Wednesday, March 31, 2010

Obama Talks Energy with his Bio-fuel F-18 Hornet

Obama insults our intelligence again, this time with a speech on energy, as he spoke in front of a bio fueled F-18 Hornet. Are you kidding me? We spend $50 million for each of these jets, and we're worried if it's going to increase our carbon footprint? Am I the only one who sees how stupid this is?

Obama also proposed opening our coastlines to new oil drilling exploration. Oil drilling stocks naturally jumped up on the announcement today, rising 2-4%. That's great for them, but for the rest of us, we probably won't see any oil for a decade, and hey aren't we supposed to be moving off of oil for good? What happened to that?

The drilling of these new wells would theoretically keep the price of oil lower, keeping it as the go-to energy option, cheaper than the "green" alternatives.

The real lesson from this episode is that Obama doesn't believe in the climate crisis theory, and he's willing to drill for oil because, economically speaking, we just don't have a choice.

Real Life Walter Sobchak Awaits Trial [Big Lebowski]

Walter Sobchak (pictured above) is the gun wielding Vietnam vet from the Coen Brother's cult classic The Big Lebowski.

His real life doppelganger, Robert Stewart (pictured below), is awaiting trial for a shooting up a North Carolina nursing home last year.

Sometimes life imitates art in the strangest ways.

Monday, March 29, 2010

iPhone Likely Coming To Verizon

According to insiders, Apple's Taiwanese contractors are working on a new Verizon-compatible CDMA version of the iPhone. Previously, iPhones only worked on GSM networks, used by AT&T and T-mobile.

This should be a boon to both Apple and Verizon, as the most popular smartphone + the best cellular network = lots of money.

Treasury to Sell 7.7 Billion Shares of Citi

Remember when all the banks fell apart, and our government gave them a bunch of our money? Well, in the process we bought 7.7 billion shares (a 27% stake) of Citigroup, Inc., that the Treasury is now planning on selling back to the market.

SAN FRANCISCO (MarketWatch) -- Citigroup Inc. shares fell 2.4% Monday as investors unloaded the stock following news that the Treasury Department will begin to unwind its sizeable stake in the banking giant this year.

The Treasury said it plans to sell 7.7 billion shares of Citi (C 4.16, -0.02, -0.48%) it owns as a result of the financial bailout over the course of 2010 subject to market conditions.

"Treasury intends to sell its Citigroup common shares into the market through various means in an orderly and measured fashion," it said in a statement.

Treasury said it intends to initiate its disposal of the common shares pursuant to a pre-arranged written trading plan.

The Treasury bought the shares when the stock was at $3.25. Many analysts say we should have begun the sell off in October, when the stock was around $5 per share. Today, it is at $4.17, still a nice $7 billion profit if we sell now.

My only question is: what are they waiting for?

Ford Mustang Brings Back the 5.0

With the 2011 Mustang GT, Ford is bringing back the 5.0 liter V-8.

[slow news day]

Saturday, March 27, 2010

Why Should You Want A Government Job?

The question is, why wouldn't you want a government job?

Government jobs PAY. On the state and federal level, the government pays its employees well, to speak nothing of generous pensions and health benefits. And the best part is you almost never get fired or downsized. You may have to join a union, but it's worth it. It's easy to squeeze an institution that has no bottom line.

While private pay and economic growth is stagnating, our state employee counterparts have secure, great paying jobs, at our expense.

Now, if I had my druthers, I'd cut huge thousands of jobs from the federal government. But I know I'll have to change a few more minds before we do that. So in the meantime, could we just bring government salaries more in line with their private sector counterparts?

Our leaders bemoan the bank bailouts, but too many government employees enjoy excess on the public dime. We can't afford it, and paying for it is choking our economy when it needs the most help. Even if we could reduce the deficit just a little, we should look at it.

But for now, government jobs remain a staple of American employment. Solid pay, good benefits. We should all be so lucky.

[WSJ and USAToday]

Friday, March 26, 2010

Why Women Don't Blog

Why blogging is a "guy thing."
“Not many women are interested enough in spitting out an opinion on current events every 20 minutes.” Blogging is little more than a glorified pissing contest, she says, and women don’t do well at competitive pissing.
True. Guys just like to argue with each other, it's what we do best. Women like to hate each other too, but when they can't talk shit behind each other's backs, they lose their main weapon.

Thursday, March 25, 2010

The Story of Nikola Tesla

As told by a drunk person

[Thanks Brian]

Moving Forward on Health Care

America has taken the plunge into (near) Universal Health Care. There is no turning back now. We have just passed a system that shares many key ingredients with Switzerland's current system, such as the reliance on private insurers, so it may be possible to glean some insights into where we're heading by looking at the Swiss system.

Switzerland has the least paternalistic health care system in Europe. It is the only country in Europe with a health care system that is based totally on private insurance.

Health insurance was made mandatory only in 1995. Premiums are not risk-related or linked to income, but are set on a per-capita basis with weightings for age of entry into a fund, regional cost differences, and sex. The government subsidizes poor individuals by paying a percentage of their premiums. These subsidies account for approximately one-third of health care funding by the Swiss Confederation.

Switzerland has also introduced a risk-adjustment system. All insurers in the market are required to pay a portion of the premiums or contributions they collect into a central fund. The relative financial risk of each insurer is then calculated, and insurers with a larger proportion of less healthy, high-risk members receive an amount from the fund that compensates for the higher financial risks involved in insuring their members. This type of risk-adjustment prevents a situation in which all low-risk people would flock to insurance companies that can keep their premiums low because of their minimal risks, while other insurers who have the majority of high-risk members would have to ask exorbitant premiums.

Switzerland solves the high-risk problem by spreading the costs among insurance companies. It reminds me of how NFL franchises share their profits, how large market teams like the Cowboys will in a sense subsidize the lower performing teams like the Jaguars or the Bills.

The law recently passed by Congress will subsidize insurers who take on high-risk subscribers. However, this will not begin until 2014; until then, high-risk people will be able to get on the Medicare expansion or by taxpayer funded high-risk pools, many of which are already administered by state governments.

Among European nations, Switzerland currently spends the largest portion of its GDP on health care, about 11% of their GDP. In comparison, America spends about 16% of its GDP on health care, whereas Sweden spends about 9%. The country with one of the most advanced and efficient health care systems is Japan, who spends about 8% of their GDP on health care.

Other countries pay much less than we do for much more egalitarian health systems. However, all is not perfect sunshine and rainbows on the other side of the Atlantic. The downsides of waste, inefficiency, lowered quality standards, and lack of vibrant research into new treatments definitely exist in countries with highly managed health care schemes.

An examination of several European countries discovered the limitations of universal coverage.

Some Lessons

For Members of Congress and state legislators, there are some valuable lessons from the European experience that should be less surprising.

If you insist on government management of the health care system, do not expect freedom from waste, inefficiency, or inequity in the delivery of care (look at France).

If you want to promise citizens a national or state program of universal insurance coverage, don't expect that you will be able to deliver universal access to high-quality health care. You won't and you can't (look at Britain).

If you want to fix prices for medical services, prescription drugs, or other medical devices, don't expect demand for these goods and services to be met or investment in research and development to continue apace. It won't (look anywhere).

If you insist, with a straight face, that in a government-run health care system, all of your fellow citizens will be treated equally -- regardless of their class, station in life, or disease condition -- you are not merely enthusiastic or well intentioned. You are lying.
America is home to the majority of medical innovations over the last half-centry, in part due to the profit motive that exists in our health care system. Our system can be prohibitively expensive for some of our unluckier citizens, and I can understand the movement to help them out. However, such an endeavor must be taken on very carefully, as Medicare was our first attempt into subsidizing care for the poor, and while it worked temporarily, it is now on the verge of failure.

We must strive to avoid mistakes of the past and learn from others, while forging our own path that retains our critical research and development streams.

Our current system is broken, but not entirely. I only hope the government does not break the good parts while trying to fix the bad.


Wednesday, March 24, 2010

Freakonomics Radio

Freakonomics just released a new podcast. Check it out.

Who Needs New Cartoons

When our problems stay the same?

Circa 1934

Tuesday, March 23, 2010

Mythbuster Adam Savage Doesn't Trust Robots [Robot Apocalypse]

I'm glad to see we have a high-profile member of the cause for the safe use of robots.

"I know how machines work and I wouldn't trust a machine with a's the worst idea in the world."

[via Gizmodo]

13 State Attorneys General Sue Over Health Law

Attorneys general from 13 states have filed suit on behalf of their states against the latest federal health legislation:

The lawsuit claims the bill violates the 10th Amendment, which says the federal government has no authority beyond the powers granted to it under the Constitution, by forcing the states to carry out its provisions but not reimbursing them for the costs.

It also says the states can't afford the new law. Using Florida as an example, the lawsuit says the overhaul will add almost 1.3 million people to the state's Medicaid rolls and cost the state an additional $150 million in 2014, growing to $1 billion a year by 2019.

"We simply cannot afford to do the things in this bill that we're mandated to do," McCollum said at a press conference after filing the suit. He said the Medicaid expansion in Florida will cost $1.6 billion.

"That's not possible or practical to do in our state," he said.

They have a great case, and this expansion of federal power should be scaled back. The ball is in the Supreme Court's hands now, we'll soon see where their priorities lie.

Seven Questions to Ask When Picking a Financial Adviser

Great article on how to choose someone to shepherd your wealth.

For example, you might ask: How many clients beat their benchmarks or are in line with their goals? How have clients similar to me fared during recessions? Can you combine all of your clients into a single portfolio and tell me how the overall portfolio did? Remember to ask about both short-term (one year) and long-term (10 years or more) records, and ask if your adviser is using absolute returns or returns relative to the performance of the market.

Next, use the advisers' record to understand how they make decisions. "You can ask about performance, but what you're really after is how the adviser processes decisions," says Mr. Rogers of RayLign Advisory.

He suggests asking advisers to dissect a specific situation that has occurred to them. For instance, you could say, " 'Take your worst investment and evaluate how you made the investment, monitored it and the decisions you made along the way to stick with it or get out,' " he says.

"If you feel they are dodging the question or putting a positive spin on everything, it's a red flag," Mr. Rogers says. "It could mean they're not going to deal with or handle the tough decisions."

If I ever need a financial advisor, I will definitely refer back to this.

Monday, March 22, 2010

Virgin Galactic Tests SpaceShipTwo

MOJAVE SPACEPORT - Richard Branson's Virgin Galactic began initial testing today of the VSS Enterprise (center) as carried by the propeller jet powered WhiteKnightTwo. The Enterprise is a SpaceShipTwo class space plane built by Scaled Composites, winners of the 2004 X-Prize for a reusable space plane, SpaceShipOne.

More pictures at Gizmodo.

As there has been no date specified for the first commercial flight, I assume testing will continue until they are sure the plane is absolutely safe for their first customers, as their entire business hinges on it.

Good luck, guys.

CNN Poll: 59% Oppose the Health Care Legislation

In case you were wondering, CNN polled Americans over the weekend to gauge their approval of the health care bill.

20. As you may know, the U.S. House of Representatives and the U.S. Senate are trying to pass final legislation that would make major changes in the country’s health care system. Based on what you have read or heard about that legislation, do you generally favor it or generally oppose it?

Mar 19-21
Favor 39%
Oppose 59%
No opinion 2%

21. (IF OPPOSE) Do you oppose that legislation because you think its approach toward health care is too liberal, or because you think it is not liberal enough?

Mar 19-21
Favor (from Question 20) 39%
Oppose, too liberal 43%
Oppose, not liberal enough 13%
No opinion 5%

What we have is a government that increasingly ignores the wishes of its people to pass corporatist "reform" legislation, because it's easier than passing real reform.

Health Care Bill Passes, 219-212

It's here. The worst health care reform possible. Enjoy it, suckers.

A comment from a fellow concerned citizen:

The plan to solve health care is to force everyone under penalty of law to buy health insurance? Really? Then why not solve homelessness by passing a law forcing everyone, under penalty of law, to buy a house? Why not solve poverty by passing a law forcing everyone, under penalty of law, to make $100,000 a year?

Well at least we can stop talking about this now.

Saturday, March 20, 2010

Rage Against the Morons

I found this in my travels:

To President Obama and all 535 voting members of the Legislature,
It is now official you are ALL corrupt morons:

1. The U.S. Post Service was established in 1775. You have had 234 years to get it right and it is becoming more unsustainable by the day.

2. Social Security was established in 1935. You have had 74 years to get it right and it is bankrupt.

3. Fannie Mae was established in 1938. You have had 71 years to get it right. It is bankrupt and now has an unlimited line of credit from the Fed.

4. The War on Poverty started in 1964. You have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to "the poor" and they only want more.

5. Medicare and Medicaid were established in 1965. You have had 44 years to get it right and they are bankrupt.

6. Freddie Mac was established in 1970. You have had 39 years to get it right. It is bankrupt and now has an unlimited credit line from the Fed.

7. The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 32 years to get it right and it is an abysmal failure.

You have FAILED in every "government service" you have shoved down our throats while overspending our tax dollars AND YOU WANT AMERICANS TO BELIEVE YOU CAN BE TRUSTED WITH A GOVERNMENT-RUN HEALTH CARE SYSTEM??

This about sums up my feelings toward our beloved federal government. Depending on how the vote goes Sunday, we may soon have yet another bureaucracy to waste billions of our tax dollars.

WTF is this Health Care Reform, anyways?

On the eve of the historic House vote on health care reform, we reflect back on the substance of the bill, as well as the problems, as much of this has been lost in the heated debate. The bill as it stands now does many things:

  • prohibiting health insurers from refusing coverage based on patients' medical histories[5][6]
  • prohibiting health insurers from charging different rates based on patients' medical histories or gender[5][6]
  • repeal of insurance companies' exemption from anti-trust laws[6][7]
  • establishing minimum standards for qualified health benefit plans[5]
  • requiring most employers to provide coverage for their workers or pay a surtax on the worker's wages up to 8%[5][8]
  • restrictions on abortion coverage in any insurance plans for which federal funds are used[6][8]
  • an expansion of Medicaid to include more low-income Americans by increasing Medicaid eligibility limits to 150% of the Federal Poverty Level and by covering adults without dependents as long as either or any segment doesn't fall under the narrow exceptions outlined by various clauses throughout the proposal.[9][10]
  • a subsidy to low- and middle-income Americans to help buy insurance[8]
  • a central health insurance exchange where the public can compare policies and rates[8]
  • requiring most Americans to carry or obtain qualifying health insurance coverage or possibly face a surtax for non-compliance.[5][12]
  • a 5.4% surtax on individuals whose adjusted gross income exceeds $500,000 ($1 million for married couples filing joint returns)[5]
  • a 2.5% excise tax on medical devices[5]

Basically it will establish minimum standards for "qualified health benefit plans," which we will all be required to buy, or our employer will be required to buy for us, on new "exchanges" which are mechanisms will theoretically allow people to more easily compare and shop for insurance plans. It also expands Medicaid, and provides subsidies for other low income people to buy insurance on exchanges. To pay for this bill, there are several new taxes and non-compliance penalties, as well as scheduled cuts to Medicare.

There are parts of the bill I agree with, but many more that I am completely opposed to. I have several critiques of this bill, but I will limit myself to my top four.

1. We can't afford it. First of all, the largest expenses don't begin until 2014, so this "$1 trillion over the next decade" price tag is misleading. A more honest price tag would start in 2014, and would be substantially higher, estimated at $2.5 trillion. And that's assuming we DO cut Medicare, which Congress is supposed to have done already on several occasions, but has not.

Also, the tax on "Cadillac" insurance plans does not kick in until 2018, and there is a strong possibility that Congress will avoid this unpopular measure when the time comes.

2. It will hurt small business. Businesses with 50 employees or more will be required to cover all of their employees or face stiff penalties. This will put many people out of work as businesses will be unable to afford the assuredly more expensive health insurance, and those who keep their jobs will likely face stagnant or reduced wages in order to pay for health care.

3. It encourages the employer-based insurance system. This system separates citizens from making health care decisions, and is a large part of why our system today is so terrible. Most people with health insurance do not pick their own plans, but rather take what is offered to them at work. The problem here is two-fold: first, since employees don't pick their insurer, employers are likely to pick the cheapest/easiest plan they can, not necessarily the best plan. Since employers may not face the consequences of picking a crappy plan, the money savings can outweigh any potential downsides of choosing a bad provider. Problem two: when you lose your job, you lose your insurance. I do not know how portability is addressed in this bill, so they may have fixed it, but I couldn't find it.

4. It is unconstitutional. Requiring every American to purchase insurance is plainly unconstitutional. Nowhere in the constitution is the federal government given this power, or anything like it. It's job is to regulate commerce, not require it. Idaho and Virginia's Attorneys General will sue over this issue if the health bill passes.

This bill has been watered down so much that little, in the end, will change. Health costs will continue to rise faster than the economy, and there will still be 20 million uninsured in America. I know we can do better.

Friday, March 19, 2010

Police Using Facebook to Connect with Community

As I found in a recent news story, the Police Department of Holly Springs, NC has started a Facebook page to better communicate with Holly Springers.

This is a great use of technology to open channels of communication between citizens and the government institutions they support, and it puts a familiar face on what could be a daunting organization.

I hope this idea spreads like wildfire.

Thursday, March 18, 2010

Repeating the Mistakes of the Great Depression

This enlightening article on the Great Depression dispels some myths and misunderstandings about the circumstances that led to and compounded the world's greatest economic recession.

Hoover dramatically increased government spending for subsidy and relief schemes. In the space of one year alone, from 1930 to 1931, the federal government’s share of GNP increased by about one-third.

Hoover’s agricultural bureaucracy doled out hundreds of millions of dollars to wheat and cotton farmers even as the new tariffs wiped out their markets. His Reconstruction Finance Corporation ladled out billions more in business subsidies. Commenting decades later on Hoover’s administration, Rexford Guy Tugwell, one of the architects of Franklin Roosevelt’s policies of the 1930s, explained, “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.”[6]

To compound the folly of high tariffs and huge subsidies, Congress then passed and Hoover signed the Revenue Act of 1932. It doubled the income tax for most Americans; the top bracket more than doubled, going from 24 percent to 63 percent. Exemptions were lowered; the earned income credit was abolished; corporate and estate taxes were raised; new gift, gasoline, and auto taxes were imposed; and postal rates were sharply hiked.

My immediate reaction was that we are repeating the same mistakes of Hoover and FDR and expecting different result.

Market Price for Health Care

Why is it that Walmart can post an obvious price for a simple eye exam, yet doctors do not post the price for a simple checkup?

- Posted using BlogPress from my iPhone


Wednesday, March 17, 2010

Mobile Blogging Test

This is a blog test from my iPhone.

I grilled cheese burgers for dinner. It was satisfying on many levels.

Sore thumbed liveblogging here we come.

- Posted using BlogPress from my iPhone


The Price We Pay For Medicare

A new public option idea is brewing, wherein people can buy into Medicare.

Representative Alan Grayson last week introduced a bill which would allow any U.S. citizen the option of buying a health insurance policy from medicare at cost.

Some facts about this proposal:

-It would not cost taxpayers anything. Those opting in would be paying for their own coverage, in addition to the taxes they pay currently.
-It is totally optional. People who like their private insurance are under no obligation to participate.
-It would actually decrease the cost of Medicare by expanding the risk pool to younger, generally healthier people.
-It has no government pork, earmarks, or kickbacks whatsoever. It is a simple, four page bill that anyone can read and understand.

While this idea has some merit, as in the government does not subsidize the cost of the health insurance. However, Medicare itself is in desperate need of an overhaul.

The annual price we pay for Medicare doubles every 4 years. Hardly a success story, and hardly a model we want to expand to everyone in America. Medicare's effects also expand far beyond it as well. Many doctors break even or lose money on Medicare patients, and they must make up this difference by overcharging the uninsured and private insurers. Private insurers then pass this extra cost on to employers. Employers then pass this extra cost on to employees.

In America, roughly 60% of people are covered by employer based health insurance. On top of that, Medicare covers another 15%. That leaves 25% of Americans in the "free" market, including the 15% of Americans who are uninsured. That leaves 10% of people who actually buy unsubsidized insurance on the "free" market. This segment of the population is too small to greatly influence the market, and they bear the full costs of their insurance. This also means that 60% of Americans, those covered through their employer, are thrice removed from the costs of their health care: once by insurers, twice by employers, then three times by the tax exemption.

As you can see in my diagram, institutions like Medicare and private insurers deal most directly with doctors and hospitals, setting coverage and prices. However, these institutions do not have to bear the full cost of these prices, as they are subsidized by tax dollars. Private insurers are further insulated from the market in that they mainly deal with employers, not individual policy holders. As such, a bad decision by a private insurer is not felt by their customer, the employer, but rather by the employee. This is a system ripe for abuse and inflation.

Overall, costs are shifted to the people with the least amount of decision making power, i.e. taxpayers, employees, and individual policy holders. Taxpayers and employees have almost no say in their health insurance choices, and because individual policy holders are such a small group, they are at the mercy of the larger market.

So now you see why it is a misnomer to classify our health insurance system as a "free market," since only 10% of Americans participate in anything that could even come close to being called a free market, as they are the only group who even knows how much their insurance really costs. The rest of the market is the result of a series of subsidies that create a system wherein people with money decide how much to pay other people with money, and the rest of us have to cough up the cash to fund these decisions.

Now, obviously Medicare is not the only problem. The other major problem is the tax exemption employers get when they offer insurance. This encourages the arcane practice of employer based health insurance, which through it's separation from supplier and consumer allows more inflation in this most critical of markets. But Medicare is still part of the problem, and should be reformed before any expansion of government health insurance.

Tuesday, March 16, 2010

Trip to DC

Took some pictures

It was raining.

Rocket ship

Thursday, March 11, 2010

The Best Argument I've Heard For France

It turns out, per hour worked, France produces slightly more than the US.

France has $36,500 GDP/Capita and works 1,453 hours per year. This equates to a GDP/Capita/Hour of $25.10. Americans, on the other hand, have $44,150 GDP/Capita but work 1,792 hours per year. Thus Americans only achieve $24.60 of GDP/Capita/Hour.

They beat us by $0.50 per hour. Not bad, France, not bad.

Fix Medicare First

As the health care battle rages on, we take time to look back at the last major federal health care plan, the $600 billion-a-year elephant in the room: Medicare. Why should we look at Medicare you ask? Because Medicare, you may be intersted to know, was broken before it even started, as is clear in this interview with Joe Califano, the major decision maker of LBJ's 1965 Medicare initiative:

Mr. CALIFANO: By late '67, the budget data was just stunning. I mean 1968, we knew that system should be changed. We asked Congress for authority to change it.

JOFFE-WALT: But you just created it.

Mr. CALIFANO: I know it. But we saw what was happening with costs so fast. So fast.

KESTENBAUM: But they couldn't change it. Doctors now like the system. They were getting paid for work they'd previously done for free. And that was that. This system, with all its problems, stayed in place for almost 30 years. Meanwhile, medicine got more expensive.

The fee-for-service model that Medicare cemented into practice drove costs up so fast that within 2 years even President Johnson exclaimed that they needed to rework the payment system. They never did.

There have been some band-aid solutions proposed here and there, but despite its fundamental flaws, most of the original Medicare model is still in place. It is still causing medical costs to skyrocket, and the cost of Medicare itself doubles every four years.

So to all you would-be health care reformers, before you go mucking with the rest of the system, how about you fix Medicare first.

Wednesday, March 10, 2010

Why Economic Stimulus is Pointless

And how minimum wage laws do more harm than good. Also, why Paul Krugman is an idiot. From 'Underconsumption is not the problem':

The problem in our economy is not that we are “producing too many goods,” or that “people cannot buy back what is produced” because they are not paid enough, or that government has not flooded the economy with enough new money. No, the problem is that much of the structure of production has been geared toward generating projects that cannot be sustained.

The only way that the economy truly can recover is for us to permit these malinvestments either to be liquidated or be directed toward other, sustainable lines of production. Instead, the government tries to throw new money at us and claim that we just are not spending enough.

That’s a prescription for disaster.
Keynesians would have you believe that the problem with our economy is that there are too many goods and not enough buyers, and that with a large enough stimulus we could take up this economic slack, and kickstart the economy back to life.

The problem is that economic slack, or 'underconsumption,' does not cause recessions, but is rather a symptom of a malinvested economy. The problem is not that people are not buying the fruits of production, but rather that production is making things people don't want.

By 'stimulating' the economy, we merely put off necessary shifts in production. We do not allow unproductive firms to fail and be liquidated, and we do not allow successful firms to use that excess capital to rise up.

Economic recessions are a sign of changing times. We can fight against them, but doing so is as useful as trying to stop the tide from coming in. Instead, we must learn to flow with recessions, to allow capital to move from one industry to another, freely and quickly, so that we can reorganize our economy quicker, and get back to business faster.

How to Build a Better Teacher

No Child Left Behind was put into place as a means to measure student performance, and by extention, teacher performance. Many have claimed that No Child Left Behind was a failure, in that it only identifies problem areas, but does nothing to fix them. They are right, but problem identification can also be valuable.

When researchers ran the numbers in dozens of different studies, every factor under a school’s control produced just a tiny impact, except for one: which teacher the student had been assigned to. Some teachers could regularly lift their students’ test scores above the average for children of the same race, class and ability level. Others’ students left with below-average results year after year. William Sanders, a statistician studying Tennessee teachers with a colleague, found that a student with a weak teacher for three straight years would score, on average, 50 percentile points behind a similar student with a strong teacher for those years. Teachers working in the same building, teaching the same grade, produced very different outcomes. And the gaps were huge. Eric Hanushek, a Stanford economist, found that while the top 5 percent of teachers were able to impart a year and a half’s worth of learning to students in one school year, as judged by standardized tests, the weakest 5 percent advanced their students only half a year of material each year.

Identifying weak and strong teachers is a great, but hardly solves the problem. The issue facing educators now is: what makes strong teachers good, and how can we teach these skills to the weaker teachers?

When Doug Lemov conducted his own search for those magical ingredients, he noticed something about most successful teachers that he hadn’t expected to find: what looked like natural-born genius was often deliberate technique in disguise. “Stand still when you’re giving directions,” a teacher at a Boston school told him. In other words, don’t do two things at once. Lemov tried it, and suddenly, he had to ask students to take out their homework only once.

The mechanics of teaching are woefully underrepresented in teaching curricula. Concrete ideas for dealing with common classroom issues are often left to the individual teacher to devise, leaving many first year teachers completely unprepared.

However, there is hope. The mechanics of teaching are not innate, non-transferable characteristics, but rather can be learned like any other skill. Take one highly-skilled teacher for example.

The clip opens at the start of class, which Zimmerli was teaching for the first time, with children — fifth graders, all of them black, mostly boys — looking everywhere but at the board. One is playing with a pair of headphones; another is slowly paging through a giant three-ring binder. Zimmerli stands at the front of the class in a neat tie. “O.K., guys, before I get started today, here’s what I need from you,” he says. “I need that piece of paper turned over and a pencil out.” Almost no one is following his directions, but he is undeterred. “So if there’s anything else on your desk right now, please put that inside your desk.” He mimics what he wants the students to do with a neat underhand pitch. A few students in the front put papers away. “Just like you’re doing, thank you very much,” Zimmerli says, pointing to one of them. Another desk emerges neat; Zimmerli targets it. “Thank you, sir.” “I appreciate it,” he says, pointing to another. By the time he points to one last student — “Nice . . . nice” — the headphones are gone, the binder has clicked shut and everyone is paying attention.

This teacher settled and prepared an unruly class effortlessly, using very basic techniques, like being direct and specific, narrating the positive ('Thank you,' 'Nice'), and remaining calm and patient. These parts of the Taxonomy of Teaching are being researched by Doug Lemov and Uncommon Schools, as well as others.

We can only hope this kind of clear thinking persists and has a real impact on education in America. Spread the word.

Sunday, March 7, 2010

The Lost Decade II

The Lost Decade (失われた10年 Ushinawareta Jūnen?) is the time after the Japanese American asset price bubble's collapse (崩壊, hōkai) within the Japanese American economy, which occurred gradually rather than catastrophically. It consists of the years 1991 2008 to 2000 2017.[1]

The strong economic growth of the 1980s 1990s ended abruptly at the start of the 1990s mid 2000s. In the late 1980s 1990s, early 2000s, abnormalities within the Japanese American economic system had fueled a massive wave of speculation by Japanese American and foreign companies, banks and securities companies. A combination of exceptionally high land values and exceptionally low interest rates briefly led to a position in which credit was both easily available and extremely cheap. This led to massive borrowing, the proceeds of which were invested mostly in domestic and foreign stocks and mortgage backed securities.

Recognizing that Because this bubble was unsustainable, the Finance Ministry sharply raised interest rates in late 1989 mortgage delinquencies and foreclosures skyrocketed due to sub-prime mortgage rate hikes. This abruptly terminated the bubble, leading to a massive crash in the stock market. It also led to a debt crisis; a large proportion of the debts that had been run up turned bad, which in turn led to a crisis in the banking sector, with many banks being bailed out by the government.

Michael Schuman of Time Magazine noted that banks kept injecting new funds into unprofitable "zombie firms" to keep them afloat, arguing that they were too big to fail. However, most of these companies were too debt-ridden to do much more than survive on further cuts, which led to an economist describing Japan America as a "loser's paradise," replete with bank bonuses. Schuman states that Japan's America’s economy did not begin to recover until this practice had ended. [2]

Eventually, many became unsustainable, and a wave of consolidation took place, resulting in only four national banks in Japan America. Critically for the long-term economic situation, it meant many Japanese American firms were burdened with massive debts, affecting their ability for capital investment. It also meant credit became very difficult to obtain, due to the beleaguered situation of the banks; even now the official interest rate is at 0% and has been for several years, and despite this credit is still difficult to obtain[citation needed].

This led to the phenomenon known as the "lost decade", when economic expansion came to a total halt in Japan during the 1990s. The impact on everyday life was muted, however. Unemployment ran rather high, but not at crisis levels. This has combined with the traditional Japanese emphasis on frugality and saving (saving money is a cultural habit in Japan) to produce a quite limited impact on the average Japanese family, which continues much as it did in the period of the miracle.

On February 9, 2009, in warning of the dire consequences facing the United States economy after its housing bubble, U.S. President Barack Obama cited the "lost decade" as a prospect the American economy faced. [5]

-Lost Decade (Japan)
From Wikipedia, the free encyclopedia

Japan went through a nearly identical asset bubble, and it's government reacted with bailouts and extremely low central bank interest rates, just like America's government. With frugality and savings, Japan managed to get through it in ten years. American's are not notorious savers of money, as we are the world's biggest debtor nation, so it will probably take us longer.

Friday, March 5, 2010

Can't Wait For This

LIFE, from the BBC (the same folks who brought you the incredible Planet Earth series) makes its American premier on March 21st on the Discovery Channel.

Thursday, March 4, 2010

The Road to Hell is Paved with Unintended Consequences

Even with the best of intentions, there are always unintended consequences.

After the Jan. 12 quake, which killed as many as 300,000 people, the world launched a massive relief effort to bring food, water, medicine and other supplies to needy Haitians. The U.S. alone has spent more than $665 million, official figures show.

But only a tiny fraction of that money is being spent in Haiti, buying goods from local businesses. Worse, the aid is having the unintended consequence of making life harder for many businesses here, because of competition from free goods brought in by relief agencies. The damage to Haitian companies is making it harder for them to get back on their feet and create the jobs the country needs for a lasting recovery. …

“I have fewer customers now because they are handing out free food down the street,” says the 52-year-old [food vendor], pointing to the nearby Champs de Mars plaza where aid organizations regularly hand out food to tens of thousands of people camped there in tents.

Obviously the people of Haiti need help after the devastation of a natural disaster of this scale, and the hundreds of millions of dollars coming into the country are a positive, but how might the lessons learned there apply here in America?

[WSJ via Freakonomics]

Not Enough Money

Federal tax receipts for 2010 are estimated $2.381 trillion. Obama's budget for 2010 wants to spend $3.55 trillion (plus another $137 billion for the wars). That leaves us $1.3 trillion dollars in the hole.

You read that correctly. One third of our federal government's expenditures this year will be paid for by...

If that wasn't bad enough, we are running a hefty trade deficit. In 2009, we exported $1.553 trillion worth of goods and services. In the same year, we imported $1.934 trillion. That means last year a whopping $380.7 billion left our country.

Taken together, that puts us $1.687 trillion in the hole FOR A SINGLE YEAR. People, that is BAD.

And it's only going to get worse unless we change course NOW.

Wednesday, March 3, 2010

Humans Love Charity

For decades, economists have thought that humans are self-interested to the detriment of their fellow man. New scientific findings about the brain call that assumption into question.

Specifically, the team found that the reward centers in the human brain respond more strongly when a poor person receives a financial reward than when a rich person does. The surprising thing? This activity pattern holds true even if the brain being looked at is in the rich person's head, rather than the poor person's.

In the experiment, half the participants were given $50 at the beginning of the study, and half were given nothing.

"People who started out poor had a stronger brain reaction to things that gave them money, and essentially no reaction to money going to another person," Camerer says. "By itself, that wasn't too surprising."

What was surprising was the other side of the coin. "In the experiment, people who started out rich had a stronger reaction to other people getting money than to themselves getting money," Camerer explains. "In other words, their brains liked it when others got money more than they liked it when they themselves got money."

"We now know that these areas are not just self-interested," adds O'Doherty. "They don't exclusively respond to the rewards that one gets as an individual, but also respond to the prospect of other individuals obtaining a reward."

So what does this mean? It means humans are naturally predisposed to be charitable. We are evolutionarily designed to give to the poor. It also means we do not need to be forced to help the less fortunate; we are, quite literally, happy to do it.

This, O'Doherty notes, is somewhat contrary to the prevailing views about human nature. "As a psychologist and cognitive neuroscientist who works on reward and motivation, I very much view the brain as a device designed to maximize one's own self interest," says O'Doherty. "The fact that these basic brain structures appear to be so readily modulated in response to rewards obtained by others highlights the idea that even the basic reward structures in the human brain are not purely self-oriented."

Humans love charity - what can I say? It's science.

[Caltech via Freakonomics]

Tuesday, March 2, 2010

The Constitution is Dead

Every person elected as President of the United States must recite the following oath.

"I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."

Every president since FDR has utterly failed to uphold this oath.

Upholding the Constitution's sharp limits on government was once a sacred duty for the men who worked in the oval office, even if that meant making unpopular decisions.

They knew that limiting the scope of the federal government was crucial to the continuation of the American experiment. They knew that turning the federal government into a giant money pool would ultimately destroy the freedoms our forefathers had fought so hard for. They knew that, sometimes, they would have to make the hard choices, even if it meant they would be ostracized.

That is why they took that oath.

President Franklin Pierce’s 1854 veto of a measure to help the mentally ill read, “I cannot find any authority in the Constitution for public charity. [To approve the measure] would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”

One cannot even imagine a president today vetoing a reading program for the mentally ill. But that is exactly what presidents of the past did, on a regular basis. Our government, by design, was never meant to be a public charity. But that is exactly what it has become.

On the issue of using federal funds to build up infrastructure, something similar to Obama's recent Stimulus Program, President James Madison had this to say:

“Having considered the bill this day presented to me . . . which sets apart and pledges funds ‘for constructing roads and canals, and improving the navigation of water courses, in order to facilitate, promote, and give security to internal commerce among the several States, and to render more easy and less expensive the means and provisions for the common defense,’ I am constrained by the insuperable difficulty I feel in reconciling the bill with the Constitution. . . .”

Madison could find no provision in the Constitution allowing federal infrastructure projects precisely because no provision ever existed. The federal government, as the founders envisioned, was never intended to take on the responsibility of building roadways or transport. In their minds, these were best left to the states.

The definition for what is allowable under our constitution has shifted so much in the last 100 years that today's federal government would be unrecognizable to presidents of the past.

Today, every congressman goes to Washington with his or her hand out, trying desperately to funnel as much money as possible into their districts. This comes in the form of road projects, bridges, government office buildings, financial assistance, tax breaks, etc.

This system has shifted the focus of our lawmakers from good governance to begging. They beg for campaign contributions so that they can go to Washington, D.C. to beg for money to pay back their campaign contributors. Then they must beg for more to keep their constituents happy, so that they can win another election and beg for more. This cycle is destroying our nation. It is obvious from our ballooning federal debt. And We always want more. But we never want to pay for it.

This is where principled men and women are supposed to stand up and shout "No!" No to stimulus spending! No to health care spending! No to education spending! No to welfare spending!

We want all these things, of course. We think these things will end our reliance on our crappy jobs, or on our crappy economy, we think these things will set us free, free to do the things we really want to do.

But what many do not realize is that these things end up controlling us. Huge swathes of our economy, including millions of jobs, live or die depending on how much our government wants to spend on a particular project.

Our spending through Medicare and on health insurance tax cuts is driving health care prices through the roof, making health care unaffordable to anyone who is not receiving federal benefits.

Our spending on education has centralized control of tens of thousands of schools, millions of teachers, and tens of millions of students into the hands of a few people in Washington, D.C.

Our welfare spending, which we say helps people without jobs, takes money out of the economy, money that could have been used to create jobs for the very people we claim to be helping.

Just Say No

It is time to say "No." If you want special interests out of Washington, remove what is bringing them there: the money. If you want to cut spending and reduce the deficit, you have to remove money. If you want to bring politics back to the state and local level, where you actually have a voice, then you need to take back the money. But it begins by saying "No."

The transition will not be an easy one, but when have Americans ever shied away from a challenge? Living under a paternalistic government is easy, but it quickly builds dependence. And once you are dependent, you are no longer free. We claim we want freedom, but we need the government constantly. We need the benefits it gives us. We have stopped providing for ourselves. Instead we look up to the government, with our hands out. We have given our freedom away, in exchange for convenience.

America was not meant to have a government that cares for you, that picks you up when you skin your knee, that makes you sandwich when you get hungry. Americans are supposed to be brave. We are supposed to take what life gives us, good or bad, and thrive.

America was meant to be the land of opportunity, the land of freedom, the land where you did what you want, and took responsibility for yourself. That is what the founders had in mind when they penned the Constitution 224 years ago. The government was there to protect your freedom to follow your dreams, and little more.

America was not supposed to be easy. It was supposed to be free. We have strayed so far from that ideal that I do not know if we can ever find our way back. But I will try, because I know what must be done. I know what must be done to revive the American spirit, to get back to the ideals upon which this country was founded, to get back the ideals that made this country great.

It starts by saying "No."

Monday, March 1, 2010

Write-ins Only, Please

What do you guys think about a write-in only ballot?

In the past, poll taxes and tests have been used to weed out the more ignorant/ethnic citizens from voting. We obviously don't want to do that, but it would be nice if voters were more informed, and people who were totally ignorant of the candidates and issues just stayed home.

Say candidates must register with the election board for consideration, but once registered that is all they have to do to qualify. After that, they just have to get their name out to as many people as possible.

This would eliminate the wholly ignorant voters without stopping people from voting. Only votes from people who actually know candidate names would count, without confronting the problem of denying suffrage to some people.

It might also elminate the endless R-D duopoly by allowing anyone and everyone an equal footing on the ballot, instead of just having the top 2 candidates listed.

This way, a candidate who might be hated by R's and D's would have a better chance.

Also, it would reduce the negative influence of primaries, wherein strongly partisan candidates are able to play to their base to get their party's nomination. If party 'nomination' became nothing more than an endorsement, perhaps we might see a different class of candidates (or, if we're lucky, a different class of parties).

I'm just thinking out loud hear. Does anyone see any serious potential drawbacks to this plan?