Thursday, October 31, 2013

My love affair with Excel for teaching economics is taking some knocks

For the last several years I have been using Excel as a homework tool for the math modeling part of my course.  (And I use blogging for the narrative part.)  Students answer questions, some of which require them to do algebra based on cell references, and they get immediate feedback on whether their answer is correct or not.  This is done via Excel's IF command.  I use nested IFs that are of the form:

If the cell is blank don't give any feedback.
If the cell has the right answer say it is Correct.
Otherwise say it is Incorrect.

There is conditional formatting as well.  The Correct response is in green and bold.  The Incorrect response is in red and Italic.

Then I use IF in plotting my graphs.  This allows a graph to be built up from scratch as students answer questions that pertain to the information in the graph.

These two features in conjunction, plus that Excel can be used to display text in a readable way, particularly if you fill the cells with a white background, allows the homework to be a mixture of presentation of ideas and assessment of understanding those ideas, in one coherent whole.  All of this makes sense to me and I've viewed this as far superior to what can be done with an LMS quiz tool.

Further my approach is for them to do it till they get all the questions right - no partial credit.  At the end of the last worksheet a code is generated if all questions are done correctly.  They are to copy the code and paste into a linked Google form.   In the Google form they also enter their assigned course alias as a second check, so I can identify who they are and give them credit for completing the assignment.  There is also a paragraph box so they can enter comments on the homework.  I find that particularly useful, as I can react to the comments when we go over the homework in class.

The workbook asks them to choose their alias and enter their NetId up front.  Part of this is to give individualized values to the parameters in the homework.  The other part is to use in generating the code.  Here is an example of what that looks like.  I entered netid into the cell that asks for that information.  This is for a homework on bargaining.  neti is the first four letter of the NetID. 5 is a number that indexes the alias chosen.

neti5Bargain_Submit

Now for the issues.  Here are a couple of comments from the homework due last night. 

I posted it twice, because it always says to copy and paste. However, the excel file never allows me to copy the key so I just type it in instead. The double entry just provides a peace of mind that I put it in right.

I had problems with one of the entries. It kept converting my answers to dates for some reason. 

I don't know how to troubleshoot these, as I can't replicate the problems on my machine at home. Then, yesterday, I had an eager beaver student who was already working on the homework due next week.  He was having some trouble with it in that the feedback didn't seem to be working properly for him.  After some back and forth in email I asked him to send me a copy of the file he had completed. 

I don't know how this happened, but the file had lost its xlsx extension.  Some of the feedback IF commands had lost the cell references to be used and likewise the graphs were screwed up too. 

I didn't say this above but my worksheets are password protected and the cells with the feedback are locked, so students shouldn't be able to get into them or see the formulas.  They should only see the output from those formulas.  This instability manifested in spite of the precautions I had taken. 

I don't know what I will do if problems of this sort persist.  I feel quite out on a limb, as there is no community of like-minded instructors doing similar things with Excel.  Microsoft has a page aimed at troubleshooting formulas in Excel.  It is insufficient to address my issues.  I know how to troubleshoot my own formulas as I create them.  The Microsoft page is really about that.  What I can't figure out is what happens on the student's computer to break a formula that works on mine. 

If this were all Mac versus PC issues, at least I'd have an explanation.  I think some of these problems are happening when the student uses a PC as I was helping one student outside of class and she had some of this instability on her laptop.  (I create these at home on my Sony Vaio in Windows 7, Excel 2010.)  Possibly the version of Excel matters here.  Some students may be using Excel 2013.  I have that on my new Vaio ultrabook.  Maybe I should try to complete my homework on it, to see if there are difficulties.  But doing that sort of thing is a stab in the dark. 

I will say my prayers and bow to the computer gods.  I'm not sure what else to do. 

Monday, October 28, 2013

The Kennedys - A TV Miniseries

I was eight and in fourth grade when JFK was shot.  You're supposed to remember what you were doing when you heard the news.  Unfortunately, I don't.  What I remember came earlier.  We had the album The First Family and played it fairly often.  At the time, I knew many of the joke lines.  One was about ordering lunch at the White House during some diplomatic negotiation.  They go around the table with the orders from the deli, the last being Krushchev.  He says something like, "I'll just have a little bit from everybody else's plate."  The other thing I remember is watching JFK on TV.  I don't recall anything about the substance of what he said.  But I do remember the bags under his eyes.  He aged visibly while he was President.  It seemed like the weight of the world was on his shoulders.  Maybe it was.

In my never ending search for finding TV shows in the vein of The West Wing, I stumbled onto The Kennedys in Amazon Prime.  The Wikipedia entry says it premiered in the US on the Reelz network in April 2011.  I never heard of that network before and now wonder whether it is included in our package on Dish.  It explains why I missed this when it originally aired.  Apparently there is some dispute about its historical accuracy.  That mattered not so much to me.  I was more interested to see if I could reconcile the show with my memories.

The show is compelling in part because the actor who plays JFK, Greg Kinnear, has a physical likeness to the man he is playing, so much so that you can believe they are one and the same.  This in contrast to the actor who plays Bobby, Barry Pepper, who may have had the voice down very well, but simply didn't look like how I remembered RFK, though there clearly was an attempt in his character to try to physically resemble the President's younger brother and right hand man.  The best episode, by far, is the sixth one on the Cuban Missile Crisis.  There is a brief moment where you see the bags under the President's eyes, the only time in the entire miniseries where he appears this way.  In this instance the cause is the strain of the moment.

The President is at the top of his game here.  He plays every card in his hand perfectly, even while he gets conflicting advice about what to do.  He understands fully that Kruschev is testing him, but otherwise doesn't want a military escalation.  The blockade of Russian ships in the Atlantic, headed for Cuba, is the main mechanism for showing JFK's stern resolve.  But then a US pilot gets shot down over Cuba.  The military advisers say this demands retaliation.  Yet Krushchev had sent a conciliatory message via Dobrynin.  The decision was made to ignore the news about the pilot and respond to the message.  The Russian ships turned around.  The escalation was averted.

The buildup to this in the earlier episodes shows a more immature JFK, in his job as President (the Bay of Pigs fiasco is depicted as a none-to-strong JFK capitulating to the pressure put on him by the military), in his dealings with his father (Joe Kennedy is depicted as pulling the strings until he is dealt out by Jack an Bobby because of mob connections), and because of his philandering ways that prove an embarrassment to Jackie.  He offers a line of self-criticism that marks a turning point, "I'm not a kid anymore, but I'm still acting like one."

In all episodes after he returns from WW II, he is depicted as in constant physical agony with back pain.  To manage that he is on a cocktail of medications aimed at relieving the pain and allowing him to function.  These don't seem to impair mental function, but they perhaps explain his early indiscretions (the philandering seems to be something he inherited from his father) and misjudgments in office.

Another possible explanation is offered in the earlier history and his relationship with his older brother Joe Jr.  It was Joe Jr. whom the dad was grooming for the White House.  JFK's role was not spelled out and he thus pursued his own interests wherever they led.  He became the stand in when Joe Jr.'s plane was shot down in WW II, but he wasn't ready to play the role.  In the first year plus in the White House, he is still getting ready.

The penultimate episode, which is about the assassination, shows a President who has reconciled with his wife, where there is now affection and mutual respect.  Paradise found becomes a horror movie when the unthinkable happens.

There is much missing that we associate with JFK.  There is no mention of Teddy whatsoever.  There is nothing about putting a man on the moon.  He isn't shown delivering the inaugural.  Yet for all of that, the series captures the sense that JFK was the President we wanted, with the vision and the sensibility to elevate the nation.

George Will had a column, When Liberals Become Scolds, that I read just before starting to watch The Kennedys.  The column bothered me.  It takes the assassination as the turning point for Liberalism.  This seems wrong to me, in spite of the quotes of Scotty Reston regarding a piece written in the aftermath of the assassination and an editorial in the Times a few days later.  JFK had appealed to our aspirations and better angels.  LBJ was able to ram home the legislation that this vision implied.  Liberalism was still surging in 1964 and 1965.  It was the Gulf of Tonkin resolution that marked the turning point.  Had we a Civil Rights Movement without the Vietnam War, the country may have healed its inner wounds by now.  As it is, we clearly haven't done that yet.

But it is both soothing and energizing to hark back to a time when there was so much promise of doing better.  This is the appeal of The Kennedys, whether it has all the facts right or not.  

Friday, October 25, 2013

The Arithmetic of GDP and Debt

Below are links to an Excel workbook with two worksheets that have models to explain the relationship between GDP growth and growth in the National Debt, regarding only the arithmetic in relating the two.  There are no policy implications in this exercise as the models are far too simple to derive any policy implications from them.  The purpose of each model is purely educational, to get people to appreciate this arithmetic.  So much of what you hear in the news - pronouncements by lawmakers and pundits alike - seems ill considered or simply uninformed by knowledge of this sort of arithmetic.  So you might consider this demonstration as a prelude to a policy discussion, to bring the latter to a higher level. 

There are two videos as well - voice over of screen captures where each model is explained and manipulated.  The videos are meant as encouragement for people to play with the model themselves.  The videos are probably best watched at full screen, so the viewer gets a better sense of what working in Excel is like.

This play is done by pressing the various spin buttons and thereby changing the associated parameter values and then eyeballing the impact of the changes in the graphs.  The hope is that one can get a reasonable feel of what is going on by exploring each model in this way.  The user is not taxed in doing paper and pencil calculations to understand this, so the entry level requirement of making sense of what is going on here is pretty low. 

For those who do want to see the math - there is a text based explication of the model to the right and the various series that are plotted in the graphs are given below the controls, so one can learn how those series are generated by simply selecting a cell within a particular series and seeing the formula in the formula bar that is associated with that cell.  The entire workbook can be re-engineered in this way. 

Excel Workbook

First Video on the Simple Model

Second Video on the Model with Business Cycles


Sunday, October 20, 2013

Is Maureen Dowd getting it wrong here?


The question at hand is whether Bill-Clinton-like-schmoozing is the appropriate behavior for President Obama now in his interactions with Congress, as Dowd suggests, or if instead the real game is to orchestrate a way for Democrats to retake the House in 2014.

Charles Blow argued for the alternative yesterday and suggested the game is to box the Republicans into uncomfortable positions. 

Also, in Dowd's column the Panetta quote seems to me taken out of context.  It was offered before the deal on the Debt Ceiling was struck.  In retrospect, it seems Panetta was wrong here.  Obama played his cards right, at least until the crisis was over. 

There is something to be said about having the victor behave in a magnanimous fashion.  But that is when the war is over.   If this is just one battle and there are still many more to be fought with the current Congress, slapping backs and having Congressmen over to watch a movie at the White House seems like a wrong approach to me.  Dowd's approach would make more sense if non-Tea-Party Republicans made a break with their Caucus. 

Until then, game on.

Saturday, October 19, 2013

For A More Compassionate And Saner America

Some time ago I started an open Facebook Group called For A More Compassionate And Saner America.  I let it go idle when the Occupy movement started to capture media attention.  But now it seems to for it to resumes activity.  If you have a Facebook account, take a look.  And if you are interested in joining please request to do so.  Below is the message I posted earlier to day to the group site about the reasons to resume activity.

- - - - -
Perhaps it is time to resume this group in earnest. When "Occupy" got up a head of steam, I more or less shut it down because it was clear that Occupy had captured media attention. Given the recent national politics, now seems like a good time to resume, with an eye toward the midterm election next fall.

Just to remind members, the core founding idea of the group (there is a Group Purpose document in the Files area) was to restore marginal income tax rates to their levels when Bill Clinton was President, for taxable income in excess of $100,000.

You'll recall that President Obama had a similar recommendation, but his floor income level was $250,000. So the proposal by our group is to broaden the base who bear responsibility for paying more in taxes.

There are many more people with taxable income between $100K and $250K than there are with incomes above $250K. For lack of a better term, you might call this group "the professional class." So the idea is that if the professional class, in numbers, can express this same view it will give cover for "reasonable elected officials" of both parties to support the idea as well. If the idea made some headway, conceivably there could be real revenue enhancement to the Federal budget in 2015. In today's NY Times, David Firestone has a piece that says not to expect much at all from the current budget negotiation.

Three other points that I suggest the group embrace are:
i) A call to immediately end the sequester.
ii) Support of a Martin Feldstein proposal to cap itemized deductions, with the caveat that Feldstein wanted to do this in the absence of raising rates. Our group should want both.
iii) A return of the capital gains tax rate to its level under Clinton.

These suggestions, if implemented, will hurt in the pocketbook. They are made to share responsibility for revenue enhancement more widely and as a partial pushback against the rising income inequality in society. They are also meant to counter the position of many of the non-Warren-Buffet uber rich on taxation. If the professional class will bear their share, then the uber rich must do so as well.

Now a brief thought on the politics and the timing. Many people, Independents included, are scared about the size of the National Debt. The Far Right has leveraged this fear into their shrink government stance. The recent events have affirmed the essential role that government plays. But the fear about the National Debt remains. The no-new-taxes position is disingenuous in light of this fear. The people who have been maintaining that position now appear like kooks, whereas in 2010 they may have been seen (especially by Independents) as having some interesting ideas. A theme that affirms the role of government but wants to see shrinkage of the National Debt might win in 2014. We have heard so much about gerrymandering and safe districts. But midterm turnout is traditionally low. If it can be boosted substantially, because Independents see there is substance in exercising their right to vote, perhaps the House can be retaken and sanity can be restored.

These are the reasons why it is time for our group to resume.

Wednesday, October 16, 2013

Apocalypse or Keystone Kops?

Today is either the beginning or the end.  It's hard to tell which will happen.  There will be no forecasts from me.  I gave my analysis a week and a half ago, with the only possible equilibrium outcome that John Boehner falls on his sword.  Nothing else is consistent with rationality.  But I've already been wrong about when (or if) this crisis will end.  My forecast in that post was for it to end last Friday.  The error light was lit with that one.

Since then I've read several apocalyptic visions.  One was by Gary Wills, who argued that we had secession in all but name before the Civil War, with the South over represented in Congress since 5 slaves counted as one person for apportioning representatives, and that the real deal happened only when new western states were admitted to the Union that would tip the balance the other way.  He then goes onto argue that in a replay of history, we've already had secession in all but name from the Tea Party reactionaries, who violate the law with impunity.  Even if the default debacle is somehow avoided, Wills analysis makes it seem as if we are steadily marching toward another great cataclysm.

Another was  by Elizabeth Drew, who points out the hidden culprit in the rise of the Tea Party - the apathy of the rest of the electorate.   She brings to light that voter turnout in midterm elections is very low, hovering above 40% of the electorate.  And here she is talking about what happens on election day.  She doesn't mention the primaries, but one has got to believe it is worse there.  When ordinary folks who are not so excited by the current regime stay away, in effect that is inviting the crazies to the party.  The gerrymandering may exacerbate the problem, but the first and foremost issue is that apart from the election of the President most people choose not to exercise the franchise.  If normalcy is to be restored, that must change.  The next midterms are a year off.  It will provide a good test case to see if the corner is turned.

There are many pieces today on the Keystone Kops interpretation of what happened yesterday, such as this one by Dana Milbank.  I'm hoping that John Boehner is smarter than he looks.  In this interpretation, he needed yesterday to set up today, and bring to the House floor whatever the Senate delivers, without getting a massive revolt on his right flank about his own leadership in response.  Now out of time, there is no other play left that makes sense.

But, of course, we could still end up going over a tremendously high cliff. 

Monday, October 14, 2013

Leon

I got notified last night that Leon Moses passed away.  There was information about a memorial service and an academic biography.  He was almost 89 and his wife had passed away earlier this year.  I suspect he led a full life, though we stopped corresponding after the 1980s, so I'm unaware of the specifics of what he did later.

My first published paper was with Leon and it got into the AER; so that was plum.  And it was a good thing too since the papers I had carved out of my dissertation were going nowhere and I spent about three years pushing them before moving onto other research.

I was surprised to see that my adviser, John Ledyard, also had a piece with Leon.  I had thought my collaboration with Leon a bit odd, but seeing the paper with Ledyard maybe it wasn't so unusual.  Here's the story behind it. 

Leon had been the full time director of the Transportation Center, an administrative position, but he stepped down from that to return to being a regular member of the faculty.  He was to teach an intermediate microeconomics class.  To manage the reentry issue, he negotiated for having a student well trained in microeconomics to serve as his grader.  I was selected for this task.  I can't remember which quarter it was, but it was definitely during my third year in grad school, 1978-79.  While I'm not 100% sure of this now, I think the grading thing was really more an internship role.  What Leon actually wanted was a young guy who was current in then modern to technique to help formalize his intuitive ideas.

Somebody had to pull strings to make the grader job happen.  I was on fellowship and that carried a stipulation about not doing work for pay.   So a waiver needed to be granted.  I believe I got paid $500 for being the grader, which was on top of what the fellowship paid as a stipend.

Northwestern quarters are quite short - nine weeks of class and a week for final exams.  The first several weeks Leon and I were all about his class and how the students performed on the homework.  Then, sometime in the middle of the quarter, he initiated a conversation about an idea he had on inventory investment, as a way for a firm to take advantage of scale economies.  He wanted feedback from me on how to model the joint production and product pricing decisions.  That first discussion is what eventually led to the paper. We eventually had many more such discussions.  Both of us enjoyed arguing about the model we developed.

We continued to have these conversations well after the grading work had been completed.  Eventually, I came up with a model that utilized optimal control techniques, something I had learned in a class taught by Kamien and Schwartz, using notes that would eventually become their book.  This means that time is modeled as continuous and one solves differential equations to get at a solution to the model.  In retrospect, it would have been better to model this in discrete time, as we (really it was only me) made an error in the formulation and later had to publish an erratum.  The error would not have occurred in a discrete time model, where Leon's simple insight was that batch production and then selling off the product for many periods before the next batch is run is the best way to manage the economies of scale in production.  In continuous time, however, a u-shaped average cost curve in flow production is really not a way to get at economies of scale, because a rapid on-off-on-off sequence approximates constant returns with little or no storage cost incurred.  In the continuous time approach you need economies of scale in the stock production.  That gives a rationale for producing in batches. 

That paper was essentially completed while I was still a grad student at Northwestern.  Yet my collaboration with Leon didn't end after I began work at Illinois.  We talked a bit about mode choice in transportation to and from work (bus, train, walk, drive, etc.).  Leon wanted to develop a model where mixed mode was an equilibrium outcome.  I can no longer remember why this was of interest to him, but I wasn't very tooled up on categorical choice models, which may have been more interesting to the empiricist than to the theorist.  Ultimately we did not write anything in this area. 

We did write another paper that extended the earlier model to include plant location for a multi-plant firm.  It is perhaps more interesting for how that got done and what it lead to, then for the model itself.  I don't really remember this, but probably most of our conversations happened on the phone.  I do remember that we met at least once, and maybe twice, in south Florida when I was visiting my parents and Leon was on vacation with his family.  If you are a real scholar, even vacation is a time for work.  And then somehow Leon got us invited to go to UmeÃ¥ for a conference on location choice, where we gave an early version of the second paper.  It was an exotic trip, my first time visiting Europe.

UmeÃ¥ is about 500 miles north of Stockholm.  We had to go from the international airport to a regional airport to catch a connecting flight.  We were already zombie-like from the jet lag when we took a cab or a limo to the regional airport.  I don't think we figured out that the speedometer was in kilometers/hour instead of miles/hour so we thought we were really speeding.  That marked the first of many strange but interesting things on that trip.  It was early summer and it never got really dark in UmeÃ¥.  You could read a book outside even at midnight.  The bathrooms were in the Scandinavian style, with the toilet on the same level as the shower and a drain somewhere in the middle of the room, where you could sweep standing water after taking a shower.  Breakfasts were also exotic, with a wide variety of cheeses I hadn't had before served on those thick and heavy crackers and something like grits, but served with sour milk.  While we stayed in a dorm during the conference, our hosts treated us very well.   I do recall meeting another American there, a woman who was living in Sweden, but I believe we were the only ones who came to the conference from the U.S., so Leon and I were treated like dignitaries.  It made for a very enjoyable time.

The collaboration with Leon had indirect effects on me as well.  I wrote a couple of other papers on my own that amounted to derivative work on our first paper.  One was a short piece to make the model more symmetric in its assumptions.  If the firm was going to solve an inter-temporal optimization to come up with its inventory investment and pricing decisions, consumers too should solve a dynamic optimization to come up with their choices of how much to consume over time.  It was a harder model to solve, but I showed the core insight of the original paper remained intact when consumers are more sophisticated in their purchasing behavior.

The other paper marked my switch from the dissertation research to study of oligopoly models, where I had more success.  One of these was a paper on dynamic duopoly with inventory.  I'm rather proud of this paper, as it made a fundamental point that wasn't in the rest of the literature.  Heretofore people who worked in this area assumed that asymmetric outcomes (one firm is the market leader, the other is a follower) were a consequence of some asymmetry in the initial conditions (the leader got there first and leveraged that for strategic advantage).  My examples showed that you could have symmetric starting conditions but still get asymmetric outcomes and, indeed, that is to be expected in these sorts of models. Google Scholar says the paper got  32 citations, which is second highest among the pieces I've written.  I would never had thought to write on this topic at all if it had not been for the earlier work with Leon.

I've not otherwise written with somebody who was a near contemporary of my parents, where there is such an obvious age differential between the authors.  Looking back on this, I wish I had done more of it, with Leon and perhaps with other senior scholars.  It would have been a way for me to touch research issues that mattered to others and to ground my intrinsic interest in theory with practical questions which were posed to me rather than by me.

I now find myself at approximately the same age as  Leon was when he and I started to work together.  Perhaps I should be looking for some junior people to co-author on pieces, as a way to invigorate my thinking and possibly to pass on some nuggets to the next generation.  It's an interesting thought to ponder.

Sunday, October 13, 2013

Do I have to consume conservative media to consider myself thoughtful?

On Friday I found this piece in the Times: It’s Not Just Political Districts. Our News Is Gerrymandered, Too.  I felt challenged by it and wanted to think through a response.  There seems to be two different issues.  One is not seeing the full picture.  The other is that much of the news these days is delivered in a shrill manner.  Certitude has replaced reasoning based on evidence.  Listeners/viewers/readers start to imitate the pundits they follow.  Have I fallen into the trap on both counts, at least as far as thinking about our national politics? 

I tend to read a lot of opinion pieces, much less straight news.  I want analysis more than I want facts.  I produce my own analysis, quite frequently.  It is what I do, who I am.  I need fodder for that.  The analysis of others provides a point of departure.  So let's note that while the Washington Post in the linked piece is characterized as overly liberal (by Antonin Scalia), they do have George Will, Michael Gerson, Charles Krauthammer, and other conservative columnists.  Likewise, the Times has Ross Douthat and David Brooks, though Brooks is on book leave now.

Way back when I used to read the Sunday Times in paper form for hours - before, during, and after brunch, usually at the pancake house.  I'd give the daily paper a decent read as well (not counting the crossword puzzle, but I'm harking back to when Maleska did that since at the time I did that too).   I would dutifully read William Safire, not liking his regular columns, sometimes liking his On Language pieces, but reading through to the conclusion in any event. I had more patience then or was more willing to surrender my own thoughts to those of the writer. 

It is different now.  I am unsure of the causes.  I read the paper online at my computer.  That is one factor.  I am less in awe of the pundits now, viewing them more as peers than as superior life forms.  With my own regular blogging, I compare my writing to theirs.  They obviously are exposed to a lot of information that I don't have.  But on the analysis front, I can hold my own.  Indeed, it often seems that polemic substitutes for analysis.  (To be fair, this is also true with liberal pundits, Tom Friedman in particular.)  It is why about a year ago I announced I was Taking a Sabbatical from David Brooks.  Who needs the aggravation?  And then it is the news itself, that it seems so depressing or idiotic.  We appear hell bent on shooting ourselves in the foot.  In desperate times, that can be a rational act.  When it is the shooting ourselves in the foot which is the cause of the desperation, however, there is no apparent rationality.  In the presence of madness, analysis is not helpful.   It is replaced by a macabre fascination with the latest on the Debt Ceiling standoff.  It's like watching Rollerball.

I have been tuning out more.  I used to be a regular with the NewsHour.  Now I hardly watch it.  During the last election season, when they would have a Tea Party spokesman on the show, they would let that person give a canned response that didn't address the questions the interviewer asked.  I stopped being able to listen to it.  And between the aftermath of of the Sandy Hook Elementary School shooting, the gridlock between Israel and the Palestinians, and the chaos and horror in Syria, ignorance may not be bliss but being informed is definitely demoralizing.  So the sense I used to have of needing to understand things in a balanced way has been gradually eroding. 

I have come to greatly respect the writing and analysis of Thomas Edsall.  He is the one commentator I know who is interested in depth of analysis by soliciting multiple perspectives on issues, submerging his own voice perhaps in an attempt to let others speak their views.  He sets a very high bar, one I'm afraid I can't get over myself.  I do want to note that he writes only one (rather lengthy) column a week.  Perhaps there is a lesson in that.  If there is a need for more thoughtfulness in opinion writing, and to distance it more from the twenty four hour news cycle, maybe other columnists should also be asked to write less frequently. 

There is then the question whether I need to go outside the umbrella of the Washington Post and the New York Times and see what conservative pundits write when on their own turf.  Immediately after reading It's Not Just Political Districts...., the guilt feelings start to escalate so I do some Google searches on names I am familiar with.  From this I learned that William Kristol was fired from the Times (at the time I assumed he had simply had enough of writing for a non-conservative audience), with the cause not his extreme views but that he didn't do his homework in writing his columns.  I next searched for Yuval Levin, but was disappointed to discover that his most recent pieces for National Affairs dates back to 2011.  So I went to the National Affairs main page and found a piece Conservative Health-Care Reform: A Reality Check.  I start to read it.  Very soon, it begins to discuss market based reforms.  I stop right there.  The health-care market is characterized by market failure.  Robert Frank has a nice column from last summer that explains why.  I can't read through stuff that seems fundamentally flawed at the outset.  Then I do a search on Rich Lowry.  His posts seem like a hatchet job.  If he were simply a columnist for the National Review (I learned he is a columnist for Politico) then this would be fair game.  Paul Krugman's posts are often hatchet jobs.  But Krugman is not the editor of the New York Times.  Lowry is the editor of National Review.   When the editor does hatchet jobs, what can you expect from the rest of the periodical?

So I stopped.  The guilt feelings had subsided.  I came to the realization that yes, I may be narrowing my perspective and becoming less thoughtful about national politics. But preserving my personal equilibrium is more important.  If sanity is ever restored to our national discourse, I will resume where I left off. 

Wednesday, October 09, 2013

Bluster's Last Stand

The melting pot
Is left to rot
Tolerance not
In time forgot.

Saturday, October 05, 2013

MAD and Going All-In with Bad Cards

I learned some game theory while I was a graduate student.  At the time it seemed like the answer.  It took strategic thinking seriously and appeared to make sharp predictions about equilibrium outcomes.  Deterrence in the nuclear arena may have been its crowning achievement.  MAD worked.

I started to become disenchanted with game theory ten to fifteen years later, after learning about the Folk Theorem of infinitely repeated games which says, more or less, that any individually rational outcome can be an equilibrium - so much for sharp predictions.  Like general equilibrium theory before it, which produced similar results about what could be an equilibrium outcome, game theory itself had little to say about what we might observe, especially if we wanted to otherwise be general in the formulation.  The sharp predictions were a consequence of ad hoc assumptions made about the structural form of the game.

The last decade or so there seems to be a new phenomenon to upset the strategic apple cart, though I'd be happy to be corrected by folks who better understand history than I do that it is more a rehash of the megalomania of the fascists from the 1930s coupled with the utter paranoia of the Joe McCarthy years. This is the rejection of rationality itself, at least in public posture, by leaders who claim to be on a divine mission.

The first instance of this that we observed could be found in the utterances of President Mahmoud Ahmadinejad of Iran on the topics of Israel, The Holocaust, and Iran's plans for developing a nuclear capability.  The guy may have been rational in fact, but he came across to many people, myself included, as completely crazy - what he was doing didn't seem to be in Iran's own interest, even if you take the point of view of the iron-handed leadership of that country.  His successor is demonstrating that now by backing away from those positions.

Before I get to talking about the current situation with the Tea Party, let me talk a little about what economic theory should be good for, which is to think forward strategically, figure out what equilibrium looks like in the future, and then reason by backward induction about how that should impact present thinking and action.  So, with the debt ceiling debacle we are currently in, we might consider what the world will look like one month from now, which happens to be Election Day, though it is an off year for elections for national office.

In this simple analysis there are three possible states that might be reached:  (1) there is no agreement on the debt ceiling and the country ends up in default, (2) there is an agreement where a clean CR is passed, and (3) there is an agreement with some concessions about spending cuts added in.   It is important to note, if you are doing a game theory analysis, that we are already in the subgame where it was possible to avoid government shutdown by the passing of a clean CR, but that alternative was scrapped.

Alternative (1) is not just that all players lose, it is an unmitigated disaster that might very well cause a world-wide depression.  Alternative (2) would be a reasonable outcome economically, but it clearly would reduce the cachet of the Tea Party radicals in the House and/or it would result in John Boehner's ouster as Speaker, and it would result in a divided Republican party in the House.  It is therefore not a situation that rational Republican players would have desired at the outset.  If a clean CR had been passed before the shutdown, there would not have been the loss of cachet for the Tea Party.  Alternative (3) would be worse economically than alternative (2) but certainly better than alternative (1), but it would be horrible for the Democrats and President Obama, because it would reward hostage taking as a strategy by the Tea Party Republicans. 

Now add to this that Speaker Boehner has said publicly that he won't allow the country to default and all he has to do is bring the Senate Bill to the House floor for a vote to achieve outcome (2).  That now appears to be the likely equilibrium, with Speaker Boehner falling on his sword.  But if that's right, it makes what the Tea Party radicals have done seem irrational.  They will have played out the hand and lost, when they could have folded earlier and kept their stash.  If this outcome does indeed happen, and several days before the date when default would occur, it will make it appear that the Tea Party types severely miscalculated.  Rational players don't do that.

Let's turn to the decision making from Speaker Boehner's position.  He may still wish to hold onto his position as Speaker, so could delay his bringing the Senate Bill to the House floor, in the hope of getting both Harry Reid and President Obama to bargain, where neither has indicated any willingness to do so to date.  But, it would seem, eventually the Speaker must bring the Senate Bill to the floor if he doesn't otherwise extract concessions.  Understanding that, neither Harry Reid nor President Obama have incentive to compromise one inch.  Thus, in any equilibrium situation Speaker Boehner brings the Senate Bill to the House floor.  The only question is when.  And if even in delay he gets voted out as Speaker because outcome (2) was produced, then his incentive for delay is weak.

So we seem to be on a branch of the game tree that we should not have reached and having gotten this far, it would still seem that outcome (2) is the only possible equilibrium play.  That the Tea Party members of Congress appear to believe otherwise makes this seem more like a rehash of the Three Little Pigs, with them in the role of the Big Bad Wolf, yet hoping for a rewrite of the story's ending.

Public posture that seems irrational may make perfect sense as a tactical ploy, but interpreting what the Tea Party radicals in the House are doing as rational makes sense only if the threat of (1) happening becomes real for the Democratic Leadership.  That is reliance on an out-of-equilibrium threat to win the day.  It is a strange way to play the game.

If outcome (2) does happen then one might ask: what is the impact on future elections as a consequence?    It is hard to see this persuading Independents to vote Republican. 

There is perhaps a different way to make sense of what is happening from the Tea Party side of the equation - using an analogy with a wounded predator.  Such a predator fights very aggressively because survival is threatened.  Many commentators have written that the demographics are all wrong for the Republicans in the future, unless they significantly change their message.  In other words, if the options are either a slow death or a rapid one, then continuing the fight to the bitter end can make sense.  But that in itself doesn't produce concessions from the Democratic leadership. Indeed, it might very well have the reverse effect than intended and strengthen the Democratic hand.

In reading the news about the issues, it is very hard to trust what people are quoted as saying, not the words themselves but whether the words represent what they actually think.

Given the above analysis, my prediction is that there is a clean CR brought to the House floor by this Friday.  It will pass.  Then all hell breaks loose among the Republicans in Congress.  That's what happens when you you overplay your cards.

Friday, October 04, 2013

The Liberal View of Capitalism

One wonders how much of the conservative - liberal argument as it applies to economic issues hinges on the conservatives believing that everyone should turn into a Type A personality and liberals countering that the majority of the population is Type B and would prefer a world where Type B's can be productive.  What does such a world look like?  Most liberals are familiar with the macroeconomics of Keynes and associate it with the fiscal policies of The New Deal.  Is there a complementary microeconomic view that can be articulated at the level of the theory of the firm?

There is, though I believe it to be much less familiar to most liberals who are not economists.  The hero of this vision is not Keynes.  It is George Akerlof (and before Akerlof Arthur Okun).  If Janet Yellen becomes the next Fed Chair, as now seems likely, Akerlof may come to be widely known as her significant other.  But he is a first-rate economist in his own right.  Indeed, he is a Nobel Prize winner. 

http://www.jstor.org/stable/1885099

Akerlof's theory is rather simple to articulate, as is the debate between conservatives and liberals on this point.  The quintessential issue is whether pay should be performance based and hence vary from individual to individual who hold the same job (the conservative view) or if instead pay should be position based and not feature such idiosyncratic variation, except perhaps on a seniority basis (the liberal alternative).   Of course, liberals don't deny that performance matters.  Where they differ with conservatives is on how it should be rewarded.  Promotion should be the primary reward for exceptional performance.  Within a job classification, the workers need to be managed fairly, which provides the basis for equal treatment.  This is the essence of the liberal view.  

The vision for why the liberal view produces superior performance was supplied by Dumas père in The Three Musketeers.  It is embedded in the relationship between Athos, Porthos, and Aramis (the workers doing the same job) and D'Artagnan (their manager) and is captured in the phrase, "All for one and one for all."  Akerlof crafts that vision and related ideas from sociology to make an economic model of it.  For the non-economist, it might be framed as collegiality-driven productivity.  Here are the model's basic elements.

There is a minimal performance standard below which the employee will get fired.  There is a performance norm, substantially above the minimal standard, that typifies what workers produce.  The difference between the minimal standard and the higher norm constitutes a gift that workers give to the firm.  Likewise, there is a minimal wage below which workers would quit and find work elsewhere and there is an actual wage above that minimum that the firm pays to workers.  The difference is a gift that the firm gives to its employees.  Gift giving demands reciprocation for it to be sustained.  When that happens all involved feel good about the place of work and productivity is high as a consequence.

There is one more piece to the puzzle.  This regards how productivity is observed and what explains variation in productivity from one worker to the next and for one worker over time.  From the worker's own perspective, this is mainly due to random factors - circumstances beyond the employee's control.  Or, in the case where there is clearly a drop off in a particular employee's performance, it can be attributed to outside of work stresses (e.g., a sick child at home) that are apt to be temporary in nature.  The correct response in this case is not to punish the employee but rather for co-workers to chip in and pick up the slack.  Sometime in the future, the employee who received such help will lend a hand when another co-worker has a similar problem.

A conservative with an open mind might grant that collegiality-driven productivity can be a good thing, as long as the fire burns within all the workers, but will argue that eventually a worker burns out and turns into dead wood.  That is not temporary.  It is a permanent change.  Conservatives will argue that the liberal vision sustains the dead wood, who act as a drag on the entire system.  One needs, instead, a time-consistent way to purge the system of the dead wood.  Performance based pay does that.

Akerlof's model does not address that critique.  Before I provide my own answer, let me take a slight detour.  The Akerlof gift exchange model is essentially social in nature.  There is a different reason to depart from performance based pay that is intellectual in nature and is particular to knowledge work.  This other view is articulated by Daniel Pink in this RSA Animiate video and focuses on psychological explanations for productivity.  There can be performance anxiety or, if you prefer, writer's block. High performance is achieved when intrinsic motivation is strong and the individual becomes so involved in the work as to entirely lose a sense of self.  Making extrinsic rewards overt moves the individual's focus away from the intrinsic motivation and thereby lessons productivity.  Better to have the economic rewards provided up front so that one can put them out of mind when the real work commences.  While I have critiqued this video on how it represents the economics, I concur with its representation of the importance of intrinsic motivation. 

Burnout then can be thought of as the disappearance of intrinsic motivation.  The liberal response to the conservative critique is to look at the causes for why intrinsic motivation should disappear.  One possible cause is a sense of plateauing in the work.  There is little left to learn, no inherently new challenges.  For the most part it is a rehash of what's come before - been there, done that.  This cause is consistent with the conservative view.  When it happens, it would seem to make sense that the worker should move onto a new challenge; do something else.  There is, however, a different cause that is also possible.  It is that the individual confronts organizational barriers that seem arbitrary and anti-productive and those barriers repeatedly thwart the individual's creative efforts.  Eventually, the individual wears down from not seeming able to accomplish sensible change.  Gallows humor becomes part of the routine as the individual loses the desire to fight the system.  This second cause might reasonably dictate that more fundamental organizational change is necessary.  The burden shouldn't be placed on the individual to accommodate organizational inertia.

It is this second cause that forms the basis of the liberal response.  The Akerlof gift exchange approach must happen within a dynamic organization that makes organizational learning paramount.  (See Senge's The Fifth Discipline.)  Employee burnout might still happen in such organizations, but it would be far rarer.  When it does happen the appropriate organizational response should be job reassignment rather than immediate severance, this in accord with the gift exchange view.  Collegiality, in tone and actual practice, then characterizes good jobs and is at the heart of how the organization remains productive.

In my years working in learning technology, everyone I've encountered knows this implicitly, though I expect that the vast majority of them were not acquainted with Akerlof's gift exchange model.  Readers of this post now have those fundamentals.  I wonder if some of them might start arguing for movement away from performance-based approaches and toward collegiality-based alternatives, in education and elsewhere.  It would be good to match those implicit beliefs with some explicit rhetoric on the point and see others make this sort of argument. 

Quick Update on Replacing iGoogle

This won't work for everybody, but what I've decided to do is to use my dashboard for Lanny on Learning Technology as my homepage.  I've caved in and now use my Google+ profile for identifying myself in this blog.  (I have a different account, prof.arvan, where I continue to use my Blogger profile.)  With the Google+ profile, there is a black bar above the dashboard with all the useful Google links.  And then in the browser I have the bookmarks toolbar enabled and it has all other links I go to regularly. 

This puts most of what I need regularly one click away.  I would prefer to have previews, particularly for Gmail, Google Calendar, The New York Times, ESPN, and the Quotes of the Day.  In other words, I'd prefer that iGoogle stick around.  But I've not been especially impressed with the various NetVibes clones (including the original).  They'd make me still need to use the bookmarks toolbar and if you have more bookmarks than can fit on the screen at any one time, that is a pain.  This approach avoids that particular problem. 


Saturday, September 28, 2013

Music from summer camp

Sometimes I surprise myself going from topic to topic, seemingly entirely disparate, yet there is some connection that manifests which drives the sequencing.  On Thursday after class, I was in slight distress in the afternoon.  I had posted an early feedback survey for my course and a couple of students in their comments pointed out that my approach was more than a little scattered.  I wanted to respond that this was more like the real world than the orderly approach they've experienced repeatedly in their other courses.

Early yesterday morning when I got up to go to the bathroom, prompted by this image of a scattered reality, I started to recall the movie M*A*S*H, which I think was the first film I saw where people spoke at the same time, signifying dissonance and countervailing currents.  Indeed, my inclination immediately thereafter was to make up a slide in PowerPoint akin to something we saw in the first full day of the Frye Leadership Institute in summer 2003 about chin up leadership.  It looked something like this, the closest thing I've seen or heard in formal education that seemed in tune with Robert Altman's approach to film direction.

Chin up leadership
Chin up


Of course there are some rather serious themes in Mash and some of the characters are downright prescient about about what is going on (particularly Radar O'Reilly).  Then there are the adolescent humor bits.  There were several of those.  The most elaborate was the football game against a rival unit, with lots of shenanigans during, including giving an opposing top player an injection while he was lying on the field after a play and hidden from view of the the rival bench, to get him out of the game so he couldn't perform any more.  But there was also pure inanity, embodied in the absurd messages delivered over the the loudspeaker  - tonight's movie is Mash, though maybe that is from the TV adaptation.

Camp Oxford, where I went for sleep away camp, had such a loudspeaker as well.  It was in the Headquarters (HQ) hut, which was in the middle of a horseshoe comprised of 25 bunks where the campers lived.  The open end of the horseshoe led down to the lake, North Pond in a map of upstate New York.  It was thinking about the loudspeaker that led me to think about Camp Oxford.  Then I quickly realized how much structure there was imposed on the lives of us campers.  Music was a big part of that.  Structure with music is what I remember of camp, yet somehow I think of reality now as dissonance and countervailing trends.  Hmm.

Many of the songs were bugle calls borrowed from the military, recorded to vinyl and then played over those same loudspeakers, when the time was right.  We woke up to First Call, which nowadays you might hear if you watch the Kentucky Derby.  If you slept through First Call, you would wake up for sure when they played Reveille.

You've got to get up
You've got to get up
You've got to get up in the morning.

You've got to get up
You've got to get up
You've got to get up right now!

Da da da da da da, da da da da da da
.............

Immediately after Reveille, we went outside in our PJs and slippers, perhaps a robe as well, and did some light calisthenics. Over the loudspeaker we'd hear the command for the particular exercise and then a count out of the beat.  After that, we'd get dressed, based on the uniform of the day given over the loudspeaker - shorts, shoes, light sweater or jacket. After everyone was dressed there'd be a call to Assembly.  Each group would line up and then we'd go to the flag raising.  The flagpole was right in front of HQ.  After the Flag was raised, they'd place Mess Call, and we'd go across the street to the Mess hall for breakfast.

The pattern was a little different for lunch since each group would be involved in its own activity and possibly on a ball field far away from the mess hall, so when hearing Mess Call that group might barely have time to put the balls and gloves away and could be a few minutes late getting to lunch.  The situation around dinner time was closer to what happened at breakfast.  There was Assembly for the Flag lowering.  Then we went off for dinner.

I view myself somewhat anti military symbols, a distrust dating back to the Vietnam War, which was well underway my last few years of camp.  But listening to the bugle calls now, I find them very familiar and somewhat comforting to hear.  I wouldn't have guessed that to be my reaction, but it is.

We had music frequently while we were at mess.  There was a piano player, Daddy Joe.  He probably had a broader repertoire, but the only song I can recall him playing, which he seemingly did every day, was Tequila.  I liked the Daddy Joe version better than the original recorded by The Champs.   At other times we did sing-alouds, usually near the end of the meal.  The head counselor in my first few years was Tony Boch.  (He was Italian and this was a Jewish camp.  Boch was a short form of his real last name.)  He would lead us in what I think was an Italian song (or a street version of one) about various instruments in a band or orchestra.  There was one kid in the camp, in particular, who loved to sing this song.  Tony would do a line.  The kid would do the next line.  Then the full camp would come in with the refrain.

There was a very odd-to-an-outsider activity at mess once a week, but to explain it I need to give some background first.  Each day after breakfast there was cleanup.  You had to make your bed - hospital corners for the sheets and the one woolen blanket in blue or gray that was on top of the bed, with the two other woolen blankets wrapped in jelly rolls and placed at the foot of the bed.  Then each camper in the bunk had a job - sweep, kybo (bathroom) and outside are the ones I remember.  Most bunks had eight campers.  There were seven of these jobs.  The eighth position was off.  You didn't have to do a cleaning job when you were off.

After cleanup there would be inspection.  A counselor from another group would come and inspect each of the bunks in the group for how well they did in keeping the bunk tidy.  The inspector would give a rating to each bunk on a 10-point scale, taking off one tenth of a point for each thing he found that shouldn't be there.  A 10.0 was perfect.  A 9.9 was pretty darn good.  The bunks would be in competition for the highest average rating over the week.  The winning bunk would get a prize.  That prize was "delivered" once a week at the lunchtime mess.

Tony would have a bunch of pies, either blueberry or apple if memory serves, one for each group.  As he called out which bunk in a group won, a counselor from the winning bunk, sitting at a table with the campers and the other counselors in the bunk, would go to the middle of the mess hall.   There he would wait for Tony to toss a pie from the head table where Tony was to where the counselor was standing.  It seemed to me that Tony always loosened the pie from the pie pan that was containing it.  Sometimes in the toss the pie would remain largely intact and in the pan and the counselor would catch it.  In this case the pie would be brought to the table of the winning bunk and consumed on the spot.   Other times the pie would come completely out of the pan during the toss and much of it would end up on floor.  The counselor would get only a little bit on his fingers, not enough to go around the table.  When that happened the entire camp would sing:

Because he didn't scoop
Ice cream for the group. 

Sure enough, the next time the group was at canteen, which happened during the evening once or twice a week, canteen was where the kids bought candy to bring back to their bunks, there would be ice cream for everyone.  

There was also singing at other times when you were with your group, perhaps at a campfire, maybe after a Watermelon League (inter-group) softball game.  Each group had their own song.  I was in the Cub group for my first two years, in bunk 3 the first time and bunk 5 the second.  I remember the Cub group song quite well.

Men of the Cub group
Men of the Cub group
Sweep the fields like we have swept the fields before
Till the last man
Of the enemy clan
Conquers all to rise no more.

Alleveevo, Allevivo
Alleveevo vivo ves
Come a seven
Come eleven.
Come a rickety-rackety yes, yes, yes.

Then the first verse repeats.  We also sang at the end of the day, many groups together in some ensemble activity, whether after watching a movie at the Rec hall or doing something else.   First we sang the camp alma mater.

Oxford fair and true
With our hearts we belong to you
As we love all the old and new
That we think of when we are gone.

Sunset and starry night
Our cherished and fond delight
As we linger by the pale moonlight
To await the awakening dawn.

Through the years our memories cling around us.
Through the tears our voices ring around us.

Let there be no goodbye
For the thought of you never dies
We'll return to you by and by
Oh, Oxford the camp that we love.

This was followed immediately by the singing of Taps.

Day is done
Gone the sun
From the lake
From the hills
From the sky
All is well
Safely rest
God is nigh.

I want to close with a couple of things that were a bit more idiosyncratic.  Language was used then in a way it no longer is.  One expression I remember that was chanted with some frequency, though I don't recall it's significance now:

You're no good you
You piece of wood you
Ahhhh.

Then a bunk mate of mine, Alan, and I made up a very simple lyric sung to the Call to Services (the linked version is slower than what I remember) that we had on Saturday, done jointly with Camp Guilford, the girls camp.  At the time Alan and I referred to many people as a "tool," not meant as a compliment.  Our lyric went like this.

Tool ool ool
Tool ool ool.
Tool and a little dodo bird
Tool and a little dodo bird
Tool and a little dodo bird.
Tool and a little bird.


Perhaps life now seems so less ordered to me because there is no music used regularly to give it structure.  And maybe it is because I grew out of it.  I didn't like my last year in camp, when I was in bunk 19.  But now I find it compelling to revisit the  earlier years when I did like camp.  The folks who designed it and were the first owners, Marcy Hessel and Sid Fiedler, knew a thing or two about how such a place should be run.

Tuesday, September 24, 2013

Lie-Ability

Is it just me or have universities become more intrusive in what they require employees to report?  So far I've had to complete ANCRA training (this is new) and fill out a disclosure of non-university activities that could create a conflict of interest (this has been around for quite a while).  I'm anticipating in the near future having to do the Ethics training.  At least I don't have to do the time reporting, since I'm only working 25% time.  But I do wonder what will be next on the reporting front.

Before getting to that let me note that in my class students had to blog about opportunism and come up with a scenario where the possibility for opportunism was there but where the person (possibly themselves) refrained from taking advantage of the situation.  We will discuss their posts later this morning.  The canonical economics example of opportunism is the "snake oil salesman"  (for a latter day example think originators of sub-prime loans) and, hence, there is an element of deceit in opportunistic behavior.  This provides the source of my title.

But, of course, the title is meant as a play on words.  It occurred to me while reading this piece from today's Chronicle, about Northern Illinois University and its new reporting requirements for staff about their use of social media.  If I'm like most, people there will be both a rational and a visceral reaction to the piece.  The rational reaction is that institutional auditors do have a job to do in identifying potential liability for the institution.  But they should not have the last say on how the institution addresses that, as there may be competing "upside" risks that don't concern the auditor but should be of concern to other campus leaders.  In this case, the article is about the potential chilling effect that such regulation will create, dampening the creativity and enthusiasm of engaged staff who are doing effective work in getting the message out to their respective audiences.

I asked myself what I'd do if my campus adopted the same requirement.  Then I got quite angry.  The requirement treats staff as if they are children.  Doing that is infuriating.  When I'm angry, I respond in kind.  Were we to require completion of such a form here, I would lie on it.

Near the end of the piece Steven McDonald, who used to speak here at the Faculty Summer Institute when I was the head facilitator, gives what seemed to me a sensible view that there needs to be an education effort about what the institutional goals are for communication via social media.  In theory, that sounded like the right answer.

In practice, I'm much less sure.  Real education is labor intensive and if not well done can achieve much the opposite of what is intended.  Massmails won't do the trick.  Further, some behavior is so ingrained at this point (e.g., people having Facebook open while they are at the office) that if the institution seems to condemn that behavior it possibly will experience quite a backlash from the staff.

Sometimes leaving well enough alone is optimal.  Certainly, it is an option to consider.

Saturday, September 21, 2013

Out-of-the-box thinking 101 - employer pay for college

Yesterday I attended most of a symposium on the future of Higher Ed that was held at the I-Hotel near campus.  I hadn't gotten much sleep for a couple of nights in a row - worried about my class and some of the usual stuff about getting up in the middle of the night and not being able to go back to sleep.  So I was a bit more crabby and off my game.  Today, after a decent night's sleep, I'm ready to chime in.  Most of what I heard seemed like the same old, same old, not all that different from an event like this held fifteen years ago.  What was different, however, was the strong emphasis on college cost and student indebtedness.  That you wouldn't have heard about when I was the one hosting such a conference.

The common sense "analysis" of the problem is that there is a need to find a low cost way for students to get a college degree, so students can reap the reward from the degree and not have to go into hock to do so.  Way back when, that was done via night school.  First generation, mainly recent immigrant students would get their degrees this way.  They'd get ahead of where they would have been otherwise, and eventually their children would go to a residential college and find the good life from that.  This pattern has been disrupted by various changes in the economy.  The jobs that those night school graduates had gotten have been drying up and the tuition for college has reached a level where that first generation now has no confidence that they can deliver for their offspring.  There is a further issue that appears to be emerging on the other side of the labor market - employers increasingly reporting that they can't find candidates for job openings.  You hear about that now and then.  You don't hear about anyone taking constructive steps to address the issue.

As an economist steeped in general equilibrium theory and the escoterics of subgame perfection in non-cooperative games, as well as the non-economics but relevant systems approach to thinking about management and organizations (Peter Senge, The Fifth Discipline), I have a tendency to give a nod to common sense, but be quite suspicious of its conclusions, especially when it is applied to complex social problems.  There is a strong inclination to mistakenly treat symptom as root cause and thereby come up with a quite wrong headed solution.  In this case the problem with the common sense solution is that it treats higher education over here and the labor market over there, taking the latter fixed while it tries to jerry-rig the former.  What is needed, instead, is a conjoined solution.

Economists looking at the problem (at least the one authoring this piece) would begin with a theoretical ideal, describe that, and use it to provide context for looking at solutions, imperfect though they might be, that best approximate the ideal.  Here the theoretical ideal is given by making a perfect capital markets assumption - the student can borrow as much as he or she wants and will pay back the loan via the increase in wages earned in the future.  If all of this were certain, the amount of college would be determined by the usual marginal benefits equals marginal cost conditions that set the optimal investment level.  (Yesterday at the symposium, there was discussion of the "public good" aspect of a college degree.  I concur; there is a strong public good benefit.  I would add there is or at least can be a strong consumption good aspect - college to be enjoyed as a thing in itself by the matriculating student.  I don't want to deny these other benefits at all and I agree it is too narrow to focus only on the human capital aspects of college education that have market value.  But here I will ignore the public good and consumption benefits as I don't believe that looking at them helps in considering how the college education should be financed.)

The first step in moving away from the perfect capital markets ideal is recognizing that all of this is not certain, but that the tuition costs are far more certain than the student's future wages in the labor market.  So there are risks - first in an entering student completing college and then, having attained the degree, in future earnings.  These risks are currently borne by the students themselves (and their families).  They are risks that can't be diversified away, at least not as things currently are done.  And for middle and low income students, in particular, college as it is currently financed has become too much risk to carry.

The search for low-cost ways to attend college, when viewed this way, is the search for a safety-play in this otherwise high-risk universe.  But socially, that might be quite wrong.  Instead, what might be preferred is to keep the riskiness of the system as is, but to get some other parties to bear the risk.  To me, that seems optimal as does that the other parties who are the obvious candidates to bear the risk are the future employers, especially those who are currently sitting on a pile of cash and can diversify the risk much better than the students can.  This is the impetus for an employer-pay-for-college approach. 

Readers, who properly should be skeptical about suggestions such as this one,  might ask, if this is so much better than the low-cost college alternative why doesn't it happen on its own accord?  It is a fair question.  The answer is that it does happen now, in niche areas, but is certainly not ubiquitous.  Looking at the niches might help in ascertaining what would need to be done to make the practice more widespread.

Let's consider two quite distinct areas.  One is graduate professional education for mid-career employees who have climbed the job ladder and are highly valued by their employers.  In this case, the productivity risk is much less than for new college grads.  Further, these employees are implicitly bonded to their employer.  Even if the professional education raises their future productivity substantially, they are apt to remain with their current employer, so the current employer has a reasonable belief that it can capture a good share of the productivity gains, thereby rationalizing the paying for the professional education investment.

The other is the remuneration of NCAA athletes in the revenue generating sports.  The pro teams don't overtly pay the college tuition and incidental costs.  But implicitly they do, especially by not maintaining minor league/development leagues for the players who would be high predictors for making it at the professional level and by having a draft system, so that players as they leave college are not immediately free agents.  The draft system means that younger pro players are bonded to their teams.

Between these two examples I believe there are the elements of what an employer-pay system must do.  First, of course, it must bring a good chunk of the wages it would pay employees (say in the first five years of employment after graduation) forward to  the college years.  The employers absorb the productivity risk this way.  In, return for that, they are entitled to extract some risk premium, which would be done by paying those graduates substantially less in that five-year period than they would otherwise earn,  the wage reduction covering the college cost and then some.

Second, the system must address the issue that some other employer will poach the productive employee - get the productivity reward but not incur the cost of paying for college.  If this can happen freely (as is the case now) that would kill the incentives for employer pay.  So there must be some legal form of bonding to the employer.  Concomitantly, there needs to be some cartel pricing for the wages of new employees, so the solution works both for the students and the employers.  Tilted one way, as already argued, the employers won't have incentive to make this sort of investment.  Tilted the other way, this would appear like indentured servitude.  What is needed is to minimize the tilt in either direction.

Third, the system must come to address how particular students get matched with their future employers and how the matching can become at least approximately efficient.  Now we have a system based on recruiting and internships, as the primary identifying mechanism, followed by a standard market where near grads are free agents who collect offers (if they are lucky enough to appear attractive to potential employers) and chose the one they prefer.   Employers, in turn, use both the recruiting and the internships as screening to whittle down the list of their preferred job candidates and from there make offers accordingly.  Can such a system survive if the wages paid get taken out of the equation? 

I suspect not.  The incentives to cheat would be too great.  Under the table payments would emerge as a way for an employer to attract preferred candidates.  That would unravel the entire thing.  If that is right, a different approach to matching would be necessary, such as a draft like what the pro sports leagues do or, instead, like the National Residency Matching Program, where ultimately the match is determined by the process rather than by being the highest bidder.  This would still afford reason for pre-play communication like internships, so each side would have more information about the other when approaching the matching process.  But it would preclude any bidding that would undermine the system. 

Can this work?  First, let me say this essay is only meant as a brief sketch of what might be done.  It is not a fully fleshed out plan, not by a long shot.  In adding flesh to the ideas here and in making tweaks to what has already been suggested (Why 5 years of bonding to the employer?  Why not 3 years or 7 years instead?) many other related issues will likely emerge.  (For example, the system might reasonably serve those future employers who are large and have substantial accumulated cash balances.  But what of new ventures just beginning to make their way?  How would they attract talent in this system?)  Second, my purpose in this piece was not to answer whether this can work or not.  I don't know the answer to that question.  My purpose was to ask, why aren't we even attempting to consider this sort of alternative?

It is hubris to refer to your own thinking as out of the box.  I do so here not as self-promotion, but because I'm frustrated that others don't seem to be producing non-obvious but interesting possible solutions to the problem.  Instead, there is only the conventional thinking, which makes it seem like higher education is now in a race to the bottom, following in the footsteps of K-12 over the past twenty years or more.  There was much talk at the symposium about crystal balls and making prognostications for where higher education will be in five years.  My prognostication is decline, unless we do something serious and substantial to reverse that.  So put on your thinking caps and come up with your own out-of-the-box alternatives.  That's what we need to make things better.

Saturday, September 14, 2013

Roundedness

You don't hear the expression "Renaissance Man" used much these days, certainly not as an ideal, and not for an adult but rather for how a kid should develop.  I looked it up in Wikipedia and found there it identified with polymath, conjuring up images of Benjamin Franklin and Leonardo da Vinci. This is not how the expression was used when I was a kid, where diversity of interest was implied but world-class expertise was not.  "Hobby" is another word you don't hear too often nowadays.  My conception of a Renaissance Man is somebody with many hobbies. It was an ideal embodied in my dad's approach to the education of me and my siblings.  Some outdoor activities we did serve as example. 

In our backyard we had a gazebo, a screened in structure that we used mainly for storage of the bikes and lawn furniture, but on the weekends during the spring and summer we would eat a lunch out there on a picnic table, with the food cooked in the outside fireplace.  Though the food variety was pretty similar to what I'd grill today, mostly hot dogs and hamburgers and also baked potatoes, the quality of it was quite different.  The fireplace was wood burning.  The wood we simply gathered in the backyard from fallen branches (we had a lot of trees).  My father would use old newspaper to start the fire.   There was a grating to place over the burning wood.  You wouldn't put the meat directly on the grating, but you could rest a hand grill on it so the meat would could cook several inches above the fire.  Even this way, the hot dogs often came out blackened on the outside.  And for the potatoes, my dad simply threw them directly into the fire, without any aluminum foil on them.  They'd come out completely charred, with the black coating thicker than your fingernail.  Mostly you didn't eat that, but scraped it off instead.  What was left over was remarkably tasty.  We liked doing this sort of thing so much that sometimes we'd replicate it in the winter at Alley Pond Park, bringing along a thermos of hot chocolate to help keep us warm.

I want to be clear about what this was. Sometime in the 1980s after I had been a faculty member at Illinois for while, I became aware of Paul Proudhomme and Cajun cooking.   The particular delicacy that everyone was raving about was Blackened Redfish.  My dad's stuff, also blackened, might seem similar.  It wasn't.  My dad called the potatoes Mickeys (see definition 3), an expression that emerged during the Great Depression.  In other words, it was cooking that came out of utter desperation and it was cooking that my dad was still comfortable with, although in the 1960s the poverty he had lived through as a young adult happened long ago.   Further, the cookout was lunchtime fare and in that a contrast to what we'd otherwise have.  It wasn't meant as a substitute for going out to dinner as grilling on the Weber is meant for my family now.  Lunch wasn't supposed to be fancy.  It just had to be good enough.  That was my dad's philosophy in a nutshell. 

In the fall we had to rake the leaves, particularly in the front yard.  There were a couple of trees that produced a prodigious amount of droppings.  Each kid would have an area to cover and rake the leaves  in that area into a pile, then make another pile nearby, and continue in that manner until the lawn had been done.  Here my dad explicitly said, "you don't have to do a perfect job."  Indeed, you couldn't because as you were raking the trees were delivering more of their deposit.  When the piles started to accumulate it became somebody's job to put the leaves into a trashcan.  I recall our trash was picked up three times a week and when I was young they would allow leaves and other yard waste to be put into the trash, done directly with no bag to contain them.  Later, either because the city outlawed it or because my dad just became ecologically minded, I'm not sure which, we'd take the trashcan full of leaves and dump it in a pile in the backyard where my dad intended to make mulch.  Once in a while we'd splash down into that pile.  I recall my sister doing that and then burying her under more leaves after. Work and fun were interwoven that way.

Also in the fall on many Saturday afternoons my dad would play football with us and my friends.   It was different than what most people think of as touch football.  He said this particular game was invented by the Kennedys and he called it association football.  There was only one down.  Forward laterals were okay.  One hand touches were also okay.  The game featured improvisation more than running a play, because if you had the ball and were about to be touched, you had to get rid of it quickly. Also, my dad imposed his own ground rule, that was put in place because we were of different ages and different skills.  At the start of the down he would say, "give him a chance" and not allow an immediate touch before the play really had gotten started.  My dad was plenty competitive.  You'd see it on the tennis court.  But he understood that when kids play participation beats winning.

I should add that my dad was the only parent among my friends to play with us on the weekends.  I became a Cub Scout and there were definitely other parents involved in that.  I think I was not quite eight when Cub Scouts started and somehow I was allowed to join at the time because I was bigger than my friends who were in the Cub Scouts even though I was younger than them. When I was eleven I played in Little League.  As with Cub Scouts, there was parental supervision.  What made my dad's participation unique in our football games was that was unmediated by any formal structure.  He adapted to the kids environment, not vice versa.  We played on 212th street, where parked cars were natural obstacles on the field and where the neighbors could watch us if they had nothing better to do.

We also did a variety of arts and crafts.  For a while my siblings and I would go to some Center in Whitestone off of Francis Lewis Boulevard where our time was divided between arts and crafts and physical fitness.  For the former, we made sculptures out of paper mache, strips of newspaper and some godawful smelling glue to bind it together.  My memory of this is rather unpleasant, the foul odor dominating over any sense of creativity in action.  In the gym we passed a medicine ball around, although that was not literally true.  It was too heavy for us to lift.  So we'd role it to the next person, not quite a real workout but some activity nonetheless.

My dad had us doing arts and crafts at home as well.  We often made tiled ashtrays.  Our job was first to get the right shape of tiles, which were on a mesh backing, to fit the metal ashtray.  Then we'd glue the mesh to the ashtray, possible using a few different pieces of tiles in mesh to get a good covering.  Most of the work was in making the grout and filling the spaces between the tiles with the grout.  The result was an interlacing of the tiles, usually in a variety of different colors, with white spacing in between.  You could buy fancier ashtrays in the department store, but these were functional and not unattractive.  We also did leather work on occasion.  My dad had metal tools to make imprints in the leather.  I know I made a bookmark for my mom this way.  I don't recall other things we made, but I know we did this multiple times and got somewhat proficient at imprinting the various shapes.

We had a live-in maid when my brother and I were very young.  She slept in the basement.  We went through quite a number of different people in this job.  As we got older we switched to a day person who was with us for many years, Louise.  She cooked the dinner in addition to doing the cleaning.  During the first summer of the World's Fair, my cousin Kim from Denmark stayed in our basement and sold Danish Hot Dogs at the World's Fair.  After he left the basement no longer needed to serve as an extra bedroom and we got a ping pong table down there.  It was a tight fit.  We had a built in bar in the northwest corner of the room.  It had a sharp corner that would hurt you if you bumped into it.  And the east wall was quite close to the table, which was set up at a bit of angle though more or less in a north-south direction.  The particulars of the setting encouraged me to learn an unorthodox inside-out backhand so that when I was standing next to the bar my follow through wouldn't go into it and the spin imparted on the ball angled it toward that east wall in a way that would make a point for me if the opponent didn't reach it quickly.

I'd like to know the cumulative effect of these activities on me now.  Before trying to get at that, however, let me talk about one other activity, playing the piano.  When I started, we had what was once a player piano but then was converted for normal use.  After some time, my parents bought a new upright, which probably had a better sound, though I can't really recall.  My brother now has that piano in his house in Ann Arbor.

I took lessons from Mr. Anson, who came to the house.  My sister had been taking lessons from Mr. Anson for some time and I would occasionally watch and listen to these.  It was why I was interested in having lessons as well.  I started when I was eight.  Each year Mr. Anson would give you a statuette of a great composer.  Since my brother also took lessons from Mr. Anson, starting a year or two after me, we ultimately ended up with quite a collection of statuettes.

Lessons were part review of the music that was practiced during the week and part introduction to new pieces that would be practiced the following week.  The music itself was also divided into two categories, classical (think Sonatinas by Muzio Clementi) and show music by such composers as Hoagy Carmichael, Jerome Kern, Cole Porter, George Gershwin, Rogers and Hammerstein, and with other popular music thrown in, such as some of the hits by the Beatles. For the classical stuff, you had to learn the proper fingering as well as the correct notes and doing so was work as much as it was pleasure.  For the show music, Mr. Anson taught a style where the right hand played the melody and the left hand could improvise on the accompaniment, playing either block chords, possibly at different positions on the keyboard and in rhythms that might vary from one play to the next, or playing arpeggios that also showed variation in how they were performed.

I was never great at the Classical stuff, ultimately getting as far as Beethoven's Moonlight Sonata, Mozart's Fantasia in D-Minor, and Chopin's Waltz in C Sharp Minor.  These were delivered in a tolerable but certainly not elegant manner.  I most definitely could not reproduce that level of delivery now.

It was different for the show music.  I got to the point where if I knew the tune ahead of time I could give a decent rendition the very first time through.  It was easier to do this with slower moving pieces, for sure, but I could even attempt the quick ones this way.  This skill has stayed with me and in that way I continue to enjoy playing the piano as an adult.  I would do it more often if the font on our sheet music was somewhat larger.

The downstream impact of the piano lessons is most obvious to me.  On occasion the family would sing at the piano, where I'd be playing.  We did this with some frequency, sometimes even when company would be over.  Singing along at the piano is quite an enjoyable activity.  I have a distinct memory during my last semester at MIT (before I transferred to Cornell) where we had a party in the dorm.  Slightly bombed on Gin and Tonic, I was at the piano playing.  I didn't have the gumption to ask a girl out on a date at the time, but a rather attractive blonde who lived a floor below me sat down on the bench next to me to sing along.  A number of other people stood behind us, also joining in on the singing.  The sheet music Mr. Anson had given us included the lyrics. (He had his own ditto machine and would bring copies of individual songs that we'd put into a loose leaf binder.)  So I learned the words to these pieces as well.  I too would sing along to the piano accompaniment.

Indeed the singing of the show tunes became its own thing even when there was no piano around.  When I was in Vancouver and then living with my not-yet-wife, we would on the weekend often drive past North Vancouver into the hills for a walk and a picnic.  On the drive we'd be singing the entire time.  Old Man River was a particular favorite as was the opening number from Fiddler on the Roof.

After my kids were born one of my favorite activities was to hold one of them next to my chest with their head on my shoulder, my ear touching their head.  I would gently start singing to them, the graveling voice seemed a wonderful way to get them to sleep.  Haul Away Joe was a particularly good number for this.  When it took a little longer I would go through more of my repertoire.  Night and Day is an octave or two higher, so perhaps not quite as good for getting the baby to fall asleep, but I was entertaining myself as well as the baby and I enjoyed the variety.

There are no such obvious derivative activities that are a consequence of the other lessons of childhood that I've describe above.  What endures, instead, is a tone and a certain approach to things.  In the book, A Whole New Mind, Daniel Pink advises the reader to "celebrate your amateurness."  While my dad would never have embraced Pink's jargon, his philosophy to teaching us kids embodies that ideal.  It encourages a generalist's approach when most of us, instead, tend to become hyper professional, certainly in our work but also in our leisure pursuits.  Graduate school in economics encouraged me to be hyper professional with the economic theory and for ten to fifteen years afterward I was most comfortable when talking with other economists and still to this day find it harder to have reasonable conversation with folks entirely outside of academia if I don't know them already.

Becoming a parent and getting involved with online learning reversed that.  My more recent found pleasure in writing has pushed me further in the direction of the generalist.  Especially when I don't write overtly about economics (where the professional side still shows through on occasion) the hypothetical reader whom I write for is a generalist who is quite good at making sense of arguments expressed in plain English, but who has an aversion for ideas expressed too technically, for lack of expertise and for fear of missing the forest for the trees.

I have a feeling that if we had more generalists we'd be more tolerant of one another.  Amateurs can err in a benign way that offends no one.  Experts don't make mistakes, in the popular conception of expertise, and it offends the sensibilities of others when it appears that the expert has made an error.  In the opposite direction, experts often don't have the patience to engage in conversation with those less informed or talk down to them when they do.

Further, expertise is niched.  To get deep into a subject one must also become narrow.  In turn, the narrowness also contributes to a lack of tolerance, because we have less in common with one another.  It is a way in which "progress" is really more like regress.  Instead of moving forward toward democracy, we are sliding backward toward tribalism.  And it is why my dad's views about learning still seem powerful to me, rather than some quaint way of doing things from a bygone era.