Adair Turner: stop blaming bankers
The art of the nappy
31st August 2009
Sam Leith’s amusing piece on the cultural penumbra of nappies (September) is essentially about the confusion generated in people’s minds—including, it seems, his own—by the use of the kinderschema. This is the phenomenon where the appearance of infant humans, indeed all mammals, differs from that of adults: bigger head relative to body, chubby roundedness, less protruding (snub) nose, large eyes, small mouth and so on. It gets the “ah how cute” reaction from adults and, most importantly, elicits caring. It has been used by makers of films, books, toys, clothes and nappies to appeal to adults by drawing a similar response to the product as to the children themselves. From Disney to the Teletubbies, the kinderschema has been exploited to say: this is cute and suitable for children, watch me, buy me.
John Richer
Children’s Hospital, Oxford
***
Adair Turner 1
7th September 2009
Adair Turner (September) suggests that bad remuneration policies encouraged excessive risk taking among bankers, even though he admits that the same policies wiped out fortunes in bank stock held by bank employees. He brushes away this contradiction by claiming that bankers took “irrational” risks, and argues for higher capital requirements as a check against them doing so in the future.
Yet capital requirements may have actually caused the crisis. From 2001, US banks were required to hold 60 per cent more capital against a mortgage than against a mortgage-backed security rated AA or AAA. This encouraged banks to buy these securities—arguably the root of the problem. But 81 per cent of the securities bought were rated AAA, meaning that they were less risky and less lucrative than AA-rated securities. It would appear, then, that bankers did not knowingly, and thus “irrationally,” embrace risk in pursuit of higher remuneration. Rather, they mistakenly believed that triple-A bonds were virtually risk free—as did the regulators whose rules privileged such bonds.
Jeffrey Friedman
University of Texas, Austin
***
Adair Turner 2
3rd September 2009
In the recent boom, bankers made themselves rich by creating too much money to lend. When the bust arrived, they were given billions of taxpayers’ money to create and lend enough to keep the economy going. Now they are making it difficult and expensive for people and businesses to borrow the money, instead diverting it to their own purposes: rebuilding their balance sheets; continuing to pay big bonuses; and restoring the value of their shares. Clearly, this system encourages banks to create recurring cycles of credit booms and busts.
The way to stop this is not to pile further layers of complicated and costly regulation on an already expensive banking system. It is to give the central bank responsibility for actually creating the public money supply. This could be done by simply making the existing emergency procedure of “quantitative easing” the normal way of regulating the money supply in the public interest. The money put into circulation would quickly reach banks, making it available for borrowing and lending in markets that would be much more efficient and competitive than those we have today.
James Robertson
Cholsey, Oxon
***
Give me the drugs
9th September 2009
Frankly, I’d be game to try just about any of the proposed “enhancement” drugs in David Edmonds’s article (September).Cognitive enhancers are important quality-of-life drugs. Does anyone want to spend any part of their life with dementia or Alzheimer’s? Anything that can help either enhance a desired drive—be it cognitive, sexual or biological—or significantly slow the age-related decay of a desired performance (of any type) is definitely welcome. Medical research shouldn’t focus on life extension, but on quality of life issues. I have no desire to live a long life, but I do have a deep desire to live a fruitful, happy and productive one until the day I die.
David Scott Lewis
Via the Prospect blog
***
Where’s the justice?
14th September 2009
Amitai Etzioni (September) suggests that a decline of consumerism may prompt an increase in social justice, yet he undermines this by his own examples of non-consumerist societies. “The lifestyle of the Chinese literati, centred around art and philosophy, is a case in point, but a limited one since it was practised by an elite and based in part on exploitation of others.” Not so good on the social justice front, then.
Plus, why would we want social justice as he conceives it at all? He argues for a redistribution of wealth from rich to poor, yet he claims that the working class “spend a good part of their income on status goods such as brand name clothing and other items they don’t really need.” Why redistribute wealth if money just gets taken from the rich, who use it to buy Rolex watches and Ferraris, and given to the poor, who use it to buy flat-screen televisions and overpriced trainers? A non-consumerist society surely has no requirement for greater equality, and could well become more unequal while remaining consistent with its principles. Etzioni himself points out that once annual income reaches $20,000, “there is no correlation between increased income and increased happiness.” So all that is required is that everyone reaches a basic level in terms of satisfiable human needs, after which no redistribution would be needed. And even this, as the Chinese example and other non-consumerist societies throughout history demonstrate, is not guaranteed to happen.
Kieron O’Hara
Nottingham
***
The database state
12th September 2009
Tim Kelsey (August) argues for sharing more public sector data and attacks the “Database State” report that my colleagues and I wrote for the Joseph Rowntree Reform Trust. He cites some of the benefits from analysing NHS data, such as identifying efficient hospitals. But more and more groups are demanding the right to opt out of sharing their records. The Catholic Bishops’ Conference wants women to have the option not to have their records used in research on abortifacients, or in stem cell work; Muslim doctors have made similar demands. An old-fashioned socialist might object to NHS data being used for profit by private companies, like Kelsey’s. And Aims.org.uk, a pregnancy charity, argues that sharing GP records with social care makes poor women less trusting of their GPs and less likely to report post-natal depression, putting them at increased risk of self-harm.
Our “Database State” report found that of 46 large government systems, 11 were almost certainly illegal, and most of the rest had problems. These legal problems cannot be fixed by British legislation as Kelsey seems to think—unless a future parliament is prepared to abrogate the European Convention on Human Rights, leave the Council of Europe, repeal the Human Rights Act and probably leave the EU too.
Kelsey hopes that anonymising records will provide a solution. It will not. For most uses, medical records must link up successive episodes of care. And if we had a public database of all medical records, with only names and addresses removed, a journalist interested in the prime minister would simply search for everyone who had four operations for detached retinas from 1967 to 1972. Indeed, it’s even easier than that; “de-identified” medical records usually have the patient’s postcode and date of birth, making them hardly “de-identified” at all.
Giving people the right to opt out of sharing their records would not, as Kelsey fears, be a disaster for the NHS. If the right is granted calmly, privacy will not become salient for most people and they won’t even think of opting out. But if ministers listen to those who want all of our data, not just most of it, we could see a rerun of Iceland in the late 1990s. There, a company made a deal with the government for access to the nation’s medical records, and objections from campaigners were overruled. This high-handedness led to a bruising fight; eventually the Icelandic supreme court found for the campaigners. Today only about half of the population of Iceland are opted in to their database.
Medical researchers in Britain face a practical choice: act with good grace, and get the records of the large majority. Or try for total control, and lose the farm.
Ross Anderson
University of Cambridge
***
Faking it
26th August 2009
The UK Research Integrity Office (UKRIO) welcomes John Naish’s article (August) on the damaging consequences of academic fraud. Unfortunately, Naish claims that the UKRIO caved in to resistance from academic institutions and shelved plans for a body with powers to investigate fraud allegations. The UKRIO has never proposed creating such a body, nor has it “capitulated” to anyone. We are not beholden to academic institutions or any other part of the research community. Instead, we support researchers, universities and NHS trusts, all of which recognise that misconduct can tarnish Britain’s well-earned reputation as a centre of excellence in research.
Ian Kennedy
Chair, UK Research Integrity Office
***
Opera’s dead women
19th July 2009
Martin Kettle (July) asks where opera would be without dead women. What about the dead men? Monteverdi’s Seneca dies as nobly as Purcell’s Dido. Pollione dies with Norma, Tristan dies before Isolde, Siegfried before Brünnhilde, John the Baptist before Salome. Sometimes only a man dies (Werther); in Don Carlos, the only spotlit death—other than the burning heretic—is Rodrigo. Plus, in Lulu isn’t the body count two women, but four men—three of them Lulu’s husbands, one of whom she murders? And for the record: it’s a myth that the Muette de Portici jumps into the crater of Vesuvius. But where would opera be without myths?
Julian Rushton
University of Leeds
The art of the nappy
31st August 2009
Sam Leith’s amusing piece on the cultural penumbra of nappies (September) is essentially about the confusion generated in people’s minds—including, it seems, his own—by the use of the kinderschema. This is the phenomenon where the appearance of infant humans, indeed all mammals, differs from that of adults: bigger head relative to body, chubby roundedness, less protruding (snub) nose, large eyes, small mouth and so on. It gets the “ah how cute” reaction from adults and, most importantly, elicits caring. It has been used by makers of films, books, toys, clothes and nappies to appeal to adults by drawing a similar response to the product as to the children themselves. From Disney to the Teletubbies, the kinderschema has been exploited to say: this is cute and suitable for children, watch me, buy me.
John Richer
Children’s Hospital, Oxford
***
Adair Turner 1
7th September 2009
Adair Turner (September) suggests that bad remuneration policies encouraged excessive risk taking among bankers, even though he admits that the same policies wiped out fortunes in bank stock held by bank employees. He brushes away this contradiction by claiming that bankers took “irrational” risks, and argues for higher capital requirements as a check against them doing so in the future.
Yet capital requirements may have actually caused the crisis. From 2001, US banks were required to hold 60 per cent more capital against a mortgage than against a mortgage-backed security rated AA or AAA. This encouraged banks to buy these securities—arguably the root of the problem. But 81 per cent of the securities bought were rated AAA, meaning that they were less risky and less lucrative than AA-rated securities. It would appear, then, that bankers did not knowingly, and thus “irrationally,” embrace risk in pursuit of higher remuneration. Rather, they mistakenly believed that triple-A bonds were virtually risk free—as did the regulators whose rules privileged such bonds.
Jeffrey Friedman
University of Texas, Austin
***
Adair Turner 2
3rd September 2009
In the recent boom, bankers made themselves rich by creating too much money to lend. When the bust arrived, they were given billions of taxpayers’ money to create and lend enough to keep the economy going. Now they are making it difficult and expensive for people and businesses to borrow the money, instead diverting it to their own purposes: rebuilding their balance sheets; continuing to pay big bonuses; and restoring the value of their shares. Clearly, this system encourages banks to create recurring cycles of credit booms and busts.
The way to stop this is not to pile further layers of complicated and costly regulation on an already expensive banking system. It is to give the central bank responsibility for actually creating the public money supply. This could be done by simply making the existing emergency procedure of “quantitative easing” the normal way of regulating the money supply in the public interest. The money put into circulation would quickly reach banks, making it available for borrowing and lending in markets that would be much more efficient and competitive than those we have today.
James Robertson
Cholsey, Oxon
***
Give me the drugs
9th September 2009
Frankly, I’d be game to try just about any of the proposed “enhancement” drugs in David Edmonds’s article (September).Cognitive enhancers are important quality-of-life drugs. Does anyone want to spend any part of their life with dementia or Alzheimer’s? Anything that can help either enhance a desired drive—be it cognitive, sexual or biological—or significantly slow the age-related decay of a desired performance (of any type) is definitely welcome. Medical research shouldn’t focus on life extension, but on quality of life issues. I have no desire to live a long life, but I do have a deep desire to live a fruitful, happy and productive one until the day I die.
David Scott Lewis
Via the Prospect blog
***
Where’s the justice?
14th September 2009
Amitai Etzioni (September) suggests that a decline of consumerism may prompt an increase in social justice, yet he undermines this by his own examples of non-consumerist societies. “The lifestyle of the Chinese literati, centred around art and philosophy, is a case in point, but a limited one since it was practised by an elite and based in part on exploitation of others.” Not so good on the social justice front, then.
Plus, why would we want social justice as he conceives it at all? He argues for a redistribution of wealth from rich to poor, yet he claims that the working class “spend a good part of their income on status goods such as brand name clothing and other items they don’t really need.” Why redistribute wealth if money just gets taken from the rich, who use it to buy Rolex watches and Ferraris, and given to the poor, who use it to buy flat-screen televisions and overpriced trainers? A non-consumerist society surely has no requirement for greater equality, and could well become more unequal while remaining consistent with its principles. Etzioni himself points out that once annual income reaches $20,000, “there is no correlation between increased income and increased happiness.” So all that is required is that everyone reaches a basic level in terms of satisfiable human needs, after which no redistribution would be needed. And even this, as the Chinese example and other non-consumerist societies throughout history demonstrate, is not guaranteed to happen.
Kieron O’Hara
Nottingham
***
The database state
12th September 2009
Tim Kelsey (August) argues for sharing more public sector data and attacks the “Database State” report that my colleagues and I wrote for the Joseph Rowntree Reform Trust. He cites some of the benefits from analysing NHS data, such as identifying efficient hospitals. But more and more groups are demanding the right to opt out of sharing their records. The Catholic Bishops’ Conference wants women to have the option not to have their records used in research on abortifacients, or in stem cell work; Muslim doctors have made similar demands. An old-fashioned socialist might object to NHS data being used for profit by private companies, like Kelsey’s. And Aims.org.uk, a pregnancy charity, argues that sharing GP records with social care makes poor women less trusting of their GPs and less likely to report post-natal depression, putting them at increased risk of self-harm.
Our “Database State” report found that of 46 large government systems, 11 were almost certainly illegal, and most of the rest had problems. These legal problems cannot be fixed by British legislation as Kelsey seems to think—unless a future parliament is prepared to abrogate the European Convention on Human Rights, leave the Council of Europe, repeal the Human Rights Act and probably leave the EU too.
Kelsey hopes that anonymising records will provide a solution. It will not. For most uses, medical records must link up successive episodes of care. And if we had a public database of all medical records, with only names and addresses removed, a journalist interested in the prime minister would simply search for everyone who had four operations for detached retinas from 1967 to 1972. Indeed, it’s even easier than that; “de-identified” medical records usually have the patient’s postcode and date of birth, making them hardly “de-identified” at all.
Giving people the right to opt out of sharing their records would not, as Kelsey fears, be a disaster for the NHS. If the right is granted calmly, privacy will not become salient for most people and they won’t even think of opting out. But if ministers listen to those who want all of our data, not just most of it, we could see a rerun of Iceland in the late 1990s. There, a company made a deal with the government for access to the nation’s medical records, and objections from campaigners were overruled. This high-handedness led to a bruising fight; eventually the Icelandic supreme court found for the campaigners. Today only about half of the population of Iceland are opted in to their database.
Medical researchers in Britain face a practical choice: act with good grace, and get the records of the large majority. Or try for total control, and lose the farm.
Ross Anderson
University of Cambridge
***
Faking it
26th August 2009
The UK Research Integrity Office (UKRIO) welcomes John Naish’s article (August) on the damaging consequences of academic fraud. Unfortunately, Naish claims that the UKRIO caved in to resistance from academic institutions and shelved plans for a body with powers to investigate fraud allegations. The UKRIO has never proposed creating such a body, nor has it “capitulated” to anyone. We are not beholden to academic institutions or any other part of the research community. Instead, we support researchers, universities and NHS trusts, all of which recognise that misconduct can tarnish Britain’s well-earned reputation as a centre of excellence in research.
Ian Kennedy
Chair, UK Research Integrity Office
***
Opera’s dead women
19th July 2009
Martin Kettle (July) asks where opera would be without dead women. What about the dead men? Monteverdi’s Seneca dies as nobly as Purcell’s Dido. Pollione dies with Norma, Tristan dies before Isolde, Siegfried before Brünnhilde, John the Baptist before Salome. Sometimes only a man dies (Werther); in Don Carlos, the only spotlit death—other than the burning heretic—is Rodrigo. Plus, in Lulu isn’t the body count two women, but four men—three of them Lulu’s husbands, one of whom she murders? And for the record: it’s a myth that the Muette de Portici jumps into the crater of Vesuvius. But where would opera be without myths?
Julian Rushton
University of Leeds
