Time to borrow from Keynes

March 10, 2009
ECONOMIC WATCH

By Randall Morck

THIS recession shows signs of getting out of hand. The over-the-top rhetoric of United States officials - 'the world will end unless you do just as I say' - has bordered on economic malpractice. Terrifying people rarely makes them buy new cars or technology stocks.

The Panic of 2008 followed an old-fashioned scam: high-risk investments disguised as 'sure things'.

American banks had securitised high-risk mortgages. Had the bond holders known these mortgages were risky, all would have been well. Investors should be free to bet on clearly risky ventures.

But the mortgage-backed bonds somehow got coveted AAA ratings. Foreign banks, pension funds and small investors relied on these ratings, and bought what seemed 'safe' investments. Insurance companies, like AIG, happily insured companies holding these AAA bonds. And meanwhile, the outfits organising the securitisations frenetically lobbied for oversight so relaxed as to verge on a meditative trance.

Also governments negotiating global banking regulations somehow ended up vying for their national banks' tactical advantage, rather than building a sensible regulatory framework. Freed of meaningful oversight, banks everywhere took risky bets.

Why didn't regulators quash gambling? Why didn't they check where the risk in the risky mortgages was hiding? Why did diplomats become advocates for their countries' banks? Were all these just inexplicable lapses or the result of corruption?

When all of this hit the fan, investors were not amused and banks' share prices collapsed. Fearing for their multimillion dollar income streams, top bankers panicked. That panic, I suspect, finds its way into the utterances of top US officials.

To be fair, Federal Reserve chairman Ben Bernanke is a respected specialist on the Great Depression. Just as cardiologists suspect the heart in any inexplicable health disorder, he might see a looming Great Depression in inexplicable economic symptoms.

Unfortunately, economies are profoundly affected by people's expectations. In economics, expecting a heart attack can cause one. The panic of 2008 might have ended quickly, with a few bank nationalisations, but this is no longer possible. Consumers no longer dare consume, suppliers are unwilling to extend credit and savers have all but buried their coins in the garden. Consumers, business managers and savers now expect a crisis of 'historical dimensions' - and will therefore probably get one.

Globalisation, which generates much prosperity in normal times, allowed the disease spread. Trade and investment barriers are worse than useless now, for all are infected. Neither quarantines nor anti-American Schadenfreude will help.

Rather, governments should adjust people's catastrophically self-fulfilling expectations. Keynesian economics, long abused by left-leaning politicians, shows how. Keynes saw expectations about the future (his term was 'animal spirits') collapsing in the 1930s, and prescribed two antidepressants.

One was expansionary fiscal policy. Increased government spending creates stable business, stable incomes and a sense of security for investors. Asia needs schools, hospitals, roads and bridges, and governments should use the current downturn to get more of these. Tax cuts help counterbalance evaporating stock portfolios in people's assessments of their finances.

Of course, the danger lies in becoming addicted to perpetual deficits, as many countries did in the 1970s. That is why public works with fixed goals are best.

Keynes' second prescription was expansionary monetary policy - print money. This is because deflationary expectations can develop in severe downturns. Feeling poorer, we buy less, so businesses mark down prices, which cuts their profits, making them cut our salaries, making us poorer so we buy even less - and so on, in a downward spiral. Once prices are falling, we delay purchases in the expectation of further falls. Printing money induces inflationary pressure. We don't want the high inflation of the 1970s again, but we should err on the side of inflation a bit, rather than risk deflation.

The continuing source of the infection is America's banks. Keynes saw banks as the heart of the economy. The biggest impediment to global recovery is America's fear of a heart transplant for its banking system. When its banks were stuffed with 'toxic' assets in the 1990s, Sweden nationalised them first and sorted out the 'toxic' assets later. This cost the Swedes but it saved them from Japan's lost decade. In contrast, bank bailouts are pain killers, and no substitute for a new heart.

Critics of Keynes rightly argue that 'Keynesian economics' lost credibility in the 1970s and 1980s. It did - because self-described Keynesians abused it to justify ever bigger government. Despite occasional bloopers, Keynes is more reasonable than most Keynesians. His prescriptions can cure our present illness. Once cured, Keynes can be returned to the bookshelf, where he can wait quietly until we need him again.

The writer, the NUS Business School Dean's Visiting Professor, is also University Professor and the Jarislowsky Chair in finance at the University of Alberta, and the Schoen Visiting Professor of Finance at Yale University.

How to fail to recover

March 10, 2009
OBAMA'S PLANS FOR THE ECONOMY

By Joseph E. Stiglitz

SOME people thought that Mr Barack Obama's election as President of the United States would turn everything around for America. Because it has not, some are beginning to blame Mr Obama and his team.

Mr Obama, however, inherited an economy in free fall, and could not possibly have turned things around in the short time since his inauguration. Former president George W. Bush seemed like a deer caught in the headlights for months before he left office. It is a relief that the US finally has a president who can act, and what he has been doing will make a big difference.

Unfortunately, what he is doing is not enough. His stimulus package appears big - more than 2 per cent of GDP - but one-third of it goes to tax cuts. With Americans facing a debt overhang, rapidly increasing unemployment and falling asset prices, they are likely to save much of the tax cut.

Almost half of the stimulus simply offsets the contractionary effect of cutbacks at the state level. America's 50 states must maintain balanced budgets. The total shortfalls were estimated at US$150 billion (S$232 billion) a few months ago; now the number must be much larger. Indeed, California alone faces a shortfall of US$40 billion.

Household savings are finally beginning to rise, which is good for the long-run health of household finances, but disastrous for economic growth. Meanwhile, investment and exports are plummeting. America's automatic stabilisers - the progressivity of its tax system, its welfare system - have been greatly weakened, but they will provide some stimulus, as the expected fiscal deficit soars to 10 per cent of GDP.

In short, the stimulus will strengthen America's economy, but it will probably not be enough to restore robust growth. This is bad news for the rest of the world, too, for a strong global recovery requires a strong American economy. The real failings in the Obama recovery programme, however, lie not in the stimulus package but in its efforts to revive financial markets. America's failures provide important lessons to countries around the world, which are or will be facing increasing problems with their banks:

# Delaying bank restructuring is costly, in terms of both the eventual bailout costs and the damage to the overall economy in the interim.

# Governments do not like to admit the full costs of the problem, so they give the banking system just enough to survive, but not enough to return it to health.

# Confidence is important, but it must rest on sound fundamentals. Policies must not be based on the fiction that good loans were made, and that the business acumen of financial-market leaders and regulators will be validated once confidence is restored.

# Bankers can be expected to act in their self-interest on the basis of incentives. Perverse incentives fuelled excessive risk-taking, and banks that are near collapse but are too big to fail will engage in even more of it. Knowing that the government will pick up the pieces if necessary, they will postpone resolving mortgages and pay out billions in bonuses.

# Socialising losses while privatising gains is more worrisome than the consequences of nationalising banks. American taxpayers are getting an increasingly bad deal. In the first round of cash infusions, they got about 67 US cents in assets for every dollar they gave (though the assets were almost surely overvalued, and quickly fell in value). But in the recent cash infusions, it is estimated that Americans are getting 25 US cents or less for every dollar they gave. Bad terms mean a large national debt in the future. One reason taxpayers may be getting bad terms is that if they got fair value for their money, the US government would by now be the dominant shareholder in at least one of the major banks.

# Don't confuse saving bankers and shareholders with saving banks. America could have saved its banks, but let the shareholders go, for far less than it has spent.

# Trickle-down economics almost never works. Throwing money at banks has not helped homeowners: Foreclosures continue to increase. Letting AIG fail might have hurt some systemically important institutions, but dealing with that would have been better than to gamble upwards of US$150 billion and hope that some of it might stick where it is important.

# Lack of transparency got the US financial system into this trouble. Lack of transparency will not get it out. The Obama administration is promising to pick up losses to persuade hedge funds and other private investors to buy out banks' bad assets. But this will not establish 'market prices', as the administration claims. With the government bearing losses, these actions will distort prices.

# Better to be forward looking than backward looking; focusing on reducing the risk of new loans and ensuring new lending capacity, than backward looking. Bygone are bygones. As a point of reference: US$700 billion provided to a new bank, leveraged 10 to 1, could have financed US$7 trillion of new loans.

The era of believing that something can be created out of nothing should be over. Short-sighted responses by politicians - who hope to get by with a deal that is small enough to please taxpayers and large enough to please the banks - will only prolong the problem. An impasse is looming. More money will be needed, but Americans are in no mood to provide it - certainly not on the terms that have been seen so far. The well of money may be running dry, and so, too, may be America's legendary optimism.

The writer, the 2001 Nobel laureate in economics, is professor of economics at Columbia University.

PROJECT SYNDICATE

US debt: When 'Judgment Day' comes

March 10, 2009
ST-NUS BUSINESS SCHOOL SERIES ON GLOBALISATION

By Sam Ouliaris

HOWEVER you look at it, the debt of the United States federal government is huge. As of March 8 this year, it stood at around US$11 trillion (S$17 trillion) - approximately US$36,000 per US resident). And since 2007, it has been growing faster than nominal gross domestic product (GDP). The result is a slow but steady rise in the debt-to-GDP ratio.

The 'public' - including foreign central banks - currently holds about US$6.5 trillion of the debt, and 45 per cent of this amount (US$3 trillion) is owed to foreigners (mostly the central banks of Japan and China). The remainder of the debt is owned by US federal agencies, such as the Social Security Administration.

These estimates do not include the cost of the 2008 financial crisis, which will add at least US$1.5 trillion to the tally. According to the US Congressional Budget Office, these costs will raise the public debt-to-GDP ratio to 50 per cent by the end of this year.

The long-term outlook for the US federal debt is even worse. Under existing laws, mandatory spending - such as Social Security, Medicare, Medicaid and interest on the debt, none of which can be reduced without an act of Congress - will exceed tax revenue some time between 2030 and 2040. After that, any discretionary spending - for defence, education, et cetera - will have to be funded through borrowing.

A rising national debt is not a problem necessarily if the borrowing enhances the economy's growth potential through targeted investments on infrastructure and human capital. However, to ensure that the debt-to-GDP ratio eventually declines, the return on such investments will need to be greater than the interest paid on the corresponding debt.

Such a favourable outcome is unlikely in the case of the US. This is because the bulk of the government's future borrowing has already been promised to an ageing population, one that is more likely to spend on non-durable goods and services rather than invest in the future.

The government will therefore be forced to finance 'productive' additions to the capital stock - schools, roads and bridges - through additional borrowing. Doing so will almost surely place upward pressure on long-term interest rates, and consequently lower private investment growth and labour productivity. And that in turn will make it even more difficult for the government to reduce the debt-to-GDP ratio through strategic investments.

Worrying about events that might occur 30 years hence might seem rather futile. However, owing to the way financial markets operate, 'Judgment Day' will arrive much earlier than 2040. Given the rising debt-to-GDP ratio, prospective lenders to the US will conclude that the US dollar will need to decline over the long term. That will make them reluctant to accumulate US dollar-denominated government bonds.

It may even encourage them to reduce their existing holdings of US assets. But unwinding their exposure quickly could be self-defeating as a large sell-off will significantly reduce the value of the US dollar and hence the value of their existing holdings.

As the exchange rate declines and the debt grows, nominal interest rates will need to rise to entice investors to buy US dollar-denominated bonds. Moreover, US inflation will be higher because of higher import prices due to the falling exchange rate. The US economy will inevitably be pushed into a lower investment and growth path.

In the worst-case scenario, if the US government found it difficult to finance its operating deficit by issuing bonds, another financial crisis could arise. As the events of 2008-2009 have painfully demonstrated, this will cause adverse spillovers for the global economy.

Since the US dollar is currently the world's reserve currency, one option for tackling the debt would be for the US government to print money. However, without a corresponding increase in global output, printing money would create a vicious circle of higher inflation and higher nominal interest rates. The US will suffer from hyperinflation, an even lower dollar exchange rate and financial default.

Since financial default is not an option, the US government clearly has no choice but to save more, either through lower government spending and/or higher taxation. It follows that the ability of the US to act as the locomotive of global growth will diminish as it turns to the task of reducing its debt.

In the absence of other low saving nations, greater US saving will leave the global economy more vulnerable to large shocks such as the 2008-2009 financial crisis. Imagine how long the current recession would be if the US were unable to increase its expenditure because of a high level of debt.

While it remains unclear which country (or group of countries) will be able to take on the important role of being a spender, a positive development would be for emerging market countries like China to work collectively towards becoming the new engines of global growth in the medium term. This would require a gradual shift from their current export-led growth strategies, which are overly dependent on the health of US economy, to strategies that depend more on their own domestic consumption and investment growth.

In the near term, policies promoting more flexible exchange rates and less public and private saving in emerging markets would help to reduce the global economy's dependence on the US.

The good news is that globalisation, through the normal workings of the free market, is helping to bring about the needed adjustments by increasing the size and wealth of the middle class, especially in emerging markets. This growth brings with it huge potential for consumption that will eventually support growth in the US as it tackles its debt problem. Globalisation should therefore be embraced rather than feared.

The writer is professor of business policy and economics at the National University of Singapore. This is the fourth in the 12-part ST-NUS Business School Series on Globalisation.

Long-drawn battle over one word

March 9, 2009
MEMO FROM KUALA LUMPUR

Back to square one on the use of the word Allah

By Elizabeth Looi

TALK about an almighty issue.

To Malaysian Muslims, Allah means God in the Islamic faith. To Christians, however, it simply means God in any faith. The Sikhs hold the same view.

And from this one word, a long-drawn battle has ensued. It started in 2007 when the Home Ministry revoked permission for Christian publications, the Bible included, to use the word. It wants them to use Tuhan (which also means God to Muslims but not Christians) instead.

The Catholic Church remained adamant, and after some public squabbling, it took the matter to court. The Sikhs, whose holy texts also use the word Allah, are attempting to join in the case.

The editor of the Catholic Church's publication, The Herald, Father Lawrence Andrew, said Christians could not use Tuhan as the word meant Lord to them.

'We have been using Allah in our prayers and worship. When this issue was highlighted by international media, someone from Bahrain sent us a copy of the bible in Arabic and pointed out that Allah is used in that. For the Church, Allah is a language that has been consistent,' Father Lawrence told The Straits Times.

The matter took a surprising turn on Feb 16 when the Home Ministry appeared to have relented, agreeing that Christian publications could use Allah, provided the words 'For Christianity' were published on the cover.

This move pleased no one. Some Christians deplored the restriction, arguing that it would circumscribe their use of the word in church. They also argued that it would be difficult to comply with the requirement for existing publications.

Muslims were even more upset.

Perak Mufti Harussani Zakaria expressed shock and objected to this conditional use of Allah in Christian publications, saying it would not be possible to differentiate God among the faiths. He added that Muslims use Allah to refer to God, unlike those in other faiths.

'Why the need to compromise in this matter? It is not allowed according to state Islamic department enactments,' he was quoted as saying in Utusan Malaysia.

The Syariah Lawyers Association also urged the government to revoke the gazette, as it could cause anxiety among Muslims.

'The decision is also against the Cabinet's orders made on May 19, 1986,' said association president Zainul Rijal Abu Bakar.

Penang Islamic Council chief Shabudin Yahaya asked for the decision to be reviewed as it involved Islam.

'This is dangerous and could bring confusion, especially among Muslims,' he said. 'The Herald case is still in the courts, so why should the gazette be released now?'

He added that the issue should not have arisen in the first place as Islam is the official religion.

The government has since rescinded permission, calling the move a 'mistake'.

Things are now back to square one, with emotions running high.

To some, including Christians, the Church is being unnecessarily sticky. But it does have a point in that the word Allah has no religious origins.

'For a start, the word Allah pre-dates the revelation to the Prophet Muhammad and goes back to the pre-Islamic era. Christians had been using the word long before there were any Muslims,' political scientist Farish Noor noted in his article 'The origins of the word Allah' in 2007.

'It is an Arabic word and thus common to all the peoples, cultures and societies where Arabic, in all its dialects, is spoken. It is also understood by millions of Arabic speakers to mean God, and little else.

'One could add that as it is an Arabic word, it has more to do with the development and evolution of Arabic language and culture, and less to do with Islam.'

However, in Malaysia, Allah - unlike Tuhan - has emotional connotations for many Muslims. They have tried to apply the same reasoning used by Religious Adviser to the Prime Minister, Mr Abdullah Md Zin. He did not deny that the word had existed in ancient days, but said that it had been used in the wrong context.

He said people in the olden days claimed that Allah had children, that angels were His daughters and that Allah had associations with the idols used then for worshipping.

'That is why Allah directed Prophet Muhammad to clear up the matter and declare that Allah is One, has no children, was not given birth to, and cannot be associated or likened to other things or objects in this world. That is why the word Allah cannot be used by non-Muslims to describe their God,' he said.

However, more is at issue than the origins of the word. The controversy is inextricably tied to the complexity of race relations in the country, and religion plays a major role for the Malays as it forms the core of their identity.

There is no doubt that race relations are not at their best, and that many in the majority community feel under siege. Rightly or wrongly, they feel they are being asked to give up their comfortable status quo - and this includes the special position of Islam as the official religion of Malaysia.

However, Muslim opinion on the use of the word by non-believers is quite divided, even within the conservative Parti Islam SeMalaysia (PAS). The party's revered spiritual adviser Nik Aziz Nik Mat felt it was not wrong for non-Muslims to use the word.

Kuala Selangor MP Dzulkifli Ahmad cited the Quran to show how the word was used by non-Muslims. He was supported by Shah Alam MP Khalid Samad, who argued that Allah means God in Arabic. Both MPs are from PAS.

But Baling MP Taib Azamudin, also from PAS, disagreed and said he wanted to protect the sanctity of the religion.

Umno leaders appear, in general, to be against the use of the word by non-believers. Minister in the Prime Minister's Department Ahmad Zahid Hamidi, who is in charge of Islamic affairs, said the government's stand is that Allah cannot be used by non-Muslims, citing state enactments and gazetted decrees by Islamic authorities.

The issue is now in the High Court for resolution.

elizlooi@sph.com.sg

Tiptoeing round the 'N' word

March 9, 2009

Now loath to nationalise banks, West will end up adopting Asian model

By Jonathan Eyal

IN ECONOMIC terms, the last half century was about the seemingly unstoppable march of private enterprise.

But what took decades to accomplish may now be reversed in a matter of months: a growing number of influential commentators in the United States and Europe are arguing that the only way to halt the current economic slump is for governments to nationalise their ailing banks.

To a casual observer, this may appear as a rather old ideological confrontation between left-wingers and hardcore capitalists who believe that markets are the only efficient creators of resources.

But things are not as simple as an ideological divide. It was Mr Alan Greenspan, the former US Federal Reserve chairman and high priest of laissez faire capitalism, who called for the outright nationalisation of America's banks.

And it is the government of US President Barack Obama - one of the most interventionist in America's modern history - which steadfastly refuses to utter the 'N' word.

'This administration continues to believe that a privately held banking system is the correct way to go,' said Mr Robert Gibbs, the White House spokesman.

In reality, none of the protagonists in this debate have a monopoly over truth; both camps are haunted by past historic experiences which indicate that, ultimately, there are grave dangers in either leaving banks to their own devices, or seizing them.

For the moment, the arguments for nationalising banks appear more persuasive.

The bailout plans have clearly failed to work. And economists fear that as the downturn pushes more companies to the wall, the bad debts in the banks' balance sheets will pile up.

So, the argument goes, instead of living for years with so-called 'zombie banks' - technically bankrupt but kept alive on government guarantees - better to nationalise them now, isolate their 'toxic' assets and break them up into more manageable chunks.

This will ensure that any government cash goes on loans for the real economy. And it will also result in the dismissal of all the 'fat cat' bank bosses responsible for the disaster.

Besides, governments already own a majority shareholding in top banks - up to 40 per cent in the US' Citigroup, and over 70 per cent in Britain's Royal Bank of Scotland. Moving from this to outright nationalisation is a question of just good sense, rather than ideology.

What is more, the US has periodically nationalised small failing banks and the Europeans have operated nationalised banks as late as the 1980s.

So why this tiptoeing around the N word?

As Ms Diane Casey-Landry, the chief operating officer of the American Bankers' Association, pointed out, 'one of the challenges is defining exactly what people mean by nationalisation'.

An outright takeover with no compensation for existing shareholders will pulverise not only individual investors, but also large pension funds which hold stakes in these banks.

Yet nationalisation with full compensation could be prohibitively expensive. To date, US banks have admitted to more than US$1 trillion (S$1.5 trillion) worth of losses, but the fear is that the total may be double that.

Furthermore, the past performance of nationalised banks has hardly been encouraging. The longer they are held in state hands, the more they become political tools, magnets for corruption and inefficiency.

The example of Sweden, which experienced a deep financial crisis a decade ago, is now held as proof that things can be handled differently. The Swedes nationalised their banks but kept them free of political interference. And they returned them to the private sector after a few years.

Yet Sweden, a relatively small European country which accomplished this feat at a time when the rest of the global economy was growing, may be the exception.

To see how matters are likely to turn out now, one need not look any further than France, where two failing banks were recently merged. To much controversy, the man appointed to manage them has scant financial experience, but one great asset: he is a trusted personal adviser to the French President.

Throughout Europe, nationalised industries remain synonymous with shoddy products and services. Alitalia, Italy's state airline, is a European joke. So were France's attempts to create a 'national champion' in the computer industry, or Britain's state-owned car manufacturers.

And the bosses of these nationalised companies are usually paid just as much as some of the top private sector bankers.

More importantly, Western leaders remain only too aware that, despite the failure of the current capital markets, electorates are not clamouring for a return to left-wing ideas.

Socialist parties remain in the doldrums in all the key European states.

And, regardless of his political beliefs, President Obama has no intention of being pigeonholed as a nationaliser either.

This is not to say that bank nationalisations will be avoided altogether. The situation is fluid, and the governments' hands can be forced at any moment.

But, if they come, nationalisations will be decided on need, rather than conviction.

What Western politicians still refuse to acknowledge is that, as a result of the current crisis, their economic model will increasingly resemble that of most Asian nations, where the state plays an important guiding role, while encouraging an open economy.

The West spent decades dismissing Asia's 'mixed' model as irrelevant. But it will now be forced to adopt it.

Meanwhile, Western banks will remain neither private fish, nor public fowl, but a mixture of the two, a hybrid which defies any ideology.

jonathan.eyal@gmail.com

[Republicans and Capitalists clamour for banks to be nationalised, and Democrats refuse - surely these are signs of the end of the world. But perhaps Obama is right to say, this is not about idealogies but about pragmatic realities.]

'Catch' cancer? Yes, you can

March 7, 2009
DAEDALUS

By Andy Ho

A VERY close relative of mine has just come down with lymphoma. This is a cancer of the specific type of white blood cells called lymphocytes, which are part of the immune system.

Specifically, my relative has non-Hodgkin's lymphoma - indeed, a relapse of the disease he first had in 2006. Cancerous lymphocytes multiply very fast to crowd out healthy tissue and create lumps, which he recently noticed again.

The first time around, it was a very aggressive variant that spread to his brain. Yet he was cured, thanks to the efforts of the National Cancer Centre's doctors and nurses. Now it is back with a vengeance.

At lunch last Sunday, his 16-year-old son asked in a low voice: 'Can I catch it from Dad?' His mother had a benign breast lump two years ago and another one again recently. Though he had been assured by adults that cancers were not contagious, it seemed to him that tumours struck by households.

It is folk wisdom that you cannot catch cancer like a cold. However, a recent Johns Hopkins University study revealed that if you have had oral sex with six or more individuals, you are thrice more likely to get oral cancer. This is caused by the human papilloma virus (HPV).

Last month, the British Journal of Cancer reported that cancers of the anus, vulva and vagina have increased among 'baby boomers' because of increased HPV transmission among the age group that launched the sexual revolution of the 1960s.

All this is in addition to the fact that 99 per cent of all cancers of the cervix are caused by HPV, now the most common sexually transmitted disease. A recent study showed that 28.5 per cent and 50 per cent of first- and third-year United States female university students, respectively, who had had just one male sex partner were HPV-positive.

The HPV causes no symptoms and our immune systems generally clear it out of the body within two years. However, in 10 per cent of infected women, it persists to cause cervical cancer. In all these cases, the HPV genome actually gets incorporated into the human genome. It then switches off the human genes that make specific human proteins which suppress cancers from developing. When these proteins are not made, cancers erupt.

If sex can transmit HPV that causes cancer in an unfortunate minority, you can obviously 'catch' cancer, even if it takes time to develop. We do not want cancer patients treated like lepers of old. But this should not mean being skittish about taking the necessary steps - like being careful with food or eating utensils of a loved one with cancer - to prevent transmission, if any, of his or her disease.

Beside HPV, the World Health Organisation has identified other viruses that cause human cancers. These include the Epstein-Barr virus (lymphomas and nose cancer); hepatitis B and C viruses (liver cancer); human T-lymphotropic virus, types 1 and 2 (adult T-cell and hairy-cell leukaemia, respectively); and human herpesvirus 8 (Kaposi's sarcoma).

Take the case of an outdoorsy Secondary 3 boy named Cao Yuanchi from Raffles Institution who suddenly developed leukaemia within days of completing an Outward Bound School course in January. The leukaemia caused fatal bleeding in his brain. Did he catch something outdoors that triggered the fatal leukaemia?

Yet if you could catch cancer like that, oncology doctors and nurses should have extraordinarily high cancer rates. They don't.

However, this could be because, first, you probably do not catch cancer viruses from the air; and second, these professionals are meticulous in handling patient body fluids, the possible vehicles of transmission of cancer viruses.

Take the Epstein-Barr virus now known to cause Hodgkin's lymphoma in previously healthy people, and non-Hodgkin's lymphoma in those with suppressed immunity like organ recipients. It also causes nasopharyngeal carcinoma, the nose cancer rare worldwide but common in Singapore, Malaysia and south China.

Transmitted by saliva, it also causes glandular fever, nicknamed the 'kissing disease' for obvious reasons. Yet the hospital dietitian advised my relative's wife to cook bigger portions. Her husband would then have more to eat and, for the sake of convenience, she could just consume the leftovers. No risk of catching his lymphoma, of course, she added.

The Epstein-Barr virus causes yet another lymphoma called Burkitt's, which usually appears as a jawbone lump that can double in size within 24 to 48 hours. The virus' genome is detected in 100 per cent of these cases, which usually occur in equatorial Africa.

Elsewhere, Burkitt's manifests mainly as abdominal masses. This week, local colorectal surgeon Francis Seow-Choen revealed in The Straits Times that he contracted it in 1964 when he was seven.

He obviously survived, Burkitt's being eminently treatable even back then. Not so non-Hodgkin's, which has a survival rate of only 51 per cent five years after diagnosis. If its spread, or that of nose cancer, say, may be prevented by being careful with food and body fluids, why not say so?

In fact, almost one in every five cancer cases is caused by infections, mainly viruses but also at least one food-borne bacterium called Helicobacter pylori that causes stomach cancer. There are also two food-borne parasites, the Thai- and Chinese-liver flukes, which cause cancer of the ducts that serve to drain bile from the liver into the intestines.

The takeaway lesson here for family members? Don't be politically correct unto death.

andyho@sph.com.sg

Daedalus (meaning "cunning worker" in Greek) was the man who built wings so he and his son Icarus could fly. As Icarus flew too close to the sun, his wings melted and he crashed to earth. Daedalus is a weekly column on the triumphs and challenges of science and technology.

What the wild things are

March 7, 2009
CHIMPANZEES AND ANTHROPOMORPHISM

By Charles Siebert

IT'S common to hear, in the wake of someone's sudden lethal outburst, exclamations of shock along the lines of: 'He seemed so pleasant and mild-mannered.' But when those same sentiments are voiced in the aftermath of a chimpanzee attack like the one in Stamford, Connecticut, last month - in which a pet chimp named Travis mauled a woman, robbing her of her hands, eyesight and much of her face, and possibly causing brain damage - they raise serious questions about us, the primates with the so-called higher cognitive functions.

There is something about chimpanzees that has always driven human beings to behavioural extremes, actions that reflect a deep discomfort with our own animality, and invariably turn out bad for both us and them.

The first live chimpanzee to set foot on Europe's shores arrived in The Hague in 1641, on board a Dutch merchant ship returning from Angola. The only known visual record of this unwitting pioneer's existence is an engraving done that same year by the Dutch physician and anatomist Nicolaes Tulp. A leading figure of the Enlightenment with its emergent emphasis on objective observation and realistic representation, Tulp proceeded to compose one of the more surreal depictions of a chimpanzee imaginable. The creature - seated atop a boulder with its mostly hairless torso and limbs, tapered elfin hands and feet, and sweetly smiling face - looks like a potbellied forest nymph dreamily sleeping off a good drink. Not a chimpanzee so much as an ape-human hybrid.

The fact that Tulp refused to let his hand depict what his eyes were seeing goes to the heart of the threat that the chimpanzee's near-humanness has long posed to our consciousness. By depicting a nymphlike creature, he reinforced an age-old anthropocentric conception of human-like apes as mythic beings.

Travis' tragic end is a sadly familiar occurrence within today's equally distorting framework of trying to coerce evolution in a direction it didn't quite go for chimps, by making them be us: living on our turf and terms, dressing in our clothes, acting in our films and commercials, suffering in our research labs.

While researching a book about my days living in a retirement home for former chimp actors - chimps work as actors only until about the age of six, after which they become too strong and wilful; they then spend the rest of their lives, often 40 to 50 more years, behind bars - I happened to visit Mike and Connie Casey, the breeders who originally sold the baby Travis to Ms Sandra Herold.

Mrs Casey saw Travis' mother, Suzy, shot dead in 2001 when this chimp, too, escaped and got into a tussle with a dog.

Chimps are, like us, given to occasional violent outbursts, but they have exponentially greater strength. Chimps also have, like us, minds enough to lose and memories that can hasten the process. Wild chimps 'recruited' by poachers for entertainment watch as their mothers are gunned down - the only way a chimp mother would ever relinquish a child.

Chimps born in captivity are spared that experience, but they suffer the same premature separation from their mothers, isolation from their normal social groups and often mistreatment from trainers and keepers, all traumatic events that have been shown to cause deep psychological scarring and, as in human beings, can lead an animal to overreact to the slightest stimuli: the look in someone's eye, the colour of someone's hair or, as with Ms Herold's friend that day, hair done up in an unaccustomed style. These are, in short, deeply conflicted beings, evolutionary anomalies that only we could have created: chimps with names and yet no recollection of trees!

The most tragic example of this is Lucy, who lived in the late 1960s and early 70s. Raised from infancy to age 10 as a human child by the psychologist Maurice Temerlin and his wife, Jane, Lucy made her own meals, mixed her own cocktails, flipped through magazines, slept on soft mattresses, raised a pet cat, learned sign language - and had no contact whatsoever with other chimpanzees. By the time she reached sexual maturity, however, she became more and more difficult to handle, and the Temerlins decided they had to let Lucy go.

They chose to send her to a place that was the complete opposite of what she knew, a refuge that reintroduces captive chimps into the wild. Lucy, it will perhaps come as little surprise, struggled mightily. She refused to socialise with the other chimps, to climb trees, forage for food, make nests. She took to waiting beneath trees for the others' crumbs to fall.

Eventually, Lucy adopted an orphan baby chimp and mothered him until he died three years later of a stomach parasite. She herself barely survived a bout of hookworm, then began to show enough positive signs of socialising with the others that they were all left for a time to their own devices.

A year later, Lucy's skeleton was found near the shores of the island refuge, without, some reports said, her hands or feet. The cause of her death isn't known, but speculation is that Lucy, always the first to greet human visitors, one day unwittingly approached a group of poachers, who readily seized upon their overeager prey.

Lucy, Travis and all the others died for the same reason that Tulp couldn't draw the actual being seated before him: our ongoing inability to see animals outside our own fraught frame of reference. The chimp that Tulp, in fear of science, preserved as a mythic human, Temerlin tried to make a human, in science's name. Lost in the shuffle of either agenda were the animals themselves, creatures we still can't regard and respect for what they are and just leave alone.

NEW YORK TIMES