Wednesday, January 30, 2008

Attracting good math teachers: the upside, the downside


A blog on USA Today Tuesday Jan 29 discusses the effort in getting intellectually inclined young adults and mainly college students interesting careers in teaching math. The piece is by Laura Vanderkam, it is titled “Making Math Pay: Good teachers appear when the price is right,” on p 15A of the print edition, and the link is here,
labeled online as a “Columnist opinion.”

One program is Math for America, sponsored by a hedge fund manager. Its link is this. Exxon-Mobil is involved in a National Math and Science Initiative (NMSI), link here (and a program with the University of Texas called UTeach). Many of these programs seem designed to attract recent college graduates. As I’ve noted before, attracting retirees from business presents its own issues (of temperament) but some companies like IBM have been developing such programs.

Back in the 1950s, after Russia launched Sputnik, I recall the efforts to get high school students to “take all the Math and science you can.” The show “Watch Mr. Wizard” also preached this mantra. Science fairs grew quickly: I seem to remember doing a project in 10th Grade Biology that was a woodcut model of the human digestive tract, and I recall going to the Georgetown University Library for research, for some reason. The notion of student deferments from the (male only) military draft grew, and these would become a moral controversy in the middle and late 60s as the Vietnam war escalated. Since then, the rest is history. Washington-Lee high school in 1960 had a car designing contest, and I remember the “long low look”.

Math education bifurcates into two somewhat separated areas. One is getting younger and often disadvantaged kids out of the real world and into abstract thinking. In the lower grades it starts with drill. Remember learning the multiplication tables? I can recall that in Second Grade, graduating from the 7’s table to the 8’s was a big deal. (The 7’s were harder. It seems odd that the number 49 would be a perfect square. And, sorry, Jim Carrey's "The Number 23" is in no one's multiplication table because it is a prime.)

By middle school, drill has migrated into self-driven thought. In Algebra I, students learn to represent real things with symbols that seem like counts of things. Students gradually learn to appreciate that translation into abstract symbols can give an advantage, as in sports. If Ben and Grant both have to run the length of a football field, and Ben got a 20 yard head start and is running at 3 miles an hour, how quickly does Grant have to run to catch up with him and tackle him before Ben reaches the end zone? When will it happen. (Yes, I know, I’m referring to a controversial movie short that is all the rage on the Net.) How about a physics problem: How high does teenage quarterback Clark Kent (Smallville -- you know, his "speed") have to throw the pigskin to catch his own forward pass in the endzone 50 yards away in three seconds? Another good one is in geometry. If a baseball field is a perfect square and the foul lines are 320 feet, how far does a batted baseball have to travel to dead center to be a home run? (That gives the student an idea why baseball stadiums usually aren’t square-shaped, although Shibe Park in Philadelphia in the 1930s was.)

Finally, in the advanced grades, math education reaches its other logical bookend (far removed from the grade school sword drills): encouraging students to learn the value of intellectual independence and how it generates freedom. Once more advanced students reach calculus, they begin to see the value of abstraction as a way to develop principles (especially moral ones) to deal with everything. Math is “absolute truth”; even God (or Allah) can’t change it.

But, then, there must be a huge range in interpersonal skills demanded of math teachers. Lower grades and culturally disadvantaged students need constant patience and intervention. Advanced students like to be left alone and prefer teachers who are more like facilitators. The same person is unlikely to want to do both, as the temperaments required are so different. In many school districts, the most advanced students have high schools for themselves. In northen Virginia, the institution is Thomas Jefferson High School for Science and Technology, link here.

The falling property values of homes could well undermine the effort to attract more teachers, as the subprime problem is already causing school districts to cut budgets. The problem in the suburban Washington DC area is not as bad is in some other sections of the country, but nevertheless, some expansion programs (like pre-K) are slowing down, and class sizes may get larger, and some students may have to pay more for AP or IB exams or materials. The story in The Washington Post today (Jan. 30, 2008) by Nelson Hernandez and Daniel de Vise is “Housing Downturn Squeezes Schools: Program Delays, Larger Classes Being Considered,” on the front page A1, link here.

Monday, January 28, 2008

Among birds, it is the male who must remain beautiful (or "beauteous"), sometimes: a lesson in gender equality?


The Washington Post runs a short column for kids on Mondays, “Science Notebook,” which appears on p A07 today (Jan. 28, 2008), link here. There is an attractive picture of a Midwestern lark bunting (Wikipedia says that this name is a misnomer and that the bird is a kind of sparrow, although it is gaudier than most sparrows), and a short article by David Brown, “Female Birds Size Up Males,” and this may intimidate young men when its lessons are applied to “measuring people”.

Brown goes on to explain that about 45% of males never produce descendants and about 25% wind up helping raise other males’ progeny. Females are very picky about their “husbands.” They look at such factors as overall size, plumage, and even rump color. Moreover, the desirable “fashion” changes from year to year depending on environmental factors like weather or drought, and the presence of predators (probably especially cats).

In human society, at least in the West, it is the female who is prized and pampered for obvious external “beauty.” This works both ways, as older women may come to believe that they are no longer wanted, and as well-to-do older men (to the moral disapproval of socially conservative authors like George Gilder (the book "Men and Marriage" (1986)) look for nubile younger women, presumably to give them additional healthy children as lineage. In nature, it sometimes works the other way. With birds (and sometimes with mammals like lions, whose males sport manes) sometimes the male is gaudier with bright colored plumage. The northern cardinal is a good example in many parts of the country. Probably the male, by being gaudier, can “attract” and fend off predators and thereby protect the nearby more camouflaged female who will carry the genes. I've seen bright red male cardinals hiding in ground mulch (as an "overcoat") on bitter cold winter days.

In human society, women probably do “discriminate” among men, but nobody likes to talk about this. They often prefer taller men (but not always, as shorter men make smaller targets). Beards are the obvious secondary sexual characteristic, and they seem very important in Muslim society. Especially among Caucasians, women may prefer men with profuse or scant body hair, according to local culture and various circumstances, which can change rapidly, just as they do with birds. What's attractive, fashionable or "desirable" one day may not be so the next; the tables can turn quickly. Heterosexual young men may sit around in dorm rooms or Army barracks and speculate about what women “like,” but it’s actually a very sensitive topic for them. They are used to measuring women, but they don’t like to be “measured” or compared themselves. This can be very threatening to performance in a competitive culture. Hazing rituals in colleges, fraternities and, yes, military service academies (they’re supposed to be outlawed everywhere but they still make it into the movies a lot, like the horror film “Cry_Wolf”, or even “Old School”) are supposed to provide a rite of passage that prepare a man for the change in socialization and self-perception that he supposedly will need to marry and raise a family himself, even in a society that externally must talk in terms of competition. I remember encountering this with the William and Mary “tribunals” in 1961, which I have discussed elsewhere on my blogs and websites.

In human society, some males decide that they do not want to procreate, or may perceive (because of boyhood experiences) that they are not "competitive" enough to. How those who have children affect those who do not and vice versa becomes a political and hidden "moral" issue. This situation does occur in nature: with packs of wolves, the alpha males and females are the preferred ancestors, with other pack members sometimes giving up their own reproductive futures to serve the pack. This sounds like a kind of mandatory "socialism" in nature. But conservatives are right to point out that human civilization is supposed to provide mores that take man beyond "Darwinian" (a bit of a misnomer; Spencerian may the more apt term) competition or other coercive structures to a society with some socialization that supports an intrinsic value for all human life.

The science page also discusses a near miss tonight by an asteroid almost 1000 feet long, probably capable of wiping out a city with a direct hit. That story is by Rick Weiss (“Asteroid to Miss Earth Tonight.” There is also a story by Marc Kaufman, “People Infect Chimps with Viruses,” which reverses the usual concern about infectious diseases moving from animals to man and causing surprise pandemics.

I remember a cat that adopted me once in Dallas. One morning he presented me with a trophy or “present” at the apartment door, a sparrow. But it was not gaudy.

Sunday, January 27, 2008

McCain on veterans and military health care


Today Senator John McCain talked a lot about Veterans health care while campaigning before the Florida primary. He talked about the wait lists and bureaucracy.

One fact that is little known is that, it seems, anyone who has ever served two years of active duty (such as a Vietnam era draftee) and was discharged under honorable conditions may be eligible for care. However there are means tests and various criteria that have to do with service-related disabilities. In some cases, veterans would have to make co-pays that can be billed to insurance carriers (and can bill Medicare for supplemental services). However, on January 17, 2003 the Veterans Administration stopped accepting enrollees for what would have been the lowest priority groups.

The basic link on Priority Groups is here.

The actual list of Priority Groups is here.

The information about qualifying military service (sometimes merchant marine) is here.

In conversation, and in discussions about health care policy, a few times people have actually said, "if you were drafted and served a regular tour, you're eligible for care." That comes as a surprise at first. The truth is "yes and no." But VA won't solve the issue of finding health insurance for average veterans with the standard 2 or 3 year hitches and no disability.

Of course, another military medical care issue that receives attention is the interim treatment that some returning (usually active duty) Iraq combat personnel received while not hospitalized but housed in adjacent quarters (such as near the Walter Reed Army Medical Center on Georgia Ave in NE Washington DC). This is an issue for active duty personnel, and a different issue, but certainly another one that should draw the attention of presidential candidates. The DC VA Hospital is fairly close to this geographically, link here.

Saturday, January 26, 2008

SE drought can curtail nuclear power plants


Media stories this past week report that some nuclear power plants, mainly in the Southeast, could be forced to shut down because of extreme drought. Up to 24 plants may be affected. Shutdown of power plants may not cause blackouts but could increase water bills.

Recent rains and even snows in Alabama and Georgia have not significantly increased lake levels. The heavy storms of warm months are needed to maintain water levels, and in 2007 they all stayed over Texas and Oklahoma, with record flooding. And even there, Texas has record drought and brush fires before the winter of 2007.

Extremely heavy snows in the Sierra Nevada probably are somewhat reassuring to the short term water needs of southern California.

The AP story is by Mitch Weiss, here.

I visited the nuclear power plant near Glen Rose, Texas in 1982, ironically on a Sierra Club weekend at a nearby wild animal reserve, while it was under construction.

And in the late 1970s, while living in New York City, I became acquainted, through my "Understanding" unit then -- founded originally in Arizona by Dan Fry), with a grass roots effort to ban nuclear power. I would not support such an effort today.

Friday, January 25, 2008

Insurance companies and lenders: while pulling FICO "risk predictor" scores, capable of so much recklessness


A couple of stories in the Business Section D of The Washington Post this morning (Friday Jan. 25, 2008) illustrate the uncertainty that the economy is up against.

Steven Pearlstine has a column “Over an Insurance Barrel.” The link is here. He also has a Post discussion forum from Jan. 23, here. He creates a metaphor for bond insurance companies (previously discussed on this blog) with property and casualty companies. In that industry, you could get “pretty good” or “good enough” coverage from a company with a lower rating. (The same would be true of life insurance.) But then when some huge mega-disaster happens the company goes under with the volume and total of claims. Companies do have some ways to forestall this, by not writing some kinds of unquantifiable risks: war, asteroid hits, and, as we know from Hurricane Katrina, floods. A property company’s credit rating is certainly related to the risk grab bag that it has taken on. Imagine making a Parker Brother’s board game out of this. We’ve had an issue like this with media perils (or media risks) insurance, where some companies are unwilling to insure bloggers or amateurs because the risk, while probably very low, is still impossible to calculate from experience.

In the next column, there is an article by David Cho, “Complex Financial Trades Worry Economy Watchers: Rise of Bets Called Swaps Could Worsen Subprime Damage,” here. Here, the “accounting equation” is used to construct entities represented by securities to be traded, where one party’s debt or even contingent liability becomes an investor’s asset, with considerable buffering. They make good scenarios for final exam problems in business school courses. But such mechanism encouraged normally more conservative institutions to invest in risky ventures which perhaps they did not fully understand or take responsibility for.

All of this presents a certain paradox. We constantly hear about personal FICO scores and credit ratings, and the way they are used by lenders, landlords, employers and insurance companies to make decisions about individual people. One wonders if “online reputation” could be scored and used in a similar way. Yet, the whole subprime crisis indicates lender behavior that went in a “pi” opposite direction (sort of like an arrow in a box and whiskers diagram).



Update: Feb. 10, 2008

For a contrasting view, look at Matthew Goldstein, "Do Bond Insurers Need CPR? Fears of a muni market meltdown may be overblown," p. 20, Business Week, Feb. 18, 2008, link here. The article mentions that the municipal bond insurance business came into being after the 1994 bankruptcy in Orange County, CA, and that muni bankruptcies are rare. Remember, however, the 1975 New York City financial crisis, and the Oct. 30, 1975 New York Daily News headline, "Ford to City: Drop Dead!," here.

On Feb. 12, 2008, Warren Buffett offered to help bail out the bond insurers. The AP story is by Josh Funk, here.

The Bush administration announced a plan to give some homeowners 30-day reprieves on foreclosures, AP Story Feb 12 by Marcy Gordon here.

Thursday, January 24, 2008

House leaders and White House agree on economic stimulus plan, said to be "family friendly"


Thursday afternoon (Jan. 24) The New York Times reported (story by David M. Herzenhorn) "Tentative Deal on Economic Stimulus Plan", link here) that House leaders and the White House had agreed on an economic stimulus plan, about two-thirds of which came from tax rebates. The basic rebate is about $300 per individual (it could be more), with that as a minimum even to those who had paid no taxes, with up to $1200 for families with children, with a component of $300 per child. Original proposes floating around had suggested $800 per individual and $1600 per family. However, House leaders wanted to base the rebate on a sense of need and perhaps "entitlement". Their theory is that the needy will spend more and stimulate the economy more. However, more of it simply has to do with social policy regarding having children. It was not clear yet if the marital status of parents could affect the rebates.

Later stories during the day seemed to increase the amount, to $600 for most individuals and $1200 for most couples who paid income taxes, $300 ($600 per couple) for those who didn't but who earned income over $3000 per person, and $300 more per child up to some limit. The CNN story is here.
The rebates phase out at over $75000 per person. Permanent tax cuts are not included. There is help to forestall foreclosures, but extension of unemployment benefits and food stamps are not included. There are some breaks for businesses to invest in capital.

The requirement that those who paid no tax earn a minimum ($3000) could itself raise questions. Does that $3000 have to come from work, or could it come from pensions or social security, or even interest? Since the issue is sensitive with social security earnings limits tests for early retirees, it could be made sensitive here. It can be a policy question, sensitive to to value systems, that can sometimes wind up with "all or nothing" results based on how someone has behaved.

Libertarians hate the idea of wealth "redistribution" based on "need" because it tends to become politicized and a means for the government to reward some chose behaviors at the expense of others. Rebates don't fix recessions, and some economists say this rewards "doing nothing."

In 2001 (in recession), Bush proffered a modest rebate that was paid shortly before 9/11.

Update: Feb. 13, 2008


President Bush signed the stimulus package into law today. It's pretty much the $600-$1200 deal. The top income for some rebate for a single is $87000. Those who oay no tax but have earnings of $3000 (and/or have social security but no tax) can get $300. The qualification is based on the 2007 tax return and the tax check cannot be sent until the return is filed, and any amount due before rebate is paid. The AP story by Jeannine Aversa is here.

Picture: Sterling VA (just in Loudon County) where, in 1972, a tract house could be had for $35000. No more.

Wednesday, January 23, 2008

What did you do after the roller coaster ride?


The New York Times, today, Wed. July 23, 2008, published a front page perspective by David Leonhardt, “Worries That the Goods Times Were a Mirage,” link here.

Back in 1988, George H. W. Bush (Sr.) had described Gov. Dukasis ‘s effort as the “Massachusetts Mirage.” Indeed. Leonhardt suggests that this recession is for real and could be much deeper and more protracted than that of 2000-2001, 9/11 and the corporate scandals (Enron, WorldComm) included, and with the bloodletting in technical job markets. This time, the writers says, there are three bad fundamentals: (1) Wall Street has not come clean (2) Real estate and stocks are still overpriced by historical standards and have a way to fall (3) Consumers have viewed their homes (and stock portfolios) as piggy banks, and can no longer spend money they never had in the first place. On point (2) the local "Arlington Sun Gazette" reports that sales are slow but prices more or less holding (assessments are down slightly), which suggests that instead of price-drops, many areas may just experience constipated sales activity, which doesn't help consumers either.

All three points cause concern. Point (1) is pretty much about the technical difficulty of finding the “Truth” by appealing to the eternal feminine. (2) deals with real value of things. I saw a $40000 Pulte condo purchased in Dallas in 1984 (I actually had a housewarming “39990 party” complete with hors d’oeuvres) sink to the low teens in value after I had sold it on assumption. I managed to recover from this contingent liability, and I presume that the value eventually came all the way back, and then some, But the episode does show how intangible and subjective real estate prices area. (3) is about individual consumer “discipline.” On ABC’s “The View” today, Tom Brokaw reminded us that ordinary, non-military-related Americans have not been asked to share sacrifice the way previous generations had, and many people, by the end of 2002, were acting as if the world were a candy store again.

An underlying problem is the deficit spending caused by the Wars in Iraq and Afghanistan (most of it Iraq), not matched by taxes or revenue. (Johnson actually raised taxes for a while during the draft-driven Vietnam War.) Another is the global competition for oil, the likelihood that we could peak in production, and political instability of source countries. The global warming issue does represent a legitimate challenge to solve these problems with productive work. Ultimately, what matters is the real wealth underneath the paper instruments (that get increasingly layered and self-referential).


Some change of heart in corporate America is shown by the New York Times story by Michael Barbaro, Jan. 24, 2008, “Wal-Mart’s Chief Offers a Social Manifesto,” here, in which H. Lee Scott announced all kinds of initiatives to go green and improve social benefits. “The Manifesto” indeed.

The stock market today took it's "Six Flags" (or maybe "Wet 'n' Wild") roller coaster climb, it seems. It will wind-whip us. I have seen a lot of other “panics.” There was the 1990-91 recession started by the savings and loan scandals (and related to the Texas overbuilding real estate bust that affected me). There was the 1998 Asian financial crisis that spurned the moralizing article in Esquire Oct. 1998 (cover) (“What did you do after the crash, Daddy?”) And, of course, there was 2001. By that year, well before 9/11, finance column writers on the Internet (not quite ready for prime time blogging) would speculate about the coming "capitulation." They would ask the Philosophy 101 question of epistemology. "How will we know when....?" Is this time different? They say that company balance sheets are OK outside of the financial companies. But have we lived beyond our means? We always ask and don’t always tell.

Picture: Building at 20th & M where I worked in 1988-1989 for a Blue Cross Blue Shield (VA) consulting subsidiary called the "Consolidated Consulting Group," which would become Lewin-ICF and eventually The Lewin Group (part of Quorum), a health care policy consulting firm. I would go to USLICO in early 1990 (to become ReliaStar and eventually ING.) The AARP was in this building at that time.

Tuesday, January 22, 2008

Fed makes emergecy interest rate cut this morning


Bloomberg is reporting that the Federal Reserve this morning (Tuesday Jan. 22, 2008) lowered the benchmark lending rate (called the "discount rate") to 3.5%, by .75% from 4.25%, in an emergency move supposedly designed to thwart financial panic (and stem the contagion of home foreclosures), after the massive sell-off in international markets Monday Jan. 21 while US markets were closed. Apparently foreign markets did not appreciate the president's speech Friday, when the US markets would be closed the following Monday while foreign markets would be left open to stew.

The Bloomberg story is by Scott Larman, here.

A similar story in The Washington Post is "Fed Cuts Key Interest Rate as Global Markets Drop for Second Day: Sell-Offs on All Major Exchanges," by Howard Schneider, Ariana Eunjung Cha, and Neil Irwin, link here.

This seems unprecedented, for the Fed to cut a rate outside of a scheduled meeting, and indicates a high degree of alarm, especially over the failure of and downgrades of bond insurers. The Washington Post Jan. 22 reports this morning that ACA is in receivership with the Maryland insurance commissioner. This is covered in Steve Pearstein's column "More Room to Fall," here.

The AP story is by Martin Crutsinger, here. A subsequent AP story by Tim Paradis has stock futures see-sawing wildly before opening. here.

Many companies show about a 5% drop in free trading. XOM, Exxon-Mobil, is a typical example. I own XOM and have depended on it for stability in retirement, buffering myself to benefit from higher oil prices, which would normally drive down the value of many other securities. (Does that make me a "bad guy"?)

This announcement came across as I was watching the scrooge ghost appear while approaching an old version of Dickens 's "A Christmas Carol."

George W. this morning said, "The economy is basically pretty good." Really.

Update: Jan. 23

It happens that a CD that I have matured yesterday and matured automatically. The interest rate dropped by about .5% (to about 4.3). The Fed Rate cut may have affected it.

Update: Jan. 24

The bond insurer debacle continues with the New York Times story Jan. 24 by Vikas Baja and Jenny Anderson, "Next on the Worry List: Shaky Insurers of Bonds," link here. The story focuses on MBIA and Ambac. See this blog on Dec. 19 2007.

Sunday, January 20, 2008

States interested in privatizing lotteries


David Gram of the Associated Press, in a story on AOL and USA Today, are reporting that many states are considering privatizing lotteries. The USA Today story is here, and it appeared on Sunday morning. Vermont is one of the states. The lotteries would be "leased" to private investors on Wall Street.

An AOL polled showed that the public disagrees with privatizing them, and that a majority of people have played a lottery at least once. Lottery ticket purchases tend to take a lot of time in convenience stores.

People on the far political left have often argued that a lottery is the most regressive "tax" of all (beyond the sales tax and FICA [and Medicare] "tax" as implemented) because the poor or moderate income people are much more likely to play them. I recall this from Dr. Spock 's "People's Party of New Jersey" back in 1972. I never play them.

Libertarians would probably support the proposal.

Picture: Charles Town race track in Charles Town, W Va.

Saturday, January 19, 2008

Arlington VA adds commercial use line to real estate assessment letters (usually zero)


Arlington County, VA recently sent out real estate tax assessment notices. Now, each notice prints a line for assessment for residential use and a separate line for commercial use. Under normal circumstances, the commercial use amount on a home will be zero. But the information systems structure now allows additional assessment for commercial use of a residence. Actual tax rates for 2008 will not be known until after the board meeting late in March 2008.

This concern was addressed on this blog on Nov. 28, 2007. Virginia authorized a higher tax rate for commercial properties than for residential properties. Presumably, this could mean a partial increase in a case where, in accordance with zoning, a portion of a home has been turned into a commercial office (like a lawyer's office), probably for seeing clients.

At the long County Board meeting on Nov. 27 (in the wee morning hours of the 28th) concerns were expressed by at least one speaker that additional tax could be imposed on homes if used for telecommuting (to be encouraged in the "going green" revolution) or for incidental home use in work (such as a freelance writer or software developer) not even requiring visitors from the public (usually the concern for zoning -- parking, traffic, etc.) The concern was not conclusively answered, but there is no evidence so far that this will happen. This kind of concern has been a problem in some other states (like New Jersey). It's reasonable, of course, that if any property tax is incurred over such a situation, that it take into consideration the actual income generated from home activity, which for many people (like retirees) ma y be very low and may be more of a publicity rights issue.

The information for home based businesses in Arlington, VA is at this URL. It is typical of what is required in most localities around the country. Note that Arlington has three kinds of businesses "home-based", "retail", "commercial."

Friday, January 18, 2008

George W. Bush and the Three T's: will there be an income tax rebate for everyone?


George W. Bush went on the major networks at 11 AM EST today to announce his plan for an economic stimulus package, that reportedly would include tax rebates, as well as jawboning for lower interest rates. The AP story by Deb Reichmann and Andrew Taylor is “Bush Calls for $145 Billion Economy Plan.” Wall Street was underwhelmed, as stock fell afterwards. The URL is this.

Critics can maintain that the move would help a Republican nominee improve his chances in the election in November. They can also criticize the plan for the possibility of driving down the dollar more in the face of overspending on the Iraq war and on oil imports.

The speech emphasized the three T’s, like on a test (or maybe the movie “Dr. T”). That is, targeted, timely, and temporary. Economists say there is more bang for the buck in placing the rebates in the hands of low income people who will spend it and increase retail sales. Democrats want to make food stamp programs more generous and extend unemployment benefits again, as happened after the 2001 recession. It was unclear how retirees on social security (those who have paid income tax on up to 85% of the payments) would benefit, or on how family structure (singles, v. families with children – the eternal “war of the roses”) would affect any rebates.

The Bush administration did engineer a rebate in August 2001, paid shortly before 9/11 happened.

This morning I talked to a Merrill Lynch advisor about the bond insurance "crisis" and he indicated that mutual bond funds like those owned by small individual investors (I discussed this on this blog Dec. 19, 2007 -- check the archive links; there is a good explanatory comment there) should not be at risk since these funds can swap bonds internally. Holders of individual corporate and municipal bonds need to be careful, however. Some municipalities have recently called in their bonds (as had mine).



Update: Jan. 19

Another major bond insurer was downgraded Friday Jan. 18. This time the Ambac Financial Group had its Fitch Rating downgraded from AAA to AA. The Washington Post story in the Business Section p D01 by Tomoeh Murakami Tse is "Insurer Of Bonds Loses Top Rating" and the link is here. Please see Dec. 19 on this blog for earlier detailed discussion and comments.

Update: Jan. 20

The AP has a story by Jeannine Aversa, Economics Writer, "Debate over getting rebates to the poor." Persons who paid no tax might get no rebate, but if they did, they might stimulate the economy more. The link is here.

Update: Jan 21

The Washington Times has a story by Patrice Hill, "Overvalued Homes Discourage Buyers," p A1, link here. If homes are, on the average, over-valued by 50%, lenders (and banks) could be on the hook for $3.5 trillion, of which only about $1 trillion is insured. A federal bailout that dwarfs the Savings and Loan bailout at the end of the 80s could become necessary. I was living in Texas then, and moved to DC, having to deal with a condo that had lost value.

Black Rock Global links to an article by Tom Middleton, "How to survive a market correction: The Dow's plunge has been plenty scary, but this is no time to panic. Here are things to do, and not to do, with your investment dollars," here.

Thursday, January 17, 2008

State universal coverage laws may run into ERISA if they mandate employer coverage


Plans in a number of states to mandate universal health insurance have run into a roadblock in federal statutory law, the Employee Retirement Income and Security Act of 1974 (ERISA). Putatively, this law prohibits states from requiring employers to provide employee health insurance or penalizing those who do not. A group of restauranteurs in San Francisco sued in 2006, over a San Francisco ordinance. California, under Arnold “no more movies” Schwarzenegger has a proposal to require this by state law as part of a universal coverage plan. So do Colorado, Michigan and Minnesota. A group called Consumers for Health Care Choice assisted the plaintiffs.

A circuit court in December 2007 ruled for the plaintiffs, put stayed the effect pending appeal to the Ninth Circuit.

There was a similar case in Maryland, in the 4th Circuit, generally conservative, but that Circuit ruled that a state may require employers to provide health insurance. In Maryland the only employer targeted was Wal-Mart. States have argued that without laws like this, more consumers wind up on Medicaid at state expense, so private employers are mooching off taxpayers.

If the 9th Circuit reaches a different ruling, the case will probably be heard before the United States Supreme Court.

Republican presidential candidates, especially Rudy Giuliani, have suggested that the country scrap the system of relying on employers for health insurance, as part of a plan to set up tax-deferred health savings accounts or allowing and then encouraging consumers to purchase health insurance with pre-tax dollars. Relieving employers of this expectation could help provide more jobs with better wages.

In Massachusetts, there is a mandatory universal coverage plan with mandatory employer participation, but employers have not objected.

One of the reasons for the legal questions is that employers cannot readily deal with separate employee insurance requirements in different states (although that sounds a but like a canard).

The USA Today story on p 1 of the Jan. 17, 2008 paper was by Julie Appleby, and is titled, “Health plans up against U.S. law: Local efforts to cover uninsured stymied.” The link is here, and it is one of today’s most commented stories.

There is a website called “Cover the Uninsured,” here.

Wednesday, January 16, 2008

California utilities want to set home temperatures with "big brother" tactics


ABC News gave Californians a feint yesterday. On Monday, ABC said that it would have a story Tuesday on plans to allow electric utilities to control the ambient temperatures inside people's homes, at least in homes heated by electricity (rather than gas). Baseboard heating is popular in California homes. This would have prevented homeowners or tenants (even in apartments) from setting temperatures for their own comfort, especially in summer where there are serious threats of brownouts and blackouts, as well as new arguments about appropriate individual behavior in the face of global warming ("personal carbon footprints").

But Tuesday night (Jan. 15, 2008) ABC World News Tonight reported that the California Utilities Commission had gotten wind of this upcoming story, and had told California utilities that such "big brother" behavior would not be allowed.

It reminds me of other problems in the cable industry, where a few customers have been cut off for excessive broadband use (when there is no actual tiered pricing for use) or for excessive customer support phone calls.

California water supply issues may get a reprieve, with the record snowfalls in the Sierras in recent days.

Tuesday, January 15, 2008

Texas schools offer (mandatory?) classes in parenting and child care: does this fit the ideal of abstinence?


USA Today is reporting (Jan. 15 2008) that Texas schools will start teaching parenting skills to high school and middle school students. Some commentators say that this is because of the epidemic of “children having children.” The USA Today link is here.
The original Houston Chronicle report is by Jennifer Radcliffe (yes, the namesake of Harry Potter’s player), Jan. 14, 2008, “New School Year Brings New Class: Parenting”, link here.

The lessons will be taught by health teachers (presumably as part of health and physical education). Some questions come to mind to the novice. If school systems are supposed to discourage teenage sex (of any orientation) before kids are mature enough to make a living on their own (and promote the "Vatican" philosophy of "abstinence"), why make them learn parenting now? What kind of message does that send?

One reason could have to do with a deeper view of social policy. It could be viewed as desirable that everyone learn parenting and personal care skills. One never knows when one will be called upon to participate in this because of problems in a family beyond one’s control. It happens in the movies (“Raising Helen”). There are plenty of news reports of “children raising children,” of teens being “forced” to raise younger siblings because of family dysfunction or misfortune. The same message exists with eldercare. So the idea of “family responsibility,” even before sex, ought to be spread around.

Many school systems already teach child care skills in home economics classes or in “career center” classes. What gets problematical is when never-married subs find themselves in these classes.

Sunday, January 13, 2008

Health Fair in Washington DC Convention Center; big crowds walk through "tunnel"; Autism literature available



This weekend, NBC4, along with the Nationals Baseball team in Washington, sponsored an area wide personal health fair at the Washington DC Convention Center at Mt. Vernon Place, just north of the main downtown area.



At 11 AM today Sunday (January 13, 2008) the area was packed, with people waiting in long lines for free diagnostic tests for blood pressure and cholesterol (the Howard University Hospital exhibit), and prostate cancer (GW). There was a colon cancer exhibit where one could walk through a model colon “tunnel” and see what the doctor sees during a colonoscopy. I chose not to wait in any of the huge lines.

I did not see any electrocariograms (or stress tests or similar tests) being done, although at a health fair in Dallas in 1988 (ironically, in the Village Station) people were given public electrocardiograms, complete with sticky pads (leads).

There were many sports activities: wall climbing, jogging, tennis, soccer, baseball pitching. The Washington Nationals had a presence, with bobbleheads.

There was a small autism exhibit where one could sign up to get information. Austism has been in the news recently, as there is new published research pointing to genetic causes of autism, as opposed to vaccines, mercury, and even Wi-Fi or exposure to more television and media. A typical story is by Thomas H. Maugh II in The Los Angeles Times, Jan. 12, “Studies link autism to two genetic defects,” here. Science News had a Jan. 11 story from UCLA, “New Genetic Link to Autism Discovered by Studying Speech," here.

The DC exhibit did give out a handout from the CDC, here. The handout (in English and Spanish) gives warning signs for developmental problems at various age levels, spelled out in detail on some “important milestones” sheets.

One sign that was interesting is that a child should be able to throw a ball overhead at age 4. I could not do that, although I probably was OK with most of the other milestones given. I became physically inept, although I recovered somewhat. I swung a bat with awkward body mechanics, but oddly could sometimes hit a softball with some distance, even a rare legitimate home run.



Autism is unevenly addressed by public school special education programs, which must provide individualized education programs under NCLB. Confidentiality is an issue. When I was subbing, teachers would say something like “He has autism” to me when they probably weren’t supposed to. I know of a substitute teacher who was fired in a New England school system for shouting down the hallway that an escaping student was autistic, because that was taken as a breach of confidentiality, even in an emergency.

Sunday, January 06, 2008

Subprime crisis complicates property appraisals and tax collections; insurers get more careful; asymmetry makes for an unpredictable insurance market


Newspapers around the country are watching the trends in real estate appraisals and tax assessments in view of the subprime and foreclosure crisis. The ramifications of all of this can be complex, and most of it not too good. Typically, local governments appraise property every one to three years, and allow a brief period of appeal with exacting procedures and deadlines. They have tended to disallow foreclosure sales or late “stress sales” (such as those from “we buy homes” sites) as comps in making appraisals. For the Washington DC area, the visitor can read Elizabeth Razzi: “Local Address: Assessment Shock: Know Your Rights,” on p. F1, Business, The Washington Post, Sunday Jan. 6, 2007, here.
The issue may be even more complicated as appraisals are often done in a piecework fashion by independent contractors.

Local governments may fear increased pressure from the touted bond insurance crisis, as one major bond insurance company lost its rating in December (see this blog), and several bond insurers have been “warned.” That could make governments more determined to hold high appraisal values, or to raise rates. In northern Virginia, the picture is complicated by a new law that allows governments to charge more for commercial property, but some observers fear that local governments will be tempted to reclassify some residential or apartment properties “commercial” for various reasons such as telecommuting or the presence of home based businesses – all of which could involve relooking at zoning. Generally, local government officials deny this (although many of them have passed ordinances to authorize the new tax rates as a contingency), but it is hard to tell in the longer run. What’s interesting is the bad karma issue: the foreclosure crisis can affect people who rent and who never had any interest in trying to take out risky mortgages. In a free market, sometimes you have to be your brother’s keeper, just as in the New Testament.

The property and casualty insurance industry is starting to look at everybody, too. We hear a lot about underwriting problems in coastal areas. But now property insurers are sending homeowners in areas normally safer from catastrophes (such as more inland areas in the mid-Atlantic or New England) evaluation forms to recalculate replacement costs of homes. Insurers probably take global warming seriously. They know that in many areas, previously not controversial to underwrite in, there are increased risks of previously unusual super-storms, with hail, ice, tornadoes, and floods along streams and rivers. Hurricane Isabel seemed like a shock to the DC area in 2003 (Dominion Power called it a “giant washing machine” in a letter to consumers), but it may have made subsequent storms less severe by taking down a lot of weaker trees at once.

I would wonder if, in this asymmetric Internet age where all the sudden “reputation defense” has suddenly become a new media buzzword, insurers will look more at personal behavior, and even be tempted to mine the Internet as well as credit reports (for FICO). I hope not, as it was not designed to be used this way in a reliable way to check up on people. Reputation, a subjective concept, is very much in the eye of the beholder.
Yet, simple examples are already known: younger single men pay more for car insurance than young married men. Yes, that’s offensive. But I worry that this kind of thing can spread quickly. Free speech and free markets create two-way streets.

The casualty insurance industry also has a concept of "umbrella" insurance that combines normal property perils with extended liability. It is often offered with automobile insurance policies as well as homeowners. Such policies are not generally available (through normal casualty business) for "entertainers". That gets harder to define or pin down in the Internet age. People have sometimes asked umbrella policies to cover intellectual property liability risks associated with online activity. A few companies have actually looked at a person's activity and agreed to cover it. As a general principle, I don't think it is a good idea to bundle coverage or perils to physical property (or liability for physical injury or property damage) with intellectual property issues, as a trend like this could jeopardize or complicate homeowner's or auto insurance further for everybody.



Update: Monday, January 7.

The Washington Post has a major story this morning by Kirstin Downey, "Prospects Appear Bright for Tax Exemption for Va. Homeowners
Legislature to Consider Bill That Could Offer Rebates of Up to 20%, Easing Rocketing Valuations," link here.
This is a fairly complicated topic, involving the Virginia constitution and amending process, and then follow on legislation by the General Assembly in Richmond, and then further legislation by local governments. Again, during the foreclosure crisis, some governments may not be as able to be generous with breaks for owner-occupied homes. (Generally, it's expected that such legislation will apply only to homeowners who live in their homes.) As the story points out, there used to be a system in Virginia that prohibited charging residential taxpayers less than commercial, until the law last year. Offering further tax rebates could invite political complications, and attempt to regulate further what homeowners or relatives living in the homes can do with their property, particularly in the home-based business area. Pro-business lobbyists may tend to oppose further residential breaks. This sort of thing has been a problem in other states with heavier union interests (California, New Jersey) and may not be as likely in Virginia.

Picture: natural ice sculpture

Tuesday, January 01, 2008

"Special Education": a very complicated topic


Continuing to cover education while the kids are out of Christmas break, The Washington Post, Metro Section page B1, on New Years Day Jan. 1, 2008, has a story on special education by Michael Allison Chandler, “Waiting Too Late to Test? Parents Protest as Area Schools Delay Learning Disability Screening in Hopes of Avoiding Costly Special Education,” link here. http://www.washingtonpost.com/wp-dyn/content/article/2007/12/30/AR2007123002447.html

A 1975 federal law gave students with learning disabilities a right to special education at public expense. Over time, the percentage of students in special education has tended to increase, and ranges between 10% and 18% in most school districts. Schools sometimes try to delay special education placement with “Response to Intervention” or RTI strategies.

Actually, special education covers many levels and kinds of disability. When I started substituting in the spring of 2004, I found myself getting calls for special education even when I did not put it on my profile (and at the time it included calls in Fairfax County for PHTA, or Public Health Training Assistant). There is one sequence of classes available until age 22 for severely disabled students (this encompasses a large variety of medical diagnoses ranging from specific forms of retardation to autism). There are a variety of other programs for much more moderate disabilities, categorized in many ways, including emotional disturbance. Depending on the grade (especially in high school), nature and level of disability, students may take some classes in “team taught” mainstream classes in English, math, social studies, etc. They can take electives like music which are not team taught. In some cases, students are accompanied or assisted by “teaching assistants” or “instructional assistants” which are hourly positions requiring less education and licensing than is expected for teachers, and these also have subs. In middle school, special education students will generally spend most of their time in one room with one teacher, and perhaps be mainstreamed to just one or two classes, if any. Every student has an individualized education plan, or IEP. Special education teachers are supposed to have specific license endorsements which generally require specific courses and extra (education course) classroom hours, and all university teacher programs address this. Practice has shown, however, that special education endorsement does not enable teachers to handle all of the problems that occur. From a psychological point of view, teachers find this field easier to enter when they decide to do so when young (while still in college or in a master’s program).

Statistics show that minorities have a larger percentage of students in special education (as in the article), but the range of problems is wide and the needs can arise unpredicably with any parents in any social background or income level. Autism seems to be increasing (one in every 160 children, greater in boys) but it is hard to tell if this is because of more diagnosis and reporting. Asperger syndrome is considered a form of autism (or at least a “pervasive developmental disorder”) but may not always be so, and the social environment of the student (with the social isolation from or teasing by other students) is then a major issue, but often there is no academic impairment, or only very limited, circumscribed impairment. Dyslexia is a special problem that may be addressed with special attention. The same may be true of ADD. All of these problems are different and tricky, and proper placement of the student is often very difficult.

Special education students may sometimes be waived from taking conventional SOL’s by assembling binders that prove that certain learning goals are met. These are tedious for teachers to help prepare (they require precise attention to the details of each learning objective), and tedious to score (school districts hire subs or retired teachers, or sometimes retired employees from companies, to score them).

I did very well in first and second grades. I had the measles in June following the first grade (we have to come home early from an Ocean City, MD vacation). In the third grade, I suddenly found I was the subject of taunts by other students and was not liked by my teacher. I don’t know exactly what happened, but the measles (with the neurological effects – all prevented today by those controversial vaccines) might have been involved. We had a kids’ newspaper called “My Weekly Reader” (link) which came out periodically with color-coded banner headlines. Three times a year MWR gave a reading test of 60 multiple choice questions, that might resembled the SOL’s in grade school reading today. I remember that he highest grade on the first one was 44/60. As the teacher passed out the tests, she said “poor little Bill got 16”. But I got a 44 on the second one, whereas one girl got a 60. I slipped back. I might have been a candidate for special education, but snapped out of it and was a pretty good student again by fifth grade, and did well thereafter. I really don’t know what happened, but I did not get along with the (female) teacher I had in third and fourth grade, who was very determined to make a man out of me. I think this little story demonstrates the complexity of maturation. Girls mature faster than boys at elementary levels. One other factor is that I started piano less in February of 1952, when I was in third grade. Music lessons (with their grounding in mathematical concepts) and especially public performance (whether as an individual or in chorus or orchestra) seems to improve the overall academic performance of many students.

Special education is a very complicated issue and matter. Many students are misclassified, and to many parents it still must be a mystery.