December 16, 2008 · 9:40 am

Public Participation – A public value problem

Here’s a synopsis of the problem.  People are increasingly disengaging themselves from government (local, state, and federal).  As they become more disengaged, there is a growing dissonance between public values and public policy (i.e. policy elites command the agenda, public input is minimized, sometimes to zero).  As dissonance increases, disengagement increases until the system which supports the policy apparatus collapses in upon itself, much like a dying star.

So, how do you reverse this inertia feeding increasing dissonance?

Perhaps by encouraging students/public to ask provocative questions — as this interfiew with Jessica Fridrich states, the questions are sometimes fifty percent of the answers.  For a bio article on Jessica Fridrich see NYT “Jessica Fridrich specializes in problems that only seem impossible to solve“.

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December 14, 2008 · 7:11 pm

Just because you model it wrong, doesn’t mean it failed

Do markets really fail, if the failure is really in the fact that the financial system had the wrong belief?  In other words, the market does note suffer a failure simply because the model you use to predict market performance is wrong.

Interesting essay in the NYT magazine today, which leads with:

Among the most astonishing statements to be made by any policymaker in recent years was Alan Greenspan’s admission this autumn that the regime of deregulation he oversaw as chairman of the Federal Reserve was based on a “flaw”: he had overestimated the ability of a free market to self-correct and had missed the self-destructive power of deregulated mortgage lending. The “whole intellectual edifice,” he said, “collapsed in the summer of last year.”

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December 12, 2008 · 3:57 pm

Market Failure, Public Value Failure

When the two failures occur simulatanously, you have a serious problem.  See What you don’t know about a drug can hurt you in the WSJ.

“What’s happening in oncology is happening in all other fields of medicine,” says study co-author health economist Scott Ramsey at the Fred Hutchinson Cancer Research Center in Seattle, who checked more than 2,000 chemotherapy trials recorded in the federal registry. “You may not get a full picture of whether a drug is effective or not. With the stakes being what they are in terms of money and human lives, this is a big problem in my view.”

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December 11, 2008 · 8:13 am

Books to read

Adam Frank, The Constant Fire: Beyond the Science vs. Religion Debate – examines division of science and religion — background for public values/discourse and science policy

John Kenneth Gailbraith, The Great Crash of 1929 — a classic on the causes… appropriate for today’s debates on economic/finance policy

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December 11, 2008 · 7:52 am

A milestone

Received word I passed my field exam.

We pause for a moment to celebrate…. “YEA!”.

That’s enough celebrating, on to the dissertation proposal.

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December 9, 2008 · 4:58 am

Cybersecurity – Market Failure or Public Values Failure or both?

The Center for Strategic and International Studies is delivering a report, “Securing CyberSpace for the 44th President,” which notes, among other things, :

“We believe that cyberspace cannot be secured without regulation,”

The report, which offers guidance to the Obama administration, is a strong indictment of government and private industry efforts to secure cyberspace to date. “The laissez-faire approach to cyber-security has failed,” Mr. Kellermann said.

So, the commission concludes the market has failed to secure cyberspace.  And, it has also concluded that current government policy has failed to secure cyberspace.

In the intro, the report reads:

We advocate a new approach to regulature that avoids both prescriptive mandates, which could add unnecessary costs and stifle innovation, and overreliance on market forces, which are ill-equipped to meet public safety and national security requirements.

So, we have reasons why the market fails with regards to cybersecurity.

Not surprisingly, DHS is defending itself against the Commissions’ criticism of how cybersecurity has been managed.

“To be fair, we are undertaking something not unlike the Manhattan Project,” Keehner said. “Billions of dollars are going into this effort. We’re the first to admit there is more work to be done, but the progress that we have made should not be discounted.”

For further reading — see presentations made at CSIS event called

Improving Cybersecurity : Recommendations from Private Sector Experts

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December 8, 2008 · 3:14 pm

Increasing Access — Enhancing Public Values to Increase Market Value

Change.gov represents President-elect Obama’s efforts to involve everyone in his efforts to change government. Can this approach work?

{Note to self — study this}

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December 4, 2008 · 12:16 pm

Information Asymmetry – the Disease

Or more of what you don’t know will hurt you.

Seems we will have even less science journalism:

CNN is eliminating its seven-person unit covering science, the environment, and technology, saying its “Planet in Peril” programs do the trick. Curtis Brainard, who assesses environmental coverage for the Columbia Journalism Review online, in a comprehensive piece on the move, said: “[T]he decision to eliminate the positions seems particularly misguided at a time when world events would seem to warrant expanding science and environmental staff.”

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November 30, 2008 · 7:06 am

Information Asymmetry – A case of what you don’t know will hurt you

This blog entry describes how and why opaqueness is a must on Wall Street and notes the obvious — that a drive to maintain informational advantage frustrated attempts to regulate (and continues to do so) dangerous practices of asymmetry.

Transparency is the enemy of information advantages, and opacity is the friend of high margin investment products.  In the wake of unprecedented regulation after the dot-com bubble and the Worldcom and Enron scandals, Wall Street turned transparency and disclosure on its head by layering so many documents onto each other, few people ever bothered to read them.  This obfuscation of otherwise transparent information recreated new informational asymmetries leading to new high margin businesses.  Informational advantages are what drive Wall Street profits.

A drive to maximize informational advantage defeats market mechanisms and public regulatory efforts leading to both market and public value failure.

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November 30, 2008 · 6:49 am

Is technology a solution to information asymmetry?

While the author of this article is focusing on the “privacy” issues arising from research (Reality mining) using data found with new technologies, I think he highlights a means to battle information asymmetries (IA).  IA leads to situations including moral hazards and I think act like a cancer on markets — and can lead to market failures.  So, can technologies that defeat IA be a good (thing)?

And, so far as privacy is concerned, perhaps we should remember the not too distant past:

“The new information tools symbolized by the Internet are radically changing the possibility of how we can organize large-scale human efforts,” said Thomas W. Malone, director of the M.I.T. Center for Collective Intelligence.

“For most of human history, people have lived in small tribes where everything they did was known by everyone they knew,” Dr. Malone said. “In some sense we’re becoming a global village. Privacy may turn out to have become an anomaly.”

Some links to follow:

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