Wednesday, March 31, 2010

Student loan reform

This is real reform, and was added to the passed health care expansion bill. Well done, Obama and the Dems in Congress. I have no qualms with this (can you believe it!?!), except that it is long overdue. There is absolutely ZERO reason why private banks and Sallie Mae (top lender managing >10M loans) should serve as the middleman between students/colleges and the federal government underwriting the loans, while of course increasing the cost of the loan for their own profits (another "subsidy for the banks"). The industry is huge (total US student debt is $527B) and their cut is not insignificant (~$6B/year), which is why the banks were fighting the reform so much (Sallie Mae alone spent $3M on lobbying/ads). The government will use that money to increase the size and number of Pell grants (need-based college grants) to keep up with inflation, and also support the hurting junior college system that has seen its funding pillaged by cash-strapped states. Since the Clinton administration, a number of direct student loans were available (~23% of all loans, and about 7% CHEAPER than Sallie Mae), and public schools like UC Berkeley have been using them for years. During the Bush presidency, multiple attempts to close that program were made, but fortunately failed. Direct loans have worked at places like UCB, so there's no reason why they can't work nationwide.

Pells used to cover most of a college education, but now that costs have soared almost as much as health care, the $6k/year grant doesn't go very far, but under Obama government spending on Pells has doubled (almost a million more grants will be given out by 2020). As my last email described, college is one of the best ways that poorer immigrants and the lower classes can advance themselves in US society. And if we're excluding talented, motivated people from quality higher education just because of financial hardship, then that impairs our overall economic and social well being.

This education reform demonstrates why we needed the private option in health care, possibly on the road to single-payer. This will keep student loan interest rates down. It's not putting the private lenders out of business (it will of course force them to shrink), but serving as a check against extortion. The direct government loans will offer an APR of 8% for professional schools, versus 12% in the private sector. It's not like banks will go under because they lose that extra 4% on a medical school loan, but now they have to offer competitive rates to earn our business.

Banks counter that customer service will suffer now that a "federal bureaucracy" is servicing loans directly instead of your "friendly community bank". I'm not defending government customer service (try speaking to a human at the IRS), but that's a load of crap. Sallie Mae (SLM) is a for-profit entity, and JP Morgan, Bank of America, and some private equity firms tried and failed to acquire it for $25B in 2007. If SLM is just a friendly lender trying to help our America's students, why would the sharks show so much interest? The same big bank sharks who destroyed the economy with mortgage trading are the ones servicing student loans too. When the credit crisis hit, worthy students couldn't get college loans because the greedy, paranoid banks weren't loaning. Then why are they even involved when they're not fulfilling their function? Republicans (often from states that are home to the HQ's of these banks) criticized the legislation, saying that it will cost thousands of jobs and is actually a clandestine way to help fund the health bill. Well, the first count is true, but so what? Aren't they the ones against subsidizing failing industries like auto (or are they just against union-heavy industries)? The private student loan industry is obsolete and now needs significant retooling. It's a free market and America is the land of opportunity, right? Sink or swim. No one cried when thousands of Lehman and Enron workers found themselves on the street, even though they weren't responsible for the transgressions of their execs.

And as you would expect, like in other credit industries, abuses abound on private student loans. NY sued SLM, Citi, Nelnet, The College Board (the SAT a-holes), and others for deceptive lending practices in 2007, and SLM settled for a $2M donation to a NY student loan information program. There is another class action suit pending against SLM for discrimination against black and Latino customers (charging them higher rates). In 2007 (apparently a very bad year for the industry), scandals abounded across America involving bank reps offering gifts and favors (even stock options!) to college financial aid officers to promote their banks as the "preferred lender" to students, which led to firings for those who were caught. In addition, unlike with other types of loans, the 1965 Higher Education Act allows student loan providers to also handle collection duties. So they have a financial interest to maximize defaults, which in many cases can lead to more money for them than the borrower keeping up with payments. Just your friendly neighborhood lender huh? I don't think the Feds will be that evil. 

http://thecaucus.blogs.nytimes.com/2010/03/30/obama-signs-bill-on-student-loans-health-care/?8au&emc=au
http://en.wikipedia.org/wiki/SLM_Corporation
http://www.thenation.com/doc/20070521/loan_abuse
http://www.kqed.org/epArchive/R201003310900
http://campusprogress.org/tools/788/crib-sheet-direct-loans
http://www.npr.org/templates/story/story.php?storyId=9803210&ft=1&f=1001

Monday, March 29, 2010

Asian-Americans and college admissions

There was an interesting recent discussion about the representation of Asian-American students in top universities (well, the conversation mostly focused on the Ivy League). In this case, Asian-American refers to East and South Asian. Since those Asian-American families seem to emphasize high grades and standardized test scores over other student qualities, this can be a double-edged sword. For the public schools that admit students based on a formula that gives a lot of weight to the "numbers" in an applicant's record, this can be advantageous (hence the fairly high representation of Asians in the UCs). But for admissions to the elite private schools that claim to seek out "well-rounded" students and a "diverse" student body, they don't want a whole bunch of science geeks with 95th percentile scores. They also consider athletics, volunteering, leadership, hobbies, and other extra-curriculars, which Asians may not exhibit similar success (whether that be a racial stereotype or not).

I understand the argument that you don't want your school full of one-dimensional bookworms, but on the other hand, grades and test scores are the most objective aspect of an applicant's profile (assuming that high school ranking and socioeconomic-geographic factors are taken into account). When private schools put more weight on the other stuff, that opens the door for more subjectivity, which critics say is just a way to mask preferential admissions for the children of alums, big donors, and/or the rich and famous. But of course the over-arching question remains: how does one really evaluate a student's overall merit and potential to succeed at a particular school and beyond? If we went purely by demographics-blind academic numbers, it's possible that Cal's or even Harvard's class of 2015 would be 70% Asian. Is that bad for the university? Apart from the obvious benefits of a Harvard education and degree, would even the parents of an Asian student want their child to live and learn in such an environment? How do you balance diversity with academic achievements?

Bottom line, as any student adviser would tell you, it's all about making your application stand out from the pack. There are just so many talented students with good numbers competing for a finite number of Ivy spots. But if admissions boards and the general public think of Asians as a homogeneous group (which is racist and ignorant), it's harder to stand out. Every Asian-American is basically a short, skinny Chinese person from Orange County with glasses, who wants to go to medical school, plays the piano, and parents own a restaurant (or are software engineers), right? There are actually some people out there from Mongolia and Bangladesh (yes, those places actually exist!), who may be great electric guitarists or baseball pitchers, and want to study theater or geology, you know? Well in CA for example, there have been some interesting developments. After voters passed Proposition 209 in 1996, outlawing racial preference and other affirmative actions, black/Latino enrollment at the top UCs plummeted, while whites and especially Asians rose (13% of CA is Asian, but now account for 40% of the UCs). Now that the UCs have become "too Asian", admissions offices are planning to reduce guaranteed UC admission from the top 12% of a high school's students to the top 9%, and remove the SAT II subject tests from the application. Some faculty and Asian groups are quite upset (probably the test-prep industry isn't too happy either). The state won't admit that this is in response to the Asian skew, but some predictions suggest that Asian enrollment will decrease due to the changes. This is obviously due to the fact that Asians score better on the SAT II than other races, so they are losing an advantage area. The UCs fire back the guaranteed admission only applies to UC Merced (successful Asian students rejected from Berkeley don't want to go there anyway), and that the SAT II doesn't provide much extra information over the SAT I to guide admissions decisions.  

They don't just want to admit good test takers. Regardless of alleged racism, it can't just be about grades and scores. Interning at a lab and getting your name on a patent/publication, or winning an award from your city for organizing a beach clean-up, are probably much better than taking a test-prep course to boost your score by 10%. There are only so many hours in the day. If Asian kids are devoting a huge amount of time to projects that only improve their GPAs and test scores, then they have less time for extra curriculars, if they are even interested in any. I know it's a lot harder to convince Asian immigrant parents that drama club or volunteering at the senior center will help them get into an Ivy as much as studying harder, but it's the truth. Maybe some parents don't let their kids go out and prefer they study all day. That's definitely the way it is in Asia, where college admissions are even more competitive, kids just normally study all the time, and extra curriculars barely factor in since the entrance exams are everything. So maybe that culture clash is now holding back some of the top Asian-American minds? I just hate it if kids of any race pursue extra curriculars just to improve their admission chances. I know it's a practical reality of the system, but I'd rather people do things because their heart is in it and they want to help others and do their best, not because of how it can help them later. And I'm sure many savvy Asian parents force their kids to pursue ostensibly beneficial extra curriculars that their kids actually despise. I am so glad I am not a teenager now faced with these dilemmas.

I have more gripes with Asian-Americans than your average Klansman, so I am not bringing all this up from an "Asian pride" standpoint. As precedent, the Ivies discriminated against Jews during the 1950s-60s (well, for centuries even rich white women and the smartest black guy in America weren't allowed at Harvard), and a generation later Jews are now vastly over-represented in both the student body and faculty. And of course over time, as Asian immigrant families get more established in America and grow their wealth/influence, more Asian students will be similarly admitted. Independent of that, the Asian population percentage is expected to increase from 5 to 9% by 2050, so there will be more Asians applying everywhere.

Based on a 2008 US Census update, 68% of Americans are non-Hispanic whites, 15% are Hispanics, 12% are blacks, and 5% are (any) Asian. Although most schools do not admit students based on affirmative action (but do give preference to some under-represented students), clearly the percentage of Asians in top schools exceeds their population representation. So what's the problem? Well in a typical Ivy applicant pool, maybe 1/3 of students deemed "worthy of admission" are Asian, yet the number of Asians actually given an admission letter is lower. Stanford's class of 2013 is 33% white, 23% Asian, 15% Hispanic, 10% black, 8% international (not sure if that includes Asian non-Americans), and 3% Native American. But this may reflect California's Asian-heavy population (relative to the rest of the US) and Stanford's admissions policies. In contrast, Harvard's 2009 student body was 43% white, 13% Asian, 6% black, 5% Hispanic, and 20% international. So why are more worthy Asians getting turned down? Extra curriculars? Well in many cases, Asians with top scores/grades also have above-average extra curriculars, recommendations, and essays. So why the discrepancy? Most of us would agree that the biggest discriminating factor for top university admission is not race, but family wealth. Even many of the under-represented minorities going to top schools do not fit the typical economic profile of Americans of that race.

In a recent book from a Harvard grad and Bloomberg editor, The Price of Admission, Daniel Golden explores how money buys elite college admission. We all suspect this implicitly (look at the example of George W. Bush), but he actually provides concrete evidence. A 1980s Justice Dept. investigation concluded that Asians had a harder road to Harvard admission that whites, but this was permissible because Harvard had the "right" to favor athletes and legacy students (Harvard claims to have done away with this policy in the 1990s, but the numbers show it still persists). The Ivies admit outstanding kids, we all know that. Often legacy kids or student-athletes/artists do fit in the school's typical academic profile, so just because an Asian had a 5% higher GPA, it's defensible to select a non-Asian violin protege or gifted swimmer over him/her.

But what about the legacy students who really are one or two standard deviations below the median academic profile? Harvard, for example, unofficially encourages rich parents of weaker students to join their Committee on University Resources (COUR). I'm not sure that Cmte. actually does anything, but requires a $1M donation for membership. And as you would expect, members' children enjoy a disproportionate acceptance rate, making parents' COUR membership statistically more advantageous on your Harvard app. than a perfect SAT score. The Ivy League turns away students with perfect test scores and GPA every year, but a disproportionate number of them are Asian, propagating the sentiment that Asians need to go above and beyond the other races to prove their worthiness for Ivy admission (an Asian guy with a perfect SAT sued Princeton over this, but lost). Princeton sociology prof Thomas Espenshade's study showed that in 1997, a black student with 1150 SAT, a white with 1460, and an Asian with 1600 all had equal chances of attending a private college (he did not have access to the extra curriculars and essays of those students in his study though). Why is that? My theory is that someone has to make room for the legacy students and other VIPs. Or more innocuously, when the admissions pool doesn't quite reflect the ideal freshman class profile that the school is hoping for, someone has to draw the short straw and provide the wiggle-room. Asians are the next most abundant applicant group by race, and assumed to be fairly interchangeable, so it's just more likely that they will get the boot in place of Malia Obama or a poor Latino. I don't think it's a deliberate targeting of Asians, but just probability. If under-represented minorities were getting passed over (they are already, but say at the same degree as Asians), it would cause a much bigger civil rights controversy. But with Asians, the university can claim that they already admit a double-digit % of Asians, so what's the problem?

We all know that the rich get richer. Well-to-do families who went to good colleges have the know-how to prepare their kids to replicate their successes. They also have the resources to provide the best schooling, tutoring, materials, and other opportunities to help the kid maximize his or her pre-college potential. And if all else fails, they can write a big check to the endowment. All the kid pretty much has to do is not screw up (and even cheating or drugs can be wiped from the slate, and least in the pre-Twitter days). Bill Gates would have been some mid-manager (at best) at Oracle if he grew up black in Richmond, and maybe I could be a Senator if I was a Kennedy. Talent and drive are some of it, luck and help are the rest. I just think it's too bad because the American Dream and our economy are built on the assumption of meritocracy, and many times it holds true. It's what makes us different than Nigeria or Russia where you don't get anywhere without family connections and bribes. American education is one of the truest meritocracies we have, and if we taint that with actual or suspected corruption/favoritism, then it's just like steroids in baseball. Well, some studies suggest that there is actually more social mobility in former European monarchies than the US, despite their history of classism and our supposed history of equality. But enrollment at an elite university is one of the few ways that poor or minority people can advance in America. The rich don't need that assistance; even if Bush went to TCU, his dad still would have gotten him a high position at Arbusto. So the rich, who don't need to go to Ivies to make it big, still are and thereby prevent other less privileged students of color from using that conduit to land more prestigious jobs later (and in turn help their kids follow in their footsteps, which ironically is the exact problem their co-minorities are criticizing). :(

http://www.kqed.org/epArchive/R201003261000
http://www.unc.edu/cr/features/books/golden-the-price-of-admission.html
http://www.dailyprincetonian.com/2009/10/12/24103/
http://hpronline.org/blog/harvard/the-asian-ceiling/
http://www.usnews.com/mobile/articles_mobile/do-elite-private-colleges-discriminate-against-asian-students/index.html
http://www.forbes.com/2007/10/09/america-class-society-ent-dream1007-cx_pm_1009class.html
http://www.forbes.com/2007/10/09/income-mobility-opportunity-ent-dream1007-cx_th_1009harford.html

FYI from boston.com:
Yale’s class of 2013 is 15.5 percent Asian-American, compared with 16.1 percent at Dartmouth, 19.1 percent at Harvard, and 17.6 percent at Princeton.

More from Espenshade's study:
Espenshade found that when comparing applicants with similar grades, scores, athletic qualifications, and family history for seven elite private colleges and universities:
  • Whites were three times as likely to get fat envelopes as Asians.
  • Hispanics were twice as likely to win admission as whites.
  • African-Americans were at least five times as likely to be accepted as whites.
  • Athletes were more than twice as likely to get in as non-athletes with similar qualifications.
  • Students from private high schools were twice as likely to receive acceptance letters as similar students from regular public high schools.
  • Students from highly regarded public and private high schools were three times as likely to win admission as others.
  • Students in the top 10 percent of their high school classes were about twice as likely to get in as students in the next 10 percent.
Tim Harford, Financial Times:

The unfortunate news is that the children of poor American families end up being poor adults far more often than the children of poor Danish or Norwegian or Canadian families. And that chips away at the cherished myth that America is a land of opportunity for all.

Friday, March 26, 2010

Healthcare bill cont'd

Universal healthcare has been a liberal goal for decades.  This bill marks a pretty dramatic shift: previously, an individual bore the risk/cost of a serious medical condition.  If you weren't insured when you developed Huntington's or whatever, you paid for it.  After this, that risk is socialized.  Liberals didn't get everything they wanted (public option et al), but they got enough that the frothing right is suggesting Obama has done more to socialize America than any president since FDR - that's obviously an overstatement, but the left got a lot more than nothing here.

And the hold-ups on this bill haven't been a travesty of democracy.  The polls I've seen suggest that less than 40% of Americans support the changes being made (http://marathonpundit.blogspot.com/2010/03/three-new-polls-obamacare-support-still.html).  Democrats have a majority in Congress, but they also want to get re-elected.

I think a lot of the problems the bill had, and the sacrifices made, have to be laid at Obama's feet.  Frankly, he did a poor job of shepherding this thing through.  He promised to lead, to make changes, blah blah blah, but then handed his biggest cause to the "business as usual" party chiefs.  Incidentally, this was exactly the complaint many people raised about him before the election: that despite his outstanding rhetoric, he'd never really stood up to the party chiefs.  If he'd taken the reins and pushed this thing through 9 months ago on his terms, we'd probably have the public option.  Instead, everyone got their turn at the trough - no surprise, then, that so few voters support the final outcome.  The Republicans were dicks, but it's not like he made much effort to get them on board ... even for their good ideas, like tort reform (trial lawyers write big checks to Dems, business as usual) or other cost-cutting efforts.

So now he's got a second chance at making something of his presidency.  Hopefully he'll continue actually leading, rather than reverting to the "give pretty speeches to give the party chiefs air cover for business as usual" approach.  Voters like his ideas, but he has to be willing to stand up to the special interests ... and it's apparently easier to make a speech saying you will, than actually to do it.

As for the bill ... socializing some of the risk of health problems is a good thing.  It's good for all the liberal ideal reasons, but it also makes it easier for workers to switch jobs, for people to make decisions about their futures without "will I have health care" hanging about their necks.  The costs worry me.  Even the most optimistic seem to be delivering the "this won't be super-expensive" line ... that is, no one seems to think this is going to reduce the costs.  But even if health care stays on its current cost trajectory, it's still far too expensive in the long term.

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Yes exactly, this bill is more about universal coverage than socialized medicine or cost control. But of course this still falls short of universal coverage. Universal coverage is Cuba or the UK, where I can walk into a clinic and get treated without showing any papers. I can elect to not have insurance and just pay a small yearly fee to Uncle Sam. And I think the paperwork to get uninsured people into the system will be substantial, which can be intimidating to rural, recent immigrant, or non-English speaking citizens. So will we punish those individuals if they are unwilling/unable to get coverage? And even if those people are covered, there's no guarantee that they will have reasonable access to care providers (imagine people on remote Indian reservations or in poor urban areas with overwhelmed, poor-quality public clinics). It's not very useful to give free gas to someone who doesn't own a car.

I don't think that universal coverage and socialized medicine should be relegated to a "liberal aspiration". Americans have the right to life, liberty, and the pursuit of happiness (or was it property?). Basic education and security (police, fire, etc.) are included in that, so why not health care? We are guaranteed healthcare in prison and the military, but not out on the streets? We are the only developed nation where healthcare bankruptcy exists - how obscene is that? With our progressive tax, the rich subsidize the poor, elderly, and disabled. So the rich and healthy should subsidize the sick as well. No society can survive unless the populace is healthy and productive. Especially in this era of obesity and possible pandemics and bioweapons terrorism, accessible healthcare is a national security concern. So it's not about the evil big government trying to control how much medicine you get and when you die. Government needs to be involved in healthcare for the best interests of the nation, even if the people don't realize it.

According to the CBO, this bill will reduce the deficit by $140B or so over a decade, by restructuring Medicare reimbursements. I am not sure how that affects the quality of coverage for seniors. I think that the bill authors also anticipate cost savings by making preventative medicine more affordable/accessible to uninsured people, thereby preempting more costly serious procedures later. Electronic medical records will save a little, but only pocket change compared to the bill's price tag. And no one is sure if the health insurance exchange/marketplace will function properly and lower prices. It's nice to close the Medicare drug "doughnut hole" immediately, but that only affects a small minority of seniors. It's also good that uninsured young adults can be covered by their parents' plans until age 26, but young people consume less healthcare anyway.

In France (their health system was ranked highest by the WHO in 2000), they have several private insurance companies, but all of them charge the same rates, can't turn anyone away, and don't have lifetime maximum benefits. As far as I know, they are nonprofit and heavily regulated too. Then every so often, they get together with the government and medical providers to modify costs and coverage based on social needs. Germany is similar, but also with the option to buy more private supplemental insurance on your own. So you have guaranteed coverage and the freedom to get more. Patients get care, medical providers get reimbursed by the insurance companies, and the government reimburses them. I guess it's like Medicare for everyone, but with an efficient private sector middleman that hopefully doesn't game the system for profit. Their systems are going broke too, but at least their people enjoyed decades of better care with less worry and cost.

To me, employer-provided insurance and for-profit medicine make no sense, and have led to our horrible problems. That's why the public option was so crucial, so hopefully even employed people can choose between their employer's plan or a plan through the gov't. The gov't should low-ball coverage and put the heat on insurers. Other industries do it all the time to jolt the competition (think Walmart vs. mom-and-pop stores), so the insurers should stop their bitching. The current bill mostly helps the uninsured and individually-covered, which is 15% and 5% of non-seniors, respectively. What about the 60% of non-senior Americans on group coverage? If we decline employer coverage and switch to the gov't plan, we could possibly save our employers millions. The public option is the first step towards single-payer, and phasing out of the insurance companies, which is probably why they fought it so hard. The more people that switch to the public plan, the harder it will be for bad private insurers to stay in business. When the public plan gets enough customers, they will have great bargaining power to get cheaper drugs/services (as the VA system already does). Or on the flipside, private insurers can get leaner and deliver better service to customers that surpasses what the gov't can provide, which will lead to retiring of the public option, which is fine too. Better service for the money is the end goal, and I don't care how we get there.

I think Obama made a reasonable effort to include the GOP. He extended his hand but they didn't take it. "Tort reform" was a non-starter, because they didn't offer a concrete plan and knew the Dems probably couldn't get it approved within their ranks. It's like Israel making disarmament a precondition for peace talks with Hamas. If they agree, there's not much else to talk about! But they say it because they fully know Hamas won't agree to it. So they appear diplomatic but have no intention to open dialogue. GOP want to get re-elected too, so they won't be caught cutting deals and making compromises on ObamaCare. To be frank, the GOP didn't offer anything helpful to add to the legislation.

As you said, Obama has a precious second chance now, but won't get a third. He still won't stand up to the party bosses though, because he owes a lot of them for getting him elected, and now owes them on healthcare. He is no LBJ who built up decades of Washington favors/leverage, and can force his will on others (be it good or bad). He was a junior legislator and has a history of conflict aversion. Supposedly his chief of staff and other enforcers should help corral Congressmen and get stuff done, but I'm not sure how many bridges they have left intact. The GOP are outraged, and maybe they can only count on Lindsay Graham to support climate change legislation.

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I'm not so sure I agree about the party bosses argument. To whom he owes his election is an interesting question, but I think, related to passage of health care, is that he disengaged too much from the process early on. He thought that if Congress did most of the detail work, they'd be more likely to own it and then want to pass it. Instead (and perhaps predictably) Congress stalled and stalled without much direction, especially on the attempt to corral a few Republican votes. If Max Baucus (who was probably doing so at the urging of the President's strategists) hadn't dragged out the Senate Finance Committee work on the bill for 5 months in an attempt to get some Republican votes, this thing would have been wrapped up by last Thanksgiving at the latest.

Obama also never seemed to have much of a strong picture of what exactly he wanted in the bill; he said he preferred a Public Option but never really fought for it. Without a  blueprint from which to negotiate, the Senate and House versions became different and this again caused delays and painful after-passage negotiations (especially after Scott Brown's victory) that easily added on a couple of months to the passage process. My reading would be that Obama basically wants a skeleton of a system in place that guarantees universal coverage and from which future reforms can be based. The exact details of the current plan don't seem to have been any great concern for him instead of making sure a plan passed.

There's a certain amount of sense in realizing that, given the unknown future, arguing over details that are likely going to changed in five years anyway is counter-productive. On the other hand, a lot of people cared about these details now and it slowed the bill down (and, without the public option, enraged his left flank). It was only once Obama became seriously engaged in the process after the Mass. special election that the passage efforts began to get traction. I'm not really sure where party bosses fit into this picture; it seems much more of a case of Obama trying to do post-partisan and be above it when instead he should have been engaged in the details.

Ultimately, I think this bill is about as small 'c' conservative a way as possible to reach universal coverage (and only in American would proponents of this approach be called "Socialist Fascists"). Basically, it gives subsidies to those without care to get it, and changes some regulations in the insurance market. It doesn't fundamentally alter the structure of the American medical system at all (for better, or probably, for worse) except for possibly the exchanges, which won't really have any serious impact until 2018 (at which point states can allow any size business to buy their insurance from the exchange). I wish it were politically possible to do otherwise, but if you had told me four years ago that Democrats were able to enact legislation giving significant subsidies to expand coverage to 30 million uninsured, I would have thought it to be an unmitigated good.

I'd note that it's easy for us to imagine a world in which people we know might be too lazy to get insurance (those in the 26-maybe 36 bracket). But for anyone with a family or anyone over 35, in which chronic medical conditions are an issue, jumping through the hoops of getting the subsidies will be very high on their list of things to do. Welfare, SCHIP, jobless benefits, and other government programs also have a fair number of hoops through which one needs to jump to receive the benefits, yet, precisely because of the lifeline nature of these programs, are that undersubscribed by the eligible.

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Regarding the party bosses, I know it was J's point but my take on it is this: Obama chose to defer to the committee heads to shape the bill, so as to not bruise egos or whatnot. There wasn't just a House and Senate bill, but several committees had their own versions: Baucus' (Finance), Waxman's (Ways & Means), etc. (in total, 3 from the House, and 1 from the Senate, and I guess the GOP had one or two later crappy bills of their own, where only 5M or so uninsured would get covered). Plus Obama and his staff don't have much rapport with the big lobbying org's and trade groups, so they needed to rely on the party boss intermediaries. Baucus is a big pal of pharma and helped them cut the secret deal, as a previous email described. Basically, I don't think Obama was really leading the effort until things turned sour. I know that may be his leadership style, to delegate and monitor from a distance, but sometimes you have to take the reins.

Each version was different, with varying degrees of public option-ness. Obama laid out his vision for the bill in January, 2010. I am not sure if he had that plan all along, or if he just cobbled together popular/passable aspects of the Congressional versions. But if he had the plan in his pocket since election day, he should have unveiled it much sooner, before the sausage/deal making in Congress turned off the public.

A president has to have a plan and vision, not just "get a health bill passed so I can fulfill my campaign promise, make history, and I don't care what's in it". I disagree that arguing about the details was not important, and the future is not so uncertain with regards to health care. We know that premiums will continue to rise and Medicare/aid will get closer to going broke, as more expensive drugs and treatments are prescribed more frequently (and the Boomers retire). The trends have been there, especially with anti-depressants and Caesarean births. Medicaid reimbursements were falling more and more behind the going rate, and Medicare drug coverage needs major reworking. Sure some health systems like Mayo and Kaiser show improvements (like all-digital medical data and doctors paid a fixed salary), but also some inner-city ER hospitals were closing their doors. These problems were known and out there, but the Democrat/Obama effort barely addressed them.

The administration had to decide whether they were trying to achieve universal coverage, new restrictions on the insurance industry, and/or comprehensive reform. They kept giving the public and Congress mixed signals, so of course the party leaders and their friends would try to include different things into their versions of the mammoth bills depending on their priorities. If they scrapped their ambitions of true reform on the road to single-payer, then the current bill could have been passed in a couple months without all the vitriol. Maybe in his second term Obama could have tried for more reforms. But it ended up as a strategic mess all around (like Hillary's presidential campaign), though fortunately they have something to show for it in the end.

As you said, this bill was the most conservative possible way to achieve almost-universal coverage. Maybe that is all we could have reasonably hoped for in 2010, but as you said, if some decisions were made differently in 2009 we would have had a public option and Scott Brown would still be at his former job. Of course it's a good thing to help 30M people get coverage who would otherwise be excluded. But what did you have to sacrifice to get there? His poll rating plummeted, millions of man-hours and dollars spent, other national agenda items had to be delayed (job creation!), Congress turned even more deadlocked and partisan, and right wing media spread anger, misinformation, and paranoia across the nation. If Obama pulled out of Iraq last March (unfeasible, but humor me for argument's sake), he would have saved America $144B over 12 months. America spends about $6k per capita on health care (could be higher now, since that was a 2003 stat), so covering the uninsured would total $180B per year. So by pulling out of Iraq a year ago, we could have covered the uninsured over that time period instead. The resources are there, but gov't just has to decide what it wants to give up in order to make it happen.  

I would rather have this bill than the status quo, but I just worry about the future. If this bill doesn't show clear, measurable healthcare improvement for the public and our national debt gets under control, the GOP will attack health reform as ineffective and wasteful, making it harder to move towards single-payer. In other words, this was their one big chance in a generation to cram in as many improvements as they could, and they didn't deliver much (in terms of cost controls and quality of care). On the other hand, if the bill is successful, then future administrations will have an easier time building on it. Time will tell I suppose. But you can bet that in the meantime, the insurance companies will be strategizing how to defeat any future reforms and do what they can to show America that these new regulations on their industry are bad. Already the GOP are twisting the bill as an assault on freedom, which is obviously idiotic.

Wednesday, March 24, 2010

More on Israel-US tensions

...Mr Netanyahu’s brother-in-law, Hagai Ben-Artzi, who called Mr Obama an anti-Semite on Israeli radio last week; nor by reports that the Prime Minister himself has referred to David Axelrod and Rahm Emanuel, both senior White House staff, as “self-hating Jews”. He has denied the reports.
Nice... after all the UN vetoes, billions of dollars in aid/trade, and all the military tech we have given them over the decades, Israel comes to our capital and gives a big middle finger to the administration over the settlements row.
They say that Jerusalem is theirs, ALL theirs, because the Bible said so. Well, the last time I checked we didn't live in a theocratic world, and the Bible is not an internationally ratified document establishing legal borders. If we did live by the Bible, Maine lobster fishermen would be unemployed, and stoning to death would replace lethal injection. They said that the Jewish homeland was in Israel thousands of years ago, and so they have claim to it today. Well if that is the case, then basically all of the New World and Australia need to change hands. Peoples get conquered, displaced, and some are lucky to return, but it's not their "divine right". The Basques, Tibetans, and Kurds are waiting for their autonomous homelands too. If prior residency is the only criterion, then the Turks, Italians, Babylonians/Assyrians (whomever their modern ethnic descendants are), Greeks, and of course Palestinians have claim to the land known as Israel too. Ironically, Israel was also occupied by Persia, so does Ahmadinejad have as much claim to it as Netanyahu? And speaking of Ahmadinejad: we chastise Iran for being a pariah nation, stubbornly defying international consensus to continue nuclear development and threaten security in the region. Isn't Israel behaving exactly the same way with respect to settlement expansion? Of course they usually get a pass in the mainstream media, but Iran is public enemy number one. I am not defending Iran's actions, but the discrepancy of response is obvious. 

I'm tired of Israeli exceptionalism.
“Jerusalem is not a settlement, it’s our capital,” [Netanyahu] told the American Israel Public Affairs Committee (Aipac) gala dinner. “Almost half the Jewish population of Jerusalem lives just beyond the 1949 armistice line, five minutes from the Knesset.”
Well according to the UN, East Jerusalem is a settlement. It technically belongs to the Palestinians since 1949. Although Israel captured it in the 1967 war, no major power recognizes the area as part of Israel, the US included.
The Aipac annual dinner traditionally gives pro-Israel hawks their most sympathetic US audience, but it does not speak for the whole Jewish lobby. J Street, a liberal Jewish think-tank established last year, took out a full-page advertisement in Monday’s New York Times to declare: “It’s time for Israel to stop allowing extremist settlers and their sympathisers to endanger not only the friendship of the United States but also the very future of Israel.”

Tuesday, March 23, 2010

The healthcare bill passing

http://news.yahoo.com/s/ap/us_health_care_overhaul




From a conversation I had with a friend; feel free to chime in:



Regarding health care, I see what you mean about the rope-a-dope but I am not sure if that was their deliberate strategy, rather than necessity. With their huge Congressional majority and Obamania still lingering from the election, I think Obama expected to pass the health bill in a few months, and with a public option (what he campaigned on). He expected to get some GOP on board and celebrate a bipartisan reform. But they were shortsighted to not anticipate the tea party grassroots opposition. And they made the tactical blunder of letting the process be Congress-driven and not responding to the sometimes ridiculous attacks from the right. In short, Obama was too much of an "elitist Washingtonian" last summer, and lost the initiative. The public tired of the "sausage making" deals and such, and instead turned their attention to the inflammatory sound bites from the tea baggers (dealth panels, socialism, etc.). There was a failure to communicate. I can pretty much guarantee that Scott Brown wouldn't have won if Obama didn't mess up so badly last summer. I really think that Obama expected his grassroots army to respond to and defeat the tea baggers. But they have been working 24-7 since early 2008; how much can you ask of these exhausted volunteers amidst a recession? They are his adoring fans and patriots, but not robots. And he didn't give them much inspiration and leadership to keep them going. I think that turned a lot of them off, and Dem turnout in November may suffer (we already saw some early signs with 3 significant GOP election victories besides Massachussetts).



So then Obama had to spend all fall and winter to repair the damage, and figure out how to pass the bill with parliamentary tricks and policy compromises. Then I guess he went into rope-a-dope mode, or war of attrition mode. He used his bully pulpit a lot since the State of the Union, and scheduled all those health care discussions that were mostly media spectacles. It was a good move that he finally published his own version of the health bill in January, but that should have come out last June. Give the nation (and Congress) a roadmap and a vision. He is the president! And he should have been more decisive about abortion funding, public option, taxing union Cadillac plans, and other funding. We kept hearing so many versions and explanations with or without all those components, and Obama was so vague and wavering, that we just got turned off and tuned out. In this case, there was too much communication. Don't say anything until you're ready and you have a finalized plan. I know things change constantly in Washington, but don't confuse the public. I am sure they witheld 90% of the health care negotiations from us anyway, but the portion that were were exposed to wasn't persuasive enough it seems. You're not going to please everyone and have to compromise somewhere, but stop listening to the pollsters and consultants. Pick the best plan you can at the time, and stick with it - that's what made George Bush successful (until it did him in).



So Obama snatched defeat from the jaws of victory, and then recovered to snatch victory back. It is a noteworthy, historic accomplishment for his administration, but at what cost? Over the last year, he definitely lost his election mojo, and the GOP is emboldened. Many Dems will get voted out in Nov., and the public is as angry as ever with Washington. He disappointed (or even enraged) parts of his loyal Dem base like the unions, the pro-choice camp http://www.upi.com/Top_News/US/2010/03/21/Abortion-rights-groups-criticize-Obama/UPI-76141269215815/, and the more liberal wing who still believe that single-payer is the only way and for-profit healthcare is unsustainable (maybe more now than ever!). In fact, who in America is going to rejoice over this bill apart from politicians and the poor/sick who directly benefit from the legislation? It's kind of sad that the only celebrations going on for healthcare reform are inside the Beltway (I exaggerate but you know what I mean). The polls are mixed, but I think it's safe to say that 40-50% of America is not only opposed to the bill, but outraged about it (but maybe those people hated Obama and his agenda from the start anyway?). I wonder how many Obama supporters and undecideds became opponents due to the healthcare effort though. Those who support the bill are maybe just relieved that the debacle is over. Like Kucinich, they'll take the bill, but wish there was more meat in it. I know it's a first step that Obama and future leaders can build on, like the civil rights effort. But for me and many liberals, I think after millions spent on PR, all the man-hours wasted, and a year of Washington wrangling, there should be more to show for it.



I heard some commentary on Friday that the "winner" in the health care fight will actually be the loser, politically speaking. Now that the Dems have prevailed, health care costs will still inevitably rise in the coming years until all the bill's measures kick in by 2014 (and even then the average American won't see drastic cost savings). So the GOP will say, "See we told you! The bill is costing us $1T AND your premiums are still going up!" But if the GOP won and killed healthcare reform, the Dems could say in November: "We tried to help middle class families but the GOP just blocked everything, so we're stuck with the broken status quo and you can't afford health care." What is the GOP counter for that? Contrary to some predictions, I doubt the GOP would try to repeal the bill. It's political suicide and the Dems could play the sympathy card: "Little Sally has leukemia and she was able to get life-saving coverage through the Obama reforms. But now the GOP wants to take it away and let her die!" The Dems had to pass something though, but maybe they painted themselves into a corner. They pass reform, and the conservative backlash will haunt them for several elections. They scrap reform, and the whole country loses faith in them as ineffective leaders. It's enough to make you long for the days of monarchy.



This bill is a healthcare coverage expansion and a respectable reform of health insurance practices. Both those steps are admirable and necessary, but unfortunately they failed to address price negotiation and reimportation for drugs, pay-for-outcome instead of pay-for-service, and other factors that strongly contribute to our bloated healthcare costs. But considering the state of Congress and lobbying today, maybe it's the most the public could reasonably hope for, which is sad.

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In the end, do you guys really feel that this "reform" will actually save both the federal government and regular privately insured citizens money? Will illegal immigrants (who do use emergency services) continue to provide a justifiable reason for hospitals to charge inflated rates on services/products which in turn raise overall premiums?

I feel like I have more questions than answers ... fail.

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Yes the bill does create more questions than answers, and only time will tell. Plus it's hard since history is not a controlled experiment; we can only speculate on the bill's true benefits, since we will never know how America could have been without the bill or with a different/better bill. But the social scientists will be able to mine the data and tell us something down the road.

I just wonder how many private citizens without insurance will actually get covered, or just elect to pay the small fines, which can be much less than insurance premiums anyway. And although the cost burdens to the states won't kick in until 2013 or so (the Feds will fit the bill for expanded Medicaid and higher reimbursements in the meantime), I wonder how near-bankrupt states will be able to handle all the new beneficiaries. Plus, will we train enough doctors, nurses, etc. to handle the increased demand (especially when the Baby Boomer health professionals are retiring)?

Here's a healthcare discussion on KQED today: http://www.kqed.org/epArchive/R201003240900

I haven't listened to it all yet, but it looks to be an informative program.

The bill covers more needy Americans, but doesn't address the quality of healthcare gap. Yes the poor and sick will now get subsidies and protections so they can get Medicaid and won't be turned away by private insurance. But the plans that they are on are fairly terrible. Yes it's better than paying out of pocket with no insurance, but the copays are high, and many doctors won't treat Medicaid patients now because the gov't reimbursements are too low (shame on those doctors though). The "working poor" who do get crappy health coverage from their employers (Walmart for example) have high copay, bad coverage plans. I am not sure if the bill addresses insurers refusing to cover certain procedures? And of course on the other hand, the rich continue to enjoy their Cadillac plans, and wastefully consume a lot of healthcare resources because they can. Obama scaled back his taxing of those such plans to get the necessary Democrat votes.

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the one thing that is perfectly clear about this healthcare bill is the fact that both sides of the political spectrum didn't like it.  obama made all kinds of concessions-no public option, reinforcing the hyde amendment, etc. for the right's vote, but made NO concessions to the progressives.  when this healthcare reform process started, rahm emanuel made some comment somewhere that obama won't have to worry about the progressives.  they'll vote on whatever you give them.  what will happen?  they'll cause a dem. loss on the bill and they'll be thrown out on the next election cycle.  that, and they'll be responsible for the ruination of the obama presidency.
obama has shown his true colors in this process.  he's down with the neoliberal policies of the past several presidents.  he plays a liberal so thoughtless liberals will like his brand.  but, in reality, he's a corporatist like the others.

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I have to agree with that. How much slack can liberals give him? We don't have infinite patience and loyalty. What is the point of running for president on a change agenda when you act 70-90% like your predecessors, for better or worse? Of course he's an improvement over Bush (but that would apply to anyone but Palin), though call me naive for disapproving of the disconnect between his campaign and presidential rhetoric.

Bush favored the neocons, business elites, and Christian conservatives, and lost the support of the fiscal conservatives and independents, many of whom then voted for Obama. If Obama and Rahm keep taking the progressives for granted, they may not jump ship and vote GOP, but they will tune out or support an alternative agenda, like how the Tea Party movement spawned from the feeling that GOP politicians weren't conservative enough. If you claim to be a coalition builder and bipartisan leader, and then fail at it (whether your fault or not), it will only serve to hinder cooperation and moderation. The angry groups who felt shut out of the coalition will turn more extreme and polarized, as we have seen on the right at least. That's the sad irony of governing from the middle. Some say that it's better if everyone is a little unhappy instead of one group gaining favor at the expense of the rest. But if everyone is unhappy, of course they're going to blame you and each other, and that doesn't bode well for future political cooperation.
So what are liberals to do? When the GOP was in power, they used 9/11 to silence dissent and twist arms, so the Dems in Congress just had to approve everything (even invading Iraq) or risk being labeled as unpatriotic during the next election cycle. What was the good of that anyway, since the Dems lost Congress and the High Court too? But now that the Dems are in charge, how are they holding the GOP's feet to the coals and using their numerical advantage? It's almost like David is bullying Goliath here; the GOP just doesn't want to let Obama and the Dems get credit for anything positive. And if the GOP isn't blocking progress, then the "centrist Dems" are. I use quotation marks because they aren't centrists really, but wed to specific religious, regional, or corporate agendas that conflict with progressives. So Obama and the Dems can't pass anything until they water it down to the point of triviality. So forget about bringing up anything to do with tax hikes, abortion, climate change, or expansion of government. I just hope that during the next GOP dynasty, the Dems are just as obstructionist. Government will be paralyzed, and the cynical public will tire of both parties and remake the political landscape into something more constructive and rational.
FYI, I just re-registered as an independent voter, after 12 years as a disgruntled Democrat. If only I didn't live in CA, then I would really be a swing vote.

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We all know the legislation is far from perfect. But a move (in this case, a big move) in the right direction is a big deal. Yes, corporations and insurers will continue to profit, but the next steps - maybe in the next twenty years (hopefully sooner) - may be to take the profit motive away from health insurers (making them non-profits) and/or moving to single-payer by expanding Medicare. 

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I would rather have this bill than the status quo (even though it doesn't affect me, but helps some needy people), but I just worry about the future that you mention. If this bill doesn't show clear, measurable healthcare improvement for the public and our national debt gets under control, the GOP will attack health reform as ineffective and wasteful, making it harder to move towards single-payer. In other words, this was their one big chance in a generation to cram in as many improvements as they could, and they didn't deliver much (in terms of cost controls and quality of care). On the other hand, if the bill is successful, then future administrations will have an easier time building on it. Time will tell I suppose. But you can bet that in the meantime, the insurance companies will be strategizing how to defeat any future reforms and do what they can to show America that these new regulations on their industry are bad.

Friday, March 19, 2010

The short-sellers during the Wall Street crisis

Here's a Fresh Air interview with Michael Lewis, a very cool author (and former Wall Street alum) who wrote "Moneyball" about the Oakland A's (soon to be a Brad Pitt film) and the book that "The Blindside" film was based on. His theme is writing about innovators who beat the odds to succeed in their trades, much to the disdain of the establishment. His recent book is about a few observant investors who saw through the mortgage-backed securities (MBS) scam and actually made a fortune betting on them to fail. You'd think that these guys were sharks who exploited the system and hoarded secret information from the rest of us. But actually it's not the case. The real "bad guys" were obviously the big Wall Street banks who didn't realize (or didn't admit) that they were trading and peddling in crap securities. The short-sellers we actually doing what the brokers and advisors were supposed to do (and claimed to be doing for their customers): making the best trades possible that would net the most profit under current market conditions. Would you rather risk your money at the blackjack table, or buy an insurance policy that pays you off if another dude loses his money at blackjack?
Some background definitions that you may already know:
Credit default swap (CDS) - Basically insurance on an investment (usually debt/credit based). But the trick is it's off the books - a confidential agreement between two private parties. So say I bought a risky bond, and propose to Goldman Sachs that I will pay them a premium to protect the bond's value. If it defaults, Goldman will pay me my losses. So obviously Goldman wouldn't agree to it unless they thought the chance-cost of default was lower than the premiums I would pay them.
Short-selling - You borrow security X from a third party lender at cost Y, and sell it on the open market immediately, expecting it to go down. Then after it does, X now costs Z. You buy X back at Z in order to repay the lender. So now you've made Y-Z profit (minus transaction fees or whatnot).
http://en.wikipedia.org/wiki/Short_(finance)
So the short-sellers did their research and saw the insanity behind the MBS's: bonds made of pools of subprime mortgages where payouts depended on homeowners faithfully maintaining impossible payments. In one example, a couple of "garage hedge-fund managers" gathered up $100k to start short-selling. Their research suggested that Wall Street insurance for unlikely catastrophes was excessively cheap, so it made sense to pay the pocket change and possibly reap huge rewards if a bad event occurred. They grew their seed money to $15M, and then entered the subprime market expecting those bad securities to default. They were soon up to $120M. But they didn't just exploit this discrepancy for personal gain; once they saw that the entire US financial system was basically built like a Ponzi scheme, they contacted the SEC. But as you would expect, they were ignored. In fact, this is the common trend for all the short-sell success stories: after they figured out how to capitalize off this market vulnerability, they alerted the authorities, but to deaf ears. So short of taking out a full-page ad on the NYT, they did their reasonable best to do the right thing, and can't really be faulted for others' stupidity and greed. In fact, many of the short-sellers were terribly distraught over the situation and had poor health during the crisis. It's not like they felt guilty for profiting on other people's foreclosures, but they lost faith in the American financial system and social structure that permitted this scam to materialize. They really feared that the masses would rise up and destroy the elites for perpetrating all this. But unfortunately, we were too gutless and gullible to demand justice.
One way they were guilty by association was their participation in the CDS market. This offshoot market is built on risky MBS's, so they were basically multiplying risk and adding more fuel to the fire. Even though they were betting against others and expecting the MBS's to fail, they contributed to popularizing this exotic trading instrument that created terrible havoc for AIG, Bear Stearns, and others, as we now know. It's like I could buy a gun for home protection and be the perfect poster-boy safe gun owner, but I'm still supporting an industry that is involved with crime and suffering. It's a tough call, but it was legal so they did it to make money. Getting back to the CDS's, they're so dangerous because they're off the books. They don't need to be declared to anyone, so John Q. Public (and the SEC for that matter) have no idea how much CDS business the banks have done with each other, and who owes who how much, but it's clearly in the billions. And as we have seen, this uncertainty caused panic and a loss of trust, which sent share prices plummetting. So the short-sellers also bought CDS's against bank stocks. They knew that some of the Wall Street titans were heavily invested in MBS's, so of course they would fall when their investments did. And they were right. 
One of the Wall Street survivors, Goldman, succeeded because they limited their exposure to MBS's, yet pushed MBS's onto their clients, and then placed big side bets on those same MDS's failing (often through CDS's with AIG). It was a real scam job and the perfect hedge: if MBS's go up, they make money on client commission and their own holdings, which will easily cover the meager cost of the CDS premiums. If they go down, AIG covers their losses and so what if their clients get hosed; they're just Guinea pigs. What boggles my mind is that AIG and others were so confident that MBS's were safe that they agreed to insure them so cheaply, and to such a crazy extent that their liability was 20X their total assets. That's like me being so confident that the next roulette spin will be a 00 that I take out a $10M loan on my $500k home to bet on 00. But what was AIG thinking - that they could pull a fast one on Goldman?
The last part of the debacle is the bond-rating agencies (Moody's and S&P). These guys are supposed to be the Yelp that is telling you the best places to spend your money, except that they're financial experts. One problem: they are paid by the banks whose securities they are supposed to objectively evaluate for risk. Apparently Wall Street and Washington are perfectly ok with this, yet it's not like the EPA is funded by Shell and the FDA by Pfizer! One could invest in MBS's in various ways, since an MBS is a collection of low-to-high risk mortgages to spread out exposure. If you want to play it safe, you can buy into the bond at a low interest rate, and get first dibs to the mortgage payments coming in. Those bonds were AAA rated, which is as safe as T-bonds. If you want to gamble for a higher rate of return, you can delay your payout, and possibly reap higher returns if homeowners don't default. But those risky bonds were of course rated worse: BBB barely ahead of junk bonds, and for good reason since a mere 8% default rate of the constituent mortgages would render the bonds worthless. The banks found that no one was buying the BBB bonds, for obvious reasons. So they decided to package a bunch of BBB bonds together, and told the rating agencies that they were safer because again, the volume and geographic diversity of mortgages spread out risk. Somehow Moody's decided to rate 80% of bonds that were collections of BBB crap as AAA, and then they sold better. But all these "bonds of bonds of mortgages" got so damn complicated and inaccurately rated that even the banks themselves didn't know what they were worth and how risky they were. They polished up Yugos, told people they were Porsches, and then when they were flying off the shelves, their greed made them forget what they did and bought them up too.
So Lewis suggests 3 obvious reforms to prevent a future similar crisis: (1) prohibit banks from investing in the same securities that they advise clients on, (2) require CDS's to be transparent and regulated, and (3) prohibit rating agencies taking money from banks. 1 is meant to prevent the Goldman-type conflict of interest. 2 is meant to lift the veil on CDS's so people can better evaluate a bank's health. And 3 is meant to fend off that other conflict of interest and give investors cleaner information. These ideas are already circulating in Congress, but I doubt will make it onto a Senate reform bill. Of course Wall Street are fighting these measures tooth and nail, since they will make it harder for them to make easy money.

Tuesday, March 16, 2010

With friends like Israel, who need enemies?

http://news.yahoo.com/s/afp/20100315/wl_afp/mideastisraelusdiplomacy

I am pleasantly surprised that the Obama administration isn't just letting this slide. Maybe Israel doesn't have limitless credit at our casino after all. If they keep sabotaging the peace process by provoking the Palestinians and making us look like illegitimate peace brokers, it will only hurt them in the end. They are acting like spoiled brats, and treated Biden (the #2 guy of the world's lone superpower) like a chump when he was supposed to be a guest of the state. It's tragic how all of Obama's hard work and overtures to the Muslim World were mostly erased by his Afghanistan escalation and a few new apartments in Jerusalem.

The settlement BS is undermining Mahmoud Abbas' credibility, who is supposedly Israel's preferred negotiations partner instead of Hamas. He only has the trust of 1/3-1/2 of Palestinians as it is, but if he doesn't deliver solid progress, they will kick him in favor of a more radical voice. So all of Israel's games and nonsense are actually increasing the likelihood of a new Intifada, when instead they could actually seize this moment of relative calm to work out something lasting with the PA. But that tells me that Likud are not concerned with peace. They just want to keep the Palestinians divided, poor, and suppressed, the US government spinning its wheels, and the American public cynical and apathetic about peace prospects. Actually they're probably hoping for Ahmadinejad to run his mouth again or some sort of other Iranian provocation, in order to augment support for tougher sanctions and shift the spotlight from the Two-State Solution. Israel is fixated on defeating their more formidable Iranian foe; the Palestinians are but a mere nuisance.

I expect this from Bibi and the Zionist hard-asses, but I think it's kind of sad that some polls show that many Israelis don't care about peace with the Palestinians anymore. They "won" already, so why the need to make concessions for peace? They built their Berlin Wall so terrorism is near zero, the Gazans are poor and powerless, America is compliant, and their economy is flourishing. Israelis and foreign tourists are going to the beach resorts again. Why mess all that up with peace talks?

Like after the Hamas hit job in Dubai, all but the most dovish Israelis praised it with much national pride (like it was an Olympic gold or something). The target, Mahmoud al-Mabhouh, was a Hamas operative working to obtain arms from Iran (allegedly). Apart from that indirect threat, he hasn't lifted a finger against Israel in decades, and in fact was held and released by Israeli authorities multiple times. Why let him go if he was such a bad guy? He supposedly orchestrated the kidnapping and killing of 2 Israeli soldiers in 1989. So Israel went though all that effort and nearly got caught in a major diplomatic row just for 20-year-old revenge. And they have the nerve to call Hamas the extremists? Well it takes one to know one. I don't think we can downplay how serious this could have been for Israel if things went worse, like at Watergate. The US took a lot of heat and Americans were generally outraged when we learned about Extraordinary Rendition, faulty Iraq WMD evidence, and the outing of Valerie Plame by Bush's people. But in Israel, a similar scandal was celebrated as a great victory.

http://www.newsweek.com/id/228840
http://www.guardian.co.uk/world/2010/feb/19/israel-britain-dubai-killing

Thursday, March 11, 2010

More on teacher firings and education reform

And I guess Obama is not the only dumbass on the issue:




http://www.newsweek.com/id/234590



Newsweek had a cover story on teacher firings too, but missed the big picture. I was disappointed by the writers' narrow perspective. Bad teachers are a problem for US education, but not the only problem. What about bloated school district bureaucracies, ineffective and overpaid administrators (who are also rarely fired), declining of family time, and sociopolitical apathy to explore more sophisticated remedies than standardized testing?



The Obama administration and Newsweek praised the mass firings at Central Falls, RI. The teachers were being unreasonable, but it is not "bold" and "courageous" leadership for Superintendant Gallo to just give up and fire them. That is terribly traumatic for students, erodes community trust, and destroys the morale of good teachers with decades of professional wisdom. The finger-pointers should first remodel crumbling classrooms, help overwhelmed families, reduce poverty, and develop smarter ways to measure and enhance teaching performance. Then if learning doesn't improve, go ahead and fire the teachers.



Newsweek praised the European model where teachers are cherry-picked from top college grads, paid better vs. other professions, and more culturally respected. They say that many US teachers come from the bottom third of college-bound high schoolers, and once they reach tenure (fought for by unions in the past), they are virtually immune to firing regardless of performance. Yes this could be a problem. Well how do they propose changing our culture and economics to pay teachers more and celebrate the profession so our top people want to join? If our brightest stars hear in the media about mass teacher layoffs/firings (either due to NCLB or bankrupt governments), horrible teaching conditions (including school shootings), and now possiblying doing away with tenure and pension, then why would all but the most masochistic/saintly/both of them want to sign up? Blaming teachers is like blaming the fireman for a burning building. The fireman may have failed to save the kitten inside, but they didn't start the fire either.



So Europe has it all figured out, and our system is broken just because tenured teachers can't be fired. But Newsweek failed to consider that teacher firings in Europe are also probably very low. I couldn't find data on it, but in general it's a lot harder to get fired in Western Europe than the US. You can argue that the average European teacher is better anyway, so it's less likely that he or she would be in danger of termination. But because of job security, resources, and social support, European teachers are more likely to succeed. If you've spoken to anyone who grew up in a European education system, they will tell you that most students were well behaved and it was easy to enforce discipline. The thought of talking back to authority figures or goofing off never crossed their minds, and if they did, they knew punishment would be severe. That's like the polar opposite of many US schools, especially poor urban ones. So it's a positive feedback loop: European teachers start good, are well taken care of, and work with polite kids. So that makes it easy for them to succeed and make their students learn better, which precludes the need to fire anyone. US teachers in poor schools may be inferior, but they also have shit to work with, and are now one test score away from a pink slip. They're set up for failure. You can't chop off a marathon runner's leg and then scold him for not finishing the race.



And then Newsweek hailed the Teach for America (TFA, which I just found out is co-sponsored by Goldman Sachs - BIG RED FLAG) program for showing that top college grads sent to the worst schools can do better than their tenured underperforming peers, and some of them decide to pursue a career in education. But it's not all wine and roses; many drop out or leave the program jaded about education. Others join for their own benefit, gaining "skills and experience" to distinguish themselves from other qualified job applicants:

Looking back, I’m so glad I chose to teach before embarking on this next phase of my career. I developed skills that empowered me to excel beyond my peers in business school: organization, effective time management, dexterity in communication and public speaking, and the ability to think on my feet. The responsibilities I shouldered in the classroom prepared me like nothing else could for the challenges of management, communication, and intense focus that characterize my current position, where I conduct industry research, create financial models, identify industry trends, and explain their implications.

-Scott, an analyst at Lehman Brothers (taken from the TFA website)

Wow, I guess dealing with punk kids helped him navigate the shark-infested waters of Wall Street. The sad irony of TFA is that they accept applicants with no teaching background, throw them in the worst teaching situations possible, and for the ones who survive and succeed, their program ends just as they start to learn the skills to become good career teachers. Then they're off to their next gig, leaving their kids behind for a new idealistic greenhorn. TFA doesn't require or help alums to pursue a Master's in Education after they finish, which is required to teach in most states. So is this helpful to kids? A lot of TFA teachers went to New Orleans after Katrina and performed better than local teachers. But this created resentment, because people knew the TFAs would be gone in a few years, while the permanent local teachers were losing morale playing second fiddle. In fact, the local veterans helped teach the TFAs, and gained nothing from them, except a bunch of competitors with different life situations making it impossible to work as hard as them. One view of the TFAs is that they're actually young, underpaid, ambitious union busters disguised by philanthropy. Throwing TFAs into disaster schools is no better than throwing sacks of rice to Haiti quake victims. A temporary helpful relief, but no lasting impact. This is from a very well-written New York City Teaching Fellow's blog (a program similar to TFA):

At my school, a small public high school in Brooklyn, New York, well over half of the teachers at the school are Teaching Fellows, and, at least in the three years I have been at the school, the longest any of us has stayed (yet) is three years. A few of us are starting our fourth.

And this sucks for our students. I mean, it really, really sucks. It sucks to come back to school and have to have yet another first-year-teacher as a teacher. It sucks to have six different advisory teachers in four years (the case with my old advisory). It sucks to have no continuity from year to year. It sucks for the ninth grade math teacher you really liked to disappear by the time you are in eleventh grade and wanted to ask for some extra help before the PSATs. It sucks to slowly get the impression that teaching anywhere else, or doing anything else for a job is better than staying here and working with you. It sucks to get abandoned year after year after year by young, enthusiastic teachers who saw teaching in the inner city as something great to put on that law school application.

If you’re thinking of applying to Teach for America because you want to be a career teacher, don’t. There are many other alternative-certification programs that will help you get a masters degree (and will help you pay for it). And if you’re thinking of applying to Teach for America because you are interested in doing a service project for two years before starting a different career, don’t. There are many other Americorp-type programs that lend themselves better to that time of time-frame.

And a TFA participant's response to her blog:

Right on, and well said... TFA brings young, often incredibly privileged, enthusiastic teachers to come into schools feeling a self-righteous sense of martyrdom. We often end up fostering an expectation in our schools that a) all teachers should be able and willing to, for example, work for 15 hour days without demanding pay (which is fundamentally union busting, in the sense that many teachers who are veterans may have families or second jobs that prevent them from being able to put in that much time without pay), b) essentially “price out” veteran teachers, because new teachers come in being paid less than veteran teachers – which public schools and the public education system loves, and c) often end up becoming principals after only 2 or 3 years in teaching, over far more qualified veteran teachers who didn’t go through such “prestigious” programs.

If TFA is truly trying to eradicate educational inequality, then you would think that the goal of TFA would be to phase out, or not be necessary anymore, at some point in the future. But think about it this way: does Goldman-Sachs usually partner with or invest in something that is going to go away anytime soon? Hell no.

http://www.feministe.us/blog/archives/2008/08/23/why-i-hate-teach-for-america/

http://www.huffingtonpost.com/diane-ravitch/first-lets-fire-all-the-t_b_483074.html

Monday, March 8, 2010

Balanced coverage of religious violence?

Maybe you have heard about the religious, social, and ethnic tensions in parts of Nigeria. Here was a headline today from the AFP:




http://news.yahoo.com/s/afp/20100308/wl_afp/nigeriaunrest



Machete attacks on Christian villages kill 500-plus in Nigeria



This was the first news headline on Yahoo! at 4:30PST, so millions of eyes may have browsed it in a matter of minutes. It's terrible and despicable; I think we all can agree. What's also terrible is that in this 791-word article, not until the 717th word do readers learn of a potential motive for the attack:

Rights activists said the slaughter appeared to be revenge for the January attacks in which mainly Muslims were killed.

In high school journalism, they told us to structure stories like inverted pyramids, with the most important facts coming earlier. Isn't motive pretty important, or do they deliberately bury anything that makes Christians into aggressors and Muslims into victims? If you had 10 seconds to scan the article, starting from the lead, you may assume that a bunch of Muslim barbarians slaughtered innocent Christians minding their own business. Like Osama and the Hollywood depictions, every Muslim on the planet appears to be very hostile against non-Muslims. Not that a prior attack justifies this atrocity, but it adds context. Apparently the author and editor felt that marginally-relevant material like this was more important than motive:

The Vatican led a wave of outrage with spokesman Federico Lombardi expressing the Roman Catholic Church's "sadness" at the "horrible acts of violence".

"People were attacked with axes, daggers and cutlasses -- many of them children, the aged and pregnant women."

I seriously doubt that the Christian-on-Muslim attack in Jos in January got as much attention. Apparently the AFP did minimally report on that clash, but the article was much shorter, and again, you only learn in the last sentence that 364 of the 492 victims were Muslim, suggesting that the violence was majority perpetrated by Christians. But many scholars think that this year's violence is not primarily due to religion, as the two warring groups also compete for agricultural resources, speak different languages, and have different tribal origins.



http://www.google.com/hostednews/afp/article/ALeqM5gzl2_TiUNy_W4vqIC3NZSasnA5HA

Friday, March 5, 2010

Central Falls, RI mass teacher firings and Obama's dumbass response

"I like to know what I'm talking about before I speak.” - President Obama on the AIG bonuses, March 2009

"If a school continues to fail its students year after year after year, if it doesn't show signs of improvement, then there's got to be a sense of accountability. And that's what happened in Rhode Island last week at a chronically troubled school." - President Obama, March 2010

A very poor, half-Latino community in Rhode Island called Central Falls has a very bad education record. In this "No Child Left Behind (NCLB)" era of standardized testing being the final word and punishment for poor performance being the bureaucrats' go-to play, the district administration decided to fire 93% of the teachers and staff in accordance with the generic "restructuring" strategy of NCLB. We on this email list don't even have education degrees, and we probably already realize that this is problematic, if not completely moronic and traumatic for the students.

Yet Obama and his education secretary and Chicago hanger-on, Arne Duncan, praised it. Obama claimed that he likes to know what he's talking about before he speaks. Yeah, I guess that showed when he called the cop's actions "stupid" in the arrest of his Harvard professor and hothead pal Henry Louis Gates, without knowing a single detail about the case. And now with the Rhode Island issue, he is also being a dumbass douchebag, for lack of a better description. 

"[The Central Falls administrators are] showing courage and doing the right thing for kids." - Arne Duncan, March 2010

Yep, it sure shows courage when the captain of the ship sacrifices the seamen to the pirates and keeps the one lifeboat for himself. If anything, the Central Falls administrators should fire THEMSELVES, and Obama/Duncan should have called for that. Do the angry Toyota customers blame the assembly line workers who were instructed to put shitty parts into the vehicles, or do they blame the careless designers who cut corners and the arrogant execs who were tone-deaf to early complaints? Central Falls was a tragedy for years, and the admins (the ones with the fancy degrees, higher pay, and less stress than those lazy unionized teachers) failed to show leadership and execute reforms. The buck stops where? Teachers can only do so much, even the most heroic of them. Education solutions should be top-down for best effect. But I guess our president can't wrap his brain around that.

Second, how the hell can you produce great education results overnight in such a community? If a basketball coach gets a bunch of guys like me, and his boss expects a winning season, what do you think will happen? He won't deliver and he'll be fired. I don't care if it's Phil Jackson, but he won't turn me into LeBron, or even an above-average player, because of my limitations (physical and economic - I have a job so I can't practice hoops and work out 5 hours a day to get better). But maybe Phil taught me a lot of good stuff and did make me a vastly improved player, but I'm still not up to the standards imposed by outsiders. Phil did a great job, but still gets fired. How does that make sense?

Central Falls is a tough place to grow up. The ratio of single-parent to traditional family households is 2:3. 25% of families live below the poverty line, with a median income of $26k. 40% of kids live in poverty, and 40% of the population are Latinos who don't speak English at home. If you sent the Eton faculty to Central Falls, do you think they could dramatically improve graduation rates in a couple years? We all know that kids can't learn if their bellies are aching and they are fatigued/troubled by issues at home. We know that it's harder for kids to learn if their parents are uneducated, poor, and working long hours. We can't expect miracles. If Obama, Duncan, et al. really cared about those kids, they would increase social welfare programs for them and their families, and invest in better teaching materials. Swap the students at Harvard and Kabul University for a decade, and we'll see which performs better. America has gutted its public school systems to balance budgets and pay corporate tax breaks, and now we're outraged that our schools suck and our kids are struggling? We (or should I say the Boomers) made our bed, and now we must lay in it. Yes of course bloated teacher/union concessions have contributed in some cases, but "charter schools" competition isn't the answer either. According to former Assistant Secretary of Education Diane Ravitch, a national study showed that only 17% of charter schools outperformed comparable local public schools, and quite a few were worse. Education is supposed to be collaborative and supportive. It's lunacy to pit schools and teachers against each other, hoarding trade secrets to compete for students, tenure, and funding. Yes it's important to improve efficiency and accountability, but education doesn't lend itself to traditional business performance metrics. Main Street isn't Wall Street, and I don't want to live here if the two become indistinguishable. "Marketizing" our education system is not the answer. Some government services shouldn't be privatized, like social security and the military (oops, I forgot about Blackwater and Boeing). Wake up, Obama.

Even though Central Fall's graduation rate is 48% and only 7% of 11th graders could pass the state math exam, some teachers are doing a good job. This is obvious because students wept and protested when they heard the news. Kids aren't dumb, even if they can't do long division. They know that it won't help to fire the whole lot and replace them with ambitious newcomers. Even if the new crop is excellent, they will be hampered by job pressure because they know they could be fired too if scores don't go up. By firing those teachers, they destroyed decades of cumulative community and education wisdom. And those teachers may be jaded and unwilling to return, even if the admin changes its mind. Like a nasty lockout or strike in pro sports, it could take a decade (or never) to repair the damage and loss of community trust. What are those standardized test scores worth anyway? Maybe the Central Falls math teachers instructed their students with techniques that are not represented on the exam. Other schools and teachers, fearful for their jobs/funding, just help their students "master the test" (or just make the tests easier!), without really becoming skilled in the subject. Their goal is high scores, not pure understanding and thinking. The National Assessment of Educational Progress (NAEP) investigated a subset of students who had 90% passing rates on their state reading exams. But by NAEP's metrics, only 20-30% of those same students read proficiently. There have been many cases of teachers caught cheating to help their students get higher scores. That should be evidence enough to show that NCLB is failing in its purpose.

The admins were not total tyrants. They gave them a chance: they requested that the Central Falls faculty increase instruction time, training, and tutoring without much additional compensation. The teachers' union refused, so the admin decided to fire them. That is not good management, and Obama/Duncan shouldn't have endorsed it. Maybe the teachers were being unreasonable, but a skilled leader can still work with them and achieve something positive. What if Nixon walked out on Mao at the first sign of resistance? Then he would have been like Congress. Restructuring the faculty won't work either. All of us working people know that reorganizations are terribly disruptive. Even a bunch of weak employees are preferable in the short term to a total purge. Weak employees still know stuff and can maintain the vital operations. When you get rid of them, who is doing the work in the meantime? Substitute teachers? Yes we should wean out poor performers, but gradually and sensitively, or the admin might create tensions and resentment among the new and remaining staff. All of this is management 101, which is why the management are the ones who need the pink slips. 

And Obama's guy Duncan is one to talk about education reform. His record in Chicago is decent but far from stellar. Yes he inherited a Chicago system that was among the nation's worst, but Chicago's math improvement rate (as evaluated by the NAEP) lagged behind many other cities of comparable size and demographics (in some cases, even behind DC and dysfunctional LAUSD that needed to be taken over by the mayor for a time). Duncan played around with performance pay, charter schools, closing bad schools, and mass firings, with inconsistent results. But it's not like he turned poop into gold over there. Plus, many of the test score gains that Duncan brags about were actually due to relaxed test standards, not improved knowledge. Half of Chicago kids still don't graduate in normal time (even though passing criteria was relaxed).

"There's been this rhetoric about dramatic gains, dramatic success, that we have to replicate this model because of its dramatic success," said Julie Woestehoff of the advocacy group Parents United for Responsible Education. "And here in Chicago, we're looking at these schools and going, 'Uh . . . ' "

What does that say about Obama for picking an inner-circle Chicago boy for a crucial job when better alternatives were available? I've had about all I can take of this "change stuff", and he still has three years to go.

http://voices.washingtonpost.com/answer-sheet/education-secretary-duncan/obamas-unfortunate-comments-on.html?wprss=answer-sheet
http://www.npr.org/templates/story/story.php?storyId=124316925
http://www.npr.org/templates/story/story.php?storyId=124227796
http://www.npr.org/templates/story/story.php?storyId=124209100
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/28/AR2009122802368.html
http://en.wikipedia.org/wiki/Central_Falls,_Rhode_Island#Demographics
http://www.education.com/magazine/article/Obama_Child_Left_Behind/