The inalienable right to have a nice lawn

I keep trying to reconstruct the reasoning behind this:

Texas has long been a hotbed of controversy on immigration issues. And a proposed immigration bill in the Texas state House is sure to raise more than a few eyebrows. The bill would make hiring an "unauthorized alien" a crime punishable by up to two years in prison and a $10,000 fine, unless that is, they are hired to do household chores.

Yes, under the House Bill 2012 introduced by a tea party favorite state Rep. Debbie Riddle -- who's been saying for some time that she'd like to see Texas institute an Arizona-style immigration law -- hiring an undocumented maid, caretaker, lawnworker or any type of houseworker would be allowed. Why? As Texas state Rep. Aaron Pena, also a Republican, told CNN, without the exemption, "a large segment of the Texas population" would wind up in prison if the bill became law.

I would think that people could simply start doing without maids and gardeners. I had always assumed that undocumented domestic workers didn't have ironclad employment contracts.

This might just be an example of what we were talking about

This Daily Show montage makes me feel slightly less paranoid about suggesting that some people might go out of their way to undermine teacher's unions.

From Jonathan Cohn:

The Daily Show - Crisis in Dairyland - Odor in the Capitol Building
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Does running schools like a business actually argue for keeping LIFO? -- part II, the need for layoffs

In part I, I discussed the implications of LIFO (Last In, First Out) and non-LIFO lay-offs from a business perspective, particularly how LIFO, though not ideal from a management point of view, did offer certain advantages. (Just to be clear, as I said in the last post: "It's important not to confuse headcount reduction, which we're talking about here, with cleaning out the deadwood, where how long a person has been with the company should not be a factor.")

This leads to a bigger question: what are the reasons a company would want to have lay-offs and other forms of head count reduction? Different situations suggest different policies so you can't have an intelligent conversation about lay-off without first establishing the context.

To keep things simple, let's talk about three common situations:

Permanent drop. You are simply going to need fewer employees in the foreseeable future because of a drop in demand and/or a rise in productivity;

Cyclical drop. Your need for employees has decreased sharply but you anticipate ramping back up in the not-too-distant future;

Non-headcount driven lay-offs. Your need for employees hasn't actually dropped but lay-offs allow you to accomplish some other, almost always unstated, goal such as replacing highly paid employees with cheaper substitutes, getting rid of union leaders or creating patronage positions.

An example of a technique that works well in one situation but not another is reduction by attrition. Since permanent drops tend to be slower and can often be anticipated well in advance, you can frequently deal the problem by curtailing hiring and possibly offering some incentives for early retirement. This will take longer but given the potential for disruption that comes with approaching lay-offs and the danger of chasing away the people you need to stay (who are generally the most employable), there is a lot to be said for the attrition approach.

In the case of a sudden cyclical drop, the opposite advice holds. Cyclical drops often give less advance warning and by the time attrition shows results you might be on the other side of the cycle. This would mean you could have people exiting at the very time you start to need more employees.

To further complicate things, there's another issue managers often need to face when dealing with cyclical drops. Lay-offs need to be handled in such a way that the company will still be able to attract high quality applicants in the near future. In other words, you would like to maintain a reputation as a great place to work even while you are laying off a large portion of your workforce.

When applying these ideas to schools, two facts are particularly relevant:

First, not only is education a labor-intensive industry, but the primary workforce (teachers and administrators) have to have at least a bachelor's degree and need to be certified and vetted;

Second, the attrition rate is very high for teachers in their first few years.

Since automation and outsourcing are not big factors in education, permanent job losses in a district generally are caused by demographic shifts and possibly the introduction of charter schools. In either case, these are relatively slow and predictable phenomena. With competent management on the state level, most if not all of these cases can be handled by adjusting hiring practices.

Cyclical drops are generally caused by economic downturns. I've said before that I believe panicked, pro-cyclic government lay-offs are bad ideas in general. Furthermore, I am absolutely certain that there are ways to make state budgets less vulnerable to these downturns. Having said that, the most popular way of addressing current budget shortfalls is to get rid of large numbers of teachers and since there's no reason to believe that's going to change in the foreseeable future, how should we handle this situation?

Here is where a couple more arguments in favor of LIFO pop up. Remember, we are talking about reducing staffs to suboptimal levels. That implies that at some point, probably within the next two to four years, we will want to start increasing headcount. Given historic attrition patterns, it is safe to assume that a large number of the newer teachers will leave as soon as the economy picks up which happens to be when you most want to expand headcount.

Then we get to the asymmetry of information problem I discussed in a previous post:

We take our already somewhat understaffed schools and lay off, let's say, 200,000* teachers selected based in part on some quality metric. We then run the schools severely understaffed for the next year or so until state revenues recover.

That 200K will be made up of three groups, the good, the bad and the better-than-nothing. The good are effective teachers who end up on the list through a combination of bad luck, bad metrics and bad administrators (go here to see how the last two can work together). The bad are teachers at the very bottom of the quality scale. The better-than-nothing are teachers who aren't all that effective but are probably still at least as good as most of the people you could get to replace them.

Given the flaws in our system of ranking teachers and the innate difficulty of the problem, a fair number of good teachers will end up on the list. Likewise, given the problems with recruiting teachers for problem schools, better-than-nothing teachers will continue to make up a large part of it.

The upshot of all this is that, given population growth and the high level of teacher attrition, you will need a substantial number of the people you laid off to come back if you are to have any hope of meeting staffing targets. This wasn't as much of a problem under last-in/first-out for a couple of reasons. First, the attrition rate for new teachers was so high that many of the teachers you laid off wouldn't have been there in a couple of years even if you hadn't let them go. Second, leaving under last-in/first-out carries minimal stigma. For those who really wanted to it was easy to get back into the field a year later.

Under the 'reform' system, there is a serious stigma and a deadly asymmetry of information problem. Keep in mind that administrators are basically stuck with new hires for a year (you try finding a certified replacement in, say, November). They know that a teacher laid off under that system might turn out to be first rate, but do they really want to take the chance?

Let's say 100,000 of the laid-off teachers fell into the need-them-later category. We have screwed these teachers out of contractually obligated compensation, scapegoated them for all the problems in the education system and made them unemployable in their chosen field. Would you come back under those circumstances?

Which brings us to the third kind of lay-offs. It may seem strange to modern ears, but teaching positions once fell under the spoils system. That's one of the reasons that teachers and other public employees have so many job protections (from Wikipedia: "Louisiana, under state education superintendent T. H. Harris, led the move to establish a teacher protection policy in the 1930s because of past political considerations in hiring and dismissal of educators").

In addition to the political advantages of having lots to hand out, mass lay-offs can be devastating to unions, particularly when there is some potential for administrators to game the system. LIFO offers a considerable degree of protection against this abuse (most union leaders aren't first or second year teachers) and it completely blocks the practice of getting rid of certain teachers just because they're highly paid.

It is easy to forget that practices like LIFO and tenure were put in place to discourage people abusing their power. If you take these practices away without replacing them with other safeguards, you can't reasonably expect everyone to resist the temptation to abuse them again.

Does running schools like a business actually argue for keeping LIFO? -- part I, the nature of layoffs

Last In First Out (LIFO) has become one of the causes célèbres of the educational reform movement, a handy, easy to enunciate little acronym that beautifully captures what's wrong with our current system.

But if we really wanted to run schools like a business, just how wrong would LIFO be? This may seem like a strange question. After all, the reform movement is often portrayed as the domain of show-me-the-data empiricists and clear-headed economists. Surely anything they suggest is going to be based on sound business principals.

Here's how one of those economists puts it:

An economist myself, let me try to explain. Economists tend to think like well-meaning business people. They focus more on bottom-line results than processes and pedagogy, care more about preparing students for the workplace than the ballot box or art museum, and worry more about U.S. economic competitiveness. Economists also focus on the role financial incentives play in organizations, more so than the other myriad factors affecting human behavior. From this perspective, if we can get rid of ineffective teachers and provide financial incentives for the remainder to improve, then students will have higher test scores, yielding more productive workers and a more competitive U.S. economy.

The trouble is, having been a well-meaning business person myself (more recently than I was a teacher), and having built hiring and retention models for a couple of big companies (let's just say you've heard of them and leave it at that), most of the reformers don't seem to approaching this the way a business would, at least not a well-run business.

LIFO is a compromise, but not always an unhappy one. Unions would prefer no lay-offs at all. Companies would prefer no restrictions at all on who they let go. As a solution to this conflict, LIFO isn't perfect but it does offer some positives for both parties.

Though employers complain loudly about LIFO, they often end up resorting to something close to a de facto form of the practice when left to their own devices. Established employees have more experience, training and institutional knowledge. They tend to be more stable and reliable, more invested in the job and in the community, much less likely to make a dash for the door when the economy turns around and you find yourself understaffed. Removing them can disruptive and can lower morale.

(It's important not to confuse headcount reduction, which we're talking about here, with cleaning out the deadwood, where how long a person has been with the company should not be a factor. Even there, though, companies will often go to alarming lengths to avoid dismissing an established employee, even one who has cost the company massive amounts of money -- buy me a beer sometime and I'll tell you the examples that don't make it to the blog.)

If you don't have a transparent and reliable performance metric like sales, the consequences of deviating from LIFO can be even worse. Your best qualified and most ambitious employees tend to jump ship (Dilbert's 'brightsizing' writ large). Between the people who are definitely leaving and the uncertainty over who will be let go, a kind of mass learned helplessness can take take hold. As a manager this is not something you want to deal with.

For employees, the advantages are more obvious. LIFO offers a deferred compensation package where the compensation is security. For most of us, the demand for security increases as we age. We start families, sign mortgages, start getting serious about saving for retirement. Viewed in this light, LIFO starts to look like a case of markets doing a remarkably good job of allocation. Employees get security when they value it most and in exchange are willing to work for lower wages. (looks kind of like a win for Adam Smith)

There is, of course, a more immediate need for LIFO in many cases. It is the most effective means of preventing employers from using lay-offs as cover for improper dismissal. The classic example here is punishing employees for their role in a union. This was the issue that so offended Jonathan Chait when the victims were journalists.

Chait's position on teachers was notably different, which is interesting because not only is the potential for the abuse that Chait was implying also a concern for teachers; it is accompanied by other, even greater concerns caused by the nature of teaching and the org charts of schools.

Teachers have three primary roles: instruction; counselling; and evaluation. Because we have a complex, multidimensional, badly defined target variable and some of the nastiest confounded data you'll ever see, every method suggested for measure teacher effectiveness has been either overly-complicated, opaque, unreliable or some combination of the above and all seem to have the potential for gaming by unscrupulous administrators.

An experienced and highly respected superintendent I knew used to tell new teachers, "never trust a superintendent," and while all but one or two of the administrators I have dealt with have been dedicated professionals, I understand where he was coming from. The nastiest politics I have ever seen have been at school board meetings. That's the world administrators have to survive in. If they're successful they can be looking at a plum job in a large (but not huge) district making 170K. If they're inept they can find themselves stuck as assistant principals making little more than they made as teachers.

Put another way, it is entirely possible for a few angry parents and a couple of political missteps to cost a principal fifty thousand or more (possibly quite a bit more). As mentioned before, evaluation is part of a teacher's job and a tough grader will generate more than a few angry parents. This is one of the reasons we have tenure.

Though it's rare, I have seen principals pressure teachers to change the grades of students with influential parents. It is also rare but not unheard of for principals to shift difficult students and unpleasant classes away from allies on the faculty.

Now imagine a system where the principal can arrange, with relatively little effort and no fear of reprisals, for certain teachers to be safe from lay-offs and other teachers to be first in line. I'm sure most principals wouldn't use this unchecked power to put tough graders, independent voices, and strong union supporters in the expendable pile. There would, however, be abuses and the administrators who commit these abuses will have a tremendous advantage in the competitive landscape.

Worse yet, every decision that administrators make will be met with suspicion. Every time a teacher gets a larger than average class with more than the average number of kids with behavior problems, colleagues will wonder if the assignment had something to do with flunking students who blow off their term papers, or pushing for a tough stance in contract negotiation, or just voicing too many concerns in faculty meetings.

Businesses go to great lengths to avoid the atmosphere of distrust and labor/management tension I've just described. For all their talk of looking to business for ideas, advocates of the reform movement don't seem to give these issues much thought.

Next, the different kinds of lay-offs and their implications

Arguments that generalize poorly

If only Megan McArdle would make the same argument for medical care that she does for congestion pricing:

But that brings us to the heart of the populist argument against congestion pricing, and even express toll lanes, and I think ultimately supports Tim's argument that this is never going to be democratically popular: most people don't pay. And they tend to resent the people who do. It is not an accident that congestion pricing is a system most beloved of people who are a) relatively affluent and/or b) don't drive to work. This tells us empirically why congestion pricing is unlikely to ever get enough political support to be implemented in America. But maybe it also tells us, maybe, why it shouldn't be implemented. Who are we to tell people that they ought to prefer prices to queuing?

The is a reflection of how conservatives often seem to (oddly) switch sides when the question is one of transportation. Clearly, a single payer medical system is the most fair (see Canada). Canada's single payer system has also got issues with efficiency, being one of the few countries to have worse physician wait times than the United States.

But with health care we always see the reverse argument (efficiency > fairness), which strikes me as an odd mixture of priorities. Or am I missing something?

This should literally be a textbook example of how phrasing and context affect polling

Talking Points Memo discusses how two polls given in the same week can get starkly different results:

Last week, a Gallup poll showed that 60% of Americans would rather see a budget compromise than see members of Congress who represent their interests hold out for their ideal budget, if it means the government would shut down. That phrases the current debate in Washington fairly concisely.

Compare that to Rasmussen, which framed the question much differently:

5* Would you rather have Congress avoid a government shutdown by authorizing spending at the same levels as last year or would you rather have a partial government shutdown until Democrats and Republicans can agree on what spending to cut?

That frames the budget showdown as an either or: either the government continues spending at current levels, or it shuts down until cuts are made. In response to that, 58% of likely voters said they preferred a government shutdown.

Rasmussen is, of course, something of a special case. To understand just how special, take a look at Nate Silver's excellent analysis,"When ‘House Effects’ Become ‘Bias.’"

More big burdens, more small shoulders

From Jonathan Cohn:

Please indulge me while I share some local news: Rick Snyder, newly elected governor in my home state of Michigan, announced this week that he will call for massive cuts in state spending on education.* (*Note: My [Cohn's] wife is a professor at a public university that would lose some funding under Snyder’s plan. I doubt she'll feel much impact from these cuts. But, as you can guess from this item, I think my kids will.) Very roughly, it will result in a reduction of about $470 per student.

I know enough about public education, and public education bureaucracies, to believe that school districts could find ways to reduce spending without hurting the quality of education. And, yes, it would probably mean teachers and staff making more concessions on salaries or, more likely, benefits.

But could they find $470 per student that way? I don't think so. On the contrary, I expect that schools--including the ones that my sons attend--would end up with fewer teachers, fewer courses, and fewer extracurricular offerings if the legislature approves Snyder's plan. And my kids would be among the lucky ones. It would be much worse in places like Detroit, where an ongoing funding crisis is about to swell some classes to 60 students. (No, that’s not a misprint.)

Health Insurance

Discussion of individual health insurance (with or wihtout pre-existing medical conditions) often overlooks the point that a pay as you go system is inherently expensive here in the United States. Consider:

Why did we even need insurance? First, we wanted to know that, if we had a medical catastrophe, we would not exhaust our savings. Second, uninsured patients are billed more than the rates that insurers negotiate with doctors and hospitals, and we wanted to pay those lower rates. The difference is significant: my recent M.R.I. cost $1,300 at the “retail” rate, while the rate negotiated by the insurance company was $700.

Obviously standard market mechanisms are not going to be able to kick in when the only way to get affordable care is to be part of a pooled insurance plan. And, with rate differentials this high, no sane person will exit the health insurance market. So the whole idea of free market heakth care is a bit of a distraction: our system is designed for people who have insurance.

[Not to mention the impact of policies that can be rescinded for good faith errors; these factors make the market opaque and resistant to market forces]

The biggest burdens go on the smallest shoulders

In today's New York Times, Paul Krugman reminds us just how hypocritical all the talk we hear about "putting children first" really is:

And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.

But wait — how can graduation rates be so low when Texas had that education miracle back when former President Bush was governor? Well, a couple of years into his presidency the truth about that miracle came out: Texas school administrators achieved low reported dropout rates the old-fashioned way — they, ahem, got the numbers wrong.

It’s not a pretty picture; compassion aside, you have to wonder — and many business people in Texas do — how the state can prosper in the long run with a future work force blighted by childhood poverty, poor health and lack of education.

But things are about to get much worse.

A few months ago another Texas miracle went the way of that education miracle of the 1990s. For months, Gov. Rick Perry had boasted that his “tough conservative decisions” had kept the budget in surplus while allowing the state to weather the recession unscathed. But after Mr. Perry’s re-election, reality intruded — funny how that happens — and the state is now scrambling to close a huge budget gap. (By the way, given the current efforts to blame public-sector unions for state fiscal problems, it’s worth noting that the mess in Texas was achieved with an overwhelmingly nonunion work force.)

So how will that gap be closed? Given the already dire condition of Texas children, you might have expected the state’s leaders to focus the pain elsewhere. In particular, you might have expected high-income Texans, who pay much less in state and local taxes than the national average, to be asked to bear at least some of the burden.

But you’d be wrong. Tax increases have been ruled out of consideration; the gap will be closed solely through spending cuts. Medicaid, a program that is crucial to many of the state’s children, will take the biggest hit, with the Legislature proposing a funding cut of no less than 29 percent, including a reduction in the state’s already low payments to providers — raising fears that doctors will start refusing to see Medicaid patients. And education will also face steep cuts, with school administrators talking about as many as 100,000 layoffs.

Castles and Crusades

Mark has been doing a games section on the blog (it's cool and you should check out some of his posts). If we are lucky, he might do a post on Kruzno, eventually.

The Castle Keepers Guide has now been released for Castles and Crusades making the base game system complete. For fans of older style role playing games this is a major milestone, admittedly one that comes late in the day. But it's a good book and has a lot of the "look and feel" of Gary Gygax's classic writing. It's well worth a look.

Some Thoughts on Personal Finance

It was unfortunate that Mark decided not to write about personal finance as I think that there is a lot to say about this topic. In particular, I agree that it was odd that this article was treated as a revelation. Consider this comment:

I won’t bore you with the math, but this meal plan cuts out all the extras. No snacks, no OJ, no organic milk at $5.99 per gallon, no Parmesan cheese sprinkled on top of that pasta, no frozen yogurt at night in front of DWTS. The husband brown bags it to the office. I’ll admit I included my coffee, at $2.15 per week, because I consider it essential, along with milk for the kids at every meal.

I have actually been extremely poor and I begin to think that most financial journalists have never been in that state. I remember saving up to buy powdered skim milk (as the only possible option) and would never have dreamed of affording organic milk. Some of the cheap food options that are listed are good but I remember buying huge bags of rice (10 kg, if I remember correctly) so I could stretch a tiny food budget out over a month. I notice this level of extreme economy is absent from the discussion.


In a lot of ways this is a good thing. The United States is wealthy country and it is good that inexpensive food is an feature of our society. But one should not mistake this advice as being how one would actually deal with dire poverty.

A Miscellany of Topics That Will Not Appear in My Next Blog Post

I've recently gotten in the habit of using the "save and quit" option on my browser when I shut down my laptop. The driver of this odd behavior is the ever-growing pile of posts I'm meaning to write.

I've decided to stop telling myself that I'll eventually get around to them (if you're going to tell yourself lies, you should really save them for the big stuff). Instead, I'm going to use this post as a data dump with links and brief descriptions of the articles. I'll probably get around to some of them eventually, but if something sounds interesting, don't wait for me. If any of these seem to merit more attention, let me know and I'll put it on the top of the pile:

Education researchers need to worry more about the Hawthorne effect;

And the Halo effect;

Why are financial advice columnists so clueless about living on a budget?;

On a related note, how to get concert tickets for just $350 isn't really the kind of financial advice we really need at the moment;

The Collegiate Learning Assessment sounds promising but I'm not sure sure it supports the coverage it's gotten, let alone a book;

Not to be cynical, but has any educational study not shown promising results? (see Hawthorne effect);

On a related topic, when we hear about a new study discrediting an old technique, how can we be sure they didn't just use the technique badly? (not sayin', just wonderin');

Whenever an economist talks about how regular people just aren't as clear-headed and rational as economists are, it makes baby Jesus cry;

Michael Hiltzik is really sharp;

Felix Salmon thinks so too;

Paul Krugman also has something to say on the topic;

"[H]e suddenly declared that we needed to cut taxes to prevent too rapid a reduction in US debt." (comment is superfluous);

I really need to write something about this;

And this;

I wonder what Daniel Little would say about social norming in the classroom?

This round just might go to Eminem

Edward L. Glaeser has been tough on Detroit and the auto industry. Here's how he opened a column last week:

During the Super Bowl, Chrysler and Eminem gave us a chest-thumping, soul-lifting vision of Detroit as a city of character, competence and style. But the Census tells us that per-capita incomes in Detroit are barely half the national average and that one-third of the city lives in poverty.

Michigan was the only state that lost people from 2000 to 2010, and the state’s unemployment rate remains near 12 percent. Is it possible that Detroit will turn the corner despite decades of decline?

It's safe to assume that the answer Glaeser had in mind for his rhetorical question didn't rely too much on the Big Three. Back in June, 2009, here's what he had to say about the bailouts:

Since the collapse of Lehman Brothers, the public sector has spent billions saving the banks. While these decisions are certainly debatable, they are understandable. The US financial industry misbehaved badly,... but it is still a sector with a future. ... After all, every other sector in the economy depends on banks for their financing.

But what about cars? ... Does anyone, other than GM's management, believe that this company can come back? The current treatment, cash infusion and a reduction in corporate liabilities, provides a solution for a company that is broke, not for one that is broken.

Given that analysis, it might be interesting to get his take on this item from the New York Times:

General Motors, which nearly collapsed from the weight of its debts two years ago before reorganizing in a government-sponsored bankruptcy, said Thursday that it earned $4.7 billion in 2010, the most in more than a decade.

It was the first profitable year since 2004 for G.M., which became publicly traded in November, ending a streak of losses totaling about $90 billion.

In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history. ...

Globally, G.M.’s sales rose 12.2 percent in 2010, to 8.39 million, coming within about 30,000 vehicles of retaking the title of world’s largest automaker from Toyota. For the first time, it sold more cars and trucks in China, where its sales rose 28.8 percent from 2009, than in the United States, where sales were up 6.3 percent.

Or to see what he had to say about Jonathan Cohn's reaction to the news:

Seriously, though, this is another important milestone for GM. Profits for the final quarter were actually lower than initial expectations. But the company attributed that, in part, to heavy investment in the development of new products, which is a sign of company health. “Their recovery has been fueled by significant cost-cutting, arrival of new products that consumers were seeking along with better management of incentives and supply,” Jesse Toprak, vice president of industry trends and insight at TrueCar.com, told the Times. “The sky is the limit for G.M. after becoming profitable at this low of a sales pace.”

Of course, the usual caveats apply: The two companies could still stumble and Chrysler, in particular, still needs to prove they can cars as good as their television commercials. And it's not as if workers in the auto industry didn't take a huge hit anyway: Many did lose their jobs and new employees are making a lot less money than old ones do.

Still, it looks increasingly like the rescue of the auto industry was an overall success, saving hundreds of thousands (if not millions) of jobs and bolstering the country's manufacturing base for years (if not decades) to come. Maybe it's time to start giving President Obama some credit for it--and recognizing that, when properly managed, the federal government can do a lot of good.

Weekend Gaming -- Piet Hein's TacTix

A Grook by Piet Hein:

ARS BREVIS

There is
one art,
no more,
no less:
to do
all things
with art-
lessness.


Piet Hein was, among many other things, an inventor of remarkably clever games. After Hex,* his most famous is probably his two-dimensional variant on nim, TacTix.



As with most of Hein's recreations (even those dealing with sophisticated mathematical concepts), the rules of TacTix are wonderfully simple. The players take turns picking up pieces from the board (shown above) until the losing player is forced to pick up the last piece. The players can pick up as many pieces at a time as they choose with the only constraint being that the pieces have to be in the same row or column and have to be contiguous.

Here's what what a game might look like after a couple of moves (taken from this sample game):

TacTix doesn't quite meet Othello's "a minute to learn a lifetime to master" standard, it yields fairly easily to analysis (or to practice if you're paying attention), but while this keeps it out of competition with chess and Go and less well-known games like agon, Hein's invention still has a lot to offer:

The rules are almost as simple as TicTacToe, making it an ideal game for very young players;

Like TicTacToe, TacTix can easily be played as a pencil-and-paper game. Just mark off a grid then cross out squares instead of removing pieces;

Unlike more complicated games, the underlying concepts of TacTix are easy to grasp and to teach (Martin Gardner had a good summary in one of his Scientific American columns though I'm not sure where it's collected);

TacTix also makes an excellent programming exercise;

Finally, there's no rule that says you have to follow the rules. Try adding a few of your own. Play around with the board configuration or try flipping a coin to determine whether you can pick up an odd or even number of pieces. Get creative. It's what Hein would have wanted.






* Also independently invented by John Nash a few years later.

Interesting paper on peer effects

I'm not sure this is the ideal methodology to approach this problem (I'd like to see this combined with something that captures the actual interactions in the classroom), but, based on what I've seen, this is a definite improvement.

From VoxEU (via Thoma)

Our recent research uncovers peer effects in education as distinct from the contextual and other correlated influences. Our econometric strategy uses the topological structure of social networks as well as network fixed effects to identify each of these effects separately.

Our analysis is made possible by the use of a unique database on friendship networks from the National Longitudinal Survey of Adolescent Health (AddHealth). The AddHealth database has been designed to study the impact of the social environment (i.e. friends, family, neighbourhood and school) on adolescents' behaviour in the US by collecting data on students in grades 7-12 from a nationally representative sample of roughly 130 private and public schools in years 1994-95 (wave I). A subset of adolescents selected from the rosters of the sampled schools, was then interviewed again in 1995-96 (wave II), in 2001-2 (wave III), and again in 2007-2008 (wave IV). For our purposes, the most interesting aspect of the AddHealth data is the friendship information, which is based upon actual friend nominations. It is collected at wave I, i.e. when individuals were at school. Indeed, pupils were asked to identify their best friends from a school roster (up to five males and five females). As a result, we can reconstruct the whole geometric structure of the friendship networks.

In Calvó-Armengol et al. (2008), we exploit such information to test a peer-effect model which relates analytically equilibrium behaviour to network location. This analysis shows that the structure of friendships ties is an important, and so far unnoticed, determinant of a pupil performance at school. In Patacchini et al. (2011), we follow this line of research by exploiting the other AddHealth waves in order to investigate whether such effect is carried over time. Indeed, the longitudinal structure of the survey provides information on both respondents and friends during the adulthood. In particular, the questionnaire of wave IV contains detailed information on the highest education qualification achieved.

We analyse the impact of the friends' educational attainment on an individual's educational attainment where they are identified as friends during school and in to adulthood. We find that peer effects in education are not only strong but also persistent over time. We find that the most relevant peers are the friends people make in grade 10-12, from when they are around 15 years old. This suggests that individuals are more likely to work towards and apply to college if this choice is popular among their peers, especially in the last years at school. This could represent the effect of contagion and collective socialisation and mean that any education policy targeting specific individuals will have multiplier effects.

So many problems for such a little state

As if this weren't enough.

From TPM:

According to The Providence Journal, "[s]chool and city leaders said they were forced to issue the mass dismissal notices because of a state law that says teachers must be notified about possible layoffs or terminations by March 1." In a statement, Mayor Angel Taveras said that because the deadline for informing teachers about employment changes came before the budget for next year could be determined, the move was necessary.

"Providence faces significant challenges in getting its financial house in order," Taveras said in the statement. "Spending reductions are inevitable. It is also inevitable that some portion of cuts will come from the school budget. This is why we faced the difficult decision of sending letters to all teachers: we do not yet know what actions will be required and believe it was only fair to let all teachers know about the severity of the situation."

Taveras told the Journal that there would be fewer schools open, and fewer teachers teaching, in Providence next year -- he just couldn't yet say how many.

I hope to have a post up later today on the economics and logistics of hiring and firing of teachers. One of the relevant sub-topics here is the highly compressed hiring season. It is difficult and terribly disruptive (particularly for the students) to make staffing changes during the school year. Unlike most fields where employer and/or employee has the option of deciding that a position isn't a good fit, a teaching assignment represents a decision that all parties will have to live with for the next year.

The result? Take a year's worth of staffing for a labor-intensive industry, up the stakes, then squeeze the whole thing into eight or ten weeks. That's the reality of managing the education workforce. Any viable reform proposal based on changing the way we hire and fire teachers has got to either work under those constraints or fix the system.

Evidence

John D Cook has a very nice post up about evidence in science:

Though it is not proof, absence of evidence is unusually strong evidence due to subtle statistical result. Compare the following two scenarios.

Scenario 1: You’ve sequenced the DNA of a large number prostate tumors and found that not one had a particular genetic mutation. How confident can you be that prostate tumors never have this mutation?

Scenario 2: You’ve found that 40% of prostate tumors in your sample have a particular mutation. How confident can you be that 40% of all prostate tumors have this mutation?

It turns out you can have more confidence in the first scenario than the second. If you’ve tested N subjects and not found the mutation, the length of your confidence interval around zero is proportional to N. But if you’ve tested N subjects and found the mutation in 40% of subjects, the length of your confidence interval around 0.40 is proportional to √N. So, for example, if N = 10,000 then the former interval has length on the order of 1/10,000 while the latter interval has length on the order of 1/100. This is known as the rule of three. You can find both a frequentist and a Bayesian justification of the rule here.

Absence of evidence is unusually strong evidence that something is at least rare, though it’s not proof. Sometimes you catch a coelacanth.

Now it is true that this approach can be carried too far. The comments section has a really good discussion of the limitations of this type of reasoning (it doesn't handle sudden change points well, for example).

But it is worth noting that a failure to find evidence (despite one's best attempts) does tell you something about the distribution. So, for example, the failure to find a strong benefit for users of Vitamin C on mortality, despite a number of large randomized trials, makes the idea that this drug is actually helpful somewhat less likely. It is true we could look in just one more population and find an important effect. Or that it is only useful in certain physiological states (like the process of getting a cold) which are hard to capture in a population based study.

But failing to find evidence of the association isn't bad evidence, in and of itself that the association is unlikely.

P.S. For those who can't read the journal article, the association between Vitamin C and mortality is Relative Risk 0.97 (95% Confidence Interval:0.88-1.06), N=70 456 participants (this includes all of the trials).

You'll notice they said nothing about the op-eds being fit to print

An unnamed friend of Jonathan Chait had some fun re-editing a recent Tom Friedman column:

A wake-up call’s mother is unfolding. At the other end is a bell, which is telling us we have built a house at the foot of a volcano. The volcano is spewing lava, which says move your house. The road will be long and rocky, but it will trigger a shift before it kicks. We can capture some of it. IF the Middle East was a collection of gas stations, Saudi Arabia would be a station. Iran, Kuwait , Bahrain, Egypt, Libya, Iraq, and the United Arab Emirates would all be stations. Guys, here’s the deal. Don’t hassle the Jews. You are insulated from history. History is back. Fasten your seat belts. Don’t expect a joy ride because the lid is blowing off. The west turned a blind eye, but the report was prophetic, with key evidence. Societies are frozen in time. No one should have any illusions. Root for the return to history, but not in the middle.*

Which brought to mind this memorably representative passage from Maureen Dowd:

Mr. Obama called W. on Friday to give him a heads-up about the repudiation on Iraq. Robert Gibbs said the call was not at all contentious. But in the Lehrer interview, the president compared America to a big tanker that needed to "start moving in a better trajectory so that five years, 10 years down the road you can say, you know what, because of good decisions now our kids are safer, more secure, more prosperous, more unified than they were before." This analogy turns W. into the Exxon Valdez.

Dowd's attempts at analogies often go something like that, a collection of elements vaguely related to the topic at hand but without analogous relationships (like when she called Joe Biden a human lie detector because he compulsively told the truth). You could make an analogy where Bush was Captain Hazelwood or the U.S. under Bush was the Valdez, but what you have here isn't an analogy; it's just word association.

The sad part is that Dowd's plum position is based on her writing and analytic abilities. Unlike Friedman, and, for that matter, Brooks and Krugman (both of whom can actually write), Dowd brings no special expertise to her columns. All she offers are her prose and her insights, both of which are terrible. And yet the halo effect of the New York Times was strong enough to pull in a Pulitzer.

And the really sad part is that both Friedman and Dowd are better than John Tierney.

* To be fair, Friedman's main points are quite a bit better than his prose.

"Just around the corner" for about a century

The rate of technological progress is an incredibly complex subject and is open to interpretation depending on how you define your terms and weight your metrics. I see a huge surge starting around the 1870s and running more or less uninterrupted* through the 1960s followed by a perhaps inevitable leveling off to a more sustainable rate in the past few decades but I've heard well-reasoned arguments that paint a completely different picture.

Having acknowledged this diversity of opinion, there's still a wonderful irony to using a video phones to counter the argument that technology isn't delivering what was promised because we were promised video phones for an awfully long time. As early as 1891, Alexander Graham Bell was thinking seriously about the subject:

"Should it be found... [that the image sensor] is illuminated, then an apparatus might be constructed in which each piece of selenium is a mere speck, like the head of a small pin, the smaller the better. The darkened selenium should be placed in a cup-like receiver which can fit over the eye… Then, when the first selenium speck is presented to an illuminated object, it may be possible that the eye in the darkened receiver, should perceive, not merely light, but an image of the object… "

By 1930, AT&T was testing prototypes. By 1936, the German postal service had a public video phone service available. Research into wireless systems was going on at the same time.

And through all this, for about a hundred years, there was a constant stream of stories in newspapers and magazines like Popular Science announcing that it wouldn't be long before every home had a video phone. Young boys and girls who grew up reading these stories died of old age reading the same headlines. Given this history, it's difficult to be that impressed by the rate of innovation.

I would argue that for the past few decades, most areas of technology have advanced at about the rate we expected with more areas under-performing than exceeding expectations. There are any number good arguments to the contrary, but none of them use the video phone as an example.

p.s. I don't think great-granddad would be all that dazzled by texting either.



* I'm not sure about the Thirties. Does anyone have any thoughts on the effects of the Great Depression on technology?

"Don't worry, honey, the other children won't judge you on your looks."

Joseph recently brought up the subject of separated-twin studies. Let's take things to the next level with a thought experiment using clones. We'll have to go full-bore mad scientist mode here and assume we have exclusive access not only to an unlimited supply of clones but to undetectable plastic surgery techniques that can be performed without the subject's knowledge.

From early childhood, we assign different treatment combinations to different groups of our genetically identical subjects. We adjust features to match those that tend to elicit strong responses in terms of attractiveness, intelligence, likeability, and other traits. We modify height and body type, again making sure to cover the extremes. We even determine vocal characteristics.

After about thirty years of this, we assess the subjects using a variety of personal, professional, and academic metrics, the same sort of metrics often used in twin studies.

Now we come to the big question, are you willing bet a sizeable amount of money that none of these treatments are significant? If the answer is no, you shouldn't put a lot of faith in twin studies that measure these same factors because these studies never control for appearance.

How we look does not determine who we are but it does have a big impact on the life that we lead. It makes people more or less likely to want to hang out with us (particularly if those people see us as potential mates). Through the halo effect it affects people's opinion of us (including opinions in the form of grades and professional evaluations). Perhaps most importantly, it changes the way we see ourselves.

Separated twin studies have often been held up as a gold standard. Pyrite might be a more apt description. The data are invariably confounded in numerous ways that are difficult to correct for. In addition to the factors mentioned above, twins (barring surrogacy) share a prenatal background, the same relative age compared to their classmates and the same absolute age. You could easily find yourself comparing a pair of twins who suffered from mild FAS, were the youngest students in their classes, and were born in 1960 against a pair of twins who had excellent prenatal care, were the oldest in their classes and who were born in 1950.

Twins can be incredibly useful as test subjects, but the popular notion that these separated twin studies provide clean, unambiguous findings is simply wrong. Every one of them has serious problems with confounded data and these problems hold even for perfect studies with twins separated at birth, randomly assigned to adoptive parents and kept isolated from each other (conditions that aren't met that often). Personally, I have trouble overlooking all these concerns and putting a lot of weight into these findings, but, of course, I didn't inherit a trusting nature.

Goodbye little buddy

This is a cat named Turtle, who will be sorely missed by his adoptive parents. He had a unique ability to express himself and has left a Turtle sized hole the lives of all who knew him. Rest in peace, little buddy.

"Especially when it’s done wrong"

Felix Salmon has another intriguing (and, more to the point, important) post on saving and investing based on this (also intriguing and important) paper by Wade Pfau on saving and investing. I won't try to summarize but I have to quote this one paragraph.

Investing can be exciting, especially when it’s done wrong. You follow the markets rising and falling, you obsess about your retirement-fund balance, you rotate out of this and into that, you read books and magazines and blogs to try to learn more about what to do. You might even, in a moment of weakness, find yourself watching CNBC. Budgeting, by contrast, is like going on a diet: it’s a drag, and it’s hard to get any pleasure or excitement out of it. But the latter is much more likely to get you well-set in retirement than the former.

There is no market solution to the blankonomics problem

And obviously God has not listened to our prayers to end the plague:

Spousanomics: Using Economics to Master Love, Marriage, and Dirty Dishes

From Yahoo's Shine:

Splitting the dishes, laundry, vacuuming, and other household chores may seem fair, but an unbending line right down the middle can lead to more friction, not less, because no one is good and fast at all things. But when couples adopt the economic principle of “comparative advantage,” which says it’s not efficient to take on every task you’re good at, only the ones you are relatively better at, couples can gain time for the things they really want to do, the authors write.

“In economics, having the comparative advantage in something means you produce it at a lower cost and really quickly,”* Paula Szuchman said in an interview with Yahoo! Shine. So if one of you is better at laundry, then do it. And if the other can do the dishes and clean up the kitchen faster every night, while the better cook cooks, go for it.

The authors, both accomplished journalists (Szuchman: Wall Street Journal and Anderson: New York Times, where she spent years covering Wall Street and delivered award-winning coverage of Merrill Lynch) decided the time was right for an economics-approach how-to for a successful union for a few reasons. One was a pretty tough first year of marriage for Szuchman, who was surprised it was harder than she thought to merge two lives and that “something as banal as housework could get in the way” of all the fun she heard people were having being married. Another was the prevalence of economic terms suddenly in the national lexicon at the time of the financial meltdown. All at once, terms like “moral hazard” and “loss aversion” were all over the news to help explain a seemingly unexplainable economic freefall. “There seemed to be some useful parallels,” Szuchman said.

If you can get beyond the incredibly annoying title (and I can think of no reason you should), the fundamental analogy is still fatally flawed. Economic approaches tend to be reductionist; they work best on problems with clearly defined objectives and components that can easily and accurately be assigned scalar metrics (problems distinctly unlike those involving relationships).

If the purpose of a marriage were to optimize the completion of chores, the authors might be on to something other than a band wagon here, but, of course, that's not why people enter into the institution. This is not to say that things like chores can't have a major impact on a relationship or even that the advice the authors give about dividing up chores based on competence is necessarily bad, but that even if the authors are right here, they are still using a terrible model.

A flawed model may occasionally, simply by accident, lead to an accurate prediction, but so can guessing and in one important way guessing is far superior. The model brings with it a sense of rigor and reliability, of intellectual seriousness. With a guess you know what you're getting.

* Maybe an economist out there can help me out. This sounds like absolute advantage -- "I can do A better than you." I thought comparative advantage was something like this "I can do A better than B and better than you can do A (or at least more profitably). Your B is as good or better than your A (though possibly not as good as my B). I should focus on A (because of the opportunity costs of B) and you should focus on B."

Anyone care to clear this up?

Environment is complex

Via Tyler Cowen:

A case in point is provided by the recent study of regular tobacco use among SATSA's twins (24). Heritability was estimated as 60% for men, only 20% for women. Separate analyses were then performed for three distinct age cohorts. For men, the heritability estimates were nearly identical for each cohort. But for women, heritability increased from zero for those born between 1910 and 1924, to 21% for those in the 1925-39 birth cohort, to 64% for the 1940-58 cohort. The authors suggested that the most plausible explanation for this finding was that "a reduction in the social restrictions on smoking in women in Sweden as the 20th century progressed permitted genetic factors increasing the risk for regular tobacco use to express themselves." If purportedly genetic factors can be so readily suppressed by social restrictions, one must ask the question, "For what conceivable purpose is the phenotypic variance being allocated?" This question is not addressed seriously by MISTRA or SATSA. The numbers, and the associated modeling, appear to be ends in themselves.

The idea that culture, itself, is an environmental exposure does shed some serious doubt on twin studies as the gold standard to separate genetic and environmental influences on phenotypes. Tyler Cowen says it well here:

"Culture" and "genes" are two major factors determining individual outcomes, toss in parenting, and if you wish call parenting and culture two parts of "environment." It is obvious that culture matters a great deal, and this comes from knowledge which existed prior to rigorous behavioral genetic studies.

I say "soda" and people in Nebraska say "pop." Singapore vs. southern China. German musical tastes in 1780 vs. today. Rural Africa vs. urban Africa. Most concretely, if I meet someone I want to know what country he came from and grew up in; in fact that is the first thing I wish to know. "The culture word" may be overused and abused, but still the power of culture is evident.

I think that we should think carefully about how quick we are to ascribe behaviors to genetics (once we account for within culture variability) without considering between culture variability. Even worse, it is not clear that the modern world has a sufficient degree of cultural variation (given our connectivity in the modern world) to even measure this parameter properly.

Mark also has another insight as to a limitation of twin studies that I hope he posts at some point.

A nice comment on investment strategies

James Joyner:

Aside from diversifying one’s portfolio over both time and scope of investments, there’s no great option. As I recently told an investment counselor who was encouraging me to move investments from one fund to a one that “would have a higher rate of growth,” if she really had the ability to accurately predict which stocks would go up, she wouldn’t need to be advising clients for a living. Anyone who claims to know what the market is going to do over the long term is an idiot or a liar.

I think that this comment is right on. I always get worried with investment professionals (who gets paid based on a percentage of your portfolio and not based on how it performs) giving advice on very specific investment options. Diversification and dollar cost averaging are the only elements that really seem to be under my control. Otherwise, as Mark says, focusing on savings is your best option to control your ability to retire.

The unreliable magic of compound interest

Felix Salmon has been doing remarkably good work recently but this column stood out as particularly relevant:

My point is that the range of remotely sensible investment strategies for a working person is actually pretty narrow. You can’t just wave a magic asset-allocation wand and change your annualized return over a period of 35 years by 300 basis points. Frankly, you’d be doing well if you could improve it by 30 basis points. The market will return whatever the market will return and you will do a little bit worse than that, most likely.

So the way to have a comfortable retirement is not to think that by making a clever choice when it comes to stock-picking or investment strategy that you can somehow make up for the money you’re spending rather than saving. Instead, it’s to diligently save as much as you can, from as early an age as possible and simply invest it in a non-idiotic manner. The more you save, especially in your 20s and 30s, the more you’ll end up with in retirement.

Wall Street would love us to believe that the magic of compound interest gives us a free lunch; that a small amount of savings, if compounded at a high enough rate, can set us up for life. That might be true mathematically, but saving doesn’t work that way in the real world. Interest rates are low, now, and wages are growing sluggishly.

The three big drivers of big retirement accounts — sharply rising salaries, sharply rising house prices and a sharply rising stock market — are all looking very uncertain these days. So let’s not perpetuate this pipe dream that if only we can get an 8% return on our funds, everything will be fine. Because chances are we won’t. Absent that 8% return, the only way of getting to where we want to be is to simply spend less and save more.

There are two factors here: how much you save and how effectively you manage that savings. An entire industry has grown up around the second, usually based on appallingly optimistic estimates, often bordering on the fraudulent.

These financial gurus have done their best to popularize the idea that a good investment strategy was more important than how much money you put away and they've tried their hardest to avoid the unpalatable truth that there is only one aspect of our financial futures we have any real control over. Most of us can't really choose how much we'll make and we certainly can't control the performance of the market but we can decide how much of our disposable income to spend.

Spend less, save more, and ignore everything you hear on CNBC.

Another note on Herman Mankiewicz, Peter Bogdanovich, and the definition of 'hack'

Following up on an earlier topic, I had known that Herman Mankiewicz had worked on the Wizard of Oz, but I had left it out of this post because I assumed his contribution was insignificant. Then I came across this:

In February, 1938, he was assigned as the first of ten screenwriters to work on The Wizard of Oz. Three days after he started writing he handed in a seventeen-page treatment of what was later known as "the Kansas sequence". While Baum devoted less than a thousand words in his book to Kansas, Mankiewicz almost balanced the attention on Kansas to the section about Oz. He felt it was necessary to have the audience relate to Dorothy in a real world before transporting her to a magic one. By the end of the week he had finished writing fifty-six pages of the script and included instructions to film the scenes in Kansas in black and white. His goal, according to film historian Aljean Harmetz, was to "to capture in pictures what Baum had captured in words--the grey lifelessness of Kansas contrasted with the visual richness of Oz." He was not credited for his work on the film, however.

Aljean Harmetz certainly knows what she's talking about and, if she's quoted accurately, this would require an awfully broad definition of 'hack.'

If you don't post it someone else will

I was planning to do a post on these comments by Edward Glaeser, but I decided to put it off because:

a) Joseph told me he was reading the book and could give me a better assessment of how the ideas held up;

b) I'd recently criticized Glaeser at some length;

c) I had about a dozen other posts I wanted to do.

One of the comments that annoyed me was Glaeser's comparison of public schools and restaurants, now Dominik Lukeš has spent two thousand plus words taking the analogy apart stone by stone and salting the ground. If you're in the mood for a good dismantling and salting you should definitely follow the link.

Weekend Gaming -- Quickie book review edition

The world is too much with me this weekend, at least too much for adequate posting, but here are a couple of books to keep the board gamers out there busy for the next year or so.

The first is a Gamut of Games by the legendary game historian, designer and collector, Sid Sackson. As Wikipedia puts it:

Many of the games in the book had never before been published. It is considered by many to be an essential text for anyone interested in abstract strategy games, and a number of the rules were later expanded into full-fledged published board games.

If Sackson isn't enough for you, there's always David Parlett's comprehensive Oxford History of Board Games. Parlett is also a distinguished game designer, having won the Spiel des Jahres award (which is a big deal for people who follow this sort of thing). When I was designing games, I had a rule: if Parlett didn't have a similar game, I could call an idea original.

I'll have an actual game next week.

Social Security

Some thoughts on social security:

First, let's remember that Social Security actually provides support at a very modest level. Last year, the average retirement benefit was $1,170 a month, or about $14,000 a year, with the average disabled worker or widow receiving slightly less. (It would be wonderfully educational for the cable talkers and newspaper editorialists to live on that amount for a few months — they would not only lose weight but gain empathy.)
Remember, too, that despite our status as the largest and most productive economy in the world, Social Security is among the least generous retirement programs among all the developed nations. As a percentage of the average worker's pre-retirement wages, the benefit has been declining for years and will continue to fall without any further cutbacks.

and

The actuarial experts whose job is to monitor Social Security's fortunes have long assured us that small and gradual rises in the tax revenues that support Social Security, accompanied by small and gradual shifts in benefits over the coming years, will solve whatever fiscal challenges the program may eventually confront. There is no reason to panic, and there is certainly no reason to consider wholesale changes in benefits.

Well, there is a reason, but only if your real aim is to destroy the system and replace it with something less useful but more profitable. Wall Street and its servants on Capitol Hill have lusted after Social Security's revenues for many years. And they regard the current uproar over the budget as a fresh opportunity to get their hands on a trillion-dollar bonanza. Given their record in recent years, it is all too easy to imagine how badly that would work out for everybody — except them, of course.

I think that this is precisely correct. The amount of profit that could be derived from the privatization of social security is astounding and I think that it is the real reason that the program is always under attack. Consider this:

But Fred Reish, an employee benefits lawyer, says it is not uncommon for fees on a small 401(k) plan to break down like this: 0.25% a year for the plan adviser, 0.25% a year for the record keeper and 0.75% a year for mutual funds, totaling 1.25%.

Note that this is in addition to the fees charged by mutual funds that most 401k plans allow you to invest in. The average equity mutual fund charges around 1.3%-1.5% The real rate of return on the United States stock market is typically between six and seven percent; likely less under current market conditions. It is easily to imagine half of a person's returns being eaten up by fees (which is a very good deal for people who run retirement funds).

So it is worth keeping in mind that attacks on Social Security, as a program, seem to mostly revolve around attempts to create new markets for investment bankers. In terms of actual budget issues, Paul Krugman puts it best:

What would a serious approach to our fiscal problems involve? I can summarize it in seven words: health care, health care, health care, revenue.

I just wish we would see more of this sort of sanity in the discourse about government fiscal problems.

EDIT: See also; most interesting quote:

Recently, Vanguard has begun urging people to contribute 12% to 15%, including the employer contribution, because of the stock market's weak returns and uncertainty about the future of Social Security and Medicare.

But the article is interesting throughout.

Edward Glaeser

Two quotes from the first chapter of his new book, triumph of the city:

All of the world's older cities have suffered the great scourges of urban life: disease, crime, congestion. And the fight against these ills has never been won by passively accepting things as they are or by mindlessly relying on the free market.

and

Infrastructure eventually becomes obselete, but education perpetuates itself as one smart generation teaches the next.

so far the book itself is beating my expectations based on his recent articles. Already there is a strong theme of needing to consider group interests relative to individual interests (and the collective action problems that result when you do not properrly regulate a city). We'll see if the rest of the book holds up or not.

Zonkers and millionaires

Partially making up for recent indiscretions, Paul Krugman gives us a wonderful analogy for proposals that leave out the hard part:

When I was in college, we sat around eating, among other things, Screaming Yellow Zonkers; they weren’t especially tasty, but the copy on the boxes was fun. Among the instruction was the Disappearing Zonkers Trick:

After putting on your magician’s outfit, look around the house for a handkerchief, two hard boiled eggs, and a small piece of radium. Then take seven Zonkers and place them neatly into the exact center of the handkerchief. Two eggs are arranged near each other and under your hands. Tie a half-hitch knot in the radium. Then make the seven Zonkers disappear. Your friends will be amazed.

It occurred to me that this is a pretty good description of the Ryan Roadmap plan for controlling health care costs — make a lot of proclamations about responsibility, dress up in a reformer’s costume, then make cost growth disappear.

How to lie with statistics -- rare cinema history edition

From David Leonhardt (via DeLong):

When I read that John Boehner, the speaker of the House, had said that the federal government added 200,000 federal workers under President Obama, I wondered, “Really? Where?” I’m not aware of any major federal hiring initiatives since January 2009.

... It turns out that the 200,000 number is simply incorrect.

...

Second, Mr. Boehner was starting his clock in December 2008, the month before Mr. Obama became president. The Bureau of Labor Statistics conducts its monthly survey during the week that contains the 12th day of each month, so there is no reason to start the clock in December 2008 as opposed to January 2009. On Jan. 12, 2009, George W. Bush was still president.

To be more accurate there wasn't an honest reason. As Leonhardt points out later, 11,000 jobs were added by President Bush in his last month in office. Speaker Boehner was interval shopping, one of the most effective and time-honored methods of lying with statistics. (Given that, by Leonhardt's estimate, Boehner went from 57,000 actual jobs to a claim of 200,000, he used lots of effective and time-honored methods of lying with statistics.)

Interval shopping is based on the idea that if you can adjust the period being studied, you can make something look much better or worse than it actually is. For example, if you take one day off of the service record of the Titanic, it looks like a remarkably safe form of transportation.

The method also allows you to have a great deal of fun with denominators. You will often see people in positions of responsibility pointing to a period of growth that started just after a disastrous collapse and ends just before the next one. The worse that initial collapse was, the better your growth rate looks.

Interval shopping can be particularly effective when the groups being compared are at different stages of life. You can, for example, use it to argue that a product is less reliable than one that was introduced a couple of years later, not taking into account the difference in average ages, or you could 'prove' the mental inferiority of one immigrant group over another by comparing test scores, not taking into account the higher proportion of non-English-speaking first generation immigrants.

For beautiful example of egregious interval shopping, check out this excerpt from a rebuttal to Gore Vidal written by Peter Bogdanovich in the New York Review of Books:

Now I’m getting in a foul mood because I’m reading this sentence again: “The badness of so many of Orson Welles’s post-Mankiewicz films ought to be instructive.” That’s another of those glib, sweeping statements that play right into the reader’s lack of information and is written so as to presume a general critical atmosphere, which in this case is not just superficial, it is decidedly untrue, which makes it all the more offensive and irresponsible on Gore’s part. Almost everyone with any sense knows that Orson Welles is a great director and that Herman Mankiewicz was a talented hack,* but for the record, here is a list of the movies Orson Welles has directed since Citizen Kane:

The Magnificent Ambersons

The Stranger

The Lady from Shanghai

Macbeth

Othello

Mr. Arkadin (Confidential Report)

Touch of Evil

The Trial

Chimes at Midnight (Falstaff)

The Immortal Story

F for Fake

And these are all of Herman Mankiewicz’s post-Welles films:

Rise and Shine

Pride of the Yankees

Stand by for Action

Christmas Holiday

The Enchanted Cottage

The Spanish Main

A Woman’s Secret

The Pride of St. Louis

One of the surest signs of interval shopping is the arbitrary start point, but the key to making it work is finding an arbitrary point that doesn't look arbitrary. Here Bogdanovich is able to make use of a sloppy writing by Vidal. The phrase "post-Mankiewicz" implies that there is some special significance to these films coming after Citizen Kane. If Vidal were comparing Welles' post-Mankiewicz films to his pre-Mankiewicz films (which he obviously isn't), or if he were arguing that Welles was changed by working with Mankiewicz (which seems unlikely, though I'd need to get behind the paywall to be sure), then the wording would have been appropriate. Here, though, we simply have Vidal saying "post-Mankiewicz" when he means "non-Mankiewicz."

This small bit of imprecision on Vidal's part gives Bogdanovich the opportunity to use Kane as the start point for his interval (and Peter Bogdanovich has never been one to pass up on opportunity). When comparing careers you would normally look at entire careers. This interval includes all of Welles' films and less than half of Mankiewicz's.

To make matters worse, the intervals aren't even close to the same length for the two men. Mankiewicz drank himself to death in 1953. Welles died in 1985 (the last film on Bogdanovich's list was released in 1974).

More importantly, though, this list includes all of Orson Welles' career as a director barring some shorts and TV work, while it leaves out most of Mankiewicz's major accomplishments as a writer and producer. Even in his final, declining, alcohol-soaked years, Mankiewicz still managed a good picture or two, but a list of films that he wrote or produced before Kane would include Dinner at Eight, Million Dollar Legs (with W.C. Fields) and three out of four of the Marx Brothers' best movies Monkey Business, Horse Feathers and Duck Soup.

And when you leave out Duck Soup, that's just going too far.



*Bogdanovich's senseless group here include Mankiewicz collaborators and admirers such as Alexander Woollcott, Heywood Broun, Dorothy Parker, Robert E. Sherwood, George S. Kaufman, Marc Connelly and Nunnally Johnson, but that's a topic for another post and perhaps another blog.

Update: The conversation continues here and here.

An excuse to pull out my favorite John Ford quote

It's not often you have to correct Roger Ebert on film history, but his recent retrospective on the Grapes of Wrath opens with a statement that definitely needs correcting:

John Ford's "The Grapes of Wrath" is a left-wing parable, directed by a right-wing American director, about how a sharecropper's son, a barroom brawler, is converted into a union organizer.

It's true that Ford became more identified with the GOP in the late Forties (calling himself a 'Maine Republican') and turned sharply to the right in the mid-Sixties (around the time he turned seventy), but up until that sharp turn he had been a progressive (even afterwards his favorite presidents were FDR and JFK) and he was an ardent FDR man when he made Grapes of Wrath in 1940. He held to these basic principles even when they entailed significant professional risk in the Fifties.

From Wikipedia:

Ford's attitude to McCarthyism in Hollywood is expressed by a story told by Joseph L. Mankiewicz. A faction of the Directors Guild of America led by Cecil B. DeMille had tried to make it mandatory for every member to sign a loyalty oath. A whispering campaign was being conducted against Mankiewicz, then President of the Guild, alleging he had communist sympathies. At a crucial meeting of the Guild, DeMille's faction spoke for four hours until Ford spoke against DeMille and proposed a vote of confidence in Mankiewicz, which was passed. His words were recorded by a court stenographer:

"My name's John Ford. I make Westerns. I don't think there's anyone in this room who knows more about what the American public wants than Cecil B. DeMille — and he certainly knows how to give it to them.... [looking at DeMille] But I don't like you, C.B. I don't like what you stand for and I don't like what you've been saying here tonight."^[77]

Having made fun of Paul Krugman's puns, there's no way I can use the title "Darby's Rhee Lapse"

From the New Republic's Seyward Darby:

The mantra goes, “You either love or hate Michelle Rhee.” In the education world, there is no figure as polarizing as the former chancellor of Washington, D.C.’s public schools, who famously warred with the city’s teachers’ union and left abruptly when her boss, Mayor Adrian Fenty, lost reelection last year. Since then, she has started an organization called StudentsFirst to push for education reform nationwide. She announced the group in a Newsweek cover story, and it raised more than $700,000 in its first week. Andrew Rotherham, an education policy expert, told me, “Do people say, ‘I [am] kind of uncertain about Michelle Rhee’? No way.”

Count me, then, as one of the uncertain few. To be sure, I am generally a fan of Rhee. The world of liberal education policy consists, more or less, of two factions: reformers, who support performance pay, charter schools, and weakening seniority-based job protections for teachers; and opponents of these ideas, who are often allied with teachers’ unions. Like most reformers, I greatly admired Rhee’s tenure in D.C., in which she closed failing schools, fired underperforming teachers, and helped raise student achievement.

But, in reading about Rhee’s recent moves, I’ve felt a nagging sense of disappointment. She is now advising several conservative governors who line up with reformers on certain issues but whose commitment to public education is questionable. Meanwhile, she hasn’t offered robust answers to some of the thorniest matters facing education policymakers. Last week, I put these challenges to Rhee directly. And I came out of our conversation much as I went in: with decidedly mixed feelings about her vision for the education-reform movement.

I have long had decidedly mixed feeling about Seyward Darby (as you can see for yourself with a quick keyword search). Her reporting and analysis of the education reform movement has been, to put it simply, bad (better than Chait's but still bad). She was overly eager to accept the movement's preferred narrative, credulous about its claims, negligent about digging into the research that called these claims into question, and dismissive of those on the other side.

That last trait is still on display even now with the weasel-worded "more or less, of two factions... opponents of these ideas, who are often allied with teachers’ unions." The implication here is that the opponents are shilling for the unions. I don't know the alliances of everyone out there but I can tell you that I'm not allied with the unions (I never even bothered to join one when I was a teacher), nor is Joseph, nor is David Warsh, nor, to my knowledge are most of the people in my corner of the blogosphere. In my experience, it would have been more accurate to say "opponents who question the evidence presented by the reformers."

But there was no question in my mind that Darby is an intelligent, competent and basically honest journalist and that eventually the internal contradictions would start to get to her. One of the ways that people deal with cognitive dissonance is by convincing themselves that things have changed. Rather than question their original assessment and reaction, they convince themselves that they were right then but they are taking the opposite position now because things are different.

Michelle Rhee hasn't changed. She is constant as the northern star. Every point on her career trajectory is collinear. Those who didn't see her current incarnation coming either weren't paying attention or weren't being honest with themselves.

The rest of Darby's article is behind a paywall and I haven't had a chance to look at it. Perhaps something in the piece will invalidate something I've said here. If so let me know and I'll gladly make the appropriate retractions.

Paul Krugman still has no shame

An Asterix the Gaul pun? Has it really come to that?

(this is not a first offense)

Words of Wisdom

From the ever brilliant Felix Salmon:

The more important answer is “I’m not an investor” — and neither are you. Just because you have a 401k plan does not, ipso facto, make you an investor. This is a serious problem with defined-contribution pensions in general: they place an onerous set of responsibilities onto individuals who are wholly unqualified to discharge them in a sensible manner. Already, such plans tend to have far too many choices, many of which are expensive long-only mutual funds which seem like a pretty bad idea for just about anybody. Trying to add alternative investments in private equity or hedge funds to the mix would almost certainly be disastrous — the dumb money coming in at just the wrong time, just like it always does.

I always kind of worry paying a management fee for investing in TIPS (i.e. my retirement fund does not let me buy individual bonds). The yield on these bonds is already pretty low and paying a percentage of assets in order to invest in this instrument makes it a far less efficient vehicle for investment. But it's also true that I have neither the expertise nor the information network to invest intelligently (beyond some basic, general principles) in the general market.

I always find it odd that the employer (who does not directly benefit from the results of the investment) picks the funds that are available. Market forces only work well when the customer (in this case the individual employee) is able to make free choices. But, unfortunately, the lack of information makes it impossible for the average employee to know if they are getting a good return.

So, in the end, only the fund managers really seem to benefit from this arrangement.

Easily worth a thousand words... Maybe even fifteen hundred

From Mark Thoma.