http://en.wikipedia.org/wiki/Minsky_moment
http://en.wikipedia.org/wiki/Austrian_Business_Cycle_Theory

and if i were to pick a specific cause, i would pin it on the combination of the boom in loan securitization and freewheeling rating agencies.

what has to be done (or not done) is a different story.

The reason I called Frank a Marxist is because I listened to him for an hour, and he openly espouses a disdain for private corporations and markets of any kind, speaks of class struggle and an untenable gap between the “management and the workers in this country,” and has little to no regard for the individual liberties that we cherish. I might not have wrote so in the post, but he sees corporations as greedy and corrupt entities.

What is the polar alternative to all of these factors? A centrally planned and controlled society, where capital is largely controlled by the state and redistributed from those who manage to generate it, but are deemed to have too much of it. There is little rhetorical space between what he advocates and some form of socialism.

You make a shrewd point about the NIH. It is actually something that I think about a lot. Here are my overall thoughts. The NIH has two roles: to dole out funding for federal research grants and as a federal biomedical research facility (largely a federal university) in Bethesda and elsewhere. My feeling is that the federal funding for grants at public and private universities (as well as defense and ID-type research, such as at the CDC) is completely justifiable; the academic research conducted in Bethesda, however, is a different story. Back in the 1940-50s, the NIH was a small CDC-like facility in Washington. If the role had never changed and grown to the largest biomedical research campus in the world, more funding would have gone to the grant system and we would be no worse off today. This is the philosophical ideal, in my view.

Obviously, that fork in the road has long since passed. And now the NIH campus is a leader in biomedical research in the world, which is valuable to society. But no, it is not ideal in my view. There is a ton of waste, the campus is half-federal facility half-academia, and does a complete job in neither role. There is tremendous research being conducted there, but there has also been justifiable criticism about the number of treatments and other breakthroughs that have not come from the NIH. And I think this is largely due to the competitive mechanisms that are built-in to the university system (with tenure and grants, etc.) that until recently were not a part of the NIH. Consider this: the tenure system was only implemented as recently as the late 1980s. There are PIs in my branch who came to interview for a job, were hired, and have never had to be personally evaluated in their position (though their lab is reviewed every few years). This is ridiculous.

One more point. The NIH budge doubled under Clinton, which is what everybody is clamoring for in the next administration, because there is indignant outrage that the budget has actually slightly shrunk under the Bush administration. Now I am not saying that this was on purpose, but maybe the budget woes of the last 8 years were a good thing. It is a legislated budget — money generated by taxpayers that is used with little critical reporting in return. The labs aren’t falling apart. The sky is not falling. New buildings are still being built, big papers are being published. Does the intramural budget have to double every ten years? Certainly not. It shouldn’t grow more than a few percent above inflation, tops, in my opinion. What is the need, it is already the largest such facility in the world!

I have written too much. As I said, I have thought about this deeply. I wish the NIH was not the way it was, but without a sea change in society and government, it is not going away.

the fda has certainly had its problem recently, but i believe that while capital markets might be more efficient in discovering the optimal risk/benefit ratio of drugs, we are safer as a whole having a regulatory body vet our drugs.

free markets cannot be the answer for everything and certainly government is no panacea either. frank may characterize conservatives as malicious etc, but are you doing any differently by calling him a ‘full-blooded Marxist?’

also, i am curious.. currently you are subsisting on the government coffer yourself; certainly, the nih is a socialist boondoggle in the classical liberal sense. how does that square with your view of free markets v. government interference?

The question is, then, how accurate is it to base every insurance rate and whatever else off of an “elevated” genetic risk. Yes, it’s based on some correlative data, but what happens when such data is revised or contradicted by multiple sources? What of those without the genetic marker comes down with gamma-like syndrome? What about when the individual dies without coming down with said condition during his/her lifetime, do they get that extra premium money back?

To slice it to the bone here, I think that for the vast majority of diseases or chronic medical conditions genetic predisposition means absolutely nothing without the context of various other marginally-associated genetic factors and an almost infinite number of non-genetic (“environmental”) variables. I do not mean that genes do not matter — they matter a great deal — but that we do not yet come close to understanding how they work in the manifestation of disease. Not only are we not close, I would argue that we will never reach this point for many diseases (e.g. cancer), because the causes are so molecularly multi-factorial and because these contributing factors are heavily dependent on behavior and the external environment. How can we possible monitor and score these two variables? In the case of cancer, sure we can point to some common causes of cancer, but we will never be able to come up with all of them.

This is the point I was trying to make about the designer babies: it smacks of molecular eugenics in that people are willing to believe that the chemical sequence makes the person. This is simply not true for disease or cognition or intelligence (or wealth or happiness…). Genes are important, and they heavily influence behavior (best book I have ever read, I am reading it for the second time: The Blank Slate by Steven Pinker), but they are not everything.

Given the non-biology-educated populus and a hyper-reflexive non-scientist insurance bureaucrats, emphasizing genetics as the main source of disease is dangerous.