Analysis: Right wing stink tank sells sales tax snake oil to Rhode Island


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tax-cut-fairyThe ongoing discussion of eliminating the sales tax proves the enduring value of telling people what they want to hear.

Don Carcieri, for his whole term, told people that government could be cheaper, but really all he did was insist it be so and ignore the evidence when it turned out not to work quite the way he’d hoped. Does anyone remember the “big audit”? It was done early in his administration, but all the findings about places where increased investment would help our state were deep-sixed and the other results were insignificant enough that the whole project was considered a minor embarrassment and mostly forgotten.

The most recent success along these lines is the RI Center for Freedom, Prosperity, Motherhood, and Apple Pie who have enjoyed an astonishing level of success in keeping under discussion their claim that Rhode Island would profit by eliminating or slashing its sales tax. There’s a legislative commission that keeps meeting and they put out an unending stream of press releases that occasionally get reprinted.

So here I am, feeding into exactly that need for attention they crave, but let’s be clear: this is a stupid idea, supported by fantasy projections and a misunderstanding of the real world.

I see from their most recent press release that they claim a reduction of the sales tax to 3% would produce secondary effects worth much more than the revenue lost: over 13,000 new jobs, hundreds of millions in new revenue to the state and cities and towns, and so on.  They call these “dynamic projections” presumably because everyone knows that something that is “dynamic” must be good. They do say that state revenue might be down by a bit, but made up by city and town revenue. (An aside is important here: we often see claims like theirs that Rhode Island’s sales tax is the highest in the country. This is false, or misleading at best. In most states, county governments are supported by sales taxes, and there are places in 31 states — including Texas, Arizona, and most of the South — with a higher sales tax than ours.)

But let’s look at these “results” of theirs.  They claim, for example, that their model predicts $79 million in new sales tax revenue. This is a 20% boost in sales. Do you believe that lowering the cost of a $100 item from $107 to $103 will produce a 20% increase in sales of that item? That is, they predict that a 3.7% savings will produce a 20% increase in sales. Do people out there with retail experience think this is remotely likely? Presumably people will spend a little more when there are savings, but seriously? Perhaps they imagine hordes of Swansea residents will drive through Seekonk to do their shopping in Warwick in order to save a few percent on their purchases?

The CFPMAP report goes on to imagine that the resulting 20% increase in retail sales in Rhode Island will be responsible for $208 million in income tax revenue. Backing this out, that means they imagine the 20% increase in sales will be responsible for around $4 billion in income for the state. This is almost a 10% increase in the economic output of the entire state. Do you believe this will be the result of a sales tax cut? They are only (only!) projecting an increase in taxable retail sales of $2.5 billion, so the other money presumably comes from the tax cut fairy. The 13,000 new jobs they suggest would appear don’t even account for a quarter of the increase in income they project. The rest is because everyone else would get a raise, or more hours. Would you expect a raise if the sales tax is cut?

One could go on, into their hidden assumption that all these new hires and raises happen instantaneously upon the announcement of the newly lowered tax, or into their projections that newly-prosperous Rhode Islanders would buy 32% more cigarettes and 25% more liquor (also immediately), thereby swelling the revenues from those taxes, but why bother?  The proposal is ridiculous, supported by projections that will take in only the gullible and those who really wish to be taken in.

And there’s the issue, really. Lincoln Almond and Don Carcieri owe their success to the desire of people to believe their claims that government could be cheaper. They were not brave politicians, taking on the fearful power of special interests. They were guys who were propelled into high position by promising people what they wanted to hear and maintaining that it was possible long after events had proven them wrong. Theirs was no kind of courage. Political courage is what we have seen in Governor Chafee, who has consistently presented us with tax and budget proposals that worked against his interest in re-election — and that have been consistently overridden by legislative leaders more interested in theirs. Let us only hope that they are able and willing to see through this latest sales tax claptrap.

Social impact bonds: ‘do they promote public good, or sell it?’


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raimondo fist pumpGina Raimondo “kicked off” her campaign for Governor yesterday, and wouldn’t you know it, but the centerpiece of her policy proposals will be a new invention of Goldman Sachs, the “social impact” bond.

What, you might ask, is a social impact bond?  The idea is that some great source of capital like, oh, I don’t know, Goldman Sachs, lends some community millions of dollars to improve early-childhood education. Perhaps they build a new pre-K facility, or even use the money to pay some teacher salaries. A wealth of evidence shows that this kind of investment pays a return of sorts because the kids who enjoy this better education are less likely to become teen parents or teen lawbreakers. It stands to reason, therefore, that the community so enriched by this investment can repay the bond by sending to Goldman Sachs the money that would have been spent on the welfare or jail that those teens didn’t need. How’s that for a win-win?

From the perspective of the public budget, you’re really no further ahead, of course, since the money you were going to spend on jails is spent on paying Goldman instead, but at least you have this shiny new school, and fewer criminals, too.

Of course if your pre-K students grow up to be peaceable, responsible, taxpaying, and generally lovely adults — who happen to live somewhere else — well, you can’t make an omelette without cracking a piggy bank, right?

Snark aside, what do we really have here?  Is it a good idea or not? Is this a way for communities to access funds for desperately needed investments, or is it a new way for the financiers who burned down our economy just a few years ago to rape the public funds — again?  Bear in mind, please, that there is a substantial risk here. Research about the future costs of jail and welfare are estimates, made to illustrate various cost/benefit analyses. They are not carefully calibrated prices. The weight of evidence says there will be savings, and the side benefit is happy people and less crime. To me, that’s enough to argue for investment, but the happy people and less crime parts of the benefit aren’t going to help pay off a loan.

It might be worth asking at this point, why those communities can’t afford to invest in these improvements the evidence says will pay off. Oh, right, it’s all the tax breaks of the past decades. Did you know that business taxes used to be the third most important source of revenue to the state of Rhode Island?  Now they are fifth, behind the lottery and all the fees collected by various departments. Did you know that the richest Rhode Islanders paid over three times the income tax of the average taxpayer in 1996, and in 2011, a bit more than twice?  Over the past decades, our state and nation have cut taxes repeatedly in a vain and misguided attempt to stimulate the economy and things have only gotten worse for everyone except those whose taxes were cut.

So now that we can’t afford to make these investments in education and infrastructure (not to mention the human capital our business community claims they want access to but won’t pay for) here’s a new plan: take money from the rich, not as taxes, but as loans, and in return pay them the benefits that used to be thought of as belonging to everyone. And if the benefits don’t actually pan out, do you imagine that the financiers will be at risk?

It’s easy to imagine a community in dire straits, seeking to salvage the futures of some of its residents, with such a desperate and risky scheme. Business owners on Federal Hill used to find themselves wondering in the same way if they should ask the mob for help. But to imagine — no, to actually see and hear — a gubernatorial candidate suggest that this is a good idea on its own merits is appalling. The idea is a disgrace, a wholesale sellout of the very concept of the public good.

So what do we learn here?  First, that the creativity of people paid millions of dollars to think of new ideas to make more money is nearly boundless. Over the past decades, we offered a bargain: tax cuts for rich people in exchange for a better economy. But they used the money to buy political power and used it to extract still more money from the rest of us. They are already on the way to owning the world. Here is yet one more way for the fabulously wealthy to solidify their control of our politics and our world.

The other thing we learn?  That clearly Gina Raimondo is not at all worried by the idea that she might be perceived as too closely tied to the wolves of Wall Street. The question she should answer: does she want to promote the public good, or sell it?

A knew hat in the wring


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Received the following press release in my email.  It is reproduced verbatim here as a public service to East Side voters:

Press Release:

From College Republicans of Johnson & Wales University

A Young College Republican Upset that his District is paying more of there fare share into the city and the State of Rhode Island.

Johnson & Wales University College Republican President Russell Taub considers running for either city council in Providence or for the State House in 2014 at Edith Ajello.

H. Russell Taub 25 years old student at Johnson & Wales University studying hospitality and entrepreneurship is a member of many campus organization starts to gather information on issues that his district  faces and what changes need to start happening.

H. Russell Taub who participated in this year Hanukkah lighting says he feels that that Jewish Community has been ignored when the state house did not even have the Hanukkah lighting on the calender for people to look up or attend. Even Governor Chafee staff had no idea when or if it was still happening, creating a feeling of not caring about the Jewish Community. And that Christmas is more important than any other holiday.

He  went to Fairleigh Dickinson University to study politics and foreign relations, which he did for three years before he  given an opportunity to be part of the Social Humanitarian Committee on Indigenous Affairs as an NGO Rep. at the United Nations for one year. After that he transferred to Johnson & Wales University. Currently H. Russell Taub represents many organizations including a social group designed to promote the State of the Rhode Island and its job to promote businesses and the state with foreign governments, the group is called the United Nations Association of Rhode Island. He also works for the Blackstone Valley Tourism Council as the Relationship Manager and part of the RIGOP Finance Committee as an educational resource for him to learn from. He recently was part of the polar express in Woonsocket where the Tourism Council was solely responsible for bringing roughly 11,500 people to the city of Woonsocket. Last year he was appointed by the International Human Rights Commission to Ambassador to the USA at the age 24.

H. Russell Taub maybe a republican but he is very much bi partisan politician who believes in working together is the only way that we can start to solve Rhode Island problems. He does not stand for party politics at all he stands for the community and what his constituents wants.

 He believes in property tax reform, bipartisan women in leadership and entrepreneurship, accountability of taxes, and making sure those who are paying more of there fare share do not have to any more.

More news will come in the next weeks to weather or not he will run and if so what he will run for.

From College Republican
H. Russell Taub
russ taub

 

 

Turning the ProJo into an employee-owned co-op


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ProjoThe possible sale of the Providence Journal is a perfect opportunity to examine what has often seemed to me to be about the lowest-hanging economic development fruit — that we continue to ignore.

Back in the misty dawn of time, also known as the 1980s, when Mario Cuomo was Governor of New York and liberals weren’t afraid to support good policy just because it was a good idea, the Empire State Development Corporation established an office of employee buyouts. They realized that it’s hundreds of times easier to keep a business going than to start a new one, and that sometimes the best buyers for a company are the people who already know how it works. The idea was to provide low-cost financing to groups of employees who wanted to keep a business going when the owners wanted to sell or retire.

The office existed for a few years, did good work retaining lots of small businesses, and then George Pataki was elected governor. That Republican had run against exactly the kind of economic intervention implied by the employee buyout program, and so the program was jeopardized. For a while, the office continued its existence by going underground. ESD directors renamed it the Office of Business Succession and had it offer more general succession planning, where employee buyouts were only one among the options. But the financing piece was difficult to implement under the new regime, and without that, it became little more than a referral service to business consultants. The program exists today as only a fond memory among elder ESD staff.

Employee-owned companies are an old idea, but a good one. The worker co-ops of Mondragon, in Basque Spain, were founded in the 1940s, and have been the centerpiece of a vigorous industrial economy ever since. Similar organizations existed over a hundred years before, in England and Scotland. These days, they are an important part of an industrial renaissance in parts of the midwest, where the idea appears to have caught on. Ohio State now runs a coop development center to provide technical assistance to establishing such businesses, and the University of Wisconsin has a Center for Cooperatives that does the same, plus research into the topic.

Years ago, I worked for a little while at just such a company. The Worcester Company, of Centerdale, was among Rhode Island’s last textile companies. When the owner wanted to retire in the 1970s, rather than sell his factory to someone who would move production to North Carolina, he financed an employee buyout. About 400 people worked there, and every morning would file in to work through a door marked “Owners Entrance.”  They had monthly business meetings where dozens of people would meet to hash out strategies and opportunities. They made mostly high-end woolens, and by exploiting a high-cost niche at the top of the market, were holding their own, paying all their employees decent wages and even turning a small profit.

Unfortunately, though the company made money, it was not enough to service the high-cost debt that was all they could find. With no help available within the state (or from the state), the company sold a 25% stake to British investors in exchange for a line of credit. After a few years, those investors saw higher returns available elsewhere and demanded to sell their share. The state stood by, offering nothing at all, while a profitable company, with 400 employees, was forced into liquidation, and now the rotting hulk of its factory sits at the heart of Centerdale.

We’ve lost a lot of manufacturing, but at least some other businesses have grown up. Every one of those existing businesses would be easier to keep than to replace, and lots of them are owned by people who are at least thinking of selling or retiring, if they are not actively doing so right now. Statistics are hard to come by, but it’s relatively clear that less than a third of privately-owned businesses continue into a second generation, and many fewer than that pass into a third.

Paying some attention to these businesses would be easy and inexpensive. Creating a central marketplace for business owners who want to sell out would take very little effort, and reliably save a lot more jobs than investing in any startup could. In his short-lived run for Secretary of State, Ed Pacheco spoke about how that office—already in at least annual contact with all the corporations in the state—could readily assume such a role.

The business for sale that’s in the news right now is the Providence Journal. Back when it was a family-owned affair, it might have been an excellent candidate for such an employee buyout. These days, after more than a decade of bumbling management and, well, rapine, by its Dallas owners, it’s not quite so clear. (Especially since such a transaction usually requires an accommodating seller willing to wait while the pieces are assembled.)  The paper’s value 15 years ago was in its staff and its circulation, and both of those have been decimated by management.

Even so, at a small fraction of the size they used to be, the Journal has several times as many reporters as any other news organization in the state. The paper dominates the local news scene, still setting the agenda for the other media in the state. Many tens of thousands of people see it every day. There is important value there, and it seems conceivable that some non-profit form of ownership — maybe even a co-op — would be a useful way to preserve the paper, and its role in shining bright light on matters others try to keep hidden.

It’s doubtful that it would be a good idea for the state government itself to get involved in preserving a newspaper that needs to retain its independence in order to be a trusted voice. But our community does clearly have an interest in an informed public, and finding a way forward to keep the Journal ownership local and responsible should be at the top of the agenda for everyone concerned about the future of our state.

The Manufactured OPEB Crisis


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203opebI read in Monday’s newspaper about the terrible state of the retiree health-care system in our cities and towns. The trust funds that are supposed to pay for retiree health benefits (called “Other Post-Employment Benefits” or OPEB) decades into the future are deeply in the red. But as usual, there are some very troubling assumptions made in order to paint this bleak picture. If you do the math, you’ll see that the actuaries who predict this disaster do so by assuming a catastrophe.

Where does this terrible debt come from?  It comes from the exploding cost of health care, extended out a few decades into the future. Even a small inflation rate, sustained over 50 years, can become a huge number. So what have the actuaries assumed in order to make these bleak predictions?  I surveyed some of the reports, and found that Providence’s actuaries assumed that 2011 would see 7.5% inflation, scaling down to 4.5% in 2022 and for all the years thereafter. From my casual survey, this seemed typical, even low, and it sounds reasonable, right?  East Providence’s actuaries assumed 9%, sloping down, Barrington’s 8% and so on. Health care inflation has been at 8-10% for far too long, so a declining rate of inflation actually seems optimistic, doesn’t it?

But let’s do more math, because there’s an interesting story lurking in it. There are lots of city and town employees who will still be getting this health care benefit 50 years from now. (And state employees too. The report on Monday was about municipal benefits, but the state system has the same problem.)  So what will happen 50 years from now?  According to these projections, in the year 2061 health care costs will be around 12 times what they were in 2011. A procedure that costs $1,000 in 2011 will cost $12,000. If we make a similar projection with ordinary inflation, 50 years out we’re looking at around a factor of three, as in the graph above. So the actuaries are predicting that your income, food, gas, whatever, will be up by a factor of three, but health care more than four times as much.

That is a truly remarkable number, and should be scary for anyone who is promising these benefits to their employees today. One way to look at the problem is to panic that our cities, towns, and state have not put away nearly enough money to pay for these benefits down the road. This is the point of the OPEB benefits report, and the unquestioning articles that fan the panic over these costs. This panic has serious results, including tax increases, cuts to other important services, and the potential for still more municipal bankruptcies. Providence is said to owe over $1.1 billion, Pawtucket $300 million and Warwick over $230 million. Collectively the debt is over $3 billion, more than the cities and towns owe for their pensions. Indeed, that was the screaming headline of the email I received from the “RI Taxpayers” group on Tuesday morning.

The other way to look at the problem is that it’s a complete crock. I cannot predict the future, so I don’t know how exactly it will happen, but I am quite confident that 50 years from now health care costs will not be 12 times what they are today. More importantly, if costs are as high as that, the matter of how to pay them for people who have retired will be the least of our worries.

Let’s do a little more of the math. These days health care costs run a little more than half of average housing costs. Do you believe in a world where health care costs more than twice what you pay for your mortgage?  That’s what these projections predict.  Health care costs today — for employees, prisoners, poor people, DCYF clients, and so on — represent about $2 billion, around a quarter of the state budget. By these projections, in 50 years they will be well over half the budget. What few private corporations who still offer health insurance will be paying equal amounts in salary and health benefits. Looking at the share of GDP that goes to health care, our nation will be paying well over 20% for health care, approximately twice as much as any other developed country today.

These are not sustainable increases. I do not have to know how or when these increases will be reined in, but only observe that they are not feasible to know that they will be reined in somehow. Herb Stein, economic advisor to Richard Nixon, put it this way, “Things that can’t go on forever, don’t.”

In other words, these OPEB projections are complete malarkey, compiled by actuaries whose noses are so deep in their spreadsheets that they can’t seem to see they are predicting the end of civilization as we know it and wondering how to pay for retiree health benefits when it happens. Put it in perspective. As I said, the state’s budget contains around $2 billion in health care costs. The cost for retiree health care? Around $50 million. I sometimes while away idle moments wondering about what would happen if an asteroid hit the earth, but my concerns are about survival, not how would I pay the electric bill. Yes, it is true that runaway health care costs are a serious threat to our nation, but to imagine that the threat is only to our system of paying health care for retirees is laughable.

The good news is that health care inflation rates have tumbled since Obamacare became law in 2010 — current estimates are about 1.3% per year — rendering the doom and gloom of these reports even less relevant to the real world then they were when they were made a couple of years ago. This is a big deal. Providence is said to have a $1.1 billion deficit, using those inflation rates. Rates of 1-2% instead of 7-8% over the next two or three years could cut $200 million from Providence’s OPEB deficit and have a similar effect on everyone else’s deficit.

The lesson here is this: if you’re serious about fiscal responsibility, you prove it by being serious about finding ways to reduce health care costs, which drive the vast bulk of the increases in state and local government expenses over the last 20 years. You do not show seriousness by simply negotiating these benefits out of contracts, or by cutting benefits. Rising health care costs are a problem for everyone, and a solution that benefits everyone is the only solution worth consideration.

The scourge of writer’s block


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I would like all the regular readers here to know that I’ve written many interesting and funny columns about education and testing since September, but in order to overcome my writer’s block, I promised I’d never publish them.  I want to assure you that there is nothing at all embarrassing in them, or any bizarre assertions that would have you question my understanding of our state, and certainly nothing insulting to others in there, because I wouldn’t dream of that.

You might ask why I don’t publish them anyway, since I’ve already written them–doesn’t the public have a right to know?–but hey, a promise is a promise.  Would you have me go back on my word to myself?

gist2

Julian days and Healthcare.gov


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julian daysThere is a great deal of gnashing of teeth going on about healthcare.gov, the Obamacare portal for people who live in a state that refused to create its own exchange.  I’m sure that some of the well-reported woes of the web site are deserved, but it seems fairly obvious that a large number of the commenters, and the complainers, have little idea what they are talking about.

I have no direct knowledge of the software behind healthcare.gov, neither of the team behind it, or the technologies they are using.  But I do have some expertise in web sites, software, and data management, acquired over 28 years consulting in the software industry at many different companies, and there are some things that are being said that are just plain wrong.

To begin with, the health care exchange is not “just” a web site.  It is a system that has to communicate data between lots of different insurance company databases very quickly.  You can’t get a quote from a dozen different insurance companies to appear in any other way.  This means that a dozen different insurance company databases have to be equipped to provide that kind of real-time response to a query.

To anyone who has spent time thinking about data, this is already the knell of trouble.  To anyone who is counting how many insurance companies in how many states this system must deal with, this sounds much worse.

First, a tale.  Back in the early days of working with data, I ran across a measure of time you frequently see in science data, the “Julian” day.  The idea here is that dealing with months and years is kind of a pain when you want to draw a graph, so let’s just number the days from the first year and ignore the months and years, and things will be much simpler.  It’s not a terrible idea, until you want to exchange your data with someone else.

At that point, you discover that you were counting days from January 1, in the year 1, and they were counting them from the year zero.  You point out that there wasn’t a year zero, but they say it makes the math work out better. Or you discover that you were using the days as a measure, so that day 2.5 means noon of the third day, whereas they said that day 2 was the second day and day 2.5 is nonsense.  Or you discover that though it says Julian days, they were counting leap years on the Gregorian calendar so your counts are two weeks off theirs.  Or you discover that you were using local time, and they were using Greenwich time. Or you find yourself looking at satellite data, where measurements can be taken from two or three different days within any 24-hour period.

I ran across this issue because for a number of years I contributed to a science data project, meant to normalize access to a whole lot of oceanographic and other earth science data.  Even beyond questions of data units, there were structural problems with interoperability, too.  There were two widely-used data sources in that project that, given the constraints involved, turned out to be impossible to reconcile.  Which is astonishing, since they were data measuring more or less the same things about the oceans.  But one of them had been created by scientists who believed the data ought to be accessed a small bite at a time while the other had been created by scientists who believed you should get big chunks at a time.  

These guys had made design decisions early on that made working together utterly impossible, and with the best will in the world, the two could not be reconciled to work in real time without one team essentially scrapping its original design and putting in a lot of work while the other team sat around and waited for them.  Try as they might, there was no middle ground because neither one wanted to give up their design.

These are some of the lessons I learned:

  1. In data, even when people are talking about the same thing, they’re not necessarily talking about the same thing.
  2. Even when people want to work together, design decisions made in the distant past might make it difficult.  
  3. When two teams have to choose between their approaches, there is very seldom middle ground.  One team gets to do all the work to convert to the other’s approach, while the other team sits around and makes snide comments.
  4. No engineer thinks another engineer’s approach to a problem is worth a dime. 

Now think about trying to resolve problems like this among a few hundred databases run by insurance companies who are not necessarily going to be the most cooperative folks out there.  Think about it: you’re an insurance company IT executive and the healthcare.gov folks ask you if you might change the format of your data reporting to coordinate with the other companies in your state.  Your immediate response?  Why should we change and not them?  That’s more work for us and besides our system was designed better.

So not only are the healthcare.gov folks working against a few hundred different design decisions, but they’re also counting on having been able to anticipate all the data entry errors that might be lurking in hundreds of databases out there, and hoping that everyone has decent support staff, too.  

On top of that, healthcare.gov also has to interact with a handful of databases from other government departments, so there are similar problems on that end.  For those who sneer that the private sector would have gotten it right, let me tell you another time about my work on the airline reservation system that never got built, or the credit card database whose books didn’t balance, or the speech recognition system that couldn’t distinguish between “pizza” and “tractor.” 

In other words, big systems are complicated.  It is a scandal that the federal exchange isn’t ready yet, but no one should underestimate the social, technical, and management challenges faced by the team putting it together.  When you hear someone who says healthcare.gov is “just” a web site, you are hearing someone who does not care to understand the problem.

The good news is that there is little reason to doubt that most of the problems will find workarounds soon.  The issues are difficult, but the need is there to resolve them, and they will be resolved.  By this time next year, the glitches will be a memory, and it often seems that is what some of the critics fear most.

Another ‘Munich Moment’


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Munich-MomentIn a conference call on Syria with House members this past Monday Secretary of State John Kerry called this a “Munich moment.”  My throat clenched up as I read yet one more in an endless series of references to Neville Chamberlain’s ill-advised attempt at peacemaking with Adolf Hitler in 1938.

Let’s start with a stipulation: The use of chemical weapons is barbaric and ought not to be tolerated. I believe this, and probably you do, too. No one is arguing about this.

However, I don’t know about you, but I have had it up to here with people trotting out the ghost of Neville Chamberlain whenever there is a war to be waged. It’s offensive and silly for two reasons. The first is that it implicitly compares every bad guy to Hitler. Bashar al Assad is certainly not my kind of guy, but he has not turned his nation into a war-making expansionist machine that threatens his neighbors with its designs on their territory. (Though of course he is no friend of Israel.)  Assad is a dictator fighting a brutal civil war against mostly domestic opponents, many of whom are no friends of ours. He is also not a threat to the United States. Apart from the dictator bit, the comparison to Hitler fails on every count, from the war aims to the mustache.

The other reason invoking Chamberlain’s ghost is offensive is this: Munich was in 1938. Was Neville Chamberlain the last guy to make a foreign policy mistake?  Is Secretary Kerry telling us that no one since then has made enough of a mistake to learn lessons from?  Does he have nothing to learn from, oh, I don’t know, Lyndon Johnson?

Johnson liked to refer to Munich, too, and in 1965 used the comparison to say that surrender in Vietnam would encourage the aggression of the North Vietnamese.  This was the moment that Johnson essentially Americanized the Vietnam war. With 48 years to think about it, would Secretary Kerry agree with Johnson’s assessment now?

How about the Bush gang who brought us war in Iraq?  They were all over the Chamberlain analogy.  In 2002 Donald Rumsfeld said that looking for proof of Saddam Hussein’s weapons programs was “appeasement” akin to Munich. With 11 years to think about it, would Kerry agree with Rumsfeld’s assessment now?

Here’s some news: since Chamberlain’s dumb mistake in 1938, we fought WWII, but we also fought wars in Korea, Vietnam, Iraq, the Balkans, Somalia, Afghanistan, Grenada, Panama, and probably others I’m forgetting. Do we have no lessons to learn from those adventures? How about all the proxy wars we had others fight for us in Nicaragua, El Salvador, Guatemala, Angola, Laos, Afghanistan and the rest?  Is Neville Chamberlain more relevant to a decision about war today than all of that blood and treasure spilt?

And beyond all that, please Secretary Kerry, tell me again why I should believe the intelligence assessment that supposedly guarantees the chemical attacks really were the work of Assad’s army?  On whose credibility would I rely should I believe those reports?  Would those be the same agencies that told me so clearly false things about weapons in Iraq?  So far as I can tell, the evidence in Syria remains quite cloudy. For example, the relevant UN agencies do not agree that the responsibility for the attack is clear. Claims of certainty are little more than the usual stance of the charlatan.

President Obama went even farther than Kerry. He said, about the use of chemical weapons: “The moral thing to do is not to stand by and do nothing.”  He later added, “I do have to ask people if in fact you’re outraged by the slaughter of innocent people, what are you doing about it?”

This is a legitimate challenge, and the civilized world has struggled with it for decades. However, the struggle is not a struggle simply to find answers to the question. We do not lack for answers; we lack for good answers. We have plenty of experience with answers that are ineffectual, wasteful, and expensive. These are bad answers, and I’m tired of our nation’s routine answer that seems mostly to consist of blowing things up, shooting people, and getting our soldiers shot and blown up in turn.

To some, the President’s failure to muster international support for action against Syria means we must take up the task ourselves. To me, the failure means that the world isn’t ready or able to enforce a ban on chemical weapons. While I agree that this is tragic, I don’t agree that a solo strike against Syria will make it any better.

Sanctions, boycotts, frozen assets, arguments in the Hague — all these things are far less cathartic than the fantasy of justice delivered on the tip of a cruise missile. But when you consider the uncertainty of the intelligence and the muddle of the Syrian civil war, the likelihood of such a missile even being aimed at an appropriate target seem very small, let alone hitting it. I believe there are other solutions to find, and that we owe it to ourselves and to the rest of the world to seek them.

Please, for once, let’s consider the limits of power. Is it disloyal to point out that history teaches other lessons besides Neville Chamberlain’s?  Is it unpatriotic to care about blood and treasure? Is it treasonous to suggest that the most powerful country on earth is not actually omnipotent?

It’s tempting to fantasize how easy solutions would be if we could just storm in and knock some heads. But Captain America is a comic-book figure, not a model after which to fashion our armed forces. Here in the real world, problems are difficult to solve because they are complicated. The easy answers are bad ones. Unleashing more violence on war-torn Syria is nothing more than a seemingly easy solution that will do more harm than good. I beg our congressional delegation not to go along with the easy march to regrettable violence. Some will moan about losing “credibility”, but that is not the only object of value to protect. In the end, our nation will be stronger tomorrow for restraint today.

RIte Care cuts could prove to be a killer


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RIteCareDo you  support the compromises made to put together this year’s state budget?  Would you support them if you knew they will cause people to die?  Statistically speaking, one cut is likely to cause as many as 30 deaths over the next few years.

The problem with discussions of the state budget is that they’re usually conducted in the abstract.  We talk about budget numbers and cutting a little here and moving this number into that column and it’s all rather academic and somewhat bloodless.  To make it a little less bloodless, I’d like to look at just one number and see what it really means.  And since we’re talking about blood, let’s look at the Medicaid cut.

As was reported here, the Finance Committee’s budget drops Medicaid coverage for about 6,500 parents to save a bit more than $4 million.  The deal is that these are people whose incomes are between 133% and 175% of the Federal poverty line, or $25,975 to $34,177.  Their children will continue to receive health care through Medicaid and RIte Care, but these parents will have to buy insurance on the new Health Benefits Exchange, part of Obamacare.  There is a federal subsidy available, that will keep the monthly costs down to $100-150/month, but each person will be liable for out-of-pocket medical costs expected to average around $2,000 per year.  There’s a good summary here.

So, now to the math: someone who earns $26,000 each year will see an increase in monthly payments equal to a little more than half a month’s gross pay per year, plus out-of-pocket costs.  If he or she is healthy, maybe that’s all.  But if there’s an illness or injury, we’re looking at an additional month’s pay in medical costs.  So how would you feel to know that your salary next year is going to be short 1.5 months gross over this year?  In fairness, the House budget includes $500,000 to provide some subsidy.  More math: $500,000 divided by 6,500 is about eight cents short of $77.  That will surely help.

Still more math: According to a 2008 study by the Urban Institute, using numbers from the Census Bureau and the Institute of Medicine, about 137,000 people died between 2000 and 2006 from a lack of insurance.  These are estimated excess deaths due to late or skipped treatments for disease and injury, or missed diagnoses.  This is a mortality rate of a bit less than half a percent for the uninsured.

Unfortunately, 6,500 is a fairly big number.  A bit less than half a percent of that still comes up a bit more than 30 people.  If none of those 6,500 get insurance, or if they forego treatment because of its expense, we can expect about 30 people to die in the next few years as a result of this change in policy.  Presumably lots of them will get coverage, but I doubt that all will.  If as many as 29 people out of 30 — 6,283 out of 6,500 — manage to scrape up enough to pay for health insurance and also pay for all the doctor visits they might have used under Medicaid, there will still be one death.

In other words, we can reasonably expect that people will die because of the House Finance vote last Tuesday.  Thank you, Helio Melo and Gordon Fox.

Ok, so this is not a large number of deaths in the grand scheme of state business (unless it happens to be you, of course), but the point of doing a study like the Urban Institute’s is that mortality is just the readily countable tip of the iceberg, and that for each preventable death, we can expect a great deal of pointless suffering from untreated chronic conditions, illness, and injuries.

This is what’s so infuriating about what passes for debate on the state budget around here.  Because the legislative leadership has so thoroughly assimilated the idea that the only way to conduct state business is simply to do what business wants — tax policy, education policy, health care, whatever — it seems impossible to construct an argument in favor of something as simple as preventing death and suffering.  Sometimes it seems the only effective way forward is to argue in terms of cost-benefit analyses and advancing the state’s economy.  But in fact, sometimes things must be done simply because they are the right thing to do, and other things must be condemned because they are not.  What kind of state do you want to live in?

So next time you hear someone saying how important it is that we pay back all our bonds, even the ones borrowed to fund stupid insider deals, don’t ask “is this important?”  Ask, “Is this more important than the death and suffering of some poor people?”  Is cutting the sales tax on liquor to improve sales in liquor stores near Massachusetts more important than the death and suffering of poor people?  How about letting businesses accelerate depreciation?  Is preserving all the tax cuts rich people got between 1997 and 2010 more important than that death and suffering?  See how much clearer it gets?

Needless to say, people will object to having their budget choices portrayed in this manner, but do you sympathize with them, or with the poor people who will not get decent health care here, in what is still among the richest countries on earth?

Debate: should we repay 38 Studios bondholders


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occupy prov 38Spent some of the afternoon Thursday discussing the 38 Studios bonds with Elaine Heebner, John Chung, a law professor at Roger Williams, Gary Sasse, the former director of the Rhode Island Public Expenditure Council, Mark Higgins, the dean of the URI Business School, and Bob Cusack, a guy who’s been on one side or the other of the municipal bond market for 35 years.  The event was a co-production of the Stephen Hopkins Center for Freedom, Prosperity, and Motherhood and Occupy Providence, and Bill Rappleye of Channel 10 moderated us all.

You can read WJAR’s account here

News, Weather and Classifieds for Southern New England

There was a surprising amount of skepticism expressed about repaying the bonds.

John Chung started off by endorsing neither paying nor defaulting, but calling for more research to understand exactly what the downside of default would be, a point echoed by Sasse and Higgins.  No one was willing to endorse the idea of simply repaying the bonds without knowing more about the downside, which was much farther down the road to skipping the bailout than I’d anticipated.

Bob Cusack then pointed out that the research would actually be pretty easy.  He suggested just calling the three bond rating agencies and asking their opinion, and then calling the five biggest buyers of our bonds and asking them whether they’d still buy our bonds.  When you call it “research” or “analysis” it sounds forbidding, but when you call it “make a few phone calls” it doesn’t sound so hard.  Cusack said he’s hard put to understand why analysis so easy seems not to have been done.

One of my favorite moments came when Bill Rappleye asked whether a compromise could be possible, that might get the cost of this bailout down to a more manageable $50 million.  Elaine Heebner pointed out that the rental subsidy program on which she depends (she’s disabled) only costs $1.6 million per year and is threatened by budget cuts.  As Everett Dirksen used to say, “A billion here, a billion there, and pretty soon you’re talking about real money.”  Our state’s budget is not so flush that we can contemplate any kind of expense in isolation.

But considering it in isolation is precisely what people who say this is an obligation want us to do.  This language of “obligation” or even “moral obligation” elevates this expense to make it seem more important than any other state expense.  But that’s silly.  The legislature’s role is to balance expenses and set priorities.  Everyone will rank them differently, no doubt, but discretion is discretion.

When my turn to speak came, I began with a spirited defense of finger-pointing.  The people who say we can’t play the “blame game” and should just move on are usually the ones at fault.  Finger-pointing and assessing responsibility is how we learn from mistakes.  If someone isn’t trustworthy, I want to know that before I trust them again.  Some of the most bleakly funny writing I’ve read in the past year is in the complaint Governor Chafee filed against 38 Studio executives, EDC staff members, and several members of the downtown legal establishment.  Go read it, and enjoy a laugh about how people we paid a lot of money for their expertise didn’t apply it and just waved this deal through.

Among all the discussion of how defaulting will hurt the bond rating of EDC and possibly of the state, one point hasn’t been made: the damage may have already been done.  Any bond investors analyzing some future EDC deal will be aware that in 2010, they really messed up. In other words, knowing what you know now, without knowing whether the state will actually pay these bonds or not, would you buy some future EDC bond?  I wouldn’t, and if I can construct an argument that someone shouldn’t, that likely means there has already been a hit to the agency’s bond rating.

The worst part of the whole fiasco was the abuse of a useful lending program.  The fact is that the loans EDC was making to other businesses were to address a real failure of the private credit market.  Bank credit is too tight now, and perfectly viable businesses cannot find the credit they need to keep afloat.  This has been documented in many ways, and the bill that allowed the 38 Studios deal was intended to make operational what had been a successful pilot lending program.  This would have been a valuable aid to the state’s economy, but was ruined by people who cared more about headlines than about policy.

So yes, please let’s not waste this money.  EDC’s reputation is ruined, but it won’t have been done by defaulting on dumb bonds, but by the “serious people” who thought that trusting a baseball player for his video game expertise was a good idea.

Pretending to discuss NECAP test validity


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seattle-test-boycottOne of the real problems that our politics has never addressed is full-time advocates.  In issue after issue, only one side has money, so therefore has the time to write, speak, argue, make radio appearances, testify at great length to legislative committees, and generally conduct an all-out campaign to win.  The other side relies on volunteers, stealing time from their jobs or families in order to wage a fight.  You see this in fights over tax cuts, over the argument about whether payday lenders should be allowed to charge 260% interest, and in discussions about virtually every environmental regulation ever proposed.

So it is in the debates about the state’s misguided use and abuse of the NECAP test.  To date, I have yet to see any response to my letter to the Board of Education chair that didn’t rely on misconstruing it.  Not only that, but I’ve heard from several psychometricians that my criticisms were on target.  And I keep hearing from teachers the same refrain: “yeah you’re right, but you don’t know the half of it.”

What I have seen is a continuing blizzard of media and radio appearances by the Commissioner and her supporters, where her assertions about testing policy and statistics are allowed to pass essentially unchallenged by hosts who maybe aren’t exactly statistics aces.  I’ve also seen a very strange letter from business leaders that endorses Commissioner Gist for no reason they could actually cite.

Let the record show that, since I wrote my letter in March, Dan Yorke’s is the only media outlet to invite me on.  I was on Buddy Cianci’s show for about five minutes, when I called in.  I also got to mention the subject for a minute during a Lively Experiment appearance, out of the indulgence of the producers who hadn’t put the controversy on that week’s agenda — even though the Commissioner had appeared the previous week.  

Outside the media’s eye, I got two minutes to speak at a Senate Education Committee hearing, after the Commissioner spoke for about an hour and a half, and failed to speak at a Board of Education hearing when Eva Mancuso, the chair, shut down the public comment after 30 minutes, most of which was filled by endorsements of decisions the Board was already planning to make.

Have you seen any independent psychometricians interviewed or questioned by other media?  They exist out there in the wide world. Which local reporter has called around to find one to weigh in? Who has published it?

In short, we’ve seen nothing that remotely resembles a debate over the issues raised by me, RI Future and by the Providence Student Union.  The issues have not only gone unanswered, they pretty much remain ignored.   This is not a debate that I have lost; it’s a debate that has never happened.  The Department of Education has gone out of its way to show they have policies to address some of the failings of the test, but the easiest policy to address misuse of the NECAP test is simply to stop misusing it, and that is apparently not on the table.

So this is how policy works around here.  There is no debate about issues going on, though we pretend.   The pretense is abetted by politicians and education board members who only make a pretense of caring about public policy.  The sad fact, though, is that policy is what the government actually does, for us and to us.  If we don’t discuss policy in any useful fashion, is it any wonder that we can’t get out of our own way?

Do you care about the show or about results?


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There was apparently quite a party in Cranston yesterday, with several hundred teachers coming together to, well, you wouldn’t say they were there to praise the state Education Commissioner, Deborah Gist. In a poll out a couple of weeks ago, 85% of teachers say they don’t approve of the commissioner or the current policies of the state Department of Education. 

gist in egI think a number of friends I’ve spoken to about this poll don’t appreciate how remarkable a result it is. One of the little secrets of unions is that they don’t usually have unanimous support of their members, and independent polling generally bears that out. It is the rare union that has 85% support on most of what it does. In other words, Commissioner Gist has given a remarkable boost to union solidarity.

On the same subject, there was an interesting letter last week, written to the Board of Education and signed by the directors of 20 different business organizations, like the Greater Providence Chamber of Commerce and the Rhode Island Public Expenditure Council. The writers praised Commissioner Gist’s “admirable leadership” and begged her contract be renewed in June.

To be honest, I was being kind and it actually wasn’t that interesting a letter. It mostly consisted of the usual boilerplate, reciting familiar facts about our state’s economy and the educational condition of our citizens. Then it goes on to praise Gist for the mere establishment of policies and the winning of grants, and her willingness to “take bold action for reform.”  These are nice things, to be sure, but who would mistake them for actual achievements?  The policies, you might have noticed, are fairly controversial, and the evidence that they will work is, well, thin. Bold action certainly sounds nice, but invading Iraq was pretty bold, too. How did that work out for us?  If you care more about results than about show, the letter showed some curious priorities.

The thing that came closest to being interesting about the letter was that it referenced our lag behind neighboring states on the national NAEP test scores. This is true, but it is not the only thing shown by those scores and I wonder how many of the letter’s signers have spent time examining Rhode Island’s NAEP results.

To review, the national NAEP tests are widely described as the “gold standard” of testing. They are administered nationally and the data are considered quite reliable, largely because no one has an incentive to game the results. They are administered in the 4th and 8th grades, in reading and math. (I gather there will be high school tests in the future, but there is no past data for now.)

naep-plot

NAEP average figures are shown in the figure, where you can see that Rhode Island scores (red lines) have been steadily climbing for several years. For simplicity, these are averages of the 4th and 8th-grade test scores in the two subjects, but there are similar stories in all the disaggregated scores. Yes, Massachusetts students (blue lines) score higher than ours, but are the red lines in the graph a record of dismal achievement rescued by Governor Don Carcieri’s 2009 appointment of Deborah Gist?  That’s not what they look like to me.

To me, the NAEP results seem somewhat encouraging. They say we still have some hard work to do to catch up to our neighbors, but we embarked on an upward path several years ago. The last data point belongs to the current commissioner, but there is no story to tell here of the triumph of her policies: some categories see a slight uptick and some are slightly down. If she wants to take credit for the accelerating improvement in 8th-grade math scores, she’ll also have to take blame for the slowing improvement in 4th-grade reading scores. In all cases, the encouraging trends were underway years before her arrival.

Monday also saw the release of another letter, from 25 community groups, including the Urban League, the ACLU, RI Legal Services, and the Providence Student Union, urging the Board of Education to reconsider the Commissioner’s disastrous revamp of the high school graduation requirements. Unlike the business leaders, who praised the show of establishing policies and talk about “bold action”, this letter focused on a specific policy — the change in graduation requirement — and its bad effects on students. In other words, these guys are paying attention to the facts on the ground, not the nice words about them. Which one matters more?

The truth is that policy is where rubber meets road. It’s not about the show and about who cuts the most vigorous figure as a leader. It’s not about the hair or the smile, the cut of a suit, or the right kinds of friends. Debates like these ought to be about facts and the policies to address those facts. Policy is what the government does — for you and to you. To focus on the personalities behind it is entirely to miss the point. You’d think this is something folks who think of themselves as business leaders would understand, but the evidence is, well, thin.

Our schools and the truth about policy


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The commissioner of education has an op-ed in the Providence Journal this morning.  Entitled “Our Schools and the Truth about Testing” it painted a rosy picture of what high performance in schools means:

“Every high-performing school I have ever visited has been a vibrant, rich educational environment where learning is fun and well-rounded, and where students and teachers are joyful and engaged in meaningful, relevant activities.”

That sounds great, doesn’t it?  But:

  • What about the schools that are not yet high-performing?  Exactly how does the simple imposition of a stern graduation requirement move a low-performing high school towards an environment “where learning is fun and well-rounded”?  The evidence on the ground is quite thin, and all the schools I know about are addressing the problem through testing drills and prep sessions, hardly a route to joyful engagement.
  • And what about the high-performing schools who have watered down their curricula because, though they do fine on the tests, they don’t show “Adequate Yearly Progress” as Rhode Island Department of Education (RIDE) policy demands.  My daughter attends one of these, and her educational options have been diluted and curtailed in order to improve what are already fairly respectable scores on the NECAP test.  Her “educational environment” is less “vibrant” and “rich” as a direct result of RIDE policy.

After describing the sweetness and light of her vision for education, the commissioner goes on:

“In Rhode Island, we use our statewide standardized assessment, the New England Common Assessment Program (NECAP), for a variety of purposes, yet there isn’t a single decision about students or teachers that we base solely on the state assessments.”

And then contradicts herself in the very next sentence:

“For example, as part of our Diploma System, we expect students to attain at least a minimum level of achievement on the NECAP or to show progress in order to earn a high-school diploma.”

If you expect students to pass the NECAP test in order to graduate, or at least to improve, then graduation is a decision based solely on the state assessment, despite words to the contrary.  There may be other factors, but unless those other factors can override a poor performance on the test, graduation is determined solely by performance on the test and the rest is just decoration.

In public statements like these, the commissioner takes pains to point out that other tests can substitute for the NECAP test.  The word I’ve heard is that few students are informed of these options, and that it takes activist parents to use them.

In a similar vein, the commissioner writes:

“Unfortunately, some schools do have too many tests, and these tests can disrupt classroom instruction. It is our responsibility to work with our local educators to ensure a proper balance of high-quality and useful assessments”

And here, perhaps, is the nub of the problem.  When the majority of schools are implementing RIDE policy in a way that hurts education, is it the fault of the schools, or the fault of the policy?  Are we to excuse the people who created the policy because they claim that everyone is implementing it badly?

To review:

  • The NECAP test was designed to assess students and schools: to tell which are ahead and which behind their peers.  This is a good thing.  I wish the tests were less intrusive, but valid assessments are a useful tool, and NECAP seems to be a decent assessment test.
  • The NECAP test was not designed to assess mastery of a body of knowledge, though grade-level standards were used to develop appropriate test questions.
  • The high stakes applied to the test — graduation requirement for students, job evaluations for teachers and principals — have distorted the test results and forced many schools to devote increasing numbers of classroom hours to test prep, or disguised test prep, such as a new science “survey” class whose purpose is to introduce topics that might be covered on the NECAP.

The result is that most schools find themselves far from the rosy picture of high performing schools painted in the commissioner’s op-ed, and those high-performing schools are themselves under pressure in ways that darken the picture.

The second point in the list is important, and it has been the source of a great deal of confusion.  Imagine yourself designing an end-of-term test for a class you taught.  Maybe you’d have 20 questions on the test, and maybe 15 of them would be questions anyone could answer who had been paying attention.  The other 5 would be questions that might distinguish the A students from the C students, and maybe you’re throw in another question for extra credit.  The NECAP designers, for perfectly valid statistical reasons, feel those first 15 questions are a waste of time and they leave them out.  Consequently, students who might have gotten 16 questions correct on a properly designed end-of-term test get only one, and probably flunk.

To this day, I’ve heard no valid rebuttals of this criticism.  I have heard the critique misconstrued so it can be brushed aside.  I’ve seen test technical materials changed to reflect RIDE policy rather than have RIDE policy reflect the limitations of the tests, which would be more appropriate.  And now I’ve seen a vision of glorious education, full of that ol’ sweetness and light, but completely lacking in the details of how we get there.

I share the commissioner’s vision for what a high-performing school should look like.  I share her commitment to a rigorous education, too.  But the evidence that we’re on track to get to that Nirvana is extremely hard to find.  Simply repeating an outline of that vision does very little to get us there.

There are very specific RIDE policies that I argue are actually working against that vision, and those ought to be the subject of any discussion, not further description of the fantasy.  Where is the defense of requiring financially strapped districts to provide more test prep?  Where is the defense of demanding “Adequate Yearly Progress” of schools that are already doing very well?  Are they not allowed to add enriching activites instead of just pushing harder on the test prep?  Where is the defense of demanding better results without providing a plan (or resources) to get us there?  As the commissioner writes, we absolutely do:

“…need a system that brings excellent educators into our schools and classrooms and that provides teachers with the resources and support they need to do their job well.”

Unfortunately we do not have this at the present, and I see no plan that will actually create that so long as RIDE policy is based on little more than simply demanding that the world conform to their fantasy.

More illogic from RIDE


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In a reply to my post about sneaky changes in the NECAP documentation, the RI Department of Education spokesman wrote this:

“The NECAP assessment is designed to measure whether students have attained the knowledge and skills expected at each grade level, that is, whether students have met grade-level standards.”

This, of course, is the heart of the matter, isn’t it?  I claim the test is a poor measure of the mastery of a body of knowledge, and therefore it is, shall we say, an outrageous act of irresponsibility to use it for a graduation test.  RIDE, of course, says otherwise.  This is precisely what is at issue in this whole controversy, and simply stating it as fact at the head of a reply doesn’t really address the point at all, but simply seeks to override it with the voice of authority.

In truth, as was pointed out by the psychometricians I’ve spoken to, RIDE has done little or no work to demonstrate the “validity” of the test, this very question.  For an employment test, by contrast, the laws insist that the employer demonstrate — with real data — that good performance on the test is a good way to identify good employees.  RIDE relies on correlation between NECAP scores and survey questions that ask piffle like “how much homework do you do in a week?”

The NECAP test was designed with the grade-level expectations (GLE) in mind, and it uses questions relevant to those GLEs.  Does that make it a good measure of whether a student has mastered those or not?  Tom Hoffman, who runs tuttlesvc.org, a great education resource, showed us at a Senate hearing that performance in Massachusetts and Rhode Island is not so very different on the 8th-grade math NAEP tests (administered by the federal Dept of Education and widely considered the “gold standard” of testing).  Overall, Massachusetts does do better than Rhode Island on that test, but they’re not in a different league.  But performance is dramatically different on the 11th-grade math tests administered by each state (NECAP in RI, the MCAS in MA).  Can anyone explain this?  Do our kids get dumber in the 9th and 10th grades?  Or are the tests different in ways that haven’t been adequately explained?

“NECAP was not designed to provide, in isolation, detailed student-level diagnostic information for formulating individual instructional plans.”

This is a quote from the NECAP documentation, earlier in the paragraph that they “clarified.”  According to RIDE, then, we should read “in isolation” in the sentence above as “only taking it once”?  This is comparable to the way RIDE claims that “multiple measures” is to mean that you can take the NECAP more than one time.  This is silly.  What the above means is that NECAP is a clue to student achievement, but should only be used as one of several measures, as was policy under the previous commissioner.  Making passage a graduation requirement is contrary to the meaning of the NECAP designers’ instructions.

Let’s end with a brief but important digression.

One hundred years ago, Henry Goddard, who went to school at Moses Brown and was a member of the first generation of psychological testers, persuaded Congress to let him set up an IQ testing program at Ellis Island that eventually proved that most immigrants were “morons.” (He  coined the term.)  During World War I, intelligence tests used to select officers were later shown to have profound biases in favor of native-born recruits and those of northern European extraction, which is another way to say that lots of Italian-American soldiers were unjustly denied promotions. For decades, misused IQ tests classified tremndous numbers of healthy children as disabled, or mentally deficient — well into the 1960s and 1970s. The history of testing in America is littered with misuses of testing that have had profound and unjust effects on millions of adults and children.  Does the available evidence about the NECAP test persuade you that we are not in the middle of one more chapter of this terrible history?

A graduation test is not a trivial thing.  The results of a test can have a significant impact on a young person’s life.  It seems to me that the burden is on the people who think a high-stakes graduation test is the only sensible way forward to demonstrate — with a great deal more rigor than they have so far bothered to do — that a test measures what it is supposed to measure.  The IQ tests at Ellis Island, in the officer corps, and in the schools, did not measure what they claimed, and thousands upon thousands of lives were changed, few for the better.

If these policy changes are being made for the sake of our children, then can’t we stand to have a little more compassion while we’re making them?  This means intellectual honesty, and it also means being careful not to ruin lives you say you’re trying to help.

Sneaky changes in NECAP documentation


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gist in egThe NECAP-as-graduation-test has occupied a lot of my attention recently.  As I have written before, the NECAP test is a fundamentally different kind of test than one you would use as a graduation test.  The questions you’d put on a graduation test are exactly the ones that the test designers consider a waste of time and leave off.  This is a matter of relatively simple statistics, and even if it were not, there are plenty of psychometricians (testing experts) who agree with me.

In discussions of this matter, it’s tempting to quote a page from the “Guide to Using the 2012 NECAP Reports” on the subject, and several people have drawn my attention to this passage:

“NECAP is only one indicator of student performance and results of a single NECAP test administration should not be used for referring students to special education or for making promotion and/or graduation decisions.” (page 6)

At a hearing on the matter a couple of weeks ago, a Senator read that passage to Deborah Gist, who replied by pouncing on him to emphasize that the word “single” was the key word in that sentence. She pointed out that giving kids who flunk the opportunity to take the test again complies fully with this caution.

At the time, I wondered how any sentient speaker of English could read that sentence and think the critical word in it was “single.” To me, it seems like a caution against using the test as a graduation test or a special ed placement test. In truth, the sentence is a tad gratuitous, since the statistics of the test say the same thing, and say it in much stronger language. It seems odd to read the sentence any other way. However, if it was my career and reputation that depended on reading it in just the right way, I suppose I too could find a way to claim that never has the word “single” played such an important role in any sentence of the English language.

So imagine my surprise when I learned that the word “single” was added to that sentence in 2011. Measured Progress, the company that designed the NECAP test, publishes a “Guide to Using the NECAP Reports” each year. For the most part the report is just boilerplate, updated each year by changing it slightly to accommodate some of the changes to the test. That year, for example, was the first year for the writing test in the 3-8 grades, so there was some text about that. But before February 2011, when the guide was reporting on the 2009 test, the sentence above — same page, identical rest of the paragraph — read like this:

“NECAP is only one indicator of student performance and should not be used for referring students to special education or for making promotion and/or graduation decisions.”

Let’s have a big hurrah here for the internet archive’s Wayback Machine, from which I learned that the old version was still on the RIDE web site as late as January 18 of this year, and that the change was made for the report on the 2010 results, in early 2011.

What’s interesting to me is that the earlier sentence seems pretty clear — and to be clearly different than it became after 2011. There is no wiggle room in “should not be used.”

More important, this is how the text read back when the NECAP was adopted as a graduation requirement. At that time, it seems that the Department of Education was fairly clearly contradicting the advice of the NECAP designers — who subsequently changed that advice!  Are we to assume that the technical documentation for this test is only advisory?  Or maybe not proofed very well?  Which other simple declarative statements in the documentation are ok for the department to ignore?  Can schools ignore some of it?  How about students?

Or is it only the people who pay Measured Progress who can get them to change their advice?

The guides for the NECAP science tests were never changed — after all, they’re not used for graduation tests — so they continue to read just as the reading and math guide did before 2011. (The 2011 science report is here.  A friend downloaded the 2012 report a few weeks ago, but there appears to be no link to it any more on this page, so maybe they’re changing that one now, too.)

What we’re talking about here is dishonesty. This isn’t the same as simple dishonesty, or lying. This is intellectual dishonesty, and here’s the problem with that. The world is what it is. The facts of the world do not care about your opinion, or your triumph in some argument. Intellectual honesty is important in science because it’s the only way to get our understanding of the world to approach the world.  Fudge your results, and you’ll find that your cure for cancer doesn’t work, that your miracle glue is really an explosive, or that your economic policy just makes things worse. This is why science is supposed to progress by scientists checking and criticizing each others results: that’s how you maintain intellectual honesty. Sometimes the disputes get personal or political and distract from the real aim, but the real aim is to get at the truth via intellectual honesty, enforced by the scientific community.

The truth is that the NECAP wasn’t designed to be a graduation test, and this was obvious from the very beginning. It has been coerced into the role not because it was good for kids, but because it was cheaper than designing a dedicated graduation test. The features that make it a bad graduation test are objectively true facts about the test and its design. Neither editing technical documentation, committee-hearing filibusters, or cutting off public comment at Board of Education meetings will change those facts.

I have no doubt at all that the commissioner can fend off challenges from the public over these matters, indefinitely. But reality will — as it usually does — have the last word. And children will pay the price. The question for Board of Education members, legislators, school administrators, teachers, and parents is which side they want to be on.

What RI should know about hedge funds, part 2


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hedge fundsThe truly remarkable thing about the hedge fund industry is that once you strip away the confusion about how shares are valued and what exactly the returns are, you find returns that are far from extraordinary. In fact, the average returns over the past 20 years for the industry — the returns actually experienced by the vast majority of hedge fund investors — are less than they would have earned in government bonds. (And this isn’t just a matter of the huge losses in 2008-2009, though obviously that didn’t help.)  This isn’t to say that some customers aren’t lucky in their choice of funds, but the odds are stacked heavily against them.

As if this isn’t bad enough, fraud in the hedge fund industry is hardly confined to Bernie Madoff. The unregulated and opaque nature of the funds lends itself to fraud. Plenty of managers have succumbed to the obvious moral hazard, and Simon Lack, in his book, “Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True“, provides plenty of examples. With a hedge fund, the entire investment is at risk, so fraud is an ever-present concern.

The Hedge Fund Fraud Casebook provides over 100 examples of hedge fund fraud, all of which happened before anyone realized that Bernie Madoff, the former president of the NASDAQ and famous fund manager, was running a giant Ponzi scheme, but also before the frauds of Conrad Seghers, James Dickey, Ed Strafaci, Mark Focht, Paul Eustace, Michael Berger, and many more were uncovered. When the industry standard is to charge high fees and to tell your customers what you want and when you want, can any of this be a surprise?

Surveying the industry landscape at the end of his book, Lack says he used to blame the managers for running a rigged game, but eventually he turned around and now blames the customers for enabling this bad behavior. This is a funny kind of Wall Street blame-the-victim ethics, but it is true that a lot of institutional investors — like pension funds — have the resources to have discovered these facts on their own. And they haven’t.

Let’s be clear: any investment portfolio should be hedged somehow. Even within the world of stocks, most fools know you don’t make a portfolio out of a single company’s stock. Diversifying stocks is one way to hedge. Diversifying investments so that you’ve got some money in things that tend to go up in value when your other investments go down is also wise. This is what hedge funds originally did. But the evidence implies that the lowest cost way to do that now might be to do it yourself. Want to hedge your exposure to stocks with investments in bonds?  Go find a friendly bond dealer and buy some. Or invest in a mutual fund for bonds. Want to invest in failing mortgages?  You can find ways to do that without paying 2-and-20. Gold?  That can be done, too, if you must. But if you go to a hedge fund, you should know that you’re walking into a casino where the odds are great that you’re not going to walk out with nearly as much money as the advertising claims. If you walk out with any at all. The occasional lucky patsy can walk out of a rigged game a winner, but that doesn’t mean the game isn’t rigged. As they say in poker, if you can’t tell who’s the patsy at the table, well, you’re the patsy.

If you’re not a “accredited” investor, who can afford to dine at tables like these, why should you care?  Because, though you might not be one yourself, you probably belong to one. Institutional investors — pension funds, university endowments, banks, charitable foundations — make up a huge proportion of the money invested in the hedge fund industry, though exact data is hard to come by. You probably have a piece of this somewhere, perhaps as a taxpayer whose municipal or state government is investing heavily in hedge funds, or as an alumnus/a of some college, or as a customer at a big bank. Rhode Island’s pension fund has increased its investment in hedge funds substantially, and as much as a quarter of the value of the fund is now invested in “alternative investments”, which includes hedge funds, and private equity funds (also not an industry known for its low fees and transparency).

The stated reason behind this is to increase the returns. This is important, as a result of the 2011 pension changes. With fewer people paying less money into the pension fund, investment returns are more important than ever before to make good the state’s debts to its retirees. Perhaps it’s possible to negotiate lower fees, or find ways to increase the transparency of the funds you invest in, but there are valid reasons to be very skeptical.

Here and in other states, when your money winds up in a hedge fund, the people in charge of your money have put it in the care of fund managers whose incentives do not involve keeping your best interests at heart. And while those Very Serious People invest your money in these risky and opaque funds, they are relying on the empty promises of representatives of a corrupt industry. If they do well, you’re lucky. If, as is more likely the case, they do not — well, you’re the patsy.

Part I of this series

Updated: clarified that the RI fund’s allocation to alternative investments is not exclusively hedge funds.

What Rhode Island should know about hedge funds, part 1


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hedge fundsWhat’s the purpose of investing in a hedge fund?  Because “hedge fund manager” is almost synonymous with “fabulously wealthy” in the popular press, lots of people think hedge funds are all about high risk and high returns.

Originally, though, hedge funds were thought to provide high returns simply by being consistent, if dull. The idea was that by “hedging” risk with investments whose value fluctuates independently from one another, a good manager could deliver solid but unspectacular results, but do so year after year. 

Since the origination of these funds, more than 40 years ago, the industry has transformed from a handful of conservative investor funds in a relative backwater of the investor world to include funds that follow a much wider variety of strategies, and have trillions of dollars under management. In the process, the meaning of the term has changes, and these days, it just means any unregulated investment fund.

What’s that?  Unregulated?  Well, yes. The SEC, which regulates lots of other Wall Street activity, doesn’t have much to say about hedge funds, except that you have to be a “accredited investor” to invest in one. Essentially this just means you have to be rich enough.

A mutual fund, open to anyone with a dollar, is regulated by the SEC, and is subject to various kinds of disclosure and reporting requirements. Hedge funds, by contrast, only give their clients (usually referred to as fund “partners”, which sounds chummy, doesn’t it?) the information they want to release. If they want to tell you what their returns were, they can. If they don’t, that’s your problem.

Fees are high, too. Where a mutual fund might charge a service charge of one percent or less to its customers’ accounts each year, the standard in the hedge fund industry is 2%, plus a 20% share of any investment gains. Naturally, they do not share in any losses.

Lack of information and high fees?  Such a deal. The reason customers put up with this kind of abuse is the promise of high returns. That’s what makes it so shocking that over the past 20 years, most investors would have made substantially more money by investing in low-interest US government bonds. (This is not just a matter of the 2008-2009 downturn, though that plays a role.)

That’s the message of Simon Lack, whose book, “Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good To Be True“, describes his experiences in the hedge fund industry. Lack, a trader at JP Morgan, spent several years investing in hedge funds on behalf of the bank.

JP Morgan did its part to foster the recent flourishing of the hedge fund industry because in the 1990’s, astute traders there noticed the contrast between the weak returns of the industry and the wealth of the managers. The contrast led them to wonder whether they should try investing in a different way. Lack helped start their Capital Market Investment Program, which provided seed money to fledgling funds in exchange for a share of the fees as well as the investment returns. With one foot on the management side of the business and the other with the customers, Lack has a unique perspective on the business.

What he learned was this: The fabulous wealth of hedge fund managers serves as the best possible marketing tool for hedge funds. Look at me, the private jets and penthouse apartments say. I am successful and if you invest with me, you can be too. But he also asked this: where are the hedge fund investors who have become fabulously rich by trusting their money to such managers? And he’s still looking for them.

In his book, Lack points out that a manager can make money when the fund makes money, but that many managers make even more money when a fund’s early good returns inspire lots more people to invest in it. Taking a couple of percent off the flood of new money each year can be much more profitable than hoping for a fraction of the investment gains, and if the fund grows quickly, your wealth can, too, no matter what the returns. The incentives aren’t to nurture your customers money and make it grow, but to expand the business and bring in lots of new money.

What’s more, for a variety of reasons that Lack described, a fund’s growth usually decreases the rate of its returns. A large fund is somewhat more cumbersome and profitable opportunities are not always to scale. So you have managers becoming absurdly wealthy while overseeing a fund whose growth serves their interests, but not those of their customers.

Lack also puzzles over the problem of reporting investment gains. A fund will naturally report its gains in the most flattering light possible. What you might not realize is how much latitude there is for telling the story a fund manager wants you to hear. When reporting returns, a fund might report the growth of the investment pool. But the investment pool can grow both by getting new customers and by investment gains, so that’s not what will be experienced by any individual investor. Plus the shares of a hedge fund can be very challenging to value, and there’s a certain arbitrary nature to any answer to this question.

If a hedge fund invests in bonds, for example, do you value bonds at the price at which they were bought, or the price at which they can be sold?  These prices are different at the very moment the bonds are bought, so we’re not talking about market movements, just about the difference between a bid price and and ask price. Depending on which price the fund manager chooses to use to value the portfolio, it will affect the calculation of the fund returns, though the actual amount of money won’t change.

Furthermore, a customer’s shares might be “worth” some specified net asset value, but they might not be redeemable at that value, due to redemption limitations, withdrawal fees, or some other clause in the “partnership” contract. As I’m sure you can imagine, this is just the beginning of the confusion. The point is that when you buy shares in a hedge fund, you are putting a great deal of trust in the management of that fund, and the management holds all the information in the relationship, and has incentives that are not perfectly aligned with yours. Does that sound like a recipe for success?

Read part II.

Power concedes nothing — not even time


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mancusoEver since I wrote my letter to Eva Mancuso, the Board of Education chair, a month ago, I have hoped to have some other forum than this one in which to find a hearing for these concerns. (Since it seems clear I’m never going to get an actual reply.) I had a minute or two on Buddy Cianci’s show, after 45 minutes on hold, and about 20 minutes on Dan Yorke’s show.

After that, I tried to speak at a state Board of Education meeting, but Mancuso limited public comment to 30 minutes and allowed the first 15 of it to be used up by witnesses complimenting the board on opening up a charter school that already had majority support. Along with me, there were dozens of people left unheard at that meeting: angry parents, students, professors of education.

Last night, I tried to speak at a Senate hearing before the Education Committee, about a bill sponsored by Harold Metts that would forbid using the NECAP as a graduation test. I gather that something else was going on in the Senate yesterday afternoon — though how important could it really have been? — so the hearing didn’t get started until after 6pm.

At the outset of the meeting, the chair, Senator Hanna Gallo (D-Cranston), said that because there were so many people who wanted to speak, she was going to limit speakers to 2 minutes each. She opened the meeting by inviting Commissioner Gist to speak, and offered a double-ration of time: four minutes. Aided by friendly questions from the committee, Gist took somewhat longer.

Over an hour later, the next person got a turn. (Well, not counting a mother and daughter whose voluble objections couldn’t be suppressed when Gist was talking about the wealth of accommodations for kids with IEPs.)

When it came my turn to speak, while I managed to make the skeleton of my point in the allotted two minutes, I was unable to describe any of the evidence for it, to explain its consequences, or to list any of the support I’ve received from experts in the past month. Better than nothing, I suppose, but without any questions from the panel, it was two minutes and out. Of course it was after 8 o’clock by then, so I was starving and grateful to be done with the waiting, but how much good did it do?

What have I learned?  That there is essentially no forum in the state of Rhode Island in which one can address the kinds of technical concerns I have aired about the state Department of Education’s misuse of the NECAP tests. The people who are interested have no power to change the situation and the people with the power to change the situation apparently have no interest in hearing about it. The reporters dutifully report both sides (sometimes), but the conventions of modern journalism, along with the need to write for an audience who isn’t really familiar with the statistical issues involved mean that articles can’t even rise to the level of he said/she said.

I have two daughters, five grades apart. Comparing their experiences is instructive. My town has a relatively high-performing school department. There have been several changes in our schools between my first and second daughter, and as far as I can see, they fall into two categories: budget cuts and NECAP prep. Before my younger daughter entered seventh grade, the school department did away with seventh-grade foreign language instruction in favor of a second period of reading — to address NECAP deficiencies. While in the eighth grade, part of her shop class was turned over to NECAP prep for math. In the ninth grade, she is not taking a year-long biology, chemistry, or physics class, but a year-long science survey class that hopes to touch on all the topics covered by the science NECAP. Have any of these changes actually improved her education?

Remember, this is a relatively high-performing district, but RIDE rules demand improvement every single year, even for districts that are already doing fine. It is a truism of policy studies that a regulation that sounds good — demanding constant improvement from everyone — can have seriously counter-productive results, but the evidence is rarely as stark.

Along with the NECAP adjustments, budget constraints have had the music program cut back in the elementary grades, the high school has reduced the number of AP classes, and there are fewer buses to accommodate after-school activities. And much more.

So far as I can see, not a single one of the changes in my town’s schools over the past five years between my children has had anything at all to do with improving the quality of the education, and the changes to accommodate the NECAP test have been every bit as destructive of my daughter’s educational opportunities as the budget cuts.

So, buckle up everyone. The destruction of public education wrought by misguided RIDE testing policies has only just begun. Some people apparently buy the argument that simply demanding results gets results. For those of us who think this a dubious strategy, there is no real reason — beyond the personal promise of Deborah Gist — to think that these policies will improve education in Rhode Island and quite a number of reasons to think it will get a lot worse before it gets better. But if you want to bring these matters to anyone’s attention? Talk to the hand — for no more than two minutes.

Update: Hanna Gallo is from Cranston.  My apologies to her and to you.

How RIDE Undermines Their Own NECAP Test


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If I had to pick one thing to complain about with the high-stakes NECAP testing regime it wouldn’t be the pressure on the students, the deformation of the curriculum, or any of that. If it was just one thing, it wouldn’t even be the misguided policy to use NECAP as a graduation test. It would be that RIDE policies have taken a tool they could be using to understand what’s going on in our schools and deformed it so it can never be useful for its intended purpose. 

What’s the problem?  Just this: the NECAP test was intended to gather data about our schools, but the high stakes — teacher evaluations, potential school closings, high-school graduations that all depend on NECAP scores — have guaranteed the data we get from the test are not trustworthy. It has been turned from a useful tool to a gargantuan waste.

As any scientist knows, it’s hard to measure something without affecting it. But if you affect it, then what have you measured?  So you measure gently. If you really want a measurement of how a school is doing, a sensible testing regimen would at least try to be minimally intrusive. Testing would be quick and not disruptive. Test results might be used to monitor the condition of schools, teachers, and students, but important decisions about them would depend heavily on subsequent inquiry.

The NECAP test itself is more intrusive than is ideal, but it could easily meet these other conditions, if scores were kept quiet and not directly tied to any sanction or punishment. The federal NAEP tests are like this, and they provide good data in no small part because there’s no incentive to push scores up or down. By contrast, the state Department of Education trumpets school scores, encourages school departments to adjust curricula to game the test designers’ strategy, and creates the conditions that virtually ensure that some school administrators and teachers will at least consider ways to cheat on the test.

To be completely clear, I know of no evidence at all that any teacher or administrator in Rhode Island has cheated on the NECAP tests. However, though it’s hard to find cheating, it’s easy to identify incentives to cheat. In a climate where professional advancement or even keeping one’s job as a teacher or principal requires improvement every single year (no matter how good you are already) the incentives are obvious. And in school system after school system, across our country, similar incentives have led to completely predictable action.

Lately, we’re hearing from Atlanta, where the former superintendent — the 2009 superintendent of the year of the American Association of School Administrators — and 45 principals and teachers are now under indictment for orchestrating a huge conspiracy that apparently involved locked rooms full of teachers pressured into “correcting” student tests and administrators wearing gloves while handling doctored test papers. But before Atlanta, we heard about DC schools. Before that, there were similar scandals in Texas, Maryland, Kentucky, Wyoming, Arizona, North Carolina, Illinois, Florida, Wisconsin, Louisiana, Connecticut, California, Michigan, Virginia, Utah, Ohio, Pennsylvania, Nevada, Kansas, New Mexico, Tennessee, New York, and Massachusetts.  This list doesn’t count all the mini-scandals that might have just been misunderstandings about test procedures, or maybe weren’t.

This is hardly all. Last year, when the Atlanta scandal broke, reporters at the Atlanta Journal-Constitution surveyed testing data from a few thousand school districts around the country last year, and found 196 of them showed statistical inconsistencies similar to the ones that led to the Atlanta investigation. That doesn’t exactly imply that Atlanta is an exception.

Predictably, the policy responses to these scandals have been simply to tighten security requirements, not to rethink the testing policy. Unfortunately, it’s not as if this is new territory. Let me acquaint you with an observation made by Donald Campbell, a past president of the American Psychological Association. He published an article about measuring the effects of public policy in 1976 that stated what has come to be known as “Campbell’s Law”: “The more any quantitative social indicator is used for social decisionmaking, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.”

He wasn’t the only one to notice this. A banker named Charles Goodhart made the same observation around the same time, as did anthropologist Marilyn Strathern who put it succinctly: “When a measure becomes a target, it ceases to be a good measure.”  Cheating on high-stakes tests is only one manifestation of this. You saw the same thing when Barclays and UBS conspired to rig the LIBOR interest rate (an index rate meant to be a market indicator), or when stock prices become the focus of company policy rather than just a measure of how they were doing. Enron became (in)famous for this, but they were far from unique. If you want to read a detailed (and uncharacteristically entertaining for an academic) account of how the principle affects testing, try “The Inevitable Corruption of Indicators and Educators Through High-Stakes Testing” by researchers at the University of Texas and Arizona State. (Where I ran across that list of testing scandals above.)

All of these are observations about how the world actually works. ignoring them won’t change them. You might complain that if Campbell’s Law is true then we can’t use testing as a valid measure of teaching and then where’s the accountability. Sadly for you, your complaint won’t change the world to something you prefer. This gets to a fundamental distinction between sensible policy and the other kind. Sensible public policy takes the actual, real, world — the one that you and I live in — and finds ways to work within the contraints of reality, be it physical, psychological, economic, or diplomatic. The other kind posits a world as the policy maker would wish it to be and careens forward regardless of the consequences.

In other words, if we know that applying high stakes to a test distorts the data we get from that test, then sensible policy dictates that we don’t use it that way. There are lots of creative and intelligent people out there capable of finding ways to use the valuable information this test could have provided in constructive and useful ways. But that’s not the way we’ve played it.

So here in Rhode Island, we now have the worst of both worlds: a test that can no longer do what it was designed for, while at the same time it has a deeply destructive effect on students, teachers, and the curriculum. Plus it costs millions of dollars to develop and administer, not to mention lost instruction time and wounded lives. Congratulations.

URI Psychometrician Agrees With Tom Sgouros

I promised last time to write about the other psychometrician I encountered last week. His name is Peter Merenda, and he’s something of a psychometrician’s psychometrician. He’s written a textbook about testing, along with another book on statistical analysis and about 250 articles in various journals.  He’s won prizes, fellowships, awards.  He founded the URI Psychology department in 1960, and led it too, retiring in 1984. Now, at the age of 90, he still keeps up with the literature — and the NECAP tests still rankle him.

He was kind enough to sit down for an interview last weekend and to mark up some of my and the reply from the RIDE consultant, Charles DePascale. His years as a professor seem to have inculcated a deep love of red pen, as you can see from his markup:

So that’s a lot of red.  What does he think of my critique of using the NECAP test as a graduation requirement?  My suggestion was that the test is created with the expectation that lots of students will flunk, for perfectly valid statistical goals.  I am deeply chagrined to say that he chided me…  for not going nearly far enough. He said my critique was correct as far as it goes, but there is a far worse problem: validation.  Those markups on the paper above say things like, “RIDE as user of NECAP is in violation of National Testing Standards“, and “the test scores have not even been validated for any purpose.”

Validating a test means to ask in a serious and disciplined way, what does the test actually measure?  It usually means stepping outside the framework of the test itself to see how good the correlation is between test results and whatever it is you want to be measuring. For an employment test, you might try to compare job performance with test results (before making your hiring dependent on those test results, that is). For an intelligence test, you might compare test results with some other intelligence test. And for a graduation test, you might want to examine the test-takers and see, in some independent way, whether the students who pass deserve to graduate and whether the students who flunk do not.

For an employment test, Merenda was able to cite a list of court cases that essentially make it illegal to use a written employment test that hasn’t been validated in a rigorous way. (He was an expert witness in several of those cases.)  The idea is that it’s illegal to use a test as a bar to employment if that test has nothing to do with the job in question. The result of these cases is that the burden is on employers and testing companies to show that any test is relevant to the job in question, and to show it in a way that can withstand legal scrutiny. So they do, and there is a long list of American Psychological Association Standards that dictate exactly how.

The NECAP technical documentation does indeed contain a “Validation” chapter, indicating that at least some of the test designers understood this to be an obligation. But the obligation is honored in the breach, and the chapter is essentially laughable. There is, for example, a collection of graphs that show results of the NECAP against answers to a few of the survey questions that are asked at each test. For example, you can see on page 84 a graph comparing performance on the 11th grade math NECAP with the survey question, “How often do you do homework?”  At the bottom of the same page is a graph comparing the writing score with the survey question, “How often do you write more than one draft of an essay?”  While these are occasionally interesting, the word “superficial” comes to mind far more readily than the word “rigorous”.

To the test designers’ credit, there are two graphs that compare a student’s performance on the 11th grade NECAPs with their grades. How did they get those grades?  They asked students on the same survey for his or her most recent grade in reading and math.  Self-reported data — of course it’s reliable.   This whole chapter is sort of a feint in the direction of a validity study, but as actual data in support of the test, it barely rises to the level of risible, let alone to a level that might be defensible in a court.

How about a study of how well students do in geometry class compared with NECAP performance?  Maybe you could even track how different the scores would be if the students took geometry before or after the NECAP?  Maybe a correlation between NECAP scores and being required to do remedial work in college?  A correlation between scores and likelihood of dropping out?  Or a longitudinal study of job success compared with NECAP scores?  Or all of the above?  There are lots of ways you could think of to answer the question of how well the NECAP does at evaluating a student’s readiness to leave high school, but this work was apparently never done, or if it was, it’s not reported in the chapter entitled “Validity” where the curious can find it.

One hundred years ago, Henry Goddard, who went to school at Moses Brown and was a member of the first generation of psychological testers, persuaded Congress to let him set up an IQ testing program at Ellis Island that eventually proved that most immigrants were “morons.” (He  coined the term.)  During World War I, intelligence tests used to select officers were later shown to have profound biases in favor of native-born recruits and those of northern European extraction, which is another way to say that lots of Italian-American soldiers were unjustly denied promotions. For decades, misused IQ tests classified tremndous numbers of healthy children as disabled, or mentally deficient — well into the 1960s and 1970s. The history of testing in America is littered with misuses of testing that have had profound and unjust effects on millions of adults and children. Does the available evidence about the NECAP test persuade you that we are not in the middle of one more chapter of this terrible history?

Decisions made about testing can have huge impacts on young people who deserve far better than we’re giving them. To quote a prominent Rhode Island education official in a slightly different context, it is an outrageous act of irresponsibility to impose a test as a graduation requirement without doing the homework necessary to support its use. Again, our children deserve much better than this, and it’s hard to understand why we can’t seem to give it to them.


It is doubtless just a sign of my own weakness and vanity that I not simply stop this column here. However, over the past couple of weeks, my own qualifications to comment on the NECAP test have been part of the public conversation, such as it is, so I can’t really help myself.  Here’s one more bit of Merenda’s grading: 

If you can’t read it, it says, “Sgouros may not be a professional psychometrician, but he does resemble one in his writings!”  Because I already know I’m a nerd, I’m choosing to take this as a compliment.

Along with Merenda, I have also heard from psychometricians and their ilk in three other states over the past couple of weeks. And Bruce Marlowe, an education psychology professor at Roger Williams weighed in on the editorial page of yesterday’s Providence Journal.  So far, the score is that they’re all with me, except for the ones who suggest that I haven’t gone far enough. Against them is one guy, who is paid by RIDE, and who apparently has to misconstrue what I said in order to argue against it, in an unsigned document.  And an education commissioner.  I report, you decide, as they say.


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