Category Archives: science

Guess what? Government housing policy did NOT create the subprime crisis:

A couple of economists at the Federal Reserve actually did the research, and what do you know?  The government policy of supporting home ownership didn’t encourage the unworthy peasants to borrow beyond their means, as the Republicans would like to tell the story today.

It was actually the slimy mortgage lenders who gave undocumented mortgages to anyone who was breathing.  They did it because they could sell them off to unscrupulous Wall Street investment houses.  They in turn bought them because they could buy AAA ratings from the ratings agencies for the bundles they made from them.

And then the Wall Street could slice and dice the bundles and sell them to unsuspecting pension funds and charitable organizations looking for safe yields to replace the bonds they could no longer invest in because they were only yielding paltry interest rates.  Why?  Because Alan Greenspan kept interest rates so low in the early 2000’s that charities couldn’t meet their obligations to pay out 5% of their assets and still grow with the safe investments they were used to investing in.

So let’s not drink the Kool-Aid we’re being sold.  Here it is from the horse’s mouth- first the Abstract, then the link to the entire research paper:


A growing literature suggests that housing policy, embodied by the Community Reinvestment Act (CRA) and the affordable housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality.

We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRA’s effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest.

We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes.












A very important scientific study has finally reached a conclusion:

We have all wondered, I am sure, why it always seems longer to get to where we are going, than it does to get home again.  Now the science is in:

Just sharing…

Another great read-  Joseph Stiglitz on Project Syndicate.  This particular column is called “Gambling with the Planet” – and covers everything from the too-big-to-fail banks to the Japan tsunami/earthquake/nuclear disaster to climate change and what we are risking.  Tough read but well worth it.

The anniversary of the Apple computer – from NPR

On Apple’s Birthday, NPR has a great history of the computer and its components, like the mouse and the integrated circuit.  How far we have come!  I can still remember being taken as a class trip to the local Toronto headquarters of IBM in about 1957 and being shown a room-sized computer.  It didn’t make a great impression as we just sat there and so did the computer.  No bells and whistles, no lights and flashes, just a big box and some boring speeches.  Not much to impress a 10-year-old.

To Gadget or Not? What we really need now –

A great service to those of us who have become addicted to technology and want to slim down our collections. What do we really need and what can we now do without? The best part of technology today is that you can do more with less. Since about 1996, I began to gather a cell phone, a PDA for addresses and calendar, a digital camera, a Kindle and a laptop, not to mention a never-at-hand-when-I-needed-it video camera. Now my iPhone does it all and I only have one item to lose or break! Given that I can do either easily, this is perfect for my scattered and aging brain!

Here is my bottom line:

DESKTOP COMPUTER Lose it. Except for those of us who need it for major data accumulation and program manipulation.

HIGH-SPEED INTERNET AT HOME Keep it. Stick with your I.S.P.

CABLE TV Depends. You could get by with a good Internet connection and some low-cost subscriptions to services like Netflix, Hulu Plus and Amazon Instant Video.

POINT-AND-SHOOT CAMERA Lose it. Use your smartphone.

CAMCORDER Lose it. See camera, above.

USB THUMB DRIVE Lose it. ‘Dropbox’ app or the drafts folder of Gmail, Yahoo Mail, etc works just fine. Email yourself the files.

DIGITAL MUSIC PLAYER Lose it (probably). Do you have a smartphone? Then you have a music player.

ALARM CLOCK Keep it. Phone apps have glitches.

GPS UNIT Lose it. Smartphones have several options for GPS apps.

BOOKS Keep them. You can even borrow them free at sites called libraries. Except for recipe apps for the iPad – complete with video instructions and timers! Wow! Can’t get that in a cookbook!

The whole article is:

Gadgets You Should Get Rid Of (or Not)
Published: March 23, 2011

………..and I seem to be unable to insert the link here! Just color me blog-challenged today!

Big Brother is Watching you! – from the New York Times

It’s Tracking Your Every Move and You May Not Even Know

Published: March 26, 2011


A favorite pastime of Internet users is to share their location: services like Google Latitude can inform friends when you are nearby; another, Foursquare, has turned reporting these updates into a game.

Michael Löwa for The New York Times

Malte Spitz was surprised by how much detail Deutsche Telekom had about his whereabouts.

But as a German Green party politician, Malte Spitz, recently learned, we are already continually being tracked whether we volunteer to be or not. Cellphone companies do not typically divulge how much information they collect, so Mr. Spitz went to court to find out exactly what his cellphone company, Deutsche Telekom, knew about his whereabouts.

The results were astounding. In a six-month period — from Aug 31, 2009, to Feb. 28, 2010, Deutsche Telekom had recorded and saved his longitude and latitude coordinates more than 35,000 times. It traced him from a train on the way to Erlangen at the start through to that last night, when he was home in Berlin.

Mr. Spitz has provided a rare glimpse — an unprecedented one, privacy experts say — of what is being collected as we walk around with our phones. Unlike many online services and Web sites that must send “cookies” to a user’s computer to try to link its traffic to a specific person, cellphone companies simply have to sit back and hit “record.”

“We are all walking around with little tags, and our tag has a phone number associated with it, who we called and what we do with the phone,” said Sarah E. Williams, an expert on graphic information at Columbia University’s architecture school. “We don’t even know we are giving up that data.”

Tracking a customer’s whereabouts is part and parcel of what phone companies do for a living. Every seven seconds or so, the phone company of someone with a working cellphone is determining the nearest tower, so as to most efficiently route calls. And for billing reasons, they track where the call is coming from and how long it has lasted.

“At any given instant, a cell company has to know where you are; it is constantly registering with the tower with the strongest signal,” said Matthew Blaze, a professor of computer and information science at the University of Pennsylvania who has testified before Congress on the issue.

Testosterone and Politics

TESTOSTERONE AND AGGRESSION – AND THE LINK TO SEXUAL SCANDALS – A brief summary of the literature by my friend, Professor Jean Elson, Ph.D.

I asked her about the research regarding testosterone and alpha-males – in regard to all the news in the last decades about politicians, for example, as men in positions of power and their scandals with women – Clinton, Spitzer, Gingrich, Giuliani, Gov. Mark Sanford, Sen. Gary Hart, Pres. Kennedy, the list goes on…  It seemed to me as a biologist that testosterone levels in these men might explain (not excuse) their behavior as it is almost a cliché in our society – the old story of the boss chasing his secretary around the desk is almost enshrined in the mid-20th century psyche.  While we used to believe that the male with the highest level of testosterone achieved the alpha-male status, that is in fact not the case, as shown by the research – the levels actually RISE AFTER WINNING!

So here is the email on the subject from Dr. Elson:

Kemper, Theodore. 1990. Testosterone and Social Structure. New Brunswick, NJ: Rutgers U. Press

Kling, Arthur. 1975. “Testosterone and Aggressive Behavior in Man and Non-human Primates,” In Hormonal Correlates of Behavior, B. Eleftheriou and R. Sprott, eds. New York: Plenum.

Theodore Kemper notes several studies in which testosterone levels were linked to (human) men’s social experiences. The studies included tennis players, medical students, wrestlers, nautical competitors (?), parachutists, and officer candidates. In all cases, winning and losing determined the men’s levels of testosterone. The levels of winners rose dramatically, while those of the losers dropped or remained the same. Kemper suggests that testosterone levels vary depending upon men’s experiences of either dominance (“elevated social rank that is achieved by overcoming others in a competitive confrontation”) or eminence (“elevated social rank that is earned through socially valued and approved accomplishment”– I use Donald Trump as an example). Men’s prior levels of testosterone before either dominance or eminence could not predict the outcome– it was the experience of rising status due to success that led to the elevation of the testosterone level.

Here’s a cite (annotated) claiming that testosterone creates a “permissive effect,” rather than directly causing aggression:

Sapolsky, Robert. 1997. The Trouble with Testosterone. New York: Simon and Schuster, p.155.

Robert Sapolsky is a Stanford neurobiologist who criticizes the leaps of logic that other scientists make regarding testosterone as the direct cause of aggression. Experimenters took 5 male monkeys and arranged them in a dominance hierarchy from one to five, with the #1 monkey having the highest testosterone level, and levels decreasing down the line. Monkey #3 would pick fights with #4 and #5, but will avoid and run away from numbers #1 and #2. HOWEVER: When they gave Monkey #3 a massive dose of testosterone, he would become more aggressive– but ONLY toward Monkeys #4 and #5. Monkey #3 would still avoid Monkey #1 and #2. This has been used to prove that testosterone has a permissive effect on aggression– it doesn’t cause it, but it does facilitate and enable the aggression that is already there.

If you are interested in a really good critique of hormones from a biologist, fire up your Kindle and read the work of Anne Fausto- Sterling, who I read in grad. school, used in my dissertation and book, and used at UNH with grad. students. Myths of Gender and Gender Trouble are really good– I have the hard copies if you want to wait. Fausto-Sterling writes a bit densely, but I know that you are up to it. I met her when I was working at Harvard.

As I mentioned in my previous email, I have known about and have been teaching about this topic for many years (are you sure you didn’t hear about this from me?). This is one of the points that my students most remember. Another point is most remembered by women students in particular: During the supposed PMS period women’s hormones are most similar to men’s hormones all of the time.