Friday, February 20, 2009

Educational Philosophy From Across the Pond

Reacting to an increasing emphasis on test results in the evaluation of the British educational system, a recent study suggests,
Teaching to the test has become endemic, sapping the enthusiasm of teachers and pupils alike. As the Cambridge review finds, the result, in too many cases, is a new form of rote learning in which pupils memorise the answers that are required, without understanding the hows and whys. Professor Alexander argues that standards and breadth are not incompatible and pleads for the return to the curriculum of creative subjects and approaches that have been progressively squeezed out by the requirements of testing. He goes so far as to suggest that stressing standards above all else is actually counterproductive to raising those very same standards, because a sterile focus on tests can have the effect of depressing achievement, while a broader approach can foster an additional measure of interest and enthusiasm that raises standards of its own accord.
This is one of the things I find worrisome about "No Child Left Behind", or charter schools that "improve the performance" of inner city kids through rote learning exercises. Improving test scores is not the same thing as improving education. In some cases, it's not even the same thing as teaching. And yet it's what many want to use as the primary or sole measure of effective teaching.

Wednesday, February 18, 2009

More on Not Bailing Out Cerberus

James Kwak helps explain why we shoudn't bail out Cerberus in the name of "saving" Chrysler:
There are two other plausible reasons why Cerberus would prefer to go to the government. The first is if they can get cheaper capital (a lower-interest loan) from the government than from their limited partners or from the capital markets. But then the question becomes why the government should be in the business of giving cheap capital to a private equity firm that has other sources of capital.

The other possibility is that Cerberus/Chrysler doesn't actually believe the plan, and that's why Cerberus doesn't want to put in the money. The plan is a Hail Mary strategy that might work, but the chances of it working aren't good enough to put in their own money; but if they can get free money from the government (free in the sense that if Chrysler collapses, Cerberus won't have to repay the government), they might as well give it a shot.
You already know that I'm a believer in the second scenario. I don't see why Cerberus can't be required to guarantee loans to Chrysler with its remaining portfolio. If that's something they would purport to "violate their fiduciary duty to their limited partners", well, too bad, so sad, get the loan somewhere else.

Tuesday, February 17, 2009

How Much Is Too Much?

That GM Chapter 11 plan?

It's still sounding good.
The U.S. auto industry needs even more help from the government to survive than originally thought.

General Motors Corp. on Tuesday said it could need up to $30-billion (U.S.) from the Treasury Department to keep operating. Included in that amount is $13.4-billion the company has already received. Previously, GM had said it could need as much as $18-billion.

GM and Chrysler LLC said Tuesday they'll need billions more in government loans than they predicted just two months ago. The two auto makers also plan further job cuts and additional curtailment of auto production.

Both companies plan to reduce the number of models they offer to car buyers over the next few years.
Help Chrysler find a buyerCerberus find a buyer for Chrysler, or roll it into GM and let them go bankrupt together.

Monday, February 16, 2009

Everything Old is New Again

With all of the recent variants on advance fee fraud (419 scams), particularly money order fraud, It's been a while since I got the classic "I'm the millionaire son of a tyrant who needs help figuring out how to FedEx a suitcase full of diamonds" version. But my wait is over:

TEL: +27-784100444


You may be surprised to receive this message from me since you don't know me in person, but for the purpose of introduction, I am MR ZUBI ADAM, the son of late MR. THAMBA ADAM, who was murdered in a land dispute in ZIMBABWE. My late father was among the few black Zimbabwean rich farmers and a strong member of opposition party MDC (MOVEMENT DEOMCRATIC OF CHANGE) who is murdered in cold blood day by the agent of the ruling government of President ROBERT MUGABE for his alleged support and sympathy for Zimbabwean opposition party. Which we communicated to the whole world through BBC AND CNN.

Before the death of my father, he took me to SOUTH AFRICA to deposit the sum of EIGHTEEN MILLION US DOLLARS ($18M) with a security and finance company, as if he knew the looming danger in Zimbabwe . The money was deposited as a gem or precious stone to avoid much demurrage from the security firm. This money was earmarked for the purchase of new machinery and chemicals for the farms and the establishment of new farms in Lesotho and Swaziland .

This land problem arose when President ROBERT MUGABE introduced a new land Act. Which wholly affects the white rich farmers and some few blacks vehemently condemned the 'MODUS OPERANDI' adopted by the government. This resulted to rampant killing and mob actions. I and my family who are currently staying in South Africa as a refugee or an asylum seeker have decided to transfer this money to a foreign country where we can invest it. I am faced with the dilemma of investing this amount of money in South Africa for fear of encountering the same experience in future since both countries have the same political history.

I have meet and agreed after consulting financial expert who humbly advice us that the best way for realizing and safe guarding this fund without South Africa authority being after the money is to involve a foreigner.

Moreover, the South African monetary policy/law does not allow such investment hence I am seeking for an asylum or refugee. And the nature of your business does not necessary matter. So if you are willing to assist us, I and my family have agreed to give you 35% of the total money, 60% will be for a joint business venture I will be doing with you in your country and the remaining 5% will be mapped out for all expenses we may incurred during the transaction.

Therefore, if you are willing and interested to render the needed assistance, endeavor to reply through the above email address. Remember that this is highly confidential and the success of this business depends on how secret it is kept.

Expecting your reply soonest.

Best Regard.


From its carefully personalized opening, "ATTENTION: SIR/MADAM", to its emotionally wrenching close, "(FOR THE FAMILY)", to the admission that the money (that doesn't actually exist) was stolen from a program "for the purchase of new machinery and chemicals for the farms and the establishment of new farms", I have to tell you... the proposal was hard to resist.

A GM Bankruptcy?

I say, go for it! If in fact it's a viable plan, it seems like a much better option than limping along, surviving only with infusions of taxpayer money.

The viability of a GM bankruptcy might also give Congress the backbone to give Cerberus the overdue instruction that it needs to live up to its claims of being a turnaround specialist, and require it to pay for its own mistakes.

Sunday, February 15, 2009

Bipartisanship and Opposition Parties

As you already know, I'm a bit cynical on the subject of bipartisanship. So I have to roll my eyes bit when I read something like this:
And if [passing the stimulus bill] was this hard for Mr. Obama to lure Republican votes to spend money, how will he manage to entice Republican support to deal with even more contentious issues, such as climate change or health care?
What about the passage of the stimulus bill suggests that it was "hard" for Obama? Point to the precedent - any similar bill passed by a President, let alone during his first three weeks in office - and explain why this was "harder"? It was "hard" because the Republican Party decided to be "the Party of 'No'", and the legislation passed with the support of only a few Republican votes in the Senate and none in the House?

I find it fascinating that, not too long ago, factions like the "Gang of 14" were deemed to reflect bipartisanship - get seven Democratic senators on board with the Republican agenda, and bipartisanship lives! Get three Republican senators to support of a massive stimulus plan and it's some sort of failure to "entice Republican support". Somehow I doubt that Broder and the Washington post will excitedly hail as bipartisan every Democratic initiative that passes with the support of only small numbers of Republicans. No, I don't believe for a second that McCain's promise to reach across the aisle would have been treated in the same manner as Obama's - McCain's bipartisanship is reflected in his participation in that gang, and few of the beltway pundits would have demanded that he demonstrate any greater level of bipartisanship than that necessary to advance his legislative agenda.

I have no sympathy for the notion that it's Obama's failure if the Republican Party decides to remain "the Party of 'No'" in relation to every major bill he advances, or even to every bill that comes before the House and Senate. They're the opposition party, they owe Obama no loyalty, and if they believe they will gain politically by saying "no" to every bill that comes along that's their right. The questions left unasked: What motivates the opposition, and is the opposition reasonable? If there's a failure, it's in the analysis that suggests that Obama only succeeds if a significant number of Republicans sign on to his legislation, rather than looking at the reasons why that hasn't happened and may not happen.

As this editorial indicates, the Washington Post's editorial team is already anticipating the problem, even as they acknowledge Obama's outreach to the Republicans, so what will it take to inspire them to start editorializing about how the Republican Party has reduced itself to obstructionism, even of reasonable legislation, and won't participate in bipartisan efforts to create legislation on even the most important issues facing the nation?

Bankruptcy and Primary Residences

The housing bubble was blown up to its absurd proportion by the joint willingness of people to purchase homes that, in many cases, they could not reasonably afford, coupled with a mortgage industry that knew as much but was happy to lend them money anyway. I'm not personally happy that either side in that type of transaction is getting bailed out but, like it or not, they affected (and continue to affect) their neighbors. In a faltering economy, even some responsible borrowers are struggling with mortgage payments inflated by the housing bubble, while housing values may be further depressed by abandoned homes (perhaps half-built), empty lots from abandoned or unsuccessful development, and foreclosures in their neighborhoods.

With hundreds of billions, really trillions of dollars of taxpayer funds being used to prop up the lenders in that scenario, while speculators walk away from bankrupt corporations or get relief through bankruptcy court, it should be no surprise that people like Todd Zwicki are shocked that any relief might be directed at... ordinary homeowners. I'm not sure where I can find Zywicki's outrage at hundreds of billions of dollars being directed at financial institutions, and I don't see in his editorial any lament that debtors can "cram down" the value of their investment properties and vacation homes in bankruptcy. But how horrible, that bankruptcy judges may be able to "rewrite" mortgages for people who own only one home.
In the first place, mortgage costs will rise. If bankruptcy judges can rewrite mortgage loans after they are made, it will increase the risk of mortgage lending at the time they are made. Increased risk increases the overall cost of lending, which in turn will require future borrowers to pay higher interest rates and upfront costs, such as higher down payments and points.
There are three obvious responses to that.
  • Why should mortgage lenders sit in a privileged position as compared to other lenders? I recognize that this is the "American way" - you hire lobbyists to get legislation to favor your industry over others - but what is it that makes home lenders so special? In bankruptcy, where some bills will go unpaid, at least in relation to the unsecured portion of their loans why should financial institutions be privileged over doctors and hospitals?

  • Is there any reason to believe that the increased costs will be substantial, particularly in relation to borrowers who aren't marginal? Are second mortgages or mortgages for vacation properties significantly more expensive than primary home mortgages?

  • So what? If the net effect of bankruptcy law is that lenders think twice about housing prices "always going up", or require a sufficient down payment and proof of income to be reasonably certain that the loan will be repaid even if the market is flat or values decline, isn't that a good thing?

Further, Zywicki ignores the fact that this legislation limits itself to mortgages in existence at the time it passes. That should ameliorate its assumed effect on future lending decisions. In terms of that change, Zywicki writes,
This is illustrated by a recent example: In 2005, Congress eliminated the power of bankruptcy judges to modify auto loans. A recent staff report by the Federal Reserve Bank of New York estimated a 265 basis-point reduction on average in auto loan terms as a result of the reform.
The car loan example is an interesting one, as it highlights how lobbyists for an industry can shift costs to other lenders. Bankruptcy reforms restrict judges from reducing car payments in a Chapter 13 plan so, instead, payments to other creditors go down. Zywicki doesn't explain why that's a superior outcome.

But more to the point, as you may have guessed from the fact that car loan rates haven't dropped by 2.65%, he seems to have his numbers wrong. The Federal Reserve Bank of New York observed that "auto loan interest rates were higher for households in states with high home equity exemptions" and performed an analysis to "see whether BAR [the 2005 Bankruptcy Reform Act] undoes that link":
Overall, auto loan delinquency rates tended downward after BAR in higher or unlimited exemption states, significantly so for direct loans. Consistent with that result, auto loan interest spreads also declined after BAR in states with high or unlimited exemptions. The link between spreads and exemptions was more significant using unscaled exemptions, but the magnitudes were comparable regardless. The decline in the average auto loan spread was 15 basis points lower after BAR for unlimited exemption states, a 5.7 percent decline relative to the mean over all states (265 basis points). The regression results show clearly in Chart 5.
Looking at chart five, you find that the chart tracks the "interest rate on new automobile loan (5 year) minus rate on government bond (5 year)." The mean over all states is 265 basis points. Prior to BAR the interest rates for auto loans in states with "unlimited home equity bankruptcy exemptions" tended to be higher than those in other states. Subsequent to BAR, on average, the difference diminished by 15 basis points, 0.15%. That's a significant number for lenders, and appears attributable to BAR, but it's hardly the massive reduction Zywicki claims.

Zywicki's next argument is a red herring:
But by recent count, some five million homeowners are currently delinquent on their mortgages and some 12 million to 15 million homeowners owe more on their mortgages than the home is worth. If even a fraction of those homeowners file for bankruptcy to reduce their interest rates or strip down their principle amounts to the value of their homes, we could see an unprecedented surge in filings, overwhelming the bankruptcy system.
We should not fashion bankruptcy laws to prevent bankrupt people from declaring bankruptcy, merely because of the potential that it might be difficult for bankruptcy courts to do their job. We should instead provide bankruptcy courts with the necessary manpower and resources to do their job.

Beyond that, Zywicki pretends that this legislation will help people who aren't bankrupt. Sure, millions of people "owe more than their house is worth" - and the vast majority of them aren't bankrupt and are making their house payments. The problem faced by the majority of people who aren't making their payments isn't the value of their home - it's the fact that they can't afford their payments. Given that bankruptcy is not cost-free, many of those people will struggle, try to work things out with their lenders, and find ways other than bankruptcy to work their way through their financial difficulties. Others will weigh their options and walk away from their homes - either by allowing foreclosure or by surrendering their homes in bankruptcy.

Continuing his supposition that this legislation will cause people who aren't bankrupt to declare bankruptcy, Zywicki writes,
Finally, a bankruptcy proceeding sweeps in all of the filer's other debts, including credit cards, car loans, unpaid medical bills, etc. This means that a surge in new bankruptcy filings, brought about by a judge's power to modify mortgages, could destabilize the market for all other types of consumer credit.
I guess Zywicki has forgotten his earlier comments on the non-modifiability of car loans. But even overlooking that, I'm not sure how this follows. If you force people in bankruptcy to either give up their homes or to pay the full amount of their mortgages, you already create a significant distortion. In the former case, the home lender gets a foreclosure, and it may be that the other creditors recover a bit more money by removing mortgage payments from a Chapter 13 repayment plan. In the latter case, a Chapter 13 plan incorporates the higher-than-market mortgage payment, and other creditors get less. I guess the "horrible" outcome for Zywicki is the homeowner who otherwise would have allowed foreclosure but who can now stay in their home, resulting in smaller payments to other creditors. I somehow suspect, though, that the nightmare prospect for lenders is instead that borrowers who would have stayed in their homes anyway will have their mortgages revised, resulting in greater payments to other creditors and lesser payments to housing lenders.

Zywicki makes a reasonable point in relation to the interest rate that should be paid post-modification.
Consider that the pending legislation requires the judge to set the interest rate at the prime rate plus "a reasonable premium for risk." Question: What is a reasonable risk premium for an already risky subprime borrower who has filed for bankruptcy and is getting the equivalent of a new loan with nothing down?
Of course, he then extrapolates to suggest that if a borrower is bankrupt, they should be paying double-digit interest, and that anything affordable would be a "submarket rate, apparently violating the premise of the statute and piling further harm on the lender". If this were a medical study, at this point I would be asking "which pharmaceutical company is bankrolling Zywicki's research"? It may well be that the legislation should provide additional guidance to judges when it comes to setting interest rates. But Zywicki's comments betray his contempt for the goals, and perhaps even the concept, of bankruptcy.

Zywicki offers a single example that he pretends illustrates how the proposed legislation could be abused:
Imagine the following situation: A few years ago a borrower took out a $300,000 loan with nothing down to buy a new house. The house rises in value to $400,000, at which time he refinances or takes out a home-equity loan to buy a big-screen TV and expensive vacations. He still has no equity in the house.

The house subsequently falls in value to $250,000, at which point the borrower files for bankruptcy, the mortgage principal is written down, and the homeowner keeps all the goodies purchased with the home-equity loan. Several years from now, however, the house appreciates in value back to $300,000 or more -- at which point the homeowner sells the house for a tidy profit.
I do find some humor in the way Zywicki depicts the borrower in his example as the modern equivalent of Ronald Reagan's Cadillac-driving welfare queen. Never mind what's typical - he's trying to evoke an emotional reaction.

Okay... so I have a marginal borrower who comes into my bank and says, "Give me a $300,000 loan for my $300,000 house." I wouldn't ordinarily give him the loan, and would historically have required 10-20% down to protect my investment, but I've decided that housing prices will invariably go up at 10-20% per year so I authorize the loan.

Within three or four years I'm proved "right" - the home now appraises for $400,000. So I'm very secure in the event of default. Now the borrower comes back to me and says, "I want to take out every penny of equity." I again note that he was a marginal borrower at $300,000, and that's even more the case at $400,000. But I'm more convinced than every that housing hyperinflation appreciation at a rate of 10-20% per year is inevitable, and that housing values never go down, so again I authorize the loan.

Then the bubble bursts, and the economy crashes. The borrower loses his job and falls behind on his payments. His house appraises for only $250,000. Traditionally I would foreclose, try to sell the house as quickly as possible, and hope to recover about $220,000 to $230,000 after the costs of foreclosure and sale. If I were in a state that allows deficiency judgments, I might seek one from the borrower - although it would be dischargeable in bankruptcy. Not a good outcome for me....

Under the new law, the borrower declares bankruptcy. A court revises his mortgage to reflect the market value of his home, and sets an interest rate a few points above prime. He makes his payments. But sixty months later, at the end of his repayment plan, he is able to sell the house for $300,000. All I get back is the $250,000, plus of course the interest I've obtained over the course of the repayment plan (not a bad rate of return, but well below what I would have charged this borrower in the post-bubble market). (Sure, I gave this guy a 0% teaser rate to get him to sign up, but let's not change the subject.)

I'm well ahead of where I would have been had I foreclosed at the bottom of the bubble, but so is the borrower. I'm in the same position as any other creditor at the end of bankruptcy, seeing a debtor who has recovered from a crisis and is now able to pay off some of the debts that were discharged, but for reasons I can't fathom he's protected by the law. It's almost as if bankruptcy is supposed to help people get back on their feet and get a fresh start - how absurd is that!

Meanwhile, the only thing I could have done to protect myself would have been to apply reasonable lending standards, and not let a marginal borrower repeatedly max out the equity in his home. Or voluntarily worked with the borrower to restructure the loan or payments in a manner that would have kept him out of bankruptcy. How unfair is that!

What if I'm in state where first mortgages are non-recourse loans, and where I lent $400,000 for a first mortgage to a home buyer whose house is now worth $250,000? If the borrower allows foreclosure, I can't get a deficiency judgment. If the borrower goes into bankruptcy under the proposed law, I get a $150,000 unsecured claim that should be partially repaid over the course of the repayment plan. That would appear to improve my position at the expense of other unsecured creditors. If the debtor is ordered to repay 1/3 of his unsecured debt over the course of the repayment plan, my recovery is $250,000 + $50,000 = $300,000, the assumed market value of the house at the end of the plan.

Credit Suisse took a look at this proposed reform, weighing the good and bad. Its report reflects that the impact of this reform is likely to be substantially less than Zywicki suggests, for reasons that seem obvious:
The impact of the law reform at this stage is unclear as we’re not sure what percentage of borrowers can and will take advantage of this option. For borrowers who can’t even pay the secured amount of the mortgage, bankruptcy isn’t an option. For borrowers who have lots of excess income, bankruptcy will provide little benefit. So only borrowers who want to stay in their homes, can afford the secured amount but not the entire mortgage, and are willing and able to go through the invasive procedure of Chapter 13 bankruptcy seem likely to apply.

Bottom line is that the new plan adds an important new tool in the foreclosure avoidance arsenal and will likely result in a marginal reduction of foreclosures.
A benefit I see in resolving these issues in bankruptcy is that the burden is primarily borne by the two responsible parties - the borrower and lender. There's a further benefit, in that if foreclosures are prevented, housing values in the rest of the neighborhood are less likely to be negatively affected by foreclosure sales or abandoned properties. But the biggest benefit, as I see it, is that lenders might think twice before repeating the reckless lending policies that inflated the bubble and led to the current financial crisis.

Saturday, February 14, 2009

Modern Bank Robbery

I agree with Simon Johnson that this line of thinking is atrocious and unacceptable:
One main stumbling block to the purchasing of troubled assets has been pricing, specifically how does the government price a diverse set of assets in a way that does not put the taxpayer on the hook. However, this should not be the standard by which we judge the efficacy of the plan, because a more prolonged deterioration in the economy will result in a higher terminal unemployment rate and a greater deterioration of the tax base. As such, the decline in tax revenues will crimp many of the essential services provided by the government. Ultimately, the taxpayer will pay one way or another, either through greatly diminished job prospects and/or significantly higher taxes down the line to pay for the massive debt issuance required to fund current and prospective fiscal spending initiatives. We think the government should do the following: estimate the highest price it can pay for the various toxic assets residing on financial institution balance sheets which would still return the principal to taxpayers.
If the goal is to wrap up the crisis as quickly as possible, then let's stop talking about buying junk assets from banks and start talking nationalization. If the key to recovery is to avoid "prolonged deterioration", we can end the role of those junk assets in this mess just as quickly by estimating the lowest price we can pay for "the various toxic assets residing on financial institution balance sheets".

Making Teachers Less Like... Windows Vista?

I'll give Bill Gates credit for directing a huge amount of money, through his foundation, at education reform. And I very much appreciate his effort to try to determine what works instead of resorting to fads or politics. But when he writes,
The private high school I attended, Lakeside in Seattle, made a huge difference in my life. The teachers fueled my interests and encouraged me to read and learn as much as I could. Without those teachers I never would have gotten on the path of getting deeply engaged in math and software. . . .

How many kids don't get the same chance to achieve their full potential?
I know he's not proposing that public schools be brought up to the standard of his private high school, currently costing well over $25,000 per year in tuition and fees. But his findings in relation to the most successful public schools, supported by Gates Foundation grants, are interesting.
But a few of the schools that we funded achieved something amazing. They replaced schools with low expectations and low results with ones that have high expectations and high results. These schools are not selective in whom they admit, and they are overwhelmingly serving kids in poor areas, most of whose parents did not go to college. Almost all of these schools are charter schools that have significantly longer school days than other schools.
Gates observes, "We had less success trying to change an existing school than helping to create a new school" - I suspect that plays a role in why charter schools were more likely to be successful. They have the opportunity to start fresh with administrators who were better positioned to try something new, and perhaps also much more interested in doing so.

Honestly, I've seen school administrators in public school systems enact policies that seem designed to stifle innovation, and make the extraordinary more ordinary, either because they don't understand alternative models to education or (in my cynical view) because it's more work. Also, while charter schools don't discriminate in who they admit, there's going to be some self-selection both in terms of the parents and kids who are willing to tolerate extra rules or requirements, or even to overcome the lethargy that keeps them in the default neighborhood school. They also get to recruit teachers whose philosophies align with their own.

Consistent with the Washington Posts editorial stance, Gates argues that this means we need more charter schools.
Many states have limits on charter schools, including giving them less funding than other schools. Educational innovation and overall improvement will go a lot faster if the charter school limits and funding rules are changed.
Yet let's be honest here. School funding levels are only part of the picture. I suspect it's a "donut hole" phenomenon, and schools like Lakeside or Sidwell Friends establish that extremely high funding can bring additional benefits to their students, but there's a basic level of funding beyond which additional dollars don't seem to have much impact on student performance. The fact that charter schools on the whole aren't outperforming, or are underperforming, public schools has less to do with funding and more to do with the fact that the people who set them up don't always share Gates' zeal for quality and performance, or don't have the requisite skill set to turn that interest into reality.

When the idea of charter schools was first raised, I found it very intriguing. I saw real potential for experimentation and improvement. But the reality is, building and running a school is hard work. The amount of institutional lethargy behind institutions of higher learning (particularly schools with large teaching colleges) was perhaps not surprising, but was disappointing - I haven't seen any real leadership from that direction. Some charter school entrepreneurs seemed (and seem) more interested in providing an alternative culture (e.g., charter schools that follow a particular religious model) than a better educational model. Some appear to be driven almost entirely by profit. There are true believers out there, but there don't seem to be as many as Bill Gates appears to believe.

Also, unless charter schools have equal responsibility - no indirect subsidy by letting their students use sports facilities or play on sports teams at nearby public schools, equal responsibility for special education students, etc. - they shouldn't get equal funding. I'm not arguing that some states or school districts don't underfund charter schools, as that appears to happen with some regularity, but mere inequality of funding does not of itself mean that charter schools aren't equitably funded.

Gates speaks of improving teachers:
One of the key things these schools have done is help their teachers be more effective in the classroom.
It's no surprise that the best schools, public and private, support their teachers and help them achieve, maintain and build on their classroom effectiveness.
Research shows that there is only half as much variation in student achievement between schools as there is among classrooms in the same school.
I hate "research shows" lines tossed out like that, with no indication of what the research actually means. If you compare an AP math class to a remedial math class, you're going to see a huge difference in performance between the two classrooms. But for all we know, they may be taught by the same teacher. And if they're not, it's not an indictment of the teacher who's working to bring the unprepared kids up to speed, but results from the fact that they're in a classroom full of kids whose math skills were far below grade level from day one.

The teacher in the remedial classroom may in fact be the better teacher. The worst math teacher I ever had taught honors math at my high school - I was stuck in her class for 11th and 12th grades. Our class performed despite her, not because of her, yet we still significantly outperformed the school's other math classes on standardized tests.
Whenever I talk to teachers, it is clear that they want to be great, but they need better tools so they can measure their progress and keep improving.
So teachers are like Windows Vista, but want to be more like Windows 7? I joke, but I agree with this:
So our new strategy focuses on learning why some teachers are so much more effective than others and how best practices can be spread throughout the education system so that the average quality goes up.
I just hope they also spend some time looking at administrators.

I applaud the notion of having 90-100% of high school students graduate ready to enter college. However, I think it's more important to our nation that we help a young potential Bill Gates graduate from a public high school, as ready as Bill himself was to... drop out of college and co-found a cutting edge tech company. These goals don't have to be mutually exclusive, but I don't see any way to pretend otherwise: with enough time, energy and resources you may be able to get 90% of the kids in any given high school ready for college, but unless you're assuming that the smartest and most capable will "take care of themselves", you can't afford to lose them in the shuffle as you focus on raising the common denominator.*
* Thomas Friedman argues in favor of an open door policy, bringing in more entrepreneurial immigrants. I'm all for trying to attract students and innovators from around the world, to study and set up shop in the United States. No doubt, even if we forget the role of education, particularly sciences, maths, and other difficult disciplines not directly associated with Wall Street riches, and the importance of nurturing the next generation of leaders in scientific disciplines, other nations will not.

Wednesday, February 11, 2009

This Is Acceptable?

Robert Reich comments,
In other words, Geithner and Fed Chair Ben Bernanke continue to do pretty much what Hank Paulson and Bernanke did: They hide much of the true costs and risks to taxpayers of repairing the banking system. Those risks and costs should be put on the people who made risky bets on the banks in the first place - namely bank shareholders and creditors. Shareholders of the most troubled banks should be wiped out entirely. Bank creditors- except depositors - should take major hits. And top executives who were responsible should be canned. But Geithner and Bernanke don't want to take these steps for fear of spooking the Street. They think it's safer to put the costs and risks on taxpayers -- especially in ways they can't see.
Remind me again why "nationalization" is such an awful word? Not in the context of healthy organizations, or even those that are struggling to recover, but in the context of bankrupt financial institutions that seem to lack the will, desire, and ability to get themselves out of the mess they created? "It spooks the street" just isn't convincing enough for me.

Tuesday, February 10, 2009

The New Bailout - I Don't Get It...

Okay, I'm not an economist. Not even close. My calculus is so rusty, I probably couldn't struggle through the first exam in a Calculus 101 class. (Or is it 201? See, I can't even remember that much calculus.) So no, I'm no expert - don't pretend to be. So maybe this shouldn't be a surprise, but...

I just don't get it.

I appreciate that we've moved away from the "bad bank" model, something that seems primarily to be "bad for taxpayers". But I just don't see how providing capital for private investors to buy toxic assets is going to help clear up this mess. Let's say I'm an investor, and I'm not inclined to borrow money to invest in those assets at a present, near zero interest rate. That could be because I see them as too risky, as offering an inadequate rate of return, or because the seller doesn't want to admit their fair market price. Unless somebody gets subsidized how does federal money change that equation?

If I'm a bank that does not want to admit actual value for its assets because I'm bankrupt, having more potential buyers won't change that. Maybe that where Geithner's idea of auditing banks before giving them additional bailout funds comes in, assuming that plan has teeth. Their "97 cents on the dollar" entry is reduced to 38 cents, they qualify for federal aid (or a takeover), and the investor uses a federal loan to pick up the securities at their market value. But how is that superior to simply bailing out the bank and having it hold its own asset at its actual value?

Is the idea here that the money is only available to buy toxic securities, so that the private partners may decide, "Well, I wouldn't put my money on the line for a possible 0.1% rate of return, but I'll happily put free federal money on the line." What guarantees are we offering to the private partners? That we'll cover any losses if the securities drop in value - subsidizing the investors instead of the banks? How is that better than directly overpaying for junk securities through something like TARP - such a guarantee would seem to be yet another layer of lemon socialism, as with TARP the taxpayer would at least get the benefit of any increase in value. If we're not offering any guarantees, why should we expect investors to pick up the worst of the worst securities, the ones that are the biggest drags on the financial industry?

Granted, I'm working off of a public statement, pretty much devoid of details. I guess I'll wait to see what the experts have to say.... (Although the operative word so far seems to be BARF.)

Update: What are Nobel Prize-winning economists for, if not to explain these things to us, and Paul Krugman has stepped in to help me understand the Geithner plan!
So what is the plan? I really don’t know, at least based on what we’ve seen today.
Wow.... I feel... so much better....

Monday, February 09, 2009

State Secrets Litigation

Glenn Greenwald is up in arms about the Obama Administration's advancing the same, extreme interpretation of State Secrets Privilege as the Bush Administration:
It's really remarkable what happened. One of the judges on the three-judge panel explicitly asked the DOJ lawyer, Doug Letter, whether the change in administrations had any bearing on the Government's position in this case. Letter emphatically said it did not. Instead, he told the court, the new administration -- the new DOJ -- had actively reviewed this case and vetted the Bush positions and decisively opted to embrace the same positions.
It's a double-edged sword, though, isn't it? By pushing the Bush Administration's interpretation, the Obama Administration ensures that there will be an appellate court ruling on that interpretation, likely followed by a Supreme Court ruling on that interpretation. Either the courts will reject the Bush/Obama Administration arguments, or they will find them constitutional.

Perhaps that's the worst case scenario for opponents of State Secrets Privilege - that the Supreme Court will give the Bush Administration's extreme views its seal of approval. But if the issue isn't litigated, the issue remains open. Even if Obama backs down, a future administration will reassert the extreme interpretation presently before the courts. Is it truly better "not to know"?

Sunday, February 08, 2009


With all of the reasons tossed out for why a stimulus bill needs to be conservative, at least in comparison to the amounts many said would be necessary for an effective stimulus, what's the future of the bank bailout? I may not be thrilled about taking a huge money gamble to fix an economic mess largely created by the idiots who run our nation's banks, but I'm even less thrilled by spending hundreds of billions more to help save their jobs and prop up their bankrupt companies.

And in terms of that bailout....
Summers suggested the bank rescue plan may offer incentives for private investors to buy mortgage-related assets that have lost value because of the collapsed U.S. housing market.

"It can't all be private capital," Summers said on "Fox News Sunday."
It only takes enough private capital for securities not already guaranteed by the government to establish their market price; then the government can buy the rest at market value? Yeah, right.
"But with the right kinds of government guarantees, with the right kinds of financing ... with the right strategic approaches, Secretary Geithner believes that we can bring in substantial private capital," Summers said.
Why do I suspect that with Summers' version of "the right kinds of government guarantees", whether it's public money or private that "buys" the security, the taxpayer bears all the risk.

Friday, February 06, 2009

At Least He's Honest

Caught up in what you would thing would be an obvious scam, a lawyer admits,
"I'm a capital 'D' Dumbass."
I don't say that to be hard on the man, but to emphasize this: When you're offered huge amounts of money for doing virtually nothing, odds are you're being scammed.

I don't want to review the entire history of international financial scams - it's long, and predates the Internet. Yes, those promises of wealth from foreign lotteries you haven't entered, deaths of foreign relatives you didn't know existed, or desperate millionaires who can only get their money out of a developing nation if you let them wire it to you? There was a time that they came by mail or fax. Now they come primarily by email, and although they evolve the central theme remains the same:
1. You are selected at random, for no apparent reason;

2. You are offered a great deal of money to do virtually no work; and

3. If you go along with the scam, you'll end up losing a great deal of money.
A relatively recent version of this scam is a "work at home" scam, where you supposedly process payments for a company, forwarding them their balance when the checks clear. You retain a percentage, say 10 - 20%, as your fee. Now it should be pretty obvious that there's something fishy here - why would a company direct its clients to send you their checks (more probably, money orders), and pay you to process them, when it would be cheaper and easier to receive the payments directly?

I received a phone call the other day, inspired by an article I wrote a few years ago on this type of money order fraud. It was a story I expect to hear repeated quite often in the current economic climate - a woman, facing financial hardship, answers an ad offering home-based employment. She signs up, starts receiving and processing money orders, and "clears" a couple of money orders through her bank before they are revealed to be fraudulent. She's already forwarded the money, less her "share", to an international address. Her bank wants its money back from her. The money orders in that case looked very real because they were real - all except for the dollar figures. The scammers had managed to steal some blank money orders.

But that woman is "small fry" compared to the lawyers who have been targeted. It's exactly the same deal, except the scam comes from somebody claiming to represent an international corporation trying to collect on an unpaid account - tens or hundreds of thousands of dollars. They offer the lawyer a sizable percentage of the money recovered. Ironically, this percentage vastly exceeds the 10 - 20% offered in the "work at home" version of the scam, because ordinary people would probably be incredulous that they could get 30 - 40% of the payment merely for processing a check. The lawyer-victims, not so much.... They sign up, call the debtor, are told, "No problem - I'll mail that right out," get a check within days, and it never occurs to them to wonder, "If the debtor was that eager to pay, why didn't the creditor simply call and ask for payment and why would they offer, let alone agree to, this fee?"

Here's my proposed solution - banks should prepare brochures outlining the most common version of this scam, and have them available at their counters. When a customer comes in to deposit a money order, their tellers should be instructed to ask, "Do you personally know the person who sent you that money order? Have you seen our brochure on money order fraud?" Even at the ATM machine, banks could give a general warning about money orders to customers making deposits - display the full warning one time, and offer a "press here to learn about money order scams" option for future deposits.

Because I suspect that 90% of the people suckered into this type of scam, once made aware of how the scam works, would figure out whether or not they should be depositing the money order. Banks lose money on these scams, as well. Wouldn't this simple step be less costly for everybody?

Online Communities Gone Wrong

If you've been involved with online communities long enough, you've seen them turn mean. If you're an outsider you can look at a lot of the drama and have no idea why people are so worked up. This seems to be a good description of the phenomenon:
Eventually, you see the effect of what I’ll call Harris’ Law: At some point, all humanity in an online community is lost, and the goal becomes to inflict as much psychological suffering as possible on another person.
The examples provided in that article,
Harris’ Law took effect last year when Abraham Biggs killed himself in front of a live webcam audience on life-streaming service JustinTV. The audience’s role? They encouraged him to do it.

Harris’ law took effect in October of 2006, when Lori Drew, a grown woman, created a fake alias on MySpace (”Josh Evans”) in order to psychologically torture 14-year-old Megan Meier. Drew started a online love affair with Megan as “Evans” before pulling the rug out and viciously turning on her victim. This “cyber-bullying,” as the press likes to call it, resulted in Megan killing herself.

Harris’ Law took effect in October of last year when Choi Jin-sil killed herself, reportedly over the fallout from Internet rumors. The bullying in Korea has become so intense that you’re now required to use your Social Security Number to sign up for a social network.
Yet anonymity isn't crucial to online bullying. In fact, sometimes it's the opposite - Lori Drew may have been anonymous, but the harm was inflicted through a profile that was believed to be real.

Unpleasantness in virtual communities is often at the hands of people whose real identities are known, or who have an established virtual identity that vests them with significant authority despite their nominal anonymity. Online cliques form and... well, when Heathers rule the world you don't want to be "Martha Dumptruck". But there's a twist: in some ways its easier to be a Heather in an online world, but also it's easier to refuse to leave a virtual world in response to the Heathers. If you're in a physical living room, and your host and her friends start acting obnoxious, odds are you're going to leave. If it's the online equivalent, you're more likely to dig your heels in and insist, "I have every bit as much right to be here as you do." So on it goes. In one of my forums, I have reminded people that they can put other members they don't like on their "ignore" lists, but it seems that most prefer to read the offending remarks, take great umbrage, and perpetuate the war.

Meanwhile, in the virtual world known as "4chan", the beat goes on. A twitchy teenager named "Boxxy" inspired astonishing acrimony:
What kind of a teenager so divides the fifth-largest Web community that the entire mechanism grinds to a halt? Probably not the kind you expect. She holds no strong opinions, does not deal in sex or violence, and wasn't even looking for fame when she sparked a civil war on a popular website called 4chan.
"Neither a presidential election nor troubles in the Middle East provoked people as much in the 4chan community" - The resulting civil war literally crashed 4chan's servers and, ultimately, Boxxy disappeared.

Thursday, February 05, 2009

Somebody Knows What Those Assets Are Worth....

Following up on the obvious fact that there is a way to get an actual valuation for the toxic securities held by financial institutions, commenting on a New York Times article on some of the dubious assets, Rep. Brad Miller writes,
The financial institution [holding the bond] values the bond at 97 cents on the dollar. Standard & Poor’s values the bond at 87 cents at the current default rate, but estimates the bond’s value could go down to 53 cents if the default rate doubles. But someone actually bought one of the bonds recently. The purchase price was 38 cents.

According to the article, financial industry critics “say that the banks’ accounting for those assets cannot be trusted because they have an incentive to use optimistic assumptions.”

“Optimistic”? Whoever paid 38 cents on the dollar for one of those bonds is a giddy optimist. The financial institution’s valuation of 97 cents on the dollar is pretty clearly fraudulent.

How Do Mere Mortals React To "Politics as Soap Opera"

I mean, when it's not quite as literally soap opera as it was during the Ken Starr / Monical Lewinski era.

In terms of those who aren't addicted to politics.... Do they particularly care if Obama gets his stimulus package passed within 2-1/2 weeks of taking office instead of 1-1/2? Is anybody appalled that he included provisions demanded by Republicans? Or is this drama that political junkies dream up and project upon the rest of America?

It amazes me that people who should know better seem to think Obama was going to walk into Congress with his own pure-as-snow stimulus bill, be received like Moses coming down Mount Sinai with the Ten Commandments, and somehow avoid the whole ugly mess that is Congress. The factory that actually produces legislation. Sure, it would have been nice had members his own party not tucked in their bibs as soon as they heard the numbers involved, but it's the nature of the beast.

Wednesday, February 04, 2009

Stupid Tax Breaks

Oh, joy.... The Senate wants to reinflate the housing bubble.
The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.
The downside is, it has to be used to buy your primary residence. The upside is, maybe I can sell "my" house to my wife - I purchased it before we married - and get $15,000 in free money. I'll have to read the fine print.

This one should be fun, as well:
On Tuesday, the Senate approved a tax incentive for car buyers, sponsored by Senator Barbara Mikulski, Democrat of Maryland, that would allow the deduction of sales tax and loan interest on purchases made this year.
Would this work: I sell you a car at 25% interest. At the end of the year if you've made all your payments on time, I give you 15% of your interest as a credit toward your remaining principal balance and adjust your future interest to market rates. I end up with a great rate of return on the loan, you end up with a 15% discount on your car, and the government picks up the entire tab!

What other genius ideas are coming down the pike?

Bipartisanship is Marketing

To those who believe that Obama's attempts at bipartisanship demonstrate abandonment of political advantage (as if the stimulus bill would sail through if not for Obama's outreach to Republicans?) or misguided (in the manner of David Broder's apparent belief that a solution reached through compromise is always better, even when one side to an argument is clearly wrong), I say the following: When a politician refers to "bipartisanship", the politician should be seen as either admitting that he doesn't have the political clout to carry an issue without help from the minority party, or because he feels that the public wants him to appear bipartisan.

The difficulty for Obama is that he's dealing with a minority party that has decided (probably correctly) that its power lies in obstructionism, and the media is packed with people like Broder who can't or won't admit that you don't need to compromise in the face of obstructionism. Granted, had Obama not played up to the public belief that bipartisanship is a good thing and that he would be a bipartisan leader, he would be better positioned to say, "This isn't the time for bipartisanship." But had he done that, he probably wouldn't be President.

Falling Down on the Job

Although nothing's set in stone yet, I'm not particularly impressed with the lack of progress on a stimulus bill, or with what looks like a pretty atrocious approach to bailing out the nation's financial institutions.

I Can Almost Imagine The Conversation

Thomas Friedman talking to his taxi driver in Jenin:
Tom: What do you think of my ideas on how to achieve a resolution of the Israel-Palestine conflict?

Driver: I think you're an idiot. Are you going to quote me in your column?

Tom: Not this time.
And yet somehow it's hard to avoid the simple wisdom of a taxi driver.

Friedman is one of those who has, in essence, argued for decades that "everybody knows" how the Israel-Palestine conflict will end up. The Israelis will return most of the occupied territories to the Palestinians, making some land swaps along the border in the interest of security and to annex its larger settlements, and the Palestinians will give up their claims of a "right of return" to villages within Israel. This remains the basic premise of his seven percent five (er, six) state solution. The only problem is that while Friedman has been content to yammer on about what "everybody knows", and assume that his take on conventional wisdom will somehow magically turn into reality, he's pretty much ignored everything in the real world.

So now he finds himself in a café in Jenin, sipping coffee served by a waiter whose opinion is also not likely to end up in his column, and writing stuff like this:
The West Bank is so chopped up and divided now by roads, checkpoints and fences to separate Israel’s crazy settlements from Palestinian villages that a Palestinian could fly from Jerusalem to Paris quicker than he or she could drive from Jenin, here in the northern West Bank, to Hebron in the south.
Admit it - if you were the waiter, wouldn't you be tempted to slap him upside the head and remind him that you have to fly out of Jordan, because you're not even allowed into Jerusalem? To point out to him that if forty years of "suck on this" policy directed at the Palestinians didn't work, you would have to be close to senile to think it was an approach to take with the larger Arab world? Because somebody who is an "expert" on the Middle East, as Friedman is supposed to be, should be aware of the forty-year effort to create "facts on the ground" that prevent the return of the occupied territories and resources to Palestinian control - a conscious and deliberate policy to prevent the "conventional wisdom" from ever becoming reality. Friedman acts as if this all occurred beneath his notice ("How did this conflict get so fragmented?"), but I think we know better than that.

Friedman presents an exceptionally silly statement,
Another reason [this conflict got so fragmented] is that every idea has been tried and has failed.
Really? So if I call up Uri Avnery and ask, "When you were a member of the Knesset right after the 1967 war, and you called for immediate withdrawal from Palestinian lands and forecast great misery for Israel if it tried to annex those territories, did Israel try that?" Or did they follow the model preferred by Ariel Sharon:
Standing with the cabinet ministers on a high hill, I pointed out exactly what I thought was needed. If in the future we wanted in any way to control this area, I told them, we would need to establish a Jewish presence now. Otherwise we would have no motivation to be there during difficult times later on.
A model Sharon continued to advance as Prime Minister, only a few years ago.

So... maybe Friedman means that we've tried every possible solution to end the conflict and occupation other than ending the occupation. Or even proposing to end the occupation. Even Friedman's new preferred "solution" promises no end to occupation - he simply wants to change the occupying power and stick Saudi Arabia with the tab. You know what? People don't like to be occupied by foreign military powers. The "best" outcomes seem to come when the occupying power does its best to make clear that it doesn't want to be there, and gets out of town at the earliest possible date. As Israel can attest through its experience with Hezbollah, although the Shia of Lebanon initially greeted its forces as liberators when it invaded Lebanon in 1982, the consequences can be grave if you overstay your welcome. There's also the Chinese model - claim the entire territory for your nation, bring in tens of thousands of your nationals and settle them in the occupied land. This works best, of course, if you're not a democracy and are willing to tolerate a generation or two of unrest, violence, and occasional terrorism as growing pains.

Except there's another solution we haven't tried. Arbitration under international law. (Are you laughing yet?) Each side picks its own arbitrator, and the two arbitrators pick a neutral from a list acceptable to both sides. They then apply the principles of international law to the conflict, and decide each issue by majority vote. Both sides have to abide by the outcome. If you held a plebiscite in the Palestinian territories, you would likely get 90+% approval for such a proposal. But, you know, ain't gonna happen.

If we're going to be serious for a minute, we can stick with Friedman's "conventional wisdom" and the idea of a plebiscite. Have both Israel and the Palestinians hold a vote, asking their populations to instruct their leaders to negotiate a resolution consistent with Friedman's conventional wisdom.

This would not be something instantly implemented - it would be the destination for a new road map, fully implemented only when Israel could be reasonably certain that its border with the Palestinian territories would be acceptably policed, monitored and peaceful. But it would bring an end to any claim of legitimacy to either side's claim to be held hostage to its extremists. It should give Palestinian leadership the backbone it's been sorely lacking on the "right of return" issue, and open the door to the resolution of the refugee camps in which some Palestinian families have been living for sixty years - not so bad, perhaps, for those refugees living in Jordan, but pretty awful in Lebanon or Gaza. Under a road map with a destination, the Palestinians would have nobody to blame but their leaders and themselves for any delay in their getting a state.

If Tzipi Livni becomes Israel's next Prime Minister, perhaps such a vote could be held. If it's Netanyahu... ain't gonna happen. It will be interesting to see if Netanyahu the retread is smaller, more corrupt and less competent than he was the first time around; it wouldn't surprise me, given the recent pattern. Friedman alludes to the sort of chest-thumping bravado that passes for "courage" among Israel's political "leaders":
The other day, Labor Party leader, Ehud Barak, was quoted in the newspaper Haaretz as criticizing Lieberman as a lamb in hawk’s clothing, asking: “When has he ever shot anyone?”
As the last Prime Minister to actually show moral courage on these issues could attest, Israel needs leaders who have the courage to risk taking a bullet. Barak revealed himself in an unguarded moment, when he admitted that if born Palestinian "I would join a terror organization." That's the courage of Yassin, not the courage of Rabin.

Tuesday, February 03, 2009

The Dregs of Society....

My sentiment toward the stimulus bill has been what I might call optimistically credulous. That is, I'm pretending that the goal here is to actually stimulate the economy. Thus, my reaction to the inclusion (or removal) of sensible public policy proposals has been to ask, "How well does this fit with the purpose of a stimulus bill?" Sure, this involves overlooking some of the compromise that has already been made to put together a bill that's expected to pass. Sure, if you look closely at the bill, you can find other similar provisions that arguably should be eliminated on the same grounds, but don't happen to be controversial. Because thanks to the nature of our political system, with any sort of spending bill (massive or minor), you're not likely to get more than 2/3 of the way to ideological purity. But shouldn't you try?

Not according to Richard Cohen. To Cohen, it is a great sin to put forth a stimulus bill that doesn't attempt to reform... things. The idea that a stimulus bill should focus on short-term spending, "shovel-ready" projects, and programs that don't require sustained, increased government spending? The idea that this should be a bill that passes quickly rather than getting bogged down in endless debate and controversies? Lost on him. But okay... there are lots of issues that need reform. Perhaps you're thinking, "Cohen wants to restore funding for birth control." Or "Cohen wants to use the stimulus bill to lay a foundation for further reforms, such as a national health care program, a cleaner environment, sustainable energy...." nope. Cohen wants to tackle education reform.

The funny part, if you want to call it that: Cohen doesn't know anything about education reform. Thus, instead of concrete proposals, we get platitudinous statements like this:
But if the money is going to be offered, why not couple it with demands for reform? After all, without the extra cash, the likelihood is that teachers across the country will be laid off. That gives the president some leverage: Take my money, take my reforms. Maybe a deal could not be done. We won't know. We do know, though, that the teachers unions have an understandable aversion to some reforms. We also know that the unions supported Obama in his campaign.
You see? The most obvious reason that a federal stimulus bill doesn't micromanage education, something traditionally though of as a state issue, is that "unions supported Obama." It must be nice to live in a world that... simple.
Do your reading on education and you will find an emerging consensus. Abolish tenure.
That's right... stretching from the WSJ editorial page to its op/ed page, the emerging consensus is right there for you to see. I've spoken about this before, but I guess it bears repeating: If tenure were the real issue, the problems attributed to tenure would be seen in every school district. Getting legislatures to act against tenure wouldn't be an issue, because everybody with kids in public schools would be screaming for reform. The problem in schools like DC's is that between an unpleasant work environment and incompetent administrators, classrooms were filled with available applicants, steps weren't taken to weed out bad teachers before they got tenure, and the environment for teacher burnout is exceptional. As a consequence, no doubt, you have a lot of kids being taught by teachers who should never have obtained tenure or who are counting the days until they can retire. That happens in other school districts as well, but at nowhere near the same levels. Also, the good teachers from a district like DC? They can seek jobs in other districts where they will again get tenure - but without the controversy.
There are other ways to ensure that teachers are fairly treated without guaranteeing the jobs of the inept. (Cops don't have tenure, and neither do columnists.)
That's almost funny. Columnists don't have tenure, meaning they could be fired at will? No, as Cohen knows, name brand columnists work under contract. Now I'll grant, they don't have a CBA that will get them their job back if they're wrongfully terminated, but they will seek full compensation under their contracts.

Police officers? Come now, Richard. Tenure is a form of job protection that follows your probationary period. It doesn't mean "we can't fire you", and it certainly doesn't mean "we can't fire you for cause". It means that once you complete your probationary period you can (normally) only be fired for cause, and you may have to offer an employee improvement plan or follow an incremental disciplinary process. It could be said that any union employee past the probationary period has "tenure". And yes, that includes officers in unionized police departments (which is to say, most of them). Believe it or not, there's nothing talismanic about the term - you can find state legislation describing police officer tenure, and police disciplinary hearings may be described as "tenure hearings".

Let's look at Cohen's version of a "solution" - how do we "ensure that teachers are fairly treated without guaranteeing the jobs of the inept"?
Ensure that the best teachers teach at the most challenging schools and ensure also that they get paid lavishly for doing so.
It's one of the problems with the simple-minded union busting mantra, that somehow unions are to blame for everything that's wrong in the schools. Even giving due respect to Michelle Rhee's apparently unsustainable plan to provide teacher raises, the fact is that there's no popular will to give teachers more money. Cohen just got through telling us that things are so bad that states are looking at laying off needed teachers. Either Cohen's looking at the stimulus bill as the magic federal money tree - a gift that keeps on giving - or he's not considered that if you increase teacher pay, once funding levels return to normal you have to lay off even more needed teachers. Actually, it's probably both.

If Cohen were to venture out of his office and stop by some inner city private schools and religious schools, he would likely find that there are good teachers in many of those schools who have chosen to make less money in order to teach in a school environment that they find to be more secure, stable, and supported. That's an issue Rhee likes to sidestep, and people like Cohen don't even seem to know exists - there's more to a job than money. The focus of making individual classroom teachers responsible for the failures of parents, schools and school administrators kind of misses the point. Or perhaps it is the point - by placing the focus there, Rhee creates instant insulation against the failures of her own, substantive reforms (or lack thereof). Rhee, for example, favors mainstreaming - something that saves the school district money and... it's the teachers' fault if they can't deal with high numbers of emotionally disturbed or learning disabled kids mainstreamed into their classrooms, right?

Cohen likes solutions that "sound good" (to him), even if he has no concept of what they would mean:
How about extending the school day, maybe for an hour or so? How about extending the school year? How about tinkering with the No Child Left Behind law but insisting that testing - accountability - be maintained?
Because it's free to keep schools open for extra hours or days, we'll have already busted the teachers unions so they won't be able to object to an increased work day or year, and surely more classroom hours will automatically translate into more learning, right? That's why when you go to college you spend more time in classrooms than ever before. Personally, I do think that we should revisit the school year, the paring away of school days to save money, the structure of the school year around an agricultural calendar, etc. But I don't see it as a magic cure, as something that should be imposed on school districts as part of a stimulus bill, or as a legislative priority for preempting teachers' collective bargaining rights.

You want specifics, Cohen's got them - he's thought long and hard about "No Child Left Behind" and came up with the insightful solution that it can be improved by "tinkering". Um... Thanks. But it gets better:
How about doing something about the sad fact that teachers aren't what they used to be? Now that women and minorities have more opportunities in almost every field, the best of them have abandoned teaching.
Ah, the good old days when women and minorities didn't have good job opportunities other than teaching. Now everybody with a brain has moved on to better professions, and those that are left.... (Is it just me, or is Cohen's statement oh... just a wee bit sexist and racist? What does he have to say about white men who teach?) Mix that sentiment with the idea that the best way to keep the best of the remaining dregs happy is to force them to work in inner city schools, increase their workday and work year, and take away their job protections and... what more needs to be said?

One of these days, somebody will need to explain to Cohen that you can have a teacher who works wonders with suburban fifth grade students, but who would be stretched to (or beyond) the limits of her capacity trying to maintain order in an inner city fifth grade classroom. A teacher who is able to handle the most difficult classrooms is likely to be able to handle an easier classroom, but the opposite isn't always true. But to Cohen, teachers are apparently all dregs who can't get real jobs, so perhaps he sees 'em all as fungible.

Sunday, February 01, 2009

Speaking in Code

Lest I be "speared", I have no wish to disrespect Huorini / Waodoni culture.
The Huaorani believe that when someone dies, the soul starts a journey towards heaven. On the way, in the middle of the path, a big anaconda is obstructing the way. Only brave souls can jump the boa and reach heaven. Whoever fails, returns to earth as a termite, and leads a miserable existence.
However, if your first exposure to the term is the discussion in a pretty, but clumsily made movie (The End of the Spear), glorifying missionary work, over when particular characters "jumped the great boa"... similar expressions come to mind. I thus propose "Jumped the Boa" as a term to describe when Christian-themed entertainment goes way off mark.

The "S" Word?

That's right, folks. When you run your business into the ground and the government rushes in to give you billions of dollars, allowing you to stay out of bankruptcy, keep the lights on, and pay your employees, anybody who criticizes the fact that you use government money to give oversized bonuses to the people who ran your company into the ground is... a socialist.

Well, better that type of "socialism" than lemon socialism, right?