Inequality 31, Economics, politics and forcing equality

A number of my friends have posted in facebook in agreement with this article from The Economist, "To be relevant, economists need to take politics into account." so I will post to contradict it. This article or its title is misleading if not wrong because: 

(1) It is saying that economists writing about plain economics are not relevant, so to make them relevant, they must write about economics + politics + sociology + anthropology + history + genderology + ...?

(2) Consider a simple demand-supply price equilibrium theory. A big storm damaged crops in a major food producing region that substantially supplies food in M.Manila, so the supply goes down, the price goes up since demand remains the same. No need for politics, history, anthro, sociology, gender, etc. to inject into the analysis to make it relevant.

Now comes politics, government imposes price control on food items supplied by other regions not affected by that big storm "to protect the poor." Things become awful, formal supply goes down, turns to "black market" supply. It is politics inserted into normal economic phenomena that distort things. And people think economists should always factor in politics, history, etc. in an otherwise simple situation. Lousy.

(3) Economists who comment on political issues -- politics around the world, political ramifications of federalism and parliamentarism, revamp of the constitution, etc. -- then they must insert politics, history, etc. in their analysis.

Consider this paper, "Economics versus Politics: Pitfalls of

Policy Advice" by Daron Acemoglu and James A. Robinson, Journal of Economic Perspectives—Volume 27, Number 2—Spring 2013. http://economics.mit.edu/files/10403

"Our argument is that economic policy should not just focus on removing market failures and correcting distortions but, particularly when it will affect the distribution of income and rents in society..." (last par. of the paper)

Can people, economists "remove market failures"? Wow. Only central planners would think that way. Consider these:

1. Mr. X and his friends demand a 500 GB USB that is sold for only P1,000. Demand is there but supply is zero, so market failure.

2. Mr. Y and his friends supply a rice variety that is said to cure 10 types of common diseases and sold at P800/kilo, no one buys their rice. Supply is there but demand is zero, so market failure.

Anyone, anytime and anywhere can create a market failure, as shown by 2 examples above. Some guys like economists (and politicians, etc.) think they can stop or remove that? Wow.

On inequality, it's part of nature, it's good. Otherwise people will work only few hours a day and demand that their pay, their house, healthcare, etc should be at least 1/5 that of the privileges enjoyed by Bill Gates and Henry Sy or John Gokongwei, etc. to have equality in society. The world has progressed because of respecting inequality, not forcing equality like socialist countries.

Now consider this drama by Oxfam and many other groups, institutions like the UN. https://www.oxfam.org/.../just-8-men-own-same-wealth-half...

Ok, the incomes and wealth of Bill Gates, Zuckerberg, etc. have expanded up to the troposphere, did they make people's lives, our lives, poorer and lousier? Do we have lousy and despicable lives because Zuckerberg got richer each year because of facebook?

No. On the contrary, we enjoy more comfortable, more convenient lives because of the inventions of these super rich people. If people think that Zuckerberg et al are creating a more despicable world because of their inventions and companies, they better opt out of fb, youtube, google, iphone, etc because everytime they use those things, they contribute to further enrichment of these super super rich people.

The world enjoys more comfort, more welfare because of the innovations made by these super-efficient, super-ambitious and super-rich people. Soon people will be working only 4 or 3 days a week and still get high pay because of rising productivity (and rising inequality) introduced by those super-efficient people. We should support the expansion of more super rich people instead of demonizing them. The politics of envy is only for the envious, like Oxfam and the UN :-)

The only way to stop rising inequality is via dictatorship. Put a gun on people's heads and tell them to stop being too innovative, too inventive, too revolutionary in business, to stop and limit excellence.

Central planners would clap this scenario. They get huge pay and various political perks doing all types of social engineering to force equality in the world.
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See also:

Inequality 28, IBON and sensational analysis, November 19, 2015

Inequality 29, More on Oxfam, squatters and a lamborghini

Inequality 30, Filipinos in Forbes' world billionaires, March 04, 2016

BWorld 42, World inequality, Oxfam and bad mathematics, February 11, 2016 

Inequality 29, More on Oxfam, squatters and a lamborghini

A friend commented on my critique of the Oxfam paper and said that it is not only Oxfam that questions rising inequality, there are also some reference to the  Credit Suisse report, the last Davos conference saying that inequality as "deepening", and Piketty says the same thing.

My main issue here is against bad math. The numerator, world's top billionaires (numbers from Forbes) is cumulative wealth of the top 80, or top 100, etc. rich individuals, accumulated after 4, 5, 7 decades. But denominator is wealth of a country for 1 year. Numerator will be bloated while denominator is relatively understated, that is why people get quotients like 40% or 60% of GDP, etc. 

To compare apples to apples, it should be:

[wealth of top 10 (or top 80, or top 100, etc.) accumulated over 40 years] / [national wealth (or GDP size) accumulated over 40 years].

What Oxfam and others lousily did is:

[wealth of top 10 (or top 80, or top 100, etc.) accumulated over X years] / [national wealth (or GDP size) of only 1 year]

That is why the numerator is bloated, the denominator is controlled. Lousy math.

Here's an analogy. People take the cumulative wealth of the CEO of a company with 200 employees, the value of his houses, cars, investments, other properties, things that he acquired over the past 40 years as an ordinary employee, then a junior officer until he became a CEO of that same company. That's the numerator, it's big because it's accumulated wealth over 40 years.

Then people get that company's gross sales for one year. This method of bloated numerator over denominator = "scandalous inequality" is simply lousy math.

The gross debt/GDP ratio can be comparable because a responsible government would aspire to pay back or retire some debts in period of no economic and financial turmoil or crisis, so the ratio should flatline or even decline after sometime. But most or majority of governments are outright irresponsible, spend-spend-spend, borrow-tax-borrow is their endless motto, thus the ratio keeps rising.

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See photo 1 below. Many people say having those tall and flashy skyscrapers in Makati is scandalous or even criminal because there are so many squatters left behind. Are they correct in saying this?

No. Why? 

1. In the first place, there should be no squatters in this part of the river, Pasig river. That area should have no structures because that is a river bank, prone to flooding and the people living on those structures contribute to more solid wastes directly dumped to the river.

2. Assuming that all laws (on private property, public property, environmental protection, etc.) are waived and the squatters are justified to live in that river bank. Those structures will greatly improve as the residents there have property rights to the area, there is no threat of being demolished, so they will aspire to build more stable structures.

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See photo 2 below. Some people say that society should demonize this, that government should tax ostentatious goods 500%, 2,000% or more as an "equating factor". Are they correct in saying this?

No. That is another politics of envy, the thinking that no one in this country should drive a lambo, a ferrari, etc. because there are "so many" poor people. Better if everyone is riding a motorcycle or tricycle, there will be equality? Equally poor?

In a country of 102 M people, only a few dozen of Lambo and Ferrari? There should be hundreds. There should be more rich and super rich people here.

A position in government is often a trap. Rational people become irrational, easily infected by a welfarist, populist, and even socialist thinking. Inequality is wrong so there should be forced equality. Pull down the rich and efficient and subsidize the lazy or irresponsible. Like people who do not want to work, or they work 6 days a week but also drink and party 6 nights a week and have zero savings.

"Trickle down" philosophy is actually from a statist or "worship the state" philosophy. The biggest entity in society is the state and its national and local agencies and bureaucracies. From the state, subsidies and welfare and the moon and the stars will trickle down to the masses.

A friend commented that "To improve I believe we all need to be Smart. Being able to get by with just a "job" is not enough. People don't realize that in a few years computers will replace us. I struggle to figure out which job a computer won't do better in the future."

Right, and many jobs that are done by less skilled workers -- laundry, street sweeping, kitchen dish washing, rice planting and harvesting, cashiers in MRT stations, etc. -- will be done by machines. And many anti-rich, anti-capitalism, anti-globalization, anti-many things will cry out loud in the streets to further raise the government-dictated minimum wage. And this will result in an unintended consequent of more unskilled people who will no longer be hired because the mandatory wages + mandatory social contributions have become higher while those skills are replaceable by machines.

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See also:

Inequality 25: On High CEOs Pay and Legislated Minimum Wages, April 30, 2015 

Inequality 26, Pew survey result on support for free market, July 27, 2015 

Inequality 27, ADR Institute forum on poverty and growth, August 18, 2015

Inequality 28, IBON and sensational analysis, November 19, 2015

BWorld 42, World inequality, Oxfam and bad mathematics, February 11, 2016

BWorld 42, World inequality, Oxfam and bad mathematics

* This is my article in BusinessWorld last February 09, 2016.

There are two ways to exaggerate and sensationalize national or global income inequality. One is to compare the wealth of the top 10 or top 50 richest individuals and families per country using Forbes’ Billionaires data as numerator, with the gross domestic product (GDP) size of that country as denominator. The other is to use country wealth using household balance sheet (HBS) for one year as denominator.

(A) 

Sum of wealth of top 10 (or 50) richest individuals in a country

------------------------------------------------------------------------ = inequality share

Gross domestic product (GDP) of a country, latest year

And

(B)

Sum of wealth of top 10 (or 50) richest individuals in a country

------------------------------------------------------------------------- = inequality share

Estimated country wealth using household balance sheet (HBS)

Both computations are using wrong mathematics. Why?

Simple, the numerator is cumulative wealth or wealth accumulated over a period of many years (earnings, savings, investments, reinvestments) while the denominator is GDP size for only one year, or estimated country wealth for only one year.

Or the numerator is sum of wealth over many years for individuals while the denominator is sum of wealth produced in just one year in one country. The GDP for instance is the value of flow of goods and services produced in one year, not the cumulative production of goods and services for many decades.

Oxfam has produced a sensational report published in January 2016, Wealth: Having It All and Wanting More.

It claims, among others, that:

“By 2016, the top 1% of people in the world will have more wealth than the bottom 99%, and 80 people now have the same wealth as the bottom half of the world’s population, down from 388 in 2010.”

If the data and math are correct, that is indeed a revolting statement. But Oxfam used faulty math in equation (b) to make that false statement. It used data from Forbes Billionaires for its numerator, and Credit Suisse’s (CS) Global Wealth Databook 2015 for the denominator.

Credit Suisse computed country wealth using household balance sheet (HBS), but only 48 countries have such data.

Of the 48, only 17 have complete data, the other 31 countries cover only financial assets and debts. Then three countries have household survey data where wealth levels can be calculated. These 51 countries (48 + 3) cover 66% of the global population and 96% of total global wealth, estimated to be $263.24 trillion in 2014.

For the other 160 countries that lack direct data, CS used econometric techniques to generate estimates of the level of wealth. Thus, for many countries, the quality of wealth data is labeled by CS itself in Table 2.1 as either “poor” or “very poor.”

On the super-rich, let us take the case of the 5 richest person in the world from Forbes Billionaires report. (See table)

Notice that ALL five of them made their fortune on their own, did not inherit huge money from their parents. It is mainly a case of hard work, efficiency, and luck.

But Oxfam gave the impression that those wealth accumulated through four to seven decades of savings and reinvestments are comparable to national and global wealth flow in one year.

So because Oxfam made wrong math and wrong assumptions, it proposes wrong and questionable proposals to fight high inequality. Below are five of their nine proposals, my comments are indicated by:

1. Governments should end extreme inequality by 2030, create national inequality commissions.

Meaning the bulk of the fruits of efficiency, hard work and innovation should go to governments, the UN, other central planning agencies. Get more money from the super rich and distribute to the poor, with huge pay, allowances and perks to the central planners, policy makers, consultants and administrators of a massive global wealth redistribution.

2. Increase minimum wages towards living wages; and close the gap with skyrocketing executive, move towards a highest-to-median pay ratio of 20:1.

Meaning as entrepreneurs grapple with rising labor cost for the skilled workers, the unskilled will hardly be hired and unemployment will rise.

3. Share the tax burden fairly, shift taxation from labor and consumption towards wealth, capital and income from these assets.

Meaning cut the income tax of workers, cut GST and VAT rates, good. Shift taxes to ownership of companies, houses, cars, private jets, yachts.

4. Close international tax loopholes, a new global governance body for tax matters, stop the use of tax havens.

Meaning there should be no more tax competition, only tax harmonization and uniformity; create a new global tax bureaucracy that will bully economies that charge very low taxes.

5. Implement a universal social protection floor, basic income security through universal child benefits, unemployment benefits and pensions.

Governments should expand public spending including giving benefits to people who do not want to work, or are hired but frequently fired due to laziness and irresponsibility.

People should avoid that lousy computational approaches shown above.

To get a more realistic picture of inequality, they may use this approach,

(C)

Sum of wealth of top 10 (or 50) richest individuals in a country

--------------------------------------------------------------------------- = inequality share

Sum of GDP (or HBS) of a country over X number of years

Finally, Oxfam is silent on the more important function of government, that of enforcing the rule of law and protecting private property.

A poor person may have free education up to college for the kids, free health care and medicines, free or highly-subsidized housing, monthly cash transfer, and allowance from the state, and so on. Fine.

Of what use are these if the kids can be easily abducted and sexually abused if not murdered, if the small investments like a tricycle or farm animals or tractor can easily be stolen, if a small piece of land purchased can be easily land grabbed?

Protection of private property rights, protection of people’s right to life against bullies, rapists, and murderers, is a more important function of government, not having endless subsidies and welfarism funded by endless taxation, driven by the politics of envy.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers, and a Fellow of the South East Asia Network for Development (SEANET) and Stratbase Albert del Rosario Institute (ADRi).

minimalgovernment@gmail.com

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See also:

BWorld 16, Growth, capitalism and inequality, August 22, 2015

BWorld 39, Coal and renewables complement each other, January 26, 2016

BWorld 40, CCT vs other welfare programs, SSS vs pension deregulation, January 29, 2016

BWorld 41, OFWs, cheap oil and the TPP, February 06, 2016

Inequality 27, ADR Institute forum on poverty and growth, August 18, 2015

Inequality 28, IBON and sensational analysis, November 19, 2015

Inequality 16: Oxfam and the Politics of Envy

Egalitarianism is very definitely not a feeling but an intellectual construction. I don't think the people at large really believe in egalitarianism; egalitarianism seems to be entirely a product of the intellectuals. -- Hayek, Interview with Bork (1978).

Social inequality is a result of diverse ability, efficiency and motivation of people. Those who are more creative and innovative in producing more output from limited resources will earn more than the others.  And those who are more motivated, more ambitious in producing something that is so innovative and revolutionary, and they later become successful, will also become more wealthy than the rest of society.

So the wider the gap of efficiency and motivation among people, the wider the inequality becomes. Forcing equality among people in society as is done in socialist countries tend to produce more poverty than wealth. This happens because by penalizing creativity and efficiency and subsidizing irresponsibility and inefficiency, the system of economic rewards and punishment is corrupted. If people can eat even if they do not work, why should they work hard, or even work at all.

Free people are not equal and equal people are not free. If people are free to dream high, to work as hard and as efficiently as possible, and some people are free to bum around, to sleep and party as often as possible, then inequality among people will widen. Forcing equality means putting a gun on some people’s head that they should not excel compared to the rest of society.

There was a long article by Oxfam last January 22, 2013, After extreme poverty, let’s look at extreme wealth arguing that extreme inequality is “economically inefficient, politically corrosive, socially divisive, environmentally destructive, unethical, not inevitable.” So they propose to “end extreme wealth by 2025, return inequality to 1990 level.”

To realize their goal, Oxfam is proposing more “regulation and taxation… Limits to bonuses, or to how much people can earn as a multiple of the earnings of the lowest paid, limits to interest rates, limits to capital accumulation… progressive taxation, cracking down on tax avoidance and tax evasion... Closing tax havens…  a globally agreed minimum rate of corporation tax.”

The politics of envy implicitly embedded in these advocacies does not recognize the benefits to humanity produced by the super rich. Among such people are Microsoft founder Bill Gates, facebook founder Mark Zucerberg,  google founders Larry Page, Sergy Brin and Eric Schmidt,  and youtube founders Chad Hurley, Steve Chen and Jawed Karim.

Have these people helped create economic inefficiency, political corrosion, social divisiveness and environmental destruction in the process of their giving us facebook, google, youtube and Microsoft? So that their excess wealth and privileges should be subjected to extra taxes and regulations by governments? This is a doubtful if not mistaken assertion.

Here in the Philippines, multi-billionaires Henry Sy, Gokongwei, Lucio Tan, the Ayalas and many others have become super rich not only because they founded or developed businesses that were patronized and deemed useful by millions of Filipinos like SM, Robinsons, PAL, Ayala Land, Globe, Smart, and other big businesses.  In addition, they do not have enough competitors because of Constitutional limitations and prohibitions on foreign equity ownership on certain sectors of the economy.

There is nothing wrong with being a multi-billionaire if this is achieved through useful invention that benefits humanity. Actual examples are the discovery of facebook, google and youtube.  Take also this hypothetical example.

Supposing a bunch of science geeks and nerds make a grand ambition to create or invent a rice or potato variety that is packed with certain nutrients and vitamins that will improve or boost its consumers' immune system against certain infectious diseases. It is like an indirect vaccine against certain diseases minus the injections. Various laboratory and clinical trials prove that their invention was successful -- safe, effective, no negative side effects, etc. Their rice and potato variety has become a worldwide hit, the geek inventors are selling their rice at P100 per kilo equivalent, and millions and millions of people worldwide are buying their rice, the geeks became super-super rich, they became multi-billionaires.

By simply inventing products and services that are proven to be useful to people, rich and poor alike, these businessmen have already done their part in helping humanity.

It is presumptuous to say that all the super rich only amass their wealth only for their personal and selfish needs, that they are incapable of donating their wealth to the poor, so governments must confiscate a big portion of their wealth and government politicians, officials and bureaucrats, and favored NGOs will redistribute such wealth to the poor.

This is wrong. There are many examples that very rich people voluntarily give away their wealth to the poor, at their chosen projects, programs and terms, not as dictated and prioritized by government politicians and officials.

The Bill and Melinda Gates Foundation (BMGF) gives away $4B a year on average, perhaps in perpetuity, for health charity alone. If  Bill Gates' money was confiscated early on by the US government due to envy or simply because it is a "sin" to amass too much wealth, that foundation's money and global health initiative would not have been possible.

There is also this interesting story of a “nomad billionaire”, Nicolas Berggruen, who as of mid-2012 has a £1.5 billion fortune but plans to give away half of his wealth. He has bought £881m stake in Burger King but he owns no house, no car, not even a watch and carries things in paper bag when he travels.

Class envy and resentment should be curtailed and people should not be penalized for their success. When some people become very rich, their wealth pale in comparison to the greater wealth enjoyed by humanity as a whole through the higher standard of living that the inventions and production of the rich have enabled.

Profit from successful businesses are not hidden in cabinets or idly parked in banks for long. Those profits are reinvested and plowed back into the national and global economy either by expanding the business and hiring more people, or by buying and consuming various products and services, which support other businesses that also hire other people.

If we want prosperity for as many people as possible, allow the producers to produce more, the innovators to invent more, the job creators to hire more. Make things easy for them, do not allow the politics of envy via more regulations and taxation to expand endlessly.

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See also::
Inequality 12: Billionaires and the UN Politics of Envy, July 11, 2012

Inequality 13: Nomad Billionaire, Burger King and Pretty Women, July 17, 2012

Inequality 14: 99 Percent to Support the 1 Percent, October 20, 2012

Inequality 15: SM, Henry Sy and Class Envy, October 31, 2012

EFN Asia 15: Distortions of Welfare Populism, January 17, 2013

EMHN 4: Free Trade, TPP and Public Health Protection

Our new global health network, Emerging Markets Health Network (EMHN) has a new website, http://www.emhn.org/. We are composed of independent and private think tanks in emerging Asian countries that believe in greater role for market competition in the provision of healthcare for the people, rich and poor alike.

Last month, EMHN Executive Director and a good friend, Philip Stevens, wrote an article published in WSJ Asia. Philip argued that free trade -- freedom to trade by producers from different countries and freedom to choose by consumers from different countries -- is consistent with protecting public health especially in encouraging the emergence of more powerful, more disease-killer new medicines. The opposition by Oxfam and other left-leaning NGOs to data exclusivity purportedly to protect public health is not valid, Philip argued.

Enjoy reading, cheers.
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http://online.wsj.com/article/SB10001424127887324407504578186882937216070.html#articleTabs%3Darticle

December 18, 2012, 11:41 a.m. ET

Free Trade Is Good for Health

The TPP can improve access to food and medicine. But Oxfam won't tell you that.

By PHILIP STEVENS

Last week, trade negotiators for the Trans Pacific Partnership (TPP) sat down in Auckland to hammer out a deal. This new multilateral trade agreement between the U.S. and ten Asian and Latin American countries could be the largest of its kind since the collapse of World Trade Organization talks in Geneva in 2008, so it's perhaps not surprising that it's coming under a barrage of left-liberal criticism. Oxfam and others now claim the TPP is bad for health.

These development NGOs argue the free-trade pact will impose onerous new forms of intellectual-property protection on essential medicines that go beyond those agreed by the WTO's Trade Related Aspects of Intellectual Property (TRIPS) 1995 agreement. And that this will make it difficult for the world's poor to access cheap drugs. But this is a misperception NGOs are amplifying, ignoring altogether the positive story about free trade and health.

First off, Oxfam's claim that the TPP will reduce access to essential medicines for poorer TPP countries like Vietnam or Peru is factually untrue. The U.S. government has stated that the TPP will respect flexibilities in the TRIPS agreement agreed in Doha in 2001 that allow developing nations to override pharmaceutical IP rights in a number of circumstances, including health emergencies.

Next, the vast majority of drugs on the World Health Organization's list of essential medicines to treat the most common infectious diseases are off-patent. So IP rules are simply irrelevant to drugs for many conditions prevalent in the poorest countries.

The same is true for common medicines used to treat the most prevalent non-communicable diseases faced by slightly wealthier TPP countries such as Malaysia. So many medicines for diabetes, hypertension and asthma are completely outside the scope of any free-trade agreement.

Still, NGOs raise the specter that the TPP will sidestep traditional patent rules by imposing punitive new periods of "data exclusivity" for essential medicines. Data exclusivity is a form of intellectual property that allows manufacturers of new drugs to retain the right to valuable data generated during clinical trials. The idea is to prevent generic manufacturers from using it to make copies until a fixed period elapses—typically five years in most countries.

Data exclusivity is rapidly surpassing patents as the most important form of intellectual property for medicines, as the 20-year term of a standard patent is increasingly eaten up by lengthy testing and regulatory requirements that drive up R&D costs. After jumping though these hurdles, an innovative medicine typically has around only seven years patent life to recoup costs and make a profit.

Absent radical reform of the drug approval system—which is unlikely to happen any time soon—data exclusivity is then the best assurance innovators have that their investments will reap a return. Otherwise, launching a new drug could become so expensive that patients may not have access to new medicines. That's why such considerations are now included in modern trade deals.

Despite what Oxfam thinks however, the chances that the TPP will lengthen the exclusivity period are very low. The five years of exclusivity for new standard chemical drugs is enshrined in U.S. law, so Washington cannot ask for more in trade negotiations.

Five years is also the standard to which other TPP countries like Vietnam and Malaysia subscribe, so it isn't clear they'll push for more. In any case, the TPP will probably only apply data exclusivity to new drugs, meaning that existing drugs remain unaffected.

Yet in the end, intellectual property and the NGO community's fulminations against it are a sideshow in the wider story about trade and health. These activists and their intellectual backers like to view free trade as somewhere between an agent of imperialist economic repression and a sinister vehicle for America's fast food industry, but the reality is that there have been few more powerful forces for improving health in the history of humanity.

Prior to the 1950s, the majority of the world's population lived a precarious life as subsistence farmers. Since then, the opening of global markets, first by the General Agreement on Tariffs and Trade and then by the WTO, has transformed the health prospects of millions by raising incomes. That, and not IP flexibility, made decent food, sanitation, and new medical technologies available.

That's how the Asian countries involved in the TPP—Malaysia, Singapore, Brunei and Vietnam—have witnessed startling improvements in the health prospects of their citizens since the middle of the last century. Singapore signed GATT in 1973, and by 1993 there were no import duties for any product except alcohol, tobacco and automobiles, a situation that largely persists today. Singapore now surpasses many European countries for life expectancy, with Malaysia not far behind.

Each of these countries has reaped enormous welfare dividends by opening their borders to free trade. With poorer countries such as Vietnam now joining the party, millions could benefit from the TPP—provided they are not put off by scaremongering NGOs.

Mr. Stevens is executive director of the Emerging Markets Health Network at the Institute of Democracy and Economic Affairs (IDEAS), Malaysia.

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See also:
EMHN 1: Forum on Promoting Markets in Healthcare, IDEAS-Malaysia, June 23, 2012
EMHN 2: IDEAS Forum in Penang, Malaysia, September 01, 2012
EMHN 3: Penang Workshop Report, Seotember 10, 2012

Drug Innovation 6: Dealing with Drug-Resistant TB

Diseases evolve. These are living micro-organisms -- bacteria, virus, etc. -- that feed on certain organs of the human body. They are part of human and natural evolution, sadly. That is why treatment and cure of old and re-emerging diseases must evolve too, endlessly. That is why drug innovation, medical science and diagnostics innovation, must continue to evolve and modernize.

Below are some stories of drug-resistant tuberculosis, as well as challenges to deal with malaria, an old disease that continues to kill hundreds of thousands of people every year until now. Estimated global death from malaria in 2010 was twice that of WHO estimates of 655,000 people. A BMGF funded study published in The Lancet showed that for the same year, estimated death from malaria was 1.24 million people, mostly children, and mostly in Africa.

1. TB drug resistance, from interaksyon.com, August 30, 2012
2. Cure for malaria, from ibtimes.co, October 25, 2012
3. Malaria deaths, from The Lancet and BBC.

http://www.interaksyon.com/article/41831/tb-drug-resistance-a-fast-growing-problem-researchers-warn

TB drug resistance a fast-growing problem, researchers warn

August 30, 2012

PARIS - Researchers on Thursday sounded the alarm over drug-resistant tuberculosis, calling it a curse that was swiftly becoming more difficult and costly to treat.

In eight countries they studied, 43.7 percent of TB patients did not respond to at least one second-line TB drug, a strategy used when the most powerful first-line drugs fail.

The probe, covering Estonia, Latvia, Peru, the Philippines, Russia, South Africa, South Korea and Thailand, is reported in The Lancet medical journal.

"Most international recommendations for TB control have been developed for MDR (multidrug-resistant) TB prevalence of up to around five percent. Yet now we face prevalence up to 10 times higher in some places," Sven Hoffner of the Swedish Institute for Communicable Disease Control wrote in a comment carried by The Lancet.

The study also found a 6.7 percent rate for an even more worrying form of resistance called XDR -- for extensively drug-resistant -- TB. It means a patient who does not respond to any two second-line drugs.

An airborne disease of the lungs, tuberculosis is usually treatable with a six-month course of antibiotics.

But if patients do not take their medicines as prescribed, the bacteria that causes TB can develop resistance to the drugs. In rare cases, people can also be infected with already resistant strains.

MDR TB in the United States can cost as much as $250,000 (200,000 euros) per patient to treat.

XDR TB requires about two years of treatment with even more expensive drugs that often cause side-effects and offer no guarantee of a cure.

According to the World Health Organization (WHO), 8.8 million people fell ill with TB in 2010 and 1.4 million died. Co-infection with the disease causes about a quarter of all deaths among people with HIV.

"So far, XDR TB has been reported in 77 countries worldwide, but exact prevalence remains unclear," study author Tracy Dalton of the US Centers for Disease Control and Prevention (CDC) said.

Climate Stupidity 24: Environmental NGOs as Climate Saviours

The UN FCCC meeting in Durban ended last week. Here's my article yesterday:

http://www.thelobbyist.biz/perspectives/less-gorvernment/1250-environmental-ngos-and-the-climate-racket

Environmental NGOs and the Climate Racket

MONDAY, 12 DECEMBER 2011 08:18

WRITTEN BY NONOY OPLAS

Tags: Less Government

Many environmental NGOs are in the frontline of climate alarmism and scaremongering and in the process, they earn oodles of money from various donors, private and government. The World Wildlife Fund (WWF), Oxfam and Greenpeace are clearly the top three of these NGOs.

I was scandalized by this analysis of the number of participants in the on-going UN climate negotiations in Durban, South Africa. Out of the 14,500+ registered participants to the two-weeks meeting, nearly 6,000 were from NGOs, nearly 5,000 from governments or country delegations, 1,400+ from media, 1,100+ from different UN agencies, 486 from different international organizations (WB, ADB, etc.), 327 from UN Secretariat, and 278 from “unknown” or non-registered groups. See the chart and longer discussion by Willis Essenbach here,, NGOs: It’s Worse Than We Thought.

Willis exposed that nominally, there were plentier country delegations than from NGOs. But many NGO leaders – at least 14 from WWF, 9 from Oxfam, and from various country-based NGOs – were masquerading as government and country delegates. So that when he reclassified them to where they really belonged, the number of “climate-saviour” NGO leaders is plentier than delegates from country governments. Woe unto the taxpayers of those countries. I will not be surprised if many “Philippine delegates” are actually from NGOs and not from the government. But the list of Philippine delegation to Durban can be a mystery, it’s not even in the website of the Climate Change Commission.

While in Durban, the WWF and Oxfam  have conspired to propose a new international tax, a fuel levy of $25/ton, raising bunker fuel prices by 10 percent. Now see how they will indirectly benefit from it, via the so-called “Climate Green Fund”. This chart below and a longer discussion about this new rent-seeking scheme is discussed here,  WWF and Oxfam pushing for a shipping tax at Durban COP17 – since when do NGO’s get to write tax laws?

The WWF is making hundreds of millions of dollars per year from donations from different sources. All they do is keep scaring the world, and those gullible enough, rich and poor alike, give them money. Coca Cola for instance, gave WWF $1.64 M last year, and will give a separate $2 M for “polar bear conservation projects”. So next time you drink Coke, you are indirectly giving money to the WWF.

If you withraw money from Banco de Oro (BDO, Sy group), the ATM automatically asks you to donate P5 to WWF or not. If you buy a plane ticket from Cebu Pacific (Gokongwei group), they ask you to donate several hundred pesos to WWF to offset for your “carbon footprint” or not. If you are not careful, you will be hoodwinked and fooled to donating money to the WWF, and this NGO will use the money to further scare you that the end of the world is near, unless you give them more money. The WWF is also among the strong lobbyists for the enactment of the renewable energy (RE) law where one of its goal is to make the already most expensive power rates in Asia become even more expensive, see earlier discussion here   Climate Alarm vs. Expensive Electricity.

Meanwhile, here is the temperature anomaly (or “deviation from average temperature”) for all Novembers over the past 10 years. Graphs is from RSS : Coldest November Of The Millennium

Global warming is indeed getting more scary. This early part of December 2011 here in Metro Manila and other provinces is wet-wet. Rainy season is supposed to be from June to October only each year. Now we have rains until December, and most likely until early next year as the current La Nina -- started in May 2010, briefly ended but re-emerged again -- is projected to last until end of 2012, or even longer.

And we need those environmental NGOs to further scare us with their stupid and idiotic formulation that “man-made warming causes less rain and more rain, less snow and more snow, warming causes cooling”.

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Meanwhile, just how much extortion do the climate party-goers from NGOs and poorer governments want from rich governments? I thought it was on the several hundred billion dollars only. I was wrong, see this report from WUWT.

http://wattsupwiththat.com/2011/12/10/latest-extortion-attempt-from-durban-1-6-trillion/
Latest extortion attempt from Durban COP17: $1.6 Trillion

Posted on December 10, 2011 by Anthony Watts

Gosh. Who knew that a massive tax could solve all imagined climate problems?

David L. Hagen writes:

The UN is demanding control over $1.6 trillion per year to control climate. See Section 47 in draft # FCCC/AWGLCA/2011/CRP.39 9 December 2011 #GE.11-71576 at: http://unfccc.int/resource/docs/2011/awglca14/eng/crp39.pdf

47.  The provision of the amount of funds to be made available annually to developing country Parties, which shall be equivalent to the budget that developed countries spend ondefence, security, and warfare. Fifty per cent of that amount shall be for adaptation, 20 per cent for mitigation, 15 per cent for technology development and transfer and 15 per cent for forest-related actions in developing country Parties;

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Update: One shocker news to the warmists:

http://www.bbc.co.uk/news/world-us-canada-16151310


13 December 2011 Last updated at 12:01 GMT
Canada to withdraw from Kyoto Protocol

Environment Minister Peter Kent: ''Kyoto is not the path forward for a global solution for climate change''

Continue reading the main story

Canada will formally withdraw from the Kyoto Protocol on climate change, the minister of the environment has said.

Peter Kent said the protocol "does not represent a way forward for Canada" and the country would face crippling fines for failing to meet its targets.

The move, which is legal and was expected, makes it the first nation to pull out of the global treaty.

The protocol, initially adopted in Kyoto, Japan, in 1997, is aimed at fighting global warming.

"Kyoto, for Canada, is in the past, and as such we are invoking our legal right to withdraw from Kyoto," Mr Kent said in Toronto.

He said he would be formally advising the United Nations of his country's intention to pull out.

'Impediment'

He said meeting Canada's obligations under Kyoto would cost $13.6bn (10.3bn euros; £8.7bn): "That's $1,600 from every Canadian family - that's the Kyoto cost to Canadians, that was the legacy of an incompetent Liberal government".

He said that despite this cost, greenhouse emissions would continue to rise as two of the world's largest polluters - the US and China - were not covered by the Kyoto agreement.

"We believe that a new agreement that will allow us to generate jobs and economic growth represents the way forward," he said....

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See also:

Little Ice Age for the Next 300 Years?, July 07, 2009
Sunspotless Days, Cooling and Bureaucracy, July 21, 2009
Politics and Money in Climate Hysteria, July 24, 2009
Scientists Speak: No "Consensus" on AGW, July 31, 2009
Sunspotless Days, Cooling and Bureaucracy, August 12, 2009
Sunspots and Politics, August 15, 2009
Solar Minimum and Copenhagen, September 12, 2009