Politeía Digest

Quis custodiet ipsos custodes?

The Economist Corner – essential readings XI

leave a comment »

Global economic policy

Austerity alarm

Both sides in the row over stimulus v austerity exaggerate, but the austerity lobby is the more dangerous

ECONOMIC policymaking, like hemlines, has fads. Last year the leaders of the G20 group of big economies led a global Keynesian boost, pledging fiscal stimulus worth a combined 2% of world GDP to prop up demand. At their most recent gathering, in Toronto on June 26th-27th, the club’s rich-world members pledged “at least” to halve their deficits by 2013. Though they left themselves wiggle room, the change of tone was clear. Thanks to Greece’s sovereign-debt crisis, which has terrified politicians, stimulus is out and deficit reduction is in.

The trend has been most noticeable in Europe, where every big economy has spelled out spending cuts or tax increases in recent weeks. But it is evident everywhere. Japan’s new prime minister, Naoto Kan, has pushed a debate about raising the consumption tax to the top of the campaign for the upper house of parliament. In America, Congress’s fears about the deficit have thwarted the Obama administration’s efforts to pass a new mini-stimulus (see article).

Until recently the deficit-cutting rhetoric exaggerated its likely short-term impact. Germany has long been one of the loudest proponents of the need for austerity. But its near-term plans (tightening worth 0.4% of GDP in 2011) are modest. Spain was the only big European economy forced by financial markets into immediate, tough austerity. Yet now Britain has chosen that route, with a budget that promises tightening worth 2% of GDP in 2011. The expiration of America’s stimulus implies a fiscal tightening of some 1.3% of GDP in 2011, a figure which could rise considerably if Congress prevented the extension of George Bush’s tax cuts. Much could change, but for now the rich world looks set for a collective fiscal adjustment worth around 1% of its combined GDP next year, the biggest synchronised budget contraction in at least four decades. Read the rest of this entry.

A special report on the human genome

Biology 2.0

A decade after the human-genome project, writes Geoffrey Carr (interviewed here), biological science is poised on the edge of something wonderful.

TEN years ago, on June 26th 2000, a race ended. The result was declared a dead heat and both runners won the prize of shaking the hand of America’s then president, Bill Clinton, at the White House. The runners were J. Craig Venter for the private sector and Francis Collins for the public. The race was to sequence the human genome, all 3 billion genetic letters of it, and thus—as headline writers put it—read the book of life.

It quite caught the public imagination at the time. There was the drama of a maverick upstart, in the form of Dr Venter and his newly created firm, Celera, taking on the medical establishment, in the form of Dr Collins’s International Human Genome Sequencing Consortium. There was the promise of a cornucopia of new drugs as genetic targets previously unknown to biologists succumbed to pharmacological investigation. There was talk of an era of “personalised medicine” in which treatments would be tailored to an individual’s genetic make-up. There was the frisson of fear that a genetic helotry would be created, doomed by its DNA to second-class health care, education and employment. And there was, in some quarters, a hope that a biotech boom based on genomics might pick up the baton that the internet boom had just dropped, and that lots and lots of money would be made.

And then it all went terribly quiet. The drugs did not appear. Nor did personalised medicine. Neither did the genetic underclass. And the money certainly did not materialise. Biotech firms proved to be just as good at consuming cash as dotcom start-ups, and with as little return. The casual observer, then, might be forgiven for thinking the whole thing a damp squib, and the $3 billion spent on the project to be so much wasted money. But the casual observer would be wrong. As The Economist observed at the time, the race Dr Venter and Dr Collins had been engaged in was a race not to the finish but to the starting line. Moreover, compared with the sprint they had been running in the closing years of the 1990s, the new race marked by that starting line was a marathon.

The new race has been dogged by difficulties from the beginning. There was a false start (the announcement at the White House that the sequence was complete relied on a generous definition of that word: a truly complete sequence was not published until 2003). The competitors then ran into numerous obstacles that nature had strewn on the course. They found at first that there were far fewer genes than they had expected, only to discover later that there were far more. These discoveries changed the meaning of the word “gene”. They found the way genes are switched on and off is at least as important, both biologically and medically, as the composition of those genes. They found that their methods for linking genetic variation to disease were inadequate. And they found, above all, that they did not have enough genomes to work on. Each human genome is different, and that matters. Read the rest of this entry.

Advertisements

Written by Theophyle

July 3, 2010 at 2:35 pm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: