The Pope and Condoms

It's No Secret That AIDS is an Epidemic in Africa.

Two-thirds of all AIDS cases in the world are in Africa alone. [9] This is why I was quite surprised to hear that Pope Benedict XVI actually said that the AIDS epidemic is, and I quote:

"a tragedy that cannot be overcome by money alone, that cannot be overcome through the distribution of condoms, which even aggravates the problems." [3]

Condoms Make AIDS Worse?

I was absolutely stunned. Apparently the Vatican does not understand the difference between rhetoric and views which are supported with actual facts and evidence.

The Vatican also says condoms can also lead to risky behavior but many contest that view.

Kevin De Cock, director of the World Health Organization's HIV/AIDS department, said there is no scientific evidence showing that condom use spurs people to take more sexual risks. [2]

"My reaction is that this represents a major step backwards in terms of global health education, is entirely counter-productive, and is likely to lead to increases in HIV infection in Africa and elsewhere," said Prof Quentin Sattentau, Professor of Immunology at Britain's Oxford University.

"There is a large body of published evidence demonstrating that condom use reduces the risk of acquiring HIV infection, but does not lead to increased sexual activity," he said.[2]

Kevin Osborne, HIV adviser at the International Planned Parenthood Federation, said: "All the evidence is that preaching sexual abstinence and fidelity will not solve the problems. [4]

“France voices extremely sharp concern over the consequences of Benedict XVI’s comments,” adding they posed “a threat to public health policies and the duty to protect human life,” the French foreign ministry said today in a statement distributed to reporters. [9]

The Pope's Myopia

Ignore for a moment that people will have sex anyway, with or without condoms, and abstinence-only education has almost no effect[6][7][8]. Forgive them for their ignorance of the African tradition of a widow marrying her dead husband's brother, a tradition which provides security for families in countries where there is no social safety net. [5] The Vatican is a group of people who don't have sex claiming to know how people who do have sex are going to react to the introduction of a product that they themselves will never use.

As if to demonstrate how irrationally dogmatic they can be, the Vatican bans condoms even if an HIV positive individual wants to protect their monogamous partner.

Two years ago, there was speculation the Vatican might amend its ban on condoms after Cardinal Carlo Maria Martini, the former archbishop of Milan, said that in couples where one partner had HIV/AIDS, the use of condoms was "a lesser evil".[4]

Refuting the Propaganda

Let us cut through the Pope's willful disregard for the truth and analyze the scientific evidence surrounding condom usage. The World Health Organization (WHO) says that consistent and correct condom use reduces the risk of HIV infection by 90% [4]. The Center for Disease Control (CDC) cites comprehensive and conclusive evidence that consistent and correct usage of condoms is highly effective. [1] A meta-analysis published by Cochrane Collaboration concludes that condoms can reduce the risk by 80%. [1]

"In a very poor area here in Cape Town, we have a person called the Condom King. He hands out upwards of 500,000 condoms a month and he also gives HIV awareness education. And he gives information how best to use the condoms. And the evidence that we have found there, based on a study with Doctors Without Borders, is that because of this concerted education campaign around condoms, together with the condom access, there's actually been a decrease in sexually transmitted infections in Khayelitsha. That is quite remarkable in an area which is very poor, where people have a lot of sexually transmitted infections and have a lot of transactional sex," she says. [3]

Do Not Let Perfect Be the Enemy of Good

Of course condoms are not perfect. As the Pope said, they aren't going to stop the spread of HIV alone. But this does not mean that comdoms are without use, or that they make the problem worse.

However, both groups [CDC and Cochrane Collaboration] warned that condom use cannot provide absolute protection. Condoms sometimes break, slip or are put on incorrectly. The best way to avoid transmission of the virus is to abstain from sexual intercourse or have a long-term mutually monogamous relationship with an uninfected person. [1]

He [Kevin De Cock, director of the WHO's HIV/AIDS department] said abstinence and reducing the number of partners were also needed. [2]

They [the Treatment Action Campaign (TAC), one of South Africa's leading HIV/AIDS advocacy groups,] first promotes abstinence, then they promote being faithful and then they promote condom use. It's called the ABC campaign: abstain, be faithful, condomize," she says. [Rebecca Hodes, TAC's director of policy communication and research] [3]

The Blood On the Vatican's Hands

Pope Benedict's approach is particularly disappointing in light of what happened after Pope John Paul II visited Africa in 1990. Pope John Paul said pretty much the same thing - using condoms is a sin - and afterward the AIDS epidemic became worse.

Today, more than 28 per cent of African children have lost one or both parents to AIDS. In 1990, at the time of the pope's visit to Tanzania, the figure was 2 per cent. [5]

Both Popes are using their bully pulpit to preach policies which will sentence millions of Africans to a slow and painful death. And for what? Because religious devotion against contraceptives is more important than protecting individuals, families, and whole societies from this awful disease?


[1] New York Times - http://www.nytimes.com/2009/03/18/opinion/18wed2.html

[2] Reuters - http://www.reuters.com/article/healthNews/idUSLI43220920090318?sp=true

[3] Voice of America - http://www.voanews.com/english/Africa/2009-03-18-voa28.cfm

[4] The Australian - http://www.theaustralian.news.com.au/story/0,25197,25206355-32682,00.html

[5] The Australian -http://www.theaustralian.news.com.au/story/0,25197,25206351-32682,00.html

[6] New York Times - http://www.nytimes.com/imagepages/2007/07/18/education/20070718_ABSTAIN_GRAPHIC.html

[7] Fox News - http://www.foxnews.com/story/0,2933,265940,00.html

[8] American Psychological Association - http://www.apa.org/releases/sexeducation.html

[9] Bloomberg - http://www.bloomberg.com/apps/news?pid=20601085&sid=ajyuJ1GGgHOE&refer=europe

Terence Corcoran: AIG bonuses should be paid

This argument is so ridiculous that I almost thought it was satire. Here is the original. What follows is quoted in its entirety, with my systematic deconstruction of the various flawed arguments in-lined.

To use a current cliché, frequently deployed to humiliate bankers and CEOs: He doesn’t get it. Barack Obama, that is. He just doesn’t get it, and nor do millions of others who are following the U.S. President on his long destructive march against bankers and corporate executives for their alleged “recklessness and greed.” (I love when they use "alleged")

Those were the words Mr. Obama used Monday when he instructed his treasury secretary, Timothy Geithner, to “pursue every legal avenue” to block the payment of $165-million in bonuses to employees of AIG Financial Products. News of the payments sparked a demagogic explosion in Congress and the U.S. media, and the President seized the momentum and then got out in front of it. He loves a parade. (Excuse me, you're dripping condescension on my floor...)

There’s no need to repeat here the distorted content and hysterical tone of the AIG explosion. What is worth repeating, however, are some of the facts behind the AIG bonus payments. Much has been made of AIG CEO Edward Liddy’s letter to Mr. Geithner, explaining the reasons for the bonuses. For people who like facts with their hysteria, and can calm down enough to read it, the Liddy letter appears elsewhere on this page. (My, what a high horse you're riding on...)

Mr. Liddy had no involvement with establishing the original bonus plan, designed to “retain” AIG Financial Product specialists through 2008 and 2009. But he says he has “grave concerns about the long-term consequences of the actions we are taking” to reduce the contractual payments to AIG employees. He warns of AIG’s inability to retain the best talent. AIG, he says, will simply not be able to attract employees if they come to believe “that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.”

Finally, after three paragraphs of vitriol, we have an argument.

First, note that Mr. Liddy lays the blame at the feet of his predecessor. Why, though, was a "bonus" established before the employees in question had rendered their services? I was under the impression that bonuses were used to reward people for performance after-the-fact.

Second, perhaps AIG doesn't want the best talent. The second-best talent might not have screwed the pooch so badly.

Third, I'm sure that no one will have any problem awarding bonuses for people who deserve them based on their performance. No one wants to stop AIG (or any other company) from giving bonuses to successful people. But doesn't it pervert the incentive structure if we award bonuses regardless of failure?

Fourth, the auto-workers had to make contract concessions as a part of the bailout. Same basic thing happened with the Continental Airline workers. I don't see you defending them, but I imagine that you don't really care about those little people who actually produce things of value.

Now their compensation is about to undergo adjustment down to zero by the U.S. President. They say you can’t fight city hall. Then what can you do with the mighty U.S. government, which is going to throw the full legal force of the state against you? Even if the AIG employees are legally and rightly entitled to their bonus payments — which they almost certainly are — they are about to get steamrolled by a populist president riding an anti-corporate wave.

First, their compensation is not being adjusted to zero. They are still receiving their salary.

Second, without the US government, AIG would be bankrupt and those employees would have neither bonus nor salary.

Third, you do not know that they are legally entitled to their bonus payments. Have you read their contracts? Do you know for certain that they did not violate any provisions? Do you know for certain that the contract is enforceable?

Of course, if you believe that AIG and its Financial Products group —through greed, recklessness and malfeasance — were the cause of AIG’s failure and the adjacent global financial meltdown, then you have no problem with rolling back the bonuses.

But the attack on executive compensation, Wall Street bonuses and bankers is largely without merit, a trumped up attack on the private sector — on markets and capitalism — to overshadow the real causes of the global financial crisis. In recent weeks, reports from U.S. Fed Chairman Ben Bernanke, the International Monetary Fund and former Fed Chairman Alan Greenspan added to the already mountainous body of evidence that massive government failure created a monetary- and policy-driven house of cards.

Last I checked, capitalism rewards success and not failure. If you still feel that this is an attack on the private sector, you should research income inequality. It would also be illuminating to look at executive compensation relative to the average worker in the US, compared to outside the US. Ask yourself who is actually creating value - the CEO who rides a private jet to ask for bailout money, or the Joe Six Pack who is working in the factory assembling the cars.

Writing in The Wall Street Journal last week, Mr. Greenspan all but conceded that the Fed missed the signals and implications from the flood of foreign-owned dollars cascading into the U.S. market — dollars that his monetary policies had created. But he said his 1% interest rate regime through 2003 and 2004 was not to blame.

Absurd on its face. Greenspan wants us to think that it was the fixed-interest mortgages that are causing the problem, and that those mortgages aren't correlated with the fed funds rate.

However, those mortgages were never the problem. Adjustable rate mortgages, some of which were pegged to indexes that are in fact affected by the fed funds rate, were the source of the problem.

Further, consider that the 1% interest rate was giving the finger to everyone who wanted to save, because your savings account couldn't get you a decent return. Naturally, the "global savings glut" went looking for somewhere else to put all that money...

Then Mr. Bernanke, current Fed chairman, in a speech last Tuesday, said we were experiencing the worst financial crisis since the 1930s, but, “Its fundamental causes remain in dispute.” While corporate behaviour may have played a role, Mr. Bernanke ran through a list of government-based causes for the global crisis. Mr. Bernanke cited global savings imbalances, the buildup of U.S. dollar currency reserves in China and elsewhere and the build-up of oil dollars among petroleum exporting countries.

The build-up of systemic risk — the rising odds that the entire system might crash — took place beyond the ability or even the responsibility of any one private bank or insurance company. No bankers or AIG executives are responsible for systemic risk.

If it were not for AIG, the risk would be far less systemic! The branch in question whose bonuses are under threat specialized in credit default swaps, designed to provide insurance against risk. However, with a little bit of doublespeak, they can avoid the regulatory requirements normally associated with insurance - common-sense requirements that were put in place to prevent systemic risk from happening. They became responsible when they chose to bypass these requirements that were put in place for safety reasons because they wanted to make more money.

The leading government-created disaster behind the financial crisis is U.S. housing policy and the multi-trillion dollar securitized mortgage market created by the U.S.-government backed mortgage agencies known as Fannie Mae and Freddie Mac. In comments in 2007, Mr. Bernanke reported that the two agencies, with $5.2-trillion in mortgage obligations, posed a systemic risk. Such risk, he said, occurs when “disruptions occurring in one firm or financial market may spread to other parts of the financial system, with possibly serious implications for the performance of the broader economy.”

First, Fannie and Freddie had pretty strong underwriting requirements. 20% down payment, for instance. No jumbo mortgages, either. They largely avoided the subprime market up until about 2004, when Wall Street investment banks cut out the middle man and started heavily securitizing mortgages on their own. Certainly Fannie and Freddie abused their political connections to leverage themselves to the brink, but you might be surprised to know that a lot of European banks were as leveraged as Fannie and Freddie because AIGFP's credit default swaps allowed them to skirt regulatory requirements.

The greater share of the blame goes to Wall Street investment banks (like Bear Stearns) that would bribe small, unregulated brokers with attractive fees to provide them with more and more loans regardless of risk, and then they bribed credit ratings agencies with still more attractive fees to label the different tranches of this toxic waste as AAA using poor risk models. Then they sold this ticking time bomb to investors, justifying their intentional fraud because this was what a CDS was for...

When Fannie Mae and Freddie Mack failed, because of the mortgage bubble they helped create, the systemic meltdown spread around the globe. The private sector, bankers and insurance companies, were the victims of a failed global financial regulatory regime.

First, when Fannie and Freddie failed, they were taken into conservatorship by the US government. Only the shareholders lost money because all of Fannie and Freddie's obligations are now backed by the full faith and credit of the federal government.

Second, the bubble was mainly in California, Arizona, Nevada, and Florida. This is where most of the unregulated brokers were - you know, the unregulated brokers who weren't under any obligation by the Community Reinvestment Act (CRA) to loan to minorities. They made big mortgages (alt-A or jumbo) for the McMansions that are currently losing value the fastest.

That conclusion is essentially the one delivered by International Monetary Fund officials in early March. In a brief report, “Initial Lessons of the Crisis,” the IMF reviews the regulatory disaster. It tries to put the blame on “market failure” and financial institutions for failing to recognize the looming systemic problems. But it is the regulators — who are really charged with detecting and preventing systemic risks — who failed to see the train coming down the track.

Try telling that to Chris Cox, who reduced the capital requirements for Wall Street banks in 2004 at their request, allowing them to leverage themselves out of existence.

Botched regulations, distorting accounting rules, misguided monetary policy, over-stimulative government policy — the list of state policy failure behind the crisis is long and much more significant than any of the individual deals done by AIG Financial Products. They sold products that made sense under the monetary and regulatory regimes established by governments all over the world. Market players do that. Bankers are not responsible for systemic risk.

I still find it amusing that the people who are selling a product for managing systemic risk are not responsible for systemic risk. Doublespeak at its finest.

But now, apparently, bankers and financial market actors are supposed to personally pay for the government-created systemic risk and collapse. In its report, the IMF suggested that in future, financial market compensation packages should be designed so that individuals are only paid the money after the passage of time. “An early priority should be to delink bonuses from annual results and short-term indicators.” Instead, bonuses would be paid as “deferred disbursements and allowing for some claw back as risks are realized.”

Pay people a bonus after they have earned it? That's crazy talk!

Private market players, in other words, are to bear the burden of regulatory failure. They would only receive their compensation after they find out whether governments and regulators have done their jobs and protected against systemic risk. In AIG’s case, Mr. Obama is punishing AIG staff for massive, global government failure.

They ceased to be merely "private market players" when they began actively lobbying the government to change the regulatory structure in ways that permitted the systemic failure to occur.

Mitt Romney on the economy

Mitt Romney wrote in an op-ed to the NYT regarding what to do about the auto-makers. It's a good read, but in particular this part stood out to me.

The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Beautiful words. It reminds me of business owners who are complaining about taxes being raised on companies who make really big profits. If they're so interested in the lower tax bracket, why don't they pay their employees a better wage? It sickens me to see executives exploit the productivity of their workers for their own personal gain.

Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.

This is a great idea in theory, but capitalism is cutthroat in practice. Imagine for a second that you're a company and you're focused on long-term appreciation and watching your balance sheet. Now imagine that you have competitors, and they're focused on the short-term; they're leveraging their balance sheet and taking risky bets, and right now the bets are paying off. Suddenly, you start losing all kinds of market share because investors can get better returns somewhere else. If you don't lower your standards to that of your competitors, you risk going out of business.

That must be how Daniel Mudd felt when he took over Fannie Mae in 2004. He had the following conversation with the CEO of Countrywide at the time, Angelo Mozilo.

Wall Street had recently jumped into the market for risky mortgages. Firms like Bear Stearns, Lehman Brothers and Goldman Sachs had started bundling home loans and selling them to investors — bypassing Fannie and dealing with Countrywide directly.

“You’re becoming irrelevant,” Mr. Mozilo told Mr. Mudd, according to two people with knowledge of the meeting who requested anonymity because the talks were confidential. In the previous year, Fannie had already lost 56 percent of its loan-reselling business to Wall Street and other competitors.

“You need us more than we need you,” Mr. Mozilo said, “and if you don’t take these loans, you’ll find you can lose much more.”

Then Mr. Mozilo offered everyone a breath mint.

An honest businessman cannot make a living in a capitalist society that encourages market participants to be no more honest than those with the least honesty and lowest ethics.
 

Financial crisis

Two videos from youtube with some nice animations and simple graphs.

America is a center-moderate country

House GOP leader John Boehner told colleagues Wednesday, "America remains a center-right country. Democrats should not make the mistake of viewing Tuesday's results as a repudiation of conservatism."

Americans have repudiated unbalanced conservatism. Republicans have tried to drag this country too far to the right, essentially placing the goal posts at "center" and "right". Mainstream America voted to restore the goal posts to "center-left" and "center-right". We do not seek to do away with conservative ideology...we just want people like Rep. Boehner to know that we are a center-moderate country, with a healthy balance of liberal and conservative ideology.

This graphic from the New York Times illustrates my point perfectly. Each precinct in America is colored according to how the voting percentages shifted versus some previous election. A precinct that voted more Democratic in 2008 than it did in 2004 is shaded a blue, and vice versa.



This is how precincts compared between the 2008 election and Bill Clinton's 1996 election. Obama still has many more hearts and minds to win.



Someone over at the Huffington Post links to a poll with even more proof that America is not a center-right nation.

Various items - money

So the bailout contained a hidden giveaway for corporations. The Washington Post has a lengthy article on Section 382, which was just modified by bailout legislation.

Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes. ...

The Treasury notice suddenly made it much more attractive to acquire distressed banks, and Wells Fargo, which had been an earlier suitor for Wachovia, made a new and ultimately successful play to take it over.

The Jones Day law firm said the tax change, which some analysts soon dubbed "the Wells Fargo Ruling," could be worth about $25 billion for Wells Fargo. Wells Fargo declined to comment for this article. ...

Jones Day released a widely circulated commentary that concluded that the change could cost taxpayers about $140 billion. Robert L. Willens, a prominent corporate tax expert in New York City, said the price is more likely to be $105 billion to $110 billion.

AIG needs even more cash.

American International Group Inc. got a $150 billion government rescue package, almost doubling the initial bailout of less than two months ago as the insurer burns through cash at a record rate.

AIG will get lower interest rates and $40 billion of new capital from the government to help ease the impact of four straight quarterly deficits, including a $24.5 billion third- quarter loss posted today by the New York-based company. ...

To make the bailout affordable, the U.S. will reduce the $85 billion loan that saved AIG in September to $60 billion, buy $40 billion of preferred shares, and purchase $52.5 billion of mortgage securities owned or backed by the company, the Federal Reserve said today in a separate statement.

I wrote earlier about disappearing economies of scale. I wonder, if the scale of their economy were larger, would Circuit City be filing for bankruptcy? The report alleges competition from Best Buy and Wal-Mart. However, I can't help but think that the loss of consumer spending doomed the relatively smaller retailer.

Various items - war

US airstrikes bombed another wedding party in Afghanistan.

Tensions between American forces and the Afghan government over civilian casualties from coalition airstrikes spiked again on Wednesday with a report by Afghan officials that a missile from a United States aircraft had killed 40 civilians and wounded 28 others at a wedding party in the southern province of Kandahar. ...

In one of the worst cases of civilian deaths by an American strike this year, an attack aimed at a meeting of Taliban insurgent leaders on Aug. 22 killed at least 33 civilians, according to a Pentagon inquiry. Other investigators said the numbers were much higher. According to an Afghan parliamentary investigation, an airstrike in July in the eastern province of Nangarhar also struck a wedding, killing 47 civilians, including the bride.

So much for respecting other country's sovereignty.

The United States military since 2004 has used broad, secret authority to carry out nearly a dozen previously undisclosed attacks against Al Qaeda and other militants in Syria, Pakistan and elsewhere, according to senior American officials.

It also appears that Georgia threw the first punch.

Newly available accounts by independent military observers of the beginning of the war between Georgia and Russia this summer call into question the longstanding Georgian assertion that it was acting defensively against separatist and Russian aggression.

Instead, the accounts suggest that Georgia’s inexperienced military attacked the isolated separatist capital of Tskhinvali on Aug. 7 with indiscriminate artillery and rocket fire, exposing civilians, Russian peacekeepers and unarmed monitors to harm.

The AP writes that Obama is planning on shutting down Gitmo.

President-elect Obama's advisers are quietly crafting a proposal to ship dozens, if not hundreds, of imprisoned terrorism suspects to the United States to face criminal trials, a plan that would make good on his promise to close the Guantanamo Bay prison but could require creation of a controversial new system of justice. ...

Under plans being put together in Obama's camp, some detainees would be released and many others would be prosecuted in U.S. criminal courts.

A third group of detainees — the ones whose cases are most entangled in highly classified information — might have to go before a new court designed especially to handle sensitive national security cases, according to advisers and Democrats involved in the talks. Advisers participating directly in the planning spoke on condition of anonymity because the plans aren't final.