Comments on economics, mystery fiction, drama, and art.

Monday, July 18, 2016

Rudy Giuliani:  "You know who you are, and we're coming to get you."

What does this even mean?  Apparently, "you" are radical Islamic terrorists.  But what about the "...we're coming to  get you..." part?  How does he propose to identify who is (and who is not) on his hit list?  How are we going to "[e] to get..." them?  Are we going to bomb?  Then how do we avoid killing, and maiming, people who are our friends?  And if we kill and maim our friends, how long will they continue to be our friends?  Are we going to send US military personnel into...where, exactly?  Iraq?  Syria?  Washington Heights?  With what mission, exactly?  Without, again killing people who only want to live in peace? 

This is cheap rhetoric.  It is designed, not to solve a problem, but to rouse a beast.  The problem with cheap rhetoric, though, is that all too often, the price we pay for it is obscenely high.

Monday, June 06, 2016

The Surprising Lack of Change in Imports and Exports, 2012-2016

For reasons I can't quite remember, I was looking at US import and export data, and the following chart is what I found (at FRED) for US nominal (current dollar value) imports, monthly, from January 1992 through April 2016.

(Click to enlarge)

What I am primarily interested in is the 2012-2016 period.  Both exports and imports have not increased in any significant way in the past four years.  And, recently, both have declined.  The decline in exports is fairly easy  to explain--the dollar has increased in value--since January 2012, the trade-weighted value of the US dollar has increased by 22%.  By itself, this would tend to reduce US exports (which have, effectively, become more expensive) and increase US imports (which have, effectively, become cheaper).  But this has not happened.  I am only a dabbler in international trade, so I have no easy explanation. 

But an explanation would be nice to have.  (Interestingly, the national income accounts quarterly data don't look much like this, so having an explanation of that would also be nice.)

Friday, May 06, 2016

Are the "official" inflation measures in the US biased?

There seems to be a fair number of people who will argue that the "official" inflation data from the BLS is biased downward...either the "right" data are not collected or the calculation incorrectly weights the data or something.  Well, the MIT Billion Price Project has been going for a while now (nearly 10 years), and both the annual and the monthly rates of inflation based on their data look suspiciously like the BLS data.  You can see for yourself by clicking on the link.

Monday, April 18, 2016

On the incoherence of Ted Cruz

Earlier this morning, I happened to see part of Ted Cruz’s appearance on Good Morning America; he was answering questions from the audience, and one , by a man who started by saying he was in a same-sex marriage, asked what Cruz’s stance on same-sex marriage was.  Cruz’s response was (a) that the first amendment guarantees freedom of religion and (b) the Supreme Court (or, as he referred to them “five unelected lawyers in Washington D.C.” had wrongly decided the issue, that it should be left to the states, that one of the strengths of our nation was that different states could have different laws.

I was struck by the incoherence of his comments.  I wanted to ask him if he thought Loving v.Virginia (unanimously, in 1967, invalidating state laws that prohibited “inter-racial” marriages) was wrongly decided, whether states should be allowed to regulate marriage between “racial” or ethnic groups—and, if he thought that decision was correct, what made that decision different from the more recent one.  I wanted to ask him if he thought different states should be allowed to have significantly different laws of contract. 

I wanted to pose a hypothetical:  Suppose two people of the same sex in New York entered into a marriage that was legal and valid in New York, graduated from college, and both received wonderful job offers—in Houston.  If they took those jobs and moved to Houston, would the State of Texas recognize their marriage?  If not, why not?  And if not, what happens next?  Because marital status is implicated in any number of other family situations, and if their marriage is not valid in Texas, then the State of Texas is imposing (in my opinion) undue burdens on them.

For example, it has implications for taxes.  A married couple can file a joint federal income tax return.  Now, Texas does not have a state income tax.  But could this couple still file jointly for federal income tax purposes?

For example, it has implications for end-of-life care issues.  Generally, a spouse can, in certain circumstances, make medical care decisions on behalf of a spouse who is unable to make those decisions. Would that be allowed in Texas?  Could a doctor even legally share information about the patient’s condition with the spouse (who is, after all, not recognized as a spouse in Texas)?

I could go on.  But Cruz wanted to imply that having different definitions of marriage in different states was costless (as, for example, having different speed limits is pretty much costless, or even different zoning laws).  But it clearly is not.  And the burdens would be borne by the people whose marriages are not recognized in some states.

(This, of course, leaves aside the fact that Cruz’s actual position is not leaving this decision to the states, but enacting a constitutional amendment defining marriage as a union or one woman and one man.)

Saturday, April 02, 2016

Grade Inflation Again

For some reason, grade inflation seems to be (once again) a hot topic.  Larry Summers weighs in, with a brief headlined "If we really valued excellence, we would single it out."  I've already suggested a couple of reasons why I think that people who are concerned about grade inflation might be a bit overwrought.  So what does Summers add to the discussion?

I think that the pervasiveness of top grades in American higher education is shameful. How can a society that inflates the grades of its students and assigns the top standard to average performance be surprised when its corporate leaders inflate their earnings, its generals inflate their body counts, or its political leaders inflate their achievements?

That's an argument?  Evidence that grade inflation exists?  Frankly, I read it as an assumption that grade inflation--defined as students receiving higher grades for equivalent work than they would have received in the past--exists.  I don't see any attempt to present evidence.

Consider the equivalent in any other sector of the economy...say, health care.  In a world in which production processes change, in which we learn more about how to do things, in a world in which we observe that there are some things that we need to focus on, would we be content with a hospital sector that produced the same results it did 20 or 30 or 40 or 50 years ago?  Of course not.  So when hospitals report that they have reduced patient infection rates during hospital stays, or reduced patient readmissions to hospitals (because the patients don't need to be readmitted), do we go "Ooooh...bad could things be getting better like that?"

Well, look at Harvard, since Summers has essentially spent his academic life there.  What has happened to the quality of the incoming students with which Harvard has to work to produce quality educational outcomes? This has:
Fifty years ago, Harvard sent acceptance letters to 20 percent of roughly 6,700 applicants to the Class of 1969. By 2006, that figure had dropped to 9.7 percent for the class of 2010 and since then has continued on a downward trend overall, reaching a record-low 5.3 percent acceptance rate earlier this month.

So someone applying for admission to Harvard when I was about to enter college  would have had a 20% chance of admission.  Today, it's 5%.  In addition, the entering class at Harvard is about the same size as it was in 1965, despite a 60% increase in the US population and a vastly larger pool of applicants from outside the US.  Do you think Harvard attracts a less qualified pool of applicants today than it did 50 years ago?  Or would you guess that is uses stricter admissions criteria?  I know which end of that I'd take.  The quality of Harvard's entering students is higher today than if was in the past.  How much higher?  I don't know.  But it's probably substantial.  (Yale's acceptance rate is 6.3%; Dartmouth is 10%...all of these are much lower than in the past.)

With a more talented, better-prepared group of admitted students, wouldn't we expect students at Harvard to perform better?  If not, why not?  Harvard has a Bureau of Study Counsel that provides assistance to students who need it.  I'd be willing to bet that no such thing existed 50 (or 40 or 30) years ago.  Go look at that.  Guides to writing papers in 29 different courses/situations.  Guides for studying in introductory science courses.  Do you think that first year students in 1965 (or 1975, or 1985) had anything like that?  Wouldn't we expect that such additional support would lead to better performance. 

Harvard has a large and diversified faculty development program, which includes development of teaching skills.  Wouldn't you be surprised to discover that these programs existed in 1965 (or 1975...maybe by 1985)?  In the sciences, Harvard faculty have been leaders in developing new methods of pedagogy.  Wouldn't we expect that this additional support for faculty would lead to increased learning?

And what has happened at Harvard has happened at institutions across the country.  Highly selective institutions have become more selective.  My undergraduate institution (a fairly selective, private, liberal arts college) enrolled about 2,400 students in 1965; it now has about 2,200.  And it also has expanded its recruiting efforts overseas.  Its potential student base has probably at least doubled.  But it is smaller.  More, not less selective.  Why wouldn't students there perform better?

If all this is right, student performance is rising, not constant, at least at selective institutions.  The only way to have maintained the grade distribution that existed 50 (40, 30, 20, 10) years ago is to redefine the criteria upwardI do not necessarily object to that.  But if that's what we want to do, we should be open about it.  And unless our standards have changed, we should not be surprised that, at least at selective colleges, student performance has improved.

Thursday, March 31, 2016

The Economics of Columbia Law School

Paul Campos has an interesting post at Lawyers, Guns, and Money, in which he discusses the changes in (inflations) adjusted tuition, endowment and annual giving revenue for Columbia's law school.  I thought it would be interesting to put the distribution of revenues in percentage terms, and revenue per enrolled student.



% from

% from Endowment
% from
Revenue per Enrolled
$25.6 Mill.
$59.4 Mill.
$114.2 Mill.
(In 2016 $$)

Strikingly, there has been little change in the percentage distribution of revenue sources.  Tuition is up a little, and use of endowment income is down a little.  But, overall revenue per student has increased by a factor of 3.  [Enrollment has increased from 1,050 (1975) to 1,350 (1996) and to 1,460 (2015).]  Where has the money gone?  Unfortunately, Campos does not tell  us.  However, the Chronicle of Higher Education data base lists full professors at Columbia University (not just the Law School) as earning $201,400 in 2014-15.  The earliest year in their data base has Columbia fulls at $131,900 in 2003-04.  (Columbia has apparently not participated in surveys of law school salaries.)  So faculty salaries at Columbia, overall, grew in real terms by about 1.4% per year between 2003 and 2015.  If that rate of growth holds for the entire 1975-2015 period, then average law school salaries would have increased by about 76% between 1975  and 2015.

Columbia has about 125 full-time faculty now, or about 1 for every 12 students (The school also employs a large number of part-time, adjunct, and other faculty; the total list is about 450 people with one sort of academic rank or another.)  I suspect both that the number of full-time faculty and the  number of total faculty have grown more rapidly than enrollment, although in the case of full-time faculty, probably not much faster.  A constant student-faculty ratio would suggest about 88 f-t faculty in 1975 and 110 in 1995.  But I would bet that the number of other-than-f-t faculty (currently about 325) has increased much more rapidly than enrollment.  Let's suggest, then, that faculty salaries as a budget line would have tripled between 1975 and 1995 (or, given the likely growth in non-full-time ranks, perhaps even quadrupled).  Given the 40% increase in enrollment, faculty salaries per enrolled student have increased by something like 50%.

Where has the rest come from?  I suspect that administrative positons have grown more rapidly than faculty positions (and perhaps salaries have grown more rapidly as well).  The Law School, as is true of almost every academic program everywhere, has had to make large, and on-going, investments in technology. But the tripling of law school revenue per enrolled student seems extraordinary (and note that tuition per enrolled student has slightly more than tripled).  That probably is not, in the long-run, a positive outcome for Columbia Law School students, or for the School itself.

Thursday, March 10, 2016

A minor rant on grade inflation

This is a comment I posted on a blog elsewhere.

Grade inflation is one of those topics that nags at me. The linked article refers largely to “elite” universities. Other things equal, I would have expected average grades to have gone up somewhat in those institutions, because they have become even more selective. Unless their selection algorithms are even more messed up than we would have thought, they should be doing a better job of selecting students more likely to succeed. Why wouldn’t grades rise?

And that’s without considering two other phenomena that extend beyond elite institutions.

The first is the more widespread availability of assistance for students–study skills, writing/math/language labs, tutors (I’m adjuncting at a reasonably selective private liberal arts institution right now that has tutors available for intro econ; until the mid-1980s, or even later, many if not most public universities did not offer tutors for those courses), and so on. An immense amount of research on which study practices work better (and for which types of students), and that information is fairly widely available.

The second is that more and more institutions–yes, even elite schools and R-1s–are at least paying more attention to preparing people to teach and supporting better teaching practices. This is true at all of the institutions at which I have taught, and it appears to be true generally. There has been an explosion in the number of journals that focus on teaching in higher education, with actual evidence of what does and does not work. Institutions have teaching/learning centers and run series of workshops. So, I would contend, the average effectiveness of instruction has increased.

Put all this together–why wouldn’t we expect grades to have risen? If I am correct, the only way to prevent that is for grading standards, far from eroding, to become more stringent.

I do not intend to imply that no one anywhere has eased up. I simply intend to argue that a rising average grade distribution is not necessarily *proof* that standards are eroding. Hell, I’m not sure it’s even *evidence* that standards are eroding.