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Monthly Archives: July 2010

Wow. The Case for $320,000 Kindergarten Teachers makes a pretty solid case that good early childhood education makes a reliable and positive difference for people. If we could see a few more studies like this, and we privatize schooling enough, we might actually see teachers getting salaries that will attract talented people to teaching.

I can not help but remember my one year teaching second grade. That year ended with me feeling more accomplished than in any of the 25 years I have taught secondary and college. The kids, with a bit of my help, turned themselves into aggressive learners. At the time I had the feeling–I still have the feeling–that they would all be successful students and successful in life.

The point is only that I have much sympathy for this study. I really believe it is probably true, the link between good early education and a successful life. Then, we still face the problem, how do we know when a teacher is good or not? Who are going to give that big salary to?

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Is Another Economics Possible–This article attracted my attention because I have been thinking, for a couple of years now, that another economics is necessary.

Disappointment followed as I read through the article. The views described are those of the World Social Forum, “based on more cooperative, sustainable, egalitarian and democratic institutions than those favored at (the World Economic Forum in) Davos, Switzerland.”

Textbook economics treats individuals as selfish optimizers, unconcerned about the welfare of others. Only recently have economists begun to explore the importance of fairness, reciprocity and altruism, and to consider the possibility that incentives to behave selfishly can undermine both moral norms and altruistic preferences.

Textbook economics also largely ignores worker-owned businesses and consumer cooperatives, although these are geographically widespread in the United States. Recent research suggests that many workers would like to play a larger role in the management of their companies and that “shared capitalism” works remarkably well.

Of course these views are only valid for a superficial sort of economics. In real economics, being a “selfish optimizer” includes our desires to help our friends and communities.

While I like the idea of encouraging cooperative enterprise and egalitarianism, those are not new ideas and there is not a new economics being introduced. only old ideals reborn.

A new economics needs to explain how the world’s markets are working, and how government policy can help or hurt social welfare. My opinion? We need to get away from the Keynesian measures of growth and employment. They are not the best measures of welfare and happiness and satisfaction with our lives. Ultimately, those are much more important than how much money and stuff we have.

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Computers at Home: Educational Hope vs. Teenage Reality—this article responds to some research done with young teenagers, looking at computer subsidy programs for lower income families and comparing future school performance with control groups–either groups without computers or higher income families.

The result? “We found a negative effect on academic achievement.” When computers were given to the kids, their scores went down in math and languages. The one positive effect? Better computer skills.

Economists are trying to measure a home computer’s educational impact on schoolchildren in low-income households. Taking widely varying routes, they are arriving at similar conclusions: little or no educational benefit is found. Worse, computers seem to have further separated children in low-income households, whose test scores often decline after the machine arrives, from their more privileged counterparts.

As a teacher, I was simply nodding my head at this, not surprising. But now I have doubts. Maybe there are other legitimate ways to interpret the results. Yes, computers probably do offer kids further distraction from study. Does that mean their education suffers?

Other studies have been done that show brain activity is much higher for someone playing a computer game than when they sit in a classroom or read a textbook. Something is going on there. What are they learning? Games, of course, are one way to learn strategy, and planning. Not math and language, but important skills none the less.

A new study needs to be done. Do not test these kids for math and language, test them for critical thinking skills. I bet the results are very different. Then develop some more games that enhance those math and language skills we like so much.

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Here is a headline anyone will approach with a grain of salt– Chinese credit firm says US worse risk than China.

A Chinese credit-rating firm, Dagong, founded in 1994, rates China and the government debt of 11 other countries as safer than debt from the US. Slow growth and high debt are given as the primary reasons. While the pinch of salt seems legitimate–there may be some pressure from the Chinese government on this–Dagong also makes a decent case for their ratings.

Dagong said it hopes to “break the monopoly” of Moody’s Investors Service, Standard & Poors and Fitch Ratings. Their reputation suffered after they gave high ratings to mortgage-linked investments that soured when the U.S. housing market collapsed in 2007.

Manoj Kulkarni, head of credit research for SJS Markets in Hong Kong, said that despite the possibility China’s government might try to influence Dagong’s decisions, there is room in the market for a Chinese agency because Western firms’ credibility is badly tarnished.

China, holding huge amounts of American debt, has strong incentives to encourage stricter controls over US debt and the value of the dollar. If investors world-wide start taking Dagong’s ratings seriously, it may influence US policy.

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The news seems more and more pessimistic about the prospects for recovery and growth in the west. Are Americans Worried About a Double Dip? was one story, and Strategies: A Market Forecast that Says Take Cover was another–just two of dozens of editorials written on the same theme.

It may be that this is partly a response to falling market values over the last several days. It might also be that investors are responding to negative reports by analysts and the shared pessimism becomes a self-fulfilling prophesy. A Bearish forecast brings down investment, jobs go missing, output drops, income drops, more bearish forecasts.

The traditional idea of the business cycle says that resource prices drop during a recession, and that brings new opportunities for investment and profit. Keynes explained that prices may be static for long periods of time, despite surpluses. While politicians have embraced Keynes’ suggestion of deficit spending, public fear of huge debt remains a big part of the argument, just as it did in the thirties.

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