Blog Me, Maybe

I have picked up my family and moved to a rental house on the California coast for a month.  I am still working, but experimenting with getting out of town for the hot Arizona summers.  I may or may not take the opportunity to cut back on blogging for a month or so.  I haven't decided.

Moral Hazard in the Drone War

I missed Tom Junod's original article on targeted killing, but his response to Andrew Sullivan's defense of the Obama Administration is terrific:

I did not -- and do not -- condone the use of torture any more than Sullivan does. But the moral risk of torture is not so different from the moral risk of targeted killing. Indeed, the moral risk of torture provides a template for the moral risk of targeted killing. What was introduced as an option of last resort becomes the option of first resort, then the only option. Sullivan always understood that torture was a temptation, and that the day would come when it was applied not in emergency, "ticking-clock" situations, but as a matter of routine. Well, that day has come, only now with targeted killing, where the option of first resort meets the court of no appeal.

Yes, killing is a part of war, and torture isn't. But what if the the kind of militant who was captured and tortured under Bush is the kind of militant who is simply being killed under President Obama? The Obama Administration vigorously denies this, just as it vigorously denies that it is combating terrorism by practicing a policy of extermination against terrorists. But the numbers -- the thousands killed by drone and raid against the single high-value asset captured and interrogated outside the theater of war in Afghanistan -- tell a story that can't simply be shrugged off. Interrogation has been replaced by assassination.

Moreover, I talked to a source familiar with the targeting process who told me that the people involved in the life-or-death decisions of the Obama administration often do not know the credibility of intelligence sources. This was a highly informed and involved source who, when asked the most essential question -- "how good is the intelligence?" -- paused and finally couldn't answer. In fact, when I raised the question of whether those who were once captured are now being killed, the source suggested that it was the wrong question:

"It's not at all clear that we'd be sending our people into Yemen to capture the people we're targeting. But it's not at all clear that we'd be targeting them if the technology wasn't so advanced. What's happening is that we're using the technology to target people we never would have bothered to capture."

Unfortunately, I think targeting killing is here to stay, by the "only Nixon could go to China" logic.  By having a Democrat start this policy, it has avoided a lot of critique from the usual defenders of humanity against arbitrary power, for the simple reason that many of these folks consider Obama to be "on their team."  Just look at Andrew Sullivan, for God sakes, defending the practice.   The Left spent more time criticizing Bush over looting at the Bagdad museum than it has over Obama's targeted killing (Glen Greenwald being a notable exception).  Having set the precedent under Obama, there will be no going back under either party in the future.

Crazy Awful Idea - Incarcerating People For Their Own Good

Via Carpe Diem

This does not include the millions in state and county jails.  All those drug offenders in jail for a victemless crime, essentially "for their own good."

"I've sentenced boys younger than you to the gas chamber. Didn't want to do it. I felt I owed it to them. "

The Government Should Borrow More Money Because It Gets A Really Good Teaser Rate On Its Credit Card

In one of the most irresponsible suggestions I have seen in a while, Ezra Klein writes: (via Kevin Drum)

The Financial Times reports that there was record demand for 10-year Treasurys this week. “The $21 [billion] sale of 10-year paper sold at a yield of 1.459 per cent, the lowest ever in an auction.” William O’Donnell, a strategist at RBS Securities, told the FT that “we were expecting good auction results but this one has left me speechless.”...

But that 1.459 percent doesn’t account for inflation. And so when you do account for inflation, it’s not “almost nothing.” It’s “less than nothing.”...

The market will literally pay us a small premium to take their money and keep it safe for them for five, seven or 10 years. We could use that money to rebuild our roads and water filtration systems. We could use that money to cut taxes for any business that adds to its payrolls. We could use that to hire back the 600,000 state and local workers we’ve laid off in the last few years.

Or, as Larry Summers has written, we could simply accelerate payments we know we’ll need to make anyway. We could move up maintenance projects, replace our military equipment or buy space we’re currently leasing. All of that would leave the government in a better fiscal position going forward, not to mention help the economy.

The fact that we’re not doing any of this isn’t just a lost opportunity. It’s financial mismanagement on an epic scale.

This is wrong on so many levels that it makes my head spin.  However, I will begin with four:

  1. The US never pays down debt.  Except for a short period in the 1990's when we paid a tiny chunk off, all we do is roll over the old debt and pile more on top.  We are still rolling over most of the debt we incurred in World War II.   So any new debt we take on will likely still be around fifty years from now.   As a result, taking on debt based on current low rates is exactly equivalent to a cash-strapped family taking on more debt because they got a low teaser rate on a new credit card.  Eventually the rates go back up on the debt.
  2. Just because interest rates are low does not mean that somehow the spending is free.  In the private sector, companies take on debt in expectation of growing revenues enough to pay the debt back.  How is hiring 600,000 state bureaucrats going to help pay off the new debt in 10 years?
  3. The implication here is that all current government spending is so awesome that when we drew the line to mark the budget, additional totally awesome spending got left out, so if we just had more money, there are still lots of great projects available to spend the money on.  Really?  Where was all the catch-up road maintenance and water filtration systems in the last trillion dollar stimulus debt-binge?   Seriously, the Left had their trillion dollar opportunity to prove out some value here and coughed up a hairball.  So now they want a do-over?   This is yet another great bait-and-switch:  They say its for water filtration and roads, but it ends up just being to maintain do-nothing government jobs with above market pay and benefits, largely in exchange for these folks voting Democrat.
  4. Here is the ultimate irony -- certain countries are getting negative interest rates  (Switzerland comes to mind right now) in government bond auctions because they are considered safe in comparison to a number of countries that are floundering.  They are considered safe because investors think they are less likely to do fiscally stupid stuff like what is done in Greece in Spain -- say, for example, borrowing a bunch of money when the country is already deeply in debt to rehire at above market salaries 600,000 unneeded government workers.  Klein is saying, basically, since interest rates are low, lets go indulge ourselves in all the actions that tend to drive interest rates for government way up.

Summer of the Shark, Global Warming Edition

My new column is up, comparing coverage of this summer's heat wave to "Summer of the Shark"

Before I discuss the 2012 global warming version of this process, let's take a step back to 2001 and the "Summer of the Shark."  The media hysteria began in early July, when a young boy was bitten by a shark on a beach in Florida.  Subsequent attacks received breathless media coverage, up to and including near-nightly footage from TV helicopters of swimming sharks.  Until the 9/11 attacks, sharks were the third biggest story of the year as measured by the time dedicated to it on the three major broadcast networks' news shows.

Through this coverage, Americans were left with a strong impression that something unusual was happening -- that an unprecedented number of shark attacks were occurring in that year, and the media dedicated endless coverage to speculation by various "experts" as to the cause of this sharp increase in attacks.

Except there was one problem -- there was no sharp increase in attacks.  In the year 2001, five people died in 76 shark attacks.  However, just a year earlier, 12 people had died in 85 attacks.  The data showed that 2001 actually was  a down year for shark attacks.

This summer we have been absolutely bombarded with stories about the summer heat wave in the United States.  The constant drumbeat of this coverage is being jumped on by many as evidence of catastrophic man-made global warming....

What the Summer of the Shark needed, and what this summer’s US heatwave needs, is a little context.  Specifically, if we are going to talk about supposed “trends”, then we should look at the data series in question over time.  So let’s do so.

I go on to present a number of data series on temperatures, temperature maximums, droughts, and fires.   Enjoy.

Just How Little Does Government Trust Individuals?

From CNN via Carpe Diem

 

A 24-year scandal was quietly acknowledged last week. On July 3 the U.S. Food and Drug Administration approved the first "rapid home" test for HIV—a test that people can take in the privacy of their own homes to determine whether they have the virus that causes AIDS.

The approval is an unambiguously good thing—or so you would think. The saliva test in question, made by OraSure Technologies and known as OraQuick, costs less than $60 and takes just 20 minutes to self-administer. According to statistics an FDA advisory committee presented at a hearing in May, it holds the potential to prevent the transmission of more than 4,000 new HIV infections in its first year of use alone. That would be about 8 percent of the roughly 50,000 new infections we currently see annually in the United States. (About 1.2 million people in the U.S. are now living with HIV, according to the Centers for Disease Control and Prevention, of whom about 20 percent don't realize they have it. Since the epidemic began in the early 1980s, about 1.1 million people have been diagnosed with AIDS, and more than 619,000 have died from it.)

The scandal is that the approval of a rapid home test for HIV did not occur until last week—about 24 years after the FDA received its first application seeking permission to market one.

Apparently, for years, even decades, only tests of clinical options were allowed to proceed, basically because the government considers Americans to be infants:

There was great concern that the patient receive proper counseling, both before and after the test. The patient needed to appreciate the possibility of false positives, so he wouldn't panic unnecessarily if he got one. He needed to appreciate the danger of false negatives, so he wouldn't become reckless, endangering sexual partners. And he needed to understand the options and support groups available in the event he received a true positive. (On top of all these concerns, many AIDS activists at the time were opposed to almost any form of HIV testing out of fear that results could be used to ostracize and persecute HIV-positive people—though one hopes that public health concerns were paramount to the FDA, rather than political pressure and hysteria.)

Cool Tech...

...though not as cool as I thought at first.  I thought the machine actually arranged the bricks, but that is done by hand.  Still, it eliminates a ton of stoop work with people placing bricks at table-top level.  I am sure it is more efficient, though I want the one where the machine arranges the bricks itself.  Video at the link

 

Two Views of the Police

Radley Balko has this amazing comparison of two different citys' police recruitment videos, which paired together give great insight into really different ways these departments see themselves and their mission.  As Balko asks, which town do you want to live in?

How About A Left-Right Coalition Against the Corporate State?

I am encouraged to see this from the Left.  Kevin Drum writes, in response to a proposal for California state licensing of dog groomers:

What's unfortunate, I guess, is that this would all be unobjectionable if it were a voluntary certification program. If you want to pay more to take Fido to a certified groomer, go right ahead. If you want to save money, then don't. But critics are almost certainly right that a voluntary license would become a required license in pretty short order. After all, Vargas's proposal may be for a voluntary license right now, but that's only because he's failed to get support for a required license in the past.

What's more, if the program were voluntary I'm not sure why you'd need the state involved in the first place. If there's really a demand for this kind of certification, it seems likely that a trade association of some kind would set something up. And if there isn't, then why bother?

Right on!  I wish Drum would carry this same thinking further into other economic spheres (why are consumers powerful enough to handle dog grooming choices suddenly infantile when it comes to health care decisions) but I am encouraged none-the-less.  There is room, I think, for a left-right coalition against corporate cronyism (of which licensing is among the worst forms, helping to protect incumbent businesses against upstart competitors).  Unfortunately, such cronyism is so deeply ingrained in both Romney and Obama that it is certainly not going to happen in this election.

Great Moments in Government Energy Policy Failure

So, why do we have all these "dirty" coal plants?  Market failure?  Industry greed?  Nope -- Carter-era government policy.  For you younger folks, here is a law you may have never heard of:

The Powerplant and Industrial Fuel Use Act (FUA) was passed in 1978 in response to concerns over national energy security. The 1973 oil crisis and the natural gas curtailments of the mid 1970s contributed to concerns about U.S. supplies of oil and natural gas. The FUA restricted construction of power plants using oil or natural gas as a primary fuel and encouraged the use of coal, nuclear energy and other alternative fuels. It also restricted the industrial use of oil and natural gas in large boilers.**

In other words, all new fossil fuel-powered boilers had to be coal-fired (which in a year or so, after Three Mile Island, translated to all new boilers since nuclear was essentially eliminated as an option).  Yes, this may seem odd to us in an era of so much environmental concern over coal, but something coal opponents don't tell you is that many of the exact same left-liberal-government-top-down-energy-policy types that oppose coal today lobbied hard for the above law several decades ago.  Here is a simplified timeline:

1.  Government energy policy sets price controls that create artificial shortages of oil and gas

2.  Government-created shortages of oil and gas lead to this law, with government demanding that all new fossil fuel-powered electric plants and boilers be coal powered.

3.  Government mandates on coal use create environmental concerns, which lead to proposals for taxes and bans on coal power.

4.  The need for government action against coal is obviated by a resurgence of oil and gas supply once government controls were removed.  However, in response, government beings to consider strong controls on expansion in oil and gas production (e.g. fracking limits).

 

** I got involved with this because I worked in an oil refinery in the 1980's.  We had to get special exemptions to run our new boilers on various petroleum products (basically byproducts and waste products of the refining process).  Without these, the law would have required we bring in coal to run our oil refinery furnaces.

 

Quiz: Who is This Wearing Prince Leia's Dress?

Total Symmetry

I read a few political blogs from the Left and Right - not many, because I cannot stand the whole team-politics thing, but I feel like I need to hear what they are saying.  Apparently, Conservatives (after the Supreme Court Obamacare decision) are saying that their side is too soft, too amenable to being intimidated by the Left.

Here is my observation from reading a fairly equal helping of political blogs from both sides:  These sort of things are cherished beliefs of both sides.  I don't have the post-holiday energy to hunt up the links, but I can say with confidence that both Left and Right seem to believe, or at least to write that:

  • Their own side compromises more than the other side does
  • The other side is much more bare knuckles, doing what it takes to win.  Their own side has ethics that always causes them to stop short
  • The other side is better at keeping its members from breaking ranks
  • The other side is raising more money than their side
  • The other side is a vast coordinated conspiracy using a top-down imposed message while their own side is mainly individuals acting independently

Obama as Venture Capitalist

John Stossel has a great link-filled round up of failed and failing solar and green energy programs funded by the Obama Administration with our money.  Check out the extensive list.

Here, for laughs, is Ray Lane of Kleiner Perkins rhapsodizing about Obama as the greatest government venture capitalist ever, and using for his prime example ... Solyndra!

I suppose at one point Kleiner Perkins used to take private risks with private money, but it seems to have found out it can make higher returns leveraging its investments with taxpayer money, and then using political influence to mandate business for the companies in which it invests. Thus the hiring of Al Gore, among other moves, to the KP board. Lane, by the way, is Chairman of serial government trough-feeder Fisker automotive, which make admittedly very cool-looking cars that require a lot of taxpayer subsidies.

Certainly Mr. Lane knows something about marketing, including that age-old tactic the "bait and switch."  The taxpayer subsidies of Fisker were made on the theory that electric cars were somehow greener than gasoline cars because they use less energy.  But looking at the fuel at the power plant it takes to make the electricity that goes into a Fisker Karma, the car gets worse gas mileage than an SUV  (only an EPA equivalent MPG standard that breaks the second law of thermodynamics hides this fact).  Congratulations Mr. Lane, green subsidies for sub-SUV gas mileage.  All those checks KP partners wrote to Obama in the last election certainly got a good return.

Cost of Green

From Zero Hedge:

Why should we worry about 5c or 10c on a gallon of fuel down the local gas station when the US Navy (in all her glory) is willing to pay a staggering $26-a-gallon for 'green' synthetic biofuel(made we assume from the very same unicorn tears and leprechaun nipples that funded the ESM). AsReuters reports, the 'Great Green Fleet' will be the first carrier strike group powered largely by alternative fuels; as the Pentagon hopes it can prove the Navy looks just as impressive burning fuel squeezed from seeds, algae, and chicken fat (we did not make this up). The story gets better as it appears back in 2009, the Navy paid Solazyme (whose strategic advisors included TJ Gaulthier who served on Obama's White House Transition team) $8.5mm for 20,055 gallons on algae-based biofuel - a snip at just $424-a-gallon.

In its defense, the Navy Secretary said, ""Of course it costs more.  It's a new technology. If we didn't pay a little bit more for new technologies, we'd still be using typewriters instead of computers."  Of course, the switch from typewriters to computers proceeded without government mandates (or taxes, as they are called now) and in fact was led by the private sector -- the government trailed in this transition.  Further, people paid the extra money for a computer because they found real value in it (document storage, easy editing, font flexibility).  What real value is the Navy getting for the extra $22 a gallon?  How much better will this task force perform?  The answer, of course, is zero.

Here-to-For Only Seen in Spy Movies - the Cyanide Capsule

It is never dull here in AZ.  It appears that Michael Marin, upon being convicted of arson in court yesterday, may have committed suicide right there in court.

"Burning Man" Michael Marin reportedly died after his "medical emergency" in the courtroom yesterday, which came after a jury handed down a guilty verdict in Marin's arson case.

Fox 10 had its camera on Marin's face as the verdict came in, and it sure looks like he put something in his mouth before he started having an apparent seizure and fell unconscious in the courtroom.

Video at the link if you are morbidly inclined.

I just read JD Tuccille's High Desert Barbeque, also about arson in AZ as it turns out, and enjoyed it thoroughly.  But authors like Tuccille who are writing satire have to work hard to stay more outrageous than the news here in AZ.  Seriously, a guy starts a fire in his own house, escapes from the second floor in a scuba mask and tanks, and then crunches a cyanide tablet in court as the verdict is read?  Come on, who is writing this stuff?

PS-  I may be missing the legal definition on this, but Marin was convicted of arson on an occupied structure when he was the only occupant.  I find it odd that the arsonist himself "counts" as an occupant towards this charge which, I presume, carries worse penalties than arson on an unoccupied structure.  Upping the charge this way reminds me of the NYC police asking people on the street to show them their weed and then busting them on the charge of public display of said weed.

Now That Mandates Are Effectively Legal, Here is The Next One

You have to watch politicians' commercials

The Dish Network, in its continuing effort to attract new viewers, introduced a new DVR called the Hopper earlier this year. The Hopper's main appeal is that it allows you to skip past commercials entirely, and unsurprisingly, TV networks aren't very happy about this. But guess who else is unhappy?

At a Wednesday hearing on video distribution held by the Communications and Technology Subcommittee of the Energy and Commerce Committee, [Rep. John Dingell, D–Clueless] complained that the service will allow potential voters to skip past important commercial messages.

"I've got an election coming up, like all my colleagues," Dingell said, during his questioning of Dish Network Chairman Charlie Ergen. "We all put political ads on the local stations to reach our constituents. The Hopper potentially limits the ability of every member of this subcommittee to reach constituents to help them make up their minds on Election Day.

"Do you understand and appreciate the concerns that the politicians up here on the dais and other politicians everywhere will feel about that, yes or no?" Dingell asked.

Unintended Consequences

These women's weight gain ads seem funny because they are so out of step with most women's concerns today.  But what changed?  My guess is that the whole weight-gain thing really was about larger breasts.  If you wanted more cleavage, you had to gain weight.  But breast implants changed that.  Now one can have an improbable rack while still starving.  So while breast implants are a positive in terms of empowering women to have control over their body, they have eliminated an important counter-balance to this crazy pressure on skinny-ness.

Disclosure:  On a scale from 1=Kate Moss to 10=Rubens paintings, my preferences definitely are in the higher numbers, so I am not without bias.  I also have a daughter who wastes way too much of her life worrying whether her body properly meets societal expectations for fat content.

Is the Obamacare Decision Internally Consistent?

My column is up at Forbes.com, and has a few quick thoughts on the decision.  A brief excerpt:

Second, though, I am really confused how financial penalties on states can be read as an effective mandate, and therefore un-Constitutional, but financial penalties on individuals do not constitute an effective mandate (if they did, this very ruling says that such a mandate would be illegal).   Using financial penalties to coerce action is either the equivalent of a mandate or it is not, but the decision seems to take two opposite stances on this question.

Commerce Clause Limits are Dead, Dead, Dead

I will disagree with most commenters -- there is no support for the commerce clause implying any kind of regulatory limitations in this decision.  Any discussion of the commerce clause and what the Supreme said about it is irrelevant.   By this decision, Congress can essentially mandate any activity it pleases as long as it imposes a financial penalty for an individual who ignores the mandate.  SCOTUS upheld that the commerce clause has limits, and then made these limits irrelevant.

The Supremes Have Me Confused

So this is how I read the PPACA/Obamacare decision today

  • The mandate is not allowed under the commerce clause powers
  • However, Congress is allowed to use its taxing power to issue financial threats to coerce individual activity it can't mandate
  • However, Congress is not allowed to use financial threats to coerce state government activity that it can't mandate
Right?

Bid Rigging for Municipal Asset Management

Rolling Stone Magazine has an good story on the conviction of a number of banks and brokers on charges of bid-rigging, specifically on contracts for short-to-medium term management of municipal bond cash accounts.  Apparently brokers were paid by certain banks to be given a look at all the other bids before they made their final bid.  The article focuses mainly on the ability of winning bidders not to bid any higher than necessary, though I would suppose there were also times when, given this peek, the winning bidder actually raised its bid higher than it might have to ace out other bidders.

This is classic government contracting fraud and it's great to see this being rooted out.  I am not wildly confident it is going to go away, but any prosecutorial attention is welcome.

But I am left with a few questions:

  • It seems that government contracting is more susceptible to this kind of manipulation.  Similar stories have existed for years in state highway contracting, and the municipal bond world has had accusations of kick-backs for years.  Is this a correct perception, or is the rate of fraud between public and private contracting the same but we just notice more with the government because the numbers are larger, the press coverage is greater, and the prosecutorial resources are more robust?
  • If government contracting of this sort is more susceptible to fraud, why, and how do we fix it?

The latter is not an academic question for me.  I run a company that privately operates public recreation areas.  I bid on and manage government contracts.  Frequently, a major argument used against the expansion of such privatization initiatives is that past government outsourcing and contracting efforts have been characterized by fraud and mismanagement.  The argument boils down to "the government has so many management problems that it can't be trusted with contracting for certain services so it needs to operate those services itself."

The only way to reconcile this view is to assume that private actors are more likely to act fraudulently and be dishonest than public employees.  If this were true, then the public would be safer if a public management process of questionable ability were applied towards public employees rather than outside private contractors, because those who were being managed would be less likely to take advantage.  And certainly there are plenty of folks with deep skepticism of private enterprise that believe this.

However, I would offer that only by adopting an asymmetric view of what constitutes fraud would we get to this conclusion.  Clearly, banks colluding to shave a few basis points off municipal asset returns is fraud.     As the author of the Rolling Stone piece puts it several times, the crime here is that the public did not get the best market rate.  So why is, say, elected officials colluding with public employees unions to artificially raise wages, benefits, and staffing levels above market rates not fraud as well?  In both cases insiders are manipulating the government's procurement and political processes to pay more than the market rates for certain services.

This is Bastiat's "seen and unseen" of the privatization debate.   Yes, the world is unfortunately littered with examples of government procurement fraud.  This is often cited as a reason for maintaining the status quo of continued government management of a diverse range of services.  But what we miss, what is unseen, is that these government services are often run with staffing levels, work rules, productivity expectations, and pay rates that would constitute a scandal if uncovered in a division of a corporation, particularly if the workers were spending a lot of money to make sure the manager handing them this largess was able to keep his job.

Yes, the public lost several basis points on its investments when it did not get the market rate of return from cheating bankers.  But it loses as much as 50% of every tax dollar sent to many state agencies because it does not get market rates (and practices) for state labor.

Predicting Netquakes

No matter what the SCOTUS decision on health care, the Internet is going to go apeshit tomorrow.

Time Perception Paradox

This is true for me, ymmv.

Time seems to pass much more quickly as one is experiencing it when one is busy.

However, looking backwards, time periods that were chock-full of activities tend to lengthen.  A point in time a year ago seems further in the past in a busy year than a sparse year.  Almost as if your mind assumes some average activity density, then applies this to remembered activities to estimate time passage.

The absolute randomness of this observation should give readers an idea of my state of mind today.

More SLAPP-happy Lawyer Fun

Apparently the co-owner of the Miami Heat Ranaan Katz does not like to be criticized by the plebes.  So like many rich guys nowadays, he sued a blogger who he felt was saying hurtful things about him, because as we all know the First Amendment has a built in exception for college students and billionaires who have a right not to be offended by other peoples' speech.  So far, this is just the usual SLAPP nuttiness, up to and including a rallying of support by attorneys willing to help out pro bono.  This latter can usually solve the problem, as these suits gain their strength not from any legal merit but from the ability to intimidate ordinary people unfamiliar with the legal system and without the resources to hire top attorneys to defend themselves.

But, as with the case of serial moron Charles Carreon, Katz and his attorneys then proceeded to drive right over the cliff.  Because they then sued the attorney's representing the blogger on the brilliant theory that by providing legal advice to the blogger, the attorneys made themselves parties to the bloggers "crimes."  Seriously.   By which theory Jerry Sandusky's attorneys will soon be serving time for child abuse.

Creative Destruction

On UVA from Walter Russel Mead via Glenn Reynolds

As the NYT article points out, universities all over the country are facing a world of rapid change. This is going to be hard to face. Universities are structured to adapt slowly—if at all. Typically, university presidents have only limited controls, while faculties have a lot of power to resist. Management is usually decentralized, with different schools and departments governed under different rules and accountable to different constituencies. The fiscal arrangements of most universities are both byzantine and opaque; it can be very hard for administrators to understand or properly and fairly value the true cost and contributions of different parts of the institution.

The structural problem our universities face is this: confronted with the need for sweeping, rapid changes, administrators and boards have two options — and they are both bad. One option is to press ahead to make rapid changes. This risks — and in many (perhaps most) cases will cause — enormous upheavals; star professors will flounce off. Alumni will be offended. Waves of horrible publicity will besmirch the university’s name.

Option two: you can try to make your reforms consensual — watering down, delaying, carefully respecting existing interests and pecking orders. If you do this, you will have a peaceful, happy campus . . . until the money runs out.

This kind of organizational change issue is NOT unique to public institutions.  I think if one were a fly on the wall at Sears, or RIM/Blackberry, or AOL, one could describe exactly the same dynamic: insider constituencies were and are successful under the old model, so consensus processes involving these same constituencies seldom lead to change since these changes are inherently threatening to these same constituencies.  A simpler way of saying this is that it is really hard to obsolete oneself.  Just go ask Blockbuster Video.

But there is one difference in the world of public institutions.  In the private world, new success models in the worlds of Sears and AOL and Blackberry are already out there and growing really fast, run by outsiders who have absolutely no stake in the success of the old model (in fact by folks who have a strong economic stake in killing the old models).  But there is no parallel to capital markets and entrepreneurship in the public space.  There is no venue for new-model proponents to get capital and support outside of the old-model institutions.  In fact, if anything, public institutions will rally their political clout, up to and including sponsoring new legislation, to make sure new models are strangled in the crib.

If I were in the VA legislature and really cared about education innovation in the future, I would give up on UVA driving it and instead take 20% of its funding and hand it off to a brand new parallel entity, say UVA 2.0, run by an entirely new team.