Month: September 2011

Does this sound familiar ?

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The science community is now closing in on an example of scientific fraud at Duke University. The story sounds awfully familiar.

ANIL POTTI, Joseph Nevins and their colleagues at Duke University in Durham, North Carolina, garnered widespread attention in 2006. They reported in the New England Journal of Medicine that they could predict the course of a patient’s lung cancer using devices called expression arrays, which log the activity patterns of thousands of genes in a sample of tissue as a colourful picture. A few months later, they wrote in Nature Medicine that they had developed a similar technique which used gene expression in laboratory cultures of cancer cells, known as cell lines, to predict which chemotherapy would be most effective for an individual patient suffering from lung, breast or ovarian cancer.
 
At the time, this work looked like a tremendous advance for personalised medicine—the idea that understanding the molecular specifics of an individual’s illness will lead to a tailored treatment.

This would be an incredible step forward in chemotherapy. Sensitivity to anti-tumor drugs is the holy grail of chemotherapy.

Unbeknown to most people in the field, however, within a few weeks of the publication of the Nature Medicine paper a group of biostatisticians at the MD Anderson Cancer Centre in Houston, led by Keith Baggerly and Kevin Coombes, had begun to find serious flaws in the work.
 
Dr Baggerly and Dr Coombes had been trying to reproduce Dr Potti’s results at the request of clinical researchers at the Anderson centre who wished to use the new technique. When they first encountered problems, they followed normal procedures by asking Dr Potti, who had been in charge of the day-to-day research, and Dr Nevins, who was Dr Potti’s supervisor, for the raw data on which the published analysis was based—and also for further details about the team’s methods, so that they could try to replicate the original findings.

The raw data is always the place that any analysis of another’s work must begin.

Dr Potti and Dr Nevins answered the queries and publicly corrected several errors, but Dr Baggerly and Dr Coombes still found the methods’ predictions were little better than chance. Furthermore, the list of problems they uncovered continued to grow. For example, they saw that in one of their papers Dr Potti and his colleagues had mislabelled the cell lines they used to derive their chemotherapy prediction model, describing those that were sensitive as resistant, and vice versa. This meant that even if the predictive method the team at Duke were describing did work, which Dr Baggerly and Dr Coombes now seriously doubted, patients whose doctors relied on this paper would end up being given a drug they were less likely to benefit from instead of more likely.

In other words, the raw data was a mess. The results had to be random.

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Social Security – Ending The Myth

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The US Social Security system consists of a tax on employees and on employers. The main components are 1) Social Security 2) Medicare.

How Social Security Taxes are Calculated:

The social security tax rate on individuals is 6.2% up to $106,800 (this amount has been increasing annually, that is the 2011 “cap”) and this rate was reduced to 4.2% in 2011.

The social security tax on employers is also 6.2% up to $106,800. The employer tax percentage was not reduced in the 2011 “payroll tax holiday” that was put in place as part of the grand budget compromise last year.

For medicare – it is 1.45% on employees with no limit, and for employers it is also 1.45% with no limit.

In total – if you are self employed, it is (6.2+6.2 less 2% tax holiday) or 10.4% FICA up to $106,800 and a medicare tax of 2.9% up to your total income.

The Social Security “Trust Fund”

The revenues from social security go into Federal government coffers. Then benefits are paid out of Federal funds. Technically the “surplus” of social security revenues over amounts paid out goes into a trust fund but there is essentially nothing “saved” in a real sense, just an “IOU” from the Federal government promising to use their taxing (and more likely, their borrowing) power in the future to meet this obligation.

While many people have been skeptical about social security’s ability to pay out benefits in the past (including a recent candidate who called it a “Ponzi scheme“), there was at least a logical smidgen of truth to the fact that the US government attempts to tax in a clear fashion from workers that will someday benefit from social security and then pay out benefits in a consistent manner.

Recent Tax Proposals

Recent tax proposals, however, start to remove the last fabric of the lies that allowed social security to be seen as anything other than another government entitlement program, funded by a mix of taxes with a lot of borrowing thrown in (at an unsustainable rate). The new proposals cut the individual rate to 3.1% (and the employer percentage down to 3.1% for smaller payrolls), a reduction from the pre-holiday combined rate of 12.4% down to 6.2% (for smaller companies). There is a separate $50M holiday for companies increasing payroll that makes this calculation more complex, and the medicare portion stays the same at 1.45% for employer and employee to total 2.9%.

Since social security can barely cover its current obligations now out of tax revenues, likely these changes will move it into the red immediately, and eliminate the fiction that the surplus is “saved” in a trust fund anywhere at all. Now social security looks like any other tax program, subject to the whims of the government and changing policy preferences, rather than a pension plan which it is made out to be.

Taxes and Behavior

The current administration is curious. On the topic of raising rates, they don’t think that it changes behavior. Specifically, they fought the prior administration’s tax reduction as “giveaways” to the rich who could afford to pay taxes, as if the rich would work just as hard in order to provide an ever increasing percentage of their income to the government.

But they DO believe that reducing rates can incent behavior other times, such as in “cash for clunkers” or the previous tax reduction holiday. More specifically, they take a myopic short-term view that putting a bit of extra cash into workers’ pockets will help their constituents, but making a more competitive tax policy overall (that will spur investment and growth) isn’t anything that is worth investing in or considering. I am frankly kind of surprised that it took the administration this long to consider a payroll tax holiday, since all they care about is the short term impact on their logical supporters, and this is the quickest way to reach them. I wouldn’t be surprised if the government tried to turn hiring into a tax INCENTIVE, and then just raised taxes everywhere else, or just borrowed more money. If your only goal is to put money in your supporters’ pockets in the short term, this is a (sad) way to do it.

At least these policy proposals put a lie to the myth that social security is anything other than an entitlement program supported by government tax revenues. If nothing else positive comes out of the debate, a little bit of more obvious truth is a small benefit.

Cross posted at LITGM

Fire Country

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The winds kicked up over last weekend, here in Texas – and it  was wonderful, after what seems like an eternity of soggy, brutal and unrelenting heat.   It has rained here in San Antonio precisely twice in the last three or four months, and the second rain was nothing but a thin mist that moistened the ground and dried up almost at once.   The temperatures have been in the 100s, all summer long, and now most of Texas is dried to a crisp. Seasonal watercourses are bone-dry. Even in the spring, when my daughter and I took the dog and walked along the Salado Creek Greenway, there were only occasional stagnant pools of water in the creek bed.

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