Rebecca Onie, a former student of mine, was recently named a MacArthur Fellow (“genius grant”) for her amazing work as executive director of Project Health, a non-profit organization that she co-founded while a sophomore at Harvard College. Project Health, dedicated to breaking the link between poverty and poor health, places undergraduate volunteers in medical clinics to help medical professionals connect patients and their families to local food and housing.
Here are some videos depicting the good work that Rebecca and Project Health do in attempting to assist families achieve a situation that will permit them to become healthy.
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Congratuations to Rebecca and the other remarkable people at Project Health.
A few weeks ago, the grandfather of law and economics, Richard Posner, decided to weigh in on President Obama’s proposal for a Consumer Financial Protection Agency (CFPA), which would regulate consumer financial products including mortgages and credit cards. He bemoaned the idea of a new regulatory body—dismissing it as the misguided vision of a cadre of idealistic behavioral economists.
As he explained, in an op-ed in the Wall Street Journal, “Behavioral economists are right to point to the limitations of human cognition. But if they have the same cognitive limitations as consumers, should they be designing systems of consumer protection?”
The enemy is a familiar one for Posner and any self-respecting classical liberal: paternalism.
Posner’s concern is that “the agency will steer consumers to those financial products that it thinks best for them, whatever they naïvely think.”
That statement is misleading and problematic for two reasons.
First, the aim of the CFPA is not to force consumers to agree to something they wouldn’t otherwise agree to; the point is to promote real disclosure so that consumers can make informed decisions. Thus, the impetus behind the plan for pre-approved “plain vanilla” financial product forms, for example, is not a desire to constrain choice, but to ensure a format that customers can understand. Without understanding there is no free choice.
Second, even if we accept Posner’s inaccurate and unfair characterization of the agency as paternalistic, that must certainly be better than the status quo that Posner tacitly supports in which companies steer consumers to those financial products they think best for the company, whatever consumers naïvely think. For someone committed to preserving the autonomy of the individual to pursue his own conception of the good, the world Posner affirms is a coercive nightmare far worse than his caricature of America’s future under the CFPA Act: at least in the latter case, the implicated entity is attempting to pursue the best interests of the American public, not its own.
What is to explain Posner’s inability to see that under the current system individuals lack free choice? After all he is a very smart guy and the evidence on how mortgage and credit card products are deliberately created and marketed to compel consumers to step into higher cost products is overwhelming.
Why is Posner so ready to see the government as the totalitarian bogeyman and so unwilling to see the consumer financial products industry in this role?
It is hard to say, but I expect part of it grows out of being stuck in a mid-20th-Century mindset.
Richard Posner, born in 1939, came of age during the Cold War. (Interesting aside: a thirteen-year-old Posner agreed to give his electric train set to the Rosenberg children when they visited his house shortly after their parents were executed.) During that time, the enemy was the totalitarian state—the overbearing government that thought it knew what was best for the people. Corporations, by contrast, were the good guys. They listened to our wants and responded to our desires. They helped keep us free and happy.
Today, rather than looking objectively at what presents the greatest danger to liberty; he is stuck looking for the nefarious influence of big government. And that’s where he has gone wrong.
The CFPA isn’t a big government command-and-control-style creation. It is minimalist, reflecting the ideas of a younger generation of law professors and economists—including Posner’s colleagues, Cass Sunstein and Richard Thaler—dedicated, like Posner, to an environment of free choice, but aware that the government must sometimes act to ensure that such freedom exists. It is hard to see how an agency that requires credit card companies to not print their U.S. contracts in Arabic or incomprehensible legalese is a real threat to liberty; it seems like a sensible way to make sure that consumers can accurately compare products and that markets work efficiently.
And it is not clear that the CFPA’s oversight would actually hurt the profitability of companies. Sure, entities that have survived the last few years on trickery and outright deceit would struggle in the new climate of openness, clarity, and disclosure, but what about all of those honest consumer financial businesses that were kept out of the market because they were undercut by sharp practices?
Posner needs to get with the times or get out of the way. His refrain, “too much, too soon, too costly,” is a tired old mantra that ignores the dangers, abuses, and costs hidden in the status quo.
Situationist Contributor Adam Benforado recently published the following op-ed, titled “Time to Rein in Tricks of the Financial Trade,” in Cap Times.
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I have a confession: I teach contract law, and I do not understand everything in my credit card agreement.
If business law professors are getting lost in the fine print of consumer financial products, we have a fundamental problem.
Back in the early 1980s, the average credit card contract filled up a single page. Today, a similar agreement runs to more than 30. These contracts are designed to maximize company profits by hiding costly traps for consumers in a dense forest of confusing provisions and mysterious words like “LIBOR” and “Cash Equivalent Transactions.”
It is no wonder that a 2006 study by the Government Accountability Office found that “the disclosures in the customer solicitation materials and card member agreements provided by four of the largest credit card issuers were too complicated” and that “many (credit card holders) failed to understand key aspects of their cards, including when they would be charged for late payments or what actions could cause issuers to raise rates.”
Credit card companies defend themselves by explaining that they fully disclose the terms and risks associated with their products, but it is not disclosure if you know that the other party is incapable of understanding the information you are conveying – and particularly if your profitability model is based on that person not understanding.
The situation is really no different than if credit card companies decided to print all of their U.S. contracts in Arabic instead of English. Yes, consumers would technically be given all of the relevant particulars about rates, balance calculations, and payment periods. However, just as here, companies would know that most consumers would not grasp the fundamental provisions of the agreements and that, as a result, the companies could get away with hiding plenty of underhanded – but highly profitable – tricks in the details.
The consumer financial products industry loves to talk about how it works tirelessly to cater to consumer choice, but these incomprehensible documents are a testament to the lack of choice under the current system. Dozens of critical decisions are dictated by the company with no input at all by consumers. Indeed, these contracts – whether credit card agreements, car loans, or mortgage papers – are filled with provisions that few if any rational consumers would choose if they had the option.
What customer would select a universal default provision, permitting a bank to increase interest rates even when that customer is meeting all of the terms of her credit contract? Who, in their right mind, would choose to have double-cycle billing, allowing companies to charge interest on money that a customer has already repaid? Who would elect to give the opposing party in an agreement the right to change the terms of the contract at any time, for any reason, while binding himself to follow every little detail?
The current system is not about maximizing customer choice; it is about maximizing profit while constraining choice. By strapping customers into contractual straightjackets, credit card companies can reach their hands into Americans’ back pockets without much effort at all. And that they do: for billions of dollars a year in ill-gotten interest payments, fees, and other credit charges.
So what is to be done?
We need a regulatory agency to protect our freedom of choice and to force companies to provide real disclosures – ones that everyone understands. Though it has not gotten much attention in the press, President Obama recently proposed just such an entity: a Consumer Financial Protection Agency charged with ensuring financial product safety.
Unifying and mending what is now a patchwork quilt of ineffectual, complicated, and contradictory regulations, the CFPA would have the power to set guidelines and monitor mortgages, car and payday loans, and credit card contracts. The agency would work to promote clear explanations of the real risks and costs of financial products in contracts that could be read in three or four minutes without the assistance of a lawyer or an MBA. With this newfound clarity, consumers could knowledgeably compare products and exercise real choice, allowing market competition to work effectively and allowing those honest and fair companies that currently don’t stand a chance to rise to the top.
Just as they have deceived consumers with legalese and fine print, industry representatives are now trying to muddy the waters for policymakers with convoluted arguments, faulty logic, and fear mongering. We must not lose sight of the truth: The CFPA is needed to protect the freedom and economic stability of hard-working American families.
Judge Richard Posner just published an essay, “How I Became a Keynesian” in the New Republic. In it he describes how the economic depression led him to go back to read Keynes’s The General Theory of Employment, Interest, and Money and his new-found appreciation for Keynes and elements of Keynesianism. Here are some excerpts.
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I knew that John Maynard Keynes was widely considered the greatest economist of the twentieth century, and I knew of his book’s extraordinary reputation. But it was a work of macroeconomics–the study of economy-wide phenomena such as inflation, the business cycle, and economic growth. Law, and hence the economics of law–my academic field–did not figure largely in the regulation of those phenomena. And I had heard that it was a very difficult book, which I assumed meant it was heavily mathematical; and that Keynes was an old-fashioned liberal, who believed in controlling business ups and downs through heavy-handed fiscal policy (taxing, borrowing, spending); and that the book had been refuted by Milton Friedman, though he admired Keynes’s earlier work on monetarism. I would not have been surprised by, or inclined to challenge, the claim made in 1992 by Gregory Mankiw, a prominent macroeconomist at Harvard, that “after fifty years of additional progress in economic science, The General Theory is an outdated book. . . . We are in a much better position than Keynes was to figure out how the economy works.”
We have learned since September that the present generation of economists has not figured out how the economy works. The vast majority of them were blindsided by the housing bubble and the ensuing banking crisis; and misjudged the gravity of the economic downturn that resulted; and were perplexed by the inability of orthodox monetary policy administered by the Federal Reserve to prevent such a steep downturn; and could not agree on what, if anything, the government should do to halt it and put the economy on the road to recovery. By now a majority of economists are in general agreement with the Obama administration’s exceedingly Keynesian strategy for digging the economy out of its deep hole. Some say the government is not doing enough and is too cozy with the bankers, and others say that it is doing too much, heedless of long-term consequences. There is no professional consensus on the details of what should be done to arrest the downturn, speed recovery, and prevent (so far as possible) a recurrence. Not having believed that what has happened could happen, the profession had not thought carefully about what should be done if it did happen.
Baffled by the profession’s disarray, I decided I had better read The General Theory. Having done so, I have concluded that, despite its antiquity, it is the best guide we have to the crisis.
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[The General Theory] is an especially difficult read for present-day academic economists, because it is based on a conception of economics remote from theirs. This is what made the book seem “outdated” to Mankiw–and has made it, indeed, a largely unread classic. (Another very distinguished macroeconomist, Robert Lucas, writing a few years after Mankiw, dismissed The General Theory as “an ideological event.”) The dominant conception of economics today, and one that has guided my own academic work in the economics of law, is that economics is the study of rational choice. People are assumed to make rational decisions across the entire range of human choice, including but not limited to market transactions, by employing a form (usually truncated and informal) of cost-benefit analysis. The older view was that economics is the study of the economy, employing whatever assumptions seem realistic and whatever analytical methods come to hand. Keynes wanted to be realistic about decision-making rather than explore how far an economist could get by assuming that people really do base decisions on some approximation to cost-benefit analysis.
The General Theory is full of interesting psychological observations–the word “psychological” is ubiquitous–as when Keynes notes that “during a boom the popular estimation of [risk] is apt to become unusually and imprudently low,” while during a bust the “animal spirits” of entrepreneurs droop. He uses such insights without trying to fit them into a model of rational decision-making.
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Posner’s essay is reviews many of Keynes’s arguments and insights and then concludes as follows.
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Although there are other heresies in The General Theory, along with puzzles, opacities, loose ends, confusions, errors, exaggerations, and anachronisms galore, they do not detract from the book’s relevance to our present troubles. Economists may have forgotten The General Theory and moved on, but economics has not outgrown it, or the informal mode of argument that it exemplifies, which can illuminate nooks and crannies that are closed to mathematics. Keynes’s masterpiece is many things, but “outdated” it is not. So I will let a contrite Gregory Mankiw, writing in November 2008 in TheNew York Times, amid a collapsing economy, have the last word: “If you were going to turn to only one economist to understand the problems facing the economy, there is little doubt that the economist would be John Maynard Keynes. Although Keynes died more than a half-century ago, his diagnosis of recessions and depressions remains the foundation of modern macroeconomics. His insights go a long way toward explaining the challenges we now confront. . . . Keynes wrote, ‘Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slave of some defunct economist.’ In 2008, no defunct economist is more prominent than Keynes himself.”
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In March of 2009, Judge Posner spoke at the Third Annual Project on Law and Mind Sciences Conference, titled “The Free Market Mindset.” In his talk, “A Failure of Capitalism,” Posner discussed his own explanation for the economic depression, informed by his then-recent reading of The General Theory. You can watch a video of his talk here. (Thanks to Goutam Jois for sending the link to Posner’s essay.)
The contemporary underclass is defined not by race but rather by its weak or nonexistent ties to the labor market. Members of the underclass are more likely to be labeled as criminals than are any other members of society. The process is not a tightly coordinated conspiracy, but in various ways police, prosecutors, and jailers routinely deem members of the underclass to be nefarious lawbreakers. While in many cases underclass men and women have committed acts that justify this perception, the criminal justice system as a whole is too eager and too hasty to attach the criminal label to members of the underclass. What’s more, law and legal institutions contribute to an even broader process of criminalization, one which assumes the entire underclass is criminal. This criminalization of the underclass dooms members of the underclass to be outsiders in American life and becomes a central and powerful premise in the general framework of sociopolitical thought.
Can Ted Kennedy’s death help shape future health care negotiations and pass a compromise bill? Yes – but not for the reasons you think.
On August 24, 2009, President Barack Obama’s ambitious health care agenda looked to be at serious risk. Numerous sources such as MSNBC, CBS News, and even the blogosphere were noting that Obama’s key initiative was losing traction among an American electorate that was alternately confused on the details of an amorphous plan, concerned about taking on additional costs during a nearly unprecedented recession, or ideologically opposed to a supposedly ‘inferior’ “Canadian-style health care” A Republican Party which had appeared confused and unfocused in response to Obama’s popularity suddenly had an issue around which could re-energize their base.
But on August 25, something seemingly important happened –Ted Kennedy passed away. Instantly, a Democratic Party which had been previously charitably described as ‘torn’ on the issue of a national health care plan sprung into action. Hours after Kennedy’s passing, Nancy Pelosi attempted to rally her party around an issue which Kennedy had described as his life’s unfinished work. ‘Win one for Teddy’ was the message and the rally around the flag effect came into play to varying degrees of receptivity. Kennedy supporters, such as his former press secretary Bob Shrum, were hopeful that his “long shadow” could spur renewed commitment for a deal. Those sceptical of the need to reform health care in the United States, such as John McCain, were quick to dispute the notion that Kennedy’s passing would help the pro-reform crowd due to the loss of the senior senator from Massachusetts’ strong bipartisan deal-making ability and passionate advocacy for his ‘pet project’.
Ultimately only time will tell what, if any, long-term effect Kennedy’s death will have among centrist Democrats and moderate Republicans (the key demographics necessary to pass health care reform). However, a week following the events of Kennedy’s death the centrist reconciliatory approach hoped for by Shrum already appears to have been a pipe dream as Kennedy’s passing seems to have a had a marginal impact on the terms of debate. On a recent head-to-head debate spot on CNN on September 7, 2009, Senators Orrin Hatch (R-Utah) and Bernie Sanders (I-Vermont) repeated almost verbatim the general entrenched arguments of both sides. Hatch argued that adding a layer of complexity to the current U.S. health care system by putting it in the hands of the ‘bureaucrats’ (a favourite target of the Republicans since the Reagan days) while Sanders questioned how adding a public option and introducing competition to the private sector would negatively impact the business models of HMOs (overlooking the fact that a public option would have access to vast amounts of capital and visibility that some HMOs would be unable to compete with).
President Obama’s major address to Congress on health care on September 9th did little to heal these ingrained divisions. While the speech was well received by many centrist critics, the reaction among both the left and the right was largely humdrum. As noted by many observers from a wide spectrum of sources, Obama’s rhetoric and appeals to bipartisanship may have appealed to moderate Americans but did little to move legislators and, most likely, their core constituents.
The seeming inablity of both sides to parrot anything other than their entrenched arguments got me thinking about modern conceptions of the ‘art’ of negotiation and how it pertains to hot-button national political issues. Specifically, current political debates serve to underscore how undervalued situation has been as a consideration by scholars when studying political negotiations.
A favourite case study used by negotiation theorists to illustrate the power of political negotiators in bargaining situations is the Malta-U.K. negotiation for British leasing rights of a Maltese naval base in 1971. William Howard Wriggins advances the notion in his case study that Malta managed to maximize the value of their lease agreement with the U.K. by shopping their outdated and relatively unimportant military outpost to NATO enemies such as the Soviet Union, Libya and other Arab states. Malta’s leader leveraged the situation at the height of the Cold War to their advantage by making the alternatives to the U.K. and its NATO allies (that of having a rival’s outpost right in the middle of the Mediterranean) exceedingly unattractive. The contention of negotiation scholars is that Malta’s leadership managed to reframe the terms of the negotiation from a straight-up lease renewal of an unimportant outpost into a broader issue regarding NATO defence strategies.
While Wriggins’ example is an entertaining example of how political negotiators can use situation in order to reframe the terms of debate, state-to-state negotiations rarely share characteristics with intra-state political negotiations. To exemplify this point, take the Malta-U.K. example. What must be kept in mind in that case is the fact that the Maltese prime minister was wildly popular for taking on ‘outsiders’ (the U.K.). His aggressive and sometimes belligerent negotiation tactics helped foster an ‘us-against-them’ mentality among his constituents and consequently helped unite them in a (mostly) singular cause – making the British pay. Even though the costs to the Maltese would be great in financial terms were negotiations unsuccessful, their shared goal made the issue a collective struggle. However, in cases of internal political divisions such as the debate over health care, this ‘us-against-them’ phenomenon is more destructive. Because the foe in this case is not an ‘outsider’ and the issue an ideologically salient one regarding the future direction of the country, any attempts to incite such bravado inflame existing tensions making a peaceable resolution less likely. Unfortunately (or fortunately, depending on your political viewpoint), the debate surrounding health care has already reached ‘us-against-them’ proportions as the debate between Senators Sanders and Hatch would attest.
The differences between the forums in which these negotiations take place are also exceedingly important. State-to-state negotiations usually take place at a high-level and behind closed doors where the public only knows the final outcome. Because the number of participants in these negotiations is so limited, it makes the tactics used by skilled negotiators more valuable. This is because the participants and negotiators in these sessions are freer to discuss options (framing various options in their favour being what skilled negotiators do best) without public scrutiny and gives ‘low-skill agents’ less opportunity to distort situations. Internal political negotiations, on the other hand, necessarily take place in the public sphere. Due to the fact that issues such as health care affect all Americans, possibly for generations, there is little tolerance for elite-driven closed-door bargaining – the public wishes to be engaged. Hence, even if closed-door negotiations did put an end to the health-care debate among legislators (which is unlikely), there would be little public acceptance of such a deal due to the fact that it would fail ‘second-table’ negotiation – that is negotiation with constituents.
But what about if you abandon strategic bargaining and try ‘principled negotiation in order to ‘expand the pie’? This ‘principled’ conception of negotiation was introduced by Roger Fisher and William Ury at the Harvard Project on Negotiation. Fisher and Ury’s assumption was that negotiators and stakeholders have the power and ability to reframe the terms of the negotiation and introduce new `win-win’ scenarios as possible outcomes. In essence, the theory posited by Fisher and Ury advances the notion how you negotiate (Fisher and Ury, Getting to Yes Second Edition, p. 177) makes an enormous difference because skilled negotiators can come up with creative options by which to ‘expand the pie’ and can overcome vast differences in power between the negotiation parties. While Fisher and Ury’s points are well made and are essential practical skills for negotiators, their points are less adept at explaining the dynamics driving intra-state political negotiations, such as that over health care.
As we have seen above, the ‘us-against-them’ mentality has already taken root which makes principled negotiation difficult. As I noted in a previous piece, UVA Social Psychology Professor Jonathan Haidt argues that when the public is faced with a difficult political question (of which health care would certainly qualify), most people “generally lean one way or the other right away, and then put a call in to reasoning to see whether support for that position is forthcoming.” Most tellingly, Haidt notes that “Most people gave no real evidence for their positions, and most made no effort to look for evidence opposing their initial positions.” Hence, while the negotiators behind the health care debate (in this case, legislators) may know the intricacies underpinning their respective arguments, convincing their constituents at second-table negotiations will be difficult. Indeed, even Senators with impeccable conservative credentials such as Chuck Grassley (R-Iowa) are getting hammered by his core constituents who are concerned he may “bend too much on the way to compromise”.
In addition, while some legislators such as Max Baucus’ bipartisan “Gang of Six” have been working toward a health care compromise bill for months, most of the debate has been waged in full view of the American public. While this makes sense given the nature of the issue and the unlikelihood of success of second-table negotiations if negotiations were held behind closed doors (as noted above), this has also served to make fringe media characters on both sides more powerful. While these fringe agents aren’t ‘low-skill agents’ per say given that they aren’t actual negotiators or ‘agents’ they can be described as tools used by low-skill agents in gaining traction or core support for their more aggressive demands. Therefore, such talking heads as Keith Olbermann and Ann Coulter add a degree of obfuscation and surreality to the health care debate. Fringe media used by low-skills agents often impede the process of negotiations due to the fact that they are more interested in increasing their profile rather than wishing for any reasoned compromise. As noted by Michael Caine (Alfred) in the Dark Knight “Some men can’t be … reasoned with. Some men want to watch the world burn”.
Knowing all this, then, the question remains –Will Ted Kennedy’s passing influence the passage of ‘Obamacare’ and is there any hope for a compromise? The answer to both is yes though for reasons some may find counterintuitive.
Kennedy’s passing surely has an impact on the health care debate in America. While the central disagreements may have stayed the same, the loss of Kennedy is surely a blow to civilized discourse regarding health care reform. As noted by both Republicans and Democrats in the wake of Kennedy’s death, he was a respected legislator who was “willing to work with others to get things done, for the greater good.” His passing, then, means that there is one less communicator to sell health care and one less contemporary off of which Republicans can bounce their objections and ideas. Sadly, Shrum’s vision of a bipartisan Congress working toward a peaceable compromise on health care is growing more unlikely. As noted by Senator Arlen Specter (D-Pennsylvania), “We shall pause for our fallen comrade, but nothing seems to have any effect on the partisanship.” Instead, Kennedy’s legacy is more likely to be used to Democrats to rally their troops as Obama did September 9th. Kennedy’s legacy regarding the passage of reformed health care, then, may not be as a segueway to grand compromise but as a tool for greater Democratic engagement.
But is there still any hope for compromise bill? And can political negotiations regarding sensitive national issues still attain success? There is, and it can. However, building in order to reach this compromise we must build upon the lessons of Fisher and Ury. In negotiations such as this how you negotiate strikes me as less important than with whom you negotiate. In order to reach a negotiated settlement to the health care debate, politicians must turn the page and realize that their audience for negotiations rests ultimately not with their political peers but with their constituents. The negotiation is therefore not with each other but with voters.
With mid-term elections coming up, political leadership on both sides must realize that the fringes of their support have little place to go – those Republicans opposing all forms of government intervention aren’t going to vote Democrat or vice versa. Even those disaffected by any compromise aren’t likely to stay home given the pervasiveness of the issue and its potential effects. Therefore, the leaders on both sides must moderate their tone and aim for the squarely for the soft centre, where there is more leeway and additional votes to be had for or against health care reform. Only in this way will either side get (or, in the case of the Democrats, hang on to) the seats necessary to control the framework of negotiations for health care reform. President Obama has seemingly realized this appetite for compromise among the centre given his speech on health care. The question is, are legislators listening?
THE BELIEVER: I take it that one of the goals of the Stanford Prison Experiment was to build on Milgram’s results that demonstrated the power of situational elements. Is that right?
PHILIP ZIMBARDO: It was really to broaden his message and put it to a higher-level test. In Milgram’s study, we don’t know about those thousand people who answered the ad. His subjects were not Yale students, although he did it at Yale. They were a thousand ordinary citizens from New Haven and Bridgeport, Connecticut, ages twenty to fifty, and in his advertisement in the newspaper he said: college students and high-school students cannot be used. It could have been a selection of people who were more psychopathic. For our study, we picked only two dozen of seventy-five who applied, who on seven different personality tests were normal or average. So we knew there were no psychopaths, no deviants. Nobody had been in therapy, and even though it was a drug era, nobody (at least in the reports) had taken anything more than marijuana, and they were physically healthy at the time. So the question was: Suppose you had only kids who were normally healthy, psychologically and physically, and they knew they would be going into a prison-like environment and that some of their civil rights would be sacrificed. Would those good people, put in that bad, evil place—would their goodness triumph?
That sitautionist snippet should convince you to check out the rest of the interview! Also, it is worth pointing out the Sommers has a forthcoming collection entitled A Very Bad Wizard: Morality Behind the Curtain, which includes past interviews with philosophers and psychologists such as Galen Strawson, Michael Ruse, Jon Haidt, Frans de Waal, Steve Stich, Josh Greene, Liane Young, Joe Henrich, William Ian Miller, and Zimbardo. So, make sure to check it out as well once it comes out.
If you haven’t already (or even if you have), we invite you to take, the “Policy IAT.” We urge individuals of all political and ideological orientations to participate in the on-line test designed to examine whether and to what extent people have implicit preferences for certain types of policy options. Please encourage your friends (and, to those of you who are bloggers, your readers) to participate as well.
To learn more or to take the Policy IAT (a roughly 15-minute task), click here.
The op-ed excerpted below, “America’s Best Colleges: Merit by the Numbers,” by Harvard Law School Professor Lani Guinier and Columbia Law Professor Susan Sturm, appeared in the August 5, 2009, edition of Forbes. It eloquently examines the role played and not played by universities in educating young people to promote the system-justifying illusion of merit.
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In its recent commencement issue, an Ivy League college newspaper displayed a snapshot of the Class of 2009 “by the numbers.” Although the students had by then been at the college for four years, all of the relevant “numbers” were based on a profile of the class at the time of enrollment. Prominently featured were the 157 children of alumni; the 9.7% of applicants who were admitted; and, last but not least, the median SAT math and verbal scores–740 and 750, respectively–of the class.
Amazingly, all the “merits” of the graduating seniors involved attributes that predated the students’ arrival on campus. Totally missing from the portrait was the “merit” that the Class of 2009 developed as a result of the four years they had spent at the school. Nor was any mention made of the contributions they were poised to make. Apparently, the defining qualities of merit–and what was most valued in the students–were the attributes they already had as incoming freshmen.
Selective colleges and universities, like this one, act more like consumers than producers of merit. They build their reputation based on the credentials of the people they admit rather than the contributions of the people they graduate. Trapped by a rankings culture that ties their reputation to admissions inputs, they also define themselves by whom they exclude. Schools that attract a lot of applicants, and then reject 92.3% of them, are held in the highest esteem.
But this process valorizes a uniform set of test-taking skills that produce results no better at predicting college performance than family wealth. In fact, Jesse Rothstein, a Princeton economist, found that the socio-economic status of a high school is a better predictor of what kind of grades its students will earn their first year in college than the individual SAT scores of its students. In effect, the testocracy reproduces privilege and stratifies the higher-education system by race and class. Individuals who perform well on high-stakes tests are awarded admission to college or law school as a prize for performance on a test that best predicts not aptitude, but parental income and education. This inequality effect of the SAT undermines a range of public values, from providing access to college independent of wealth and privilege to developing problem-solving capabilities.
The preoccupation with backwards-looking statistical criteria also severs the tie between admissions and mission. The testing regime deflects the college’s responsibility away from, for example, producing a diverse and dynamic learning environment that actually builds capacity among the students to become the leaders, thinkers and entrepreneurs of the next generation. Reputation based on numerical ranking assumes greater importance than reputation based on the development of innovative ideas and publicly spirited graduates. The primary function of admission becomes status and prestige enhancement for the institution itself and for those who enroll.
Beyond that, the pre-eminent role of high-stakes tests also negatively affects student engagement and learning. The standardized and time-limited nature of the SAT and the ACT fixate student attention on the mastery of test-taking techniques, rather than on developing qualities such as creativity, ability to collaborate, critical thinking and drive. It misleads, by reinforcing the view that ability is fixed when in fact intelligence is both malleable and incremental.
A static view of intelligence has been widely debunked; it undermines intellectual risk-taking. It is also self-fulfilling. According to social psychologist Carol Dweck, students who hold a “fixed” theory of intelligence expend enormous energy worrying about how smart they are–they become preoccupied with avoiding mistakes and are less likely to engage in the excitement of learning. In contrast, people who believe that one’s capacity to learn is “expandable” are more willing to challenge themselves.
An openness to learning from others is crucial in today’s complex environment. People who tackle the world’s problems with the benefit of different perspectives are less likely to get stuck in the same dead ends. As Scott Page, a professor of complex systems, has demonstrated, diverse groups have greater potential to generate effective and innovative solutions to tough problems.
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To read the entire column, including Guinier and Sturm’s discussion of solutions and alternatives to the “testocracy,” click here.
What does the 2008 election of Barack Obama to the United States presidency portend for race in America? This Essay uses the tremendous racial disparities in the American crime control system to assess race and racism as key features of contemporary society. The Essay begins by considering a compelling thesis that racialized mass incarceration stems from backlash to the civil rights movement. If true, this raises the possibility that Obama’s election, potentially marking the end of backlash politics, also represents a likely turning point in the war on crime. The Essay then reconsiders mass imprisonment from the perspective of “racial stratification,” a structural theory that emphasizes the simultaneous formation of racial categories and the misallocation of resources between races. A stratification approach leaves one less sanguine about rapid change in American race relations, though without disparaging either the historic nature of Obama’s inauguration or the possibility of incremental improvements in racial justice. Reflecting the continued need to push for positive racial change, the Essay concludes by arguing morally and politically for a renewed focus on racism, in particular on “post-racial racism.”
STANDING on the steps of the federal courthouse in New Haven, the lawyer Karen Torre reveled in her clients’ victory in a recent case before the Supreme Court. She anointed her clients — the white firefighters who scored well on a promotion test — “a symbol” for millions of Americans who are “tired of seeing individual achievement and merit take a back seat to race and ethnicity.”
But the Supreme Court’s 5-to-4 decision last month — that New Haven should not have scrapped the test — perpetuates profound misconceptions about the capacity of paper-and-pencil tests to gauge a person’s potential on the job. Exams like the one the New Haven firefighters took are neither designed nor administered to identify the employees most qualified for promotion. And Ms. Torre’s identity-politics sloganeering diverts attention from what we need most: a clear-eyed reassessment of our blind faith in entrenched testing regimes.
New Haven used a multiple-choice test to measure its firefighters’ retention of information from national firefighting textbooks and study guides. Civil service tests like these do not identify people who are best suited for leadership positions. The most important skills of any fire department lieutenant or captain are steady command presence, sound judgment and the ability to make life-or-death decisions under pressure. In a city that is nearly 60 percent black and Latino, the ability to promote cross-racial harmony under stress is also crucial.
These skills are not well measured by tests that reward memorization and ask irrelevant questions like whether it is best to approach a particular emergency from uptown or downtown even when the city isn’t oriented that way. The Civil Service Board in New Haven declined to certify the test not only because of concerns about difference in scores between black and white firefighters but also because it failed to assess qualities essential for firefighting.
As Justice Ruth Bader Ginsburg noted in her dissent, tests drawn from national textbooks often do not match a city’s local firefighting needs. Most American fire departments have abandoned such tests or limited the multiple-choice format to 30 percent or less of an applicant’s score. In New Haven, the test still accounted for 60 percent of the score. Compounding the problem, insignificant numerical score differences were used to rank the firefighter candidates.
What should a city do when its promotion test puts a majority of its population at a disadvantage and is also unlikely to predict essential job performance? People who excel on such a test may expect to be promoted. But testing should not be about allocating prizes to winners. No one has a proprietary right to a particular open job, even if that person worked hard preparing for a test.
When a city replaces a bad test, as New Haven wanted to do, the employees who did well on it do not lose their right to compete for promotions; they merely need to compete according to procedures that actually identify people who advance the mission of saving lives and property — and enhance the department’s reputation in the community for treating all citizens with respect.
Yet many Americans believe so strongly that tests are fair that they never question the outcomes, especially when those outcomes conform to stereotypes about people of color. Such preconceptions lead to the conclusion that blacks or Latinos who don’t do well must lack individual initiative or ability.
As the plaintiff in the New Haven case, Frank Ricci, declared, “If you work hard, you can succeed in America.” His lawyer went further: White officials who voted for a better assessment system must have been lowering “the professional standard of competence,” she said, “for the sake of identity politics.” Yet, in New Haven, no one was promoted instead of the white firefighters.
In fact, many fire departments with a history of discrimination, like New Haven’s, still stack the deck in favor of candidates who have relationships to people already in the fire department. Those without $500 for the study materials or a relative or friend from whom they might borrow the books were put at a disadvantage.
Moreover, it was the firefighters union — which sided with the white firefighters in the Supreme Court — that negotiated the contractual mandate giving disproportionate weight to the multiple-choice test. Those negotiations occurred two decades ago when the leadership of the department was virtually all white. Taking this into account, after five days of public hearings, Malcolm Webber, one of the white members of the New Haven Civil Service Board, said: “I’ve heard enough testimony here to give me great doubts about the test itself and the testing — some of the procedures. And I believe we can do better.”
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To read the entire op-ed, click here. For a collection of previous Situationist posts discussing how situation influences standardized test scores, click here. For those discussing Supreme Court nominee, Judge Sotomayor, click here.
Paul Starobin of CNN.com has an interesting commentary on President Obama’s trip to Russia and how the President, in Starobin’s view, might receive an unenthusiastic welcome. An excerpt of Starobin’s piece explains why.
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But if Obama, more ambitiously, hopes to win over the hearts of the Russian people — along the lines of his recent Cairo address, pitched over the heads of the governments of the Islamic world and straight at their citizenry — he can expect to leave disappointed.
The Russians, to start with, have never been all that enthralled with the Obama phenomenon. On the eve of his inauguration, a 17-nation poll conducted by the BBC World Service found that in every country except two, a majority of the people believed his presidency would lead to an improvement in relations between the United States and the rest of the world.
The two nations feeling otherwise were Russia and Japan. And a poll just released by the Levada Center in Moscow found that only 23 percent of Russians feel confident that Obama will “do the right thing in world affairs.”
One reason for this attitude is that the Russians do not quite share Obama’s sense of global priorities. For Obama, as for so much of the planet, global climate change is a serious and even urgent concern. But as the BBC poll found, this is not a priority for Russians, and neither is making peace between the Israelis and the Palestinians, another big agenda item for Obama and his allies.
A deeper reason for Russian skepticism of Obama, and of the Obama craze in general, goes to a core difference of temperament. Obama is prototypically American in his penchant for singing his political song in the key of optimism. For Russians, life tends to be lived in the bittersweet key of tragedy.
While the Russians are not gloomy pessimists — they have a sardonic genius for finding a way to laugh through their tears — they are skeptics on the distinctively American idea that history is all about progress. Experience, painful experience, has taught them otherwise.
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For the rest, click here. For Situationist posts on the related concept of terror management theory, which refers to the perception that society progresses in every generation, click here.
From Michael Phillips’ Chicago Tribune review: Several things — too many, probably — are going on in “Food, Inc.,” all connected. Kenner begins by tracing the impact of 20th Century American fast food on industrialized food production, and notes that when McDonald’s brought factory assembly-line strategies into practice, everything changed. McDonald’s became a universe of beef-purchasing power unto itself. Their cows, like so many millions of other feedlot residents, consume corn instead of grass; the humans in our increasingly obese nation eat a ton of corn as well, courtesy of high-fructose, heavily subsidized corn syrup found in everything from ketchup to Twinkies to Coke. As a Brooklyn, N.Y., doctor in another food doc, “King Corn,” put it: American food policy ensures that “we subsidize the Happy Meals — but we don’t subsidize the healthy ones.”
Are the federal regulatory and protection agencies doing enough to keep us safe from E. coli outbreaks and the like? The film answers that one with a firm “no.” Does eating organic food lead to a healthier diet and a healthier environment? What do you think?
The film got virtually no cooperation from representatives of the dominant players in industrial food production, including Tyson (we see a chicken processing factory in full swing), Monsanto (whose strong-arm business practices come off very, very badly) and others. As a result, “Food, Inc.” is a rangy, well-articulated essay rather than a compelling point-counterpoint.
From Bill Moyers’ Journal: “Former Labor Secretary Robert Reich sits down with Bill Moyers to talk about the influence of lobbyists on policy, the economy, and the ongoing debate over health care.” See the interview on the video below. From the interview, here is a bit of what Reich had to say about trends in wealth distribution.
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“The fact of the matter is that, as late as 1980, the top 1 percent by income in the United States had about nine percent of total national income. But since then, you’ve had increasing concentration of income and wealth to the point that by 2007 the top 1 percent was taking home 21 percent of total national income. Now, when they’re taking home that much, the middle class doesn’t have enough purchasing power to keep the economy growing. That was hidden by the fact that they were borrowing so much on their homes, they kept on consuming because of their borrowing. But once that housing bubble exploded, it exposed the fact that the middle class in this country has really not participated in the growth of the economy, and over the long term we’re not gonna have a recovery until the middle class has the purchasing power it needs to buy again.”
Welfare sanctions are financial penalties applied to individuals who fail to comply with welfare program rules. Their widespread use reflects a turn toward disciplinary approaches to poverty management. In this article, we investigate how implicit racial biases and discrediting social markers interact to shape officials’ decisions to impose sanctions. We present experimental evidence based on hypothetical vignettes that case managers are more likely to recommend sanctions for Latina and black clients – but not white clients – when discrediting markers are present. We triangulate these findings with analyses of state administrative data. Our results for Latinas are mixed, but we find consistent evidence that the probability of a sanction rises significantly when a discrediting marker (i.e., a prior sanction for noncompliance) is attached to a black rather than a white welfare client. Overall, our study clarifies how racial minorities, especially African Americans, are more likely to be punished for deviant behavior in the new world of disciplinary welfare provision.
Despite concerted efforts to combat human trafficking, the trade in persons persists and, in fact, continues to grow. This article suggests that a central reason for the limited success in preventing human trafficking is the dominant conception of the problem, which forms the basis for law developed to combat human trafficking. Specifically, the author argues that “otherness” is a root cause of both inaction and the selective nature of responses to the abusive practice of human trafficking. Othering operates across multiple dimensions, including race, gender, ethnicity, class, caste, culture, and geography, to reinforce a conception of a virtuous “Self” and a devalued “Other.” This article exposes how this Self/Other dichotomy shapes the phenomenon of human trafficking, driving demand for trafficked persons, influencing perceptions of the problem, and constraining legal initiatives to end the abuse. By examining human trafficking through an otherness-aware framework, this article aims to elucidate a deeper understanding of human trafficking and offer a prescription for reducing the adverse effects of otherness on both efforts to combat human trafficking and the individuals that now suffer such abuses.
This short essay explains why it is easier for young black men in many poor, urban areas to obtain a handgun than an up-to-date school textbook or a regular job. A chapter of Against the Wall: Poor, Young, Black and Male, edited by Elijah Anderson with other chapters by Cornel West, William Julius Wilson, and Douglas Massey, the analysis focuses on handgun marketing and distribution and addresses the social and political context that yields easy availability of handguns. Under federal law and the laws of most states, any person so inclined can buy huge quantities of cheap, easily concealed handguns and sell them to others indiscriminately, often without violating any law and usually without having to worry much about getting arrested, prosecuted, or convicted. Nor are the identities of owners of handguns, or the persons to whom they transfer ownership, registered or maintained by government, unless state law so provides-and most do not. Convicted felons are not allowed to buy or possess handguns, but the marketing system up to that point is largely legal. The person who sells a handgun to a person with a felony conviction has no meaningful or enforceable responsibility. Though the handgun debate is commonly cast in terms of “illegal guns,” the central problem resides in what continues to be legal. Large cities facing declining job opportunities, losses in population and tax revenues, and rising levels of deprivation are being forced to accommodate virtually unregulated handgun markets. The cultural and political identification with guns and the unregulated handgun markets have continuing broad support almost exclusively in rural areas and have been imposed on urban and minority communities. The chapter examines proposed handgun regulations and the political and cultural opposition to them.
In his first inaugural address, President Franklin Delano Roosevelt said “the only thing we have to fear is fear itself.” The comment was made in the context of the worst economic crisis of the 20th Century, and perhaps of all time in the United States: the Great Depression, where unemployment rose to 25% and where, until the New Deal, there were minimal safety nets for those impacted by the crisis.
According to William Black, a law professor at the University of Missouri Kansas City, a former bank regulator, and author of The Best Way to Rob a Bank is to Own One, President Bush and now President Obama, along with their respective Treasury secretaries, Henry Paulson and Tim Geithner, have embraced that sentiment to justify the lending of tax dollars to distressed banks. The gist of their concern, according to Black, is that persons with bank deposits will remove their money from banks if they fear the banks no longer have their deposits — a phenomenon that led to the Panic of 1907 and that FDIC insurance (which guarantees bank accounts up to $100,000) is supposed to prevent.
In an interview with PBS’ Charlie Rose, Black contends that the Bush/Obama lending violates federal banking law, specifically the Prompt Corrective Action Law, and that the federal government has worked with banks on trying to prevent the public from realizing that. Here is a transcript of the interview, as excerpted on Daily Kos:
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WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they’re refusing to obey the law.
BILL MOYERS: In other words, they could have closed these banks without nationalizing them?
WILLIAM K. BLACK: Well, you do a receivership. No one — Ronald Reagan did receiverships. Nobody called it nationalization.
BILL MOYERS: And that’s a law?
WILLIAM K. BLACK: That’s the law.
BILL MOYERS: So, Paulson could have done this? Geithner could do this?
WILLIAM K. BLACK: Not could. Was mandated—
BILL MOYERS: By the law.
WILLIAM K. BLACK: By the law.
WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn’t matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, “You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you’re covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn’t work. You will cause your recession to continue and continue.” And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It’s working just as well as it did in Japan.
BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
WILLIAM K. BLACK: Absolutely.
BILL MOYERS: You are.
WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They’re scared to death of a collapse. They’re afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we’ll run screaming to the exits. And we won’t rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it’s foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, “We just can’t let the big banks fail.” That’s wrong.
Last September, Dr. Jeffrey Sachs, an economist and director of the Earth Institute at Columbia University, spoke to a packed hall at Harvard Law School in an address entitled “Representing the Voiceless: The Poor, The Excluded, and the Future.” We cited an article summarizing his remarkable presentation and also posted an unofficial transcript of it (Part I, Part II, Part III, Part IV, and Part V).
Today we excerpt portions of his op-ed on CNN.com concerning the upcoming G-20 Summit and how he believes the issue of global poverty should be addressed.
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The G-20 meeting in London, England, on April 2 will be watched by the entire world with urgency and with a yearning for hope, vision and programmatic clarity.
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The world’s 3 billion poor, especially the 1 billion poorest of the poor, are suffering powerful and destabilizing blows from the crisis, and these will get worse and threaten global security unless there is specific attention and action.
The G-20 cannot limit its focus to regulating the financial sector, reforming the International Monetary Fund and the World Bank, avoiding protectionism and reciting the measures that individual countries are taking. This would leave the world gasping for direction and hope.
The G-20 must offer a vision that is big enough to quell global fears and action bold enough to protect the desperately poor while guiding the cooperative decision-making of the world’s economic authorities.
The G-20 must push forward based on real policy coordination. The world does not have a system of effective cooperation. The United States, for example, does not engage in comprehensive and deep coordination with other countries. The poor countries, with half the world’s population, and the poorest countries, with roughly one-fifth of the world’s population, have not been brought into the equation.
The G-20 package for stimulus should include:
First, fulfillment by all countries of stimulus measures already announced and a commitment to undertake new joint stimulus measures, especially priority public outlays on infrastructure, the social safety net and sustainable energy, as may be needed during the coming years.
Second, establishment of a high-level G-20 coordination group, backed especially by China, the European Union, Japan and the United States, to work full-time on coordinating monetary, fiscal and financial policies for stimulus and long-term recovery. Such cooperative macroeconomic programming does not now exist.
Third, increased currency support extended from the world’s five major central banks (the U.S. Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and the People’s Bank of China) for emerging market economies facing the loss of loans from international banks (e.g. Eastern Europe). The Fed’s currency swap lines to Brazil, Mexico, Korea and Singapore last fall played an important stabilizing role. The other central banks can and should do more, as can the Fed vis-à-vis other countries.
Fourth, a G-20 commitment to gradual and orderly currency readjustments to help rebalance the world’s financial and trade flows. The Asian currencies should gradually appreciate against the euro, which in turn should appreciate gradually against the dollar. Squabbling about bilateral rates between the dollar and Chinese renmenbi should be put to rest.
G-20 actions for the poor should include:
First, establishment of an urgent special food security program, which would make grants to low-income, food-deficit countries (including Africa, Haiti, Afghanistan and elsewhere) to ensure that impoverished farmers can get the basic input they need (such as fertilizer and high-yield seeds) to grow more food.
United Nations Secretary-General Ban Ki-Moon and Spain’s Prime Minister Jose Luis Rodriguez Zapatero have joined to propose this new program and have mobilized backing from about a dozen countries.
The United States’ contribution should be at least $200 million per year over five years ($1 billion total), matching Spain, the largest donor country, and sending a powerful message of solidarity from the United States to the world. The hunger crisis is now afflicting 1 billion people and contributing to the deaths of millions of children each year.
Second, full funding of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which is facing a critical and potentially devastating cash shortfall during 2009-11.
An incremental U.S. contribution of $350 million in 2009 would close the most urgent cash-flow gap and put the United States in the clear lead of protecting the Global Fund and championing the fight against the three pandemic diseases.
Third, special urgent long-term financing of clean energy investments in the poor countries, especially solar, geothermal, wind and hydro, as a direct stimulus to the supplier countries (including the United States), a development boost for the recipient countries (notably in Africa and Central Asia) and a major spur to climate control and success in negotiations this year.