Saturday, December 24

Stop Spending My Money

From ZeroHedge.

This level of debt is extraordinary. And somehow, all this has to be paid off. As I keep on saying, somebody has to pay for this, its the consumer, shareholders, taxpayer or your children. What the hell is going to happen to this country? The level of deleveraging required will be over couple of decades. And then so many people are still whining that we aren't spending enough, whether its on benefits or public sector pensions or what have you.

STOP SPENDING MY MONEY. 

Also see this graph from here.

We are so screwed. The world will be paying off its debts for decades to come. Welcome to the great debt hangover.

We owe over £900 BILLION!

Friday, December 23

The Magic of Education.

This was a pretty brutal article. I don't agree with this but then I teach at various business schools where its much more applied. I quote:

I've been in school for the last 35 years - 21 years as a student, the rest as a professor.  As a result, the Real World is almost completely foreign to me.  I don't know how to do much of anything. While I had a few menial jobs in my teens, my first-hand knowledge of the world of work beyond the ivory tower is roughly zero.
I'm not alone.  Most professors' experience is almost as narrow as mine.  If you want to succeed in academia, the Real World is a distraction.  I have a dream job for life because I excelled in my coursework year after year, won admission to prestigious schools, and published a
couple dozen articles for other professors to read.  That's what it takes - and that's all it takes.
Considering how studiously I've ignored the Real World, you might think that the Real World would return the favor by ignoring me.  But it doesn't!  I've influenced the Real World careers of thousands of students.  How?  With grades.  At the end of every semester, I test my students to see how well they understand my courses, and grade them from A to F.  Other professors do the same.  And remarkably, employers care about our ivory tower judgments.  Students with lots of A's finish and get pleasant, high-paid jobs.  Students with a lots of F's don't finish and get unpleasant, low-paid jobs.  If that.
Why do employers care about grades and diplomas?  The "obvious" story, to most people, is that professors teach their students skills they'll eventually use on the job.  Low grades, no diploma, few skills.
This story isn't entirely wrong; literacy and numeracy are a big deal.  But the "obvious" story is far from complete.  Think about all the time students spend studying history, art, music, foreign languages, poetry, and mathematical proofs.  What you learn in most classes is, in all honesty, useless in the vast majority of occupations.  This is hardly surprising when you remember how little professors like me know about the Real World.  How can I possibly improve my students' ability to do a vast array of jobs that I don't know how to do myself?  It would be nothing short of magic.  I'd have to be Merlin, Gandalf, or Dumbledore to complete the ritual:
Step 1: I open my mouth and talk about academic topics like
externalities of population, or the effect of education on policy preferences.
Step 2: The students learn the material.
Step 3: Magic.
Step 4: My students become slightly better bankers, salesmen, managers, etc.
Yes, I can train graduate students to become professors.  No magic there; I'm teaching them the one job I know.  But what about my thousands of students who won't become economics professors?  I can't teach what I don't know, and I don't know how to do the jobs they're going to have.  Few professors do.
Many educators sooth their consciences by insisting that "I teach my students how to think, not what to think."  But this platitude goes against
a hundred years of educational psychology.  Education is very narrow; students learn the material you specifically teach them... if you're lucky.
Other educators claim they're teaching good work habits.  But especially at the college level, this doesn't pass the laugh test.  How many jobs tolerate a 50% attendance rate - or let you skate by with
twelve hours of work a week?  School probably builds character relative to playing videogames.  But it's hard to see how school could build character relative to a full-time job in the Real World.
At this point, you may be thinking: If professors don't teach a lot of job skills, don't teach their students how to think, and don't instill constructive work habits, why do employers so heavily reward educational success?  The best answer comes straight out of the ivory tower itself.  It's called the
signaling model of education - the subject of my book in progress, The Case Against Education.
According to the signaling model, employers reward educational success because of what it shows ("signals") about the student.  Good students tend to be smart, hard-working, and conformist - three crucial traits for almost any job.  When a student excels in school, then, employers correctly infer that he's likely to be a good worker.  What precisely did he study?  What did he learn how to do?  Mere details.  As long as you were a good student, employers surmise that you'll quickly learn what you need to know on the job.
In the signaling story, what matters is how much education you have compared to competing workers.  When education levels rise, employers respond with higher standards; when education levels fall, employers respond with lower standards.  We're on a treadmill.  If voters took this idea seriously, my close friends and I could easily lose our jobs.  As a professor, it is in my interest for the public to continue to believe in the magic of education: To imagine that the ivory tower transforms student lead into worker gold.
My conscience, however, urges me to blow the whistle on the system anyway.  Education is not magic.  Professors can't make students better at whatever job awaits them with learned lectures on arcane topics.  I'm glad I have a dream job for life.  I worked hard for it.  But society would be better off if taxpayers saved their money, students spent fewer years in school, and sheltered academics like me finally entered the Real World and found a real job.

Then on the other hand, one reads a letter like this. I am frankly surprised and disagree for one very good reason. I see no reason why every university has to have every subject under the sun. And the letter writer commits what I call as a basic mistake, assumes that leaders have to be technical experts. In other words, a university president has to be a teacher, or a phd. A very weak argument and perhaps a telling argument, running a university in cost constrained times requires skills which obviously this professor does not have have. Finally, open letters are frankly useless, they immediately tell me that the author is more interested in banging their own drum and ranting rather than actually trying to find a solution. Ah! well.

An open letter to George M Philip, President of the State University of New York At Albany

Dear President Philip,

Probably the last thing you need at this moment is someone else from outside your university complaining about your decision. If you want to argue that I can't really understand all aspects of the situation, never having been associated with SUNY Albany, I wouldn't disagree. But I cannot let something like this go by without weighing in. I hope, when I'm through, you will at least understand why.

Just 30 days ago, on October 1st, you announced that the departments of French, Italian, Classics, Russian and Theater Arts were being eliminated. You gave several reasons for your decision, including that 'there are comparatively fewer students enrolled in these degree programs.' Of course, your decision was also, perhaps chiefly, a cost-cutting measure - in fact, you stated that this decision might not have been necessary had the state legislature passed a bill that would have allowed your university to set its own tuition rates. Finally, you asserted that the humanities were a drain on the institution financially, as opposed to the sciences, which bring in money in the form of grants and contracts.

Let's examine these and your other reasons in detail, because I think if one does, it becomes clear that the facts on which they are based have some important aspects that are not covered in your statement. First, the matter of enrollment. I'm sure that relatively few students take classes in these subjects nowadays, just as you say. There wouldn't have been many in my day, either, if universities hadn't required students to take a distribution of courses in many different parts of the academy: humanities, social sciences, the fine arts, the physical and natural sciences, and to attain minimal proficiency in at least one foreign language. You see, the reason that humanities classes have low enrollment is not because students these days are clamoring for more relevant courses; it's because administrators like you, and spineless faculty, have stopped setting distribution requirements and started allowing students to choose their own academic programs - something I feel is a complete abrogation of the duty of university faculty as teachers and mentors. You could fix the enrollment problem tomorrow by instituting a mandatory core curriculum that included a wide range of courses.

Young people haven't, for the most part, yet attained the wisdom to have that kind of freedom without making poor decisions. In fact, without wisdom, it's hard for most people. That idea is thrashed out better than anywhere else, I think, in Dostoyevsky's parable of the Grand Inquisitor, which is told in Chapter Five of his great novel, The Brothers Karamazov. In the parable, Christ comes back to earth in Seville at the time of the Spanish Inquisition. He performs several miracles but is arrested by Inquisition leaders and sentenced to be burned at the stake. The Grand Inquisitor visits Him in his cell to tell Him that the Church no longer needs Him. The main portion of the text is the Inquisitor explaining why. The Inquisitor says that Jesus rejected the three temptations of Satan in the desert in favor of freedom, but he believes that Jesus has misjudged human nature. The Inquisitor says that the vast majority of humanity cannot handle freedom. In giving humans the freedom to choose, Christ has doomed humanity to a life of suffering.

That single chapter in a much longer book is one of the great works of modern literature. You would find a lot in it to think about. I'm sure your Russian faculty would love to talk with you about it - if only you had a Russian department, which now, of course, you don't.

Then there's the question of whether the state legislature's inaction gave you no other choice. I'm sure the budgetary problems you have to deal with are serious. They certainly are at Brandeis University, where I work. And we, too, faced critical strategic decisions because our income was no longer enough to meet our expenses. But we eschewed your draconian - and authoritarian - solution, and a team of faculty, with input from all parts of the university, came up with a plan to do more with fewer resources. I'm not saying that all the specifics of our solution would fit your institution, but the process sure would have. You did call a town meeting, but it was to discuss your plan, not let the university craft its own. And you called that meeting for Friday afternoon on October 1st, when few of your students or faculty would be around to attend. In your defense, you called the timing 'unfortunate', but pleaded that there was a 'limited availability of appropriate large venue options.' I find that rather surprising. If the President of Brandeis needed a lecture hall on short notice, he would get one. I guess you don't have much clout at your university.

It seems to me that the way you went about it couldn't have been more likely to alienate just about everybody on campus. In your position, I would have done everything possible to avoid that. I wouldn't want to end up in the 9th Bolgia (ditch of stone) of the 8th Circle of the Inferno, where the great 14th century Italian poet Dante Alighieri put the sowers of discord. There, as they struggle in that pit for all eternity, a demon continually hacks their limbs apart, just as in life they divided others.

The Inferno is the first book of Dante's Divine Comedy, one of the great works of the human imagination. There's so much to learn from it about human weakness and folly. The faculty in your Italian department would be delighted to introduce you to its many wonders - if only you had an Italian department, which now, of course, you don't.

And do you really think even those faculty and administrators who may applaud your tough-minded stance (partly, I'm sure, in relief that they didn't get the axe themselves) are still going to be on your side in the future? I'm reminded of the fable by Aesop of the Travelers and the Bear: two men were walking together through the woods, when a bear rushed out at them. One of the travelers happened to be in front, and he grabbed the branch of a tree, climbed up, and hid himself in the leaves. The other, being too far behind, threw himself flat down on the ground, with his face in the dust. The bear came up to him, put his muzzle close to the man's ear, and sniffed and sniffed. But at last with a growl the bear slouched off, for bears will not touch dead meat. Then the fellow in the tree came down to his companion, and, laughing, said 'What was it that the bear whispered to you?' 'He told me,' said the other man, 'Never to trust a friend who deserts you in a pinch.'

I first learned that fable, and its valuable lesson for life, in a freshman classics course. Aesop is credited with literally hundreds of fables, most of which are equally enjoyable - and enlightening. Your classics faculty would gladly tell you about them, if only you had a Classics department, which now, of course, you don't.

As for the argument that the humanities don't pay their own way, well, I guess that's true, but it seems to me that there's a fallacy in assuming that a university should be run like a business. I'm not saying it shouldn't be managed prudently, but the notion that every part of it needs to be self-supporting is simply at variance with what a university is all about. You seem to value entrepreneurial programs and practical subjects that might generate intellectual property more than you do 'old-fashioned' courses of study. But universities aren't just about discovering and capitalizing on new knowledge; they are also about preserving knowledge from being lost over time, and that requires a financial investment. There is good reason for it: what seems to be archaic today can become vital in the future. I'll give you two examples of that. The first is the science of virology, which in the 1970s was dying out because people felt that infectious diseases were no longer a serious health problem in the developed world and other subjects, such as molecular biology, were much sexier. Then, in the early 1990s, a little problem called AIDS became the world's number 1 health concern. The virus that causes AIDS was first isolated and characterized at the National Institutes of Health in the USA and the Institute Pasteur in France, because these were among the few institutions that still had thriving virology programs. My second example you will probably be more familiar with. Middle Eastern Studies, including the study of foreign languages such as Arabic and Persian, was hardly a hot subject on most campuses in the 1990s. Then came September 11, 2001. Suddenly we realized that we needed a lot more people who understood something about that part of the world, especially its Muslim culture. Those universities that had preserved their Middle Eastern Studies departments, even in the face of declining enrollment, suddenly became very important places. Those that hadn't - well, I'm sure you get the picture.

I know one of your arguments is that not every place should try to do everything. Let other institutions have great programs in classics or theater arts, you say; we will focus on preparing students for jobs in the real world. Well, I hope I've just shown you that the real world is pretty fickle about what it wants. The best way for people to be prepared for the inevitable shock of change is to be as broadly educated as possible, because today's backwater is often tomorrow's hot field. And interdisciplinary research, which is all the rage these days, is only possible if people aren't too narrowly trained. If none of that convinces you, then I'm willing to let you turn your institution into a place that focuses on the practical, but only if you stop calling it a university and yourself the President of one. You see, the word 'university' derives from the Latin 'universitas', meaning 'the whole'. You can't be a university without having a thriving humanities program. You will need to call SUNY Albany a trade school, or perhaps a vocational college, but not a university. Not anymore.

I utterly refuse to believe that you had no alternative. It's your job as President to find ways of solving problems that do not require the amputation of healthy limbs. Voltaire said that no problem can withstand the assault of sustained thinking. Voltaire, whose real name was Fran├žois-Marie Arouet, had a lot of pithy, witty and brilliant things to say (my favorite is 'God is a comedian playing to an audience that is afraid to laugh'). Much of what he wrote would be very useful to you. I'm sure the faculty in your French department would be happy to introduce you to his writings, if only you had a French department, which now, of course, you don't.

I guess I shouldn't be surprised that you have trouble understanding the importance of maintaining programs in unglamorous or even seemingly 'dead' subjects. From your biography, you don't actually have a PhD or other high degree, and have never really taught or done research at a university. Perhaps my own background will interest you. I started out as a classics major. I'm now Professor of Biochemistry and Chemistry. Of all the courses I took in college and graduate school, the ones that have benefited me the most in my career as a scientist are the courses in classics, art history, sociology, and English literature. These courses didn't just give me a much better appreciation for my own culture; they taught me how to think, to analyze, and to write clearly. None of my sciences courses did any of that.

One of the things I do now is write a monthly column on science and society. I've done it for over 10 years, and I'm pleased to say some people seem to like it. If I've been fortunate enough to come up with a few insightful observations, I can assure you they are entirely due to my background in the humanities and my love of the arts.

One of the things I've written about is the way genomics is changing the world we live in. Our ability to manipulate the human genome is going to pose some very difficult questions for humanity in the next few decades, including the question of just what it means to be human. That isn't a question for science alone; it's a question that must be answered with input from every sphere of human thought, including - especially including - the humanities and arts. Science unleavened by the human heart and the human spirit is sterile, cold, and self-absorbed. It's also unimaginative: some of my best ideas as a scientist have come from thinking and reading about things that have, superficially, nothing to do with science. If I'm right that what it means to be human is going to be one of the central issues of our time, then universities that are best equipped to deal with it, in all its many facets, will be the most important institutions of higher learning in the future. You've just ensured that yours won't be one of them.

Some of your defenders have asserted that this is all a brilliant ploy on your part - a master political move designed to shock the legislature and force them to give SUNY Albany enough resources to keep these departments open. That would be Machiavellian (another notable Italian writer, but then, you don't have any Italian faculty to tell you about him), certainly, but I doubt that you're that clever. If you were, you would have held that town meeting when the whole university could have been present, at a place where the press would be all over it. That's how you force the hand of a bunch of politicians. You proclaim your action on the steps of the state capitol. You don't try to sneak it through in the dead of night, when your institution has its back turned.

No, I think you were simply trying to balance your budget at the expense of what you believe to be weak, outdated and powerless departments. I think you will find, in time, that you made a Faustian bargain. Faust is the title character in a play by Johann Wolfgang von Goethe. It was written around 1800 but still attracts the largest audiences of any play in Germany whenever it's performed. Faust is the story of a scholar who makes a deal with the devil. The devil promises him anything he wants as long as he lives. In return, the devil will get - well, I'm sure you can guess how these sorts of deals usually go. If only you had a Theater department, which now, of course, you don't, you could ask them to perform the play so you could see what happens. It's awfully relevant to your situation. You see, Goethe believed that it profits a man nothing to give up his soul for the whole world. That's the whole world, President Philip, not just a balanced budget. Although, I guess, to be fair, you haven't given up your soul. Just the soul of your institution.

Disrespectfully yours,

Gregory A Petsko

But this week, I am very disappointed with the American Academy. The Harvard University faculty voted (and this is important to note) to drop 2 summer economics courses taught by S. Swamy. Why? because S. Swamy wrote a bad rant against Muslims. First of all, I am very disappointed that Harvard Faculty do not believe in freedom of speech. Calling it hate speech was amazing, this is from liberal arts professors? I am gobsmacked. Just what is the difference between these professors and the goons who destroyed Hussein’s paintings? Nothing much, same old same old, I am afraid. Shameful. And then Sean D Kelly, chair of the philosophy department said this: “I was persuaded … that the views expressed in Dr. Swamy’s op-ed piece amounted to incitement of violence instead of protected political speech, I do not believe this, this professor is a professor of philosophy and is now hiding behind legalities instead of the pure philosophy of free speech? I think his phd should be withdrawn, lol.

Shameful. Very very sad. No wonder academics are being held up to closer scrutiny and when they cannot even defend basic principles of humanities and liberalism, why wouldnt they be cut down to size?

Thursday, December 22

See why I am terrified of Diya?

I wrote this email to her from work.

Diya
I have to go to Annie Auntie's office in central London on Thursday, 12-1pm. Its near the natural history museum. Do you want to come with me? We can go there after the meeting?

She responds back:

From: Diya Dasgupta [diya@xxx.xxx]
Sent: 20/12/2011 15:36 GMT
To: Bhaskar DASGUPTA
Subject: Re: this thursday

Baba


I read the email and told you I'll come (just in case you do not understand 'yes'.)


see you at 5,


diya xxx

My life is woe, I tell you, this at the age of 8? sighs…

Wednesday, December 21

Two grief stricken moments

Before we laugh at the North Koreans, remember the extraordinary scenes at Diana’s death? One was a dictator and the other one was a princess who divorced and was a basket case.

But in both cases, we saw hysterical nationwide reactions to both deaths.

Tuesday, December 20

Vegetius–the ancient Roman War Chronicler

You might have heard about Clausewitz or Sun Tzu and a whole host of other people who wrote on war, son. Vegetius was one of the ancient Roman historians. While there are debates about how good a writer he was, his book, De Re Militari, is a good exposition on how the early Roman Empire came to being. One can argue that the Roman military was one of the most successful in the world. So what did he say as general advice? Here are some of his maxims.

  • “Men must be sufficiently tried before they are led against the enemy.
  • Valour is superior to numbers.
  • The nature of the ground is often of more consequence than courage.
  • Few men are born brave; many become so through care and force of discipline.
  • An army is strengthened by labour and enervated by idleness.
  • Troops are not to be led to battle unless confident of success.
  • An army unsupplied with grain and other necessary provisions will be vanquished without striking a blow.
  • A general whose troops are superior both in number and bravery should engage in the oblong square, which is the first formation.
  • He who judges himself inferior should advance his right wing obliquely against the enemy's left. This is the second formation.
  • If your left wing is strongest, you must attack the enemy's right according to the third formation.
  • The general who can depend on the discipline of his men should begin the engagement by attacking both the enemy's wings at once, the fourth formation.
  • He whose light infantry is good should cover his centre by forming them in its front and charge both the enemy's wings at once. This is the fifth formation.
  • He who cannot depend either on the number or courage of his troops, if obliged to engage, should begin the action with his right and endeavour to break the enemy's left, the rest of his army remaining formed in a line perpendicular to the front and extended to the rear like a javelin. This is the sixth formation.
  • If your forces are few and weak in comparison to the enemy,you must make use of the seventh formation and cover one of your flanks either with an eminence, a city, the sea, a river or some protection of that kind.
  • When an enemy's spy lurks in the camp, order all your soldiers in the day time to their tents, and he will instantly be apprehended.
  • Consult with many on proper measures to be taken, but communicate the plans you intend to put in execution to few, and those only of the most assured fidelity; or rather trust no one but yourself.
  • Punishment, and fear thereof, are necessary to keep soldiers in order in quarters; but in the field they are more influenced by hope and rewards.
  • Good officers never engage in general actions unless induced by opportunity or obliged by necessity.”

You can see quite a lot of these maxims are dedicated to internal army organisation but some of these general points apply in real life as well, son.

For example, the first one is important, train your team before putting them into operations. By itself, size is of no matter, the courage and individual matters much more. Unfortunately, by itself, the individual or even the collection cant do much when we are talking about the nature of the ground – in business we refer to this as the macro economic environment or the regulatory landscape. Few men are born brave, but care, discipline and training can improve your staff members hugely. And so on and so forth.

The Roman Legions were a formidable force and has been fairly well documented as compared to other ancient armies such as of the Greeks, Egyptians, Sumerians, etc. Much to learn from them, son, much to learn. Much of western civilisation has descended from what these Roman Leaders and legions did.

Monday, December 19

Gobsmacking–a public sector body actually reducing tax

I am so impressed by Hammersmith and Fulham Council, who have proposed to cut council tax by 3.75% and this is the 5th year out of 6 that they have managed to do so. I quote:

This saving is due to several cost cutting measures including combining services with Westminster and Kensington & Chelsea councils in order to cut management and overhead costs by half.

This tax cut will be realised without resorting to the kind of ‘bleeding stump’ approach of shutting libraries and cutting services that some councils have taken, say H&F:

“While planning to cut [council] tax, H&F is intending to freeze parking charges, keep all its libraries open, maintain weekly or even twice-weekly refuse collection and plough £1.3 million into extra town centre police.  It is also one of just two councils in London offering homecare to people in the ‘greater moderate’ as well as ‘substantial’ or ‘critical’ banding.”

Further savings are to be made by selling off underused property, co-locating services among other measures in order to pay off about half the council’s debt and reduce annual interest payments.

We are pleased to see that some councils are giving taxpayers a break. The dramatic savings that H&F are proposing show that other councils can follow suit with tax cuts by cutting out waste. Sharing services can be a sensible way forward, too. It’s a shame that other councils are choosing to increase council tax, like Brighton & Hove who are looking to impose a 3.5 per cent hike.

The welcome move by the Department of Communities and Local Government to use money generated through other taxes to help councils freeze council tax bills cannot compete with genuine tax cuts. Funding from central government grants may be falling but since council tax has doubledover the last ten years, there is plenty of space for efficiency savings and for more creative solutions.

Cllr Stephen Greenhalgh, Leader of Hammersmith and Fulham council, spoke at a TaxPayers’ Alliance fringe event at the 2011 Conservative Party Conference. He explained the position they were in when they took over and how things have changed since then. Council tax has fallen from one of the highest levels in the country to one of the lowest, while debt levels have been reduced at the same time.

My local council, on the other hand, has also slashed spending and is just managing to freeze council tax, so including the impact of inflation, can be considered as a reduction of sorts. But since that impacts my income as well, the best I can say about Harrow is that its flat.

Sunday, December 18

Chivalry

Now this spoke to me. I actually have a poster of this series. I am a long away away from this but at least my son could pick this up. Old fashioned? Yep, somethings are forever…