Monday, September 30, 2013
Why do bad ideas and bad advice seem to persist in a society with easy access to good science? One reason may be the tendency to cling to beliefs then look for evidence to support them, instead of accepting the conclusions of well-designed experiments. In his book The Righteous Mind Jonathan Haidt proposes that feelings and emotions come first, and that most reasoning works to justify rather than to test beliefs, that our “intuitions tend to drive our later reasoning.” John Stuart Mill presented the same thought more than 150 years ago: (paraphrasing) the more you argue, even while making clear, rational points, the deeper others dig in to protect long-held beliefs. Adding to the sad situation are the effects of scientists and doctors who would rather become famous as authors or TV stars by promoting populist beliefs than risk challenging them, as they should, with the truth.
One case that comes to mind is the persistent belief that artificial sweeteners are dangerous. Simple research is reassuring, but the belief is ingrained in our culture. The National Cancer Institute states clearly and unequivocally: “There is no clear evidence that the artificial sweeteners available commercially in the United States are associated with cancer risk in humans.” The Mayo Clinic’s view is that “there's no sound scientific evidence that any of the artificial sweeteners approved for use in the U.S. cause cancer or other serious health problems.” So who do Americans trust, these authoritative sources or a Facebook friend who watched some guy in a halloween costume on YouTube?
Likewise folk remedies of all kinds continue to circulate. One longstanding belief is that magnetism has magical healing powers, leading people to buy bracelets, insoles and other magnetic devices. This is odd because over the past 15 years the FTC has ordered Magnetic Therapeutic Technologies, among others, to stop advertising magnets as a cure for numerous diseases or even as a pain reliever. No credible evidence exists of healing powers, and none can be claimed in their advertising. One recent well-designed test of such devices confirms this fact concluding: “Wearing a magnetic wrist strap or a copper bracelet did not appear to have any meaningful therapeutic effect, beyond that of a placebo, for alleviating symptoms and combating disease activity in rheumatoid arthritis.” Does that slow the sale of magnetic shoe insoles? – Not for people who don’t let the facts get in the way of a good story, a persuasive ad or a celebrity endorsement.
It’s your money to use as you please. You can save it for college and retirement, give it away to companies selling you magnetic health devices, or even flush it down the toilet. Two of those choices make the same amount of sense, but as Paul Simon sang, “A man hears what he wants to hear and disregards the rest.
Friday, September 27, 2013
On Monday ("Pain at the Plug?") I explained that regardless of the good intentions, the EPA’s proposed cap on new power-plant emissions would likely translate into increased electric bills for everyone. Coal is a dirty source of power, but economic understanding leads to the inevitable conclusion that any future costs related to cleaner emissions will be borne by the electric consumer.
Of course, this might not be the case, the electric industry may choose to build no new coal-fired plants, favoring the cleaner natural gas with a mix of solar and wind power. These other sources however are not without their own problems and controversies. Solar energy is not available on cloudy days or at night and, like wind, has a much bigger environmental footprint than traditional power plants. Wind power also faces mounting bad press in that “almost 600,000 birds are killed by wind farms in America each year, including over 80,000 raptors such as hawks and falcons and eagles” (not to mention hundreds of thousands of bats). The practice of fracking, used to increase the recovery of natural gas is bringing citizens out in opposition, signing petitions, and just this week, demonstrating in Washington to "demand that the government reopen investigations into fracking-related drinking water pollution in Pennsylvania, Texas and Wyoming.” It seems good options are hard to find.
Diversification, the investment principle of spreading out money over a number of different instruments so that one bad stock or one bad sector (e.g., bonds) does not ruin future prospects, applies here as well. Diversification of energy sources protects against unforeseen shortages or disruptions. If the above three energy types have problems, one of the few remaining alternatives is nuclear, which has zero emissions, but scares people enough to make opposition an easy sell. Taking all this into consideration, it is quite likely that more of those cleaner, but more expensive coal-powered plants will be built in the future.
Individuals and families are not the only ones who use electricity. Stores, manufacturers and governments do too. GM uses it to power their robots. Wal-Mart uses electricity to light the parking lots and keep the ice cream frozen. The town uses electricity to heat and cool public buildings and to light the streets at night. How would airports, restaurants, and printers, even Internet companies, run without electricity? If the price of electricity goes up, the cost will not be restricted to uses at home. Everything we buy will be more expensive.
When the time comes to pay for cleaner air, eventually the bill comes to us.
Monday, September 23, 2013
On Friday the EPA announced a “proposal to cap the amount of heat-trapping greenhouse gas emissions from new power plants. Coal-fired plants -- unlike most natural gas facilities -- won't meet the standard without costly technology to capture and store carbon emissions.”
The EPA argues that today’s coal powered electric plants discharge a disproportionate amount of CO2 into the atmosphere. The industry argues that the technology required is not tested and that the requirement is therefore unreasonable and possibly a costly mistake. Finally, their statement mentioned that added costs must be passed along to customers resulting in “more pain at the plug than Americans have experienced at the pump…" That’s certainly a colorful way of phrasing what we all know – there’s no magic money tree.
As utility costs increase due to regulation, fuel costs, or for any other reason, they must recover those costs from somewhere. They can lower dividends, but that will likely drive the price of their stock down. I personally own a small number of utility shares, as do many other small investors. These dividends yield a better return than savings accounts, but if they go down and the investment becomes more risky, investors will be harder to find. Bankers will also be less inclined to make loans or will do so at higher interest. This may seem like their problem until they go to the regulatory board and plead for rate increases to cover higher costs. Then we will see it in our bills and hear the outrage of our neighbors. Doubtless the media will have a field day covering stories of increased hardship just as they do when gasoline prices spike.
The EPA and environmental advocates make a good case that these costs are already out there – what economists call external costs – hidden in the free discharge of CO2 and “sulfur dioxide, nitrogen oxide and heavy metals (such as mercury and arsenic) and acid gases (such as hydrogen chloride), which have been linked to acid rain, smog and health issues.” These are health and quality-of-life issues. But when those costs are captured, it is the consumer or taxpayer who pays.
Headlines like this are easily ignored as unimportant. What’s in it for me? But economic understanding brings us to a different conclusion. Even when the changes are desirable and beneficial, it’s not the corporations or the government that pays. The evidence is in the article: “Mississippi Power has raised rates 15% this year and plans an additional 3% increase next year to help pay for the new Kemper County plant [which employs this technology], whose price tag has risen from an initial $2.4 billion to $3.8 billion…”
This will affect you each time you switch on a light or TV, or recharge your phone, or your refrigerator or furnace snaps on. We have become so dependent on electricity, and there are few substitutes.
Friday, September 20, 2013
The primary differences between prescriptions medicines and vitamins or other supplements are that prescription drugs must be thoroughly tested for effectiveness and side effects before they are sold, and they can legally claim to cure or alleviate diseases and conditions. Even if they are known to be helpful for problems that they weren’t approved for, on the other hand, drug companies cannot legally market them for these off label uses. The market is very controlled.
Vitamins and supplements must make no claims to cure, but rely on their reputation of just generally being good for you, a reputation often spread by non-professionals: neighbors, friends, relatives and talk show hosts. Notice that in ads and packaging material that all claims are very general, often padded with cue words like natural and organic. They can be sold to anyone before they are tested for safety and effectiveness. Testing may or may not come later. Common and long-standing advice on vitamins and minerals is that they are best acquired from the food we eat rather than from supplements.
This has been a regular topic here, but was brought to mind again by a recent example from Johns Hopkins Health Alert regarding alternative therapies for hot flashes related to prostate treatment. “In general, neither soy nor black cohosh was shown to be any better than placebo in reducing hot flashes. Studies of vitamin E show that it was only marginally effective in reducing hot flash frequency and severity. Research has shown that high doses may have negative effects on cardiovascular health, and a 400-IU dose is associated with an increased risk of prostate cancer.” Instead they recommend “common keep-cool strategies” like fans and loose clothing.
The second example is personal. On a recent Southwest Airlines flight, I heard the announcement that vitamin water could be purchased for $3. I first thought that it was Karma – people who didn’t read my blog (July 5, 2013) or otherwise find out about the latest science deserved to throw away money. Kids believe in the tooth fairy and the Easter bunny, but grow out of it when they get better evidence. Some adults continue to believe in magic pills and elixirs by resisting and denying the evidence, but it’s really not funny.
The reason I consistently address this issue is that Americans spend over $20 billion annually on these unproven supplements, and now the government is trying to make it easier. Move over NRA. New legislation supported by the Natural Products Association (NPA) and Council for Responsible Nutrition has been introduced to allow those with health savings accounts or flexible spending accounts to use that money to buy supplements. While the median household income is falling and many people are struggling, we should have a government more concerned about this kind of unwise expenditure. It’s clear that the government is more interested in pleasing the lobbyists than protecting citizens from poor spending decisions.