Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Saturday, October 19, 2013

Further Reading.

Regarding Monday's post, three articles caught my eye in the past few days touching on some of the particular points made in that post.  The first is from the Economist, the second from Time Magazine, and the third from the New York Times.

Angela Ahrendts

image available at
Starting with the Economist, this will be among the few times this blog ever mentions Burberry.  Angela Ahrendts, its CEO, has quit to run Apple's retail operations. In six paragraphs, the Economist's editors managed to miss (or chose to ignore) the significance of the fact that Ms. Ahrendts is a woman. Apple's executive suite is composed of CEO Tim Cook and eight male senior vice presidents. Ahrendts will be Apple's ninth SVP, and first female SVP since 1992.

Why should Ahrendts quit as a CEO to play second fiddle to Tim Cook?  There's a lot of things that Tim Cook's been responsible for, but amongst his biggest achievements was the move from PowerPC to Intel chips for the Mac line; that's an engineering, not a design function.  The Economist correctly notes that Ahrendts is very effective at fusing design and technology, but I have a strong suspicion that Ahrendts is willing to make the jump because she has confidence she has a shot to run Apple if she's successful, and that she's risen as far as she practically can in the UK, although perhaps not in California ...

The second article, from Time Magazine, notes that the end of the government shutdown was, in many ways, attributable to a group of female senators.  The U.S. Senate has been called the ultimate men's club, with, "unspoken rules, hidden alliances, off-hours socializing and an ethic based at least as much on personal relationships as merit to get things done."  But the article instead drew attention to the success that the group of female senators, regardless of party, have managed to achieve:
image available at

"Most of the Senators say they feel they speak not just for the voters in their states but for women across America. Over the years they have pushed through legislation that has vastly expanded funding of women’s- and children’s-health research, testing and treatment. They’ve passed the Lilly ­Ledbetter Fair Pay Act and other anti­discrimination laws. And they’ve won federally mandated maternity and family medical leave. While most of these efforts were driven by Democrats, the women are strongest when they unite on legislation like the Homemakers IRA, which allows tax-deductible contributions to retirement plans by stay-at-home parents."
image available at
The final piece, from the New York Times, concerns California's government. Noting that the State has long been "the national symbol of partisan paralysis and government dysfunction," the article points out that a sunny assessment of changes in the State have been voiced by people inside and outside the government:
"... [T]he new atmosphere in Sacramento also offers the first evidence that three major changes in California’s governance system intended to leach some of the partisanship out of politics — championed by reform advocates — may also be having their desired effect in a state that has long offered itself as the legislative laboratory for the nation." 
"Lawmakers came into office this year representing districts whose lines were drawn by a nonpartisan commission, rather than under the more calculating eye of political leaders. This is the first Legislature chosen under an election system where the top two finishers in a nonpartisan primary run against each other, regardless of party affiliations, an effort to prod candidates to appeal to a wider ideological swath of the electorate."
"The turnaround from just 10 years ago — striking in tone, productivity and, at least on fiscal issues, moderation — is certainly a lesson in the power of one-party rule. Democrats hold an overwhelming majority in the Assembly and Senate and the governor, Jerry Brown, is a Democrat. The Republican Party, which just three years ago held the governor’s seat and a feisty minority in both houses, has diminished to the point of near irrelevance."

Monday, October 14, 2013

California, where Malala Yousafzai becomes Janet Yellen.

This is the fourth (and final) part of a series on the future of California. The first post is here, the second is here, and the third is here.  A three paragraph summary of those posts is here.

This post is not brief, but a summary of it can be.  Education makes women powerful, and California is the place where women can get it, use it, and be recognized for it better than anywhere else.  It comes from the character of the State's institutions --  there is evidence that they are earning the public's trust, while nationally faith in government has collapsed.  California, like the Nordics, is building a society that can support women who are working. It will increasingly be immigrants, particularly those that are the mothers of young children, that will hold the keys to California's future. Government must re-earn their trust, generation after generation.  Through education and law, California can continue to win that confidence, making it one of the world's citadels of hope in the face of primitive barbarism.


Malala Yousafzai
Image available at
Malala Yousafzai's on my mind this week. She's come up here before, back in May, when I noted the most popular movie trailer on Apple's site was for Girl Rising, a film partially about her experiences. Malala is a Pakistani girl from the northwestern Khyber Pakhtunkhwa province. In early 2009, when Malala was 11, she began writing a blog detailing her life under Taliban rule, and their ban on girls attending school. In October of 2012, she was shot in the head and neck in an assassination attempt by Taliban gunmen while returning home on a school bus. The assassination attempt sparked a national and international outpouring of support for Malala.

Because she was nominated this year for the Nobel Peace Prize, there were a series of interviews with her in the run-up to the announcement of the award last week (she did not win this time, but don't count her out). Malala made one comment a few days ago on "The Daily Show" that specifically caught my attention, in response to the question "[w]here did your love of education come from?" Her response was:
"We are human beings, and this is the part of our human nature, that we don’t learn the importance of anything until it is snatched from our hands … and when, in Pakistan, we were stopped from going to school, and at that time, I realized, that education is very important, and education is the power for women, and that is why the terrorists are afraid of education, they do not want women to get education, because then women would become more powerful.” 

Janet Yellen
Image available at
It was also last week that Barack Obama nominated Janet Yellen to be the Chairman of the Federal Reserve. As the Daily Telegraph's Ambrose Evans-Pritchard put it:
"Janet Yellen is to take over the US Federal Reserve, the world's monetary hegemon, the master of all our lives ... [n]o Fed chief in history has been better qualified. She is a glaring contrast to Alan Greenspan, a political speech writer for Richard Nixon, who never earned a real PhD (it was honorary) or penned an economic paper of depth ... [s]he has pedigree. Her husband is Nobel laureate George Akerlof, the scourge of efficient markets theory. She co-authored "Market for Lemons", the paper that won the prize ... [c]urrently vice-chairman of the Fed, she was a junior governor from 1994 to 1997 under Greenspan, and then president of the San Francisco Fed from 2004 to 2010. She was head of Bill Clinton's Council of Economic Advisers from 1997 to 1999, when she handled the Asian crisis. You could hardly find a safer pair of hands."
Yet despite her obvious ability, Janet Yellen hasn't exactly had an easy time of it; in 1978, when she and her husband were both teaching at the London School of Economics, Yellen encountered the same resistance Margaret Thatcher described in the UK's culture. ” Meghnad Desai, Baron Desai, who worked alongside Yellen at the LSE, said that:
She was very undervalued at that time, because we only thought of her as someone’s wife ... I could see that she felt she was not getting her due.
While neither Akerlof nor Yellen were from the San Francisco Bay Area, they had jumped ship from the LSE to UC Berkeley by 1980.  Yellen became a full professor within five years, the position from which she vaulted to her most impressive achievements.


So much for Yousafzai and Yellen, how does California come into this story?

David Brooks, in his "Sidney" Awards in December 2012, called attention to an article by Ron Unz, entitled "The Myth of The American Meritocracy." Unz's article demonstrates the sharp differences in admissions practices between, on the one hand, the Ivy League, and on the other, CalTech, MIT, and the flagship UC campuses, Berkeley and UCLA.

Between 1980 and 1993, Asian students went from ~5% of the entering Ivy League freshman classes to over 20% -- but then the percentage fell to 16.5%, where it has held constant more or less since. Meanwhile, CalTech, MIT, and the UC campuses saw the same increase starting in 1980 -- except that the rise never stopped. Unz points out that CalTech, MIT, Berkeley and UCLA have about the number of Asian students that would be expected based on the number of Asian National Merit Scholars overall (about 40% as of 2013).

I cite to Unz (while disagreeing on several points) because he singles out the University of California (along with the science-focused CalTech and MIT) as the schools continuing to fulfill the meritocratic ideal. I think he's right on that particular issue. Berkeley and UCLA will not discriminate against a student that looks like Malala Yousafzai based on the color of her skin.  It is the UC system that will, regardless of sex or religion or race or whatever, catapult one to the apogee of their field. It is where someone like Janet Yellen is not "someone's wife."


The meritocratic ideal, of which UC and CalTech are examples, is a value that has spread far beyond California's universities -- the State's institutions draw in women with ability from all over the world, and advance them to positions of power in government, science, business, and law. Dianne Feinstein. Barbara BoxerCondoleezza Rice. Laura Tyson and Christina RomerMeg Whitman, Carly Fiorina, Carol Bartz, and Marissa MeyerRose Bird, Tani Cantil-Sakauye, and Kamala HarrisElizabeth CabraserMary Meeker. Susan Wojcicki and Sheryl Sandberg

"Asia Has Surpassed Latin America As The
 Leading Source of Immigrants to California"
Infographic, "Immigrants In California," 
Public Policy Institute of California, 
When we speak of the technical achievements of California researchers, or of the skill of the State's businesses in the creative arts and in cutting-edge technology, it is in no small part due to the fact that California is the place in the US that has done the best at unlocking the intellectual abilities of all of its citizens. This is a feat unimaginable in Japan, and a continuing challenge even for the UK. As a consequence, California has become a magnet for talent worldwide.

This means there's been a lot of very powerful, very intelligent women in California demanding practical solutions to the issues such a situation creates. The Nordics were (probably) the first to encounter the problem of how to organize society when almost all women work -- and California has learned from their example. Systematically, the kinds of programs supporting working mothers taken for granted in the Nordics have been, or are being put in place in California. And it is the challenges faced by those mothers -- particularly by immigrant mothers -- that will determine the future of California.


"How Much of the Time Do You 
Trust The Government in Washington?"
Public Trust in Government Survey, 1958-2013, 
Pew Research Center
The Pew Research Center has conducted a survey of Americans for over fifty years, asking them "How much of the time do you trust the government in Washington?" The chart on the right graphs the "just about always/most of the time" response. It has gone from 73% in 1960 to 26% today.

From the early 1960's through the present, the US embraced an elite educated at Ivy League (and similar) schools. On a national level, those leaders have systematically lost the confidence of the nation's citizens. The result of this dysfunction is now on display, as our federal government remains closed for business. Returning to Ron Unz for a moment, his criticism should sting when he writes that:
"Over the last few decades America’s ruling elites have been produced largely as a consequence of the particular selection methods adopted by our top national universities in the late 1960s ... the elites they have produced have clearly done a very poor job of leading our country[.]"
California, though, is different from the nation as a whole. For a generation, the basic operating levers of the California Republic were virtually locked via onerous voting requirements -- a statement by the citizens that the government could not be trusted to make decisions. But Californians have now created a supermajority in their legislature -- and they handed it to the party of government, the Democrats.

Despite an 8.9% unemployment rate, and a tax policy that horribly distorts economic behavior, California's future is brightening. Its voters have engaged in fundamental political reform, creating a nonpartisan citizen's commission to conduct redistricting, instituting a top-two system for general elections that defangs partisan primaries, while at the same time increasing funding for education. Its elected officials have simultaneously ended ineffective, pork-barrel economic development programs and have returned control over education to local school districts.

Meanwhile, perhaps the most significant problem for California has long been, both culturally and from a budgetary perspective, the costs associated with health care. It is no mystery why California has enthusiastically embraced the Affordable Care Act. The former US system, where health insurance was typically provided by employers, has long since been abandoned by the UK, Japan, and the Nordics. Not only does the ACA address the massive long term growth of the cost of health care for the State, but delinking health care from employment (and breaking entrepreneurial lock) means starting a business doesn't require changing (or losing) your doctor -- an annoyance for a thirty-something man, but an entirely different matter for an entrepreneurial female (or, one better, a business-minded mother).

This is not to suggest that California's government is pursuing magical thinking; California has a balanced budget, passed on time.  It is to point out that California and the Nordics are converging on a model that bears great promise for the future.

"The Share of California's Residents Who 
Are Foreign Born Has Plateaued at High Levels"
Infographic, "Immigrants In California," 
Public Policy Institute of California, 
There are countries in the world that deserve low ratings on trust -- in many countries fear of the "government" (kleptocracies) is well warranted. Half of the children in California have at least one immigrant parent, and many of the immigrant families who come to California have lived with governments of that type. So when those parents hear that the government cannot be trusted, they believe it, with damaging consequences.

The mother in such a family, oftentimes without any traditional networks to draw on for support, and perhaps not speaking the language, is making decisions about how to raise her children that will chart the future of the State. Education is the escalator to the future for her kids, and especially for her daughters, and that mother must be able to trust her local school -- to trust her government -- for that to happen. And it is the enduring challenge for the State to make sure that she can.


"The Economist Staff's Favorite
Covers From The Past 20 Years"
Business Insider, July 22, 2011
 available at
I have been asked, what is it about California, that makes it a place of such remarkable achievement for women? Surely government cannot be given credit for this?

I have always been struck by one of the covers of the Economist from March of 2010, which is on the right. The article is here. I caution the reader, the stories related by Xuē Xīnrán are amongst the most terrible, poignant, and emotional you will ever read, and the following passage, describing what she witnessed in the Yimeng area of the Chinese province of Shandong, is heart rending:
"We had scarcely sat down in the kitchen when we heard a moan of pain from the bedroom next door...The cries from the inner room grew louder—and abruptly stopped. There was a low sob, and then a man's gruff voice said accusingly: ‘Useless thing!' ... Suddenly, I thought I heard a slight movement in the slops pail behind me ... to my absolute horror, I saw a tiny foot poking out of the pail. The midwife must have dropped that tiny baby alive into the slops pail! I nearly threw myself at it, but the two policemen [who had accompanied me] held my shoulders in a firm grip. ‘Don't move, you can't save it, it's too late.' ‘But that's...murder...and you're the police!' The little foot was still now. The policemen held on to me for a few more minutes. ‘Doing a baby girl is not a big thing around here,' [an] older woman said comfortingly. ‘That's a living child,' I said in a shaking voice, pointing at the slops pail. ‘It's not a child,' she corrected me. ‘It's a girl baby, and we can't keep it. Around these parts, you can't get by without a son. Girl babies don't count.'”
The horror of a police officer that refuses to protect a female baby is the most dramatic example of why this issue is all about government.

It may surprise the reader, but the message I took from the Economist's series of articles on this subject was one of hope, rather than despair. I remind myself of the following passage when I consider this issue today:
"Baby girls are thus victims of a malign combination of ancient prejudice and modern preferences for small families. Only one country has managed to change this pattern. In the 1990s South Korea had a sex ratio almost as skewed as China's. Now, it is heading towards normality. It has achieved this not deliberately, but because the culture changed. Female education, anti-discrimination suits and equal-rights rulings made son preference seem old-fashioned and unnecessary. The forces of modernity first exacerbated prejudice—then overwhelmed it."
Like South Korea, female education, anti-discrimination suits, and equal-rights rulings are ultimately what can put daughters on an equal footing with sons -- all things that California's government has accomplished. But a country cannot summon the will to take such action, to continue such action, unless it first believes in the effectiveness of the efforts of its own government -- if it possesses the trust of the public.

Where families can trust that their daughters will enjoy the same rights as sons, where the law will protect their daughters, the horror of gendercide can be brought to an end. And the success of California (fittingly, named after a fictional queen) is thus a beacon of hope for families across the world.  It is the place where the immigrant mother can obtain an education, for herself and her daughters, of the highest quality at nearly no cost -- thanks to the California Master Plan for Higher Education. California's commitment to equality reflects the emerging public trust that promises the same rewards for the Golden State as it has for Sweden, Denmark, Finland, Norway and Switzerland.

And so when I consider the future of California, and how the State is not infrequently mocked for its liberal politics and concern with social welfare, I think of the little pink shoes from the Economist's cover.  And as a father, I think of my daughters, and why government matters.

And I have hope for the future of us all.

Tuesday, September 10, 2013

Hanlon's Razor.

So, the Index-Tribune took the time to review the post I made here yesterday. They acknowledged mistakes.  However, they missed the substantive error with their reporter's analysis.  Further, others have now weighed in, pointing out that the STAR test is obsolete -- a point recognized by their sister publication, The Press Democrat, and echoed by the SVUSD Superintendent in another comment today on this blog.  Finally, while I generally always apply Hanlon's Razor in situations like this, I have concerns regarding the adequacy of the reporter's byline that test the applicability of that adage.

To summarize what happened yesterday, I pointed out that the crushing effects on families of the continued Greater Recession/Lesser Depression is increasingly being revealed by standardized test scores in California.  The I-T's article never mentioned the effect of a depressed economy on educational outcomes for students.  However, I also pointed out the technical shortcomings of the reporter's analysis, including specific factual errors included in the article.

While the paper acknowledged the specific errors I pointed out, to understand the magnitude of the mistakes made means that we have to look at the explanatory PDF on appropriate comparisons of the API prepared by the California Department of Education.

"Invalid Comparisons of the API,"
2012-13 API Reports Information Guide, p. 13
California Department of Education
available at  
California helpfully explains invalid comparisons using the API on page 13 (!) of the PDF.  The article in question made a series of these invalid comparisons -- in the same sentence.

The sentence at issue was "[t]he [high] school’s base API was 712 in 2013, down from 723 last year and down from 735 in 2008."
  • First, this sentence mistakes the 2013 Growth API for the 2013 Base API. The California Department of Education Guide never even considers the possibility of a mistake like that -- it's such a basic mistake, I think it would kind of blow their minds. This is the mistake the I-T has admitted. 
  • Then, the sentence sought to compare what it thought was the 2013 Base API to the 2012 Base API, which is invalid comparison Number One from the list.  The I-T hasn't admitted this mistake yet. 
  • Then, the sentence sought to compare the 2013 Growth API to the 2008 Base API, which, coincidentally, is invalid comparison Number Two from the list.  The I-T hasn't admitted this mistake yet, either. 
These errors using the API aren't limited to the discussion of Sonoma Valley High -- they run throughout the discussion of all the other schools as well.  That's why I noted that "most of the multiyear comparisons in the article thus don't really hold up as a consequence." The fact that the article reports nonexistent numbers is one thing, but the basic error here is that the author really doesn't understand how the testing system works. 

Of course, there's yet another issue that's compounding the problems with the reporting in this article, which is that California's schools are in the middle of implementing Common Core.  My opinion (and I'd really like to have completed that blog post by now, but I do actually have to run my law practice and coach soccer, too) is that the individuals behind the creation of Common Core have taken the legal doctrine undergirding the Free Software (Open Source) movement and have implemented it brilliantly to revolutionize American education.

As a consequence, the STAR testing regime has been akin to legacy software for several years now -- and the advent of Common Core renders it obsolete. It's probably time for application retirement.  The Press Democrat's editorial board weighed in this week, calling for exactly that. The Superintendent of SVUSD commented this morning here, and based on that post, I think she concurs. Frankly, I have to agree -- STAR testing results get overwhelmed by demographic noise that obscures the signal concerning educational effectiveness, which has come up on this blog before.

California Schools GuideLos Angeles Times
Screenshot Taken June 7, 2013.
Screenshot available at
Regarding the balance of the comment from the I-T, I'd note that neither of the URLs posted in the comment work, and stating "our print article included a huge chart" is a "defense" that explains many of the problems faced by the newspaper industry.  Further, telling parents "you can go search here" rather than doing the analysis seems to miss the point of reporting.

Finally, I respect the paper when it notes that "[a]s for the reporter being remiss in not speculating why the scores went down, that isn't our role." I agree that the role, as described, is indeed the proper province of the paper. However, I have a hard time reconciling that statement with comments like the one the author of the article left on the LA Times' web site, a screenshot of which is at the right, where the reporter explicitly speculates about what causes test scores to move -- a comment that also suggests a level of partisanship one would think is inappropriate in a reporter.

If there is some relationship, business or otherwise, between the reporter and a private school here in Sonoma Valley, I think that relationship should, at a minimum, be disclosed in the reporter's byline.  Whether the existence of such a relationship should render that individual ineligible to serve as a reporter on the subject of public school test scores is a question that is, however, above my pay grade.

Monday, September 9, 2013

"It's the Economy, ..."

(November 5, 2013 -- For the benefit of readers, please note that the comments on this post include statements from the Sonoma Index-Tribune and the Sonoma Valley Unified School District, that were the subject of a followup post here.)

The Sonoma Index-Tribune wrote an article last week about "declining" test scores in Sonoma Valley. While I'm blogging about another topic at the moment, I did not want to let this one fly by without comment, as there was an interesting data trend buried in the (somewhat confused) article.

The students entering kindergarten this year were born at the end of 2007 and the first part of 2008.  These are children whose "First 5" years of child development took place during an economic collapse.  All of the students in elementary school today have spent at least half of their lives in a depression.  It is my suspicion that the consequences of that experience will be visible in the data for decades.

The data trend stumbled upon by the I-T is not unique to Sonoma Valley. Austin Creek Elementary is a nice example -- it's ranked as a "10" on the statewide rankings, and it's the Santa Rosa school geographically closest to Sonoma Valley.  Austin Creek's 2013 Growth API Report shows the same trends as Sonoma Valley.  Its scores are plummeting -- Hispanic/Latino student performance fell by 51 points, and Socioeconomically Disadvantaged student performance fell even more dramatically, by 113 points.

Austin Creek Elementary
Yet it's unlikely that Austin Creek's (or anyone else's) ranking will change as a consequence of these declines, because school rankings are relative things. If everyone starts doing worse, the rankings stay the same.  And that's exactly what's been going on, as nearly every student, across California, has faced an extraordinary tumult and disruption in their daily life.  This is not just due to school budget cuts, but more importantly, because their families are being crushed by an ongoing, drawn out economic depression.

I do, though, want to draw attention to the fact that there were problems with the substance of the reporting, which probably has more to do with the author's unfamiliarity with the testing regime than anything else.

First, the article consistently confuses the difference between Growth API and Base API.  For instance, the article states that "[t]he [high] school’s base API was 712 in 2013, down from 723 last year and down from 735 in 2008." This is easily, demonstrably wrong -- the 2013 Base API won't be released until Spring of 2014; the only thing that's been released for 2013 is the Growth API.  It's not uncommon for the less experienced observer to make that mistake, and most of the multiyear comparisons in the article thus don't really hold up as a consequence.

Further, while the title of the article concerns STAR results, there's next to no discussion of the specific results at all.   The STAR test results are granular -- results come out for each school, each class, and each quintile within each class. An article that gave some guidance for parents on how to understand those reports would have been useful. However, that explanation would not have been a short one, and would have shown some very positive results for the District.   But the article wanted to talk about Base API for 2013 (even though that's not available yet), and unfortunately, a detailed discussion and analysis of the STAR results was a casualty of that decision.

Finally, the tone of the article will probably cause some unnecessary headaches.  Every time one of these pieces comes out, there is a certain amount of rending-of-clothes by the teachers and administrators at SVUSD. But beyond the illustration of the economic impact of the Great Recession/Lesser Depression, I don't think there's much to take away from the article for those interested in improving the condition of Sonoma's schools.

Saturday, September 7, 2013

Glass Ceiling, Iron Lady.

This is the third in a series of posts, about where the State of California is headed.  The first is here, and the second is here.

In the first post, I took a look at the Nordic countries of Europe, and how their high quality governments arose out of a history of difficult geography and benign history. I noted that California has a similarly difficult geography and benign history, and that California has dealt with those challenges through a series of "big projects," the ultimate example of which is California's Master Plan for Education. Yet while both the Nordics and California have enjoyed subsequent economic success, they have developed very different levels of trust in government. To try to understand why California's culture has developed differently, I looked for a foil to California, a place with technical sophistication and high levels of education that is nonetheless suffering from economic stagnation -- a description that fits Japan.

In the second post, I took a look at Japan, and how its stagnant economy has been hobbled culturally. I drew attention to the Japanese disdain for entrepreneurs. Even more importantly, I pointed out its yawning gender gap. I found this surprising given Japan's long term cultural flexibility. However, I argued that the Japanese repression of women seems to reflect a longing for an arcadian rural society. I pointed out how England shared the Japanese preoccupation with so-called romantic country life. I argued that the English, unlike the Japanese, have self-critically examined the consequences of this ideal, and that the English had tempered their views by the late 1970's, when Margaret Thatcher, chemist by training, Education and Science minister in government, became Prime Minister.


Surrey docks, September 7, 1940
Image available at
In some respects, it is hard to pick "winners" from World War 2.  But it is clear who the losers were, and the British Empire was one of them.  Much as the collapse of the Western Roman Empire was foretold by the sack of Rome by Alaric in 410 AD, the Blitz of London in 1940 shocked the British and signaled the acceleration of Imperial decline. Despite eventual American entry into the War, the UK found itself on the brink of bankruptcy in 1945, and a harsh postwar austerity followed.

However, the UK did not stop bearing the costs of maintaining international order. Unlike the Nordics (and, effectively, since 1945, Japan), the UK continued to expend substantial sums on defense, while the Japanese and Swedes spend far below the average to this day. The UK, like the US, remained committed (most of the time) to collective defense through NATO, and to collective security through other international organizations.

 Image available at
By the 1970s, though, the UK economic situation had become dire. Wages were amongst the lowest in Western Europe -- half those of the West Germans, and only two-thirds of the Italians -- and educational achievement lagged behind a series of other industrialized nations. Massive strikes became common. The UK's "Winter of Discontent" in 1978-1979 is hard to imagine today, but it was a place where Chris Mullin's A Very British Coup was a plausible, if frightening potential future for the "Sick Man of Europe." 

Into the maelstrom stepped Margaret Thatcher as Prime Minister. Thatcher herself said, as late as 1970, that "[t]here will not be a woman prime minister in my lifetime - the male population is too prejudiced." This was a keen observation from a skilled observer; it was also wrong. The culture of the UK changed, rapidly, under pressure. 

It is difficult to understate how significant a change it was; in 1832, the UK had taken the vote away from women. While the US record on women's rights is not exactly stellar, Jeannette Rankin of Montana was serving in Congress before women in the UK even had the right to vote.  Julian Fellowes' Downton Abbey (a short clip is below) illustrates the UK upper class ... backwardness, for lack of a better phrase, right up to the start of World War 2.

Thatcher's policies in office were conservative -- essentially, to promote low inflation, the small state, and free markets through tight control of the money supply, with privatization of state-controlled businesses and constraints on labor unions.  The success of her efforts is attested to by the fact that most of the major UK political parties today accept the approach that Thatcher's government installed.  A cultural consensus formed regarding Thatcherism, which spread across the political spectrum. Tony Blair, in his autobiography A Journey, argued that the UK "needed the industrial and economic reforms of the Thatcher period ... much of what she wanted to do in the 1980s was inevitable, a consequence not of ideology but of social and economic change."

However, while Thatcher's policies were anything but socialist, her government did not challenge the existence of the National Health Service -- the UK has had what Californians would characterize as "Medicare for All" since 1948.  Just as a consensus in the UK formed around the economic policies of Thatcherism, so too had a consensus formed concerning health care. It is easy to underestimate how important portable health care is for women (or, indeed, any entrepreneur) in the workforce; the US system tying it to employment has been argued (I believe correctly) to have created a degree of "entrepreneurship lock." When Thatcher implemented her policies, no laid-off worker needed to fear losing their health care, a critical point often missed by US observers. Thatcherism, while a radical series of reforms, was therefore a great deal less harsh than similar policies are when implemented in the US.

And in that forming of a cultural consensus -- of trust in government, alternately coalescing around policies championed by the left and the right, is the thread that ties the stories of the Nordics, Japan, and the UK in the last century to the future of California in this one.  And arriving at that point is the signal that it's time to turn the focus to California itself.


Janet Yellen
Image available at
I take the trip back across the Atlantic in 1980 with a pair of somewhat nerdy economists, heading to new teaching jobs on the West Coast of the United States. They had been teaching for a few years at the London School of Economics, where the wife had encountered the same resistance Margaret Thatcher described in 1970 in the UK's culture. The husband and wife team was done with the LSE, because, as the faculty there would later admit, "we only thought of her as someone’s wife ... ”

The couple's names were George Akerlof and Janet Yellen. And that's where this story will pick up again, another day, over here.

Friday, August 30, 2013

Beikoku and Eikoku.

This is a second in a series of posts, about where the State of California is headed.

The first is here. In that post, I took a look at the Nordic countries of Europe, and how their high quality governments arose out of a history of difficult geography and benign history.  I noted that California has a similarly difficult geography and benign history, and that California has dealt with those challenges through a series of "big projects," the ultimate example of which is California's Master Plan for Education. Yet while both the Nordics and California have enjoyed subsequent economic success, they have developed very different levels of trust in government.  To try to understand why California's culture has developed differently, I looked for a foil to California, a place with technical sophistication and high levels of education that is nonetheless suffering from economic stagnation -- a description that fits Japan.

"Cherry blossoms at Hirosaki Castle, Japan"
Pretty much anyone growing up in the 1980s who was interested in economics and history spent a good deal of time looking at Japan.  No-one considers Japan a model today; after 1989, Japan fell into a seemingly endless slump.  However, this may have recently changed, given that Shinzō Abe's government appears to be having some success.  

Most economic analysts agree that Japan's situation is different from Europe's (Japan is no Greece) -- despite a national debt that stands at close to 250% of GDP, the debt is nearly entirely held domestically, and interest rates remain near the zero lower bound

Instead, Japanese stagnation is attributed to culture.  For instance, Abe is Japan’s first leader to treat entrepreneurs as something more than "greedy hustlers." As the Economist notes, "Venture-capital firms have few big payoffs to look forward to, with the result that there is a limited pool of cash available for those who do want to have a go at starting a business." But then the editors looked at another factor entirely -- the cultural obstacles to creating startups -- a factor that made me do a double-take:
"Wives, mothers and mothers-in-law exert a strong influence on men not to join risky start-ups ... [t]he success of the big firms born in Japan’s great period of post-war entrepreneurialism ... discouraged graduates from joining newer ventures ... [as a result] [e]xperienced managers are seldom keen to leave large companies."
What? In California, wives, mothers and mothers-in-law run start-ups. In Japan, am I to believe that the influence of these same individuals is limited to advising sons and husbands concerning their careers, rather than participating themselves in the economy?  That cannot be correct. Educational statistics suggest Japanese women are some of the most educated in the world. Surely, that education gives them opportunities that they are motivated by the culture of their schools to deploy in the world at large.

"Gender Gap in Median Earnings, Full-Time Employees"
Gender Brief, OECD Social Policy Division, March 2010
available at
I was, of course, totally wrong.

Japan is nearly at the bottom of the rankings in the 2012 Global Gender Gap Report -- it was number 101 out of 135. Azerbaijan, Tajikistan, and Bangladesh all do better, for Japan is one of the industrialized world's least equal countries. Writing recently in the New York Times, Laura Tyson noted how comprehensively Japan's economy has been hobbled culturally:
"... [s]trong cultural norms value stay-at-home mothers. Tax distortions reinforce these norms and penalize two-worker households. Long working hours with overtime requirements make it difficult to balance work and family responsibilities. Child-care services are in acute short supply. There are long waiting lists for public child care, and a limited number of private providers because of burdensome regulations ... [w]omen are often caught in a Catch 22: they cannot secure a job until a child-care slot is available, and they are not eligible for such a slot until they have a job ...  about 70 percent of Japanese women leave the work force after their first child. Only about 33 percent of Japanese mothers with young children work, compared with 50 to 60 percent in the United States, Britain and Germany, and 75 percent in Sweden ... [m]ost of the Japanese women who quit work for family responsibilities want to rejoin the work force but have a hard time doing so and face serious penalties in future wages and promotions."
This failure (I don't know what else to call it) of Japanese culture to engage women in the workplace is all the more peculiar given Japan's well known devotion to hard work, and further, given the extraordinary flexibility demonstrated by Japanese culture over time.  From the end of Kaikin (Sakoku) with the arrival of the Kurofune, through the Meiji Restoration and into the Taishō period, Japan demonstrated exceptional cultural adaptability -- with this glaring exception.
"Black Ships and Samurai"
MIT Visualizing Cultures

There are any number of factors grounded in the Japanese cultural experience that can explain this issue, but there is an element of the Japanese view of the world, as expressed through language, that I find particularly interesting on this point. It comes down to two specific sets of kanji characters.

The first is 米国, or Beikoku. The character , as a noun, generally means "rice," while the character  means "country." Combined, in Japanese, they mean "The United States."

There are a lot of explanations offered for this, but one suggested by Bill Emmott in his book "20:21 Vision" is that the Japanese chose this name for America in 1853, at the time of the Perry Expedition, and that the name is meant by the Japanese quite literally.  Indeed, it is Emmott's view that America was (and was expected by the Japanese to continue to be) primarily a nation of farmers. (Yes, smart people can make serious mistakes.)

But the even more interesting piece of kanji is 英国, or Eikoku.  The character , as an adjective, generally means outstanding, fine, or bright, and the second character, as in Beikoku, means "country."

That is the Japanese name for "England."

The Palace of Westminster
Image available at

Emmott (whose credentials as a journalist on Japan are exceptional) argues the name was adopted in the late 19th century, when the Japanese thought that what is our modern day United Kingdom was the country to be (and, probably, to beat). When Japan sought to modernize, in many respects, its model was Anglophilic -- for example, in 1870, an Imperial decree determined that the Royal (British) Navy should be the model for Japanese naval development, and the British model became the foundation of naval officer training and education. To this day, Anglophilia remains common in Japan -- for instance, both Crown Prince Naruhito, and his wife, Princess Masako, did postgraduate work at Oxford.

However, it is not the industrial spirit of the UK that appears to hold a cultural attraction for Japan.  Instead, as one (rather popular) Japanese author, Nozomu Hayashi, has arguedthe Japanese are drawn mostly to England's traditional attractions. Roast beef. Country houses. Patchwork quilts.  The Japanese are not enamored of the England of Charles Dickens' Oliver Twist or Richard Branson's Virgin Galactic, but instead look to the England of Julian Fellowes' Downton Abbey.

Jessica Brown Findley, Laura Carmichael, Michelle Dockery
"Downton Abbey to Return For Fourth Series"
The Daily Telegraph, November 23, 2012
Image available at
And this is one of the great peculiarities of the modern United Kingdom, and brings me to the end of this post, while pointing in the direction of the next.  For, while internationally, the romantic country life of England retains its appeal, the impact of that yearning in the UK itself, for an arcadian rural society, has been a source of intense debate and criticism. That ideal has been blamed for holding back the United Kingdom from fully realizing the benefits of modern society.  It is that ideal that has been held responsible for the preference by the commercial and industrial classes of the UK for sending their children to private schools where "the sons of businessmen were looked down upon and science was barely taught," that finds its start in the 1850s if not earlier. The ideal arguably reached its denouement with the collapse of James Callaghan's Labour government in 1979, and with the elevation to Prime Minister of a scientist -- a chemist, who specialized in x-ray crystallography -- with a prior portfolio as Secretary of State for Education and Science.

For it is to Margaret Thatcher and the UK that I turn to next. But again, a post for another day.

Tuesday, August 27, 2013

Nordic Success.

"International: The Lottery of Life"
The Economist, November 21, 2012
available at
From time to time I take on blogging topics that are bigger than a single post. A friend asked me a couple of months ago "where do you think California is headed?" That's definitely one such topic, and this post is the start of an effort to answer that question.

When thinking about California's future, it's not unusual to draw comparisons concerning the recent experiences of other countries. In such conversations, the "Nordic" countries of Europe -- Switzerland, Sweden, Finland, Norway and Denmark -- usually get discussed. I don't think these are ultimately the most relevant international comparisons, but they're not a bad place to start.

The Economist recently ranked Switzerland as the best place to be born in the world in 2013. Their survey of the country in 2004 pointed out why -- for a small, landlocked country of 7 million, the Swiss have done well.  The country is known for democracy, fairness, stability, quality, meticulousness, punctuality, thrift, efficiency, openness, reliability (whether a watch or a bank), good hotels, and great chocolate.

Indeed, all the Nordic countries do well in the Economist's rankings. The Economist ranked countries in the world in 2012 on competitiveness, and, surprise of surprises, Sweden is the top of the list, followed by the four other Nordics.

"Lessons: The Secret of Their Success"
The Economist, February 2, 2013 
"Why has this remote, thinly populated region, with its freezing winters and expanses of wilderness, proved so successful?" asked the editors?

There was one factor in these countries' success that stood out, at least to me, and which is relevant to the future of California.  The Economist noted that a key feature in the success of each of these countries is the quality of their governments:

"[T]he Nordic talent for government is sui generis. Nordic government arose from a combination of difficult geography and benign history. All the Nordic countries have small populations, which means that members of the ruling elites have to get on with each other. Their monarchs lived in relatively modest places and their barons had to strike bargains with independent-minded peasants and seafarers... [t]hey embraced liberalism early. Sweden guaranteed freedom of the press in 1766, and from the 1840s onwards it abolished preference for aristocrats in handing out top government jobs and created a meritocratic and corruption-free civil service ..."
Like the Nordics, California has had a combination of difficult geography and benign history.  California has, for practical purposes, not been a theatre of war since statehood in 1850, and the State was initially cut off from the rest of the United States, a problem addressed in degrees by the  Transcontinental Railroad, the Panama Canal, the Interstates, and the advent of cheap consumer air travel.  California's internal geography presents its own challenges, still not resolved.  Further, population growth was, is, and will continue to be constrained by water shortages, notwithstanding the construction of massive dams and aqueducts.

Sather Tower, UC Berkeley, with view of San Francisco.
Image available at
California's history of "big projects," I (and a lot of other people) would argue, led to the creation of what the State calls its "Master Plan" for education.  Starting in 1960, the State essentially decided that cheap (indeed, oftentimes free) higher education would be available to everyone. The effect of the Master Plan has been profound -- I have no problem agreeing with the assertion that California's economic dynamism results from the implementation of the Master Plan. Indeed, the Master Plan (despite its faults) has been a sterling example of the success of California's government.

California has also ended up with a liberalism that, at first glance, appears similar to if not the same as that of the Nordics.  I don't generally think it's necessary to pull examples to support that argument, but here are a couple of strong data points. Yet this is where the comparison with the Nordics starts to break down.  The Economist argues that the experiences of the Nordics had an important cultural impact, which makes them different from many other countries to this day:
 "The combination of geography and history has provided Nordic governments with two powerful resources: trust in strangers and belief in individual rights ... Economists say that high levels of trust result in lower transaction costs—there is no need to resort to American-style lawsuits or Italian-style quid-pro-quo deals in order to get things done. But its virtues go beyond that. Trust means that high-quality people join the civil service. Citizens pay their taxes and play by the rules. Government decisions are widely accepted." 
This does not describe the popular perception of California. There are few people that would agree that California, in the last 40 years, has been a place high in trust in strangers.  The State, in general, has very high quality civil servants (per the Economist, "it has never paid to bet against a state with as many inventive people as California"), but the voters of the State nonetheless undertook an effort to write tax avoidance into law. And California became an example of the most litigious State in America.

To try to understand how California enjoys a similar economic dynamism to the Nordics, but not their cultural advantages, it seems to make some sense to look for California's foil.  That country would be a place every bit as technically advanced as California, that has similar cultural advantages to the Nordics, but at the same time, would be a country that would (tragically) lack economic dynamism.  Sadly, there is such a place in the world.  Since 1990, that country has been Japan.

And that is a post for another day.

Wednesday, February 13, 2013

A Billion Reasons to Like Peg Melnik.

Peg Melnik
Peg Melnik writes a nice blog for the Press Democrat which weighs in on interesting wine and tourism related issues in Napa and Sonoma from time to time. She's a great resource for anyone visiting the area, and her book, the Explorer's Guide to Napa & Sonoma, is now in its 9th Edition (you can pick up a copy on Amazon). She writes with her husband, Tim Fish, who is an associate editor for Wine Spectator.  

She put up a piece a few weeks ago about Sonoma Valley rebranding itself, a screenshot of which is at the right. It's an interesting article, but there was just one thing that really jumped out at me ... $7 million spent in Sonoma County on tourism per year? 
Peg Melnik, "Identity Crisis?"
Tasting Room Blog, The Press Democrat, Jan. 29, 2013
available at

Someone gave Peg some very bad statistics.  The actual number in 2011, was, of course, much higher - about $1.32 billion.

By way of contrast, the value of the County's entire grape crop in 2011 was $347 million.

The figures are courtesy of Sonoma County's Economic Development Board, whose graph on the issue I excerpt at the right, and the Sonoma County Agricultural Commission.  

So -- Peg -- don't underestimate the effects of books like yours on the local economy ..., "Annual Tourism Report, 2012"
Sonoma County Economic Development Board
available at
These statistics are part of the very comprehensive economic reporting done on Sonoma County on a yearly basis.  The statistics on the EDB's web site go back more than a decade, and reading through them (and watching the changing predictions) is often illuminating.  These materials, like the UCLA Anderson Forecast and the Moody's annual reports to the County, are a great for answering questions about the economy for anyone involved in local government.

Friday, January 25, 2013

Autocorrecting Driving?

I'm frequently amused by the substitutions made by iPhones when they're trying to automatically make corrections.  The phenomenon has spawned a series of websites, and one of the funnier posts I've seen is on the right.

The reason I bring it up today is because of the posts I've been reading discussing the concept of "driverless" cars.  There's been some talk on the subject in the last day or two from  Paul Krugman and Felix Salmon. I've been thinking about it a bit because of the safety concerns that have cropped up here in Sonoma regarding pedestrians in crosswalks.  By some accounts, the technology is now at a point where your car can detect whether someone's in the road (crosswalk) in front of you, and slow your car down, automatically. Further, the technology has the potential to dramatically increase the capacity of roadways through platooning, which has important consequences from an urban planning perspective. 

However, while I am impressed with the potential of the new technologies, I must express a certain degree of skepticism concerning how quickly its benefits will be achieved.  After the perils of autocorrect, Siri, and Maps on the iPhone, I think caution is prudent for us all ...