Education as an Investment.

Posted on June 13, 2015 by jsh54

The median survival rate for metastatic breast cancer is three years from time of diagnosis. However, as any recently-diagnosed patient—or their desperate SO—will tell you, statistics are agglomerations of individual cases. They don’t tell you YOUR fate. It’s the same with college degrees. On average, over a lifetime people with college degrees earn a lot more than do people without college degrees. That doesn’t mean that all college graduates earn more than all non-graduates. That also doesn’t mean that the extra income earned is worth the cost of getting the degree.[1] Peter Cappelli, who teaches at the University of Pennsylvania’s Wharton School, elaborates on a theme he first sketched out in a WSJ Op-Ed in November 2013.[2] Cappelli’s deeply-researched book addresses a raft of issues of the day.

The “Great Recession” is but the latest shock to the American economy (and the “American Dream” come to that). It led students to focus on career-oriented majors as defined by Labor Department projections, rather than a broad liberal arts education; their parents usually resolutely back them up in this choice. This has been very distressing to broad liberal arts educators and to the skinny ones as well. Cappelli warns that many of these majors are so knowledge-specific and so likely to be drowned in new graduates that students are actually doing themselves long-term harm. For example, 30 percent of recent engineering graduates couldn’t get jobs in engineering. Capelli argues that liberal arts degrees often are actually a better preparation for adapting to unexpected developments than are the loud-mouthed “career” majors.

American students (and their families in equal measure) pay about four times as much for a college degree as do students in other Western industrial countries. A lot of this is financed through debt, rather than from savings. Senator Bernie Sanders has floated the idea of a free college education at America’s public colleges. Both those who graduate and those who fail to graduate can find themselves burdened by a lot of debt. Naturally, consumers have become enraged at the sellers. Conservatives have argued that the expansion of financial aid and borrowing by students has just allowed colleges to raise their tuition. Critics rightly point out that the administrative component of college staffs have grown 50 percent faster than have instructional staff. As presented to the public this fact conjures visions of Rolex-adorned Assistant Vice Deans for Something-or-Other. In fact, most of the growth is in support staff dealing with the reality that Johnny can’t read, claims he will go to pieces under the pressure of college, and only came here to play baseball anyway.[3]

One of the reasons that college educated people do better than the others is employer-bias in hiring. Currently, at least 40 percent of graduates end up in jobs that don’t require a degree. Employers still preferred them to people without degrees. (Nearly 60 percent of parking lot attendants have some college.[4]) What happened to the other job applicants? They got shoved farther down the income ladder, displacing teen-agers just trying to get some work experience and pocket money. This displacement may be part of the explanation for the mounting drive for a higher minimum wage.

Above all, there is an evident mismatch between American education and the economy.

[1] Peter Cappelli, Will College Pay Off? A Guide to the Most Important Financial Decision You will Ever Make (PublicAffairs, 2015).

[2] See “Major Uncertainty,” November 2013.

[3] See the Cardale Jones Twitter mishagosh for an extreme example of the latter. https://en.wikipedia.org/wiki/Cardale_Jones#Twitter_controversy

[4] They can’t all be living hand-to-mouth while they write the Great American Novel.

American Public Opinion in June 2015.

Posted on June 8, 2015 by jsh54

In 2014, 30 percent of people described themselves as social liberals, while 34 percent described themselves as social conservatives. That totaled 64 percent of the vote, while the other 36 percent were mostly “moderates.” In June 2015, 31 percent of people described themselves as social liberals, while 31 percent described themselves as social conservatives.[1] That totaled 62 percent of the vote, while the other 38 percent were mostly “moderates.”

What’s a “social liberal”? The share of the population favoring social liberal causes greatly exceeds the share identifying as social liberals. If the social liberals are added to the moderates in the two polls, we end up with totals of 65 percent in 2014 and 69 percent in 2015. Some 55 percent favor legalizing recreational marijuana, support gay marriage, and say that it is acceptable for two gay men to kiss in public.[2] All these would once have been identified with social liberalism. If it is posited that social conservatives would oppose these measures, then that makes it possible to conjecture how many “moderates” hold social liberal views. If 30 percent identified as social liberals in 2014 and 55 percent of the total favored the liberal causes, then 25/36 of the moderates supported these social liberal causes. Applying the same calculations to 2015, 24/38 of the moderates support these social liberal causes.

To belabor the obvious, there has been a shift of public opinion toward social liberal causes between 2014 and 2015: liberals added 1 percent who migrated from the moderates, and the moderates picked up 3 percent who migrated from conservatives. Any Republican wager on a socially conservative position in 2016 looks to be a loser. At the same time, the social liberal causes mentioned in the polls are all about enhancing individual rights, especially with regard to identity. The polling doesn’t tell whether the moderates will also support social liberal causes when it comes to expanding social welfare.

In June 2014, 53 percent of Americans regarded Hillary Clinton as trustworthy. Then came the e-mail story and the questions about the Clinton foundation accepting donations from foreign donors with business before the State Department. In June 2105, 41 percent of Americans regarded Hillary Clinton as trustworthy.[3] As views on her trustworthiness declined, her favorability numbers went up. In April 2015, 36 percent had a favorable view of Hillary Clinton; in May 2105, 42 percent had a favorable view[4]; in June 2015, 45 percent had a favorable view. Thus, although 45 percent of the June 2015 polling sample viewed her favorably, only 41 percent viewed her as trustworthy. So, some 4 percent of voters—all of them Democrats?—are rubbing their hands together and going “she’s a liar, good!” The same percentage, 49 percent, do not regard her as trustworthy (not trustworthy + don’t know) and view her unfavorably. It is likely that the people who distrust Clinton are divided between Republicans, Independents, and dissident Democrats. The size of the dissident Democrat community is nothing to be sneezed at. In June 2015, 45 percent of self-identified Democrats believed that their party had too few candidates running for President in 2016[5], while 52 percent were pretty sure of for whom they would vote.[6] The dissident Democrats are never going to vote Republican. If push comes to shove, they will hold their nose and vote for Clinton.

[1] “Poll Watch,” The Week, 5 June 2015, p. 19.

[2] “The way we were in 2014,” The Week, 31 December 2014, p. 12. Curiously, 72 percent are OK with lesbians kissing in public. This groups all social liberals with all moderates and about one in seven social conservatives. Probably explained in part by the popularity of lesbian porn among men.

[3] “Poll Watch,” The Week, 12 June 2015, p. 17.

[4] “Poll Watch,” The Week, 15 May 2015, p. 17.

[5] In particular, there is reason to think that most Democrats would be happier if a different Clinton was running for President. One poll reported that 42 percent listed Bill Clinton as the most admired president of the last quarter century. At 18 percent President Obama ranked second. See: “The way we were in 2014,” The Week, 31 December 2014, p. 12.

[6] “Poll Watch,” The Week, 5 June 2015, p. 19.

More degrees than a protractor factory.

Posted on June 8, 2015 by jsh54

Senator Bernie Sanders favors making a BA at the 629 public four year colleges a free good for all “qualified” applicants. He says that this would be on the European model. https://www.facebook.com/OccupyDemocrats/photos/a.517901514969574.1073741825.346937065399354/844186619007727/?type=1&theater

What is the American model?

	Number	Enrollment
Public 4-year institutions	629	6,837,605
Private 4-year institutions	1,845	4,161,815
Public 2-year institutions	1,070	6,184,229
Private 2-year institutions	596	303,826
Total	4,140	17,487,475
Undergraduate		14,473,884
Graduate		2,097,511
Professional		329,076

See: http://www.infoplease.com/ipa/A0908742.html

What is the European model?

European universities.

Country. Universities. Students. Percent.[1] Cost. Drop-out rate.

Britain. 115 2.6m. 43 E10,500. 8.6 percent.

France. 80 2.3m. 39 E 177. 42.0 percent.

Italy. 79 1.8m. 43 E1.5-3,000 45.0 percent.

Germany. 108 2.4m. 42 Free. 28.0 percent.

Poland. 98 1.8m. 54 N.A. 24.0 percent.

Source: http://www.theguardian.com/world/interactive/2012/may/31/european-students-statistics-interactive

The obvious lesson to draw here is that if something costs you something, you value it more. Where college costs are high, the drop-out rate is low; where college costs are low, the drop-out rate is high. “Eh, I’ll take a shot at it instead of looking for work, but if the professors want real work (or if the girls won’t come across), I’ll bag it.”—Anonymous.

http://www.bbc.com/news/education-11438140

So, France, Germany, and Italy all have virtually free tertiary education, BUT they spend one-third to one-half of what the USA does. How do they make it work? They admit a lot of kids from good schools, then throw them in the deep end of the pool and tell them to swim for it. No hand-holding. No office hours with professors. No counseling. No Writing Centers and Math Centers for free tutoring. No “second chance” when young Bobby messes up. You need help writing a paper? Hire a grad student with your own money. Short of money and you don’t want to admit to your parents that you’ve messed up? Try dealing hash. (I’m told that the “Milkweg” in Amsterdam used to be a good place to go, but how would I know? See: http://en.wikipedia.org/wiki/Melkweg ). Also, no sports teams. No dorms and dining halls. No marching bands. Just cafes on the Left Bank and Gitanes.

So, one follow-on question is which countries have people with degrees, rather than just having attended college?

Germany and Italy have lower graduation rates than does Britain or the United States.

Obviously, there is a lot more that can be done with this data, but this is a start. For one thing, why isn’t Sanders going off on the Finnish model? Nokia and mink ranches: let’s build our future on that.

Your thoughts?

[1] Percent of “young people” (otherwise undefined) in tertiary education of any sort.

Just another BRIC in the wall.

Posted on June 3, 2015 by jsh54

The surge in economic globalization since 1990 raised up some countries as potential rivals to the long-dominant Western industrial nations. In particular, Brazil, Russia, India, and China seemed poised to equal or surpass the economic power of the old leaders before the middle of the 21^st Century. They have been labeled the “BRIC” countries.[1] Unfortunately, “many’s the slip between the cup and the lip.”

As late as 2010, Brazil possessed an apparently dynamic economy.[2] Great results were expected from the oil reserves discovered off-shore[3] and the economy was growing at a rate of 7 percent a year. The government took advantage of the boom in the economy to embark on a generous social policy: cash-transfers and easy credit both raised 40 million Brazilians into the middle-class and expanded consumption. Government deficits, rather than higher taxation on the wealthy, expanded to finance these policies. So long as the economy continued to expand, however, there seemed little danger from these please-everyone policies.

However, aspirations aren’t the same as achievement. Brazil remained a chiefly primary-product (agriculture, mining, forestry) economy. Sugar, soybeans, coffee, and oil were all major exports. Therefore, the Great Recession hit Brazil’s export sector very hard: Chinese and German imports of Brazilian goods slumped; the prices for its main crops sank, some by as much as a third.

By 2015, the whole process seemed to have gone into reverse: economic growth has stalled and teeters on the edge of recession; government debt has expanded at an alarming rate as it tries to keep promise made in happier times, but bond-rating agencies have down-graded Brazilian government debt; the nominal inflation rate is 8 percent a year, but interest rates are at 13 percent (so people may believe that the inflation rate is higher than official statistics claim). The standard solution to such problems is one of “austerity”: cut government spending and increase tax receipts to reduce borrowing. Cutting government spending mean in large part reducing the pay and benefits of public sector employees. They aren’t happy with this reversal of course.

To make matters worse, corruption is endemic in many developing countries and that includes Brazil. Soon after the Workers Party, under President Luis Lula da Silva, took power in 2003, an official investigation began into accusations that the Workers Party had engaged in bribery of legislators to get the government’s policies through the legislature. In 2013 Brazilian police began an investigation into the giant state-owned oil company, Petrobras. The reports so far indicate that Petrobras has been over-paying contractors, who then kick-back part of the profit to the Workers Party. Police arrested the Party’s treasurer, along with many other politicians and businessmen. A proposal by current president Dilma Rousseff, Lula da Silva’s successor, to limit the ability of prosecutors to investigate charges of corruption against politicians stinks to high Heaven. Many Brazilians are enraged over austerity and corruption.

The recent performance of the BRIC economies has been scattered, but long-term performance is what matters for shifting the world balance of power and prosperity.

[1] See: http://en.wikipedia.org/wiki/BRIC

[2] “Brazil’s economic catastrophe,” The Week, 5 June 2015, p. 11.

[3] Early—and apparently exaggerated–reports on exploration of off-shore reserves suggested that there is $1 trillion worth of oil and gas. However, off-shore drilling almost forty miles out in the Atlantic has its challenges and much more modest estimates of the extent of the reserves have begun to come in. The recent decline in world oil prices also has reduced the value of whatever reserves do exist.

The Opinionated American Public.

Posted on May 31, 2015 by jsh54

American religious affiliation:

70.6 percent: Christian in some way, shape, or form.

23 percent: None. I’m not sure that this tells us very much about their social views.

21 percent: Catholic.

15 percent: “mainstream” Protestants.

If 93.6 percent of Americans are Christians or “nones,” then the remaining 6.4 percent are Jews, Muslims, Buddhists, Hindus, and other faiths that don’t come to mind at the moment.

If 70.6 are Christian and 36 percent belong to one of the “mainstream” religions, then 34 percent belong to some other variant of Christianity. This suggests that something between 30 and 34 percent of Americans belong to non-mainstream Protestant churches. OK, there is a small bunch of Seventh Day Adventists and Jehovah’s Witnesses, and I don’t know if Mormons get counted as “mainstream” Protestant. However, the majority probably belong to the free churches that dot the suburbs.[1] (Probably no role for Bing Crosby as the minister of one of these churches.) However, if there are 15 percent of Americans in “mainstream” Protestant churches and 30 percent in non-mainstream Protestant churches, then the non-mainstream Protestants would appear to be the mainstream and the mainstream Protestants would appear to be the non-mainstream. If you see what I mean. The media just haven’t caught up to this reality. It’s a “Christian” country and, within that, a “Protestant” country.

The decade and a half since 9/11 has been hard on American views of Islam. More than half (55 percent) of Americans have an unfavorable view of Islam, while 21 percent have a favorable view. Almost a quarter of Americans aren’t sure.[2] The math says that a lot of the “favorables” and “not sures” must come from the 70.6 percent who self-identify as Christians.

The Republicans opposed gay marriage. How did that work out for them? The Republicans are opposed to illegal immigration.[3] A recent poll showed that 29 percent of Americans want to round up and ship home all the illegal immigrants now in the United States. In contrast, 57 percent of Americans—essentially twice as many—want to let them stay and grant them the right to apply for citizenship. Only 11 percent favor granting the illegals “green cards” to stay in the United State, but barring them from pursuing citizenship.[4]

Savings patterns by income groups are a sort of opinion poll.[5] “How important is it to save for a rainy day or the monsoon of old age?” Eight percent of lower-income households save more than 15 percent of their income; Twenty-five percent of households earning between $50K and $75K save more than 15 percent of their income; and Seventeen percent of higher-income households save more than 15 percent of their income.

[1] “Poll Watch,” The Week, 22 May 2015, p. 15.

[2] “Poll Watch,” The Week, 24 April 2015, p. 17.

[3] “Poll Watch,” The Week, 22 May 2015, p. 15.

[4] Disclosure: this is my own position. The illegals came to the United States illegally. They can’t be allowed to crowd in ahead of people who took their turn. To do so would b to privilege those immigrants who have the easiest access to the United States across a land border over those who would have to cross the Pacific or the Atlantic. I admit that this is an argument that will resonate more in Britain than in France or Italy. On the other hand, I’m also in favor of open borders. Massive immigration of ambitious people would do the USA a lot of good. However, I’m also in favor of democracy and the rule of law. The fact that a lot of Republican businessmen want cheap labor and a lot of Democratic politicians imagine that Hispanics will vote Democratic doesn’t mean that the laws should just be ignored.

[5] The Week, 10 April 2015, p. 30.

Bully Hayes.

Posted on May 30, 2015 by jsh54

I was in Hawaii on vacation. The wife was reading James Michener’s Hawaii. That reminded me that when I was a kid I read Michener and A. Grove Day, Rascals in Paradise (1957). One chapter was about the “blackbirder” Bully Hayes. Who was he?

William “Bully” Hayes (1827-1877) grew up the son of a tavern-keeper in Cleveland, Ohio, but ran away to sea (OK, the Great Lakes) while still a boy. He shipped from New York for the Far East in March 1853, but arrived in Singapore in July 1853 as the captain. Must have been an interesting voyage. He promptly sold the ship (which he did not own). Between 1853 and 1866, more frauds, voyages, criminal charges, escapes, a ship-wreck, the loss of an ear when caught cheating at cards, several marriages, and an extended tour as a blackface minstrel followed in Australia, New Zealand, and the islands of the South Pacific.

Hayes combined considerable ability as a ship’s captain with ruthlessness and a criminal bent. Oceania in the 1860s and 1870s offered opportunities to such a man. Far to the East, Chile and Peru were expanding the guano-mining industry. (See: White Lung.) In Fiji and in Queensland, Australia, the large-scale plantation of sugar cane and cotton had begun. These all were labor intensive industries under a tropical sun. Atlantic Americans had solved this problem by importing African slaves. Now slavery was being destroyed. What to do? Recruit “indentured servants” on remote Pacific Islands! Sail to some place, lure the locals on board with offers to trade, sail away to Fiji or Australia, force the captives ashore at gun-point, and collect a fee from the plantation owners. Repeat as necessary.[1] Brilliant! In the racist lingo of the time, this was called “blackbirding.” “Bully” Hayes excelled at it.

Between 1866 and 1877, Hayes made a series of voyages through the islands on a series of ships. He recruited labor all over, but also traded in copra and coconuts. As before, narrow escapes from disaster followed Hayes like his shadow. Ships were wrecked in remote atolls, but he sailed away in home-made boats; he quarreled with business partners, but they disappeared under odd circumstances; British and American navy officers arrested him, but no crewmembers would testify against him; he talked a San Francisco merchant into buying him a new ship, then sailed away with the merchant’s wife still on board. Hayes became a legendary figure among the peoples of the South Pacific. Islanders used to threaten unruly children that Bully Hayes would come for them in the night. Europeans often regarded him as a charming rascal. His crew felt differently: he was called “Bully” for a reason. In March 1877, at Kosrae[2], one of them had had enough. He shot Hayes and threw his body overboard.

Most of what we know about Hayes comes from two sources.

Alfred Restieaux (1832–1911) was an English kid with a taste for adventure. He left England one step ahead of the law; had some adventures in Australia, Peru, and the American West, then “settled down” as a trader in the South Pacific. Here he knew Hayes. He kept a diary

Louis Becke (1855-1913) was an Australian kid with wander-lust. When he was sixteen, he stowed-away on a ship bound for Samoa. He spent the next fifteen years wandering the South Pacific, often working as store-keeper and trader on remote islands. Along the way he crewed for Hayes. Later, he returned to Australia to write short-stories and novels based on his experiences.

Once upon a time, the far Pacific was a frontier just like the American West: a land of opportunity for visionaries, thieves, and refugees from the boredom of ordinary life.

[1] About 60,000 Pacific Islanders were transported to Australia in this fashion.

[2] http://en.wikipedia.org/wiki/Kosrae

Tales of the South Atlantic II.

Posted on May 30, 2015 by jsh54

World oil supply has increased faster than has demand, so prices have fallen.[1] All sorts of changes have resulted. For example, most counties maintain some kind of petroleum reserve to be able to respond to emergencies. Many oil-consuming countries are seizing the opportunity presented by the fall in world oil prices to complete or expand those reserves. Asian countries, in particular, are buying oil where they can get it. Often, that means buying on the West Coast of Africa. “Years ago, you never saw the Chinese chartering [tankers] in West Africa,” said one shipping expert. “Now they are the largest charterer here.” The four chief oil export ports in West Africa are Luanda Oil Terminals in Angola; Warri Port , and Port Harcourt Terminals , in Nigeria; and Sogara Oil Terminal in Gabon.[2] All of them face out onto the South Atlantic.

The tankers themselves make an interesting story. Between the 1950s and the 1970s, tankers grew in size from about 500 feet in length and a capacity of 16,500 Dead Weight Tons to the “Very Large Crude Carriers” (VLCC) that run about 1,100 feet in length and can hold up to two million barrels of crude oil.[3] At Spring 2015 prices, that is a cargo worth $120 million. There are about 600 VLCC afloat at the moment.

Why did oil tankers grow in size? “Previously on LA Law,” Middle Eastern oil flowed to Europe and other Western ports through the Suez Canal. The Six Days War closed the Suez Canal for an extended period, forcing tankers to make the much longer voyage around the Cape of Good Hope.[4] To increase the efficiency and lower the transportation costs of oil, shipping companies started ordering bigger and bigger tankers. Then the oil port facilities had to be re-built because there was no way to bring these giants into any conventional port. (Indeed, the largest tanker built, the “Seawise Giant,” couldn’t use the English Channel.

The break-even charter rate for VLCC is about $25,000 a day. The global financial crisis caught tanker companies by surprise. The world economy—and demand for oil—slowed down, while they had to take delivery of a bunch of expensive ships that they had contracted for several years earlier. In 2013, average shipping rates for the VLCCs ran about $12,000 a day; in 2014 they averaged $22,000 a day. For the shipping companies, Asian entry into the West African oil market means more of their ships are making the longer runs to the Far East and back, rather than more and shorter runs across the Atlantic to ports in the Americas. This leaves fewer ships to handle that business, so the freight rates go up. In early 2105, the added Asian demand pushed rates up to $69,000 a day. More normal off-season rates run $40,000 a day.

Weird story: Speculators want to buy oil while it is cheap and sell it when the price rises. Where to store it in the meantime? Normally, in a tank farm ashore. However, there are a limited number of empty storage tanks, so the price charged by the owners tends to rise as more people want to use the tanks. Also, at some point, all the storage tanks are filled up, but the speculator still has to take delivery of the oil s/he bought low in order to sell high. Now what? Somebody chartered the VLCC “Alsace” and had it anchored off the Orkney Islands in February and March 2015. What did the crew do all day? Play cards, check on the anchors, watch the flat-screen TV? How would you like to be captain of an anchored ship? Garrr.

[1] Stanley Reed, “Oil Glut Benefits Those Who Ferry It,” NYT, date misplaced.

[2] http://globalenergyobservatory.org/list.php?db=Transmission&type=Oil_Ports

[3] By way of Ultra-Large Crude Carriers (ULCC) that were over 1,300 feet in length a capacity of 500,000 Dead Weight Tons.

[4] Avoiding that long, costly voyage had been why building the Suez Canal had been a good idea in the first place. Egypt’s loss of toll revenue from the re-routing of that traffic hasn’t helped the country’s always-struggling economy. “Thanks President Nasser!”

The Least Generation 1.

Posted on May 29, 2015 by jsh54

American education seems to be a lot like American health care: we spend more per-capita (patient/pupil) than do most countries and get less for the money than do most countries.[1] American 15 year-olds rank 15^th in literacy, 21^st in science, 24^th in problem-solving, and 25^th in math. Even in high school and college graduation rates, with schools pushing every lazy moron out the door with a diploma clutched in his/her hot little hand, America has lost ground from 1^st to 18^th place. (Now, it could be that everyone else got their ten pounds in a five pound bag and caught up to the US. I don’t know what the test scores show on this matter.) Still, American parents appear to believe that their own local schools are a happy island of excellence in a sea of national mediocrity.

The supposed crisis in American education actually seems to come down to what we do about the low performing schools, which are mostly in low-income areas.

Teachers make a difference in the lives of young people—and not always for the better. If you have three successive years of having a poor teacher, you’ll never catch up with the students in the same school who had a competent teacher. The buzz surrounding the movie “Waiting for Superman” has focused attention on teachers and especially on teachers’ unions. The unions seem bent on frustrating every effort at reform out of a selfish interest in protecting even their least-competent members at the expense of the children.

What makes a teacher “good”? According to Teach for America: setting high goals for your students, seeking to engage them by whatever means necessary, and involving the parents in the education of their children. Teachers have to be persevering and hard-working. In another view, it isn’t so much the individual teachers as the culture of the school: instill good habits and ambition, create an expectation that everyone will strive to be excellent, and put in immense amounts of time.

The Obama administration is trying to measure the effectiveness of teachers by means of a new scheme called “value-added modeling.” In theory, this allows schools to assess the contribution of individual teachers by tracking student test scores from grade to grade. The Department of Education’s $4.35 billion in “Race for the Top” awards gives the federal government a lot of leverage.

However, the current debate is missing an important part of the equation. Parents play a powerful role in shaping the educational achievement of their children. Teachers argue that homes where the parents read very little, have limited vocabularies, and don’t value education or see much chance for their kids to improve plays a major role in individual success or failure. Some of the most striking elements of successful schools in low-income areas seek to address this problem. The Knowledge Is Power Program (KIPP) charter schools operate from 7:30 AM to 5:00 PM, and the teachers must be available to answer questions until 9:00 PM. The provision of counseling and medical services by the Harlem Children’s Zone charter school goes in the same direction. Successful charter schools take over the responsibilities that many parents cannot meet. The problem is that no one actually wants to say out loud that the chief source of under-achievement is failed parents, not failed students or failed teachers or failed schools. The decline—relative or absolute—in the performance of American schools or of American students began about 1980. That would suggest that it began among children born between 1962 and 1974. That would suggest that a lot of Baby Boomers turned out to be lousy parents. The “Least Generation.”

[1] “Targeting teachers,” The Week, 15 October 2010, p. 15.

Against a Balanced Budget Amendment.

Posted on May 29, 2015 by jsh54

Some Republicans argue that the current deficit is the product of legislative indiscipline. From time to time, they have proposed a “Balanced Budget Amendment” to the Constitution as the cure for this indiscipline. Sort of like fiscal gastric by-pass surgery.[1] Allow me to disagree.

First, the whole economic history of the Twentieth Century argues against the sanctity of balanced budgets. An obsession with balanced budgets made the Great Depression of the 1930s much worse than it need have been. “Hoovervilles” were the packing-box shanty towns named after the budget-balancing president of the United States in the early Depression. Massive deficit spending—which would be outlawed by a balanced budget amendment—got the Imperial Japan, Nazi Germany, and the United States out of that Depression. You don’t have to like the company we kept to recognize what worked. Since the Second World War all countries have used deficit spending to counter down-turns in the economy. It has turned out to be a crude tool, but it has been effective. Our current problems exist because the Democrats flinched before the cost of getting us out of the mess created by the housing bubble. The stimulus package needed to be twice as big and front-loaded into the first year. Then Republicans imposed the “sequester” that further reduced government spending.

Second, a balanced budget amendment will do nothing to resolve the fundamental disputes between Democrats and Republicans which stands at the center of our current dead-lock. Republicans rightly complain that the Democrats will not address the exploding cost of entitlement programs, which cannot be supported by any model of economic growth or taxation of the rich.[2] Democrats rightly complain that they cannot sell austerity to their constituents without some tax scalps from the rich to brandish. How will a balanced budget amendment solve this basic dead-lock? Making the budget an issue subject to judicial review merely passes the buck from the legislature to the courts. If you think abortion or gun-control are subjects best avoided at the Thanksgiving dinner table, just wait until taxes and spending get on the docket!

Third, about 22 percent of federal spending goes to defense, about 22 percent goes to Social Security; and about 22 percent goes to Medicare/Medicaid. That’s two-thirds of federal spending. About 7 percent goes to debt-service. Everything else that government does is crammed into the remaining 25+ percent of federal spending. What do people want to cut? Social Security? Medicare? Defense? I would bet not. OK, we could do without the Department of Education and the DEA. What about other things? Air traffic controllers? Paving the highways? The federal courts? The Coast Guard air-lifting injured commercial fishermen off heaving decks at night in the Bering Sea? Cuts to welfare won’t do it.[3]

If the vast majority of legislators do not want to make these cuts, then the only solution that would be imposed by a Balanced Budget Amendment would be big tax increases on a very wide basis. Basically it would involve undoing the George W. Bush Administration’s tax cuts.[4] Republicans should be careful about the things for which they wish. A balanced budget amendment has a snowball’s chance in Hell of solving those problems.

[1] For a recent example, see: http://www.fredericksburg.com/news/politics/brat-pushes-for-balanced-budget/article_c82422c9-e21a-586e-b1d4-eca59612c277.html

[2] Republicans conveniently fail to provide any detailed plans on how they would contain entitlement spending. There are a bunch of ways of doing it, but not without somebody’s ox getting gored.

[3] In fiscal 2014, SNAP added $74 billion to a$3.5 trillion budget. I can’t even calculate that small a percentage.

[4] They should best be called the Bush-Obama Tax Cuts because President Obama fought hard to have 98 percent of them made permanent. According to the NYT, two-thirds of the federal revenue lost from those cuts came from people who make less than $250,000 a year.

What would Bismarck drive? 3.

Posted on May 28, 2015 by jsh54

ISIS looks like a coalition of old Al Qaeda in Mesopotamia survivors, Iraqi Ba’athists, and conservative Syrian Sunni rebels against the Assad government. If ISIS wins in western Iraq and eastern Syria and establishes a caliphate, what will happen to that coalition? Will the coalition hold together in happier times once external dangers are reduced? Or will “hunting season” open as the members pursue disparate goals?[1]

If you look at this over the long-run, working to strengthen good governance and economic development around the world is a good idea. The Islamist movements and the refugees seeking to break into Europe (and the US for that matter) are fleeing stagnant economies, misgovernment, and often violence.[2] “An ounce of prevention is worth a pound of cure.” Alas, I’m not sure that we know how to do this—aside from empires.

The Iraq War was a disaster.[3] As a result, Americans don’t want another real war at the moment. It would take a real war to slow down Iran’s pursuit of nuclear weapons by any significant amount of time. It would take conquest and occupation to stop it entirely.[4] So, the odds are that President Obama’s pursuit of an agreement with Iran to delay that country’s acquisition of nuclear weapons by some indefinite, but shorter, period is about the best that we can hope for.

However, confessing that we don’t want to do anything serious about Iran estranges us from Israel and Saudi Arabia. A nuclear Iran appears to both Israel and Saudi Arabia as a grave security threat. One of these days, the two countries may decide that Allah/Yahwey helps those who help themselves.[5] Perhaps the key decisions will be made in Jerusalem. Israel and Saudi Arabia have a community of interest in doing something about Iran’s nuclear program. The Saudis probably could not manage a pre-emptive attack on their own. The Saudis probably could not manage to fend-off an angry American reaction on their own. In both cases, a tacit alliance with Israel would be very valuable. On the other hand, Israel and Iran have a community of interest in doing something about ISIS, while Saudi Arabia has not made much of an effort against ISIS because it is beating up on Iranian clients in Iraq and Syria. It is difficult to imagine Israel working a deal with Iran over ISIS if it meant tolerating Iranian pursuit of nuclear weapons. It is easier to imagine Saudi Arabia turning on ISIS as part of a deal with Israel. The thing all the decision-makers—in Riyadh, Jerusalem, Tehran, and Washington—are bearing in mind is that any attack on Iran’s nuclear program will start a bigger war in the Middle East, rather than end the current ones. So, perhaps cooler heads will prevail. Perhaps there will be a grand bargain instead of Armageddon. An American presidential campaign in which a host of Republican hopefuls appear to have been recruited from clown college and the anointed Democratic candidate once voted for the Iraq War just to appear tough enough to be president doesn’t inspire confidence.

[1] See: Gordon Craig, Problems of coalition warfare: The military alliance against Napoleon, 1813-1814 (Colorado Springs: U.S. Air Force Academy, 1966); Winston S. Churchill, The Second World War, vol. 6: Triumph and Tragedy. .

[2] It appears that the long drop in homicide rates in most American cities has been problematic for local television news stations. Perhaps they should just keep news crews in some place like South Sudan.

[3] In a few years, someone is going to add a chapter to one of those What If? books that explores “counter-factual history.” My own version runs something like the following. Saddam Hussein was 66 when he was overthrown by the coalition of “the all-too-willing”; he had a bad back, but was afraid to have surgery because it would involve general anesthetic and something might happen; his sons were violent morons who were unlikely to be able to either share or hold power after the eventual death of their father; Iraq had attacked Iran in 1980 and the Iranians were—and are—eager for pay-back; the Shi’ite majority and the Kurds were eager to chart their own course, if only the Sunni minority would get their boot off the necks of the vast majority of Iraqis; and Abu Musab al-Zarqawi, the founder of Al Qaeda in Mesopotamia (the ancestor of ISIS) was operating in Syria from about 2002. So, even without the invasion, things might have shaken-out pretty much as they did. Only, we wouldn’t have our finger-prints all over the rubble. See: Richard K. Betts and Samuel P. Huntington, “Dead Dictators and Rioting Mobs: Does the Demise of Authoritarian Rulers Lead to Political Instability?”, International Security, Vol. 10, #3 (Winter 1985-1986), pp. 112-146.

[4] Perhaps we could partition the place with Russia? See: http://en.wikipedia.org/wiki/Anglo-Soviet_invasion_of_Iran

[5] One of the ways to think about Saudi Arabian intervention in the Yemen civil war is as an opportunity to give their soldiers and flyers some combat experience before, you know…..

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