Smack those kids up

It’s all about the socialization:

An exclusive CBS 2 investigation discovered Treveon Martin is one of at least 818 Chicago Public School students, since 2003, to allege being battered by a teacher or an aide, coach, security guard, or even a principal. In most of those cases – 568 of them – Chicago Public School investigators determined the children were telling the truth….

But even more alarming, in the vast majority of cases, teachers found guilty were only given a slap on the wrist.

The interesting thing is that if you do the math, it becomes apparent that the Chicago statistics indicate at least 18,851 students can be confirmed to have been beaten up in American public schools by teachers every year. That’s a one in 900 chance of being physically assaulted by a teacher, which makes attending public school more dangerous for children than using a chain saw, mowing the lawn, or shooting off fireworks.

And that’s just the kids who are aren’t afraid to complain about it….

The importance of incentive

A quant squint explains why bank traders tend to behave so irresponsibly when analyzing risk/reward probabilities:

Suppose that instead of betting on the biased coin you join in with all your colleagues and bet on the same toss of the first coin. Now you all win or lose together, the odds are even and the probability of getting your bonus is 50 percent. This is significantly higher than if you’d done the “responsible” thing of helping your bank to increase its expected return and decrease its risk.

This example makes it clear that your interests and those of the shareholders and depositors can be complete opposites. They probably didn’t teach you that at business school.

The fact that the federal government will then step in and bail out the bank – ensuring that bonuses are paid even in the event of failure that would normally result in bankruptcy – can’t help but exacerbate the undesirable appetite for foolish and unprofitable risk-taking.