Androcass

A few more...

2010-03-06T17:26:00.003-06:00

observations about the Winter Olympics, in particular NBC's coverage of it, before the whole thing retreats from our memories.

° Most of my most ardent feelings come from figure skating, because that's the winter sport I've followed the most closely. My brother and I used to watch it with our mother, and now I watch with my wife. When I refer to the broadcast team of Scott Hamilton and Sandra Bezic as a "train wreck," I do so based on some decades of watching figure skating.

I don't have the same points of reference for other winter sports. I really enjoy the biathlon because of its juxtaposition of cross-country skiing (a sport which, as a marathon runner, I can relate to) and shooting (which I can't relate to at all). To me it's like running as hard as I can for 15 minutes, then stopping to thread five needles as fast as possible, then running some more. (I also have to admit to a fondness for sports that are abstracted out of real things. One can see where the biathlon simulates something a soldier might have to do. Similarly, I have a great affection for modern pentathlon. Until figure skaters can shoot lasers out of their sequins, it's difficult to find the real activity there.)

But I don't "get" biathlon well enough to determine whether NBC's Chad Salmela is doing a good job. There's no obvious screeching about the mundane, no crying, and a reasonable amount of information (most of it about ski wax), so I'd guess he's doing OK. But I'm not really sure.

With skating, however, I know enough to know that we're being poorly served by the current analysts. Bezic and Hamilton offer almost nothing in the way of insight; it's just their emotions spilling out the airwaves, and I'm honestly not very interested in how they feel about things. As I wrote before, I want either information to help me understand the event better, or a sense of what it is to be there experiencing it for myself. I get neither from the screaming and the crying and the rampant self-indulgence.

The saddest thing is that NBC has better people on staff. Tom Hammond, a generally competent play-by-play guy in many sports, sinks to the level of his co-commentators. He could easily be replaced by Andrea Joyce (who's done a fine understated job hosting the Grand Prix events televised on NBC's Universal Sports) or Terry Gannon (who did figure skating for 14 years on ABC, understands the sport, and knows a lot of the players).

The Universal Sports coverage has been illuminating, as we have heard Joyce working with a few different color commentators, each of whom has surpassed Bezic or Hamilton. I only caught Michael Weiss once, but he, while unpolished, did a nice job and shows real potential. Paul Wylie gives a nice analytical look at what's going on. And Peter Carruthers, Joyce's most frequent partner, has become quite good. (Just a few years ago, he wasn't particularly good at all, talking way too much about a skater's "lack of concentration," but he's rounded into someone who can emphasize the important aspects of a routine without hyperbole or Hamilton-esque screaming.) Any of them would be better choices than Bezic/Hamilton.

º A lot has been made about the new skating scoring system. Very simply, they replaced a system in which each judge gave a mark for technical execution and another for artistry, with a system in which each element (jump, spin, step sequence) gets a value, then is judged as +3 to -3, and includes five presentation areas for which scores are given a 0 to 10 ranking. There are various weights given, the numbers are added together, and the score rolls out. (A more detailed treatment can be found here.)

[A word about the usual description of the system. It's often termed "mathematically complex." It's not. The system is based on multiplication and addition, and any reasonably smart 4th-grader could handle its complexity. What's complex is how the numbers are arrived at, and the motivation behind the calculations.]

What's odd is that they took a system which was faulted for a lack of accountability and transparency and replaced it with a system that has almost none of either. The scores that are used are not identified by judge, and the numbers they put down seem arbitrary.

The system does, however, replace two numbers per judge with a whole lot of numbers per judge, and demonstrates what I like to call the "false certainty of more data." Anyone who has seen a work performance evaluation system in which there are weights and measurements and defined criteria, all of which are used to come up with one number that reflects an employee's performance for the year, knows what I'm talking about. Each skater ends up with a whole bunch of numbers to look at, but that specificity doesn't imply greater accuracy. Any judge can still show systematic bias; instead of being clear ("The Russian judge only gave 5.2?"), that bias is buried under a mass of GOEs and base values and factors, but it can still easily be there.

º There was a lot made about the "world record" performance of Kim Yu-Na in winning the ladies' gold medal. Unfortunately, the code of points changes each year, the required elements change, and so forth. World records, national records, personal bests, all are meaningless within a system that revamps its rules each year. It's as if high jump records were kept, but the length of an inch changed each year. The records would be irrelevant, just as they are today in figure skating.

º Also in figure skating - there were some comments on the under-rotation of jumps, especially when it turned out that US hopeful Rachael Flatt had been marked down twice in her long program for failure to complete her triple flip. Bezic and Hamilton were indignant, arguing that the judges were "tough" on Flatt (indignation which seemed to come mostly from their inability to see it).

Here's the rule: if, upon slow-motion review, it is decided that the skater was more than a quarter-turn away from completing a revolution, the skater gets credit for the next smaller jump (a triple loop becomes a double loop, for example). The points are correspondingly less, so the skater will not score as high.

This debate is ludicrous. My feeling is that there shouldn't even be a quarter-turn leeway. If you complete three revolutions (not 2-3/4), you've done a triple. Anything less, it's a double. It's the only way figure skating can be considered a sport, not a dance on ice. There's no "almost" clause in any other real sport.

º Listening to NBC's coverage, one would think there was a new nation called "North America." Especially as the first week full of United States success gave way to a second week dominated by Canadian gold, there seemed to be a push to appropriate Canada's victories as, somehow, ours. This was particularly true in the ice dancing final, as a lot was made of the "first gold medal in ice dance earned by a North American team."

It may be noteworthy that Russia lost what was once a lock for a gold medal (only two exceptions, 1984 and 2002, versus 7 golds for various incarnations of Russia), but it isn't clear that "North America" has finally found the magic. The gold and silver medal-winning teams were coached by skaters who came up in the Soviet system, so it's not as if we've found some kind of capitalist magic. It hardly constituted a "Miracle on Ice."

And it isn't clear at all that, NBC notwithstanding, we in the 50 states should take a huge amount of pride in the victories of a non-entity called "North America."

º In general, I think that many of the problems NBC has in covering the Games is their omnipresent hope of finding a transcendent moment. We're supposed to believe that these athletes come to the Olympics and do the impossible (and NBC's there to capture it for us). Michael Phelps wins 8 gold medals in swimming and, despite the essentially repetitive nature of what he's doing, is instantly touted as the greatest Olympian of all time. Usain Bolt sets sprinting world records - because he happens to do it at the Olympics, he's an instant immortal.

In most cases, however, success comes as a result of long hours of mastering skills. Evan Lysacek wins an Olympic gold not by transcending human performance, but by strategically simplifying his program (by omitting an attempt at a quad jump) and executing it in a way he has hundreds of times before. You can respect his ability to perform under the exaggerated pressure of an Olympics, but you can't argue that he's doing something unprecedented. The same is true of pretty much every sport. Biathlon is impressive, but success is the result of untold hours of hard training and genetic fortune, not in willing one's self to ski faster and shoot better simply because it's the Olympics.

This is where commentators get themselves into trouble. Scott Hamilton (yes, him again) is fond of talking about "muscle memory," in which a skater does something almost automatically because they've trained the move again and again in practice. But, if that's true, then what accounts for Scotty's ecstasy at the landing of a "TRIPLE LUTZ...TRIPLE TOOOOE! Ohhhhhhh!" combination? These athletes do that every day, it just isn't that amazing.

Which brings us to Joannie Rochette (whose case I've already commented on). Her mother passed away two days before Joannie was to start competing, and NBC treated it like the most remarkable thing possible. How can she possibly skate? How can she go out there?

Here's how. She's done these routines many times. She's jumping and spinning using her "muscle memory," so her performance does not depend on being in the right frame of mind. If anything, her two routines constituted seven minutes in which she didn't have to think about her mother. It's NBC which needs to portray her performances as impossible.

I don't mean to minimize Joannie's pain. I lost my mother a few years ago; while we had an oft-contentious relationship, the pain I felt was still real. And now Joannie has to go through that, and, despite its being something most of us have to deal with eventually, I wish she didn't.

But we shouldn't ignore the context. Had she dropped out of the Olympics, no one would have blamed her, but NBC would at best have treated it as a footnote and moved on. Joannie would not have received thousands of texts and messages of support, she would not have become the icon of the Olympic spirit (and, of course, not been overscored in her long program). I'd suggest we take a moment and consider the kind of coverage an Estonian biathlete would have received in the same circumstance: pretty much none.

NBC has decided that the Olympic Games needs these kinds of over-arching narratives, these personal dramas writ large, and, as long as they arise in certain sports and from certain countries (how much attention did Petra Majdic receive for winning a bronze in the cross-country sprint immediately after falling and breaking four ribs and puncturing a lung?), they'll get the full focus of the network. And maybe they're right, maybe they do need the Tonya-Nancy kind of stuff to sustain interest as they grub for ratings.

But, occasionally, I find it kind of wretched, that we can't just be left to appreciate the effort and the training and the performance, that everything has to be augmented by heaping servings of bathos. Because it's a pretty fine line between admiring the pluck of a Joannie Rochette and shamelessly using her heartbreak to pull in the Nielsens.

NBC's lost weekend

2010-03-04T19:34:00.002-06:00

I have commented before on what a big fan of the Olympics I am (I'm sure I wrote a few posts about it in August of 2008). The Winter Games are no exception, and I watch pretty much every minute that I can. That watching is, of course, all on the big network, as I don't have cable TV, but one certainly gets one's fill from the flagship.

And the coverage was pretty much what we've come to expect. I'll probably have a post or two over the next few days about specific quibbles, but there really were no surprises. The pre-selected stars (Vonn! Ohno! White! Lysacek!) were given far more than their share of attention, and the network left some time to accommodate the stories that actually grew out of the events (Mancuso! Miller! That big bobsled guy!). Naturally, these were all Americans, as someone needs to be really special in a marquee sport to be noticed if they aren't from the 50 states (Kim Yuna! Joannie Rochette! Alexandre Bilodeau!). [Note: it really helps if they are from or train in Canada.]

This is all pretty standard stuff. What I don't understand is the series of odd decisions NBC made in their final weekend coverage. I could chalk some of it up to having to give 3 hours to a hockey game that they had not anticipated (do we really think they would have given most of Sunday afternoon to the Czech Republic vs. Finland?).

The problems actually started Thursday night in the coverage of the ladies' figure skating final. This is one of the major events of the Games, there's a massive amount of hype, and NBC gave it surprisingly short shrift. They showed a total of 9 programs, and, other than the final group of six, made curious choices as to who they showed. We "got" to see Tugba Karademir, who finished last (I wonder why NBC finds her so compelling, as they featured her four years ago), Cheltzie Lee, who finished 20th (and we saw her short program as well), and Elene Gedevanshvili, who finished 14th. Why they picked these three is beyond me.

[By the way, who finished 4th in the free skate? Laura Lepisto of Finland, who jumped from 10th after the short to 6th overall. As far as I can tell, she was never mentioned once, and was omitted from the graphic showing the final scores - we saw 1 through 5, then 7th.]

On Saturday night, NBC showed six programs in the figure skating exhibition gala. I personally don't care too much for that, but I would think it a big draw for the audience, and NBC kind of threw it away. Of course, if you had cable, you could have risen at 5:30 AM (Central Time) on Sunday and watched it on MSNBC, but I still don't grasp the rationale.

Then, Sunday afternoon, they showed almost every minute of the Men's 50K cross-country race. I like endurance athletics; had I grown up in a place with recreational skiing, I'd probably be out there myself. But watching it was not all that interesting; NBC could have cut it by about half, had a perfectly exciting event to show, and left time for other things.

Finally, there was the bizarre decision to cut abruptly from the Closing Ceremonies to Jerry Seinfeld's new show. There was almost no warning before Bob Costas told us to come back in an hour. As I get older, I find the Closing Ceremonies to be less interesting - I mean, Nickelback? Avril Lavigne? - it's like watching video of a party to which I wasn't invited. Nevertheless, it seemed like an odd choice to move so quickly from one to the other.

What a shame NBC had to end that way.

Followup on health care

2010-03-02T14:06:00.002-06:00

I know that all my readers have been breathlessly anticipating my second post on the myths of health care (the first was here). I stated there that the most ardent pro-health care advocates are making, amongst the very true things they're stating, a couple of arguments that seem quite questionable.

The first one was the idea that, no matter how flawed the legislation, it will inexorably be made better over time. I find the evidence for that rather sketchy.

My second installment is coming along one of these days, but the urgency seems undercut by the near-total lack of movement on this effort. It would appear that the coming mid-term elections will doom us to the status quo. For completeness' sake, however, I will get around to Part 2 at some point.

There is an "I" in Olympics

2010-02-24T18:40:00.003-06:00

“What a gift she's given us.” - Sandra Bezic, NBC, 2/23/2010

Joannie Rochette's story is truly sad. She comes to Vancouver as a potential medalist in the ladies' figure skating event, in an Olympics held in her home country. And her mother arrives to see her skate, then passes away before the competition begins. The juxtaposition of what should be the greatest moment in this athlete's life with one of the greatest personal tragedies one can endure makes for an almost unbearable poignancy.

Rochette chooses to skate, and, in last night's short program, skates very well and ends up scoring enough points to put her in third place at this point.

As she comes off the ice, Sandra Bezic, one of NBC's skating experts, utters the quote above. I'm willing to cut her some slack, in that stupid things can be said in the excitement of the moment, but later, during the post-competition wrap-up, she essentially repeats herself.

I could spend some time unpacking this quote, but, if you can't see the fatuousness of it, no amount of explaining is going to help. To suggest that Rochette skated for us, rather than for herself, or her father (misidentified by NBC, corrected only far after they had milked the pathos out of it), or for the memory of the mother who had supported her through her quest for a dream, strikes me as amazingly inappropriate.

But I'm not surprised.

_________________________________________________________

There are, I think, two schools of thought as to how sports commentary should work. There are those who believe that the role of the analyst is to, well, analyze and explain and teach. The audience should gain insight into how these accomplishments are done, into what distinctions are made by judges, into what separates mediocre from good from excellent. The analyst, who was a practitioner or teacher or both (Bezic herself was an excellent pairs skater with her brother, then became a top choreographer), can lead us through even unfamiliar sports and, while not necessarily deluging us with minutiae, lead us into a greater understanding and appreciation of these feats.

I'm reminded of the great Al DeRogatis, who called football for NBC in the '60s and '70s. He had been a fine player, and, in the booth, broke down football in great technical detail, allowing the viewer to understand some of the intricacies of the game. One could learn a lot from DeRogatis. But after 1975, he was out, because the new breed of broadcaster had come.

The other kind of commentator is the one who attempts to create excitement, who tries to convey a picture of what it feels like to be there. He or she might sprinkle in the occasional technical term to prove their bona fides, but that's mere seasoning in the stew of emotion that they're trying to cook up. (In football, they might mention a Cover 2 defense, but they'll never take the time, or risk viewer boredom, by actually explaining what that is.)

There are some who can play both roles. John Madden, particularly in his early days as a broadcaster, could convey with a kind of verbal shorthand what the game felt like ("Boom"), but also provide some real insight broken into 15 to 20-second chunks.

But that's all gravy, especially in something like the Olympics where we thrill to events to which we'll pay absolutely no attention until 3 years and 50 weeks from now when the next Winter Games come along. I'm certain that NBC is making a concerted effort to provide us with 99% feel, 1% information, and that's the way they're going to do it (and perhaps they have research to indicate that they get higher ratings when they handle it that way).

The problem is, of course, that facts can get in the way of the narrative excitement. Snowboardcross and skicross are the two newest additions to the Winter Olympics, and they can be exciting in the final rounds when four athletes are on the course at the same time, jostling for position.

However, qualifying for these sports is really, really boring. A course that presents numerous challenges when two competitors are an elbow shove away from each other seems to be of little interest when only one person is going down. But, in NBC terms, these sports are NEW! EXCITING! THRILL RIDES! So we're not told that the men have 33 skicrossers competing for, yes, 32 positions. The women, 35 for 32. The announcers were careful to stay away from mentioning that nothing much is at stake.
_________________________________________________________

So we end up with powerful incentives to "go surface," to hype and emotionalize everything instead of explaining. NBC hires nominal experts, then has them ignore their expertise in favor of creating a word picture of the experience.

But what happens when they hire people who can't do that, who have impressive resumes but no ability to convey the ambiance of the competition?

We know what happens - we the viewers are subjected to the train wreck that is the team of Sandra Bezic and Scott Hamilton. Hamilton, a man I think very highly of for his personal story and his charitable work, is possibly the worst "analyst" working for any major sports network. Bezic is better only because she shuts up more often (with execrable lapses like the quote above).

The problem, I think, is that they don't the narrative gifts to deliver to us a sense of what it's like to be there. Instead, they substitute their own feelings. So we don't get, "Triple lutz, triple toe loop, well done with a small turnout on the landing." We get Hamilton's "TRIPLE LUTZ...TRIPLE TOE...OH, HE FOUGHT FOR IT, BUT HE GOT IT!!!" And that's actually a high point in content for our Scotty.

Everything is filtered through the prism of their emotions. To some, it might seem more vivid, but it far more often comes off as information-free blather that appeals neither to our brains (because there's no content) nor to our hearts (because we really don't care how Sandra and Scott feel about things).

One might have thought this reached its peak in the 2002 Olympics, when Bezic told us she was "ashamed for our sport" when her favored fellow Canadian pairs team was, in her opinion, underscored. National jingoism aside, this was the apotheosis of her self-importance, as scandal, duplicate gold medals, and a new judging system followed. It's hard to avoid feeling that Bezic began to overestimate her impact after this, leading her to think that she really was a major mover and shaker in figure skating.

So we end up with the most subjective look possible, one which asks us to think more about the announcers than about the event. And we get fatuous quotes like the one from Bezic, which tells us nothing except that she feels that Joannie Rochette skated for the good of Sandra Bezic. And the "we" just makes it worse, as this hack "analyst" attempts to include us in this most inappropriate feeling possible.

NBC really needs to take a look at this team and see if there isn't some talent somewhere that could do a halfway-competent job.

The two great myths of health care - part 1

2010-02-06T17:05:00.002-06:00

I'm returning from my self-imposed exile because I'm finally fed up with the rhetoric surrounding the endless and, almost certainly, failed bid to create a health care plan that will actually help Americans at a reasonable cost. Having read endless amounts of prose on the two sides over the past year, I don't need to articulate the very real concerns that the right has over these proposed plans (of course, 95% of everything they've said is garbage - death panels? - but worrying about future costs is perfectly reasonable), because they seem to be carrying the day.

No, I have a problem with the left, particularly that segment of the left which says, "We're not getting everything we wanted at the beginning, but it's still a good start; let's not make the perfect the enemy of the good." I'm with them up to a point. I think something should be done, and the bills that are on the table represent some progress toward treating health care, to some level, as a right of citizenship rather than just another consumer good.

But it is profoundly unhelpful to advance arguments that are wildly speculative and questionable as justification for passing such major legislation. And, as I've had the opportunity to read and ponder much of the rhetoric, I've identified two such arguments that are seen as "proof" that we must move ahead with what's on the table. In this post I'll take up the first: the idea that whatever is passed will inevitably be improved in the near term, so we better get the ball rolling.

Any number of bloggers and pundits have taken up this idea, this utopian vision of "It must get better, so let's get started." Matt Yglesias, Ezra Klein, et al seem honestly to believe that flawed legislation will inevitably be followed by better legislation ad infinitum, that somewhere in the future we will end up with a near-perfect system in which everyone gets what they deserve and no one has any problems. This viewpoint is exemplified by a Kevin Drum post from today:

In 20 years this bill will be entirely forgotten except as the first step toward broad national healthcare. The excise tax, the public option, the subsidy levels, the exchange — all forgotten because they will have been steadily replaced by an entirely different infrastructure. It's true that some of that infrastructure will be path dependent on the details of the current bill, but most will simply evolve as a result of technology and public demand. By 2030 arguments over the public option will seem as antiquated as rants against the tin trust.

Wow, that sounds great. But do these folks have any evidence to offer along this route to perfection? Well, they love to cite both Medicare and Social Security, which started out in limited ways, requiring years of pressure and legislation to achieve their current status.

And I will admit that these programs, each of which were thought wanting in their original creation, have been refined over the years and become closer to their original intent. And national health care kind of looks like those programs, so it is natural (if somewhat pat) to believe that the arc of development will be the same.

However, the rationalist must then look more broadly, across all government programs, and must ask: "Has that been the fate of all large-scale government programs? Do they inevitably start out small and limited, and grow to something wonderful over time?"

The answer must, alas, be no. I'm sure there were people who felt that our periodic stabs at creating better schools would eventually lead to, yes, better schools. And some of those people have been waiting for three generations to see those schools improve, and they're still waiting. The war on poverty was going to stamp out the injustices that prevent people from achieving their dreams, and it is a war as yet unwon.

There is very little evidence that there is political tide which inevitably makes bad or flawed legislation into good policy; there are numerous examples on both sides of that ledger. I'd like to see those who are willing to settle for whatever Washington may eventually pass to concede that it may not ever get a whole lot better than what we start with. If there are flaws in National Health Care 2010, they may well still be there in 2030 (and 2050...), and we had better be prepared to live with that. [The other myth later...]

Notes on being away

2009-12-14T16:02:00.002-06:00

Not blogging for two months has its pros and cons, but there are two I'll mention briefly.

1) I've started to get comment spam, odd since there's been very little activity here, and I'm planning to clean it out. If you happen to be a spammer who's reading this (as if), don't bother to send it. My readership is not all that big, and it's pretty much non-existent from Japan, so it's really not worth it.

2) Back in July I wrote a post that was kind of a throwaway, about a radio commercial that had really bugged me (does "keeper of cool" resonate with anyone?). Why, I can't imagine, but my post continues to show up first (out of 433,000 hits) in a Google search for that phrase, and, as a result, it has become my most popular post by a wide margin, attracting (so far) 39 comments. I confess that I don't understand that at all.

Wait - what??

2009-12-14T15:49:00.002-06:00

As you can see, it's been more than two months since I've blogged, and what's funny is that I really haven't missed it all that much. That said, it may be time to get out and drop a few insights on the world; also, I owe you, my readers, some promised posts (such as my guide to going Rim-River-Rim in the Grand Canyon in one day, NPS advice notwithstanding).

In my dedication to remaining logical and centrist, I'm finding plenty to criticize in the current scheme. Since I ripped conservatives pretty consistently in the runup and aftermath of the Obama election, you might think that I'd be in hog heaven right now. But I'm not, not that I expected much else (I'm actually pretty amused at the liberals who thought the system would change overnight, ignoring that Obama is a successful product of that very system, and apparently believes that tweaks are preferable to revolution).

But what really amuses me on either side of the political dichotomy is the raging inconsistency that people demonstrate. Let's just take one example from last month. Ezra Klein is a young man who writes for the Washington Post, and has taken a special interest in health care. A lot of what he writes is insightful and informative, and I recommend following him.

However, he can fall plague to the seduction of utopia. A favorite staple of people who want to advance some controversial notion is to let the states experiment with alternatives, at which point we can pick the best one for the country as a whole. This argument ignores differing situations - does the Massachusetts health care program, and we'll stipulate that it's been a success, really apply to Hawaii, Texas, and North Dakota? I can't say, but neither can anyone else.

But here's Klein on November 17:

Medicaid should be federalized, but so too should a lot more of school spending, along the line Matthew Miller has argued for. And these would both be good policies even outside of the context of state budgeting, as leaving school funding to local communities is a recipe for wild inequality and inconsistent standards, while leaving Medicaid eligibility to the states has left America with 51 different Medicaid programs with 51 different eligibility schemes and very little coherence.

I'm sorry, but why hasn't one really good Medicaid idea come to dominate others? You can't argue that the states can be used as laboratories for policy alternatives if real-world examples are hard to come by. I suspect we're seeing path dependence and special interests as impediments to change, and that's why I'm always mightily suspicious when anyone's pet theory is advanced as a candidate for dispersion. It's very possible that some new method of education, no matter how successful, will not be adopted wholesale by lesser-performing school districts. In the end, it will all come down to some kind of central coercion, and I don't have the sense that the United States is all that happy with that idea.

A blogging loss, at least for now

2009-10-04T07:20:00.000-05:00

I would be remiss if I didn't mention that there has been a change in a blog I have mentioned often and have highlighted to the right, Decidedly. The main author, Greg Glockner, has left the company from which the blog emerges (he talks about his decision in a post here). and we shall be losing his insight on issues of decision-making. The blog continues with posts by Carol A. Burch, whom I have quoted from time to time, and I'll go on following it, but we'll miss Greg and hope he finds another outlet for his writing soon.

First the Cubs, now the Olympics

2009-10-02T19:10:00.002-05:00

I'm going to admit upfront that I love the Olympics. The idea of athletes from all countries and all sports getting together and competing is easily over-sentimentalized, I know, and the problems of the world don't go away for 17 days every four years, but it still represents an ideal that is good and noble. Maybe it's become cluttered with commercialization and politics and greed and all the other human sins, but there remains a purity behind the intent that I appreciate and admire.

Perhaps that's why I, while leaning toward wanting the Games in my home city of Chicago, retained some very real ambivalence about the whole thing. The politics of Chicago and Illinois is so corrupt, so subject to cronyism and cheating, that I feared, I suppose, that the Olympics would be tainted by the sweetheart deals, the opportunities of resource diversion to cronies of Mayor Daley, the ram-it-through mentality that would make the actual people of Chicago an afterthought.

Yet...it still would have been really cool to see the Olympics come to Chicago, to be here for this oft-wonderful city to be highlighted on the world stage. Perhaps Bob Costas could do his show overlooking Daley Plaza with a big picture of Da Mare over his shoulder (having set the precedent of honoring local dictators by allowing us to spend 17 days appreciating the lovely mass murderer Chairman Mao).

Alas, it is not to be. Chicago got blown away in the first round of a competition that everyone in the city figured was in the bag. The media coverage was laughable, of course, including Olympics "experts" who, before the vote, confidently told us all the reasons Chicago was the front-runner, then did a 180 after the vote and confidently told us about the many flaws in the plan.

[To offer a minority-in-Chicago opinion: The voting results tell me that Chicago had no chance. Had we squeaked by Tokyo in the first round, I doubt things would have gotten any better. One has to suppose that the Asian bloc would have gone to Chicago instead of Rio, and I know no reason to think that would have been a lock.]

But here's the most important flaw, in my eyes. Chicago is simply not perceived as a world-class city by, well, anyone who doesn't live in Chicago. I wish it were true, certainly, because I love a lot of things about this town, but it simply isn't, and all the boosterism in the world isn't going to change that.

Look at a Chicago Tribune editorial from this past Monday:

No, Chicago doesn't need the Olympics. This is already a world-class city. Has been for decades. During its rich history, Chicago has scrapped its path to world-class stature in manufacturing, finance, retail, professional sports, academia -- on it goes. An Olympiad would be wonderful, but certainly isn't essential.

The paper cites five areas in which Chicago is world-class.

Manufacturing - largely gone to cheaper places in the country and out, and most of the headquarters of those companies have left for greener pastures.

Finance - guess the largest bank headquartered in Chicago. Go ahead, I'll wait. That's right, it's the Northern Trust, an institution that exists primarily to manage the assets of rich people. It has no place in the nation's top banks.

Retail - we need only look at the replacement of Marshall Field's with Macy's, but we can also walk down Michigan Avenue and see all the national chains to understand that retailing is no longer a primary industry.

Professional sports - even if we grant that field an influence it doesn't have, it's hard to make a case that we're any better at that than other world cities.

Academia - the tendency to overrate Northwestern, which comes from looking around newsrooms and seeing all the Northwestern grads, is irritating enough. When one looks at the deplorable condition of the once-proud economics faculty of the U of Chicago, one gets a sense that perhaps all is not rosy on the local quads.

The "on it goes" might include financial markets, but the Board of Trade and its ilk are rapidly moving to T1 and T3 lines coming in from all over the world, so they aren't the source of employment they once were. It might include tourism and conventions, but a lot of that business is being lost to cities with more to offer in the way of entertainment and food (it seems clear that any industry with a strong Asian presence is going to put their conventions in Seattle, San Francisco, or Vegas; Europe, New York or Orlando).

What Chicago has not done is establish any particular presence in anything with a future, in technology or bioengineering or alternative energy. That we aren't Detroit stems mainly from bigger size and greater diversity of industry, but it's not difficult to see us following that path eventually.

And Mayor Daley knows this, which is why he pushes tourism and splashy parks and big events, because those are the only ways he can think of to extract money from other places to prop up an obviously unsupportable infrastructure.

I hate to write this, hate to believe it, but it's hard for me to see a great future for Chicago. Getting the Olympics might have delayed the day of reckoning, but it wouldn't have changed the fundamentals. Not getting them, I don't know what's going to happen. But, at some point, the boosters and hucksters are going to have to realize that a very different Chicago is coming down the pike, and we're better off planning for that than we are trying to hit the big home run to "put us back on the map."

Back from the Southwest

2009-09-15T11:34:00.002-05:00

Blogging (and responding to comments) has been even more sparse the past few weeks, as you may have noticed. I was away, picking up on more of the things that I missed from having a travel-averse mother. I finally made my first journey to both the Grand Canyon and Las Vegas, about which I'll probably have more to say in the coming days (of course, I said that about last year's trip to Utah, too, and you're still waiting for that).

I'll just enliven things with one comment: It is possible, no matter what the Park Service says, to hike from the rim of the Grand Canyon to the Colorado River and back in one day, though I am not minimizing it as a challenge. But the wife and I did it, it was not unbelievably difficult, and I'll write more about that for those who care at some point. Anyway, ho hum, I'm back to the quotidian, and none too thrilled about it.

They shoot, they score

2009-08-26T10:19:00.001-05:00

CBO (Congressional Budget Office) scoring has become the hottest thing lately. CBO assessment of a health care plan, for example, is seen as definitive (at least until the results differ from what is desired, at which point the spin comes in - but the numbers themselves are rarely questioned).

So, and it seems to be a question day on the old blog, why can't the magic of CBO scoring be extended to a breakdown of costs and benefits by population segment? Why can't we put the wisdom of these analytic solons to the test of figuring out, for example, what a health care bill will really cost for different people, or anticipating how the market will change in response to passage of any of the myriad of bills we have?

The answer is probably that these matters are too difficult to forecast, that too many different things can happen. But can't that same argument be extended to the areas the CBO is willing to consider? Aren't all of their numbers, all of their revenue and deficit calculations, fraught with uncertainty? Perhaps we all need to take everything we're hearing with huge heaps of salt.

Software vs. finance

2009-08-26T10:13:00.002-05:00

I've worked in software for quite a few years now, and I know that there are few more complex things that humans have created. To describe to anyone who hasn't worked in the field just how complicated an order entry system, for example, can be is almost impossible. You not only have thousands of lines of code, written by people of varying skill levels and experience responding to different requirements, but you also have interactions with the operating system, third-party software, external data stores, and so forth. Any moderately interesting application is orders more complex than the majority of the non-computer world.

So my question for the day is this:

Why do we need finance people to stay in place to unwind the crisis, when we let completely inexperienced people take over our software?

We're seeing our bankers making the big bucks again, and they were all kept in place through government bailouts. No matter what they had done to destabilize the world financial system, they were needed because "only they could understand these complicated financial instruments."

Now I have a master's in finance from a prominent school (FWIW), so I have some understanding of financial products, the misdirection, the assignment of risk (that theoretically reduces that risk, ha, ha), and I can tell you that there is no financial product, no matter how layered in legal jargon, that compares to a useful computer program in difficulty.

So, and I ask this in sincerity, why do we need to prop up the kings of Wall Street, restore them to their place in the universe, while every day we move some piece of software to an offshored company full of folks with meager training and experience? Why are we so comfortable taking applications away from the people who built them, giving them over to people who don't understand the business, the industry, the requirements of users?

Several answers present themselves, and at least one of them is right, but I still find it incongruous and unfortunate.

The final end to Camelot?

2009-08-26T09:57:00.002-05:00

Ted Kennedy has, as pretty much everyone knows by now, passed away, and there is no end to the tributes for the great "liberal lion." A typical one comes from Robert Reich:

America has had a few precious individuals who are both passionate about social justice and also understand deep in their bones its practical meaning. And we have had a few who possess great political shrewdness and can make the clunky machinery of democratic governance actually work. But I have known but one person who combined all these traits and abilities. His passing is an inestimable loss.

Most Americans will never know how many things Ted Kennedy did to make their lives better, how many things he prevented that would have hurt them, and how tenaciously he fought on their behalf. In 1969, for example, he introduced a bill in the Senate calling for universal health insurance, and then, for the next forty years, pushed and prodded colleagues and presidents to get on with it. If and when we ever achieve that goal it will be in no small measure due to the dedication and perseverance of this one remarkable man. We owe it to him and his memory to do it soon and do it well.

I don't really have a lot to say about Ted Kennedy in particular. The whole Kennedy family mystique has always eluded me; I never found them as good-looking or effective or impressive as the common wisdom would tell us, but they seemed to fill some niche in America that people desired. We're starting to see some dispassionate looks at the legacy of JFK, finally, and it would appear that, whatever his potential may have been, the reality was somewhat more disappointing. RFK was a master of rhetoric, but he didn't really accomplish much either.

But Teddy, he's the one who rolled up his sleeves and did the work and stood as a beacon of hope. And that may all be true, at least to some people.

My point, actually, is about the expectations we have for people in politics and how different they are from those in any other walk of life. Look at the Reich quote above; we're supposed to commend Kennedy for fighting for universal health insurance for 40 years, for fighting the good fight.

But, bottom line, he didn't get it done. He spent 40 years under Democratic and Republican presidents, within Democratic and Republican Congresses, and it hasn't happened. He was undoubtedly sincere about wanting it to happen, he introduced bills and talked up the issue and cared about the people who needed it, I'm sure, but, in the end, we don't have it.

I can't think of another field of endeavor in which results are so severed from perception. If you worked in a company and spent 40 years never quite getting your product out the door - well, you wouldn't work in that company for 40 years. On the other hand, if you happened to be in a division that got lucky, you'd be lucky too. But it would all come down to what you had been perceived as accomplishing, not to the effort you had made, no matter how noble.

That's not true in politics. You can truck through 40 years, making speeches and showing you care, and, when you pass on, you'll be hailed as a success despite a lack of provable results. Whatever symbolic role Ted Kennedy filled (and symbols do matter, so I am not trying to deny the power of that), the reality is that very little of his effort in health care (and other issues) came to fruition. That doesn't mean he shouldn't be admired for trying; it does mean we should try to temper our awe, just a bit.

A shameless bid for Google attention

2009-07-29T14:09:00.002-05:00

The Illinois Lottery is running a couple of commercials for their second chance lottery game, one of those things where people can win by saving their losing tickets. One of those commercials has a funny line, though I'm ignoring the fairly obvious implication that girls with accents are easy (leading the lottery-playing character to get a creepy smile on his face). One of the Vegas dancers is trotting down the street and says, "I'm a dancer. I can dance." The actress gives a good reading of the line.

I mention this only because I want to see what Google does with this post. Only one result currently comes up in a search with <"i'm a dancer i can dance" lottery>; this post should make two.

Another tragic death

2009-07-27T11:13:00.009-05:00

The word "legendary" finally died today. It had been on life support for some time, but it took the Chicago Tribune to push it over the edge:

Alexis Cohen, legendary 'American Idol' contestant, killed in hit-and-run in New Jersey
Legendary for her cursing rant against Simon Cowell

I acknowledge that this is a tragedy for her family and friends, and I'm not trying to make light of her death.

But when a headline writer for a major metropolitan newspaper destroys the meaning of a word in some lame bid to draw attention to one of the more minor stories of the year, it is not wrong to wonder just how low our standards will go.

"Keeper of cool"

2009-07-15T14:33:00.002-05:00

Sometimes I'll go to the Web to see if something is bothering others the way it bugs me; in effect, I'm pathetically looking for support in my dissatisfaction. I don't know if other people do that, but I rather suspect they do. I would think there were Google searches for "michael jackson too much coverage" from people who were attempting to discover that others felt that the "news" outlets were focusing overly much on a less-than-that-important story (I suspect that, had Jackson passed away during fall premiere season that the number of hours devoted to it would have been far less).

Anyway, I've been irritated for some time by the radio commercials for Cisco's WebEx product. It's a teleconferencing product, and the campaign has featured at least two spots starring a businessman who uses WebEx to enhance his ability to do presentations and hold internal meetings. The facts behind the campaign aren't bad; I'm a big believer that teleconferencing is going to become ever more important, that at some point it will curtail the rosy forecasts of ever-increasing business air travel (even if fact is lagging the enthusiastic projections of those who sell these systems).

What I don't like is the narrator - I've taken a visceral dislike to this guy. In the first spot, he talks about how he can appear all over the world making presentations, yet still be available for tonight's date with "the very lovely Rachel," and I just find something smug and smarmy about the way he delivers the phrase.

The newer ad demonstrates how this guy can pull his creative team together to implement some idea he had (perhaps on a date with tvlR, I don't know). His idea bounces from his head to various other cities, and the other members testify as to their contributions, and our main guy comes back to tell how his great idea was instantly translated into reality because of WebEx. (This is a pretty rosy picture of innovation, but it is an ad, I suppose.)

In this case, it's not Rachel's boyfriend who bugs me as much as "Logan in Cambridge," who proclaims himself, "I'm kind of the keeper of cool." And he's more smug than the Rachel guy, and it all just rubs me the wrong way.

So this morning I get on the Web to see if anyone else is as bugged by these ads as I am, and the answer is, apparently not. But here's the funny thing: There seems to be one transcript of this commercial that has been replicated numerous times, so it propagates the same funny errors. (Oddly, the transcripts aren't exactly the same, so is it using some kind of voice recognition software?)

First, we have "so I gathered my eighteen to meet online using WebEx," which is not what he says at all; it's "gathered my A team." Then comes Cool Boy, and his segment is transcribed as, "Logan in Cambridge Canada keeper of cool." As I've already pointed out, it's "I'm kind of the," not "Canada."

So I've gone from being nettled at an ad that just sticks in me to being perturbed by an Internet mystery: why these strange renditions, and why are they spreading (and another, why isn't anyone else bugged by these ads, but maybe I'm just going to have to accept that it's my own pathology being measured here)?

Bubble machine

2009-07-14T11:31:00.002-05:00

Occasionally I will take requests on the blog (actually, I'd love to get more), suggestions on something to write about, and I'm happy to put something together if I can think of something to say. A reader/friend asked me to write something about Matt Taibbi's Rolling Stone article titled The Great American Bubble Machine. In it, Taibbi lays the blame for our financial meltdown on investment bank Goldman Sachs:

The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

Reaction has been severe. Of course, Goldman Sachs has responded with outrage, but many other commentators have leapt to the barricades, accusing Taibbi of overreach and sloppiness. One who has attracted a lot of attention with her "takedown" is The Atlantic's Megan McArdle, and I'll swing back to her in a moment.

But, you ask, what of my take on the original article? Ah, yes, but there's a problem: Rolling Stone has, in their infinite old-media wisdom, not published the whole thing online; the link I provided above is a series of excerpts interspersed with videos of Taibbi. So it's hard for me to provide any cogent analysis of the article without running out to the store and picking up a copy of the mag, and I'm not going to do that. (Kevin Drum fell into the trap, reviewing the article without realizing he was looking at bits and pieces. Once he got on track, he read the whole thing, concluding that, "It's a very good takedown of the modern financial industry and well worth reading." Drum also provides a link to a site that purportedly offers the whole article, but that's not working for me.)

I am left, then, trying to review an article based on excerpts, and that's not fair to the piece. I will not try to claim total objectivity anyway, as I am a fan of Taibbi's writing. His reviews of the Tom Friedman oeuvre are canonical, but I already praised those enough. He is a passionate writer, one who, perhaps, sometimes allows his passions to get in the way of precision.

But that's who he is, and to take the other side, to argue that his vehement eloquence is disqualifying is to refuse to engage with his points. And that is a far greater sin. Witness the quote in a TIME piece from a former journalist, "For the record, I don't think any article that contains the line 'vampire squid sucking the face of humanity' [Taibbi's opening description of Goldman] is real journalism." That quote is vacuous and completely unenlightening. (Taibbi himself responds to TIME's piece here.)

Here's Taibbi's position in an somewhat unfair nutshell: Goldman Sachs has been at the center of every negative investing trend over the last several decades, and their involvement in questionable financial instruments and oil speculation directly led to the current world financial crisis. Furthermore, their connections to people in high places ensures that they will be allowed to profit mightily no matter what happens in the global economy.

And that doesn't really seem too wrong. I sense maybe a little too much conspiracy in Taibbi's article, a bit too much willingness to credit Goldman with prescient malevolence. In my experience, there is rarely a decision arc in even the most powerful companies; rather, there is a culture which approaches problems in consistent ways, thus leading to similar results. Once that culture is seen as successful, it becomes widely adopted and the influence is magnified.

One thinks of, in the business consulting realm, the influence of McKinsey. McKinsey is not responsible for some of the worst management trends of the past 30 years, but they do tell their well-paying clients what they want to hear. Once the concepts (things like dehumanization and offshoring, anything in which customers can reap gains without paying the full costs) get the official McKinsey imprimatur, they become consecrated as holy writ, and McKinsey appears to be at the cutting edge of modern management techniques. I believe something similar happens with Goldman Sachs, that whatever they do quickly pervades the industry, giving the appearance of a conspiracy where none exists.

Which brings me to Megan McArdle. I find this self-styled libertarian to be maddeningly inconsistent, capable of penning some clear-eyed pieces that cut through cant (as in this post about retraining, where she couples her own experience with conventional wisdom and finds reasons to question the "wisdom"), but too often falling into a mush of disorganization. One could pin that on the blog format, but she is a major force in the blogging world and I expect more from her.

At any rate, her criticism of Taibbi has received quite a bit of attention, probably because she begins:

What I think, sadly, is that Matt Taibbi is becoming the Sarah Palin of journalism. He seems to deliberately eschew understanding his subjects, because only corrupt, pointy-headed financial journalists who have been co-opted by the system do that. And Matt Taibbi is here to save you from those pointy headed elites.

(Sarah Palin analogies are always attention grabbers.) Her argument is that Taibbi misemphasizes the importance of the things that Goldman did, that they did do those bad things but they're old news and other people did stuff that was worse, so why pick on Goldman?

She then takes her U of Chicago MBA (a degree she shares with this writer) and rolls right off the tracks:

But in fact, everyone was aware that CDO's were repackaging crap mortgages--that was the point. The idea was pure portfolio theory, broadly agreed upon by everyone involved. Everyone knew a lot of the mortgages might go bad, either by defaulting or prepaying. (This is a risk for bankers, who don't like the idea that if interest rates drop, their 7% mortgage might suddenly turn into a pile of non-interest-bearing cash which can only be invested at 5%.) But if you pool the risk, only some of the bonds will go bad, while others pay off. The result is a less risky, less volatile investment than any individual junk mortgage bond. And it would have worked, too, if it hadn't been for ~~those crazy kids~~ a collapse in the housing market of a scale not seen since the Great Depression.

This betrays a misunderstanding of portfolio theory, in that the risk of the pooled security is less only if there is minimal correlation among the component securities. Diversification works only when the underlying elements are different in nature; when they all stem from the same source, for example, residential mortgages, any downturn in the overall housing market will destroy the value of the pooled security, which is, of course, exactly what happened. There is no magic that allows anyone to take D-level garbage that is all of the same type and turn it into AAA by clever dividing and recombining. That's absolutely basic.

McArdle then hedges her own bets by agreeing with Taibbi's basic point:

Wall Street is an arrogant beast that more than held up its half of the devil's bargain which drove us into our current ugly straits. Bankers who thought they were geniuses were deceived by models that assumed away the possibility of a second great depression. They made a terrifying amount of money doing it. And now that the taxpayers have bailed them out at considerable expense, we don't even get a goddamn fruit basket. Instead they merrily go along paying themselves gigantic bonuses for the singular feat of not driving our economy entirely back to the stone age. I think some populist rage is more than warranted.

She simply disagrees with the way Taibbi chose to illustrate these problems, claiming that he didn't ask the right questions and, therefore, profoundly misunderstands the true nature of the problem. So we should be mad at Goldman, but we should also be mad at others too, and we can't know exactly who we should be mad at for what, and so forth into its own brand of incoherence.

McArdle got some pushback for her piece, especially for her assertion that, "financial meltdowns don't offer villains, for the simple reason that no one person or even one group is powerful enough to take down a whole system." So she wrote another long blog post about that, defending herself with this analogy:

A woman gets into her car, and waves at her husband, who is crossing in front of the car. Pressing the pedal to the ground, she puts it into gear . . . and steams forward at full speed, crushing him against the wall of the garage.

Is she a villain? It rather depends, doesn't it?

Scenario #1: she's angry because she found out he had an affair, and decided to kill him "by accident" for the insurance. Scenario #2: she thought she was stepping on the brake, and stepped on the gas instead. The former is a crime, the latter a tragedy. But you can't divine which simply by knowing that something terrible happened....Villainy involves people who know, or should have known, that what they were doing was likely to lead to the awful results.
I mean, you can quibble and say "You should have known that that was the gas pedal", and indeed you should have, but if, for whatever reason, your senses deluded you, you're not a villain. No, even if you were thinking about the presentation you had due at work--or how angry you were at your husband for having a fling with his secreatary--rather than concentrating on your driving.
When something is common enough, I think it definitionally isn't villanous. It may be a practice that should be fixed--we should all be more careful when starting our cars, I'm sure.

This is a bad analogy, so let's try to fix it. Let's say the woman may or may not know how to drive. Her husband asks her if she knows which is the brake pedal. She confidently answers yes, then steps on the gas and kills him.

Alternatively, she chooses to flip a coin as to which pedal to step on.

Is she a "villain" in either of those scenarios? I don't know, but she is certainly criminally negligent, and we do have societal punishments for that kind of recklessness.

And this is closer to what we've seen from our financial corporations. They took unconscionable risks, actions that could bring down a world financial system, then pled, "No one could have known," when it all went south. Their perverse incentive policies made gambling with OPM (other people's money) acceptable, even necessary. This is not their senses deluding them, this is arrogant heedlessness and, whatever the merits of Taibbi's contention that a great deal of it was due to deliberate manipulation on the part of Goldman Sachs, can't be wished away by McArdle's limp argument.

Then, unsurprisingly, McArdle yet again hedges her bets, telling us that she actually doesn't like Goldman Sachs at all:

I have no reason to love Goldman Sachs, and I don't. I didn't like them when I was interviewing for investment banking internships in business school (worst interviews by far were sponsored by Goldman Sachs and Bear Stearns). I dislike the way their alums, and indeed, their current employees, have permeated our politics and our financial regulatory system like some sort of insidious fungus. I have been repelled by Jon Corzine ever since he spoke at my business school graduation ceremony, where he jovially described how he had cheated his way into a diploma by getting his girlfriend to do his final project for him. He seemed to think this was funny.

She goes on in this vein for a while, but ultimately defends the bankers by claiming that they were stupid, but so was everybody else, and that doesn't equate to villainy, and that no change to history would have allowed us to avert the financial crisis (?!?):

But I think the case needs to be a leetle bit tighter than the fact that bankers make stupid decisions, bankers get paid a lot, and we just had a financial crisis. I'd like to see someone make the case that they did things that were actively, knowingly, illegal and morally turpitudinous, rather than simply totally moronic. Because with the total moron thing, they had an awful lot of company.

Of course, that's actually just the case that Taibbi is making (perhaps it is not as airtight as we would like, but it's a start). When money is entrusted to people who are reckless with it, that's wrong - I suppose we can debate the word "villainy" at some length. But the hands-off, "no one is more wrong than anyone else" attitude is profoundly unhelpful, no matter how much the principal actors in this piece would like it to become the prevailing approach.

[Update: I have come across a site on which the whole Taibbi piece has been posted. I don't believe a complete reading changes anything I've already written, but I'll ponder it some more and come back if I have any additional comments to make.]

Used to put the paycheck in the bank, now we get it there

2009-07-13T13:12:00.002-05:00

Kevin Leicht is guest-blogging at Credit Slips this week, and he starts off with an excellent post that discusses the way in which our economy has moved from one in which people consumed based on what they were paid, lowering their risk over time, to one in which consumption is based on debt. He concludes:

More importantly, Henry Ford’s original idea (that workers should be treated well in part because they spend money as a consumer outside the office door) was discarded as a quaint old-fashioned notion. “Let the other guy treat people well, I can’t afford it” seemed to be the individual response of employers around the country and, for a long time anyway, Wall Street loved it. In the business section of the newspaper major downsizing on the front page was accompanied by major jumps in stock prices on the back page.
Over the long term this exposed a classic public goods problem – U.S. consumer purchasing power is something everyone has an interest in but no one has any concrete incentive to contribute to themselves. There are so many alternatives to paying people a decent wage that virtually any alternative is more acceptable than paying people more money or even paying people what they’re worth.
Is this sustainable?? It is difficult to see how. After all, if someone told you that we were going to base the largest developed economy in the world on (a) treating the mass of employees badly, (b) producing many products and services that are consumed offshore and then (c) loaning these same employees money to buy the basic goods and services to keep the entire economy afloat, I would say that someone just walked off a postbellum Southern plantation to sell us on the virtues of sharecropping(!) .
The current economic downturn gives us an opportunity to think hard about this entire I-borrow-because-I-can’t-get-a-decent-wage system. Simply restoring the ability of banks to loan money is not enough. Instead, the actual real earnings-based purchasing power of the American consumer must be restored. This is a much tougher task. Loaning people money is not a perfect substitute for paying them, but it is the easy way out. It produces real differences in political and economic power that can’t be ignored. It also isn’t economically sustainable.

Nothing to add, except to point out that we have structural problems which will prevent the recovery, when it comes, from being a return to what it was before. Robert Reich sees this, in a post from last week:

My prediction, then? Not a V, not a U. But an X. This economy can't get back on track because the track we were on for years -- featuring flat or declining median wages, mounting consumer debt, and widening insecurity, not to mention increasing carbon in the atmosphere -- simply cannot be sustained.
The X marks a brand new track -- a new economy. What will it look like? Nobody knows. All we know is the current economy can't "recover" because it can't go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin.

There are those of us who have been arguing this for some time, that the rules and the landscape have changed, and we had better start preparing ourselves for reduced opportunity and circumstances. We could do that through intelligent planning, through a recognition that the old rules don't apply any more, but I'm pretty sure we won't do that.

Gettin' all renegade-y

2009-07-10T20:26:00.002-05:00

A lot of people have already commented on TIME's cover story on Sarah Palin, and I'm certainly not going to go through the whole thing - it's all I could do to read it. It's a curious piece, one almost obsessed with creating an image of Palin as quintessentially Alaskan, and thus foreign to normal understanding. There is some talk of her negatives, but that all seems to get washed away in a tide of admiration, forced, I suppose, by the attempt to explain her appeal. But there is, along with a Web sidebar titled "See the fashion looks of Sarah Palin," which probably never accompanied a TIME story about Eisenhower, this:

Whether that is true or not, Palin's unconventional step speaks to an ingrained frontier skepticism of authority — even one's own. Given the plunging credibility of institutions and élites, that's a mood that fits the Palin brand. Résumés ain't what they used to be; they count only with people who trust credentials — a dwindling breed. The mathematics Ph.D.s who dreamed up economy-killing derivatives have pretty impressive résumés. The leaders of congressional committees and executive agencies have decades of experience — at wallowing in red ink, mismanaging economic bubbles and botching covert intelligence.
If ever there has been a time to gamble on a flimsy résumé, ever a time for the ultimate outsider, this might be it.

This is simply claptrap, not illuminating at all. That we should believe that Palin stepped away from the governorship because of her "ingrained frontier skepticism" of her own authority is almost insulting. It suggests that she doesn't trust herself to run something, and, while I think a little self-doubt is a good thing, this is not exactly the quality we look for in a president.

We still trust credentials a lot, as we don't ask our barber to take a little off the top and fill a bicuspid while he's at it. We might be starting to understand that credentials don't guarantee wisdom, but I don't think that credentialism is on the wane at all. If anything, it's become more prevalent as we tell our kids that the only road to success leads through college.

What's interesting is the title used on the cover of the print edition: The Renegade. I believe we're supposed to admire Palin for taking "the road less traveled." And this seems strangely reminiscent of another politician, one who bucked the system, voted his conscience, a press-deemed "maverick."

And as I wrote about John McCain close to a year ago:

Is it possible that John McCain, the original maverick, thinks that "maverick" implies random, unexplainable decisions, rather than adhering to a set of principles that are sometimes at odds with a party's orthodoxy? Because I think the people think that McCain is the latter, and I'm beginning to suspect that McCain is the former.

As entertaining as the press may find randomness, it seems a very poor quality to seek out in our leaders. A little unpredictability may be admirable; running amok rarely is.

Hello? Is anyone there?

2009-07-10T17:23:00.002-05:00

Greg Glockner, at the Dwaffler Decidedly blog, tells A tale of two outsourcings. The first is actually a counter-outsourcing story, as Boeing plans to buy one of their key suppliers for the "revolutionary" 787 airplane, running directly counter to their master strategy of strewing bits of manufacturing across the world and assembling the results in magically short time. This hasn't gone at all well, as I wrote about a year and a half ago:

This, of course, is the logical consequence of modern-day management thinking. You out-manage your risk by transferring it to others, relying on contract compliance to take the place of responsibility. You conceptualize or ideate, not even descending to the point of high-level design, rather shifting that to the "experts" who know better than you what you need.

But you can't take a contract and glue it into a working airplane. Perhaps Boeing will get some money back, eventually, through negotiation or lawsuit. Will they ever make up the deficit to Airbus in market or mind share? I doubt it.

Apparently the newest solution is to bring the suppliers into the company, so the mystical world of contract compliance will give way to the old-fangled solution of actually managing something.

Greg's second example comes from the world of telecommunications: Sprint is going to outsource their network operations to Ericsson:

So what will be left of Sprint? They don't manufacture the equipment. They won't operate the network. According to Matt Hamblen of Computerworld, "Ericsson will manage day-to-day operations of the Sprint CDMA, iDen and wired networks, while Sprint retains control and customer care under the deal."

Customer care? Excuse me while I laugh. Someone I know endured atrocious customer experiences from Sprint. It took months of letters - the old-fashioned, paper kind - to resolve a simple billing issue. Customer service is not a strength of the mobile phone industry.

Oh, and isn't customer care just another job that will be outsourced someday?

The answer to the last question is, of course, yes. Which will leave Sprint with control and...nothing else.

I may well have mentioned this before (my great ideas get lost in the swirling mists of time), but I think we're approaching the logical consequence of this thinking. Eventually, there will be a Fortune 500 company that will have about 12 employees. There will be a CEO, a few people who stay up all night to talk to the various suppliers around the world, and some flunkies who will make lunch and airplane reservations for the CEO. That'll be it.

The value of the company will not come from any value-added work they'll be providing, because there won't be any. The company won't make anything, won't sell anything, won't ship anything. It will simply be a holding company for a collection of brands, with all the work done by others as cheaply as possible. The CEO will negotiate contracts (at the highest level), check with the lawyers to ensure contracts are being complied with, give presentations to analysts, and do as much media as possible to "build the brand."

At that point, maybe we'll all finally understand that it is not a function of American business to employ Americans, and we'll stop accepting some pretty weak arguments that we have to do more for these companies. Then, corporate welfare will stop, lobbyists will have less influence on politics, and we'll be able to work for the welfare of the people.

Ha, ha, I made myself laugh.

An entertainer in the Capitol? No way

2009-07-04T23:10:00.002-05:00

Republicans seem to be upset that former Saturday Night Live writer and occasional performer Al Franken has finally been certified as the winner of a Senate seat from Minnesota. He "stole the election," he's "unqualified," and so forth.

What could they ever think of a president who had appeared in movies like:

Cowboy from Brooklyn
Girls on Probation
Naughty but Nice
Alice in Movieland
Juke Girl
The Rear Gunner
Stallion Road
She's Working Her Way Through College

I mean, come on, do we want some porn actor in Washington, in the seat of power?

Of course, these are all movies from the oeuvre of Republican saint Ronald Reagan. Maybe Stuart Smalley isn't looking quite as bad now.

Palin was different

2009-07-03T22:28:00.002-05:00

Ezra Klein, in the wake of Sarah Palin's surprise resignation, quotes some research by a Penn graduate student that indicates that Palin had an unprecedented effect on the presidential race, completely out of line with that of any other candidate for the second spot:

Judgment on her was incontestably important. The correspondence between dynamics in her ratings and dynamics in McCain vote intentions is astonishingly exact. Her marginal impact in vote-intention estimation models dwarfs that for any Vice-Presidential we are aware of, certainly for her predecessors in 2000 and 2004. And the range traversed by her favorability ratings is truly impressive. But why? We are unaware of any theory that opens the door to serious impact from the bottom half of the ticket.

I don't think this is particularly surprising at all. Most veep candidates come from a pretty narrow range of candidates, the experienced governor/senator/representative community. They usually have some kind of track record, might have been contenders for the presidency themselves, and are genially competent (Dan Quayle notwithstanding).

This does not describe Sarah Palin at all. She was and is a woman of modest accomplishments, an appalling lack of qualification for a presidency that she very well might have had to assume, and an ideologue whose beliefs were entirely out of step with the mood of the nation.

In other words, we don't need a theory to wrap around the Palin effect, we need to look at Palin herself - and that's just what the nation did, and they decided that they didn't want her a heartbeat away from the Oval Office, and McCain was reckless in picking her. If there's anything to be learned here, it is that the "bold" pick will be taken negatively if it represents an unacceptable amount of risk. We might conclude that Oprah is unlikely to be tabbed any time soon.

Post-nation nation

2009-06-17T20:16:00.001-05:00

Carol A. Burch at Decidedly (a week old; I'm still working on my new blogging schedule):

Success of one's people in those countries [Russia and Asia] is honored, appreciated and focused upon by each individual far more than in the United States, where emphasis is on the individual and individual achievement.

We can see the effect of individual vs. collective consciousness as we look at the shifts in centers of economic and political power in the world today.

Corporations and individuals in the U.S., as is their right in a free society, made decisions that inured to their individual benefit. Production and manufacturing (and the economic and political strengths that are associated with those endeavors) went elsewhere. Certainly, the image of a collective exodus of almost the entire manufacturing base from the nation was probably not part of each individual decision. Yet, cumulatively, over time, this happened. This is the effect of the lack of a collective consciousness. Now, with diminished economic health and clout to influence the world's direction, we, as a country, are less formidable, and are viewed primarily as a voracious consumer society.

Economic strength now centers in the countries that took on the manufacturing. Of note is the fact that these countries operate culturally with a high level of collective consciousness,with a collectively understood and embraced long-term vision of a future in which they will continue to dominate. It is unlikely that the mistakes we made will be repeated there.

Very true. We derided the old Five-Year-Plans of the Soviet Union and China, confusing execution with concept. Then we saw India and China actually plan for the future, focusing resources on growth fields like engineering and computer science. (Keep in mind this didn't constitute a huge risk, these were already well-established as fields of the future by the time these countries got around to supporting them.)

At the same time, the U.S. decided that laissez faire worked so well for economics that it could be applied to anything that even had the slightest economic component. CSI is a hit TV show, of course we'll see students flock to forensics programs despite the reality that budgets will never go up as much as enrollment did. I wonder what all those budding Gil Grissoms are doing now.

One thing that interests me is how this idea was sold to the American people, not that they needed much convincing. There were two large ideas, I think, with which we deluded ourselves that "collective consciousness" was something that could be transcended.

The first was what I call the "lottery mentality," with an added shot of altruism. If we allow everyone to pursue their own aims, each person will maximize their potential, get rich, and then be able to do more for the collective than they ever could just going out and living their lives. What lottery winner fails to say that he'll do more for his church, or for his children, or for his community? We created a virtue out of going out and scrabbling for whatever bucks were there, because, sometime in the future, more will be created for the larger group.

Much of this, of course, was simply mindless claptrap. A lottery is a massive tax and redistribution scheme, but it's hard to see how society profits from it. Much of business works the same way - some aspects of what is done is truly innovative, and betters the lot of humanity, but a great deal more is a way to take money from someone and give it to someone else. [I'm not talking here about the normal business of business, in which customers pay less for something than it's worth to them, but some of the less publicized activities, such as lobbyist-induced tax breaks and offshoring, things for which we never quite figure out the true cost.]

The second "big idea" was one that didn't require us to give up our sense of the collective good, but to expand it. This was what I refer to as the "post-nation" concept, the idea that we uniquely had a responsibility to the world, that even if some of our practices were negative in effect to the U.S., that they benefited the world far more.

We see this in some of the commentary the past few days about Iran, from those thinkers who believe we "must" get involved. That we would undoubtedly pay a price in lives and money to install a president who doesn't have all that much power who might be little better than the one they have is of little consequence; we must interfere because that's what America does.

We also see it in discussions of offshoring in which we blow by the very real negative effects on American workers and move to wondrous tales of how our work is helping the downtrodden of China and India. Whatever we used to call national interest gets subsumed to a utopian ideal of effortless foreign aid.

I guess my point is that the United States has never really lost its sense of the collective unconsciousness, we've just allowed it to be perverted from the straightforward sense of nation that we used to have to some pretty indirect, even strange, concepts. It's not that we've lost sight of the greater good, just that we've allowed it to be twisted into ideas that are so obscure that the true costs and benefits have been lost.

Perhaps these new ideas are, ultimately, better for the world as a whole and we should pursue them, but I don't believe the case is so clear-cut that we shouldn't at least be discussing them. And I'm sure it's just coincidence that they are pushed most ardently by the folks who have the most to gain from their acceptance.

Ups and downs

2009-06-11T14:08:00.002-05:00

Sullivan points out that poor Paul Krugman can't seem to make up his mind as to whether the economy is getting better or worse:

Is it just me, or has the economic news started to darken again?

Sullivan then prints a rejoinder from Free Exchange:

The first and most obvious point to make is that news can surprise on the downside while still trending toward improvement if expectations have improved more rapidly than the data.

Which doesn't entirely eliminate the other possibility, that the second and, at least to me, equally obvious point to make is that news can surprise on the upside while still trending toward decline if irrational hope has improved more rapidly than the data.

I'm back

2009-06-11T14:03:00.002-05:00

It's been four weeks, I'm feeling somewhat refreshed, so I'm going to do some blogging again...not every day, probably, but once in a while. I've enjoyed the time away, I don't expect the blog to ever be as much of my personal mix as it has been, but I'll weigh in when something catches my eye. Thanks to those who missed me.

500!!

2009-05-14T23:50:00.000-05:00

Back on Jan. 1, 2008, I started writing daily posts for this blog. Other than my vacation, I've stuck to that, writing at least once each day, amassing a total of somewhere north of 700 posts in those 500 days. I've tried to come up with novel takes on things each day, not always succeeding, but I've never found the time or the interest in doing "pointing posts," those "Sullivan makes a good point here: <quote>" items with no commentary. And for some time, I've been looking forward to this day, this May 14, when I would hit 500...and now I have.

Let me offer a rough, imprecise taxonomy for blogs. One can posit that blogs fall into four categories:

1) Blogs for money
There are people who blog for a living. Not many, perhaps, and many of these people are affiliated with a larger group or media outlet, but their primary job is blogging.

2) Blogs for some money
2-bloggers blog as part of earning their keep, and a large number of the most famous bloggers fall into this group. I have no idea how important Andrew Sullivan's blog is to his continued employment at The Atlantic; he still writes articles for the print magazine. I'd imagine that the blog has become increasingly important, so let's guess that Sullivan is a 1.2- or 1.3-blogger.

Yglesias, on the other hand, seems to be more of a pure blogger. He works for the Center for American Progress, a kind of think tank, and I'm not really sure what he does for them other than blog. I'd guess he's around a 1.1-blogger.

Folks who do corporate blogs fall into this category. I've spoken before of my admiration for Decidedly, a blog from a company called Dwaffler, that stays largely away from advocacy of their products (OK, they slip it in once in a while) in favor of cogent discussion of issues (primarily decision-making, which is the purpose of their product...but, hey, it's not put right in our faces). I've also seen some simply awful corporate blogs, ones that exist solely as marketing adjuncts with little insight or point of view.

But corporate bloggers generally do not blog to eat. Their primary job is CEO or COO or flack, and the blog is something extra they do, perhaps in an attempt to put a human face on a company, to relate to existing and potential customers. These are 2-bloggers.

3) Blogs for influence
We now fall into the categories of the unpaid. If you blog without remuneration, but hope that you have an effect on people's thinking, you're a 3-blogger. The vast majority of blogs fall into this category; most people aren't selling anything, not even indirectly, they're just offering ideas about subjects they know or care about. The audience can be large or small, devoted or casual, but the blogger still needs to feel that the words are being read and thought about.

4) Blogs for personal satisfaction
4-bloggers are the idealists, the people who put their thoughts out without consideration of an audience. They "have to" write, perhaps to exorcise demons or work through issues, but they do so without regard to whether anyone is listening.

However, 4-bloggers are also the most superfluous, because they have the option of writing their thoughts in a diary (sorry, guys, journal) or into a Microsoft Word file. If they truly don't care what people think, if their offerings are just for themselves, there's no reason to put their ideas out on the most public forum ever invented. For that reason, I don't believe there are many pure 4-bloggers - everyone ultimately wants their words to matter, if only a little, so a goodly number of bloggers are 3.8- or 3.7- or 3.3-bloggers.

Having created this hierarchy, I must, unsurprisingly, try to see where I fit into it. There's a purity to the idea that I write because I must, because I've just got to, got to, let my feelings OUT!, that I'm a 4.

But I'd be lying to myself. I may have started this blog with low expectations, but humans are built to dream. At the beginning, I might have said "4," that Androcass was going to be a device to let me work out my feelings, to serve as an outlet for frustrations at times (by the way, that hasn't worked for me at all - I haven't found that I naturally feel better after expressing myself, but maybe that's just me). But, not so deep down, I certainly hoped that some small audience would enjoy my writing and be engaged with it, that it would inform or provoke, and that (in the best Web 2.0 way) feedback loops would emerge and I would be enriched by the involvement of others.

Furthermore, I've had a chance to be embedded in the sphere of commentary in a way I never really was before. Previously, I read newspaper and magazine opinion pieces, got into a few blogs, but I never engaged with them in the way that I've had to over the past 16+ months. In part, it was to find fodder for my own efforts, but, whatever the reason, I've spent a lot of time in the 1 to 2-blog world (and the 1-commentators who don't blog, who just bloviate away in publications or on television).

And I haven't ended up being impressed. There are a lot of people making six figures who recite party talking points, or mislead to make a point, or lag reality by years only to present it as something they discovered (offshoring is happening, really, Tom?). I'm not so arrogant as to believe I rank with these "seasoned professionals," but I'd put my thinking track record up with many of them. It's not so much me, anyway; I read quite a few bloggers who write well and passionately, out of real knowledge, who put the windbags to shame, and none of them will ever achieve a fraction of the fame, the money, or the influence.

So what I was shooting for hasn't really happened. I have a few regular readers, some of whom comment via posting comments or direct e-mails, but (according to my readership stats) many people visit, sample what's here, then move off, never to be seen again. However the marketplace of ideas works, what I'm peddling isn't selling.

I'll grant that I haven't done the things that "drive traffic." I haven't done much of the, wait around for Drum to write something, write a real quick blog post, then puff it up in Drum's comments. There are other tips and tricks to make one's blog a go-to spot, and I haven't found the time to implement those (and I find some of them kind of unseemly).

I might fare better if I homed in on one or two topics of interest. Some specialized blogs become quite successful, rising past the 3 level and on to the more lucrative positions. I have chosen a certain eclecticity, in that I have things to say in more than area; this blog has always been more a reflection of me than of a specific point of view, anyway.

I've had comments about my tone, but I haven't altered anything in response. Here's why: I've been told that I'm overly negative, too cynical, unduly harsh, that this attitude turns people away. That may be true, but I read plenty of blogs that seem far more down that road than mine, so I don't really see it.

What I have tried to do is ask questions, present alternatives. I think it's important to understand the difference between "positive-sum" and "win-win," and I am, possibly, withering in my opinion of people who understand the difference but fail to point it out because it might undercut their (political) point. I think it's important not to align one's self with either Bill Gates or Lou Dobbs on visa issues, but to ask the questions which would allow us to make decisions and formulate policy; if that's deemed by others as being "harsh" toward anyone at the poles, then I guess I'm harsh.

But the clincher is, I've also read other comments that suggest I
should inject more passion, put more of my outrage into what I write.
I can't square that circle; maybe there's some kind of skill that
allows a writer to be passionate and advocating, but not critical - I don't have that skill, I guess.

The upshot of this is that, as of today, Androcass is sliding into semi-retirement. I've grown tired of working pretty hard at something that actually seems to be moving down the hierarchy, that is of its own weight approaching 4-hood. I have no doubts I've had some good ideas, and some that I've found novel ways of presenting - I'm happy with a higher percentage of my posts than I would ever have anticipated when I began this.

For some time, though, it's been clear to me that the cost-benefit is going the wrong way. I'm not accountable to a little mini-community; heck, my most ardent reader and contributor has disappeared off the face of the earth (something which served to support my already-made decision). There are other things I want and need to do, hours that are better spent in other pursuits. Over the past 500 days, this blog has become far too central to my life, and I need it to stop.

Don't take that to mean that I'm going to pull a vanishing act. I like this Androcass persona, and the very act of thinking and writing has allowed me to polish and refine my thinking on all sorts of topics. If I'm in your feed reader, please leave me there, because I'll be back from time to time, as passion demands (it's possible I'll feel compelled to post something tomorrow, though it would ruin the nice symmetry of "500"). I have a bunch of topics I can't quite get myself to part with (any day now, I expect to finish my classic post titled, "Korea - Should Truman really be getting involved?).

But I may not post tomorrow, or over the weekend, or the rest of the month, I just don't know. Maybe I'll pour my energy into bike riding, or music, or doing things around the house (do I hear the wife cheering?). It makes little sense to do so to a blog that is moving down the hierarchy, that will never bring anything other than a mix of satisfaction and frustration.

To those of you, whether commenters or not, who have been regular readers, I thank you. Whether active or passive contributors, you have enriched my life, and I am most appreciative. Catch y'all down the road somewhere.

Next top model

2009-05-14T16:38:00.002-05:00

Why do economists all end up advocating the same positions, free trade, free markets, and all the other sorts of things that have been shown to have flaws that stunned those very economists when they were confronted with a real economy?

John Kay discusses the limitations of economic models here:

Since the 1970s economists have been engaged in a grand project. The project’s objective is that macroeconomics should have microeconomic foundations. In everyday language, that means that what we say about big policy issues – growth and inflation, boom and bust – should be grounded in the study of individual behaviour. Put like that, the project sounds obviously desirable, even essential. I confess I was long seduced by it.
Most economists would claim that the project has been a success. But the criteria are the self-referential criteria of modern academic life. The greatest compliment you can now pay an economic argument is to say it is rigorous. Today’s macroeconomic models are certainly that.
But policymakers and the public at large are, rightly, not interested in whether models are rigorous. They are interested in whether the models are useful and illuminating – and these rigorous models do not score well here.

Mark Thoma quotes Barry Eichengreen:

What got us into this mess, in other words, were not the limits of scholarly imagination. It was not the failure or inability of economists to model conflicts of interest, incentives to take excessive risk and information problems that can give rise to bubbles, panics and crises. It was not that economists failed to recognize the role of social and psychological factors in decision making or that they lacked the tools needed to draw out the implications. In fact, these observations and others had been imaginatively elaborated by contributors to the literatures on agency theory, information economics and behavioral finance. Rather, the problem was a partial and blinkered reading of that literature. The consumers of economic theory, not surprisingly, tended to pick and choose those elements of that rich literature that best supported their self-serving actions. ... It is in this light that we must understand how it was that the vast majority of the economics profession remained so blissfully silent and indeed unaware of the risk of financial disaster. ...

And from Thoma himself:

There are two uses of economic and econometric models, one is to use the models to understand how the world works, the other is to use the models to forecast. And while, of course, one of the goals of understanding the economy is to be able to predict it, it is simply not something most academic economists do (and the best models for forecasting are not necessarily the same as the best models for learning about how the economy works). Business economists do lots of prediction and forecasting, but academic economists? Not so much. We come along long after events have occurred - e.g. we're still analyzing the Great Depression to some extent - and try to use those events (as well as data from normal times) to try to understand how the economic world works, how policy can improve performance, etc.

[The preceding doesn't explain why academic economists take checks to do just the sorts of things Thoma says they can't do well - I'm sure there's a model to explain that.]

In a nutshell, here's the problem. Economists model what is most tractable to model, and a large economy with small players who can as a group be predicted is reasonably easy to model. It's not perfect; occasionally real people do crazy things like bid up the price of real estate beyond all historical precedent or reason, and as we saw, the models weren't able to cope with the implications of that.

If we look at the assumptions that undergird economic models, we have a roster of somewhat abstracted but perfectly logical ideas, each of which is imperfect if you want to describe real reality, but seem close enough. And, for the middle ground that is usually inhabited by the real world, they seem to work well enough.

Then along comes something extreme, something unprecedented, and the models fall apart - they simply weren't built to take into account things that have never before happened. That the extreme events are well within possibility is something the model builders prefer to ignore.

But there's something else, a feedback effect that is less noted. Once you have built your model, staked your professional flag on it, you're stuck with it and the vision of the world it encompasses. If you model free trade, and it demonstrates that free trade offers magical value-added effects, you then have to buy into a world in which free trade is always good, always right. (That's why even reputable economists refuse to refute a trade flack who makes profoundly misleading statements.)

And with that belief comes a series of subsequent conditioning. Any basic model of free trade only shows that there are gains to the two nations engaging in that trade. It doesn't demonstrate anything at all about the internal distribution of those gains, or some of the obnoxious utility effects. But your whole academic life now depends on free trade, so you have to ignore those things that are unpopular or inconvenient (and, if pressed, you fall back on the "my model doesn't include political effects" or some such hedge).

The real mistake is that we listen to these ivory tower dwellers, these folks who make amazing math while forgetting that it's supposed to model something the rest of us call reality. We shouldn't be amazed that the models failed us in the current crisis; we should be amazed when they tell us anything useful at all.

[For a somewhat more technical explication of models and assumptions, see this from Willem Buiter.]

The free world

2009-05-14T15:51:00.002-05:00

This is a favorite topic of mine, the idea that seems prevalent that there is a whole lot of free stuff that isn't being captured in GDP, but has real value, and we should count it to see how great the virtual world is, and so forth. I touched on this last week in a post where I talked about Yglesias's idea that low-selling books should be virtually given away rather than sold for big amounts of money.

The larger issue is expressed well in an older post by Yglesias:

One noteworthy trend we’re experiencing of late is the rising prominence of social production—the creation of valuable information goods on a non-commercial basis. Probably the clearest example is Wikipedia, a hugely useful service that doesn’t produce any economic “value” in GDP terms. Of course valuable activity that doesn’t register in GDP is nothing new—just ask moms spending time taking care of their kids. But the transition to the digital economy is changing things in important ways. In particular, it’s simultaneously making it cheaper than ever to produce and distribute information goods, but harder than ever to capture revenues from information goods.

This is true, but Matt sees this in extremely positive terms, particularly with the idea that retirees will embrace the free economy:

In the future, it might be common for grandpa to spend a couple of hours a day tinkering with open source software. Or maybe he’ll make it his business to attend city council meetings and write on the web about them. People will write whole books and distribute them for free to people’s kindles. A lot of this material may have a “crank” quality to it. But much of it will be genuinely well-informed, and reflect a lifetime of knowledge. Already, I can see in DC’s local blogosphere that there’s a fine line between an annoying busybody and a vital source of information. As the cohort of people with the most time on their hands to just pursue their interests becomes more digitally literate, I think we’ll probably see an explosion of non-commercial activity in a variety of fields. And one important source of success for commercial enterprises will be finding ways to hybridize commercial and non-commercial elements of the production/distribution process.

He kind of limps to the close (endings are tough for me too):

One important implication of this is that we’re almost certainly shifting from a world in which a large and important set of activities aren’t captured in the national economic statistics to a world in which a large, important, and growing set of such activities isn’t captured in the conventional statistics.

I think this is all way too positive. Ultimately, an economy is about doing something or making something that can be exchanged (generally using the medium of money) for something of value that you want. All this free activity is cool and neat, but a whole lot of it comes from a community that is fortunate to have the leisure time to do things that happen to be of interest to others.

Wikipedia is useful (don't tell John McIntyre I said so), but few are lining up to pay for it. There is a hobby quality to it, and to a lot of what passes for so-called "social production." The Internet is great in that a lot of things that people might have done for fun can now be made useful for other people, but we shouldn't confuse that with the workings of a real economy. Some of the most successful projects of the past few years have uncertain realities in a financial sense, and rely on the contributions of people who choose to work on them...and can choose not to work on them.

It's nice to think that a whole army of grandpas are going to go out and donate their time to things that profit a lot of people who are better off than they are, but that's not a sustainable resource that anyone can count on. There's a reason that we have newspapers that assign people to cover city council meetings and write about them and get paid for them - it's called work. I don't think the populace should have to work their civic knowledge around Granddad's annual trip to Florida.

The light at the end of the tunnel...

2009-05-14T15:16:00.007-05:00

Time doesn't permit me to develop this theme fully today, but we need to begin to think about what will happen after this recession/depression is over. There is a tacit assumption that the only realistic options are V-shaped, U-shaped, or W-shaped, with only a very few even contemplating the possibility that L-shaped may be far more likely.

We have just lived through a series of booms that wildly inflated our expectations of what we should expect from our economy. And it's possible that there is a "true" level to which we will revert, and it may not be the big-growth model that we assume. It could well be that the lower leg of the "L" is where we should have been all along, that the inexorable nature of the logisitic curve has finally caught up with us, and that we will sink into a prolonged low-growth mode.

What does a computer programmer cost? $50-60K, because that's what we're used to paying? Well, no, they're goods like anything else, so the real answer is, whatever the market demands. Increasingly, we can get perfectly serviceable programmers for $10-15K, so that de facto becomes the cost. To assume that the "American premium" will somehow maintain that big a differential is darned naive. (Substitute "manufacturing worker" or any other movable profession and the argument is the same.)

But, if we pay our computer programmers less (or employ fewer of them), there will be less money floating around for purchases of consumer goods and the like. One could argue (and many have) that displaced programmers will move on to work that is at least as lucrative, but that seems increasingly unlikely given the kinds of jobs that look like growth professions (solar panel installers? wind turbine makers? home health care providers? None of these seem like the stuff of upper middle class aspirations, no matter how necessary they are).

It is possible that Americans are simply overpaid with respect to the rest of the world, that our wages and prices are simply too high in a globalized competitive world. That may be due to historical precedent that is no longer relevant, but it's hard to argue that it's sustainable.

And, in a global sense, there's probably nothing wrong with that. The United States is likely due for a readjustment in light of world market conditions; maintaining the status quo is unwieldy and, quite possibly, unfair and exploitative.

But it does imply a change. Many want to think that we'll just move over and share the top step with billions of others, but that probably can't happen in a world of finite resources. The rise of others will mean some fall for us. It doesn't have to be catastrophic, but it will require some rethinking.

This might seem deflationary, if wages and then prices fall to something closer to world-acceptable levels. Every economist will say that that would be an utter disaster, that it would change our financial landscape in all kinds of unpleasant ways. And that may be right, leaving us only two options. We could inflate our currency; nominal wages and prices would stay roughly where they "should" be, but there would be all sorts of consequences from that, most unpleasant. Or we could see a massive fall in the dollar, as we equalize our wages and prices through foreign exchange. We would see a huge increase in exports, and some industries would find the U.S. labor market more attractive. Since the dollar is the world's reserve currency, there would also be some mighty nasty results from this.

There are a number of mechanisms which might counter this trend somewhat, but I don't see them being sufficient to stem off the larger problems that come from equalization. I hope so, of course, but I can't be too optimistic.

Tim Duy, via Mark Thoma, has an essay that seems slightly more positive, but leaves us, in the end, with at least some version of what I've outlined:

Bottom Line: The economy looks to be turning a corner relative to the downward cyclical force of last year. But this is only a partial victory, as the factors that that started us down this path - namely, a debt-supported consumer spending dynamic - remain in play, and will likely remain in play for years, arguing for a long period of slow growth, punctuated by short-lived bursts of positive data. In such an environment, and considering the importance of government support to sustain financial stability, the odds favor continued policy easing. Those looking for a more positive scenario are pinning their hopes on either an unlikely rapid return to past patterns of consumer behavior, an unlikely rapid evolution in patterns of economic activity that are not consumer dependent, or a decoupling of emerging market economic activity from the US (which could pose a different set of policy challenges).

Brad DeLong believes that we will be sustained by something that has blinded us, so far, to the extent of our problem, the handcuffed dollar-holding foreign governments:

The next generation, therefore, will see a very interesting dance. Call it reverse finance colonialism? Call it something. Foreign governments will be seeking high-return assets for their enormous portfolios without selling dollar-denominated wealth. Consequently, they will have to focus on U.S. corporate securities. With such large-scale investment comes ownership and with ownership comes control. No government will want to play the role of passive investor, with the attendant risk that its partners will tunnel the wealth out from under its grasp, leaving an empty corporate shell.

So what is likely to come to pass is not the socialism feared by the Right—at least not ownership of the means of production by the U.S. government. Instead, it will be ownership of U.S. companies by foreign governments—and on a scale we’ve never before seen.
Can anything stop this progression? Yes. A collapse of world economic growth—which would create a very dangerous and angry world. Or a sudden return to thrift on the part of American consumers—so that we can finance the industrialization of the rest of the world rather than having them finance our consumption. But neither is likely.

That will leave Americans confronting a new and unprecedented phase of globalization. Government agencies in Beijing, Dubai, and Brazilia will have a large financial interest in everything from the health-care policies of American factories to the compensation packages of corporate executives and the apportionment of seats on corporate boards. And their interest will matter: They will, after all, be the people who have the money—just as Americans were the people who had the money in the years after World War II.

So we'll be able to sustain our lifestyle to some extent, but only at the price of becoming financial captives to the countries that can prop up their bad investments only by throwing more money into the pot. I'm not sure DeLong follows his own thinking quite far enough, but it's difficult to see a way in which scenario ends well for anyone.

Norms

2009-05-14T15:16:00.006-05:00

Drum mentions one of the real unmentioned issues in testing:

Now, the whole point of high-stakes testing is to provide us with hard, quantitative assessments of how our kids are doing. You simply can't be a believer in this stuff and not care about whether the tests are meaningful from place to place and year to year. And yet, as Bob says, this issue gets only an occasional mention each year before being quickly dropped down the memory hole until another year's test results come out and someone happens to casually mention it again. It's almost enough to make you think that a lot of these folks are more interested in using tests as a political cudgel than they are in whether kids are actually learning something. Almost.

This is such a huge issue. If you look into the literature on the subject, you'll see a lot about "objective norming" and the like. It all sounds very statistical and scientific, and it certainly generates no end of PhDs in education.

But creating tests is very hard, even in isolation. When you freight them with conveying more information than they can easily, such as allowing comparisons across space and time, you create a near-insuperable problem. Think about it: How would you create two tests in anything that are sufficiently different so as not to allow cheating, but similar enough that two different groups of students will score proportional to their "true" levels of ability?

Even if you could create tests far better than seems possible, how do you know the populations are really the same? There is an assumption that a 2008 group of 7th-graders is roughly the same as a 2009 group, but you don't know that, and you have no way to tell whether an increase in scores comes from: 1) A group that happens to be smarter; 2) A test that turned out to be easier; or 3) An actual improvement in knowledge that comes from education. (Again, the testing bodies will assert that they do have ways to correct for the first two, but I have little confidence in the fourth-decimal point precision that they assert.)

Yet, every year, the results roll out, and they're used to threaten or close schools, discipline teachers and administrators, allocate funds, and as a symbol of American pride or shame. That's putting a whole lot of weight on something that has inherent statistical problems. It's a real shame we're so uncomfortable with plus/minus, that we demand a false accuracy that alters lives.

Take the next step

2009-05-14T15:15:00.003-05:00

Yglesias, a couple of weeks ago, on national identification of companies:

He [Tyler Cowen] points out that not only do Toyota and Honda manufacture cars in the United States, but these are publicly traded firms. Americans can—and do—own shares in both firms, and could own more if we wanted to. Conversely, an “American” company like Apple actually does very little production in the United States. Nestle is “Swiss” but it’s a giant multinational corporation and Switzerland is a small country so the vast majority of its operations are elsewhere.

So let's follow the logic a little further and ask ourselves why we use taxpayer money to prop up one set of multinationals at the expense of another set, and why the economic talking heads don't leap to calling that what it is...protectionism.

If we put a tariff on every foreign car of $1000, every reputable pundit would yell Smoot-Hawley (except for Congresswoman Bachmann, who would yell Hoot-Smalley) and decry this action as Hoover-style Depression-inducing.

Let us, however, give $1000 per car to an auto company that happens to house its executives in and around the Detroit area, and that's called principled support of a major American industry. I really don't get the distinction.

Update: for a somewhat economisty view of this which makes sense, see Claus Vistesen by way of Edward Hugh.

Walking the middle

2009-05-13T14:37:00.002-05:00

We're having a discussion on yesterday's post about whether paying for labor is a plausible alternative to whining about it and importing people. My conclusion was that we should be rational about it, explore all options, instead of leaping to expedience. North Dakota does have other ways of getting doctors than to eliminate H-1B quotas. Rational examination might still lead us to the importation of doctors, but it might not; the challenge commands us to think more broadly than the first (and possibly cheapest) solution that comes to mind.

But I don't want to rehash that here. What I want to talk about is the tendency we all have to over-contextualize arguments people make, to focus on the back story instead of what's really being said. I've had comments on this blog (and in private e-mails) that deal, not with what I'm writing, but with the motivations of those who provide the evidence. There is enough validity to that view to make it worth considering, but it is not sufficient to allow the arguer to ignore the actual argument.

I have often cited sources that come from people who are clearly more anti-immigration than I am. I do that because the conventional media seems to ignore a lot of the evidence that conflicts with the common wisdom that Americans aren't good enough to fill certain jobs (the PR-fueled, CEO position). And if you read what I write, really read it, you will see that I'm taking a more nuanced view than, simply, we must close our borders. To lump me in with the people who do believe that is, while convenient for you who want to disagree with me, spurious and insulting.

Let's take the H-1B question, at least one aspect of it. There are people who believe that the number should be 0, and their views have become marginalized. There are other people whose self-interest drives them to believe that the number should be essentially infinite. And there is the actual number, based on historical accident more than science, of 65,000.

Where I have tried to walk is the uneasy middle, because I really want to understand what the "right" number is. Unfortunately, that stance means that I have to disagree somewhat with both sides, that I don't have the false comfort of saying, on the one hand, that abuses in the program imply that it should be abolished, or, on the other hand, that there's a (rather bogus) study that "proves" that H-1B applications create jobs. Moving in either direction would, I assure you, be far easier; I could jump in bed with one side or the other and sway along with one mantra ("H-1Bs are bad, bad, bad") or the other ("H-1Bs are good, good, good").

I'm not contending that I am unaffected by my own experience, that's asking a bit much. But I do believe I can remove myself from the midst of whatever biases I have, at least enough to ask the right questions. For example, I've worked with H-1Bs who had no business programming a computer, and certainly should not have been allowed in a position where they could undercut native talent. That's happened enough times to make me think that, more than perhaps, the quota is too high.

But that's a first-cut reaction, and I like to dig a bit deeper. So I ask myself how we actually come up with the people who receive these visas. And I look at the conventional media, which pretty much accepts the idea that H-1Bs go only to the "best and the brightest," but is weak on details. It turns out that there is no great selectivity there, that we're not necessarily skimming the cream from other countries. Additionally, the biggest H-1B users are Indian offshoring companies, who have their own motivations for bringing in their countrymen for a few years, then sending them back to the subcontinent.

If we really take the time to look at this, or any other, issue, we find that there is a complexity that doesn't quite line up with political simplicity, that, if we're trying to find truth, we can't just line up with Bill Gates or Lou Dobbs. Each may have contributions to make to the dialogue, but neither seems to capture the full difficulty of the problems inherent in immigration policy - each is quite selective in their choice of facts.

But each of them may have facts to contribute to the discussion, and it behooves the inquirer to look at both sides and try to determine what truth can be found. Sadly, our news providers seem incapable, most of the time, to appreciate this. It's easier to brand Gates an eminent statesman and assume that his wealth gives him special insight into topics that are well beyond his ken (but within his sphere of self-interest). In this way, extremes are relabeled "conventional wisdom," and any dissent becomes relegated to the fringes; you're either with Bill Gates or you're part of the radical nutjob Dobbs contingent.

That may make the job of commenting on things a lot easier, but it's also colossally lazy. Some of the people who disagree with me are guilty of that (and I am, at times, just as guilty). It's hard to question assumptions, to look skeptically at what both sides are saying, especially when you can sort people into two classes ("agree with me, disagree with me").

I'm pretty sure that the 65,000 number for H-1Bs is "wrong," because it was not determined based on much of anything that I can tell, and because it doesn't change in response to any externalities. Is it too low, or too high? Well, that depends on what our goal for the program is, and that's not something that either side spells out particularly well.

[I thought of trying to hash some of the two sides out here, but this isn't the post for that, because I'm using the H-1B question to illustrate the thought process.]

Hey, facts are tough, but that doesn't make truth something we should ignore. Since I don't have the ability to run an experiment on the H-1B question, my guess is that there are gains and losses whichever path we select. If we dropped visas to 0, some people would be better off, some would be worse. If we expanded them to 200,000, same thing. If I can acknowledge that, try to figure out who falls into each category and determine the magnitude of the life change, then so can everyone else. Of course, that wouldn't be as much fun as the shouting off the top of the head that most people seem content to do, but that doesn't mean we shouldn't try.

Where have all the doctors gone?

2009-05-12T17:42:00.002-05:00

Rob Sanchez, in his most recent Job Destruction Newsletter, writes about a new Senate bill that would effectively lift the H-1B caps on the importation of foreign doctors. As Rob points out:

In conclusion, the Conrad "improvement" program is a backdoor attempt to raise the H-1B cap. That's because if more foreign medical students can get a Conrad waiver there will be more H-1B visas left over for programmers and engineers. We can expect more bills like this that whittle away at the H-1B cap without having to actually raise it.

This is likely true, and brings up a larger point that I'll probably get around to writing about tomorrow, but I wanted to pick up on one statement in the press release from the senator who's sponsoring this change:

The physician shortage in America is a growing crisis. By 2020, some projections show the nation may fall short by as many as 200,000 doctors. This shortage will be felt hardest in rural areas in North Dakota -- and across the nation.

The Conrad State 30 Program has brought more than 100 doctors to North Dakota communities that otherwise would have experienced a lack of physician coverage.

Need I talk about this again? I guess so. This is the same argument that we hear about the need to increase H-1B visas, that we simply cannot find all the qualified people we require to do...whatever it is the speaker thinks needs to be done.

Let me help the rural areas of North Dakota -- and across the nation -- with their problem. Fill a briefcase with cash, let's say a million dollars worth. Go to the Minot International Airport, catch a flight to Minneapolis, then on to Milwaukee, and finish in Boston, it takes less than a day. Go walk around a medical center, offering the briefcase to any doctor who's willing to commit to two years. I bet you'll find someone who will come.

[Actually, to go up even earlier in the quote, I'm not sure what it means to have a shortage of 200,000 doctors. We could make more simply by letting more into our medical schools, and immigration policy wouldn't have to enter into it at all.]

This is yet another in a long list of assertions that ignore how markets work. Any such statement should be followed by, "at the price we're willing to pay." You can get doctors to North Dakota or anywhere else, just as you can attract students into certain fields of study, just as you can compete with the industry leader in a certain technology - if you're willing to pay for it.

Now I'm not contending that that isn't hard sometimes. Finding a million dollars for two years of a doctor may seem like an intractable problem, just as wresting someone away from Google's search team might present a real challenge to Microsoft's recruiters.

But those are options, and they shouldn't be removed from the discussion just because someone sees a more expedient route if they can just push (lobby? pay?) to have laws changed. Immigration has increasingly become the solution of first resort, when it should only be part of the mix as one possibility. I've written before that there may be times when certain markets have a short-term shortage that requires importation of labor, but, if that happens, any relaxation of visa quotas should be accompanied by a longer-term strategy to alleviate that shortage. Clearly, that second part never actually happens; instead, we change our policies yet again to make the relaxation permanent.

I'm all for attracting the "best and the brightest" to our shores, but I know too many talented developers who are unemployed or underemployed or underpaid to believe that magical people from overseas are going to upgrade the profession, especially when a large number of companies aren't seeking out the best and the brightest, just the cheapest and most easily exploited. Sure, it's easy just to churn out the visas and give American companies and governments what they want, and it's a lot harder to look at the long-term implications of our decisions and be rational about it. But being hard shouldn't serve as a dterrent to doing what is right.

Rush to judgment

2009-05-12T17:03:00.002-05:00

Kevin Drum:

From Rush Limbaugh, commenting on the deteriorating economy:
In the Oval Office of the White House none of this is a problem. This is the objective. The objective is unemployment. The objective is more food stamp benefits. The objective is more unemployment benefits. The objective is an expanding welfare state. And the objective is to take the nation’s wealth and return to it to the nation’s quote, “rightful owners.” Think reparations. Think forced reparations here if you want to understand what actually is going on.
The tendency of liberals to shout "racism" a little too often is not one of my side's most attractive qualities. But it's a damn sight less disturbing than the tendency of conservatives to ignore racism when it comes crawling out from under rocks on their side. Limbaugh's message could hardly have been more obvious if he'd donned blackface and performed a soft-shoe in his studio.

Is there any real proof that this guy speaks for the interests of large numbers of people? Yes, his radio show draws big ratings - for a radio program - but we're still talking somewhere under 5% of the population. This number might be significant at the margins, but only if Limbaugh's leading his listeners somewhere they wouldn't already be going.

And I don't think that's true. I really doubt there are any Obama supporters who flip on Rush, then say, "Wow, he makes a lot of sense," and join the dittoheads. He's an entertainer playing to the same audience, the people who nod their heads and tell themselves that Rush really reflects their point of view.

Yet he gets an amazing amount of attention from people who ought to know better. To accept Rush Limbaugh as a transformative force is akin to believing that Ashton Kutcher is a technical visionary; why, then, is the first belief so common and the second so ludicrous?

If I had to posit a reason, I'd say it's because we look for significance in success. Limbaugh has a lot of listeners, at least compared to other radio programs, so there must be some kind of importance there. American Idol gets big ratings and has the word "American" in it, so must represent the deep manifestation of the American Dream that all individuals have a weight, whether externally manifested or internally realized (there's your thesis topic for today, kids).

Maybe popularity doesn't always imply significance. Maybe Limbaugh's 13 million listeners wouldn't miss him if he went off the air tomorrow, maybe he's just a habit. And maybe we should all stop caring about his predictable and specious rants that insult our intelligence.

Great minds think alike

2009-05-11T18:22:00.001-05:00

I may have sorted out my computer problems, so I'm finally able to catch up with some blogs I read regularly. One of those is that of sportswriter Joe Posnanski, who writes copiously among all the other work he does for the Kansas City Star and, now, Sports Illustrated. (And he has a new book coming out 9/9/09, which I expect to be quite good, though it will have to go some to beat his last one.)

At any rate, he wrote last Friday about streaks in baseball, reiterating the evidence that there really is no such thing as a "hot hand," something that seems counterintuitive. The most hallowed record in sports, the 56-game hitting streak of Joe DiMaggio, has been shown to be, actually, pretty likely (that is to say, someone in the history of baseball should have done it, not necessarily DiMaggio).

Coincidentally, that's pretty much the same thing I was writing about on Wednesday, that any specific occurrence might be quite unlikely, but that something of note would happen is very likely. At a single point in time, for example now, it is almost certain that something interesting and improbable is going on, whether in sports or anything else. Streaks and records are fun, I certainly enjoy them, but there is a kind of inevitability in them, if not any specific one. So take a lot of what you read about improbability with a grain of salt.

[By the way, if you like baseball, go on to read the rest of Posnanski's post. He talks about some amazing hot streaks in history, and any post that remembers Rico Carty is fine by me.]

Educational triage

2009-05-11T14:54:00.003-05:00

It's been, hard as it is for me to believe, almost three weeks since I promised a follow-up to this post, one in which I discussed (yet again) the difficulty of waving a magic wand and creating 3,000,000 great teachers. It worked off a taxonomy created by Carol Burch at Decidedly, in a post where she abstracted out eight qualities that might be used to define quality in teaching. It was a good post, and the qualities did a fine job of covering the waterfront of the kinds of things we should want in our teachers, but I felt there were still good-sized problems:

So the initial question, how do we find people who are top-notch across the board?, morphs into, how do we manage the trade-offs that are inevitable? And that's the part that I never see discussed. The solution always comes down to: find good teachers, and break the unions so that we can get rid of bad teachers, and education will become great for every student.

We assume that the evaluation function is perfect, but let me pose it to you: how would you design an evaluation process that would tell you how well a teacher "understands students holistically"? I'm not ridiculing the concept, I'd like to see every teacher do that, I'm just wondering how we rate a teacher on it.

But, even if we somehow get past that problem, we're still left with the challenge of how we manage the reality that most teachers will come up short on one or more of those. There's some lip service paid to the idea of Great Teachers mentoring the newcomers, but I've never heard of such a system working totally well. And some of those attributes may be more genetic than malleable (I have no idea how you teach someone to build trust in others, at least not without a commitment to one-on-one instruction that is unlikely in cash-strapped school districts).

What I believe we have is a problem not of aspiration, but of possibility. We want all our schools to be great, to maximize the potential of students and thus make them happy, productive members of society, so we create policies that, were miracles to happen in execution, would get us there. If, somehow, 3,000,000 great teacher candidates were to show up, we want to have the infrastructure in place to attract and keep them in the profession, so we push for higher pay and better conditions and smaller class sizes. And, invariably, we end up disappointed, with another 25-year plan in place that "might" solve the problems, starting the cycle all over again.

As I've written before, one of the problems is that we don't set real goals for the system as a whole. We are stuck with the idea of creating "educated" humans, and we're getting pasted by other nations' systems that have far more specific goals. We come up with specific goals, not for what someone might do with that education, but for a proxy: standardized test scores. And that fails to work, so we change the proxy goals, we "get tough" on principals and teachers, and we sit back and watch the line...remain essentially flat.

Oh, we think we have goals, that of getting every student into college, get that four-year degree, jump into the middle class, but that goal is increasingly opposed to the reality of the jobs we're creating. So we pretend that we aren't putting millions of students through vocational training, that we're teaching them to "have the skills" necessary to exist in a flexible, ever-changing society, even though we can't define what those skills might be nor determine how to teach them.

One of the brilliant PR constructs of our time is the way that politicians and policy makers have found studies that purport that all student achievement is dependent on teacher quality and, to a somewhat lesser extent, administrator quality. That reductionism allows us to ignore the very real effect of home life and nutrition on the ability to educate our children, because those are problems that would require some effort on the part of those politicians. Far easier just to put it all in the hands of the teachers, then we can see the "get-tough" upper-level administrators rail at how "we won't accept excuses for failure from our teachers" (see: Michelle Rhee of D.C.).

But education is inextricably embedded within society, and trying to sever that link so the problems are easier ("if only those blasted unions would play ball, we'd have world-class schools") is a cop-out. We need to go back to the beginning, figure out what our schools are for, and create policies that have a chance of advancing the nation and its citizens.

First, we need to embrace what we used to call technical education (before that, manual arts). This is by no means a personal desire; what little shop I took was an unqualified disaster, as I firmly belonged on the academic track. But many of my fellow students did not, and would have been far better served by education that met their needs and their skills.

I don't mean that we should track kids too early, and we should still provide a basic education in everything so there's a common ground in being an American. But we already subsidize Internet service and pay for public libraries, so even the most vocational of high school graduates will have ample opportunities during his or her life to move back into a more academic existence (though I concede we'll need some social changes to overcome some of the stigma of that path).

Instead of putting every student on the same college-prep assembly line, and propping them back up when they fall off, at least until they turn 16 or 17 at which point we call them failures and let them fend for themselves, wouldn't we be better off expanding opportunities and recognizing that the real job market and personal attributes call for a larger vision as to what education should be?

But I've written about that before, so let me get to my second idea, one that I offer not in a wholly committed way, largely because it's impractical and would be seen as elitist and non-PC. But it's an idea that might serve as a bridge to help the talented while we figure out how we provide a decent education for every child, something we seem unable to do now.

It's triage, in which we save the kids who have a chance to thrive by pulling them out of the toxic school environments in which they're forced to try to get ahead. We use the same standardized tests that are failing to save education to at least save some.

Every year, we take the top X students from the tests (X would have to be determined by practical concerns and money), and take them out of their environment. Not only do we move the student to a school with good teachers and decent facilities, we move their families as well, with job opportunities and subsidized housing. The promising 7- or 8-year-old will be allowed to grow in the best environment our society can provide, and we enjoy the fringe benefit of helping entire families.

Of course there are problems with this idea, some real, some illusory. I'm going to ignore NIMBY concerns because this idea wouldn't hurt anyone - I'm not recommending wholesale demographic changes, just a sprinkling of good kids and their families throughout robust communities that can easily survive this meager effect.

A more realistic criticism is that this idea would put the youngest children in a position of being responsible for the well-being of their entire families, and I'd be daft if I didn't have some misgivings on that score. But this, and other criticisms, have to give way to the larger sense that we are failing most those who need the schools most to work, and we need to do something other than continued posturing and hearings and laws and programs that never seem to accomplish anything.

I know that, in Chicago, some might say that the public schools are already offering some of this through charter and magnet schools. But these are iterative, not transformative, steps, compounded by the practical unreality of asking schoolchildren to commute two hours each way every day to get an education that is, after all, promised to them by law and by tradition.

I doubt that anyone would take this idea seriously; the charges of racism and brain drain would be sufficient to derail it. But we have to do something, and throwing 10% more salary at teachers isn't going to cut it any more than vouchers or charters or whatever other magic beans that the educationist establishment has in its rucksack. Let me state the problem one more time: current theory suggests that the only way to give a proper education is to find 3,000,000 great teachers. Unless you have a plan to get that done, it may be time to try something else.

Note: understand I'm not saying that, were we to implement triage, we give up on certain school districts. It is simply right to provide a high-quality education to every single American child. But we can't even define "high-quality" right now, much less provide it, so we need to get off our duffs and try to help the high-potential children who, who knows, might offer the larger solutions some day.

Mother's Day

2009-05-10T07:44:00.001-05:00

I lost my mother a few years ago (it was at the mall, between the Orange Julius and the 5-7-9, rim shot). No, she passed away, and so this day becomes, for me, more one of remembrance than of celebration.

This will not be one of those essays that tell you to treat your mother well, to value her while she's still here...not because you shouldn't, just because you can read that anywhere, especially today. No, what I would like to urge people to do is to try to see their mothers, whether they're still around or not, as humans, with the strengths and weaknesses of all humans.

You see, I had issues with my mom, serious life-shaking issues. When she passed away, we were not on the best of terms, and I have probably felt some guilt over that...but only briefly. I have also probably blamed her for that (which is not wholly unjustified)...but only briefly.

Because to see blame or guilt requires "shoulds," a set of assumptions as to what the relationship with a mother should be. And applying that set to the real person who was my mother somehow diminishes her, reducing her to a television mom who plays a certain role in my life, and I in hers, and everything should play out the way it would in a Hallmark Hall of Fame very special presentation.

But I'm not, say, Kyle Chandler, and my mom wasn't Ellen Burstyn, and we didn't have a scriptwriter creating false conflicts and even more false resolutions so we could achieve closure by the time the credits rolled. We were real people, struggling with our lives, our places in the world, our other relationships, our weaknesses, and, every so often, our lives would intersect in ways that were positive, as we built each other up, and, sometimes, we would bring out the worst in each other, as we could use our mutual knowledge to try to ease our own pains by hurting the other.

My mom was an interesting person, but not in the cliched ways. She lived through the Depression but had no interesting life lessons to convey from her untroubled passage through that decade. My father passed away when my brother and I were quite young; rather than creating him as a symbol of veneration, Mother never got over the hassles his death created for her, and her anger prevented us from ever getting a clear picture of the man.

But she was also a pioneer of feminism, not by choice after consciousness-raising, but by necessity because she had to support her family, however resentful she might have been of having to do so. She was ruggedly independent past the point of stubbornness, and was admired and appreciated for that by a wide range of people (even if her sons often failed to reap the benefits of that attitude).

Quite frankly, there are things about her I don't particularly miss - I have not, even at the remove of several years, been able to chuckle at her more obnoxious qualities. She could be a royal pain in the, well, one area of the body is not enough to describe the irritation. I am not now at, and may never get to, the point where the negatives become endearing.

But she wasn't a symbol, and I can't blame her for not being one. She wasn't June Cleaver or Margaret Anderson, but she was one fierce lady, and I'm glad I knew her, and I miss her on this Mother's Day. So, Mom, wherever you are, have an extra martini and an extra cigarette on me.

Speculations on significance

2009-05-09T19:11:00.003-05:00

I've been having Internet connectivity problems the past couple of days, so who knows if this post will even make it, but I'll give it a shot anyway. As a result, there were a number of hanging-fire posts that require links and quotes, and I won't be able to give you those (because I have few links that are working right now).

What I can do is expound, briefly, on the significance of the Internet. It's a topic I've taken up before, and I tend to have a conservative view of such things. My usual question is, what would happen if X disappeared tomorrow, how would life change?

If we woke up tomorrow and the internal combustion engine had simply ceased to exist or to work, our lives would be dramatically altered, largely because we have about a century of building institutions around it. Where we work, where we live, our leisure-time activities, these choices have mainly been predicated on the idea that we have a tool that allows us to, for minimal expense really, travel hither and yon with relative ease. Had we no cars, our homes would be insupportable, our stores would be unsupplyable, and it is not at all clear (though an interesting counterfactual to mull on) what we could to survive.

And we can substitute any number of things for X and come up with similar results. Electricity, water distribution, the use of steel in construction: We can posit a world in which these things weren't developed, but it's difficult to see how we would get from the world we have now to a world in which those things didn't exist.

To me, the Internet has not yet reached that level. I'm not trying to minimize its importance in transferring information about the world, and it has brought about many changes. If the Internet suddenly disappeared, there would be huge inconveniences to a lot of people and organizations that have made it an integral part of their existence.

Yet, the pre-Internet institutions still, for the most part, continue to exist. We still have universal mail service, paper on which to write our letters, and stamps with which to mail them. We may get our news online, but we still could wander down to the newsstand and pick up a paper if we had to. The new networks such as Facebook and Twitter, whatever their potential might be, are still not necessary to the living of anyone's life; you can still join a bowling league if you want to.

Obviously, anything in that preceding paragraph might change, especially in the media universe. We may be very close to the moment when a major American metropolitan area ceases to have a newspaper of record, abandoning the field to the World Wide Web. But, even then, a large number of people will get their news from the radio or television, and the Internet will continue to be one option among many.

If you want to argue that the trend is clear, that the Internet will one day have at least the importance of the automobile or any other invention, I'm not disposed to disagree with you. But the overheated rhetoric, the embarrassing TIME essay by Ashton Kutcher about the founders of Twitter (I'd link to it if I could), the bandwagon-jumping of people who should know better, all this is still based more on a view of the future, not the reality of the present. We haven't yet scratched the surface of all the ways we might end up using the Internet, but it will take a lot of work to make that happen. So maybe we can tone down the fervor, OK?

Butterflies are free...why not books?

2009-05-08T01:10:00.000-05:00

I'm not sure what Yglesias is thinking here. It seems that he's unhappy about having to pay $33.59 (on Kindle; $95 if he wants a paper and glue copy) for a philosophy book (which Yglesias admits is "relatively obscure"):

Given that the marginal cost to Cambridge University Press of giving me a Kindle copy of the book is almost $0 it seems a bit absurd for the price to be so high. What’s more, according to the CUP website: “As a department of the University of Cambridge, its purpose is to further the University’s objective of advancing knowledge, education, learning, and research.” It seems to me that knowledge, education, learning, and research are not being advanced by seeking to extract exorbitant monopoly rents from relatively obscure philosophy books. Would not knowledge, education, learning, and research be better advanced by making such books as widely available as is practical? Obviously, in an era of physical books even a commitment to such a policy would imply a fairly high price. But electronic publishing via Kindle, it seems to me, ought to change the occasion.
We live in a world where, in principle, it ought to be viable for CUP to offer Peter Railton’s books for sale quite cheaply....That, it seems to me, would be a world in which knowledge, education, learning, and research are being advanced.

Perhaps Matt is so fixated on the Internet that he's decided everything should be free, though his own book (not even available for Kindle) sells at a discounted rate of $15.57 at Amazon. But his argument doesn't hold up at all.

First of all, let's dispense with the Kindle vs. tangible book point. I can pretty much guarantee you that 408 pages, even including printing, handling, and delivery, doesn't require a premium of $61.41. Clearly, the price comes from other considerations than just those of production costs.

Second, why does the obscurity of the book matter? Sure, Railton might sell more books if each was priced at $5, or $1, whatever the medium, but the publisher has made a decision that the right price point is $95 or $33. This exposes a common myth, that markets exist to get products to people; that's untrue, of course, markets exist to maximize profits. If CUP can make the most money selling 1 copy a year, they'll price it in just that way (I'm deliberately ignoring the odd aspects of university presses).

And that point is true regardless of the popularity or sales of the book.

Let's move on to the nub of the argument, that books should be priced in such a way as to advance "knowledge, education, learning, and research." You know, I'd love that too. I have all kinds of books that were bought for just those purposes, and I would certainly love it if all of them had been virtually given away.

If you want to contend that Matt's point is specifically about Cambridge University Press because of the statement he found on their web site, well, that's just not enough. Presumably every publisher could list similar goals, even if profit is a little higher in the mix for a commercial publisher, but CUP has employees and a building and expenses that need to be covered, and that's not going to happen if they're just freely disseminating information.

And why would any author sign up with a publisher that told them, "You're not going to make anything from your work because we're here to advance knowledge"? (Of course, one could argue that the book isn't publishable by a mainstream publisher due to its obscurity; then why is it publishable at all?) Yglesias himself writes a blog that may advance knowledge, and he's paid for that, even though his organization could advance more knowledge if he gave them his blogging skills for free.

Oh, details, always with the details

2009-05-07T19:37:00.002-05:00

Robert Reich today on the outcome of the Treasury Department "stress tests":

The outcome of the "stress tests" will be that the banks needing extra capital will get it from the Treasury. But where will the money come from, now that the TARP fund is almost exhausted and Congress is dead set against providing more bank bailout money? The Treasury will simply swap debt for equity – turning what the banks owe the government into shares of stock in the banks. Presto. Ailing banks will get more capital, and Tim Geithner won’t have to go back to Congress to ask for it.

But by this sleight-of-hand, the public takes on more risk. Much of the money we originally gave Wall Street took the form of senior debt. We were preferred creditors, meaning that in the event of bankruptcy (or some form of it) we’d get repaid first. But as shareholders, we’d get nothing. As we’ve seen time and again during this economic crisis, shareholders lose big.

Wait a second. Let's go back:

But by this sleight-of-hand, the public takes on more risk.

Professor Reich goes on to discuss the likelihood that, should we become the major bank shareholders, we might well not make the money back (though that doesn't seem to be the common assumption of the administration and most economists), and it's not clear at all how governance is done in a publicly-owned bank (my guess: business as usual, see AIG for details).

It seems to me that pretty much everything that's being done right now pushes risk onto the most vulnerable, and anything that might reduce risk (national health care, for example) is deferred or delayed or otherwise left for later.

Perhaps this is inevitable. After all, the nation as a whole has spent itself and leveraged itself into a remarkably risky position, and none of this can be unwound without involving the "regular people." Clearly, a good portion of what we're experiencing now is actually the realization of the risk we deferred year after year.

But risk rarely spontaneously decreases, it takes positive innovation to do that. Otherwise, most actions just move risk around. For example, the invention of circuit breakers made the use of electricity far less risky than it had been. Traffic lights, the use of automobiles - we could come up with any number of examples.

The financial world, however, has spent its time on innovations that do not in fact reduce risk, but move it around. Sometimes that's been desirable, as it is for commodity futures, in which the risk is removed from the farmer who just wants to focus on growing a healthy crop, and given to a trader who's comfortable with the downside potential (but believes his or her innate smarts will offer upside).

What we've seen over the past few years is the negative side of innovation, a host of complicated-sounding products that have simply moved risk around, and not always to those who are willing to embrace it. We've also had a lot of puffery, much of it expounded by seemingly trustworthy types, to the effect that, for example, the stock market always offers positive returns over the long haul. And we've bought into that puffery, believing that risk has somehow been removed from the system when nothing of the sort has happened.

That hits home only when a family wakes up and realizes that putting Junior's college fund into a can't-drop-in-price house, or worse yet, into a big screen TV, actually pushes their risk (and Junior's) into unacceptable territory.

We can explain a few other things through this spreading of risk (if you want to read some real-life examples of risk-shifting, I direct you once again to Peter Gosselin's excellent book High Wire). Income inequality is a direct consequence of spreading inappropriate risk around the economy.

It's also the case that there is a global risk, and, as we take steps to reduce the risk in other countries, we assume that much more ourselves (creating more certain income streams for Indian computer programmers makes returns for American programmers that much more uncertain - I'll leave it as an exercise as to whether there are other compensations that make up for that).

There is clearly a political opportunity for someone to pick up on and speak to the increasingly risky lives of Americans. It could be done by intelligent re-examination of our national priorities, adjusting spending even as we provide appropriate stimulus; this is unlikely, as chronicled today by EconomistMom. Or we can slip into foolish demagoguery, which appears to be the approach of the Republican Party.

What we could do is reprioritize, accept that our chickens have come home to roost, and intelligently reorder things so as to deal with the reality of a poorer nation than we would like to believe we have. I am not hopeful.

Win-win vs. positive-sum

2009-05-06T17:42:00.003-05:00

I really shouldn't have to go through this again, but a panel discussion on Charlie Rose last night makes it clear that we have a long way to go. The discussion concerned free trade; unfortunately the panel was severely skewed, offering a former U.S. trade representative, two economists, and the hapless Senator Sherrod Brown (D-OH), who was the only one trying to provide any dissent from pro-free trade orthodoxy. He offered very little that was coherent, especially in light of the relentlessly sunny views expressed by Susan Schwab, Jagdish Bhagwati, and Alan Blinder.

Let me take up one point that came up a lot in the testifying by former Bush trade representative Schwab. She tried several times to conflate "positive-sum game" with "win-win," and everyone just sat there and let her get away with it. I have no doubt that Bhagwati and Blinder get the distinction, but calling her out would have undercut an argument that they fully supported.

As I went through in some detail last month, the two concepts are not at all identical. Win-win does imply positive-sum, but the opposite is most definitely not true, particularly (but not absolutely) when there are more than two parties to a transaction. It is quite possible to posit that trade is a positive-sum game, yet still find that there are winners and losers, that large numbers of people will not net any benefit.

Let me try another example. Let's say I ask Charlie Rose to give me $10, and also ask him to get 99 of his friends to give me $10. I take this $1000 and, through a magical process (oh, let's call it free trade), I turn it into $1500. I then give Charlie back $800, tell him that returns weren't guaranteed, and walk away with $700. The system as a whole is wealthier by $500 (positive-sum, oh yeah!), but we have a win-lose-lose-(98 more lose's) proposition; Charlie and all of his friends are worse off than they were before.

It is popular to try to identify these two principles as equivalent. "Positive-sum" sounds kind of wonky, while "win-win" is clear and positive and cool. But all we can absolutely say about free trade is that it's positive-sum; we cannot, using classical economics, determine the distribution of those positive returns.

To be fair, there was a little discussion of the fact that some people do lose from free trade, and Sen. Brown tried to make the point that those people are almost invariably Americans. But the rest pooh-poohed the idea that the number of losers was significant, and Blinder in particular threw out the standard canard that all we need to fix the problem is enhanced benefits, retraining, trade adjustment assistance - you know, all those programs that aren't really working all that well now.

In general, I'm for free trade. It gives me access to goods I would not otherwise have, probably at somewhat lower prices than a purely domestic market would offer me. It makes me feel good to know that we're giving the rest of the world's people the opportunity to improve themselves through some means other than direct aid.

But that doesn't mean we should use specious arguments to get there. One of the more uncomfortable moments in the discussion was when Blinder contended that it was a failure of the economics profession that it hasn't "persuaded the general public of the virtues of comparative advantage and trade across nations," as if the problems presented by free trade could be washed away with the right marketing campaign. Americans may not be as well-informed on such matters as we would like, but they can see what's happening right in front of them.

I will point out, yet again, that our systems are human constructs, made for the benefit of actual people - if they don't work right, we need to fix them so they achieve the goals of our society.

Confusing "positive-sum" with "win-win" is misleading. Lumping free trade in labor together with free trade in goods is misleading; the markets are very different, and have differing objectives. Vague hand-waving as to how we might redistribute some of the gains from free trade doesn't accomplish anything. There's a tendency to inflate the gains from trade to make the orthodox view more acceptable. And the "fair trade" people have a point, should we really allow corporations to make huge returns off of environmental and labor law arbitrage?

My basic point is that this issue is far more complicated than drawing a two-country, two-good graph and pointing to the gains (which is about as far as most economists seem to want to take it). There are real costs to real people when we allow their careers to be offshored; they are, in effect, subsidizing the people who are taking advantage of that opportunity. Maybe that's OK, but I'd sure like to see economists and politicians and businessmen have to express it in just that way, rather than shouting down the people who point it out.

Streaks and stats

2009-05-06T16:47:00.002-05:00

On Baseball Musings, the fine summary site run by David Pinto, he quotes another site on the current winning streak (now at 17) of Milwaukee over Pittsburgh:

Let’s assume, for a second, that the Brewers have a 60% chance of beating the Pirates in any given game. The chances that they win two in a row at that rate would be 0.6*0.6, which equals 0.36, or 36%. A three-game sweep? The odds of that are 21.4%. The odds of the Brewers winning 17 in a row? The chances of that are 0.17%. Even if you assume the Brewers have a 70% chance to beat the Bucs, the odds jump to 0.23%. If we bump the odds of a Brewers win in any given game to 80% (which is pretty high, even for the Pirates and Brewers), this sort of thing only happens 2.3% of the time.

I wrote the following comment:

That analysis is fine, as far as it goes, but it's more valid to look at the probability that any matchup over a period of time might bring about that result, in which case the chances are considerably higher.

We are looking, right now, at a result that's caught our eye simply because it's improbable. But there are 30 MLB teams, and 435 possible matchups. A back-of-the-envelope calculation with the 60% figure shows us that there's actually a 52.3% probability that one of the 435 matchups leads to a 17-game streak.

I wrote that this morning, and time precluded me from doing a better job. So let me unfold that a bit more, and correct a big mistake I made.

The original quote incorrectly figures the probability of any one team beating another team 17 straight times given a single probability of winning (we know that's untrue, as the percentage should actually fluctuate quite a bit depending on starting pitchers, home field advantage, injuries, and what have you, but the overall unlikelihood is roughly correct). It gets off to a rough start, in that the probability of winning three in a row is 21.6%, not 21.4%. The probability of 17 in a row is actually (0.6^17), or 0.017%. (With 70%, it is 0.23% - drat, that's where the first number should have seemed wrong to me - I told you I was in a hurry earlier.)

As I stated in my original comment, there are 435 (30*29/2) possible matchups between two teams in a 30-team league, so, if you're looking for the probability that some two teams will feature a 17-game streak, you have to use that (unless for some reason you really are focusing just on the Milwaukee-Pittsburgh competition).

So, and here is where I revise my original comment, the probability that one of the 435 matchups will contain at least one 17-game winning streak will be (using 60% - I know that's wrong, I'll get back to it in a minute) 1 - (1 - 0.017%)^435, or 7.1%. At 70%, the number rises to 63.7%.

Now, it's obvious that not every one of those matchups can be at 60% or 70%; one would assume from symmetry that they should average out at 50%. While I could write a quick program to simulate the range of winning percentages, that's a bit more of a project than I would prefer to take on today. I'll just use 50% for all matchups, which puts a floor on the result (I should explain; any deviation from the 50% figure creates a higher probability of such a streak, and you can see that by considering the case where one team has a 100% chance of winning a game against the other team, where a 17-game streak, or longer, is self-evident).

At 50%, the probability that one team can beat another 17 times in a row is very small, 0.00076%. Even with 435 matchups, one would expect to see a streak like this only 0.33% of the time, about 1 in 300. But that's the number at one point in time, and there are numerous opportunities to see a streak of this type.

I won't essay the math on how often we should see such a streak over the whole of major league baseball; the noise threatens to overtake the real information after a while. I will offer a simplification to at least gauge a result, that this problem is analogous to that of any 17-game winning streak. In that case, we should see a streak of this length 1 in 131,072 times. But we have 30 teams, and the streak can start in any one of the 162 games in a season, so we might expect to see a streak like this every (131,072/(30 * 162)) seasons, which is right around 27.

In this light, that this is the longest such streak since 1970 would make us think that, just maybe, we shold have expected this before now. It certainly doesn't seem that this quote from the original article, "When one team loses to another seventeen straight times, it's not just a case of good vs. bad. It's a case of good vs. bad with a sprinkle of bad luck and an incredible rash of improbability" is true at all.

A couple of follow-ups

2009-05-05T15:01:00.002-05:00

1) Sunday, I wrote about Kevin Drum's struggles with Nassim Taleb's The Black Swan, a book that, for no particular reason, has vaulted the author into the pantheon of pundits. His unremarkable observation that "bad things happen," cloaked as it is in self-indulgent tracts of virtually unreadable prose, struck me as a very few good ideas in search of a book.

Kevin found it "odd" and "intensely annoying":

The problem is that Nassim Nicholas Taleb basically sounds like a crank. His prose has all the usual markers: everyone else is an idiot (this includes philosophers, economists, historians, journalists, and pretty much all social scientists, among others); he's the only one who truly understands the world as it is; there's a monocausal explanation for this almost universal lack of understanding in others; and there's a tiny cast of other unappreciated geniuses who do get it (Benoit Mandelbrot, Karl Popper, G.L.S. Shackle, Daniel Kahneman, etc.).

But what of the content (and Taleb certainly pushes against the idea that we can separate style from content)?:

Generally speaking, he wants to persuade us that we know less than we think and that forecasting the future is a mug's game because history is primarily governed by huge, unpredictable events that come out of nowhere (black swans). But this is sort of a banal point: scholars have been arguing about the importance of contingent events vs. broad historical trends forever, and the difficulty of predicting technological breakthroughs is well-trod ground. Worse, Taleb doesn't add much to what's already been said about it. Just the opposite, in fact. In one chapter he cherry picks some inventions here and there to help make his case, but even using his own hand-picked examples he's not very convincing. We all know that penicillin was discovered by accident, but the computer? Taleb seems to think it sprang out of nowhere, but that's sure not how I remember it. It was a big invention and a huge discontinuity, but it was hardly unpredictable and hardly an accident.

Kevin seems to be surprised that there is so little there there, but is willing to concede that he may have missed the point. I would say, Kevin, you didn't miss the point at all; the real challenge is to explain why so many others have been so influenced as to make "black swan" a hot term, and Taleb a media star.

2) As for the disappearance of the great blog Carrie's Nation, in a comment to my follow-up post, 2Truthy unfolds the speculation that she shared with Melvin Toast on her fine blog, to wit:

In a nutshell, the entity known as 'Carrie's Nation' was likely one or more professional researchers working for a firm that pulled the plug at the end of April. That explains the blogger, CC's sudden and mysterious disappearance. Job over, on to the next disparate gig, maybe with tax codes. Detroit housewife? Fine. Sure.

That may be so, and fits the facts as we know them as well as any other explanation (including 2Truthy's offer of CC's suicide as an explanation, and mine of the Obama Indian technology cabal pulling the plug and sending her off to Gitmo).

If that is so, then there is actually a kind of Turing Test insidiousness to the Carrie's Nation experience, no matter how much I might tend to agree to the purpose to which it was put. The creation of a back story, complete with blog posts containing out-the-front-door pictures of a snowy day; the personal e-mails that I exchanged with CC; the idiosyncracies that, at least, seemed grounded in quotidian life: If all of these are fictions, I am left with a peculiar feeling.

Again, accepting 2Truthy's theory requires me to accept that a lie lay at the heart of Carrie's Nation. I have discussed my reasons for cloaking my real identity, but I am still the person I have revealed here. My name wouldn't add anything to the discussion, but every material fact I have written is, indeed, a fact. I can't really say that I like the idea that CC may have been a corporate figment, partially because my own representation of "her" is put in question, but more because it casts doubts on anyone who adopts a nom de plume for whatever reason.

So a part of me resists the theory, even as time and logic dictate acceptance. If that's the case, then perhaps 2Truthy is the passionate alter ego of George Will (he doesn't really believe the stuff he writes, so expresses his true feelings under an alias), mcfnord the online avatar of Bill Gates - heck, maybe I better go check my driver's license to make sure I'm not some consortium of think tank-ers writing my little blog each day.

Holism

2009-05-04T16:27:00.002-05:00

Robert Reich explores the question of Why Obama is Taking on Corporate Tax Havens, as the president takes aim at foreign sheltered income, especially when there are so many more important things to do. This now becomes the, oh I'll say, 67th thing that people on both sides of the aisle have questioned:

So why take them on now, when the President is also taking on universal health insurance and global warming, and trying to get the economy going again?

Reich's post is typically interesting, as he knocks down a couple of reasons. Professor/Secretary Reich doesn't believe that closing these loopholes will necessarily save American jobs, as the companies might have less money to employ people, or might just leave the U.S. altogether.

He doesn't think Obama is urging a crackdown because he wants to fulfill a campaign promise; after all, he's already backing down on modifications to NAFTA. What could it be?

Reich offers a couple of ideas: 1) Obama may be putting forth a bargaining chip that he can take back in return for support on universal health insurance; and 2) he may be using this as a revenue source to pay for his health plan. Either of these could be true, though we still haven't dealt with the larger question: Why is Obama taking on so much, when he (should be/could be) focusing on the economy with the intensity of a laser?

Here's what I think may be happening. I believe Obama takes a holistic view of America, that he has a vision that encompasses pretty much everything. Further, he knows that he will never have a better chance to implement many of the policies that will get us where he wants to be.

He sees universal health insurance, paid for by relentless efficiencies; a strong economy based on free market principles, but with stepped-up regulation to ensure equity; significant progress toward energy independence; improved education opportunity leading to work opportunity; and a bunch of other stuff. Most importantly, he sees all of these things as parts of a new system, interconnected in necessary ways, rather than as a laundry list of up-or-down items that may or may not be done (which is the typical way Congress works).

I applaud this, even though I disagree with some of the specifics. Personally, I think that the U.S. is going to have to do some serious prioritizing over the next decade or so, and that we may never get back to the bubble-induced trend line that we were on, but that view is not incompatible with Obama's. We could establish a set of priorities that move toward the Obama view of the future, then explore what we might have to do to get there (I'd imagine a serious reduction in what we call "defense" will be required, but that's just one example).

As I've chronicled in this blog in the past, I don't believe in many of Obama's specific prescriptions; he seems as captive of "conventional wisdom" as anyone else. However, given the contradictions into which we're led by the orthodoxy of either party, I'd rather see someone with a vision of America's future try to lead us there, no matter how flawed that vision, than see a continuation of the policy-by-policy, calculated within a strategy for re-election, view that has dominated American politics for far too long.

Lotsa luck, Kevin

2009-05-03T03:24:00.000-05:00

From Thursday, Kevin Drum, talking about the media reaction to the swine flu:

So will we ever know if SF 2.0 was The Big One? If it kills a billion people, yes. If it doesn't, no. We'll just have to keep wondering. Which, to my surprise (and to change the subject completely), turns out to be a big chunk of what Nassim Nicholas Taleb writes about in The Black Swan. After I was (properly) smacked down over my airy dismissal of Taleb a few days ago, I finally decided that maybe I ought to actually read his book instead of relying on the odd blog post about it, and I have to say that it's not at all what I expected. So far, anyway. It's a real mishmash of odd potted historical anecdotes that go nowhere, interesting insights about human nature, opinions about historical contingency that are strangely unmoored from even an acknowledgment that lots of other people have thought about this subject before, and conventional observations about things like confirmation bias and the limits of induction. However, Taleb swears that he's a doer, not an idle idea spinner, and by the time I'm finished I'll get some genuinely concrete advice about how to deal with uncertainty and the limits of knowledge in real life.
We'll see. I'm a little skeptical based on the first few chapters, but I suppose Taleb himself would warn me that even a long string of mediocre chapters doesn't mean there won't be a phenomenal one that will rock my world when I least expect it. If I finish it this weekend, I'll report back.

Had Kevin asked me, I could have told him that there is no black swan in The Black Swan, but I guess he'll just have to figure that out on his own.

Thresholds

2009-05-02T03:35:00.000-05:00

Everyone's got a blog now. People, from famous to not, are creating Facebook pages, though there are those few stubborn holdouts who cling to their MySpace pages. And now there's Twitter, and even the most hardened reporters are jumping on board; Philip Hersh of the Chicago Tribune is tweeting, even though he admits it will mostly consist of links to other stuff.

Of course, there's the recently reported stat that Twitter loses more than half its devotees each month, though there are theories that the number is inaccurate because of the way the data is collected (it may not be fully accounting for phone usage). But that's a bit off-topic.

I have no idea how the internal workings of our newspapers are grinding these days, but I would guess that Hersh didn't wake up the other day and say to himself, "I feel the need to tweet." I believe that it is much more like my speculation in my March post, The future of journalism, in which I mused that there would be ever greater pressure on news reporters to turn out endless streams of copy for platforms of all types, whether they be print or a blog or Twitter or so forth.

So my question is, what will be the threshold of acceptance for a platform to be added to the list? If someone comes out tomorrow with Twitter+, a site that requires one to write messages of 141-280 characters, how will organizations know when they should jump on that bandwagon? After all, we know that the most popular blogs are overrepresented by the writers who started up around 2003. Facebook probably seemed more useful before everyone had a page. And I have to think that new Twitterers are likely to be lost in the noise. So there's likely to be quicker movement to the next big thing, even if it turns out to be not so big.

I'd expect a lot of time to be wasted as people and organizations chase the future, and I wonder just how evanescent our information is likely to become.

He's back!

2009-05-01T14:30:00.002-05:00

As he promised, John McIntyre, erstwhile copy editor at the sad Baltimore Sun, is back on the web. So we were only without him for a couple of days, which is a very good thing. You can enjoy his, well, I can't say it better than he:

Observations on language and the craft of editing, with additional reflections on subjects of no necessary connection with the former topics. Comments are welcome, and commenters are invited to keep a civil tongue in their heads.

at You Don't Say (that's right, unlike Larry "Bud" Melman, a name that NBC kept when Dave Letterman moved to CBS, the Sun has allowed Mr. McIntyre to take the name with him). [And I give the Sun credit for providing the link, without which I might have had trouble following this blog.]

His first non-welcome post is about the national conference of the American Copy Editors Society. I guess they're all in Minneapolis, at least if you read the sports section of the Chicago Tribune today to discover that the Marlins scored their game-winning runs in the 9th inning yesterday - I was watching the game, and could swear that the runs came in the 10th, but who am I to argue with a great metropolitan newspaper?

Nationalization

2009-05-01T04:32:00.000-05:00

I have held off writing about this, as there are so many people weighing in on what our government should do about the banks. It is amusing to watch spreading groupthink, as pundits and economists who never would have trusted the Bush administration with massive involvement in the economy leap to ever-widening trust in Geithner and Summers. One thing you can say for Bush: had he taken over the banking industry and the auto industry and parts of the insurance industry, he would have been absolutely definite about his ability to do so, no matter the actual results.

Here's my view, conditioned by years of considering myself a moderate Republican. Government involvement is necessary whenever the market cannot achieve a necessary aim, that is, when questions of equity or safety outweigh the magic properties of free-market capitalism. Almost everyone accepted the federal projects to electrify the nation (for example, the TVA) because electricity was seen as vital to the interests of our citizens, and it was highly unlikely that any private company was going to supply power to certain poor areas. Other than a few purist zealots, we all think that government should play a role in product safety, because the industries themselves have few incentives to guarantee a certain level of freedom from worry about the dangers of lead paint or infestation (I mention the zealots because there are those who will make a case that the dangers are self-limiting; once consumers realize they're dropping dead from lead-painted toys, they will put the offending companies out of business - most of us reject this "wisdom").

Intervention in the banking industry is touted as necessary because, without it, lack of credit will cripple businesses and consumers and the entire world could be caught in a financial conflagration. If that's true, then our government has a necessary responsibility to do something other than stand by and hope for the best.

It's a lot harder to make the same case for the auto industry. There is nothing vital in having a domestic manufacturer of cars, as is obvious when we look at the growing market shares of Toyota, Hyundai, and so forth. One might still offer an argument if the contention is made that employment cannot take the sudden shock of GM bankruptcy, but, since the remedy currently offered is to drastically reduce employment, that argument doesn't hold up.

So here's what I would suggest. Let's let the auto industries go. Maybe Ford will survive, but GM and Chrysler are unlikely to ever become functioning entities again, and it's time to pull off the Band-Aid.

As for banks, let's nationalize them and instantly sell off every piece that isn't commercial or personal banking. If a bank is doing something that doesn't involve supplying credit to a business or individual, that function has to be excised, because it's not vital to the operation of the republic. Merger and acquisition advisory services, gone. Sponsorship of opera nights or marathons, gone. We simplify the business for two reasons: first, we should only be propping up those parts that are truly necessary, and, second, government may have a better chance to operate a loan operation than it does a CDO shop. (This would have the pleasant by-product of eliminating those nasty bonuses, as the "hot" banking areas would be on their own.)

If you want four more takes on the auto industry question, see the New York Times' Room For Debate, Does the U.S. Need an Auto Industry?

Robert Reich, who has realized that bailout plans rely on the dismissal of workers, is outraged in his post from yesterday, The Auto Bailout Is Going Off the Road. I respect Professor/Secretary Reich a lot, but he seems a little late to this party:

What? Having General Motors or Chrysler cut tens of thousands of jobs in order to be eligible for a government bailout reminds me of "saving" Vietnam by bombing it to smithereens. Aren't we giving these companies billions of taxpayer dollars to save jobs? If not, we're just transferring money from taxpayers to GM and Chrysler bondholders and shareholders.

Unfortunately, even a man with his intellect doesn't really offer anything useful as an antidote:

The purpose of any auto bailout ought to be to help American auto workers keep their jobs, regardless of whether they work for GM or Toyota or anyone else. Or if they lose their jobs, help them get new ones that pay almost as well. Yet we’re doing exactly the opposite: We're paying GM and Chrysler billions of taxpayer dollars to keep them afloat while they cut tens of thousands of American jobs and slash wages.

True, until we ask the question, what jobs "that pay almost as well," and what does "almost" mean? This conundrum is the exact reason that our leaders consistently punt on this issue; there are no solutions to this dilemma. We're seeing the props come out from under this economy, and nobody has the answer for 300 million Americans.

Dark doings

2009-04-30T15:16:00.002-05:00

I'm not fond of conspiracy theories in general. Even if I am an insider, I am enough of a democrat to believe that unshared information is harmful; if I happen to know there are layoffs coming at my place of business, my pleasure at being "in the know" is more than outweighed by the damage that the information will do (and the knowledge that dissemination will allow people to prepare for that damage). The burden of secrecy rarely has its compensations for me.

For others, though, there is a kick to the whispering and the sidelong glances, and I am willing to concede that I am outside of the norm here. Most people derive value from being privy to "the truth," though it's amazing how often that truth turns out to be only somewhat true. Other people seem to enjoy getting just enough of a clue that they can endlessly speculate on what the insiders aren't saying.

So I will offer to my readers the opportunity to try to ferret out the mystery that is being alluded to concerning the disappearance of the blog Carrie's Nation. The blog continues to link only to a message, "Blog has been removed," and I certainly have no insight as to its being gone.

But 2Truthy and Melvin Toast are hinting at some kind of secret over at 2Truthy's blog in the comments to her original post, and you can feel free to speculate among yourselves.

Note: my lack of interest in the arcana does not prevent me from a thank-you to 2Truthy for her kind words in the sixth comment. I am inadequate, as I do not fill the same niche as Citizen Carrie did, and I am unlikely to start poring over the India Times any time soon.

And to my friend mcfnord, who takes another opportunity for some mild sniping, I can only offer the wish that he would engage in discussion on what I actually write, but I have conceded the unlikelihood of that.

The first 100 days

2009-04-30T04:06:00.000-05:00

I'm sure we're all having fun with the media's obsession with totting up the successes and failures of Obama's first 100 days in office. This perennial exercise in reaching conclusions about very complex initiatives that have only just begun tends to devolve into an evaluation of style, one which correlates very well with one's party, one's November vote, and one's position on the political spectrum.

I refuse to play. I've expressed reservations about some of Obama's initiatives, even though I hope they will all work like magic and this nation will be restored to, well, wherever it is it ought to be, but I find it premature to even think about summarizing his wins and losses.

However, as a former math guy, I would be remiss if I didn't point out that, had we five fingers and a thumb on each hand, we would have to wait until June 13 for these retrospectives; were we cartoon characters with three fingers, we would have done this back on March 25. And, if we were centipedes, we'd never see day 100.

Oh, by the way

2009-04-29T09:08:00.002-05:00

I mentioned 2Truthy in my last post. 2Truthy is the blogger who, at Losing the War on Humor, weighs in on all manner of corporate and government shenanigans in a style that I cannot begin to describe. It's one of those blogs that consistently offers posts that I wish, just once, I could write, so wry and funny and impassioned. You should check it out for yourself, as I'm not doing it any justice, and I don't want to start quoting, because I'll get lost in reading and blow my whole day (as it is, I'm behind on some other stuff like replying to an e-mail from my brother...just go read LtWoH and leave me out of it).

My larger point is about how we all are constrained by our tools, a point that has some connection to my post from yesterday. I rarely mention 2Truthy, despite my admiration, because, for some reason, LtWoH doesn't work as a feed to my Google Reader. I have it there, but no new posts ever come through. I know 2Truthy is posting, I go there, Carrie (please come back) mentions posts there, but the site doesn't regularly bubble into my consciousness because there's never a little (1) next to it in GR.

Two lessons here: 1) for me, I need to go out and check sites I like once in a while even if Google Reader doesn't show anything; and 2) we all need to stay aware of the limitations of our tools and work to overcome them.

[Update: OK, a taste, from a recent post about everyone's favorite Pulitzer winner, Tom "Jowls" Friedman:

Rather than Tom taking his puffed up journalistic backside down to North Carolina to interview the fired locals from Wachovia who have lost their jobs because of the legalized, Indian cheap labor lobby that Friedman triumphs, he instead is content to dispense quotes from officials at companies like Infosys who are complicit in this war on America’s white collar middle class.
Friedman goes on to proclaim that we need new banking regulations that reins in the leverage and speculative trading that big banks and insurance companies can undertake. Fair enough. But THEN he displays his salesy, bag-of burning rats in a meth lab, pseudo analysis here:

“And this is ALSO why we need a tax on carbon — so we and our power utilities don't become permanently addicted to cheap coal that makes for lower electricity prices today but spits out toxic greenhouse gases that have to be paid for by future generations tomorrow.”

Huh? Coal is bad. Check. Let’s tax all those American hillbillies who rely on coal to heat their dreadful shanties. Check. Let’s tax Utility companies that don’t do business with businessman Al Gore’s portfolio companies. Check. Let’s tax every effing body in this country, while we’re at it – to subsidize all of that other gre$n stuff that Gore’s VC firm is pushing. Check!

Put that on your Friedman shelf next to Matt Taibbi.]

Does the bad news never stop?

2009-04-29T08:45:00.002-05:00

I just caught a look at a comment on yesterday's blogging effort, and 2Truthy has informed me that, as the title of her post states, Citizen Carrie Gone Missing. The blog Carrie's Nation now is filled with the message, "Blog has been removed."

It would be easy to be flip here, as I would assume that this is more likely to be a Blogger technical mishap (my post editing screen has been acting peculiarly the past couple of days - related? Who knows?) than something dire, so one's first thought turn to whatever humor can be derived from it (perhaps Obama's Chief Information Officer and Chief Technology Officer, both men of Indian descent, have tired of Carrie's concerns about the reckless use of H-1B visas and offshoring, and have invoked a super-secret Dick Cheney-style law to shut her down - one only hopes that Carrie is not right now on her way to Gitmo). 2Truthy has, more entertainingly than I, covered up her concern with some light-hearted musings.

So we who care about Carrie will watch, and wait, and hope that it is nothing more than the usual Blogger foolishness, and all will be restored before too long.

An unfortunate loss

2009-04-29T08:26:00.002-05:00

I've ruminated before on how a relationship between bloggers can feel like a friendship in that you get to know someone on at least some level as they write day after day. Given the somewhat tenuous nature of "real" friendships, it's not a surprise to me at all that the virtual world can seem just as vivid; I may not be cracking a beer with Eric Zorn of the Chicago Tribune, but I do have a look into his mind several times a day.

I understand there's an unfortunate asymmetry there. I read Zorn, but, as far as I know, he doesn't read me; since I'm not a crazy wild stalker guy, I get that we're not really friends in any definition of the word. But I know more about what he thinks and feels, what things concern him, than I do about the majority of people I would call friends (at some point I should write a post on my "friends," because they are just about the least friend-like people I can imagine, for the folks who never initiate contact to the 20-year-long acquaintance who always makes plans to see me when she's in town and never quite is able to make it happen...but I digress).

When a regular poster leaves for whatever reason, there is a feeling of loss. I know there are people still saddened at the passing of Tanta at Calculated Risk. Today, the economics of the newspaper business has caught up with John McIntyre of the Baltimore Sun, the copy editor whose ruminations on language and newspapers (and Wikipedia and so on) have offered insight and entertainment and food for thought on the blog You Don't Say. I will miss him (though he promises to keep blogging).

My first temptation is to take You Don't Say off my blogroll. After all, why should I want to drive traffic to the site of a newspaper that would lay off my friend? On the other hand, his work still lives there, so I should probably suggest you go there, partake of his thinking, but not to look at any ads you might find. However, the click counts will remain, so I remain caught on the horns. I shall agree to disagree with myself, and allow inertia to leave the link, for now.

There's not much I can offer that's fresh about the implications for the newspaper business, except for this. Mr. McIntyre has spent 23 years at the Sun, and so, whatever his age, is not in the first blush of youth. However, he has embraced new technology, the blog, the Twitter feed, the e-mail. He hasn't been shuffling around metal sorts while his younger colleagues smiled sadly and indulgently as they slipped his work into the computer typesetting system. And none of that was sufficient to save his position in the cold hard calculus of today's media business. I'll leave it to the reader to infer what he or she can about anyone's future in this economy.

Isn't the medium the message?

2009-04-28T15:46:00.002-05:00

Yglesias, in In Defense of Twitter, contends that:

The idea of a “banal and superficial” medium simply doesn’t make much sense.

Curiously, his quote is from Twitter-using Senator Claire McCaskill, whose defense is "ultimately not that interesting." (Talk about backhanded....)

His contention is that the medium has little to do with the message, that content should be evaluated irrespective of how it's delivered. He has a point, I suppose, but I think he overstates it. There are limitations in the Twitter format which make it inappropriate for certain kinds of information conveyance, and I sense that its current popularity is pushing those boundaries.

The question is not, is the medium bad, but is it being used for the right purposes? George Stephanopoulos interviewing John McCain using Twitter may enhance both men's credentials as with-it, modern, tech-savvy guys, but it did nothing to improve the knowledge of the body politic. A Twitter message is 140 characters - think about that, 140 characters. There may be forms of discourse that are appropriately expressed in that space, but there are many more that cannot.

One of the discussion topics for the future is how we're going to deal with the multiplicity of platforms on which we can express ourselves. [A related topic is how that expression will fit into a business model, but that's for another day.] And Yglesias may not be the best person to speak to that subject, as he has far more options than most of us. If he's writing something for his Twitter feed, and he has a thought that will take him past the 140-character barrier, he can "repurpose" it for his very successful blog. If he has a big thought that can't be contained within the confines of his blog (or is potentially more lucrative), he has a big enough name that he can find another outlet for it, up to and including a book.

But Twitter is smoking hot right now, much more than a new blog would be, and people are going to try to utilize it regardless of message. We'll lose some deep arguments that might have some value. In the end, it probably doesn't matter all that much; just as we can't add infinite blogs to our feed readers and have any hope of keeping up, so too will we tend to limit our Twitter feeds, and a lot of the hype and noise will settle down (when your boss and your parents and your children are all tweeting away, are you really going to care what Ashton Kutcher has to say?). I expect Twitter to become much like the blogosphere; local clusters will emerge and be much more important than the mass that gets the attention now.

At the same time, we can't assume that the limitations of Twitter don't make it somewhat more likely to be "banal and superficial," and it takes only a few minutes on it to convince the discerning person of that.

Note: Yglesias stumbles at the end of his post, when he writes: "There’s no tool so good as to produce good work when badly used." That has nothing to do with the rest of this entry, as no serious person contends that Twitter magically transforms garbage into flowers...do they?

The Iacocca theory

2009-04-27T16:42:00.002-05:00

I've searched my blog, and I find no evidence I've put forth my Iacocca theory before. I find that hard to believe, as it's something I've believed since, well, Lee Iacocca would have seemed like the best illustration of that theory.

What has induced me to bring this up is a post by Greg Glockner on Decidedly, where he asks the musical question, Are "Great" Companies Just Lucky?":

When you look at an old list of "top companies" or "top executives", how many are still tops? If someone is no longer tops, what can we learn? Were they just lucky at the time that someone said they were "tops"? Or did they make some strategic blunder that caused them to fall from the top?

The Iacocca theory says: Take 100 "Lee Iacocca's," and watch them through their lives. We can even cook the game by putting them in the same circumstances, presenting them with the same options. What will happen?

Obviously, they can't all become heads of car companies and American business icons - there aren't that many spots open in a generation. My guess is that one will become the Lee Iacocca we know and love(?), nine will do very well for themselves, 50 or so will top out somewhere below the very top levels of whatever organization they end up in, 30 will stall out early through some fundamental mistake or (yes!) bad luck, and 10 will end up abject failures (or will die early or something else dire).

[Clearly those numbers are totally made up - my wife wanted me to be sure to mention that.]

If you want to seem more au courant, substitute "Bill Gates" or "Larry Ellison" or whatever business hero you have. But the point remains the same, that confusing the result with the process is a common mistake people make, that is, the assumption is that the successful had some kind of distinguishing feature that made them so successful. And that's true of companies just as it is of individuals.

Of course, there's another reinforcing factor: someone has to be in that position. Some company is going to be the number one car company, and the leaders of that company are going to seem, well, near-magical as a result. Right now Toyota's riding relatively high, and it's natural (but misleading) to focus on everything they've done right; moreover, to believe that everything they've done has contributed to that "rightness," that they are beyond criticism.

Few business leaders were riding higher a year ago than GE CEO Jeff Immelt. He seemed to have seamlessly mastered the globalization trend, taking the "legendary" Jack Welch's accomplishments on into the heavens. Now it seems clear that he was just riding the bubble, that there is little magic there, and one could easily foretell a bad end for Mr. Immelt sometime in the future. My point is not to castigate Immelt in particular, merely to point out how a year can seriously unguru some of our biggest names.

It reminds me of the studies that have been done on clutch hitting in baseball. There are few more commonly-held ideas than that there are some players who are superb in the tough situations - they rise to the occasion and carry their teams, and so are worth more than similar ball players who can't come up as big when the pressure is on.

And study after study have found that there is pretty much no clutch effect at all, that a player who does well with the bases loaded one year ("well" being defined as beyond his own norm) does not tend to see this persist year after year. Obviously, there will be the occasional player who will seem clutch for ten straight years, but no more than one would expect by chance. (There's also the memory effect in which we tend to remember the dramatic moments, all the times David Ortiz clears the bases in the 8th inning with a long double, not all the times he pops up in similar situations.)

I'm sure that Bill Gates is a pretty smart guy. I'm not sure that there aren't a whole lot of other people who would have done just as well if they had been inserted into Bill Gates's skin 30 years ago. We can't rerun history, as the saying goes.

But we need to be wary, as we evaluate individuals or companies (or any other institution), of crediting the wrong things for success that may well be indistinguishable from luck. We would do well to remember that it took even the great Bill Gates a long time to acknowledge the importance of the Internet, and only the vast market power of Microsoft kept that from being a company-killing misstep.

Review - Alphabet Juice

2009-04-26T03:40:00.000-05:00

» Alphabet Juice

The subtitle tells you a lot of what you need to know to evaluate this book:

The Energies, Gists, and Spirits of Letters, Words, and Combinations Thereof; Their Roots, Bones, Innards, Piths, Pips, and Secret Parts, Tinctures, Tonics, and Essences; With Examples of Their Usage Foul and Savory

Roy Blount Jr. is a writer of numerous books and articles that cover a large spectrum of topics, and, apparently, all the while he was harboring a love of words. Not just words that he could put together into salable writing, but words as words, and this Alphabet Juice is an exploration of words.

This is a simply wonderful book, organized in the classic way, alphabetically, as Blount takes us through "A" to "Zyzzyva." Yet it is not the typical book of word and phrase origins (as in the books by the Morrises). There are poems, and stories, and strange little fragments of ideas, so it doesn't stand so much as a reference work, but as an excursion by one writer through the language he loves.

There are a couple of things you should know before picking up this book, as it may color your view of it. First of all, Blount is prescriptive, but idiosyncratically so. He laments the loss of certain meanings and connotations as definitions change, but he has no problem with the likes of "ain't." The best summary is his own (in the entry for worthy enough):

It's up to those of us who care about words to hang on to their intrinsics and their connections - connections to the world, and to our minds and fingers. We don't have to contribute to the inflation of words. We have to struggle to keep words from becoming arbitrary.

Second, Blount is a big advocate of what he calls "sonicky," something we learned in school as "onomatopoeic," that is, the idea that the sound of words somehow reflect their meaning. It's self-evident in coinages like "fizz," but most linguists believe it a limited theory.

On the other hand, Blount embraces it wholly, and, after reading Alphabet Juice, you may be convinced yourself. At the very least, you will think more about the sounds of words, and that's enriching no matter what theory of language you prefer.

I haven't given you a real flavor of this book, so I will close with a couple of short examples. If you like these, you'll probably enjoy the book. First, under id:

Odd that this and ID are so different; the latter makes you (and your ego) respectable, the former au contraire.

And, under reservationist:

Can this, at last, be my religion? I'm not an indifferentist or a nothingarian, I'm a reservationist. One who refuses to believe in anything - even the reservations - without reservations. I'm not boasting. I'm not trying to proselytize. I'm not even saying I'm a good one. I'm just saying, that's what I am, perhaps.

This from a story about trying to hire a car to take him to LaGuardia. (And I have a sneaking suspicion that I should have named this blog The Reservationist, perhaps.)

What Cheney did to America

2009-04-25T21:03:00.000-05:00

Andrew Sullivan wrote an excellent piece on Cheney's assertion of the "unitary executive," the idea that, in extreme circumstances (which are defined by the executive branch), the executive branch needs to be given virtually unlimited power. This idea led directly to all numbers of heinous acts, in particular the repeated torture of bad guys who had no more to give. You should read the whole thing, but here are a couple of quotes:

It ended, as all regimes bent on total power always end, with torture. Why? Because reality may differ from ideology; and when it does, it is vital to create reality to support ideology. And so torture creates reality by coercing "facts" from broken bodies and minds.

This is how torture is always a fantastic temptation for those in power: it provides a way for them to coerce reality into the shape they desire. This is also why it is so uniquely dangerous. Because it creates a closed circle of untruth, which is then used to justify more torture, which generates more "truth."

And:

Since the war had no geographical boundaries, since an enemy combatant could be an American citizen or resident, since the enemy could never surrender, and since the war could never end, the dictatorial powers, allied with the power to torture, destroyed the balance of the American constitution. Until this is fully accounted for and the law-breakers brought to justice, that constitution remains with a massive breach below its waterline.

[Note: I changed Sullivan's title, which was "What Cheney Did To Conservatism." I grow weary of Sullivan's attempts to distinguish his brand of conservatism from real conservatism; more importantly, the Bush-Cheney regime has damaged the moral standing and authority of this nation, not just a political philosophy.]

Methinks a rather limp defence

2009-04-24T14:23:00.000-05:00

The Economist doesn't like the opinions of Peter Coy in Business Week:

PETER COY'S rant against the entire economics profession sounds a mite bitter.

This touches on one of my "favorite" points, that "bitter" is, like comparison of anything to Hitler and the Nazis, is supposed to end the conversation:

The word "bitterness" is rapidly becoming the end of all arguments. We're asked to believe, not just here but on my blog and many other places throughout BlogWorld, that an assignment of bitterness is the ultimate in argumentation. McIntyre is "bitter" about something, and should no longer offer his reasons on the topic. I'm "bitter" about something, as a (former?) commenter expressed, and so my judgment on, say, economics or politics is immediately suspect.

Anyone who's taken Intro to Logic recognizes this for the ad hominem argument it is, but the people who use it seem to find it a devastating critique. It isn't, of course, it's just a way for a weak arguer to claim, "I win. My comments come out of passion and logic, yours merely from bitterness."

Let's move on, and see what The Economist doesn't like in Coy's piece:

The rap on economists, only somewhat exaggerated, is that they are overconfident, unrealistic, and political. They claim a precision that neither their raw material nor their skill warrants. Too many assume that people behave like the mythical homo economicus, who is hyperrational and omniscient. And they take sides in quarrels that freeze the progress of research. Those few who defy the conventional wisdom are ignored.

I expect a devastating rebuttal, but I don't get it:

That's a rather sweeping conclusion of a profession that includes more than 20,000 people in a wide variety of applications. Besides, which economist ever claimed his model predicts the future precisely? When I learned economic modelling I was told it acts as a guide, sort of like a road map. If you allow for every detail, the map is intractable, so you must make some simplifying assumptions. Those assumptions introduce weaknesses into the model; it's the trade-off of tractability for usability. Well-trained economists are mindful of this and understand that an economic model simply gives you some sense of where you are going.

True as this may be, it's certainly not the impression that economists give when they appear on news shows or in front of Congress. When an economist is interviewed, does he or she answer "I don't know" to every question?

As I've pointed out before, economists are, in private, pretty realistic about the limitations of their profession. They understand that predictions exist within a probability space, and they offer their idea of the most likely outcome. But, publicly, that's not where the money is - the light of the cameras or the lure of the lucrative lecture creates a sense of certainty where none can exist. The world beats a path to the doorstep of the eminent, asks what will happen; can we really blame a human being for succumbing to the desire of all for definitude?

The worst sin is that The Economist didn't actually read all of Coy's piece, which goes on to contend that economists are necessary, but that they need to combat their own "hubris." This is pretty good advice for any "expert."

Obviously, the best thing would be for all of us to recognize that economists are not much better or worse than the sportswriters who predict the outcome of the Big Game. Of course, we want to believe that someone, somewhere, "gets" what's going on, because we sure don't. But economics isn't there yet, and The Economist doesn't provide us any reason to hope that it will get there soon. (Their "defence" comes down to, economists all disagree, so how can they be criticized for not knowing what's going to happen? What?)

By the way, I'm not completely defending Coy's piece. At the end, he anoints Nassim "The Black Swan" Taleb as "the scholar of unpredictability," and cites one of his weakest arguments: "that nature achieves robustness through a redundancy that economists would consider wasteful: two hands, two eyes, etc." Any economist who sees two eyes as redundant needs to take a basic course in biology. Coy may want to be wary of the expertise of his experts.

Walk on - McGwire/Noonan edition

2009-04-24T13:42:00.000-05:00

Not to keep beating on Peggy Noonan (oh, why not?), but her unconscionable remark of last Sunday about prosecution of those who condoned illegal torture ("Some things in life need to be mysterious. Sometimes you need to just keep walking. ... It's hard for me to look at a great nation issuing these documents and sending them out to the world and thinking, oh, much good will come of that.") seems to engender ever more thoughts. I wrote some here, and Andrew Sullivan continues to follow up, this time by quoting Hilzoy at Obsidian Wings:

If most people tried to make the case that prosecuting their criminal acts was just "looking backwards", or a sign that the prosecutor was motivated by a desire for retribution, they'd be laughed out of court. Imagine the likely reaction if your average crack dealer were to urge the judge not to dwell on the past, or if someone who used accounting fraud to flip houses told offered a prosecutor the chance to be "very Mandelalike in the sense [of] saying let the past be the past and let us move into the future", or if I were pulled over for speeding and, when asked if I knew how fast I was going, replied that "Some things in life need to be mysterious ... Sometimes you need to just keep walking." I don't think any of us would get very far.

And I'm reminded of Mark McGwire, baseball player. He is, famously, the player who hit 583 home runs (with 70 in a single season) who, after retirement, testified in a Congressional hearing investigating steroids in baseball:

I'm not here to talk about the past. I'm here to be positive about this subject.

That testimony made McGwire the poster boy for all that's wrong in sports today, and has made it highly unlikely that he will have a serious shot at the Baseball Hall of Fame in the near term. His attempt to erase the past was seen as evasion, and called all his accomplishments into question.

And, if the world were fair, we would do the same to Peggy Noonan. The contrast between her status as a journalist and her unwillingness to discover the truth of American-approved torture would be seen as disqualifying, and we would not only not grant her the honors she continues to receive, we would efface her from her role as leading light pundit. Her name should be just as much a joke as is that of Mark McGwire.

The new journalism

2009-04-23T14:25:00.002-05:00

I've talked about Dean Baker before. His blog, Beat The Press, gives an economist's take on the way financial news is reported in the media (at least, the New York Times, the Washington Post, and a very few others). I do enjoy reading it, but, to be honest, it's one of those where, if Baker put a general statement at the top, he could save us all a lot of trouble. (I suggested this earlier this month, that a lot of the traffic on even the best blogs could be reduced if there was a statement of principles: "Andrew Sullivan supports all measures that allow gays to marry" would eliminate 10-20% of his posts, I think.)

Baker could do the same - why do we worry about protectionism in manufacturing when we don't care about doctors and lawyers? - and save himself a lot of writing. But that's a minor quibble, he doesn't post that much anyway.

He's often at his most amusing when writing about the objectivity of journalism. He's pretty old school, believing (as I do) that there is value in separating reporting from editorializing, that there is such a thing as objective writing without opinion, and he is outraged when that fails to happen. Today he's written about a New York Times story about the apparent suicide of the CFO of Freddie Mac, and he notes:

It is hard to understand how these statements appeared in a news story. The article is speculating on issues about which it has no factual information. These comments might be appropriate for an oped, but they are not news.

That's the kind of statement very common in Baker posts, and I agree, but I also see what's happening to traditional journalism. Perhaps he should have read my post of March 18, The future of journalism:

So what I think is going to happen is that reporters are going to have to become brands, and they will be charged with providing an endless stream of content that can be "repurposed" by "content managers" (no editors here) to the various media platforms that are part of the modern news organization.... We'll see more "controversial" writers in place of solid thinking and writing (hence, new media star Karl Rove).

Blame blogging or cable news for it if you must, but news consumers are increasingly comfortable with the idea of digesting opinions with their news. I'm not convinced they're any better at separating fact from opinion, but they're used to having it all mixed together. Not a lot of value is attached to old-style objective reporting.

So Baker had better get used to the kinds of stories at which he rails. I think they're ever more likely, and we'll probably never really appreciate what we've lost.

Fallbacks

2009-04-22T19:57:00.002-05:00

I've written before about Decidedly, the company blog of Dwaffler, which produces decision software. Greg Glockner has ably manned the blog-writing chores for quite a while, and has now been joined by Carol A. Burch (I believe she's the CEO, but I didn't do an exhaustive search for this piece of information). Her writing is different from Greg's, but she has so far proved to be an interesting voice, and I hope that having two writers will make the posts come more frequently.

Today, Ms. Burch wrote about a New York Times feature that discussed the idea that teaching could become a "fallback" career for displaced professionals. To summarize the thoughts of the five contributors (three teachers, a professor, and an economist), anyone contemplating moving to the world of education should check it out thoroughly and shouldn't assume that they'll succeed. There may also not be as many jobs there as we commonly assume (statistics here are difficult to clarify, as some factoids will tell you that there's a shortage, others that schools are having little trouble filling positions - here's an interesting study that discusses this complex issue).

Ms. Burch helpfully abstracts out the qualities of a good teacher:

Has depth of subject matter knowledge
Has the ability to transfer knowledge
Has a passion for the subject matter
Has a passion for teaching
Has a demonstrated ability to build trust in others
Demonstrates flexibility to adapt content to the learning styles of the students
Engages/impassions others to want to learn subject matter
Understands students holistically (maturity, issues, personalities)

This is as fine a set of qualities as one could put together, and anyone with all of them would probably be pretty good at the front of the classroom. Her post goes on to point out that all of these criteria, after being ranked, should be used to evaluate prospective and existing teachers, and not to encourage people without all of them to use education as a fallback.

[A note here: something I've probably pointed out before, but Decidedly is one of the better corporate blogs I've ever read. They make decision software, and their posts usually concern making decisions, but it's never so overt as to be obnoxious - "Every school system should buy our product" - and that's quiet appreciated by this reader.]

I have no issue with Ms. Burch's conclusions, but I wish to point out the impossibility of finding the requisite number of people who fit these criteria. Remember, there are more than 3,000,000 elementary and secondary teachers in the U.S., meaning that roughly 1 out of every 70 adults has to be a teacher. Look again at the list of attributes, and ask yourself whether we're likely ever to find the needed number who fulfill all of those.

Let's take one as an example, depth of subject matter knowledge. This is very hard to measure in a meaningful way. One might think that more is better, but a knowledge of, say, differential geometry is useless in any K-12 setting. I'd be surprised if even a small fraction of people who use mathematics in their jobs retain detailed insight into the ins and outs of conic sections. There is a mismatch between the skills that one uses on the job, and what needs to be imparted to the young. (Obviously, one would expect that someone with a knowledge of higher mathematics would have an easy time reacquiring "lesser" math, and that's probably right. Still, there isn't necessarily a perfect correlation.)

We could go through each of the other seven categories and point out problems, but I'll let the reader take that on. My point is that, even if we get the weights right (we want high school math teachers to have more subject matter knowledge than a third grade teacher needs), we still have the problem that we're not going to find 3,000,000 people who score 4 or 5 (out of 5) in every one of these criteria - that's just not going to happen.

So the initial question, how do we find people who are top-notch across the board?, morphs into, how do we manage the trade-offs that are inevitable? And that's the part that I never see discussed. The solution always comes down to: find good teachers, and break the unions so that we can get rid of bad teachers, and education will become great for every student.

We assume that the evaluation function is perfect, but let me pose it to you: how would you design an evaluation process that would tell you how well a teacher "understands students holistically"? I'm not ridiculing the concept, I'd like to see every teacher do that, I'm just wondering how we rate a teacher on it.

But, even if we somehow get past that problem, we're still left with the challenge of how we manage the reality that most teachers will come up short on one or more of those. There's some lip service paid to the idea of Great Teachers mentoring the newcomers, but I've never heard of such a system working totally well. And some of those attributes may be more genetic than malleable (I have no idea how you teach someone to build trust in others, at least not without a commitment to one-on-one instruction that is unlikely in cash-strapped school districts).

I don't want to be totally negative; we should be working to upgrade our schools because it's the right thing to do (I still have reservations about upgrading the supply of graduates beyond the real demand of the economy). But we need to be realistic about the likelihood that these steps will transform our schools.

In a subsequent post, I'm going to explore a possible solution to this problem, one with no chance of being implemented, but one which would at least make explicit some of the assumptions we're glossing over in our current "fix the teacher" mentality.

[Note: I discussed some of the issues in the latter part of this post in one from last month, OK, we're saved, which talked about Obama's educational initiative. I'll just recall one thing from the President's speech that has stayed with me: "By 2016, four out of every 10 new jobs will require at least some advanced education or training." The majority of new jobs, then, won't, so what is all this upgrading for, exactly?]

Noonan - Part 2

2009-04-21T19:25:00.002-05:00

Andrew Sullivan:

Am I the only one to free associate from Peggy Noonan's infamous quote last Sunday to the church sex abuse crisis?...And it's the same reasoning: your loyalty to an institution requires covering up its crimes, not exposing them. But there is one difference: child abuse was not the actual policy of the Vatican. Torture was the actual policy of the Bush White House. And still she walks on.

I'm sure we could find any number of other analogies, once we get into it.

Just keep walking

2009-04-21T19:15:00.002-05:00

It's been two days, and I'm still trying to get over Peggy Noonan's appearance on Sunday's This Week (with George Stephanopoulos) on ABC. I've written about this Wall Street Journal pundit before, her hunching forward in her chair as she whispers out pronouncements about the world from her perch that we are to take oh-so-seriously. Her reporting by walking around has allowed her to miss pretty much everything that's been going on in the country, and her self-important manner is in complete contrast to the wispiness of her ideas.

Peggy and the gang, Stephanopoulos, Will, Donaldson, and Roberts, were meandering in typical fashion through the news of the week, taking their predictable positions on all things, when they came to the release of the torture memos.

[Note: Perhaps the most ridiculous criticism of the release of the memos is that it would allow the terrorists to "prepare" for torture by revealing the methods. First of all, the techniques are already out there; there didn't seem to be anything new in the memos.

Second, Chertoff and Hayden, I have a suggestion: we're going to wire your genitals to a car battery in, say, three months. You have all that time to prepare, so I'm sure you'll breeze right through it, right?

Let's say, for the sake of argument, that the average person can withstand a pain level of 3 on a 0-10 scale. So we tell our enemies that we torture, so they begin to prepare themselves. They get up to the point where 6 is no problem, then we capture them. And...we turn it up to 7.]

I've expressed reservations over putting various members of the Bush administration on trial. I'm not certain the country is well-served by what would be lengthy and partisan trials. (I'm unsettled by the prospect of a lengthy trial of Illinois ex-governor Blagojevich, but it must happen under our system.) There was a lot of fear in the aftermath of 9/11, so, while I support a complete release of the facts, I'm still not convinced that turning that truth into a criminal proceeding against Bush, Cheney, and the others who approved of these activities serves any purpose. Frankly, either option makes me ill.

And then comes Peggy. She definitely feels we need to move on, which she expressed as, "Some things in life need to be mysterious. Sometimes you need to just keep walking. ... It's hard for me to look at a great nation issuing these documents and sending them out to the world and thinking, oh, much good will come of that."

As a result, I've changed my opinion. That this wealthy, respected opinionator could, in her usual flippant manner, could believe that we should just gloss over this, the systematic (and ineffective) torture of prisoners in our custody is revolting. She would happily cloak herself in the 1st Amendment if anyone tried to abridge her freedom of the press, but her desire to discover the truth, which ought to serve as her job description, is conditional on what might be found - and who might be found under the rock.

If Peggy Noonan feels that our democratic government should cover things up, that we "need to be mysterious," that we "need to just keep walking," then she should walk right out of her cushy sinecure, her lush job pontificating to the great unwashed, and take some time to explore what other acts would deserve the brush-off. If someone breaks into her lavish digs and steals all her stuff, maybe the NYPD should just keep walking.

So, inspired by Peggy's limp thinking, I now believe we need to prosecute to the fullest extent of the law. If Bush and Cheney violated the laws of this land, put them on trial. The lawyers who wrote the opinions that permitted the use of illegal tactics should be turned out; at a minimum, Bybee should be impeached and Yoo should be kicked out of Berkeley. Maybe Peggy will quit and join the defense team, using her novel strategy of "keep walking."

Will employment really get back?

2009-04-20T04:52:00.000-05:00

A sobering post from the Federal Reserve Bank of Atlanta studying the growth of employment after recessions. There is little in the way of hard and fast conclusions, given the small number of data points and the changes in the world, but the 2001 recession may be the closest indicator:

The two most recent recessions, which had relatively low rates of job decline, had very drawn-out employment recoveries. In 2001, employment—growing at an average annualized rate of 0.3 percent—took 35 months (nearly three years) to return to prerecessionary levels. The average rate of employment growth was also approximately 0.3 percent after the 1990–91 recession. But because the share of employment lost was less, employment returned to prerecession levels in 19 months.

The post tries to derive some sense of what could happen this time:

If the current recession ended today with a 2.7 percent job decline, and postrecession employment growth resembled the recovery from the 1981–82 recession, then employment would return to prerecessionary levels in approximately 14 months. But if the employment growth path is more similar to the two most recent recessions, then it would take well over eight years for employment to return to prerecession levels.

Since the recession does not appear to be ending today, this has to be seen as optimistic, and one would have to lean toward the eight-year side of things. This is scary.

Steve Benen had something similar in a piece about a Washington Monthly print story by economist James Galbraith. He quotes the editor's note by Paul Glastris:

If Galbraith is right -- and I fear he is -- it means that tens of millions more Americans will be out of work in a year or two or five, even if the stimulus creates all the jobs the president expects. It means that the big banks really are 'zombies' that will neither resume normal lending nor grow their way out of insolvency regardless of how much money the Treasury pours into them. It means that the auto companies will burn through every dime the government lends them and still not turn a profit.

(Galbraith's story is here. Essentially, he believes that the current situation may lie outside the traditional models, leaving us in a state from which proposed methods will be insufficient. Banking may not just come back, and the rest of the economy will be similarly crippled for years to come.)

It's growing increasingly difficult to look at what's happening and believe that, after some rough months, we'll just end up on the upward glide-path to success. It may well be that something is irretrievably broken, and we may just have to steel ourselves to living in a different America.

[Note: I didn't look at the comments to the Fed piece until after I finished this post, but there are some good thoughts there. Sandwichman points out the story is not told wholly by numbers:

Those red, blue and orange lines are not just measuring a change in quantity of an unvarying commodity, they are also concealing the changing characteristics of the jobs being measured. The recovery from this recession is likely to involve a much greater qualitative change in jobs than the previous recoveries. The pace of that recovery thus will reflect how quickly the process of change occurs, not simply a quantitative "return to pre-recession levels."

This part should never be forgotten when people talk about the recovery. The post-recession landscape will be seen as positive only if we end up with an increase in opportunity for all Americans, something that seems increasingly unlikely.]

Review - Pieces of My Heart

2009-04-19T04:40:00.000-05:00

I can't say I've ever spent a lot of time thinking about actor Robert Wagner. He was one of the last products of the great studio systems that chose and groomed young talent, but he came along at a time when the industry was transitioning away from this controlled environment, and acting itself was under assault from the method acting that soon came to dominate the major films. Wagner always struck me as a minor talent, a very nice man, a pleasant actor who competently hit his marks and said his lines.

And there's nothing in his autobiography, Pieces of My Heart: A Life (2008), that will make you see him much differently. There are no moments in reading these 324 pages that will make you stop and say, "Oh, he was in that movie, maybe I've underrated him all these years." He was a young kid who loved the movies and grew up to be in them, and he's filled a slot in Hollywood history that could easily have been filled by any other reasonably good-looking fellow who worked hard enough to be competent at the craft.

I don't think, based on what I read here, that Wagner would be terribly offended by what I wrote in the above paragraph. He seems to have made his peace with the reality that he hasn't changed the history of cinema, with a perspective that is surprisingly sane and even-keeled.

For this book isn't really a movie memoir, but rather, as the title implies, a chronicle of the people he's met and who have mattered to him. The films and TV shows are here, but mostly as a device to frame the characters who have filled his fascinating life. Of course, he talks at length about his first (and third) wife, Natalie Wood, and even discusses her drowning in a way that he apparently never has before.

But there are so many others, and most are from so-called Old Hollywood. Wagner has had amazing fortune at getting close to many of the great stars (most notably Barbara Stanwyck, with whom he had a long-term affair when he was 22, she 44). He was also close to Gable and Tracy, and learned a lot about professionalism from them. There are some wonderful stories about Fred Astaire.

In many ways, Wagner appeared to be closest to David Niven. He tells many tales of Niven's personal kindness to his family, most particularly after the death of Wood. This seems fitting to me, in that Wagner and Niven have similar careers. Both had a certain charm, brought a sense of ease to their roles, but neither really ever had that star-making role; was the talent not there, or the hunger, or the luck?

But, again, that seems to be all right for Wagner. He's had a good life, one that hasn't entirely depended on the big roles or Oscar nominations, one that's been filled with good friends and good times (and a bit of heartbreak). His book will not force you to reexamine his career, but it is a pleasant walk through a piece of Hollywood history. It's not a whitewash - there are plenty of people Wagner didn't like at all - but it does add to the lore of some of the big names of movies.

Some yea, some nay

2009-04-18T16:02:00.002-05:00

Steve Yegge is a big-time computer programmer, well-known in the industry, and he has a blog (Stevey's Blog Rants) where he posts about 15 times a year. This is not quite as limiting as it sounds, as his posts tend to be quite long; his most recent goes about 5500 words. His posts may touch on programming, but are by no means confined to that, and are always at the very least interesting.

His most recent post, Have you ever legalized marijuana?, is pretty good...for the first two-thirds, then goes off the rails. In that first two-thirds, you may wonder when Yegge will get around to discussing marijuana. After that, you'll wonder why he bothered.

The post is built around Dan Ariely's idea of "credit buckets," that is, partitioning people's credit limits by category. In that way, the consumer could manage credit at a more granular, and presumably more controllable, level. In effect, the very structure of the buckets would enforce a kind of spending discipline (you'd be limited in how much you could spend on gas, or on food).

The first inclination I have is to see the ways this wouldn't work. Wouldn't the average consumer just use more credit cards to get around these limits? I'm sure you can think of more. But I have to concede that awareness is a great deal of the problem, and the bucket idea might reduce the casual misuse of credit.

Ariely, in his book Predictably Irrational, goes on to talk about how he actually presented this idea to a bank board of directors, and how they never did a thing about it. Yegge then speculates that such a feature would work against the goal of the bank, which is, after all, to get people to use as much credit as possible, and it certainly has no problem with overdraft fees. This shows, yet again, according to Yegge, why "the banks are evil."

But then Yegge puts on his programmer hat, ponders how this simple idea would actually gets done, and theorizes as to the preliminary questions he would have to ask his boss (I will quote the entire list except for the last item):

Can customers control the buckets, or are they fixed?
If fixed, how many are there? What are their names?
Let's assume for the remaining questions that they are NOT fixed, since a predefined set of buckets would be "insanely stupid" and rejected by customers. So, how many buckets can a customer make? Min and max?
Can customers give the buckets names? If not, do they have to use numbers?
What characters can they use in the name? What's the maximum length? If we need to truncate the name in a printed statement, how do we truncate it?
Can a customer change their buckets mid-month?
Can a customer change their buckets between months? What if their balance is nonzero? Can they transfer balance between buckets?
Can a customer change the name of a bucket? Do names have to be unique?
Exactly how does a customer name a bucket? Online? Over the phone? By snail mail forms? Talking to bank teller? All of the above?
Same question for all other configuration settings. How? Where?
Do credit-card customer service reps have to know about the buckets? How much do they have to know? (hint: everything) Is there training involved? (hint: yes)
Do the customer-service tools have to be redesigned to take into account this bucketization?
What about the bank's customer self-service website?
What about the phone interactive voice-response tree?
What about the software that sends email updates to the customer?
What about the software that generates printed billing statements? How exactly does it represent the buckets, the individual spending limits and balances, the carry-overs from month to month, the transfers, the charge-backs, the individual per-bucket fees?
What about the help text on the website? What about the terms and conditions? What about the little marketing pamphlets? Should they try to explain all this shit, or just do some hand-waving?
Can a customer insert a new bucket into the list? How are the credit limits of the remaining buckets re-allocated? What if adding a new bucket puts one or more of the older buckets over the limit? Do we charge fees? Do we tell the customer they're about to be charged a fee right before they create the bucket? Is it, like, OK/Cancel? Do we send them a follow-up email telling them they just fucked themselves over? What exact wording do we use?
Can a customer delete a bucket? What if there's money in it? What if it's overdrawn? How do we represent the overdraft fee in the database? How do we show the deletion event in their bill?
Can a customer merge or consolidate buckets?
What if a customer has an emergency situation, plenty of limit in other buckets, and they really really need to charge to a couple of buckets, but they want to avoid an overdraft fee? What do they do? Are the buckets mandatory or discretionary?
How the hell do we even tell if they're buying "chocolate", anyway? The vendor doesn't tell us the purchase type. How do we know how to charge the right bucket? What if it's ambiguous? What if the buckets overlap? Does the customer need a point-of-sale interface for deciding which bucket to put the charge in? Can they do "separate checks" and split the charge into several buckets?
Where are you going? Answer me!

If you're not a programmer, or you've never been in a position in which you have to implement someone else's "great idea," you may not realize that this list is just the tip of the iceberg. These are just business-level questions, they don't even delve into the technical details. Chances are this bucket idea would cut across pretty much every existing system the bank has, which may well be divided by programming teams, so there are big organizational problems as well.

And for what? For a feature that might or might not bring in any additional customers, and would almost certainly only bring them in by promising them that they would end up paying less to the bank. It's going to be real hard for the financial analysts to create a scenario in which the return on investment is positive.

I've worked on quite a few development projects in my time, and occasionally one of these things gets championed by a high-enough executive that it gets approved, and they pretty much all end badly (some time I'll tell the story of what happened when my management decided a new order and inventory system "needed" to be accompanied by a new user interface paradigm; it was not delightful).

Yegge goes on to apply this same kind of analysis to the legalization of marijuana, which he in general favors. But then he thinks of all the difficulties of implementing such laws, and finds that they get mired in the same complexity as credit buckets, and this is where the post kind of goes off the rails.

Because Yegge believes that making these laws are analogous to creating a complex piece of software, that it's an implementation of a project. The reason that the analogy doesn't hold up is that our political/legal system is built around just these sorts of issues, and the questions that he raises are not seen as deterrents.

If even one component of the bucket software doesn't work, it can prove calamitous for the project as a whole. If one component of the marijuana law doesn't work, well, people work around it in some way. Either the unworkable parts are ignored by law enforcement, or the public attorney avoids bringing charges around the problematic pieces, or the whole thing is left to the judiciary to interpret or rule. The imperfections that come out of the inability for people to anticipate every possible implication are handled by other people; if the problems rise to high-enough awareness, new laws are passed to delineate or modify the old law.

And that's why this post is valuable, even for non-technical people. Yegge's list of questions about the credit bucket project needs to be answered before work can begin. You can't just write up some of it, throw it out there, and hope it works (note that I'm not claiming that's true of all software, as there are projects that can be rolled out incrementally - but even that needs to be explicitly planned out). I don't believe the average person realizes just how difficult it is to create computer systems, and I think they should.

Ideas

2009-04-17T19:22:00.002-05:00

I know I'm critical of Yglesias from time to time. Occasionally, in my opinion, he shorthands some items, likely in his haste to push out x number of blog posts a day. Perhaps it is true that standards for blogging should be lowered in light of its immediacy, but that's not an excuse for publishing something that's too doctrinaire, not thought out enough.

In general, though, Matt puts out some pretty good stuff, like this post (Ideas Matter). He agrees with Keynes that "the ideas of economists and political philosophers...are more powerful than is commonly understood":

I think that the questions that political philosophers have taken to debating professionally in recent decades have a limited relevance to contemporary politics. But I think a number of fairly abstract misguided ideas in ethics, political philosophy, and economics have come to have extraordinary cultural and political power in the United States and to a lesser extent elsewhere in the English speaking world, all to incredibly pernicious effect. What’s more, though most of these ideas are propounded, originally, by people whose degrees are in economics most of them are really ideas of a philosophical character.

Clearly, one reason I like this is that I have contended several times (on this blog, and many more in life - just ask my long-suffering wife) that modern economics, for all its supercomputer models and calculus equations, continues to be far closer to the field of political philosophy than its practitioners would like to admit.

Yglesias cites three examples:

1) One important set of ideas is the perverse notion that it’s wrong or inappropriate to subject people to moral criticism for making selfish decisions as long as the decisions don’t involve breaking the law.

On this, I'm not sure Yglesias goes far enough. For the last umpteen years, it has not only not been morally wrong to be selfish, it's been lauded as right, as desirable, as American. A great number of greedy people who have read only selectively from Adam Smith have convinced themselves that, in the words of Gordon Gekko, "Greed is good."

(Note: I wonder if it didn't unhinge Oliver Stone more than a bit to see the lesson he wanted to teach in the movie Wall Street be so perverted, to the extent that the above quote has been seen as a slogan, not a warning.)

There's been no end of economists backing this up, contending that unchecked greed is the basis for our wealth-producing capitalist system. We've focused so much on "growing the pie" that we missed the reality that a lot of people were getting none, while fewer and fewer had it all over their piggish faces.

2) Under guise of eschewing values, economics has adopted a philosophical value system which says that the well-being of rich people is more important than the well-being of poor people.

It may only be a coincidence that economists can do pretty well working for think tanks that are supported by rich people, or by giving lucrative lectures to audiences made up of rich people.

3) As a society we’ve become accustomed to the idea that when empirical evidence seems to contradict basic economic theory—as when the United States experienced rapid economic growth under conditions of widespread unionization and a high minimum wage—that we ought to accept the theory as true.

Belief in economic theory tends to come and go depending on the person who is paying the bills, or, at least, that person's political leanings. Furthermore, if basic economic theory conflicts with what people want to hear, that theory tends to get lost.

For example, if a wealthy country suddenly sees the expansion of a low-cost, accessible labor supply, basic economic theory suggests two things will happen: first, the number of jobs available in the wealthy country will decline; and second, the wages that the remaining jobs will pay will decline. (There is a trade-off between these two effects that depends on several factors - the slope of certain curves - but both should happen to some extent.)

That's a very ugly conclusion to try to sell to Americans (the wealthy country), that globalization, for all its wonders, has some deleterious effects on numerous categories of workers, that it represents a major redistribution of income. (That's actually pretty ironic if you think about it. The Republicans who are insisting that Obama is a socialist for raising a tax rate by a few percentage points are generally supportive of a policy that has resulted - and will result - in a massive redistribution of wealth and income.)

Yglesias concludes:

Ultimately I do think that these big ideas matter as well. They’re enormously important in terms of setting the terms of political debate, in terms of influence what’s considered “possible” and what kinds of people have standing to have their views taken seriously. Building a better world ultimately requires getting people to understand that both the empirical and philosophical underpinnings of America’s free market society are much weaker than is generally understood. That doesn’t mean these questions will ever be debated by politicians at a live town hall. But it does mean trying to press a better understanding of these issues on the mass elite who set the tone for much of American political life.

We might hope for that, but I'm skeptical. Not that our mass elite is blind to the things that matter. George Will, for example, has nailed down America's biggest problem: the wearing of blue jeans.

Bigger scoops, I guess

2009-04-16T14:26:00.002-05:00

Maybe someone can explain this to me. Several years ago, Kellogg's had a big ad campaign to show us that every box of Raisin Bran contained two scoops of raisins. [Note: I did some Googling, and apparently the slogan has been reintroduced to Canada.] While that isn't the big thrust of their marketing campaign, it's still featured on their box; we can see the words "Two Scoops!," and a smiling sun is holding a scoop of raisins in each hand.

Here's my question. The 20 ounce box features "Two Scoops!" The 25.5 ounce box features "Two Scoops!" I'm not going to make a trip to the store just for this meager blog post, but I would guess the 15 ounce box looks pretty much the same.

So, do the various sizes have different-sized scoops, or are we getting ripped off raisin-wise when we buy the large size?

Added note: There is a result from math, counter-intuitive to some, that in a container that holds two different sizes of bodies, if you agitate the container sufficiently, the smaller bodies fall to the bottom. Some people think the heavier ones drop to the bottom, but what actually occurs is that the small ones can easily move downward, so they congregate there.

I'm guessing some work went into raisin bran to get the size of the flakes right. If they're too big relative to the raisins, all the fruit would end up on the bottom. Generally, that doesn't happen.

Added added note: Before I published this, I decided to go out and see if anyone had looked into this before (nice Internet). Naturally, some people have. The two examples I found are both from students, which isn't too surprising.

The first just wanted to see what constituted a scoop, so he took a single box (475 g - cursed Canadians and their funny metric system - that's about 16-3/4 oz) and found that each scoop is about half a cup. No answer to my question here.

The second was far more methodical, taking two boxes each of the 15, 20, and 25.5 ounce sizes, and counting the number of raisins in each (of course, this work had more resources, involving a PhD and a JD). The two hypotheses tested were:

(A) Scoop size is independent of box size. In other words, the same scoops are used to add raisins to each box, regardless of box size, so that the number of raisins per box is constant.
(B) Scoop size is proportional to box size. In other words, larger scoops are used for the larger boxes so that the number of raisins per ounce of cereal remains constant.

The empirical data, which is limited in applicability by the small sample size (only two boxes of each size), failed to support either hypothesis. There was a lot of variability in the number of raisins, both within the sizes and across them. Raisins per ounce varied from 12.1 to 19.1.

My conclusion: Kellogg's may not be using a scoop at all!

How can we miss her if she never goes away?

2009-04-15T09:15:00.002-05:00

From Philadelphia:

He mishandled her national rollout to the public, botched her relationship with the media and now supporters of Alaska Gov. Sarah Palin are charging Sen. John McCain with snubbing his former running mate during an interview on NBC’s “Tonight Show With Jay Leno” Monday night.

Mr. McCain is coming under fire for his conspicuous memory lapse when listing the names of Republican governors who could be the next in line to challenge President Barack Obama in 2012. Mrs. Palin did not make the cut.

“We have, I’m happy to say, a lot of voices out there,” Mr. McCain told host Jay Leno before listing Louisiana Gov. Bobby Jindal, Minnesota Gov. Tim Pawlenty, Utah Gov. Jim Huntsman, former Massachusetts Gov. Mitt Romney, and Florida Gov. Charlie Crist. “There are a lot of governors out there who are young and dynamic.”

Let's back up a minute. He "mishandled her national rollout," he "botched her relationship with the media"?

John McCain, whatever he might have improved operationally, took a no-name governor from a small-population state and turned her into a national figure by tapping her as his running mate. Without McCain, Palin doesn't have a PAC, isn't on everyone's short list for consideration in 2012 or 2016, is as obscure as Donald Carcieri.

She sat in the interview with Katie Couric, not John McCain. She was the one unable to answer simple questions, a lack that proved to a lot of people that she was nowhere near the level we'd expect of someone very likely to take over the presidency.

I understand that this Joe Murray who wrote the article is a former staffer for Wildmon's American Family Association, so unbiased journalism is not remotely possible here, but couldn't he at least try to be credible in making an argument?

Is there no shame?

2009-04-15T08:56:00.002-05:00

In celebrity/political news:

When he was indicted, former Gov. Rod Blagojevich went to Disney World. Now that he’s been arraigned on federal corruption charges, Blagojevich wants to head off to the jungles of Costa Rica.
Blagojevich has signed on to do the “Survivor”-style reality show “I’m a Celebrity, Get Me Out of Here” that’s to be filmed in June in Costa Rica.
The prime-time NBC program will pay contestants up to $80,000 an episode. Until they’re voted off, anyway.

Celebrity? An elected representative of the people who has abused the power of his office (even if we ignore the specific charges against him), who has accomplished very little other than self-aggrandizement, who preposterously believed that he would become President one day, this man is a celebrity?

There are families that would love to make $80,000 a year, and this pompous, laughable, despicable figure is going to make this per episode (and rub shoulders with the likes of Nancy Kerrigan - whoo!) after abusing the trust of the people who gave him what fame he has.

He clearly has no shame, no self-awareness. But what does this say about the people who will be watching?

Prices are down. That's good. No, it's bad...

2009-04-15T08:45:00.002-05:00

From the AP:

Consumer prices dipped unexpectedly in March, leaving inflation over the past year falling at the fastest clip in more than a half-century. The recession is expected to keep a lid on inflation as widespread layoffs dampen wage pressures and weak demand keeps companies from raising prices....It was a better performance than the 0.1 percent rise in the Consumer Price Index that economists had expected.

So that's great news, right? "Better" performance?

Maybe not:

Over the past 12 months, core inflation has risen 1.8 percent. While some economists have expressed fears the recession could spawn a destabilizing period of falling prices, other analysts point to the rise in core inflation as evidence that deflation remains only a distant threat.
In fact, some economists worry that all of the moves the Federal Reserve has made to fight the recession and the worst financial crisis in 70 years could be sowing the seeds for inflation troubles down the road.

Well, that actually sounds pretty dire. I'm getting a little confused as to whether we have deflation or inflation, and whether we have good news or bad. If only some learned fellow could put my mind at ease:

In a speech Tuesday, Federal Reserve Chairman Ben Bernanke repeated assurances that the central bank is always mindful of the threats of inflation and is prepared to remove the monetary stimulus it has provided once the economy shows signs of stabilizing.

Oh, OK then. The central bank is on top of it, and will suck all the money out of the economy, the billions and billions of dollars, once there are "signs" of things going better.

Sarcasm aside, we need to be very afraid of this. There are two massive forces colliding, one deflationary as wages and prices are cut, the other inflationary, as the Fed pumps money into the economy. As long as they remain roughly in balance, we'll see only mild price changes.

If we listen to the Chairman, we would believe that the Fed is so thoroughly attuned to the health of the economy that it will know exactly when things are turning around and will remove "monetary stimulus." This is code for money supply and interest rate changes (those are the two monetary tools the Fed has at its disposal).

This is the same Fed that did nothing to curb a tech boom 10 years ago, and did nothing to curb the housing boom of these past several years.

More importantly, monetary policy is not what we're using to put people to work and get the economy moving. We're using fiscal policy, as the government shovels money out the door to soak up all that unused supply of labor.

However, the stimulus money, quite a bit of it, has been marked for long-term projects, infrastructure improvements, just as all the economists and pundits told us it should be. These projects, despite the use of the term "shovel-ready," tend to take a certain amount of time to wind up, and they also are predominately atomic (that is, a single indivisible unit).

For this kind of fine tuning to work, we had better be prepared to see roads to nowhere, bridges half completed, wind farms abandoned...but we know that's not going to happen. Even after the economy starts to turn around, we're going to be committed to finishing these projects, and that will cause distortions in the recovery - even, potentially, more bubbles. We could very easily end up lurching back and forth from boom to bust, never quite getting a handle on doing things that lead to long-term growth and stability. And I don't even need to mention the political swings that will come about.

(W)age discrimination revisited

2009-04-14T20:45:00.002-05:00

I may have understated the problem last Saturday when I contended that age discrimination can be explained, at least in part, by expectations about the future:

If a company takes a chance and hires the older person for $40K, there is the real possibility that another company might come along two months later and decide to pay that person something closer to their previous salary. Then the company is out time and money, plus having their technology exposed to someone who's gone. It's a lot easier just to hire someone who's happy to get the $40K to begin with.

I still believe that's a real mechanism, but The New York Times has quite the sobering article:

But unemployed baby boomers, many of whom believed they were still in the prime of their careers, are confronting the grim reality that they face some of the steepest odds of any job seekers in this dismal market. Workers ages 45 and over form a disproportionate share of the hard-luck recession category, the long-term unemployed — those who have been out of work for six months or longer, according to the Bureau of Labor Statistics....Even when they finally land jobs, they typically experience a much steeper drop in earnings than their younger counterparts.

The piece also cites the fairly well-known study in which a professor sent out resumes that differed only in age. Younger workers were 40% more likely to be called for an interview.

There's a real disconnect here among various trends:

We're going to "reform" Social Security at some point by delaying payouts (we've already done that to some extent) under the theory that people are living longer and, therefore, can work longer.
An inability to effect meaningful monetary policy has created the necessity of less-effective fiscal policy, which is justified by one and all as filling the need of getting the un- and underemployed back to work, soaking up all that unused capacity.
Workers over 45 are finding it hard to stay employed or get reemployed - and they're only about halfway through their working lives.

These simply don't fit together, in that we have an experienced population that is going to be asked to work longer at jobs that don't exist for them. There will likely be people who contend that this is a good thing, that workers will have to plan their lives better, not count on 40 years of earnings and Social Security.

I'm not qualified to talk about whether this will eventually be better in the sociological sense. What I do know is that the large number of folks who worked under the old assumptions are going to be in a lot of trouble as the world changes, and we as a society ought to figure out how we're going to look after Grandma and Grandpa when their security guard jobs are still not enough to keep them from eating cat food.

Facebook?

2009-04-13T18:40:00.003-05:00

It has come to my attention that someone has started a Facebook group for fans of this blog. I'm not exactly sure how I feel about that, just as I'm not sure how I feel about Facebook in general. It's flattering in a sense, but I have no idea how anyone is supposed to use it or enjoy it.

A few months ago, I got on Facebook, mainly to see what it was about (I've criticized it a few times for being relatively content-free, and I really can't do that unless I have some experience with it; my experience has not changed that opinion). I don't really feel like doing a detailed critique of social networking sites right now, but it strikes me that Facebook and MySpace tend to be relatively passive ways of maintaining what they have brilliantly called "friendships." There is an illusion of intimacy that comes from being enmeshed in the minutiae of someone's day-to-day life, but that's a far cry from being an actual friend.

I'm sure there are those who could find ways in which Facebook has actually enhanced life; I know it's been used as a platform for fund-raising (though I'm not certain that Facebook is required for that), but I wonder about costs vs. benefits. A lot of people spend a whole lot of time on what strikes me essentially as filling in a form (for those people who think that engaging in social networking is somehow high-tech, let me tell you - it's not). Are the benefits that these sites provide really worth the time and energy people spend on them? I guess that's a personal decision, but I didn't find it especially compelling.

Twitter is similar, something that I've been on and not been grabbed by, but I know quite a few people who find it useful (though they may actually mean "interesting," which is something quite different). Of course, I spend rather too much time on this blog, and I would guess many would find that a waste of time. Each to their own, I suppose.

Titles

2009-04-13T18:39:00.002-05:00

A question for the gathered throng: When do titles expire, or become ex-? I ask this because, in watching This Week on ABC yesterday, George Stephanopoulos and his guests did something I've heard before, and that is to refer to guest Newt Gingrich as "Speaker."

Last I checked, Gingrich wasn't speaker of anything except his own particular (and rather strange) view of the world. He was Speaker of the House, but that ended over 10 years ago. While it might be ungainly to refer to him constantly as "ex-Speaker," that argues for dropping the whole thing, not for dropping just the "ex."

Is there some standard published somewhere that tells us which titles expire and which don't? I know that Miss America becomes a former Miss America the minute the crown is placed on another woman's head, and Presidents of the United States seem to remain "Mr. President," but, for all the titles in between, I just don't know.

A worthwhile hour

2009-04-12T05:26:00.001-05:00

For me to write about a television show that has finished its run for the year, and won't be back for nine months, seems pointless. But Friday Night Lights, which had its season finale on NBC on Friday, is performing at such a high level that I'm going to call it out before memory fades.

You can find plenty of tributes to FNL on the Web - it's a real critical favorite - and I don't need to recount most of that. The actors, led by Kyle Chandler (and hasn't he done a nice job of overcoming his work on What About Joan; how has he kept his name off the IMDB page for that stinker?) and the writers have created complex, believable characters. The style, featuring handheld cameras and, apparently, improvisation, gives an intimacy to the show that's hard to match.

But I also like how issues are woven into the show through telling stories, rather than by didactically hitting the viewer over the head (the way this blog does sometimes, unfortunately). The conflict between the needs of education and the mania for the football team (a less artistic presentation here) was illustrated through the means of a booster-desired Jumbotron screen in the face of teacher cutbacks. That didn't come to a neat, happy resolution, which is pretty real.

The character of Tyra, well played by Adrianne Palicki, is a young woman who has come of age over the three seasons. Tyra, as we first knew her, was lost, hiding whatever her real talents were in romance and a who-cares attitude. Then she, for various reasons, got serious about school and her future. Without spoiling the final episode, I'll just say that it makes you think about the importance we place on young people making the right decisions off the bat, regardless of what role models they have or resources they can draw on. That a clearly smart young woman as Tyra can worry about whether she can go to college, even though her last two years were filled with achievement, feels wrong, in that we expect 14-year-olds to understand that their future depends on what they do right now.

The show is not, naturally, perfect. The football sequences are pretty poor, with far too many last second victories (or losses), and a real lack of coherence. There are times when characters are far too articulate - Tyra's mom has a speech in the next-to-last episode this season that has no precedent in anything we've ever seen from this character. Lyla is #2 in her class (because we know #1 just must be a grind, no one we'd ever want to hang with).

Some of these flaws are explainable by the exigencies of television. In real life, Tyra's mom might have said something far less articulate but equally understandable by her daughter, but it needs to be unpacked for the mass audience. The football games are meant to be significant, so are bended to the needs of the show.

These things aside, FNL is a welcome change from gritty police dramas and blue-lit procedurals and ersatz reality shows. If you haven't been watching (and, according to the ratings, most of you haven't been), you can catch up on NBC or buy the DVDs. I'd strongly recommend you add this show to your list - and it's been renewed for two more seasons, so you still have a chance to jump on board (even though it won't be back on NBC until it's finished its run on DirecTV, an unusual arrangement that splits the costs and helps the show survive).

(W)age discrimination

2009-04-11T16:50:00.002-05:00

There's been a lot of talk lately about age discrimination, especially in technical fields. It's been occurring to many of us that our experience and wisdom is being ignored in favor of the perceived advantages of youth, their "fresh outlook" and their "eagerness." For those of us in the knowledge fields who don't think enthusiasm trumps knowledge, that kind of statement is profoundly ignorant and insulting. While some people over 40 do become ossified in their thinking, stuck in a morass of 20-year-old knowledge, most I have known retain their interest and aptitude for solving problems by whatever means necessary. They are adept at learning new things, and the base of knowledge they already have makes that learning far easier than for someone, no matter how great their enthusiasm, who does not have that base.

None of what I've written so far is anything new, and other observers of this phenomenon have hit upon the idea of cost. Why pay an older person $80K, when you can get two young people for the same amount of money who will work incredible hours (no families yet) and bring cutting-edge ideas from their education?

That the older person may have the experience to know what does and doesn't work, allowing him or her to cut through the noise and solve the problem in less than half the time, doesn't occur to those who prefer to look, not at efficiency, but at cost per employee.

But there's another factor, and, that is, older people have been beaten down by the job market. Many of them would be perfectly happy to get to do what they want and love, even if the pay were considerably less than they received during the good times. Yet many still languish, working, if at all, in jobs that offer less challenge than they can handle, or worse working conditions than would be ideal. So why are they not snapped up?

[Note: I am not unaware of the argument that says employers prefer younger people because they have longer potential tenure. I just think it's wrong. I know of no statistics to back me up, but I'm guessing that it's at least as likely for a 55-year-old to still be with a company after 10 years as it is for a 25-year-old.]

It's easy to look at age discrimination as the answer, and de facto that's what we have, but I think the mechanism is a bit different from, "we don't like having old people around." Here's my analogy.

Let's say you engaged in an auction, but the rules were different. You would have to pay something every time you made a bid. Of course, this would change your behavior, perhaps to the point where the auction couldn't take place at all. If the payment was at all significant, you wouldn't make any trial bids early in the process, you'd wait until you were pretty much sure of winning...which you would never be.

This is analogous to what happens in the hiring process. If a company takes a chance and hires the older person for $40K, there is the real possibility that another company might come along two months later and decide to pay that person something closer to their previous salary. Then the company is out time and money, plus having their technology exposed to someone who's gone. It's a lot easier just to hire someone who's happy to get the $40K to begin with.

In this way we see the exclusion of people who have ever made more money than the current prevailing wage, creating a class of formerly successful people who now have far less chance of being employed. As a result, there is a tendency on the part of these people to downplay their experience (once again, I have no proof that this is happening, the "puffing down" of resumes, but I'd be very surprised if it isn't).

Economics doesn't do a good job of capturing this, given its propensity to believe that people move effortlessly up and down the wage scale. But this is a real problem, in that companies are deprived of utilizing the talents of the experienced, and the employees themselves who are prevented from working in their field.

Of course, companies could prevent this problem through the well-understood mechanism of contract law, but they really don't want to limit themselves in this way, no matter what the gains might be. It's hard to see the current model as the best way forward.

Big time ballin'

2009-04-10T22:05:00.002-05:00

Eric Zorn asks, in light of the news that the Illinois Institute of Technology is dropping varsity basketball, "Why does any college or university give scholarship money to athletes in non-revenue producing sports?" He goes on to write:

In fact, with any non-revenue sport, you can make the case that non-athletes at a college or university end up helping to pay the freight for the athletes. What's the justification for this, given the core mission of higher education?

These are good questions, but I wouldn't limit the discussion to non-revenue sports. Someone may be able to make a case that the revenues from some sports (basically, men's basketball and football) are a positive for the college, but they seem only to contribute to a gigantism of those programs (as we see with new Kentucky basketball coach John Calipari, who's going to get almost $4 million a year).

There are some interesting comments within the post, some reinforcing the Zorn opinion, others refuting it, like this one:

As a non-athlete, I disagree with the premise of EZ's argument. If athletic scholarships should only be given in revenue-producing sports, does that mean only basketball and football players (and baseball at a few schools) should benefit? This kind of thinking would screw women athletes especially. And while football and basketball programs make the money, colleges accrue a great deal of cachet competing in things like volleyball, rowing, soccer, swimming, wrestling and track.

Zorn responds:

Really? Colleges accrue "cachet" competing in volleyball etc? First, says who? And second, so what? What's the bottom-line value of having a volleyball or rowing team? How does it serve the core mission of the institution?
Does it attract a higher-caliber of student? More enrollments? Greater giving by alumni? Anything else that might attach to a school's bottom line?

Wouldn't have even tried expressing it better, but I couldn't entirely resist jumping in on the thread:

I would question the granting of money to so-called revenue-producing sports. That gets us into a difficult calculus where we try to decide which students bring in money and which do not (the perfect SAT kid beefs up the stats and attracts more top students, at least theoretically - what's the value of that?).
As for private universities, perhaps they "should receive no public funding," but they certainly do through grants and tax breaks. They have forfeited the right to do whatever they want.

Zorn goes on (and isn't it good to see a popular blogger who engages in some back-and-forth?):

Student achievement is part of the core mission of a college or university. I don't see how having a talented swimmer or juggler or foosball player or hacky-sacker or whatever necessarily advances that core mission.

Is it the building of "school community"? most sports have more participants than spectators, so money spent in that area should go not to scholarships, coaching salarie or travel, but to intramurals.
Nothing said so far persuades me that this is anything other than tradition run totally wild to the detriment of the institutions.
Who calculates what does and doesn't pay off? Why not let the schools make that calculation? If they can justify having fencing teams and golf teams and so on even in a tangential bottom-line, core mission way (that explains why it's better to invest resources there than in, say, science labs, library books, academic scholarships and so on), I'd like to hear it.

I think Zorn is dead on (except for his exclusion of revenue-producing sports; we should still ask if they serve the core missions of the institution). I've never really understood why every college, whatever the size, is compelled to offer an expensive football team. I know the arguments, in particular that it revs up the alums and their checkbooks, but I'd have a lot of respect for an institution that came out and said, "We take pride in our science and math and English graduates, we don't need to offer up five or six expensive shows every year heedless of cost."

I am a big sports fan, but that doesn't mean I can turn a blind eye to the disparity between what ought to be the objectives of an institution of higher learning and the actual practices. One hears about college presidents spending major amounts of time on NCAA investigations and "problems" with athletes, and it raises the question of how time should be allocated.

Of course, this is not a problem confined to tertiary education. Our high schools suffer from the same kind of misemphasis; even in these difficult times, no one ever seriously considers dropping or cutting back on football (at least in my area of the world), even as teachers are let go.

I know that there are benefits to team sports, at least for the relatively few who get to experience them. But it is not unfair to insist that we look at the benefits and the costs, and make these programs fit into a spectrum of activities that represent the actual purpose of what are, after all, educational institutions.

Ripped from today's headlines

2009-04-09T09:00:00.002-05:00

From the first page of the sports section of today's Chicago Tribune:

(In a story about the Masters golf tournament) Shark attack: The new groom (Mr. Chris Evert) and perennial bridesmaid (three second-place finishes) returns to Augusta for the first time since 2002 - and as the sentimental favorite

Yes, but who is it? The reader must guess.

And:

(In a story about yesterday's White Sox loss) The Sox were shut out 11 times last season, but they couldn't produce an extra-base hit after seizing a 4-2 victory on Jim Thome's dramatic three-run homer in Tuesday's regular-season opener.

This sentence is just a train wreck.

Any chance we can get John McIntyre, professional copy editor, to move to Chicago?

Goodbye, middle class

2009-04-09T07:44:00.000-05:00

From about a month ago, Mark Thoma quotes an article by Stephanie Schorow:

Dramatic shifts in the U.S. labor market in the last 25 years are relegating older workers -- even those with a college education -- to lower-wage jobs, according to a research paper by MIT Economics Professor David Autor.
This trend appears likely to steepen in the current recession, as employers accelerate the rate at which they shed nonessential positions....
As the labor market "hollows out," workers who in a previous generation would have occupied middle-skill, white-collar positions must increasingly find their fortunes elsewhere -- either in high-skill, high-education professional, technical and managerial positions, or in less-educated manual labor and in-person service jobs. Autor's data indicate that since 1980, older workers with at least some college education are increasingly doing what was once thought of as "non-college" work, i.e. non-routine, but not highly skilled jobs.

I have certainly written before that the "college premium" is on its way downward, and this research supports my contention. We need to be cognizant of the implications of this idea, because it changes many of our long-held beliefs as to how we get ahead, and calls into question the commonly-held belief that more education is always better. I just don't know what it will take to get us to see that putting every young person on the college track and letting them fail into the vital (but non-academic) jobs is not a recipe for long-term survival.

Poor Larry

2009-04-08T19:36:00.002-05:00

Richard Cohen in the Washington Post:

The recent headlines about Lawrence Summers had it all wrong. They announced with an implied breathlessness that he earned around $8 million last year -- much of it from the hedge fund D.E. Shaw. Here's what I would have written: "Man Takes More Than $7.9 Million Cut in Pay." Somewhere in the Diagnostic and Statistical Manual of Mental Disorders, the bible of shrinks, there should be an entry for "public servant." They are all, bless their hearts, a little nuts.

Dean Baker responds:

Arguably Richard Cohen is just best ignored as readership of the Washington Post oped pages rapidly approaches zero, but it is worth correcting the logic by which he decided that Larry Summers, one of President Obama's top advisers, is making a huge sacrifice by foregoing Wall Street millions.
All jobs carry a mix of pleasant and unpleasant aspects. Many people take relatively low-paying jobs, for example school teachers or social workers, because they believe that they are advancing a social purpose that they consider valuable.

Cohen does allow:

I don't mean to characterize these or other administration aides as the functional equivalent of Trappist monks, since they enjoy the attention, the power and -- above all -- the action. They are doing something substantive, important -- sometimes making life-or-death decisions and gaining, if they are lucky, a mention in a history book. It is not a life without any compensation.

I think both Cohen and Baker have forgotten something important, that it is the government service which, in many cases, enables the riches. To talk about Larry Summers' "sacrifice" without pointing out that he was one of Clinton's Secretaries of the Treasury is a major omission. Without his occasional forays into public positions, Summers stands as a major but by no means invaluable economist.

There is also the issue of access, that someone who has held the sorts of positions Summers has is more likely to have a voice in the halls of Congress. I obviously have no idea what he was doing that would induce a hedge fund to pay him more than $5 million last year, but it would be odd if some of that didn't come from his implied influence with politicians. And, when Summers is done working for Obama, there's a high probability that he will be that much more valuable, and able to command more money.

This is one of those classic fallacies of short-term thinking, similar to the idea that we can't restrict the pay of top bankers because "they'll take their talent elsewhere." That leads us to give failed financial wizards major dollars when they have most certainly not earned them, at least not lately. But no one is saying that their pay will be restricted forever, and the cachet that comes from turning around a bad situation will undoubtedly enhance their future prospects.

At least he won't mention me

2009-04-07T22:06:00.002-05:00

Entertaining post by Jim Henley at Unqualified Offerings, Who Blogs Too Much? Henley contends that there are just some bloggers who are too busy. He captures well the challenge of keeping up with even those writers who are favorites:

Some of the people are folks whose writing I’ve long enjoyed but whom I’ve practically given up on reading because, when faced with a count of 30 items in Google Reader – since breakfast – the heart sinks and the mind quails. And if you’ve ever seen a sinking quail you know they make awkward, fluttering crashes. It’s much easier to just click the “Mark All Read” button and resolve to catch the next batch.

Wow, can I relate. I try to keep up with a fraction of the "big" bloggers, and Yglesias, Benen, and Sullivan alone are utterly exhausting. Then I fall behind, and Google Reader cuts off the posts after a month, and I feel that I'm missing something (even though it's just old news).

There does come a point where you kind of wish that these folks would put some general principles at the top of the page, then not write any posts that are covered by those principles (Yglesias: "I support congestion pricing and mass transportation" - that would eliminate some goodly percentage of his output).

Henley offers some suggestions of his own ("Most of you should average four to six posts a day"), but I fear nothing will work, at least not so long as blog posts = traffic = revenue.

The tragic comedy of visas

2009-04-07T21:55:00.002-05:00

I've written before that I'm not categorically opposed to the H-1B visa program, that offering short-term employment to people from other countries in certain fields is not necessarily a bad thing. But I do insist that the various people who buy wholeheartedly into maintenance or expansion of the program be honest in presenting their reasons, and that just isn't happening. When Bill Gates testifies to Congress that the program needs to be expanded, he isn't speaking as a statesman or expert in immigration policy, he's doing so as a major stockholder in a company that will profit from that immigration.

We hear a lot about a study that claims that every H-1B application generates five to eight jobs. I've read the study, and it's rather poorly done. (You can tell that from the conclusion, which is preposterous; if it were true, we could hire interns to fill out applications that would never be approved, and, voila!, instant jobs.) It's a regression study, plain and simple, with no causative factors explored. I would guess that, were it to be redone today, we would see continued H-1Bs and a drop in technical employment. That result would be just as spurious ("H-1Bs Cost American Jobs, Study Says"), and just as dismissible.

I don't know what the "right" number of H-1Bs is, and neither does anyone else. Right now, it's 65,000 a year, plus 20,000 for applicants who have earned masters' degrees or higher. I see nothing wrong with attracting the best and the brightest (the term that is invariably used by supporters of the program), I just don't see the mechanism by which we ensure that we're actually getting them.

I also don't like the marginalization of those who question or oppose the program. There are a lot of concerns that H-1B fans don't want to address, and those peope tend to be powerful enough to demonize the questioners. If you want to discuss whether the program has the right limits, or whether it's being used as intended (the companies that use the largest number of these visas are Indian inshoring companies), or whether the workers are paid the "prevailing wage," or whether this amounts to a kind of indentured servitude that enriches corporate executives, you're either told that you don't understand the wonders of free trade, or that you're an immigrant-hating racist.

It's something I've written before, but it bears repeating. I, unlike many of the people who feel free to weigh in on this issue, have worked with quite a few H-1B holders. Some of them are very good; you'd want them on your team, in your company, in your country. Some of them are just terrible, and should be sent home and drummed out of the field. The vast majority of them are, well, OK, competent, but nothing special. And the percentages of the people who fall into these categories are not so very different from that of US citizens.

It's really hard to justify, in our current climate, the importation of the mediocre and the terrible when there are good, experienced workers out of a job. That doesn't mean that we should exclude everybody, just that we should find some way of distinguishing those who are truly outstanding from those who are not. It's not as easy as handing every college graduate a visa, as not every mope who drags him- or herself to four years of classes is necessarily best or brightest (this goes for Americans as well).

Rob Sanchez's Job Destruction Newsletter chronicles the issues surrounding this topic in thorough fashion. He is, probably, more anti-H1Bs than I am, but that's fine. What is scandalous is that the issues Sanchez writes about are rarely taken seriously by the CEOs and pundits whose single-minded focus is "American workers bad, H-1Bs good."

April 1 is the day that US Citizenship and Immigration Services begins accepting H-1B petitions, and Sanchez is staying on top of this. There is a deadline of five days for accepting these petitions, and you may be wondering what happens if the cap is reached in that time - how does our government determine these best and brightest?

I'll let Sanchez answer this:

In case you are wondering what happens after the cap is reached, the USCIS will hold a random drawing to determine which ones get visas to work in the USA, and which ones have to go back to India. So, in order to select the "best and brightest" whiz kids in the world who will be invited to take jobs that Americans either can't do or don't want, we will pull names out of a big hat.

Again, I'm not absolutely opposed to some kind of program like this, but random selection completely undercuts the contention of its supporters. We're not looking for the elite, we're just looking to bring in people to do our work. That is most certainly not the stated intention.

Note: I'm not ignoring one possibility. It is conceivable that proponents of the H-1B program have no problem with the random draw because they believe that any immigrant is superior to any American. If so, they should just say that, and clarify their thinking for us.

Review - Cross Country

2009-04-06T19:40:00.002-05:00

Wow!

That's my initial reaction to the new Alex Cross detective novel, Cross Country (2008). James Patterson made his bones on the series featuring Washington detective/psychologist Cross in books like Along Came a Spider and Kiss the Girls. Those were riveting thrillers, Cross a fascinating character.

But Cross Country is dreck, amateurish and uninteresting dreck (what, you thought that was a good Wow? - no way). Here's the plot: someone close to Alex is killed; Alex gets mad, but can't stave off several more brutal killings; Alex decides to follow the killer to Africa; Alex is tortured; Alex gets out; Alex gets tortured; and repeat (if there's a reader alive who won't say, "Alex, don't go out for that run"...). There isn't a moment in this 406 pages that is believable or involving.

One hears about the James Patterson writing factory, how he churns out outlines at the beginning of the year, takes a couple for himself, parcels the rest out to other writers. While this may serve Patterson's goal of making big money, hitting the bestseller list several times a year, making appearances on television shows (ABC's Castle), it's done nothing for his writing.

To be fair, what I think happened here is that Patterson read about the horrific violence in Africa, particularly Nigeria, Sierra Leone, and the Sudan, and decided something needed to be done. And what better way of drawing attention to the violence, even genocide, than to involve his most popular character in it? But how do you get someone from Washington, DC, to sub-Saharan Africa?

A good writer would find a way that would be in the nature of the character and credible. Patterson didn't go that way, so Cross Country ends up being bad, so bad as to tarnish his main character. It will be hard to accept the Alex Cross we've come to know from the earlier books after witnessing his immense stupidity here.

I will say this, however. If you insist on reading this book (if only for completeness), it won't take long. The 406 pages feature so much white space and so many chapter breaks (there are 158 of them) that the book can easily be labored through in a couple of hours.

New places

2009-04-05T05:24:00.001-05:00

I am not as diligent in managing my Other Places of Interest (move your eyes to the right) as I should be. There are places I go to that I haven't added, some because they're too ubiquitous to need my help (I'm talking about you, Sullivan and Yglesias), some because my feed reader obviates the need for me to click on my own places.

I'm also wary of doing too much pruning; it's easy to believe that some people are gone when they're only resting. One of my favorites, The Corporate Cynic, hasn't had any activity since last July; should I drop that? I don't, for two reasons: first, the stuff that's posted there is still worthwhile to read if you haven't seen it before; and second, these sites can come popping back into play at any moment. For example, I had pretty much figured that From ship to shore, an entertaining travel blog by a cruise ship hostess, was out of business when there had been no new posts in 14 months. But Jacky's back out on a round-the-world cruise, and she's posting again.

So I've added another couple this week, only fitting as I keep plundering them for posts. The Baltimore Sun copy editor John McIntyre writes a very entertaining and enlightening blog, You Don't Say, and I have added it to the list. Now you can easily go there directly instead of reading my rehashes of his work.

David Seaton is a journalist who now lives in Spain, and he has a pretty cynical (realistic?) take on the world. He expresses this on his News Links blog in which he chronicles the destructive trends he sees, and he spares nobody; he's not much a bigger fan of Obama than he was of Bush.

More math

2009-04-04T15:12:00.002-05:00

Last Sunday I wrote a short piece on three concepts from mathematics that are frequently misunderstood, but have a great effect on our understanding of current events and what people are saying and writing about them. For the record, those are: so-called exponential growth, curve fitting, and nonlinearity.

It's occurred to me that I left one important math misunderstanding out, so I'll swing back and put in here. That concept is one from game theory, the idea of zero-sum vs. positive-sum vs. negative-sum games. These are words that are thrown around a lot, and, as invariably occurs when amateurs pick up the terms of a specialized field, they are abused a lot as well.

In short, the nature of the sum (zero, positive, negative) comes from the inherent nature of the game being played, and refers to the total resources of the players. (It's important to stress that the word "game" here has a specialized meaning, not restricted to fun activities, but to any human endeavor that has an uncertain outcome.)

Casino games are negative-sum games, at least for the players, because they never return as much to the players as the players put in. Two important points here: 1) Obviously, if one counts the casino as a player in the game, the money stays the same - it must be a zero-sum game - but it is customary to exclude the rule-setter as a player; and 2) The game is the whole system between player and casino, so it is not a refutation to point out that some players do walk away ahead.

Private poker games are, generally, zero-sum games. Each of five people walk in with $100, and, at the end of the evening, $500 walks out the door; we just don't know ahead of time in whose hands it will be. It is not impossible, but fairly unlikely, that everyone will leave with exactly what they came in with. That's why we don't see poker as a productive activity, even though in the usual case one or two people do walk away richer.

Now let's take the poker game, but add the idea that some wealthy person has decided to subsidize the action, say by throwing an extra dollar into each pot. If the players engage in 100 hands during the evening, the total they will walk away with will be $600. We have just defined a positive-sum game, one in which, theoretically, every player could come away better off (even if this doesn't ever actually happen).

Here's the thing. While everyone might come out better off, it's more likely that one person will walk away with $600, the other four all losing $100. Telling the latter four that it's a positive-sum game doesn't really do anything for them at all, they still lost all their money. In fact, they may even resent this game more, because there was an extra $100 up for grabs and they got none of it.

I'll give just one example of the way this is used in political and economic discussion, but there are others. Very often, someone will support free trade by saying, usually pretty smugly in an attempt to forestall further discussion, that free trade is a positive-sum game. The clear inference we're to draw is that everyone will be better off. But that's not what "positive-sum" means at all, it only means there will be more wealth in the system than there otherwise would have been - that's all.

It's the old question of growing the pie vs. splitting the pie, which is more of a political issue than an economic one. Free trade, for all of its pie-growing capabilities, is not "good" if it brings unacceptable distributional effects. Whichever you come down on that issue, it is clearly more complicated than citing "positive-sum" and sitting back, convinced the discussion is over. We need to be smarter than that.

Too much book-larnin'?

2009-04-03T20:07:00.002-05:00

In the category of late to the party, I put a reference to an excellent Vanity Fair article by the reliable Michael Lewis, Wall Street on the Tundra. It chronicles, in painful detail, the way that Iceland messed up its economy. Essentially, the country became obsessed with finance, making scores of young people into untutored investment bankers.

There's too much here to summarize properly, you really have to read it for yourself, but, for me, a telling quote:

Back away from the Icelandic economy and you can’t help but notice something really strange about it: the people have cultivated themselves to the point where they are unsuited for the work available to them. All these exquisitely schooled, sophisticated people, each and every one of whom feels special, are presented with two mainly horrible ways to earn a living: trawler fishing and aluminum smelting. There are, of course, a few jobs in Iceland that any refined, educated person might like to do. Certifying the nonexistence of elves, for instance. (“This will take at least six months—it can be very tricky.”) But not nearly so many as the place needs, given its talent for turning cod into Ph.D.’s. At the dawn of the 21st century, Icelanders were still waiting for some task more suited to their filigreed minds to turn up inside their economy so they might do it.
Enter investment banking.

I do understand that one cannot compare Iceland to the United States (though Lewis certainly finds parallels to our high-flying world of finance), but it seems indicative of something that it is at least possible for a nation to have too much education. It demonstrates that the commonly-held idea that more education is always better is false, that its truth depends on a base that is considerably more complicated.

As I have pointed out before, the labor market is in many ways not a market at all. No one really cares if everyone has an SUV, or a big-screen TV, but we want everyone to be working. The employment market really only works in two cases: either there is so much demand for everyone that the supply mix is immaterial, or the demand has to pretty closely match the supply.

I would contend that, for a very long time, the first condition was true in America (generally, that is; I'm not forgetting the Great Depression). We were so productive and had such resources that we needed everyone, no matter what they did. And as classical economics would tell you, that situation leads to incomes being bid up, and that's just what happened, from CEOs to garbage haulers.

But our growth rate, for a host of reasons, is no longer what it was, even potentially. We're not China that can unleash pent-up demand and grow in the double digits every year. We've moved to a mature phase in which growth can come only from real innovation, and that will never be 10+% again.

So our labor market is in the second situation, that is, the people we're producing have to pretty well match up to the opportunities we have. That matching has to come out of the whole system we have. If we tell our young people (as we have) that agriculture is a dead end for the uneducated, so no one enters the field, but we still need, say, 1,000,000 people to work on farms, we can only get them from two places: from somewhere else, or from those who haven't succeeded in anything else.

That is the crux of the Iceland problem, that they can't paper over the mismatch by importing workers to do the fishing and smelting. There are structural reasons, most social, why that won't work. It also is not clear, if they did import workers, what Icelanders would then do, other than leave the country.

Now I hear the objection. What should happen, if Icelanders are extremely well-educated but have nothing to do, is they should become great innovators and creators. That's the assumption our experts make, that more education will lead our youth to make the future.

That's not wholly untrue. We have a far greater ability to assemble a critical mass of diverse-skilled workers to accomplish things, much more than does Iceland. If we overeducate some number of people, there is some probability that they will find something to do, and it may even be productive and lucrative (like Twitter...but I don't want to start on that).

But some is not 100%, and, in my opinion, it is possible to have too much education, and almost certain in specific fields. Which leads us to the Iceland case, one that I think serves as a cautionary tale for us. Instead of assuming that more education in any field is absolutely required to be a good thing, we need to start looking at the mix, and, perhaps, provide incentives for young people to enter vocations that we're actually going to need. More home health care workers, fewer software engineers.

Otherwise, we're left with the argument that supply inevitably creates its own demand, and we're pretty sure that's not an inviolable law at all.

New economics blog

2009-04-02T17:38:00.002-05:00

Robert N. Stavins is a professor of Business and Government at Harvard, and he started a blog in February called "An Economic View of the Environment." Since I don't know too much about this subject, I'm going to follow it for a while and see what I can learn.

Stavins got off to an interesting start with a series of posts about myths concerning the way economists think (Mark Thoma pointed to these, which is where I found out about it). He cites four such myths:

Economists believe that the market solves all problems (discussed here)
Economists always recommend simple market solutions for market problems (here)
When non-market solutions are considered, economists use only market prices to evaluate them
Economic analyses are concerned only with efficiency rather than distribution (the last two here)

And as I'm reading these, and thinking that only in a fantasy world are these things myths, Stavins anticipates my feeling:

I want to acknowledge that my profession bears some responsibility for the existence of such misunderstandings about economics. Like our colleagues in the other social and natural sciences, academic economists focus their greatest energies on communicating to their peers within their own discipline. Greater effort can certainly be given by economists to improving communication across disciplinary boundaries. And that is one of my key goals in this blog in the weeks and months ahead.

This is good, but not sufficient. These myths apply to all economists, not just those studying the environment, and the communication needs to get out of the ivory tower. Because, whether non-experts are perpetuating these myths for personal reasons, or economists themselves are misrepresenting their work to fit a political orthodoxy, the reality must be exposed.

Of course, the reality is that economics has few definite answers, and that makes a lot of people uncomfortable. Nevertheless, if the profession is to maintain any credibility, it needs to be a lot more realistic about what we can expect from it.

Why the heck not?

2009-04-02T14:29:00.002-05:00

A lot of media types are reacting negatively to the forcing out of GM CEO Rick Wagoner (he's comforted only by the $20 million retirement package). The argument, similar to that of the folks who argued the AIG bonuses weren't so bad, is that government shouldn't interfere this dramatically with the operations of a private company, and the CEO is just a fall guy for bigger problems; he alone doesn't make much of a difference anyway.

For the first objection, I would counter that GM (and AIG and...) is no longer a private corporation. If you can't survive without public money, you end up with obligations and accountability to the public at large. The day Wagoner hopped on the private jet to come to Washington with his hand out is the day he should have started to look around the office to see what he wanted to take home.

The second objection is, if anything, even more idiotic. GM has lost $82 billion over the past four years. Had they earned that much, Wagoner would be rolling in money and on the cover of every major news magazine. His leadership would be seen as significant.

At base, though, my feeling is this: why not get rid of him? If various pundits can ask the opposite, why bother getting him out, I can certainly ask the opposite. Had he any way to save GM, he presumably would have shown it well before now. Since the whole thing has become a crap shoot anyway, let's get another shooter in there.

H-1Bs and you

2009-04-01T17:03:00.002-05:00

I suppose it's somewhat encouraging that The Numbers Guy (Carl Bialik) in the Wall Street Journal is at least writing something about the numbers surrounding the H-1B visa issue. (The link in the first sentence is to his blog post; his print article is here.)

It's not all to the good, as he tries for that false parallelism so common in journalism today ("Bob Franklin teaches his students that 2 + 2 = 5; some experts disagree"). As the subtitle in the print piece states, "Both Sides in the Debate Over Employee Immigration Policies Misuse Data to Advance Their Positions on the Issue."

He does expose the idiocy of Bill Gates' statement to Congress, "for every H-1B holder that technology companies hire, five additional jobs are created around that person," which comes from a "study" I have taken issue with before. That study, so flawed, seems to continue to rally the troops in favor of lifting the cap on H-1Bs. Bialik also points out that the study omits the biggest users of these visas, the Indian technology companies.

For balance, he tries to find fault with those who are against granting more of these tickets to employment. The evidence of statistical misuse is a lot more thin than the above, relying mainly on the premise that the number of actual jobs affected is less than some say. Citigroup says H-1Bs are "fewer than 1% of all employees," which may be true, but doesn't stand as much of a refutation of the larger issues.

Of course, the issue is way more complicated than this back and forth, and Bialik doesn't delve very deeply into it. But at least a mainstream publication is doing something more than parroting the standard drivel served up by those "statesmen" who, coincidentally, have something to gain from bringing in low-cost labor. Whatever statistics one wishes to cite, I'm still not convinced that we won't, someday, be looking at the H-1B program the way we now look (negatively) at the bracero program for agricultural workers of the 1940s and '50s.

The good, the bad...TIME edition

2009-04-01T16:43:00.002-05:00

The current issue of TIME magazine is a disconcerting mix of good news, bad news, and something in between. The bad news is an article about four countries, Ireland, Spain, Taiwan, and Singapore, and how they're hurting in the current financial crisis. Ireland, for example, is suffering the bounce effect of globalization; many of the jobs that came there from the United States over the last decade are now moving again, to Eastern Europe. It would be good if someone could tell us where all the jobs will eventually land, then we could all move there - Abidjan, anyone?

There is little hope in any of these countries. Ireland hopes to use wind and water to get a toehold in renewable energy, Singapore's diversity is not protecting it against a systemic downturn, Spain is not certain of being able to employ anybody, and Taiwan may have to embrace the mainland to keep their economy going. Even countries that made many of the right choices are facing unpleasantness.

The in-between news is an essay with photos on the plight of Detroit. This once-proud city is now under a million in population, with a third of its land vacant. The items that cite its decline are by now familiar: the loss of jobs as the automakers have fallen, the corruption, the unemployment, and on and on.

The article tries to present hope, but I find it difficult to see how turning an auto body plant into a haven for artists will stem the tide. There are new hotels, and the state is offering massive tax breaks to Hollywood; various Detroiters are quoted as saying that the city is a canvas upon which new and wondrous things can be wrought.

But even in a piece that wants to fill us with optimism, the news is pretty bleak. Here is the end of the story:

As America's 11th largest city tries to mount a comeback, locals battling lean times are far from the only stakeholders. "The problems facing Detroit are definitely going to be cropping up in cities all over the country," says Hollander. "The kind of devastated postindustrial landscape we associate with the Rust Belt is starting to creep into the Sun Belt and may start to become a universal problem." Says Covington: "The rest of the world is just catching up to the hard times we've been experiencing." Which is why the world is now watching Detroit with interest--and waiting to see if it finds a way to rise from the ashes.

Pretty thin evidence for a potential comeback here.

The good news is the cover story, written by novelist Kurt Andersen. The cover features a red RESET button and the text, "The End of Excess: Why this crisis is good for America." The subtitle inside ends, "How a reset can make America a saner, better place."

And I've now told you pretty much everything you need to know about this think piece. It's the standard "we've put ourselves into a big hole, but what will emerge will be brighter and more wonderful than ever." Yes, Andersen cites the ant and the grasshopper. There are also pop-culture swings by Homer Simpson (old bloated America - bad!) and Road Runner cartoons, references to silver linings and exhortations to continue thinking big grand thoughts. Our young peope will move away from the crass, money-making interests of their elders, and dedicate themselves to the public good. We'll be able to do housing right, avoiding our soul-crushing, resource-wasting suburban sprawl. And, as an extra bonus, we'll stop paying attention to Paris Hilton.

Finally, somewhere on the fifth page of five, Andersen gets more serious and confronts some of the hard reality. And you'll be happy to know that even our putative economic competitor doesn't have to be a problem:

Twenty-first century China is the greatest country of the 20th century. Muscular industrialism gets you only so far. Further increases in productivity and prosperity require ingenuity and enterprise applied at the micro scale — digital devices and networked systems, biotechnology, subatomic nanotechnology. As China and other developing countries finally achieve the industrial plenty that we enjoyed 50 years ago, the U.S. can stay ahead once again by pioneering the next-generation technologies that the increasingly industrialized world will require.

That's right, it's more of the idea that a country that can find no jobs for people who want to work in technology will somehow take the lead in developing the next big thing (other than Twitter or Facebook).

The other pillar of Andersen's strategy is that we need to take in more immigrants. He does qualify it by saying we need to, "to encourage as many as possible of the world's smartest and most ambitious people to become Americans." That we have no idea how to identify which of the people who want to come here are smart and ambitious does not deter Andersen in the least.

So what this boils down to is a cleverly-written article right out of the Noonan/Friedman handbook. All inconvenient realities, any recognition of the ways in which the world has dramatically changed, the need to temper balloon-headed thinking about "American ingenuity," these are swept away in a tide of feverish excitement about our "reconstruction and reinvention."

Very little of it is convincing; cheerleading will not get the job done (see Detroit above). Even if this time did present an opportunity to get real about what America can be, we're unlikely to do the hard work necessary. One need only listen to the various leaders, who are pretty well unanimous that we will get through this time, then return to the fervid, profligate ways we "enjoyed" before.

On second thought, TIME doesn't have any good news at all...

"Can-do" attitude

2009-03-31T04:49:00.000-05:00

I don't know exactly how I feel about what actions we should take concerning the Bush-Cheney torture activities. Truth commission, war crimes trials (if The Hague doesn't get there first), investigation followed by censure - which choice is best is something on which I have not been able to reach a conclusion.

Our nation has trouble dealing with bad things done in our name or by our representatives. White people certainly benefited from the destruction of the indigenous population, and our attempts to make it right have never seemed satisfactory. Ford pardoned Nixon, reasoning that the country had already been through enough; I can't say if the catharsis of a trial would have made things better.

The Clinton impeachment showed the alternative at its worst, as it devolved into a partisan witch hunt. (I should say more about this, because I think quite a few people shared my opinion. The Monica Lewinsky business was, yes, a personal matter that did not merit impeachment. But it was reprehensible for this activity to take place in one of our hallowed national places, the Oval Office. It demonstrated Clinton's recklessness and arrogance, and we should never forget that.)

So I don't have anything to offer as to what we should do about the perversion that was Bush-Cheney policy. I have this vague sense that we can't just leave it as it is, let it go while we deal with our pressing problems. To see these two men strutting around, Cheney in particular, proudly defending one of the shameful periods in American history, is an offense to everything I've ever believed was right about this country.

On the other hand, to allow the real business of the nation to be sidetracked while a Democratic Congress postures for the people back home seems a poor solution also. Letting the likes of Pelosi and Reid, sham public servants that they are, use such a proceeding as a means of gaining political capital disgusts me.

For now, then, I'll leave the discussion to others. Andrew Sullivan has written a lot about this issue, apparently believing that no stone should be left unturned in determining the truth and bringing everyone involved to account. In a Sunday post, he again takes up the case of Abu Zabaida, someone we tortured though we had evidence that he was a low-level al-Qaeda functionary. Apparently, whatever useful information he had, essentially names, he gave up before the torture actually began - there was no plot failed as a result of our "interrogation."

[Here's one thing I never quite understand. If you were running a terrorist outfit, and someone with critical information disappeared, wouldn't you then change your plans? "Hey, Osama's not in his cave any more. Well, maybe he's just on vacation, let's go ahead with those attacks exactly as planned." I know that some would say you extract the information before anyone knows he's gone, which is inevitably the situation on 24, but it doesn't appear that our post-9/11 procedures were restricted to that.]

Sullivan quotes an article from the Washington Post:

As weeks passed after the capture without significant new confessions, the Bush White House and some at the CIA became convinced that tougher measures had to be tried. The pressure from upper levels of the government was "tremendous," driven in part by the routine of daily meetings in which policymakers would press for updates, one official remembered. "They couldn't stand the idea that there wasn't anything new," the official said. "They'd say, 'You aren't working hard enough.' There was both a disbelief in what he was saying and also a desire for retribution -- a feeling that 'He's going to talk, and if he doesn't talk, we'll do whatever.' "

I think I understand the mindset that gave rise to this attitude. George W. Bush was in so many ways the epitome of a bad CEO. (This isn't surprising in that he was, in fact, a bad CEO.) I've worked for a few (fortunately, very few) people who adopt a credo that any failure is the result of not making sufficient effort, that something not getting done can be overcome by more hard work.

There are, of course, times when that's true. There are, of course, other times when that's not. A great deal of wisdom is understanding the difference.

Some things are impossible or infeasible. You can push someone to create faster-than-light speed travel by next week, and it still won't happen. You can insist on extracting information from someone who doesn't have any, and you may get information, but it won't be true.

When one works for someone who doesn't understand this, the negative effects go beyond the wasting of time. It creates a lack of trust up and down the chain of command. Imagine being the person who had to go into the Oval Office and say, "This guy clearly doesn't have anything more to give," and to be told, "You're wrong, go back again." Your boss is saying, in effect, that you're an idiot who doesn't know his work, doesn't have the ability to distinguish between the hard and the impossible. I can tell you, that makes for a very corrosive work environment.