0.5% of the employees of Company X use drugs.  Company X therefore decides to administer a drug test to all of its employees.  The drug test is 99% accurate and 99% specific (which means that 99% of all positives will be true positives, and 99% of all negatives will be true negatives).

What is the probability that any given positive test will be that of an actual drug user?

This quote is just beautiful writing, and a fascinating question I cannot answer about greatness.

I watched Springsteen very closely when he performed “Born to Run” toward the end of the show. I watched the close-ups of his face on the video screen, and I watched the way he moved around the stage, and I listened carefully to the pitch of his voice. My God, how many times has Bruce Springsteen performed this song by now? The album “Born to Run” came out in 1975, almost 33 years ago, and he performed the song even before the album came out. So has he performed it live 5,000 times? I’ll bet it’s been more. Maybe 7,500 times? Maybe 10,000 times?

There are certain professional things we have all done thousands of times. I know truck drivers who have driven more than three million miles. We all do. We know doctors who have delivered thousands of babies, and mechanics who have fixed thousands of cars, and chefs who have grilled thousands of steaks and all that. But Springsteen’s repetitions is a little different, and not just because Springsteen gets paid a lot more money to sing “Born to Run”, and not just because he gets many more perks and shrieking women and whatever. It’s because every single time Bruce Springsteen performs that song, there are thousands and thousands of people in the crowd that want a transcendent moment. That’s his song, but it’s also our song, it has meant something important to countless people. We will know if he means it.

Economist Dani Rodrik excerpts from economist Robert Kuttner’s (subscription only) article about the transferability of the Danish economic system with interesting results.

Does Denmark have some secret formula that combines the best of Adam Smith with the best of the welfare state? Is there something culturally unique about the open-minded Danes? Can a model like the Danish one survive as a social democratic island in a turbulent sea of globalization, where unregulated markets tend to swamp mixed economic systems? What does Denmark have to teach the rest of the industrial world?

These questions brought me to Copenhagen for a series of interviews in 2007 for a book I am writing on globalization and the welfare state. The answers are complex and often counterintuitive. With appropriate caveats, Danish ideas can indeed be instructive for other nations grappling with the enduring dilemma of how to reconcile market dynamism with social and personal security. Yet Denmark’s social compact is the result of a century of political conflict and accommodation that produced a consensual style of problem solving that is uniquely Danish. It cannot be understood merely as a technical policy fix to be swallowed whole in a different cultural or political context. Those who would learn from Denmark must first appreciate that social models have to grow in their own political soil.

Both Kuttner and Rodrik conclude that while Denmark’s model is not easily transferable, the ideas there are too important to be dismissed by the US.  What is most interesting about this is that while Kuttner is a liberal, Rodrik is more center-right.  Worth reading Rodrik’s post at the least.

A new economics study by Joseph Altonji, Prashant Bharadwaj, and Fabian Lange demonstrates that:

The earnings premium for skilled labour has increased dramatically in recent decades. Yet, as this column shows, Americans are not acquiring significantly greater skills in response to this change. The resulting gap will increase US income inequality in the coming decades.

The study goes on to demonstrate that despite the increased premium value of developing labor skills through higher education, the population in general has not sought these skills in relative proportion.  In other words, we aren’t seeing many gains in people improving their financial prospects by investing in their own education.

Economist Brad DeLong says that the study’s authors don’t know why this is happening (which is a fair complaint), but goes on to suggest that

This raises the possibility that the only easy way to reduce market inequality is to greatly increase the supply of the skilled and educated in the long run by making higher education free

This seems unlikely to be effective to me on two levels.  First of all, an economist ought to understand (and DeLong does) that there is no such thing as “free”; someone will have to pay for higher education to be free to its consumers.  Indeed, as he points out, “which is a very dubious policy on the inequality front, because it starts with a honking huge transfer from the average taxpayer today to the relatively rich well-educated of tomorrow.”

But the more important rebuttal to his point (more effective than his own) is that brought up by Tyler Cowen: that the skills required to succeed at even a low level in college are poorly taught to the population at large.

One of my close friends is completing her first year as a public school teacher in New York City (her third year as a professional teacher).  Her class is a fourth grade class at a public school in Grand Concourse in the Bronx.  She has 28 students, only one of which reads at a fourth grade level.  For a wide variety of reasons, despite her significant efforts, it is unlikely that more than a couple of her students will be at a fifth grade level when the school year ends this month.  And no, this is not the most remedial class of fourth graders her school has.

It seems to me that DeLong obscures the real problem, that of students being unprepared and unlikely to succeed in higher education, with that of students being unable to afford higher education.  Many, if not most, college and graduate students debt finance their education; a rational choice considering the economic benefits that education will offer them.  However, rational actors will not pay for a premium education if they consider themselves unlikely to succeed at it and therefore unlikely to reap the future economic benefit.

I read this study as evidence of the continued failure of our primary and secondary education systems, not as a study of the failure of our society to make higher education affordable or making the information about the benefits of higher education widely available.  What say you?

“Mr. Cobb, how are you doing?” I asked James Cobb, a lawyer in New Orleans, Louisiana.

“It depends on what you mean,” Mr. Cobb answered. “If you mean how am I doing after losing my house and every fucking thing in it, and after being forced to live in a two-bedroom shithole with my wife and two kids and being told how lucky I am to get it, and after being fucked — and I mean absolutely fucked — by my insurance company and by the United States government (and by the way, just so you know, if anybody from New Orleans, Louisiana, tells you that they’re not getting fucked by their insurance company and by the United States government, they’re fucking lying, all right?) . . . if you mean, how am I doing after all that is factored in: Well, I guess the answer is that I’m doing fine. Now, how can I help you?”

Jim Cobb and I had never spoken before.

From the remarkable article, The Loved Ones, by Tom Junod, Esquire Magazine, September 2007.

I try not to be too cynical about government.  But I have to ask, at what point do all these cumulative failures become evidence of the inability of it to not fail?

Tonight we do service, taking the day as a convocation to that which led us out of bondage.  We are meant to know and to understand that it is a service that we do, and not a celebration, although in the common meaning that is what we are told it is.  We know this because it is written:

Exodus 12:25

And it shall come to pass, when ye be come to the land which the LORD will give you, according as He hath promised, that ye shall keep this service.

Pope Says Church Will Not Allow Pedophile Priests

Talk about infallible!

Today, the sad news has broken: there will not be democracy, or freedom from despotism in Zimbabwe.  

The call by Zimbabwe’s political opposition for people nationwide to stay away from work began to take effect on Tuesday, but it did not succeed in shutting down the capital, Harare.

Election officials, citing voting irregularities, have refused to release the outcome of the contest, between Zimbabwe’s autocratic president, Robert G. Mugabe, who has ruled for 28 years, and the MDC candidate, Morgan Tsvangirai.

The High Court Monday rejected an opposition demand that it force Zimbabwe’s electoral commission to publish the results, prompting the opposition to go ahead with the strike.

The opposition, which analysts say does not have a strong track record of organizing large public protests, decided against calling on its followers to take to the streets.

Police have banned all public rallies. And in recent days, opposition leaders have said in interviews they believe Mr. Mugabe’s government is looking for reasons to crack down and declare a state of emergency that would allow him to rule by decree.  They hoped a stay-away would enable them to avoid violent confrontations with the police and the army.