Peter Thiel: We’re in a Bubble and It’s Not the Internet. It’s Higher Education.

Fair warning: This article will piss off a lot of you.

I can say that with confidence because it’s about Peter Thiel. And Thiel – the PayPal co-founder, hedge fund manager and venture capitalist – not only has a special talent for making money, he has a special talent for making people furious.

Some people are contrarian for the sake of getting headlines or outsmarting the markets. For Thiel, it’s simply how he views the world. Of course a side benefit for the natural contrarian is it frequently leads to things like headlines and money.

Consider the 2000 Nasdaq crash. Thiel was one of the few who saw in coming. There’s a famous story about PayPal’s March 2000 venture capital round. The offer was “only” at a $500 million-or-so valuation. Nearly everyone on the board and the management team balked, except Thiel who calmly told the room that this was a bubble at its peak, and the company needed to take every dime it could right now. That’s how close PayPal came to being dot com roadkill a la WebVan or Pets.com.

And after the crash, Thiel insisted there hadn’t really been a crash: He argued the equity bubble had simply shifted onto the housing market. Thiel was so convinced of this thesis that until recently, he refused to buy property, despite his soaring personal net worth. And, again, he was right.

So Friday, as I sat with Thiel in his San Francisco home that he finally owns, I was curious what he thinks of the current Web frenzy. Not surprisingly, another Internet bubble seemed the farthest thing from his mind. But, he argued, America is under the spell of a bubble of a very different kind. Is it an emerging markets bubble? You could argue that, Thiel says, but he also notes that with half of the world’s population surging to modernity, it’s hard to argue the emerging world is overvalued.

Instead, for Thiel, the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.

Like any good bubble, this belief– while rooted in truth– gets pushed to unhealthy levels. Thiel talks about consumption masquerading as investment during the housing bubble, as people would take out speculative interest-only loans to get a bigger house with a pool and tell themselves they were being frugal and saving for retirement. Similarly, the idea that attending Harvard is all about learning? Yeah. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life.  It can lead to an unhealthy sense of entitlement. “It’s what you’ve been told all your life, and it’s how schools rationalize a quarter of a million dollars in debt,” Thiel says.

Thiel isn’t totally alone in the first part of his education bubble assertion. It used to be a given that a college education was always worth the investment– even if you had to take out student loans to get one. But over the last year, as unemployment hovers around double digits, the cost of universities soars and kids graduate and move back home with their parents, the once-heretical question of whether education is worth the exorbitant price has started to be re-examined even by the most hard-core members of American intelligensia.

Making matters worse was a 2005 President George W. Bush decree that student loan debt is the one thing you can’t wriggle away from by declaring personal bankruptcy, says Thiel. “It’s actually worse than a bad mortgage,” he says. “You have to get rid of the future you wanted to pay off all the debt from the fancy school that was supposed to give you that future.”

But Thiel’s issues with education run even deeper. He thinks it’s fundamentally wrong for a society to pin people’s best hope for a better life on  something that is by definition exclusionary. “If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates?” he says. “It’s something about the scarcity and the status. In education your value depends on other people failing. Whenever Darwinism is invoked it’s usually a justification for doing something mean. It’s a way to ignore that people are falling through the cracks, because you pretend that if they could just go to Harvard, they’d be fine. Maybe that’s not true.”

And that ripples down to other private colleges and universities. At an event two weeks ago, I met Geoffrey Canada, one of the stars of the documentary “Waiting for Superman.” He talked about a college he advises that argued they couldn’t possible cut their fees for the simple reason that people would deem them to be less-prestigious.

Thiel is the first to admit some of this promised security is true. He himself grew up in a comfortable upper-middle-class household and went to Stanford and Stanford Law School. He certainly reaped advantages, like friendships with frequent collaborators and co-investors Keith Rabois and Reid Hoffman. Today he ranks on Forbes billionaire list and has a huge house in San Francisco with a butler. How much of that was him and how much of that was Stanford? He doesn’t know. No one does.

But, he argues, that doesn’t mean it’s not an uncomfortable elitist dynamic that we should try to change. He compares it to a world in which everyone was buying guns to stay safe. Maybe they do need them. But maybe they should also examine some of the reasons life is so dangerous and try to solve those too.

Thiel’s solution to opening the minds of those who can’t easily go to Harvard? Poke a small but solid hole in this Ivy League bubble by convincing some of the most talented kids to stop out of school and try another path. The idea of the successful drop out has been well documented in technology entrepreneurship circles. But Thiel and Founders Fund managing partner Luke Nosek wanted to fund something less one-off, so they came up with the idea of the “20 Under 20″ program last September, announcing it just days later at San Francisco Disrupt. The idea was simple: Pick the best twenty kids he could find under 20 years of age and pay them $100,000 over two years to leave school and start a company instead.

Two weeks ago, Thiel quietly invited 45 finalists to San Francisco for interviews. Everyone who was invited attended– no hysterical parents in sight. Thiel and crew have started to winnow the finalists down to the final 20. They’ll be announced in the next few weeks.

While a controversial program for many in the press, plenty of students, their parents and people in tech have been wildly supportive. Thiel received more than 400 applications and most were from very high-end schools, including about seventeen applicants from Stanford. And more than 100 people in his network have signed up to be mentors to them.

Thiel thinks there’s been a sea-change in the last three years, as debt has mounted and the economy has faltered. “This wouldn’t have been feasible in 2007,” he says. “Parents see kids moving back home after college and they’re thinking, ‘Something is not working. This was not part of the deal.’ We got surprisingly little pushback from parents.” Thiel notes a handful of students told him that whether they were selected or not, they were leaving school to start a company. Many more built tight relationships with competing applicants during the brief Silicon Valley retreat– a sort of support group of like-minded restless students.

Of course, if the problem Thiel sees with the higher education bubble is elitism, why were so many of the invitees Ivy League kids? Where were the smart inner-city kids let down by economic blight and a failing education system of a city like Detroit; the kids who need to be lifted up the most? Thiel notes it wasn’t all elites. Many of the applicants came from other countries, some from remote villages in emerging markets.

But the program has a clear bias towards talent, and like it or not, talent tends to be found in private universities. Besides, he’s not advocating that stopping out of school is for everyone any more than he’s arguing everyone should be an entrepreneur. But to start a new aspirational example– an alternative path– it makes sense to start with the people who have all the options. “Everyone thinks kids in inner-city Detroit should do something else,” Thiel says. “We’re saying maybe people at Harvard need to be doing something else. We have to reset what the bar is at the top.”

That hints at another interesting distinction between the housing bubble and the education bubble: Class. The housing bubble was mostly a middle-class phenomenon. Even as much of the nation was wrapped up in it, there was a counter narrative on programs like CNBC and in papers like the Wall Street Journal pooh-poohing the dumb people buying all those condos in Florida. But with education, there’s barely any counter-narrative at all, because it is rooted in the most elite echelons of the upper class.

Thiel assumes this is why his relatively modest plan to get 20 kids to stop out of school for a few years is so threatening to a lot of the people who have the biggest megaphones to scream about it. “The people who are the most critical of this program are the ones who are most complacent with where the country is right now,” he says.

via techcrunch.com

Liberal vs. Conservative: Does the Difference Lie in the Brain? | TIME Healthland

By AMIE NINH

The differences between liberals and conservatives run wide and deep, and a new study suggests they may even be reflected in the ery structure of their brains.

In the study, led by Ryota Kanai of the University College London, people who identified themselves as liberals generally had a larger anterior cingulate cortex — a comma-shaped region near the front of the brain that is involved in decision-making. By contrast, those who identified as conservatives had larger amygdalas — almond-shaped structures that are linked with emotional learning and the processing of fear. (More on TIME.com: In Politics, It's Survival of the Fittest, Literally)

These structural differences, the authors suggest, support previous reports of differences in personality: liberals tend to be better at managing conflicting information, while conservatives are though to be better at recognizing threats, researchers said. "Previously, some psychological traits were known to be predictive of an individual's political orientation," said Kanai in a press release. "Our study now links such personality traits with specific brain structure."

For the study, Kanai and his colleagues asked 90 young adults to rank their political views on a five-point scale from very liberal to very conservative. Then, the volunteers underwent structural MRI scans, which revealed "substantial differences" in brain structure. (More on TIME.com: The Politics of Perceiving Skin Color)

This is not the first attempt to locate the biological roots of party affiliation. In an October 2010 study, researchers from the University of California, San Diego, and Harvard University identified a "liberal gene" — a variant called DRD4-7R, which affects the neurotransmitter dopamine — that has been linked with a personality type driven to seek out new experiences.

Another study from the University of Nebraska found that liberals and conservatives had different reactions to "gaze cues" — whether they tended to look in the same direction as a face on their computer screen. Liberals were more likely than conservatives to follow another person's gaze, suggesting that people who lean right value autonomy more; alternative explanations suggest that liberals might be more empathetic, or that conservatives are less trusting of others. (More on Time.com: Is There Any Biology Behind Our Political Affiliations?)

The theories are best guesses. And Kanai qualifies the findings of his own study, acknowledging that political orientation is complex, and can fall into more than just two categories. In addition, the study doesn't answer whether brain structure influences political preferences or vice versa: it's possible that the shape of the brain changes over time with a person's experiences — and with his or her changing political views.

So, despite increasing evidence suggesting biological differences between liberals and conservatives, Kanai warns against reading too much into the findings. "It's very unlikely that actual political orientation is directly encoded in these brain regions," he said. "More work is needed to determine how these brain structures mediate the formation of political attitude." (More on TIME.com: Why We Form Societies: It's Our Big Babies)

The study is published in the April 7 issue of Current Biology.

Find this article at:
http://healthland.time.com/2011/04/08/liberal-vs-conservative-does-the-difference-lie-in-the-brain/

via healthland.time.com

Quote For The Day II - The Dish | By Andrew Sullivan - The Daily Beast

Quote For The Day II

"The Dalai Lama, when asked what surprised him most about humanity, answered, 'Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the the present or the future; he lives as if he is never going to die, and then dies having never really lived,'"

via andrewsullivan.thedailybeast.com

Obama Is Missing - NYTimes.com

April 10, 2011

The President Is Missing

By PAUL KRUGMAN

What have they done with President Obama? What happened to the inspirational figure his supporters thought they elected? Who is this bland, timid guy who doesn’t seem to stand for anything in particular?

I realize that with hostile Republicans controlling the House, there’s not much Mr. Obama can get done in the way of concrete policy. Arguably, all he has left is the bully pulpit. But he isn’t even using that — or, rather, he’s using it to reinforce his enemies’ narrative.

His remarks after last week’s budget deal were a case in point.

Maybe that terrible deal, in which Republicans ended up getting more than their opening bid, was the best he could achieve — although it looks from here as if the president’s idea of how to bargain is to start by negotiating with himself, making pre-emptive concessions, then pursue a second round of negotiation with the G.O.P., leading to further concessions.

And bear in mind that this was just the first of several chances for Republicans to hold the budget hostage and threaten a government shutdown; by caving in so completely on the first round, Mr. Obama set a baseline for even bigger concessions over the next few months.

But let’s give the president the benefit of the doubt, and suppose that $38 billion in spending cuts — and a much larger cut relative to his own budget proposals — was the best deal available. Even so, did Mr. Obama have to celebrate his defeat? Did he have to praise Congress for enacting “the largest annual spending cut in our history,” as if shortsighted budget cuts in the face of high unemployment — cuts that will slow growth and increase unemployment — are actually a good idea?

Among other things, the latest budget deal more than wipes out any positive economic effects of the big prize Mr. Obama supposedly won from last December’s deal, a temporary extension of his 2009 tax cuts for working Americans. And the price of that deal, let’s remember, was a two-year extension of the Bush tax cuts, at an immediate cost of $363 billion, and a potential cost that’s much larger — because it’s now looking increasingly likely that those irresponsible tax cuts will be made permanent.

More broadly, Mr. Obama is conspicuously failing to mount any kind of challenge to the philosophy now dominating Washington discussion — a philosophy that says the poor must accept big cuts in Medicaid and food stamps; the middle class must accept big cuts in Medicare (actually a dismantling of the whole program); and corporations and the rich must accept big cuts in the taxes they have to pay. Shared sacrifice!

I’m not exaggerating. The House budget proposal that was unveiled last week — and was praised as “bold” and “serious” by all of Washington’s Very Serious People — includes savage cuts in Medicaid and other programs that help the neediest, which would among other things deprive 34 million Americans of health insurance. It includes a plan to privatize and defund Medicare that would leave many if not most seniors unable to afford health care. And it includes a plan to sharply cut taxes on corporations and to bring the tax rate on high earners down to its lowest level since 1931.

The nonpartisan Tax Policy Center puts the revenue loss from these tax cuts at $2.9 trillion over the next decade. House Republicans claim that the tax cuts can be made “revenue neutral” by “broadening the tax base” — that is, by closing loopholes and ending exemptions. But you’d need to close a lot of loopholes to close a $3 trillion gap; for example, even completely eliminating one of the biggest exemptions, the mortgage interest deduction, wouldn’t come close. And G.O.P. leaders have not, of course, called for anything that drastic. I haven’t seen them name any significant exemptions they would end.

You might have expected the president’s team not just to reject this proposal, but to see it as a big fat political target. But while the G.O.P. proposal has drawn fire from a number of Democrats — including a harsh condemnation from Senator Max Baucus, a centrist who has often worked with Republicans — the White House response was a statement from the press secretary expressing mild disapproval.

What’s going on here? Despite the ferocious opposition he has faced since the day he took office, Mr. Obama is clearly still clinging to his vision of himself as a figure who can transcend America’s partisan differences. And his political strategists seem to believe that he can win re-election by positioning himself as being conciliatory and reasonable, by always being willing to compromise.

But if you ask me, I’d say that the nation wants — and more important, the nation needs — a president who believes in something, and is willing to take a stand. And that’s not what we’re seeing. 

via nytimes.com

Change

via sinfest.net

The One-Percenters - Roger Ebert's Journal

The One-Percenters

By Roger Ebert on April 8, 2011 11:25 PM | 1 Comment

"The upper 1 percent of Americans are now taking in nearly a quarter of the nation's income every year. In terms of wealth rather than income, the top 1 percent control 40 percent.

"Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent."

So I discover in a piece by Joseph E. Stiglitz in the new issue of Vanity Fair. These facts confirm my impression that greed is now seen as a virtue in America. I'm not surprised by the greed of the One-Percenters. I'm mystified by the lack of indignation from so many of the rest of us.

Day after day I read stories that make me angry. Wanton consumption is glorified. Corruption is rewarded. Ordinary people see their real income dropping, their houses sold out from under them, their pensions plundered, their unions legislated against, their health care still under attack. Yes, people in Wisconsin and Ohio have risen up to protest these realities, but why has there not been more outrage?

The most visible centers of these crimes against the population are Wall Street and the financial industry in general. Although there are still many honest bankers, some seem to regard banking and trading as a license to steal. Outrageous acts are committed and go unpunished. Consider this case of money laundering by Wachovia Bank, now part of Wells Fargo. This Guardian article reports: "The authorities uncovered billions of dollars in wire transfers, traveler's checks and cash shipments through Mexican exchanges into Wachovia accounts."

The bank paid fines of less than 2% of its $12.2 billion profit in 2009. No individual was ever charged with a crime. We need not doubt that Wachovia executives received bonuses over the period of time when they were overseeing these illegal activities. Permit me to quote one more paragraph:

"More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4 billion -- a sum equivalent to one-third of Mexico's gross national product -- into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business."

If a third of the Mexican GNP passes through your bank and you don't ask the questions required by law, you are either (1) a criminal, or (2) incompetent. I can't think of another possibility.

Stories like this have become commonplace. Two of the most common types of news stories about banks recently have involved their losses, and the size of their executive bonuses. Bloomberg News reports: "JPMorgan Chase & Co. gave Chief Executive Officer Jamie Dimon a 51 percent raise in 2010 as the bank resumed paying cash bonuses following two years of pressure from regulators and lawmakers to curb compensation."

And here's more, from the Wall Street journal: "$57,031. That's about what the average U.S. archaeologist made last year. It's also what J.P. Morgan CEO Jamie Dimon made every day of last year -- $20.8 million total, according to the firm's proxy filing this week. Anyone who has doubts about the resiliency of Wall Street banks and brokerages should ponder that figure for awhile. The J.P. Morgan board also spent about $421,500 to sell Dimon's Chicago home. And they brought back the big cash bonus, doling out $30.2 million in greenbacks to Dimon and his top six lieutenants."

The CEOs of the venerable trading firms that were forced into bankruptcy were all paid bonuses. In a small recent case, executives of Borders intended to pay themselves $8 million in bonuses until a U. S. Trustee objected. A company spokesperson said, "The proposed programs were designed to retain key executives at Borders as we proceed through the Chapter 11 reorganization process." In short, retain those whose management bankrupted the corporation.

Corporations in theory are managed to benefit their shareholders. The more money Wal-Mart can make by busting unions and allegedly discriminating in its hiring practices, the happier its shareholders become. Yet obscene bonuses penalize even the shareholders. Isn't that, in theory, their money? Wouldn't it be decent for the occasional corporation to put a cap on bonuses and distribute the funds as dividends?

I have no objection to financial success. I've had a lot of it myself. All of my income came from paychecks from jobs I held and books I published. I have the quaint idea that wealth should be obtained by legal and conventional means--by working, in other words--and not through the manipulation of financial scams. You're familiar with the ways bad mortgages were urged upon people who couldn't afford them, by banks who didn't care that the loans were bad. The banks made the loans and turned a profit by selling them to investors while at the same time betting against them on their own account. While Wall Street was knowingly trading the worthless paper that led to the financial collapse of 2008, executives were being paid huge bonuses.

Wasn't that fraud? Wasn't it theft? The largest financial crime in American history took place and resulted in no criminal charges. Then the money industries and their lobbyists fought tooth and nail against financial regulation. The Republicans resisted it, but so did many Democrats. Partially because of the Supreme Court decision allowing secret campaign contributions, our political system is largely financed by vested interests.

We know that Bernie Madoff went to jail. Fine. No Wall Street or bank executive has been charged with anything. It will never happen. The financial industries are locked an unholy alliance with politicians and regulators, all choreographed by lobbyists. You know all that.

What puzzles me is why there isn't more indignation. The Tea Party is the most indignant domestic political movement since Norman Thomas's Socialist Party, but its wrath is turned in the wrong direction. It favors policies that are favorable to corporations and unfavorable to individuals. Its opposition to Obamacare is a textbook example. Insurance companies and the health care industry finance a "populist" movement that is manipulated to oppose its own interests. The billionaire Koch brothers payroll right wing front organizations that oppose labor unions and financial reform. The patriots wave their flags and don't realize they're being duped.

Consider taxes. Do you know we could eliminate half the predicted shortfall in the national budget by simply failing to renew the Bush tax cuts? Do you know that if corporations were taxed at a fair rate, much of the rest could be found? General Electric recently reported it paid no current taxes. Why do you think that was? Why do middle and lower class Tea Party members not understand that they bear an unfair burden of taxes that should be more fairly distributed? Why do they support those who campaign against unions and a higher minimum wage? What do they think is in it for them?

If it is "socialist" to believe in a more equal distribution of income, what is the word for the system we now live under? A system under which the very rich have doubled their share of the nation's income in 25 years? I believe in a fair day's work for a fair day's pay. Isn't that an American credo? How did it get twisted around into an obscene wage for shameless plunder?

One of the challenges facing the One-Percenters these days is finding ways to spend their money. Private residences grow as large as hotels, and are fitted out with the amenities of luxury resorts. Fleets of cars and private airplanes are at their owners' disposal. At work, they sink absurd mountains of money into show-off corporate headquarters that have less to do with work than with a pissing contest among rival executives. Private toilets grow as large as small condos, outfitted with Italian marbles and rare antiques. This is all paid for by the shareholders. One area of equality between the One-Percenters and the rest of us is that we sit on toilets of about the same size. What's different is the size of our throne rooms.

I find this extravagance unseemly in a democracy. Many of today's One-Percenters feel no more constraint than Louis XIV. A culture of celebrity has grown up around these conspicuous consumers, celebrating their excesses. I believe rewards are appropriate for those who have been successful. I also believe a certain modesty and humility are virtuous. I find it unbecoming that those who fight most against social welfare are those most devoted to their own welfare.

In America there is an ingrained populist suspicion of fats cats and robber barons. This feeling rises up from time to time. Theodore Roosevelt, who was elected as a Trust Buster, would be appalled by the excesses of our current economy. Many of the rich have a conscience. Andrew Carnegie built libraries all over America. The Rockefeller and Ford Foundations do great good. Bill Gates lists his occupation as "philanthropist."

Yet the most visible plutocrat in America is Donald Trump, a man who has made a fetish of his power. What kind of sick mind conceives of a television show built on suspense about which "contestant" he will "fire" next? What sort of masochism builds his viewership? Sadly, I suspect it is based on viewers who identify with Trump, and envy his power over his victims. Don't viewers understand they are the ones being fired in today's America?

via blogs.suntimes.com

The Truth | Shoe

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Winded | Shoe

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Stiff | Shoe

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Scott Adams: How to Get a Real Education at College - WSJ.com

I understand why the top students in America study physics, chemistry, calculus and classic literature. The kids in this brainy group are the future professors, scientists, thinkers and engineers who will propel civilization forward. But why do we make B students sit through these same classes? That's like trying to train your cat to do your taxes—a waste of time and money. Wouldn't it make more sense to teach B students something useful, like entrepreneurship?

Scott Adams

I speak from experience because I majored in entrepreneurship at Hartwick College in Oneonta, N.Y. Technically, my major was economics. But the unsung advantage of attending a small college is that you can mold your experience any way you want.

There was a small business on our campus called The Coffee House. It served beer and snacks, and featured live entertainment. It was managed by students, and it was a money-losing mess, subsidized by the college. I thought I could make a difference, so I applied for an opening as the so-called Minister of Finance. I landed the job, thanks to my impressive interviewing skills, my can-do attitude and the fact that everyone else in the solar system had more interesting plans.

The drinking age in those days was 18, and the entire compensation package for the managers of The Coffee House was free beer. That goes a long way toward explaining why the accounting system consisted of seven students trying to remember where all the money went. I thought we could do better. So I proposed to my accounting professor that for three course credits I would build and operate a proper accounting system for the business. And so I did. It was a great experience. Meanwhile, some of my peers were taking courses in art history so they'd be prepared to remember what art looked like just in case anyone asked.

One day the managers of The Coffee House had a meeting to discuss two topics. First, our Minister of Employment was recommending that we fire a bartender, who happened to be one of my best friends. Second, we needed to choose a leader for our group. On the first question, there was a general consensus that my friend lacked both the will and the potential to master the bartending arts. I reluctantly voted with the majority to fire him.

But when it came to discussing who should be our new leader, I pointed out that my friend—the soon-to-be-fired bartender—was tall, good-looking and so gifted at b.s. that he'd be the perfect leader. By the end of the meeting I had persuaded the group to fire the worst bartender that any of us had ever seen…and ask him if he would consider being our leader. My friend nailed the interview and became our Commissioner. He went on to do a terrific job. That was the year I learned everything I know about management.

At about the same time, this same friend, along with my roommate and me, hatched a plan to become the student managers of our dormitory and to get paid to do it. The idea involved replacing all of the professional staff, including the resident assistant, security guard and even the cleaning crew, with students who would be paid to do the work. We imagined forming a dorm government to manage elections for various jobs, set out penalties for misbehavior and generally take care of business. And we imagined that the three of us, being the visionaries for this scheme, would run the show.

We pitched our entrepreneurial idea to the dean and his staff. To our surprise, the dean said that if we could get a majority of next year's dorm residents to agree to our scheme, the college would back it.

It was a high hurdle, but a loophole made it easier to clear. We only needed a majority of students who said they planned to live in the dorm next year. And we had plenty of friends who were happy to plan just about anything so long as they could later change their minds. That's the year I learned that if there's a loophole, someone's going to drive a truck through it, and the people in the truck will get paid better than the people under it.

The dean required that our first order of business in the fall would be creating a dorm constitution and getting it ratified. That sounded like a nightmare to organize. To save time, I wrote the constitution over the summer and didn't mention it when classes resumed. We held a constitutional convention to collect everyone's input, and I listened to two hours of diverse opinions. At the end of the meeting I volunteered to take on the daunting task of crafting a document that reflected all of the varied and sometimes conflicting opinions that had been aired. I waited a week, made copies of the document that I had written over the summer, presented it to the dorm as their own ideas and watched it get approved in a landslide vote. That was the year I learned everything I know about getting buy-in.

“Why do we make B students sit through the same classes as their brainy peers? That's like trying to train your cat to do your taxes—a waste of time and money. Wouldn't it make sense to teach them something useful instead?”

For the next two years my friends and I each had a private room at no cost, a base salary and the experience of managing the dorm. On some nights I also got paid to do overnight security, while also getting paid to clean the laundry room. At the end of my security shift I would go to The Coffee House and balance the books.

My college days were full of entrepreneurial stories of this sort. When my friends and I couldn't get the gym to give us space for our informal games of indoor soccer, we considered our options. The gym's rule was that only organized groups could reserve time. A few days later we took another run at it, but this time we were an organized soccer club, and I was the president. My executive duties included filling out a form to register the club and remembering to bring the ball.

By the time I graduated, I had mastered the strange art of transforming nothing into something. Every good thing that has happened to me as an adult can be traced back to that training. Several years later, I finished my MBA at Berkeley's Haas School of Business. That was the fine-tuning I needed to see the world through an entrepreneur's eyes.

If you're having a hard time imagining what an education in entrepreneurship should include, allow me to prime the pump with some lessons I've learned along the way.

Combine Skills. The first thing you should learn in a course on entrepreneurship is how to make yourself valuable. It's unlikely that any average student can develop a world-class skill in one particular area. But it's easy to learn how to do several different things fairly well. I succeeded as a cartoonist with negligible art talent, some basic writing skills, an ordinary sense of humor and a bit of experience in the business world. The "Dilbert" comic is a combination of all four skills. The world has plenty of better artists, smarter writers, funnier humorists and more experienced business people. The rare part is that each of those modest skills is collected in one person. That's how value is created.

Fail Forward. If you're taking risks, and you probably should, you can find yourself failing 90% of the time. The trick is to get paid while you're doing the failing and to use the experience to gain skills that will be useful later. I failed at my first career in banking. I failed at my second career with the phone company. But you'd be surprised at how many of the skills I learned in those careers can be applied to almost any field, including cartooning. Students should be taught that failure is a process, not an obstacle.

Find the Action. In my senior year of college I asked my adviser how I should pursue my goal of being a banker. He told me to figure out where the most innovation in banking was happening and to move there. And so I did. Banking didn't work out for me, but the advice still holds: Move to where the action is. Distance is your enemy.

Scott Adams

Attract Luck. You can't manage luck directly, but you can manage your career in a way that makes it easier for luck to find you. To succeed, first you must do something. And if that doesn't work, which can be 90% of the time, do something else. Luck finds the doers. Readers of the Journal will find this point obvious. It's not obvious to a teenager.

Conquer Fear. I took classes in public speaking in college and a few more during my corporate days. That training was marginally useful for learning how to mask nervousness in public. Then I took the Dale Carnegie course. It was life-changing. The Dale Carnegie method ignores speaking technique entirely and trains you instead to enjoy the experience of speaking to a crowd. Once you become relaxed in front of people, technique comes automatically. Over the years, I've given speeches to hundreds of audiences and enjoyed every minute on stage. But this isn't a plug for Dale Carnegie. The point is that people can be trained to replace fear and shyness with enthusiasm. Every entrepreneur can use that skill.

Write Simply. I took a two-day class in business writing that taught me how to write direct sentences and to avoid extra words. Simplicity makes ideas powerful. Want examples? Read anything by Steve Jobs or Warren Buffett.

Learn Persuasion. Students of entrepreneurship should learn the art of persuasion in all its forms, including psychology, sales, marketing, negotiating, statistics and even design. Usually those skills are sprinkled across several disciplines. For entrepreneurs, it makes sense to teach them as a package.

That's my starter list for the sort of classes that would serve B students well. The list is not meant to be complete. Obviously an entrepreneur would benefit from classes in finance, management and more.

Remember, children are our future, and the majority of them are B students. If that doesn't scare you, it probably should

via online.wsj.com

10 Internet Retailers Rated on Complaint Resolution | DealNews

By Mitch Lipka, dealnews Consumer Advocate

Some of the biggest online sellers have embraced the Better Business Bureau to aid their credibility, which means — like it or not — you should, too, when you have a problem.

The BBB, a business organization that has been accused of giving high ratings to dues-paying members despite their track records, counts as members seven of 10 top retailers surveyed by dealnews. We reviewed the complaint data and found that all but one of the companies surveyed received an A rating or higher.

The only one without that lofty rating is Cabela’s, the outdoors retailer, whose rating is being reviewed after an uptick in complaints. Cabela’s logged 163 complaints in the past three years, more than 100 of which came in the past year, the BBB says. But the number of complaints against Cabela’s is small in comparison to some other retailers.

Amazon.com, the biggest of the bunch, tallied 2,580 complaints. It’s all relative, of course. Amazon had nearly $13 billion in sales in the last quarter of 2010. And about 1,800 of those complaints were resolved to the customers’ satisfaction.

Among the companies surveyed, only Cabela’s, Piperlime (Gap) and Apple did not pay for BBB accreditation. So, why does a company’s BBB rating matter to you? A company with a D or F rating is not likely to care very much if the BBB forwards a letter of complaint. Most likely, they’ve decided that they’re not interested in having the BBB mediate disputes with customers.

But, and it’s no guarantee, if the company has a higher rating (and/or is a member) a consumer will have a better chance of getting a complaint noticed when it’s filed through the BBB. Meritline and Overstock, for example, resolve most complaints filed through the BBB to the satisfaction of their customers. Others, such as TigerDirect, have a lower success rate.

If you have a dispute with an online seller, you should first try to resolve it with the company. If there’s a charge that shouldn’t be there, be sure to alert your credit card company so your objection is documented within 60 days of getting the credit card statement with the erroneous charge.

If your complaint goes beyond normal issues and is worthy of a larger complaint, still file with the BBB, but add to the mix your state attorney general or consumer affairs office.

With that perspective, here are the 10 retailers listed by the number of complaints, how many were resolved to the customer’s satisfaction and the company’s BBB rating.

Amazon (A+) 2,580 complaints/ 1,798 resolved Full Report

TigerDirect (A) 704 complaints/ 478 resolved Full Report

Meritline (A+) 82 complaints/ 79 resolved Full Report

Zappos (A+) 20 complaints/ 16 resolved Full Report

Piperlime/Gap (A+): 277/ 210 resolved Full Report

Cabela’s (NR): 163 complaints / 135 resolved Full Report

Apple (A+): 1,754 complaints / 1,008 resolved Full Report

New Egg (A+): 685 / 585 resolved Full Report

Overstock.com (A+): 483/ 474 resolved Full Report

Buy.com ( A+): 1,001/ 821 resolved Full Report

If you've got a complaint against a retailer that you want to file with the BBB, you can do it on the Web here. If you want to check on the rating of a particular company, you can use the BBB finder.

via dealnews.com

New engine shakes up auto industry - Technology & science - Innovation - msnbc.com

New engine sends shock waves through auto industry

Prototype could potentially decrease auto emissions up to 90 percent

Discovery News

An illustration of the Wave Disk Generator.

By Nic Halverson

Despite shifting into higher gear within the consumer's green conscience, hybrid vehicles are still tethered to the gas pump via a fuel-thirsty 100-year-old invention: the internal combustion engine.

However, researchers at Michigan State University have built a prototype gasoline engine that requires no transmission, crankshaft, pistons, valves, fuel compression, cooling systems or fluids. Their so-called Wave Disk Generator could greatly improve the efficiency of gas-electric hybrid automobiles and potentially decrease auto emissions up to 90 percent when compared with conventional combustion engines.

The engine has a rotor that's equipped with wave-like channels that trap and mix oxygen and fuel as the rotor spins. These central inlets are blocked off, building pressure within the chamber, causing a shock wave that ignites the compressed air and fuel to transmit energy.

The Wave Disk Generator uses 60 percent of its fuel for propulsion; standard car engines use just 15 percent. As a result, the generator is 3.5 times more fuel efficient than typical combustion engines.

Researchers estimate the new model could shave almost 1,000 pounds off a car's weight currently taken up by conventional engine systems.

Last week, the prototype was presented to the energy division of the Advanced Research Projects Agency, which is backing the Michigan State University Engine Research Laboratory with $2.5 million in funding.

Michigan State's team of engineers hope to have a car-sized 25-kilowatt version of the prototype ready by the end of the year.

via msnbc.msn.com

Are you smarter than a Fox News viewer? How about a CNN viewer? Take our quiz to find out. - How did you do - CSMonitor.com

Are you smarter than a News viewer?

My Quiz results

10
Correct

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You answered 10 of 11 questions correctly for a total score of 91%.

Take the test here

Is China's Elite Preparing for Exile? - Bruce Nussbaum - The Conversation - Harvard Business Review

In the years before Hong Kong reverted to Chinese control, the children of its rich and upper middle classes were sent in great numbers to Canada, Australia, Britain and the U.S. for schooling — and passports. These children were the means of escape for their families if escape was necessary. We may be seeing the same phenomenon repeating itself, with the mass exodus of China's political and economic elites children to schools abroad.

This time, the U.S. is the most-favored destination, with 100,000 Chinese students studying in American colleges and universities — more than any other country. Many thousands more study in high school and boarding schools. The talk in Shanghai and Beijing, and New York and Boston, is that many are "just-in-case" children, vectors to more permanent residency for their families.

The arrest and disappearance of world-renowned artist Ai Weiwei is but the latest evidence that the political culture of China is shifting toward that of a police state. For the past 20 years, the upper classes in China's cities have been able to negotiate an ever widening-space of freedom for themselves. It was possible to talk to censors who, by and large, were willing to liberalize when possible. Private networks and workarounds let elites retain access to information when Google, YouTube, and Twitter were shut down. Artists were allowed to criticize the growing inequality in society in their work.

This appears to be ending as the military and extremely conservative political forces restrict civic and cultural spaces. The Middle East upheavals and the prospect of a more liberal Tiananmen generation soon taking power has pushed policy to the extreme right in China. Political control in universities is tightening and overseas travel for scientists is being scrutinized. While government economic policy favors "indigenous innovation" and Beijing's five-year plan focusses on innovation, the free flow of information and creative expression are being repressed.

Meanwhile, some 20% to 30% of college graduates every year can't get white-collar jobs and do menial work while protests against corruption in rural areas and rising inequality in the city increase in number. High-profile officials and businessmen are being arrested or blocked. The head of China's famous high-speed train project was just arrested for corruption. The CEO of BYD, China's electric-car company that has Warren Buffet as an investor, has run afoul of authorities who prevent him from expanding production. Indeed, politically-connected state enterprises are reasserting themselves against the entire private sector.

Beneath the gloss of high-GDP growth numbers, there is now a whiff of fear in China. A bright future for the political and economic elites is not as guaranteed as once thought. Sending their children to study in the U.S. is an insurance policy that many Chinese are purchasing. These overseas students make up China's new just-in-case generation.

via blogs.hbr.org

10 Life Lessons That We Should Try To Remember! | Bit Rebels

I am very lucky to have had a very wise man for a dad. I never really understood what he was trying to convey to us when we were children, but now as an adult, I have realized the life lessons that he wanted to impart on us. They are sort of like rules to live by. With life being so fast paced nowadays, it is easy to get caught up with trivial things or to get so consumed by our everyday problems that we forget to enjoy the beautiful things that life has to offer. This leaves people feeling depressed and unsatisfied, which leads to having that constant feeling of being unhappy.

As I walk life’s journey, I try to keep in mind the following lessons that help guide me whenever I feel I am lost. I also try to impart what I have experienced to people close to me, particularly my younger brother and sister, when I see that they are getting overwhelmed or struggling to find light to life’s problems.

1. Have a balanced life – This took me some time to learn. I was such a workaholic when I started building my career, but lately, I have learned and really put into practice balancing my work and personal life. I try as much as possible not to bring my work home.

2. Be a student of life – Learn one new thing everyday. It can be a word, a skill, anything that can help you grow as a person.

3. Stand by your beliefs and principles – Our beliefs and our principles are developed as we grow older. Make sure that you stand up and fight for what you believe in, even if it means being alone in that decision, especially if you know that you are doing what is right.

4. Work for it – This is one thing that I strongly believe in… work for what you want. Do not rely on fate or others to give you what you want in life. If you want to be successful, work for it.

5. Ask for help when you need it – Whenever I am assigned a new person to assist me at work, the first thing I always tell him or her is to ask for help when you need it. No one is perfect, and no one knows everything.

6. Give yourself to others – Help out someone if they need it. I know a lot of people who have been doing charity work, and they always express the feeling of satisfaction and fulfillment. It does not have to be in a big way if you feel overwhelmed with joining organizations, it can be simply volunteering your time to a worthy cause.

7. Live within your means – I believe this is the wisest advise that I received from my dad. It is okay to buy the stuff that we want, but in moderation. Always look out for the future. It is not good to be in debt just because you want to live the way others live.

8. Daydream a lot, it’s free – It’s always good to dream, and then make it happen. I guess that is why I have a very active imagination, it’s because I daydream a lot.

9. Love yourself – Love yourself first. It will help you show affection and share that love to others more easily. Be forgiving of yourself and of others.

10. Live your dream – Give life to your passion. Don’t just dream about it, live it!

via bitrebels.com

Gonzalo Lira: The Causes of The Mess We’re In

Friday, April 1, 2011

The Causes of The Mess We’re In

“But I just wanted a pony!”

We can feel how it’s on its way. Most everyone plugged into the macro-economic zeitgeist can tell you that bad juju is most definitely in the post—just that nobody yet knows (or is sure) what shape the next crisis will take.

Lots of people have been pointing to the various signs of the coming crisis: A U.S. Federal government deficit that’s over 12% of GDP, to be repeated in fiscal years 2012, ’13, ’14 and possibly ’15, if not surpassed; abnormal rises in commodity prices; European disintegration; a Federal Reserve that is printing money like there’s no tomorrow; the largest bond fund in the world—PIMCO—exiting Treasuries (that’s like Baskin & Robbins exiting chocolate); a complete inability of the political leadership class to do anything about the fiscal mess of the United States, at the Federal, State and local levels.

But though everybody points to the signs of the coming crisis, no one can yet make out its true shape. I’ve posited that it’ll be hyperinflationary, while other very clever people have claimed it’ll be deflationary.

However, these different interpretations about the coming crisis are interpretations of what’s coming up in the future.

As we sit here waiting for the next Apocalypse, let’s forget about tomorrow and instead consider the past. Let’s ask ourselves the obvious question:

What got us here?

What policies were implemented—decisions made—actions taken—which would set us on such a path to oblivion? Because that is our ultimate destination—oblivion. It’s coming to the American economy—and American society—as surely as if it had been FedExed last night. So if we’re going to hell, might as well figure out how we got there.

Some people claim it was the very invention of the Federal Reserve back in the early XX century that set us on the path to ruin. Others claim it was the Hamiltonian desire for a central bank. If we play the causal game at these focus lengths, then we might as well go back to Adam and Eve—they’re the reason for all our macroeconomic misery!

Patently absurd.

But if we get serious and look at the policies, decisions and actions carried out in our own lifetimes, then I’d have to say that there were two things that set us on the road that we’re on:

• One, the failure of Congress to deliver a balanced budget since 1975, and 

• Two, the subsidy the Federal Reserve gave both the U.S. economy and the Federal government by way of its artificially low interest rates, starting in 1987. 

Starting in 1975, the United States has had an uninterrupted string of yearly deficits—that is, the Federal government has routinely spent more money than it has brought in, barring a few exceptional years in the 1990’s.

Deficit spending satisfied the ideologies of both sides of the economic divide:

For the economic Right, cutting taxes satisfied its notion that more money in the hands of the citizenry and corporations guarantees greater economic growth.

For the economic Left, more government spending every year satisfied its notion that more money spent by the government guarantees greater economic growth.

As per my Democratic Bankruptcy Paradox, starting in 1975, both sides of the political divide in the United States failed to resolve the fiscal incoherence of the United States, except in a couple of exceptional years in the 1990’s.

The economic Right wanted lower taxes. The economic Left wanted more fiscal spending. Rather than thrash out their differences and come to a compromise, they resorted to the national credit card: Since 1975, the political equation insofar as Federal government money is concerned has not been either/or—it’s been both/and.

Both lower taxes and higher Federal government spending—an achievement bought and paid for with fiscal debt. The fiscal incoherence I have posited, and which the American Congress proved in spades.

With each year that the fiscal incoherence was unresolved—that is, with each year that the political factions failed to hammer out their differences and balance the Federal government budget, and instead issued Treasury bonds to cover the difference—the overall debt became greater and greater—

—to the point where we are now: Total fiscal debt that exceeds 100% of GDP. Yearly deficits for the next five years that will exceed 10% of GDP each year.

Now, the Federal government has failed to resolve its fiscal incoherence starting in 1975—but it’s been able to get away with deficit year after deficit year because of the cheap interest rates it has had to pay for its debt.

The low interests the Federal government—and the rest of the U.S. economy—was able to take advantage of? Brought about by the Federal Reserve’s money subsidy.

Yes: The Federal Reserve’s money subsidy—with all the market distortions that a subsidy implies.

The price of a good is the intersection of its supply and its demand—this is Eccy 101. Money is a good like any other—and like any good, it has a price: Its interest rate. Ordinarily, the price of money is fixed by suppliers of credit—that is, banks. They create money via credit—and they sell this money to their customers, the price of this sale being the interest rate that they charge.

However, starting in 1987, the Federal Reserve went beyond its mandate of price stability and full employment (the latter part of which it has never really paid much attention to), and instead went into the business of goosing along the economy.

In other words, it focussed on mindless growth—and focussed specifically on the blunt, club-like metric of GDP growth—and goosed along the economy in order to raise that mindless metric.

It did this by usurping the role of banks, and providing cheap money by way of low interest rates—low interests rates carried out with the explicit aim of gaming the GDP.

The economy slowing down? Cut interest rates. Momentary market panic? Flood the market with liquidity. The economy (as measured strictly by GDP) slowing down again? Cut interest rates some more. GDP booming? Very very very slowly and predictably raise rates—then cut ‘em again the instant the GDP looks like it’s starting to slow down.

This was, in a nushell, what Federal Reserve Chairman Alan Greenspan did, during his tenure at the Eccles Building: Greenspan subsidized money for the sake of gaming a single metric, the GDP.

Everyone knew it, by the way. There was even a name for it: The Greenspan Put.

For such an avowed free-marketeer, Greenspan was quite the Socialist apparatchik: Rather than allow the market to dictate the price of money, he subsidized it like a Socialist Pricing Board. And just like a Soviet apparatchik of old, Greenspan focussed on one number—GDP—irrespective of all the other subtle qualifiers that define a healthy economy.

The fucker was a Soviet goon—his Ayn Rand, “Free-Markets Forever!” bullshit was just for show.

The distortive effects that Greenspan’s money subsidy brought to the US economy are clear to all—serial bubbles: Dot-com, tech, bio-tech, CDO’s, real estate, and now Treasuries—all these serial bubbles were blown by the Fed’s relentless subsidy of the price of money.

Now of course, if you are using the subsidized price of money to goose along an economy, there comes a moment when it doesn’t work anymore. Poor Ben Bernanke, he’s living that unhappy life: His Zero Interest Rate Policy (ZIRP) and Quantitative Easing-1, -lite and -2 are the perverted policies he has had to pursue in order to keep up the Greenspan Put.

All of The Bernank’s recent policies are aimed at shoring up the “growth” that the U.S. economy has experienced over the last 24 years.

But the thing is, that “growth”? It wasn’t real—it was steroid-induced bubble-muscle. It was an illusion.

You don’t agree? You think there has been actual growth over the last 25 years?

By measuring gross GDP adjusted for inflation—“Red Al” Greenspan’s sole metric—the answer is “yes”.

However, if measured by median and average wages, per capita incomes adjusted for purchasing power, or any other such metric that measures the well-being of the average- and the below-average-citizen, the answer is a resounding “no”.

People are less well off. The middle class in the United States has shrunk—drastically. Sure, the average income might be higher—but that’s the distortive effect you get from having tremendous, inorganic wealth disparities, as we have today.

It’s not merely that the disparity between the wealthy and the rest of the population is obscene—the disparity skews the results. Remove the top 15% of the population, and the average income in the United States drops below Slovenia’s—and no, I’m not kidding.

Furthermore—and this is germane insofar as our current situation is concerned—the sort of growth the American economy would have experienced since 1987 without this money subsidy would likely have been very different from the growth we have actually experienced.

The growth we have experienced has been speculative. Why was it speculative? Because cheap (ie. subsidized) money Greenspan made available was set to chasing returns via trading, not production.

Had money been expensive, yields that beat savings would have been harder to come by—and thereby encouraged savings instead of speculation.

Expensive money would have also kept banks from the insane speculation of the real estate markets: On the one hand, expensive money would have kept low-quality buyers from access to credit, and on the other, expensive money would have disuaded banks from expanding their businesses into riskier territories, in order to reap higher returns.

In other words, risk would have been accurately priced.

In other words, there wouldn’t have been a Global Financial Crisis.

Now, obviously, it’s a fool’s game to try to go back over the 24 years since Greenspan took office and try to deduce what would have been the organic price of money without his and Bernanke’s subsidy.

But clearly, had the Greenspan Put never existed, there would likely have been less growth than has been had.

Would there have been less money for venture capital and the financing of new businesses? Yes, no question. Would those new businesses therefore never have existed? Again, yes.

However: How many ridiculous, fairy-tale businesses would have been financed, as happened during the various bubbles of the last 24 years? Very few: Capital would have been much more efficiently allocated, in a world where there was no subsidy on money. It would have been too expensive for the economy to throw away capital on clearly nonsensical businesses.

Would the solid businesses have gotten financing? The ones that actually did something for the economy, like Google, Ebay, and so on? Clearly, it would have been tougher for them, and their growth would have been slower—but just as clearly, they would indeed have gotten financing, because they are obviously good businesses.

Anyway, even if many good businesses would have failed to raise financing in a world of more expensive credit, the good outweighs the bad: There would not have been any serial bubbles—

—and the Federal government would not have had access to cheap financing, which encouraged its back-breaking debt.

Had Greenspan not subsidized money, it would have been far too expensive for the Federal government to continue increasing its yearly deficits, and adding to the national debt. A fiscal day of reckoning would have happened a lot sooner—and therefore would have been a lot less painful. It would have been bad, sure—all days of reckoning are bad. But it wouldn’t have been mind-crunchingly destructive—as we all sense the coming crisis will be.

As it is—as we live in a world where Greenspan and now Bernanke keep money at absurdly, unsustainably low prices—the Federal government was allowed to balloon its fiscal debt to monumental proportions: As I said, over 100% of GDP, with future yearly deficits in the +10% of GDP range as far as the eye can see.

The Fed’s subsidized money postponed the day of reckoning, insofar as the Federal government debt is concerned—but it has made that day of reckoning much worse than it needed to be.

That’s why we’re sitting here, waiting for the next financial Apocalypse, and pondering the causes that led us here.

via gonzalolira.blogspot.com

Live human heart grown in lab using stem cells in potential transplant breakthrough | Mail Online

Live human heart grown in lab using stem cells in potential transplant breakthrough

By David Derbyshire
Last updated at 12:22 PM on 4th April 2011

Breakthrough: Scientists are hopeful their artificial heart will be beating within days

Scientists are growing human hearts in laboratories, offering hope for millions of cardiac patients.

American researchers believe the artificial organs could start beating within weeks.

The experiment is a major step towards the first ‘grow-your-own’ heart, and could pave the way for  livers, lungs or kidneys to be made  to order.

The organs were created by removing muscle cells from donor organs to leave behind tough hearts of connective tissue.

Researchers then injected stem cells which multiplied and grew around the structure, eventually turning into healthy heart cells.

Dr Doris Taylor, an expert in regenerative medicine at the University of Minnesota in Minneapolis, said: ‘The hearts are growing, and we hope they will show signs of beating within the next weeks.

‘There are many hurdles to overcome to generate a fully functioning heart, but my prediction is that it may one day be possible to grow entire organs for transplant.’

Patients given normal heart transplants must take drugs to suppress their immune systems for the rest of their lives.

This can increase the risk of high blood pressure, kidney failure and diabetes.

If new hearts could be made using a patient’s own stem cells, it is less likely they would be rejected.

The lab-grown organs have been created using these types of cells – the body’s immature ‘master cells’ which have the ability to turn into different types of tissue. The experiment follows a string of successes for researchers trying to create spare body parts for transplants.

In 2007, British doctors grew  a human heart valve using stem  cells taken from a patient’s  bone marrow.

HOW TO GROW YOUR OWN HEART

• The donor heart is removed from the body; pig hearts may also be suitable.
• Detergents are then used to strip the cells from the heart leaving behind the protein skeleton or 'ghost heart'.
• Stem cells grown from cells taken from a patient are then added to the ghost heart.
• The stem cells then multiply and generate new heart cells. now all that is left is the hope that these will start beating.

A year later, scientists grew a beating animal heart for the first time.

Dr Taylor’s team have already created beating rat and pig hearts. Although they were too weak to be used in animals, the work was an important step towards tailor-made organs.

In their latest study, reported at the American College of Cardiology’s annual conference in New Orleans, researchers created new organs using human hearts taken from dead bodies.

The scientists stripped the  cells from the dead hearts with a powerful detergent, leaving ‘ghost heart’ scaffolds made from the protein collagen.

The ghost hearts were then injected with millions of stem cells, which had been extracted from patients and supplied with nutrients.

The stem cells ‘recognized’ the collagen heart structure and began to turn into heart muscle cells.

The hearts have yet to start beating – but if they do, they could be strong enough to pump blood.

However, the race to create a working heart faces many obstacles.

One of the biggest is getting enough oxygen to the organ through a complex network of blood vessels. Scientists also need to ensure the heart cells beat in time.

Dr Taylor told the Sunday Times: ‘We are a long way off creating a heart for transplant, but we think we’ve opened a door to building any organ for human transplant.’

via dailymail.co.uk

Medicare reform: You put the load right on me | The Economist

Medicare reform

You put the load right on me

Apr 5th 2011, 13:55 by M.S.

PAUL RYAN'S plan to replace Medicare with a system of vouchers for seniors to buy health care on the private market has only been vaguely described, as of this writing. But there is one thing about it that's fairly clear, regardless of what's in the details Mr Ryan will announce today: Mr Ryan's plan ends the guarantee that all American seniors will have health insurance. The Medicare system we've had in place for the past 45 years promises that once you reach 65, you will be covered by a government-financed health-insurance plan. Mr Ryan's plan promises that once you reach 65, you will receive a voucher for an amount that he thinks ought to be enough for individuals to purchase a private health-insurance plan. (Mr Ryan insists that his plan doesn't entail a "voucher", but there is no meaningful distinction between getting a voucher with which to pay for insurance, and having the government send a payment to the insurer you choose.) If that voucher isn't worth enough for some particular senior to buy insurance, and that particular senior isn't wealthy enough to top off the coverage, or is a bit forgetful and neglects to purchase insurance, there's no guarantee that that person will be insured. It's up to you; you carry the risk.

Mr Ryan thinks this is a good thing, because individuals who are responsible for paying for their own health insurance will be strongly motivated to seek better insurance at a lower price. I think this is a terrible thing, because the mechanism Mr Ryan is using to incentivise people to seek better coverage for the price is to expose them to the risk that they will suffer from disease for which their insurance doesn't cover them. The threat that you will suffer illness with inadequate treatment because you can't afford it and your insurance doesn't cover it is certainly a pretty strong motivator for most people to seek better insurance. But the purpose of insurance is to insulate people from risks like that. Furthermore, individuals do not have negotiating power when they go up against health-insurance companies. You and I don't know what the risks or costs of different illnesses and treatments are, and we don't have the time or expertise to evaluate the legal fine print of insurance agreements with the care and attention devoted to them by the insurance companies who write them.

The idea of making market forces work to bring down health-care and health-insurance costs is plausible. What's not plausible is the idea that average individuals are the best-placed people to be carrying out those negotiations. It's entirely possible to set up markets where powerful, well-informed organisations represent individuals in negotiations with insurers and providers in order to bring prices down, without putting those individuals at risk of losing their coverage or of having to go untreated. That's how the Affordable Care Act envisions saving money on Medicare, without running the risk that the elderly will lose their health-insurance coverage. Mr Ryan's proposal is to save money by capping the amount the government will spend on insurance, and letting individual seniors fight the rest out on their own.

When I say using market forces to bring down health-care expenditures is "plausible", I mean that while it seems like it ought to work, the evidence is telling us that it may not. As Uwe Reinhardt explains, insurance companies don't seem to be capable of holding down provider costs to anywhere near the rate of inflation, even though in theory you'd expect them to do so in order to bolster their profits. Austin Frakt writes that while private Medicare Advantage plans cost more than government-run fee-for-service Medicare, we've never really seen a level-playing-field contest between private and public Medicare, and we simply don't know which would cost more. And the  CBO's analysis of the plan, as Mr Ryan articulated it with Alice Rivlin when both were serving on the president's deficit reduction commission last year, found that "Voucher recipients would probably have to purchase less extensive coverage or pay higher premiums than they would under current law," because "future beneficiaries would probably face higher premiums in the private market for a package of benefits similar to that currently provided by Medicare."

Insurance is all about spreading risk. Guaranteeing health insurance for the elderly takes their risk of high health-care expenditures and spreads it out across the population. Unfortunately, with the risk so diffuse, there's insufficient incentive for anyone to control costs, so government expenditures on Medicare are becoming unacceptably high. Mr Ryan's proposal to privatise and voucherise Medicare attempts to reintroduce the incentive to cut costs by dumping that risk back onto individual seniors. And the greatest risks will fall on the poorest, sickest, or least savvy elderly; they will be the ones most at risk of going uncovered. I agree with Mr Ryan that the government needs to limit taxpayers' exposure to Medicare cost inflation. I think this plan is a fundamentally immoral way to do it.

via economist.com

Fifty genome sequences reveal breast cancer's complexity : Nature News

Fifty genome sequences reveal breast cancer's complexity

Decoding of ten trillion bases yields no simple patterns or silver bullets.

Meredith Wadman

Mammograms of a malignant breast tumor before (L) and after (R) 16 weeks of aromatase inhibitor therapy. The more we learn about breast cancer, the more complicated it becomes.Dr. Kim Wiele, Paul K. Commean and Joan Moulton, Electronic Radiology Laboratory, Washington University

The deeper researchers dive into the genetics of breast cancer, the more complicated their discoveries. And the latest, and deepest, dive is no exception.

Scientists led by Matthew Ellis at Washington University in St. Louis, Missouri, have sequenced the whole genomes of 50 patients' breast cancer tumours alongside matching DNA from the same patients' healthy cells in order to identify genomic alterations present only in the cancerous cells. Their findings, presented today at the Annual Meeting of the American Association for Cancer Research in Orlando, Florida, reveal that these cancers' genetic fingerprints are highly diverse; of the 1,700 gene mutations they found in total, most were unique to individual patients' tumours, and only three occurred in 10% or more. The genomic changes were also of all kinds, from single-nucleotide variations and frame shifts to translocations and deletions.

"The results are complex and somewhat alarming, because the problem does make you sit down and rethink what breast cancer is," says Ellis, leader of the breast cancer programme at the university's Siteman Cancer Center.

Nonetheless, he says, there is reason for optimism — not least because careful analysis of the data, combined with what is already known about the functions of the affected genes, yields a wealth of new therapeutic possibilities.

Big science

The sheer volume of the scientists' enterprise is impressive: they sequenced and analysed more than ten trillion bases, using a supercomputer of a power similar to that of the Large Hadron Collider at CERN, Europe's premier physics laboratory in Geneva, Switzerland. The tumours sequenced, with average 30-fold coverage, were from oestrogen-receptor-positive breast cancers. They came from participants of two clinical trials of oestrogen-lowering drugs known as aromatase inhibitors. Patients with breast cancer who are not responsive to these drugs have significantly worse outcomes, although the molecular basis for this is poorly understood. The scientists hoped that, by comparing the genome sequences of oestrogen-sensitive tumours (26 of the 50) to oestrogen-resistant cancers (24), they might find clues to the pathological basis for the difference.

They did find at least one association — for the breast-cancer-suppressor gene MAP3K1, the protein product of which accelerates programmed cell death. Mutations that disable this gene allow cells that should die to remain living. MAP3K1 mutations were present in about 10% of the tumours, and seemed to be associated with the aromatase inhibitor-sensitive, more favorable, type of disease, particularly when the same cancer carried another, previously described mutation in a gene called PIK3CA.

This was one of two mutations already associated with breast cancer that occurred frequently in the 50 tumours: PIK3CA was found in 43% of samples and the tumour suppressor TP53 turned up in about 15%. All told, about half the cancers carried a combination of these three mutations — leaving half with cancers arising from varying constellations of much rarer mutations.

Ellis says that the complexity of their results indicates that when it comes to developing therapeutics "very clearly the only way forward is the genome-first approach. No single blockbuster drug will answer the problem of endocrine-therapy resistance".

He adds that, because breast cancer is so common, even treatments targeting pathological mechanisms triggered by relatively rare mutations could benefit many thousands of women

"The fact they have sequenced cancers in the context of a clinical trial, that's what's really significant here," says Samuel Aparicio, a breast cancer researcher at the University of British Columbia and the BC Cancer Agency in Vancouver, Canada. This is because clinical trial data allow scientists to relate genomic findings to detailed data on, for instance, patient survival. "One knows exactly what happened to those patients," says Aparicio.

Ellis, for his part, says that he has already begun his next step: to repeat the experiment on at least 1,000 more tumours. "It's complicated and we're going to have to do many many more cases to understand how this all works," he says. "But certainly we have the methodology to begin to sort it out." 

via nature.com

Untitled

Students Are the Gold Mine, Banks Are the Miners. How and Why US Banks Take Advantage of Students, Why Nobody Knows About It, and What Might Be Done to Stop It

Inform Yourself and Others, Organize Yourself and Others, Fight for Our Rights!

By Jon Smith

I have previously written about the injustices inherent to student loans in the United States, but I would like to supplement my criticisms with an example that shows just how devastating unforgivable student loan debt is. For background, consumer protections for people with student loans were removed in the 1970s and still have yet to be restored. This means student loans are the only loan that can never be forgiven through bankruptcy.

Today, I overheard a conversation between a roommate of mine, Tom, and my landlady, Tonei. He was saying that, because he was unable to pay his student loan debts, he now had 15% of his paycheck garnished by the banks he owed money to. The worst part is, this 15% of his paycheck (he works 48+ hours a week at barely above minimum wage) doesn't even cover the interest that is accumulating; so, currently, it appears that Tom will be paying off his student loan until he dies.

The tone of desperation, disgust, and resignation permeated his voice as he explained to my landlady, "that I can't do anything about it" and "I am going to be paying until I'm 92." (for the sake of honesty and accuracy, these quotes are probably a little off, but they cover the basic concepts of what he was saying. Also, a hint of anger and despair were present in his voice, but they were muted; by now, he has lived with spiraling student loan debt for a decade and has resigned himself to being under the heel of banks for the rest of his life.

Sure, Tom made a mistake in taking out so much in student loans. I don't want to excuse him for that. But he is paying for one mistake that he made while young with an entire lifetime of work.

We need to begin to educate ourselves about student loans. I urge you to talk about this to your friends and family to raise awareness that student loans are the only loan that you cannot have forgiven through bankruptcy. I didn't know this when I took out student loans; my dad didn't know this. Schools don't tell you this because they don't want to scare away prospective students; banks don't tell you this because student loans are immensely profitable. There is no reason for any institutions involved in this to mention it, and that is why it is so important that it gets around through word of mouth and the Internet. Otherwise, we cannot fight this injustice.

Here is why banks make so much on these types of loans:

If the student pays off their loan, then the bank makes the amount of the loan back plus the interest that has accumulated. If the student doesn't pay off the loan and defaults, then the banks can extract more money than if you paid it off. This is because the interest keeps accumulating, so they get the original amount plus more and more interest. Through collection agencies, they can garnish wages, tax refunds, and so on. Here is a list of all the banks can do. The debt is never forgiven.

If you make no money and have no property, the banks cannot get anything; however, the interest constantly accumulates so that if you ever do get an influx of money it will then begin to get garnished by the banks. Coupled with the increase in people being jailed for their debts and it is not a pretty picture facing students graduating with record amounts of debt in a weak economy.

There are still a few ways out of student loan debt in the US. However, as I've emphasized, none of these are through the usual way of simply declaring bankruptcy, taking the associated hit to your credit score.

There are some ways for a sizable minority of recent graduates who enter into certain programs. Very few entirely forgive the debt and it would arguably be better just to get a well-paying job in the private sector (if you can net a good job, that is), but there are several ways mentioned here.

One is through a provable amount of "undue hardship", such as major long lasting illness, disfigurement, or overwhelming mental problems. However, this usually requires a bankruptcy lawyer to argue the case in court, who costs money. Thus, people eligible for this are caught in a Catch-22: severely distressed and too poor to hire a lawyer to argue that they are severely distressed and without money and a way of making money. Despite the hurdles, a few people are able to have their debt forgiven because of "severe personal distress."

However, the vast majority of students only have one other way out: through death, and that is a miserable, stressful way to go through life. And escape from debt through death increasingly becomes the norm as the price of college, fuel, and food increases while the average salary (not to mention job availability) decreases or stagnates. Defaults are on the rise according to the Wall Street Journal and the US Department of Education.

But there is a glimmer of hope. Through sites like StudentLoanJustice, we can begin to organize to restore consumer protections to anyone with student loans. A fascinating article has been written by the Harvard Law Review that reveals the problems and what might be done to solve them. I sincerely urge you personally to spread the word because there is no other way that people are going to hear about this mounting injustice.

More resources

• http://studentloanjustice.org/
• http://hlpronline.com/2010/05/lamort_deb/
• http://online.wsj.com/article/SB124027600001437467.html

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