Madness is on a roll; where is common sense?

A bit of news coming from the Fulton County (Atlanta) School System generated a lot of commentary recently.

The system is using a private grant to institute a pilot program that will pay 40 students $8 an hour to attend after-school tutoring sessions. If their grades go up, the program will also give them a cash bonus. I guess this is the new wave of public school innovation in America: bribery.

These students are definitely being subjected to behavioral modification, the obvious purpose of the grant. But the “modification” that comes out of this exercise may be very suspect. If students understand that doing poorly in school might result in a financial reward, many will be sorely tempted to hold back on academic progress in order to reap some short-term financial gain.

There may be a better financial stimulus for the public school system in the Atlanta area to use: a “pilot program” that would shut down academically bankrupt schools and give funds to parents to send their children to a school that actually works. It is an old concept called “vouchers” (a dirty word to the defenders of incompetence in public education). It doesn’t use bribery as is the case with the Atlanta “pilot;” rather, it can allow students a better chance to succeed in a setting more conducive to educational success.

The Atlanta public school system wasn’t the only bastion of madness recently. Congress and the muddled financial markets in the U.S. and abroad are rife with examples of logic run amok. Part of the “economic stimulus” discussions include allowing the major financial institutions that engaged in very risky investment strategies to write off much of their huge losses by carrying the losses back and applying them against more profitable years. This sends an even worse signal than the one the Atlanta school system is trying out on underperforming students. Telling the fiscal culprits that the rest of the taxpayers will bail out their losses will only result in more risky activity, since some of the large financial institutions will assume that the U.S. treasury will cover any future losses if they fall on their faces again.

There will likely be more losses in the financial mess that is still unfolding. The next shoe that is prone to fall will be from the potential default of companies that insured the bad collateralized debt portfolios that the financial institutions held. One of the reasons that they engaged in unsound lending practices was because they could get insurance to limit their exposure. Unfortunately for them, whoever was supposed to have determined the solvency of some of those insurers was asleep at the switch. One highly rated firm met all the standards for being able to write this type of insurance, yet it was allowed to write $60 billion of coverage on a capital base of just $500 million. Go figure.

There is no shortage of madness going on today. One has to wonder if concepts such as logic, prudence and common sense are still in vogue. Whether it is in the realm of public education or high finance, individuals and institutions that are allegedly intelligent and sophisticated are certainly doing some dumb things. It almost seems the trend is to put into practice Thomas Gray’s sarcastic line: “Where ignorance is bliss, ‘tis folly to be wise.”


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