As I ponder the big question of how to improve the sorry state of education in the State of Washington, my mind conjures up images of the familiar ancient story about five blind men and an elephant. Every person has an opinion about what the problems are, and how to solve them. If you are an educator, you get one version of the problem and proposed solutions. Administrators have their own view, so do the superintendents and the school board members. But all the people above are part of the system. Their view often reflects the immediate problems they see in connection with their jobs. What about the “customer”? We rarely read or hear about the people who are paying for the education that their kids are getting, namely, the taxpayer. In most cases, this person also doubles as the parent of a public school kid. I am a long standing tax payer with hundreds of hours of volunteer hours in public schools, and I have a few views of my own. As a customer of a system that spends $7500 per child on K-12 education (which, by the way, is higher than the per capita GDP of about 65% of this world’s nations), in this election year, I want my voice to be heard too. So, here goes.
As a customer, I want the schools to turn out quality graduates. What I mean by quality is that the graduates meet all the skill and knowledge requirements expected out of a world class graduate. One measure of the quality of graduates, at least in case of those who go on to college, is remediation rates. The goal, of course, is zero remediation rates. Another measure of quality is for graduates to enter a trade or occupation of their choice with very little on-the-job training. Unfortunately, this is not the case today. Remediation rates in our community colleges, especially in the gatekeeper skills like math, are running over 50%. Even our most selective college, University of Washington, has over 10% remediation rate, and the math, science and engineering faculty have come out with an open letter saying they have seen a decline in core math skills. The WASL scores bear out an even sadder fact – 65% of our graduates cannot pass an 8th grade level science test either. This is not what I expect out of a quality organization that charges the taxpayer $7500 per student.
Quality of graduates is a direct measure of how well a school system does. There are some indirect measures, ones that lead up to the final goal of turning out quality graduates. These are by no means new - they have been talked about for decades. But I feel, as a customer, it is my job to keep repeating the message until action is taken to remedy the defects in the system. After researching what works worldwide, I have discounted the familiar arguments about more money and smaller class sizes. There are many more zero cost (or, sometimes, cost saving) alternatives we can explore before we blow more money on something that is not working well. But good teachers DO make a difference, so do well designed curricula. So I have decided to focus on these three problem areas – Quality graduates, Good Teachers, Good Curricula. Below each, I have listed several possible solutions, with my take on what the cost would be – both monetary and political.
Problem #1: How to increase the quality of our K-12 graduates
o Solution: Increase the content and rigor of state standards for every subject matter at every grade level, starting with math and science. Today's standards for math, even the revised ones, trail the world class by a year or two. Since math is the language of science, the science standards and performance suffer accordingly. The standards should be made devoid of pedagogical methods, and focused on performance expected out of students. This is the job of OSPI, and they have failed miserably in their primary mission. The legislature must drive OSPI to make Washington standards the unquestioned leader in the world. The opponents of this have been, and will be, the entire establishment, because they are afraid they won't be able to deliver. This is nonsense, because setting standards should not have anything to do with whether we can deliver, and everything to do with setting world class expectations of our graduates. This is a low investment, high return area. The legislature has already done some expectation setting to OSPI on this, but OSPI has been an unwilling participant so far.
o Solution: Measure our graduates with the same ruler as the rest of the nation. WASL test is a custom made test that only OSPI loves and understands. It has wasted over a billion dollars, while providing little information to teachers on how to improve their instruction, and students on how to improve their learning. Lower grade WASL must be replaced with a nationally normed and standardized test such as SAT10 (Stanford Achievement Test, v.10) and the high school exit exams replaced with ACT. The overall cost may be a wash, compared to the cost of administering the WASL. But the students and teachers will gain immensely because of the feedback.
o Solution: Hold schools accountable for competency by raising the bar at every grade level, and do away with social promotions. Social promotions are a product of the self esteem movement which has permeated all aspects of our teaching establishment. But it has taken all accountability away from students, parents, and teachers. If students do not meet minimum grade level performance requirements, they should spend time in summer school until they do. If not, they should repeat the grade, since they were probably not prepared to take it anyway. This will take some investment, and political will to implement, but will pay off handsomely in high school and college, when students actually come in prepared to take higher level classes.
o Solution: Fund full day kindergarten and head start. This will make sure that both low income and high income kids have the same baseline when they enter first grade. Study after study has shown that head start funding and prison funding are inversely correlated. With the US having the highest incarceration rate, at over $25,000 per annum per inmate, we can spend a fraction of that on headstart and avoid most of it. The return justifies the investment.
o Solution: Cut back on big sports expenditures, and fund intellectual curricular and co-curricular activities in math, science, geography, spelling, chess, and lego robotics. Our schools, especially at the high school level, have become like sports camps. Curricular achievement often takes a back seat to sports achievement. There is nothing wrong with pursuing sports, as many of us were involved in them ourselves. But having the two funded from the same bucket of money tends to confound the funding issues. I propose dividing educational districts into two categories - academic districts and athletic districts. This allows the funding to be distributed according to availability, and have the schools focus on what they should - academics. This could actually be a money saver, since it will make obvious the eye popping amount of money we spend on athletics in the name of academics.
Problem #2 - How to get good teachers into classrooms:
o Solution: Pass an emergency teacher certification bill that grants full teaching certificates to retired and unemployed engineers and technicians. This is very low cost, high return area, but you will have to fight the teacher's unions to get it through. But it takes advantage of a large number of retired professionals or those being laid off, and are eager to teach.
o Solution: Mandate that the schools of education raise their admissions standards to at least those earning a basic arts/science degree, increase credit hours required to graduate, increase the credit hours and rigor of advanced math courses for teachers, and tighten the graduation criteria. In the short term, it will decrease the number of graduating teachers, but if you act on the previous solution first, it should compensate for the shortfall. Again, this is a low cost, high return proposal, but you will have to fight the bureaucracy in colleges.
o Solution: Mandate that every teacher get evaluated on the increase in standardized test scores in their classes, and on a 360 degree evaluation by students/parents, peers, and the principal. The good ones should get higher raises, the really bad ones put on probation. If no improvement is seen after probationary period, they need to be let go. Tenure has blurred the difference between stellar performers and poor performers, and has provided a reason for good teachers to leave the profession. Without a periodic review system of review, over time, the entire system degenerates into mediocrity. As we speak, Michelle Rhee is overhauling the Washington DC school system, partly by challenging the teachers to step up or leave. I think this change is one of the most significant we can implement. This is a medium cost area (takes yearly testing to track progress), but can be automated with technology. This is how all professionals get evaluated in most of the world. I expect strong resistance from the unions, but they will be fighting a losing battle in the face of increasing job losses in the economy. This is also a low dollar item, since you are giving the total money you would have normally given for salary increases, and distributing it by performance.
Problem #3 - How to get good curricula into schools
o Solution: Seek out what works worldwide, and implement it in schools. The public schools in the US in general, and in the state of Washington in particular, have been victims of faddish trends in education. Without going into gory details, my research has uncovered that a large portion of poor student performance can be traced to poor curricular choice based on faddish philosophies promoted by the schools of education. Nowhere is this more apparent than in the area of math education. The K-8 public school math curricula based on these philosophies has dumbed down an entire generation of school kids. Increasing expectations is only part of the story. Without rigorous teaching materials, the goal of turning out world class graduates will still be a dream. My recommendation is to follow the list published by What Works Clearinghouse, and implement only those that have proven to produce results (as in higher test scores). Math keeps coming up as a subject that needs particular attention. Saxon Math and Singapore Math have been proven to work in the K-8 curricula, and I feel they are a great choice for any school district as primary math curricula.
Tuesday, October 28, 2008
Thursday, October 23, 2008
The Trouble With Ideology And The Dawn Of The Age Of Reason
There have been countless articles in the papers and op-ed pieces on radio and TV recently on why the country got into such an economic mess almost overnight. Some of them have been suggesting that the free market ideology, or the lax regulation policies on banks and mortgage lenders got us into this mess. Some other articles on educational ideologies that believe in constructivist learning suggest that they could be part of the reason why our schools turn out such poor performers. Then there is the all consuming presidential race which keeps bringing racial and religious ideologies into the forefront, whether they are relevant or not. That got me to think about the fundamental concept of ideology. If a certain ideologies got us into this mess that we are in, then is the solution an opposing ideology? What is the guarantee that an opposing ideology will not get us into another mess sometime later? Could the problem be the fact that we cling to various ideologies to save us at different situations, without really questioning the validity of believing in any ideology at all?
I am of the opinion that all ideologies were conceived to simplify life. Ideologies provide simple explanations and prescribe relatively easy to understand prescriptions in certain situations. Religious ideologies belonging to various religions lay down how life should be led, and the consequences of good or bad deeds in this world or an afterlife. Various political ideologies favor control of the society by a certain class of people, assuming that what is good for the ruling class is good for humanity. But to believe in an ideology, an individual must see value in what it has to offer. It could be positive value in terms of direct rewards for following its prescribed practices, or lack of punishment for doing so. The net result is that if the ideology fails to show value, it fails to appeal to the individual. So, what are the characteristics of a successful ideology which shows value? I have come up with some ideas below:
1. First and foremost, a successful ideology must be simple to understand. Even a flawed ideology sometimes succeeds because it appears to be easy to understand. For example, when Communism was first introduced in Europe, it seemed so simple that it appealed to almost half the population of this planet, and caused the masses to take up arms and overthrow their governments. The flaw in the ideology is painfully obvious now. At best, it took away all the incentives for one to excel, and at worst, it spawned party dictatorships or individual dictatorships because the one party system made it too easy to do so. Even though the success of communism was fleeting, in historical terms, its impact, good or bad, has been so powerful that it will be hard to ignore.
2. Second, a successful ideology provides some reasonable and immediate solutions to a pressing problem . For example, when Buddhism was first introduced in India in 6th century BC, it provided a way out for millions of masses who found the existing religion and the social structure it created to be too oppressive.
3. Third, a successful ideology is self-reinforcing. Its followers create a system that rewards the believers and punishes the non-believers, therefore perpetuating its existence. This can be said about any religion currently in existence, but it can also be extended to social and political beliefs. Ideology, by definition, creates exclusive cliques or groups. The followers of an ideology may think this is great, because of the rewards they receive for being part of a larger group.
So, what then is the trouble with the concept of ideology? Other than some obvious ones that failed, we should be fine with the remaining ones, right?
I beg to disagree. Let me attempt to explain:
The greatest strength of ideologies, their simplicity, is also their greatest weakness. Let us take the example of Communism. The earliest treatise, written by Carl Marx, was during the early stages of the industrial revolution. Big money built huge industrial infrastructure with one sole end in mind – maximum output. Working conditions were abysmal, and the wages were just enough for subsistence living in slums. All the profits went to the capitalists, who hired and fired employees at will , at a time when there was no safety net. What the laborer saw was that the bosses hardly broke a sweat and lived a plush life, while they had to constantly toil without even the guarantee of being able to make the same subsistence wages the next day. The workers were not literate, and were not capable of understanding a deep treatise on economic theory of supply and demand. Communism was just the tonic for many of them. Revolution provided a vent for their pent up rage, and the idea of everyone being equal appealed to them. Heck, everyone they knew was in the same boat. It was not hard to imagine life being a little better for everyone.
But it turned out everything was not hunky dory after the first revolution. Russia quickly industrialized after its bloody revolution, only to find Stalin rise to power and establish a long and painful dictatorship until his demise. China followed suit with Mao Zedong. Other Asian and Latin American countries quickly followed. But then, a funny thing happened. The same ideology that led the rise of these nations also threatened their very solvency. Since there was no incentive to work hard and excel, the entire economy eventually became filled with workers who got by with the bare minimum effort. “Everyone being equal” turned into “everyone being equally mediocre”. This, combined with the zeal of the leaders to build big militaries, drained their already weak economies. When the only choice left was to face bankruptcy, the leadership of Russia invented “glasnost” , a thinly veiled attempt at allowing freedom of expression. This was quickly followed by the collapse of the Soviet empire itself. China was on a different path, but came to the same conclusion after the demise of Mao. Still ruling with an iron fist, the leadership allowed private enterprises, and opened its markets. So, the ideology where “everyone was created equal” did not quite hold water. The conditions that made it a sensible ideology did not exist any more. The ideology had helped create an entirely new condition, wherein a completely opposite ideology started making more sense.
So, in short, the simplicity that successful ideologies deliver also is their greatest liability. The simplicity is analogous to that of a stopped clock. It is exactly right twice in a 24 hour period. But it keeps deviating until it is exactly opposite of the correct time. I assert that every ideology suffers from the same limitation. Why? Because simplicity lulls people to believe in certain simple axioms, regardless of the situation. The world has become a lot more complex and intertwined in the 21st century for any ideology to be correct for everyone 100% of the time. Believers of ideologies make their own lives simpler by shutting down the brain circuits that would have otherwise be open to examining new situations in their own light. I have seen the quip “my mind is made up, don’t confuse me with facts”, which is probably a jab at such mentality. And yet, the world needs more and more people who can look at each situation intelligently, and draw their own conclusions. Ideologies create extreme conditions that a counter ideology will destroy, thereby starting the whole cycle all over. The fact that ideologies help create extreme conditions are illustrated even more clearly by the economic chaos in the US today. We have had the opposite ideology to communism operating in this country since its inception, at least in the private sector. It has been forty years since we landed a man on the moon, which was a symbolic pinnacle of capitalist achievement. And yet, today the wealth disparity in the US is the highest in 40 years, so is poverty rate, illiteracy rate, high school dropout rate, unemployment rate, foreclosure rate, bankruptcy rate…the list goes on and on. Does this mean the citizens of the US need a counter ideology, something of the likes of Socialism?
Hardly. I assert that every society deserves to be freed from the endless cycles of ideologies and counter ideologies butting heads every so many decades. The only way to do that is to wean the public from the idea that there is a simple ideological solution to everything. Problems today are complex. To be solved, they need all the knowledge, and processing ability that every individual can bring to the table. Reason must replace blind belief. Every problem must be identified early in its cycle, and must deserve the best people we can throw at it. But it has to start with creating minds that are predisposed to reason, rather than belief in an ideology. Hence my oxymoronic statement – believe that one should not believe.
The 21st century will create many new winners and losers. My hope is that more enlightened societies will see the wisdom behind not following an ideology blindly. Instead, they will focus on creating more objective thinkers. They will have mastered all the relevant facts and skills that humankind has learned so far, and use that knowledge to build a better tomorrow. That will be the dawn of the age of reason.
I am of the opinion that all ideologies were conceived to simplify life. Ideologies provide simple explanations and prescribe relatively easy to understand prescriptions in certain situations. Religious ideologies belonging to various religions lay down how life should be led, and the consequences of good or bad deeds in this world or an afterlife. Various political ideologies favor control of the society by a certain class of people, assuming that what is good for the ruling class is good for humanity. But to believe in an ideology, an individual must see value in what it has to offer. It could be positive value in terms of direct rewards for following its prescribed practices, or lack of punishment for doing so. The net result is that if the ideology fails to show value, it fails to appeal to the individual. So, what are the characteristics of a successful ideology which shows value? I have come up with some ideas below:
1. First and foremost, a successful ideology must be simple to understand. Even a flawed ideology sometimes succeeds because it appears to be easy to understand. For example, when Communism was first introduced in Europe, it seemed so simple that it appealed to almost half the population of this planet, and caused the masses to take up arms and overthrow their governments. The flaw in the ideology is painfully obvious now. At best, it took away all the incentives for one to excel, and at worst, it spawned party dictatorships or individual dictatorships because the one party system made it too easy to do so. Even though the success of communism was fleeting, in historical terms, its impact, good or bad, has been so powerful that it will be hard to ignore.
2. Second, a successful ideology provides some reasonable and immediate solutions to a pressing problem . For example, when Buddhism was first introduced in India in 6th century BC, it provided a way out for millions of masses who found the existing religion and the social structure it created to be too oppressive.
3. Third, a successful ideology is self-reinforcing. Its followers create a system that rewards the believers and punishes the non-believers, therefore perpetuating its existence. This can be said about any religion currently in existence, but it can also be extended to social and political beliefs. Ideology, by definition, creates exclusive cliques or groups. The followers of an ideology may think this is great, because of the rewards they receive for being part of a larger group.
So, what then is the trouble with the concept of ideology? Other than some obvious ones that failed, we should be fine with the remaining ones, right?
I beg to disagree. Let me attempt to explain:
The greatest strength of ideologies, their simplicity, is also their greatest weakness. Let us take the example of Communism. The earliest treatise, written by Carl Marx, was during the early stages of the industrial revolution. Big money built huge industrial infrastructure with one sole end in mind – maximum output. Working conditions were abysmal, and the wages were just enough for subsistence living in slums. All the profits went to the capitalists, who hired and fired employees at will , at a time when there was no safety net. What the laborer saw was that the bosses hardly broke a sweat and lived a plush life, while they had to constantly toil without even the guarantee of being able to make the same subsistence wages the next day. The workers were not literate, and were not capable of understanding a deep treatise on economic theory of supply and demand. Communism was just the tonic for many of them. Revolution provided a vent for their pent up rage, and the idea of everyone being equal appealed to them. Heck, everyone they knew was in the same boat. It was not hard to imagine life being a little better for everyone.
But it turned out everything was not hunky dory after the first revolution. Russia quickly industrialized after its bloody revolution, only to find Stalin rise to power and establish a long and painful dictatorship until his demise. China followed suit with Mao Zedong. Other Asian and Latin American countries quickly followed. But then, a funny thing happened. The same ideology that led the rise of these nations also threatened their very solvency. Since there was no incentive to work hard and excel, the entire economy eventually became filled with workers who got by with the bare minimum effort. “Everyone being equal” turned into “everyone being equally mediocre”. This, combined with the zeal of the leaders to build big militaries, drained their already weak economies. When the only choice left was to face bankruptcy, the leadership of Russia invented “glasnost” , a thinly veiled attempt at allowing freedom of expression. This was quickly followed by the collapse of the Soviet empire itself. China was on a different path, but came to the same conclusion after the demise of Mao. Still ruling with an iron fist, the leadership allowed private enterprises, and opened its markets. So, the ideology where “everyone was created equal” did not quite hold water. The conditions that made it a sensible ideology did not exist any more. The ideology had helped create an entirely new condition, wherein a completely opposite ideology started making more sense.
So, in short, the simplicity that successful ideologies deliver also is their greatest liability. The simplicity is analogous to that of a stopped clock. It is exactly right twice in a 24 hour period. But it keeps deviating until it is exactly opposite of the correct time. I assert that every ideology suffers from the same limitation. Why? Because simplicity lulls people to believe in certain simple axioms, regardless of the situation. The world has become a lot more complex and intertwined in the 21st century for any ideology to be correct for everyone 100% of the time. Believers of ideologies make their own lives simpler by shutting down the brain circuits that would have otherwise be open to examining new situations in their own light. I have seen the quip “my mind is made up, don’t confuse me with facts”, which is probably a jab at such mentality. And yet, the world needs more and more people who can look at each situation intelligently, and draw their own conclusions. Ideologies create extreme conditions that a counter ideology will destroy, thereby starting the whole cycle all over. The fact that ideologies help create extreme conditions are illustrated even more clearly by the economic chaos in the US today. We have had the opposite ideology to communism operating in this country since its inception, at least in the private sector. It has been forty years since we landed a man on the moon, which was a symbolic pinnacle of capitalist achievement. And yet, today the wealth disparity in the US is the highest in 40 years, so is poverty rate, illiteracy rate, high school dropout rate, unemployment rate, foreclosure rate, bankruptcy rate…the list goes on and on. Does this mean the citizens of the US need a counter ideology, something of the likes of Socialism?
Hardly. I assert that every society deserves to be freed from the endless cycles of ideologies and counter ideologies butting heads every so many decades. The only way to do that is to wean the public from the idea that there is a simple ideological solution to everything. Problems today are complex. To be solved, they need all the knowledge, and processing ability that every individual can bring to the table. Reason must replace blind belief. Every problem must be identified early in its cycle, and must deserve the best people we can throw at it. But it has to start with creating minds that are predisposed to reason, rather than belief in an ideology. Hence my oxymoronic statement – believe that one should not believe.
The 21st century will create many new winners and losers. My hope is that more enlightened societies will see the wisdom behind not following an ideology blindly. Instead, they will focus on creating more objective thinkers. They will have mastered all the relevant facts and skills that humankind has learned so far, and use that knowledge to build a better tomorrow. That will be the dawn of the age of reason.
Sunday, October 5, 2008
Colossal Crises Part 2 - Economics
In the last blog, I was leading up to the topic of how I think economics functions in a democracy. I am not an economist by training, but I have taken enough classes and read enough books on economics to at least understand the basics. The basic tenet that any economics text book teaches is that supply and demand are in balance at a price called the “market price”. When there are many producers of “goods” and “services”, and many buyers for these goods and services, it creates an ideal situation where producers compete for market share, and buyers get the best deals. Free and fair competitive markets ensure that goods and services are delivered at the maximum possible productivity. It The key word here is “productivity”. As producers compete, they figure out how to make more things in less time, and productivity increases with time. Higher productivity should theoretically translate into higher wages. After all, the definition of productivity is how much work gets done in a given amount of time. Let us look at how these ideals have become distorted in some areas.
Let me start with two of the key words I introduced, “goods” and “services”. “Goods” are tangible things produced by workers, often in factories. (The kind that have been disappearing from this land.) Apparently, many Asian countries have managed to produce goods at a lower price and higher quality. The American ideal of free and fair competition has been realized in other countries, which produce low cost, high quality items at a much higher productivity. So, we are used to paying the lowest price for an imported car, sometimes lower than it is sold in its home country. But why are so few car makers left here? Why are more American workers not benefiting from the largest free market for automobiles in the world? Why is Toyota today worth 20 times more than Ford and GM COMBINED? Why are Honda, Toyota, and countless other foreign automakers able to make top quality cars in this country, and provide competitive wages to their workers in American factories, when GM and Ford can not?
I could not find any simple answers, but one thing jumped out at me. Decision making in the management of large corporations were decidedly short sighted and speculative. When there was ample evidence that fuel prices would go up in the long run, Detroit was building large SUV factories to cash in on the short term demand. When oil prices jumped, Detroit got caught with large factories that were useless. Now they are asking for a $50 billion bailout from the government (read – taxpayers). Now, it is not the government’s role to tell GM or Ford to build a certain type of vehicle. But it is also true that our representatives buckled under the automobile lobby and did not enforce fuel efficiency standards despite mounting evidence of global warming, and now, increasing fuel prices.
Similarly, in the stock market of the 90’s, when Greenspan made his “irrational exuberance” speech, stocks were valued much higher than their underlying value. But nothing was done by the regulators to check the speculative options trading, or day trading. In the early 2000’s, when there was ample evidence that home prices were going up at a faster rate than wages, mortgage lenders were making sub prime loans at an ever increasing rate. Speculation started controlling the prices of homes, rather than the true underlying demand. The fundamental economic principle where demand and supply were in balance was distorted by speculation, which by definition is not true demand. It is an aberration in demand, anticipating more demand. Again, the government regulators did nothing to curb the lax lending practices.
On the other hand, “services” are not tangible. An accountant preparing your taxes, a doctor prescribing a medicine, a secretary answering phones, are all services which we cannot touch or feel. But there is a common thread between goods and services. Where services are delivered in a competitive market, there has been improvement in productivity, just as in the production of goods. However, when the competitive aspect is taken away, it becomes non ideal, and mediocrity sets in over time. The best example of non ideal conditions I could find was unions. In principle, unions make worker’s life easier by providing a single body to negotiate with management on work hours, working conditions, wages, etc. But this also means the unions are creating a monopoly over how services are delivered. A monopoly is by itself a non ideal condition for the economic principles to operate. With no competition over how services are delivered, productivity remains stagnant. Over time, the loss of productivity starts to strangle the company, and the company loses competitiveness. The unions are slowly killing the goose that lays the golden eggs, so to speak. There are many industries with non-union labor (semiconductors and software, to name a couple), and there are world leading companies still thriving in the US. The difference is that most of these successful companies have dealt with their employees in good faith, at least as much as the circumstances will allow them. I am convinced that the concept of the traditional union, invented during the industrial age, is as obsolete as buggy whips. We need a new paradigm where the distinction between management and labor blurs, and the government needs to be a champion of this change. There are plenty of examples of how this has been done in high tech companies, which evolved in the post industrial era. All that needs to be done is to copy the best practices, and implement them in areas that needs them.
I infer the following common threads from these observations:
1. The economic principles of demand and supply, free and fair markets, are fundamentally sound. Where they have been allowed to operate, these forces have produced the maximum increases in productivity, and higher wages for the workers. Conversely, where they did not exist, the result was market bubbles followed by crashes.
2. The role of the government should be to make sure that the environment within which all goods and services are made adhere to these fundamental principles.
The big question now is, how many of our elected representatives believe in and champion these ideas. I am willing to support all who show me evidence that they do. But from what I have seen, most are happy to be one of the sheep, and line up behind a few manipulative leaders who scare them into action.
Next up - The Environment
Let me start with two of the key words I introduced, “goods” and “services”. “Goods” are tangible things produced by workers, often in factories. (The kind that have been disappearing from this land.) Apparently, many Asian countries have managed to produce goods at a lower price and higher quality. The American ideal of free and fair competition has been realized in other countries, which produce low cost, high quality items at a much higher productivity. So, we are used to paying the lowest price for an imported car, sometimes lower than it is sold in its home country. But why are so few car makers left here? Why are more American workers not benefiting from the largest free market for automobiles in the world? Why is Toyota today worth 20 times more than Ford and GM COMBINED? Why are Honda, Toyota, and countless other foreign automakers able to make top quality cars in this country, and provide competitive wages to their workers in American factories, when GM and Ford can not?
I could not find any simple answers, but one thing jumped out at me. Decision making in the management of large corporations were decidedly short sighted and speculative. When there was ample evidence that fuel prices would go up in the long run, Detroit was building large SUV factories to cash in on the short term demand. When oil prices jumped, Detroit got caught with large factories that were useless. Now they are asking for a $50 billion bailout from the government (read – taxpayers). Now, it is not the government’s role to tell GM or Ford to build a certain type of vehicle. But it is also true that our representatives buckled under the automobile lobby and did not enforce fuel efficiency standards despite mounting evidence of global warming, and now, increasing fuel prices.
Similarly, in the stock market of the 90’s, when Greenspan made his “irrational exuberance” speech, stocks were valued much higher than their underlying value. But nothing was done by the regulators to check the speculative options trading, or day trading. In the early 2000’s, when there was ample evidence that home prices were going up at a faster rate than wages, mortgage lenders were making sub prime loans at an ever increasing rate. Speculation started controlling the prices of homes, rather than the true underlying demand. The fundamental economic principle where demand and supply were in balance was distorted by speculation, which by definition is not true demand. It is an aberration in demand, anticipating more demand. Again, the government regulators did nothing to curb the lax lending practices.
On the other hand, “services” are not tangible. An accountant preparing your taxes, a doctor prescribing a medicine, a secretary answering phones, are all services which we cannot touch or feel. But there is a common thread between goods and services. Where services are delivered in a competitive market, there has been improvement in productivity, just as in the production of goods. However, when the competitive aspect is taken away, it becomes non ideal, and mediocrity sets in over time. The best example of non ideal conditions I could find was unions. In principle, unions make worker’s life easier by providing a single body to negotiate with management on work hours, working conditions, wages, etc. But this also means the unions are creating a monopoly over how services are delivered. A monopoly is by itself a non ideal condition for the economic principles to operate. With no competition over how services are delivered, productivity remains stagnant. Over time, the loss of productivity starts to strangle the company, and the company loses competitiveness. The unions are slowly killing the goose that lays the golden eggs, so to speak. There are many industries with non-union labor (semiconductors and software, to name a couple), and there are world leading companies still thriving in the US. The difference is that most of these successful companies have dealt with their employees in good faith, at least as much as the circumstances will allow them. I am convinced that the concept of the traditional union, invented during the industrial age, is as obsolete as buggy whips. We need a new paradigm where the distinction between management and labor blurs, and the government needs to be a champion of this change. There are plenty of examples of how this has been done in high tech companies, which evolved in the post industrial era. All that needs to be done is to copy the best practices, and implement them in areas that needs them.
I infer the following common threads from these observations:
1. The economic principles of demand and supply, free and fair markets, are fundamentally sound. Where they have been allowed to operate, these forces have produced the maximum increases in productivity, and higher wages for the workers. Conversely, where they did not exist, the result was market bubbles followed by crashes.
2. The role of the government should be to make sure that the environment within which all goods and services are made adhere to these fundamental principles.
The big question now is, how many of our elected representatives believe in and champion these ideas. I am willing to support all who show me evidence that they do. But from what I have seen, most are happy to be one of the sheep, and line up behind a few manipulative leaders who scare them into action.
Next up - The Environment
The Unified Field Theory Of The Colossal Crises
It has been a while since I posted on this blog. In a previous blog, dated July 25, titled “Instant versus Delayed Gratification”, I had concluded with the sentence “It is going to be a long and bumpy ride....hold on tight!”
What a ride it has been. I was pinned to my computer as bank after bank, institution after institution, fell with breathtaking speed. And I am afraid it is just the beginning. Why was this happening with such rapidity all at once? Those who could not find a few million dollars to save headstart were all of a sudden begging the public to shell out $700 billion dollars to save our financial institutions. Why? How could this happen out of the blue, and catch everyone by surprise? I was struggling for answers. This prompted me to look beyond how I got started with blogging – math education in my school district. I looked into how public education is delivered to kids, how government regulates banks and brokerages, how micro and macro economics works, and finally, how democracy is supposed to work, and why we as a nation have been so ineffective in preventing such large crises. I have also been pondering if there is a common thread behind the reason for all these catastrophes. What I discovered was pretty obvious, yet hard to find these days. It is also too much material to fit on one blog, so I have split it into series of blogs.
I liken this quest to that of a Physicist who started with lessons on the theory of gravity, and along the way picked up the collective knowledge and wisdom on various forces that dictate the properties stars, planets, atoms, quarks, energy are all interrelated. Then they almost all seem to “lap dissolve” into one. This is the Physicist’s holy grail, called the “Unified Field Theory”. It remains unproven, but it has not stopped them from building giant particle accelerators to prove it.
Similarly, what started as a blog on education has now lap dissolved into economics, domestic and international politics, technology, and environment…. They all appear to be part of the same continuum. Have these crises just popped up out of nowhere? Evidence has been all over the place, sometimes for decades, that things have been seriously wrong. Yet, all the actions that were taken were ineffective in preventing the ultimate spectacular crashes – in the stock market of the late ‘90s, the 9-11 attacks of 2001, now the housing crash and the resulting credit crisis. It appears to me that the unifying force behind all these is defined by how uninformed, unskilled and apathetic we collectively are as a democracy. Let me expand on this a bit.
Democracy is neither new, nor is it a novel idea. We can brag America is the oldest democracy, but strictly speaking, it is neither. The oldest democracy in recorded history I could find was the city state of Athens, circa 100 BC. Every citizen with voting rights had the right to vote on any issue that the public considered important. It did not last very long. Democracy is a very fragile and unstable way to maintain order in any nation. But we are not a true democracy either. Even though we do not have a true democracy as the ancient Athenians had, we have a republic, started by ancient Romans, which is a close approximation. Theory goes that the elected “re”presentatives of the “public” are a close enough approximation of the real thing, because the representatives are beholden to the public that elects them. Well, like any theory, when put to practice, it becomes something else. Therein lies the rub. Whenever power concentrates in the hands of a few, other centers of power, like large corporations, unions, think tanks, religious and civic groups, government agencies, etc. try and influence their decision making. When all the time of a politician is taken up by the “sky is falling” message coming from these power centers, precious little is left to cater to the cries of the voters that got them there. When the voters do respond, their voices are often ignored. Take the banking bailout, for example. The vast majority of the emails from citizens have been against the bailout, but our leaders went ahead with it anyway! Did they act because they knew something the public did not? Like they did when “WMDs” were discovered in Bagdad? What happened to the idea of a representative being the spokesperson for the public, and not of another branch of the government? What constitutional remedy is left for a voter to have their voice heard, other than try to vote these people out of office? Only to find the new person falls victim to the same old game?
To be fair, this nation has performed better than the vast majority of the world, when it comes to creating a great place to live. The infrastructure, the universities, the business environment, and the ability to communicate freely are the envy of the world. But underneath it all, I sense there is something very insidious. I see that the public is content when they have a well paying job, a clean and secure living environment, good education for their kids, and some hope for a comfortable retirement. For several decades, these benefits have been taken for granted. They have counted on our elected reps to do what is in the public’s best interest, and maintain these benefits we enjoy. Now, one by one, these seem to be disappearing, often at a breathtaking pace, without a chance for us to respond. Is there a pattern behind each area that has gone or is going wrong? I contend there is. Read my the next blog on “Economics” for more food for thought.
What a ride it has been. I was pinned to my computer as bank after bank, institution after institution, fell with breathtaking speed. And I am afraid it is just the beginning. Why was this happening with such rapidity all at once? Those who could not find a few million dollars to save headstart were all of a sudden begging the public to shell out $700 billion dollars to save our financial institutions. Why? How could this happen out of the blue, and catch everyone by surprise? I was struggling for answers. This prompted me to look beyond how I got started with blogging – math education in my school district. I looked into how public education is delivered to kids, how government regulates banks and brokerages, how micro and macro economics works, and finally, how democracy is supposed to work, and why we as a nation have been so ineffective in preventing such large crises. I have also been pondering if there is a common thread behind the reason for all these catastrophes. What I discovered was pretty obvious, yet hard to find these days. It is also too much material to fit on one blog, so I have split it into series of blogs.
I liken this quest to that of a Physicist who started with lessons on the theory of gravity, and along the way picked up the collective knowledge and wisdom on various forces that dictate the properties stars, planets, atoms, quarks, energy are all interrelated. Then they almost all seem to “lap dissolve” into one. This is the Physicist’s holy grail, called the “Unified Field Theory”. It remains unproven, but it has not stopped them from building giant particle accelerators to prove it.
Similarly, what started as a blog on education has now lap dissolved into economics, domestic and international politics, technology, and environment…. They all appear to be part of the same continuum. Have these crises just popped up out of nowhere? Evidence has been all over the place, sometimes for decades, that things have been seriously wrong. Yet, all the actions that were taken were ineffective in preventing the ultimate spectacular crashes – in the stock market of the late ‘90s, the 9-11 attacks of 2001, now the housing crash and the resulting credit crisis. It appears to me that the unifying force behind all these is defined by how uninformed, unskilled and apathetic we collectively are as a democracy. Let me expand on this a bit.
Democracy is neither new, nor is it a novel idea. We can brag America is the oldest democracy, but strictly speaking, it is neither. The oldest democracy in recorded history I could find was the city state of Athens, circa 100 BC. Every citizen with voting rights had the right to vote on any issue that the public considered important. It did not last very long. Democracy is a very fragile and unstable way to maintain order in any nation. But we are not a true democracy either. Even though we do not have a true democracy as the ancient Athenians had, we have a republic, started by ancient Romans, which is a close approximation. Theory goes that the elected “re”presentatives of the “public” are a close enough approximation of the real thing, because the representatives are beholden to the public that elects them. Well, like any theory, when put to practice, it becomes something else. Therein lies the rub. Whenever power concentrates in the hands of a few, other centers of power, like large corporations, unions, think tanks, religious and civic groups, government agencies, etc. try and influence their decision making. When all the time of a politician is taken up by the “sky is falling” message coming from these power centers, precious little is left to cater to the cries of the voters that got them there. When the voters do respond, their voices are often ignored. Take the banking bailout, for example. The vast majority of the emails from citizens have been against the bailout, but our leaders went ahead with it anyway! Did they act because they knew something the public did not? Like they did when “WMDs” were discovered in Bagdad? What happened to the idea of a representative being the spokesperson for the public, and not of another branch of the government? What constitutional remedy is left for a voter to have their voice heard, other than try to vote these people out of office? Only to find the new person falls victim to the same old game?
To be fair, this nation has performed better than the vast majority of the world, when it comes to creating a great place to live. The infrastructure, the universities, the business environment, and the ability to communicate freely are the envy of the world. But underneath it all, I sense there is something very insidious. I see that the public is content when they have a well paying job, a clean and secure living environment, good education for their kids, and some hope for a comfortable retirement. For several decades, these benefits have been taken for granted. They have counted on our elected reps to do what is in the public’s best interest, and maintain these benefits we enjoy. Now, one by one, these seem to be disappearing, often at a breathtaking pace, without a chance for us to respond. Is there a pattern behind each area that has gone or is going wrong? I contend there is. Read my the next blog on “Economics” for more food for thought.
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