Archive for June, 2011
Matt Yglesias is making some sense with regard to teachers and the endless public debate about their worth:
… I run into what I think is a huge consistency problem in the messaging coming out of teachers unions. Sometimes I hear from union-affiliated folks that it’s unfair to attribute differences in student learning to differences in teacher skill, because everyone knows that socioeconomic and home environment factors drive a lot of this. Other times I see the American Federation of Teachers building a messaging program around the idea that its members are Making A Difference Every Day. To me this leads to the obvious conclusion that while socioeconomic and home environment factors do drive a lot of student learning, teachers are also making a difference every day. And it makes a lot of sense to ask which teachers are making the most difference… the teachers who are in the bottom percent of difference-makers are doing us little good, and we should try to replace them with other people.
Of course to do that, you need to measure student learning and that means tests. But now comes out the worry that educators are now “incentivized to raise test scores at any cost” and will become soulless stat-juking monsters. If this is true, though, then what happens is teachers are given zero financial incentive to perform well on the job. What if the only financial incentives teachers get are to obtain meaningless degrees and stick around long enough for pensions to vest? It’s fun to speculate on the extent to which educators are or aren’t driven by objective financial incentives, but you need a consistent psychological theory of the case. The hypothesis that a teacher who responds to an incentive-free system is going to have a highly effective pedagogical method that he then abandons in favor of pure score-gaming once faced with an incentive to get students to do well on tests doesn’t make sense…My own take is that talk of incentives is massively overrated…it’s about attracting and retaining high performers to your organization.
…which is why testing and performance-based pay, as well as the ability to fire teachers, when they fail, matter greatly.
In out and In and out and
In out in out in out in out
Want to stop? Sluggish, Slow, Weighted, Pressure, Too much
Damnit, slow down
Damnit just be better. Frustrated
“it gets better”
It works, after some time—after
Right, that’s what I want
Where I want
How I want
slipped or tripped or pushed or something
not so bad
In and out
1. Monetary policy is never “neutral” or “doing nothing”. Like temperature, it is a general background condition – of liquidity in the economy. “There is no temperature right now” makes no sense.
2.(a) Money can’t “leave the country” in any meaningful sense. If you buy imports (goods that foreigners are really good at making) and hand people green pieces of paper in exchange, they can burn them or hide them under their mattress, which basically means you got your imports for free, or they can take them and buy things in your country with them. If they buystuff that they can take home with them it’s an export. If they buy stuff that stays in your country (bonds, factories, stocks), it is like a loan to you and is called a capital inflow. So the “trade surplus/deficit” just indicates what share of the stuff they buy the foreigners take home after they are done shopping, with the strange corollary that politicians think your country will be better off if the foreigners take their purchases with them (exports!) than if they leave them behind for you to play with (capital inflows).
2.(b) You can’t hoard money. Yeah, that’s right. Both Marxist economic theory and modern “mean corporation” rhetoric think that there is a way that capitalists/companies can “hoard” money and keep it from productive uses in the economy. This is called the “Junker problem” by Tyler Cowen here, allegedly because 19th century German “Junker” (large landholders) were believed to be stifling growth by buying land instead of machines with money. The issue is that money is not the same as real resources. Consider this: Imagine you are able to somehow get hold of half of all the dollar bills in the country and burn them. Does this mean that any resources are kept from the economy? Well, this is equivalent to a reduction in the money supply, so the central bank could simply reprint all the dollar bills you stole and there are no effects on the real economy, or nominal prices will fall until the real prices are the same as before – nothing changes. What’s more likely though in real-world examples is that “hoarding” happens by putting your income into a bank account – from which the bank can simply lend it out to other people – or investing in safe treasury bills, which means handing your money to the government and telling it to have a good time with it until you want it back. I suppose a libertarian might say with a wink that funding government spending through bonds is the same as keeping it from productive uses, but that is clearly not what all sorts of pundits seem to be criticizing when they take about the “hoarding” going on.
3. The impact of changes in GDP on living standards depends on what part of GDP is produced in a market-priced environment and what part is produced in a government-priced environment. That is, if I have a dollar, I can buy whatever I want with it, for example chocolate ice cream. But if the government takes that dollar through taxes and decides that it should buy me a vanilla ice cream, I am made worse off, because if I wanted vanilla, I could have bought itin the alternative scenario, but I didn’t. Thus, the “one dollar of GDP” increases my living standards by less if I am not free to decide how to spend it. On the other hand, the more likely scenario is that the government takes my dollar, debates for 8 months what to do with it, decides to buy vanilla ice cream, bribes a congressman, who obstructs the legislation, with a quarter ice cream in earmarks, sends the remaining money through several bureaucracies, which have to be paid with another quarter ice cream, only to finally buy me half a vanilla ice cream a year after they took the dollar, even though I was going to buy a whole chocolate ice cream with it. The important thing is that all of this activity will still be considered to have created “one dollar of GDP”, but because I don’t value the wasteful political process on which part of it was spent, the increase in living standards is smaller than before.
4. When most people say that “Globalization”, “Free Markets” have done something terrible to poor people, they usually point to examples where neither one of these things have ever been tried and enumerate problems that are best addressed by increasing globalization and free markets. Examples include: African development, global income inequality, increasing food prices, decreasing food prices, high profits for multinational corporation, Greece’s current misery, Spain’s economic malaise…
5. “Income” is not a very meaningful concept in public policy terms. Although everyone loves to cite all sorts of facts about income levels, growth, distributions etc., this category usually lumps together labor (wages) and capital income (interest and capital gains from investments) although these two should be considered separately from a moral and economic standpoint. The latter kind of “income” is just the result of taking (already taxed) labor income and deciding to consume it at a later point in life. For that purpose it is put into some kind of savings device, that is, invested as “capital”, where an interest rate or appreciation compensates you for the purchasing power loss that you would otherwise incur from consuming your income in a later year. Counting and taxing that compensation again, as “capital income”, once you decide to consume it later, is double-counting and -taxation. There is no reason to treat capital gains as “income” at all, as it is simply the compensatory nominal increase in value of your investment that ensures that present consumption is equal to future consumption in present value terms (discounted for the fact that we like money in the future less than money today). If properly accounted for, having capital income is simply a result of choosing a different point in time for consumption of previous labor income, but does not change lifetime consumption at all.
This may sound quite technical and strange, so let me try to illustrate:
Imagine you and another person both earn ice cubes of equal size (their labor income) in the first period. Ice cubes are really tasty and people like eating them. There is a sweating guy in the area (an investment opportunity) who would like to borrow as many cubes as he can. As your original cube will melt partly before he gives it back to you (it is “discounted”/you have a present bias), he promises to give you some smaller bits of ice (capital income) with it when he returns it to you to make sure you are not worse off by lending it to him. Before your earned cubes are handed to the two of you in the beginning, the government chops off an equal share from each one to keep as payroll tax. Then, you are free to invest it or consume it. The other guy immediately consumes his ice cube. You decide to lend it to the sweating guy under the assumption that he’ll make it up to you by giving you some ice bits with it when he returns it. When, in the next period, the sweating guy returns your partly molten ice cube and wants to hand you the corresponding ice bits, the government suddenly jumps out from its hiding place and says to you: “Oh, you had more income, I see! That’s not fair to the other guy who ate all his ice already! You are having an ice cube AND ice bits! I will take part of your ice bits away (capital income tax)!” This seems wrong, doesn’t it? After all, both you and the other guy had the choice of saving some of your ice cube for later in exchange for ice bits, so why should the government take an additional chunk away from you just because you chose to consume your ice in the next period? This illustrates that capital income is basically just labor income whose consumption was delayed and should therefore not be taxed again.
So if someone says “Income has…” in an article, the immediate question should always be: Labor or capital income? Why do we care about “income”, rather than consumption/wealth? For the best reference for these thoughts and an explanation for why inheritance tax should be negative read Scott Sumner.
To be continued…
Some of my friends are probably aware that I don’t have a high opinion of high schools. I attended some very prestigious schools, claiming to be dedicated to educating future leaders, and found that they shared several objectives – especially instilling the following values in their pupils:
1. Respect hierarchies.
2. Excellence would require running the risk of allowing diversity of learning styles. We don’t like risks.
3. Rules have to be obeyed, even if all people involved agree that the rule should not exist.
4. Conservatism is the lowest common denominator of diversity.
5. Pulic sector workers and bureaucracies are awesome. Markets not so much.
So I was not surprised to learn about this study about the effect of schooling on democratic values:
Those who posit that more schooling leads to greater democracy often have specific ideas about how people’s attitudes change as a result of their becoming more educated, arguing that it creates people who are more willing to challenge authority. It is possible, however, that education reinforces authority and the power of ruling elites; indeed, it may often be designed to do precisely this…The authors compared a group of Kenyan girls in 69 primary schools whose students were randomly selected to receive a scholarship with similar students in schools which received no such financial aid…
…[G]irls who benefited from the scholarship and got more schooling were more independent and less accepting of the traditional sources of authority within the family. But although education seemed in some sense to have “liberated” them in terms of their personal aspirations…those with more education did not become more favourably inclined towards democracy. In fact, education deepened their sense of identification with their ethnic group and increased their tolerance for political violence. There was little evidence that having more education made them more engaged in civic life or political organisations.
…Education may make people more interested in improving their own lives but they may not necessarily see democracy as the way to do it. Even in established democracies, more education does not always mean either more active political participation or greater faith in democrac…Many yearn instead for the kind of government that would execute the corrupt and build highways, railway lines and bridges at the dizzying pace of authoritarian China.
Recent NYT article on London meditation anti-Guru moving to New York has inspired some thoughts as to why i don’t buy new age, 10 minute meditation session, end your anxiety without some sort of spirituality/faith/religion. One of the main tenets of buddhism that has made it into the mainsteam, LA fitness/YMCA yoga, pop meditation guru, “new age buddhist-influenced philosophy of life” is the need/ability to control and let go of your thoughts.
I’ve recently been thinking just how important that tenet is and whether/what is missing from this one step mantra to modern life success
1) Our thoughts give us meaning/define (obviously) the way we look at the world
1a) obviously we’ve got to be sort of attached to some thoughts to be used as building blocks in order to create meaning so that we can live and invest in our lives in consistent ways. These building blocks are necessary so that we ultimately can do things that improve our daily life – you know innovation, technology, family/friend time, humanity, and world peace.
2)our anxiety/stress/otherwise unhelpful thoughts keeping us from the wonderful improvement above might be do from lack of control in the outermost layer of building blocks (aka a bad roof) or from some deeper layer (like a bad foundation) or from multiple layers (consistently bad concrete/molding/anything else in a house that goes throughout).
2a) For the really stressed, angry, anxiety driven, cruel, fearful people out there –how many layers of building blocks do we need to let go/control/sift through?
2b) That is some hard work.
2c) Given how deep most of our problem are and that most of us are subject to the bad foundation and bad multiple layers problem, ten minutes of thinking and letting go when you’re “away from it all” will not help.
3) Given that most of our problems are relational and we’re hoping for brilliant thoughts to explain how we can better approach these relationships in practical ways; (sometimes telling someone “just love them like you love yourself” isn’t the most clear cut direction of what to say/how to act/how to think about a person that will improve the relations —being patronizing/motherly/fatherly/sisterly/disciplinarian sometimes doesn’t work); any practice of letting go of one’s thoughts would also need to cultivate practical helpful thoughts…which again requires rebuilding thought building blocks. (reorientation)
3a) list of new age spirituality needs based off this short, superficial analysis
a. practice letting bad thoughts go
b. learning to identify which thoughts are bad – especially the non-obvious ones
c. building a complementary framework to identify the bad thoughts we didn’t know were bad/interfering
d. getting the new ideas to build the complementary framework
e. practice sifting to find and cultivate innovative new ideas which are practical and specifically life applicable to build and to build from the complementary and ultimately newly adopted framework.
f. More than ten minutes of quiet time during your lunch break because reorienting the way you see the world and how you think about the world is not easy.
4) on the other hand, if mr. anti-guru is helping the most successful people, then perhaps these are people who have learned to orient their building blocks in such a way that they can get their jobs done with minimal emotional/moral/physical(Thought) interference and need the meditation merely to get to the next level of success.
5) in which case, Mr. anti- Guru, you are helping people be better at doing what people already do really really well in their current context and are unhelpful to these same people in helping them be better at things they do quite badly, sort of badly, or in a mediocre way. Changing the roof probably won’t help the foundation for long.
Despite the major weaknesses with religions in general and each religion specifically, we might agree that religions/spiritualities that make people the happiest (i know its a vague term but I’m thinking somewhere along the lines of “i have a meaningful life” ) seem to converge on the point that it is not easy to cultivate that type of happiness everyday/all the time. Of course it need not be a neverending struggle nor a wait til death struggle, but perhaps it lies in the happy medium.
Disclaimer – all i know about mr. anti-guru and his practices is from the recent NYT article so his article inspired me to think through basic meditation rather than informedly critique his practices.
While the legalization of same-sex marriage in the state of New York is certainly a cause for joy, it contains at its root a cautionary tale about the power of politics over the private realm that Columbia professor Katherine M. Franke touches upon in this column:
What’s difficult to explain is that for some lesbians and gay men, having our relationships sanctioned and regulated by the state is hardly something to celebrate. It was only a few years ago that we were criminals in the eyes of the law simply because of whom we loved. As strangers to marriage for so long, we’ve created loving and committed forms of family, care and attachment that far exceed, and often improve on, the narrow legal definition of marriage. Many of us are not ready to abandon those nonmarital ways of loving once we can legally marry.
The swift transformation of the public perception of homosexuality from mental illness only a few decades ago to a recognized and respected sexual identity makes one wonder whether political decision-makers have not been obstructing rather than aiding happiness and freedom in the private sphere by assuming authority over questions of life that it should always be the sole prerogative of the individuals concerned to answer – in this case, what kinds of partnerships are of merit.
Advertisements are everywhere. As human attention has become the essential precursor to creating product demand and at times even the product itself, advertisements have become a continuous presence in all aspects of life: news articles, (electronic) letters, movies, public transports, even on cars and urban apartment buildings.
However, some spaces seem surprisingly resistant to being converted into ad space. Important parameters for potential ad space should be the frequency of information-transmitting interactions with potential customers and the “stickiness” of these interactions in terms of memorability and actual conversion into product sales. Based on these criteria one would think that human names, funerals, classroom interiors and high school course materials would be prime targets for marketing companies, but I am not aware of major successes in placing ads in those spaces. Narrowly considered, this seems irrational, as “being made aware of a brand” seems a small price that we happily pay every time we venture into public space or open a website. On the other hand, the gain from allowing a Microsoft ad in the corner of the blackboard, for instance, might be a substantial increase in funds for our childrens’ education, a major concern for most people. I suggest that the explanation might lie in constructing human preferences more broadly.
This paradox is similar to other situations, like child labor or perhaps kidney transplants, that I recently discussed with my esteemed co-blogger: We intuitively feel that these are sacred/heroic spaces of emotional import upon which the reality of a world with many tradeoffs and hardship should not intrude. This meta-preference for being part of a more pleasant narrative of the human condition seems to be strong enough to outweigh the elevated living standards and happiness that could be gained by having more money in a less romantic version of our tale of humanity. To put it in a somewhat crude metaphor, we would rather starve and sacrifice a lamb in the temple than eat the lamb and be made to question our mythical view of the world.