Spend, Spend, Spend 3 Sociability May Depend Upon Brain Cells Generated in Adolescence 6 At Tate Britain 8 Last Universal Common Ancestor More Complex Than Previously Thought 11 The New Ivies 2011 14 On Wall Street 20 Why have the right and the left resurrected Reinhold Niebuhr? 23 Kepler Spacecraft Discovers New Multi-Planet Solar System 26 Pedro Almodóvar’s new film is a math problem, not a poem. 29 'Quasicrystals' Once Thought Impossible Have Changed Understanding of Solid Matter 31 When Water and Air Meet 33 “Cartier” 35 A Voice, Still Vibrant, Reflects on Mortality 36 Major birth defects come as a surprise for most parents, but they don’t have to. 39 Long-Lost Lake Agassiz Offers Clues to Climate Change 42 Climate Change Simulations Show Which Animals Can Take the Heat 45 'Mirage-Effect' Helps Researchers Hide Objects 47 Where Should I Start with Tomas Tranströmer? 49 Alzheimer's Might Be Transmissible in Similar Way as Infectious Prion Diseases 51 Plasmons on precious metals make for super-sensitive hydrogen leak detector 53 Engineers Build Smart Petri Dish 56 Discovery of Expanding Universe by Observing Distant Supernovae 59 Data gold mine lifts veil on world of online poker 61 World's first cloned human embryonic stem cells 64 Is it better for the environment to watch TV via satellite, cable, or the Internet? 66 What happened when I abandoned print for pixels. 69 Cheatobiotics: Send in the subversive superbugs 72 The Five Best Ways to Fight AIDS 76 Before Hitler, Who Was the Stand-In for Pure Evil? 79 Improve your vision with an app 81 Where pop meets Modernism. 83 European wars, famine, and plagues driven by changing climate 87 Ice-age nettles may survive in dark Chinese caves 89 American Horror Story 91 Sistema de Infotecas Centrales Universidad Autónoma de Coahuila Climatequake: Will global warming rock the planet? 93 A man’s quest for his soul starts with a walk downstairs. 98 Pay as you go solar power makes energy cheaper 101 If you want to honor Steve Jobs, do what somebody did for him: Donate your organs. 103 Forget the new iPhone, let's talk Siri 105 Does homosexuality exist in every human society? 106 App could help you control your home appliances 110 The 40-Year Itch 111 Star exploded? Just another day in Arp 220 115 How Do You Turn Off a Particle Accelerator? 118 Giant star comes with ancient tree rings 120 Single Moms Are Crazy! 122 Ancient cave paintings threatened by tourist plans 126 Before Netscape: the forgotten Web browsers of the early 1990s 128 The giant, prehistoric squid that ate common sense 137 Will the E-Book Kill the Footnote? 140 Uncharted Territory: Scientists Sequence the First Carbohydrate Biopolymer 142 Artificial crystals get their own textbook laws 145 Oldest Fossil Rodents in South America Discovered 147 Glow around black holes could light up dark energy 150 How the Zebra Gets Its Stripes: A Simple Genetic Circuit 153 The rebel star that broke the medieval sky 155 'Robot Biologist' Solves Complex Problem from Scratch 157 Rover scientist: Why I'm spending 13 days underwater 160 Carbon Nanotube Muscles Generate Giant Twist for Novel Motors 162 Tributes for Steve Jobs, the man who tamed technology 165 New Technologies Challenge Old Ideas About Early Hominid Diets 167 Hypersonic X-37 spaceplanes 'could carry astronauts' 169 Schizophrenia Genetics Linked to Disruption in How Brain Processes Sound 171 Electric cars to get universal charger 173 From Blue Whales to Earthworms, a Common Mechanism Gives Shape to Living Beings 174 Paper patterns and smartphones foil forgers 176 Cars have evolved to go faster – but humans haven't 178 Clearing the 'Cosmic Fog' of the Early Universe: Massive Stars May Be Responsible 180 Smart sensors stop flickering wind turbines 182 Part of Biggest-Ever Toothed Pterosaur from Dinosaur Era 184 Clean air fixes cold poles in model of ancient climate 187 Subtly Shaded Map of Moon Reveals Titanium Treasure Troves 189 When will the 7 billionth human be born? 192 Super-Sized Muscle Made Twin-Horned Dinosaur a Speedster 194 About time: Finding the age of everything 196 Watching Motion of Electrons in Molecules During Chemical Reactions 198 Three-way race to reach lost Antarctic lakes 200 2 Infoteca’s E-Journal No. 175 November 2011 Sistema de Infotecas Centrales Universidad Autónoma de Coahuila Spend, Spend, Spend There is only one way out of the global recession, and government must lead the way. By Joseph E. Stiglitz|Posted Monday, Oct. 3, 2011, at 5:52 PM ET A project at the Oakland International Airport financed by the American Recovery and Reinvestment Act Photo by Justin Sullivan/Getty Images. As the economic slump that began in 2007 continues, the question persists: Why? Unless we have a better understanding of the causes of the crisis, we can’t implement an effective recovery strategy. So far, we have neither. We were told that this was a financial crisis, so governments on both sides of the Atlantic focused on the banks. Stimulus programs were sold as being a temporary palliative, needed to bridge the gap until the financial sector recovered and private lending resumed. But, while bank profitability and bonuses have returned, lending has not recovered, despite record-low long- and short-term interest rates. Advertisement The banks claim that lending remains constrained by a shortage of creditworthy borrowers. And key data indicate that they are at least partly right. After all, large enterprises are sitting on a few trillion dollars in cash, so money is not what is holding them back from investing and hiring. Some (perhaps many) small businesses are, however, in a very different position: Strapped for funds, they can’t grow, and many are being forced to contract. 3 Infoteca’s E-Journal No. 175 November 2011 Sistema de Infotecas Centrales Universidad Autónoma de Coahuila Still, overall, business investment—excluding construction—has returned to 10 percent of GDP (from 10.6 percent before the crisis). With so much excess capacity in real estate, confidence will not recover to its pre- crisis levels anytime soon, regardless of what is done to the banking sector. The financial sector’s inexcusable recklessness, given free rein by mindless deregulation, was the obvious precipitating factor of the crisis. The legacy of excess real-estate capacity and over-leveraged households makes recovery all the more difficult. But the economy was very sick before the crisis; the housing bubble merely papered over its weaknesses. Without bubble-supported consumption, there would have been a massive shortfall in aggregate demand. Instead, the personal savings rate plunged to 1 percent, and the bottom 80 percent of Americans were spending, every year, roughly 110 percent of their income. Even if the financial sector were fully repaired, and even if these profligate Americans hadn’t learned a lesson about the importance of saving, their consumption would be limited to 100 percent of their income. So anyone who talks about the consumer “coming back”—even after deleveraging—is living in a fantasy world. Fixing the financial sector was necessary, but far from sufficient, for economic recovery. To understand what needs to be done, we have to understand the economy’s problems before the crisis hit. First, America and the world were victims of their own success. Rapid productivity increases in manufacturing had outpaced growth in demand, which meant that manufacturing employment decreased. Labor had to shift to services. The problems are not dissimilar to those of the early 20th century, when rapid productivity growth in agriculture forced labor to move from rural areas to urban manufacturing centers. With a decline in farm income in excess of 50 percent from 1929 to 1932, one might have anticipated massive migration. But workers were “trapped” in the rural sector: They didn’t have the resources to move, and their declining incomes so weakened aggregate demand that urban/manufacturing unemployment soared. For America and Europe, the need for labor to move out of manufacturing is compounded by shifting comparative advantage: Not only is the total number of manufacturing jobs limited globally, but a smaller share of those jobs will be local. Globalization has been one, but only one, of the factors contributing to the second key problem: growing inequality. Shifting income from those who would spend it to those who won’t lowers aggregate demand. By the same token, soaring energy prices shifted purchasing power from the United States and Europe to oil exporters, who, recognizing the volatility of energy prices, rightly saved much of this income. The final problem contributing to weakness in global aggregate demand was emerging markets’ massive buildup of foreign-exchange reserves—partly motivated by the mismanagement of the 1997-98 East Asia crisis by the International Monetary Fund and the U.S. Treasury. Countries recognized that without reserves, they risked losing their economic sovereignty. Many said, “Never again.” But, while the buildup of reserves—currently around $7.6 trillion in emerging and developing economies—protected them, money going into reserves was money not spent. Where are we today in addressing these underlying problems? To take the last one first, those countries that built up large reserves were able to weather the economic crisis better, so the incentive to accumulate reserves is even stronger. Similarly, while bankers have regained their bonuses, workers are seeing their wages eroded and their hours diminished, further widening the income gap. Moreover, the United States has not shaken off its dependence on oil. With oil prices back above $100 a barrel this summer (and still high), money is once again being transferred to the oil-exporting countries.