US education: another turn of the wheel

To get the full feel of US culture, it helps to know a few things. One is Churchill’s correct observation that, “Americans do the right thing, once they have tried everything else.” Another is the cultural preference to make everything a matter of black and white, “If you’re not a winner, you’re a loser.”

This refusal to acknowledge shades of grey means an awful lot of cognitive dissonance, and bending of the rules. It also means massive and regular policy shifts. Progress is more a matter of stumbling onto new ideas in a Drunkard’s Walk than a gradual set of small improvements.

Nowhere are these false dichotomies more obvious than in Education. For example, when studies indicated that there might be too much rote learning in the standard curriculum, it was replaced by “discovery” or “inquiry-based learning”, with absolutely no memorization at all. For another, the famous No Child Left Behind initiative of President G.W.Bush requires by law that every single student in the country perform above benchmarks by 2014. Not surprisingly, this has led to massive cheating, and very low benchmarks.

On the surface, the US education system looks free and democratically-driven. Each state has its own Board of Education, which sets the statewide standards and basic curriculum, from which each school district generates its own requirements. That is, unless you live in Ohio, Louisiana, Kentucky, Kansas, or several other states, where the process has been hijacked by a vocal religious minority, who wish to ignore centuries of scientific advancement.

When new studies showed that not enough students were “ready for higher education”, a group of states signed on to the Common Core, an agreed-upon set of material that every high school graduate should know. With Teutonic efficiency, school administrators have leapt upon the idea that this minimum should be the maximum. Not only that, but the results of the students’ tests will be used to measure teachers, and “eliminate the failing ones.” This appeals to US conservatives, who rail against public education, and to corporations such as Pearson publishing, now poised to make billions. One of their income streams is to provide scripts to teachers, from which they are not permitted to deviate. Another is to generate the aforementioned assessments.

 As I get ready for retirement. I can’t wait to see what happens next.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

No satnav for Lalaland

But there is really no scientific or other method by which men can steer safely between the opposite dangers of believing too little or of believing too much. To face such dangers is apparently our duty, and to hit the right channel between them is the measure of our wisdom as men.

William James - The Will to Believe

One of my ideals is believe nothing. I could have called it a belief rather than an ideal, but even I can see the pitfall in that. 

Yet as James implies in the above quote, it isn’t actually possible to believe nothing. We need beliefs as conceptual frameworks to communicate socially – to live even. It is possible try putting the brain into neutral and merely observe, but we observe via language and that's something we have to borrow.

So what’s the point of trying to believe nothing? I think it reminds us to be wary of generalisations, sentiment, cultural norms and especially language. Yet as Wittgenstein showed, we can’t become intellectual hermits and invent a  private language to solve the problem.

One difficulty with a cautious attitude to belief is how we delve into matters too complex for data or logic to flash up convenient answers. Political discourse for example is easy enough to engage in but not so easy to analyse in a neutral way. Political arguments veer off so quickly into Lalaland.

This presents few problems for anyone who enjoys the fun of debate, because Lalaland is easily navigated via a host of special aids – political ideas framed by an allegiance to one’s favoured Lalaland region and written in the regional dialect.

However these regional allegiances are only clearly visible to those who don’t share them. Those with no wish to settle in Lalaland – those who are not prepared to adopt one of its seductive cultures or learn one of its many languages. Therein lies the real difficulty doesn’t it?

To see any political allegiance for what it is, we cannot share it.

We can’t easily engage in political debates as a neutral critic either, because almost any criticism is seen as an enemy allegiance. Debate grinds to a halt or becomes lost again in the endless highways and byways of Lalaland.

Of course, politically ambitious cynics often profess undying allegiance to a Lalaland region without ever going there in person. Their sights are set far beyond its borders even though they find the inhabitants useful. 

Nick Clegg is an example.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Tickle a kitten!

What do stock market indices measure?

On both sides of the Atlantic, there is a tendency in the popular media to see stock indices (FTSE, S&P, Dow) as some indicator of the health of the economy or measure of our collective wealth.

But the implications can be misleading.

What's really being measured (and I leave out the tricky ways in which the individual stock prices are weighted in creating the index) is the current level of settlement between buyers and sellers.

Some will then extrapolate the index to value the entire market. But this is absurd, for if everyone was looking to sell and nobody wanted to buy, shares would be worth nothing. Conversely, if everyone wished to buy and nobody wanted to sell, the price would be pretty much limitless.

What stabilises the market is the degree of participation, and so we are also given figures on the volume of trading. But even this information is misleading, because thanks to computer-based high-speed buying and selling, and the huge amounts of almost interest-free money made available to banks to gamble with, the market may make us misread the shouting of a few for the murmurs of a crowd.

I've been on the loookout for evidence of what the rich are doing. Some say they are holding a great deal of cash - but then, they've captured most of it over the last 30 or 40 years anyway, as middle incomes stagnated but (the face value of) the economy grew.

Others think they're not trading stocks but simply holding - remember that after 1929, members of Chicago Stock Exchange pasted the walls with apparently worthless stock certificates, only to steam them off again five years later.

If you are truly wealthy, as I said recently, you needn't be concerned about buying and selling your shareholding, so long as you haven't borrowed  money to do it. That last is what stuffed the market in 1929 - a great banking crash - and we've had that again, but this time government have authorised unbelievable amounts of fiat money to rescue the perpetrators.

If, as it's said, 82% of individually-owned stocks are held by just 5% of the population, who also have lots of cash,bonds and real estate, then the only reason to sell is because you think you'll make a bit of a killing rebuying at bottom. But you don't have to do it.

Pension funds are in difficulties, but if they are not defined-benefit the pensioner bears the risk; and if they are, then it'll be what a shame, force majeure, you're not going to get what you thought. Even now, in the UK, the retirement age for state pensions and state-employee occupational schemes is being racked upward and calculations of benefits under the latter quietly rogered in ways the average worker can't understand (or is too busy to examine) until too late.

So it seems to me that the figures we need to watch are those relating to inequality, because of the threat to social cohesion when promises start to be broken and expectations disappointed. That's when we'll find out if we are truly "all in this together".

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

A reply from Mr Karl Denninger

         I'm struck by the vehemence of opposition to so-called "Obamacare".

 

Why are you struck by vehement opposition to anyone putting a gun in your face and demanding money? Can I send a few brigands over to your home because they need something and tell them it's ok to stick you up this evening? After all, it's for their children.

Am I correct in supposing that you are not in principle against the idea that poor, sick people might receive appropriate medical treatment?

 Define "appropriate" and, incidentally, how much of that medical care is necessary due to self-inflicted injury and illness? For example, it is clear that someone who has Type II diabetes requires treatment. Exactly why should they be able to force someone else to pay for it when the condition is evident because they have voluntarily eaten a crap diet for 30 years and weigh 350lbs?

Note that the real issue here isn't care -- it's cost. Even very poor people have access to some cash flow for the most part in the United States; those who don't (e.g. truly homeless) either are typically so by choice or relatively-severe mental illness. The former is a choice, the latter is a disease but in terms of percentages is a vanishingly-small percentage of the whole, and absent compulsion they don't want treatment.

It's not illegal to be crazy (nor should it be) so long as you don't harm others. Voluntary charity is more than sufficient to cover both needs in the main; it was for hundreds of years in the past and it is today -- provided we stop jacking up the cost.

Isn't the real problem, the fact that drug companies, doctors, medical lawyers, medical malpractice insurers and health plan insurers all make and take so much money that healthcare for the common man is seen to be unaffordable?

Yes, but.

If you look at the facts (as opposed to the rabid nonsense coming from the left and apologists for asset-stripping the entire nation to cover this crap) you will find that, for example, a routine birth in 1963, repriced under the CPI from 1963 to today, could be had (complete, all costs included) for under $1,000 US.

Now in 1963 this included not only the epidural and other medications and such but also all doctor charges and three nights in the hospital!

Today that same routine procedure cannot be had in this country for less than 500% of that price and they kick you out of the hospital within 24 hours. The only reason that's the case is monopoly protections, which in theory are illegal under The Sherman and Clayton Acts. The medical industry has finagled itself exemptions to said laws. If I tried any of what they do every day when I ran an Internet company I'd STILL be rotting in a federal prison (and with good cause.)

Now consider the poor couple. They have few assets or funds, but I refuse to believe that given nine months notice they could not come up with $1,000. Sure they could. They might have to give up the beer and smokes for the duration, but they can do it. Difficult? Yes. Impossible? Not even close in a nation (ours) where "poor people" have Xboxes, 60" flatscreen TVs and cars with $3,000 rims on them along with iPhones and $1,000 annual service plans (which, incidentally, is most of those so-called "poor") not to mention the Earned Income Tax Credit that is refundable, meaning that they typically get thousands in actual cash every year from the government in excess of the taxes they paid.

But can they afford an $8,000 bill for the same thing? No -- but they can afford a $1,000 bill.

So where does the problem lie? It's not in their cash flow, it's in the monopoly pricing.

Malpractice and lawsuits (e.g. "tort reform") along with "uncompensated care" are often thrown around as the cause of this. That's a knowing and intentional lie; you could cut both to ZERO (the former of which would deny legitimately injured people compensation) and it would amount to less than 10% of what we spend on medical care. The problem simply doesn't lie there but it's a convenient foil for both the right and left to avoid talking about where the problem really DOES lie.

 Over here in the UK, the American Right seems insanely hard-hearted, homicidal even. And your general stance viv-a-vis the crookery of politicians and banksters doesn't seem to gel with your passionate denunciation of widening medical cover.

Of course it does. Theft is theft, fraud is fraud, and both are supposed to be illegal whether or not they are undertaken for a given person's benefit or not.

Is the explanation that you think the latter is actually OK as a project, but the way it's been done is misguided?

Not at all.

If you remove the monopoly games then even the poor can afford to pay cash, in the main. And virtually everyone who chooses to would be able to buy a catastrophic medical policy to cover the rare but possible situation that can arise, because it would cost a few hundred dollars a year. Those who choose not to do so, taking their chances, have the right to do exactly that.

But you have to break the monopolies and demand that insurance actually be insurance or you solve nothing.

Obamacare is designed to perpetuate theft in this portion of the economy and provide these firms and individuals involved in it with the guns of government. At the end of the day all monopolies and similar schemes rely on force of some form -- the medical industry ran out of their ability to use fear to power more extraction from the average American, and thus turned to government (literally, they wrote the bill) to continue the scam.

More to the point if we don't stop this the economy is doomed and so are federal, state and local budgets. That's a matter of arithmetic and no amount of trying to patch it by stealing one person's money to pay a monopolist will change it. We either cut this crap out or it is a mathematical certainty that our economy and the medical system will both collapse.

Incidentally, I assume that since you published this letter to me you intend to also publish, in full and unedited, my response.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

"Obamacare": an email to Mr Karl Denninger

Dear Karl

I'm struck by the vehemence of opposition to so-called "Obamacare". Am I correct in supposing that you are not in principle against the idea that poor, sick people might receive appropriate medical treatment?

Isn't the real problem, the fact that drug companies, doctors, medical lawyers, medical malpractice insurers and health plan insurers all make and take so much money that healthcare for the common man is seen to be unaffordable?

Over here in the UK, the American Right seems insanely hard-hearted, homicidal even. And your general stance vis-a-vis the crookery of politicians and banksters doesn't seem to gel with your passionate denunciation of widening medical cover. Is the explanation that you think the latter is actually OK as a project, but the way it's been done is misguided?

Yours faithfully

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

FRB 13.3 and Dodd-Frank : an email to the Federal Reserve Bank of Minneapolis

Dear Mr Fettig

I have read with interest your 2008 article on FRB 13.3.

Now I learn via Australian economist Professor Steve Keen that this provision was scrapped under the Dodd-Frank Act, allegedly in response to lobbying by commercial banks.

Can you provide any background information to this decision, and whether indeed it is now no longer possible for the Federal Reserve to assist individuals and businesses with direct credit?

Yours faithfully

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.