Last week an article I wrote with Chris Healy for the Teachers College Record on the topic of college grading got picked up by the NY Times in the Economix blog. The blog post covered the salient points of the article very well, generated about 20,000 new visitors to gradeinflation.com the very first day, and focused on one aspect of the article that other journalists decided to sidestep: the private college premium. Private colleges, on average, grade higher for a given caliber of student.
This grading premium is small, about 0.1 to 0.2 on a 4.0 GPA scale, but it's definitely measurable and runs across the spectrum of private schools from the 1200 SAT type places for problem students on up to the Ivy League. There are certainly exceptions to this rule; that's how averages work. But it's a good assumption that if you attend a private school you'll get a slightly higher GPA.
There were a slew of comments, mostly from outraged parents and students who attend private schools, about this observation in our article. The editor of the blog received a bunch of separate emails from people who felt maligned by the post. Apparently, she and I hit a nerve.
The fact is that there is no convincing evidence that those that attend private colleges and universities learn more than those who attend public schools. It's simply not there in the education literature. People have been trying to find this measurable advantage for decades. They can't. Students do not work harder at private schools according to student reported data. They are not smarter with the exception of a small number of private schools that house mostly 2300 SAT types of students. They are not more mature. They simply can afford to attend a private school; family incomes of students who attend private schools are significantly higher than those that attend public schools.
Given these observations, it is likely that the reason grades are slightly higher in private colleges is that professors in those schools choose to grade a little easier for a given level of student performance. They give out several percent more A's and B's and the equivalent less C's, D's and F's (I'm working on a paper on the specifics of the difference in grading patterns this week). Why do they choose to do this? I don't know why. I know I graded easier at Duke than I would have at UNC down the road. It was just part of the culture to do so.
Now why are people so upset about this observation? I have no idea, really. We do not live in a anything close to a strict meritocracy. Wealthy children have many advantages in life. In their pursuit of getting into the "right school" they spend four figures taking SAT prep courses in the hope that they'll earn a slightly higher SAT score. They are essentially paying for a higher SAT score than they "deserve". If someone wrote a research paper that stated that those that took SAT prep courses had, controlling for student talent, slightly higher SAT scores, there wouldn't be any outrage from people with big houses and bank accounts. They'd instead be happy; that's why they are paying those dollars.
But somehow, when a similar advantage in grading is pointed out about private colleges and universities, the country club set gets upset. They also get upset when people point out that private colleges and universities are for the most part for those that earn 150K or more (median incomes tend to be in excess of 200K at elite private colleges and universities). I don't understand this insistence to ignore data when it comes to who goes to private colleges either.
There are benefits to attending private colleges. I am not trying to bash them. But facts are facts. The facts are that those advantages do not include any educational benefit that you can measure with a GRE or LSAT or MCAT. The students are not on average more motivated. They do not work harder. When you attend a private college or university you do so for reasons aside from getting a better teacher or more in depth look at organic chemistry. Yes you do get, on average, a 0.1 to 0.2 bump in a GPA. Is that worth an extra 30K in cost? I don't think so. There should be better reasons to attend private colleges. I happen to think that there are for certain types of students. I might talk about that in another post.
Wednesday, April 28, 2010
Monday, April 26, 2010
Something You Don't See Every Day
Sabathia was fighting his mechanics all day and was behind three to zero early because of two walked batters followed by a grooved fastball right in the A's catcher's roundhouse. He settled down a bit, though, and relied on a live fastball the rest of the way because none of his breaking pitches were working.
On the other side, the A's pitcher was far from the ace of aces. But he was getting an assortment of junk pitches over and the ball wasn't carrying all that well, which meant he only gave up two solo home runs instead of the four he might have given up on a hotter day.
In the top of the sixth, after a foul ball, things got a little interesting. The star of stars of the Yankees, Alex Rodriguez - whose brain power is in inverse proportion to his prodigious talent - got lazy and jogged across the pitcher's mound on his way back to first base after a foul ball. The A's pitcher talked some trash over this breach of etiquette. In the old days, someone like Bob Gibson or Juan Marichal would have decked an opposing player for doing that. A-Rod, ever brain dead, didn't even know he had done anything wrong.
Then in the second half of the sixth inning, the once in a blue moon thing happened. First the A's got a single. The runner advanced on a wild pitch. Sabathia walked the next batter. The A's catcher who had hit a home run earlier came up to the plate. Sabathia paused, turned, and looked at his second baseman, nodding his head.
Sabbathia was going to throw the next pitch outside I knew. So did the A's batter. But instead of going with the pitch, he tried to pull it, and hit a weak grounder to the third baseman, the aforementioned A-Rod. A-Rod stepped on third base and then threw to second for the next out. The second baseman then threw the ball to the first baseman and caught the A's batter by a step. I marked it down on my scorecard 5-4-3.
A triple play. A guy about 80 years old who sat a row in front of me and was asking me questions all game turned his head with literally a glint in his eye. "Never saw somethin' like that before," he said to me. "Me neither," I said, smiling. It's true. I've been scoring baseball games for forty years. I've never scored anything like that before.
It took less than six seconds to happen. If my eyes had drifted off, I would have missed it. But lucky for me, I was caught up in the drama of the inning, the solemn nod of Sabathia to his second baseman, telling him the ball was going to come his way. It did. Not the way Sabathia planned, but even better.
The A's won the ball game. That was nice. But teams win ball games all the time. A triple play. Now that's something you don't see every day. That was even better.
Wednesday, April 21, 2010
I Won't Laugh Anymore
"Proud Parent of an Honor Student at Your Name Here High." I don't see these bumper stickers much where I live now, but when I lived in North Carolina they were ubiquitous. They were about as common as another sticker/sign that was all the rage at one time, Baby on Board. I used to think, "How many honor students are there? Is every high school student an honor student?"
Given the grades at US high schools - a quick perusal of this paper suggests that the average GPA of a high school student today is about 3.3 - and assuming that to be an honors student you'd likely need a GPA of 3.5 or better, it may be that about 20 to 40 percent of all high school students have parents who could possess a "honor student" sticker. No wonder those stickers were so common. Why don't I see them here? It's just not fashionable to have any bumper sticker on a car is all.
It really is almost meaningless to have a bumper sticker like this. You might as well have a bumper sticker that says "proud parent of a left handed kid." But people apparently love to kvell about their children so much that they'll take whatever symbol of their kid's specialness they can get.
We want every one of our children to receive academic honor upon honor. We also want every one of them to be well educated. The former wish is attainable if we simply give every kid badges and stickers and declare them all geniuses. The second wish isn't possible at all, but becomes significantly harder when every kid is declared an automatic genius. It would seem that parents prefer to deal with this conflict by pretending those honor student stickers actually mean something significant.
Move on up to college and the situation is a little different. The average college GPA is about 3.0 to 3.1. As a result, A minus students are not as common nationwide. But when 3.0ish is the average GPA, when A is the most common grade and given about 40 percent of the time (our national average), we have crossed the line into a land where grades are mostly meaningless.
We seem to want grades as a measure. Students certainly obsess over them. But so many students have high grades that it's hard to say what an A means aside from having some natural intelligence, the ability to (mostly) show up, and probably hand in assignments on time. We don't know how to deal with this situation rationally. As America's Grade Inflation Czar (how this happened I don't quite understand myself), sometimes I get the strangest calls and emails about this conflict. Sometimes they are so strange that I assume that my leg is being pulled.
Last April Fools, I got a call from the Chronicle of Higher Education asking for my opinion about a move by Loyola Law School to retroactively raise grades by 0.3. I had to suppress my laughter. Surely this was a joke. I answered the questions from the reporter and tried to play it straight. It was April Fools after all. I like good jokes. After I hung up, I couldn't stop laughing. That was a good one, I thought. But it turned out it wasn't a joke. Loyola was really doing this in an effort to try to help its graduates find jobs. The joke instead was on me.
A couple of years ago, I got another call from a reporter. He wanted to know what I thought about grade forgiveness programs. I hadn't heard of such a thing. I asked him to explain it to me. Basically, it's the equivalent of a mulligan on a college transcript. You can get a bad grade completely removed if you retake the course. I asked him if he was joking. He said no. I laughed out loud. This is unbelievable, I said. You can't make this stuff up it's so ridiculous.
The other day I got an email about University of Georgia trying to eliminate the C-. The "problem" is that getting a C- at Georgia sometimes means your class counts toward major/distribution requirements and sometimes doesn't. What to do? Just get rid of the grade. I don't imagine anyone is proposing getting rid of A- grades at Georgia. Again, you can't make this stuff up.
The situation isn't always so ridiculous that it's funny. Sometimes it's a tragedy. Last week I got an email about LSU dismissing a faculty member from a classroom for giving too many bad grades on her first exam. Most students had failed.
Yes, that grading policy is very harsh. But we give the benefit of the doubt to professors who pass out A's to almost all of a class. If grades were a meaningful pedagogical tool today, we'd do the same for those who gave failing grades. But grades aren't particularly meaningful anymore. Instead, they've turned into something else. They're some sort of mandatory trophy.
I've been conflicted, too, about these calls and emails. I'm dumbfounded that the unbelievable has become reality. Why am I asked to comment on something that should have never happened if we took evaluation and education seriously?
I think - ever since the April Fools joke that wasn't a joke - that I'm finally past the idea that when it comes to grades we must be living in an Ionesco play. I'm won't laugh anymore when I get a call from a reporter. Not on April Fools. Not ever. I've finally figured out that no one is trying to pull my leg. Grade forgiveness. Retroactively raising grades. Trying to get rid of the pesky C-. Pulling a tenured professor in the middle of a class because students didn't like their grades. It's all bizarre, yes. And ultimately, it isn't funny at all.
Given the grades at US high schools - a quick perusal of this paper suggests that the average GPA of a high school student today is about 3.3 - and assuming that to be an honors student you'd likely need a GPA of 3.5 or better, it may be that about 20 to 40 percent of all high school students have parents who could possess a "honor student" sticker. No wonder those stickers were so common. Why don't I see them here? It's just not fashionable to have any bumper sticker on a car is all.
It really is almost meaningless to have a bumper sticker like this. You might as well have a bumper sticker that says "proud parent of a left handed kid." But people apparently love to kvell about their children so much that they'll take whatever symbol of their kid's specialness they can get.
We want every one of our children to receive academic honor upon honor. We also want every one of them to be well educated. The former wish is attainable if we simply give every kid badges and stickers and declare them all geniuses. The second wish isn't possible at all, but becomes significantly harder when every kid is declared an automatic genius. It would seem that parents prefer to deal with this conflict by pretending those honor student stickers actually mean something significant.
Move on up to college and the situation is a little different. The average college GPA is about 3.0 to 3.1. As a result, A minus students are not as common nationwide. But when 3.0ish is the average GPA, when A is the most common grade and given about 40 percent of the time (our national average), we have crossed the line into a land where grades are mostly meaningless.
We seem to want grades as a measure. Students certainly obsess over them. But so many students have high grades that it's hard to say what an A means aside from having some natural intelligence, the ability to (mostly) show up, and probably hand in assignments on time. We don't know how to deal with this situation rationally. As America's Grade Inflation Czar (how this happened I don't quite understand myself), sometimes I get the strangest calls and emails about this conflict. Sometimes they are so strange that I assume that my leg is being pulled.
Last April Fools, I got a call from the Chronicle of Higher Education asking for my opinion about a move by Loyola Law School to retroactively raise grades by 0.3. I had to suppress my laughter. Surely this was a joke. I answered the questions from the reporter and tried to play it straight. It was April Fools after all. I like good jokes. After I hung up, I couldn't stop laughing. That was a good one, I thought. But it turned out it wasn't a joke. Loyola was really doing this in an effort to try to help its graduates find jobs. The joke instead was on me.
A couple of years ago, I got another call from a reporter. He wanted to know what I thought about grade forgiveness programs. I hadn't heard of such a thing. I asked him to explain it to me. Basically, it's the equivalent of a mulligan on a college transcript. You can get a bad grade completely removed if you retake the course. I asked him if he was joking. He said no. I laughed out loud. This is unbelievable, I said. You can't make this stuff up it's so ridiculous.
The other day I got an email about University of Georgia trying to eliminate the C-. The "problem" is that getting a C- at Georgia sometimes means your class counts toward major/distribution requirements and sometimes doesn't. What to do? Just get rid of the grade. I don't imagine anyone is proposing getting rid of A- grades at Georgia. Again, you can't make this stuff up.
The situation isn't always so ridiculous that it's funny. Sometimes it's a tragedy. Last week I got an email about LSU dismissing a faculty member from a classroom for giving too many bad grades on her first exam. Most students had failed.
Yes, that grading policy is very harsh. But we give the benefit of the doubt to professors who pass out A's to almost all of a class. If grades were a meaningful pedagogical tool today, we'd do the same for those who gave failing grades. But grades aren't particularly meaningful anymore. Instead, they've turned into something else. They're some sort of mandatory trophy.
I've been conflicted, too, about these calls and emails. I'm dumbfounded that the unbelievable has become reality. Why am I asked to comment on something that should have never happened if we took evaluation and education seriously?
I think - ever since the April Fools joke that wasn't a joke - that I'm finally past the idea that when it comes to grades we must be living in an Ionesco play. I'm won't laugh anymore when I get a call from a reporter. Not on April Fools. Not ever. I've finally figured out that no one is trying to pull my leg. Grade forgiveness. Retroactively raising grades. Trying to get rid of the pesky C-. Pulling a tenured professor in the middle of a class because students didn't like their grades. It's all bizarre, yes. And ultimately, it isn't funny at all.
Monday, April 19, 2010
It Must Have Been The Chicken
The other night I made some roasted chicken with a fresh orange from a friend's backyard and a rosemary sprig from our yard. Some salad. Some strawberries, mango and bananas. Nice dinner with some good Spanish wine. That night I had a dream.
A publisher was all excited about my book. They were doing some marketing studies and decided this thing was going to be a hit (now that's already ridiculous, but hey it's a dream). As a final check, they sent the book to Studs Terkel for a read. Yes, I know Studs Terkel is dead but in my dream he was alive and kicking. And boy was he kicking. He hated the book! Absolutely couldn't stand it.
The thumbs down by Terkel caused the publisher to abandon the book. They flew me out to New York to tell me the news. The chief editor walked with me along Central Park. It was a beautiful spring day. The editor was a snazzy dresser. Tall handsome and a bit slimy. But he was incredibly honest. They loved the book. But without Studs Terkel behind it, there was no way they could proceed.
I flew back home. I thought, well that was all very interesting. Then I got a call from Studs himself. He'd found my phone number and wanted to give me a piece of his mind. My book was trash. It was anti-union. It was anti-Semitic. As far as he was concerned I was scum of the earth. He shouted insult after insult and then hung up.
I never met Studs Terkel. I heard him on the radio a couple of times. He seemed like a nice guy. But apparently my subconscious thinks otherwise. Why this dream? I have no idea. It must have been the chicken.
A publisher was all excited about my book. They were doing some marketing studies and decided this thing was going to be a hit (now that's already ridiculous, but hey it's a dream). As a final check, they sent the book to Studs Terkel for a read. Yes, I know Studs Terkel is dead but in my dream he was alive and kicking. And boy was he kicking. He hated the book! Absolutely couldn't stand it.
The thumbs down by Terkel caused the publisher to abandon the book. They flew me out to New York to tell me the news. The chief editor walked with me along Central Park. It was a beautiful spring day. The editor was a snazzy dresser. Tall handsome and a bit slimy. But he was incredibly honest. They loved the book. But without Studs Terkel behind it, there was no way they could proceed.
I flew back home. I thought, well that was all very interesting. Then I got a call from Studs himself. He'd found my phone number and wanted to give me a piece of his mind. My book was trash. It was anti-union. It was anti-Semitic. As far as he was concerned I was scum of the earth. He shouted insult after insult and then hung up.
I never met Studs Terkel. I heard him on the radio a couple of times. He seemed like a nice guy. But apparently my subconscious thinks otherwise. Why this dream? I have no idea. It must have been the chicken.
Wednesday, April 14, 2010
Mining The Tunnel, Part 1 (and there may not be a Part 2)
Today, I'm going to dismiss 98 percent of all current intellectual activity in academe in the space of about 800 words. And after I've thoroughly depressed you, I'll end on a sort of vague hopeful note. I may do an optimistic (OK, not optimistic; that's not my thing; how about acid neutral) piece on that hopeful note next time. Here goes.
A few years ago I was having lunch with an older (older than me at any rate) geophysicist of some renown. I asked him what he was up to. He gave me a wry grin and said, "Trying to figure out what to do after plate tectonics." I nodded. Plate tectonics was discovered in the 1960s. Basically from that time on, we've known how the earth works. There was a little mopping up in the 1970s, but since that time geophysics and most of geology as an intellectual field of knowledge has been dead as a doornail.
I was reminded of this when I was a visiting scholar at my old Ph.D. institution. It represents a fair bit of the cutting edge in the earth sciences. I hadn't been back in a dozen years. Much to my surprise, everyone was doing pretty much the same stuff they did way back when. It was a little more refined, kind of like comparing a 2010 Accord to a 2000 Accord. But really, a 2000 Accord is a fine car. So was the state of knowledge in geophysics in 2000. Basically, its been a big zero in terms of advancement.
In my own field of hydrology, the advent of the computer and the mass spectrometer kept the field going strong until about 1983, give or take a few years. Since that time, it's been a big zero intellectually as well.
That said, there are people still doing research in the earth sciences. About 10,000 of them descend upon San Francisco at the annual American Geophysical Union convention every year. They are working on the third or fourth decimal place in our state of knowledge.
I don't mean to pick on the earth sciences. Physics and chemistry are working on the sixth or seventh decimal place. Biology got a shot of life with the advent of PCR techniques, but most non-genetic aspects of biology have been dead for decades. The Ph.D.s and profs are essentially doing boring mop up work after Darwin.
Move outside of the sciences and it gets worse. The humanities? Please, what can possibly be discovered of any real value in the humanities that wasn't already discovered hundreds of years ago? Is someone suddenly going to interpret Shakespeare significantly better than in the past? How about the Bible? After you've read Rashi and Maimonides, even Spinoza seems lame.
It's no wonder that literature departments have turned into popular culture departments. There's nothing left that can be said with originality that concerns the classics. Literary criticism has been dead for a long, long time. Don't believe me? Ask Mark Bauerlein an English professor at Emory. He'll say much the same thing and has even written a book about it, Literary Criticism: An Autopsy. No I haven't read the book. I did ask him once how it was received. He said he got his share of nasty emails saying he was a neanderthal who didn't understand the humanities. Apparently, people in the humanities don't like to be reminded that they are obsolete.
How about the social sciences? Economics has given up on big theories - they don't work - and instead has found life running regression models on obscure data that have little to do with economics. Political science at least has current events to argue over, but really there is no science there; it's a debate club that thinks it's a field of knowledge. Sociology is still mopping up after Max Weber.
Oh I forgot about history. At least we keep making more of it. But no we don't need more analyses of WWII or the Civil War, please. They've been done countless times. As for the most recent events, historians are so desperate for something new that they've become the equivalent of ambulance chasing tort lawyers.
Whew! There I've done it! Dismissed all but a few bits of current academe as a mix of mental masturbation and field gleaning. It wasn't hard at all to do this, believe me.
The good news is that intellectual discovery had a glorious run in the 19th and 20th centuries. There were breakthroughs upon breakthroughs for a century or more. The bad news is that in most fields of study much of what can be discovered of intellectual value has already been discovered. Yet we have teams upon teams pretending they are doing something of major intellectual value that are housed in universities around the world.
It's as if the intellectual world found a great mine about 200 years ago. The rocks in that mine were filled with nuggets of gold. As time went on, all the easy stuff was found. Mining got harder. The grade of the remaining ore declined and declined. In this century, we're mining tiny, tiny flakes. It sounds silly that we do this. It is silly. But it does serve a purpose. It really does. I might discuss that next post.
A few years ago I was having lunch with an older (older than me at any rate) geophysicist of some renown. I asked him what he was up to. He gave me a wry grin and said, "Trying to figure out what to do after plate tectonics." I nodded. Plate tectonics was discovered in the 1960s. Basically from that time on, we've known how the earth works. There was a little mopping up in the 1970s, but since that time geophysics and most of geology as an intellectual field of knowledge has been dead as a doornail.
I was reminded of this when I was a visiting scholar at my old Ph.D. institution. It represents a fair bit of the cutting edge in the earth sciences. I hadn't been back in a dozen years. Much to my surprise, everyone was doing pretty much the same stuff they did way back when. It was a little more refined, kind of like comparing a 2010 Accord to a 2000 Accord. But really, a 2000 Accord is a fine car. So was the state of knowledge in geophysics in 2000. Basically, its been a big zero in terms of advancement.
In my own field of hydrology, the advent of the computer and the mass spectrometer kept the field going strong until about 1983, give or take a few years. Since that time, it's been a big zero intellectually as well.
That said, there are people still doing research in the earth sciences. About 10,000 of them descend upon San Francisco at the annual American Geophysical Union convention every year. They are working on the third or fourth decimal place in our state of knowledge.
I don't mean to pick on the earth sciences. Physics and chemistry are working on the sixth or seventh decimal place. Biology got a shot of life with the advent of PCR techniques, but most non-genetic aspects of biology have been dead for decades. The Ph.D.s and profs are essentially doing boring mop up work after Darwin.
Move outside of the sciences and it gets worse. The humanities? Please, what can possibly be discovered of any real value in the humanities that wasn't already discovered hundreds of years ago? Is someone suddenly going to interpret Shakespeare significantly better than in the past? How about the Bible? After you've read Rashi and Maimonides, even Spinoza seems lame.
It's no wonder that literature departments have turned into popular culture departments. There's nothing left that can be said with originality that concerns the classics. Literary criticism has been dead for a long, long time. Don't believe me? Ask Mark Bauerlein an English professor at Emory. He'll say much the same thing and has even written a book about it, Literary Criticism: An Autopsy. No I haven't read the book. I did ask him once how it was received. He said he got his share of nasty emails saying he was a neanderthal who didn't understand the humanities. Apparently, people in the humanities don't like to be reminded that they are obsolete.
How about the social sciences? Economics has given up on big theories - they don't work - and instead has found life running regression models on obscure data that have little to do with economics. Political science at least has current events to argue over, but really there is no science there; it's a debate club that thinks it's a field of knowledge. Sociology is still mopping up after Max Weber.
Oh I forgot about history. At least we keep making more of it. But no we don't need more analyses of WWII or the Civil War, please. They've been done countless times. As for the most recent events, historians are so desperate for something new that they've become the equivalent of ambulance chasing tort lawyers.
Whew! There I've done it! Dismissed all but a few bits of current academe as a mix of mental masturbation and field gleaning. It wasn't hard at all to do this, believe me.
The good news is that intellectual discovery had a glorious run in the 19th and 20th centuries. There were breakthroughs upon breakthroughs for a century or more. The bad news is that in most fields of study much of what can be discovered of intellectual value has already been discovered. Yet we have teams upon teams pretending they are doing something of major intellectual value that are housed in universities around the world.
It's as if the intellectual world found a great mine about 200 years ago. The rocks in that mine were filled with nuggets of gold. As time went on, all the easy stuff was found. Mining got harder. The grade of the remaining ore declined and declined. In this century, we're mining tiny, tiny flakes. It sounds silly that we do this. It is silly. But it does serve a purpose. It really does. I might discuss that next post.
Monday, April 12, 2010
Baubles, Bangles and Beads
I went to the Cartier exhibit at the Legion of Honor the other day. I kind of liked it at first. Seeing all those over the top jewelry pieces loaded with diamonds was awe inspiring in a way. But then about half-way through I started to feel that this was all very creepy. It was excess for the purpose of excess. I feel somewhat the same way when I go to the Vatican. My response is half "now that is beautiful" and half "this group has way, way too much money and way, way too little taste."
Somehow, and this is both my snobbery and old lefty side showing through, the Cartier exhibit is creepier though. These baubles are not the excessive accumulations of boy kings (see King Tut) or the church (see the Vatican) or a long line of royalty (see the Tower of London). To thoroughly mix up cultural references, there is no yeechus (look that one up if you're interested; it's a Yiddish word) at work. Instead it's the stuff of spoiled rotten newly rich people. They accumulated these ridiculously expensive gaudy pieces of jewelry in a time period when ordinary Americans were struggling and starving.
I mean look at this:
Basically, Cartier threw together an ungodly number of jewels in a statement that isn't about beauty, but simply conspicuous consumption. And who exactly bought this stuff? People like Mrs. Irving Berlin and Mrs. Cole Porter and the heiress to the Post cereal fortune, Mrs. E.F. Hutton (until she married some other rich dude). I note that two of those people were at least loved by some wonderful songwriters. But really now, this is all about people with bad taste more than anything else.
In the exhibit mix, there was some tasteful and carefully crafted jewelry, but mostly this exhibit was about heaping one jewel on top of another. The exhibit gives you a window into how some of the obscenely rich live. They apparently spend their time buying a lot of junk. It's almost enough to turn me into a...socialist. But not quite.
Somehow, and this is both my snobbery and old lefty side showing through, the Cartier exhibit is creepier though. These baubles are not the excessive accumulations of boy kings (see King Tut) or the church (see the Vatican) or a long line of royalty (see the Tower of London). To thoroughly mix up cultural references, there is no yeechus (look that one up if you're interested; it's a Yiddish word) at work. Instead it's the stuff of spoiled rotten newly rich people. They accumulated these ridiculously expensive gaudy pieces of jewelry in a time period when ordinary Americans were struggling and starving.
I mean look at this:
Basically, Cartier threw together an ungodly number of jewels in a statement that isn't about beauty, but simply conspicuous consumption. And who exactly bought this stuff? People like Mrs. Irving Berlin and Mrs. Cole Porter and the heiress to the Post cereal fortune, Mrs. E.F. Hutton (until she married some other rich dude). I note that two of those people were at least loved by some wonderful songwriters. But really now, this is all about people with bad taste more than anything else.
In the exhibit mix, there was some tasteful and carefully crafted jewelry, but mostly this exhibit was about heaping one jewel on top of another. The exhibit gives you a window into how some of the obscenely rich live. They apparently spend their time buying a lot of junk. It's almost enough to turn me into a...socialist. But not quite.
Wednesday, April 07, 2010
Making Money Off Stupidity
About a year ago, I needed a loan to buy a property. The loan was small, I have good credit and in a normal environment, it would have been no problem. But it wasn't a normal environment. Money was frozen. I knew things would be difficult so I gave myself an extra four weeks to find the loan. I needed every one of those four weeks. Luckily, everything was approved literally twenty four hours before the closing.
As we all know, the reason money was frozen was because trillions of dollars worth of subprime loans collapsed. When you look at the nature of those loans, you wonder not only how the banks and the government sanctioned these financial instruments, but what kind of idiot potential homeowner would sign on to such a thing.
Let's say you're making 50K a year and have a couple of kids. You want a home and someone is offering you a 360K mortgage to buy your bit of paradise in Clovis, California. If you're lucky (no past of health related debt), you can probably afford $1200 dollars a month. At six percent interest, you should be paying $2200 a month plus taxes (another $400 a month), plus another $200 a month for a contingency fund for repairs.
You can't afford to buy a home. You just can't. If someone is telling you that you can, he is selling you a bill of goods. You have to be an idiot to sign on to any deal that makes you to go into hock to the tune of 360K. You should know what's going to happen. Eventually, once the teaser rate changes to a real rate that's above market rates, your payments will exceed your ability to pay. The people who are offering you this mortgage are trying to make money off your stupidity.
But it isn't only the home buyer that's an idiot. These mortgages are bundled and sold in the marketplace of securities. What kind of institutional investor is an idiot enough to buy them? The person selling these bundles is also trying to make money off someone's stupidity.
This is how much of capitalism works. Profits often don't come from the grind of making one honest deal at a time. They depend on people or institutions being idiots. A car dealer doesn't make money off smart people. He makes it off the person who doesn't know how to negotiate, buys dealer add ons with 150 percent profit, and buys extended warranties they don't need. Insurance companies make money off overpriced life insurance policies and annuities with fine print that should make anyone say no.
Banks make money by charging outrageous fees to people who bounce their checks regularly and overdraft their accounts using their debit cards. Credit card companies make money by charging interest rates that would make Shylock blush and nasty fees for late payments. Investment banks make money by selling lousy securities to institutions that should know better and then shorting on those same securities.
Because much of capitalism is predatory in nature, people with half a brain pay less than they would in a fair system. They can buy cars at $100 over wholesale, acquire fee free credit cards and pay off all debt before the interest kicks in, etc. Essentially, they benefit from the idiocy of others.
For those who believe in free markets, this system of exploiting the idiots is considered to be fair and square. Government regulation designed to level the playing field and protect people and institutions from their own greed and frozen brains just gets in the way. People should be rewarded for being smart and lucky. People should be punished for being dumb and in the wrong place at the wrong time.
I sort of buy into this argument. I don't buy all of it. I remember when I was in grade school and there was someone in my neighborhood who'd make money off five-year-olds by telling them that nickles were worth more than dimes because they were bigger (No that kid wasn't named Bernie Madoff). Now that is just too much for me to handle. Actually, that's predatory behavior that crosses over into the criminal. But if that kid went up to another 10 year old, managed to convince him that a nickle was worth more than a dime, and successfully executed a trade at a 100 percent profit, more power to him.
Such trades are at a microscale. The harm they cause is strictly to the individual. Now scale up that nickle for dime trade to the entire housing industry. Individuals are being idiots by buying into mortgages some slimy mortgage broker is selling. Institutions are being idiots by buying bundles of worthless mortgages. A derivatives market is created for these worthless pieces of paper and an insurance giant is idiotic enough to back these derivatives. It's idiots all the way up from the working class stiff who bought a house he couldn't afford to the financial titans on Wall Street to the idiots that run the Fed.
So while I understand why free market promoters like the idea of "eat what you kill" markets, the fact is that it doesn't work in the modern world of finance. Hardly anything is microscale anymore. It's never just one home buying idiot in Clovis. We are all ultimately interconnected. It's a whole bunch of idiots from Clovis, California to Miami, Florida getting screwed. When so many people get screwed it affects the entire nation. That's why governments need to have working financial regulations and significant oversight to somehow temper the naturally predatory nature of capitalism.
As we all know, the reason money was frozen was because trillions of dollars worth of subprime loans collapsed. When you look at the nature of those loans, you wonder not only how the banks and the government sanctioned these financial instruments, but what kind of idiot potential homeowner would sign on to such a thing.
Let's say you're making 50K a year and have a couple of kids. You want a home and someone is offering you a 360K mortgage to buy your bit of paradise in Clovis, California. If you're lucky (no past of health related debt), you can probably afford $1200 dollars a month. At six percent interest, you should be paying $2200 a month plus taxes (another $400 a month), plus another $200 a month for a contingency fund for repairs.
You can't afford to buy a home. You just can't. If someone is telling you that you can, he is selling you a bill of goods. You have to be an idiot to sign on to any deal that makes you to go into hock to the tune of 360K. You should know what's going to happen. Eventually, once the teaser rate changes to a real rate that's above market rates, your payments will exceed your ability to pay. The people who are offering you this mortgage are trying to make money off your stupidity.
But it isn't only the home buyer that's an idiot. These mortgages are bundled and sold in the marketplace of securities. What kind of institutional investor is an idiot enough to buy them? The person selling these bundles is also trying to make money off someone's stupidity.
This is how much of capitalism works. Profits often don't come from the grind of making one honest deal at a time. They depend on people or institutions being idiots. A car dealer doesn't make money off smart people. He makes it off the person who doesn't know how to negotiate, buys dealer add ons with 150 percent profit, and buys extended warranties they don't need. Insurance companies make money off overpriced life insurance policies and annuities with fine print that should make anyone say no.
Banks make money by charging outrageous fees to people who bounce their checks regularly and overdraft their accounts using their debit cards. Credit card companies make money by charging interest rates that would make Shylock blush and nasty fees for late payments. Investment banks make money by selling lousy securities to institutions that should know better and then shorting on those same securities.
Because much of capitalism is predatory in nature, people with half a brain pay less than they would in a fair system. They can buy cars at $100 over wholesale, acquire fee free credit cards and pay off all debt before the interest kicks in, etc. Essentially, they benefit from the idiocy of others.
For those who believe in free markets, this system of exploiting the idiots is considered to be fair and square. Government regulation designed to level the playing field and protect people and institutions from their own greed and frozen brains just gets in the way. People should be rewarded for being smart and lucky. People should be punished for being dumb and in the wrong place at the wrong time.
I sort of buy into this argument. I don't buy all of it. I remember when I was in grade school and there was someone in my neighborhood who'd make money off five-year-olds by telling them that nickles were worth more than dimes because they were bigger (No that kid wasn't named Bernie Madoff). Now that is just too much for me to handle. Actually, that's predatory behavior that crosses over into the criminal. But if that kid went up to another 10 year old, managed to convince him that a nickle was worth more than a dime, and successfully executed a trade at a 100 percent profit, more power to him.
Such trades are at a microscale. The harm they cause is strictly to the individual. Now scale up that nickle for dime trade to the entire housing industry. Individuals are being idiots by buying into mortgages some slimy mortgage broker is selling. Institutions are being idiots by buying bundles of worthless mortgages. A derivatives market is created for these worthless pieces of paper and an insurance giant is idiotic enough to back these derivatives. It's idiots all the way up from the working class stiff who bought a house he couldn't afford to the financial titans on Wall Street to the idiots that run the Fed.
So while I understand why free market promoters like the idea of "eat what you kill" markets, the fact is that it doesn't work in the modern world of finance. Hardly anything is microscale anymore. It's never just one home buying idiot in Clovis. We are all ultimately interconnected. It's a whole bunch of idiots from Clovis, California to Miami, Florida getting screwed. When so many people get screwed it affects the entire nation. That's why governments need to have working financial regulations and significant oversight to somehow temper the naturally predatory nature of capitalism.
Monday, April 05, 2010
Why I Follow The Rules of Passover
It's about the fifth day of Passover as I write this. The holiday celebrates a journey that never took place. It honors the deliverance of "my people" from a bondage in Egypt that likely never happened. No Moses didn't turn a rod into a snake. But that's great phallic imagery I've got to admit. No Jews didn't split the Red Sea. There were no plagues of Egypt. Yes, boils are nasty things. The story of the Jews leaving Egypt was written down in the Torah probably about 1000 years after the supposed event happened. It's a great story, but it's likely ninety eight percent baloney.
No there is no Santa Claus. No Jesus didn't rise to heaven and isn't the son of God. The story of Abraham, the founder of my tribe, and his son Isaac is undoubtedly some wacky parable. Adam and Eve? That story is just plain weird. And what about Adam living over 900 years? Maybe in dog years if there was such a man, but even then. The Easter Bunny. Buddha sitting under a tree to gain enlightenment? Probably about as likely as Robert Johnson standing at the crossroads to receive the gift of the blues from the devil. Zeus? No. Elvis' 1967 Comeback Special? Yes, and one day Elvis will be revered as another son of god.
As a kid, I used to have discussions about the bullshit in these stories with my rabbis in cheder (that's Orthodox Jewish school). These poor fellows had been exiled to Milwaukee because they couldn't make a living in the Big Apple. In hindsight, not only did they have to endure the indignity of being in such a small town without any real Jewish scholarship, but they also had to endure obnoxious apikoyresim (heretics) like me. I'm sure I made them thoroughly miserable. When they slapped me around for my impudence, I was plenty miserable as well.
But despite the fact that I would swear up and down that every story in the Bible is baloney (right, who exactly am I swearing to?), I was more or less observant. I still am. No, not the Sabbath. I ignore that, although I still like a good Shabbas dinner complete with prayers and singing.
Ham? I don't like it and don't cook it, although I'll eat it if my sweetie does the cooking (that's what love will do). Bacon? Even the smell of it makes me nauseous. I have to leave the house when my sweetie fries it up (which she does a lot less than she'd like; that's what love will do, too). The reason for my nausea is simple. As a kid, I'd walk with my mother in the neighborhood on Sunday mornings. She'd stop in front of the houses of the Gentiles when they cooked their breakfasts. "Can you smell that?" She'd ask. I'd draw some air into my nostrils. "That's poison!" OK, I'm a lot like Pavlov's dog.
But the rest of my following ritual is voluntary. On Passover you won't find my mouth anywhere near bread products or corn products. I'm just about as law abiding as any Hasid during Passover. I don't like Passover food. But it's a minor imposition really. I'm glad I do it.
Why?
There's no simple reason really. Some of it is because of continuity. I've been doing this since I was a baby boy. Why should I stop now? Some of it is because even though I'm an atheist, I do feel a need to be tied to some history. I like the fact that I'm linked back thousands of years to one guy in the desert, albeit a nut job who heard voices and tried to kill his own son. As a contrarian, I like that my religion has been as unsuccessful in terms of gaining numbers as it has been resilient. Then there is the Holocaust. Almost all of my family was murdered because they practiced this obscure religion and I feel a political and family obligation to keep up their ways even though I don't believe a word in the Torah.
But then there is the funny thing about narrative. Who really cares if it's true? Yeah it's baloney. But it's great baloney. I mean that's a wonderful story that a group of writers concocted about 2500 years ago. You have to give those writers some props. I love the Torah. I don't care if it's fiction. Maybe I love it even more because it's fiction. I'm following the rules of Passover partly to honor its writers.
It's like being a Trekie in a way and Passover is like a Trekie convention. You meet for two days and retell the story. You eat all kinds of weird food. You bond with other folks who normally you wouldn't care about. You talk about old seders just like Trekies talk about old conventions.
Maybe one day, William Shatner will be like Moses. Star Trek will become a full-fledged religion. Anything is possible.
Oh I forgot something else. The jokes. That's another reason to follow these rules. Here's one I'm stealing from the Old Jewish Guys Telling Jokes web site.
A Jewish man from the old country settles in England after the War. He becomes a celebrated tailor to the famous. Even the Queen and Prince of England use his services. He is so highly regarded that one day the Queen decides he should be knighted.
The tailor is so excited about this honor. He studies up on what he has to do during the ceremony. Get down on the right knee. Wait until the Queen places a sword on his right shoulder. Then get down on the left knee. Wait until the Queen places a sword on his left shoulder. Then the Queen asks, "Upon which sword do you wish to swear your Oath?" He is supposed to answer, "Upon the sword of Her Imperial Majesty."
The Jewish tailor goes to the knighting ceremony. He's in awe of the surroundings. To the left and right of him are other men about to be knighted, all tall and blond, wearing suits that he has made for them over the years.
When it's finally his turn, the old man gets up before the Queen. He bows and places his left knee onto the ground. Ooops he's got it backwards. Then he places his right knee onto the ground. He knows he's screwing up. He's getting all flustered. The Queen asks, "Upon which sword do you wish to swear your Oath?"
The tailor is in such a tizzy that he draws a blank as to what he's supposed to say. Finally, he blurts out the first thing that comes to his head, something from his childhood, "Mah nish tanah halailah hazeh mikol hallayloys."
The Queen looks puzzled at the response. She asks the Prince, "Why is this knight different from all other knights?" badabump
That's why I follow the rules of Passover.
No there is no Santa Claus. No Jesus didn't rise to heaven and isn't the son of God. The story of Abraham, the founder of my tribe, and his son Isaac is undoubtedly some wacky parable. Adam and Eve? That story is just plain weird. And what about Adam living over 900 years? Maybe in dog years if there was such a man, but even then. The Easter Bunny. Buddha sitting under a tree to gain enlightenment? Probably about as likely as Robert Johnson standing at the crossroads to receive the gift of the blues from the devil. Zeus? No. Elvis' 1967 Comeback Special? Yes, and one day Elvis will be revered as another son of god.
As a kid, I used to have discussions about the bullshit in these stories with my rabbis in cheder (that's Orthodox Jewish school). These poor fellows had been exiled to Milwaukee because they couldn't make a living in the Big Apple. In hindsight, not only did they have to endure the indignity of being in such a small town without any real Jewish scholarship, but they also had to endure obnoxious apikoyresim (heretics) like me. I'm sure I made them thoroughly miserable. When they slapped me around for my impudence, I was plenty miserable as well.
But despite the fact that I would swear up and down that every story in the Bible is baloney (right, who exactly am I swearing to?), I was more or less observant. I still am. No, not the Sabbath. I ignore that, although I still like a good Shabbas dinner complete with prayers and singing.
Ham? I don't like it and don't cook it, although I'll eat it if my sweetie does the cooking (that's what love will do). Bacon? Even the smell of it makes me nauseous. I have to leave the house when my sweetie fries it up (which she does a lot less than she'd like; that's what love will do, too). The reason for my nausea is simple. As a kid, I'd walk with my mother in the neighborhood on Sunday mornings. She'd stop in front of the houses of the Gentiles when they cooked their breakfasts. "Can you smell that?" She'd ask. I'd draw some air into my nostrils. "That's poison!" OK, I'm a lot like Pavlov's dog.
But the rest of my following ritual is voluntary. On Passover you won't find my mouth anywhere near bread products or corn products. I'm just about as law abiding as any Hasid during Passover. I don't like Passover food. But it's a minor imposition really. I'm glad I do it.
Why?
There's no simple reason really. Some of it is because of continuity. I've been doing this since I was a baby boy. Why should I stop now? Some of it is because even though I'm an atheist, I do feel a need to be tied to some history. I like the fact that I'm linked back thousands of years to one guy in the desert, albeit a nut job who heard voices and tried to kill his own son. As a contrarian, I like that my religion has been as unsuccessful in terms of gaining numbers as it has been resilient. Then there is the Holocaust. Almost all of my family was murdered because they practiced this obscure religion and I feel a political and family obligation to keep up their ways even though I don't believe a word in the Torah.
But then there is the funny thing about narrative. Who really cares if it's true? Yeah it's baloney. But it's great baloney. I mean that's a wonderful story that a group of writers concocted about 2500 years ago. You have to give those writers some props. I love the Torah. I don't care if it's fiction. Maybe I love it even more because it's fiction. I'm following the rules of Passover partly to honor its writers.
It's like being a Trekie in a way and Passover is like a Trekie convention. You meet for two days and retell the story. You eat all kinds of weird food. You bond with other folks who normally you wouldn't care about. You talk about old seders just like Trekies talk about old conventions.
Maybe one day, William Shatner will be like Moses. Star Trek will become a full-fledged religion. Anything is possible.
Oh I forgot something else. The jokes. That's another reason to follow these rules. Here's one I'm stealing from the Old Jewish Guys Telling Jokes web site.
A Jewish man from the old country settles in England after the War. He becomes a celebrated tailor to the famous. Even the Queen and Prince of England use his services. He is so highly regarded that one day the Queen decides he should be knighted.
The tailor is so excited about this honor. He studies up on what he has to do during the ceremony. Get down on the right knee. Wait until the Queen places a sword on his right shoulder. Then get down on the left knee. Wait until the Queen places a sword on his left shoulder. Then the Queen asks, "Upon which sword do you wish to swear your Oath?" He is supposed to answer, "Upon the sword of Her Imperial Majesty."
The Jewish tailor goes to the knighting ceremony. He's in awe of the surroundings. To the left and right of him are other men about to be knighted, all tall and blond, wearing suits that he has made for them over the years.
When it's finally his turn, the old man gets up before the Queen. He bows and places his left knee onto the ground. Ooops he's got it backwards. Then he places his right knee onto the ground. He knows he's screwing up. He's getting all flustered. The Queen asks, "Upon which sword do you wish to swear your Oath?"
The tailor is in such a tizzy that he draws a blank as to what he's supposed to say. Finally, he blurts out the first thing that comes to his head, something from his childhood, "Mah nish tanah halailah hazeh mikol hallayloys."
The Queen looks puzzled at the response. She asks the Prince, "Why is this knight different from all other knights?" badabump
That's why I follow the rules of Passover.
Friday, April 02, 2010
Obama's Oil Folly
Below is a list of all the major oil fields found worldwide from 1890 to 2007. The US discoveries are listed at the bottom. We've found about two trillion barrels worldwide. A small fraction of those finds have been in the US. We've used up about one trillion barrels. Probably about one trillion barrels of relatively cheap and extractable oil await to be discovered. That's about a 70 year supply based on current rates of worldwide consumption.
The reality of the situation is that new fields are, of course, discovered worldwide all the time. But the "elephants," the big discoveries of 50 billion barrels or more, have likely all been found. Future major discoveries will almost certainly follow the pattern of past discoveries. The US is not blessed with vast reserves of oil and will not be a significant player in providing the world with its oil needs. Geologists know this. I'm simply stating what is common scientific knowledge in the earth sciences. The era of significant oil exploration in the US ended over thirty years ago.
The other day Obama decided to ignore science and, in a fool's effort to buttress US petroleum supplies, opened up large offshore tracts along the Atlantic seaboard and the Gulf of Mexico for exploration. There is no doubt that oil will be found in some of these tracts. There is also no doubt that what will be found will be small potatoes relative to US consumption.
What Obama decided to do in opening up these tracts was placate a handful of ignorant senators who have delusions that the US holds vast oil reserves just waiting to be discovered. Wouldn't it have been better, if instead of ignoring science and pandering to the ignorant, he simply pointed out their folly?
The reality of the situation is that new fields are, of course, discovered worldwide all the time. But the "elephants," the big discoveries of 50 billion barrels or more, have likely all been found. Future major discoveries will almost certainly follow the pattern of past discoveries. The US is not blessed with vast reserves of oil and will not be a significant player in providing the world with its oil needs. Geologists know this. I'm simply stating what is common scientific knowledge in the earth sciences. The era of significant oil exploration in the US ended over thirty years ago.
The other day Obama decided to ignore science and, in a fool's effort to buttress US petroleum supplies, opened up large offshore tracts along the Atlantic seaboard and the Gulf of Mexico for exploration. There is no doubt that oil will be found in some of these tracts. There is also no doubt that what will be found will be small potatoes relative to US consumption.
What Obama decided to do in opening up these tracts was placate a handful of ignorant senators who have delusions that the US holds vast oil reserves just waiting to be discovered. Wouldn't it have been better, if instead of ignoring science and pandering to the ignorant, he simply pointed out their folly?
| field | country | billion barrels | year discovered |
| bolivar | venezuela | 31 | 1917 |
| chicontepic | mexico | 12 | 1926 |
| kirkuk | iraq | 16 | 1927 |
| gachsaran | iran | 15 | 1928 |
| burgan | Kuwait | 69 | 1938 |
| aghajari | iran | 14 | 1941 |
| abqaiq | saudi arabia | 12 | 1941 |
| ghawar | Saudi arabia | 79 | 1948 |
| romashkino | russia | 13 | 1948 |
| safaniya-kafji | saudi arabia | 30 | 1951 |
| rumailia | iraq | 20 | 1953 |
| manifa | saudi arabia | 11 | 1957 |
| ahwaz | iran | 17 | 1958 |
| daqing | china | 16 | 1960 |
| samotlor | russia | 15 | 1961 |
| marun | iran | 16 | 1963 |
| berri | saudi arabia | 12 | 1964 |
| zakum | adu dhabi | 12 | 1964 |
| faroozan-marjan | saudi arabia | 10 | 1967 |
| prudhoe Bay | usa | 13 | 1969 |
| cantarell | mexico | 18 | 1976 |
| tengiz | kazakhstan | 20.5 | 1979 |
| marlim | brazil | 10 | 1987 |
| kashagan | kazakhstan | 13 | 2000 |
| carioca | brazil | 20 | 2007 |
| prudhoe bay | alaska | 13 | 1969 |
| east texas | texas | 5.55 | 1930 |
| wilmington | california | 2.9 | 1932 |
| midway-sunset | california | 3.15 | 1894 |
| kuparuk | alaska | 2.6 | 1969 |
| thunder horse | gulf of mexico | 1.75 | 1999 |
| kern river | california | 2.2 | 1899 |
| yates | texas | 1.95 | 1926 |
| belridge south | california | 1.9 | 1911 |
| wasson | texas | 1.8 | 1936 |
| elk hills | california | 1.4 | 1911 |
| panhandle | texas | 1.4 | 1925 |
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