Monday, December 14, 2009
Hate Crimes
Saturday, December 12, 2009
Sumner on Macro Double Standards
Friday, December 11, 2009
Economics and Physics
What is Going on with the FT Website?
A Cold Game
- The first person to arrive should never leave. As tempting as it may be to go across the street and enjoy a hot coffee in the -4 windchill temperatures, the chance that someone else comes and takes the top spot is too great to risk. Leaving the position of control would be a bad choice: if you get there first you should be there for the long haul.
- The second arriver should stay and wait behind the first arriver. There is a nontrivial probability that the first arriver chickens out and leaves, gets distracted and leaves his spot open, or that the store owner will randomly select the winner from all those who are waiting. Of course, if the latter is the best possibility, the second arriver should probably leave the line as it gets longer, then show up at the very end. A line with ten people creates an expected value (assuming random selection) of only $20, an amount that most would not want to wait for. The second arriver could also attempt to pay the first arriver for his rights to the first spot.
- A third arriver should not stay in line at all and only appear a little before noon in hopes that random selection will take place.
Thursday, December 10, 2009
Guantanamo Mystery
"There is no explanation of how three bodies could have hung in cells for at least two hours while the cells were under constant supervision, both by video camera and by guards continually walking the corridors guarding only 28 detainees."
Wednesday, December 9, 2009
The First and Last Post About Tiger Woods
I am a golf nerd. I worked at a golf course throughout middle school and high school and played almost every day during most summers. I wake up early and watch the European tour, and stay up late to watch events in Asia. Golf has been a refuge from the idiocy of American culture. And then, last week happened.
Every media outlet rabidly pursued this “story” and people cannot get enough. Why? I think it has a lot to do with what Brian Eno describes as “the firehose mentality” of American journalism. Public attention is constantly whipped up in a delusional frenzy and pointed by the media towards the next relevant target. One target can’t last long, though, otherwise the mania might calm down a bit, hurting ratings and page hits. We can’t keep talking about health care: too old! Don’t print a story about the greedheads in the financial sector looting the Treasury: too depressing! And Dubai? Too hard to understand! How about a guy who may have cheated on his wife and then got into a car accident, the cause of which is unclear? Just right.
The Tragedy of Higher Education
This report on the unsavory dealings of for-profit colleges came to my attention via Mike Konczal, who, for the last few months, has hosted a very interesting discussion of consumer finance issues. Like anyone who has watched more than ten minutes of daytime television recently, I had seen a lot of advertisements for for-profit schools. According to The Washington Monthly:
In the 1980s and early ’90s, it came to light that hundreds of fly-by-night schools had been set up solely to reap profits from the federal student loan programs, in part by preying on poor people and minorities. The most unscrupulous of them enrolled people straight off the welfare lines, and got them to sign up for the maximum amount of federal student loans available—sometimes without their knowledge or consent.
The idea was to get everyone they could into their schools, get them signed up for federal loans, and collect for as long as the student could handle the work. The students would often leave with a large amount of debt but no degree, while the colleges made out like bandits. This party didn’t last long and the government set some reasonable rules.
Under the new rules, for-profit colleges had to get at least 15 percent of their tuition money from sources other than federal loans and financial aid. Also, if more than a quarter of a school’s students consistently defaulted on their loans within two years of graduating or dropping out, the school could be barred from participating in federal financial aid programs. The idea was to get rid of those schools that were set up solely to feed on federal funds and didn’t provide the meaningful training students needed to get jobs and pay off their debt. As a result, during the 1990s more than 1,500 proprietary schools were either kicked out of the government’s financial aid programs altogether or withdrew voluntarily. In an effort to rein in abusive recruiting tactics, in 1992 Congress also barred schools from compensating recruiters based on the number of students they brought in.
Everything’s fine now, right? No. As with most government regulation, the companies that were supposed to reform instead worked at getting around the rules set for them. To deal with the 15 percent rule, they pressured students to take out private student loans usually intended for law and medical students, and have worked to extend lines of credit to students in danger of a quick default so that they will not default within two years of graduation. The colleges evaded the regulations by pushing their students even more indebted. How thoughtful.
Even though they were not functioning as intended, the regulations themselves became less stringent in the early part of this decade.
In his first term, Bush packed the Department of Education with allies of the proprietary colleges. Before becoming the assistant secretary for post-secondary education, for example, Sally Stroup worked as a lobbyist for the University of Phoenix. Under her leadership, the agency took the teeth out of regulations that were designed to rein in abuses of the 1990s, including the incentive-compensation ban for recruiters.
I hate to play the blame-Bush game, but loading the Department of Education with for-profit school lackeys is like puttingRick James in charge of the “War on Drugs.”
At this point, banning for-profit universities seems to throw the baby out with the bath water. Ostensibly, these colleges do help someone. But is that someone a person who can't be helped by a legitimate Community College? I don't know, but what I do know is that Community Colleges are not dependent on subprime loans. Widespread attraction to Community Colleges is unfeasible, however, since they don't offer the same, minimally-demanding job training programs as for-profits like Everest Institute. For people that have to take care of kids and pay bills, the time and money needed to take basic coursework required by Community Colleges are a large deterrent. Perhaps a more optimal outcome would be for Community Colleges to offer a wide(r) array of job training programs.