Yacoubian Building and Egypt

I want to write about Egypt, but am a bit under the weather. In the meantime, if you want some fiction from Egypt that is well written and can give you a sense of the culture there - read The Yacoubian Building.

Book Report: The Fires, Part I

I am about halfway through The Fires: How a Computer Formula, Big Ideas, and the Best of Intentions Burned Down New York City-and Determined the Future of Cities by Joe Flood. The book is about New York City mayor John Lindsay and his work with the RAND corporation to make the FDNY more efficient. Of course those efforts had disastrous consequences for housing in the Bronx.

Before I get to his story about RAND and the FDNY (Part II of this book report), I want to start with two other things that the author uses as background. First, he does a good job talking about the differences between Democrats and Republicans during the machine / progressive eras. He is clearly on one side, but it is interesting to think about the differences in respect to today's policy decisions. Second, he has a specific narrative about why the Bronx declined as much as it did during the 1960s and 1970s.

Progressive v. Machine
According to Flood, the main difference in methods between machine Democrats and progressive Republicans was the approach to decision-making. The machines received information from the community, through local ward leaders, about problems and then seemingly used trial and error to find solutions. This approach was often clumsy and responsive (and included a fair bit of graft), but according to the author was less prone to overreach and major mistakes of hubris.

Progressives on the other hand believed that data and science could explain everything and all decisions could be objective. Policy solutions would be clear based on the evidence, and government could identify and solve problems broadly and proactively. Flood will explain how often this method lead to bad policy because data is often misread or misunderstood or people don't see negative side effects until its too late.

Decline of the Bronx Explained
Flood's narrative of the decline of the Bronx comes down clearly on one side of this; he blames the decline predominantly on all types of central planning / urban planning / root approaches to policy.

He blames urban planning for driving industry out of the city, chasing hundreds of thousands of jobs out of the city just when African-American and Puerto Rican populations were entering the city. Flood is very critical of the belief that we can / should try centrally to create an ideal city. The urban planners thought we could drive industry out and create a clean and beautiful city. Unfortunately that had disastrous consequences for jobs.

Central planners also created redlining, where the federal government identified neighborhoods (often low income and minority) that were bad risks and therefore should be ineligible for bank loans. This left good building owners in those neighborhoods with no ability to get financing, which left them to sell to slumlords who would milk as much money out of the property as possible and spend as little as possible on the buildings.

Joe Flood also talks about slum clearance. Following the work of Jacob Riis to highlight the living conditions of the poor immigrants in the lower east side, city officials apparently cleared the slums to build new housing. Of course, this likely only shifted the problem and since they didn't create enough to match how much they knocked down, it increased homelessness.

Finally, Flood talks about everyone's favorite urban planner, Robert Moses and his destruction of poor neighborhoods either to create new highways without concern for the effects or for slum clearance to build public housing.

Lessons for the Future
As you can see from his examples, Flood comes down very negatively against the progressive movement and central planning. I think we'll see that the FDNY / RAND example will be the ultimate example against central planning / root approach.

In his narrative, and therefore lessons for current policy, I wonder if he exaggerates the effects of central planners. I don't think we can blame urban planning for the loss of industrial jobs in the city. And while redlining was appalling, I wonder how easy it was to get a loan in those neighborhoods before that. And I would argue that Robert Moses' projects had serious consequences only on some individual neighborhoods. As for slum clearance - I don't think there is an ideal solution for housing - either at the root or branch level - that doesn't involve more money than we are willing to spend or greater tolerance for dangerous conditions.

Either with the branch or root approach, policy makers make bad decisions. Sometimes the exacerbate already troubling trends, or marginally roll back good trends, but I just doubt how much effect they really have over broader trends that are often out of our control.

Basically, despite a compelling story, I am convinced that neither the bottom-up nor the top-down approaches are ideal by themselves. We can and should use data to inform our decisions and have broad solutions for problems. But we also need to have key involvement from people at the local level as a check against hubris, which can lead to very bad decisions. In other words, as is often the case, the answer is somewhere in the middle.

Congressional Shooting: One Week Late(r)

I am a week late on this, but I feel the need to post anyway. For the record, my opinion hasn't changed since I first found out about the shooting. Of course the shooting is tragic - and a little scary for those of us that work for elected officials. But in the press the shooting was seen through the lens of a few different issues, which I will give my comments on.

Political Discourse
I think Jon Stewart handled this better than almost anyone (Obama's speech was pretty good, too, but his was more inspiring while Stewart was more honest and without pretense). Basically, I don't think there is any evidence that the shooter was inspired by over-the-top conservative rhetoric, and even if he claimed he was, I maintain that most people know that the commentary is nothing by hyperbole.

At the same time, I think our political rhetoric, while maybe not that unusual throughout our history, is ill-informed and hysterical. I think both sides are guilty. However - and feel free to take this with a grain of salt - I do think Republicans are worse and more hysterical. Or at least there are more lies and fake conspiracy theories than I remember coming from Democrats during the Bush Jr. years.

The point is that I would love it if we could have intelligent and honest debates about the issues. I don't intend to suggest that they should be dispassionate. They can be aggressive as long as they are not personal. It would be great if we lived in a world where we could fight political battles during the day and laugh about it over dinner and drinks at night.

Guns
I don't think guns are the big issue here. Granted, I support background checks and bans on assault weapons. But at some point, you won't be able to stop crazy people from getting a gun.

My bigger concern though is that most gun violence is not perpetrated by people with legal guns but by people with illegal guns. I don't care about guns in Starbucks or concealed weapons laws. I would much rather deal with laws to prevent people from getting guns on the black market.

This is a significant challenge though. Look around at activities that we have tried to ban and see if we have been successful. From prostitution to drugs to guns we are unable to stop market transactions that people want to engage in. This doesn't mean we should give up, but we need to realize that this is the challenge and is one that is far more difficult than our discourse suggests.

Congressman King's legislation is completely absurd and amazingly the rest of the GOP sees that. He wants to ban someone from taking a gun within 1000 feet of a judge or elected official. So King clearly wants to protect himself and people like him from guns, but seems uninterested in the hard fight to protect those that are actually dying from gun-related deaths - poor minorities in urban areas.

I still think that one of the best strategies for dealing with this would be to create a new gun rights group that protects rights of individuals that have passed basic background checks but is really tough on assault weapons and the black market. The NRA seems unwilling to help on that front - especially since the gun manufacturers don't care who buys their guns as long as they make money.

Sarah Palin, et al
Two quick things: Why do we respond and make a big deal about what the crazies say? Why are we obsessed with Sarah Palin's idiotic tweets? Why do we care about Glen Beck's absurd conspiracy theories? And why do we go crazy when Limbaugh makes another racist statement or bold-faced lie?

It's like training a dolphin - if you want it to stop misbehaving, ignore the bad behavior. Trying to condemn the bad behavior only gives it attention, which is what it really wants afterall.

Second - Palin's video after the shooting made it crystal clear to almost everyone that she cares most about herself. She wasn't confronting the issue. Instead she was playing the victim at a time when dozens of actual victims were dealing with a real nightmare.

Dear Conservative: Homeless

Dear Conservative,

It has been a while since I last addressed a post to you. But I feel I have an issue to raise: government spending - specifically social services spending.

Let me start by saying that I mostly understand the desire to reign in government spending. After all, being fiscally responsible is necessary in any facet of life. The problem though is how that desire is actually carried out.

First of all, when fiscal conservatives like yourself call for less government spending, rarely are you talking about the parts of government that are clearly public services - police, fire, transportation, water and sewer, or even military. Sure, in those areas you want to eliminate waste, and stick it to the unions sometimes, but you aren't really looking for deep cuts there. And let's be honest, both parties want to eliminate waste, which is why both parties employ budget analysts.

Instead, you are more often after services that don't benefit everyone but instead benefit those that need assistance. I gather that this feeling comes from two places. First, you think free money is a disincentive to work.

Let me comment on that briefly. I will acknowledge that people respond to incentives and so free benefits can be a disincentive to work. I imagine you would also concede though that some people want to work for its own sake but cannot find work (if not, I'd love to introduce you to the real world sometime).

If we accept both premises, than we accept that a policy that provides no help will hurt people that want to work but cannot and a policy that helps everyone will help some people avoid work. In this case, I would rather help those that might be undeserving than not help those that we would both agree are deserving. We'll never have a perfect policy - but ask yourself which way would you rather be wrong?

I would also say that you probably underestimate how many people want to work but cannot - I assume most people want to work even if they can stay home and make the same amount of money. Almost everyone values a job for its own sake - just like you and I do.

The second reason you want to see cuts in social services is that you think we are too generous in our services and could cut back while still providing basic services. That is the position of yours that I want to address because it is the most flawed.

Let me give you one example where we are not too generous and instead are far too stingy. Close your eyes and take an imaginary trip with me on the streets or subways of New York City. While we are walking, let's look for (as opposed to our usual habit of ignoring) the street homeless.

Okay, have you found a homeless individual yet? Let's see if we can describe him or her. Among other things, I assume you'll notice that the person's mental state is in some way troubled. You might in fact use the word crazy, although I would suggest the term mental illness*.

A quick survey of the research suggests that 25 percent of the homeless single adult population suffers from a severe and persistent mental illness. I think the number is higher among the chronically homeless in New York City. But let's focus on that 25 percent. Right now, those individuals are living on the street not because they are lazy or somehow value the freedom of the street, but because they need medical help. Unfortunately, we do not provide enough funding for the housing and health services they require.

I hope you see the point I am trying to make. The fact is that once you really look at the world around you - or maybe the world not around you - you will see how many people are in terrible situations that are not of their choosing. I am pointing to chronically homeless individuals, but we could also look at the foster care system, public assistance, affordable and safe housing, juvenile detention, and education. In each of these areas, more funding would help people that even you would agree are deserving and in need of help.

See, I am writing this to you because I know you share my values. I know that you are inspired to help those that are in need. I call it social justice but maybe you respond more to Jesus, who said that those that have helped the least among us have helped Jesus, and to them await the rewards of heaven. There are so many people in this world that need a hand - that need food, clothing, shelter or health support. Government is not always the solution, but when nothing else is working, we need to pool our collective resources and help.


*What if on your imaginary tour you came across someone that did not seem to have a mental illness? I would argue that the other 75 percent are unable to afford a place to live and are meanwhile choosing to avoid the shelters due to perceived or actual danger.

Steriods and the Hall of Fame

I have written a lot about baseball, steroids, and the Hall of Fame and I am not sure I have been consistent. But here is my current thinking (in response to this NY Times piece).

If we were going to be consistent about how we select people for the Hall of Fame, we would either prevent everyone who used from selection into the Hall of Fame, or we would ignore whether they used or not and vote strictly on performance. The former strategy is impossible and the later, while consistent, feels unsatisfying - like there must be a more just approach.

So if we shoot for something more satisfying, we might decide not to vote for people we know used steroids. This strategy will affect Mark McGwire, Raphael Palmeiro, and Barry Bonds. But many journalists are also guessing, which can affect someone like Jeff Bagwell that may or may not have used.

The great struggle with this issue is that each option is imperfect; every choice seems to be an injustice to someone. Voting strictly on performance is an injustice to the players that did not use and are therefore likely being overlooked (as they were likely outperformed by their peers that did use). Punishing those that did use, depending on how strict your standards of evidence are, will either avoid punishing some that have escaped detection or punish some that are accused but did not use - or both.

Out of those three options, none feels much better than the others. But I think I lean towards punishing those where there is good evidence that they used. We have to accept that some got away with it. There is nothing we can do about it. Considering that though, I would hope that voters keep their standards of evidence pretty strict. I would rather not punish someone that used than punish someone that did not.

This means not voting for Bonds, McGwire, Palmeiro, Sosa and Clemens. Most others should probably get considered.

I also think that this would be a less contentious issue if the baseball writers that vote were not so publicly sanctimonious after so obviously missing the issue.

DADT

I have been absent for a while; I apologize. I will say that I am happy with the lame duck compromises / legislative victories. And none more so than DADT repeal. And I have to say, I have new faith in Joe Lieberman thanks to his fight for this issue. Somehow, it didn't seem political or calculated; it seemed like he just wanted it. I could be wrong of course, but that is my initial read.

These are the Values Voters?

So let me get this straight - Republicans think that tax cuts to the wealthiest Americans is so important that we don't need to identify savings to offset it. But a bill to support people that worked at the World Trade Center following the collapse is not that important and instead, for that, we need to know how we will pay for it. To put it even more simply: tax cuts for wealthy is important, health care for 9/11 responders, not that important. Nice values.

I Don't Hate It

So the Times is reporting an agreement between Obama and GOP on extending the Bush tax cuts - all of them - and aid to lower income Americans including further tax breaks. I think it is a fine compromise and a sign that maybe our government will not completely shut down during the next two years.

However, Obama has been too silent for too long. I completely agree with Frank Rich that Obama needs to articulate his positions, and do it frequently, even if the public is likely to disagree with him. Instead, we have no idea where he stands - or only a vague idea. I envision for him a moment similar to the end of The American President, when President Shepard finally takes a principled stand.

But in reality, Obama should be in front of cameras all the time - so much that we get sick of him. For someone in an office with significant control over the agenda, he seems to cede it to the Republicans. I see myself returning to this theme frequently over the next two years.

But coming back to this issue, Obama and Democrats need some message discipline and they need to repeat over and over again that Republicans went into this negotiation looking to protect the richest Americans and Democrats went in looking to protect middle and lower class Americans and Americans that are out of work. They need to hammer that home the way Republicans managed to hammer every one of their messages home over the last year.

If I weren't so tired, I would be screaming this message. Instead, you'll have to trust me when I say how frustrated I am that this isn't happening.

Politics Night: Wikileaks

We had our third politics night on Tuesday (11/30/2010). We discussed Wikileaks. I will summarize my position. Others can add theirs in the comments if they so choose.

Let me start by saying two things about state secrets that do not directly relate to Wikileaks. First, I think people in government abuse state secrets privileges (see my post on Claim of Privilege). So I am not a zealot on protecting classified documents. And related to that, I think there can be really important instances when leaked documents tell the public what they need to know but the government has been hiding from them.

Now, as to Wikileaks, I don't think that this last release was necessary nor has it been helpful at all. As many commentators have already said, the release was gossip and nothing more. And that gossip hasn't told the public anything useful, but it has potentially hurt our ability to work with partners like Russia, Pakistan, and Saudi Arabia.

Governments should be able to talk privately. Of course, in the end, their decisions, and the information that went into making those decisions should be made public. But we don't need to know all private conversations.

I don't remember the previous releases too well, except that in general they didn't say a whole lot that we didn't already know. I think there were certain events that we didn't know about, but overall, there didn't seem to be a message that the government was hiding that came out in the releases.

I believe that the reason the Wikileaks information hasn't been that helpful in general stems from Julian Assange's motives. If we are to believe him, his goal is to make everything government does public. If we are to believe others, he just wants to embarrass the US. Either way, these intentions have lead, and will continue to lead to, unedited information dumps that are mostly useless but sometimes harmful.

When someone's intention is to highlight wrongdoing or bad decision-making, then we are likely to get information that furthers those goals. But when one's motives come from an absurd notion about democracy, or just a hatred of the US, then we will get a lot of information that is not helpful for the public to know and in some cases is harmful.

Update:
One of the Politics Night faithful pointed me to a debate between Glenn Greenwald and Steven Aftergood on Democracy Now. Also, so that Julian Assange can speak for himself, here is a link to some of the interviews with him recently.

Shame HuffPo

While I mostly blame cable news for ruining constructive debate in our country, there are definitely on-line news sources that are doing their part. I have seen Huffington Post a number of times, and it always enrages me, present a headline and even a description of someone's talking points that is incorrect and needlessly inflamatory.

In this example, HuffPo says that Juan Williams is saying unemployment benefits weaken regular work values. But in watching the video, I don't see Williams saying that at all. He says that when a person chooses to stay home instead of work, it erodes their work values. And while he might acknowledge that some people are incentivized against working by the extension of unemployment benefits, I don't see him accepting that argument at large.

I know that as Democrats we like to think that only Fox News distorts what people say. But clearly, that isn't the case.

Does the Punishment Fit the Crime?

Tom Delay
I’m not sure how I feel about the Delay conviction. In fact, I think I agree with parts of this Wall Street Journal editorial.

Tom Delay certainly seems to have violated the spirit of the campaign finance rules. But it seems like he found a way around them so that he couldn't be convicted of actually violating them.

But I am not convinced that he is guilty of money laundering; at least I don’t think his crime fits in with the purpose (or spirit) of the money laundering law. But if there are experience lawyers out there that feel otherwise, feel free to convince me.

On a related note, I discovered a really good blog on New York State politics the day it shut down. Oh well. Here is a really good post on Joe Bruno's legal issues.

Charles Rangel
I think the Rangel case is interesting if not a little frustrating. I agree with the people that say his crimes don't seem to fit with previous censures. However, his crimes seem worse than behavior that received reprimands.

And as bad as Rangel's actions were, I can't believe for one minute that he is the only one of the 535 members that have used their stationary for private fund-raising or forgotten to count rental income from second or third houses in their taxes. (The rent stabilized apartments situation is probably unique to New Yorkers.)

Basically, I feel that the House is making an example out of Rangel - Democrats to pretend they are tough on ethics violations and Republicans to make a Democrat look bad. But really, there are probably other examples of similar bad behavior that are missed or ignored. In other words, censure only seems strong because of how bad they probably are in cracking down on all violators.

To conclude, to the extent that justice was served in these two examples, it was imperfect justice. Maybe that is all we can hope for.

If I were President: Budget Deficit

I played the NY Times' Budget Puzzle. Here is my first attempt. I fixed the deficit with 43% tax increases and 57% spending cuts. Again, this was just a first cut. I basically went through and checked things I could live with. But I didn't do a great job of comparing all of the options and only choosing the least painful ones. I was surprised how easy it was. Of course, capping Medicare really helped (saving $562 billion!).

It is also surprising how many reasonable things I did not do, which shows that there is wiggle room. I did not choose to decrease the size of the Navy nor reduce Iraq and Afghanistan troop levels to 60,000 or (gasp) 30,000. I did not increase the Medicare eligibility age or the Social Security retirement age. I choose a moderate estate tax proposal (Obama's instead of Kyl's or Clinton's). But since I did choose the millionaire's tax, some of the things listed above could offset that if it is unreasonable.

CEO Pay

A colleague and I were debating about CEO compensation. We were actually talking about the music industry and my colleague suggested that the decrease in revenues could be mitigated if the CEO took a pay cut.

My response, and I am confident that I am right about this, was that a cut in the CEO's salary would have little effect on any companies' overall profit picture. I offered him, and now I offer you dear reader, this challenge: Find me a CEO that makes in salary more than 0.1% of the companies' revenue.

In fact, I'll even give you a head start. This page on the AFL/CIO website lists CEO salaries. Once you have that, you can find the companies' revenue by searching the company name and "annual report".

I am willing to bet though that all CEO salaries will be well below the 0.1% of revenue. In fact, I looked at one random company today and found that the CEO was making 0.03% of revenue.

With salaries this low as a percentage of revenue, cuts to their salaries will not help with budget problems. If the company sees a decrease in revenue of 3%, having the CEO work for free will only cover 1% of that gap. Therefore, even that big cut will only be symbolic.

Now, that isn't to say that symbolic gestures are meaningless. I do believe that symbols can be very important. A salary that is 0.03% of revenue can still be considered obscene and a big cut can send an important message. So I am not suggesting that it shouldn't happen in a company in difficult times. I am just saying that it will do very little for the companies fiscal problems.

Some Music and Some Econ 101

This weekend, I had a pleasant debate about the music industry and downloading of music for free. My overall point was that downloading music is and should be illegal and the government should work to increase enforcement. While I do think the record industry has been slow to evolve with new technology, I don't think stealing music is a good (moral or effective) way to force the industry to change.

Although I do like to recap arguments on my blog sometimes - with the intention of synthesizing my thoughts, not to get the last word - this is not the point of this post. As I was falling asleep last night thinking about the debate, I realized a way to better show a fear I have with the illegal downloading of music - through a supply and demand graph!

One of the points I made was that in the market place, consumers have the choice to show their dissatisfaction with a product by refusing to purchase it. I argued that it gives the consumer an unfair advantage in the marketplace if they can get the product without paying for it (fairness within a transaction is necessary for a well-functioning market system - I can explain further if anyone wants me to). This will drive the price down to an unsustainable level.


Here is where the economics comes in. For a given product, consumers are willing to pay a certain price to have that product as opposed to not having it. That price is shown by the original equilibrium, P1, Q1. When a consumer can choose to have the product without paying for it, or have the product and pay for it, their price is no longer the value of the product, but the value of feeling good about how they obtained the product. Clearly that price will be much less than the previous price.

What you see in this scenario is a shift in the demand curve from D1 to D2. And when the demand curve shifts back, you see a lower equilibrium price, but more importantly, a lower quantity. This means that in this scenario, prices decrease and less music is produced. And I don't think anyone wants that.

A colleague of mine theorized that getting free music mitigates - possibly completely - this shift in the demand curve. He thinks that getting free music leads the consumer to purchase new music. I think this argument is weak and an attempt at justification. Consumers are not so irrational that they spend the same amount of money for the same quantity of music whether there is the option to steal music or not. And if it mitigates but not completely, then all we are talking about is magnitude - but the direction of the effect is still the same.

I also think a musician should have the ability to choose to make that investment instead of consumers forcing that situation on them.

Anyway, enjoy the flash back to Econ 101. And feel free to challenge my model or my assumptions.

My Ignorance of Historians

In my post on Definitive Biographies, I remarked that I was skeptical of Jon Meacham's book on Andrew Jackson because he is a journalist and not a historian. I am embarrassed about my ignorance. I was right that he is not a historian but I had no idea how many of the great popular history writers are also not historians.

I only recently learned this fact that many of my favorite / respected authors of history do not have PhD's in history. David McCollough only has a BA in English Literature. Ron Chernow also has only a bachelor's degree (granted, I haven't read his stuff, but his book on Alexander Hamilton is on the top of my history list). Robert Caro has a degree in English. And Doris Kearns Goodwin has a PhD but in Government.

This article in the New York Review of Books, which by the way is a glowing review of Chernow's George Washington biography, explains this development over the last 50 years or so. It seems that historians are busy specializing in very specific issues and are mostly debating each other. While this is valuable for debates in history, it is usually not very accessible to a non-historian audience.

So Jon Meacham, I owe you an apology. And when I make time to read more biographies, I'll be sure to check out your book American Lion.

What A Liberal Would Have Done

I saw this post by James Galbraith on what Obama should have done to stem the financial crisis.

Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the Federal Deposit Insurance Corporation. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force.

Team Obama did none of these things. Instead they announced "stress tests," plainly designed so as to obscure the banks' true condition. They pressured the Federal Accounting Standards Board to permit the banks to ignore the market value of their toxic assets. Management stayed in place. They prosecuted no one. The Fed cut the cost of funds to zero. The President justified all this by repeating, many times, that the goal of policy was "to get credit flowing again."

The banks threw a party. Reported profits soared, as did bonuses. With free funds, the banks could make money with no risk, by lending back to the Treasury. They could boom the stock market. They could make a mint on proprietary trading. Their losses on mortgages were concealed -- until the fact came out that they'd so neglected basic mortgage paperwork, as to be unable to foreclose in many cases, without the help of forged documents and perjured affidavits.

Maybe it wouldn't have been as easy as it sounds here, but the fact is that the bail-out plan was not successful and has not gotten us out of the woods. One of the reasons banks are able to report profits again is because much of their balance sheets are not properly valued. We see this with single-family mortgages, and we definitely see it with the multifamily stock.

The solution so far has been to be easy on banks, lest they fail. But while Obama is going easy, state and local governments - and homeowners and tenants - are paying the price. All so that we didn't have to take over the banks and be accused of being socialists. Except that happened anyway.

What Kind of Teacher?

This post is going to focus on how we recruit the best teachers. President Bush thought all we needed to do was make prospective teachers get degrees and certifications and take tests. This might require decent training and prevent some bad teachers, but it does not in itself recruit good teachers. Instead, we need to focus on incentives that would attract and retain more of the best and the brightest. Teaching can be an exciting and rewarding endeavor. But for public schools, we would need to change some things first.

Salary
Of course salary is a big issue. Granted, teachers, after a couple decades of service, do pretty well. However, I do think it is less than other occupations where workers have similar credentials. I also think though that salary isn't the only thing.

Flexibility
I am confident that most of us highly value flexibility in our jobs. We don't want rote tasks dictated to us from on high. Having direction is good. But no flexibility is bad. With teaching, the more strict curricula become, the less likely people are going to be to want to teach. Teachers should be told generally what the students are expected to learn, and they should be free to operate within that. We lose central control, but we would recruit better teachers. This is one of the reasons talented teachers choose independent / private schools; they have flexibility over curriculum.

Responsibility
With flexibility should come responsibility. A fairly recent David Brooks column has this quote that I agree with:

"What’s needed, Howard argues, is a great streamlining. He’s not calling for deregulation. It’s about giving teachers, doctors and officials the power to actually make decisions and then holding them accountable. Some of their choices will be wrong, Howard acknowledges, but it is better to live in an imperfect world of individual responsibility than it is to live within a dehumanizing legal thicket that seeks to eliminate risk through a tangle of micromanaging statutes."

For teachers, this specifically means eliminating tenure and using test scores and a lot of other measures to evaluate a teachers effectiveness.

Grow and Learn New Things
There are two other things people value in a job: the ability to gain new responsibilities and the ability to learn new things. For the former, there are some opportunities for teachers - move to administration or become a team leader / mentor. But that is about it. So if we want to attract and retain smart people in teaching, we should be heavy on the later. Staff development for teachers is not only good to keep teachers' knowledge up to date, but serves to recruit people to teaching that want to be lifelong learners. We should be prepared to spend a lot more on staff development.

What We Have Now
Instead of the above benefits, we have a system whose main attractions are summer vacations and job security. And when those are the main benefits, you don't attract the best and brightest.

The point isn't to disparage teachers. I do think that most of our teachers are capable, smart, and dedicated. The goal though is to replace the ones at the bottom of the curve with more people at the top of the curve. We can only do this by changing the incentives on the margins.

Many really smart people work in jobs where there is little security because they are confident in their ability and believe that they will have a boss will be reasonable and make the right decision in most cases. Teaching could be the same way. As for summers off - I would not argue that teachers do not deserve it. I just think that right now, absent incentives for more really good teachers, it attracts people to teaching for the wrong reasons.

I will say, and I think I have said it before, that the unions are a serious impediment. In other occupations as well, they go out of their way to protect people from management at all costs. But this means you are not rewarded for good performance and not punished for poor performance. Everyone moves along in a uniform system. This protects everyone, but does nothing to attract the best we can have.

Economy: Lost Decade?

I'll admit that after Obama's election, I mostly sat back and let his administration do their work. I didn't think too hard about whether they were getting things right. Only now that some of their plans - most notably on the economy - am I really trying to understand what went wrong and why.

The person I have been looking to the most is Paul Krugman, but I have lately been expanding my horizons to see what the right thinks (mainly through WSJ and Financial Times). It seems to me that almost everyone agrees the government should do something to help the economy - whether it be through monetary or fiscal policy. Unfortunately, it seems that monetary policy is not very useful at the moment as interest rates are up against the lower bound (ie cannot go lower than zero and are near zero now).

That leaves fiscal policy. As we know however, there is no public support for fiscal stimulus and there are no leaders willing to try to change minds and convince people that fiscal stimulus is necessary. Bernake is unwilling, as is Obama.

I will admit, as Obama should, that the original fiscal stimulus was imperfect - and not only because it was too small. Shovel-ready didn't pan out as planned and Davis-Bacon requirements slowed things down. Plus, the stimulus seemed to replace state and local spending cuts, negating the stimulus effect.

I had assumed it was common knowledge that we got out of the Great Depression with stimulus spending - ie the war - but there seem to be many that think otherwise and are doing a good job of convincing the public of that. (And if you wonder why war spending is a better stimulus, I would argue that it is because we mobilize war spending very quickly and rarely argue about whether it is too much spending or too little so long as the cause is just.)

If I am understanding the Wall Street Journal and Financial Times correctly, they also think that fiscal policy might help but is politically not viable and monetary policy (QE2 - ie Fed will buy long term debt instead of short term debt) will be mostly ineffective.

Only non-economists are saying that less government spending will allow businesses to spend more and that will get us out of the recession. This isn't the answer because businesses are facing surpluses of their products, and only consumer spending will clear those surpluses and cause businesses to re-start production and hire again. Fiscal stimulus is our only way to achieve that.

If fiscal stimulus is a no-go and monetary policy will not be helpful, what is the outcome? Unfortunately, probably a lost decade.

Casualties in Iraq

The Economist has a graph showing the casualties in Iraq based on WikiLeaks. Graphs like this are really good at showing trends - in this case showing how bad it really was in 2006.

Deficit Panel

The chairs of Obama's deficit reduction panel have made their recommendations, and of course they have hit some nerves. Included in the list of strategies are eliminating the tax exemption for health care plans and interest on home mortgages as well as increasing the age to collect social security. I can't really see either of the tax break changes happening - although I do like the later one (mortgage interest) if it is phased in.

I was frustrated by Republicans on the campaign trail (although honestly no more than I have been with Democrats, including Obama, on the campaign) and their vague and useless talk about decreasing spending. Any meaningful decreases will need to cut services for important and widely-used programs. (For a really good sense of the cost of programs, see this "tax receipt".)

Now at least Republicans will have to weigh in. Do they want to increase the age for social security benefits (unpopular but maybe necessary)? Do they want to eliminate popular tax breaks in the name of decreasing overall taxes and simplifying the tax code? We'll wait and see.