Follow Florida’s lead:

Between 1992 and 1998, Florida’s already-low fourth-grade National Assessment of Educational Progress (NAEP)
reading scores were declining. In 1999, when these reforms were enacted, nearly half of Florida fourth-graders scored
“below basic” on the NAEP reading test, meaning that they could not read at a basic level. But by 2007, less than a
decade after the education reforms took effect, 70 percent of Florida’s fourth-graders scored basic or above. Florida’s
Hispanic students now have the second-highest statewide reading scores in the nation, and African-Americans score
fourth-highest, when compared with their peers.

If you’re still scratching your head over the financial mess, a friend at VCU kindly forwards the explainer below, which he has been sharing with students.

The kicker is in the last paragraph.

Collateralized Debt Obligations (CDO’s) are the repackaged mortgage instruments that were used to resell bundles of loans containing hi-risk mortgage loans and remove them from the portfolio of the originating lenders.  They were repackaged yet again and sold on the world markets using leverage that amplified the risk.  Some estimates I’ve heard are that there were less than $1 trillion worth of bad mortgages that have created risky investments of over $60 trillion in value throughout the world. 

This was recognized as a high risk activity by the originators, and their search for financial backing developed an assurance package called Credit Default Swaps (CDS’s).  These were essentially insurance policies against default of the CDO packages, but registering as an insurance company would have required compliance with the cash reserves necessary for that registration.  Since the debt packages were so huge, no-one could afford that type of registration due to the reserve requirement, so they created the CDS as an entity NOT categorized as an insurance product even though that was its essential characteristic. 

So now we have large corporations holding risky assets, some of whom have been seized, bought on the cheap, bankrupt and more.  This is bad for the markets, and has shown up in the gyrations of late.  We also have other large corporations who have guaranteed the risky investments against default.  They have not been required to disclose their level of reserves or much of anything, so we don’t know if they are capable of absorbing the losses that will ensue if the CDO’s they covered go into default.

This Friday we have a major test of the creation of CDO’s and CDS’s.  Lehman Brothers (in bankruptcy now) had $110 billion of their debt covered by CDS’s.  That debt is now in default and the CDS coverage is due to settle.  If the issuing firms are able to cover the contracts we may see the end of much of the market turbulence we’ve been watching.  If they can’t, hang on to the overhead straps,’cause we’re in for an even rougher ride!

Two items about voter fraud today:

(1) James Taranto has a telling rundown of shenanigans by A.C.O.R.N. in Nevada, Ohio, etc.

(2) Hans Bader questions the ACLU’s assertions about election law and student registrations. He links to a pretty damning (if true!) comment in the Virginian-Pilot. The retort to that is noting the plural of anecdote is not data. The rebuttal to the retort is to refer the reader back to the Taranto compilation above.

Also from IPN, this piece raises a point too few have considered:

The UN and its cheerleaders should ask why so many African countries have failed over decades to control preventable diseases that other nations have successfully defeated.

Today, 90% of malaria infections occur in sub-Saharan Africa--but the disease was rife in Europe, America and Russia until the middle of the last century. Historical figures as diverse as Saint Augustine and George Washington suffered from malaria, while the largest pandemic to date occurred in the northern Soviet Union in the 1920s. Yet all these regions overcame the disease. Why then is Africa struggling, in spite of billions of dollars in aid?

The answer: endemic corruption and economic repression. Malaria is just a symptom of a much wider sickness.

Read the whole thing.

From The Scotsman, via the International Policy Network, comes an economist’s perspective on the financial crisis:

The regulators, meanwhile, were unconscious on the floor. The US mortgage institutions, Fannie Mae and Freddie Mac, had 200 regulators on their case but still went bust for US$5 trillion. These semi-governmental companies allowed investors to believe the bad mortgages were guaranteed by government, causing credit rating agencies to give their dodgy bonds high scores.

Mortgage lenders re-packaged these bad debts round the world but nobody cried foul. Institutions were lending thirty times their asset base. Though the Bank of England knew that the huge mortgage lender Northern Rock was failing, the 2,500 staff of the Financial Services Authority seemed to do nothing until it actually collapsed six months later. Even then, they, the Treasury and the Bank had no coherent plan.

When the government is persuading the casino to hand out free chips and the regulators are standing drinks at the bar, you shouldn’t be surprised if the customers place a few risky bets. It’s the management and not the system that deserves our scorn for breaking the basic rules of economics: there ain’t no such thing as a free lunch.

The Greater Richmond Chamber hosted the mayoral candidates for a question-and-answer session at its breakfast meeting this morning. A few impressions:

(1) Pity the event was held on Yom Kippur, when Paul Goldman couldn’t attend.

(2) Bill Pantele came across as the most knowledgeable. Regarding the question as to whether the candidates supported a regional transportation authority, for instance, Pantele spoke to the details of the proposal, unlike the others.

(3) Dwight Jones gave the most unexpected answer. Asked about the role of regional businesses in improving the city schools, Jones said, although there was no need for him to say, that he used to be a “public-school purist,” but that, having visited city schools recently, he found himself asking if he would send his children to city schools now and decided: no, he would not. It was time, he said, to “change the paradigm” and look to public-private partnerships and Milwaukee (where school vouchers are operative).

(4) Lawerence Williams gave the least pandering answer of the session. While the other candidates repeatedly emphasized their support for mass transit, including rail, Williams noted that rail is extremely expensive and requires critical population density to make it affordable.

(5) None of the candidates gave a direct and serious answer to the question about where he would cut the city budget, as the next mayor might need to do. Williams came the closest by mentioning procurement costs for, e.g., elevator service—but even if elevator installation is grossly overcharged for, how many elevators does the city install in a given year? Jones gave the most entertaining answer, when he said he would cut the mayor’s entourage—“there’s a million”—and end the lawsuits—“there’s another million.”

(6) Maggie Walker senior Danny Yates asked about the controversy regarding minority enrollment at the school. Pantele said it was the first he’d heard of the issue. That was a little surprising to hear from someone who is supposedly so in tune with what’s happening in the city. Jones again got in a good line, when he noted that it shouldn’t take a $70,000 study by outside consultants to diversify the school, and he probably would have been willing to do it for half that amount.

(7) You’ll note no mention has been made so far of Robert Grey. He was present and answered questions, in his own elegant manner, but his answers could have been made at any forum for any election. He spoke of the need to increase the level of professionalism in government, and to do all we can to provide great services, and to make all voices heard, and to recognize that it’s time for results, not words, and that it is time to stop talking and start doing, and we need to bring experience to bear, and to work with all the communities in the city, and to rely on people of goodwill to provide leadership, and so on. Fine sentiments all. But it will be hard for the next mayor to govern by platitudes alone.

Today’s New York Times has a piece about hiphoprepublican, a haven for black conservatives, who not only suffer racial insults from other African-Americans but also get mistaken for protesters at GOP gatherings. 

According to one survey, America’s CEOs don’t put a lot of stock in Barack Obama. Some even worry that

his programs would bankrupt the country within three years.

Hmmmm. I’d say he’s about three years ahead of schedule then, wouldn’t you?

Barack Obama knows that to win the election, he must sway middle-class, middle-America voters.  He knows also that the Democrats were hit hard in the 1990’s and the 2000 presidential election due to the Clinton-era gun bans and stringent gun control legislation, which raised the question of gun control to a litmus test equivalent to abortion, prayer in schools, and gay rights. 

Obama and his campaign have accordingly been claiming that he supports the Second Amendment and endorses the view that gun ownership is an individual right - albeit one apparently subject to almost limitless restriction in his view, or at the very least, limited only to certain shotguns used for hunting.  His past record, however, belies his recent claims of a new-found belief in gun rights.  Obama was, for nearly eight years, on the board of directors of the Joyce Foundation, the single largest supporter and provider of funds for anti-gun groups, backed by well-known left-wing billionaire George Soros.

During Obama’s tenure with the Joyce Foundation, donations to anti-gun groups increased dramatically. For example, in 1997 and 1998 the Violence Policy Center received $221,000 and $360,000 from the Foundation; those grants and donations increased to $1 million in 2000 and $800,000 in 2002. In all, during Obama’s tenure, the group received $15 million from the Joyce Foundation.

The Violence Policy Center touts itself as “the most aggressive group in the gun control movement”.  The Joyce Foundation also made hefty contributions to the Johns Hopkins Center for Gun Policy and Research, which is anti-gun and pro-gun control, as well as the Brady Campaign, which possibly is the most well-known anti-gun group.

Also during Obama’s tenure on the board, the Joyce Foundation engaged in an orchestrated campaign to influence public perception, policy and legislation by paying law professors to write, and paying law reviews to publish, “scholarly” articles concluding that the Second Amendment does not and never has protected an individual right.  The Foundation hoped to pave the way to a rejection of the individual rights view in a future Supreme Court case it knew was inevitable.  The Joyce Foundation funded symposia to which only law professors known to hold a “collective right” view of the Second Amendment were invited.  When individual right proponents requested to attend, they were rejected, explicitly being told that “sometimes a more balanced debate is best served by an unbalanced symposium”.

The Joyce Foundation also bought up issues of the Fordham Law law review, Chicago-Kent Law Review and Stanford Law and Policy Review, inviting submissions from only those professors willing to write articles concluding that the Second Amendment did not protect an individual right.  It did this by paying the law review and the professors amounts far in excess - in some cases ten times - the normal stipend or honorarium paid to a law review article author.  Some of the other pro-gun control organizations that the Joyce Foundation has funded include:

Mayors Against Illegal Guns Coalition
Firearms Law Center (now Legal Community Against Violence)
Franklin County Prevention Institute
Handgun Epidemic Lowering Plan (HELP) Network
Indiana Partnership to Prevent Firearm Violence
Legal Community Against Violence (formerly Firearms Law Center)
Ohio Coalition Against Gun Violence
On-Target Coalition
Second Amendment Research Center[14]
Violence Policy Center: $4,154,970 between 1996 and 2006.
WAVE Educational fund
Workforce Strategy Center

Within the last few days, the Obama campaign in Indiana illegally acquired a mailing list belonging to the National Shooting Sports Foundation (NSSF) and used it to send unsolicited e-mail and letters to people who had attended NSSF’s Shooting, Hunting and Outdoor Trade (SHOT) Show, again touting Obama’s support of “hunting and fishing.” NSSF has sent the campaign a letter directing it to cease and desist its illegal use of NSSF’s proprietary mailing list.  It is possible that the actions of the Obama campaign not only violate multiple federal laws regarding intellectual property rights, including the Economic Espionage Act of 1996, but they likely also provide a valid cause of action for a civil suit for damages.

At least Obama has known better than to have himself photographed holding a gun or wearing a blaze orange vest - campaign stunts that did not help John Kerry gain any credibility with gun owners in 2004.  But he doesn’t look terribly comfortable in that cowboy hat.

Updated to add a link to an annoted report substantiating the above.

I’m announcing a contest. First prize is a ticket to this event:

Former President Bill Clinton will campaign for the Obama-Biden ticket in Richmond. . . .

Second prize is two tickets. 

. . . after all the great publicity it’s been getting lately, now this.

Do you do this? I know I do:

Emory University psychologist Drew Westen put self-identified Democratic and Republican partisans in brain scanners and asked them to evaluate negative information about various candidates. Both groups were quick to spot inconsistency and hypocrisy—but only in candidates they opposed.

When presented with negative information about the candidates they liked, partisans of all stripes found ways to discount it, Westen said. When the unpalatable information was rejected, furthermore, the brain scans showed that volunteers gave themselves feel-good pats—the scans showed that “reward centers” in volunteers’ brains were activated.

Richard Fuld, former CEO of now-bankrupt Lehman Brothers, who took home somewhere between $300 million and $480 million over the past several years, was working out in the Lehman Brothers company gym shortly after the public announcement of the firm’s bankruptcy.  Another person also working out in the gym walked over to Mr. Fuld, punched him the face and knocked him out cold. 

The Iowa Electronic Markets have a better predictive history than political polls do. Lately traders have been selling John McCain short, in a manner of speaking:

Prices for Republican presidential candidate John McCain tumbled more than 10 percent in trading on the Iowa Electronic Markets over the weekend, so traders now believe he has less than a one-third chance of winning the popular vote.

At 9 a.m. Central Time Monday, the price of a McCain contract on the IEM’s Winner Take All market was 32.7 cents. That means traders on the political prediction futures market operated by the University of Iowa’s Tippie College of Business believe McCain has a 32.7 percent probability of winning the popular vote in November.

Anyone who harbors the sincere conviction that McCain will win on Nov. 4 could make a killing—presuming, of course, that his prediction proves correct.

P.S.—price history here.

If you don’t have time to read the whole book, or even the whole review, here’s the nut:

Could, and should, something be done?

Claudia Goldin and Lawrence F. Katz, two Harvard economists, think yes. Their book, “The Race Between Education and Technology” (Harvard, $39.95), contains many tables, a few equations and a powerfully told story about how and why the United States became the world’s richest nation — namely, thanks to its schools.

The authors skillfully demonstrate that for more than a century, and at a steady rate, technological breakthroughs — the mass production system, electricity, computers — have been increasing the demand for ever more educated workers. And, they show, America’s school system met this demand, not with a national policy, but in grassroots fashion, as communities taxed themselves and built schools and colleges.

Beginning in the 1970s, however, the education system failed to keep pace, resulting, Ms. Goldin and Mr. Katz contend, in a sharply unequal nation.

Today’s column advises viewing the Justice Department’s new rules for the FBI in light of the recent financial mess.

Obama and Biden have made a dozen trips to Virginia, McCain-Palin just one. While the Republicans are holding their breath, Virginia is turning blue:

Suffolk University just released a new poll giving Obama a 12-point lead in Virginia, 51-39.

The New York Times Magazine has an interesting profile of Virginia Congressman Tom Davis—who says, of Republicans after eight years of George W.,

If we were a dog food, they would take us off the shelf.

When is it permissible to harvest organs for transplatation? After a patient has died. But how do we define death when the organ that has “failed,” causing death, then is transplanted into another body where it performs its function perfectly well? This piece in Slate explores the troubling issue.

This Washington Post story reads like it was written by an anthropologist who parachuted into Middle America and is reporting back to her friends at the wine-tasting party. It’s not condescending, because it doesn’t even pretend to be speaking to ordinary people; it’s explaining ordinary people to their social betters, so-called.

The people the story is about don’t need to be told what kind of products a dollar store stocks; they know. They don’t need to be told what a millwright does, for the same reason.

That makes the story, inadvertently, an anthropological study of the people who reads such stories, too.

An interesting take on the split between the haves and have-nots, and the other split between the haves and the have-ungodly-richeses. The two splits, say the authors, have different causes.