A Better Business

A new form of business incorporation offers a ray of hope amid the moral darkness.

The limited liability corporation has become an institution of enormous importance. One aspect to appreciate about it is its steadfastly secular nature, organized to make money and little else. Corporations have occupied and expanded the secular space of Western culture, and many imagine that it may do the same in other corners of the world currently under the sway of religous or state ideologies.

A second positive aspect of the corporation is its standing refutation of Chicago-style economic theory. If everyone had perfect knowledge of economic circumstances, and acted in perfect self-interest, then why would we need the apparatus of the corporation? Instead we might have a perfectly free-lance world were workers and capitalists enter into voluntary contracts for each desired task, priced by a perfect market and renegotiated continuously, while each party serves its self-interest perfectly by serving the interest of the other with perfect fidelity. Not realistic? No indeed, thus corporations arose to organize labor on an explicitly non-market basis (i.e. by direct management) so that actual and complex productive activity could take place without the inefficiencies of the market.

Lastly, the corporation has been an important promoter of personal freedom, especially the freedom of capitalists (we'll call them entrepreneurs!) to generate new enterprises, new goods, and forms of productive activity outside state control. The freedom of employees has been less enthusiastically advanced, but depending on the state of the labor market and the diversity of the corporate landscape, workers may have freedom at least to choose among employers, and can exercise some power and gain a significant share of the benefits of this organizational form. At any rate, better that some be free than none.

On the other hand, with the rising importance of the corporation as the scope of productive activity that needs to be shielded from markets grows in complexity, and as individual corporations have grown, numerous flaws have become apparent. One is that corporations have no morals. Their only admissible ultimate goal is to make money, and (formally at least) to obey the law. While it is helpful in many ways to have such philosophical clarity, it also sentences the majority of the population to spend the majority of their waking hours in the bulk of their most productive years in what are often soul-crushing conditions, dedicated to bilking their fellow-citizens of a few dollars by whatever means human imagination can devise, in a never-ending rite propitating Mammon.

A second flaw is that corporations are not properly separated from the state, but rather control enormous pots of money that have been allowed to seep into the political system, buying the ear of the electorate, buying the personal loyalty of leaders, and buying legislation directly. While pure democracy has its problems, and all associations of citizens deserve a hearing in the public square, the combination of amorality and vast wealth with political influence has created a toxic imbalance in the political system, where vast swaths of the citizenry are effectively disenfranchised, both of their intellectual / media atmosphere, and of their vote.

And corporate money doesn't even represent the corporation as a whole- most certainly not its workers- but typically the cozy self-serving ideologies of its management, who have captured, as they have so many other fruits of corporate existence, the political power inherent in the corporation's concentration of wealth.

In some respects, it was ever thus, from our founding by the most wealthy planters, slaveholders, and financiers of the English colonies. Nevertheless, as we have advanced from our founding state in such other matters as slavery, and as the corporation has gained truly prodigious roles in our culture and government, not to mention ever-increasing legal rights of personhood, it is time to give the corporate charter a rethink.

Thus I am happy that my state representative, Jared Huffman, has offered legislation for California to authorise a form of incorporation that restores some small amount of moral sanity to the concept- the benefit corporation. This corporate form has been set up in several other states- California is not plowing new ground- and exists in the continuum from non-profit corporations and public benefit corporations, (like port authorities and other municipal bodies), to mutual benefit corporations (membership organizations, like country clubs, that may be profitable) to the full-out for-profit corporation.

The distinction from the latter is that a benefit corporation can't necessarily be sued for not maximizing profits. It can adopt binding obligations to other goals, such as fair treatment of employees, the environment, or its customers, in addition to making profits and paying taxes. Thus a company like, say, Google, would not have to rely on a putative corporate culture of "don't be evil" to withstand the pressures of the marketplace and the ire of its shareholders, but could write social obligations of various kinds into its charter of incorporation that are equally binding as the profit motive.

Granted, this is a small step. But it recognizes that corporations are the gorrillas of our culture. If they must be legal people, then at least they should be allowed the possibility of being moral people. As we have recognized that Darwinian evolution is not solely the province of rapine and slaughter, but also of social morals and altruism, so we may eventually evolve the corporation into a responsible social entity, by demanding through the competitive market as well as other avenues that it encode moral tendencies a little more deeply.

• Working life today.
• A little more on Hayek and Friedman- not so freedom-loving after all.
• Germany's convenient devaluation.
• Failure of the free market- the mortgage industry is still evil.
• Another failure of the free market- generic drug shortages.
• Apple- the good side of business competition.
• Spiritual warfare, going mainstream. Darwin would be so proud.
• A 12-step program for atheists.
• Pakistanis appear uncomfortable with an "atmosphere of distrust". Who knew?
• Bank capital needs to be liquid, and better regulated.
• Martin Wolf on economic escape velocity ... not.
• Economics quote of the week, by Bill Mitchell.

"And when a major recession comes along Barro and Co explain this by millions of workers making the same calculation together – that leisure is preferred and so they quit. All at the same time."

• And.. Maynard Keynes, 1936, from Skidelski's "Return of the Master":

"If nations can learn to provide themselves with full employment by their domestic policy ... there would no longer be a pressing motive why one coungtry needs to force its wares on another or repulse the offerings of its neighbor ... with the express object of upsetting the equilibrium of payments so as to develop a balance of trade in its own favour. International trade would cease to be what it is, namely a desperate expedient to maintain employment at home by forcing sales on foreign markets and restricting purchases which, if successful, will merely shift the problem of unemployment to the neighbor which is worsted in the struggle, but a willing and unimpeded exchange of goods and services in conditions of mutual advantage."

Breaking DNA to save itself

The structure of an enzyme that disentangles DNA- by passing strands through each other.

A single break in a cell's DNA is, typically, lethal. The cell will wait and wait for repair to happen, but if it doesn't, boom- it commits suicide. This is one of the quality controls that cancerous cells lose, in order to carry on despite the broken chromosomes they typically contain, among many other mutations. It is one of many homeostatic and quality control mechanisms that manage our cells. Another enforces that all DNA is completely replicated before cell division begins, and a different one enforces that all the condensed chromosomes are congregated neatly at the middle of the cell in mitosis, before separation and division can proceeed.

Yet we have enormous amounts- eight feet- of DNA in each cell, wrapped up in knarly bundles that can't possibly be maintained tangle-free, even with nice rollers to curl on (histones) and scaffolds to fold into (chromosomes, when condensed). On top of that, DNA is helical and additionally twisted, requiring unwinding to be read by RNA polymerases, and much more extensive unwinding to be replicated. What we find inside our cell nuclei is a mess. So naturally, we have several enzymes dedicated to untangling DNA- winding and unwinding it, and in extremis, when a knot can't be unwound, an enzyme that passes strands through each other, cutting the gordian knot.

These are topological problems, so the enzymes are called topoisomerases, catalyzing transitions between topological states. The current paper describes an atomic structure of topoisomerase II, which cuts DNA, allows another strand to pass through the cut, and then reseals the original strand. Quite a dangerous proposition! The experimenters used an anti-cancer drug (etoposide) to lock the enzyme in an interesting halfway state of cut DNA, helping them grow the crystals of protein that provided the structure.

Remember that the diffraction pattern of X-rays passed through a crystal allows mathematical reconstruction of the arrangement of the crystal's atoms, given enough order in that crystal, and enough intensity from the X-rays, typically provided by synchrotrons these days.

X-ray diffraction pattern of an arbitrary crystal. The center is where the main X-ray beam goes through, and the surrounding dots are reflections from the atomic crystal planes. With a lot of math, one can reconstruct the crystal's atomic structure.

In cancer cells, the DNA is particularly messed-up, cell devision is rapid, and the quality control mechanisms that tell the cell to halt and wait for repairs when the DNA is broken are gone. So this drug encourages more and more DNA breaks, to the point that active cancer cells get fatally damaged, even without the specific suicide system that is sensitive to single DNA breaks in normal cells. The cancer cells are given the rope to hang themselves.

But I am more interested in the magic of the topoisomerase II enzyme. (Topoisomerase I enzymes just nick one strand of the DNA, altering its helical winding- a much less complex proposition). It is interesting to consider how mere enzymes could effectively untangle DNA as they do. They don't have fingers or eyes, and they don't have any wider perspective on what is going on in the cell or in the DNA knots that evolution has fashioned them to resolve. They just cut DNA and reseal it, but in a clever way that leads, quite efficiently, to de-knotting of the cell's DNA.

The cycle of action is shown below, in cartoon form.

The enzyme grabs one segment of DNA (the G-segment), and bends it. This bend plays a critical role in funneling local knotted DNA segments (the T-segment in this case) which topologically "want" to pass through the G-strand towards the "mouth" of the enzyme, here shown in beige. When such a T-segment arrives, the enzyme, using ATP, cleaves the G-segment, opens its DNA gate (red, and see below), and allows the T-strand to pass through to the C-gate, the hollow area below the active site (green). Lastly, the G-strand is resealed, the T-segment is released, and everything is reset as it was at the start, minus one tangle. Incidentally, bent, stressed DNA induces increased activity by this enzyme.

Why does the C-gate exist? One might think that once the T-strand is through, then no problems- no need to keep it around rather then let it go on its way. I think the reason is for informational control- so that the enzyme knows to reseal the G-strand, rather than to cut it again. I assume there is a shape-dependent control by the occupied C-gate to enforce the direction of the overall cycle of the cutting/sealing active site.

The structure of the enzyme (just the core part, including only the colored areas of the protein cartoon in "A") is shown below. The C-gate is hard to miss. This large void is clearly able to hold the passed T-strand of DNA while the enzyme ligates the G-strand back to its pristine condition. Looking carefully, one can also see the strong bend of the G-segment DNA (backbone in blue), with both ends pointing sharply upwards.

One can imagine that the rest of the enzyme that was not solved or shown here (gray in part A) might help to form more of the funnel that brings the T-segment into proper position at the top. It might also help the enzyme hold tighly onto those DNA ends that, were they to get lost, would be virtually impossible to find again in the vast molecular soup of the cell and likely cause complete cellular arrest and death.

The cancer drug and topoisomerase II inhibitor, etoposide (in yellow) blocking the DNA strands within the topoisomerase II complex from being fully religated.

The paper devotes most of its time to the structure of the etoposide drug complex- how it locks the enzyme in an intermediate conformation and how these interactions might guide the design of better drugs. Given that this whole mode of therapy is rather crude, (hardly better than bombarding cells with radiation), it is hard to imagine how any "improvements" to the inhibitor would be helpful. Nevertheless, I find these structures immensely interesting- informative about how our bodies work at the molecular level, enlightening about obvious questions that arise with the advent of ever-longer DNA genomes, and indeed even artistic.

Here it is in 3D!

• Yes, the crazies are really crazy.
• Secular humanism, in the sentimental clutches of Paul Kurtz.
• Is BofA the next Lehman, going over the event horizon? Parts I, II, III
• Bernanke's speech, dedicated to do-nothing-ism.
• Shalizi on macroeconomic models, with link to a critique.
• Diplomatically speaking, talking is OK.
• Economic quotes of the week, from Bill Mitchell

"Our real world laboratory is providing priceless data upon which we can assess basic propositions that mainstream macroeconomics provides and which Modern Monetary Theory (MMT) contests. A nation cannot have a fiscal contraction expansion when all other spending is flat or going backwards. Britain is up against an impossible equation."

• And, on the "believers in laissez-faire". A Kuhnian expired paradigm is on its last legs, waiting for its proponents to die off.

"One thing that is clear – the majority of these economists never have to carry the costs of their denial and retire on nice pensions. The same cannot be said for the victims of their arrogance and denial."

The worse, the better

The unemployment rate is not just a bummer, it is a sensitive gauge of social power.

The unemployment rate is disastrously high, and our government studiously dithers about doing nothing. The Republicans have cleverly diverted attention from the real problem onto the entirely chimerical problem of the federal "debt" at a time when people are saving like mad and only too happy to hold government bonds. The Democrats seem to have caved utterly to the forces of corporatism and finance, which got their bailouts and are now busily making war on labor. We (and other developed nations) are making precisely the same errors that we made during the Great Depression and in Japan's long-running recession, leaving the economy stalled so that the rich can widen their relative advantage.

It is as though Keynes and others who learned from economic history never existed. It is almost as though democracy doesn't exist either. Most of the problem is intellectual. This morning, a leading economist and conservative ideolog (John Taylor) lied through his teeth on NPR about how the Obama stimulus didn't work "at all", how corporations are not investing due to their fears of higher taxes, and other talking points of the Right. That such people are allowed to continue speaking as "experts" is unconscionable, however credentialed they are.

In this way, the intellectual waters are muddied, just as the tobacco industry, the fossil fuel industry, and the anti-evolution industries have muddied waters in their respective fields, freezing constructive public debate and action. What do conservative economists serve? The interests of wealth. At this moment, their lies serve variously to shield the powers of finance and corporate America from a reckoning for creating this enormous economic crisis in the first place, to forestall any constructive regulatory and fiscal solution to that crisis, (other than bailing out the banks, and the first dose of stimulus), and to entrench the power of wealth by floating the most self-serving "solutions" like lowering taxes and pulling saftey net programs from the poor, as well as, in effect, extending high unemployment for as long as possible.

For unemployment is a key indicator of our era. It is a barometer of the balance of power of capital vs labor. Low unemployment means that labor is hard to find and needs to be paid and treated well. High unemployment means the opposite- that employers can demand extraordinarily precise skill sets, provide no training, little security or benefits, all for low pay. Low unemployment is the most powerful promoter of worker's rights and middle class well-being, more than unions or legislative action.

Beware of economists who soft-pedel high unemployment as "natural" or "structural", as though the country were full of "lucky duckies" who prefer poverty to work, or losers who can't keep up with the jet setting workers of China. Whenever macro-economic times are good, people show that they can and want to work by working at high rates. Desire and training are not the issues.

It is more than ironic that the disaster caused by the financial sector as it oversold credit to the unworthy and leveraged itself to the stratosphere would result in yet greater power for those very financial and corporate malefactors. But there we are, and our only recourse is through the political system, which has  also duly been taken over by money, speaking with the forked tongue of right wing economics.

The Federal Reserve has the official mandate of maintaining low unemployment as well as low inflation- somewhat conflicting goals. But who runs the Fed? Bankers run the Fed, and bankers have had little regard for the employment mandate. Now they have none. The Fed poured money into the banks to restore their solvency, and took on vast quantities of their questionable debt. But for employment? They have hardly lifted a finger, lowering interest rates in case any bank might deign to lend to a worthy cause. There has been no mention of truly active policies like targeting higher inflation rates and negative real interest, forcing banks to lend or lose their charters, or forcing banks to eat some of their bad mortgage loans, as well as processing them more efficiently, to get consumers back on their feet.

We have little to hope from any of these quarters. The sad part is that high unemployment and a widening gap between rich and poor doesn't even serve the rich very well. The economy as a whole will become less productive, skills will be lost, infrastructure will continue to deteriorate, public goods will be shortchanged, political and social relations will fray, we will fall behind China, the dollar will slowly lose its reserve currency status, and even the rich will find that their heretofore advanced base of operations in the US is not nearly as attractive as it once was. It is a scandal and a shame.

Incidentally, today's title comes from the Russian revolution, whose instigators recognized that the worse conditions became within Russia, the more fertile they were for revolution. The analogy to our epoch may be double-edged.

• Cary Tennis ruminates on work.
• Defenders of marriage should look to jobs and income.

"...people are more likely to get married if they have the things that make a union strong: mutual respect, problem-solving skills and — especially — economic security."

• If we need jobs, we should make them.
• MMT economics gains a little ground.
• Mystical experiences in the azure hyperfield.
• Regulator saves the country $1 trillion.
• Does the euro need to split in two?
• Where do profits come from? Investment, government deficits, and consumer debt- an unstable combination.
• Economics quote of the week, from Nouriel Roubini:

"So Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proven wrong). Firms are cutting jobs because there is not enough final demand. But cutting jobs reduces labor income, increases inequality and reduces final demand."

• Graph of the week: Fed data on bank reserves. QE1,2 has been funnelled into banks, which sit on the money, doing no good to anyone, other than themselves by collecting interest courtesy of the Fed. The velocity of this money is zero. The Fed pays 0.25% on reserves, which adds up to real money on $2 trillion outstanding. This is quite apart from whatever Treasury bonds banks can buy paying 3%. Banks are well cared-for. Workers and homeowners.. not so much.

 

Sex and the Red Queen

You knew sex was good. Now it is shown to fight disease and extinction too.

As studies of evolution progress, we often find papers dotting i's and crossing t's more often than opening new vistas of theory. This is one of those papers, showing with elegant experiments that reproduction via sex has significant advantages for a population of animals faced with pathogens that evolve quickly- as most of them do, and as most populations are.

In alchemy, the queen is typically white, and marries the red king to bring about the union of opposite natures, resulting in the birth of a unified hermaphrodite, the diamond body, the rubido, the golden flower, or the philosopher's stone. In psychological terms, enlightenment is achieved through such unifications when one has found the Jungian Self, or turned into the Nietzschean Übermensch. Given all this, I have no idea why Lewis Carroll chose the Red Queen as his character who runs and runs, but never gets anywhere- he was apparently more familiar with card play than with mystical esoterica.

At any rate, Carroll's Red Queen symbolizes an important feature of evolution, which is that a great deal may be going on genetically and physiologically over evolutionary time, with little changing on the surface (i.e, in  the fossils or other visible features). Even in the absence of selection and adaptation, evolution continues apace through neutral change, as mutations and other alterations accumulate, leading to the many forensic tools we have today to identify people and trace their lineages.

The most pressing source of non-neutral change, i.e. selection, is typically from microbial pathogens, which we may not think about very much in the developed world, but which pervade the evolutionary setting. Such pathogens evolve quickly, as we have learned from spectacular feats of antibiotic resistance. So, while we as animals possess a sophisticated multi-layer defense with an adaptive immune system, it isn't enough. Plagues of many kinds, and more chronic infections have wrought havok, keeping lifespans low, infant mortality high, and life generally perilous. Our salvation is genetic diversity, accumulated through mutation, kept in ready reserve in our diploid genomes where recessive genes are frequently not expressed, and shuffled continually by sexual reproduction.

For example, some people are resistant to AIDS. They may be infected by HIV, but do not become ill. They have a mutation that, when present in two copies, denies HIV access to the receptor it binds on the cell surface, and that is that.. complete protection. Were the AIDS epidemic to run to completion, those people might be the only ones left.

After several epidemics of this kind, (which cause genetic "sweeps" in the human population), a lot of evolution has happened, raising the proportion of previously rare gene alleles, but for little obvious gain- just to escape the next pathogen, and the next, and the next, in a never-ending arms race with those evil micro-terrorists who would do us ill. That is basically the Red Queen hypothesis.

The role of sex in this scenario is manifold. First, it keeps shuffling the genes around in the population, so that those animals that survive a genetic sweep should still harbor a fair proportion of the population's genetic variation at other loci, (genes), in preparation for the next pathogenic assault or other adaptive crisis.

Second, the shuffling uses the diploid nature of our genomes to "hide" recessive alleles of genes, so that even if such alleles have slightly deleterious effects most of the time, they persist in the population and can come to the rescue when they represent a key solution to an adaptive challenge.

Third, sex recombines genes that may in combination represent adaptive solutions that they do not in isolation. Fourth, the shuffling process deals out especially "bad hands" to a few organisms, which concentrates the bad genetic material and presumably kills it off by selection, counteracting the ever-rising level of mutations in the population at large, the large majority of which are deleterious- a process that goes by the name of Muller's Ratchet.

Very well- the theory behind all this is solid enough, biologists have deduced instances many times, and have tested it explicitly where it is easy to do- among microbes. But the current paper demonstrates the benefit of sex in particularly clear-cut fashon, using the nematode worm C. elegans. This tiny worm has a sexual choice- hermaphroditism and self-fertization, or maleness and obligatory sex, which can be enforced in the lab with appropriate genetic mutations when desired. In the wild, C. elegans are mostly hermaphroditic, with about 20% choosing the single-sex (male) lifestyle which carries the risk of not finding a partner and not reproducing at all. The choice is stochastic, but also a matter of genetics, so worm populations can evolve different rates of hermaphroditism when the trait matters.

The experimenters subjected worms to persistent infection with a bacterial species they typically contend with at much lower levels in the wild. In various experiments, the bacteria were either held constant or allowed to evolve along with the worms, in which case they evolved against each other through thirty worm generations. To maximize bacterial evolution, the bacteria for the next generation were taken from the dead carcasses of worms they had killed in the current generation. To help the worms along, they were mutagenized lightly before beginning, so their populations would have increased genetic variation.

One question was- if worms are genetically prevented from cross-fertilizing, can they keep up with an evolving pathogen? The answer turned out to be... no they can't. Such strains went extinct within about ten generations.

The metric for this work was bacterially-induced mortality rate of worms at the end of the experiment, at either generation ten (to accommodate those worm strains that went extinct shortly thereafter), or at generation thirty. The orginal mortality rate was 20% to 40% for all strains. For the obligately selfing (hermaphroditic) worms, this rose slightly against the non-evolving bacteria (to 40%), and rose dramatically- to 80%- against bacteria allowed to co-evolve, after which these worm strains went extinct.

On the other hand, wild-type worm strains ended up just where they began, no matter what the bacterial regimen- at about 30% mortality. And the obligately outcrossing worms succeeded by generation thirty in lowering their mortality from infection to about 15%, even in the face of co-evolving bacteria. The message is that sex strongly facilitates the rapid evolution that is required to outrun pathogens which have short generation times and rapid rates of evolution themselves.

An interesting extra analysis showed that among the wild-type strains put through this process, their rate of outcrossing increased markedly in response to bacterial infection, ending up at 90% in the face of co-evolving bacteria (see graph). This indicates that not only is sex helpful in staving off infection, but is itself a target of selection in organisms that have a choice in the matter, and is thus a sensitive gauge of sex's benefits.

Rate of outcrossing (sex) among wild-type C. elegans subjected to co-evolution with pathogenic bacteria (solid line), or to non-evolving bacteria (dashed line), or to no bacteria at all (dotted line).

• London reaps its due from austerity.
• Where are the real grass roots?
• The rich are different, not in a good way.
• Thank god- blasphemy is still OK.
• Lies, magic, and art..
• Bernanke finally comes clean.
• Economic quote of the week, from a policy paper by James Crotty- the great austerity war.

"This increasing political pressure to destroy the foundations of the New Deal is bizarrely paradoxical. The right-wing coalition is on the verge of succeeding in its eighty-year quest to defeat the New Deal, not in spite of, but because it produced three-decades of economic failure and exploding deficits. It is the huge rise in government debt generated by the right-wing model that created the recent financial and political crisis that in turn spawned a wide-spread demand for austerity."

Oolon Colluphid's God

An homage to Don Cupitt- a theologian I can deal with.

What is it about god? It drives some people nuts, and drives others to absurd feats of theological gymnastics. Dead for a hundred years, but your garden-variety theologian seemingly hasn't gotten the message. Don Cupitt offers an answer:

"... theology is the one subject whose practitioners are in constant danger of finding themselves becoming demythologized right out of their subject, and then being told by everyone that they have a duty to resign. The corollary is that you can be a theologian in good standing only for so long as you are not very good because you don't yet see your subject clearly and in an up-to-date way. You may plan to survive the difficulty by adopting the time-honoured strategies of being evasive, or sticking to history, and so avoiding ever actually having to come clean about your own personal views. But you cannot help but feel a little uncomfortable about the paradox: an academic must seek full, transparent understanding, but when you fully understand religion you are no longer a 'believer'."

Former Dean of Emanual College, Cambridge, radical theologian Don Cupitt takes modern science and philosophy seriously, and thus doesn't believe god is "real". And that is perfectly OK with him. In any case, the matter needs to be faced squarely. Due to his various heresies, he has both been sidelined in the Anglican church, and humorously mocked by Douglas Adams, who modeled the theologian Oolon Colluphid in his Hitchhiker's Guide to the Galaxy on Cupitt. Colluphid's putative titles include "Where God Went Wrong", "Some More of God's Greatest Mistakes", "Who Is This God Person Anyway?", and "Well That About Wraps It Up for God".

The title I am going to cover is "The Great Questions of Life", 2005, a book that puts Cupitt's various philosophical points across fairly briefly. Of the great questions, some are badly posed (What are we here for?), some not theological at all (Are we alone?), some infected with bad philosophy (What is real?), while some get a plain answer (Is there a God? No). The rub is that Cupitt still has great attachment to the Anglican traditions, and to some of the overall Christian culture, especially the revolutionary liberal teachings of Jesus himself.

The problem is simply to take in the higher level of knowledge we now have, and the separation of reality and fantasy that characterizes the modern state of philosophical understanding, including the sciences, arts, and humanities, and apply it to theology. Unfortunately, that means throwing a great deal out, and Cupitt has bitten the bullet and done so. The book is heavily philosophical, more so than Christian per se, which makes it interesting far beyond the Christian (or post-Christian) community. For instance, right off the bat, he has a passage on Hegel that did more to clarify Hegel's philosophy for me than reams of wiki pages:

"In Hegel's day people were coming to see the end of L'Ancien Régime as marking the end of the old hierarchical conception of reality, and its replacement by a new story that sees everything as developing historically within an entirely immanent process. In Hegel's interpretation of modernity, with the end of classical metaphysics the entire supernatural world of religion has come down from heaven and been dispersed into the unfolding common life of humanity. Ecclesiastical Christianity as we have known it hitherto reaches fulfilment and comes to an end. Instead of being routed through the heavenly world above, religion becomes immediate and beliefless, and the love of God is transposed into a new and ardent love of and commitment to life."

The main theme of this book is the "outsidelessness" of our situation. The universe is outsideless, there being no way we can ever peer beyond the shroud where our telescopes and cosmological theories reach, with spacetime being essentially closed (with a hat-tip to the multiverses, which are dubious). Supernaturalism is a matter, not of cosmology, but of psychology. His other example is language, which in any dictionary is defined solely in term of other language symbols- it is a self-contained, self-referential system. Similarly, our human, earthly world is outsideless as well, with no one handing down the rules and meaning. We are all we've got, and we had better take care of this, our precious world.

"As we have seen in looking at the great questions of life, even to this day, most people seem to assume that the purpose of life, the real meaning of life, the point of it all, the goal of life, what life is all about must be something great that hidden outside life. I thought the same myself, at first. Only very gradually, through the influence of figures like Hume and Darwin, did I gradually some to admit the superior beauty and clarity of naturalistic or immanent types of explanation in all fields."

"The general rule is that everything is contingent: everything is the product of time and chance. The cases of living organisms, of language, and of culture generally all pursuade us that complex, ordered, rule-governed, and self-maintaining or self-replicating systems can be formed and can develop just by the interplay of contingent forces within the world, over long periods of time. ... a broad, spreading network of purely contingent truths can be immensely strong without having to be based upon any sort of external support or founding certainties."

Cupitt makes the rather ironic point that conventional belief is in essence just as unrealist as his own more explicit formulation:

"Today, because of the decay of metaphysics, the ordinary believer's God is an imaginary Father- a finite being, in time- to whom one listens and with whom one talks. At the same time the ordinary believer invokes the God of non-realism, as when he or she says: 'My God is not a God of Judgement. My God is a God of Mercy, forgiveness, and love. Not a God of the respectable only, but also a God who takes the side of the outcast, etc.' In such talk (of which we hear a great deal) God functions as a personification of our most cherished values. So the God of the ordinary believer and the ordinary chuch leader clearly does not 'literally' exist. ... the believer is openly admitting that 'I posit a god whose job is to reflect my own cherished values, and in whom I can therefore believe.' Today's religion is therefore non-realist and will be quite happy to remain so- but with one qualification: it oddly insists upon its own realistic character, even though it is totally unable to spell out exactly what God's 'objective reality' is."

Ouch! No wonder Cupitt had to strike out on his own, founding the "Sea of faith" movement. And no wonder he tickled Douglas Adams.

Getting past the dissing of traditional religion, Cupitt's positive program consists of a very democratic and idiosyncratic approach to spirituality. Indeed, he is very sympathetic to those who term themselves "spiritual", without bothering with traditional dogma and theology. Glastonbury and all that. The purpose of religion becomes the generation of hope and health insofar as it battles the existential problem. He offers a creed:

"1. True religion is your own voice, if you can but find it.
2. True religion is in every sense to own one's own life.
3. True religion is the pure solar affirmation of life, 'in full acknowledgement of its utter gratuitousness, its contingency, its transience, and even its nothingness.'
4. True religion is productive, value-realizing action in the public world.
5. Faith is not a matter of holding onto anything. Faith is simply a letting go. It floats free."

I particularly liked his discussion of point 2, where he urges being and showing the values you have inside:

"You are your own life. Your personal identity is not a secret thing hidden inside you: it is your lived life and the roles you play. Thus your commitment to life and to the task of becoming yourself has to be read as the task of fully appropriating one's own life and assuming full responsibility for it. Here I reject the traditional idea that there is great virtue in obedience to religious law and to the direction of religious superiors. Instead I join all those young people who would rather die than put up with an arranged marriage or any career or life-path chosen for them by someone else. In traditional Christianity the  demand for radical personal religious freedom has always been condemned as deeply sinful, but I think we must now insist upon it. One must choose one's own life, both making it one's own and seeking fully to express oneself in it. One must come out in one's own life."

While this can be taken as vintage 70's self-actualization and self-fulfillment, even self-centeredness, (or, more probably, a redux of Nietzsche), it is also quite akin to the Buddhist program of fixing the world from the inside out, instead of finding and conquering outside demons. And yet, it communicates a love and gratitude for life, instead of a focus on asceticism and sufferance.

• People take their own paths to reject reality.
• Joseph Heller and the death of god.
• And in Afghanistan, is it tradition, or is it religion? Whatever its name, it is patriarchy.
• A southern tea party, a southern agenda.
• We are still on FIRE.
• Terror attack in the US- ho-hum.
• Europe has set itself on course to repeat depression dynamics.
• Economics quote of the week, today from a wealth fund manager, speaking of how differentiated wealth and power are, even within the top 1% of the wealthy.

"Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%, just like the bottom 99%. In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it."

• And a graph, on where gross income shares are headed, drawn from regular Fed reports:

What do I know?

A review of "On being Certain", by Robert Burton.

Do you know someone who is always right? Who knows all the answers and would be mortified to admit that he (it is usually a "he") doesn't know something, has no opinion on some topic, large or small, or, heaven forfend, was wrong? I guess that would be me, in all honesty.

Complementary syndromes, Burton suggests, might be OCD, depression, and anxiety, afflicting those who lack a sense of certainty about some issues- whether one is clean enough, has done the right thing, or said the right words. Or of having lost the essential sense of purpose and meaning of which one was previously confident.

The sense of certainty is highly valuable to us, allowing decisive and efficient use of scarce time and partial information. But is it right? Obviously, it is not always right, and can't be relied on ... that is the problem.

"It is no great accomplishment to hear a voice in your head. The accomplishment is to make sure that it is telling you the truth." - a patient, quoted by Burton

Burton is a former head of neurology at UCSF, a novelist in his spare time, and has written a charming, temperate, and succinct indictment of our sense of certainty. His first job is to elevate this mental sense to an explicit and respected status, since it is a bit nebulous. We have our five traditional senses. And recently, we have become aware of a few other senses, like the body position sense and the empathic social mirror sense. These unconscious mechanisms of our minds help make us feel "normal" and situated, becoming apparent only in rare cases when they go awry.

Likewise, the sense of certainty is central to our mental workings, yet a little difficult to appreciate. How do ideas "pop" out of unconciousness? Why do they pop out? Clearly while we are day-dreaming, or night-dreaming, some parts of our minds are hard at work, testing out problems, models, and ideas. Just as clearly, the unconscious has some mechanism to evaluate the results- how closely their solution matches a target problem, perhaps posed explicitly by our conscious mind, ("What is the nature of benzene's double bonds?"), or perhaps posed implicitly by circumstance ("How do I get out of this burning building?"). Either way, we don't typically hear about all the false leads and underlying processes, but receive "the answer" as an idea that "strikes" us as correct, perhaps leading to immediate action.

This sense is, naturally, tied into the pleasure centers of the brain as well, so if we come up with a great idea, we feel great about it. It can be a very powerful buzz. This leads to the possibility of addiction, as mentioned at the top, which is to say that people may become so attached to the pleasure of being right that they keep blogging, week after pointless week, prating about how right they are to hold some idea or other.

There are also times when the sense of certainty arises untethered and unbidden, such as during mystical experiences. One that comes to mind is that of the German Jacob Böhme in 1600: "... one day he focused his attention onto the exquisite beauty of a beam of sunlight reflected in a pewter dish. He believed this vision revealed to him the spiritual structure of the world, as well as the relationship between God and man, and good and evil." Burton quotes William James on the subject:

"They are illuminations, revelations, full of significance and importance, all inarticulate though they remain; and as a rule they carry with them a curious sense of authority for after-time."

Likewise, drug-induced hallucinations can cause absolute senses of knowledge, realness, and purpose which dissolve into a hangover. Temporal lobe epilepsy can have similar effects. All of this is to say that this sense is a specific function of our brains, and needs to be regarded with a bit of dispassion by those (which generally means all of us) who give it excessive credence. In fact, I regard this book as an excellent companion to Eric Reitan's "Is God a delusion?", which with similar temperance and good cheer goes right down the rabbit hole of imputing great (possible) cosmic sigificance to mystical experiences, among other improbable conclusions. The one clearly informs the arguments and scope of the other.

"Knowing that the sense of self is an emergent phenomenon arising out of simpler neuronal structures doesn't and won't stop theologians and philosophers from debating issues they have no chance of resolving. Scorpions sting. We talk of religion, afterlife, souls, higher powers, muses, purpose, reason, objectivity, pointlelssness, and randomness. We cannot help ourselves."

But Burton fries fishes on both sides of the culture war. The sense of certainty is not just core to our conscious stream, but also to memory, which is far less reliable than we typically assume. One of the great findings of social & cognitive science has been about the unreliability of eye-witnesses. A person may spin a tale of rationalizations with complete certainty, unaware of how vague their memories really are. We had a local court case recently where the defendent, cleary guilty of murdering an ex-girlfriend, spun a tale of defending her against two unidentified assailants who were the actual murderers. Not even his own defense attorney took the proposition seriously, but the troubling thought is that this defendent may have convinced himself of its truth, as OJ may of his yarn as well.

So certainty is fundamentally impossible. Internally, our brains use sophisticated Bayesian statistical methods to come up with probabilistic conclusions. But do they tell us about it? Of course not. They typically give us black and white answers, which we have historically assumed come from heaven, or from souls, or from wherever. We really can not make any definitive statements about anything outside the kinds of logic and math that are self-contained inventions to start with. The atheist can not be certain that there is no god, and nor can she be sure that the sun will rise tomorrow, or even that it rose today. Some things may be more certain than others, but none are absolute. And the kicker is that we are in constant revolt against this uncertainty, since it is both psychologically uncomfortable, operationally impractical, and hidden from our view.

"Our mental limitations prevent us from accepting our mental limitations."

Ultimately, I think Burton does a little soft-peddling, since the conclusion of all this is that we benefit from an outside arbiter to control our sense of knowing about important and abstract topics. And that arbiter is ideally going to be empiricism, i.e. science. Indeed, one might portray science as, in a way, a higher level of consciousness, in the sequence from unconscious reflex to consciousness under emotional brain control, to increasingly reliable memory stored in written form, and then to a communally validated pool of knowledge & theory. Science is the social mechanism we have devised to hold hypotheses in suspension, to test them logically and empirically, to subject them to public scrutiny by those who typically have an emotional interest in shooting them down, and attempt to record their fruits objectively. It descended from the academic disputation common in the monastic and humanist past, but obviously evolved in a new and far more productive direction.

"There must be certainty from the US president." -G. W. Bush, quoted by Burton.

Unfortunately, there is far more to the human condition than science can address. A depressing coda in the book deals with medical practice, which is ridden with the posture of certainty subsituting for actual knowledge, expertise, and competence. Even the best doctors can never consciously assimilate very much of the vast medical corpus, (assuming that this data is itself free of bias, which is far from the case). So they go by their training, by hunches, and experience, more or less well remembered, all wrapped up in the white coat of authority. Most of the time it turns out OK, but frequently it doesn't. Something as simple as a checklist for medical procedures has been shown to dramatically reduce complications, showing that the confident competence we typically rely on is far from sufficient to render optimal care.

Conversely, confidence and authority can have medical benefits, such as when a doctor prescribes a placebo, yet inspires enough confidence in the patient that real improvement results. The endless billions that Americans pour into alternative medical treatments, self-help, motivational speakers, and the like are surely not going completely to waste, since however appalling from a rational perspective, subjective confidence and happiness can lead to health (though probably not wealth!) in some circumstances, due to our intimate mind-body connections, particularly in the areas of stress and immune function. We just need the wisdom to know where, when, and who- which, by Burton's analysis, we can never have.

Incidentally, particularly clever theologians have seized on the cognitive defects of our condition as an argument that nothing said by a philosophical naturalists can make any sense- that the position is inherently self-defeating because reason itself is impossible if we truly are naturally evolved beings, speaking nonsense and greed into each other's ears. To the rescue comes god, who by fiat makes us make sense- both in the context of the universe, and to each other. God enables reason, we are in His image, He is reasonable by definition, etc..

"And this leads directly to the question whether it is at all likely that our cognitive faculties, given naturalism and given their evolutionary origin, would have developed in such a way as to be reliable, to furnish us with mostly true beliefs." -Alvin Plantinga

Among the assumptions here is that biologically evolved reason and the sense of certainty are not just unreliable, as per Burton, but totally, fantastically, utterly defective. Needless to say, there is little reason to take this argument seriously, since evolution, while it may not have rationality as its only cognitive goal, has accuracy in many perceptual and cognitive respects among its goals, which can later be leveraged and supplemented by calibration, critique, etc. in a scientific/philosophical method, at least when carried out by competent people.

I found this is an outstanding book with philosophical and practical messages. Uncertainty touches countless areas of our lives. For example, serious consideration of uncertainty underlies much of the difference between Keynesian and classical economics, with the latter taking a typically theological approach by assuming away uncertainty (i.e. supposing rational expectations and perfect knowledge) under the cover of an impressive (in this case mathematical) apparatus. In other news- the Norwegian atrocity- the attachment that right wingnuts have for their guns testifies to their lack of appreciation for our many limits as humans- particularly, the possibility that extremism and passion (which they typically possess in abundance) may in rare circumstances get the better of them or others in their household and render their favorite weapon an instrument of mayhem and murder.

• Wingnut response to Norway: "I hereby vow to carry my handguns more often."
• A little epistemic humility on Afghanistan.
• Saudi Arabia- still not a beacon of freedom.
• How can one have a lie detector if we believe our lies?
• Pasta, flying to new heights.
• Why are we kowtowing to economic criminals?
• Reinhard and Rogoff are responsible for immeasurable harm, are apparently still employed.
• And what is going on with "President Pushover"?
• Economics quotes of the week, via Bill Mitchell. Apparently the Bank of International Settlements understands the banking system after all, by this quote:

"In particular, it is argued that the concept of the money multiplier is flawed and uninformative in terms of analyzing the dynamics of bank lending. Under a fiat money standard and liberalized financial system, there is no exogenous constraint on the supply of credit except through regulatory capital requirements."

• And:

"Further, the only way a government such as the US can “go broke” is if the politicians deliberately and wilfully decide not to use the financial capacity of the government and refuse to credit relevant bank accounts in the non-government sector. That would be an extraordinary conspiracy against the people of their own land and against peoples in other lands that had acquired US dollar-denominated assets."

• Finally, an unemployment update:

To sleep, perchance to renormalize synapses

Flies sleep too, and give us novel access to the nature and function of sleep.

Why do we sleep? Why do even whales and dolphins sleep, alternating hemispheres so that they can stay at the surface, breathing reliably? Why does sleep deprivation eventually lead to insanity and death? Incidentally, isn't sleep deprivation as commonly used by our military and other security organizations equivalent to torture?

A recent paper supports one theory (originally developed by the same authors, Tononi and Cirelli, in 2003) of why we sleep, which is that our brain's neurons build up connections through the day, which the special characteristics of deep, slow wave sleep prune back to a manageable condition. Apparently fruit flies also sleep, allowing the enormous tool chest of experimental fly biology to be deployed on this fascinating question. That flies sleep at all is quite remarkable, since a fly's life is extremely short- a perilous few weeks at most. Yet they snooze away a third of it, admittedly at night when they might not want to be active anyhow.

The idea behind this theory is that learning happens by the classic Hebbian theory- cells that fire together wire together. That is to say, their synaptic connections increase in strength and number. Nerve cell processes (axons and dendrites) grow and make new contacts, and in a few cases, nerve cells may even divide and multiply. So during a day of intense activity and learning, we (or a fly) are continuously building up synapses, and perhaps not breaking them down ... the balance continues to rise and rise, until eventually the brain just seizes up and doesn't work anymore.

"The hypothesis predicts that the more one learns and adapts, (i.e. the more intense is the wake experience), the more one needs to sleep."

Sleep -specifically, the deepest slow wave forms that happen relatively early each night- is then theorized to put this process into reverse, erasing the weakest synapses and thus "renormalizing" the system back to some "normal" level that exchanges some old or unimportant crud for newly learned connections. Thus you might wake up and suddenly, the piano piece you were working on with diminishing returns the night before now seems a great deal easier, while yesterday's lunch is wiped clean away. Incidentally, later stages of sleep that involve dreaming may selectively reinforce older memories, instinctive imperatives, and stray connections in a completely different tuning process.

The original paper outlining this theory is thankfully available, and here are a few choice quotes from it:

"The slow oscillation occurs at a frequency that is ideally suited to induce depotentiation/depression in stimulation paradigms, namely <1 Hz [31]. Thus, from a frequency perspective alone, slow-wave sleep would be a good candidate for promoting depotentiation/depression.
...
The close temporal pairing between generalized spiking at the end of the up-phase and generalized hyperpolarization at the beginning of the down-phase may indicate to synapses that presynaptic input was not effective in driving postsynaptic activity, a key requirement for depression." 

(Here, depression means the opposite of classic Hebbian learning. Now cells that fire together under the slow wave paradigm unwire from each other. "Downscaling" is another term for synaptic renormalization.) 

"Thus, at least at the molecular level, sleep may not just be unfavorable to synaptic potentiation, but specifically conducive to generalized synaptic depotentiation/depression. More direct tests of this prediction can be envisaged. It is already known that sleep altogether favors dephosphorylation in the brain. One could further measure phosphorylation levels in sleep and wakefulness of residues of the AMPA channel [sensitive to the neurotransmitter glutamate and widely present in the brain] involved in potentiation/depotentiation and depression/dedepression, as well as indices of AMPA receptor internalization."

...
"Finally, the reduced activity of the noradrenergic system during sleep would ensure that only downscaling occurs, and not potentiation."

"According to the hypothesis, during sleep the strength of each synapse would decrease by a proportional amount, until the total amount of synaptic weight impinging on each neuron returns to a baseline level. Provided there is a threshold below which synapses become ineffective or silent, synapses contributing to the noise, being on average weaker than those contributing to the signal, would cease to interfere in the execution, and the SNR [signal to noise ratio] would increase. "

"Finally, the hypothesis triggers some further questions. For example, can anesthetic agents also produce synaptic downscaling, to the extent that they promote slow-wave activity comparable to that of NREM [non-rapid eye movement] sleep? ... How does the hypothesis apply to other brain structures where sleep rhythms are different, such as the hippocampus? Or to other species, such as the fruit fly? And finally, what about REM sleep? Could it be, for example, that with its steady depolarization and high spontaneous activity, REM sleep might pro- mote the insertion of AMPA receptors in the synaptic sites that are still effective after the downscaling of NREM sleep, and thereby favor their consolidation? Such “polishing” of synapses after the “cleansing” action of NREM sleep would agree with the regular alternation between NREM and REM sleep and the reported cooperativity between the two stages of sleep in certain procedural tasks"

Summary of model, from a later Tononi and Cirelli paper.

"Evidence for a relationship between synaptic strength or density and SWA [slow wave activity during sleep] also comes from developmental studies. SWA changes during the lifespan in a way that seems to follow cortical synaptic density, as indicated directly by electron microscopy on post-mortem tissue and by MRI estimates of the amount of gray matter. Thus, both synaptic density and SWA reach a peak in adolescence, after which they decline rapidly, and continue a slower decline into old age. Pathological decreases in synaptic density, as observed in neurodegenerative disorders and schizophrenia, are also associated with reductions in SWA. Moreover, after visual deprivation during the critical period—a procedure associated with synaptic depression, slow waves are reduced by 40% in the absence of changes in sleep architecture."

The synapse is a complicated place, with special proteins expressed on both sides, (i.e. presynaptic and postsynaptic), including storage systems for neurotransmitters and neuropeptides, secretion apparatus, receptors to detect them, as well as the usual ion channels that run electrical conduction along membranes all over the nerve cell.

The researchers use flies altered to express neuron- and synapse-specific genes fused to a gene fragment encoding the fluorescent protein GFP, lighting up the resulting neurons. The researchers also use straightforward sleep/wake control over their flies, keeping them in individual glass tubes (+ food) mounted in automated activity monitors, and shaken when needed to keep the flies sleep-deprived.

Flies don't make beds, put on pyjamas, or even so much as curl up to sleep, so researchers have to define it in a slightly more indirect way. Immobility for over five minutes is called sleep, while activity within a one-minute interval is defined as wakefullness (called "wake", for convenience). Nevertheless, they tend to sleep in a familiar pattern, for an eight-hour night, of which the first 2.5 hours are the deepest and most immobile. Flies are kept up by caffeine, noisy neighbors, etc., and catch up on missed Z's as soon as possible, but only for a fraction of the missed time. All of this is very much like our own sleep.

Below is the observed sleep pattern for typical female flies, where W marks the wake period (lights on), S marks the sleep period in the dark, and SD marks sleep deprivation, which appears to be very effective.

The weak part of the paper is that the researchers get their data by microscopically visualizing the synapses and neurons in selected areas of the fly brains and counting them or measuring their overall brightness by eye, which, even if done by neutral ("blind"!) observers, as they claim, is inherently noisy and subjective. But the point was to judge the effect of sleep on synapse structure and proliferation as directly as possible, (rather than, say, measuring the level of synaptonemal proteins over the entire brain in a gross way, which has been done repeatedly and agrees with the hypothesis on that level), so for the moment, this might be the best method available.

Below is shown a typical set of data, where they measure the volume of presynaptic structures (the half of the synapse that comes from the upstream axon) with two different marked proteins (syt-e/synaptogamin, and a neuropeptide called PDF) in a type of neuron involved in circadian rhythms. There are unequivocal differences when the flies were sampled after the sleep (S) condition or after the other two conditions- sleep deprived (SD) and wake (W).

Tha shake things up a little, they use mutant flies with no circadian rhythm- the Per (Period) gene is knocked out, so the flies have random bouts of sleep, (shown below), at least until they were all sleep deprived (SD7, seven hours), followed by either more sleep deprivation (SD12) or sleep (+S5). The data shows the despite that lack of endogenous rhythm, flies still need to catch up on sleep after being deprived.

The corresponding graphs of visualized synaptonemal proteins is below, showing, as expected, that sleep lowers these proteins significantly, while continued sleep deprivation raises them. These flies are cranky!

In the next set, the experimenters test another type of neuron, and look at postsynaptic dendrite elaboration in flies expressing fluorescent actin, which should show up pretty much everywhere. In this case, the dentrites grow "spines" as they contact upstream neurons and make synapses, so the spines are counted, shown in the image below as the very small balls. They also measured dendrite branch lengths. After showing that sleep deprivation leads to slightly elevated numbers of spines, they ask a new question- whether environmental enrichment during the day correlates with number of dendritic connections. While the control flies are left in their boring one-fly-per-tube hotels (W), the experimental flies are unleashed for twelve hours into a fly "mall" with a hundred other flies (Wm). Whether terror or happiness ensues, the researchers probably can't tell!

You can see that the briefly socialized flies have a lot more going on in their brains, growing longer dendrites and more dendritic synapses (spines).

All these values fell back to normal levels after sleep (below), showing a correlating cycle of more neuronal connections after waking activities and declines after sleep. Incidentally, the enriched flies also slept longer (I), as you might expect after a day of partying, including naps taken during daylight.

Lastly, the researchers use an interesting gene (FMR1), which, when defective in its homologous form in humans, causes mental retardation and other problems, called fragile X syndrome. Prior work indicated that flies lacking this gene product have over-elaborated neurons with lack of pruning, along with learning and other problems, and that overexpression of the gene can cause the reverse effect: well-pruned neurons even in the absence of sleep. These flies sleep 30% less than normal, and sure enough, the experimental protocols of sleep deprivation didn't significantly alter the dendrite counts and volume compared to wild-type flies.

Genetic variation in such a gene might be responsible for variable amounts of sleep need seen naturally, in flies as well as in humans. So it remains slightly puzzling why most animals need so much of it. Perhaps, given the astronomically-imposed day/night cycle, checking out for eight hours is not much worse than checking out for two. We may also have only scratched the surface of what sleep does for us, whether physiologically or psychologically. Certainly Jungians, among others, set great store by dreaming, which happens during a separate sleep phase. Do flies dream?

This hypothesis is well on its way to becoming a compelling theory of what is likely the principal reason why we need deep slow-wave sleep and run into serious problems if we don't get it. The underlying mechanisms remain under investigation, (especially the functions of the various brain waves, and the dynamics of synapse growth and regression), and the hunt goes on for the mechanisms and rationale of other significant processes that happen during sleep.

• We have a gambling problem.
• On the power of the placebo effect.
• What happened to the Republicans?
• How's that hearts-and-minds operation going in the Middle East?
• A local peace dividend- open space on Mt Umunhum.
• Krugman tracks employment.
• Economics quote of the week, George Packer in the New Yorker, on Goldman Sachs board member Rajat Gupta's insider trading conspiracy with Galleon's Raj Rajaratnam.

"On the afternoon of September 23rd [2008], Rajat Gupta, former head of McKinsey, joined members of the Goldman Sachs board on a conference call. They discussed Warren Buffet's proposed investment of five billion dollars in the investment bank, which had been imperiled by the crash. The conference call ended at 3:54 P.M. Sixteen seconds later, Gupta called Rajaratnam's office. At 3:58, just two minutes before the markets closed, Rajaratnam gave an order to buy three hundred and fifty thousand shares of Goldman stock, worth forty-three million dollars. That night, the world learned of the Buffett investment. At the peak of the crisis, Gupta the Goldman board member's first thought was to make sure that his investment partner Raj Rajaratnam could exploit the deal. A month later, the drill was repeated: as Goldman prepared to announce an unexpected quarterly loss, Gupta called Rajaratnam, and Rajaratnam sold all his Goldman stock before the announcement."

Who's got the biggest piggy bank?

Some notes on the US federal debt.

It is important to realize what a non-issue the US federal debt is, and thus what a stalking horse it is for the same old class war of rich vs poor and capital vs labor. This was clarified when, after voting against raising the debt ceiling, House Republican leaders hurried to assure Wall Street bankers that they were just bluffing- they would surely raise the debt ceiling in the end, but just wanted to put some more theatrical pressure on the Democrats to squeeze out more spending cuts, presumably so that the economy performs worse during the upcoming election. Government is always bad, when it is run by Democrats.

One would think that savings are a good thing to be encouraged, so increased government bond holdings by individuals would be a good thing, insulating them against future calamity, funding their retirements, paying for their medical services, etc. The Federal reserve has certainly encouraged banks to save lots of money, pumping them full of reserves and offering them bonds so that they can make a bit of money and crawl their way back to solvency without lending.

But one person's saving is another's liability. Why not leave these liabilities in the private sector instead of the government sector? The private sector recently went through a meltdown where some savings were lost due to bankruptcy, and other savings through vertiginous market drops- a highly unpleasant situation. Federal debt has zero financial risk, (though the risk of political idiocy rises by the day). The US government has never defaulted, has never repaid substantial amounts of its own debt, and can print up more money any time. So from the customer's standpoint, safety is worth the low interest rates the government offers.

On the other hand, is the government robbing the private sector of capital, "crowding out" sources of savings? Hardly ... the world is awash in savings, increasingly desperate to chase even meagre returns. Obscure economies were inudated with investment in the 90's, only to be whipsawed by its fickle exit. The Chinese, of all people, are saving prodigiously. The dot-com boom showed the nation's enormous appetite and financial capacity (via other people's savings) to support risky schemes that end in tears. Ditto for the housing boom just ended. Most companies are sitting on hoards of cash. Any decent commercial investment can find plenty of money, but with demand guttering, few companies have strong growth and investment prospects. Bankers are reluctant to lend, but not for lack of money.

Granted, the private financial sector (or FIRE) would prefer to force the regular savers and pension funds to invest through their greedy minions. Thus the ideological push to privatize Social Security, Medicare, 401k's, and anything else they can get their hands on. But while private finance is surely important, (though its "innovations" are anything but), it is not ideal for many forms of investment, retirement perhaps among them.

But what of the risk to the government? Isn't its debt bomb "exploding"? Or spiralling? Or "out of control"? This where the title comes in, because if we take a step back, we can see that of all the savings kitties out there, the government has the largest one by far. The power to print money is equivalent to having an infinite piggy bank. It can spend any time, as much as it wants. It can also reverse course and add to its virtual savings by running overall budget surpluses (drawing dollars back out of the private balances, which is typically quite destructive to economic growth). So of all the actors on the scene, the federal government is best equipped to weather any storm and meet any calamity. The question is mostly whether it wishes to do so, and secondly, whether its use of that piggy bank is consistent with keeping the value of the money stable.

Inflation can be caused by unbalanced spending from any source- if the government prints and spends too much money, or if China suddenly decides to dump all its dollars and buy US real estate, or if the older generation suddenly joins a Buddhist cult en masse and gives all its money away, or if banks keep lending and creating money without proper oversight and capital backing. The economics would be the same- galloping inflation when spending of saved dollars far outstrips the productive capacity of the economy. So whoever has the dollar stash is a source of inflation risk, just as sudden credit destruction and a pell mell flight to safety leads to the economic tailspin we are experiencing now.

It is uniquely the government's job to 1. regulate the banking sector which creates most of the money, and  2. meter out its own spending to counteract whatever monetary pressures there are, whether contractionary or inflationary. Today the pressures are clearly contractionary. With interest rates at zero, the Fed has found it impossible to prod banks to create more money by lending. More spending is called for, and indeed a higher explicit inflation target is called for as well. (A whacky site hosts a good video series on money & banking, at least in the opening three parts- especially note the equation of debt with money.)

Note how different this is from an individual Euro country, which has no implicit pile of savings to work from, or from a gold-standard country, which likewise is limited to whatever its miners happen across in their voyage of environmental destruction. The powers of having an unlimited piggy bank are enormous, as are the dangers, which is why governments have tried to paint central banks as mysterious, oracular, god-like, non-political entities.

Conversely, it does the government no good to pile up surpluses. Since its "savings" are infinite, it need pile up no savings against a rainy day. Indeed, any surplus it runs is useless, flushed down an accounting hole. Surpluses represent money withdrawn from the private sector (by excess taxation) which is simply extinguished ... it is not stored in a vault somewhere, or used to buy private bonds, etc.. it is deflationary destruction of the same money it creates effortlessly on the other end. Sometimes such deflationary pressure is helpful, but of course not today.

It is also worth noting that issuing government bonds to balance government spending is no protection against inflation. Bondholders give up short notes (dollar bills) in exchange for long notes (bonds). But nothing much else changes as far as anyone is concerned. The government had spent the money originally in any case, the money was intended to be saved in any case, the savers still possess the money in any case, and they can redeem their bonds in the market at any time, given the government's commitment to keeping it liquid and functioning. With bonds, the spending of those dollars is notionally barred for the term of the bond, and in return, government throws in a small annuity, paid from its infinite stock of savings or from taxes. But these are very minor effects in the normal course of affairs.

The bond rigamarole is virtually pointless from a macroeconomic standpoint, though from a political standpoint, it can "bond" the rich to the financial soundness of the government (though Republicans may not have gotten the message!). Government bonds also provide provander for central bank's management of bank reserves and interest rates, though it certainly doesn't need endless trillions for that purpose in the normal course of events.

Anyhow, the bottom line is that savings in government bonds will be an increasing and stabilizing feature of our financial landscape. By all means, private issuers should have first priority in the market, getting all risk-seeking money that wants higher rates. But our future looks much like Japan's present, with high levels of federal bonds held by individuals as a stable core of savings. And that future looks very good, as far as the government's accounts go.

How much is too much? We are closing in on a federal debt of 1X GDP, or about $14 trillion. Japan is at roughly 2X GDP. How much do you have in savings personally? Do you want to have one year's income, or two year's? These seem like paltry amounts, really, compared to what is needed for serious retirement, so averaged over a population, 2 or 3X GDP sounds perfectly reasonable as a steady-state level of population savings parked in safe government bonds, balancing consumption with savings. (The fact that these holdings tend to be held highly unevenly among income groups is a separate issue.)

The problem in the mean time is that savings desires are running ahead of consumption desires, resulting in depressed economic activity and unemployment. Here is where the our political will comes into play. It is the government that can support both the desire of people to save after the recent profligate boom, and also the horrifying unemployment that continues in its wake.

There is no inherent contradiction between the two. The government clearly needs to spend more, within its inflationary constraints, which are right now extremely low. It would also help if it spent in targeted ways that directly create jobs, rather than disproportionately giving to the rich through tax gifts, etc. and waiting for the shower of money to trickle down. And the point doesn't have to be consuming more stuff made in China. With a little political foresight and leadership, we could be spending on remaking our energy system and rebuilding our infrastructure and educational system. There is a great deal to be done to make our country and world a better place.

• J. K. Galbraith on the various idiocies of the debt ceiling "debate".
• Tom Tomorrow, ditto...
• Class war in the EU.
• Class war here.
• Class war in the courts ... back to caveat emptor.
• Crush the proles!
• The jack-boots are also marching in Belarus.
• Fox news and taxes.
• Progressives don't get the deficit, either.
• Krugman does debt.
• Not so easy being a psychic.
• Withdrawal from Afghanistan.. not all it is cracked up to be.
• Economics quote of the week, from Bill Mitchell:

"The national government in a sovereign nation (currency issuing with floating exchange rate) always chooses the national unemployment rate. Not sometimes, but always."