Sunday, November 03, 2013

Rabbit Tracks and the Big Game of Education - Jeff Johnson's Understanding of What Makes a Great School for All in Alberta...

“You don’t follow rabbit tracks when you are hunting big game” said Jeff Johnson, Minister of Education in the Government of Alberta at a conference run by the Canadian Education Association. No one knows what the big game is in education in Alberta anymore, but we do know that Jeff Johnson is not the right man to lead the hunt for excellence and school transformation.

In response to a simple question asked by Naresh Bhardwaj (a former teacher) about class size this last week in the legislature he said this:
“when we’re looking at quality of education and the success of the student, the size of the class is not the most important thing to track or to try to affect. Obviously, the engagement of the parent is the most important, but second to that is the quality of teaching.”(my emphasis)

Where to start?


There is a mountain of data dating from the early 1970’s and Michael Rutter’s study of school effectiveness and the work of David Reynolds (both of which I was involved in) looking at the factors which impact school achievement. What we know is that there are a range of factors which impact school performance. While parental engagement is a “nice to have” it is not amongst the most critical in shaping school outcomes.


In terms of what we know after this forty years of very rigorous work is that the five key factors which shape outcomes are: (a) prior educational performance of the student – a student who has done well before is likely to continue to do so; (b) social class and economic status – students from impoverished backgrounds do less well than the students from high income families; (c) school size and culture, both overall size of the school and class size matter for a range of complex reasons; (d) whether the school is urban or rural – which is basically a matter of curriculum choice and ability to attract and retain quality teachers; and (e) whether the school is public, private or Catholic and the level of support it receives for its work from its funding source. This list comes from a comprehensive study of this question undertaken by the Government of Australia (2004).


Class size is a complex question, as Harvey Goldstein and Peter Blatchford  pointed out in the 1990’s (here) – it is not just size, it is what happens in class, who is in class and the degree of student engagement that impacts performance. There is not a simple cause-effect relationship. However, a US analysis and synthesis of almost 200 empirical research studies have shown that, for specific targeted purposes, reducing class size improves academic performance. The targeted purposes are: (a) for primary education; (b) for schools with a high intake of students from poor economic backgrounds; (c) where there is a high level of students in class with special needs; and (d) where the subject being studied is known to be challenging for many students. A key condition of success for small class size is that teachers have been trained to teach small groups.


A meta-analysis of 77 studies published by Smith and Glass in 1978 found that small classes were associated with higher achievement at all grade levels. The major benefits of reduction occurred where the number of students in the class was fewer than 20. They concluded that small classes were superior in terms of students’ reactions, teacher morale, and the quality of the instructional environment.

The key findings to review are those from the detailed analysis of PISA. These show that school climate and culture are far more significant that specific organizational measures. While they are related, culture and context speak more to the engaged environment of all aspects of schooling than any specific organizational measure, such as class size (see here, especially at page 37).


The question of teacher quality, which has preoccupied Jeff Johnson for some time (he favours merit pay for teachers – he made this clear when he worked with Dave Hancock on Inspiring Education) is an important question.  A variety of studies indicate that measures of teacher preparation and certification are by far the strongest correlates of student achievement in reading and mathematics, both before and after controlling for student socio-economic status and that teacher quality and qualifications count (see here). In particular, subject matter knowledge (those who have a degree in mathematics or science are much better at teaching math or science than those who do not), knowledge of teaching for student engagement and skills in the effective use of learning technologies are all seen as key ingredients for student achievement. Surprisingly for some, the key here is knowledge of teaching and learning processes – it is far more important than knowledge of the subject (Ferguson and Womack, 1993).


Not all teachers are great teachers all of the time. The biggest critics of bad teaching are good teachers. As part of any review there is a need to look at sensible professional practice, including peer-to-peer performance measures and continual performance assessment of teaching, including clear metrics for raising performance year after year. There is also a strong case to introduce a requirement for continuing professional development (CPD) for teachers as a requirement for continuing certification. The important thing is to have a clear, effective system that school Principals can use flexibly but is also fair to staff.


Merit pay for teachers is not a smart idea. A 2004 study in Tennessee showed that it had mixed success in rewarding teachers who increased student achievement. Assignment to career-ladder teachers increased mathematics scores by roughly 3 percentile points but generally had smaller and statistically insignificant effects on reading scores (here). Several meta analysis show that merit pay has little or no impact on student achievement, but does start to change adult behaviour in inappropriate ways. Schools have many educational goals – not only easily tested basic skills in math and reading, but the sciences, history, good citizenship, appreciation of literature, the arts and music, physical fitness, good health habits, and character. In any institution with complex or multiple goals, incentive systems that reward achieving only some of those goals (usually those most easily measured) will inevitably distort that system’s output. Rational agents, responding to incentives, will ensure that resources, time, and attention are redirected to goals being rewarded, and away from those (perhaps equally important but more difficult to measure) not being rewarded.  Thirty years ago, the methodologist Donald T. Campbell framed what he called a ‘law’ of performance measurement:


“The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.”


Since then, social scientists have documented how simple accountability or incentive systems based on quantitative output indicators have actually harmed the institutions they were designed to improve – not only in education but in business, health care, welfare policy, human capital development, criminal justice, and public administration. Merit pay is a rabbit track.


As for parental involvement or engagement, it is the prior education of parents and their economic status which has an impact on student achievement, not their engagement with the school. Parents who read a lot are more likely to provide an environment in which their children read and parents with a post-secondary education are more likely to be able to provide learner supports to their children than parents who did not complete their high school education. But this is more about socio-economic status and income levels than about engagement. According to the PISA data – consistent over time - about
50 per cent or more of differences between schools are jointly explained by the school climate and student characteristics and the school context. Parental engagement does not appear to be a significant factor.

So, I suggest to Naresh Bhardwaj MLA that he pay attention to the evidence and not much attention to Jeff Johnson, especially if Naresh Bhardwaj is seeking to make informed decisions on the basis of evidence. As for Jeff Johnson, well he should go out and shoot some rabbits – he seems to be tracking them.



References

Ferguson, P., & Womack, S .T. (1993). The impact of subject matter and education
coursework on teaching performance. Journal of Teacher Education, 44 (1), 55-63.


Saturday, November 02, 2013

Alison in Wonderland - The Alberta Premier and the Review of Her Leadership

In just twenty days Premier Alison Redford faces a leadership review by the Progressive Conservative Party of Alberta. The party is likely to permit her to continue, but it will be close.

What’s gnawing at the party are three things. First, it is clear that she is not a very capable leader. While she is by far the smartest Premier since Peter Lougheed, she is no team player. She is petulant, argumentative, single minded and rarely tows lines that have been collectively agreed. She is not liked as a person – even her security team finds her exceptionally difficult – and many within her cabinet simply do not trust her.

Second, party revenue is drying up. Corporate Calgary and the well known donors didn’t favour her in the leadership election, don’t like her and don’t want her. They are not paying. She has also alienated many faithful in the party – like all who supported Gary Mar in the leadership election – and she is not a focused, team playing fund raising machine.

The third reason is that the oil and gas industry (and many others) find the Government she leads basically dysfunctional. One seasoned oil executive said “it’s like dealing with a bag of play dough, you never know what shape the government will be in when you meet them!”. Since she became Premier, foreign direct investment in the oil sands has fallen by 90% - down from $27 billion to just $2 billion in 18 months. Her Government is one key factor – no one has faith in their handling of the Alberta economy. Price of oil, the reaction to Sovereign Fund takeovers by Canada’s Federal Government and concerns over pipelines are the other key factors. While Premier Redford is working hard to secure the three pipelines, she is not working in any convincing way to run a focused and aligned government.

The flooding in Alberta this last summer will help her for some attending the leadership review. She was seen to handle the initial days of the disaster in a positive way (no where near as positively as the Mayor of Calgary), but even this became evidence of her inability to manage her government. Contradictory messages sent to flood victims about compensation, lack of clarity over process and funding and then the “magical trick” of providing what now look like up to $6 billion in restoration costs to municipalities and individuals – money Alberta doesn’t have – are all causing concern.

Premier Redford will not state what level of support she will find satisfactory, though her predecessors have looked to 70% or higher as the staying afloat as Premier watermark. Those who know her well say that she is looking for 50% plus .0001 as a sufficiently winning number.

What may comfort her is that no one is clearly stepping up to the plate at this time, though Stephen Mandel, former Mayor of Edmonton and an astute politician who is an established team player, hinted at his interest “depending on a vote in November”.  Jeff Johnson, Minister of Education and a man who is part of a political dynasty (his father was an MLA) is also known to be interested, as is the pugilistic Deputy Premier, Thomas (“I haven’t a clue what harm I am doing to post-secondary education in Alberta”) Adam Lukaszuk.

I have suggested before that there is no one within the party who is not tainted with the experience of being in this government who should be allowed to lead. Rona Ambrose, Federal Minister of Health, is still by far the best bet to refocus and reinvigorate the party and she would make a tremendous candidate against the very smart and cunning Wildrose leader, Danielle Smith. Ms. Smith has moved her party close enough to the centre, has retained a focus on fiscal responsibility and is dealing with the “nutters and dingbats” within her party. She will do much better in the next election, partly because all she has to do is to let Alison Redford continue as she is and Albertan’s will flock to any credible alternative.


The party could be smart and ditch her now while there is still time to turn this sinking ship around. They are much more likely to re-arrange the deck chairs and send a note of caution to their leader. No courage will be shown. 

Tuesday, October 29, 2013

Canadian Journal of Teacher Research - Call for Papers

Human life, in and out of school, is complex. Personal, public, and educational changes can be dramatic, and these changes transform how we communicate. How we define and how we teach literacy may also have to change. Because our journal’s focus is Canadian teacher research, we necessarily choose to ground our work in schools – however schools might be designed. In our inaugural issue, dedicated to the teaching of literacy, we want to focus upon what it means to teach literacy and what it means to become literate. Perhaps, we need drastic pedagogical change: perhaps we need to embrace our traditions more tightly.

We have chosen the term “multi-literacies” to highlights two important, related changes. First, Canada is growing more culturally and linguistically diverse. Literacy calls us to negotiate community and global differences, as our lives increasingly interconnect. All languages, English and French included, change and morph. No longer is a single, standard language even possible. Migration, multiculturalism, and global integration intensify this process of change. Second, conceptualizing “multi-literacies” helps us consider the influence of new communication technologies. Meaning is increasingly multi-modal, and written literacy is now only part of a broader literacy that includes visual, audio, and spatial. The Internet is the chief example of literacy’s versatility – the interactive multimedia of a complex, communicating world.

In this context, we invite teacher research about how teachers can help children become literate. What does literacy mean? How can and should “multi-literacies” transform the curriculum and pedagogy of our language and communication? Will old pedagogies cut it? Must we embrace open-ended, flexible, and functional grammars to help language learners consider the cultural, regional/national, technical, contextual differences of language and the multi-modal meanings that seem so crucial to better communication in our world?

The Canadian Journal of Teacher Research is a new, online journal which enables teacher researchers to publish their work in a peer reviewed online journal, present the key ideas from their research in both a published paper and a blog, interact with readers about the issues raised in their papers, and present their ideas (if they chose to do so) using a short video. The Canadian Journal of Teacher Research is a new kind of journal for a new age of teacher-led research. The Journal’s aim is to improve practice on the basis of research evidence and understanding.

The first issue, launched at the beginning of 2014, will focus on literacy, multi-literacies, and the implications of literacy for student and teacher learning, school-based curriculum and instruction, school systems, and for teaching. Submissions should follows the guidelines attached and should be made to Professor Jim Parsons, a member of the Department of Secondary Education at the University of Alberta. Jim will serve as the Executive Editor of the Canadian Journal of Teacher Research

Although our first edition focuses on literacy research, please think expansively about both research and literacy. Submissions should document the article’s rationale for the research, the research process (methods and data) and analysis and then look at the implications of this work for teachers, school administrators, systems administrators and policy makers where it is relevant to do so. If, in addition to the article itself, you submit an opinion piece about the meaning of this work  (between 650 and 850 words) it will appear as a blog on the Journal site.

GENERAL ARTICLE REQUIREMENTS

• Cover Page – The title should be in 14 point, bolded, italicized, in Times New Roman, and centered on the cover page with authors’ name(s) and rank four spaces below the title in 12 point and centered. Include institutional affiliations and authors’ e-mail addresses.

• Abstract Page – All manuscripts should include an abstract following the title page. Include the title of the article above the abstract. Limit the abstract to approximately 150 words or less, single-spaced.

Body of Manuscript:
• Use APA guidelines in preparing the manuscript. See http://www.apa.org/journals/faq.html for formatting information.
• The Canadian Journal of Teacher Research accepts manuscripts of varying lengths – if length adjustments are required, the editors will contact authors.
• Leave a single space before and after headings.
• Use 12 point font size.
• Use Times New Roman font.
• Use 1″ margins throughout the document.
• References and citations should also be prepared using APA guidelines. All table, appendices, footnotes, and bibliographic information will be placed at the end of the article in 12 point Times New Roman.

Please also add this line to your email: This manuscript represents original research and is not under consideration for publication in any other journal, conference proceedings, book, or encyclopedia.

Please submit all articles for submission consideration to jim.parsons@ualberta.ca



Thursday, October 17, 2013

2014 and the US Government - Welcome to the Rocky Horror Show

Ninety one days from now the United States government is likely to demonstrate yet again its incompetence. The Jihadist section of the Republican Party will once again refuse to face the reality of the way the world works and demand that the US Government relentlessly pursue an austerity policy that would make the IMF and Angela Merkel blush in its audacity.

Ted Cruz, the Tea Party senator from Texas, is already signaling that Obama-care and social security spending together with other entitlements must be cut dramatically and no new spending permitted. He is joined by other tea party Jihadists – the new terrorists within Government who want hostage taking and bomb threats (blowing up the US economy should be seen for what it is – a threat to peace and stability and a weapon of mass economic destruction) who call for a massive scale back of equity based entitlements and health care supports. They also want tax cuts for the wealthy and corporations.
Their core argument is that the deficit – at around $17 trillion – is too high. They don’t accept the argument that it is all relative and that the real challenge is to get economic growth back to 3.5 – 5% in the US so that the ratio of debt to GDP becomes sustainable.

Nor do they accept the growing view that their own actions have wiped some 3% off the GDP of the US. That is, republicans who pursue this Jihadist stance are bad for the economy, for communities and for the standing of the US in the world.

Their current claim is that the President would not negotiate. Quite right. It is a long standing policy of western governments not to negotiate with terrorists, especially when hostages are involved and a weapon of mass [economic] destruction is about to be deployed. In some countries, the tea-party would be declared a terrorist organization and be banned.

It is very unlikely that a deal will be in place along the time-lines Congress agreed to yesterday. Both the Senate and the House passed budgets for 2014 in April but have not met in conference at all since then. Paul Ryan, failed Vice Presidential candidate and Chair of the House Budget committee, thinks that the gap between the two budgets is so wide as not to be worth discussing. Who is not negotiating now?

We can expect to see rating agencies downgrade the US, interest rates rise and more threats about the debt ceiling and a shut-down in the new year as well as new “cause célèbre” emerging between now and the deadlines established in the “kick the can down the road” deal struck yesterday. Three separate attempts to secure long term financial deals in Congress based on “blue ribbon” panels have failed. What hope is there now?

To make matters worse. The Jihadists have given up using evidence and reason as the core of civil debate and reject compromise as a normal behaviour in politics. They confront, challenge, cheat and demean – that is their stock in trade. When faced with compelling evidence – for example, that Government spending is falling faster under Obama than under any Republican since the way – they simply deny evidence and it deepens their conviction to their version of “truth”. They are born again by evidence that shows them to be dead wrong.


So sit back and watch incompetence, poor leadership and the gradual decline of the United States. It will be the horror movie of 2014.

Sunday, October 13, 2013

The Fall and Decline of Government in the United States

The United States is in the grip of a political drama the likes of which no one has yet seen before.

Imagine a group taking a family hostage and demanding that their relatives give up the hard won property, money and basic rights they had worked so hard for so as to get that hostage back.  The reason for the hostage taking in the first place are spurious, but so enshrined in the belief system of the hostage takers as to beyond reason, especially reason based on evidence. If they called themselves the Taliban and declared their mission a jihad, the full resources of the United States would be deployed against them.

In this case, they are called the Republican Party, their hostage is the American people, their belief system is a jihad on the idea that the State should enable equity and reduce poverty and their jihad is based upon poor evidence, a paucity of ideas and very shallow thinking. In fact, they have had no new ideas since their previous Jihad leader, Newt Gingrich, advances exactly the same thinking in 1996.

What it looks like is this: the GOP believe that deficits and debt are intrinsically bad, no matter that the deficit is falling in the US and that some level of US debt is inevitable, given the nature of its economy. They blame social security, Medicare and Medicaid and Obamacare for the deficit and debt and point to fiscal forecasts of impending doom as costs of these services rise as a result of the retiring baby boomers. Their solution is to make massive cuts in these essential services (essential to enable social mobility, economic stability and growth) and to cut taxes on the rich and corporations. They still believe in trickle down economics, despite countless demonstrations of its lack of efficacy. They still believe in austerity, despite growing evidence that this leads to economic decline, widespread unemployment (especially amongst the young) and to growing social inequity.

The GOP is staggered by President Obama’s refusal to negotiate while the government is shutdown and while an established tradition of the US congress (automatic renewal of the debt ceiling) is broken and bipartisan politics appears “dead” as a Dodo. But he is following the standard policy of dealing with terrorists and Jihadists – no negotiation with hostage takers.  He is simply saying, lets go back to a functioning Government (which includes raising the debt ceiling) and then we can discuss a strategy for the future of the economy. He will not compromise, and for the sake of good government, should not do so.

The Ryan idea of saying OK, we can go back to being a government for six weeks and we can raise the debt ceiling for six weeks while we start to cut social and health services is a dead-duck. Its rather like saying, we will give you your hostage back for a few days, but we will take them back again if you don’t do exactly as we ask. Who would agree to that?

Paul Ryan, the totally vacuous Chair of the House Budget Committee, has no new ideas. John Boehner, Speaker of the House of Representatives, has no new ideas.  Neither are interested in an evidence based conversation. The democrats are criticized for having the idea of a strong and abiding commitment to equity through the redistribution of wealth – their core policy for the last sixty years. The lack of movement is seen as a reality TV show by the media who seem preoccupied with winners and losers. It looks to sensible people like the end of reason, which in fact it largely is.

So what will happen? Obama will not budge and all the evidence points to the Republicans failing to win the argument, so no deal. The US will default and then the President will act unilaterally and be subject to impeachment.


Aside from the economic consequence of all of this, there are consequences for our understanding of government and governance. The US Congress is dysfunctional – not just as a result of this current debacle but from the whole period since the middle of Bush 2’s second term. Agreed, Obama is a weak and ineffective President (good on promise and imagination, weak of execution) – but only Johnson could be seen to be a President who could stick handle this kind of nonsense.  The most worrying consequence of all of this is that the US can be seen not to have a Government that anyone could take seriously.

Tuesday, September 24, 2013

27th September - Al Gore Day in Memory of Inconvenient Un-Truths



The International Panel on Climate Change (IPCC) is a political agency that uses science to make a particular political case for change. It is not an independent scientific agency. It does not conduct research. It does not consult with all of the worlds leading climate scientists. It makes use of non-peer reviewed materials to justify some its claims. It makes significant mistakes. It is actively pursuing an agenda. Not all of those who contribute to its work are free of conflict of interest – several work or are senior consultants to the World Wild Life Fund, which also has an agenda. Its Summary for Policy Makers is edited from the original science based submission to reflect the agenda of UN member governments.

This week the IPCC will begin the release of its fifth assessment of the state of the worlds climate. It will accept that no significant increase in surface temperatures have occurred for between fifteen and twenty years and that the climate models it uses for its scenarios are flawed – constantly overestimate both the rate and degree of warming. Nonetheless, it will stick to its guns that the primary cause of warming in the current age is man and that CO2 emissions are what we should focus on. It will issue dire warnings that urgent action is needed.

IPCC vice chair Francis Zwiers, director of the Pacific Climate Impacts Consortium at the University of Victoria in Canada, co-wrote a paper published in Nature Climate Change that said climate models had "significantly" overestimated global warming over the last 20 years — and especially for the last 15 years, which coincides with the onset of the hiatus in rising temperatures.

Judith Curry, a climatologist who heads the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology. She was involved in the third IPCC assessment, which was published in 2001. But now she accuses the organization of intellectual arrogance and bias. "All other things being equal, adding more greenhouse gases to the atmosphere will have a warming effect on the planet," Curry said. "However, all things are never equal, and what we are seeing is natural climate variability dominating over human impact."

Roger Pielke Jr., a Professor of Environmental Studies at the University of Colorado in Boulder is also a vocal critic of the climate change establishment in general and the IPCC in particular. He asks this simple question: “how is it that this broad community of researchers -- full of bright and thoughtful people -- allowed intolerant activists who make false claims to certainty to become the public face of the field?”. He cites IPCC in particular (see here).

We have been here before. Governments through the IPCC are pursuing an agenda that seeks to give them permission to introduce new taxes, to make strategic investments in “green energy” and penalize the oil, gas, coal, energy and mining industries. They seek a license for carbon taxes and opportunistic investments that fuel the wind, solar and renewable fuels lobbies -  despite the consistent failure of wind and solar to produce affordable, market-based solutions. It is an agenda for wealth transfer – with developed countries being asked to pay a premium to developing countries for their “past carbon sins”. It is also an agenda for increased energy poverty in the developed world.

So I for one will not be surprised to hear that unless we act now we are all doomed. We should name Friday – the day of the publication of the Summary for Policy Makers – Al Gore Day in memory of the inconvenient un-truths associated with his documentary. It will be a suitable commemoration.

Saturday, August 10, 2013

Peak Renewables



EU members states have spent about €600 billion ($882bn) on renewable energy projects since 2005, according to Bloomberg New Energy Finance. This funding was intended to help green energy achieve commercially competitive status and make a significant contribution to lowering carbon emissions and reducing the “threat” of climate change.


Now most European governments are backing off this strategy. The most recent shift came from the Czech government, which has decided to end all subsidies for new renewable energy projects at the end of this year. Almost all EU member states also have begun the process of rolling back and cutting green subsidies.

There are many reasons for this. Take the case of Spain. By failing to control the cost of guaranteed subsidies, the country has been saddled with €126bn of obligations to renewable-energy investors. Now that the Spanish government has dramatically curtailed these subsidies, even retrospectively, more than 50,000 solar entrepreneurs face financial disaster and bankruptcy.

Germany is another interesting case. During the past year, the wave of bankruptcies in solar has devastated the entire industry, while solar investors have lost almost €25bn on the stock market.
Now Germany plans to phase out subsidies altogether so as to stabilize energy costs, its solar industry is likely to disappear by the end of the decade. More than half of the world’s solar panels are installed in Germany. Yet for many weeks in December 2012 and January 2013, Germany’s 1.1 million solar power systems generated almost no electricity. During much of those overcast winter months, solar panels basically stopped generating electricity. To prevent blackouts, grid operators had to import nuclear energy from France and the Czech Republic and power up an old oil-fired power plant in Austria.
This in a country that closed in nuclear plants in favour of solar.

It gets worse.  Almost 20 per cent of gas power plants in Germany have become unprofitable and face shutdown as massively subsidized renewables flood the electricity grid with preferential energy. To avoid blackouts, the government has had to subsidize uneconomic gas and coal power stations so that they can be used as back-up when the sun is not shining, the wind does not blow and renewables fail to generate sufficient electricity.

The EU also is also quietly rolling back its renewable agenda, which EU leaders now accept has been raising energy prices across the Continent. At a summit in Brussels in May, European  leaders indicated that they intended to prioritize the issue of affordable energy over cutting greenhouse gas emissions with the focus on stabilizing (and possibly lowering) energy costs. The EU summit signaled that Europe intended to restore its declining competitiveness by supporting the development of cheap energy, including shale gas, while cutting green energy subsidies.  Europe, The Washington Post recently suggested, “has become a green-energy basket case. Instead of a model for the world to emulate, Europe has become a model of what not to do.”

Given that the link between CO2 emissions and climate is weakening in the light of actual evidence (as opposed to models of these relationships) and that the global economy continues to struggle, economics is trumping ideology as many always said it would. Rather than seeing peak oil or peak coal, we are in fact witnessing the decline of the commitment to supporting renewable energy and for good reason.


Wednesday, August 07, 2013

Austerity and Reality



The primary cause of the 2007/8  financial crisis was private debt, especially the debts owned by private banks. This was especially focused on housing “scams” operated in concert by the banks – using bundled mortgages to create new kinds of fiscal instruments and a hitherto unknown level of debt-risk – which in turn led to a collapse of the housing market. The response to this was, world-wide, a confused fiscal policy ranging from austerity and budget cuts and stimulus coupled with low interest rates and pumping cash into the system (quantitative easing).

The new version of all of this is that it isn’t private debt that needs now to be tackled (e.g. by higher interest rates) but public debt that has to be dealt with. The rationale is that it is the level of public debt that impacts investor confidence (the so called “confidence fairy”). The trouble is that investor confidence is back as a high, but the pursuit of austerity continues. Put another way, this theory of action – the critical need to restore confidence justifies austerity – continues to drive policy, even though confidence is back.  Meanwhile, the banks continue to be problematic and are developing new forms of risk ventures which will lead, at some point in the next forty eight months, to a further debacle.


How can the basic causes of the crisis now be forgotten in the rush to austerity? Why is it that a disproven economic theory (we need to do magic to call up the confidence fairy) continues to drive policy makers?