More from Tony Horton

Natalie and I recently ordered Volume 1 of the One-on-One with Tony Horton workouts. We had to move a newer dvd player in the workout room to get them to play, but they are excellent. I miss having the graphics showing the amount of time left in the workout and on each exercise, but the workouts are great. Thirty-Fifteen is a real challenge, and I really like the under an hour yoga routine (although I am not bendy in any way, shape, or form).

The Michael Lewis Challenge

I recently finished Michael Lewis' book The Big Short and enjoyed it immensely. I thint it would be interesting one day to teach an economics for business class just using his books. A consistent theme in Lewis' books Liar's Poker, Moneyball, and The Big Short is that many people in the business world just don't know their business. As Lewis puts it in the preface:

This woman [Meredith Lewis] wasn't saying that Wall Street Bankers were corrupt.
She was saying that they were stupid. These people whose job it was to allocate
capital apparently didn't even know how to manage their own. (xvii)

The necessity of a division of knowledge makes it difficult to evaluate charges of ignorance. Bosses probably shouldn't understand all of the jobs which people working for their company (or their division even), and so some ignorance is consistent with a well-functioning economy. But the level of ignorance Lewis describes seems to really challenge the efficiency of markets.

What supports such ignorance? In Lewis' view, the potential of all the parties, at least the players in financial markets, to profit from the system:

What's strange and complicated about it, however, is that pretty much all the
important people on both sides of the gamble left the table rich. Steve Eisman and
Michael Burry and the young men at Cornwall Capital each made tens of millions
of dollars for themselves, of course. Greg Lippmann was paid $47 million in 2007
... But all of these people had been right; they'd been on the winning side of the bet.
Wing Chau's CDO managing business went bust, but he, too, left with tens of millions
of dollars ... Hower Hubler lost more money than any single trader in the history
of Wall Street - and yet he was permitted to keep the tens of millions he had made.
The CEOs of every major Wall Street firm ... without exception, either ran their
public corporations into bankruptcy or were saved from bankruptcy by the United
States government. They all got rich too.
What are the odds that people will make smart decisions about money if they
don't need to make smart decisions - if they can get rich making dumb decisions?
(pp.256-7)

Of course not every body in the game got rich - a lot of shareholders in Wall Street companies and other investors lost milions. If all of the regulars - the players who might be subject to government regulation - got rich regardless, then Lewis is right. A part of this is a result of the socialization of risk through government guarantees, whic clearly undermine market efficiency. More of it may be a result of players receiving bonuses when they earn profits but not negative bonuses as a result of losses. And the fact that some of the Wall Street firms were corporations with limited liability for the investors would contribute to this. The result would be an asymmetry which will lead to excessive risk taking. If Wall Street firms are collectively like the house in sports bettin or poker and can cooperate to share the risk, then all of the players can indeed profit.

Often free market economists take it for granted that there is no easy money to be made and that markets punish stupidity. Michael Lewis' book reminds us that this proposition that markets really punish stupidity requires empirical validation, and may not hold, at least in a strong fashion.

The Wit and Wisdom of Tony Horton

"Rome wasn't build in a day, and Wacky Jacks weren't figured out on the first work out." How does such wisdom not inspire you to do the P90-X workouts?

Professor or Teacher: Is the line being redrawn?

People sometimes think that professors are like teachers, but as I will explain to them, a professor is an expert in a field not in teaching. Traditionally the line between relying on professional educators and experts in the field for instruction has been drawn after grade 12. Several developments in higher education - increasing use of community colleges, online courses, and for-profit universities - all are leading to instructors not having freedom to develop their own course. If the instructor for a course does not choose the textbook and design the syllabus, then there is no reason that the instructor needs expertise in the field as opposed to in teaching. The rise of teaching specialists at research universities could also contribute to this shift. The reason for having experts in a field teach is an evaluation that mastery of research in a field (and perhaps an ability to conduct research) is more important than expertise in teaching. Perhaps the time has come to rethink where the line should be drawn. The proportion of the population going to college has risen steadily over the last 100 years; it may be that the percentage of attending graduate school now is around what the percentage attending college was a century ago. Perhaps expertise in the field becomes more important than expertise in teaching only for the 10 or 20 percent of the students who go the furthest in education. If so, we may easily be witnessing a transition of the first two years of college instruction or perhaps all of undergraduate education from professors to teachers.

The Puppy is Here

We have adopted a new puppy. We are calling her Diane and she is about 9 weeks old, a lab mix. Pictures will be coming soon. She looks just like the Cottonelle puppy. We got her from Cinderella Pet Rescue, a local no-kill shelter, and we highly recommend them.

The Wisdom of Tony Horton

I have been doing P90-X since last summer and really think it's great. In addition to the workouts, I really enjoy the daily sessions with Tony Horton. He has some tremendous formulations, and I will share some of my favorites from time to time. Today's words of wisdom: "That's a short uncle."

Will This Model Work?

I receive and enjoy the weekly Clarion Call from the Pope Center for Higher Education Policy. I recently read The Lindenwood Model on their recommendation. The book describes the changes implemented by Lindenwood University in St. Louis in the 1990s which staved off financial collapse. In brief, the University abolished tenure, increased faculty teaching loads to five classes per semester, and eliminated support for faculty research. I don't know if I agree with these recommendations, but am willing to consider that this could be a viable mode of operation for colleges and universities, at least in some segment of the higher education market.

My bigger concern is whether this is a viable option for many universities in the long run. I believe that many people pursue a Ph. D. in hopes of eventually landing a job as a professor for the purpose of being able to do research. Lindenwood is eliminating the main attraction to the professorate for many would-be professors. A person can teach high school, which from my perspective Lindenwood amounts to, without spending 6 years in graduate school. One university can always employ this model and hire people who have made the sunk investment of earning a doctorate and are unable to secure regular faculty employment else where. But these people went to grad school hoping to land a job at a school where they could do research. So even if one grants that the model works for Lindenwood, it is not clear that it offers what the book's subtitle suggests, An Antidote for What Ails Undergraduate Education.