic usage (30%) has resulted because of the increase in animal sickness. The same thing happened in Sweden as well. Let it be known that this increase represents increased of drugs that happen to be vital for human health.

Even after reviewing the science behind feed grade antibiotics, if consumers still want ‘antibiotic free’ beef, there is certainly a market for it. However, politicians and activists should not make political ‘hay’ from these interests by promoting feeding regulations that endanger the health of consumers as a whole.

PORK: MARKET INCENTIVES FOR A BETTER ENVIRONMENT

If you read my previous entry you might say OK, so what about the environment? What good does it do to provide consumers with healthy food if it leads to an unhealthy environment?

Well the same trend in technological advancement that is leading to healthier pork products are also leading to cleaner, ‘greener’ production practices. Simply, improved nutrition and swine genetics means better nutrient utilization and basically less ‘potent’ excrement. With more nutrients being absorbed and utilized by the livestock we have fewer making it into streams and water sources. This results in less pollution

Examples include corn with altered amino acid profiles, energy content, and available phosphorus levels. NutriDense corn developed by ExSeed Genetics is a prime example. Other companies such as Monsanto and Pioneer Hi-Bred are also developing similar products. Rations have even been developed to help manage odor control.

The bottom line is that better nutrition and genetics that leads to improved feed efficiency and rate of gain means less impact on the environment per pound of food produced. The truth is that laws mandating healthier food choices did not bring about these advancements. They were brought about by consumer demands and the profit incentives associated with meeting those demands.

PORK: MARKET INCENTIVES FOR BETTER HEALTH

McDonalds has been in the news lately for its unhealthy menu. People like to blame unrestrained capitalism for the poor choices people make in their diet and the widespread availability of unhealthy food. However, we must recognize that there are many positive, healthy, and environmentally friendly trends that are also consumer and profit driven.

In order to compete with the poultry industry, and its perceived leaner and healthier food products, the pork industry has been campaigning for over a decade to respond to consumer demands for healthier food choices i.e. the campaign slogan ‘Pork: the other white meat.’ Due to advances in feed technology, management, and swine genetics, the pork industry has been able to improve their products to meet these demands. It is now possible to choose pork over chicken and not have to compromise on fat intake. Pork loin now has less fat than an equal serving of chicken breast.

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THE REAL THANKSGIVING ( FROM NOV'05)

Thanksgiving was not about the Pilgrims embracing diversity and thanking the Indians (otherwise known as Native Americans) for helping them survive. The celebration was about thanking God for the abundance which ultimately resulted from a move away from socialism ( imposed on them by the Colony’s Sponsors) to free market capitalism.

As governor William Bradford commented on the dreadful conditions of 1622:

" . . . the young men . . . did repine that they should spend their time and strength to work for other men's wives and children without any recompense. The strong . . . had not more in division . . . than he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labors and victuals, clothes, etc . . . thought it some indignity and disrespect unto them. And the men's wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it.""For this community of property (so far as it went) was found to breed much confusion and discontentment and retard much employment that would have been to their benefit and comfort . . . all being to have alike, and all to do alike . . . if it did not cut off those relations that God hath set amongst men, yet it did at least much diminish and take off the mutual respects that should be preserved amongst them."

In the Spring of 1623, they moved away from Socialism and embraced the incentives of Private Property and Capitalism:

"All their victuals were spent . . . no supply was heard of, neither knew they when they might expect any. So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. At length . . . the Governor (with the advice of the chiefest among them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves. . . . And so assigned to every family a parcel of land . . . "

"This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn, which before would allege weakness and inability, whom to have compelled would have been thought great tyranny and oppression."

Thanksgiving is therefore about freedom, private property and the unrestrained ability to worship and show thanksgiving.

A RELIGIOUS THANKSGIVING

(reprint from Nov '06)
George Washington certainly felt that the celebration of Thanksgiving could not be divorced from any religious connotation, as indicated in the following Thanksgiving Day proclamation:

"It is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favors."

Although certainly not as revered as the Birth of Christ, it is as much a religious holiday as Christmas, Easter or Passover. Unfortunately this aspect of Thanksgiving has been downplayed in our schools and replaced with teachings about tolerance and ethnic diversity. They have been so successful at this there is no wonder that when it comes time to talk about Thanksgiving in the classroom, virtually no one opposes. This is because the celebration has become completely divorced from its true meaning, and hence is uncontroversial to the secularists.

They have not been so successful with Christmas, however the attempts to divorce this holiday from all historical meaning are well underway. We are seeing 'Christmas' replaced with 'Holiday.' It is done in the name of tolerance and diversity awareness.

It was in 1789 that George Washington gave the above Thanksgiving Day Proclamation. By 1989 its celebration has already lost much of its true meaning as taught in the schools and celebrated by many. I wonder what will be the fate of Christmas in the year 2089?

WHAT'S SO GREAT ABOUT AMERICA

In the book "What's So Great About America" Dinesh D'Souza points out that the three truly western institutions of science, democracy, and capitalism are responsible for the hegemony of western culture.

This blog primarily has a focus on science and economics (in sorts a study of capitalism), which certainly are influenced by government. In light of this and the upcoming Thanksgiving Day holiday (which is a celebration of the triumph of providence, capitalism, and agriculture) the next few series of entries will carry this theme- taking a brief rest of the previous focus on organic foods.

STEM CELL SCIENCE

With approaching elections, debates about embryonic stem cell research have been given lots of attention. While issues of ethics have been brought up, weighing the destruction of embryos against possible medical breakthroughs, no one seems to have given much attention to related advancements in stem cell science.

Recently, a team of researchers at Advanced Cell Technology reported in the journal Nature that they have been able to remove singe cells from human blastomeres (cell groupings that result from mitotic divisions of the embryo) and coax these cells into forming embryonic stem cells with no harm to the embryo. If this procedure can be replicated successfully, then one side of the ethics argument may become irrelevant.

A QUIET REPEAL

A colleague, who certainly carries views of the more liberal and left wing flavor commented on how out of bounds our state’s concealed carry laws were. He certainly is of the opinion that these laws do more to endanger the populace than protect it. He criticized the politician who introduced the bill. The politician I’m sure took the opposite view.

Both individuals are confused about where they should focus their criticisms. The 2nd amendment of the constitution makes clear that all people are to have an unfettered right to bear arms, with no exceptions mentioned regarding concealment or otherwise.

While the politician may have felt that he won a victory for the 2nd amendment, the fact that a bill had to be introduced at all is testament of our government not recognizing protected constitutional rights. He should have taken his passion to the Supreme Court, who should simply side on the basis of a literal interpretation of the constitution. My colleague, while disgusted with the politician, should realize that his true focus should be on amending the constitution to restrict the use of guns.

Of course, to the disgust of all of us, this is not likely to happen. It is in the best interest of each legislature to push through every bill necessary to maintain power, and our courts do not have a reputation of standing in the way. This process has been coined ‘ the quiet repeal of the American Revolution’ by economist Thomas Sowell in his book ‘The Quest for Cosmic Justice.’

Why is this relevant to this blog? This blog is devoted to science and economics, and both are heavily influenced by the way we are governed. In fact, many of the things that I have written about are in response to potential governmental and political behaviors.

QUOTES

"Would I prefer that the world was nothing but organic agriculture? Yes. But on the other hand GM crops have a much higher yield per acre and use less pesticides."
-Leslie Hoffman, Director, Earth Pledge

" Over the next 10 years. I predict the mainstream of the environmental movement will reverse its opinion and activism in four major areas: population growth, urbanization, genetically engineered foods, and nuclear power."
-Founder, The Whole Earth Catalog

"You couldn't feed more than 4 billion people on an all organic diet."
-Norman Borlaug, Winner, Nobel Prize for accomplishments in agricultural advances benefiting the 3rd world.

ORGANIC FACADE

While organic foods provide us with a sense of nostalgia for 19th century agriculture, its claims of safety, sustainability, and ‘greenness’ can be distracting. Case in point, the recent recall of E. coli infested spinach, traced to a major organic producer, Earthbound farms. According to the Center for Global Food issues, organic foods are 8 times more likely to be recalled than conventional food. Although organic food makes up less than 1% of diets in the US, it accounts for 8% of all food E coli cases.

According to a University of Minnesota study, researchers determined that produce grown with manure aged 6-12 months was actually 19 times more likely to be contaminated with E. coli than foods grown with manure aged more than a year. USDA organic rules allow manure to be applied after just 3 days of composting—right up to harvest time and raw manure can be applied until 90 to120 days prior to harvest in most cases.

It’s true that conventionally growers may also use manure as part of their fertility program, but in a recent study published in the Journal of Food Protection, organic produce was 6 times more likely to be contaminated with E. coli than conventional produce. Conventional growers always have the option of reducing manure use and supplementing with synthetic alternatives that offer the same nutritional value with less risk and increasingly less damage to the environment as genetics and technology improve.
Perhaps that’s why the founder of The Whole Earth Catalog believes the environmental movement will soon reverse its trend of aversion to GM foods.

ROUNDUP READY GM & ENVIRONMENTAL HEALTH

Roundup Ready technology (GM) has allowed for 5.4 million pounds of glyphosate herbicide to substitute for 7.2 million pounds of other chemistries (ex: imazethapyr,pendimethalin,trifluralin ). What are the public health implications of this?

Let’s look at the properties of these chemicals as they relate to environmental health.

PERSITENCE: Roundup (glyphosate) has a half-life of 47 days vs. the much longer periods of those chemicals it has displaced.

TOXICIY: The chemistries roundup has displaced are 3-16 times more toxic.

So we have a GM crop that enables producers to use chemicals that are less toxic and less persistent in the environment than conventional crop production systems.

Perhaps this is why 73% of consumers say they are willing to accept GM products because of their potential for improving safety and environmental impact.

Source: Agricultural Outlook ERS/USDA Aug 2000

GREEN GOUGING

Many pundits try to characterize global warming as a golem created by greedy corporations. Much environmental policy is developed under this guise. Unfortunaltey, giving the federal government the power to regulate commerce in the name of soaking the rich leads to ‘rent seeking’ that in the end benefits large corporations and hurts the poor. In the name of ‘green’ and responsible refining, Unical successfully lobbied for tight restrictions on refining in California during the 90's. Once the standards were passed it was revealed that noone could refine gas and remain compliant without violating Unical’s patented refining technology. This resulted in windfall profits for Unical, restricted gasoline supplies, and higher prices at the pump.

Restrictive environmental laws that decrease the incentive for oil exploration, the building of refineries, and expanding our electrical grid all lead to ( at least to some degree) increased market power for incumbent corporations. If anyone complains about ‘price gouging’ and ‘abnormal profits’, these are the polices that help make it possible.

Free markets, growth, and investment are perhaps the best solutions for achieving energy stability that is in the interest of everyone as opposed to just politicians and big business.