How Did University Degrees Become Subprime Mortgages? Part II

If you made it to the end of my last post you will have the same question I did.

Why did Finance Companies and our ersatz Mr. Finance Company Guy arrange a mortgage for Michelle, our hypothetical mortgagee,  when he should have known quite well from experience and the numbers that she would likely be unable to pay it off?  To answer this question we have to introduce a bond trader on Wall Street in New York.  We can even give him a real name.  We can call him Howie Huble

because Howie Hubler really exists and he is the most infamous example of what was happening in the bond markets in 2008.  A bond like a mortgage and like money is a kind of IOU.  It’s a piece of paper that says someone owes someone an amount of money.  Bonds have always been considered good, solid, conservative  low-risk forms of investment.  Usually bonds were IOUs from big companies or banks or even countries, but any kind of debt can be incorporated into a bond and resold to investors.  Unless you are an investment banker you have to get used to the idea that one person’s debt is always someone else’s investment. For the most part, debt is what financial markets buy and sell.

Leading up to 2008, bonds were being created by bundling together a lot of subprime mortgages.  Imagine that Michelle’s mortgage and 99 other mortgages just like hers were put together in a bundle.  All together they would create a bond (or what was called an “asset-backed security” or "collateralized default obligation") which, on paper, was worth 17 million dollars.  Howie Hubler and his ilk on Wall Street would turn around and sell that 17-million-dollar bond to pension funds, banks, and other investment companies around the world.  The answer to our question, the reason Mr. Finance Guy gave Michelle the mortgage in the first place was because he could immediately turn around and sell it to a Hublerite on Wall Street, and the Hublerites would sell it inside a bond to investors all over the world.

Pause and take note that, despite what we are constantly told about capitalism, the people who were making the real money were taking no risks, in fact, as the saying goes, they had no skin in the game. Howie and Mr. Finance Company Guy got paid no matter what.  They could remain indifferent to the quality of the mortgages and bonds they were selling.  In fact, being attentive to the quality and viability of the paper they were selling would have been counter to their financial interests.  The only thing that mattered to them was that they move a lot of "paper" from Main Street to Wall Street to Global Markets.  The hypothetical 17-million-dollar bond I mentioned above was peanuts to the Hublerites on Wall Street.  Merrill Lynch, the company Howie worked for, was paying him 25 million a year and he complained of being underpaid.  Even after Howie lost 9 billion dollars on "credit default swaps" and was fired, he still walked away with a 10-million-dollar severance payment in addition to the millions he would have salted away over the years.

Confession of ignorance #2:  I hadn’t heard of Howie Hubler or “collateralized default obligations” nor did I understand how "credit default swaps" worked until I read The Big Short.  My general impression of how subprime mortgages were bundled into bonds and resold was correct but The Big Short gave me the details and explained how Mr. Finance Guy and Howie could make enormous amounts of money, for as long as the bubble lasted, by moving worthless pieces of paper around.  Actually calling these investments “pieces of paper” gives them more substance than they had in reality.  Not only were the transactions digital, but when Main Street Finance Guys couldn't keep up with the demand on Wall Street for more mortgage paper, some Wall Street gurus, as Michael Lewis reports,  figured out a way to create mortgages out of nothing.  When financial analysts went looking to see what was inside CDOs (“collateralized default obligations”); for example, to find "Michelle's mortgage," they came away saying it was impossible to say what was in a CDO.  

Think about it!  People were paying billions of dollars for CDOs but no-one was able to say exactly what was being purchased when you bought  a CDO.  No problem!  As we now know the government of the USA stepped in and purchased hundreds of billions of dollars worth of this bad, toxic, imaginary debt and all the perpetrators were let off the hook, except of course, Michelle and people like her who were evicted from their homes, lost savings and pensions and were forced into debt and bankruptcy. 

Parallel #2:  In both cases, Michelle’s mortgage and Michelle’s BA, a huge system has been constructed, an upside down pyramid, based on the assumption that Michelle is going to do what is expected of her.  Despite Michelle’s good intentions and hard work, the open question remains:  was Michelle being provided with the conditions which would allow her to succeed?  In the case of her mortgage, the evidence is now clear she had little hope of  paying off the mortgage and owning a house.  The whole venture was to be a losing proposition for her.  What about her BA?

I have to hold back the vitriol in launching accusations against Mr. Finance Company Guy who sold Michelle her mortgage, because in terms of education I am his homologue. I never consciously deceived or mislead a student, and remained convinced throughout my career that I was doing something beneficial for my students.  However, I suspect that the average Mr. Finance Guy could make the same claims about his mortgage customers.  

Like Mr. Finance Guy, I felt pressure to attract students and get them through the program.  I know lots of individuals who were conscientious and diligent, working to ensure that Michelle got the best education possible--and I count myself among them.  Overall, anecdotal evidence I’ve gleaned suggests that my undergraduates have done better than average in finding employment. Nonetheless it seems clear to me that just as the problem with the financial markets was that no-one was playing careful attention to the details of Michelle’s mortgage, no-one  is paying careful attention to the details of her BA.   As the system currently stands there is no incentive for anyone to be particularly attentive to the make-up and quality of the education that Michelle is receiving.  

For university professors interested in advancing their careers, far from "no incentive,"as I have pointed out in earlier posts, there is significant disincentive for any professor getting too fussy about the quality of their courses or teaching, or becoming preoccupied with the overall quality of education their students are receiving.  In universities there are only two roads to advancement: research or administration.  The cliché of "publish or perish" has more purchase than ever.  The number and salaries of university administrators has ballooned, while most of the teaching is left to lowly adjuncts and part-time lecturers who are destined to remain at the bottom of the ladder in terms of salary, job security and status.  

Are administrators and tenured professors concerned about the level of pedagogy in their universities?  The most interesting and telling aspect of this question is that we can't know the answer because the question never gets asked.  Lots of lip service gets passed around as part of every university's sales pitch but it is simply not something that professors ever discuss.

In keeping with a typical business model, universities are concerned with enrolment and completion rates.  The system offers no incentive for anyone to be preoccupied by what happens between registration and graduation.  The system is driven by ideology, narcissism, petty politics, turf wars and the obsessive compulsions of fastidious low-level administrators, but because there is little to no consensus about what students should be taught, there is no tracking or sharing of information about what students are supposed to have learned.  

My recent posts might create the false impressions in readers' minds 1) that I view university education as somehow comparable to the financial markets, and 2) that I have some silver-bullet solution in mind for how to fix university education for all times.  This comparison of universities and the financial markets is a demonstration of how disastrous the business model is for education.  I have seen numerous panaceas proposed to cure all that ills university education and invariably come away with the impression that there is no one solution to fit all situations.  The solutions that seem clear and viable to me are the ones who's outcomes are least predictable.  We need to empower those who teach, those who can facilitate effective teaching, and those who want to learn, and then, to quote Death of a Salesman, "attention must be paid" to what is happening to students every step of the way from pre-registration to career.

Gladys Night heard it through the grapevine.

How Did University Degrees Become Subprime Mortgages?

In the wake of the Wall Street collapse and bailout in 2008, I was repeatedly tempted to present my students with a lecture on subprime mortgages.  I kept imagining the lecture I wanted to deliver but finance and economics were not my fields or a relevant subject for any of my literature classes.  Reading the prologue to Michael Lewis’s The Big Short about the nerdy outsiders who foresaw and actually made money from the collapse and learning that Meredith Whitney with her B.A. in English from Brown University was one of the first whistleblowers to accurately assess the mismanagement that was going on, I am once again feeling inspired to offer my two cents (for those of you who still know what “two cents” means).  

What follows is the lecture that I almost but never quite gave and a comparison of university degrees and subprime mortgages punctuated with confessions of ignorance which will demonstrate that you don’t need to know very much in order to understand what was going on even though the people who were supposed to know everything about big finance still claim they had no understanding of what was going on.

Confession of ignorance #1:  Until recently I misunderstood what the word “subprime” meant in the expression “subprime mortgage.” I knew that the “prime rate” meant the best possible rate at which a bank would lend money.  Since the prefix “sub” means “under,” “beneath,” or “lower,” I assumed that a "subprime mortgage" must be a special low-interest kind of mortgage designed to help poorer people. Based on the words, that’s what the expression should mean but I and the people who took out those mortgages could not have been more wrong; it means exactly the opposite.  To keep it simple the expression “subprime mortgage” is a lie, a sales-pitch expression to convince people that they were getting a deal when in fact they were being tricked into signing mortgage contracts with high-interest rates that ultimately they would be unable to pay. 

In financial circles the expression “subprime mortgage” means that the people borrowing the money are considered “subprime” because they have low incomes and/or poor credit ratings.  The loans are considered riskier for the lender and so the borrowers have to pay higher interest rates.  Hypothetically, if a rich person and a poor person wanted to buy exactly the same house, the rich person would pay less for the house and the poor person would have to pay a higher interest rate on the mortgage and therefore much more for the same house.  This is what is known in capitalist economics as a level playing field. (Yes, I am being sarcastic.)

The day I almost gave my lecture on subprime mortgages, I was lecturing on the Age of Reason, that period in English literary history known as the Enlightenment in antithesis to the Dark Ages, the Medieval period dominated by religious dogma.  As a warm-up to my lecture, I began with the thunderingly impertinent question to the class:  “Why are you here?”

With rapid alacrity a hand shot up in the third row and a handsome young man with loads of puppy-dog charm answered earnestly:  “to procreate.”

“Say what?” I asked.

“You know, to make more people.  To procreate.”

I couldn’t resist.  “I think I should warn the young women sitting around  ‘F.’ that he is here today in class at the University in order to procreate.”

(Just in case you might think I did “F.” some harm, I should point out that when the giggles subsided what I witnessed was a half dozen young women gazing at him in newfound dewy-eyed admiration—and “F.” was nothing if not a good sport. ) 

I was introducing the notion that a university education was the continuation of an idea, which became dominant in and perhaps defined the Enlightenment, that it was possible for individuals and societies to improve.  This concept of progress, of getting better, provided a new answer to the question about why we were here, the purpose of our existence, displacing the established Medieval notion that the human species existed to praise, worship and obey God and, in the words of my grade-school Catholic catechism, “to reflect his glory.”

Before the class could get there, we had to get past the other answer to my “why are you here?” question:  “to get a degree,” and the cut-to-the-chase, more cynical echo, “yeah, to get that piece of paper.”

“To get that piece of paper”:  that was my cue to deliver my “subprime mortgage” lecture, but I chickened out. 

In the lecture I daydreamed but never gave I took a bill out of my wallet and asked the class “and what is this?”  I received the funny joke answers with a smile and a laugh, and collected the “right” answers:  “it’s money,” “Canadian currency,” “it’s a five-dollar bill.” 

I would acknowledge and congratulate the correct answers, but at the same time, I would point out how knowing the right answer can sometimes blind us and prevent us from recognizing the most obvious, empirical, irrefutable, down-to-earth answer.  In this case what I was holding for display was, in the first place,  “a piece of paper with printing on it.”  This particular paper was an IOU issued by the Government saying that Canada owed me five dollars.  It is a very strange kind of IOU because everyone understands that it marks a debt which will never be paid.  (If this intrigues you check out When Should You Repay Your Student Loan.)  We typically assess the value of something in terms of money, but this time the valuation needed to be reversed.  The Government designated the value of this bill as “5” but its real value is unpredictable.  Depending on the time and place a Canadian 5-dollar bill could have a value of 3 litres of gas or maybe 5, 2 bottles of beer or maybe 1 or maybe 5, half a hamburger or maybe 2. You never know what five dollars is worth until you try to spend it.

Now I take out a sheet of paper and write on it in large letters:  MORTGAGE, and underneath an amount, say $170,000.  If I was really well prepared I could have copied out something that looked almost like a real mortgage:

FCG Mortgage

Name:  Michelle

Amount:  $170,000

Starting Interest rate:  3% (variable)

Property:  Nice little house on nice little street.

Lender Signature:  Finance Guy

Borrower Signature:  Michelle

“Again, this is a piece of paper.  Agreed?  If you suspend disbelief a moment, let us imagine that this piece of paper is a real mortgage.  If we compare these two pieces of paper we will discover why people who know about finance consider the mortgage so much better than money.  Ignoring the difference in the amounts (5 versus 170,000), the mortgage is better than money because the value of money is, historically, less certain.  The value of money always goes down over time but the value of mortgages and houses always go up.  Historically, inflation decreases the value of money by around 2% every year, but a typical mortgage increases in value by around 5% every year.  Money used to be backed up by gold, but these days the value of money is based on nothing tangible.  A currency is worth whatever people who trade on money markets decide it is worth for reasons that no-one really knows.  Mortgages on the other hand are backed up by actual buildings.”

[Now I would draw my best grade-school impression of a house on the blackboard.]

[Cut and paste from the net; much better than I could do!]

“So how did mortgages which were less risky and more desirable and solid than cold, hard cash suddenly become 'subprime,' 'toxic,' unreliable and generally worthless?  The answer:  mortgages are only valuable when everyone is following the rules.  When people stop following the rules, mortgages become worthless pieces of paper.  Actually, much worse than worthless because the person who takes out a mortgage is still expected to pay it off or s/he will be punished.”

[Here’s where we can begin to compare university degrees and subprime mortgages.  Spoiler alert:  The moral of both stories is that mortgages and degrees are of value when the people involved in the process are doing what is expected of them, following the rules, and fulfilling their obligations.  Unfortunately, for everything that went wrong with mortgages from 2003 to 2008, it's possible to see a parallel with university degrees.]

“A mortgage has to be taken out by an individual.  In our case, let us imagine that this is Michelle’s mortgage. [There was always at least one Michelle in in my classes and Michelles were invariably nice and smart and would cheerfully accept being my hypothetical.]  Michelle is a student and works part time, so what is she doing taking out a mortgage?  Many people would say that the problem with subprime mortgages is Michelle’s fault.  She just couldn’t afford the house she tried to buy. So why did she?  To answer this question we have to look at the guy from the finance company who arranged her mortgage.”

 “Here’s his sales pitch:  'Michelle, you can buy this house, really nice, huh, for $170,000.  I will give you a mortgage for $170,000 at 3% interest for the first two years.  That means you will be paying $805 a month, which isn’t much more than you are now paying for rent.  Your interest rate might go up after the first two years, but so will the value of your house, so if you're not happy you’ll be able to sell it for a profit.'"

“Sounds like Michelle can’t lose, right.  And how could she resist?  She’s being given $170,000 and a house.  All she has to do is sign the mortgage contract, and supply a few documents like pay cheque stubs, tax form, credit rating.  And if she doesn’t have them, well Mr. Finance Company is a nice guy and wants to be nice to her, so he will approve her mortgage even without the documents.”

“Mr. Finance Company Guy probably knows that eventually Michelle will not be able to afford the house and the mortgage.  She might manage to pay the mortgage, the taxes and the expenses of keeping up a house for the first two years, but after the first two years the 3% interest rate (it’s called the ‘teaser rate') will end.  Suddenly Michelle will have to pay a new variable, non-teaser rate of something like 12%—because students like Michelle who work part time and don’t have high incomes or great credit scores have to pay extremely high mortgage rates.  Assuming Michelle never missed a mortgage payment in the first two years (which isn’t very likely), she will still owe $160,561 on her mortgage.  Her new monthly mortgage payment at 12% will be $1657.00—at least twice as much as she can possibly afford.”

“So what does Michelle do now.  Obviously she has to sell her house.  Maybe she can sell it for $180,000?  Nope.  How about selling it for $170,000?  Still no.  How about if she sells it for just enough to pay what she owes on the mortgage?  Still no buyers.  How about if she sells it for $150,000; she ends up with no house and a debt of $10,000?  For most people in Michelle’s situation in 2008 the answer was still no.  Why?  Because Mr. Finance Company Guy had made the same deal with lots of people that he made with Michelle and they were all in the situation of being unable to pay their mortgages and were trying desperately to sell their houses for less than they paid and less than they owed—so the price of houses was collapsing.”

Parallel #1:  Anyone with a university degree who is unemployed or underemployed and faced with a student loan knows a bit about how Michelle’s situation must feel.  Owning a house, getting a degree--they were both supposed to be no-brainer guarantees of future prosperity but the implied promises have been reneged upon.

To be continued . . .

Jessica Mauboy heard it through the grapevine.

“Derivatives”: When Wall Street Went Postmodern!

Ever since Michael Moore’s 2009 film,  Capitalism, a Love Story, in which Moore stood outside office buildings on Wall Street asking “Can you explain to me what a derivative is?”  the question has stuck in the back of my mind.  What is a derivative?

The fall of the Berlin Wall in 1989 was the end of Communism; 2008 with the biggest financial institutions in the world on the verge of collapse was the end of Capitalism.  In 2008, the world’s leading capitalists—bankers, executives, CEOs, stock-market gurus—became nouveau socialists accepting hundreds of billions of dollars in government bailouts.  (Welfare is so much easier to accept when it isn’t being wasted on poor people like homeless vets and single mothers in need of daycare.) 

But what caused the immanent financial collapse?  Subprime mortgages (poor people again, screwing up the system buying houses they can’t afford) and “derivatives.”  That question again, sounding like a bad joke:  what’s a derivative?  Since they just about caused the apocalypse in 2008, you’d think that by now we would all know exactly what they are.

I had heard that Wall Street financial companies had hired small armies of science geeks and they in turn created derivatives which were super complicated mathematical formulas, logarithms, which no-one understood (other than, I assume, the wizards who created them), but were sold all over the place and created enormous profits for the lucky few who could afford to buy them.  From these tidbits of information I imagined derivatives to be something like a chemical formula which could reduce the effects of ageing, or maybe a computer code which produced the coolest video game ever.

However, reading Tony Crilly’s Mathematics (love this book; it’s sort of a history of mathematics for dummies like me), I discovered that “derivatives” are part of that form of mathematics called “the Calculus.”  The Calculus was developed simultaneously and independently of one another by Gottfried Leibniz and Isaac Newton.  Newton used his newly invented mathematics to explain (quite accurately as we now know) the planets oblong orbit around the sun.  (Crilly is insistent  that it’s always referred to as “the Calculus.”  I actually studied “the Calculus” in high school.  The only thing I remember about it is that we called it “calculus.”)

“Derivatives,” as Crilly explains, are part of that branch of the Calculus called “Differential Calculus.”

“The central purpose of Differential Calculus is to measure the rate of change—how fast or slow change occurs, and this is known as the ‘derivative’” (Crilly 77).  

Crilly eventually gives the example of Black and Scholes who used Differential Calculus “to try to predict stock prices” (Crilly 84).

In short, “derivatives” are mathematical calculations which attempt to predict how prices are going to move on the stock market.  So now we know—or do we?  Even with a scientific definition in hand, I found it hard to imagine that this is what the financial leaders on Wall Street were doing—trading tips with each other like old-fashion bookies and gamblers.  “Hey Bud, I got a hot tip for the seventh race at the Belmont this afternoon!”  Were these guys really paying each other millions and even billions of dollars for the equivalent of a tip that Son of Samantha was going to win the seventh race at Belmont this afternoon based on a calculation using Differential Calculus?

Then I found out what “derivatives” really are.  This week in fact.  What I should have realized is that Wall Street  shysters were doing exactly the same thing as postmodern academics, using a scientific term which connotes something complex, highly technical, and esoteric but which also has an ordinary, accessible meaning in common language.  The gambit is to endlessly obfuscate, never letting slip in what sense the word is being used, creating the illusion that what is being done is far beyond the comprehension of the average human brain and impossible, therefore unnecessary, to explain in straightforward, accessible, transparent language. (For further discussion of this phenomenon see The Postmodern Hoax and How We Train University Students to Write Poorly.)

A derivative is simply something that comes from something else:  orange juice is derived from oranges, maple syrup is derived from the sap of the maple tree, saying “bless you” when someone sneezes is derived from the medieval belief that the devil can enter your body when your orifices are open, and the word “derive” derives from the Latin derivus (meaning down stream). Ironically “derivative” as the term is used in financial markets carries some of the same meaning as it does in literary studies.  Describing a literary or artistic work as “derivative” is generally an insult, meaning that it is an imitation of someone else's style lacking the substance, aura and originality of the source. 

In the financial markets derivatives come in many forms and they have names like “options,” “swaps,” “futures,” “forwards,” warrants,” “LEAPS,”  “baskets” and “swaptions.”  What all these “financial instruments” (as they are called) have in common is that the profit or loss they produce is “derived” from the stock market.  Or, in the literary sense of the term, if your derivative imitates what happens on the stock market you make money, if it doesn’t you lose.  The horse race analogy turns out to be pretty apt.  If your choice of Son of Samantha in the seventh “imitates” what actually happens in the race you will “derive” a profit from the result.  When you purchase a derivative, you are not actually buying a stock or investing in a company, you are not buying or investing in anything, just as when you bet on a horse race you are not buying a horse or a piece of a horse or anything else.  Ultimately the derivative is the equivalent of putting you money on red at the roulette table.  Your profit or lose will be derived from whether or not your choice imitates what the little ball spinning around the roulette wheel does.

Are you still there?  Perfectly justifiable that you started to get a bit bored about two paragraphs back.  You’ve already gotten the idea:  Wall Street billionaires and their middle-management millionaires aren’t investing, or building or growing anything; they are just betting on what’s going to happen on the stock market, the same way you and I might bet on a horse race or football game or buy a lottery ticket.  So what.  Before apathy sets in, consider this:  they are doing it with your money!

If you have a bank account, a pension fund , a loan payment of any kind, your money is invested in derivatives. If you are affected by currency rates, interest rates, the price of food or gas or clothing; then you are affected by the derivatives market.  The problem isn’t that financial institutions are gambling.  In fact, it’s not really gambling for them, because they are using your money. Yes, they are betting your money on Son of Samantha at the track and Number 23 on the roulette wheel, but the financiers on Wall Street and global investment bankers are not that worried about the outcomes . . . because it’s your money and they get paid for betting it no matter what the outcomes.  In addition to any profit they might make themselves, they can charge fees, commissions, and administrative expenses, skimming from any pot of money they touch while accepting salaries, bonuses, and tax exemptions, deferrals and rebates.  In short, yes they are gambling, but they also own the race track and the casino.  

However, unlike race tracks and casinos, the derivatives market is unregulated.  It has been seven years since derivatives nearly collapsed global financial markets.  People lost houses and jobs and pensions, but no-one has ever been charged with a crime.  You can’t be accused of breaking the law when there are no laws.  

How much money are we talking about?  This is when we move beyond any notion of reality and into the realm of fantasy and the fantastic.  No-one knows exactly how much money there is in derivatives right now because . . .  (wait for it)  . . . . derivative markets are unregulated.  The current estimates run between 710 trillion and 1.2 quadrillion US dollars.  

(see "The Size of the Derivatives Bubble").  

How much is 1.2 quadrillion USD?  Think "a lot" then add some more zeros.  To get a handle on how much money we are talking about, let’s use the conservative estimate of 710 trillion.  Now consider:  the GDP (Gross Domestic Product, the value of all goods and services in one year) of the USA last year was 17 trillion dollars.  In other words the derivatives market is estimated to be more than 40 times larger than the US economy.   The total US debt is around 18 trillion dollars.  The total amount of US currency in circulation 1.39 trillion.  

Does anyone else find it funny that the US owes about 15 times as much of its own currency as actually exists?  Or that there are 700 times more American dollars in the derivatives market than actually exist in the world.  This returns us to the question of “what is money” discussed in “When Should You Repay Your Student Loan?”  Liquidity has become so rapid and massive that printed money can’t keep up.  Postmodern money is at least twice removed from reality—beyond paper and material value.  Detached from reality, economy has become little more than the big boys moving big numbers about, but in this context what does “we can’t afford it” mean?

Jessica Mauboy heard it through the grapevine.

“Be Yourself”? Part II

Much as I have enjoyed badmouthing postmodernism in revenge for the years of tedium it inflicted upon me, I have to admit, as I mentioned at the end of Postmodern Shibboleths, I have found discussions of “the subject” to be useful, relevant and meaningful.   Postmodernists will tend to identify challenges to the unity and stability of the ego with Lacan, and the ephemeral nature of the individual self with Derrida’s claim that “the subject is never equivalent to itself”--which is sort of an update of Heraclitus' observation that "you can't step into the same river twice."

It seems pretty obvious that the self, the individual, the person you think of as you is constantly changing.  Every time a new thought enters your head, every time you think a thought about yourself, or you have a new experience, in fact, with every breath you take you are not quite the same person you were an instant ago.  

From a purely physical (and physics) point of view every single molecule of your body is replaced in the space of seven years.  The guy who’s been in jail for eight years is, physically, a completely different person from the criminal convicted of his crime. 

We might roll our eyes at the medieval King Alfred who had a dying subject locked in a lead box so that he could see his subject’s soul rising from his body, but without the fiction of something like a soul or immortal spirit or some individual essence making us each the same person from birth to death our religions, our cultural, social, political and legal systems, our epistemology, all our ways of thinking, knowing and understanding the world could not survive. 

The playwright Pirandello argued that the characters of fiction are more “real” than the people we think of as real because they are more enduring.  Characters remain the same forever but people are constantly changing. 

Marvin Gaye heard it through the grapevine.

“Objects in Mirror Are Closer than They Appear!” Really?

It's a mirror!?

“Objects in mirror are closer than they appear.”  Just to be absolutely clear for the Alice-in-Wonderlanders, there are no objects in your mirror. Duhh, it’s a mirror!

Gamers know

Video-gamers familiar with the expression “All your base are belong to us” will immediately recognize “Objects in mirror . . .” as a Japanese translation into English.  This particular example should alert us to the easy, random and illogical fashion in which the English language gets transformed.  

Correct syntax

I can’t perceive any advantage in the erroneous “objects in mirror” claim over the correct if telegraphic English of “Objects are closer than they appear in mirror.”  Yet, we would have to assume that any youngster riding shotgun and looking at an automobile’s side mirror will grow up thinking “objects in mirror” is correct English and, in contrast, the appropriate syntax sounds a little strange.

Cut your teacher some slack!

This is a plea to all students to cut your English teachers a little slack.  If you have found real-life examples that contradict what your teachers have told you, it’s not because your teachers don’t know their business.  The way language is used doesn’t always make sense and, over time, language usage becomes the language period. Whatever rule or definition you have learned, there's a pretty good chance that eventually someone who has unwitting power over English language usage (advertiser, spin doctor, celebrity, rapper, computer guru, etc.) will break the rule or contradict the definition turning the mistake into the latest version of correct English.  

Mistakes and oversights

I am still irked when I hear the vainglorious announcement of a politician being named to head an “oversight committee.”  Doesn’t anyone remember the definition of an “oversight”?  It is “the failure to notice or do something.”  It is synonymous with “a mistake.”  Congratulations Mr. Big Britches, you have just been put in charge of the “mistakes committee.”

Less and fewer

I’m pretty sure, these days, that most TV commentators couldn’t construct a complete sentence using the word “fewer” if their lives depended on it. The distinction between “fewer” and “less” is the same as between “many” and “much,” “”few” and “little,” “number of” and “amount of.”  In other words, the distinction runs throughout the English language.  If it continues to disappear, “The amount of panhandlers has decreased because less people have much coins in their pockets” will eventually become correct English.  Unless, of course, this sentence already sounds okay to you.

Language gets simpler over time.  Does it?

The theoretical argument in linguistics is that the language gets simpler over time.  English used to have “you” and “thou” (like the “vous” and “tu” in French), but now we only use "you." English has a distinction between “there is” and “there are” (French has only “il y a” for both), but “There’s 50 people waiting outside” has become a fairly common form of English usage.  You might have heard the slogan for Labatt 50 beer:  “There’s 50 good reasons to have a 50.” The distinction in English between "there is" and "there are" is on the verge of extinction, if it hasn't already disappeared.

Learning and pattern recognition

You might think that English not having any solid rules will make it easier to learn; in fact, exactly the opposite is the case.  All learning is a matter of pattern recognition.  If the patterns of the language are constantly being broken and reconfigured, the language becomes that much more difficult, if not impossible, to master.

Language learning and the double standard

You might think that if English is a language whose rules are constantly being broken, the second-language learner can relax, knowing that just about anything goes.  Welcome to the double standard!  The typical native speaker of English assumes that whatever feels right is right. If a native speaker detects that you are a second-language learner, there is an immediate assumption that s/he knows more than you do.  The truth is that if you learned some of your English in a classroom, you know more about English grammar than the average native speaker.

Hypercorrection

Unfortunately, your knowledge of English grammar will probably cause you to make mistakes.  The most typical mistake that language learners make is to over-apply the rules that they have learned.  (Add "ed" to form the past tense, therefore the past of "eat" must be "eated" right?)  Native speakers are constantly breaking the rules and it's alright because they are . . . native speakers. Agreed, life isn't fair.

However, if you have ever been made to feel foolish, inadequate, even stupid because you made a mistake in English; take heart, the language itself is pretty stupid.

Tina Turner heard it through the grapevine.

Former student just posted this on Facebook.  Thanks Max.  Thought this would be a good spot to add it:

Police Brutality or Classroom Management?

When I heard the story of a white South Carolina police officer “brutalizing,” “man handling” and “flipping” a black teenage girl and “throwing her across the room,”  I thought, “here we go again.”   The list of similar white police or vigilante abuses of African-Americans has gotten so long it is tedious to enumerate.  From Rodney King beaten in LA to Michael Brown shot in Ferguson, Missouri to Eric Garner choked to death in New York and, in my mind the most egregious case of all which has gotten the least attention, Sandra Bland arrested in Texas and thrown into a jail cell (where she eventually committed suicide) for “failing to signal a lane change.”  (Have you driven in the USA recently?  Does anyone there signal a lane change?)

http://abc7chicago.com/853139/#videoplayer

These and a dozen more episodes in the unfortunate history of law enforcement in the USA share the pattern of white authorities and black victims, but each one is different in its own way.  We are and should be outraged by the whole, but we owe it to ourselves and to all the actors involved to take note of how each is different from the others.  The truth, like the devil, is in the details.

When I watched the video of Deputy Ben Fields arresting a 16-year-old South Carolina student in her classroom, I was expecting to have my festering anger sharpened.  I watched the video, then I watched it again.  What came to mind was a psychology experiment I heard about decades ago.  A room full of test subjects watched a film showing African children at play and carrying on their daily lives in their homes and in their community.  The children were all healthy, happy, living in a comfortable environment.  At the same time a voice-over narrative described poverty, starvation and hardship in the lives of African children.  The experiment subjects were then asked to answer questions about what they had seen.  The test demonstrated that it is typical for people to believe what they have been told, to believe what they have been told they are seeing rather than what they have actually seen.

https://www.youtube.com/watch?v=IY1e8qe-2O8

As I watched the South Carolina video sequence for the third time, resisting what I had heard and read, I became increasingly convinced that I had not seen a police officer brutalize, flip or wrestle a young girl or throw her across the room.  Anyone who has ever played around even a little with video recoding realizes how video distorts distance.  A dancer jumping three inches in the air appears to leap a foot and a half on video.  In the South Carolina video I didn’t see anyone being thrown across a room.  I saw a police officer pull a young woman out of a chair and then push her a bit further to get her clear of other desks and chairs.  

Now a personal confession that will make me either callused or an authority on the case at hand depending on your perspective.  I attended an all-boys Catholic high school run by Oblate fathers from the mid to late 60s.  In my first and second years of high school hardly a week went by without my witnessing a student being slapped, punched, choked or roughed up, one way or another, by a teacher.  My past experience has not induced me to consider corporal punishment as a desirable element of education.  In fact, Mr. Knoble, homeroom and history teacher in grade 10B who never laid a hand on a student, remained the model I tried to emulate throughout my teaching career.  He went so far as to joke with us that when he started at the school he was told by an old hand “If you want to survive here, as soon as you walk into the classroom, hit someone.”  Then looking at his class list, the old hand told him who to hit.  

Of the various beatings I witnessed, one stands out as particularly comparable to the 

South Carolina episode.  Mr. Q, the math teacher and football coach, grabbed Peter, the guy sitting behind me, by the hair and throat and dragged him out of his chair and across another row of chairs.  No gender or racial divide in this case, but the chairs with a desk attached were the same—and the type of chair does matter.  Imagine your job is to get someone out of one of those chairs using physical force.  How would you do it?

When Deputy Fields is dealing with the South Carolina student, despite descriptions of him “slamming her to the ground,” I see him tipping her desk back and then holding her so that she would not be slammed to the ground.  Deputy Fields did an effective job of getting the student out of the desk and into a clear space without bumping or banging the student against anything that might cause serious injury.  He dragged and pushed her then rolled her over, put her in handcuffs and took her away.  He did not lift her in the air and throw her across the room.

The student’s personal injury lawyer has already announced a list of her injuries.  I didn’t see the officer do anything that would cause a serious injury; in fact, I came away from the video thinking it is not easy to do what he did without causing significant injuries, and he had done a pretty good job of making sure the student was not seriously injured.  Nonetheless, in South Carolina, Sheriff’s are elected, so Deputy Fields's boss didn’t waste any time in announcing that Fields was fired. 

There is a serious problem in American schools if classroom management requires police presence, but I don’t see how we can lay the blame on the officer called upon to do his ugly duty.  The teacher had tried to deal with the young woman and failed; the principle tried to deal with her and failed.  When Deputy Fields was called, what was the expectation?  Was he called because of his expertise as a negotiator?  Was he called because of his background in pedagogy and classroom management?  His education in child psychology?  Everyone in authority and, I would surmise, the young woman herself had decided that the situation could only be dealt with through physical intervention and that is what the Deputy did.

It may seem trite in this context to discuss classroom management, but if education is going to take place in schools, then classroom management is step one.  Even at a university level it is clear that some students are unprepared for the baseline requirements of being orderly, attentive and quiet for extended periods of time.  I have been shocked a number of times to pass a university classroom and hear a university teacher attempting to lecture by speaking louder than everyone else in the room who is talking.  It is foolhardy to imagine that individuals can learn in an ambience of constant chaos and noise.  As much as everyone pays lip service to the value of education, it seems clear to me that as soon as front-line issues arise and self-interest or “covering your ass” are in play, the importance of education disappears.

The moment Deputy Fields was called to solve a problem of classroom management, the teacher, administrator and the system were announcing their own failure.  To make the police officer and/or race the issue is to guarantee that the real problem will never be addressed, will go un-solved and eventually escalate.  One recalcitrant student may very well be a victim, but making the aspirations of a roomful of students hoping to get an education collateral damage to the problems of one student and an inept system is no solution.

Are Canadian Elections Democratic?

Are Canadian elections democratic?  The short answer to the question is “no!” 

Our electoral system is based on the British system which if you listen to CGP Grey's Why the UK Election Results Are the Worst in History you will quickly understand is far from democratic.

To be fully upfront, I did not vote for the Liberal Party in the election of October 19, 2015 but I am relatively content with the results.  However, in light of the disparity between the popular vote and the number of seats won in Canada's most recent election, CGP Grey will have to retitle his post as "Why the UK Election Results Are the Second Worst in History."

Here are the number of seats and the percentage of the vote won by each of the major political parties in the Canadian election:

LIB	CON	NDP	BQ	GRN
184 seats	99 seats	44 seats	10 seats	1 seat
39.5% of vote	31.9% of vote	19.7% of vote	4.7% of vote	3.5% of vote

In case the disparity and level of misrepresentation doesn't immediately jump out at you from these numbers; in round numbers:  the Liberals got less than 40% of the votes but over 54% of the seats,  the Conservatives got 32% of the votes but 29% of the seats, the NDP got 20% of the votes and 13% of the seats, the Block got 5% of the votes and 3% of the seats, the Greens got almost 4% of the votes but far less than 1%  (in fact .29%) of the seats.  Or, viewed the other way around, based on the popular vote, the Green Party should have around 3 seats, the Block around 18 or 19, the NDP around 80, the Conservatives 100 and the Liberals 134.  In short Canadians voted for a coalition government, but they didn't get one. 

Much as I hate to be fatalistic, the situation is not likely to change, in the first place because the problem only shows up every four years or so, and afterwards people are likely to say "oh well, the election is over now."  Secondly, and more importantly, the system favours the winning party and they consequently have a vested interest in keeping things the way they are.  The smaller the party the more unfairly the system treats it--another reason the system is unlikely to change.

One glimmer of hope is that one of the first-announced planks in the Liberal Party's campaign was a promise to reform the electoral process.  Here's what the Liberals announced in their campaign literature.  

MAKE EVERY VOTE COUNT
We are committed to ensuring that 2015 will be the last federal election conducted under the first-past-the-post voting system. As part of a national engagement process, we will ensure that electoral reform measures – such as ranked ballots, proportional representation, mandatory voting, and online voting – are fully and fairly studied and considered. This will be carried out by a special all-party parliamentary committee, which will bring recommendations to Parliament on the way forward, to allow for action before the succeeding federal election. Within 18 months of forming government, we will bring forward legislation to enact electoral reform. 

It would be very interesting to see this list of measures being implemented, but take note that the promise is only that these measures will be "fully and fairly studied and considered."  (Why do I find myself finishing the sentence with "before they are rejected"?)  A year and a half from now the Liberals will be bringing forward legislation.  Unfortunately, when you promise to "bring forward legislation," you are leaving the door open so you can later claim that "I tried to bring forward legislation but my dog ate it."

Despite my instinctive cynicism on this issue, it is going to be interesting and challenging for a government in power to even begin discussion of these issues.  A typical European format is for each party to present a list of candidates and the number of candidates who become members of parliament (or its equivalent)  is determined by the percentage of the popular vote which the party wins.  I suspect that Canadians will be reluctant to give up the idea of voting for their local riding representative, but the European system ensures that the party has the representatives in government that it considers it's best people.  

Although I must confess that if this system were in place in past elections my favourite two candidates would not have been high enough on the NDP list to get elected:  Pierre Luc Dusseault first elected in 2011 at the age of 19, the youngest ever member of parliament, and re-elected in 2015, and Ruth Ellen Brousseau, the candidate everyone thought was a joke in 2011 when she was elected in a largely French riding despite media claims that she couldn't speak French and the fact that she went on a pre-paid vacation in the middle of the election campaign.  Ms. Brousseau turned out to be a dream MP for her riding and won an easy victory in 2015.





























In conclusion:  the system we will be looking for is one that, in the first place, is democratic, so that how people actually voted is reflected in the make-up of parliament, respects regional and even local representation and distribution, and still leaves open the possibility of wild-card outliers being elected.  A lot to ask for, maybe, but in the end we will get the system we deserve--meaning the system we are willing to ask for, to work for, and maybe even to fight for.  Don't let 19 May 2017 slip by without your serious consideration of our "new" electoral process.

The Truth about English Grammar

The “joke” below about the distinction between “can” and “may” crossed my Facebook feed a couple of times this week.  The last time I heard this joke I was around 10 years old, meaning more than 50 years ago, so I am a little bit more than surprised that anyone today would comment on the distinction between “can” and “may” in making polite requests, or even think that such a distinction exists.  Nonetheless the post has received tens of thousands of likes and shares.

After nearly 40 years of teaching English Language and Literature, I think I can say, based on my own authority and that of most grammar books published in the last three or four decades, that if there ever was a polite-request distinction between “can” and “may” it disappeared at least 40 years ago. 

I have a strong suspicion that the reason this kind of false distinction persists is that if you press a less-than-fully competent teacher of English or uninformed speaker of the language to explain the difference between say “going to” and “will” or between “have seen” and “saw” or between “a few” and “a number of” they will retreat into pure nonsense claims that one is more “polite and formal” than the other.  Euphemisms and dysphemisms notwithstanding (see the Sour Glossary for definitions), the distinction between polite and less polite grammar disappeared from English usage in the 16th century with the abandonment of the distinction between “you” and “thee”  (the equivalents of the French “vous” and “tu”).  “Thee,” “thou” and “thine” persisted in prayers, bible translations and poetry, specifically because these words had disappeared from common usage and being rarefied seemed special and more poetic.  Ironically, "thee," "thou," and "thine" are the less polite, less formal and deferential forms but the most typical way that Christians address God.

Register is an important concept in linguistics.  The concept reminds us that different words and expressions fit better in particular contexts.  The language you use with your grandparents will likely be different from the language you use with your friends. If the context is legal or scientific or formal we expect to hear words and expressions that fit that particular context, but the idea that certain common grammatical expressions, particularly modal auxiliaries like “can,” “should,” “may,” might,” “will” and so on, can be distinguished from one another on the basis of politeness is simply wrong.

This being said, the truth about “correct” English grammar is that it is simply a collection of the most recently accepted errors.  Just about anything that is now considered “good English” was a mistake at some point in history.  You know all those words in English that end in “e” (like “bite,” “kite,” “courage,” “wide”):  we were supposed to pronounce those final “e”s, but since most people in the 16th century were mistakenly leaving them silent, the silent final “e” became the correct thing to do.  It’s an idea worth keeping in mind if you have ever had your self-esteem battered by a know-it-all grammar mavin, and based on the vitriolic responses to the above post, it seems like a lot of people have. 

Based on these comments, you might think I am opposed to grammar.  On the contrary, I think the posting above proves that we need to re-introduce grammar instruction into the school system.  The problem with the above posting (beyond satirizing a problem that hasn't existed for 40 years) is that it mistakenly describes "Can I borrow . . ." as a "colloquial" irregularity.  It isn't.  Grammar is constantly changing and at this point in time, "Can I borrow a pencil?" is correct standard English.

Will the Government Use C-51, Anti-Terrorism Legislation, to Track Canadian University Students with Outstanding Loans?

Ottawa has instructed the Canadian Revenue Agency (CRA) to be more aggressive in collecting outstanding student loans.   According to the Globe and Mail:

The Government annually has to write off some of the $16 billion owing in student loans for a number of reasons:  a debtor may file for bankruptcy, the debt passes a six-year legal limit on collection, or the debtor can’t be found.  (B2, 31 Aug 2015)

For more detail on how the government has disallowed University graduates from declaring bankruptcy and extended the 6-year limit to 15 years, see my earlier post  When Should You Repay Your Student Loan? How about . . . Never!  However, the real cause (“90% of cases”) of non-payment is that CRA has lost track of student borrowers because “the CRA wasn’t allowed to ask other departments for help because of privacy laws” (B2, 31 Aug 2015).

What the Globe article doesn’t mention is the possibility of using C-51, anti-terrorism legislation, to solve the problem.  In case you have forgotten, the official title of the legislation is the “Security of Canada Information Sharing Act” and the purpose of the Act is 

TO ENCOURAGE AND FACILITATE INFORMATION SHARING BETWEEN GOVERNMENT OF CANADA INSTITUTIONS IN ORDER TO PROTECT CANADA AGAINST ACTIVITIES THAT UNDERMINE THE SECURITY OF CANADA

You might not think of a Canadian University grad with a student loan as a terrorist, but that’s because you have forgotten how the Conservative Government has used C-51 to re-define terrorism.  Here, unabridged, is how C-51, which is now law, defines terrorism:

The following definitions apply in this Act.Definitions“activity that undermines the security of Canada” means any activity, including any of the following activities, if it undermines the sovereignty, security or territorial integrity of Canada or the lives or the security of the people of Canada:interference with the capability of the Government of Canada in relation to intelligence, defence, border operations, public safety, the administration of justice, diplomatic or consular relations, or the economic or financial stability of Canada;

With students currently owing $16 billion in loans, and a good chunk of them refusing to pay up (28% in 2004, 13% in 2014), guess what!  They are potentially interfering with “the economic or financial stability of Canada” and therefore qualify as terrorists under C-51.

Both the Conservative and Liberal Parties are in favour of C-51, only the NDP has promised to repeal this legislation.