The New Yorker Suddenly Frets about Competence

Yeah, I would have liked at some point to have seen a President Milton Friedman or a President Thomas Sowell, but in an electoral system of universal suffrage, that does not seem to be in the cards. And so instead of a Chicago economist we get a Chicago community organizer. Or we are offered a crooked Arkansas lawyer, and then, his wife.

Second look at Constitutional Monarchy?

Parents in Denial About Academic Achievement

More than 30 years have now past since the famous report “A Nation at Risk” sounded the alarm about America’s underperforming schools. Despite lavish spending and some attempts at reform, student achievement remains scandalously low.

According to the Nation’s Report Card, widely considered the gold standard of assessing students, only 40 percent of fourth-graders are proficient in math, and only 36 percent in reading, let alone both subjects. For eighth graders, the picture gets slightly worse: 33 percent are proficient in math, 34 percent are proficient in reading.

Maybe one out of four students is proficient in both subjects.

Why does student performance remain so stubbornly low? Part of the problem is the teachers’ unions, which oppose most useful reforms. But perhaps the more fundamental problem is that most parents just don’t realize that their children are not up to par.

According to a survey commissioned by Learning Heroes, 90 percent of parents with children in grades K-8 think their child is learning at grade level.

A shocking number of those parents are wrong.

This phenomenon of parents overrating their kids’ school performance exists in all socioeconomic and demographic groups.

The reason for parents’ misperception might be that they assume that a grade promotion means their child must be performing at grade level.

“Kids are getting passed on from grade to grade, a large percentage of kids graduate high school on time,” he explains. “So certainly parents have been getting the message for a long time that their kids are doing just fine.”

In fact, the high school graduation rate is over 80 percent, and fewer than 2 percent of students are held back a grade, so perhaps parents can’t be blamed for thinking their own kids are at least on par with their peers.

Well, by definition, most kids are on par with their peers. They just aren’t on par with objective standards.

And by the way, as college professors, we can report that the practice of students “getting passed on from grade to grade” doesn’t stop at high school.

Denial–it ain’t just a river in Egypt.

Bernie Sanders Doesn’t Know Shit about Economics: An Ongoing Series

Sanders-Tweet-copyThe state of Vermont sends a guy to the U.S. Senate who doesn’t even understand the difference between a secured and an unsecured loan. And he’s running for president.

As president, Bernie Sanders will apparently consider it his job to ensure that interest rates and other prices make ‘sense,’ and if he decides they don’t make sense he’ll…what…issue a decree from the White House fixing the rates, like late-Roman Emperor Diocletian dictating the price of flax from the imperial palace? History records that it did not work out so well.

Back in 2011, the price of iron ore was $170 per metric ton. Now it’s only $43. What sense does that make? Maybe we should just abolish market prices and set prices to whatever makes sense to Bernie Sanders.


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Blowhard Senator Gets Blowback

In the United States Senate last week, something happened that nobody can remember ever happening before. Panelists at a hearing, instead of merely fielding questions from senators, turned the tables and shot questions back at a senator. The hearing concerned the scam of climate alarmism, and the senator in question was Edward Markey of Massachusetts.

Before he worked his way up the ladder of Massachusetts politics, Markey was a truck driver, and it’s safe to say that he knows about as much about science as he does about Akkadian cuneiform. But ignorance being no impediment to a Boston Irishman, Markey launched a soliloquy in which he impugned the integrity of Dr. Judith Curry, a real climate scientist. When Curry asked to respond, Markey rebuffed her saying, “I did not ask you a question.” That’s when Curry and fellow-panelist Mark Steyn turned the tables on him.

We got a chuckle out of this bit:

Markey: If you want to ignore that these changes are taking place and that they are having a dramatic impact, then you are in the right place.

Steyn: Do you know what the winters were like at Plymouth Rock? Do you know what the winters were like at Plymouth Rock, senator?

Markey: Well, here is the thing. We…

Steyn: You don’t. How long has your family been in Massachusetts?

Markey: We are new arrivals and I have to admit…

Steyn: You should have been in there in 1750.

Markey: The Irish weren’t arriving in 1750, so I apologize for being late to the country and I’ll have to chastise my grandparents for not leaving until the economic conditions in 1902 forced them here, but that notwithstanding, there is as much consensus that man is causing climate change as there is in Galileo’s original theory.

Hard to believe that date in 1902 is still not celebrated as a national holiday.

We’re imagining a plot for a Hollywood movie–Donald Trump and Ann Coulter go back in time to 1902 to stop Edward Markey’s grandparents from immigrating into America.

Anyway, in a more perfect world Markey, a walking advertisement for the Dunning-Kruger effect, would emit his gaseous bloviations not in the chambers of the U.S. Senate, but only in the more suitable environment of a South Boston pub.

After Steyn and Curry dared to confront him, Senator Markey failed to return for his scheduled second round of questioning. He ran away! Brave Sir Edward ran away!

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Ignore the big-money managers’ predictions for 2015

Brett Roi at Marketwatch provides some good investing advice:

Buy Japan. Buy Europe. Buy technology. Avoid energy. Avoid Russia.

That’s what the Big Money is saying as we get ready for the new year. This is according to the latest in-depth survey of institutional money managers conducted by Bank of America Merrill Lynch. In total, the poll-takers interviewed over 150 professional investment managers around the world with nearly $450 billion in assets under management.

There’s only one problem with this. The Big Money folks are more likely to be utterly wrong than utterly right.

That isn’t just because they are subject to the usual factors like herd instinct and professional self-preservation. It’s also because even though they like to think they are trying to beat the market, they actually are the market they are trying to beat.

This insight makes a strong case for passive, low cost, index investing.  But for those of you who have a higher risk tolerance and an unclouded crystal ball, all you have to do is pick the asset class that will have the best return for the upcoming year. Also, don’t buy losing lottery tickets at the gas station, only buy winning ones.

CNBC host doesn’t know that Ireland isn’t part of the UK

Experience has proven time and again that you may not be able to reject the hypothesis that a person actually doesn’t know anything just because someone is a successful CEO, or a college professor with or without a PhD, or a host of a nationally syndicated television business show:

If you’re interviewing the head of Ireland’s foreign investment agency on American television there are two things you need to know: the Republic of Ireland is an independent country and has been using the euro for 15 years.

But a CNBC presenter was flabbergasted by the claim as he quizzed Martin Shanahan, the new chief executive of IDA Ireland, about the country’s economic recovery and its low tax regime. Unfortunately, things took a turn for the worse, when the discussion moved to the euro and the effects of a weaker currency on tourism in Ireland.

The show’s presenter, Joe Kernen, was shocked when he found out Ireland and Northern Ireland are two different countries: one is part of the UK, the other one isn’t. And, naturally, one uses sterling, while the other one uses the euro and is part of the euro zone. But not for Joe.

In a bizarre rant, the veteran American presenter insisted Ireland should use the pound because “it’s sort of the same island” and suggested “you guys gotta get it together” as Mr Shanahan tried, and failed, to explain Northern Ireland is a different country and Dublin is “very happy with the euro”.

The video below really starts to get embarrassing at the 6:55 mark.


So-called University Students Don’t Know Who Won the Civil War

Watch the video from Texas Tech, not the worst of undergraduate institutions. The video, unfortunately, comports with our own experience of teaching today’s undergraduates. We regularly observe students display ignorance of the most elementary material that anyone with a diploma would be expected to know. In a more perfect world, their high school diplomas would be revoked.

And it’s not just history. Students exhibit deficiency in pretty much all subjects across the board, including mathematics.

We recently observed two separate incidents in which students could not solve fairly elementary algebraic equations; the sort of math that might be taught at middle school, never mind high school. In particular, one student could not solve the following equation for X:

(200 – 105)/2 – X/2 = 5.

The other recent student who couldn’t do middle school math said to us, “But I’m good at math.”

Messrs. Dunning and Kruger, please call your office.

The student is obviously deficient in math, but hey, at least she feels good about herself! That’s what modern schooling values most.

We’re just hoping we can make it to retirement.

Oh and by the way, the voting age should be raised back up to 21, where it was before 1972.


The myth of extreme weather

This week a government outfit calling itself the National Climate Data Center issued a report warning that ‘global warming’ has caused an increase in damaging storms and droughts. The legacy TV networks dutifully picked up on the report and broadcast dire warnings about the increase in extreme weather. The increase in extreme weather, however, is one of those ‘facts’ that is not a fact.

Evidence presented by University of Colorado climate scientists Dr. Roger Pielke, Jr. also shows that there has been no increase in extreme weather events due to global warming.

“It is misleading and just plain incorrect to claim that disasters associated with hurricanes, tornadoes, floods or droughts have increased on climate timescales either in the United States or globally,” Pielke said in his testimony before the Senate Environment and Public Works Committee last year. “It is further incorrect to associate the increasing costs of disasters with the emission of greenhouse gases.”

“Hurricanes have not increased in the U.S. in frequency, intensity or normalized damage since at least 1900,” Pielke added. “The same holds for tropical cyclones globally since at least 1970.”

Nevertheless, liberal commentatrix Mara Liasson did her part to propagate the myth that extreme weather has increased. See her comment at the 3:40 mark.

[T]he science is pretty overwhelming now, it is real, it’s climate change, it’s not just global warming, it’s extreme weather all over the place, and it is costing a lot of money and making a lot of changes…

For the sake of accuracy, Liasson’s statement needs just a bit of editing.

[T]he [junk] science is pretty overwhelming now, it is real fake, it’s climate change, it’s not just global warming, it’s extreme weather scaremongering all over the place, and it is costing [taxpayers] a lot of money and making a lot of changes money for Al Gore…

And liberals like Liasson believe that it is conservatives who are ‘anti-science.’


More or Better?

The age old debate about quantity over quality is continued here is an interesting take on the upcoming NFL draft:

The Baltimore Ravens think the NFL Draft is a crapshoot.

“We look at the draft as, in some respects, a luck-driven process. The more picks you have, the more chances you have to get a good player,” assistant GM Eric DeCosta told Jenny Vrentas of MMQB. “When we look at teams that draft well, it’s not necessarily that they’re drafting better than anybody else, it seems to be that they have more picks.”

Interestingly, this seems to be an anti-Moneyball type argument.  Rather than making the case for a “better” method to evaluate talent, the Ravens strategy is to accumulate more lottery tickets. Finance students should recognize this logic as similar to the case made for holding a broadly diversified portfolio.  Your duds will (on average) be more than offset by your Apples and Googles.