Greek Bail-Out Not a Good Idea

After the American Century

Greece cannot pay its bills, even in the short run. With a national debt that is more than 110% of its gross national product, and a deficit of more than 10% for this year, Greece's debt will only get worse unless and until it enacts real reforms. So far it has failed to do enough, and the deficit will only get worse.

Had the Greeks been hit with a natural disaster like Haiti, they would deserve sympathy and charity. But the Greeks  insist on spending more than they can afford. They have given massive pay increases and early retirement to state employees that are not funded by taxation. They reportedly have a massively inefficient bureaucracy. There is no  reason for the other European states to give or to loan them money unless they show that they can live within their means. Giving them a handout will solve nothing, and will only delay for a short time the day of reckoning.

Indeed, the EU has made a major blunder by even letting this become an issue. Its own laws clearly state that nations who overspend will not be bailed out.

Consider, by comparison, the plight of California. It is also a part of a federation of states that have a common currency. But no one in the US is suggesting that Ohio, Nebraska and Maine should help fund California. Instead, since California voters refuse to raise taxes, they are closing libraries, firing workers, and forcing those who remain to stay at home several days a month because there is not enough money to pay them. Admittendly, this is ridiculous, since California is a rich state and could afford to fund its education system and its services, but this is the choice the state's citizens have made. The rest of the United States will not bail out California, and as a result the state is a less desirable place to live than it was a few years ago. Eventually, the voters will realize that they have made a mistake, and in the meantime loaning them money will actually prevent them from confronting that mistake.

So why are Europeans wringing their hands over Greece? You don't get an alcoholic to reform by buying another round of drinks.

The American South and Health Care

After the American Century

I recently looked at where the Republican Party is strongest. The former slave states stood out, particularly those that grow cotton. I then looked to see where opposition to national health insurance is strongest. The former slave states again were prominent, particularly those where support for George Wallace once was strong.

The inescapable conclusion seems to be that the Republicans, who began their existence as a party based up North, insisted on keeping the South in the union so that one day the scourge of health insurance might be fought off with the help of the South. The Republicans of 1860 clearly took the long view, and wanted to be sure that when the ultimate danger to American society appeared - in the form of universal health care - the solid South would obstinately demand stasis. You could drive down Main Street in any southern town, throw a Bible out the window, and have a 65% chance of hitting someone opposed to health care.

Southerners have faith that they can get along without insurance. About 25% of all Texans have no health insurance at all, and apparently these uninsured people are against it.  One test of health, admittedly general but quite noticable, is how long people live. It turns out that people live longer in the states that want federal health coverage. According to statistics compiled at Harvard, those living longest are in Hawaii (80 years) and Minnesota (78.8), followed by Utah, Connecticut and Massachusetts.

Guess where people have the shortest life expectancy? The worst four places if you want to live a long time are Mississippi (73.6), Louisiana (74.2),  Alabama (74.4), and South Carolina (74.8). They apparently like the idea of an early death, as they are against mandatory health care.

In Massachusetts a national health bill has far more support, yet that state already has basic health care for all its citizens and its hospitals are among the best in the world. People in Massachusetts live to be 78.4, on average. So the real question is, why do so many people in Northern states like Massachustts want to subsidize health care for Southern states like Texas, Alabama and Mississippi? They apparently want to live 4 or 5 years less than people in the North anyway. 

Did CEPOS Lie or are they Incompetent?

After the American Century

The Danish "liberal Think Tank" Cepos has been spending time and money in the United States spreading dis-information about the Danish wind industry. They falsely claim that less than 10 percent of Danish electricity comes from wind power. The real figure is about double that. Other statements made by Cepos suggest they do not have a good grasp of the history of energy development and that they may not understand how energy markets work.

Readers should not trust the "facts and figures" that Cepos is distributing. Are they lying, or they are incompetent? Possibly they do not know the answer to this question themselves. Their "expert" on energy did not bother to present his argument to univestiy experts to get feedback. This is what people with respect for the truth usually do. But Cepos rushed their misinformation to the American news media. The goal apparently was to show that President Obama was wrong to praise Danish achievements in wind energy. (If Cepos really believed in the free market, they would not need to use their resources to attack windmills, because if they are right then wind power would lose out in competition with other alternatives.)

Why did Cepos take such an interest in attacking wind energy? What is their purpose? Why did they think they should spread misinformation about Denmark in the United States? Who are they really working for? This campaign of falsehoods would please Saudi Arabia, and it would be music in the ears of Fox News. Who is donating money to support Cepos? Any oil companies on the list?

If I were running Vestas, I would sue Cepos for willfully spreading false information about my business. If I were running the Paul Due Jensen Foundation, I might wonder if it was a good idea to give Cepos 1.875.000 kroner in 2007. I doubt that this foundation had any involvement with the Cepos smear campaign against wind power, but their annual report shows that they are a donor.

Another question is whether the Danish government, which often listens to policy ideas from Cepos, will distance themselves from this organization. The Danish government already has a poor record on global warming. after its poor handling of the Climate Summit in December. It has for years directly sponsored Bjorn Lomborg (not a scientist) and his Copenhagen Consensus, spending millions to undercut the work of scientists. Cepos attacks the wind industry; Lomborg attacks those worried about global warming.Is there a pattern here?

Something is rotten in Denmark, and it is not far from the political parties in power. Either they must publlically disagree with what Cepos  has done or they must appear to agree with them.
[If there was a public comment from the (now former) government, it failed to reach my ears.]

Additional comment January 7, 2012: Vestas has had poor sales in the 18 months after this campaign of disinformation, and its stock has fallen precipitously. Presumably CEPOS is delighted that it has done its part to weaken Danish exports and destroy the reputation of what had been a leading Danish company. 

New Minister of Research

After the American Century

Surely it is a sign of the times that the new minister of education in Denmark has been a key figure in setting up an educational amusement park. The size of ten football fields, Danfoss Universe (not University!) is for young people between the ages of about 6 and 15. It is dedicated to the proposition that education ought to be interactive fun. The attractions at Danfoss Universe appear to be aimed at future biologists, mathematicians, engineers, builders, planners, and scientists. 

The humanities and the arts do not seem important in Danfoss Universe. I may be mistaken as I have not been there, being a little older than the target group. I do qualify for entry to Danfoss Universe, fortunately, though full access to the attractions require one to be over 135 cm tall and weigh less than 117 kilograms. This suggests that persons like myself might still be welcome at the universities, though I presumaly ought to redesign my teaching to be more fun and interactive, and to use a host of new technologies. The Danfoss Universe webpage clearly indicates that the PC is old-fashioned and embraces digital telephones and other miniature devices. Until now I have (no doubt mistakenly) tried to keep students from using these things during class.

One other detail: the new Minister of Research failed to complete her BA and has no university degree of any kind.

Danfoss Universe may be fun and interactive and high tech, but it is hardly free. Admission is 175 kroner for one day (about $35 per adult), although children under 3 get in free. Surely one of the new minister's first steps will be to put in turnstiles and a ticket booth. If the same fees apply at the university, then Denmark will be charging tuition for the first time. Assuming students have classes (fun and interactive classes, of course) three times a week for 13 weeks, they would need to pay 6825 kroner per semester.Surely there ought to be fees for exams as well, bringing the cost up to perhaps 7500 dk, or 15000 per year, or 45000 kroner for the standard 3-year BA. 

Personally, I can hardly wait to be part of an interactive, fun universe of learning where the students like it so much they pay to come, instead of the silly system we have had until now where the high Danish taxes paid for university, which being free, was also at times a bit old-fashioned about teaching. Students were expected to read books rather than click on miniature screens, remember what they learned instead of looking it up on Goggle, and, in a pinch, be able to write without a spell-checker.  Now those (world's highest!!!!) high taxes can be used for something else. 

Getting Rid of Tenured Professors

After the American Century

The political project in Danish education for many years has apparently been to take as much power away from the faculty as possible. (Every change, of course, is made for the good of the university.)

The latest suggestion along these lines has been made by Malou Aamund, a 41-year old politician who has never had a university appointment and never published. It appears that she does not have an advanced degree. With her credentials, she could not be hired as even an assistant professor. Were she still working at IBM, her views would be of little interest. However she is now the education spokesperson for Venstre, the strongest party in the ruling coalition. She recommends that professors only receive their appointments for 10 years, after which they should be re-evaluated, and given at best five-year extensions.

Ms. Aamund proposes an evaluation that would require at least three other professors to stop their research for the equivalent of several weeks or perhaps a month to serve on a committee and read the publications and grant proposals of a senior scholar. Given academic specialization, it is extremely unlikely that any university will have two professors in precisely the same field. Even if they did, the two people would be so close that it would be best to get outsiders on the committee. It is likely that at least one, quite possibly two, of the members of such a committee would have to come from abroad and they would have to be paid well enough to make it attractive for them to do it, and in fact it might be quite difficult to find suitable people to fill such a committee. Such a review would be time-consuming and expensive.

There is second practical problem with this proposal. During the period just before and during an evaluation, the professor in question will not sit passively by, waiting to be approved. Rather, starting a year or two years before the review, he or she would go on the job market. Worse still, the stronger the professor's networks and credentials, the more likely he or she will be offered a new position abroad, where no such reviews take place. Some of the best people will leave, and at the same time the review system will make Denmark less attractive to top foreign scholars.

Denmark by itself cannot make the rules for the international academic world. Already many excellent Danish scholars are attracted to positions overseas where the research funding is better, the PhD students more plentiful, the libraries better, and political interference less common. Making a professor's job less secure will make an academic career less attractive in Denmark and weaken the nation's competitive position. Denmark does not make the rules. (Venstre ought to have learned that at the Climate Summit.) Getting rid of tenure by definition weakens Danish universities and makes them less attractive.

There is yet another problem. Holding a review after ten years and then every five years will create uncertainty in research groups, and quite possibly interfere with their proper functioning. Instead of assuming that the professor and associate professors are fully committed to the team and to the university, the whole group will suspect that colleagues may be looking for work and that they might take major grants to other institutions. Is such uncertainly, mutual suspicion, and disruption a price worth paying for mandatory reviews?

Ms. Aamund presumably means well. No doubt she wants to shake up the university and make sure there is no dead wood in the ranks. But her proposal is impractical, time-consuming, expensive, and very unlikely to achieve its announced goal. Instead of improving quality, it is likely to drive some of the best senior faculty away, create uncertainty among colleagues, and discourage the young from pursuing a university career.

Ms. Aamund and her counterparts in the Conservative Party (who want to make Associate professor jobs provisional as well) seem not to understand that giving faculty tenure saves society money. Why? Because if the university did not give tenure then it would have to compete in an open market to attract the very brightest people. Academics could just as easily have chosen another profession. They are each bright enough to enter several other fields. No one chooses the university because it pays better than law or insurance or just about anything else demanding a comparable education. Take away the possibility of tenure and few people will be willing to struggle through the uncertain early years of an academic career. Take away job security, in other words, and good academics will be hard to recruit or retain. It will become a more difficult market, and only paying better salaries all along the line will then attract and hold people. Having worked in business, Ms. Aamund should understand that.

One final point. Since I am myself a professor, one might assume these arguments are self-interested. But such is not really the case. I am far along on my career path, and if enacted these changes would not have much effect on me. Furthermore, I rather suspect I would pass any fair review, if it came to that. Instead, for me the proposed new system would likely be a bonanza. Universities can only ask professors to evaluate professors and there would be at least three needed to evaluate each candidate for renewal. If the system of reviews were expanded to the associate professors, then the extra work would really begin to pile up and to pay. In short, the review system in practice would almost certainly give more money to almost every one of the professors. That cannot be Ms. Aamund's intent.

The Ill-Equipped Danish University

After the American Century

I have been teaching full time since 1974. In all those years I have seldom found that the classroom equipment was up-to-date or that it could be counted upon to work. The only exceptions to that statement would be the University of Oviedo, Spain in 1977-78, when there was no classroom equipment of any kind, and Notre Dame University in Indiana in 2003, where everything imaginable was available, everything worked and a staff was on call to help and would arrive within 5 minutes if anything wasn't satisfactory. Between these two extremes, in an unhappy compromise, is my own university, which has badly placed screens, old powerpoint projectors, electrical connections that do not always work, different systems in different rooms, and a staff that can never be found or even spoken to on the phone in an emergency.

No one should labor under the illusion that Danish universities are well equipped with computers and the peripheral equipment to make the most of them. No one should imagine that they are at the level achieved in the US in 2005, for example. The occasion for writing this is that today I have five hours of teaching in a room where the equipment does not work, and clearly has been damaged. Since we are in the midst of a round of cutbacks, the situation will not get better soon.

So today, instead of showing my students nineteenth century American paintings, I will just talk about them. I will try to post the images later on Blackboard, but that, too, has not been working of late. Even when the images do get on line, students will view them alone and without class discussion.

As a historian of technology, I am hardly shocked that these machines do not work. But I am bemused that the Danish politicians still think they can hoodwink the public into believing that they have a world class university system, after systematically cutting it back.

Security is also a serious problem, as universities have inadequate safeguards against theft. Whole corridors are robbed of their computers at night, by thieves who clearly have master keys and entry cards with working codes. Worse yet, weeks after the break-ins, the locks remain unchanged and the computers are not replaced. It took me five weeks to get a new one in the office, which meant that I could not print anything, for example.

Since writing this, the situation has improved, but Denmark still lags.

Obama's Proposed Federal Budget Cuts for Education and Mass Transit

After the American Century

This is the first year that President Obama and his administration can be said to be fully responsible for the budget proposal. Last year they had just started, and there was little time to dig deeply into the details of federal spending. In what follows I want to focus on spending cuts in the area of education, because during the election campaign candidate Obama seemed to understand the need to improve the levels of learning in the United States. The future belongs to the best educated nation, with a workforce that can innovate and redeploy their resources. Or so it was said.

Now the actual spending proposals suggest no more commitment than under the previous administration. Here are some examples of the cutbacks:

Academic competitiveness, smart grants -58%

School improvement: -55%

Education for the Disadvantaged -31.9%

Special education: - 4.7%

Vocational and adult education: -3.7%

International educational exchange programs: - 0.3%

To be fair, there are other education programs that are slated to receive increases, and this is a difficult budget year. Nevertheless. the cutbacks are disheartening.

What about transportation? One hoped to see an Obama Administration promoting mass transit. The proposal, however, is for a 35% cut for railroads, and a 9% cut for mass transit in the discretionary part of the budget. There is mandated spending on railroads that remains unchanged. By far the lion's share of the transportation budget is mandated, and must be spent on highways. Next at the federal feeding frenzy are the airports, which receive much more than the railroads.

In short, the vast economic mess that the Bush Administration left behind has not only made it hard for Obama to move in a new direction, it seems to make it virtually impossible until the economy improves.

Even when it does improve, however, the increased interest on the national debt will eat up the money that once might have been used for education, transportation, and social programs. The interest payments next year will rise by 33% to $251 billion. Just paying the interest on the debt will be greater than the entire budgets for transportation and education combined, with energy thrown in for good measure.

Make Corporations Full Citizens

After the American Century #207

In American law the idea developed that corporations ought to be considered individuals – or persons. This idea makes a certain sense if narrowly interpreted. For example, a corporation, like a person, can be governed by the same laws regarding contracts. The corporate “person” could also be sued for liable. But in a revolutionary ruling last week, the United States Supreme Court decided that corporations also have the right to free speech and are protected by the Bill of Rights. The Court might have ruled far more narrowly but instead went out of its way to declare that corporations may advertise freely and directly in political campaigns. (Logically, the Court should also have given corporations the right to vote in elections, but perhaps it is saving that decision for another time.)

In the interest of making corporations into better fellow citizens, here are specific proposals to help them achieve a fuller humanity, since that is what the Court clearly desires.

1. Slavery being outlawed by the Constitution, it therefore should be illegal for one corporation to own another corporation. Holding companies clearly are a modern form of slavery that must be eliminated.

2. Hostile corporate takeovers must henceforth be regarded as acts of aggression that are punishable as crimes. A hostile takeover of a corporation must be considered a form of kidnapping, in some cases followed by murder, and punished accordingly.

3. Corporations that close down should be subjected to the same laws of taxation as the estates of deceased individuals. As it is now, companies can more resources around, closing down one company and opening a new one as often as they wish, without being subject to the taxation (and in effect the audit) imposed on a human being’s estate.

4. Since human beings are not immortal, it seems only fair that corporations be declared legally dead every 60 years (this being the maximum length of most person’s adult life). This death could be followed immediately be corporate rebirth, but only after paying the estate taxes.

5. Corporations should be punished for murder in the same way that people are. If they want to be considered persons, then they cannot pick and choose which legal obligations they want to assume. At present, when a corporation pollutes the air or water and as a matter of statistical certainty, makes some people ill and causes others to die, the “normal” practice is to fine them and to force them to pay compensation to the victims. This is not right, as it allows a wealthy “person” to substitute a cash payment for imprisonment. Real people cannot do that, why should corporations be allowed to get off? The people who give themselves those big corporate bonuses and stock options must also now be held criminally liable for the corporation’s behavior if they accept the payments.

6. The old idea of the corporation included the provision that people who invested in them had limited liability. That is, they could lose only the money originally invested, but had no personal responsibility in case the corporation ran up huge debts. In the nineteenth century, when corporations first were becoming a common way of organizing a business, many ordinary people protested. It seemed unfair that an ordinary grocer or carpenter was fully liable for his actions, while a vast corporation that owned many grocery stores or built many houses had limited liability. Clearly, now that the Court in its infinite wisdom has ruled by a vote of 5-4 that corporations have political rights, it follows that they can no longer claim limited liability. If they want to claim the rights of people, then they muse assume the obligations of people. Alternately, one would have to extend the same right of “limited liability” to all Americans, not just corporate Americans.

Now that the Court has ordered us to welcome corporations into full membership in political and civil society, the essential thing is to make sure that they take on ALL the obligations of citizenship.

2000-2010: The Flat Decade

After the American Century

This time of year one takes stock, and that usually means reconsidering the last 12 months. But as we reach 2010, I think also of the last decade in America.

It was not a good decade. The United States in 2000 was rapidly paying off its national debt. Its economy had created millions of new jobs in the 1990s. Trust in the banking system was high. The nation was basically at peace.

Ten years later none of this is true. It has been a flat decade, with little to show for itself. The national debt is growing rapidly. Almost no new jobs have been created, on aggregate, since 2000. The Dow Jones Industrial Average is now about where it was in 2000, after gyrating uncomfortably up and down, and people rightly are suspicious of bankers. Worst of all, the United States has spent huge amounts of money on dubious wars in Afghanistan and Iraq. And hanging over the whole decade like the pall of smoke rising from the fallen World Trade Center is the specter of terrorism.

There are bright spots, the most noteworthy being the election of President Obama. But even that success is tempered by the realization that the Congress lacks a sense of national purpose and has tremendous difficulty rising above the level of petty in-fighting and party squabbles. It compares poorly with the Congress of 1933, when Roosevelt passed a wide range of important legislation. In 2009 a comprehensive health bill has almost been completed, but we await final negotiations between the Senate and the House to find out just how good or bad the final result will be.

2009 was also the year when when attempts to reign in rampant CO2 and global warming went off the rails at the Copenhagen Summit. It was the end of a decade of often mindless growth in the developing world, which seems intent on making every industrial mistake that the West pioneered decades ago: smog, lead poisoning, urban congestion, the "car culture," and, of course, my clever readers can complete this list. Should we really celebrate the fact that China's growth rate was roughly 9% per year during this decade, and that it now buys several million more automobiles than the US every year?

But hope springs eternal, as indeed it must, and here are some wishes for 2010. That the global birth rate falls rapidly toward sustainable replacement of the existing population. That consumers discover contentment with environmentally safe products and high-mileage cars. That voters insist on more and better mass transit. That bankers act more responsibly and stop giving themselves huge and undeserved bonuses. (OK the last one is probably an absurd wish). That the US economy embraces solar and wind energy, even if Congress spinelessly does little to encourage it. That the need for any foreign military in Iraq really does wind down. And that confrontations between Christians and Muslims become less common, as dialogue and mutual respect replace demagoguery and fear.

Human beings could accomplish all of these things, starting in 2010. In theory, I could also lose some weight in 2010 but my past history suggests that even this will prove a hard New York's resolution to hang on to. So, modestly, let us hope that we all do a little better.