The federal Finance Minister, Jim Flaherty, today released revised rules for mortgages to try to avert a housing bubble.  His mechanism is to make it more difficult for people to buy houses without taking more equity and to make it so that borrowers need to meet a higher bar of being able to pay back the house (5 year fixed rate vs. a shorter term or variable rate).

Here is the problem – this is a band-aid solution to the housing problem that doesn’t address the fundamental problems:

• We have too much debt
• Debt is too easy to acquire
• Interest rates are too low, making debt appear less risky (it is only truly less risky if it is very short-term debt)

A simpler solution is for the Bank of Canada, and central banks everywhere, to consider changing the measures that are used to guide the setting of interest rates.  Today, there are three criteria that the BoC is using to set interest rates:

1. Inflation (CPI)
2. Economic Growth
3. The value of the Loonie

The problem with these is that the Inflation rate has been compromised by politics.  They removed “volatile” prices like food and energy, which means that the remaining prices are more greatly affected by things that are deflationary, such as electronics.   Economic growth is likewise a dangerous measure, especially if that growth is being built with a large current account deficit or increase in debt levels.  And the third is simple ridiculous.  Maintaining a low Canadian dollar protected Canadian business from having to spend money on improving efficiency and productivity – but we should have known we could not rely on that forever.  Also, the value of currencies is likely to shift significantly over the next few years as Europe, Japan and America deal with their giant fiscal problems and China grows into the largest economy on Earth.

A better method for setting interest rates would be for the central banks to use the same kinds of measures that the free market would (i.e. if we didn’t have central banks) – RISK.  If there is a rising level of debt, there is a rising level of default risk.  Lenders (i.e. bondholders) would demand a higher interest rate to counter the risk profile.  Central banks should do the same.  If the level of private and public debt is rising to quickly, interest rates should be increased to slow or cease said growth.  The painful part may be that we are so far gone that economic contraction may be necessary to unwind the debt.  Imagine for a moment that we didn’t have CMHC (or Fannie Mae or Freddie Mac in the US) insurance for mortgages – would banks be rushing to offer mortgages with zero down and low interest rates?  I don’t think so.  The risk profile for banks would be very different and the housing market would likewise be very different.

Therefore, the Bank of Canada and the Minister of Finance should sit down and decide what a reasonable debt level is for Canada – preferably by asking the banks what they would be comfortable with if they had to lend with no insurance policies from government.   Then raise interest rates until debt levels fall.

I am fascinated by this news story from Toronto.

A group representing dozens of lawn care companies trying to bring charges against Ontario’s environment minister and senior bureaucrats over the province’s controversial pesticide ban is now calling for charges against 23 activists.

Group spokesman Jeffrey Lowes of MREP Communications said Wednesday that information has been laid for criminal charges against 23 individuals….

…The activists worked with the Ontario government to ban pesticides using alleged false and misleading information to undermine the industry, Lowes said.

The documents filed on Tuesday allege the activists knowingly presented false and misleading information about the health and environmental risks associated with pesticide products, knowingly misled the public, lawn care industry and government officials, and impeded access to Health Canada approved pesticide products through fraudulent means.

Hmmm.  I wonder if this has been happening in Calgary too?  I’ve written on this subject previously (here and here) – and while Calgary’s city council avoided such a ban (here), there are still forces at work trying to change that.

In today’s National Post, there is an article about the elimination of a report card in Elementary schools in Ontario, replacing it with a “kinder, gentler progress assessment”.

This is a stupid idea.  You cannot fix what you don’t measure.  And fluffy, feel-good assessments don’t measure.

Mary-Lou Donnelly of the Canadian Teachers’ Federation is quoted as saying:

Assessment is very complex, it’s not just a right or a wrong and a test mark. It is an accumulation of how the student is doing in many, many different areas,

Except that measuring whether a student is absorbing and understanding the material is just a right or wrong question.  It can, and must, be measured by a test score.  Yes, there are other things that teachers should be communicating to parents about their child’s behaviour, attitude, etc – but the test score should be the opening part of the discussion.  If this kid is failing to learn the material – then let’s talk about why.   But without grade letters or percentages or some hard measurement, we can’t tell if the child is succeeding or not.

It also does a disservice to the child as they grow up.  How many businesses and career paths don’t involve hard measurement of performance?  In my field, measuring performance is critical to our success.  We measure the productivity of employees and groups of workers so we can realistically predict outcomes.  This is how the real world works – if you can’t measure it, you can’t figure out where the problem.  The movement in business over the last 20 years has been to quantify performance.  And our education system is moving as fast as it can AWAY from this model.

The big question is why?  That is simple – the teachers’ unions don’t want to be measured.  They want to get paid to do their job regardless of whether they are doing it well or not.  Measurement of performance is bad for unions because it might show that not all their members are equally good at what they do.  And poor performance is tough to use as leverage when asking for more money…

Lately, Kevin Libin has done three outstanding pieces in the National Post on the folly of certain environmentalist methods:

Blue Bin Blues – explaining how overly aggressive recycling programs are not helping the environment and are costing more than they can possibly be worth.  I was always suspicious about the City of Calgary’s plan to recycle a lot of material that wasn’t wanted by the industries and markets (like glass and some plastics).  Mr. Libin has exposed that the emissions costs are very high for some of these “recyclables”.

Feed the world: grow fish in Alberta’s badlands – explaining how technology and applying a “dirty” farming method could solve a lot of problems – but the NGOs won’t like it…

Rethinking Green: Save the environment: Don’t take transit – explaining how public transit isn’t the solution to reducing emissions if the buses and trains are empty a lot of the time.

I await the remaining two parts to this series!

Thanks to Kate over at SDA for this:  Understanding Climategate’s Hidden Decline.  As she said – a MUST READ.

Key to the problem is:

The truth is that the proxy data was scrapped because unlike those measured, reconstructed temperatures showed a marked decline after 1980.  And, as the chart plotted temperature anomalies against what the plotters selected as the “normal” period and temperatures of 1961 to 1990, the reconstruction would have been quite unremarkable otherwise.  So at the 1980 mark, the actual post-1980 measurements were actually attached to the truncated proxy series to create the illusion they were one.

So not only did conspirators cherry-pick the one series of the four that approximated measured temperatures the longest, they also terminated that series at the point that it too, began to trend down.  They then joined it to the actual 1980-1999 temperatures to “hide the decline” in the final product, as that decline created an inexplicable divergence between the reconstructed and measured temperatures.   The existence of which challenges the entire series dating back to 1000 AD.

This invalidates the idea that the warming of the last 150 years (up to 1998) was unprecedented.  Which means that trying to blame human activity for it is ridiculous.  And it is even more ridiculous to think we can change it.

My daughter is learning about government and democracy in school, and she was having trouble understanding the concepts of democracy or understanding why they were important.  I asked her if she was learning the history of how we came to have democracy and all the benefits that go along with it, such as liberty, representative government and equality.  She looked at me funny.

It appears that the schools are trying to teach Civics to children without the historical background.   This doesn’t work.  You cannot appreciate the value of democratic principles and the freedom we enjoy without understanding that our forebears did not have these freedoms.  In Canada it is a little more difficult to explain this than in the US, simply because the transition from monarchy to modern democracy was slower and less dramatic.

But after a brief discussion where I explained how autocratic monarchies treated the population, and some examples of the issues that led to the American and French Revolutions, she had much better understanding of how we ended up where we are, and why defending our freedoms and liberties is important.

This reminded me that the best teacher I ever had in public school was a guy who taught physics as history.  He explained what Aristotle thought and why, then why it was wrong, then how Galileo, Copernicus, Kepler and Newton came up with a different scientific framework, then why that was wrong, and how Einstein, Planck, Schrodinger and Gell-Mann came up with another different framework.  That explained the scientific method and made it easier to learn the science.

The same is true of Civics.   You need to understand the history.  But why don’t the schools teach it that way?  It doesn’t take longer.  It just makes it clearer.

Margaret Wente writes a very good column in the Globe and Mail today:

Jan Howlett has seen this scene before … She has another diagnosis for kids like these. NBT: Never Been Taught. “They spend all their time talking about the kid instead of teaching the kid,” she said tartly.

The Howlett Academy … offers a radical alternative to the public-school approach. Its teaching methods are heavily discouraged in today’s public schools. It stresses penmanship and spelling, accuracy and focus. Every mistake in every essay is corrected – in red ink…

…“This would be a no-no with the board of education,” said Ms. Howlett. “It’s called direct instruction.” In the age of “child-centred” education, direct instruction is thought to stifle children’s inherent creativity. They’re supposed to discover math and spelling, not memorize the times tables.

This is EXACTLY what is wrong with the public school systems across this country.  Child-centric education doesn’t educate; it coddles.

In the National Post this weekend, Kathryn Blaze Carlson presents a story about changes and potential changes to the school curriculum that have occurred in the last 40 years, as well as things that may be disappearing from the schools because they are deemed to be of little value in the modern era.  I don’t agree with all of this.

Cursive Writing

This is important because people need to learn to at least sign their name, and the current state of people’s signatures leaves a lot to be desired.  Also, cursive writing is a lot faster than printing when one does have to write with a pen and paper…  Technology may be making it easier to avoid writing by hand (look at all the university students with laptops in lectures typing out notes), but I think that cursive writing is still a useful skill.  On the other hand, it doesn’t need to be returned to the level of focus it had 30 years ago when I learned it.

Prime Numbers

Primes by themselves are useless and don’t make much sense to teach to school children.  But number theory (a much larger field) could do with some coverage in the middle schools and high schools to help students understand the fundamentals of mathematics.

Radial Clocks

Radial clocks still exist in many places (check office conference rooms, school rooms, etc).  It would be terrible if my children couldn’t read Big Ben in London…  Additionally, learning only how to read a digital clock has resulted in children not understanding such common statements as a quarter to nine.  Especially since they confuse a quarter of currency (25 cents) with a quarter of an hour (15 minutes).  This also relates back to number theory, because a clock is a base 60 counting system…

Logarithms and the like

This one bothered me a lot – because why would you want to talk about prime numbers but not logarithms.  I also laughed at the print edition of the Post because they misspelled the word as “logorithms”.

Logarithms and trigonometry are fundamental to anyone who wants to study sciences, engineering, medicine, business, anything having to do with computers or many trades.  Yes, we have machines that do the heavy lifting of calculating these numbers but understanding what they mean and the concepts of different bases is important.  Particularly important is of course the value e (2.718), the base of natural logarithms and a key part of Euler’s magical formula.   So these should stay in the secondary school curriculum…

Home Economics and Shop

These too are valuable because even students who are going to go into a more academic subjects need to be able to take care of themselves without Mom around – and Shop provides them with the idea that they can actually BUILD and FIX stuff.  Many an engineer I’ve worked with spent a lot of time doing math and science and number crunching in their academic careers, but would have benefited from taking a short course in welding, machinery and even wood shop to get a better sense of physical reality.

Assigned Reading

Letting students choose their own reading material is questionable, because the teachers cannot be expected to read all these books, nor understand what the student might learn from reading them.  Forcing students to read some “classics”, especially Shakespeare provides not just a common literary background, but allows students to learn from the teacher what the nuances and learnings of the literature are.  That won’t happen with every student reading a different book and not having a teacher to point out the nuances.

Long Division

This has to stay!!!  How else are students supposed to learn how to divide large numbers?  Or are we just supposed to create a generation of people who can’t program the computers that do the heavy lifting?   Now, admittedly most programmers don’t have to worry about HOW the computer actually divides (I don’t know exactly what procedure it uses) but leaving students to be baffled by division sounds like a stupid idea.

Additionally, the logic of long division is used in algebra to factor polynomials.  While that isn’t something that many people need to do, it is an important part of pre-calculus that needs to be covered before a student gets to university.

I’ve discussed education before, and I wish people would stop trying to fix something that has worked well for at least a hundred years…  Be careful before you take anything OUT of the curriculum that relates to fundamental reading, writing and mathematics.

While I am not involved in the specific field, I found the book “Why New Systems Fail: Theory and Practice Collide” educational.

This brief text is written in a casual style that makes it easy to read, while at the same time seeming less “professional” and less likely to be taken seriously by senior executives in corporations that might be about to make the mistakes the author, Phil Simon, clearly identifies.  But he does identify a lot of completely valid reasons why new enterprise software implementations are not the successes that are hoped for when they are begun.

However, based on my experience in the engineering and construction business, where we execute large, complex projects, many of the lessons are transferable (and in fact seem strangely familiar).  Failure to plan effectively, failure to consider that things will not go perfectly, failure to schedule with some slack or float to allow for recovery should things go off the rails during one stage or another.

Additional flags are about not selecting consultants or providers based solely on the apparently up-front cost – the idea of you get what you pay for appears to be as true in enterprise software as it is in heavy construction.

Having also spent some of my career trying to develop, implement and support data management software for engineering (not exactly enterprise class) and discovering that we had all the same problems – significant underestimation of the resources it would take to accomplish the task, failure to ask enough questions of the commercial-off-the-shelf software vendor about what the product could and couldn’t actually do (or how much customization it might take), and failure to sufficiently understand the problem we were trying to solve – which resulted in what Mr. Simon would call either a “Big Failure” or and “Unmitigated Disaster”.

Anywho – if you are interested in enterprise (or other) software development and implementation, or any manner of project execution – this is a good read.

One of the things I severely dislike in popular entertainment is bad science on TV.  I don’t mind stretching the truth a little for dramatic reasons, or for inducing people to think, but often Hollywood writers (and their ilk) have a tendency to go way overboard.

This evening, NBC broadcast part one of “Meteor“, a movie about the imminent destruction of life on earth by as asteroid thrown out of the asteroid belt towards the earth.  In the film it is detected with “24 to 48 hours” until it hits the earth…  At which point the military starts planning on throwing nuclear weapons at the rock in an attempt to deflect or destroy it.

Here are the problems:

• 114 Kassandra, the rock in question, has an estimated mass of about 1018 kg. Meteors travel at approximately 40 km/s. Which means a kinetic energy of 1027 joules. This is equivalent to the 2.5 × 1011 megatons of TNT – or about 50 million warheads. The world has tens of thousands, not millions – and we currently have no rockets with sufficient range to throw them out of earth orbit.  Of course, that would be how many we would need to stop the rock.
• The next problem is the speed and distance, if we were trying to deflect it.  With 48 hours lead time, the asteroid would be only 7 million kilometers from the earth.  This is about 18 times the distance to the moon – and about 13% of the minimum distance to Mars…  So in space terms – damn close.  Deflecting the rock would take a significant amount of energy ( I don’t feel like doing the vector math to work out the numbers).  It will be a small fraction of the billions of megatons I noted above, but even that is a ridiculous quantity.
• The final thing I noted in the program were the images of the asteroid passing the moon and then racing towards the Earth.  At meteor approach velocities, it would take less than three (3) hours for the asteroid to reach the surface of the earth after passing the moon.  On the program they still seemed to have at least a day.

I don’t know if I will watch part 2 – I can imagine that debris rains down on the Earth and the show follows those who survive (miraculous considering the equivalent of 50 million nuclear warheads will have just landed); or the scientists and military people will save the world (by again violating the laws of physics).