News Cut: October 10, 2008 Archive

What do Americans have against math?

Posted at 7:59 AM on October 10, 2008 by Bob Collins (14 Comments)

Irony seems to flourish in tough times.

In a week in which the stock market is schooling us on the power of subtraction, comes a study today that says Americans have no respect for math.

The study in the Notices of the American Mathematic Society says the United States fails to encourage its students in math, fails to identify and encourage kids who could become the world's top scientists and engineers, and the few girls that do succeed are almost all immigrants or the daughters of immigrants from countries that don't consider math experts "nerds."

Ouch.

The study said tests designed to identify math-gifted kids identified "bright" kids, but not necessarily mathematically-gifted ones. And it said the tests filtered out kids with math ability if they were poor... or, as the study said, "(students)who lacked one or more of the socio-economically privileged environmental factors necessary to be recognized by this mechanism."

China. Romania. Russia. Korea. The list of the brightest kids in math in the United States were actually the children with roots in those countries.

U.S. kids are not taught to write "rigorous essay-style proofs," the study said, and it seemed to suggest the only decent math being taught is at "math camps," which won't get you a prom date in our culture.

When asked why, a typical response is, "Only Asians and nerds do math extracurricularly)." In other words, it is deemed uncool within the social context of USA middle and high schools to do mathematics for fun; doing so can lead to social ostracism. Consequently, gifted girls, even more so than boys, usually camouflage their mathematical talent to fit in well with their peers.

Every parent in America could change this starting today. Why don't we want to?

(Photo: Getty Images)

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Live-blogging: The economy

Posted at 12:21 PM on October 10, 2008 by Bob Collins (23 Comments)
Filed under: Economy

The Dow dropped 500 points at the open today, dropping below the 8,000 mark for the first time since March 31, 2003. There are some interesting views being expressed today and I'll be dropping them in here. An analyst on CNBC suggested before the open that "we hit bottom today." Maybe it's wishful thinking, or maybe it's actual optimism, something we're simply not used to.

8:42 a.m. Bob Andres, of Portfolio Management Consultants, says what's happening is "irrational pessimism." He called for "a timeout," and suggests there be a few days of "bank holidays." He also wrote earlier this week in the Washington Times, "The financial landscape will be remarkably different, and we suspect so too will the social landscape" after the historic events of the past month.

8:49 a.m. - It's a rally! The financial sector is up. Is this it? Is this the end of the slide? The Dow is back above 8,000. The credit markets are, we're told, "beginning to thaw." President Bush to make a statement shortly.

9:03 a.m. - Blame Game O Rama. BusinessWeek has a good story on the earlier warnings sounded by two state attorneys general (no, ours wasn't one of them) to a Congress not willing to believe them.

9:05 a.m. - Opinion piece: Forget about tax cuts. (Dow has stabilized with about a 200 point drop.)

9:11 a.m. - A cheer goes up on the floor of the New York Stock Exchange. It sounds like the Metrodome when Tavaris Jackson is pulled from the game. The Dow goes positive.

9:13 a.m. - The Dow drops again. "This place sounds like a stadium where a team is losing by 40 points and the backup quarterback is put into the game," CNBC's anchor says. Hey, get your own material, fella!

9:20 a.m. - At 2:30 this afternoon, officials from the Minnesota Department of Finance and Employee Relationswill discuss the state's quarterly economic update. It'll be interesting to see if there are sales tax receipt updates from August and September, one way we can determine whether the Republican National Convention helped or hurt the local economy.

9:25 a.m. Dow is down -83.95. President Bush just started speaking. He says the "United States government is acting and will continue to act." He says banks holding mortgages have suffered serious losses and American businesses have not been able to finance expansion.

"Anxiety can feed anxiety and that can make it hard to see all that is being done to solve the problem," the president said. "We can solve this crisis and we will." He highlights the steps the government has been taking over the last few days.

He says the commercial paper market has been freezing up. (Explainer: What is commercial paper and why does it matter?) The president says it will take time for the bailout to work.

He didn't take questions.

9:33 a.m. -186.06 The Dow dropped 100 points while President Bush was speaking.

9:35 a.m. - Here's an interesting story worth chewing on. In the Washington Post (reg. required), The End of American Capitalism?

"People around the world once admired us for our economy, and we told them if you wanted to be like us, here's what you have to do -- hand over power to the market," said Joseph Stiglitz, the Nobel Prize-winning economist at Columbia University. "The point now is that no one has respect for that kind of model anymore given this crisis. And of course it raises questions about our credibility. Everyone feels they are suffering now because of us."

9:39 a.m. - Time Magazine: Charities are bracing for a long, hard winter. I beat you by four days, Time. (Dow now down 290)

9:46 a.m. - A very good comment in the comments area that I'm hearing more and more. Essentially, if the media would just shut up and report good news, these problems would go away. Discuss.

10:02 a.m. Wall St. Journal: Ten ways to protect your finances from the crisis. One controversial item:

6. Stop pulling a Monty Python when it comes to your worst investments. If you ever saw John Cleese and Michael Palin perform their famous skit about the dead parrot, you know exactly what I mean. No, your Fannie Mae shares aren't "resting." They're lying at the bottom of the cage with their feet in the air. What more do you need to know? So stop waiting for them to "recover" before sorting out your portfolio.

These days all of my investments are my "worst investments."

10:13 a.m. - As of today, average gasoline prices in the Twin Cities are just 17 cents higher than a year ago. 18 cents statewide. The price has gone down another 4 cents in the last 24 hours.

10:43 a.m. Dow down 343. Maybe you've seen ads on TV like this:

What's this? Refinancing? Without regard to credit scores. Isn't that what got us into this mess in the first place? What's going on here.

This company -- Lend America -- is actually trying to buy up mortgages and convert them into FHA loans. According to the Long Island Business Journal, the firm is bucking the trend by buying adjustable rate loans -- usually at a loss to the investor. The warning flag is that the FHA requires a credit score of 580. The advertisement says people can refinance "up to 97 1/2 percent of the home's value," but many adjustable rate mortgage holders have mortgages that are now more than the value of the home.

Obviously, look carefully here. But FHA loans are still available to potential homebuyers. In addition to the credit score requirement and you need a 3 percent downpayment.

11:57 a.m. - In a few minutes, MPR's Midday will take a look at the volatility of the markets. Guests are: Louis Johnston: Economics professor, St. John's University and the College of St. Benedict; Ross Levin: Founding Principal of Accredited Investors Inc. and author of "The Wealth Management Index." He is a regular columnist for the Journal of Financial Planning and the Star Tribune. The Dow is down 312.

12:12 p.m. - Johnston says there's no sign of the credit crunch easing. Levin says this is temporary. Here's a quote you won't like: "The pain will be great and the bleeding will be extensive."

12:19 p.m. - The two guests discussed the Wall Street Journal article today (I provided a link earlier) that said this isn't a short-term deal. Neither bought the notion although one pointed out that, technially, the market has been down for 9 years.

Questions:

Q: Where is the money that people have lost?
A: Unlike a hat or unlike a pair of socks, this money "evaporated." It didn't really go anywhere.

Q: Should I plow a lot of money into stocks now while things are at bargain-basement levels.
A: Probably yes but not for the reason you think. The caller was 24. The percentage of what he'd invest is a small amount of "total future compensation."

Q: Why not give everyone a pile of money rather than give it to the banks?
A: The $700 billion actually works out to around $400 and we saw what happened when we sent stimulus checks to everyone.

Q: If all the banks failed, what happens to my mortgage?
A: Good question. If it ends up in bankruptcy court, who collects the money from the mortgagee's? It could take a long time to work out. There'd be nobody to provide loans or do any inter-company transfers. People with mortgages would be in legal limbo.

Q: Why should I have to bail out people who overextended themselves?
A: Resist the urge for vengeance; it will only make matters worse.

Q: is the media providing good information or fanning the flames of fear?
A: We constantly reporting what's happening with the Dow . We need a patient discussion that goes through the problem and says "here's what's wrong and here's what we need to do." It's far too much breathlessness.

Q: What should we do with the 401K statements that are arriving this week?
A: Put them in the shredder.

1:40 p.m. - Dow down 484. Looking for optimism? Try a spoonful of The Big Picture, which uses plenty of charts I don't understand to come to a conclusion I can.

1:43 p.m. - Here's the full MPR/Humphrey Institute survey that shows the economic crisis is reshaping the political agenda, just weeks before the election.

2:57 p.m. - This economy must have several feet because shoes keep dropping. Finance & Commerce reports today that pensioners of three state-managed plans are getting pretty squeezed.

3:09 p.m. The "every problem is an opportunity" award today goes to Barb DeGroot, PR specialist for the Minnesota Arboretum who just sent a press release out:

Stock market crashes, nasty political ads....the world is too much with us these days. Poet William Wordsworth's refrain aptly describes the current mood in the United States. I invite to you come to the Minnesota Landscape Arboretum and experience "Autumn Unplugged," a celebration of the colors and quiet beauty of fall. Please see attached release for weekend events and a color report We are nearing peak color, by the way! Thanks and have a great weekend.

That's a pro right there.

And as long as we're on the subject, here's a photograph reader Kelly Rice sent me that he took while walking his daughter to school in Oakdale yesterday.

OK, now back to the economy...

3:14 p.m. Dow closes with its best showing of the week. It lost only 126 65 points.

3:18 p.m. - We're on a tidal wave of unbridled optimism. The state took in more money than expected last quarter. The sales tax revenue was down. We need to see that broken out by city to determine if the RNC did any good, economically. The bad news: The economic outlook has worsened, which I guess isn't really news at all.

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WWFDRD?

Posted at 3:55 PM on October 10, 2008 by Bob Collins (2 Comments)
Filed under: Economy

President Bush today channeled Franklin Roosevelt in his Rose Garden speech today.

Roosevelt's fireside chats often talked about the "fear" he railed against in his inaugural speech. But he also took on the dangers of "cut-throat competition," a complaint we don't hear much about these days.

Here's some more FDR to consider:

Seven months passed between the time Roosevelt delivered his first inaugural address ("The only thing we have to fear is fear itself."), and the third Fireside Chat I've posted above, one in which he renews a call for patience and optimism.

The current economic crisis, it's worth remembering, only exploded out in the open in a fashion that seems to affect all Americans less than a month ago. And yet, here was President Bush already trying to explain today why the bailout hasn't worked yet, and things haven't been fixed.

Meanwhile, The Atlantic's James Fallows critiques Bush's "crisis statements," and says a president should only make them if they have something new to say.

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The "we-matter" index

Posted at 4:44 PM on October 10, 2008 by Bob Collins (1 Comments)
Filed under: Politics

John McCain was in Lakeville on Friday. So we update the Visit-o-Meter. We're still trailing 2004, and it looks unlikely we'll reach our goal in the "we matter" drive of presidential candidate visits.

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Running from Petters

Posted at 5:11 PM on October 10, 2008 by Bob Collins (0 Comments)
Filed under: Crime and Justice

Yesterday, several politicians announced they intend to either return or donate campaign contributions from Tom Petters, the Minnesota businessman who is now in jail awaiting trial on fraud charges.

Today, at least one business is also trying to put some space between it and Petters.

TCF Bank issued a statement late Friday saying, "Neither TCF Financial Corporation, its subsidiaries, nor any senior executive of TCF Financial Corporation have any investment or lending exposure to Petters."

Meanwhile, David Brauer at MinnPost reports one of Petters' companies closed its doors today.

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Crossing the line in Lakeville

Posted at 8:34 PM on October 10, 2008 by Bob Collins (18 Comments)
Filed under: Politics

This is the salient part of the story about John McCain's town hall forum in Lakeville this afternoon, from the story posted here on the MPR Web site:

"I don't trust Obama," a woman said. "I have read about him. He's an Arab."

McCain shook his head in disagreement, and said: "No, ma'am. He's a decent, family man, citizen that I just happen to have disagreements with (him) on fundamental issues and that's what this campaign is all about."

It's hard to know where to begin.

These visits are, we're told, held to "fire up the base," not to create a lynch mob.

The campaign has been spiraling for awhile. Perhaps it started with the disgusting credence and coverage given to the assertion that Sarah Palin's baby wasn't really hers, and went down from there. Or perhaps that was just another benchmark, but one wonders what we've done to suppress our basic decency?

Political campaigns are certainly emotional things. Is it time that we all think about what happened in Minnesota this afternoon, and try to identify how we, as individuals from all points of the political spectrum can ratchet things down a bit and search for intelligent debate on issues on which we may disagree?

Today was not a bright spot in the history of Minnesota politics. There's always tomorrow, and we're all better than this.

Aren't we?

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