Incentives – Page 9 – artdiamondblog.com

Lax College Accreditors May Be “Doing More Harm than Good”

(p. A19) Most colleges can’t keep their doors open without an accreditor’s seal of approval, which is needed to get students access to federal loans and grants. But accreditors hardly ever kick out the worst-performing colleges and lack uniform standards for assessing graduation rates and loan defaults.
Those problems are blamed by critics for deepening the student-debt crisis as college costs soared during the past decade. Last year alone, the U.S. government sent $16 billion in aid to students at four-year colleges that graduated less than one-third of their students within six years, according to an analysis by The Wall Street Journal of the latest available federal data.
. . .
(p. A12) Accreditors say their job is to help colleges get better rather than to weed out laggards. Colleges pay for the inspections, which can cost more than $1 million at large institutions.
“You’re not there to remove an institution,” says Judith Eaton, president of the Council for Higher Education Accreditation, a trade group. “You’re there to enhance the operation.”
The government has relied on accreditors as watchdogs since the 1950s. Colleges are evaluated by teams of volunteers from similar institutions, who follow standards set by the accreditation group. For example, colleges sometimes are required to collect student-retention data but given the freedom to set their own goals for those numbers.
. . .
Stephen Roderick, former provost at Fort Lewis College in Colorado, says he now has misgivings about his 2013 review of Glenville State College in West Virginia for the Higher Learning Commission. The review team wrote that the college had a “responsible program” to minimize default rates and “demonstrates a commitment” to evaluating graduation data.
Glenville’s graduation rate is 30%, while about 22% of students defaulted on loans from 2011 to 2013. Both percentages rank near the bottom 10% of accredited four-year colleges. David Millard, assistant to Glenville’s president, says the figures reflect the opportunity offered by the college to students in one of the poorest parts of the U.S.
Mr. Roderick says accreditors are inclined to see the best in colleges like Glenville, but that might not be the best for students. “Sometimes I feel that we’re doing more harm than good,” he says.

For the full story, see:
ANDREA FULLER and DOUGLAS BELKIN. “Education Watchdogs Rarely Bite; Accreditors keep hundreds of schools with low graduation rates or high loan defaults alive.” The Wall Street Journal (Thurs., June 18, 2015): A1 & A12.
(Note: ellipses added.)
(Note: the online version of the article was dated June 17, 2015, and had the title “The Watchdogs of College Education Rarely Bite; Accreditors keep hundreds of schools with low graduation rates or high loan defaults alive.”)

Experts Are Paid “to Sound Cocksure” Even When They Do Not Know

(p. B1) I think Philip Tetlock’s “Superforecasting: The Art and Science of Prediction,” co-written with the journalist Dan Gardner, is the most important book on decision making since Daniel Kahneman’s “Thinking, Fast and Slow.” (I helped write and edit the Kahneman book but receive no royalties from it.) Prof. Kahneman agrees. “It’s a manual to systematic thinking in the real world,” he told me. “This book shows that under the right conditions regular people are capable of improving their judgment enough to beat the professionals at their own game.”
The book is so powerful because Prof. Tetlock, a psychologist and professor of management at the University of Pennsylvania’s Wharton School, has a remarkable trove of data. He has just concluded the first stage of what he calls the Good Judgment Project, which pitted some 20,000 amateur forecasters against some of the most knowledgeable experts in the world.
The amateurs won–hands down.
. . .
(p. B7) The most careful, curious, open-minded, persistent and self-critical–as measured by a battery of psychological tests–did the best.
. . .
Most experts–like most people–“are too quick to make up their minds and too slow to change them,” he says. And experts are paid not just to be right, but to sound right: cocksure even when the evidence is sparse or ambiguous.

For the full review, see:
JASON ZWEIG. “The Trick to Making Better Forecasts.” The Wall Street Journal (Sat., Sept. 26, 2015): B1 & B7.
(Note: ellipses added.)
(Note: the online version of the review has the date Sept. 25, 2015.)

The book under review, is:
Tetlock, Philip E., and Dan Gardner. Superforecasting: The Art and Science of Prediction. New York: Crown, 2015.

Plant Breeders Use Old Sloppy “Natural” Process to Avoid Regulatory Stasis

(p. A11) What’s in a name?
A lot, if the name is genetically modified organism, or G.M.O., which many people are dead set against. But what if scientists used the precise techniques of today’s molecular biology to give back to plants genes that had long ago been bred out of them? And what if that process were called “rewilding?”
That is the idea being floated by a group at the University of Copenhagen, which is proposing the name for the process that would result if scientists took a gene or two from an ancient plant variety and melded it with more modern species to promote greater resistant to drought, for example.
“I consider this something worth discussing,” said Michael B. Palmgren, a plant biologist at the Danish university who headed a group, including scientists, ethicists and lawyers, that is funded by the university and the Danish National Research Foundation.
They pondered the problem of fragile plants in organic farming, came up with the rewilding idea, and published their proposal Thursday in the journal Trends in Plant Science.
. . .
The idea of restoring long-lost genes to plants is not new, said Julian I. Schroeder, a plant researcher at the University of California, Davis. But, wary of the taint of genetic engineering, scientists have used traditional breeding methods to cross modern plants with ancient ones until they have the gene they want in a crop plant that needs it. The tedious process inevitably drags other genes along with the one that is targeted. But the older process is “natural,” Dr. Schroeder said.
. . .
Researchers have previously crossbred wheat plants with traits found in ancient varieties, noted Maarten Van Ginkel, who headed such a program in Mexico at the International Maize and Wheat Improvement Center.
“We selected for disease resistance, drought tolerance,” he said. “This method works but it has drawbacks. You prefer to move only the genes you want.”
When Dr. Van Ginkel crossbred for traits, he did not look for the specific genes conferring those traits. But with the flood-resistant rice plants, researchers knew exactly which gene they wanted. Nonetheless, they crossbred and did not use precision breeding to alter the plants.
Asked why not, Dr. Schroeder had a simple answer — a complex maze of regulations governing genetically engineered crops. With crossbreeding, he said, “the first varieties hit the fields in a couple of years.”
And if the researchers had used precision breeding to get the gene into the rice?
“They would still be stuck in the regulatory process,” Dr. Schroeder said.

For the full story, see:
GINA KOLATA. “A Proposal to Modify Plants Gives G.M.O. Debate New Life.” The Wall Street Journal (Fri., MAY 29, 2015): A11.
(Note: ellipses added.)
(Note: the online version of the story has the date MAY 28, 2015.)

A Critical Mass Need to Be Motivated by the Telos of a Practice

(p. 227) The fact that some people are led into a practice in pursuit of goals that are external to the practice– money, fame, or what have you– need pose no threat to the integrity of the practice itself. So long as those goals do not penetrate the practice at all levels, those in pursuit of external goals will eventually drop out or be left behind or change their goals or be discredited by those in pursuit of a practice’s proper goals. However, if external goals do penetrate the practice at all levels, it becomes vulnerable to corruption. Practices are always developing and changing, and the direction that development takes will be determined by participants in the practice. Good practices encourage wise practitioners who in turn will care for the future of the practice.

Source:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

George Bailey Wanted to Make Money, But He Wanted to Do More than Just Make Money

(p. 219) Actually, it’s not so strange. The norm for bankers was never just moneymaking, any more than it was for doctors or lawyers. Bankers made a livelihood, often quite a good one, by serving their clients– the depositors and borrowers– and the communities in which they worked. But traditionally, the aim of banking– even if sometimes honored only in the breach– was service, not just moneymaking.
In the movie It’s a Wonderful Life, James Stewart plays George Bailey, a small-town banker faced with a run on the bank– a liquidity crisis. When the townspeople rush into the bank to withdraw their money, Bailey tells them, “You’re thinking of this place all wrong. As if I had the money back in a safe. The money’s not here.” He goes on. “Your money’s in Joe’s house. Right next to yours. And in the Kennedy house, and Mrs. Backlin’s house, and a hundred others. Why, you’re lending them the money to build, and they’re going to pay you back, as best they can…. What are you going to do, foreclose on them?”
No, says George Bailey, “we’ve got to stick together. We’ve got to have faith in one another.” Fail to stick together, and the community will be ruined. Bailey took all the money he could get his hands on and gave it to his depositors to help see them through the crisis. Of course, George Bailey was interested in making money, but money was not the only point of what Bailey did.
Relying on a Hollywood script to provide evidence of good bankers is at some level absurd, but it does indicate something valuable about society’s expectations regarding the role of bankers. The norm for a “good banker” throughout most of the twentieth century was in fact someone who was trustworthy and who served the community, who was responsible to clients, and who took an interest in them.

Source:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.
(Note: italics in original.)

To Maintain Enrollments Professors Are Often Pressured to Inflate Grades

(p. 198) Dedicated college professors demand that students do the difficult reading and writing necessary to become skillful in understanding the complexities of the world. But the university distributes resources like research funds and new faculty positions based in part on how many students populate classes and how positively students evaluate courses. How much do you simplify to keep up enrollment and keep resources flowing into your department?

Source:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

Should Students Read to Learn, or to Get Gold Stars?

(p. 181) When a consultant tells teachers to concentrate on the bubble kids and ignore the kids who are most in need of help, something has gone wrong. And if gold stars turn reading from an adventure into a job, something has gone wrong. But what? The typical response to examples like these is not to blame incentives but to blame “dumb” incentives. The presumption is that “smart” incentives, or at least “smarter” incentives, will do the job.
This is a mistake. In many situations, for many activities, no incentives are smart enough. Teachers like Deborah Ball and Mrs. Dewey spend their day figuring out how much time to spend with each student and how to tailor what they teach to each student’s particular strengths and weaknesses. They are continually balancing conflicting aims– to treat all students equally, to give the struggling students more time, to energize and inspire the gifted students. Along comes the incentive to bring up the school’s test scores, and all the nuance and subtlety of Mrs. Dewey’s moment-by-moment decisions go out the window. And what “smarter” incentive is going to replace judgment in making sensitive choices in a complex and changing context like a classroom?
Or what, exactly, would you incentivize to encourage hospital custodian Luke to seek the kind and empathetic response to the distraught father who wanted his son’s room cleaned? Incentives are always based on meeting some specific, measurable criterion: read more books; raise more test scores; wash more floors. Left to his own devices, Luke asks himself, “What can I do to be caring?” and because he has moral skill, he comes up with a good answer. With “caring” incentivized, Luke (p. 182) might ask, “What do I have to do to get a raise or a bonus?” “Reclean the room” might be a right answer. “Look sympathetic” might be a right answer. “Be caring” surely is not. Aristotle thought that good
people do the right thing because it is the right thing. Doing the right thing because it’s the right thing unleashes the nuance, flexibility, and improvisation that moral challenges demand and moral skill enables. Doing the right thing for pay shuts down the nuance and flexibility.

Source:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.
(Note: italics in original.)

Under Perverse Institutions, It Takes “Canny Outlaws” to Do What Is Right

Practical Wisdom is a hard book to categorize. It is part philosophy, and one of the co-authors is an academic philosopher. But most of the book consists of often fascinating, concrete examples. The examples are usually of perverse institutions and policies that create incentives and constraints that reward those who do bad and punish those who do good. The authors’ main lesson is that we all should become stoical “canny outlaws” by finding crafty ways to do what is right, while trying to avoid or survive the perverse incentives and constraints.
Maybe–for me the main lesson is that we all should get busy reforming the institutions and policies. But whether their lesson or my lesson is the best lesson, their book is still filled with many great examples that are worth pondering.
In the next few weeks, I will be quoting several of the more useful, or thought-provoking passages.

The book discussed, is:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

Innovation and Jobs Destroyed by Tax

(p. 7A) I was humbled to receive in November the National Medal of Technology and Innovation at the White House for the development of life-changing medical devices. Traveling to our nation’s capital, I couldn’t help but think: There is no way I could have had the same impact if the tax on medical devices was in place when I got started over 50 years ago.
Simply put, the medical device tax is destroying job creation and innovation, and as a result, patient care is suffering.
. . .
Every day, I see firsthand the difficult choices innovators must make as a result of this ill-conceived tax. Perhaps worst of all, the medical device tax is helping cause a steep drop of investments in promising therapies.
. . .
It’s time to put an end to this disastrous policy so that medical device entrepreneurs can do what America does best — innovate.

For the full commentary, see:
Tom Fogarty. “Opposing View: Tax Destroys Jobs and Innovation.” USA Today (Mon., January 5, 2015): 7A.
(Note: ellipses added.)
(Note: the online version of the commentary has the date January 4, 2015, and has the title “Tax Destroys Jobs and Innovation: Opposing View.”)

Affordable Care Act Reduces GDP, Employment and Labor Income

(p. A17) Whether the Affordable Care Act lives up to its name depends on how, or whether, you consider its consequences for the wider economy.
. . .
I estimate that the ACA’s long-term impact will include about 3% less weekly employment, 3% fewer aggregate work hours, 2% less GDP and 2% less labor income. These effects will be visible and obvious by 2017, if not before. The employment and hours estimates are based on the combined amount of the law’s new taxes and disincentives and on historical research on the aggregate effects of each dollar of taxation. The GDP and income estimates reflect lower amounts of labor as well as the law’s effects on the productivity of each hour of labor.
. . .
The Affordable Care Act is weakening the economy. And for the large number of families and individuals who continue to pay for their own health care, health care is now less affordable.

For the full commentary, see:
CASEY B. MULLIGAN. “OPINION; The Myth of ObamaCare’s Affordability; The law’s perverse incentives will have the nation working fewer hours, and working those hours less productively.” The Wall Street Journal (Tues., SEPTEMBER 9, 2014): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date SEPTEMBER 8, 2014.)

Mulligan’s research on the effects of Obamacare is detailed in his Kindle e-book:
Mulligan, Casey B. Side Effects: The Economic Consequences of the Health Reform. Flossmoor, IL: JMJ Economics, 2014.

Shellshock Bug Shows Low Quality of Open Source Software

(p. B1) Long before the commercial success of the Internet, Brian J. Fox invented one of its most widely used tools.
In 1987, Mr. Fox, then a young programmer, wrote Bash, short for Bourne-Again Shell, a free piece of software that is now built into more than 70 percent of the machines that connect to the Internet. That includes servers, computers, routers, some mobile phones and even everyday items like refrigerators and cameras.
On Thursday [Sept. 25, 2014], security experts warned that Bash contained a particularly alarming software bug that could be used to take control of hundreds of millions of machines around the world, potentially including Macintosh computers and smartphones that use the Android operating system.
The bug, named “Shellshock,” drew comparisons to the Heartbleed bug that was discovered in a crucial piece of software last spring.
But Shellshock could be a bigger threat. While Heartbleed could be used to do things like steal passwords from a server, Shellshock can be used to take over the entire machine. And Heartbleed went unnoticed for two years and affected an estimated 500,000 machines, but Shellshock was not discovered for 22 years.
. . .
Mr. Fox maintained Bash — which serves as a sort of software interpreter for different commands from a user — for five years before handing over the reins to Chet Ramey, a 49-year-old programmer who, for the last 22 years, has maintained the software as an unpaid hobby. That is, when he is not working at his day job as a senior technology architect at Case Western Reserve University in Ohio.
. . .
(p. B2) The mantra of open source was perhaps best articulated by Eric S. Raymond, one of the elders of the open-source movement, who wrote in 1997 that “given enough eyeballs, all bugs are shallow.” But, in this case, Steven M. Bellovin, a computer science professor at Columbia University, said, those eyeballs are more consumed with new features than quality. “Quality takes work, design, review and testing and those are not nearly as much fun as coding,” Mr. Bellovin said. “If the open-source community does not develop those skills, it’s going to fall further behind in the quality race.”

For the full story, see:
NICOLE PERLROTH. “Flaw in Code Puts Millions At Big Risk.” The New York Times (Fri., SEPT. 26, 2014): B1-B2.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date SEPT. 25, 2014, and has the title “Security Experts Expect ‘Shellshock’ Software Bug in Bash to Be Significant.”)