Enjoy some unique points of view from some of Mark's university students

Facebook and the Invasion of the Body Snatchers 
by Lamia
The last week before the holidays we watched the film The Invasion of
the Body Snatchers and Mark Cramer, our English professor, asked us if
we saw any parallel between the film and Facebook. I think that in the
film, we can see a kind of metaphor of Facebook. As the body snatchers
stole the appearance and the memories of their victims, Facebook is
doing something quite similar by collecting every piece of information
concerning its members, not only professional but also personal
information. A parallel could be made between the snatchers and
Facebook’s managers in that they are in possession of their followers’
privacy.
Then I wondered what would happen if Facebook owners decided to sell
all this precious information -considering that in 2010, 74 % of the
world population will be listed in Facebook- to an organization like
the CIA, or INTERPOL to hold up as an example? The world would be kept
under surveillance and our privacy violated if need be!
We can go further if we try to understand this tendency of following
the herd. The phenomenon is infectious.
Facebook was created at the beginning with the intention of networking
people but today it raises controversial questions.

Do we need GMOs? 

by Anais L. (Biology student)

 
              GMOs have been the source of a lot of debates since the beginning of the 1990’s. Though everybody has an opinion on this subject, most people don’t actually know what GMOs really are. In fact genetically modified organisms are not something new. Transgenic manipulations weren’t discovered in the early 90’s (like cross-breeding). They have been used for centuries (1). However, these genetic manipulations could be done only within the same species, so it got more and more limited. That is why “modern” GMOs were created. These are organisms (bacteria, animals, or plants) that have been genetically modified by the insertion in their genome of a selected piece of DNA coming from another organism (different species). The DNA modifications are then transmitted to the descendants. These manipulations allow us to create organisms with characteristics of other species. For example corn has been modified to produce pesticides (if corn produces enough pesticides to be deadly toxic to insects we can wonder about its effects on people who are eating it!), or to be resistant to herbicides (2). 
              This new process opened new perspectives, but also raised a lot of worries. The insertion of DNA not being something without consequence, further studies should have been done in order to prove the safety of GMOs. Still, the possibilities offered by this technology were so great and could bring so much money, that private companies developing GMOs were not very keen to see such studies published. They knew these reports would have shed light on the fact GMOs were potentially dangerous. The GMO lobby (in particular Monsanto) has such overwhelming influence that, in 1992 the Food and Drug Administration established the “principle of substantial equivalence” (3). It allowed GMO food to enter the market place considering that all the substances resulting from the genetic modifications were the “same as or substantially similar to” the ones found in natural food (3). Yet this principle wasn’t based on scientific research.

              In order to protect their seeds and to make more profit, Monsanto also created patents, which made farmers dependant on their products. This has had tragic consequences in India (4, 5). 
              In addition to questions about health, this man-made process of agriculture also raises ecological issues. Once corn, modified to produce pesticides, has been harvested its roots decay in the soil and keep releasing pesticides that will interfere with the soil ecosystem. What’s more the over-use of these pesticides will progressively make pests resistant to these molecules (2).  
              Another problem caused by the general use of GMOs is biological pollution. As long as GMO plants are kept in laboratories there is no problem, but once they are grown outside they can spread out very easily thanks to wind, pollination, etc. Then the resistance conferred by their DNA modifications can have a selective advantage, so they can expand uncontrollably and make native species disappear. This can threaten biodiversity and the balance of ecosystems.  
              As a conclusion I would say that in regard to agriculture, GMOs might help to set up new species, with more nutritious properties, etc. Nonetheless serious studies must be carried out before allowing their consumption.  On the other hand, is it really necessary? It has been proved that there is enough food to feed all the human beings, but it has been poorly distributed. What’s more, organic agriculture shows that it is possible to grow plants without the use of chemicals or GMOs, and that this food contains much more nutrients than in intensive agriculture (6). It may be time for people to think about what the main priority is: either to overproduce food (for developed countries!) and turn a blind eye to ecological and ethical problems resulting from this agriculture, or to consider it may be wise to slow down this fanatic pursuit of overproduction and profit and turn to a more sustainable and fair agriculture. 
 
References  
(1) YouTube: Genetically Modified food issues – Educational video part 1 
(2) Youtube: Genetically Modified food – part 2 
(3) Youtube: Genetically Modified food – part 1 
(4) Youtube: Monsanto Indian farmer suicide  
(5) Youtube: Must-see documentary about GMO part 08 
(6) http://www.bbc.co.uk/food/food_matters/organicfood.shtml 

Financial Crisis: Alicia responds to a Financial Times article (copied below her response)                                                                                                                                                 Response to “Put out the fire before fixing the spinkler”:  This response by  Alicia applies the theories of University of Maryland economist Herman Daly and his SSE (steady state economics) theory.                                                        

Alicia writes:

The solution you put forward to resolve the crisis is to restore growth by “allocating capital to productive uses, so that businesses and households start spending”. The question is: are businesses and households in trouble because access to financial resources has tightened?

Herman Daly writes that this is not the right diagnosis. His reasoning is that, on the contrary, the current crisis is a result of the excessive increase of financial resources used to feed economic growth that has led “debts and virtual wealth to become so disconnected from underlying real wealth”. He goes even further avowing that even if we could “delay the painful reconciliation of virtual and real wealth and grow our way out of the crisis”, this would not be a wise thing to do. Indeed, additional growth would trigger ecological costs such as global warming or biodiversity loss, which would be likely to exceed “marginal benefits of a little extra consumption”. In other words, contrary to what you and other mainstream economists believe, promoting further economic growth would make us poorer, not richer.

What is more, you advocate “stabilizing the financial system first, and only then, implementing major regulatory reform”. On the contrary, Herman Daly would reply that “propping up such a destructive system makes no sense”. Instead, he thinks that redesigning our laws and institutions has to be the first priority in order to foster an economy that remains “within biophysical limits”: the Steady-State Economy. For instance, gradually raising reserve requirements for banks to one hundred percent could be one of these transitional policies towards a SSE. In such a system, commercial banks would simply act as financial intermediaries that lend to people willing to invest, money previously saved by others, instead of working as engines for creating money out of nothing without limit.

Article of reference:

“Put out the fire before fixing the sprinkler”

By Anil Kashyap and Frederic Mishkin

Published: March 9 2009 19:54 | Last updated: March 9 2009 19:54

Last week, President Barack Obama asked Congress to move swiftly to create a new financial regulatory system for the US. The system is clearly broken, and fixing it should be a high priority. However, moving swiftly to put in place a new regulatory system now would be a serious mistake.

There are several reasons not to rush regulatory reform. We are in the midst of a financial crisis that is crushing the economy. Recovery of the financial system has to be the first priority and is a complex task. Without the ability to allocate capital to productive uses, so that businesses and households start spending, the economy will continue to contract.

Focusing on reforming the financial regulatory system will divert attention from the more crucial task of promoting economic recovery.

Complicating matters, key senior positions in the Treasury are yet to be filled. Regulatory reform requires considerable technical expertise. This is a case where the details matter and where the decisions made now are likely to last for decades. We need the administration to have its top experts engaged in these deliberations. Decisions about reform need to be carefully considered and not made in haste.

How the crisis plays out will inform us about how to proceed. The government is engaged in financial rescues of a number of large companies, including Citigroup and AIG. It is also possible that the stress tests will reveal other seriously under-capitalised institutions that will require massive government support. The experience gained from seeing how these interventions work will inform us about what financial reforms are desirable. This experience might also make the government more sensitive to the costs of overhauling institutions and the challenges of re-orienting large institutions.

In addition, the configuration of what the financial industry will look like once the crisis is contained is unclear. There will be substantial benefits to seeing where the industry settles before deciding which direction regulatory reform should take.

Finally, one of Mr Obama’s principles for regulatory reform is that we face global challenges. Following from this principle is that fixing regulation will require global co-ordination . A go-it-alone reform effort will be ineffective as it will be possible for companies to evade many of our rules by relocating business activities to other countries. It is much more costly to close loopholes and strengthen the system than it would be to get regulations right and harmonized at the outset.

Unfortunately, the regulatory system in Europe is even more fractured than ours. Reaching consensus will take time, even if we knew what the post-crisis landscape would look like.

We are not advocating that we do nothing about regulatory reform. There is a good historical model for what should be done. The US savings and loan crisis from the late 1980s bears some resemblances to the current situation, although that crisis was less severe. We had the 1988 presidential election in the midst of the crisis, and there was little discussion during the campaign about how to resolve it. The policy response after the election, however, was sequenced.

The first priority was to resolve the crisis and this was done in the early days of the George H.W. Bush administration with the Financial Institutions Reform, Recovery and Enforcement Act of 1989. This act had a provision that the Treasury was required to produce a comprehensive study and plan for reform of the federal deposit insurance system to make a re-occurrence of banking crises less likely. Congress then went on to pass the Federal Deposit Insurance Corporation Improvement Act in 1991, which raised capital requirements and led to a stronger banking system.

The policy process that was successful in that period was first to stabilize the financial system and then implement major regulatory reform. This is still the right blueprint.

When a house is on fire, you put all your initial effort into putting it out. Only after the fire is squelched, do you redesign the sprinkler system.

Anil Kashyap is professor of economics and finance at the University of Chicago Booth School of Business and co-director of the school’s Initiative on Global Markets. Frederic Mishkin is professor of finance and economics at the Graduate School of Business, Columbia University, a former member of the Federal Reserve board of governors and author of ‘The Economics of Money, Banking and Financial Markets’, 9th Edition, (Pearson/Addison-Wesley, forthcoming)

The Financial Times Limited 2009