Curiously, Texas' reputation as a low-tax, business-friendly state survives although its state and local business levies exceed California's as a percentage of each state's business activity (4.9% versus 4.7% in 2009, according to a report by the accounting firm Ernst & Young). What's different is that Texas business taxation relies more on property, sales and excise taxes and government fees than California, which relies on taxing corporate income.
Of course, one reason many business owners and executives favor Texas over California is that the Lone Star State doesn't have a personal income tax — a big deal when you're pulling in a Texas-size paycheck.
But self-interest aside, what's at stake from fiscal policy in both states is the same — the services and programs that really matter to business owners, such as functioning schools, high-caliber universities and serviceable transport infrastructure.
Even more important are the measures that point to public well-being. In many categories, California and Texas are closer together than either state's residents would probably find comforting.
But here are a few where they're not: Texas ranks 49th in the nation (that is, third worst) in teen births; California 22nd. In providing prenatal care to expectant mothers, Texas is dead last, California eighth. Texas ranks 34th in median family income, with $47,143; California 13th, at $56,852. This is the harvest of its "superior policies," and given the current budget crisis, it's bound to get worse. Miraculous.
Wednesday, February 9, 2011
Michael Hiltzik on the Texas Miracle
Lots of good stuff in this comparison of the surprisingly similar fiscal woes of my native and adopted states. In particular, the following passage caught my eye:
What do you do when things are tight?
I was reading two different pieces today and I thought that they had a really interesting link between the two of them.
From Dana Goldstein:
From Mark Thoma:
So my question is this: why is the push for excellence being connected with schemes to reduce manpower costs? If the argument is that education is a key priority then why are we not increasing funding for education? Instead we have the odd situation where the state wants education to improve while cutting expenses.
Usually when this contradiction shows up, the government is seeking cover for the decision to cut services. If cutting expenses also results in better outcomes than we are all better off, right? Or it could be an attempt to remove the more senior (and thus higher paid) teachers to minimize the impact of budgetary decisions that have already been made. But that is a different conversation, isn't it?
Now consider another area that the state runs that is in a similar position, namely the military. Is anybody seriously arguing that some soldiers do not pull their weight? That we could be more effective with a smaller force? After all, wasn't there a movie (Rambo, for example) where a single heroic special forces soldier was more effective than a brigade? But if the administration began talking about waste and cost effectiveness then you would be certain what they really wanted was cover for cuts. Now imagine they talked about those lazy soldiers who re-enlisted or who were only interested in rewards? Who needs a veterns administration when soldiers are fighting for principle and principle alone?
Would such cuts make sense? Either for the military or for education it is a matter of opportunity cost. But maybe the best conversation to have is one about the trade-off between the options. Taxes hurt economic growth but lack of education or defence can both lead to fairly bad long term outcomes. I am not sure where the balance is but I'd prefer to have the conversation openly. Pretending that test scores plus cuts will somehow improve education seems odd.
More efficient models of defense and education may both exist, but then the optimal path seems to be to show the efficiencies first and implement the cuts second.
From Dana Goldstein:
While we're on the subject of Wisconsin, I find Scott Walker sort of terrifyingly simple-minded but charismatic. His education platform is basically Race to the Top plus vouchers while somehow massively cutting education budgets. (Huh?)
From Mark Thoma:
Local school districts have cut 154,000 education jobs since August 2008.
So my question is this: why is the push for excellence being connected with schemes to reduce manpower costs? If the argument is that education is a key priority then why are we not increasing funding for education? Instead we have the odd situation where the state wants education to improve while cutting expenses.
Usually when this contradiction shows up, the government is seeking cover for the decision to cut services. If cutting expenses also results in better outcomes than we are all better off, right? Or it could be an attempt to remove the more senior (and thus higher paid) teachers to minimize the impact of budgetary decisions that have already been made. But that is a different conversation, isn't it?
Now consider another area that the state runs that is in a similar position, namely the military. Is anybody seriously arguing that some soldiers do not pull their weight? That we could be more effective with a smaller force? After all, wasn't there a movie (Rambo, for example) where a single heroic special forces soldier was more effective than a brigade? But if the administration began talking about waste and cost effectiveness then you would be certain what they really wanted was cover for cuts. Now imagine they talked about those lazy soldiers who re-enlisted or who were only interested in rewards? Who needs a veterns administration when soldiers are fighting for principle and principle alone?
Would such cuts make sense? Either for the military or for education it is a matter of opportunity cost. But maybe the best conversation to have is one about the trade-off between the options. Taxes hurt economic growth but lack of education or defence can both lead to fairly bad long term outcomes. I am not sure where the balance is but I'd prefer to have the conversation openly. Pretending that test scores plus cuts will somehow improve education seems odd.
More efficient models of defense and education may both exist, but then the optimal path seems to be to show the efficiencies first and implement the cuts second.
An experiment in blogging -- the conclusion [reposted]
[I'm about finished with a longer post that refers to this topic so I decided to do a repost. I apologize to long time readers.]
When assessing a statement, sometimes it's useful to rephrase it in a more general way and see how well it holds up. I tried that with a passage I found in a popular blog (one of the very few I read every day). Where the author had referred to members of a specific profession I substituted in the word 'employees' except when talking about unions ('employees unions' seemed redundant). I also changed a couple of words for consistency, but other than that the passage was exactly the same.
The resulting paragraph (seen below) was much more extreme than I had expected and it got me to thinking, how would people react to this passage if they encountered it without all the baggage? I decided to post the generalized version with a brief explanatory note then give people a couple of days to think about it before filing in the details.
Here's the generalized passage:
Ironically, the more defensible position Chait can take here is the extreme one, namely that unions should not do anything to discourage employers from firing their members. It's not a position that most readers of the New Republic would embrace but, as a statement of personal belief, it is extraordinarily difficult to rebut.
If he tries to explain why teachers constitute a special case, he will have to deal with the data and in this particular debate, the numbers are not his friends. (It's worth remembering that Diane Ravitch started out on Chait's side. Her road to Damascus came when she realized she could no longer reconcile those views with what she was seeing in the research findings.)
Jonathan Chait can be a formidable debater but he has shown himself to be largely ignorant of the research behind these issues (no one at TNR even knew enough about PISA to catch the bait and switch in the intro to Waiting for Superman and in the education debate that's about as slow as the pitches get).
He'll be trying to punch holes in the findings of institutions like EPI and Rand and big guns in the field like Donald Rubin. He'll have to show precipitous educational decline without resorting to the aforementioned PISA (good test but absolutely meaningless in this context). He'll have to explain why schools that use his policies are more likely to underperform than to outperform unionized schools. He'll have to justify firing people based on metrics so volatile that a third of teachers in the top 20% could find themselves in firing range the next year, metrics based on data so confounded that "students’ fifth grade teachers were good predictors of their fourth grade test scores."
This is one time the smart money is on the other guys.
* Yes, we fire policemen. What we don't do is is fire policemen based on unreliable metrics that are largely outside of the officers' control and are easily manipulated by their superiors
When assessing a statement, sometimes it's useful to rephrase it in a more general way and see how well it holds up. I tried that with a passage I found in a popular blog (one of the very few I read every day). Where the author had referred to members of a specific profession I substituted in the word 'employees' except when talking about unions ('employees unions' seemed redundant). I also changed a couple of words for consistency, but other than that the passage was exactly the same.
The resulting paragraph (seen below) was much more extreme than I had expected and it got me to thinking, how would people react to this passage if they encountered it without all the baggage? I decided to post the generalized version with a brief explanatory note then give people a couple of days to think about it before filing in the details.
Here's the generalized passage:
If you concede that employers need to be able to fire bad employees, then you can't fully defend the role of the unions. You can defend the concept of unions, and you can believe that some of the things unions do, like bargain for higher aggregate wages, help society. But most unions demonstrably make it very difficult to fire bad employees. That is currently a core function of unions, and something that must change. You're also going to need higher salaries to attract a better caliber employee into the workforce, and that's something unions could potentially help. But being "treated like professionals" has to mean both the opportunity to earn a good living if you do well and the potential to be fired if you fail.And here is the passage Jonathan Chait (that's right, Jonathan Chait) originally posted in his blog:
If you concede that principals need to be able to fire bad teachers, then you can't fully defend the role of the unions. You can defend the concept of unions, and you can believe that some of the things unions do, like bargain for higher aggregate wages, help education. But most teachers unions demonstrably make it very difficult to fire bad teachers. That is currently a core function of teachers unions, and something that must change. You're also going to need higher salaries to attract a better caliber teacher into the profession, and that's something unions could potentially help. But being "treated like professionals" has to mean both the opportunity to earn a good living if you do well and the potential to be fired if you fail.There are obviously two possible responses Chait could make here (three if you count ignoring it entirely). He could say he agrees with the general statement or he could argue that teachers are a special case and should be granted less union protection than, say, policemen.*
Ironically, the more defensible position Chait can take here is the extreme one, namely that unions should not do anything to discourage employers from firing their members. It's not a position that most readers of the New Republic would embrace but, as a statement of personal belief, it is extraordinarily difficult to rebut.
If he tries to explain why teachers constitute a special case, he will have to deal with the data and in this particular debate, the numbers are not his friends. (It's worth remembering that Diane Ravitch started out on Chait's side. Her road to Damascus came when she realized she could no longer reconcile those views with what she was seeing in the research findings.)
Jonathan Chait can be a formidable debater but he has shown himself to be largely ignorant of the research behind these issues (no one at TNR even knew enough about PISA to catch the bait and switch in the intro to Waiting for Superman and in the education debate that's about as slow as the pitches get).
He'll be trying to punch holes in the findings of institutions like EPI and Rand and big guns in the field like Donald Rubin. He'll have to show precipitous educational decline without resorting to the aforementioned PISA (good test but absolutely meaningless in this context). He'll have to explain why schools that use his policies are more likely to underperform than to outperform unionized schools. He'll have to justify firing people based on metrics so volatile that a third of teachers in the top 20% could find themselves in firing range the next year, metrics based on data so confounded that "students’ fifth grade teachers were good predictors of their fourth grade test scores."
This is one time the smart money is on the other guys.
* Yes, we fire policemen. What we don't do is is fire policemen based on unreliable metrics that are largely outside of the officers' control and are easily manipulated by their superiors
An experiment in blogging -- reposted
[I'm about finished with a longer post that refers to this topic so I decided to do a repost. I apologize to long time readers.]
This will just take a minute of your time.
What follows is a passage from a popular blog, rewritten slightly to make it more general but otherwise unchanged. I'll post the original quote with some comments Monday or Tuesday. [later today for the repost -- Mark]
I'd appreciate it if you would take a look at this and give some thought both to the arguments proposed and to the larger belief system they suggest, then come back in a few days and see what effect learning the context has had on your initial impressions.
Thanks.
This will just take a minute of your time.
What follows is a passage from a popular blog, rewritten slightly to make it more general but otherwise unchanged. I'll post the original quote with some comments Monday or Tuesday. [later today for the repost -- Mark]
I'd appreciate it if you would take a look at this and give some thought both to the arguments proposed and to the larger belief system they suggest, then come back in a few days and see what effect learning the context has had on your initial impressions.
Thanks.
If you concede that employers need to be able to fire bad employees, then you can't fully defend the role of the unions. You can defend the concept of unions, and you can believe that some of the things unions do, like bargain for higher aggregate wages, help society. But most unions demonstrably make it very difficult to fire bad employees. That is currently a core function of unions, and something that must change. You're also going to need higher salaries to attract a better caliber employee into the workforce, and that's something unions could potentially help. But being "treated like professionals" has to mean both the opportunity to earn a good living if you do well and the potential to be fired if you fail.I welcome comments but please don't include the source of the passage. Obviously that would undercut the point of the experiment.
Tuesday, February 8, 2011
Catching up with Dana Goldstein
I'm going to try to comment on each of these individually later. Feel free to beat me to the punch.
How Politically Astute is Michelle Rhee?
The Revival of the Private School Voucher Movement
Wisconsin Teachers' Union Prepares for Battle with GOP Gov
"If you don't do well in school, your descendants could grow up to be Morlocks"
OK, maybe it's not that bad, but Berkeley professor Claude Fischer still paints a grim picture. (via Thoma, of course.)
Fischer follows this with a number of troubling statistics. I found this part particularly striking:
Degree inequality
It is now generally understood that economic inequality has expanded greatly since about 1970. (Well, there are exceptions. For a couple of decades, some commentators denied that economic inequality was growing, claiming that it was all a statistical illusion. A few holdouts against reality may remain.) Now the debate has shifted to what – if anything at all – should be done about inequality.
Most of that discussion has been about income inequality. Between 1979 and 2007, the one-fifth of American households with the highest income experienced a roughly 100% increase in their annual, inflation-adjusted, after-tax income (280% [!] for the highest one percent of households); the middle one-fifth got about 25% more income; and the poorest one-fifth got about 15% more (see pdf). For wealth – property, stocks, and the like – the gap is enormously greater and has also widened over the last few decades.
Less discussed is the widening college degree gap. Yet its implications go considerably beyond money, to widening differences in life experiences and ways of life. (I draw in particular on the work of my colleague, Michael Hout, notably here [pdf], and on two books we wrote together, here and here.)
Fischer follows this with a number of troubling statistics. I found this part particularly striking:
Even is more happening along the education gap: Increasingly, college graduates marry college graduates and live among college graduates. Increasingly, Americans group by education and their ways of life diverge by education.I would find the use of just desserts as a justification for policy more palatable if we weren't seeing an alarming decline in social mobility.
Although the trends are complex (see here), Americans today are likelier to marry people of the same educational level as themselves than was true decades ago. Some of this development results from educated men increasingly marrying educated women; for example, the lawyer who married his secretary is now a lawyer who marries another lawyer. And some of this change is due to poorly-educated men becoming ineligible as spouses; drop-outs can no longer support families on brawn alone.
Then there is residential separation: A study by Thurston Domina (pdf) shows that college graduates are concentrating in some metropolitan areas (San Francisco and Raleigh-Durham, for example) and seem to be avoiding others (Indianapolis and Las Vegas, for example) and also that neighborhood segregation by college education grew substantially between 1970 and 2000. It grew faster than segregation by income, even as segregation by race declined. Another study documents how the highly-educated are concentrating in the downtowns of the most booming cities. And a recent story reported that these degree-holders are starting to raise their children in center cities — even in Manhattan. Thus, enclaves of the highly-educated are growing in chic, gentrified, non-smoking neighborhoods, while the less educated move to the scraggly, sprawling suburbs of stagnating cities.
What is less clear, although certainly plausible, is that this widening separation carries along with its economic and social divisions, a widening gap in values and ways of life: two different Americas, divided educational attainment.
Krugman does stat 101
Nothing fancy, no big insights, just a couple of bell curves, but this post by Paul Krugman does a nice job presenting weather trends and extreme events in terms of probability. He makes it simple but not overly simplified. We need more of this.
Krugman also deserves bonus points for describing economist's practice of putting the independent variable on the wrong axis as a QWERTY problem.
Krugman also deserves bonus points for describing economist's practice of putting the independent variable on the wrong axis as a QWERTY problem.
Semi-serfdom
What are going to do with Paul Krugman? He writes clear and insightful articles on complex economic issues, then he gives them titles like "Serf's Up" (circa 2003):
Here's the puzzle. In Europe circa 1100, with population scarce, serfdom was useful to the ruling class. By 1300 it wasn't, and had been allowed to drift away. But after 1348 it should have been worthwhile again. Yet it wasn't effectively reimposed. There were attempts to restrain wages and limit labor mobility, as well as attempts to tax the peasants (Wat Tyler's rebellion fits into all this.) But all-out feudalism didn't return. Why?Though the analogy's not perfect, we do have an institution that restrains wages and limits labor mobility. It's called an H-1B visa and though I know of no Christian groups trying to explain why it's God's will, it certainly has plenty of think tanks finding justifications for it.
And an even bigger question: why hasn't indentured servitude made a comeback in the modern era? Yes, I know, human rights and all that - but if it was profitable to have indentured servants in the modern world, I'm sure that Richard Scaife's think tanks would have no trouble finding justifications, and assorted Christian groups would explain why it's God's will.
It has reached the point where not only do sitcoms portray Ponzi schemes...
They also use the term without explanation in their blurbs.
Monday, February 7, 2011
There might just be a lesson here somewhere.
Felix Salmon has an insightful and amusingly written take on AOL's acquisition of Huffington Post:
AOL in particular was a mystery to us. It went from one bad business plan to another, all while maintaining spectacularly bad customer service. None of it mattered in the face of hundreds of millions of promotional disks.*
* According to former Chief Marketing Officer at AOL, Jan Brandt, "At one point, 50% of the CD's produced worldwide had an AOL logo on it."
As for HuffPo, it gets lots of money, great tech content from Engadget and TechCrunch, hugely valuable video-production abilities, a local infrastructure in Patch, lots of money, a public stock-market listing with which to make fill-in acquisitions and incentivize employees with options, a massive leg up in terms of reaching the older and more conservative Web 1.0 audience and did I mention the lots of money?I used to work for Earthlink. It was a great company, customer-centered, innovative, but it was trapped between AOL and Microsoft's Online, two companies with immeasurably deep pockets and no apparent concern about turning a profit.
AOL in particular was a mystery to us. It went from one bad business plan to another, all while maintaining spectacularly bad customer service. None of it mattered in the face of hundreds of millions of promotional disks.*
* According to former Chief Marketing Officer at AOL, Jan Brandt, "At one point, 50% of the CD's produced worldwide had an AOL logo on it."
Well-mannered spam
A few days ago I noticed a brief comment to one of my posts. It was from someone named Lily and all it said was "Thanks." I spent a minute wondering if the comment was meant to be sincere or sarcastic but, other than that, I didn't give it much thought.
Then yesterday Lily was back with another comment, or, more accurately, the same comment, this time on another post. There was no obvious common thread to the two posts, no apparent reason that anyone would single them out. All of this made me, in equal parts, suspicious and curious, so I clicked on the profile where I found a picture of a very attractive young Asian woman and a long list of blogs that, according to Google translate, offer a wide range of questionable services.
Profile-based spam is a new one on me and I wonder how the filters are going to handle it. On the bright side, though, at least it's polite.
Then yesterday Lily was back with another comment, or, more accurately, the same comment, this time on another post. There was no obvious common thread to the two posts, no apparent reason that anyone would single them out. All of this made me, in equal parts, suspicious and curious, so I clicked on the profile where I found a picture of a very attractive young Asian woman and a long list of blogs that, according to Google translate, offer a wide range of questionable services.
Profile-based spam is a new one on me and I wonder how the filters are going to handle it. On the bright side, though, at least it's polite.
More on poverty and education
From Aleks Jakulin:
"I do know that I get anxious whenever a correlation analysis tries to look like a causal analysis. A frequent scenario introduces an outcome (test performance) with a highly correlated predictor (say poverty), and suggests that reducing poverty will improve the outcome. The problem is that poverty is correlated with a number of other predictors."
I think that the dense correlation is precisely the point that makes inference challenging here. I like to point out California as being a good example of a puzzling outlier in the original study. There is no a priori reason to expect that California would do as poorly as it does relative to other states. But different groups have different explanations.
One hypothesis is that "teacher tenure" leaves weak performers in the classroom for decades. This seems to be the position of people like Michelle Rhee.
Another hypothesis is low educational spending in the state. According to wikipedia, "In teaching staff expenditure per pupil, California ranked 49th of 51".
A third hypothesis is the composition of people in California just leads to lower educational performance (due to innate differences with, for example, the population of New York state).
I kind of suspect the second hypothesis as most likely, but, given how inter-related things are it is unclear how you would do inference here. And some forms of the first hypothesis would lead to policies that could make things worse if the second were true. The third would suggest no policy is likely to make an important difference.
Coming up with clever ways to distinguish between these hypotheses is not trivial.
"I do know that I get anxious whenever a correlation analysis tries to look like a causal analysis. A frequent scenario introduces an outcome (test performance) with a highly correlated predictor (say poverty), and suggests that reducing poverty will improve the outcome. The problem is that poverty is correlated with a number of other predictors."
I think that the dense correlation is precisely the point that makes inference challenging here. I like to point out California as being a good example of a puzzling outlier in the original study. There is no a priori reason to expect that California would do as poorly as it does relative to other states. But different groups have different explanations.
One hypothesis is that "teacher tenure" leaves weak performers in the classroom for decades. This seems to be the position of people like Michelle Rhee.
Another hypothesis is low educational spending in the state. According to wikipedia, "In teaching staff expenditure per pupil, California ranked 49th of 51".
A third hypothesis is the composition of people in California just leads to lower educational performance (due to innate differences with, for example, the population of New York state).
I kind of suspect the second hypothesis as most likely, but, given how inter-related things are it is unclear how you would do inference here. And some forms of the first hypothesis would lead to policies that could make things worse if the second were true. The third would suggest no policy is likely to make an important difference.
Coming up with clever ways to distinguish between these hypotheses is not trivial.
Speaking of epicycles...
James Kwak has a beautiful stone-by-stone dismantling of this paper by Bryan Caplan and Scott Beaulier.
One thing that is obvious from this paper is that Caplan and Beaulier have reached the epicycle stage.* They are no longer focused on finding the best model to fit the data; instead they are trying to salvage an intellectual framework that is based on elegant principles and appealing ideas like just desserts and efficient markets.
The shift from serving the data to serving the theory is easy to make and difficult to catch. Every new theory occasionally runs into a phenomena it has trouble explaining. Explaining them can be a good thing. The process of taking a theory into the counter-intuitive is an important, even necessary step in its evolution.
There is, however, one condition: the explanation you finally come up has got to be as good or better than any of the alternative hypotheses. Otherwise, the theory isn't evolving; it's decaying.
* The Wikipedia article on the subject suggests I'm being unfair to Ptolemy. I hope not -- I'd hate to have to come up with a new analogy.
The paper argues that welfare programs expand the set of choices available to people; while that is all good according to traditional economics, if we think that people are inclined to make bad choices (“behavioral economics”), then welfare programs give people more opportunity to make bad choices and hurt themselves. This is particularly a problem because, they claim, “there are good empirical reasons to think that behavioral economics better describes the poor than it does the rest of the population” (p. 4). In other words, if poor people are more irrational, then giving them more choices will hurt them more than other people.Kwak takes it all apart, from the odd and strangely uninformed take on behavioral economics to the lack of supporting data to the ready supply of superior alternative hypotheses to the generally poor quality of the authors' reasoning. If this zombie claws its way out of the grave after Kwak is through with it then there's just no killing the damned thing.
One thing that is obvious from this paper is that Caplan and Beaulier have reached the epicycle stage.* They are no longer focused on finding the best model to fit the data; instead they are trying to salvage an intellectual framework that is based on elegant principles and appealing ideas like just desserts and efficient markets.
The shift from serving the data to serving the theory is easy to make and difficult to catch. Every new theory occasionally runs into a phenomena it has trouble explaining. Explaining them can be a good thing. The process of taking a theory into the counter-intuitive is an important, even necessary step in its evolution.
There is, however, one condition: the explanation you finally come up has got to be as good or better than any of the alternative hypotheses. Otherwise, the theory isn't evolving; it's decaying.
* The Wikipedia article on the subject suggests I'm being unfair to Ptolemy. I hope not -- I'd hate to have to come up with a new analogy.
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