Hundred Pockets

Allow me to propose a new rule of political discourse: whenever Megan McArdle and Matt Yglesias agree about something, then that thing should become law. Immediately.

Today’s outbreak of McArdle-Yglesias harmony regards reforming teacher pay, so that it’s more strongly linked with being a good teacher, and less strongly linked with, um, being older. And having pointless degrees which don’t improve teaching.

Here’s Matt:

[T]he implication that the idea that pay should be differentiated based on effectiveness constitutes “teacher-bashing” is bizarre.

… once we’ve hit upon a given pot of money to spend on teacher compensation, a question arises of how it should be divided up. One way to divide it up would be evenly—each teacher could make the same salary. That would, however, be a bit weird and we don’t do it that way. Instead, we pay teachers more the more experience they have, and we also pay them more when the acquire master’s degrees.

The point of paying higher salaries to people with advanced degrees has to be the belief that teachers with advanced degrees are more effective than teachers without advanced degree. It turns out to be the case, however, that research says this is wrong. I don’t think it’s “pro-teacher” to be giving teachers financial incentives to essentially waste their time acquiring advanced degrees that don’t help them. This is simply an irrational way of divvying up the compensation pot.

Paying more for more experienced teachers makes sense, but currently we seem to be giving more weight to seniority than it deserves. Paying more for extra degrees makes no sense. Paying more for people with in-demand technical skills makes sense. Paying more for people who take on more challenging assignments in high-poverty classrooms makes sense. And trying harder to directly measure and reward effectiveness also makes sense. But if I’m “bashing” anyone it’s purveyors of useless M. Ed. degrees.

Now here’s Megan:

This is one of those odd areas where Matt and I are in total agreement.  We should pay teachers much more than we do.  Right now, they take a substantial portion of their “pay” in the form of near-total job security.  People like this benefit.  But in most cases, they shouldn’t have it, because it has predictible effects on performance–particularly when it is coupled with a pay scale that relies on measurable but not very useful traits like advanced degrees (totally useless) and seniority (the benefits of experience eventually level off).  The only thing teachers have a financial incentive to do under this system is keep their butts in the teacher’s chair, and acquire useless degrees from programs that mostly teach students how to sit through long and pointless classes.

The obvious thing to do is to strip the protections and up the pay, while using merit metrics to determine how that pay is allocated.

England had a crack at introducing ‘Performance Related Pay’ for teachers in the late 1990’s. Experienced teachers could apply to cross a ‘performance threshold’, graduating to a new (higher) pay scale if they succeeded, plus a £2,000 annual bonus. Teachers wishing to ‘cross the threshold’ had to fill in a form, and have their application assessed by their head teacher and an external auditor.

Here’s the catch: Nearly 90% of eligible teachers applied for the performance bonus. 97% were awarded it. Head teachers weren’t picky when it came to dishing out the bonuses. The scheme turned into a pay rise for virtually all teachers.

So what should be done? How can teacher pay be reformed in a way that attracts and retains high fliers, without simply hurling money at all teachers?

One interesting suggestion I heard at a recent conference (it may have been from Simon Burgess of Bristol’s CMPO) was to make teachers’ pay more like lawyers’ pay. That is, offer big rewards to those who ‘make the grade’ after the first few years, but without the expectation that everyone who joins the profession will succeed. The first three years (say) of a teachers’ career would be a sort of whittling process, with low-ish pay (as now) but the promise of a significant pay jump for those who prove themselves in the classroom.

Teachers’ unions have long expressed the wish for teaching to be considered a ‘profession’, like law or medicine. But those are high risk professions compared with teaching – your first few years in the job are ‘make or break’. If teachers are to be treated like professionals, perhaps they should be paid like professionals – for better (more money) and for worse (accepting higher risk)…

The recession, that is – or so says the National Institute for Economic and Social Research.

Britain’s economy grew for the first time over a three-month period since May last year, the National Institute of Economic and Social Research (NIESR) said today but warned that the end of recession could turn to a period of stagnation.

NIESR’s monthly estimate of economic growth suggests that gross domestic product (GDP) grew 0.2 per cent between June and August, after a 0.3 per cent fall in the three months to the end of July.

However, NIESR added: “There may well be a period of stagnation now, with output rising in some months and falling in others; the end of the recession should not be confused with a return to normal economic conditions.”

Other positive news comes from a survey of recruitment agencies:

The research, produced by Markit Economics, finds “marginal increases” in both permanent and temporary appointments in August.

For permanent staff, this is the first increase since early 2007.

“This is first time we have seen really positive news for the UK jobs market in 17 months,” said Bernard Brown from KPMG, co-sponsor of the survey.

Still, plenty of cause for pessimism, however. Our banking system remains, to a first approximation, a shambles. Households remain heavily in debt. Unemployment (a lagging indicator, admittedly) is as high as it’s been in over a decade. We’re not out of this yet…

Interesting announcement from the government today: the Academies programme is being accelerated:

The government is to make it easier for private sponsors to take over and run English state schools, in a bid to speed up its academies programme.

Instead of providing up-front funds of £2m, potential backers will now simply have to prove “the necessary skills and leadership” to run an academy.

The Academies model works something like this:

• Take a school which has been failing for years
• Close it
• Fire the head
• Demolish the buildings
• Remove the school from the control of the local authority
• Build shiny new classrooms
• Find a new head
• Find someone Great and Good to act as a ’sponsor’ for the new school
• Reopen the school as an ‘Academy’

Interesting to note a missing step here: while the head teacher is fired when a failing school is turned into an Academy, the other teachers are not. They must all be rehired, under the same terms and conditions as their previous contracts, when the school reopens as an Academy. If you believe (as many economists do) that teachers are one of the most important determinants of a school’s effectiveness, it’s pretty stunning that all teachers from the old (failed) school must be rehired. But I digress…

Academies have been kicked around by Blairites and Brownites like the proverbial political football. Blair was extremely gung-ho on Academies, despite teachers’ unions largely hating them:

NUT general secretary Christine Blower said: “We don’t believe that taking schools out of their local authorities and having them run by people who have no experience of running schools… is a way of doing school improvement.”

Gordon Brown’s administration has been far more in tune with the teachers’ unions, spending much of its first 18 months in office ‘reigning in’ the Academies. Ed Balls, the Children’s Secretary (and long considered Brown’s right hand man) won the praise of teachers unions by announcing greater local authority oversight of Academies, much to the dismay of Academies themselves. The leaders of the Academies programme within government were also ousted.

But suddenly Mr. Balls has discovered his inner Academy-lover:

The Academy programme is going from strength to strength. It has proved to be a genuine revolution in how secondary state education is delivered for those areas and pupils that need it most. GCSE results are rising faster than the national average giving outstanding opportunities for areas let down educationally for generations.

So what’s going on? Why is the government risking a fight with the teachers’ unions just before a general election?

My suspicion is: fear. Some of the Conservatives boldest policies (critics might say their only policies) relate to the supply side of the education system. The Tories have recruited some of the brightest right-of-centre education thinkers – notably James O’Shaughnessy and Sam Freedman, both previously at Policy Exchange. They’ve announced radical plans to open up the supply side of the education system, with parents, charities and co-operatives encouraged to open new schools in their area, regardless of how many school places already exist.

Labour’s response has been somewhat muted. On the one hand, they point to their own Academies as evidence that they, too, are shaking up the supply side. On the other hand, they accuse the Conservatives of going too far:

Schools minister Jim Knight… [said that Tory plans] would put at risk hundreds of school building projects. “As people study the detail they will want to know which areas and which schools the axe will fall on,” he said.

“Stripping local authorities of their role in coordinating education means that the Tories are attacking their own local councils, who would find it very difficult under these proposals to plan the improvement of their schools in a coherent way.”

This looks likely to be a key battle ground in the general election. Balls’ sudden embrace of Academies suggests Labour are shifting their position – actually conceding some ground – in anticipation of the coming battle…

As usual, the debate at Felix Salmon’s blog has thrown up some interesting comments. Marc takes issue with the idea that university students can be better off incurring debt now, in exchange for higher wages later:

@ Pockets
The argument you make for student loans (you start with more debt, but you’ll come out ahead because you’re going to earn more) is perfectly true on an individual level with everything else staying the same. In aggregate though, it doesn’t work. If half the people go to university an get a degree there is no chance that they will earn collectively substantially more than they would have if only few people got a degree. It’s a law of supply & demand. If more people with a degree are available, the difference the degree makes in the salary they can command is going to be much less significant than if only 10% of the people graduate.

Marc is of course entirely right that increasing the supply of something (like graduates) should reduce its price. But in the 1980s and 1990s, something kind of amazing happened in both the US and the UK…

First, the supply of graduates definitely did increase massively during the 80s and 90s. Here’s a chart showing British higher education participation since 1970:

The proportion of kids attending university more than doubled. So we know what should have happened to graduate wages, compared to non-graduates, right? Increased supply means a lower price, so the graduate wage premium should fall. But here’s what actually happened:

Yup, the wages of graduates went up compared with those of non-graduates. So we had both higher supply and a higher price. Which breaks all laws of supply and demand, surely…?

Actually, no. It just means that the demand for graduates wasn’t constant. Instead, demand must have gone up even faster than the increasing supply. That is, even though universities were churning out graduates, companies wanted to snap them up faster than they could earn their degrees.

Why? Probably something to do with the I.T. revolution. Computers have massively increased the productivity of highly educated workers, but have done basically nothing for the productivity of shelf-stackers and street sweepers. So even as the supply of graduates ramped up hugely in the 80s and 90s, their wages were being bid ever higher by employers. Increased supply and increased price, all at once.

The story I just told may sound simple – economists call it ’skills-biased technological change’ – but it’s one of the major achievements of modern labour economics. It’s the basis of Claudia Goldin and Lawrence Katz’s book  The Race Between Education and Technology. Their story is that for the first 80 years of the 20th Century, the supply of educated workers outstripped demand (education was ‘winning’ the race). But since 1980, technology has ‘overtaken’ education – meaning the growth in student numbers hasn’t been anything like fast enough to bid down graduate wages, which are being pushed ever higher by technological innovations which favour skilled/educated workers.

In fact, despite the explosion in higher education in recent years, the graduate wage premium has never gone back down to its pre-1980 level. It’s stopped racing upwards so fast, but it isn’t falling.

Of course, this really sucks for non-graduates – their wages were lower than graduates’ to start with, and have fallen ever further behind. It’s one of the leading explanations for growing income inequality in the US and UK over the past few decades.

But that’s all the more reason to help as many young people as possible into university/college. For now at least, our economies can’t get enough of them…

… and receive an answer (courtesy of the FT). In my previous post I wondered why the government was announcing that it wouldn’t cut jobs in the NHS. Now I know:

The analysis [which cutting 10% of the workforce], undertaken by McKinsey for the Department [of Health] in March, has been leaked to the Health Service Journal, bringing a panicked reaction on Wednesday from health ministers.

So that’s number (3) on my list of possible explanations. Good to know I was right to be baffled…

… or so says the OECD in their ‘Doing Better for Children‘ report. The UK spends more on its children than most OECD countries, and has strongly embraced the ‘early years’ agenda pushed by economists like Jim Heckman (the idea that you get most ‘bang for your buck’ by spending more money on very young children during their critical early development, and proportionately less as they get older).

Nonetheless, our school results are mediocre and on several social measures we’re among the worst in the OECD:

[T]he proportion of youth not in school, training or in jobs in the UK remains high, at more than one in ten 15 to 19 year-olds. This is the fourth highest rate in the OECD, ahead of Italy, Turkey and Mexico.

Education results are also low relative to spending levels. The UK comes out in the middle of OECD comparisons of how well 15 year olds do at school and in terms of the gaps between well and poorly performing pupils.

Underage drinking and teenage pregnancy rates are high. Drunkenness is the highest in the OECD, with one in three 13 and 15 year olds having been drunk at least twice. The UK also reports the fourth highest teen pregnancy rate after Mexico, Turkey and the United States.

On the plus side, at least we’re not bullies:

In other areas, the UK performs well. Children in the United Kingdom are materially fairly well-off. Average family income is higher and child poverty is lower than OECD averages.

Children in the United Kingdom also enjoy a high quality of school life. The United Kingdom ranks 4th out of 25 countries for children’s school satisfaction. Rates of bullying are also relatively low.

It’s worth noting, of course, that those drunk/pregnant problem teenagers were born before the big push towards high early years spending. So the jury is still out on whether the early years money is being well spent. I’m also not convinced that ‘having been drunk twice’ by the age of 15 (the OECD’s drunkeness measure) is necessarily a mark of anarchy and social decline. But perhaps that’s because I am myself a decadent young(ish) Briton, inured to such things…

So here’s the latest twist on a debate which has run for hundreds (thousands?) of years. Jack Straw denies that Abdelbaset al-Megrahi, the man convicted of the Lockerbie bombing, was released as part of an oil deal with Libya:

Letters leaked to a newspaper show Mr Straw agreed not to exclude him from a prisoner transfer deal in 2007 because of “overwhelming national interests”.

Now I can see two different sorts of argument for releasing al-Megrahi. One is an argument about British national interests (philosophy buffs might call it the Parochial Utilitarian Argument), while the other is about Absolute Moral Rights and Wrongs (philosophers might call it the Kantian Arugment). The two arguments are:

1. [Parochial Utilitarian] Releasing al-Megrahi will allow British companies to secure lucrative contracts with Libya, enhancing the welfare of British citizens. I am a British politician, elected to serve British national interests. Therefore I will release him.
2. [Kantian] Showing mercy to a dying man is, quite simply, the Right Thing To Do, regardless of what that person may have done in their life. All humans should show mercy to dying people. Therefore I will release him.

Argument (1) is ‘parochial’ because it ignores the upset caused to the families of those who died in the Lockerbie catastrophe, many of whom are not British. Argument (2) is Kantian because it deals in moral absolutes (which Kant pushed hard, but utilitarian philosophy isn’t so hot on).
Now I can also see two arguments for not releasing al-Megrahi. And (wouldn’t you know it?), they fall into the same two categories:

1. [Utilitarian] The fury of the families of Lockerbie victims far outweighs any conceivable ‘welfare gains’ of BP employees thanks to new business contracts with Libya. Therefore I will not release al-Megrahi.
2. [Kantian] Murder is wrong. Mass murder of innocent civilians is simply unforgivable. Anyone who commits such a crime forfeits any right to mercy. All people convicted of mass murderer should be imprisoned until they die. Therefore, I will not release al-Megrahi.

So the fury over Jack Straw’s leaked memos boils down (I think) to an argument between a utilitarian and a Kantian, where the utilitarian is arguing for Megrahi’s release (it is in Britain’s “overwhelming national interests”) and the Kantian is arguing for his death in prison (”it is simply wrong to release a convicted mass murderer. Ever.”)

I fear that this isn’t an argument with a ‘right’ answer. I know that Megan McArdle eschews the utilitarian argument, her economic training notwithstanding. (Economics has profoundly utilitarian roots…) But I don’t even think this a straightforward argument between a Kantian and a utilitarian. I think both the Kantian and utilitarian arguments could cut either way.

What I do believe is that politics tends to function better when politicians are of a broadly utilitarian bent. (The purpose of a political class is to compromise, not to bicker about moral absolutes.)

But then the greatest politicians of all time were those who believed that some things were absolutely, unambiguously wrong. Which only baffles me further. Do we want politicians who are utilitarian about the small stuff, but Kantian about the big stuff? Or just politicians who are utilitarian when we agree with the majority, but Kantian when we agree with the minority?

I simply don’t know…

Debate still rages over at Felix Salmon’s blog about whether or not private schools deserve charitable status.

Various arguments are advanced in favour of tax-exempting schools, among them:

1. All taxes are bad, because the state wastes our money. So we should not drag new institutions into the tax system.
2. This is class warfare. If you want to tax rich people more, just say that you want to tax rich people more. Don’t pick on schools.
3. Private school parents already pay taxes which fund public schools, so why tax private schools – isn’t that taxing them twice?

I’ve been making a nuisance of myself by wading in, naturally. But one comment really interested me. Tiny Tim writes:

Pockets – I think [the economic] theory is wrong…

There is only a finite amount of cash available to subsidise the poorer applicants. Someone has to pay fees. And clearly there is an equilibrium point at which the fee payers subsidise as many less well-off as possible. That is the point the school aims for, given that they also need to remain competitively priced relative to other “very top” schools.

Why do I find this interesting? Because after stating that he thinks the economic theory of private school behaviour is wrong, Tiny Tim then goes on to describe the economic model really, really well. The only difference between Tim’s model and, say, Epple and Romano’s, is that in Tim’s model private schools are ‘optimising’ their mix of pupils in order to take in as many poor pupils as possible. So the school is a latter-day Noah’s Ark, saving all the poor children it can from oblivion.

In Epple and Romano’s model, schools also take in as many (smart) poor kids as possible – but they do so because this allows them to charge higher fees to other (richer) kids. They’re more like a present day dance club (Ministry Of Sound), paying super-hot models to come to their club nights. Why? Not because they care desperately about super-hot models – but because their presence allows the Ministry to charge more money to schlubs who want to dance Where The Pretty People Are.

I will now shamelessly quote from my own comment on Felix’s blog, below the fold:
(more…)

Felix Salmon posts his thoughts on whether private schools can really call themselves ‘charities’. Almost all private schools in the UK are registered as charities (saving a them fortune in taxes), but the Charity Commission is showing every willingness to strip them of that status in the near future.

Private schools often claim that they act charitably because they offer scholarships to (smart) children from poor backgrounds.

Private schools were already providing a public benefit [says the head of the Independent Schools Council], by educating children who would otherwise be in state schools paid for by taxpayer

Felix has little sympathy for this argument:

The whines from the head of the Independent Schools Council are not very moving… No one’s asking to abolish private schools, or even proposing that most of them lose their charitable status. They’re just asking that they do a bit more to earn it, which seems right to me.

I’m no class warrior, but Felix is certainly right to be sceptical. Solid economic theory tells us that private schools are emphatically not acting ‘charitably’ when they offer scholarships to poor children. They’re maximising profits.

But surely (you ask) it can’t be profitable to give away expensive school places, free of charge?  Ah, but it can. Dennis Epple and Richard Romano have a classic paper on this in the American Economic Review. Those with a yen for hardcore economic theory can read it in full, but the crux of their reasoning is simply stated:

Schools can charge higher fees to the parents of rich, dumb kids, if they offer free places to smart, poor kids.

Why? Because peer groups matter, and parents know it. So let’s take the rich parents of a spoilt, none-too-smart child (call them, say, Mr. and Mrs. George Bush Senior). Do they want their child to go to a school filled entirely with other rich-but-none-too-bright kids? Absolutely not. They want their child in a class of well-behaved bright sparks (even if a few of them are, regrettably, poor), because a positive classroom environment will (they pray) ’spill over’ into their own child’s grades.

Private schools know what parents want, and so they ‘optimise’ their mix of pupils. It makes perfect sense for them to offer poor-but-smart kids cheap places (even free places), because those children provide positive spillovers which the school can charge rich parents for.

Scholarship exams for top private schools are really a price discovery system: ‘Are you so smart that rich parents will pay to have their kids sit next to you?’ If the answer is yes, then they’ll ‘charitably’ offer you a scholarship. But not because they’re altruistic – rather because they’re  maximising profits.

And don’t let anyone tell you that private schools are  ‘non-profit’ institutions. Non-profits may not distribute dividends to shareholders – but there are always ways to make life more wonderful for their ’stakeholders’ (in particular the staff). Accommodation for teachers, holiday trips, sports centres, even golf courses at some of the UK’s top schools – these are all economic ‘rents’ being shared among the producers. Because they have the money. Because they’re making what would, in any other industry, be called ‘profits’.

So I say ‘more power to Felix’. (Most of Felix’s commenters are not so, um, charitable…) If private schools really wish to be considered charities, then they’ll have to do more than offer places to poor smart kids.

They could start by offering some places to poor failing kids from difficult backgrounds. Now that really would be altruism…

The previous post on cricket auctions reminded me of a glorious post on the Cheap Talk blog, proposing a new set of rules for Scrabble. Instead of choosing letters at random, they bid for them:

The game works roughly as follows.  At the beginning of the game tiles are turned over in sequence and the players bid on them in a fixed order.  The high bidder gets the tile and subtracts his bid from his total score.  (We started with a score of 100 and ruled out going negative, but this was never binding.  An alternative is to start at zero and allow negative scores.)  After all players have 7 tiles the game begins.  In each round, each player takes a turn but does not draw any tiles at the end of his turn.  At the end of the round, tiles are again turned over in sequence and bidding works just as at the beginning until all players have 7 tiles again, and the next round begins.  Apart from this, the rules are essentially the standard scrabble rules.

This awesome proposal allowed them to work out which Scrabble letters are over/under-priced in the standard game:

The way to measure this is to compare the “market” price to the nominal value.  If the market price is higher that means that players are willing to give up more points to get the tile than that tile will give them back when played (ignoring tile-multipliers on the board.)  That means that the nominal score is too high.  For example, blanks have a nominal score of zero.  But the market price of a blank in our play was about 20 points.  This is because blanks are “team players:” very valuable in terms of helping you build words.  So, playing by standard scrabble rules with no bidding, if the value of a blank was to be on equal terms with the value of other tiles, blanks should score negative:  you should have to pay to use them.  Other tiles whose value is out of line:  s (too high, should be negative), u(too low), v(too low.)  On the other hand, the rare letters, like X, J, Z, seem to be reasonably scored.

As fun as this sounds to an econo-geek, it makes me wonder… Is nothing sacred to economists?

(I think you know the answer.)

With England eight wickets away from Ashes victory as I type this (or Australia 400 runs from triumph, depending on how you look at it), this seems a good time to talk about cricket. Specifically, the Undercover Economist’s plan to abolish the pre-match coin toss from cricket, to be replaced with (what else?) an auction.

Both captains would ‘bid’ for the right to decide who bats first – by offering free runs (’bid byes’) to the opposition. Say we use a first price, sealed-bid auction – so each captain writes a number of runs on a scrap of paper, they hand their ‘bids’ to the umpire, and the captain who offered the most runs gets to decide who bats first, while conceding his ‘bid’ runs as a head start to the opposition. Tim Harford is enthusiastic:

The advantage should be auctioned off to whoever is willing to concede the most compensation to the opposition. The idea is absolutely equitable, intrinsically more exciting than a coin toss, and puts the emphasis on the judgment of the captains. Thankfully, since not all coin tosses are equally important – especially in cricket – the auction price reflects conditions on the day.

Is this a good idea? Cricket Burble suspects not:

Maybe people want a bit of luck in their cricket games anyway. An MCC sub-committee considered the auction proposal last year and ‘found no enthusiasm’ – just not cricket apparently.

Presumably we could push this idea even further. Let’s say that after losing the auction, the captain of the fielding team can make another offer to the opposition: we’ll give you another 60 runs (say), in exchange for the wicket of your opening batsman. Or 100 runs for your opening pair. Or 350 runs for your entire team, and we’ll just skip to the next innings.

In fact, we could settle the entire match without a single ball being bowled – just a bit of haggling by both captains and a calculator. And wouldn’t that be a glorious sporting spectacle?

Um… No.

Policy Exchange won a fair amount of coverage this week, announcing that the UK private sector has shrunk since 1998. That would be staggering, if true.

In calculations which underline the catastrophic collapse in Britain’s non-public sector economy under Labour, experts have revealed that the private sector will by next year have suffered a “lost decade” of less-than-zero growth.

Fortunately, it isn’t true. David Smith explains why:

The Policy Exchange calculations were based on a popular misconception, that of assuming government spending has risen to around 50% of GDP. Spending may be equivalent to 50% of GDP but that includes transfer payments that are not part of GDP. The G that goes into the national income identity – G + C + I + X – M – is around 20% of GDP (general government spending), plus government capital spending. The public sector has grown too much but it hasn’t crowded out the private sector to quite that extent.

Oops…

In the interests of balance, I should add that Policy Exchange have produced some truly excellent reports on the education system.

But this wasn’t their finest hour.

Front page story of yesterday’s Times: Fat, unfit NHS staff top the sick league

More than 45,000 NHS workers call in sick each day — one and a half times the rate of absence seen in the private sector.

The first national audit of staff habits has found that high rates of obesity, smoking, absenteeism and poor mental health are having a direct impact on the quality of patient care.

A large body of evidence suggests that health workers tend to have poor health – mental and physical. It’s well known, for example, that doctors have a startlingly high suicide rate. Many causes are cited, including the stressful nature of the job, the long hours, the life-or-death responsibility.

Here’s the strange thing: in almost every other profession, economists worry about well-informed workers (car mechanics, say, or estate agents) using their superior knowledge for their own personal gain. Steve Levitt (of Freakonomics fame) has a well-known paper showing that estate agents sell their own houses for more than their clients’ (by holding out longer for better offers).

So doctors know more about personal health than just about anyone on the planet. When they get sick, they have a wealth of knowledge about the right tests, scans, treatments – even the ‘best’ specialists to see.  Based on the estate agent example, we’d expect doctors to have fabulous health. And yet that’s not what we see at all…

P.S. Since I’ve linked to Dr. Crippen’s post on suicide among doctors, I should also note that he’s not at all impressed with the report cited by the Times.

Here’s a sentence to set pulses racing: there was interesting news from the Bank of England’s Monetary Policy Committee today. I know. Seriously.

The Governor of the Bank of England, Mervyn King, wanted to pump more money into the UK economy this month but was outvoted by fellow policymakers.

Minutes of the bank’s Monetary Policy Committee (MPC) meeting on 6 August reveal that Mr King wanted £75bn rather than the £50bn that was injected.

Two fellow committee members [Tim Besley and David Miles] also voted for a bigger cash injection.

Outvoted by his own committee? This would never have happened to Alan Greenspan…

I admit to a personal interest – I was lucky enough to be lectured by Tim Besley at LSE, in a course on Political Economics. The introductory lecture was especially memorable – many lecturers try to make these as appealing as possible, to attract more students to their courses (people attend dozens of introductory lectures, then choose just a couple of courses). Not Prof. Besley.

In front of a pretty packed room (at least 40 people) He launched straight into the meat of his course, the overhead projector rapidly filled with algebra as he solved various models step by step. Putting up a particularly long and formidable-looking equation, Prof. Besley casually said ‘… And anyone not confident about solving this expression for the Nash equilibrium probably shouldn’t be doing this course.’

Needless to say, most of the 40 people didn’t come back. Those of us who did, though, ended up learning a huge amount about modern political economics – a field which is (at last) moving the profession away from rather stale arguments about Big-Government-Versus-Small-Government.

On joining the MPC, Prof. Besley rapidly established himself as the hawkiest of inflation hawks – the rate-raising nemesis to David Blanchflower’s Super-Dove. For a long while there were only two safe bets on MPC votes: that David Blanchflower would vote to lower interest rates, and Tim Besley would vote to raise them.

So that’s what’s noteworthy about today’s news. Prof. Besley, a man so hawkish he might as well wear claws to MPC meetings, thinks the UK economy is sufficiently screwed to warrant an extra £25bn in pump-priming.

For the love of God – somebody write the man cheque.