Tuesday, 31 August 2010

The great social divide

FT: US companies are going to have to disclose the precise difference between their corporate pay packages and average salaries, in a move bound to embarrass a great many executives. The new rule is part of an overhaul of the US financial system, the Dodd-Frank Act, passed in July.
"S&P 500 chief executives last year received median pay packages of $7.5m, according to executive compensation research firm Equilar. By comparison, official statistics show the average private sector employee was paid just over $40,000."
See full story.
University of Chicago economist Raghuram Rajan argues that since the extension of easy credit by the US government and markets in an effort to extend the American Dream of home ownership to middle and low income households backfired, we should be wary of renewed attempts to bring about equality.
"The problem, as often is the case with government policies, was not intent. It rarely is. But when lots of easy money pushed by a deep-pocketed government comes into contact with the profit motive of a sophisticated, competitive, and amoral financial sector, matters get taken far beyond the government’s intent."
See How Inequality Fueled the Crisis.

IPCC criticised
Economist: Ahead of its next plenarey meeting in October, the Intergovernmental Panel on Climate Change faces stiff criticism from a probe carried out by the umbrella group of the world's academies. "The report finds problems with the way the IPCC handles reviews of its work, the degree to which it shows fairness when considering areas that are disputed, and the way it communicates the certainty, or lack of it, wherewith it speaks."
See full story.
Guardian: Bjorn Lomborg, the 'sceptical environmentalist', will argue in a new book out next month that the world should invest tens of billions of dollars a year to combat climate change. '"Investing $100bn annually would mean that we could essentially resolve the climate change problem by the end of this century," the book concludes.'
See preview.

Peace talks start under a cloud
The Israeli and Palestinian leaders meet in Washington on Thursday for the ninth historical attempt to reach a peaceful settlement. But the Obama administration already faces a possible deal-breaking date. On September 26, Israel says it plans to restart settlement construction after the end of a moratorium.
See full story.
Palestinian PM Salaam Fayyad says "talks can and must" succeed.
See interview.
Iraq's former PM Ayad Allawi says "the environment is not right" for these talks to succeed. In an interview published as the US declares the official end of its combat presence in Iraq, he believes Iraq could still tip into chaos, with devastating results for the region. The country still has no government (Allawi is in talks with al-Maliki for a form of power-sharing) and its security forces are facing a resurgence in terrorism.

America should rethink its police across the Mideast and Asia, says Allawi, because it is a failure from Palestine to Afghanistan.
"Everybody is frightened. Every corner of the region is frightened. Even America is frightened, even Iran is frightened. We are heading towards a situation which almost compares to the Cuban crisis in 1962. There is an umbrella of fear spreading above us."
See interview.
US VP Joe Biden is in Iraq for the transitional ceremony in which the remaining 50,000 US troops will be baptised as supporting troops.
See full story.

Greek pessimism
79.6 percent of Greeks declared themselves slightly or not at all optimistic about the country's immediate future in a GPO poll released by Mega TV station yesterday. 20.1 percent said they were optimistic. Even among Pasok voters the pessimistic proportion was 65 percent. About 44 percent of voters do not believe the government's claim that further austerity measures will not be necessary this year. About 55 percent of Greeks believe the measures will lead back to economic recovery, but just under 43 percent fear bankruptcy. Asked which party's policy they trusted most to resolve the economic crisis, 31 percent said Pasok, 13.4 percent said New Democracy and 39.5 percent said neither. The poll showed that Pasok had lost a couple of points of its support since April this year to come to 28.6 percent of the vote were elections to happen now, while ND stood steady at 21 percent.
See full TV report.

Germany's new immigration debate
A new book by Thilo Sarrazin, a member of Detsche Bank's board, has sparked renewed debate in Germany about whether immigration is a good thing. Sarraziin argues that Germany's ageing population is being infiltrated by poorly educated Turkish labour. Many politicians have asked for Sarrazin's resignation.
See full story.

Ireland faces bank test
Ireland's banks will attempt to refinance 25bn euros' worth of debt in September, creating a test of whether they can do so at affordable rates.
See full story.

Friday, 27 August 2010

The education spiral

The following three paragraphs are from a July 15 Economist article on Egyptian education:

"Before the revolution Egypt’s schools and universities were few but their standard was excellent. The push to boost numbers came at the cost of a drastic fall in quality. Instead of following tested Western models, school textbooks were rewritten to emphasise “nationalist values”, scientific formulas and lists of facts rather than critical thinking. By the 1980s class sizes in government schools averaged more than 60. With student numbers in several big state universities up to six-digit figures, hundreds, even thousands of students were packed into lecture halls. Some of the better staff emigrated to Gulf countries, where salaries were many times higher.

Those left behind began to exploit an obvious market opportunity, offering private lessons on the side. This practice became so pervasive that by 2005 some 64% of urban students and 54% of rural ones resorted to private crammers in addition to regular schooling, according to Egypt’s Human Development Report. A 2002 World Bank study found that private tuition accounted for fully 1.6% of GDP, and other studies suggest it devours a whopping 20% of household spending in families with school-age children. A big reason why families are willing to spend so much is that the education system relies heavily on national exams, not only for rating students but also for placing them in the various faculties of the state universities that still account for 95% of college enrolment.

Since the 1960s these have been ranked by prestige, with medicine and engineering accepting only the highest-scoring students. The humanities, including law and education, are left with the dross. In effect, this creates a tyranny of exams largely based on rote learning. It forces unhappy students into disciplines they would not have chosen for themselves and produces a chronic imbalance between the skills of graduates and the needs of the marketplace. Egypt has a surplus of would-be lawyers, slapdash engineers and scarcely numerate accountants but few trained librarians, architects or actuaries."

The similarities with Greece's education system should be obvious, and worrying. There is the tyranny of after-school frontisteria, which sap household incomes and belabour students. There is the rote learning and lack of critical thought seen in Greek high schools and universities. There is the vast class size. There is the cascading placement system, which puts university entrants in disciplines not of their choosing. All these are the hallmarks of a centrally controlled, politicised education system that does not tend towards excellence.

This year the socialist government enormously broadened the university intake by abolishing the 50% pass grade established by former education minister Marietta Yiannakou in 2006. There are good reasons for this. Greece is in recession (the economy contracted by 3.5 percent in the second quarter, year-on-year, according to Bank of Greece figures released this week), and putting young people in study for four years (the minimum duration of a Greek Bachelor's degree) is a way of keeping unemployment figures a bit lower than they might otherwise be (officially they are topping 12.5 percent).

A similar broadening is happening elsewhere. In Britain, for instance, the number of students eligible for 'clearing' - late placement in courses that were not a student's first choice - is up by 48,000 this year to 182,000. But in the effort to place as many applicants as possible, the Greek system has plumbed new depths. The lowest-achieving entrants to the university system scored 2.3 out of 20, and to technical colleges 0.9 out of 20.

The dilemma for the public higher education system is therefore starker than ever. Are they a political instrument fulfilling a constitutional pledge to provide free higher education or are they competitive institutions improving Greek society and its economy with every passing generation? Will Greece's universities remain politically controlled, their intake dictated by government quotas, or will they be released from the state and allowed to compete with the rest of the world? There are concomitants to that state control. If the university system is not allowed to be more autonomous and accountable, it will be difficult for it to acquire transparent academic and financial management, because academic and administrative appointments come with party political backing - as do some student transfers.

Public education should not serve the interests of whichever political party is in power. The current socialist policy of broadening the intake is understandable in the interest of social stability in a recession, but ultimately an enlightened government must plot a course of radical reform and face the unions and other deeply vested interests that will fight it, even though their students will be used as hostages.