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Bailout, the book
You know that feeling, where you feel like a conspiracy theorist because, even though you don’t have cold hard evidence for it, you have a distinct feeling that someone is trying to thwart you even though they claim to be your friend, or thwart an idea they claim to believe in, or even worse, thwart a principle they claim to stand by?
That’s how I was feeling about Tim Geithner, and frankly the entire Obama administration, until I read “Bailout,” the recently published tell-all book by Neil Barofsky, who was put in charge of detecting and preventing fraud related to TARP.
I recently blogged about how I consider this book a call to Occupy, but I had only read the excerpt from Bloomberg at that point. Now that I’ve read the book, it’s most definitely a call to Occupy, as well as to any group or individual who still has principles and enough energy up to summon outrage.
Going back to the feeling of being a conspiracy theorist.
Nothing in this book was really new to me or really surprised me, except the fact that Barofsky was willing to write it down in black and white. Thank goodness there are still a few people who still have principles, even inside Washington.
Everything there was something I’d pieced together either working in finance, where I lost faith in the Obama administration right away when it introduced HAMP, which was clearly set up to fail homeowners, or by meeting people in the Alternative Banking group of #OWS, specifically Yves Smith, who explained the technical details of the more recent mortgage settlement, and how it is a backdoor bailout to the banks. Yet another one!
Where was the corresponding bailout for the people? Why this doublespeak, where we’d talk about moral hazard for people who have been screwed by the predatory loan industry, but the moral hazard for AIG executives getting multi-million dollar bonuses after an $85 billion bailout is just something we have to swallow, out of deference to the sanctity of contract?
And if we care so much about contracts, why do we allow companies to enter bankruptcy just to jettison pension promises but we don’t allow individuals (who are not too-big-to-fail) to renegotiate crippling student debt loads?
I’m confused no longer. It was never Geithner’s intention, or Obama’s intention, to help out the people. It has always been their intention solely to prop up a failed banking system. What they’ve been doing, rather than saying, is much more consistent with this theory anyway. Lots of roundabout efforts to explain why they’d set up a mortgage modification system to help homeowners was completely ineffective; it’s because it was actually set up to slow down foreclosures in order to “foam the runway” for banks to get back into the black. That makes much more sense!
It actually restores my faith in the Obama administration a bit. Before this I was sometimes torn between thinking they were bought by the banks or they were utterly incompetent. But now I know they aren’t entirely incompetent in the follow-through with their goals: they actually did succeed in slavishly working for the banks in the name of helping out homeowners.
Thank you, Neil Barofsky, for a great book. Thank you for maintaining your justified anger and for being courageous enough, and enough of a dick, to write it.
Why the internet is creepy
Recently I’ve been seeing various articles and opinion pieces that say that Facebook should pay its users to use it, or give a cut of the proceeds when they sell personal data, or something along those lines.
This strikes me a naive to a surprising degree; it means people really don’t understand how web businesses work. How can people simultaneously complain that Facebook isn’t a viable business and that they don’t pay their users for their data?
People have gotten used to getting free services, and they assume that infrastructure somehow just exists, and they want to have that infrastructure, and use it, and never see ads and never have their data used, or get paid whenever someone uses their data.
But you can’t have all of that at the same time!
These companies need to monetize somehow, and instead of asking users for money directly, which isn’t the current culture, they get creepy with data. The fact that there are basically no rules about personal information (aside from some medical information) means that the creepiness limit is extreme, and possibly hasn’t been reached yet.
What are the alternatives? I can think of a few, none of them particularly wonderful:
- Legislate privacy laws to make personal data sharing or storing illegal without explicit consent for each use (right now you just sign away all your rights at once when you sign up for the service, but that could and probably should change). This would kill the internet as we know it. In the short term the consequences would be extreme. Besides the fact that some people would save and use data illegally, which would be very hard to track and to stop, places like Twitter, Facebook, and Google would have no revenue model. An interesting thought experiment on what would happen after this.
- Make people pay for services, either through micro-payments or subscription services like Netflix. This would maybe work, but only for people with credit cards and money to spare. So it would also change access to the internet, and not in a good way.
- Wikipedia-style donation-based services. This is clearly a tough model, and they always seem to be on the edge of solvency.
- Get the government to provide these services as meaningful infrastructure for society, like highways. Imagine what Google Government would be like.
- Some combination of the above.
Am I missing something?
VAM shouldn’t be used for tenure
I recently read a New York Times “Room for Debate” discussion on the teacher Value-added model (VAM) and whether it’s fair.
I’ve blogged a few times about this model and I think it’s crap (see this prior post which is entitled “The Value Added Model Sucks” for example).
One thing I noticed about the room for debate is that the two most pro-VAM talking heads (this guy and this guy) both quoted the same paper, written by Dan Goldhaber and Michael Hansen, called “Assessing the Potential of Using Value-Added Estimates of Teacher Job Performance for Making Tenure Decisions,” which you can download here.
Looking at the paper, I don’t really think it’s a very good resource if you want to argue for tenure-decisions based on VAM, but I guess it’s one of those things, where they don’t expect you actually do the homework.
For example, they admit that year-to-year scores are only correlated between 20% and 50% for the same teacher (page 4). But then they go on to say that, if you average two or more years in a row, these correlations go up (page 4). I’m wondering if that’s just because they calculate the correlations that come from the same underlying data, in which case of course the correlations go up. They aren’t precise enough at that point to make me convinced they did this carefully.
But it doesn’t matter, because when teachers are up for tenure, they have one or two scores, that’s it. So the fact that 17 years of scores, on average, has actual information, even if true, is irrelevant. The point is that we are asking whether one or two scores, in a test that has 20-50% correlation year-to-year, is sufficiently accurate and precise to decide on someone’s job. And by the way, in my post the correlation of teachers’ scores for the same year in the same subject was 24%, so I’m guess we should lean more towards the bottom of this scale for accuracy.
This is ludicrous. Can you imagine being told you can’t keep your job because of a number that imprecise? I’m grasping for an analogy, but it’s something like getting tenure as a professor based on what an acquaintance you’ve never met head about your reputation while he was drunk at a party. Maddening. And I can’t imagine it’s attracting more good people to the trade. I’d walk the other way if I heard about this.
The reason the paper is quoted so much is that it looks at a longer-term test to see whether early-career VAM scores have predictive power for the students more than 11 years later. However, it’s for one data set in North Carolina, and the testing actually happened in 1995 (page 6), so before the testing culture really took over (an important factor), and they clearly exclude any teacher whose paperwork is unavailable or unclear, as well as small classes (page 7), which presumably means any special-ed kids. Moreover, they admit they don’t really know if the kids are actual students of the teacher who proctored the tests (page 6).
Altogether a different set-up than the idiosyncratic, real-world situation faced by actual teachers, whose tenure decision is actually being made based on one or two hugely noisy numbers.
I’m not a huge fan of tenure, and I want educators to be accountable to being good teachers just like everyone else who cares about this stuff, but this is pseudo-science.
I’m still obsessed with the idea that people would know how crappy this stuff is if we could get our hands on the VAM itself and set something up where people could test robustness directly, by putting in their information and seeing how their score would change based on how many kids they had in their class etc..
Gangnam Style
Best, most absurd video ever, and impossible not to feel cheered up after you watch it. From Gawker, hat tip Johan.
mathbabe 