Quote of the Day
Do not worry about your difficulties in Mathematics.
I can assure you mine are still greater.
Albert Einstein
Sunday Talk Soup
I believe this is the third consecutive Sunday where I've had to lead off with a rant over Meet the Press. I'm getting tired of the uncritical or one-sided moderation by David Gregory. He did have Governor Barbour (R-MS) and one of my favorite Wall Street Journal columnists, Kim Strassel, on his roundtable, but to be frank, I had to bite my tongue as guest Lawrence O'Donnell, unchallenged, went on his class warfare pitch on resolving the national deficit and especially as AFL-CIO windbag Richard Trumka, without any pushback, was allowed to present his disingenuous "Wisconsin-public-sector-workers-are-undercompensated" propaganda.
Before proceeding, I have to reflect my observation of Haley Barbour's charisma and political skills. One of the things I admire about both Bill Clinton and Mike Huckabee is their inclusive sunny, folksy Southern charm. (Of course, Bill Clinton does have a notorious temper, but his public persona is unabrasive and welcoming.) But I have to say that Haley Barbour may just be the quintessential Southern gentleman and a sleeper candidate for next year's GOP nomination for President. (I was amazed by how friendly Barbour was sitting next to Trumka; I don't think I would have been gently grasping Trumka's shoulder: Trumka would look like he was sitting next to a non-union dentist.) Many people think of Mississippi as among the reddest of the red states (this is true from a national election standpoint), but like Texas before Bush, he was just the second Republican to win as governor in generations. Just like Huckabee, Romney and Pawlenty, Barbour has had to find ways to lead an opposition legislature, and unlike many public figures during Hurricane Katrina, Barbour's handling of the crisis was well-regarded. All that being said, Haley Barbour needs to address certain differences with Tea Party supporters and/or more libertarian conservatives like myself: crop subsidies, other forms of crony capitalism/corporate welfare (e.g., biofuels), and Kelo-style eminent domain abuses of private property rights. (We can expect partisan progressives to run their usual hypocritical attacks on his having been a lobbyist.)
I thought we had discussed enough about class warfare tax policies back in December. I have had the good fortune not to have to listen to Lawrence "I Am A Socialist" O'Donnell before. But O'Donnell can't avoid looking at where the money is and "thoughtfully" advanced the idea of steeper progressive tax rates for our consideration. There are a number of points to raise here: (1) we currently have a system that is biased towards consumption versus saving and investment; (2) we have a system where half of workers do not contribute to government overhead and operational expenses and hence have no vested interest in efficient use of tax revenues; (3) this revenue-based approach to the budget deficit assumes that all spending is meritorious and constitutes a net benefit over cost.
I don't want to go into an extensive discussion here about the history of taxation, but let us remember that income taxes were not a major revenue source until the sixteenth amendment nearly 100 years ago: tariffs, a consumption tax, were the principal source of federal revenue because of the ease of assessment (income taxes were used on an interim base to fund war efforts). What I don't like when progressives start talking about consumption taxes is the immediate attempt to exclude lower-income people, net consumers of government goods and services, from paying a fee? It not only distorts the underlying market (if something is "free", why economize?) but it poses moral issues by encouraging undue dependence on other people.
The last point is that I think it's wrong for businesses and individuals to have to economize during tough times, but the government not only continues to spend despite a drop-off in revenues, but raises spending. The idea that the first thing progressives think of in terms of a budget deficit is "the other people have money: let's just take the money from them; we deserve it" is just a non-starter. The federal government is replete with redundancy; Barack Obama's example involving the oversight of salmon among various departments and agencies is just a start. Do we really need that many highly-paid federal managers? The idea that you should single out business and high-income individuals to pay more than a uniform tax rate so we can pay for redundant services is unconscionable... That's money that doesn't do a thing towards economic growth and jobs or efficient government services. We conservatives want to see government share in the cost burden of a tough global economy. The fact of the matter is that Obama has run three consecutive $1.3T or more deficits and has engaged in minimal cost-cutting...100M here, 17B there. Not to mention the fact that the well-to-do face steep progressive tax rates elsewhere (e.g., state and/or local).
Now as to Mr. Trumka. Where do we start? The misleading compensation comparisons. First of all, if you are going to compare teachers, you need to control for extraneous factors. You can compare English teachers, say, in public schools versus private schools in Wisconsin, and/or across states. But even if English teachers decided to leave the profession, say, to become pharmaceutical sales representatives, you cannot argue that the compensation of sales reps is the "real" value of English teachers. For one thing, salesmen are often compensated on a commission basis; most teaching contracts exclude the concept of merit pay. In fact, in many public sector occupations, one gets an automatic raise simply for teaching another year; it doesn't mean the teacher is more productive. The pay for sales reps also reflects supply and demand; among other things, sales reps may spend a lot of time on the road, often away from family and friends. When I started my computer programming career, I was working in San Antonio for a well-known insurance company. I later learned that I was making a third less than comparable work in Houston; the company felt that the quality of life in (then much smaller) San Antonio was worth a premium.
In fact, union contracts ignore market demand. For example, there have been a series of teacher layoffs over the past 2 or 3 years; some former teachers are working hourly positions at retailers. They would jump at the opportunity for a mediocre middle-aged tenured Milwaukee teacher at a fraction of her compensation. In less than 4 years, I was making significantly more at a new career (which had little to do with my advanced degrees) than I ever made as a professor, and the same could be said for a number of my former students. In fact, I went on a campus visit to Providence College where they told me upfront that if they made an offer, it would pay several thousand dollars less than I made at the 3 state universities. Some of my fellow UH PhD candidates were offered several thousand dollars above what I ever made. The point I'm making is that I didn't go into college teaching for the purpose of maximizing my income.
But let's go a little more into the EPI study that Trumka is implicitly referencing that claims Wisconsin teachers are 5% underpaid. Jim Manzi, an MIT mathematics graduate and a Wharton School-trained statistician/doctoral fellow, persuasively argues that the Keefe study (referenced by Klein) is an artifact of inadequate modeling (i.e., simply assumes away statistically significant variables). (We in information technology have a simple expression for this: GIGO (Garbage-In, Garbage-Out).)
Andrew Bigg, who holds a doctorate from the London School of Economics and is conducting a study using the same data, points out 5 salient points: (1) whereas the studies are controlling for relative entity size, this means that Klein is using pay information relevant to the largest Wisconsin companies and hence cannot draw inferences to the full Wisconsin private sector (where compensation may be lower as a whole): it is unlikely that a teacher would alternately work at the largest companies but on a more distributed basis across the Wisconsin economy; (2) the benefits used in the studies are based on a multi-state basis; we already know that Wisconsin teachers actually pay a negligible percentage (<1%) of their pension costs versus a national average of about 5.7%; in other words, the Wisconsin state/local contributions towards pensions is materially understated in the comparison (and, as a personal aside, let's not even consider the point that many smaller employers don't have 401K plans or if they did, may have reduced matching funds during the recession); (3) there are differences between (disappearing) private sector defined benefit plans (which assume a riskless 4% Treasury return) versus a public sector 7.8% return: the point is, if those returns aren't met, the entity has to make up the difference--or, in plain Egnlish, the "real" pension costs of public sector workers are materially understated; (4) public sector retirees are able to buy into health coverage at a rate that doesn't reflect the higher costs of their age group; this means that the cost of retiree health care is materially understated; (5) the study assumes no value for the economic security benefit for public sector workers, whom are two-thirds less likely to be laid off or terminated than private sector workers. [There are various approaches to looking at this point. For example, in my case, I quote a higher billing rate for short-term assignments, because I have to factor in business/economic risk.]
Teacher Union Junk Studies 2.0
Teacher unions zealously guard their layoff principle of "last-hired, first-fired" and try to rationalize this patently unfair policy in a number of disingenuous ways. Marcus Winters of the New York Post writes that despite polls showing over 85% of New Yorkers oppose union-backed layoff policies, unions claim given studies showing incrementally improving teachers' performance over their first 5 years of teaching, less experienced teachers should be fired earlier. This is a preposterous leap of logic; it's like saying since a 19-year-old pitcher with a 110 mph fastball will be a better baseball pitcher in 5 years (knowing the league's batters better, developing more pitches, etc.), he should get cut from the team before an aging 44-year-old knuckleball pitcher. I remember hearing an anecdote about fellow lefty Sandy Koufax (he also batted right, we share the same birthday, different years): there was a conversation about how to pitch to a certain National League hitter (Willie Mays?); somebody mentioned that Sandy Koufax could always get him out with a high fastball, and the response was--who else had a high fastball like Koufax's? Fortunately, there are many statistics that can be used to judge a pitcher's performance: win-loss record, innings pitched, ERA, strikeouts, on base percentage, home runs/hits allowed, stolen bases/pickoffs, fielding percentage/assists, etc. In fact, there are some advantages to youth: quicker reflexes, greater speed, fewer injuries or quicker recovery time, etc. There may be comparable advantages to being a younger teacher: for example, he or she may have a similar cultural frame of reference (remember the teacher whom used rap to teach math?)
Winters points out that teaching longevity, advanced education degrees, and certification accounts for less than 5% of the variance in teacher performance. In fact, Winters cites one study which shows value-added test scores are a better predictor than longevity. His point is similar to one I've posted before in a different context. During my first semester of teaching at UWM, I was allowed to submit a wishlist of PC software for my office PC. When I saw the university-approved vendor prices, I remembered there were software ads in PC Magazine that offered significantly better prices (I don't recall the specifics, but prices seemed to be 15 to 25% better). First, I was given the typical bureaucratic response when I pointed out the cost savings: this vendor is like a supermarket running specials; we get great prices on some items, and they make up for it on other items we purchase. So I was made to feel like I was depriving the vendor of making a decent profit; what a terrible person I was trying to save the university some money! Second, when I persisted, they decided it would only be fair to open up my wishlist to multiple vendors--so I got punished for doing the right thing: as I recall, I didn't get my software for several weeks. My point, relative to Winters, was--if I can show you a better price/variable, it's an improvement over the status quo. On the other hand, the union (status quo) will predictably argue value-added test scores are not necessarily the best/most ideal predictor, and we should wait until the perfect predictor(s) are available before changing the status quo. You know, citizens of New York, if you let the unions get away with playing games like these, you deserve the mess you're in.
Winters has a tongue-in-cheek response in response to dysfunctional union behavior: let's have a layoff teacher lottery. (Who knows? Maybe if the lottery tags a $100K teacher, it'll save the jobs of two $45K teachers... We'll just tell Obama that we're spreading the salary money around...) Certainly a lottery would be fairer than systematically discriminating against younger teachers.
Political Humor
The King of Saudi Arabia is giving his people 37 billion dollars in pay raises and other benefits. He says it's not a "Stimulus package." That's true. It's more a "Please don't overthrow my ass package."
- Jay Leno
[The King said that unlike the US, the increased spending will be balanced by raising
An original:
- Well, National Geographic has just posted a story that predicts a regional nuclear war could result in offsetting global cooling for a few years. North Korea's Kim Jong-il and Iran's Mahmoud Ahmadinejad expect their nominations for the Nobel Peace Prize any day now...
Musical Interlude: My Favorite Groups
The Bee Gees/Andy Gibb. "Our Love (Don't Throw It All Away". Written by oldest brother Barry, this song remains my favorite of the initial 6 consecutive Top 10 hits by the youngest Brother Gibb. I found the surviving brothers' tribute to their baby brother quite moving. I suspect Andy and Maurice must be singing in the heavenly choir...
