Live discussion with Rebecca Skloot

Henrietta Lacks died in 1951 of cancer in a “colored” ward at Johns Hopkins Hospital in Baltimore. But the cells doctors took from her body before she died are still alive today, in labs all over the world. They’ve been to space, were part of atomic bomb testing, and were critical in developing the polio vaccine and other scientific advances.

Companies made millions selling Lacks’ cells – known as HeLa cells – but her family had no idea until the early 1970s, when scientists decided they could learn more about cancer and other diseases by studying the Lacks family DNA – all without their consent. The family didn’t see a dime of those profits, and had very little idea of what had happened to Henrietta, who is buried in an unmarked grave in a dying town in Virginia.

Rebecca Skloot spent ten years tracking down the history of HeLa and the Lacks family. The New York Times called the result – “The Immortal Life of Henrietta Lacks”– “a thorny and provocative book about cancer, racism, scientific ethics and crippling poverty.” Others have heaped on similar praise.

Do patients own the rights to their tissues once they’re removed? Could what happened to Henrietta Lacks and her family happen again today?

Locking up bank reserves is wrong policy focus

– John Kemp is a Reuters columnist. The views expressed are his own. —

Plotting an exit strategy and shrinking the Federal Reserve’s balance sheet has become a hot topic as policymakers try to underscore their commitment to price stability and markets ponder the risk of inflation.

But micro-managing the reserve base is a curiously inadequate way to respond to medium-term concerns about inflation. Interest rates (the cost of credit) and supervision (leverage) are broader, more appropriate tools.

It is irrelevant whether the Fed sells its assets back to the market. What matters is whether and when the central bank is prepared to raise the price of borrowing.

Toyota’s “exceptionalism” came back to bite

– Edward Niedermeyer is the editor-in-chief of The Truth About Cars. The views expressed are his own. –

Life rarely offers easy answers to important decisions, but up until a few weeks ago, it seemed that new cars buyers simply couldn’t go wrong buying a Toyota. For decades, the Japanese automaker had built up an unmatched reputation for quality and reliability, on its way to becoming the best-selling automaker in the U.S and the top car producer worldwide. A Camry might not have been a particularly glamorous or exciting choice of vehicles, but consumers could buy one without doing a lick of research, and expect it to run reliably and efficiently for years. At least they could until a flurry of defects and recalls suddenly brought Toyota’s untouchable reputation back down to earth.

In a matter of days, Toyota’s good favor in the eyes of consumers has been replaced with suspicion and doubt. Having first ignored reports of unintended acceleration in its vehicles, Toyota then blamed floor mats before finally recalling some eight million gas pedals worldwide. When a brake software problem on the Prius hybrid emerged within days of the gas pedal recall, and Toyota’s leadership moved slowly to get in front of the burgeoning PR nightmare, the automaker’s spotless image suddenly found itself in shreds.

This rapid reversal of Toyota’s fortunes indicates that its reputation as an unquestionably logical choice in car brands was already wearing thin. Having refined the most efficiency and quality-focused manufacturing system in the industry by the late 1980s, Toyota responded to currency fluctuations in the early 90s by cutting costs on the design-end of the business.

Watch banks for clues on Greece

– James Saft is a Reuters columnist. The opinions expressed are his own. –

As odd as it sounds, concerns about the effects of a euro zone sovereign crisis on Europe’s still poorly capitalized banks may prove to be the tipping point that leads to a swifter bailout of Greece.

While discussion of contagion may seem very 2008, the problems with Greece, which faces a huge fiscal deficit, are becoming tougher for euro zone authorities to leave uninsured.

That’s not just because worries about Greece spread markedly in the past week to Portugal, Ireland, and Spain, all of which saw their financing costs rise.

from MacroScope:

Political economy and the euro

The reality of  'political economy'  is something that irritates many economists -- the "purists", if you like. The political element is impossible to model;  it often flies in the face of  textbook economics;  and democratic decision-making and backroom horse trading can be notoriously difficult to predict and painfully slow.  And political economy is all pervasive in 2010 -- Barack Obama's proposals to rein in the banks is rooted in public outrage; reading China's monetary and currency policies is like Kremlinology; capital curbs being introduced in Brazil and elsewhere aim to prevent market overshoot; and British budgetary policies are becoming the political football ahead of this spring's UK election. The list is long, the outcomes uncertain, the market risk high.

But nowhere is this more apparent than in well-worn arguments over the validity and future of Europe's single currency -- the new milennium's posterchild for political economy.

For many, the euro simply should never have happened --  it thumbed a nose at the belief that all things good come from free financial markets; it removed monetary safety valves for member countries out of sync with their bigger neighbours and put the cart before the horse with monetary union ahead of fiscal policy integration. But the sheer political determination to finish the European's single market project, stop beggar-thy-neighbour currency devaluations and face down erratic currency trading meant the  currency was born and has thrived for 11 years.

Now the budgetary and bond market upheaval currently afflicting euro member Greece and stalking  Portugal, Ireland, Spain and Italy has reawakened the whole debate. "Will the euro survive?" seems a legitimate question once again.

U.S. military power: When is enough enough?

– Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. —

The numbers tell the story of a superpower addicted to overwhelming military might: the United States accounts for five percent of the world’s population, around 23 percent of its economic output and more than 40 percent of its military spending. America spends as much on its soldiers and weapons as the next 18 countries put together.

Why such a huge margin? The question is rarely asked although there is spirited debate over specific big-ticket weapons systems whose conception dates back to the days when the United States was not the only superpower and large-scale conventional war against the other superpower, the Soviet Union, was an ever-present possibility. Those days are over.

Now, the U.S., deep in deficit and grappling with the aftermath of the worst recession since the 1930s, is reaching a point where the only way the country can maintain its role as the world’s towering military giant is to borrow money from the country many military planners see as a potential future adversary – China. “Obviously, this is not a tenable arrangement over the long run,” says Loren Thompson, CEO of the Lexington Institute, a think tank with close ties to defense contractors.

from The Great Debate UK:

One Young World: let’s hear it from the under-25s

Amid the ongoing global conversation about the economy, and projections about when -- and in which markets -- the world might emerge from financial crisis, the collective voice of the 25-and-under age group is hard to hear.

It could have been silenced due to a sense of futility about challenging the so-called Establishment, or it might be online -- constrained by such social media outlets as Facebook and Twitter.

Whatever the case, advertising and communications agency Euro RSCG Worldwide is taking measures to get the under-25s to speak up on such issues as the environment, health and education at an event called One Young World, which will be held from February 8-10 in London.

Did Asperger’s help cause the crisis?

Did the financial system blow up because it was built and largely operated by people with many of the characteristics of a mild form of autism called Asperger’s syndrome?

As explanations for the crisis go, it’s on the extreme side but forms an interesting counterpoint to the “blame the looting bankers” story line.

People with Asperger’s, a mild form of autism, are characterized by, among other things, a deficit of “theory of mind,” essentially the ability to understand that other people have different beliefs or knowledge than themselves. Nicholas Nassim Taleb, author of The Black Swan, has written that a lack of theory of mind left many in positions of responsibility without the ability to conceive of and guard against black swans, which are rare, high-impact and hard to predict events.

There were, after all, a remarkable number of people blaming “hundred-year storms” for the crisis, which was at least in substantial part caused by an over-reliance on risk management controls and models that proved to be far too narrow.

from The Great Debate UK:

Women on course to control larger proportion of wealth

- Jane Foley is research director at Forex.com and blogs regularly for Reuters Great Debate. The opinions expressed are her own. Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2009, International Women’s Day. Please tune in. -

Projections indicate that by 2050 the world’s population will stand at around 9.2 billion, up from around 6.7 million at present.  The vast majority of this increase will be in the developing world.  In developed world countries populations may start tapering off after 2025.

It seems likely that this explosion in population in the developing world will do nothing to address the fact that that per capita wealth is massively skewed towards the developed world.  Using World Bank data for 2000, the average per capital wealth in the top 10 wealthiest countries is a staggering 170 times greater than the average in the bottom ten. Demographics in the developed world are defined by low fertility and low mortality rates.  This translates into an ageing population.  Added to this mix is the fact that male mortality rates are higher than female in the developed world.  As a consequence, as these populations age they are becoming predominantly female.  It follows that women are on course to control an increasing proportion of the world’s wealth. Reports that suggest that women are responsible for buying 80 percent of household goods in the U.S. will not be a surprise to the seasoned shopper.  Over the past decade or so it appears that the advertising industry has been waking up to the notion that women’s responsibilities stretch further than making decisions on washing powder.

Big banks aren’t bad banks

— Mark T. Williams, a former Federal Reserve Bank examiner who teaches finance at Boston University School of Management, is the author of the soon to be published “Uncontrolled Risk” about the fall of Lehman Brothers. The views expressed are his own. –

Too big to fail has become nothing more than a political sound bite and the title of a best-selling book. Unfortunately, in the process big banks have gotten a bad rap. The proposed Obama administration plan to limit bank size is just another example of big-bank bashing by high-level politicians.

Policy that simply focuses on downsizing big banks overlooks an important point. The problem is not that banks are too big; it is that banks are taking excessive risk. This includes big and small banks. Since 2008, more than 170 banks have failed, including big banks such as Lehman Brothers, Wachovia, and IndyMac. But most on this list – such as Citizens State Bank, Republic Federal Bank, and First State Bank — are smallish. They didn’t make big headlines. No books were written about them or movies made.

The fact that a bank is big should not automatically mean they are a threat to the financial system. It’s true that Citigroup, once our nation’s biggest bank, needed a massive government bailout. But this singular sample size is not large enough on which to base far-reaching policy changes.