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Archive for November, 2011

…is when you are super-rich.

The hubbub over the hedge-fund managers who struck it big in the Powerball suggests that we have a problem with the image of the rich getting richer. Yet, it’s only the super-rich who should be playing the lottery in the first place.

Every additional dollar you have means less to you in terms of general utility and you worry less about losing it. Put differently, your first dollar is worth much more to you than your 114 millionth dollar. At some point, that dollar then becomes worth it for you to bet on a highly risky investment on which you might accidentally hit the jackpot.

Obviously it’s difficult to assess how much utility that dollar would have for a random individual (I’m sure some economist has calculated this using some arbitrary formula). Regardless, the lottery essentially functions as a regressive tax that only makes sense for the richest people to play.

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Ta-Nehisi Coates has a great reply to Andrew Sullivan’s rather tone-deaf regurgitation of an unsourced story on a “p.c. egalitarianism” stranglehold on so-called “intelligence research.” He writes a takedown as it should be written — with respect for the author and no tolerance for bullshit.

The problem with Sullivan’s suggestion that researchers continue pursuing race-based intelligence is that it ignores what it is that “intelligence research” is supposed to find in the first place. Context matters, and the search for the elusive g — a measure of “general intelligence” — has largely led to skewed results in favor of the dominant ruling class of well-educated white males.

Let me give you an example. Here’s a common IQ test type logic puzzle that has a clear “right” answer (the Wason selection test, for those interested).

You are told to check if the following statement is false: “If a card has a vowel on one side, the number on the other side will be even.”

You are then given the following cards: A, G, 7, 4.

Which cards do you have to flip over to check if the statement is false?

The answer is to flip over card A (obvious) and card 7 (not as obvious). It doesn’t matter what’s on the other side of G, and if card 4 had a vowel or consonant on the other side, the statement could still be true.

But let’s frame the question a different way:

You are told to check if the following rule is false: “If a person is drinking alcohol, they are over 21.” You either know the beverage they are drinking or their age.

The four people you see are: age 16, age 22, drinking a beer, and drinking a Coke.

Who do you need to check?

Most people get this one correct. (See the paper here.) Why? Because we have experienced events like these and adapted our brains to understand them. I would bet that the 10 percent of people who get the vowel/number version correct have taken formal logic courses or have wrestled with such logic puzzles before.

When I was teaching, one of the standardized tests that the book included had an extended reading sample about a family’s experiences with skiing and snow. For my students, many of whom had never left the city of Chicago, such a reading sample was totally foreign. The test wasn’t testing their reading comprehension; it was, in many ways, simply testing their familiarity with skiing and its terms.

The search for g is a search for something that doesn’t exist — no intelligence is “general”; it shifts with the context of the activity and the world we live in. I’m not a big believer in the woo-woo Gardner multiple intelligences, but I think we should be honest when we discuss intelligence. We were not born with intelligence; our culture created it. Performance on cognitive tests is as artificial as anything else we can cook up.

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Although the new NBA collective bargaining agreement (CBA) does give us basketball again, it does not solve any of the supposed problems that it set out to solve.

The owners claimed that the old CBA was deficient. The new CBA will supposedly address three primary areas of concern:

  • Profitability: Small-market teams find it difficult to be profitable with high player salaries weighing them down.
  • Parity: The rise of superteams (Miami, Los Angeles, Dallas, etc.) has made it impossible to have strong small-market teams (please ignore San Antonio).
  • Bad Contracts: Too many middling players receive outrageous contracts, and teams have no way of freeing themselves from bad contracts (i.e., their own bad decisions).

Let’s see how the new contract affects these aspects.

Profitability: Why are NBA teams having problems making money? Is it the colossal player salaries? Well, since player salaries are a flat percentage of revenue, some other higher expenditures must be impacting the NBA’s finances. Even though player salaries are the biggest chunk of an NBA team’s expenditures, they are also the most consistent because they are tied to league revenues. The new CBA does nothing to address the other costs (stadium expenses, administrative overhead costs, etc.). Assuming that the owners find no solution to those growing costs, there’s no reason why this exact standoff won’t happen again in 10 years. (That’s what happened last time.)

Parity: Will the new CBA stop superteams? Absolutely not; if anything, it encourages them. More than football or baseball teams, basketball teams rely on stars and superstars to succeed. Superstars bring people through the turnstiles, and put up championship banners. The more you have, the more you win.

How does the new CBA encourage superteams? Assume that you are a superstar player. You know that you will get paid identical money from all the clubs; no team can possibly offer more than a max contract, and your options are limited by the stricter salary cap. Would you rather go to an attractive city (big market) and a team of other stars, or would you rather go to a small market with middling players? Consider Lebron James: if there had been no cap and no max contract, Miami could not have afforded James, Wade, and Bosh. Instead, they could form the Superfriends and cost the same as the Washington Wizards.

The new CBA only makes these conditions worse.

Bad Contracts: Let’s set aside the fact that bad contracts are the owners’ fault in the first place! They exist; now what?

The new CBA has a few features to mitigate bad contracts: 1) the “amnesty” clause that allows teams to waive/release bad contracts; and 2) a costlier mid-level exception combined with more limits to sign-and-trade deals that will probably result in shorter contracts.

Yet, none of these proposals actually targets the underlying causes of these bad decisions. If we assume that people respond to incentives, then a painful negative response to a bad contract would make them less likely. Instead, the CBA makes it easier to wash one’s hands of a bad contract, making it all the more likely that GMs will sign more bad short-term contracts because they have less chance of getting burned. Just changing what makes a “bad contract” doesn’t make it less damaging to the competitive advantage of a team. Signing Joe Johnson for 6 years and $119 million dollars would have been just as dumb at 5/50 if the league’s max contract was 5/50. When dealing with scarce resources like excellent basketball players, one wrong move will still cost your team in money and in chances at success.

Conclusion: The new CBA will do little to nothing about anything it purports to solve.

What it does do is pay players less money. This will make owners happy for now, but it does nothing to address the underlying problems that hurt the league financially and the teams competitively.

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Previously I expressed my outrage about the pepper spraying of students at UC Davis. Now, I present to you a new meme, Peppersprayingcop.

 

 

 

 

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One of the problems with college athletics is their highly secretive nature (as Penn State and Syracuse have revealed). This secrecy is driven by the economic model of college sports — powerful independent organizations parallel to universities with their own cashflow under the banner of “amateur athletics,” with no accountability to anyone except the NCAA, as toothless (and incompetent) a watchdog as there ever was.

How do we solve this? I propose two solutions, each probably equally implausible.

1. The Free-Market Solution: This is the solution pushed by Taylor Branch (among others) in his long-form Atlantic piece. In short, pay the players. College sports operate in a weird cartel system, in which coaches are compensated in the tens of millions, universities make substantial revenue from football and basketball, and players make… well, nothing. Labor is not compensated appropriately for the value put in, and at far lower rates than they would receive on the open market. (Cam Newton’s salary at Auburn? $25,000 (cost of a full academic scholarship with book stipend). Newton’s salary at Carolina? $4 million.) This distorted labor market hurts the players, because they are both replaceable and cheap. If colleges had to compensate players with market wages, players could also unionize in order to demand rights collectively, particularly health benefits. Plenty of students work part-time or full-time as university employees; the players here would be no different.

Yes, players should be getting their degrees and using their scholarships, but you try learning when football practice starts at 5 and ends at 9, beginning in July and ending in May (if ever). The working conditions essentially make it quite difficult to achieve academic success.

2. The Pure Amateur Solution: My beef with the Branch free-market approach is that it further elevates the money and power of the athletics department, which I think still creates a tail-wagging-the-dog problem. Insular and powerful sports teams would still hold outsize power on campus because of their outsize money.

My ideal solution would be a return to truly pure amateurism — no more academic scholarships, and athletics departments folded back into the academic part of the university. Rather than being an independent entity reportable only to the university president (and sometimes not even), they would be collapsed into the basic student activities side. Sports should be a part of the academic experience, but they should not be the dominating one. Consider the Ivy League, which has eliminated all academic scholarships, yet continues to admit excellent athletes (dumb though they may be, see this guy). Even Vanderbilt, toiling away in the SEC, has no athletics department, yet plays the big boys close in football and does quite well in basketball.

Of course, this solution then permits the major sports leagues to start recruiting right out of high school, which I’m actually OK with. At least they’ll get paid, and the university institution won’t become subservient to the sporting one. At the same time, baseball, which already works like this, has plenty of shady practices. (Anyone who saw that scene in Moneyball where Billy Beane forgoes his scholarship for a chance in the bigs knows how cringe-inducing these conversations can be.) I wonder whether the current system (or a free-market system described above) is any better; college players inside the bubble of athletics are no wiser than a high school senior in making major life decisions.

I’m open to ideas, but there can be no moral justification for the status quo, in which college sports are money-makers for universities, coaches, sponsors, and merchandisers, with rabid demanding fanbases, while leaving the actual players as mere meat to be churned through the machine.

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Watching football, I saw a number of diamond commercials and I wondered why we value sparkly things.

Shiny things have a value, usually because they tend to be ductile, durable metals, but also because we like seeing images of ourselves. That seems to be at least a plausible explanation, however speculative it might be.

But sparkly items don’t have that value, and their uses are much more limited.

Hypotheses:

  1. Human eyes naturally detect movement, and specifically rapid changes of light and dark. Yet, one would expect this to trigger a “fight-or-flight” response rather than attraction. After all, if a human saw rapidly changing light and dark, that was probably a sign to run in the opposite direction.
  2. Humans who were attracted to sparkly things were more likely to be attracted to sparkly moving water, which may have fewer contaminants and be less likely to kill you.
  3. Humans who were attracted to sparkly things were more likely to find shiny rocks and minerals, which were useful for, say, starting fires or making stone tools. (This is pretty questionable, since many of the early stone tools weren’t shiny at all.)
  4. It’s all cultural: humans value sparkly objects for purely social/cultural reasons.

Like I said, this is all highly speculative, and there’s no probative value in this exercise whatsoever. It just seems strange how much we really like sparkly objects, without considering why we do.

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This picture is worth a thousand words. UC Davis protestors were peacefully sitting with arms linked as shown. They were encircling a place where they had set up an Occupy camp. The Davis chancellor made the decision that the camp had to go. That’s fine. The protestors, in the long spirit of civil disobedience, decided not to leave. That’s fine, too. What should have happened in that scenario is the cops arrest the protestors. That’s basically the crux of civil disobedience.

What happened instead is that the shithead shown in the picture above, Lt John Pike, casually took a canister of pepper spray and assaulted all of the students. The YouTube video is here. The Davis Faculty Association has called for the immediate resignation of the chancellor, Linda Katehi. Katehi has released this pathetic statement, calling for a task force to review what happened an report to her within 90 days. I wonder what they will say? Maybe something like, “Dear Chancellor Katehi: We have determined that peaceful students were assaulted with pepper spray as a result of the chancellor’s decision to send in a full squad of campus police in riot gear and armed with pepper spray canisters.”

Why is it that every time the tiniest issue arises, we have to send in a full force, armed to the teeth in riot gear? In this story, the police preposterously defend their actions by saying that they were threatened. Again, look at the top picture. I rest my case. Ta-Nehisi Coates frequently says that being a police officer is a tough job. Not everyone is up for it. If you panic when confronted with a non-violent situation, being a cop isn’t for you. If you cant resist the temptation to use your fancy new toys to inflict harm on civilians, being a cop isn’t for you. Pike shouldn’t be a cop, Katehi shouldn’t be the chancellor, and this madness has to stop.

-UPDATE-

Katehi has announced that the review must be completed in 30 days, rather than in 90. Ooohhh, impressive. Also, two police officers have been placed on leave. One of them surely is John Pike (pictured above). Also, below I will post the powerful video of hundreds of students forming a walkway for Katehi in complete silence. This video was taken after she left a press conference yesterday evening.

-UPDATE II-

Mark Yudof is the President of the University of California. Which means that he ranks above the chancellor of each individual campus. He has been a source of controversy in the past due to his response to budget cuts a couple years back, but he released a statement about recent campus events which strikes the right note:

I am appalled by images of University of California students being doused with pepper spray and jabbed with police batons on our campuses.

I intend to do everything in my power as president of this university to protect the rights of our students, faculty and staff to engage in non-violent protest.

Chancellors at the UC Davis and UC Berkeley campuses already have initiated reviews of incidents that occurred on their campuses. I applaud this rapid response and eagerly await the results.

The University of California, however, is a single university with 10 campuses, and the incidents in recent days cry out for a systemwide response.

Therefore I will be taking immediate steps to set that response in motion.

I intend to convene all 10 chancellors, either in person or by telephone, to engage in a full and unfettered discussion about how to ensure proportional law enforcement response to non-violent protest…

It goes on a bit from there. But notice how he does what Katehi failed to do: he immediately condemns what we all saw, says he was appalled, and claims he will do everything in his power to protect students and go over policies in place to deal with student protests. They’re just words, and we’ll have to see what happens next, but they’re a good start.

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