Friday, 29 June 2012

How the SCOTUS saved itself, rather than the POTUS

The problem with the United States Supreme Court is that it's supposed to be a neutral arbiter of what is, and is not, constitutional.

Except that it obviously isn't. If you wanted any more confirmation of that fact than take a look over Justice Scalia's extraordinary and unprofessional rant the other day about Arizona's immigration and document-checking laws. Want to read a ridiculous partisan, personal screed from a childish ideologue? Look no further.

That's why yesterday's decision by the Supreme Court - to uphold President Obama's Affordable Care Act in all essentials - is so important. It's preserved a huge decision for the American people and the American electorate, rather than nine black-clad appointees on the bench. Rather cleverly, the Chief Justice and his colleagues have avoided the danger that their personal views might seem to hold more sway than those of the President and the Congress. Chief Justice John Roberts (above) knows that forcing people to buy health care insurance is a red-button issue. But he also knows that it will be one capable of being resolved in the Presidential election in November. Or not, of course, since neither party is likely to hold the 60 seats in the Senate that will make them filibuster-proof in the upper chamber.

So Roberts has hunkered in a foxhole to avoid all the shooting. He's had to tie himself in knots to do it - arguing that conservatives were right that one cannot use the Commerce Clause of the Constitution to force people to buy anything, but that liberals can rest easy, as the government is effectively forcing you to pay a tax. But he's managed a deft political manouevre that will resonate for many years - even decades.

We've been here before, of course. The Supreme Court struck down some elements of President Roosevelt's 'New Deal' recovery programme just before he sought re-election in 1936. Little harm it did him, of course - or his reputation (partly deserved) as an economic saviour. The Supreme Court's leader at the time, Chief Justice Hughes, tacked and trimmed all he could to avoid an all-out constitutional war with the president (with some success). Roberts knows all this. He knows the harm that's been done in the past to the Supreme Court's authority by its rulings on race, on the National Recovery Administration, on big corporations' 'right' to spend as much as they like on political campaigning, and on much else. He's no fool.

The whole thing is a victory for good sense - though it leaves the American political scene in Congress and White House more deadlocked, more partisan and more extreme than ever.

That's a story for another day, though. For now, Justice Roberts has looked over the precipice, and declined to throw himself off it. Good for him.

Thursday, 28 June 2012

External examining: our happy lot

So regular readers will have noticed that I've been quiet for a few days. Sorry about that.

I've actually been off acting as an 'external examiner' in a completely different part of the country. For those of you who don't know, this is the system whereby universities call in academics from a range of other institutions to check on, support and generally help with the final stage of their assessment. 'Externals' are asked to read exam papers and questions, read a sample of all the work, come to the exam boards, and then comment at the end on everything they've seen.

Now this system has come in for a lot of flak recently. The Americans don't have this at all. The number of conferences and workshops held around the theme 'what is an external examiner for?' speaks to some uncertainty about their present and future role and point. There is some evidence, in some places, that externals are coming under pressure to allow grade inflation. There have been a few apparently nasty cases of external examiners being targeted or bullied if they are considered to be 'too tough' or 'a problem'. Standards are very, very difficult to 'compare' or 'bring into line' one with the other, and externals can't know about the whole field beyond where they've worked and where they've externalled. Last year a Review of External Examining recommended tidying up the whole system - standardising it legally, with respect to how much academics are paid for their work, in terms of what is published or given to students, and so forth. You get the picture.

But I have to say that I found the whole thing enormously positive. The administrators were incredibly efficient; members of staff agonised over each and every student who was sat slap bang on a borderline between a First and a 2.1, a 2.1 and a 2.2, and so on. They applied their regulations rigorously. They consulted the rules. They held two - count them, two - long meetings - to discuss mitigating circumstances, complaints and special cases. I was asked for my opinions all the time, and at the end, spoke up with four other academics from a range of institutions about what I thought... Which was essentially that they had a good course that could just do with a bit of tidying up here and there. Basically, they were great.

Amongst all the doom and gloom about British (and especially English) universities, all the hard challenges that lay ahead, all this was a bit of a respite and an oasis. Universities are full of conscientious people doggedly pursuing education, and the creation and dissemination of knowledge, in a harsh climate for all those values. Don't let anyone kid you out of that one, basic insight.

Thursday, 21 June 2012

Back to O-Levels and CSEs? You have got to be joking...

I always thought that Michael Gove's tenure as Education Secretary would take us back to a not-so-attractive future. But not even I realised just how extreme his plans were.

Until I woke up this morning, that is, and read about his plans to basically take us back to the age of end-of-course exam testing for a new set of O-Levels and a new exam for the 'less academic'. The era before 1988 when English education was, you know, recognisably like the 1950s.

Now we can talk until we're blue in the face about the right balance between exams and coursework. And all-coursework GCSEs did perhaps go a bit far in that direction. We can debate modularity and re-takes until the cows come home. And Mr Gove may have a point there when he says that constant retakes created an endless testing culture that meant that less learning was possible.

So a bit of re-balancing is well within the ambit of a Secretary of State's (voluminous) arbitrary powers.

But to tear up the entire system - get rid of the secondary National Curriculum, get rid of GCSEs, massively reduce or even obliterate the role of coursework - is to throw the baby out with the bathwater. It goes against two generations of academic work which show that a good balance between coursework and exams can achieve more than any boring insistence on one or the other.

It also misappropriates everyday language. These proposals (shamelessly leaked to the Daily Mail, of course) have been camouflaged by the release of a confusing, disorientating linguistic gas that turns everything on its head. 'More rigorous', 'harder', 'more academic' - those are the terms in which the new emphasis on exams are couched. For which read: 'easier for those who can bluff their way through exams'; 'good for boning up the night before'; 'helpful to the arrogant and opinionated, but ill-considered'; 'not requiring the consistent commitment to a course that regular assessment asks for'.

The re-creation of the old and completely discredited CSE - the Certificate of Secondary Education which came to be seen as a worthless piece of paper during the 1980s - is even worse. There is a mountain of evidence that streaming towards that exam institutionalised class and racial divides; dissauded students from taking the O-Level in subjects where they were highly academic (because their teachers had them down for a slate of CSEs); and downgraded the achievement of hundreds of thousands of children who gained the old CSE grade 'one' (supposedly equivalent to an O-Level, but ignored by most employers and colleges), which meant that they 'should' have taken O-Levels.

It's hard to avoid the impression that Mr Gove (above) is preparing the most extreme fusillade of proposals he can think of, so that he can bank some gains when he inevitably has to retreat a little.

But the principles involved are more critical than these political games. We need to be releasing potential. These proposals will make our system more arbitrary, more streamed, more inflexible and more forbidding for young people when we need it to be clearer, more responsive and more welcoming to drive forward the very real improvements that our ideological debates about 'standards' obscure. Give me strength.

Wednesday, 20 June 2012

English university funding: yet more cracks emerge

Again and again this blog has returned to the dog's dinner that Ministers have made of English student funding. Underfunded, I've called it. Likely to land taxpayers with a great big bill. Leaky. Ill-thought-out.

Now everyone else is saying the same thing. Not that I can claim all that much wisdom, for the flaws were all-too-evident when the House of Commons passed a higher fees cap without even seeing a Higher Education Bill (which we'll now probably never see). But there you are: it's always nice to have friends.

A Barclays Corporate event on the sector last week overwhelmingly decided that the present financial arrangements are not sustainable.

Taken at a time when universities face an ever-more confused system, with more and more colleges renaming or preparing to open with that 'university' title, and when they're facing ever-rising cost pressures such as the push for open-access publishing, it's no wonder. Universities are spending money on trying to tempt Scots students away from their taxpayer-funded system. They're facing growing competition from other EU countries' institutions teaching in English to undercut their charges. Complaints are rising from an ever-more consumerist generation of consumers.

It gets worse, by the way. The next 'reforms' to the Research Excellence Framework, and the next Comprehensive Spending Review looking ahead to 2017, are likely to see government spending on Higher Education fall further even than its projected 2015 lows (above), placing even more pressure on student tuition fees and the terms on which the Government pays them 'up front'. It's no wonder that an independent commission, chaired by Will Hutton, has decided to look again at the whole system.

What's most worrying about that is the status of the debt. While this remains a quasi-taxation system, owned by the government and available at quite low interest rates, it's just about sustainable for most young people to aspire to university. They'll have to pay less per month than they often do under the existing arrangments, as Liberal Democrat Ministers never tire of pointing out.

But if the system breaks down, and the loan book is sold meaning that higher interest rates and shorter terms have to be imposed, then the status of the debt might change. If it's ever going to be treated like normal debt, £25,000 to £40,000 of debt will weigh very heavily indeed on anyone under 18 now who aspires to, well, I don't know, ever buy a house, a car or get a personal loan. At the moment, the debt will sit rather lightly. One day it might not. That's the terrifying prospect that these risky measures hold out.

Tuesday, 19 June 2012

Greek productivity: the opposite implied by absurd racial stereotypes

One of the most depressing things about our present economic crisis is the way that it's turned Europeans against each other. To listen to some of the vox pops coming up from the street in Northern Europe, you'd think that Spaniards, Italians and Greeks were all a bunch of lazy, good-for-nothing subsidy junkies  just waiting to rob German taxpayers of their last euro. There's a nasty racial edge to this, brought out rather well by Polly Toynbee of The Guardian today:

Look at the venom – the sneering at Greeks, Italians and Spaniards, lazy southern layabouts: blaming ineffective governments nastily morphs into blaming whole nations of inferior people. Germans are again represented as spike-helmeted automatons, bidding for a fiscal and political union that would reduce proud nations to town councils under Berlin's thumb. Germany v Greece on the Euro 2012 football field may be a comic coincidence this week, but nobody should dismiss the seriousness of the EU's 'never again' founding purpose.

 In fact, the tedious racial stereotypes about Mediterranean workers are ridiculous, ahistorical and just plain wrong.

Of course Italy has to clean up its nepotistic labour market. Spain has to make sure it never has another property bubble like the one that's just burst - not that Brits are anyone to go around lecturing about this. Of course upper middle-class professional Greeks should pay their taxes.

But these are all structural problems with those economies, that have grown up over many decades (and in some cases, over centuries). They won't be solved overnight.

And they're certainly nothing to do with working harder.

Take Greece. The balance of her trading account, and the mix between assets and liabilities held abroad, was actually rather modest and conservative before the country was encouraged to go pell-mell for foreign buying by the apparent stability leant by the Euro. That alone shows that the country's long-run competitiveness was actually rather good. Greeks actually work longer hours than most Europeans. Greece's problem is not anything to do with the laziness or fecklessness of its largely blameless workforce: it's that it has a vastly overvalued currency which means it can't export the low-end produce (e.g. tomatoes, feta cheese) that other Europeans want. In the meantime, other and colder countries force-grow Europe's vegetables and stuff them down southern Europeans' throats. What a great idea - in terms of carbon release, if nothing else.

Oh, and by the way, have a look what austerity does to labour productivity. Greece had an exactly average labour productivity in 2002, when the Euro was launched. That wasn't far behind Germany's rating. And for the first few years, all went well, with the Greek figure running at 98.4 against an EU average of 100 in 2009. Since then? Er, the figure has fallen off a cliff, to 93.4. Take a look at the graph above, which just tracks relative labour productivity. The Greeks were, you might agree, doing pretty well until crazy economists arrived to give them a kicking. A relatively developing country, with a weak high-end exporting sector, can't cope with this drastic surgery, and the IMF-EU Troika are making things worse every day.

Laziness? Don't you believe it. Policy failure? Certainly.

Monday, 18 June 2012

Momentary relief: 'Grexit' still likely

The victory of the pro-Euro, and pro-bailout New Democracy Party and Antonis Samaras (above) in the Greek elections will cause Eurozone leaders to breathe a sigh of relief. For now. Their terms have been (albeit very uncertainly) accepted. They can get on with building more of a firewall for the Euro's other debtor states. They can forget about a Greek exit.

Except they can't. Greek debt is unsustainably high, even after the 'haircut' that creditors were forced to take in 2011. It's expected to grow in the next year or two, not shrink. And the Greek Government is still being asked to deliver the completely undeliverable: unrealistic privatisation receipts, very rapid structural changes that no developed state has ever delivered, and large public sector cuts that will help to deliver a shrinking economy for as far ahead as we can see.

Does anyone really think that the Greeks can stay in under these circumstances? If you do, you're on very powerful hallucinogenic drugs indeed.

Far better would be a Marshall-Plan style rescue of Greece, cancelling most of her debts in exchange for binding and legal promises about her deficits (and perhaps a technocratic regime in Athens); new German economic policies that amount to a controlled devaluation of the hidden Deutschmark (basically, a great big wage-and-spend party in Northern Europe), and a complete restructuring of Europe's banks designed to get all debt off all their balance sheets - akin to President Roosevelt's reconstruction of the American banks in 1933.

Otherwise, Greece will still leave. All we're experiencing now is a brief lull - as the banking sector's shares reflect today. Did they zoom up, indicating that no-one believes their hands will be full of next-to-worthless new drachma in the next few months? No, sorry, they didn't.

To use a now well-worn (and mendacious) phrase: we're all in this together. And unless the Greek crisis is part of a new and convincing multilateral settlement, involving less austerity and more growth, and a fiscal union at the Eurozone's core that will amount to the creation of a new state, we're all going down the tubes together too.

Friday, 15 June 2012

The President might just be in trouble

Long-term readers of the blog will know that I've always been pretty optimistic about President Obama's chances of winning re-election in November. He's charistmatic. He's a good campaigner. The demographics are going his way. He has plenty of cash to campaign with. His campaign is well-established, and they know more about the electorate than Mitt Romney's operations. The ground war, of activists on doorsteps, is likely to be heavily slanted in the President's favour.

So why, then, is he running pretty much neck-and-neck with his Republican challenger? Every single poll summary shows him only a point or two ahead. And he's even been sliding backwards in the count of state-by-state Electoral College votes, which until recently had him way ahead. Now very few of them put him over the magic finishing line of 270 Electoral College votes.

First: Romney is gaining traction and recognition. Lulled by websites that showed them winning pretty easily while ex-Governor Romney had to do battle with a string of unelectable right-wingers, Democrats thought he was a loser. But now he stands alone, and conservative Americans will rally behind him even if they don't like him very much. Which they don't. Second: the President has made a series of errors, summed up by his 'the private sector is doing fine' gaffe the other day. Such foot-in-mouth moments won't matter very much in November, but they chance the mood music.

Third, and most importantly, the economy is slowing rapidly, as job data has been showing for some weeks. This is the lethal danger, as leaders from Gordon Brown to Nicholas Sarkozy will tell you.

So the betting market now has President Obama at a 52.5% likelihood of re-election, whereas early this year he was up above 60%. Polling experts put that a little higher, again at about 60 per cent, but that can all change pretty quickly - as we've now seen already.

Small wonder that top Democratic strategists with long memories, and long experience of fighting elections, have been saying the same thing, over and over again: 'wake up, Democrats! You could lose'.

They probably shouldn't panic yet, if only because the fate of the White House isn't all that centrally in their hands. The bottom line is where it has always been: if the economy continues to recover, albeit weakly, President Obama will be in the White House for another four years. With something to spare. If it goes south, and in the worst analysis if there's another recession in the offing, then he could be toast.

Wednesday, 13 June 2012

Britain: build more houses!

So the Government and the Opposition have been having a row about housing numbers. Housing Minister Grant Shapps says that numbers of house completions have risen sharply; his Labour opponents say they've 'collapsed'. What to make of it?

Well, it's a non-story in some ways. Late last year, the number of affordable (read: non-astronomical) housing starts collapsed to almost nothing. But ever since, as new Coalition programmes have come online, numbers of starts (and, that lagging indicator) completions, have been going up. From a pathetically low base, mind you.

So it depends on how you look at it. It depends on the time frame. Yada yada, as young people apparently (don't say) all the time. Move along, citizens. No story here.

Except that there is a story here, and it's our complete inability as a society to build enough dwellings for our rising population. The birth rate rose in the 1990s, affluence and social change means that more and more people want to live alone, and immigration has been running at historic highs. So we probably need to build a quarter of a million homes every year just to keep up with that demand.

Bearing in mind that house prices haven't actually dropped all that much during the worst recession for 80 years, that means that prices aren't going to come down and help poorer and younger Britons any time soon. The Housing Minister has in fact admitted as much, along with the fact that housebuilding would actually be one of the best ways to get us out of our current fix. While cutting spending. But that's another story.

So-called 'ribbon' development - all those 1930s semis on the arterial routes out of our major cities - was one of the ways in which another apparently 'broad-based' or 'National' government dug us out of the last depression caused by the collapse of the financial system. With low interest rates, plenty of land and plenty of idle workers, we should be able to do the same again.

We won't. Swivel-eyed spending cutters, middle-aged and older homeowners, Barbour-clad country dwellers, snobs and supposedly Socialist planners will conspire to make sure that we don't.

It's a pity. It's all I'm saying.

Tuesday, 12 June 2012

Spain... a way out of the mess at last?

So I'm back! Hold the excitement in the cheaper seats, please. So... Where we we? Ah, I remember. While I was getting drenched in the Brecon Beacons (not as bad as it sounds, since you ask) the world economy was still drifting onto the rocks.

Things have been looking up a little bit this week, with the 100 billion euro bailout of Spain's banks. Some of the European Financial Stability Facility's cash has been fired out of a medium-sized bazooka; the markets rose on the news; since it's not a bailout of Spain's government, per se, there's been less talk of the absurd conditions and crazy beggar-my-neighbour 'adjustment' policies imposed on Greece. Doubt still clouds the exact conditions, but they're unlikely to be as silly as those imposed on Ireland and Portugal - to those countries' enormous displeasure, of course. There's even been excited talk of a 'European Banking Union', which would at least collectivise some of the risk that's been piling onto the back of Europe's financial structure.

So is it two cheers for Angela Merkel (above) and the so-so highwire act of her austerity politics? Well, not really, no. Spanish bond yields have continued to rise. Although investors now seem prepared to buy the stuff, since Euromillions are pouring into Spanish banks' coffers, they're still wary. And the reason why contains a highly-revealing lesson about the future of Europe.

It's that there's not enough of it. As my old tutor Niall Ferguson pointed out on Radio 4's Start the Week on Monday, there has to be a European President, a European Council and a European Budget within the Eurozone's core (at least) before risk is credibly spread, and before the funding is credibly pooled. Unless that happens, no-one really believes that the Germans are going to ride to the rescue of states they've (wrongly) come to regard as a bunch of embarrassing layabouts.

The odds are still on that happening, leaving Britain sitting on the sidelines - for there is no way that Prime Minister David Cameron could get a new treaty through Parliament without conceding a referendum that he could do with like a pistol pointed at his head. This would at least be a reflection of democracy - that the 'outer' European Community member states and their peoples want to be 'in', but not members of the new core country called 'Fiscal Europe'.

Though it might be a tight-run thing. Upcoming elections in Greece, and especially next year in Germany itself, will stifle immediate progress towards that end.

Chinks of light are starting to appear within the Euroepan elite's clouded collective mind. But make no mistake: it's fiscal union and a federal state, or it's bust.