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Wednesday, October 29

Two sides to the boom in pawn shop banking lead to same place

One side is outlined in Todd Zywicki's August 2013 article for The Volokh Conspiracy, Pawn Shops Boom as Consumer Retail Banking Retreats.  From this side the boom is part of a larger wave of decentralized banking. The wave got a big push from U.S. federal regulatory overkill in the wake of the 2008 financial crash. The largely unintended consequence were to push many Americans, even those in the higher-income brackets, out of the traditional banking system when they found that obtaining credit through the banking system had become virtually impossible.
 
The other side of story was laid out by Lydia DePillis in a December 2013 article for the Washington Post titled Your Neighborhood Pawn Shop is Propped Up By Big Banks. It starts:
We usually think of payday lenders, pawn shops, rent-to-own stores and other high-cost loan operations as alternative forms of financing for people who are short of cash. But that's merely a facade: They couldn't operate without billions of dollars in cheap capital from the nation's biggest banks.
So it seems all the differently painted doors lead to the same place. The "retail" American credit shopper is getting hit with high fees no matter where he turns.

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Speaking of shifting the poor out of big cities: London property values

"New research provides evidence of what many Londoners have long suspected: property prices in London are only partly linked to the local economy."

In the previous post I voiced in passing my suspicion that at least part of the striking demographic shift in the USA, which finds the majority of America's poor now in the suburbs, is due to government tactics to clear out inner city neighborhoods for real estate developers. 

The suspicion was grounded in part in my recollection of a conversation John Batchelor had on his radio show back in January about London property values.  Here, from the schedule, are notes on the conversation. A podcast of the segment is also available.

Friday 17 January 2014  / Hour 1, Block D: Jason Karaian, qz.com (Quartz), in re: ...  How does capital flow from poor to rich countries? In the case of London, it’s considered worldwide to be a safe haven; right now, esp Egyptians. Lucas Puzzle: when people in countries in turmoil look for where to park their cash, they find London to be safe: property will at least hold its value and not likely be appropriated. Whole blocks of fancy homes not even inhabited – lights on sometimes.  Entered by cleaners once in a while.

Oxford study: Middle East and Russian buyers concentrate on Mayfair, Knightsbridge, the highest-end; houses passed from one tycoon to another. Southern Europe and South Asia: they go to somewhat less expensive areas and often actually live there. property bubble?? Not – hard to expand beyond the ring road, so there's not much property around on which one can expand; about half the demand is met.  The average house price in London is more than $700,000.

Riots in Egypt + recessions in Greece = property boom in London.  House prices in the UK rose by a pedestrian 3.5% year-over-year in November, according to the latest data—that is, if you exclude London from the calculation.

Residential property prices in London rose by 11.6%, which is down from 12% the previous month but still frothy by any definition. Including London, British house prices were up by 5.4% in November.

For some time, property prices in London have disconnected from the UK as a whole; London homes are both the most expensive and fastest appreciating in the country. The average London house is now worth £441,000 ($724,000), versus the £248,000 national average.
 
New research provides evidence of what many Londoners have long suspected; property prices in London are only partly linked to the local economy. Academics at Oxford’s Saïd Business School looked at transaction-level data since 1996 and cross-referenced spikes in prices to economic and political turmoil abroad.
[End notes]

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Shocker: Majority of America's poor are now in suburbs

A cynic would wonder if U.S. federal programs are deliberately shifting the poor out of big cities to make way for real estate developers although there are surely several reasons for the demographic shift. But given the ongoing civil unrest in Ferguson every possible factor needs to be unearthed.  And the American press need to get serious about digging into the factors instead of trotting dutifully after Democractic operatives who portray the unrest as evidence of a big color divide in the United States. Looks to me as if the big divide is green in color. 

In August CBS News made a good start at getting serious by laying out the surface realities of a demographic shift in the USA. See the CBS website for source links in the report: 

Hit by poverty, Ferguson reflects the new suburbs
By Constantine von Hoffman
CBS News MoneyWatch
August 19, 2014

The violent confrontations between police and citizens in Ferguson, Missouri, highlight the rapid demographic shift in the suburbs, which are now home to a majority of the nation's poor.

The nation's 100 largest metropolitan areas have seen dramatic growth in poverty in the suburbs that surround them, according to the Brookings Institution.  The number of suburban neighborhoods where more than 20 percent of residents live below the federal poverty line more than doubled during the 2000s, the research organization found.

Not only did nearly every one of these areas see suburban poverty grow during that decade, but poverty also grew more concentrated in specific neighborhoods.

By 2012, 38 percent of poor residents in the suburbs lived in neighborhoods with poverty rates of 20 percent or higher, according to Brookings. For poor black residents, 53 percent lived in neighborhoods with poverty rates of 20 percent or higher.

"At the start of the 2000s, the five census tracts that fall within Ferguson's border registered poverty rates ranging between 4 and 16 percent," Brookings' analyst Elizabeth Kneebone wrote in a recent blog post:
"However, by 2008-2012 almost all of Ferguson's neighborhoods had poverty rates at or above the 20 percent threshold" at which the negative effects of concentrated poverty begin to emerge."

These effects include lack of access to jobs and health care, sub-standard schools and higher crime rates.

"We find that suburban poor neighborhoods are more likely to be organizationally deprived than urban poor neighborhoods, especially with respect to organizations that promote upward mobility," Alexandra Murphy of
the University of Michigan's National Poverty Center wrote in a report last year.

Ferguson itself is emblematic of the impact of poverty on America's suburbs. The town's unemployment rate has more than doubled in recent years, from less than 5 percent in 2000 to over 13 percent in 2010-12. According to the U.S. Census Bureau, in 2012 about one in four residents lived below the federal poverty line ($23,492 for a family of four), and 44 percent fell below twice that level.

Ferguson's per capita income of $21,000 ranks it 88th out of Missouri's 140 cities, according to BiggestUSCities.com, while its median household income of $36,645 is the state's 103rd highest.

"For those [Ferguson] residents who were employed, inflation-adjusted average earnings fell by one-third," Kneebone said. "The number of households using federal Housing Choice Vouchers climbed from roughly 300 in 2000 to more than 800 by the end of the decade."

Concurrently with the rise in poverty has been a shift in the racial composition of many suburbs around the U.S. This change has frequently not been reflected in the leadership of those cities and towns.

The clashes in Ferguson came in the wake of the killing of Michael Brown, an unarmed black man, by a police officer. Both the town's government and police force are overwhelmingly white, while the city's population is 67 percent African-American.

According to a study by the American Communities Project at American University:

"In 2000, the urban suburbs were 67 percent non-Hispanic white, 12 percent African American and 13 percent Hispanic. By 2012, the non-Hispanic white population had dropped to 59 percent , the African-American population had climbed to 13 percent and the Hispanic population was roughly 18 percent."

Nationwide, the poor have lower participation rates in elections and this appears to be the case in Ferguson as well. While the city has about 15,000 residents 18 or older, only about 1,350 votes were cast in last April's mayoral election, in which Mayor James Knowles III ran unopposed. Furthermore, in the last city council election held in 2013 there were about 1,500 votes cast. In 2011, one city councilman won his seat with a grand total of 72 votes.
[END OF REPORT]
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Friday, October 24

Ebola and the Silent Epidemic of Contaminated Hypodermic Needles

Black Bag Doctors

How common is it in Africa for medical caregivers to reuse hypodermics that haven't been properly sterilized or sterilized not at all?  So common, researchers on the team that tracked down the first known person to have contracted the disease in the West African Ebola outbreak, a two-year old in Guinea, named a contaminated needle as one of their two guesses about how the toddler got infected with Ebola.(1)

The other guess revolved around the Bushmeat - Fruit Bat hypothesis of Ebola transmission among humans but the researchers had a problem with applying the hypothesis in this case. The most likely animal to human transmissions happen with hunters of the bats or people who handle the raw meat for cooking -- unlikely for a two-year old.      

The lead author of the study observed that if a contaminated jab was the culprit then obviously the Index Patient, as medical researchers term the first known person to contract a disease, wasn't the real Index Patient. The toddler is simply as far back as the team was able to trace the outbreak, the author explained to the New York Times.

Assuming for the sake of discussion the contaminated needle scenario, where would the toddler have been most likely to receive an injection?  Yes, a hospital or medical clinic. Or a Black Bag Doctor making rounds in the toddler's village.

Now what is a Black Bag Doctor?  I have the BBC's Man in West Africa, reporter Jonathan Paye-Layleh, to thank for turning up this Joker card in the deck:

It is a cruel twist that Liberia and Sierra Leone have been worst affected by the deadliest ever Ebola outbreak, as the two countries were still recovering from brutal civil wars that decimated their [public health] infrastructure in the 1990s when the disease hit.

The virus spread from Guinea, which borders both nations. It has been far more effective in containing the outbreak because it has more resources and a "more resilient" health system, [Sierra Leonean risk analyst Omaru Sisay] says.

"'Black bag doctors"

Similarly, Nigeria, one of Africa's wealthiest states, has contained the virus after it was brought to the country by a Liberian government worker travelling on a commercial airline.

Against this backdrop, many Liberians rely on what are locally known as "black bag doctors" who go from village to village to treat people, often with fake or outdated drugs, our correspondent says.

When people do not have money to pay the "black bag doctors", he adds, they give them some of their best livestock -- chickens or goats.

In Sierra Leone, state-employed health workers do private home visits, Mr Sisay says.

"They work on the side and treat patients at home. A maternity nurse may treat somebody who has high blood pressure; a dispenser somebody who has a respiratory illness."
Even with a fairly good health care system in the country I would think BBDs and moonlighting hospital workers also ply their trade in Guinea, at least in the more remote regions, which include the village where the toddler lived. Guinea's government, as part of its battle this year against the Ebola outbreak, might have put a lid on the use of contaminated needles at the institutional level -- state-run hospitals and medical clinics. But even if Guinea's government stopped the practice in state-run health care facilities that would have been this year; it says nothing about 2013 when the Ebola outbreak first occurred.

As to the likelihood the BBDs in Liberia and Sierra Leone use disposable jabs, based on my reading of a landmark three-part series in the San Francisco Chronicle (DEADLY NEEDLES: Fast Track to Global Disaster, published October 1998), for many years virtually all hypodermics in widespread use in Africa have been disposables. It's just that the disposables are reused until they wear out. 

As to sterilization of the disposables, again from my reading of the Chronicle piece I'd assume the most the BBDs do is rinse needles with distilled water then wipe them with alcohol. This wouldn't sterilize the hypodermic syringe and chamber.

Despite all the rhetoric going back many years (see the Chronicle report)
from African governments and global health organizations, nothing has changed substantially since 1976, when Belgian nuns in Zaire unwittingly infected several pregnant African women with Ebola virus through the use of contaminated hypodermics. 

As to the needle situation today in Zaire (now DR Congo), which saw an Ebola outbreak this year unrelated to the one in West Africa: the Citizendium encyclopedia article about Ebola mentions that in developing nations such as the Democratic Republic of the Congo, "patients may be requested to bring in their own needles, or else share." And often there isn't even water in the clinics for the doctors to wash their hands.   

Ebola Virus Transmission and Contaminated Needles

Regarding a direct link between post-1976 Ebola outbreaks and contaminated needles, the Illinois Department of Health website matter-of-factly states in its article about Ebola:

Outbreaks of this disease have appeared sporadically, in Central and Western Africa, since the first occurrence in 1976. During each of these outbreaks, a majority of cases occurred in hospital settings under the challenging conditions of the developing world.

These conditions, including a lack of adequate medical supplies and the frequent reusing of needles and syringes, played a major role in the spread of the disease. Outbreaks were more easily controlled when appropriate medical supplies and equipment were available and quarantine procedures were used.
[...]
In outbreaks of Ebola, person-to-person transmission frequently occurs among health care workers or family members who care for an ill person. The virus also has been spread through the reuse of hypodermic needles in the treatment of patients.

Reusing needles may be a common practice in developing countries, where the health care system is underfinanced. U.S. medical facilities do not reuse needles.
It's not only finances; government corruption and criminals are also in play. More factors are laid out in the Chronicle report. But whatever the reasons there's no "may be" about it; the practice is common in Africa, despite very grave dangers attached to reusing unsterilized hypodermic and IV needles. The dangers were well established by medical science at least as early as the 1950s.

(The dangers extend to contaminated blood transfusions and emergency blood supplies.)

The Chronicle report disabused me of the notion that the problem should have a simple solution. Why not, I wondered, simply boil the contraptions? Ebola can't survive more than five minutes in boiling water. Yes, the glass hypodermics can be boiled but the syringes in the disposable hypodermics bend in the sustained high heat.

And many doctors faced with long lines of people to inoculate and with only a few hypodermics on hand cut corners on the boiling time for the glass hypodermics -- one reason the disposables became widely distributed in the developing nations.   

On The Road to Hell With Good Intentions

Then why not invent hypodermics that are impossible to reuse?  It's been done. But to read the Chronicle report is to be plunged into a tangled tale of inventors, hypodermic syringe manufacturers, global health organizations, and governments -- a tale the authors, Reynolds Holding, William Carlsen, relentlessly unravel. They begin this way: 

CONFERENCE ROOM A
WORLD HEALTH ORGANIZATION, GENEVA

Dr.Ciro de Quadros, chief of the campaign that eradicated polio from the Western Hemisphere, could not believe the numbers. When the esteemed Brazilian and other world health leaders arrived in Switzerland last spring [1997], they expected to discuss the progress of the global vaccination program -- the most successful public health campaign in history.

Instead, they got a medical time bomb.

In de Quadros' hand was a chilling internal report: 10 million people a year were contracting lethal diseases such as hepatitis and AIDS through the reuse of contaminated syringes.

De Quadros rose to his feet and implored his colleagues to keep the findings confidential -- at least until the numbers could be reviewed once more.

"These figures are so incredible," he said, "that if they are released, they will make the front pages of newspapers around the world."

But an earlier internal WHO study had revealed an even more alarming figure: Every year as many as 1.8 million people infected by contaminated syringes, mostly children, would die -- about one every 20 seconds.

Medical researchers had warned for decades that hypodermic needles could be deadly. But the WHO reports made it painfully clear that world health officials had an international medical crisis on their hands -- and urgent action was needed.

"We want to avoid creating a panic," said WHO's Michael Zaffran, who helped prepare the still-unreleased infection numbers. "But maybe there is a need to create that panic to solve this problem."

This is a story, based on hundreds of interviews and thousands of documents, about a vast, virtually invisible epidemic, a crisis that could have been defused more than a decade ago.

It is about soaring disease rates in Egypt and plunging life expectancies in Brazil; children combing garbage dumps for syringes to sell in Kenya and India; and ignorance, poverty and corruption driving medical workers in Cambodia and Russia to reuse needles dozens -- sometimes hundreds -- of times.

It is about a promising generation of nonreusable syringes that got lost in a multibillion-dollar corporate battle over the global syringe market.

It is about how the world's leading syringe manufacturers first ignored the problem, then either delayed the new technology or did little to get it into the hands of health workers.

And it is about how top world health officials -- including several with de Quadros in Conference Room A -- downplayed the mounting death toll for years, fearing that publicizing it would jeopardize their immunization programs.

The story began more than half a century ago with the emergence of the hypodermic syringe: an instrument of almost mystical lifesaving power, yet one that can spread disease with deadly efficiency.
That's not talking about the use of unsterilized hypodermics during the Western colonial era on the African continent and everywhere else the colonizers set up shop. Cold comfort for the Africans would be that in the days before the dangers of unsterilized needles were understood, the colonialists also stuck contaminated jabs into themselves and their own people.

None of this speaks to the fact that hypodermics weren't only used to inject vaccines.  By the early part of the last century doctors and public health administrators had gone needle happy, as had militaries and factory and plantation owners -- and Christian missionaries.  Those Belgian nuns in Zaire infected pregnant women with Ebola when they injected them with a vitamin preparation.

And at the top of the list, antibiotics were injected throughout the world in staggering amounts. And all that with contaminated hypodermics, which very efficiently and rapidly spread deadly diseases.  

Not to get into the weeds but here I suppose I should mention the jolly hypothesis that unsterile injections didn't simply transmit the virus called HIV; they created it.        

No, unfortunately this isn't a tinfoil hat theory. For details see the "Unsterile Injections" section of Wikipedia's article on the history of HIV-AIDS.

Moreover, the biological mechanisms the researchers identified, by which billions of unsterile injections helped a garden-variety virus transform into a monster, wouldn't be limited to HIV if the hypothesis, first fielded by researchers in 2001, continues to hold up.     
 
I'm tempted to close at this point with "Have a nice day" then finalize my plans to rent a cave in the Himalayas.  But while this is no time for philosophizing I think it could fairly said the hypodermic needle crusade against killer diseases killed so many people it's a wonder there's anything left of the human race to tell the tale.

Fruit bats. My foot. All right Pundita that's enough. 

How to End Unsterile Injections in Africa -- Quickly?

And of course efficiently transmitting the Ebola virus through contaminated injections isn't like, say, shooting common cold germs or even HIV into an arm.  So here one might ask why governments and international agencies battling the current Ebola outbreak haven't sounded the alarm about the use of contaminated needles. And why haven't they announced strategies to combat the lethal practice at this most critical juncture in the battle against Ebola?

Shedding light on the answer means a return to Conference Room A. Peter Evans, then a senior technical officer of the World Health Organization, reminisced further for the benefit of the Chronicle about the Sackcloth and Ashes meeting in Geneva:

In four of the world's six regions -- primarily developing countries -- half of the billions of injections administered yearly were being given with unsterile needles and syringes.

The news was nearly as bad for the World Health Organization's prized immunization programs: One of every three vaccinations was potentially contaminated with lethal infections.

The figures devastated Evans and his colleagues. They had spent years teaching immunization workers safe injection practices and proper sterilization techniques. They had vaccinated millions of children in every corner of the globe.

Now they realized that they could have been exposing millions of children to some of the world's most deadly diseases.

And there was another major worry.

For several countries, demand for immunizations had collapsed over rumors that some vaccines were unsafe.

"There was a great fear," said Evans, "that any negative news about the safety of injections themselves could also seriously impact the immunization programs."
So much for Michael Zaffran's rumination that it might be necessary to panic the public. 

If the history is any guide I'd venture public health officials are afraid at this time that if they emphasize the issue of unsterile needles in Africa, this will discourage Africans and a great many others from taking vaccines -- including the Ebola vaccine when it becomes available.

That's not an unreasonable fear; however, some way must be found to convey to officials that it's working at cross purposes to spread Ebola and other deadly diseases with unsterile needles while at the same time trying to get all of Africa immunized against Ebola.

Yet again if history is the guide such effort would take considerable time given the ponderously slow way things move at international organizations.  A striking exception has been World Bank Group President Jim Yong Kim, M.D., a prickly man who's managed to make more enemies at the Bank in a shorter time than even Paul Wolfowitz. (As to how a medical doctor ended up running the Bank -- I don't know. I don't think anyone knows.)  Dr Kim called WHO Director General Margaret Chan on the carpet for the organization's crummy response to the Ebola outbreak, then cut miles of red tape within I guess 12 minutes flat to commit the Bank to $400 million to Ebola disease treatment and containment in West Africa (and he's just getting warmed up).

So, fast action is possible and in particular if well-heeled charitable organizations such as the Bill and Melinda Gates Foundation spring into executive action.  The question is how to quickly stop the unsterile injections, at least in Ebola-stricken regions, once the will and money are there to do it. 

Here's how I would do it. 

1.  Circumvent the entire bureaucratic machinery currently in charge of purchasing and distributing hypodermic needles in 'developing' countries.  (In 1998, when the Chronicle report was written, the bureaucracy was UNICEF.) Put a hastily formed American ngo in charge -- hastily to include cutting IRS red tape -- that is exclusively dedicated to a mission to stop the use of unsterile hypodermics.  Direct the mission initially to rural West African regions that have seen Ebola outbreaks.  

2.  If companies that currently make glass hypodermics are too small to handle large volume production, ask Walmart to donate an executive to getting a factory retooled "yesterday" to handle large orders.

3.  Load the ngo with retired military procurement and logistics experts, and put a high-ranking retired military logistics expert in charge. 

4.  Have the ngo first distribute glass hypodermics to African villages via the same distribution network that Médecins Sans Frontières (Doctors Without Borders) and other aid organizations such as Samaritan's Purse are using to get home care kits into families stricken by Ebola. And have the ngo work to quickly expand the network. This could be done with help from the U.S. government, which reportedly is providing (or plans to provide) home care kits to "hundreds of thousands of households, including 50,000 that the US Agency for International Development (USAID)" was supposed to deliver to Liberia in September.
   

5. Accompany the distribution with instructions on how to sterilize the glass hypodermics (e.g., at least 5 minutes of boiling) and the proper care of the needles when not in use. Have health workers explain to the village chiefs why it is absolutely critical they convey to people in the village that only boiled glass needles should be used for all and any injections.

6. Once the chief has explained the situation in his own way, have health workers teach designated residents of the villages how to use hypodermics so they can help with immunization shots, etc. If only a very limited number of glass hypodermics can be distributed to each village, the immunizations for a particular vaccine might have to stretch for several days rather than hours as the jabs are boiled after each use. Yet in this situation certainty is the only efficiency.

7. Once the glass needles have been distributed, ask an advertising agency to design a campaign to highlight the importance of using sterilized hypodermics. One candidate would be the agency that created the
"Don't Be a Lab Rat" media blitz this year for Colorado's government. The campaign, which was to persuade Colorado teenagers to stay away from marijuana, drew criticism. But it pounded home the message in colorful fashion. More importantly, it framed the warning in very simple, personal terms. That would be the ticket for getting across the hypodermic message, which should be spread by all means of public communication.


That's the general plan. Note it omits government attempts to pry disposable hypodermics away from BBDs or demonize them for not sterilizing the jabs. To return to the BBC report:
And when Ebola spread across the two nations, people refused to go to hospitals because they saw them "as the most dangerous place to be", Mr Sisay says. He was referring to the fact that hospitals were seen as the source of the disease. It has claimed the lives of many health workers - 61 in Sierra Leone, including its only virologist, Dr Umar Khan.

Many people also did not bother to go to hospital, as there is no cure for Ebola -- although supportive care such as rehydrating patients who have diarrhoea and vomiting can help recovery.
The Black Bag Doctors fill a need, no matter how poorly, when people have good reasons to fear a medical establishment. 

There is better way to deal with the BBDs.  When money talks nobody walks, and this also applies to chickens and goats when they're used for payment. Once the BBDs and private clinics see they're losing money because village cooperatives are sterilizing glass hypodermics and doing their own injections, you may trust they'll get hold of glass hypodermics and make a production of boiling their own jabs in front of the patient. 

And money shouts when it comes to disposable syringe manufacturers. Once they see their profits eroded by glass hypodermics, they'll work miracles to get truly unusable disposable needles into wide distribution in Africa. 

By truly unusable, I mean two little blades popping out in the hypodermic chamber as soon as the syringe is pushed and cutting the syringe in two.

Yes. The invention already exists, and it works. There is absolutely no way to reuse the jab. 

So it's not as if people would have to boil glass hypodermics forever.

Ebola's Hard Lessons

The bottom line for poorer countries is that they can't afford the kind of public health system that only a large tax base, oil wealth, or the ability to do big deficit spending can support.  Nor can countries without highly developed oversight and enforcement mechanisms ward off the kind of corruption that makes distribution of counterfeit medications and use of unsterile hypodermics routine. 

What governments in the poorer countries can do is look to their strengths.

I doubt it ever occurred to the people in Conference Room A that they weren't facing an either-or situation: either downplay the disaster or risk destroying the vaccination program.  There was a third alternative, although it wouldn't have been evident in 1994 because in that era the idea of participatory medicine was still considered the province of the lunatic fringe. 

But people's great fear of unsterile injections would have come from having no control over the hypodermics' safety.  The fear is rooted in the exclusionary model of medical practice, which has dominated for centuries -- ever since the arising of settled civilizations and the specialization of medical practice. 

In this model the patient is largely excluded from the medical treatment of his body. There is the medical practitioner and the practiced upon -- the latter being inanimate at the diagnosis stage beyond supplying answers to the practitioner's questions and pointing to show where it hurts, and limited in the treatment stage to following instructions. 

Yet in the West the exclusionary medical approach is going the way of the Model-T Ford. The sheer expense of maintaining the industry that rose up to service the approach has vaulted the idea of preventive medicine out of the fringe and into the mainstream. This has opened the door for people to participate more in maintaining their own health, even to the point of arranging their own lab tests.

This in turn is creating medical cooperatives that allow entire communities, even in the poorest neighborhoods, to share the responsibility for doctoring themselves, whether it's taking blood pressure, testing for blood sugar levels, and so on.     

And so by a long way around, the human race is now set on a course to return to the ancient tribal model of health care that predominated before the rise of civilizations, only this time with all the medical knowledge and technological advances the past centuries have evolved. 

Oddly enough, this puts rural Africans in an enviable position. Just as they were able to leap directly into the digital communication era without having to dismantle the landline era, the rudimentary exclusionary health care system in the villages, which African governments and the United Nations never cease to bemoan, means they can circumvent the past century of Western health care and go directly to the participatory model.

Odder still, the current Ebola outbreak is giving the participatory model of health care a big push forward in West African regions worst hit by the outbreak.

The exclusionary model was completely overwhelmed by the outbreak, which meant overflowing hospital wards and Africans who were suffering from grave illnesses other than Ebola shut out from medical attention.  And it meant they were hauling relatives and friends with Ebola symptoms from their villages to hospitals in cities and towns, thus spreading the outbreak into the urban landscape -- an unprecedented turn of events.

Finally some health officials grew a brain. Instead of bringing the villagers to the hospitals, give them the tools they needed to care for Ebola patients in their own villages.  Thus, the Ebola home care kits. And makeshift Ebola treatment clinics that UNICEF is rushing into communities. (See the article on home care kits.)

The desperation measures are seen by health officials as a great failure of the medical system but actually it's not rocket science to look after an Ebola patient, and it shouldn't cost a fortune unless a hospital is trying to scare up funds for a new building wing and infectious disease research department. 


Ebola is not airborne, whatever you might have heard to the contrary.  And the virus is so extremely fragile it can't last more than a few minutes once outside its host's bodily fluids unless it lands on a site in the North Pole or in frigid air-conditioning.  

(Does this mean wearers of hazmat suits should simply play a few hands of poker before removing their suits after tending an Ebola patient, as the way to avoid contaminating themselves when removing the complicated gear after tending an Ebola patient?  This might be the case although don't quote me because I wouldn't want to give the CDC and NIH fits.)

And just about any ordinary cleaning solution or alcohol disinfect the surrounds of an Ebola patient.

See the Washington Post's Can You Catch Ebola from an Infected Blanket? to learn why the virus is actually a wuss when left to its own devices unless it strikes in a cold climate, where it can last for several hours on a hard surface. But when last I checked West Africa isn't a cold climate. (Could you fox the little zombie even more by moving the patient into sunlight or the warmest room possible?  Pundita, that's enough.)  

Caring for Ebola patients is mostly knowledge -- knowledge the African villagers and even the professional health workers didn't have at first. (The same could be said for workers at a major hospital in Dallas that accepted an Ebola victim.)

They were sucker-punched by the outbreak in West Africa, which had never before seen Ebola. It took time to understand what the disease was and how it worked. But once you understand, there are a few simple ground rules for dealing with an Ebola patient or corpse without getting yourself killed in the process.

From this viewpoint it'd be smart to extend the idea of home kits and small community clinics to the entire process of warding off Ebola in Africa -- or any other disease, for that matter. Instead of going on a hospital construction spree, provide mobile clinics and more mobile labs. Instead of building expensive isolation wards, truck portable isolation units -- medical tents -- to the villages. Nowhere is it written the wards have to be hardwall construction. 


Death of the Statistical Person

It is hard to read the Chronicle report without feeling repulsed by officials who oversaw immunization programs they knew were killing many people. Yet they were men and women of their times, dedicated to saving the world from the scourge of deadly diseases.  And it's to be remembered that the World Health Organization was instrumental in wiping out the highly lethal airborne communicable smallpox disease.  Saving large numbers, however, can devolve into saving a mathematical creation, a faceless statistical entity. The faceless engender corruption and the most ruthless social remedies.  

Yet fueling the "shadow epidemic," as the Chronicle termed mass death by unsterile hypodermics, is an insidious idea that took hold more than a century ago.  You go to a clinic, there is a caregiver holding a needle, you roll up your sleeve, get an injection, and presto you are effortlessly protected from death by a deadly disease.

It's just that there is no such thing as effortless survival.


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1) Despite the technical hieroglyphs the findings read like a page-turner but for a good introduction see Adam Withnall's piece for the U.K. Independent, which discusses the preliminary paper, published in April in the New England Journal of Medicine. The final version was published in NEJM October 9.

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Wednesday, October 15

Official: Duncan should have been moved to a hospital with biocontainment unit

CNN's breaking news report on a second DAllas health care worker testing positive for Ebola symptoms was updated at 5:53 AM EDT with this additional information:
Serious questions are now being raised about Texas Health Presbyterian, its ability to hand Ebola and whether it can protect its workers from getting it.

An official close to the situation says that in hindsight, Duncan should have been transferred immediately to either Emory University Hospital in Atlanta or Nebraska Medical Center in Omaha.

Those hospitals are among only four in the country that have biocontainment units and have been preparing for years to treat a highly infectious disease like Ebola.

"If we knew then what we know now about this hospital's ability to safely care for these patients, then we would have transferred him to Emory or Nebraska," the official told CNN Senior Medical Correspondent Elizabeth Cohen.

"I think there are hospitals that are more than ready, but I think there are some that are not."
More information from the update
:"Health officials have interviewed the latest patient [the second worker] to quickly identify any contacts or potential exposures, and those people will be monitored," the health department said. "The type of monitoring depends on the nature of their interactions and the potential they were exposed to the virus."

But the pool of contacts could be small, since Ebola can only be transmitted when an infected person shows symptoms. Less than a day passed between the onset of the worker's symptoms and isolation at the hospital.
Officials are still waiting on the CDC to confirm the positive test findings.  The original CNN report this morning also featured allegations made yesterday by a nurses' union so while this is already old news to those who've been closely following the Ebola story, I'll include the earlier CNN account here, which is only summarized in the updated report:
The latest infection -- the second-ever transmission of Ebola in the United States -- comes a day after a nurses' union slammed Texas Health Presbyterian, saying the hospital had guidelines that were "constantly changing" and didn't have protocols on how to deal with the deadly virus.

"The protocols that should have been in place in Dallas were not in place, and that those protocols are not in place anywhere in the United States as far as we can tell," National Nurses United Executive Director RoseAnn DeMoro said Tuesday night. "We're deeply alarmed."

Texas Health Presbyterian Hospital Dallas treated Thomas Eric Duncan before his death from Ebola last week. Nurse Nina Pham, who cared for him, is being treated for the virus.

CNN Chief Medical Correspondent Dr. Sanjay Gupta said the claims, if true, are "startling." He said some of them could be "important when it comes to possible other infections."

Officials from National Nurses United declined to specify how many nurses they had spoken with, nor identify them to to protect them from possible retaliation. The nurses at the hospital are not members of a union, officials said.

Here's a look at some of the allegations the nurses made, according to the union:

Claim: Duncan wasn't immediately isolated

On the day that Duncan was admitted to the hospital with possible Ebola symptoms, he was "left for several hours, not in isolation, in an area where other patients were present," union co-president Deborah Burger said.

Up to seven other patients were present in that area, the nurses said, according to the union.

A nursing supervisor faced resistance from hospital authorities when the supervisor demanded that Duncan be moved to an isolation unit, the nurses said, according to the union.

Claim: The nurses' protective gear left their necks exposed

After expressing concerns that their necks were exposed even as they wore protective gear, the nurses were told to wrap their necks with medical tape, the union says.

"They were told to use medical tape and had to use four to five pieces of medical tape wound around their neck. The nurses have expressed a lot of concern about how difficult it is to remove the tape from their neck," Burger said.

Claim: At one point, hazardous waste piled up

"There was no one to pick up hazardous waste as it piled to the ceiling," Burger said. "They did not have access to proper supplies."

Claim: Nurses got no "hands-on" training

"There was no mandate for nurses to attend training," Burger said, though they did receive an e-mail about a hospital seminar on Ebola.

"This was treated like hundreds of other seminars that were routinely offered to staff," she said.

Claim: The nurses "feel unsupported"

So why did the group of nurses -- the union wouldn't say how many -- contact the nursing union, which they don't belong to?

According to DeMoro, the nurses were upset after authorities appeared to blame nurse Pham, who has contracted Ebola, for not following protocols.

"This nurse was being blamed for not following protocols that did not exist. [emphasis mine] ... The nurses in that hospital were very angry, and they decided to contact us," DeMoro said.

And they're worried conditions at the hospital "may lead to infection of other nurses and patients," Burger said.

A hospital spokesman did not respond to the specific allegations, but said patient and employee safety is the hospital's top priority.

"We take compliance very seriously. We have numerous measures in place to provide a safe working environment, including mandatory annual training and a 24-7 hotline and other mechanisms that allow for anonymous reporting," hospital spokesman Wendell Watson said.
The Dallas mayor declined to comment on the accusations against the hospital.

"I don't comment on anonymous allegations," Mike Rawlings said.

But the Centers for Disease Control and Prevention released a statement following the union's claims. "For health care workers in Dallas and elsewhere, the Ebola situation is extremely difficult," CDC spokeman Tom Skinner wrote.

"The CDC is committed to their safety, and we'll continue to do everything possible to make sure they have what they need so they can prepare to safely manage Ebola patients."

2nd healthcare worker who tended Thomas Duncan tests positive for Ebola

2nd healthcare worker tests positive for Ebola at Dallas hospital
By Catherine E. Shoichet and Holly Yan, CNN
updated 5:14 AM EDT, Wed October 15, 2014
(CNN) A second health care worker at Texas Health Presbyterian Hospital who provided care for Thomas Eric Duncan has tested positive for Ebola, the state's health department said Wednesday.

The worker reported a fever Tuesday and was immediately isolated, health department spokeswoman Carrie Williams said.

The facility will now begin monitoring all those who had contact with the unidentified worker for signs of potential exposures.

The preliminary Ebola test was done late Tuesday at the state public health laboratory in Austin, and the results came back around midnight.

A second test will be conducted by the Centers for Disease Control and Prevention in Atlanta.
[...]

Tuesday, September 23

Can American Children Be Stopped From Using Marijuana?

Oh sure.  All we have to do is figure out why so many American children don't listen when their parents tell them not to use dope.  Toward that end I have a few thoughts on the system of mass education.

The human animal in childhood is a pretty simple creature that operates according to strict rules of nature. For children these rules boil down to an overriding principle: If there's more of them than me they must be right.  Because of this logic the system of public schooling, which pits a relative handful of adult teachers against large groups of children, is the worst imaginable way to educate children in this era.

Today, children in the mass education system feel they're at the mercy of peers who are not family. They develop a kind of existential fear, which corrodes self confidence.  This makes young people in particular an easy mark for chemical substances that pump them up with a false courage and substitute a chemical high for coping skills they're supposed to learn from adults, not each other.

The observation applies whether the substance is legal or illegal.  I think that's why both the criminalization and public health approaches to dealing with substance abuse are bailing water with a sieve.

To bail water with a bucket, put more adults than children in every nursery school and K-12 classroom.

To bail water even faster, have teams of teachers teach the adults who are gathered in the classroom along with the children, and have the adults, not the children in the class, put the questions to the teachers.
 
This approach to mass education takes the pressure off children to perform at an intellectual and experience level that's beyond their capacity. And it teaches children how to ask questions that lead to illuminating answers and allows them to see common sense in action.

The approach wouldn't exclude study periods for children and testing based on the studies nor would it exclude homework. It would restore the tried and true method of public education that made the human race a smashing success.

George Gurdjieff wrote of his childhood experience of attending huge convocations in the company of an uncle, where storytellers and teachers from across Central Asia gathered for weeks to orally pass down histories and legends and discuss and debate with each other while the public looked on.
 
The Kumbha Mela in India, while specifically religious, shares the same features as the Central Asian gatherings. Every 12 years Yogis leave their retreats and gather in a public place to share their insights with each other and debate.  This convocation is also open to the public.

The origins of these great gatherings are lost in the mists of what we call prehistory. Yet the antiquity of the gatherings indicates that the human race didn't become smart by telling its children to attempt to act and think like adults.  We got here by children observing adults teach each other.

This system of public education has been replaced by schools that are as much factories for producing the pack mentality.  Add the fact that in this era the factories also crank out highly developed intellects.  This is like setting an elephant atop a flea.  What little common sense the children manage to develop can be crushed under the sheer weight of their intellects.

As to why all this hasn't been clearly evident yet -- I think the Germans have been realizing the worst downsides of the system of mass education. Across much of the country they've halved the school day so children can spend more time with their family. (To my knowledge this lessening of time spent in school hasn't interfered with the children's academic progress.)

Yet I think the problem has crept up on many peoples, including Americans, from their blind side.  The family unit in this country changed markedly over the course of a century -- got much smaller. But human nature didn't change, and neither did the basic formula of the schooling system: many children, few adults.
 
In earlier eras I don't think this was such a problem because children were raised in their own packs, so speak; they could have four or ten siblings. These family packs were more important to the children raised in them than the ones they met with in school.  The family packs also prepared siblings to deal with the packs in school, and the older members of the family packs acted as authority figures for the younger siblings.   

And today in pockets around the world and even in the USA, parents have been able to offset to some degree the tyranny of the pack mentality in schools. They've done this by involving their children in communal-type activities after school, and where adults are present in large enough numbers to impress on the young brain that big people are in charge of the world, not its peers.

And there are still places in the world where children live in extended families, which offsets the worst effects of modern schooling.

Then there are parents who manage to beat the devil by force of nearly superhuman will. There are children who are more afraid of a parent than their schoolmates. While this can produce emotional scars it can also spare them much grief in their adulthood.

Take away these various pockets of resistance and I think it would be evident to many by now that the present system of public education needs considerable revision.  Children shouldn't grow up thinking that the opinions of other children are more important than the instructions of their parents. If they do grow up that way many will engage in self destructive acts simply if they see their peers doing it.

So if parents can't stop their children from using marijuana or any other drug or alcohol, they need to stop beating themselves up when their saying "no" is ignored.  They need to realize they're up against an old schooling system that is woven into the fabric of American society. It will take time to change the system so it puts more adults in children's' schooldays.

For now: if "no" consistently doesn't cut it, parents might want to insert themselves and other adults into their children's lives outside of school as much as possible. A bonus to this approach is that it takes children more away from television; many of the shows they watch reinforce their notion that little people are in charge. 
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Thursday, August 28

The mysterious journey of Bardarbunga's magma, clearly explained by the Beeb

As millions of people around the world including air traffic controllers watch and wait and wonder, the complex secret life of volcanos goes about its business, unaware of the stir it's causing in the world of humans.
 
Rebecca Morelle, Science Correspondent for BBC News, has followed the reports of scientists fussing around at the Bardarbunga volcano with their many instruments, and from this somehow delivered a clear explanation of what the hell is going on.

In the updated version ("4:47 ET") of the August 27 report (Iceland volcano: New quakes raise concern over large eruption), Morelle also details the three most likely scenarios at this point about the magma's route and explains ihow each scenario would affect people, including air travelers, should it come to pass.

When we know which scenario happens?  The worst case is that we'll know when the skies above Europe are filled with ash, which as of the update doesn't look very likely.  In a few days the magma will make up its mind, is the best the scientists can figure.
    
The report is a joy to read for its clarity.  And educational too.  And yes, there is a graphic depicting the magma's journey, if you like studying bunches of meandering dots and little triangles pointing this way and that.

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Wednesday, August 27

Legal Marijuana Farming's Phantom Profits and Why The Real Profits Are For Crooks

"The boom in medical pot farms has led to a decline in pot prices, which in turn has caused people to grow even more to make up for their income losses, further exacerbating the problem, state and federal law enforcement and environmental officials say. Both public and private lands are suffering as a result."
-- From Cleaning Up After Pot Growers Challenges North Coast; The Press Democrat (Santa Rosa, California); July 24, 2014

In response to every study and news report revealing more about the environmental damage done by commercial marijuana ("pot") cultivation, in answer to every report about criminal involvement in the industry, advocates of pot have one reply: Legalize it.
  
By this they mean legalize the cultivation of pot at the federal level of U.S. government.  This on the argument that once the federal government puts its weight behind regulating commercial pot growing it will result in better enforcement of regulations and knock criminals out of the pot growing business. That last on the assumption that under a legal regime the price of pot would decline to the point where legal growers could match or even beat the price charged by organized crime.

Yet the entire argument is wrong. This is first because it ignores retail business economics 101. The chaos that erupted in California, indicated in the quote I provided above, could have been predicted by any Walmart executive.

Second, the pot legalization argument can't seem to distinguish between agriculture for human consumption and the manufacture of chachkas. Pot agriculture intersects with no less than four heavily regulated retail areas in the USA.  This is because pot is used as a medication, added to processed foodstuffs, and cultivated commercially both indoors and outdoors. Those last two items also fall under every kind of American environmental regulation one can name.
 
Add to this the fact that while virtually all the regulations also apply to other types of agriculture for human consumption in the USA, there are features of pot agriculture that place a unique regulatory burden on it.      
All this means the regulatory regime covering just the agricultural aspects of marijuana is only slightly larger than the planet Saturn.

The cost of complying with this regime is in the stratosphere.  How, then, have any licensed commercial pot growers been able to make a profit up to this point?  Because the U.S. states that license the growers have never enforced any more than a fraction of the regulations and even then only in haphazard fashion.
 
And even with the will to enforce compliance, the cost of doing so is fabulously expensive. This is because commericial pot agriculture has two unique aspects:

1. The dual nature of commercial pot cultivation -- indoor and outdoor -- places it under two large and vastly different sets of regulations.

2.  Pot's cultivation sites are ubiquitous. If you want to inspect, say, commercial corn farms in your state, it's pretty hard to miss a corn field. But if you want to inspect commercial marijuana, first you have to find where it's grown. This can be anywhere -- inside a private home, a warehouse in a town's commercial district, in a forest or back yard, or interspersed with other crops in a field.
 
Piling those two factors on top of a regulatory regime larger than Saturn means that enforcement would gobble up all the revenue pot-licensing states realize from taxing pot sales, and then some. Yet by skimping on regulation the states have in effect been subsidizing commercial pot agriculture.  This has created the illusion that there are profits in the industry that don't actually exist.

It's this illusion that investment funds, venture capitalists, pot legalization advocates, and economists have been pitching when they laud the big profits in legal marijuana farming.

There are big profits all, right. The fine print is that the profits can only be made illegally -- by both the regulators and pot farmers cutting regulatory corners.
    
But if pot cultivation is legalized at the federal level, this would bring in a host of federal agencies that would set about enforcing codes, chiefly by handing out mountains of fines for noncompliance. 

This would force state governments to spend their revenue from taxing pot sales on code enforcement, a problem they'd try to solve by slapping all kinds of fees and taxes on pot farmers in their states.

There's only a handful of U.S. agricultural corporations with deep enough pockets to cover expenses from that big a double whammy.  However, Big Ag would have three good reasons not to grow pot: its cultivation can't be offshored, the product can't be exported, and the law suit regime that would gear up if pot is legalized at the federal level. The regime would be huge because it'll cover so many issues, including environmental and health ones.

That would leave the smaller fry to attempt to eke out pennies in profits from high volume production of pot.

To boil it down, under a federally enforced regulatory regime, commercial marijuana farming would be so costly the only entities that could legally make a decent profit from it would be law firms, accounting firms, auditing firms, and banks.

That would keep the door open for organized crime, which can make a good profit under a federally enforced legal pot regime in the same way it does now: by ignoring every U.S. law related to agriculture.
   
It would also continue to incentive lawbreaking by licensed pot growers. California's 18 year experience with licensed medical pot growing demonstrates that there is no surer way to turn law-abiding citizens into scofflaws than by setting up an industry that delivers good profits only by breaking the law.
  
So a bonus for forcing down the price of pot through high volume production while forcing up the cost of compliance is that it switches out Mexican organized crime's control of the illegal pot industry for American organized crime's control of the legal industry.  One consequence would be a level of corruption in U.S. state governments not seen since alcohol's prohibition days.
  
That's the Elmer Fudd method of crime fighting. We shot ourselves up but we sure showed those wascal Mexicans.

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Saturday, August 23

James Bamford's shattering conversations with Edward Snowden

Of all the people who might interview Edward Snowden, James Bamford is the logical top choice. But just because of this Bamford would have been the U.S. government's logical choice for the closest surveillance of anyone in the public eye who might conceivably speak with Snowden in person for publication.

It took him nine months and considerable trouble to arrange a meeting with Snowden in Moscow. Yet the long wait worked out to his advantage because he was able to study everything that had been written about Snowden in those months, all Snowden's comments during that period, and assess the questions other interviewers had put to Snowden. 

And just because he is James Bamford, the man who'd written more for publication about the National Security Agency than anyone else and closely studied the agency for decades, Snowden was willing to take successive security risks in Moscow in order to talk with him at length, over a period of three meetings.

The breaks in the periods allowed Bamford to avoid what the French call the Staircase Moment: those brilliant thoughts you should have voiced during the dinner party but didn't occur to you until you'd left.  Those moments are an occupational hazard for journalists; there's nothing like thinking of a great question four minutes after you've been ushered out the door.

Having been ushered out the door twice before his last meeting with Snowden, James Bamford had the luxury of getting the Staircase Moment out of his system before the conversations ended.

Yet if one knows nothing about Bamford's history, the one question he said he wanted Snowden to answer above all else would seem an odd choice, even a waste of interview time.  Snowden had already exhaustively explained to anyone who would listen why he'd stolen and made public copies of the most sensitive trove of secret government documents in America's history.

That is just why Bamford begins his account of his talks with Edward Snowden, which are written up as the cover story for the September issue of Wired magazine, by reminiscing about his previous visits to Moscow and his own experiences with the NSA. By the time he wraps up his account, it's clear that Bamford's burning question, as he called it, was directed as much at himself, at who he was at Snowden's age, as it was at Snowden.

These two men are not like Julian Assange and Glenn Greenwald, who were seemingly born with a great distrust for all forms of authority and never saw praise for a government they couldn't turn into an indictment. Bamford and Snowden were born to serve their government; these are law and order men, the kind who form the backbone of a nation's military and police forces. 

What could provoke such men into extreme actions to take their government to task?  Was it something in themselves that caused them to break every code of conduct that supports a nation's security services?  Or something they perceived about American government actions that was so awful conscience demanded the strongest remonstrance?

The most complete answer is found in the two most unethical and unfortunately illuminating psychology studies in U.S. history: the Milgram Experiment and the Stanford Prison Experiment.  It turns out that given the way human nature is built, there are just some among us that no matter how well-intentioned and law-abiding will transform into monsters when given even a small amount of authority that can't be challenged, or when instructed to obey such authority.

What we also know from the experiments is that there is no way, no way at all, to predict who among us will fall prey to the obverse of humanity's most noble characteristics: the ability to take charge in a crisis and make the tough and even ruthless decisions that no one else wants to make, and the ability in a crisis to unquestionably obey authority no matter the cost to oneself.

So important to our race's survival are these characteristics, any attempt to purify them of their dross would only result in a greater evil than their dark side represents. That is our lot, the dilemma we can only bear, the price we pay for free will.

And so James Bamford's burning question for Edward Snowden, what he really wanted to know, is whether either of them could have become Keith B. Alexander.  The answer, never made quite explicit in Bamford's account, is maybe but they didn't.


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That's a lot of bananas to lug around the oceans




"The project, which has spurred a series of port and infrastructure upgrades throughout the Caribbean and the US eastern seaboard, will make room for vessels with the capacity to carry as many as 12,600 containers, almost three times what the existing locks permit."

Not to be a wet blanket about what is "perhaps the most important project being built in the world right now," meaning the expansion of the Panama Canal to make room for mega-humongous container ships. These giant ships are in addition to the mega-humongous floating oil tankers, which I think I mentioned some years ago on this blog in connection with a report the John Batchelor Show did on the topic.

But I have a question about the behemoths that are now trolling the oceans in ever great numbers and frequency, and which are prompting canal expansions not only in Panama but also Egypt (see the report below), the somewhat strange plan for building a Nicaraguan canal (report below), and channel deepenings in just about every major port.
Has anyone done a study on the amount of heat generated by these big banana carriers and how this affects the ocean temperatures? Or any kind of study on how these carriers in large numbers are impacting ocean ecology?

If I understand rightly, ocean ecology has a big effect on global weather systems.

I am just asking, that's all. I know the oceans are vast, but if they're beginning to look like Grand Central Station at rush hour because traffic from veritable floating cities is covering up a lot of water surface, and combining this with a lot of floating trash on ocean surface and other floating gunk like oil spills, and with huge annual dust storms out of the Gobi picking up tons of industrial particles from China and dropping these on ocean surfaces as the trade winds pick up the grit -- I'm wondering how all this is combining to affect the oceans' reflective ability.

One of the interesting things about the mega-cargo ships, which National Geographic's article on alfalfa brought out (see my 'Shoot Yourself in the Foot Model of Global Trade' essay), is that while many of them arrive laden at ports, they can go home virtually empty because of big trade imbalances. So that's a lot of empty space to lug around the oceans -- and, I would guess, the giants exhaust as much heat into the ocean whether they're empty or full.

An ocean scientist might tell me there's nothing to worry about; that oceans are so big they aren't bothered by big banana carriers. And maybe a jaunt around Google and Bing would reassure me. Next year I'll look into the subject.

Panama says a $5.3-billion canal expansion may not be big enough
By Michael McDonald / Bloomberg / Global Eye
August 16, 2014
via Business Mirror August 22, 2014

A CENTURY after the US steamship Ancon first sailed through the Panama Canal, a $5.3-billion expansion delayed by bickering contractors and angry workers is nearing completion. The problem is it might not be big enough.

With the expansion 16 months behind schedule, canal administrator Jorge Quijano said officials are studying whether to dig a fourth set of locks to handle a growing fleet of super-sized ships. Those include the 400-meter-long “Triple E” vessels capable of carrying more than 18,000 containers, four times more than current ships passing through the canal.

“We are always analyzing the market and as soon as we can economically justify it, we will begin,” said Manuel Benitez, deputy administrator of the Panama Canal Authority, adding that he thinks the current expansion is sufficient for now. “If that changes and the demand exists, we are ready to begin.

”Panamanian officials will celebrate this weekend the anniversary of the French- and US-built canal, which cut thousands of miles off global trade routes and generated almost $10 billion in tax revenue for Panama since the US handed over control at the end of 1999. A new expansion could help sustain economic growth that has averaged 9 percent per year since 2007, the fastest in Latin America.
Delays on the current expansion, approved by voters in a 2006 referendum, have cost the country about $200 million, pushed the completion date back to December 2015 and may force the government to trim spending.
“We are going to elaborate a plan to tighten public spending, and we are going to review the budget,” Economy Minister Dulcidio de la Guardia told Congress on Monday, citing lower-than-expected canal revenue.
Campaign promises
PRESIDENT Juan Carlos Varela, who took office in July, needs the boost that would come with increased ship traffic to fulfill campaign pledges to reduce poverty, expand public transportation and sustain growth as canal construction winds down. The country’s fiscal deficit reached 3.2 percent of gross domestic product in the first half of 2014, above the 2.7 percent allowed by Panamanian law, de la Guardia said.
“We have already felt the impact of not having the canal expansion done,” Benitez said.
A consortium, led by Spain’s Sacyr SA, halted work on the expansion at the start of the year in a dispute over $1.6 billion in cost overruns. Construction workers demanding higher salaries went on strike in the days leading up to the May presidential elections and Quijano, the canal administrator, said a regional drought may limit ship traffic later this year.

Ship traffic

ECONOMIC activity in May, when the labor strike hit, eased to 1.7 percent from a year earlier, the slowest pace in almost five years. Growth will be 7.2 percent this year, the least since 2009, according to the International Monetary Fund. The country’s dollar bonds have returned 1.1 percent in the past three months, below the 1.9-percent average of emerging markets, according to JPMorgan Chase & Co.’s EMBIG index.

The global financial slowdown since 2008 has also hurt revenue in the 77-kilometer canal. Total ship transits declined to 13,660 in 2013 from 14,685 in 2011, according to the Canal Authority. Officials expect those numbers to rise when the new locks open.

With a surge in US natural-gas production expected to boost trade with Asia and shipping companies including A.P. Moeller-Maersk A/S rerouting their largest vessels away from the canal, Panama is vowing to finish the expansion next year.

The project, which has spurred a series of port and infrastructure upgrades throughout the Caribbean and the US eastern seaboard, will make room for vessels with the capacity to carry as many as 12,600 containers, almost three times what the existing locks permit.

48,000 bananas

ONE 20-foot container can hold 329 19-inch televisions, or 48,000 bananas, according to Maersk, which says it has a fleet able to transport 4.1 million containers.

“Vessels are getting larger because of the economies of scale,” said Robert Brodesky, director of transportation consulting for IHS.

“There is a lot emphasis being put on ports, particularly on the east coast of the United States, in being able to deepen their channels.”

The expansion will coincide with the delivery in the coming years of about 165 ships capable of carrying as many as 10,000 containers, said Jonathan Roach, a shipping analyst at Braemar ACM Shipbroking in London. About 140 ships, including some under construction, will be too big to fit through the new canal, Roach said.

Benitez said the idea for an additional set of locks emerged as a way to attract increasing shipments of iron ore and coal from Brazil and Colombia, and oil from Venezuela to the canal. Officials have blueprints of the land where contractors would build the locks, Benitez said.

Nicaraguan canal

CHINA Harbor Engineering Co., which built Pakistan’s Gwadar Port and Macau’s airport, said it is ready to make the canal ever bigger. Chairman Mo Wenhe announced interest last week in “exploring our participation in all canal projects, especially in the design, construction and financing of a fourth set of locks.”

Talk of new locks may be driven by Nicaragua’s efforts to pursue its own canal, a $40-billion project it announced last year in partnership with a previously unknown Chinese company. Honduras also said it wants to build a rail line connecting it’s Pacific and Caribbean coasts to spur more trade.

The route through Nicaragua would be longer than Panama’s and the cost of the undertaking, at nearly four times Nicaragua’s gross domestic product, has raised doubts over whether the project is feasible.

Egyptian rival

“THE Nicaragua canal has incited Panama to play its cards and to push it a little bit further,” said Jean-Paul Rodrigue, a professor of global studies and geography at Hofstra University in Hempstead, New York, who estimated that an additional expansion would cost $10 billion to $20 billion.

The Panama Canal’s more immediate rival, Egypt’s Suez Canal, announced plans this month for an $8.4-billion expansion. About 18,000 ships pass through the Suez each year.

Plans for a canal across the Central American isthmus date back to the Spanish colonial era. Cornelius Vanderbilt funded a failed effort in Nicaragua in the 1850s. The French government, fresh off the completion of the Suez, first backed efforts starting in the 1880s to build a waterway across Panama.

As many as 20,000 men at one point worked on the French canal project, which was abandoned multiple times as debt and deaths piled up. In 1904 the US, led by President Theodore Roosevelt, took control of the project and the entire canal zone, which it would relinquish 95 years later.

Post-Panamax

SHORTLY after the Panama Canal opened in 1914, the 4,500 container ship that came to be called the Panamax became the new standard in shipping. By 1996 the first so-called post-Panamax ships were in use, and two generations of larger ships have been built since then.

With more than 50 million tons of dirt excavated since 2006 and sets of Italian-made gates awaiting placement at the new locks, Benitez said the canal has reached an agreement with its contractors on how to resolve any disputes and will finish by the end of next year.

“We are at the point of no return,” Benitez said. “It’s perhaps the most important project being built in the world right now, and it’s to the benefit of both sides to finish it as soon as possible.”

With assistance from Naomi Christie in London
[END REORT]
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