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EXTRA CREDIT

The Birdman
of Altamont

By Alan Friedman

HOW CAN WIND ENERGY BE HARNESSED WITHOUT HARMING ENDANGERED EAGLES AND HAWKS? BY LOOKING AT THE ISSUE FROM A BIRD'S-EYE VIEW.
IN THE SAN FRANCISCO BAY Area, look up and you'll find magic overhead. Thick waves of fog roll in from the ocean by night, making rumors of the top halves of skyscrapers. By day, bay winds push east and, on their way to the hot Central Valley, spin more than 7,000 windmills. Powered by the wind, which doesn't cost a penny, ships itself, and lasts forever, these turbines that line the ridges of Altamont Pass together generate more electricity than most nuclear or coal power plants. But they don't expel airborne toxins or pollute waterways in the process.

Like just about any deal that seems too good to be true, this one came with a catch. Only after Kennetech Windpower, Inc., erected many of its turbines were golden eagles and red-tailed hawks regularly sighted. Most of these endangered birds of prey evaded the turbines with ease while soaring and diving for desert squirrels and jackrabbits. But not all were so lucky with the turbines' immense blades--2,000-pound heavyweights that outspan the wings of a 747 and exceed tip-speeds of 150 miles per hour. Five hundred downed birds per year turned this hallmark of environmentalism into a wildlife disaster.

So Kennetech called in the experts and charged them with determining what was to be done. Melvin Kreithen, assistant professor of biological science, the world's foremost authority on the sensory perception of homing pigeons, and a clean-energy advocate to boot, happily accepted the invitation.

After 25 years of experiments on the windy rooftop of Langley Hall and in his lab five stories below, Kreithen has concluded that humans and birds don't perceive the world in the same way. Consider sound. "Birds can hear frequencies 14 octaves below middle C on the piano, down there where hums are deeper than any bass note we could ever imagine," he says. Visually, humans perceive no colors beyond the spectrum bound by red at one end and violet at the other. But a bird's world is sometimes painted in ultraviolet, a shade of purple too deep and rich for human eyes, Kreithen says.

With the help of Kreithen and his knack for studying problems from a bird's vantage point, the task force assessed ways to lessen the hazards for the endangered species.

Moving the windmills wouldn't make sense, they surmised. "The very same things that make a place good for a windplant also make it attractive to birds of prey," Kreithen explains. "Imagine being an eagle in those hills, getting a free ride from the thermal currents and updrafts, being able to see 30 miles in any direction. No eagle wants to be in the lowlands."

Relocation of the windplant itself wouldn't solve anything either. In California, land so close to a major metropolitan area rarely remains undeveloped for long. A bird sanctuary would doubtfully be a part of Altamont's future.

The task force concluded that relocating the birds would also spell disaster. Altamont Pass offers a bumper crop of squirrels, rabbits, and voles--a veritable feast for birds of prey. "Usually, one eagle nest is found every 200 square miles," says Kreithen. They found 50 active nests in Altamont--an area of 80 square miles. "This area represents part of the largest breeding colony of golden eagles in the world, and nobody knew that until two years ago as a consequence of our study," he says.

Hoping to mitigate the danger, Kennetech is now heeding the task force's advice. Wires and plastic spikes have been installed to prevent perching on the most lethal turbines. Zebra stripes that blur into bull's-eyes have been painted on some blades to ward birds away from danger. The newest turbines can be shut down in a moment's notice if a flock approaches. Before erecting new turbines, Kennetech now scouts for breeding sites and migration routes.

The blades are posing less of a threat than at first, without any sacrifice in windpower. It seems an acceptable compromise has been reached. Although no one, not even Kreithen, knows for sure what the birds think.



Insecurities
Exchange

By Valerie Gregg
BUSINESS PROFESSOR KULDEEP SHASTRI'S PROBE INTO NASDAQ PRICE-FIXING ALLEGATIONS OFFERS A DIFFERENT ACCOUNT.


IT WAS ANOTHER SEXY WHITE-collar crime story: dealers on the NASDAQ stock exchange allegedly conspiring to fix prices, rigging the market to reap profits at investor expense.

First came the 1994 Journal of Finance article implicating brokers on the National Association of Securities Dealers exchange (NASDAQ) of agreeing to inflate the difference, known as the spread, between the selling and buying prices of their stocks. The greater the difference, the more they stood to profit. Sniffing another Ivan Boesky or Michael Milken scandal in the air, the media began its feeding frenzy, investors sued a slew of NASDAQ brokers, and the US Department of Justice and the Securities and Exchange Commission (SEC) began investigating.

But Katz Graduate School of Business professor Kuldeep Shastri had his doubts. "This was a major charge," he says, pointing out that such an accusation is too serious to be used without discretion. If companies collude to fix prices, they hamper the competition crucial to a free-market economy and violate federal antitrust laws. So Shastri felt it was important to be certain the evidence was clear before jumping to a conclusion. "Before settling on an explanation like illegal collusion," he says, "we wanted to make sure that the high spreads weren't due to any more fundamental economic reasons."

He and two colleagues--doctoral student Lynn Doran and faculty member Kenneth Lehn--went about probing the case more deeply and effectively than the initial whistleblowers. According to Shastri, the "apples to oranges" approach of earlier examinations called the findings into question. Making comparisons between the New York Stock Exchange (NYSE) and NASDAQ calls for first acknowledging each exchange’s unique structure and the distinct set of forces that affect each of them.

"We came up with a cleaner way of looking at the issue," he explains, a way that would take relevant differences into consideration. The NYSE, for example, deals with older and more established stocks. NASDAQ, established only in 1971, carries securities for newer and smaller companies, most of which don't have a track record to speak of. Only a handful of NASDAQ companies can boast the success of Netscape Communications and Microsoft. Also, NYSE prices are set on the trading floor, in public, and are constantly affected by competing bids. NASDAQ stocks, on the other hand, are traded by telephone and computer on relatively private terms.

Without outrightly refuting the charge of illegal collusion, the study went on to propose a reasonable, if less flashy, alternative. They considered that NASDAQ's relatively new and unpredictable stocks, though they've been known to pay off wildly, also tend to grip dealers with relentless headaches. NASDAQ stocks often take longer to sell than their NYSEcounterparts whose track records are many miles long. And when NASDAQ stocks finally do sell, they do so in high volume. For the dealers who have to cover the cost of carrying long-term inventory, this is an expensive and risky way of doing business. It may lead them, independently and perfectly legally, to compensate by cushioning spreads. In this case, the high spreads represent nothing worse than a retail markup.

Lehn and Doran, Shastri's colleagues, presented these findings to the Department of Justice and the SEC. Both organizations went on to reach agreements with NASDAQ brokers in the summer of '95 at which time the dealers, without admitting or denying guilt, conceded to allow their phone calls to be monitored for any indication of collusion.

The industry critics who have been certain of conspiracy from the very beginning dismiss such measures as a slap on the wrist. But Shastri remains hesitant to speak for anyone else's ethics or motives. After all, at NASDAQ, as in any game of chance, everyone holds their cards close to their chest. And in these games, no one has a better poker face than the dealers.



Learning to
Move On

By Alan Friedman
IN WAR-TORN BOSNIA, TEACHERS AND POLICYMAKERS PICK UP THE PIECES WITH HELP FROM PROFESSORS AT THE INSTITUTE FOR INTERNATIONAL STUDIES IN EDUCATION.


NOREEN GARMAN HAS BEEN teaching long enough to expect distractions, but nothing like the fear of shelling and snipers that loomed over her first meeting in Sarajevo with Bosnia's chief educators. "We met in a building on the front line," says the professor of education. "The minister of education kept apologizing about having to move to rooms in the back because the front rooms were being shelled."

That sort of tenacity sustained Bosnian teachers and students through the war. Many teachers worked without pay. Parents and children took advantage of lulls in sniper and missile fire before dawn and after dusk to walk to and from school. And when schools themselves were destroyed, teachers and students took to the basements of nearby churches and homes.

Now, revitalizing the schools is no less demanding a task than raising homes and roads from the rubble. For one thing, the students have changed, both literally--there are thousands of refugee children now entering the Bosnian school system--and emotionally. How do you teach children whose families have been ravaged by war? How can the importance of school be restored when their world had become so dangerous?

The plight of Bosnian education is complicated further by the dramatic political changes leading up to the war. Since the end of World War II, a central ministry of education had sought to synchronize the steps of every classroom. In 1991, when the overarching socialist Yugoslav republic ceased to exist, the educational system foundered.

Garman arrived in the Bosnian capital in December 1995, just days before the Dayton peace accords were signed. As co-director of the Institute for International Studies in Education (IISE) of Pitt's School of Education, Garman would meet with educators from cantons in Bosnia and Herzegovina to discuss the Program for Educational Renewal, an ambitious project to revitalize the education of teachers. (IISE also has current projects in China, Laos, Mongolia, Egypt, and Eastern Europe.)

Bosnian educators have targeted their system's historic inflexibility for change. "The system of the past had a fixed national curriculum, very specified and detailed, per subject, per grade," says professor of education Stephen Koziol, Garman’s primary collaborator for the program. "The beginning of differentiation of student success came as early as the end of fourth grade." Later, qualifying students went on to the academic track--the well-known "gymnasium." "Others were channeled to the technical or vocational schools. Moving from one track to another was impossible," Koziol adds. "There had always been a strong emphasis on the acquisition of information--a strong emphasis on teacher presentation and student drill."

Throughout Bosnia's socialist period, educators there and in the United States judged these methods a success. Literacy rates climbed higher than ever before. But where war has forever shaken students and their schools, the tried-and-true methods of a calmer age will no longer work, the workshop participants insisted. Says Garman, "The children are no longer the same. They've lost their innocence, their faith in social systems. Teachers are no longer able to teach simply by lecturing."

Out of IISE workshops in Bosnia came a plan to make learning meaningful again without compromising curricular standards. "Much greater emphasis must now be placed on the process of learning, not simply the informational aspects," Garman explains. Koziol adds, "What we're trying to achieve is active learning, still in the service of clear-cut curricular goals. It's a way of getting more out of the curriculum than simply the transmission of information." Pitt professors have trained 200 teachers from at least 100 schools so far.

"These innovations aren't always new to the teachers," Koziol notes. "Facets of active learning were part of a hidden curriculum in the past, but it was always done without a great deal of discussion among teachers. Our presence provided a safe forum where they were willing to share their ideas." In one participant's words, "a small miracle" occurred when Croat and Muslim teachers who had once worked together were reunited in the same room and began to cooperate. "In the final analysis," Koziol notes, "that may be the most important thing we contribute."


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