The End of One Subsidy Must Be the Start of Another?

July 30, 2010 by grantcoulson

 

from The National Post, July 30, 2010

     Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    If the market speaks, unions are structurally unable to listen because government money is so much easier to get than earned money.

Creative destruction

Don’t replace one government-subsidized industry in Windsor, Ont., with another

This week, the city of Windsor was dealt a double blow. First, on Wednesday, after 91 years of production, the last transmission was built at the local General Motors plant. The following day, Ford Motor Company announced it will lay off nearly 400 workers at its Windsor engine plant, starting Nov. 1.

Understandably, these acts were greeted with a mix of sadness, nostalgia, anger and dread. Laid-off workers worry about paying the mortgage; families fear their children will have to leave town to find jobs; businesses grapple with the predicted loss of revenue.

The reaction from the Canadian Auto Workers Union (CAW), however, tells a different story. The CAW sees the GM plant as “a prime candidate for redevelopment as a factory for solar energy companies, which enjoy generous government subsidies.”

This response is telling, for it reveals much about the modern attitude toward private business: that it needs public money — aka corporate welfare — to succeed. Instead of hoping to attract a viable private enterprise to Windsor, the CAW’s reflex is to go from one government-subsidized industry to another, because, in its experience, government pockets run deep.

Indeed, over the past 40 years, federal and local administrations on both sides of the Canada-U.S. border have pumped billions of dollars into (what were then called) the Big Three automakers. Subsidies took the form of loans, tax breaks and, most recently, outright share purchases. The goal was to “save” jobs, in companies deemed too big to fail.

But jobs were not saved. They were given a reprieve, but inexorably disappeared anyway. Why? Because by constantly throwing these ailing businesses a lifeline, government actually made them less competitive in the long run.

Corporate welfare flies in the face of a basic economic principle: the law of creative destruction. This tenet, popularized by the Austrian economist Joseph Schumpeter, mandates that businesses innovate, rise, flourish and — if they cannot keep up with the demands of the marketplace — fail, to be replaced by new enterprises producing more popular products.

Examples are all around us. The horse-drawn buggy lost ground to the steam engine locomotive, and then to the gasoline-powered automobile. The candle was replaced by the paraffin lamp, and then the light bulb. The mainframe shrunk to the size of the personal computer, and further to that of the laptop.

Did the government step in and subsidize buggy manufacturers? Or the makers of paraffin lamps? Companies producing these goods either adapted or disappeared. Workers skilled in obsolete technologies lost their jobs, while new technologies spawned jobs that didn’t exist before.

Yet the state has felt compelled to ride to the rescue of select industries and companies, often for political reasons. And the results are predictable. In the auto industry, instead of responding to customer demand for fuel efficiency and other advances, the Big Three ceded this ground to foreign manufacturers. They failed to contain labour and benefit costs, making their prices uncompetitive. When the economic crisis of 2008 pushed their businesses over the edge, they again turned to government for help — but have cut operations, regardless.

…….

      Governments can pretend to ignore the laws of economics and human nature, but in the end, they must obey.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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The Electric Car—An Idea Whose Time Will Never Come

July 29, 2010 by grantcoulson

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    This subsidy nonsense will end when money gets too expensive for the government to borrow. This stuff is so nonsensical that words fail me, so I refer to this indictment of the electric car. I don’t know why, but I don’t feel special living in a failed state even when I get to constantly say, “I told you so.”

The Voltswagen: The people’s car the people pay for

"Ontario taxpayers should be grateful that the Chevy Volt is not due to appear in the province until next year. Put together a $10,000-per-car provincial subsidy with ultra high-cost solar electricity foisted on the public via feed-in tariffs and you have a level of economic insanity it would be hard to match. Indeed, perhaps the Volt should be renamed “The McGuinty” for the Canadian market. It would take the pressure off the memory of poor Edsel Ford, who gave his name to a tail-finned lemon.

GM announced this week that the Volt, as expected, would cost US$41,000, more than a loaded Cadillac. It will still lose money. GM’s marketing chief, Joel Ewanick, when revealing the price, said the Volt was “starting the world on a different path.” Would that be The Road to Serfdom? But let’s not go over the top. The Volt will collapse under the weight of its own pointless non-viability. GM’s future lies with new conventional fuel-powered models such as the Buick Regal, which by all accounts is a terrific car. The Volt is pure politics."

GM this week started taking orders for the Volt, the purchase of which will attract a subsidy of US$7,500 from the U.S. government, plus another couple of thousand bucks in California. The phones are unlikely to be ringing off the hook. In fact, the number of Volts sold will likely be so small as to represent a mere drop in the bucket of fiscal fecklessness that is the Obama administration.

Electric vehicles have been around for more than 100 years. The remarkable thing about them is the lack of advances in battery technology. What jolted this zombie back to life was environmental legislation in California — which is in the vanguard of most bad environmental ideas — dictating that a portion of vehicle fleets should be “zero emission.” This inevitably became mixed up with notions of “energy independence,” plus the scientific and ideological morass of catastrophic man-made global warming."

The car companies pursued what was accused of being a schizophrenic approach. On the one hand they fought legislation in the courts. On the other they set about making zeroemission vehicles. The problem was that the technology of the internal combustion engine was light years ahead of ZEVs in every department except tailpipe emissions, most of the noxious elements of which had in fact been removed by technologies such as the catalytic converter. Carbon dioxide is plant food."

….

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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More On Psychotropics and the Myths About Them

July 28, 2010 by grantcoulson

 

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    Some quotes lifted from this article which is written like a more traditional scientific paper and is the basis of his book.

The case against antipsychotic drugs R. Whitaker

"Summary Although the standard of care in developed countries is to maintain schizophrenia patients on neuroleptics, this practice is not supported by the 50-year research record for the drugs. A critical review reveals that this paradigm of care worsens long-term outcomes, at least in the aggregate, and that 40% or more of all schizophrenia patients would fare better if they were not so medicated. Evidence-based care would require the selective use of  antipsychotics, based on two principles: (a) no immediate neuroleptisation of first-episode patients; (b) every patient stabilized on neuroleptics should be given an opportunity to gradually withdraw from them. This model would
dramatically increase recovery rates and decrease the percentage of patients who become chronically ill."

………

"Moreover, there was one state that did compare discharge rates for schizophrenia patients treated with and without drugs, and its results do not support the historical claim made for neuroleptics. In a study
of 1413 first-episode male schizophrenics admitted to California hospitals in 1956 and 1957, researchers found that “drug-treated patients tend to have longer periods of hospitalization. . . furthermore, the hospitals wherein a higher percentage of firstadmission schizophrenic patients are treated with these drugs tend to have somewhat higher retention rates for this group as a whole”. In short, the California
investigators determined that neuroleptics,
rather than speed patients’ return to the community, apparently hindered recovery [13].

The true period of deinstitutionalization in the US was from 1963 to the late 1970s, the exodus of patients driven by social and fiscal policies. In 1963, federal government began picking up some of the costs of care for the mentally ill not in state institutions, and two years later, Medicare and Medicaid legislation increased federal funding for care of mental patients provided they were not
housed in state hospitals. Naturally, states responded by discharging their hospital patients to private nursing homes and shelters. In 1972, an amendment to the Social Security act authorized disability payments to the mentally ill, which accelerated the transfer of hospitalized patients into private facilities. As a result of these changes in fiscal policies, the number of patients in state mental hospitals dropped from 504,600 to 153,544 over a 15-year period (1963–1978) [14].

…..

Thus, there is a preponderance of evidence
showing that standard neuroleptics, over the longterm, increase the likelihood that a person will become chronically ill. This outcome is particularly problematic when one considers that the drugs also cause a wide range of troubling side effects, including neuroleptic malignant syndrome, Parkinsonian symptoms, and tardive dyskinesia. Patients maintained on standard neuroleptics also have to worry about blindness, fatal blood clots, heat stroke, swollen breasts, leaking breasts, impotence,
obesity, sexual dysfunction, blood disorders, painful skin rashes, seizures, diabetes, and early death [35–40]. Once all these factors are considered, it is hard  to conclude that standard  neuroleptics are therapeutically
neutral. Instead, the research record shows harm done, and the record is consistent
across nearly 50 years of research. [See “Timeline to Failure” in Appendix A.]"

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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Government Costs a Lot—On the Other Hand, It’s Ineffective

July 27, 2010 by grantcoulson

      Do not think about, write about or deal with  human behavior without determining the effects of incentives.

government pay

       Well I never. Government employees get paid more than the people who pay them. On the other hand, they do have better benefits and job security.

employment per recession

     Guess which recession had the greatest government stimulus. Hint–it’s the one with the steepest decline in employment.

Charts courtesy of Clusterstock “Chart of the day”.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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National Standards Won’t Work

July 26, 2010 by grantcoulson

 

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    In terms of standards, there are two aspects of supporting evidence. The first is the necessity for standards addressed in the following article. The second is the quality of the standards themselves, addressed earlier. Standards will join the two horrible errors of the 20th century, the “New Math”, which changed math teaching with an incomprehensible curriculum and the “New New Math” which changed  the teaching methods to an incomprehensible mess. None of the three mistakes is supported by evidence.

    Quoted in its entirety.

"Common Core" School Standards Roll On Without Supporting Evidence

EAST LANSING, Mi., July 21, 2010—Very little evidence supports the contention that establishing national academic standards for K-12 schools will improve the quality of American public education, and the standards push may distract attention from other vital school reforms, concludes a new policy brief, The "Common Core" Standards Initiative: An Effective Reform Tool?

The brief, authored by William J. Mathis, was released today by the Great Lakes Center for Education Research and Practice.

"Without addressing both the in-school and out-of-school influences on test scores, common core standards are not likely to improve the quality and equity of America’s public schools," Mathis explains.

The Obama administration has embraced "common core" standards and has pressured states to adopt them by stating that federal Title I aid will be withheld from states that do not adopt standards such as those being developed by the National Governors Association and the Council of Chief State School Officers. In addition, states that adopt the standards have a major advantage on their Race to the Top applications.

Standards advocates argue that common standards are necessary for keeping the nation competitive in a global economy. But Mathis points out that research does not support this oft-expressed rationale. No studies support a true causal relationship between national standards and economic competitiveness, and at the most superficial level we know that nations with centralized standards generally tend to perform no better (or worse) on international tests than those without. Further, research shows that national economic competitiveness is influenced far more by economic decisions than by test scores.

Mathis also raises questions about the rapid development of the common-core standards, the lack of field testing, and the overarching need for any high-stakes consequences to be "valid," pursuant to established professional guidelines. Given these concerns, he says that the prospect of positive effects on educational quality or equality "seems improbable."”

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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Special Education in England

July 25, 2010 by grantcoulson

 

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.
   

    This is from an article by a British educator. In the part not shown here, he hypothesizes that some of the increase in the SEN (special education needs) classification is from the improved survivability of premature babies who have an increased probability of having learning difficulties. That may be true, but probably explains only a small percentage of the increase. The same things are, of course, happening in North America

Special needs is a fad that harms children
Pupils are being subjected to all manner of crank treatments in the name of helping them, says Francis Gilbert.

“Twenty years ago, when I started teaching in a tough, inner-city comprehensive, only three of my pupils were labelled as having "special educational needs". All three were extreme cases: one girl liked to throw chairs at her teachers, another had severe hearing problems, and another didn’t have a working stomach.

Today, things have swung to the other extreme: classrooms are swamped by pupils classified as "SEN", or having learning difficulties. All told, one in three of those aged between six and 16, or more than two million children, are identified as having some sort of learning difficulty. And it’s getting worse: in the past two years, the number of under-fives with learning difficulties has risen by almost 20 per cent, and the number of teenagers being diagnosed has also increased exponentially.”

……

…… “many teachers, myself included, like to "work the system", too. We realise that having a child diagnosed as SEN is greatly to our benefit because it means that we get extra resources – and it also lets us off the hook if they fail their exams.

In other words, pupils categorised as having special needs have been wrongly labelled: a government survey of teenagers classed as having SEN in 2009 showed that almost half had no such diagnosis six years earlier. A particularly worrying trend is the increasing numbers of children who are being identified as having attention-deficit hyperactivity disorder (ADHD), a phrase which in the teaching profession is a politically correct euphemism for "being completely out of control". According to data released under Freedom of Information legislation, there has been a 65 per cent increase in spending on drugs to treat ADHD over the last four years. Such treatments now cost the taxpayer more than £31 million a year. In the US, the use of prescription drugs to "cure" learning difficulties has become a billion-dollar industry.

This "medicalisation" of SEN is deeply worrying; it promotes the lie that a child’s learning difficulties can be solved by drugs rather than good teaching. It’s meant that all sorts of self-help quacks are grabbing money from schools and gullible parents by promising to "cure" children with herbal remedies, head massages, visualisation techniques, brainwave measurement, or the chanting of mantras.

All of which makes me think that perhaps it’s time to junk the term "Special Educational Needs" altogether, along with much of the jargon that goes with it. Sadly, these terms have become excuses to hide behind rather than steps towards solutions. Instead bandying around vague pseudo-scientific terms like "dyslexia" and "ADHD", we need to demand that learning difficulties are identified simply and specifically. If a pupil has a problem with reading books aimed at their age range, let’s call it precisely that, rather than saying he’s "dyslexic" – a notorious word that seems to mean something different every time it’s used.

It’s time we all realised no amount of jargon, drugs or massages can solve our children’s problems. The only real solution, as it always has been, is hard graft.”

    Hard graft is a British English phrase meaning hard work. “Two great peoples divided by a common language.”

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

Posted in Education | 1 Comment »

Government and Real Payroll

July 22, 2010 by grantcoulson

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

     These tell their own story. and a frightening one it is.

 

Political Cartoons by Lisa Benson

 Political Cartoon by Michael Ramirez

 

image

       Adam Smith is not the only 18th century Scotsman to have a sense of reality.

    Alexander Fraser Tytler, Scottish lawyer and writer, in 1770: "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy."

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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Vague Standards Will Lead to Awful Curricula

July 21, 2010 by grantcoulson

 

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    Zig Engelmann, one of the few people in education who knows whereof he speaks, because his programs produce superior data,  has the following to say about the standards imposed on the various states in compliance with the new federal, “Race to the Top” (where do they get these phrases?) grant structure. These standards are an example of jargon gone wild, bad and incomprehensible.

    The standards sound as if they were generated by the famous Educational Jargon Generator, found here.

    Some quotes. I encourage you to read the whole thing.

“Math Standards for the early grades, particularly K and 1, are distasteful, but the
new Common Core Standards may have premiere distasteful status.

What makes them distasteful? A subtle combination of vagueness, misplaced
specificity, and a lack of understanding about teaching young children. But let the
committee or braintrust that made up the descriptions about the standards speak
for itself.”

……

“Mathematical Practices
1. Make sense of problems and persevere in solving them.
2. Reason abstractly and quantitatively.
3. Construct viable arguments and critique the reasoning of others.
4. Model with mathematics.
5. Use appropriate tools strategically.
6. Attend to precision.
7. Look for and make use of structure.
There is no doubt that these mandates are composed of English words and follow
English syntax, but some of them don’t seem to convey more than a suggestion of
meaning or relate in an obvious manner to any specific standard or combination
that would induce the mandate.”

…….


“Mandate 1: Make sense of problems and persevere in solving them.
This item raises the question of whether the authors or committee who wrote it
has a clear idea of what kindergartners are. They are little guys who are just
getting their feet wet in the sea of formal instruction. Do we design material so it is
easy for them? Not according to mandate one. Rather, it appears that we’re going
to make math “challenging” so kids have to frown and struggle as we remind
them, “Persevere, damn it.”

If this interpretation seems like a stretch, consider mandate one with the p word
replaced by a Webster definition:
Make sense of problems and persist in the undertaking in spite of
opposition or discouragement.

If children are going to persevere, we’re going to have to do our part and provide
them with opposition and discouragement. Why? Apparently so we can show
them that they are to persevere, damn it.”

    There is, of course, much more about the Standards, but they don’t get any better.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

Posted in Uncategorized | 1 Comment »

When You’re Not Spending Your Own Money

July 20, 2010 by grantcoulson

 

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

      This needs no comment.

How Government Works

Once upon a time the government had a vast scrap yard in the middle of a desert. Congress said "someone may steal from it at night". So they created a night watchman position and hired a person for the job.

Then Congress said, "how does the watchman do his job without instruction?" So they created a planning department and hired two people, one person to write the instructions, and one person to do time studies.

Then Congress said, "how will we know the night watchman is doing the tasks correctly?" So they created a Quality Control department and hired two people. One to do the studies and one to write the reports.

Then Congress said, "how are these people going to get paid?" So they created the following positions, a time keeper, and a payroll officer, then hired two people.

Then Congress said, "who will be accountable for all of these people?" So they created an administrative section and hired three people, an Administrative Officer, Assistant Administrative Officer, and a Legal Secretary.

Then Congress said, "we have had this command in operation for one year and we are $18,000 over budget, we must cutback overall cost."

So they laid off the night watchman.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

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Tax Dollars at Work-Canadian Food in Space

July 18, 2010 by grantcoulson

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

“The ill-fated $400K federal spacefood project

By Peter Rakobowchuk, The Canadian Press

MONTREAL – It’s the secret federal space-food project that never saw liftoff.

After quietly spending more than $400,000 to develop made-in-Canada meals for astronauts, the federal government has discreetly shelved the program, The Canadian Press has learned.

Only one item ever made it through NASA’s food-testing labs and into the astronauts’ stomachs: some cream-filled oatmeal cookies known as Canasnacks.

The original idea was to have space-friendly food kits ready in time for visits to the International Space Station by Canadian astronauts Julie Payette and Bob Thirsk in 2009 and, eventually, to feed all the world’s astronauts.

The two-year project was officially put on hold after two key researchers from Agriculture and Agri-Food Canada decided to move on.

Documents obtained by The Canadian Press under the Access to Information Act revealed there were delays developing the menu and requests for additional funding.”

    Additional funding. What a shock.

…….

“Work on the moveable feast began in December 2006, when the Canadian Space Agency signed its first contract with Agriculture and Agri-Food Canada to develop "Good Tasting Foods for Space Travellers."

The space agency initially kicked in $65,000, while Agriculture Canada’s contribution was budgeted at almost $350,000. The agency had hoped to have a made-in-Canada space menu ready in two years, approved by NASA, and placed permanently on U.S. flights.

Initially, 11 specially created Canadian food items were proposed — including Bison meat loaf, wild mushroom sauce, vegetable crush, beef and barley soup, and maple cookies.”

……

“But the magic solution to the Canadian government’s $400,000 culinary conundrum? Beef jerky, from Cold Lake, Alta.

"It (was) an easy choice because jerky has an extended duration shelf-life and it also has quite a strong flavour that the astronauts enjoy because some of them experience a decreased taste sensation," Hirsch said.”

    I could have done this for less than $400,000–say $350,000, by visiting a local convenience store. I would, of course, expense the mileage. You can have a government job or respect.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

Posted in Politics | Leave a Comment »

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