Monday, April 29, 2013


In Matilda, the outstanding new Broadway musical, Matilda’s parents are horrified that she is into reading. The mom, who didn’t want this child, is into her looks and her dancing while the dad, who didn’t want a girl, is into scheming to sell his used cars at new car prices. Even with these revolting parents and an even more revolting school director, Matilda perseveres over all evils with her love for learning and reading completely intact and hopefully a Tony on the way as well.

My kids are bright and good readers and hopefully have a home life and school environment absent the stress that Matilda encounters. But this week hasn’t been a good week for my younger daughter who has spent three days and 4.5 hours taking a reading assessment. These tests will be followed up this coming week with math exams. Now some background on the reading exam will be helpful to the reader. First, the exam is based in part on the new common core curriculum; however, the students are just being exposed to that curriculum now. Second, the exam is being scored much harder than the exam in previous years so that the expectation is that failures will be up by at least a third. And third, the exam is not so much a method for grading the students as it is aimed at grading the teachers.

What is New York State thinking? I have written before on using student test results to judge teachers. I know from firsthand experience that excellent teaching makes an important difference but the home environment is nevertheless crucial. Household conditions and the support mechanisms at home make an enormous difference and there is a strong correlation between these conditions and test results. Why then do teachers shoulder so much of the responsibility with only a limited opportunity to make the difference? Every child is not a Matilda, able to overcome tremendous odds against succeeding in school.

The jury on the common core curriculum is still out but there is no doubt that most of the students being tested have had limited exposure. How then can you justify that tests are oriented around the common core? Do we want kids to fail? Once again, not every kid has the resilience of a Matilda. Which, of course, leads to the most critical point which is that an increasing number of kids will not pass this exam. How do we explain to them that we are really not judging them via the exam? Or how do we explain that the material is oriented to a curriculum design that is not yet fully implemented? The reality is we will not be able to successfully convince our children that it really isn’t a reflection on them if they don’t pass. There is no question that self respect will suffer and that some children will feel inferior as a result.

But as I have indicated before, what will suffer the most is the love of learning. Too much of an emphasis on tests and tests which are too flawed will impact our children negatively. And while the story for Matilda ends happily ever after, I am not at all convinced that this will be the result for a significant number of children in New York.

Monday, April 22, 2013

Split Personality

My older daughter has wanted to see Jekyll and Hyde, the musical, on Broadway from the time that the announcement was made that the show as coming back to Broadway. She has not yet read the book but has seen an animated version and was fascinated by the story. I had read the book by Robert Louis Stevenson decades ago and my wife and I had seen the musical version on Broadway. I thought the music and the show were very good but my wife, who prefers that musicals be based on happy themes and have happy endings, was less than thrilled. When the announcement came out that the musical was coming back, she made clear—even before I had the opportunity to ask –that she was not willing to sit through it a second time. To accommodate my older daughter and also because I had enjoyed the show, I bought us tickets to see the revival.

During the same weekend as we went to see Jekyll and Hyde, we also went to see The Host, which is based on Stephanie Meyer’s novel. Having read the Twilight series (yes, it is true that I just don’t read economics), I like the story telling of Stephanie Meyer and was looking to see this story of mostly nice aliens (given they are aliens, I felt that saying good hearted was not appropriate) who had taken over the human race and invaded our bodies. The specific story line focused on Melanie, a human, whose body is taken over by Wanderer with the mission of helping to locate the non assimilated humans that Melanie had been in contact with. Melanie, who is very strong willed, resists and the story revolves around the relationship between Melanie and Wanderer, who are both housed in Melanie’s body. Without giving away too many of the details, Wanderer ends up helping Melanie and the remaining humans survive and the story ends with some humans and some aliens including both Melanie as well as Wanderer renamed Wanda (in a human body) enjoying each other’s company. This is as close to a happy ending as you could have under the circumstances.

Jekyll and Hyde doesn’t have the same happy ending and even the good music can’t lighten the murderous behavior of Mr. Edward Hyde, the violent alter ego of Dr. Henry Jekyll. Both are in the same body, signifying the good and evil that exists in all of us. Here, over time, Mr. Hyde becomes the dominant personality with murderous results. And once again, without giving away too many details, Mr. Hyde looks to get even with those who have wronged Dr. Jekyll/him. The story is clearly riveting and has stood the test of time.

There is a debate in education as to whether to emphasize fiction or non-fiction especially as kids are still refining their reading and comprehension skills. Both clearly have merit and both are essential for an educated person. The common core standards seem to emphasize non-fiction and there is clearly the impression that literature will take more of a back seat to information. I hope this isn’t true and that fiction and non-fiction will both share the front seat. I am not an expert in this area but I do know that over the years I have enjoyed reading fiction more than non-fiction and have been glued to more fiction works than non-fiction works. And fiction or non-fiction, I always appreciate the arts be it film or a Broadway musical and the way the arts help important stories live.

Monday, April 15, 2013


A chained CPI (Consumer Price Index) sounds like a very painful condition. Or it sounds like a price index that couldn’t be controlled and is therefore forcefully restrained. Thankfully, it is neither of these situations and is instead a more realistic way of assessing cost of living increases. As a small scale example, assume that the price of broccoli increases dramatically. If you assume that you will buy the same amount of broccoli as before, the impact of this price escalation will be far greater than if, given the broccoli price increase, you move decisively into having more green beans as part of your diet. In reality we make substitutions as prices of certain products escalate in comparison to other products. I have been very careful in my example, not to use dark chocolate because for a true chocolate lover it is inconceivable to substitute out of chocolate.

As Washington continues to grapple with sequestration, the White House is proposing limited cost of living increases in indexed social programs by substituting the chained CPI for the set market basket CPI presently in use. I think this makes sense. We do substitute, when possible, out of products that have increased in price to products that serve the same purpose but are more reasonably priced. And the impact is to moderate the price increase for our (slightly) revised market basket.

Any alternative we can contemplate to the present rigid sequestration formula will require spending reductions along these lines. The Simpson Bowles Moment of Truth Project has endorsed moving to a chained CPI. Given the impact of the CPI on Social Security and other benefits, their estimate is that this more accurate measure of inflation “would save $390 billion over a decade - $215 billion from spending, $125 billion from revenue, and $50 billion from interest savings.” They also estimate that the second decade savings “would reduce the deficit by over $1 trillion…” and “would reduce Social Security’s 75-year funding gap by one-fifth.” A chained CPI is also considered, for the most part, to be “distributionally neutral” with a similar percentage impact across various income levels.

The chained CPI proposal has the endorsement of not only the White House but also of the House of Representatives leadership. Where there are still differences is what will accompany the chained CPI In the deficit reduction legislation – will it be further cuts in spending or will it be further increases in taxes. Both parties are in a difficult position in regard to this issue. The Republicans would be hard pressed to support an additional tax hike and the Democrats would be hard pressed to reductions in benefits without further tax increases. But to the extent that each party will have to move so that this key part of any solution falls into place, we should have that movement now so that the economic recovery is the clear beneficiary and we have moved forward in a most meaningful way in reducing the deficit.

Monday, April 8, 2013

Auto Show 2013

My annual trip to the New York automobile show took place recently. I have been going to this show since the 1960s, even before I learned to drive, and have only missed one or two shows in all these years. My kids sometimes even act surprised that there were cars as far back as the 60s when I first started attending. For them, this is so long ago that they imagine horsepower had to be measured in terms of real horses in those days.

My interest in the auto show is always two fold. I am a car person, even though I grew up loving mass transit (and without a family car) and am still a tremendous mass transit advocate. And second, as an economist, I know that the automobile industry here and around the globe is a barometer of the economy. Based on what I saw yesterday, the automobile industry is not only a beneficiary of the improving economy, but, given the number of attractive cars available, the industry is also a cause of further economic strengthening.

The crowd yesterday seemed more optimistic and more positive than the crowds at any recent car show. This looked to me to be a buying crowd; fewer teens just looking for something to do and more adults in their prime car buying years. This is not a conclusion based on carefully constructed research; rather this was a gut observation based on years of observation. And the cars on display were responsive to the audience. There were lots of smaller cars, with excellent designs, desirable features, and good gas mileage in addition. And Detroit was as well represented with these cars than were the usual sought after foreign car manufacturers. A beautiful very compact crossover from Buick; a stunning Corvette; a stylish compact from Dodge; a distinguished and very contemporary intermediate from Ford were joined by a new front wheel drive very stylish sedan from Mercedes, more Minis, new VWs, a small BMW crossover; and the usual well styled and designed cars from Japan as well as, in recent years, from South Korea. When I spend as much time looking at Kias as I do looking at cars from the largest American and Japanese representatives, you know the automotive landscape has changed.

The gas mileage numbers have changed as well and this is not just because there are more hybrids and electric cars. Since many cars are smaller, they are inherently more economical. Well regarded long time brands are swapping 6 cylinder engines for 4 cylinder engines. The peppiness seems to remain but the operating cost is reduced. With so many attractive options to choose from, the desire for a new car is enhanced, more cars sold and the economy is helped to move forward faster. From the dark days at the end of the last decade to the impressive results today is testimony first of all the government policy that recognized the importance of the automobile industry and took the necessary steps to keep GM and Chrysler in business. It is also testimony to the US automobile industry that the cars from Ford, GM, and Chrysler are as competitive, attractive, and sophisticated as the major foreign competition. From a major drag on the economy to a major positive force in the economy, kudos to all involved in making this transformation happen. And, to make sure we are never in this position again, keep up the good work and don’t become complacent again. Be thankful for where you are today and do everything possible to keep the momentum growing.

Monday, April 1, 2013

International Baccalaureate

At the last meeting of my local school board, the chief topic of conversation was the proposal to become an International Baccalaureate diploma school which is a high school level program. The presentation was led by our high school principal and he was an articulate passionate advocate for moving in this direction. The community was very invested in this discussion focusing, as they should on both the benefits as well as the marginal cost of adding IB to the curriculum.

For me the attractiveness of the IB program is the international focus. We live in an inextricably interwoven world. Educating our children to understand Long Island or to understand just the United States is to shortchange their future potential. Understanding that a world with differences should not be viewed as a world of right and wrong is essential. As the IB mission statement makes clear “these programmes encourage students across the world to become active compassionate and lifelong learners who understand that other people, with their differences, can also be right.” As the mission statement also states, IB is working to make sure that “inquiring, knowledgeable and caring young people…help to create a better and more peaceful world through intercultural understanding and respect.” Who could argue with these goals?

To implement the IB program, the district already has much of what is needed in place. We begin with a highly accomplished school district, with a wide range of offerings to meet the diverse needs of a wide range of students and an ongoing emphasis on educational excellence. The biggest changes will be in the more global orientation and the increased international sophistication which I view as highly desirable and essential. The cost of this transformation is under $200,000 on a budget of over $90 million, certainly very modest given the potential benefits. Where there is a concern over the budget, it takes the form of questioning why in a constrained time – which public education is certainly facing—would the district initiate any program that increases costs either on a one time basis or on an ongoing basis. My answer to the question is unequivocal. If the school district isn’t moving forward, it is likely losing ground to other very highly accomplished and competitive schools around the globe. For the sake of our kids and their future success, we must continue enhancing the quality of the education they receive. The other part of the answer relates to how we do budgeting in general in education, both k-12 education and higher education. We look at new programs through the lens of increased cost. Rather we should look at these programs and at all of our existing programs from a need basis: which programs fulfill the greatest need; which programs serve the greatest educational purpose and which are nice to have if resources are available but not really essential. New proposals might fulfill a greater need but often may not see the light of day because of the support for what already exists or inertia.

IB looked at from the lens of importance ranks highly in my opinion. I support moving forward with implementation while still living within our means.