Changing the world now
Wednesday, May 5, 2010
Cinco de Mayo has become synonymous in the United States with a drunken festival involving Corona, Dos Equis, Modelo and lots of limes. Now that Cinco de Mayo has arrived, I find myself thinking about my friend Minerva from Northern Mexico.
When we first met in Baltimore, Minerva was astounded to see so much passion for Cinco de Mayo. After all, Cinco de Mayo is virtually ignored by most people in Mexico.
Minerva soon realized that what was being billed as a great day of Mexican national pride was often little more than a well-contrived marketing plan by major Mexican beer companies. For some Mexican-Americans, this day is one of ethnic pride associated with cultural festivals and music but for most Americans it is little more than a chance to enjoy $2 specials at the local pub.
While Minerva got tired of explaining to people that Cinco de Mayo is not Mexican Independence Day (September 16th) her biggest issue on this day wasn’t the drunks pretending to be honoring her country but rather the people who asked her, “so, when exactly is that Cinco de Mayo holiday this year?” Her answer was always, “Good question. What day are Americans celebrating the Fourth of July this year?”
Thursday, April 29, 2010
As the leaders from Goldman Sachs and Fabulous Fab repeated over and over to Congress that they did not profit from the creation of a terrible entity that they knew Paulson was shorting, I was reminded of The Seven Dwarfs. Not the little fellows who hung around with Snow White, but rather of 1994 when the leaders of the seven largest tobacco companies swore that there was no connection between tobacco and cancer. No one believed The Seven Dwarfs as they lied yet they cashed their checks for millions and continued merrily along. Tobacco usage in the US has declined yet global sales thrive. No one believed the I-bankers testifying in front of Congress this week either.
Saturday, April 24, 2010
One of my favorite movies is The Sting, a classic where Newman and Redford con bad man Doyle Lonnegan while abiding by the number one rule of fraud – never let the mark know he’s been conned.
During the height of the financial crisis it seemed that the public had suddenly woken up to the fact that the rules for investment banking are designed for bankers to win and the public to lose. It appeared that the public finally noticed that the bubbles, whether they be Savings and Loan crisis (peak around 1989-90), Asian crash (1997), Tech crash (2000), Sub-Prime Mortgage Crisis (2008-9) were not rare events but rather were common events which result in a net wealth transfer from middle class or future generations to a small set of privileged insiders and bankers. The anger swelled and then faded, you see the public has a very short term memory. Sure there was a small blip of annoyance when the bonuses were announced recently but the public collectively shrugged their shoulders as if there was nothing that could be done.
Once again a pulse of public venom has been raised over the Goldman Sachs fraud allegations, especially the selected emails which brag about the fortunes made by fooling investors. We will have to see if Fabrice Tourre becomes labeled as another Maddoff situation…a lone evil genius who fooled everyone. This characterization works well for an audience that understands fictional evil geniuses like Lex Luther and Magneto but it is obvious to all that Enron, Worldcom, Madoff, etc. were not the work of one person but that of a large set of knowledgeable people.
The investment banking world is shuddering right now. Finance plays a critical in the global economy, but in recent times some of its most profitable activities appear to be little more than a fixed card game where the mark may finally have proof that he’s been conned.
Thursday, April 22, 2010
The recent volcanic eruption in Iceland and its ensuing chaos brought back fond childhood memories. No, I am not referring to the air pollution in New York wafting in the morning breeze. Rather I began reminiscing about browsing through encyclopedias as a kid (special note to those less than 20 years old: encyclopedias were large sets of books that tried to amass and organize lots of knowledge. This species of information will soon to be extinct through natural selection competitors of Wiki, Google and other internet sources).
One of my favorite articles in the encyclopedia was about Krakatoa. Krakatoa is a volcanic island in the Indonesia. In 1883, the volcano blew its head off destroying 2/3rds of the island and covering the rest in lava. Scientists estimate that this explosion was the most violent volcanic eruption in recorded history with an explosion about 13,000 times more powerful than the bomb that was dropped on Hiroshima (Breining, Greg (2007). "The Deadliest Volcanoes". Super Volcano: The Ticking Time Bomb Beneath Yellowstone National Park). The explosion was heard 3,000 miles away and the average global temperatures fell by as much as 1.2 degrees Celsius in the year following the eruption.
How is Krakatoa (or the Icelandic volcano) relevant today? To me, it is a reminder that humans have only a limited influence over nature. We can certainly cause damage but in terms of protection and improvement we are not as powerful as we sometimes think we are. We should be good guardians of the planet, vigorously trying to improve the environment and minimize the damage we cause, but not so arrogant as to think that we can create all solutions or that we are the only major influences on the environment.
The year after Krakatoa’s explosion, scientists explored the island to discover some life including grass and spiders. Perhaps the lesson there is that while life may be robust, humans as a species are just one more animal on earth which can easily become extinct.
Thursday, April 15, 2010
The Lancet has just released news that the global maternal mortality has declined - these results are controversial in that other estimates don't agree. I am not going to discuss the controversy surrounding the data as the debates focus on developing countries, not developed countries like the US and Western Europe
One area that struck me was the US maternal mortality rate. This is the chances of a women dying due to pregnancy.
The US always did poorly compared to the rest of the developed world...but the news is getting worse. According to the Lancet article, the US maternal mortality was 13 deaths per 100,000 live births in 2000 (confidence interval 12-15) but in 2008 had RISEN to
Maternal mortality for 181 countries, 1980—2008: a systematic analysis of progress towards Millennium Development Goal 5. Margaret C Hogan MSc a b, Kyle J Foreman AB a, Mohsen Naghavi MD a, Stephanie Y Ahn BA a, Mengru Wang BA a, Susanna M Makela BS a, Prof Alan D Lopez PhD c, Prof Rafael Lozano MD a, Prof Christopher JL Murray MD