Medical Education

This letter by Adam Smith is very interesting.  The key excerpt:

What the physicians of Edinburgh at present feel as a hardship is, perhaps, the real cause of their acknowledged superiority over the greater part of other physicians. The Royal College of Physicians there, you say, are obliged by their charter to grant a licence, without examination, to all the graduates of Scotch universities. You are all obliged, I suppose, in consequence of this, to consult sometimes with very unworthy brethren. You are all made to feel that you must rest no part of your dignity upon your degree, distinction which you share with the men in the world, perhaps, whom you despise the most, but that you must found the whole of it upon your merit. Not being able to derive much consequence from the character of Doctor, you are obliged, perhaps, to attend more to your characters as men, as gentlemen, and as men of letters. The unworthiness of some of your brethren, may, perhaps, in this manner be in part the cause of the very eminent and superior worth of many of the rest. The very abuse which you complain of may in this manner, perhaps, be the real source of your present excellence. You are at present well, wonderfully well, and when you are so, be assured there is always some danger in attempting to he better.
 

It is a rather strong attack on medical licensing and the monopoly priviledges that it creates for both the schools that confer it and the people who are licensed.  The idea of a parallel apprenticeship system is intriguing, if complicated to figure out how to make work.  But the argument about the perverse incentives created by this system are of interest even today. 

A difference in kind

Megan McArdle has a story about pensions today that is too clever by half.  The only problem, is that there is a complete dis-analogy between a firm and a government:

Such a pension fund would, of course, be illegal. And for good reason: we recognize that it is not, in fact, a pension fund. It’s a promise by the corporation to pay its workers at some later date, not a funded pension plan. The company can call this anything they want—trust fund, pension plan, Ponzi scheme—but whatever we call it, we’d recognize it for what it is: a meaningless accounting fiction that does not in anyway enhance the security of worker retirements. And if, say, Verizon tried to fund its pension plan this way, liberals would hit the roof. Because we recognize that a pension fund full of third-party securities is not, in fact, very much like a pension fund full of securities issued by the same entity—corporate or government—that owes you the pension. 
 

It is true that the Federal government can choose to stop paying Social Security at any time.  And it is also true that money is fungible.  But the main point of differences is that the Federal government has the right to tax the citizens of the United States (and armed forces to back this right up).  No company has access to such a long term asset. 

This has not stopped governments from defaulting in the past and it sure won't stop them in the future.  But this is the same entity that regulates contracts between you and your self funded pension fund.  Why doesn't a financial asset manager decide to cash in all of their clients assets and head off into the sunset?  Well, because it is illegal.  But if there is no government then there is no reason to give back these huge pools of cash.

So, yes, it is possible that the government will turn on you but they have a) a massive, long term asset and b) not much else in the financial markets is likely to survive if they cease to function. 

Weekend puzzle -- Count the Squares

I really like this one. The solution is easy and requires only basic math and good pattern recognition. If you don't spot the pattern, however, you've got a slog ahead of you.

There are hundreds of squares in this picture with dimensions ranging from 1x1 to 12x12. Exactly how many squares are there?

I've got a more detailed pedagogical discussion of the problem at You Do the Math. I'll post the answer in the comments section of this post later in the week.

Why are there no "Right to Ranch" states?

Here's another installment in the right-to-free-ride discussion. Sometimes it's useful to consider hypothetical extreme cases when discussing a proposed law. Imagine that we took non-right-to-free-ride states and added the following conditions:

If you refuse to make payments to the union representing you, you will NOT be allowed to:

1. go and work for a non-union shop;

2. move to a right-to-free-ride state;

3. go into business for yourself.

You will, in other words, not be allowed to ply your trade under any circumstances unless you pay these fees. What would the Republican position be on these policies? How might conservative justices like Scalia and Thomas rule on the laws?

I turns out that you don't need to speculate because this isn't a hypothetical. If you're an American beef producer, you pay a fee to the National Cattlemen's Beef Association for every head of cattle you sell. You are required to fund lobbying and advertising campaigns ("Beef, it's what's for dinner"). What's more, the Supreme Court upheld the fee in an opinion authored by Justice Scalia.

At the risk of belaboring the obvious, this was never about workers' rights. It was and is about one party using legislation to remove funding from the other party. Talking about it in any other terms is an insult to our intelligence.

And frankly, my intelligence is getting damned pissed off.

Right-to-free-ride state

Since we seem to be in the middle of a right-to-work thread, we should really take a moment to note an important point by Kahlenberg and Marvit in the New Republic:

"Nevertheless, there is an important lesson for liberals and labor in the Michigan story about the power of rhetoric. "Right to work" is a mendacious slogan but a politically resonant one. It's mendacious because everyone in every state has the right to work; the legislation simply gives employees the right to be free riders--to benefit from collective bargaining without paying for it. Yet members of the media mostly employ the phrase without qualification. (Even those that say "so-called" right to work repeat the phrase over and over again.) This past Saturday, the Washington Post'sfront page featured stories on gay marriage going before the U.S. Supreme Court and the right to work debate in Michigan--and a casual reader could assume that both stories were about "rights" ascendant."

What's wrong with science fiction authors?

They seem to have a strong opinions about people asking for free samples!

In truth, though, carefully edited text is a lot nicer to read and developing text to this level isn't free.

Right to work

I have to admit that I am with Jon Chait here:

Why is it fair to make workers in union workplaces pay an agency fee even if they don’t want to join the union? If you step back and think about it, the focus on this as a matter of personal liberty is kind of silly. On almost every single point of possible discontent you may have with a job — you don’t like the pay, you don’t like the hours, you don’t like your boss, you don’t like wearing a hairnet, you don’t like having ESPN blocked on your work computer even when there’s no work for you to do — the recourse is go work somewhere else. That recourse is also available for people who don’t want to pay an agency fee.

On top of that, there’s an additional recourse available for union-hating workers that isn’t available for most things. If a majority of workers don’t want to be represented by a union, they can vote to decertify the union.

Notice that we have almost no interest on attacking other aspects of employment that reduce freedom for the workers involved.  If unions made life worse for workers they would, on average, wither way if there were enough employment alternatives.  So if you think Unions are uniformly bad then maybe fighting for full employment would be a better choice?  Then everyone could vote (with their feet) for the jobs that they found the most satisfying.  

But curiously the right to work folks don't seem to be agitating for increased government spending to make full employment a reality.  Nor do they seem to be principled anti-deficit folks fighting for more workplace regulation in other arenas.  It's all rather confusing.

New at You Do the Math -- The Eugen Weber Paradox

This is not Harvey Korman...

...which is at least tangentially related to this post about Udacity, educational media, ddulites and my skepticism about the coming revolution.

"Rove's Dilemma" Graph Game

I suspect that Karl Rove's strategy in 2000 was to use the support of evangelicals and nativists to entrench Republican power then abandon them and transition to other groups, particularly Hispanics. Rove, an agnostic who was close to his gay adoptive father, appears to have had no personal investment in the social conservative wing of the party and though overrated as a strategist, he was certainly capable of following demographic trends.

Twelve years later, that strategy is looking less than doable. The nativists and social conservatives appear to be a shrinking demographic and the idea of winning over Hispanic voters seems increasingly unlikely. Some have made the case that the GOP's best strategy at this point is abandon its shrinking base and make a big play for the next demographic wave. The trouble with that strategy (from a strictly strategic viewpoint) is that a party has to maintain a certain critical mass to remain viable.

All this got me thinking about the best way to describe this. Here's what I've come up with. It's not there yet but I think it's on the right track.

1. We have a graph where each node is associated with a shifting size metric.

2. These nodes represent populations. You win support from these populations with messages.

3. If you target two nodes with the same message those nodes are associated

4. If the message targeted to one nodes raises support in that node and lowers it in another, those two nodes are disassociated

5. You can not target disassociated nodes.

6. Messages have a half life. If you wish to drop a node so you can start targeting one disassociated with it, you will have to wait a few cycles.

7. The objective is to get the most support possible support over the run of the game while never letting that support fall below a critical level.

Other than a little with Bayesian networks (which doesn't quite seem to cover this) I've never done a graph-based simulation so the odds are good that I'm stating or missing the obvious here. Still, the idea of graph as shifting fitness landscape might be interesting and it does explain how GOP strategists could have seen the coming demographic tides and could still have found themselves trapped by the rising water.

...worth a thousand words

A graph that really makes its point.


From James Lawrence Powell via Tim Haab by way of Thoma

This is simply remarkable

Aaron Carroll:

Lots of those 65 and 66-year-olds will need Medicaid. That will cost the federal government about $8.9 billion. Lots of those seniors will go to the exchanges for insurance. That will cost the federal government about $9.4 billion in subsidies. Oh, that Medicaid will cost states too, about $700 million. The 65 and 66 year olds getting  insurance from their employers will cost them about $4.5 billion (they’re expensive). As I’ve reported before, Medicare premiums will go up ($1.8 billion), and exchange premiums will go up ($700 million). And, there will be increased out-of-pocket spending by the 65 and 66-year-olds themselves for premiums, deductibles, co-pays, etc. Add it all up. To save the federal government $24.1 billion, we need to spend $29.8 billion.
 

 Even if some of these assumptions are naive, it doesn't look like this change is about saving money at all.  Instead, I am beginning to accept Peter Sunderman's claim that it is all about the long game of decreasing the consituency for the program.  But as a practical matter, it seems like this is a fairly stiff price to pay for a symbolic gesture that will make things more dificult for people to get medical care.  I am not even convinced that it does much to increase the work incentive -- moving social security to age 67 likely did most of the heavy lifting on this front already. 

Peter Principle or Dilbert Principle*

In case you haven't heard, Jeff Zucker has just been named president of CNN. Since we've been discussing incompetent executives lately, this seems like a good time to ask how, despite huge stakes, fierce competition and multiple layers of screening, incompetents still sometimes manage to make it to the top of large corporations.

At first glance, Zucker would appear ot be a perfect example of the Peter Principle, an effective producer promoted past his talents, but when you look closer at Zucker's one big accomplishment, the resurgence of the Today Show, you see less proof of competence and and more evidence that corporate reputations are often built on unrepresentative baselines, delayed effects, external factors and the tendency to embrace appealing and established narratives.

First some background via Wikipedia (as are all block quotes unless otherwise noted).

In 1989, [Zucker] was a field producer for Today, and at 26 he became its executive producer in 1992. He introduced the program's trademark outdoor rock concert series and was in charge as Today moved to the "window on the world" Studio 1A in Rockefeller Plaza in 1994. Under his leadership, Today was the nation’s most-watched morning news program, with viewership during the 2000-01 season reaching the highest point in the show’s history. ... In 2000, he was named NBC Entertainment's president.

Sounds pretty good, but remember two things that happened at the Today Show in 1990 an 1991. The first was a disastrous transition from Jane Pauley to Deborah Norville. You could make the case that Norville was actually better qualified for the job, but that did nothing to soften the viewer reaction. The younger Norville was seen as taking advantage of looks and youth to steal Pauley's position. Saturday Night Live even did a sketch entitled "All About Deborah Norville."

The ratings took a hit from the debacle, but Norville was soon gone, setting the stage for an upturn. That recovery was all but guaranteed by the hiring in 1991 of Katie Couric, a journalist who could have been genetically engineered to host a morning show.

Whoever got the producer's gig in 1992 was almost certain to oversee a substantial rise om ratings as the memory of the debacle faded and Couric started bringing in viewers. Now add in what was going on at Today's significant competitor.

Good Morning America entered the 1990s with its overwhelming ratings success. Gibson and Lunden were a hard team to beat. But Good Morning America stumbled from its top spot in late 1995. Lunden began to discuss working less, and mentioned to network executives that the morning schedule is the hardest in the business. ABC executives promised Lunden a prime time program; Behind Closed Doors would be on the network schedule. On September 5, 1997, Lunden decided to step down after seventeen years on Good Morning America and was replaced by Lisa McRee. Gibson and McRee did well in the ratings. However, ratings sharply declined when Gibson also left the show to make way for Kevin Newman in 1998. With McRee and Newman as anchors of Good Morning America, long-time viewers switched to Today, whose ratings skyrocketed and have remained at the top spot since the week of December 11, 1995.

In other words, Zucker started with an artificially low baseline, was handed a major TV personality on the verge, and saw his competition fall apart at exactly the right time. All of the important drivers of the show's success were things he had nothing to do with.

Just to be clear, many, probably most CEOs get their jobs because they are smart and capable and add value to the company, but there are other ways to  succeed in business. You can:


Fit in with the culture;

Make the right friends;

Couple your career with rising leaders and initiatives;

Fashion a persona that complements the favored narratives;

As for that last one, the legend of the studio boy wonder runs deep in the entertainment industry, from Thalberg to Silverman. When Zucker was put in charge of Today in his twenties and NBC in his thirties, he tapped into something both familiar and resonant.

But Thalberg and Silverman really were boy wonders who had laid down impressive resumes before they were put in charge. Zucker only had the perception of success. Sometimes, though, that's enough.



* Technically not the Dilbert Principle, but close.

Right to work is anything but!

This is right on:

Now naturally an employer's not going to want to agree to that. But he's not going to want to agree to higher pay or more vacation days either. That's why it's a negotiation. A right-to-work law is a law banning employers from making that concession.

The impact, obviously, is to make it hard to form strong unions in a given jurisdiction and thus make it a more business-friendly jurisdiction. But note that this same trick works across the board. You could just ban pay raises in general. Any one firm, after all, faces a dilemma. On the one hand it would be more profitable to pay people less. On the other hand, it's also unprofitable to have everyone quit to go work for some other higher-paying company. So a law against pay raises would make everyone more profitable, spurring crazy business investment and job creation. Except nobody does that because it would be (a) insane and (b) obviously unfair. And yet the proponents of right-to-work laws are generally exactly the people most inclined to stand up for freedom of contract under other circumstances.
 

 It is very odd that right to work has become a libertarian position.  Employment contracts require both sides to be able to bargain freely.  In an "Adam Smith" nation of shopkeepers, where an employee is bargaining with a single business owner there is some sort of sense to this arrangement.  But business has a lot of money and power relative to workers.  Why would it be illegal to try and pool resources on the worker side when it is fine for a pool of owners to pool resources by forming a corporation?  Do we honestly think that corporations don't also try and influence the political process via lobbying and donations just as unions do? 

Wage controls are also not without precedent but at least the contradiction is more immediate and obvious.  Now, I am not a libertarian but I would really like to know how this sort of ban on organizing groups is a loss of freedom.  Sure, you could end up belonging to a group you did not intend to join.  But we don't ban corporate takeovers because the workers never consented to being a part of the acquiring company, do we? 

I'm a Mac... and I'm about to be eaten by feral dingoes

Yet another reason to stick with the Android.

Hostess Pensions

Some choice quotes from a Yahoo! News article on the Hostess pension plan hijinks (called by one person in the article a "Betrayal without remedy):

Mr. Rayburn became chief executive in March and learned about the issue shortly before the company shut down, he said. "Whatever the circumstances were, whatever those decisions were, I wasn't there," he said.

and

It might have been "impossible" to undo the agreements that called for Hostess to make pension contributions using employee money, Mr. Rayburn added. One reason: Hostess could have been too short of cash to make up the difference, though he said he isn't sure.
 

Now it is true Mr. Rayburn was a last minute CEO and may well have ended up leading a company that was in worse shape than expected.  But how he could not know basic details like whether the company had enough cash to meet obligations or not suggests a lot of disarray.  I understand that precise numbers in a large business are illusory, but he should have a decent idea given that it was a major sticking point of union negotiations.

Similarly, claiming that he can't take responsibility for previous bad decisions makes sense at some level.  But at another level it makes me wonder how anybody can negotiate with an entity that can change management and request a clean slate on past misdeeds since the current teram was not there.