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Good news for donut lovers

I've always been a big donut fan.  But, they are obviously not the healthiest of breakfast options.  The good news from this study is that if you're willing exercise a bit, you might be able to tolerate a few of those delicious sugar-fat delicacies:

The objective of the study was to determine if exercise training can prevent the anticipated deleterious effects of a fat-sugar supplemented diet on endothelial function and blood markers of cardiovascular risk in young men. Twenty-one, healthy college-aged males were randomly assigned to either the doughnut + exercise or doughnut only groups. Both groups were fed 2 doughnuts per day, 6 days per week, for three weeks, while maintain their current diet. The exercise group completed 4 exercise training sessions per week consisting of 2 high intensity interval training bouts (up to 95% VO2peak) on a cycle ergometer and two moderate intensity, steady-state bouts (at 75% VO2peak) on a treadmill. Changes in body weight and composition, markers of endothelial function, oxidative stress, serum lipids, and blood glucose were measured in each group. As expected, cardiovascular fitness increased significantly in the doughnut-supplemented + exercise group as compared to the doughnut-supplemented (p=0.005). Significant increases in body weight (p=0.036), fat mass (p=0.013), and body fat percentage (p=0.014) were seen in the doughnut only group as compared to the doughnut + exercise group. The doughnut + exercise group showed significant improvements in fasting serum triglycerides (p=0.036), plasma insulin (p=0.039) and insulin sensitivity (HOMA; p=0.05) as compared to the doughnut only group. The doughnut + exercise group saw a significant improvement in nitric oxide availability whereas the doughnut only group experienced a significant decline (p=0.014). There were no significant changes in other markers. Despite the addition of a fat/sugar supplement of ~11,600 kcal over three weeks, 4 exercise sessions per week were sufficient to prevent a gain in body weight and fat mass, and also improve some measures of cardiometabolic risk. These results suggest that exercise may be necessary to prevent some adverse health outcomes associated with transient periods of excessive energy consumption 

 

Does China Require Mandatory Labeling of GMO Foods?

Proponents of mandatory labeling of GMOs in the U.S. often make claims to the effect that "Come on!  Even China requires labeling!" (e.g., see here, here, or here for just a few examples).  The implication is that we must not, heaven forbid, fall behind China in our regulatory regime!?!  

How accurate is this characterization?  It is true that China has a labeling law on the books.  But, does that have any implication for what actually happens on the ground? Here is one description of what happens in China, published in the Vermont Journal of Environmental Law:

Almost ten years after the enactment of the MMAGL [Management Measures on Agro-GMOs Labeling], the status of enforcement is far from satisfying. Despite the mandatory GM food labeling requirements, not all GM foods are labeled, and there is a lack of standardization among GM food and GMO-free food labeling in China’s food market. Even when food products have GM food labeling, the labels are not clearly visible. In addition to the enforcement issues, the rulemaking is outdated. The very narrowly defined first batch of products under the MMAGL is insufficient to cover the broad range of GM food in the market.
Food with GM soybeans is one example. In 2007, China imported 37.8 million metric tons of soybeans, and the United States, Brazil and Argentina accounted for thirty-six, thirty-three and twenty-nine percent, respectively. “The United States (85%) and Argentina (98%) produce almost exclusively GM soybeans.” In 2007, sixty-four percent of Brazil’s soybean crop was GM soybeans. Therefore, a large percentage of soybeans in China’s market are imported GM soybeans. A market survey report conducted in Tianjin, China in 2008, however, revealed that none of the soybeans or soybean powder had GM food labeling. The lack of GM food labeling for soybeans or soybean powder in the market reveals insufficient compliance with the MMAGL.

and

Various reasons exist behind the lack of compliance and enforcement of the MMAGL. One of the most important is the enforceability of the legislation itself. There are several issues in terms of the enforceability in the rulemaking. First, the zero percent tolerance without a reasonable adventitious presence threshold is both unrealistic and misleading.

I’d be careful about holding up China as some sort of example of what would happen in the US if mandatory GMO labeling were to pass.

Washington Initiative 522 on GMO Labeling

Last year there was much discussion on California's Prop 37, which would have mandated labeling of genetically engineered (GE) ingredients.  After enjoying strong a strong lead in the polls, Prop 37 actually failed to garner a majority of votes, and thus did not become law.   

One year later, Washington State now has a similar initiative up for vote (the text of the law is here; a few more details are here).  The issues at play are largely the same as those in California.  As I wrote then, the ultimate cost impacts will depend critically on how retailers chose to respond to the mandatory label, should the initiative pass.

One thing that makes the WA initiative different than the one on California is the sheer size of the state.  If Prop 37 had passed in California, it likely would have had important implications for the rest of the U.S., both because California is such a large agricultural producer and because they are such a large consumer of agricultural products.  WA, by contrast, is a much smaller state, population-wise, and they comparatively grown small amounts of corn and soybeans - the primarily GE food crops grown in the U.S. (WA grows a lot of wheat, but no GE wheat is commercially for sale in the US) . So, it is less clear what impact passage of I-522 would have for the rest of us.  Would it be worth it for Frito-Lay, Coca-Cola, Kellogg et al. to reformulate only for WA?  Would they only add a label in that state?  Would they pull out of WA all together?  Nobody knows.

I've received a couple calls from reporters asking about potential impacts on farmers and whether there is really a "zero tolerance" limit.  My thought on I-522 are largely the same as they were several months ago in relation to Prop 37: 

It is true Prop 37 doesn't literally force processors and retailers to adopt more expensive non-GE products but that may be the ultimate consequence (or it may not - but we have to keep open the possibility).  It is also true that Prop 37 doesn't literally impose zero tolerance but that may well be the ultimate consequence.  
Truth is we don't really know.  But, consider a possible chain of events at some point in the future.  Despite the wording of the law, some individual in CA tests and finds that a non-labeled product contains GE (ANY trace of GE no matter how small).  The manufacturer of the product is then sued.  Then, it would be up to the manufacturer to provide all the sworn statements of unintentional use of GE.  But, then how do you prove “unintentional” or "accidental"? This is especially [true] when every farmer (who provides the sworn statement) knows there is some chance the seed they plant contains at least some small traces of GE.  Even if the manufacturer withstands the legal challenge, non-trivial legal costs must be incurred to prove innocence.  Moreover, if one reads the full text of the law, they can see  that after July 1, 2019, the exception for "unintentional" use disappears - making the tolerance effectively zero at that time, 
It is that sort of reading and reasoning that I think folks are referring to (or at least that I am referring to) when saying that Prop 37 imposes zero-tolerance.   

Overall, it is difficult to know what effects passage of I-522 would have.  There is some chance manufactures will simply add the "contains GE label", most consumers will ignore it, and life goes on as usual (this seem to be what is implied will happen by the statements of many initiative supporters).  There is also a chance manufacturers will try to avoid the label for fear of losing customers, the entire production system eschews biotechnology, food prices go up, and farmers are less profitable (this seems to be what is implied by many opponents of the initiative).  Or anything in between could happen too.

One argument, which I find somewhat compelling is that food and biotech companies are hurting themselves by not being forthright about their products by getting on board with labeling.  It seems by fighting the label they have something to hide.  Why not spend money educating consumers rather than fighting the initiatives?  

The counter argument, which I find more persuasive, relates to one's vision for the proper role of government.  What do we want to allow the government to MANDATE companies say - to compel speech?  A case could be made that such a policy is appropriate when there are legitimate safety or health risks, for example transfats or sugar content.  But, the best science shows no such worries for biotechnology.  

Here is what Cass Sunstein, Obama's former "regulatory czar" had to say on the issue: 

The argument for labeling GM foods would be compelling if they posed risks to human health. This is, of course, a scientific question, and most scientists now believe that GM food, as such, doesn’t pose health risks. Last October, the American Association for the Advancement of Science spoke unequivocally. In its words, “the science is quite clear: crop improvement by the modern molecular techniques of biotechnology is safe.”

and

These arguments aren’t unreasonable, but they run into a serious problem, which is that GM labels may well mislead and alarm consumers, especially (though not only) if the government requires them. Any such requirement would inevitably lead many consumers to suspect that public officials, including scientists, believe that something is wrong with GM foods -- and perhaps that they pose a health risk.
Government typically requires labeling because it has identified such a risk (as in the case of tobacco) or in order to enable people to avoid or minimize costs (as in the case of fuel-economy labels).
A compulsory GM label would encourage consumers to think that GM foods should be avoided. This concern is hardly speculative. In Europe, compulsory labels have lead many retailers, anticipating an adverse consumer reaction, not to include GM foods on their shelves. In the U.S., the result could be economic damage to producers and consumers alike. And if consumers want to avoid GM foods, they can already purchase foods labeled “100 percent organic,” which lack GM ingredients.
In the abstract, it is hard to disagree with the claim that consumers “have a right to know.” But with respect to food, there are countless facts that people might conceivably want to know, and government doesn’t require them to be placed on labels. Unless science can identify a legitimate concern about risks to health or the environment, the argument for compulsory GM labels rests on weak foundations.

My thinking parallels Sunstein's, and that is why I tend to argue against mandated GMO labels (voluntary, however, is fair game).  

And, a reminder, no, I don't work for Monsanto.

What I'm Reading

I just finished two books - both recommended by colleagues.   

The first was Funny Money, written by Mark Singer, and first published in 1985.  The book covers the collapse of the Penn Square bank in Oklahoma City, which ultimately contributed to the federal government bailout (I believe it was the largest ever at the time) of Illinois Continental.  Today, one cannot help but read the book with thoughts of the recent financial crises coming to mind.  It is remarkable how similar the Penn Square collapse was to the recent real-estate collapse.  

Optimism future over oil/gas prices led to a rush of money into the sector (there was a belief energy prices could never fall).  Some energetic bankers were happy to make millions in loans based on the rosy projections.  They found that these loans could be repacked and sold "upstream" to larger banks, who had little directly knowledge of the risks of the actual underlying loans.  The loan sales provided more capital to make even more and larger loans to ever more dubious lenders.  It was a classic bubble fueled by debt, re-sold and re-packaged debt bought by people who didn't monitor the actual collateral underlying the loans.  Sound familiar?  

One interesting feature of Singer's book is the lack of moralizing that one would expect to see in this sort of book (indeed it is quite funny in many parts).  Clearly, some of the main actors turned out to make really stupid bets (and at least a couple had to serve jail time) , but Singer does a good job showing how people respond to the incentives they face, and how lack of good institutional rules can let the bad rise to the top.  The book should be required reading for any Okie - and is a prescient source for understanding how the recent financial collapse could happen.

The second book was the Fall of the House of Zeus by Curtis Wilkie.  Wilke documents the rise and fall of one of America's most powerful Trial Lawyers, Dick Scruggs.  Scruggs, a Mississippi lawyer, made his millions in the tobacco lawsuits, and found his way into legal trouble in a judge-bribing case that originated with insurance company law suits associated with Hurricane Katrina.

The book is an eye-opening account of the relationship between money, politics, and the court system.  People from John McCain to Joe Biden to Al Gore to Trent Lott are intertwined with Scruggs's activities.  At times I found myself thinking I was reading a John Grisham novel (the real-life Grisham also shows up in the book), but I had to keep reminding myself that this really happened.  Having lived in Mississippi for three years, I also enjoyed some of the discussion of local politics. 

It is hard to come away from either book with a positive outlook on human nature.  It really brings to life the fact that real-life government is nothing like what we assume in when designing "optimal" economic policies in textbooks, but it also reveals that real-life markets, especially when people can bet with other people's money, can lead to bubbles and spectacular collapse.  Both are cautionary tales to be sure.

Country of Origin Labeling Developments

A recent report from the Congressional Research Service has a nice discussion of the ongoing developments associated with mandatory country of origin labeling for meat: 

Less than one year after the COOL rules took effect, Canada and Mexico challenged them in the World Trade Organization (WTO), arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments agreed to by the United States. In November 2011, the WTO dispute settlement (DS) panel found that (1) COOL treats imported livestock less favorably than like U.S. livestock (particularly in the labeling of beef and pork muscle cuts), and (2) COOL does not meet its objective to provide complete information to consumers on the origin of meat products.

This decade-long timeline of events was particularly helpful:

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