Wednesday, May 25, 2011

The Miseducation of America

Back in the ‘good ole days’ (which usually tend to have occurred exactly one hundred years before the phrase is uttered), doing business in America was simple. Entrepreneurs completed deals using only back of the envelope calculations and a firm handshake. They didn’t need any of those Wall Street wizards with their fancy forecasting and analysis methods. Big Government wasn’t looking over your shoulder or strangling you with red tape. You didn’t need a fancy college degree to make something of yourself. All you needed to achieve wealth were willingness to work hard and a spark of inventiveness.

A profile of the typical millionaire in the United States seems to confirm this narrative. Most millionaires, according to the seminal book, The Millionaire Next Door, didn’t make their money in some highly complex business. In fact, it was usually some ordinary business – say construction or dry cleaning – that vaulted them into the ranks of the wealthy. Although fairly educated – almost 80% have a college education – education was not the distinguishing factor that accounted for their wealth. Nor was it above average performance in the marketplace, inheritance, or even the type of profession they occupied. The single biggest factor among them was their propensity to save.

Wealthy people, on average, save a far higher percentage of their income than their non-wealthy counterparts. Some would argue that of course the wealthy save more, because they do not need as much of their income to cover living expenses as ordinary people. But the data refute this. The propensity to save is a precondition, not a result of wealth. On the other hand, in some professions which demand a higher ‘appearance’ of status – say doctors or lawyers – people tend to live at or above their means. They save a relatively small amount of their income, and have fewer investments in stock, real estate and other productive assets.

Although highly educated and respected in their fields, they are also some of the most highly leveraged in terms of debt. Interestingly, their education seems to play a part in their failure to accumulate wealth. By delaying their entry into the work force through long educational careers, and accumulating consumption-related debt, many of today’s professionals start out in a hole that they never – despite their high intelligence – seem to dig themselves out of. It is telling – and a bit shocking – that even President Clinton (one of the most successful politicians in modern history) – says he did not have a cent to his name before he left the White House after two terms as President. How could this be? Here you have a family with two Yale law degrees and a Rhodes scholarship between them, years of working in Government and private practice – and they could not accumulate any wealth?

It is not uncommon to meet these types – the highly pedigreed professionals who, at mid-life resign themselves to dying with their student loans outstanding. While it is common for ex-Presidents to give speeches and receive honoraria, the Clintons seem to have created a cottage industry out of paid media appearances and book advances. In the respect, they are somewhat reminiscent of the aging baseball stars who earn a living by signing autographs and memorabilia at trade shows. Trading one’s popularity as a sports star however, seems slightly less degrading than spending ones’ post-White House years as a permanent campaigner. But when you’ve got your student loans and your children’s student loans to pay, what are you going to do?

Paradoxically, those self-made millionaires that earned their wealth over a lifetime of work and savings – tend to want something different for their children. The parents of an immigrant Indian family that saved enough from working at a 7-Eleven to eventually acquire their own franchise do not want their children to follow in the family business. They want their kids to get an elite education and become doctors and lawyers. In a sense, these are not strictly economic aspirations – they are status symbols. Education, like fancy cars, homes, and jewelry is not always an investment. Sometimes it’s a form of consumption.

What’s the difference? The true test of whether an education is an investment or merely a form of conspicuous consumption is whether the degree or skills one learns is likely to increase one’s earning ability by more than the (time and monetary) cost of the education. This seems like a simple process to gauge – much like a back of the envelope computation – but it is something that many college graduates fail to clearly consider before incurring huge debts and spending years collecting degrees. While college graduates earn on average more than non-graduates, they tend to enter the work force later with more debt. This is especially the case with people that spend on ‘name brand’ educations. It is increasingly clear that there is a disconnection between the price and the value of higher education.

It’s obvious by now that the latest collapse of the U.S. stock market and the ensuing recession was spearheaded by experts – those same people who received fancy degrees from Ivy League institutions. They sold the public on their complex mathematical models purporting to show huge profits – all the while masking the risk of a total blow up. In many respects, this is the societal effect of a miseducated population. It is the result of an over-reliance by many people on the advice of experts, and the reliance of those experts on theoretical constructs that have little bearing on the real world. It is a classic case of mistaking the map for the territory. Popular writer and educator Nassim Taleb, when describing the cause of the market collapse, was blunter. He aptly describes it as a case of “scholarship without erudition.”

Taleb’s argument is simple yet nuanced. By concentrating for a long time on complex problems, experts tend to become experts in solving known problems -- such as the probability of winning a casino game (where all of the possibilities are known). But this tunnel view prevents them from considering the broader factors that account for real world events in which there is no complete information – be it business performance, the stock market, or the riskiness of complex financial derivatives. In part, it is the level of education that deludes them into believing that they can manage the complexity of making large bets for small gains.

Under conditions of uncertainty that entrepreneurs confront in real word business situations – tunneling (or focusing on known problems) – is far less effective than remaining open and widening one’s perspective. Remaining open requires the ability to suspend belief about what’s happening, to get out of the textbook and into the decision under imperfect information. This type of perspective is becoming a lost art in today’s world of hyper-specialized experts.


NYC Teacher Claims She Was Harassed, Then Fired Over Her Christian Faith

Anita Wooten-Franci, an assistant special education teacher at PS 224, claims that she was teased, harassed and then wrongfully terminated last June. While the school claims she was fired for allegedly grabbing a child, Wooten-Franci denies this charge and insists that her firing was based on her Christian beliefs.

When it came to public displays of faith, the former assistant teacher says that she was careful not to influence her students, but that she did appropriately pray, listen to Christian music and lead a worship group during “non-instructional hours.”

Wooten-Franci claims that the school’s principal — George Andrews — was vocal and often offensive about his dislike for her Christian beliefs. She says that Andrews would frequently make negative comments and that he told her, “You can’t be praying in my school.”

The New York Post has more:

In one instance, [the principal allegedly] criticized the disabled woman for using the elevator and told her to take the stairs. When she protested, he allegedly said, “Why don’t you just pray?” Then he laughed.

At the same time, she says, the school was going to hell in a handbasket, with school administrators charging students for bake sales “even though no charity received the proceeds,” and using money from the school’s Special Needs Funds to pay for lunches and parties, the suit claims.

It was after she complained about these issues that Wooten-Francis says she was slapped with a false charge (that she laid her hands on a child). Following this allegation, she spent time in a “rubber room” and was subsequently fired. Now, she is suing the Department of Education and is confident that “…the truth will come out.”


Weak teachers will be removed from British classrooms in just one term as heads get new powers to fire

Radical plans to fast-track the sacking of almost 20,000 incompetent teachers have caused fury among unions. Education Secretary Michael Gove yesterday unveiled proposals to enable heads to axe bad teachers within a term, rather than the current average of more than a year.

He will also stop the ‘dodge’ of teachers putting off disciplinary proceedings by going on sick leave with full pay, by allowing hearings to be held during this absence.

And incompetent teachers will no longer be able to move from school to school as heads will be granted access to the ‘performance data’ of potential staff.

Under the proposals, the time it usually takes schools to remove poorly performing teachers will be cut from a year or more to one term, the equivalent of a few months.

Restricting the time a headteacher can formally observe a class teacher, known as the 'three-hour observation rule', will be scrapped. Complex and prescriptive 'capability' procedures for dealing with performance will also be overhauled.

Ministers say the system 'fails to respect the professionalism of headteachers and teachers'. Around 60 pages of 'unnecessary' guidance will be axed, the Department for Education (DfE) said, and it will be made clear that staff illness need not bring disciplinary action to a halt.

But while school leaders welcomed the moves, one teaching union said the measures will give headteachers 'a licence to bully'.

NASUWT general secretary Chris Keates said: 'Not content with subjecting teachers to a significant two-year pay cut, assault on their pension provision and savage cuts to education budgets causing job losses, ministers today have added insult to injury by effectively proposing that teachers will be on a permanent capability procedure.'

She added: 'Stripping away safeguards to ensure that teachers are treated fairly and professionally will not deliver high performance. 'These proposals will give headteachers a license to bully.'

Russell Hobby, general secretary of the National Association of Head Teachers (NAHT), said: 'Society places a great deal of faith in teachers. 'It's vital for all concerned that systems are in place to ensure performance is managed and poor performance is addressed resolutely.

'This will mean that those who place their trust in the profession can be reassured. 'There are really very few weak teachers in the country but we must be able to help those that are to move on quickly, fairly and respectfully. 'This is only right for the vast majority of dedicated and skilled teachers in our schools, as well as for pupils themselves.'

Mr Gove said: 'Heads and teachers want a simpler and faster system to deal with teachers who are struggling. For far too long schools have been trapped in complex red tape. 'We must deal with this problem in order to protect the interests of children who suffer when struggling teachers are neither helped nor removed. Schools must be given the responsibility to deal with this fairly and quickly.'

According to figures from the General Teaching Council for England (GTCE), 15 teachers were struck off for incompetence between 2001 and the beginning of last month, and there have been 81 competence hearings in that time.

Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL), said: 'The Government's proposals to merge the regulations for managing teachers' performance and objectives with those dealing with under-performing teachers are unfair, unjust and unworkable. 'The proposals turn performance management on its head. Instead of helping teachers become even better at teaching, it will give heads an easy way to get rid of teachers that they dislike.'

Ministers have already announced other reforms to boost teaching standards, including moves to raise the degree requirements needed to start a teacher training course, and a review of the professional standards teachers are judged against.

They are also considering allowing grammar schools to expand. Although the Coalition has refused to increase the number of selective schools in England - currently 164 - it is likely to allow existing ones to increase their intake. At present the number of places they can offer is restricted by local councils, which fear their expansion will make other schools in the area less attractive.

However, Education Secretary Michael Gove is ready to scrap the rule with the publication of a revised schools admissions code this summer.

The most sought-after grammar schools, which dominate league tables for GCSE and A-levels, have up to ten applications for every place. Many are looking to boost their intake by at least a sixth from 2012, and as much as a half by 2017.

Grammar school war

Mr Gove’s move is likely to reignite the bitter row over grammars within Tory ranks. David Cameron was accused of a ‘humiliating climbdown’ after ditching policy backing their return – and now faces calls to come to the aid of two long-established grammar schools in Reading.

Michael Fallon, Tory MP for Sevenoaks, Kent, has fought for a new grammar school in his constituency. He said the Education Secretary’s plans will be a step forwards but stressed the need for more selective schools.

‘Many places at grammars are taken by pupils from outside the county they are in,’ he said. ‘Expansion of existing grammars will at least take some of the pressure off places. But what we really need is more grammars.’

There are 158,000 pupils currently at grammar schools – nearly five per cent of the school roll. Heads predict that the move could boost this figure by 50 per cent within the next five years – the equivalent to each grammar taking on three additional years of entry.


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