Showing posts with label News. Show all posts
Showing posts with label News. Show all posts

Tuesday, October 20, 2015

2 economists imagined a financial crisis without stimulus or bailouts. It’s … ugly.

No comments : Posted by Fiona at 9:43 AM Labels:
The recession of 2007 to 2009 was brutal. The economy contracted by 4 percent. Unemployment peaked at 10 percent. About 8.5 million jobs were lost. It's no wonder that a year later, nearly two-thirds of Americans thought President Obama's stimulus package hadn't worked.
But a new study suggests that without the stimulus — and, more crucially, without bank bailouts and the Federal Reserve's intervention — things would have been much, much worse. Princeton economist Alan Blinder and Moody's Analytics' Mark Zandi estimate, in a paper for the Center on Budget and Policy Priorities, that without these policies:
  • The recession would have lasted twice as long.
  • The economy would have shrunk by nearly 14 percent, not 4 percent.
  • Unemployment would have peaked at nearly 16 percent, not 10 percent.
  • More than 17 million jobs would have been lost, around twice the actual number.
  • In 2015, there would still be 3.6 million fewer jobs and 7.6 percent unemployment.

Government policies saved millions of jobs

Blinder and Zandi arrive at these estimates through economic modeling. Zandi and Moody's have one of the most cited private sector models of how the economy responds to changes in public policy, and regularly produce "multiplier" estimates of how much the economy would grow in response to $1 more funding for a given policy. (For example, the current paper estimates that a $1 temporary increase in food stamps at the start of 2009 would have grown the economy by $1.74.)
So Blinder and Zandi used the Moody's model to simulate how the economy would've looked if no special measures had been taken in the wake of the financial crisis and recession. They assume that the government's "automatic stabilizers" — programs like food stamps and progressive taxes that help people more when the economy's suffering — took effect, and that the Federal Reserve took interest rates down to zero. They then compared the economy in that counterfactual to the actual history.
They did better than that, though. They also modeled the contribution of each individual policy:
  • The 2009 stimulus package cut unemployment by 1.4 points and increased GDP by 3.3 percent in 2010.
  • The Fed's quantitative easing added 1.1 percent to GDP and cut unemployment by 0.6 points in 2012.
  • The bank bailouts — specifically the TARP program and the Fed's "stress tests" — cut unemployment in 2011 by 2.2 points and increased GDP by 4.2 percent.
  • The auto bailout cut unemployment by 0.4 points and increased GDP by 1 percent in 2010.

Can we trust this estimate?

Things were really bad thenBrendan Smialowski/Getty Images
Alan Blinder testifies before the House Democratic Steering Hearing on July 7, 2011, during the debt ceiling crisis.
It's important to keep in mind that this is an estimation based on a model. That has its advantages, and it's a valid economic technique. It's a lot easier to construct a precise counterfactual when you can use a model than it is to try to statistically isolate the effects of a given policy. But some critics have argued that these models assume the stimulus worked rather than proving it.
One reason you might want to trust Blinder and Zandi, however, is that the empirical evidence on the stimulus backs them up. I did a roundup of the best studies back in 2011 on just the fiscal side, but here are a few of the empirical findings on the 2008-'09 interventions in general:
The empirical evidence suggests these policies worked — which provides some basis to trust modeling estimates of the effects. What's more, a 2014 poll of eminent economists found that 37 thought the 2009 stimulus lowered the unemployment rate, and only one disagreed.

The counterfactuals this paper doesn't consider

A foreclosure sign in Miami, early 2008.Joe Raedle/Getty Images
Would helping homeowners more directly have prevented foreclosures, like this one?
Blinder and Zandi are fairly compelling in arguing that the policies chosen by the Bush/Obama administration, Congress, and the Federal Reserve led to a shallower recession and quicker recovery that we would've had otherwise. But it's doubtful that any administration would have done literally nothing. And there's a wide array of alternative policies that at least potentially could have bested the ones chosen:
So Blinder and Zandi can tell us that the policy response was better than nothing. "If my only options are what actually happened — even including the resulting moral hazard — and the Blinder-Zandi scenario, then bail, bail, bail, stimulate, stimulate, stimulate," asAEI's Jim Pethokoukis writes.
Read More

The obesity paradox: Why Coke is promoting a theory that being fat won’t hurt your health

No comments : Posted by Fiona at 9:25 AM Labels:
Over the past few years, an unconventional idea has been gaining traction in the scientific literature: Maybe our pursuit of thinness is a big, fat waste of time.
This idea is known as the "obesity paradox," and it's based on studies finding that people who classify as overweight or even moderately obese appear to have better health and mortality outcomes than their normal or thin counterparts. This research suggests that those extra pounds might have protective effects on health, especially when it comes to certain chronic conditions like diabetes, kidney disease, and high blood pressure.
This theory has been controversial, criticized by experts who point out that studies on the phenomenon tend to use snapshots of people's weight at one point in time, instead of taking into account their full health histories. This means, for example, someone who just shed dozens of pounds after a lifetime of obesity would be classified as having a "normal" weight, which biases the results of the research. Critics of the obesity paradox also say that any benefit from carrying extra fat is small in comparison to the well-documented harms.
Still, despite the fact that "obesity paradox" science is very much unsettled, it does have one influential champion: Coca-Cola. The world's largest manufacturer of sugary drinks has been promoting the paradox, lavishing its proponents with speaking and consulting fees, and funding researchers who back the idea.
This isn't the first time Coca-Cola has waded into the obesity debates. Back in August, aNew York Times investigation found the company had been quietly funding organizations and researchers who blame obesity on too little exercise, rather than on too many calories, a view that might cause people to look askance at soft drinks. Much of Coca-Cola's money went through a nonprofit called the Global Energy Balance Network, which until recently did not disclose its Coke ties.
In September, following that story, Coca-Cola published a list of researchers and health professionals it has paid $2.1 million to over the past five years. The company said these people regularly "collaborate and consult" with them. Coca-Cola also published a list of research institutions and organizations that received $118.6 million for scientific research, as well as to support health and well-being partnerships.
Included on these lists were the leading obesity paradox researchers in the United States. 

The researchers have maintained that this funding does not sway their scientific work. But other scientists worry that Coca-Cola's influence could affect which sides of this debate travel the furthest. 

"The problem here is there is compelling evidence that the obesity paradox is not a real biological finding at all but just sloppy science," said Andrew Stokes, a professor at Boston University who studies the obesity paradox but does not receive industry funding. Of course, critics of the paradox do not have Coca-Cola's backing behind them. So, Stokes said, "this opposing evidence is not given adequate weight."

The "obesity paradox" has been heavily criticized by other researchers

The "obesity paradox" started to emerge more than a decade ago. In one of the earliest studies, published in 2003, researchers were puzzled by the fact that heavier patients suffering from heart failure seemed to have better health outcomes than their thinner counterparts. From there, a theory was born. Perhaps having extra weight can be good for you.
But Stokes, along with other researchers, have found a big flaw in the studies on the obesity paradox: They only look at people's weight at one point in time. This is like asking someone who has smoked for her entire life but quit last week about her health, and then classifying her as a "nonsmoker" without including any data about her long-term habits. That, Stokes says, can bias the findings in these studies.
"The paradox disappears," Stokes says he's found in his work, "when we use weight histories to separate out people with weight loss from the normal weight category and restrict the sample to never-smokers. Not only does it disappear but we find that overweight and obesity become significantly positively related to risk of death."
In other words, if you classify the data properly, the evidence is clear: Obesity has all sorts of negative health effects. There's no paradox here.
There may be other causes of the J-shaped relationship between obesity and mortality, which shows an increased risk of death in the slimmest and heaviest people. Frank Sacks, a researcher at the Harvard School of Public Health, said it could be explained by the fact that skinny men and women have "other co-morbidities, other problems, and bad habits."
Many smokers would fall into this category, for example, and there have been studies among the elderly and, again, in heart failure patients showing that really thin people can suffer certain health problems. "But they have lost weight because they're sick," says Sacks. "The weight loss is the result of the disease." In other words, yes, they are thinner, yes, they have a higher morbidity rate, but it's not their low weight that is putting them at a higher risk of death — it's their illness.
Other recent research appears to cut against the paradox. Last year, Stokes published astudy looking at more than 10 years of data on American adults between the ages of 50 and 84, accounting for people's longer-term weight histories. This made it possible to break up people who were "normal weight" into two separate groups: those who had maintained a normal weight throughout their lives, and those who were normal weight at the time of the study but had experienced weight loss.
Stokes found that people who had always been a normal weight had an extremely low risk of death, but that the other normal-weight group — that is, people who were formerly obese — had a much higher mortality rate. After redefining the normal-weight category to only include the stable weight individuals, he found much stronger associations between excess weight and mortality.
In another newly published study in the journal Obesity, Stokes and a colleague at the University of Pennsylvania examined data from more than 30,000 participants in theNational Health and Nutrition Examination Survey between 1988 and 2011, and found the same thing: When you controlled for weight history (and, separately, smoking), the obesity paradox went away.
Now, this doesn't definitively debunk the obesity paradox. More evidence could emerge later. "We cannot rule out that there might be health advantages associated with overweight and obesity," says Stokes, who only receives funding from the National Institutes of Health. "But our data suggest that any benefits are small in comparison to the harms associated with being overweight or obese."

Still, the obesity paradox has its proponents — including Coca-Cola

There are some researchers who continue to pursue the notion that extra weight may have some beneficial health effects. New Orleans cardiologist Carl Lavie is arguably the most prominent voice in the obesity paradox debate, having popularized the idea in his 2014 book The Obesity Paradox: When Thinner Means Sicker and Heavier Means Healthier. He’s written what are considered the most influential papers on the obesity paradox, and appeared in numerous popular news articles extolling the idea.
Lavie's main message is that we have exaggerated the importance of the obesity epidemic. As he put it concisely in a video promoting his book, "Body fat is not always the devil."
Lavie does, however, concede that his critics have a point — and calls for further research in the area. "Stokes is correct that most studies do not account for non-purposeful weight loss prior to study entry, which would be associated with a poor prognosis," he told me by email. "There still is substantial work needed to explain the obesity paradox,and currently except for underweight who generally have the worst prognosis, I am not recommending any to increase weight, although it would be worth many improving their fitness and their muscular strength."
While many researchers remain skeptical of his ideas, Coca-Cola appears to be on board. The company paid for Lavie's consulting work, as well as travel and honoraria to lecture on the obesity paradox. It has also funded webinars by him on the subject. And while Lavie mentions his relationship with Coke in his scientific papers, that disclosure does not appear on his obesity paradox website — nor is it mentioned in the many news articles he's cited in.
Lavie isn't alone. Other key "obesity paradox" researchers in the US — such as exercise scientists Steven Blair and Timothy Church — have scientific relationships with Coke, receiving millions of dollars' worth of unrestricted educational and research grants.
Blair was a major focus of the Times's investigation, since he's the vice president of the Global Energy Balance Network. Church, meanwhile, is connected to Louisiana State University's Pennington research lab, the center that received the most Coke research funding over the past five years ($6.7 million). He's been an author on Coke-funded studies out of that center, suggesting exercise — not sugary food or drinks — is the biggest contributor to obesity. (That view, too, is not shared by many health and obesity researchers. There's overwhelming evidence that suggests exercise has only a small impact on weight when compared with calorie intake.)
In an email last week, Lavie told me that Coca-Cola had no influence on his research agenda. He arrived at his views on the obesity paradox independently of the soda giant, he said, and Coke hasn't directly funded his obesity paradox research, only the related speaking and consulting work. Lavie also pointed out that other money from Coca-Cola for science has been through unrestricted research grants, "so Coca-Cola has no control over the conduct of the studies or the data."
Still, the fact that Coca-Cola funds him means that his views can gain a wider audience. The funding also raises questions about which researchers Coca-Cola chooses to support and why, and whether industry covertly influences the direction of their research.
Read More

America's latest drug epidemic began with a legal drug

No comments : Posted by Fiona at 9:24 AM Labels:
The drug epidemic currently tearing through large parts of the US began with the best intentions from doctors and a profit-driven campaign from pharmaceutical companies.
Back in the 1990s, doctors agreed — and many still do — that America has a serious pain problem: Tens of millions of Americans experienced debilitating pain, and it was left untreated. So they looked for a solution — and, fueled by a misleading marketing push from pharmaceutical companies, landed on opioid-based painkillers, widely known by brand names such as OxyContin, Percocet, and Vicodin. The drugs proliferated. 
But this led to unintended, devastating results. Prescription painkiller abuse went up, and overdose deaths linked to the drugs did as well. Then as policymakers and doctors took notice of widespread painkiller abuse, they pulled back access to the drugs. But federal data now shows many of these addicts didn't just quit the drugs altogether — some instead moved to another opioid, heroin.
The result: In 2013, more than 16,200 deaths were linked to opioid painkillers, and another 8,200 were linked to heroin. That makes opioid painkillers the deadliest drug in America after tobacco and alcohol. And both painkillers and heroin made up more than half of all 44,000 drug overdose deaths, which now kill more people than AIDS did at the height of the HIV/AIDS epidemic in the 1990s.
It's a big public health crisis. And, surprisingly, policymakers are treating it as a public health crisis — whereas previous drug epidemics invited harsh tactics typical of the war on drugs, like increased prison sentences for drug possession, the current crisis is being handled as a problem that requires more access to treatment programs. That reflects not just the opioid epidemic's unique beginnings, but a general shift in how the country views the decades-old drug war.

The desire to treat pain led to a devastating epidemic 

America has a pain problem. About 100 million Americans suffer from chronic pain, according to a 2011 report from the Institute of Medicine. This might seem like an excessive number — roughly one-third of all Americans — but it includes everyone in the chronic pain spectrum, from the silent sufferer who deals with constant back pain to the patient who can no longer move because the pain all over her body is just too much.
As the blog Skeptical Scalpel notes, there isn't a single medication that will relieve all pain for all patients. But there was a huge push in the 1990s and 2000s — through, for example, the federal government's flawed "Pain as the Fifth Vital Sign" campaign andpharmaceutical-backed advocacy efforts — that doctors do something about pain, even when there wasn't much that could be done.
This push allowed — as Keith Humphreys, an opioid and addiction expert at Stanford University, explained — pharmaceutical companies to take advantage of the pain problem: Despite the lack of good evidence that opioid painkillers can treat chronic pain and evidence that these drugs are addictive and dangerous, pharmaceutical companies saw an opportunity for profit, and they marketed opioids to doctors as a safer way to treat pain than other medications.
Pharmaceutical companies' claims were, of course, completely inaccurate, and Purdue Pharma, producer of the opioid OxyContin, would later pay hundreds of millions of dollars in fines for their false claims. Opioid painkillers carry a significant risk of addiction and overdose, especially for long-term users who build up a tolerance of the high and use more and more of the drug without building as much resistance for the respiratory effects that lead to overdose. 
But many doctors, under pressure to treat pain more seriously, bought into the messaging from those decades and prescribed a ridiculous amount of painkillers to patients. In 2012, US physicians wrote 259 million prescriptions for opioid painkillers — enough to give a bottle of pills to every adult in the country. And these pills don't just end up in patients' hands, instead proliferating to black markets, landing in the hands of teens who rummaged through parents' medicine cabinets, and so on.
Federal and state governments, aware of the problem, began going after doctors and pharmacists who provided painkillers too leniently, threatening them with incarcerationand the loss of their medical licenses. Ideally, doctors will still be able to provide painkillers to patients who really need them — after, for example, evaluating whether the patient has a history of drug abuse. But doctors who weren't conducting even such basic checks are being told — not just through the crackdown, but via health-care organizations and public education campaigns — to give more thought to their prescriptions.
Despite increased awareness and the crackdown, there are still signs of some doctors doing a lot of overprescribing. A Centers for Disease Control and Prevention reportfound that a small minority of prescribers are responsible for most opioid prescriptions, although there's a lot of variation from state to state. For example, the top 1 percent of prescribers wrote one in four opioid prescriptions in Delaware, while the top 1 percent of prescribers wrote one in eight such prescriptions in Maine.
Still, the crackdown has appeared to stabilize the number of painkiller overdose deaths in the past few years, but it also led to a major downside: an increase in heroin abuse and deaths.

Painkiller-linked deaths have stabilized, but heroin-related deaths appear to be rising 

When opioid addicts couldn't fulfill their cravings with painkillers, many turned to an opioid that is, despite its status as an illegal substance, cheaper and more accessible than the legal medicine: heroin. So as painkiller overdoses leveled off at about 16,000 in recent years, heroin deaths skyrocketed from just over 3,000 in 2010 to more than 8,200 in 2013, according to CDC data. Though all heroin users didn't necessarily start with painkillers, it's the transition from painkillers to heroin, Humphreys and other experts say, that led to the recent dramatic spike in heroin abuse. 
Heroin is even deadlier than opioid painkillers — it's far more potent, and far more addictive. So even if a small number of painkiller users moved on to heroin, it would still, on a per-person basis, lead to far more deaths.
What's worse, painkiller and heroin users tend to mix opioids with other substances — like alcohol and cocaine — that exacerbate the risk of an overdose. A 2003 study found roughly half of heroin-related deaths involved alcohol, and the CDC found that 31 percent of prescription painkiller-linked overdose deaths in 2011 were also linked tobenzodiazepines, a legal anti-anxiety drug. So as people used painkillers and moved on to heroin, they continued using all these other substances that made their risk of overdose much, much higher — and it's showing in the numbers.
That doesn't mean cracking down on painkillers was a mistake. It appears to have slowed the rising number of painkiller deaths, and may have prevented doctors from prescribing the drugs to new generations of potential addicts. So the crackdown did lead to more heroin deaths, but it will hopefully prevent future populations of drug abuse, which could have suffered even more overdose deaths. That's why, though they knew it could lead to a temporary spike in heroin use, state and federal agencies came down on painkillers.

The rise in heroin deaths wasn't unexpected 

The results of a government crackdown on opioid painkiller prescriptions were long a concern in medical circles and among drug policy experts, who warned it could lead to a rise in heroin abuse. But it's only recently that research granted legitimacy to the concerns: A study in JAMA Psychiatry found many painkiller users were moving on to heroin, and a 2015 CDC analysis found people who are addicted to prescription painkillers are 40 times more likely to be addicted to heroin.
"We always were concerned about heroin," Kevin Sabet, a former senior drug policy official for the Obama administration, told the Huffington Post. "We were always cognizant of the push-down, pop-up problem. But we weren't about to let these pill mills flourish in the name of worrying about something that hadn't happened yet. … When crooks are putting on white coats and handing out pills like candy, how could we expect a responsible administration not to act?"
The unintended consequence is a very typical result of governments' anti-drug efforts. It's called the balloon effect: When the government cracks down on one source of supply for drugs, people don't just stop using. Instead, they find another source — and the cycle continues. This effect has been observed not just with the crackdown on opioid painkillers, but with anti-drug efforts in Latin American countries — after the governments there cracked down on the illicit drug trade in the 1990s and 2000s, it simply shifted to other parts of Central and South America. This effect is one of the primary reasons the war on drugs has failed to significantly curtail drug trafficking. 
But in the case of opioid painkillers, the consequence was new heroin users and deaths in sometimes unexpected places. Unlike the heroin epidemic of the 1960s and 1970s and the crack cocaine epidemic of the 1980s, the current epidemic isn't a mostly urban problem: The places reporting the biggest struggles with painkillers and heroin — likeWest Virginia, Vermont, and New Hampshire — tend to be very rural and very white. So this wasn't just a new drug epidemic, but a crisis that was hitting regions of the country that hadn't experienced this sort of thing on such a massive scale before.
As Sabet acknowledged, the government knew this was a possibility — but the feds still thought it was worth cutting off the supply of painkillers to prevent doctors and pharmacists from creating even more generations of painkiller addicts.
This didn't quite deal with all existing opioid users, who are now dying by the tens of thousands each year, increasingly of heroin. To deal with that, policy experts and lawmakers are turning to public health policies — drawing a strong contrast with the tough-on-crime approach that followed other drug epidemics in the past few decades.

Unlike previous crises, this drug epidemic is (mostly) inspiring a public health response 

Federal and state governments have, particularly since the 1970s, tended to respond to drug epidemics with tough-on-crime measures. President Richard Nixon launched the modern war on drugs in 1971 in part as a response to the heroin epidemic of the time, which Nixon characterized as a "deadly poison in the American life stream." And President Ronald Reagan massively increased drug penalties in the 1980s as part of a response to the crack cocaine epidemic, which helps explain why possession of crack received a prison sentence 100 times as harsh as possession of the pharmacologically similar cocaine.
But the opioid painkiller and heroin epidemic is by and large resulting in a different type of response. Although some officials (particularly in Louisiana) have reacted to their heroin crises with a tough law enforcement approach, most federal and state officials have encouraged treating the epidemic as a primarily public health problem.
The public health approach is in line with both public and expert opinion. Polls show that most Americans prefer treating drugs as a public health issue, not a criminal one. Andmany experts, including the International Narcotics Control Board, have asked for a greater focus on public health policies to curtail demand for drugs.
Local and state governments have paid attention. Various state legislatures controlled by Democrats and Republicans have, for example, passed laws allowing police to carry naloxone, which reverses opioid overdoses. Some police chiefs have gone as far asrefusing to arrest heroin users, instead guiding them to rehabilitation and treatment. And governors from both parties, including New Jersey Gov. Chris Christie and West Virginia Gov. Earl Ray Tomblin, have characterized the epidemic as an urgent public health problem. 
The opioid epidemic has been at the center of much of this reform, but it's actually part of a much broader shift in the states' approach to drugs. Faced with growing prison costs and the failure of the drug war to significantly curtail drug abuse, states have cut back on old tough-on-drugs tactics by, for example, pushing low-level offenders to specialized drug courts that attempt to put drug addicts in treatment and rehabilitation instead of jail and prison. These are policy changes that should, at least in theory, benefit anyone with a drug problem, but painkiller and heroin addicts will be among the first to claim the results of reform due to the ongoing epidemic.
The Obama administration, too, has embraced the public health approach. Led by Michael Botticelli, a recovering alcoholic, the White House Office of National Drug Control Policy has stepped up spending on treatment and prevention programs. It's called on drug courts to allow people to use anti-addiction medications such as methadone and Suboxone, which stop the effects of opioid withdrawal without producing the kind of euphoric high that leads to addicts chasing more and more of the drug. It's dedicated$2.5 million to fight heroin abuse. And the US Department of Health and Human Services — notably, the public health branch of the federal government — set aside $133 million to fight opioid abuse.
"The main distinction with this plan is the general acknowledgment that substance use is a public health issue," Botticelli told me in 2014, speaking to his office's budget. "We can't arrest our way out of the problem, and we really need to focus our attention on proven public health strategies to make a significant difference as it relates to drug use and consequences to that in the United States."
Read More
Subscribe to: Posts ( Atom )