Monday, April 30, 2012

Saturday, April 28, 2012

Give everybody start-up money?
A relatively open-ended lump-sum grant given to young people as a high school graduation gift could be an attractive option. You can use it to pay for college. But you could also roll it over into a retirement account. Or use it to launch a business. Or as the down payment on some real estate. And we could say that whatever you still have on hand at the age of 25 becomes yours to use as a totally unrestricted grant. Go spend it on some (increasingly cheap) cocaine if you like. The idea is to ensure the affordability of higher education while preserving the idea that higher education providers should be able to offer low prices as a meaningful selling point to people.
The problem is that if you are government funded, sooner or later you become government regulated. Maybe the costs regulation will be less than the benefits of government start-up money, but don't ignore these costs. Maybe you'll be allowed to use your money to start a business, but not a business that sells, say, unhealthy foods. Will you be allowed to use your government start-up money to fund yourself as a missionary for a few years? What about using your start-up funds to make a risky investment in a friend's business, or to start your career as a day-trader? What about paying for grandma's assisted living apartment for the next several years? feeding and educating many poor children in another country? paying for your big wedding and honeymoon? And if what you want to do is prohibited until age 25, will you be allowed to promise to give all your government start-up money to lender when you turn 25? If not, presumably there will be a lot of black market lending designed to achieve exactly this. Also, won't making high school graduation a prerequisite for government $$$ pressure high schools to lower standards, and pressure weaker students to cheat?

The potential for political bickering is endless. One could try to avoid that with an unrestricted grant on, say, the 18th birthday, combined with a strong social stigma against squandering the grant. But even then, expect news stories about young adult's grants lost to swindlers and extortioners, and demands for government to Do Something.

All that said, universal start-up money would probably be a net plus for individual freedom. I don't know if universal start-up money is a good idea or a bad idea, but if it's a bad idea, then the reason is probably anti-modern and communitarian: for better or for worse, economic dependence that is personal, as opposed to dependence on an impersonal state, strengthens interpersonal bonds.

Friday, April 27, 2012

Thursday, April 26, 2012

Wednesday, April 25, 2012

Tuesday, April 24, 2012

Monday, April 23, 2012

Sunday, April 22, 2012

Do college degrees make us rich?
To be the nation with “highest proportion of college graduates in the world” sounds grand, but is actually rather vague. What nation is now in that position?...

Russia still topped the rankings at 54 percent for data as of 2008 for the population aged 25-64. No other country came close. Canada was ranked second at 49 percent. The U.S. came in at 41 percent, behind Israel (44 percent) and Japan (43 percent)...

The rankings look dramatically different for the age cohort 25-34. Russia ties with Japan (at 55 percent) and falls behind Korea (58 percent), and Canada (56 percent); and the U.S. (42 percent) ties with Australia, Belgium, and Israel, and fades behind Denmark (43 percent), Ireland (45 percent), New Zealand (48 percent), and Norway (46 percent).

The comparisons are revealing, but not necessarily in a way that fits Obama’s or Higher Education’s preferred narrative.

The nation’s strongest economy, the United States: 41 percent of 25-to-64-year-olds.

Economic powerhouse Switzerland: only 34 percent.

Europe’s strongest economy, Germany: a woeful 25 percent.

In the doldrums for two decades, Japan: still beats us at 43 percent.

And energy-rich but economically weak Russia, still at 54 percent.

Note that Germany's workforce has a lot more vocational training than ours, so exercise caution in interpreting its lower proportion of college graduates. As for Russia, one could always maintain that they would be even poorer if they were less educated. In any case, two general observations stand. First, what opportunities people have to use their education might matter more than how much education they have. Second, a more credential workforce is not necessarily a more educated workforce.

My off-the-cuff take on the second point is that a college education adds value beyond the signaling effect of giving you a credential, but only if you work really hard at it. If you just coasted through, probably you either didn't learn much or most of what you learned you could have learned just as well reading books in your parents' house for four years. However, if you just aren't that interested in the kind of stuff taught in college, you likely won't be motivated to work your butt off; you'll pick an easier major and your college experience won't be worth its combined costs to you and those who subsidized your education. Some people are ambitious and can delay gratification (think of pre-med stereotypes) by working hard in courses they don't care about in order to obtain a high-paying or prestigious career. However, most college students are just not that motivated. As I see it, motivation is the hardest part of higher education. Even lousy teachers and lousy textbooks cannot prevent a motivated student from getting a good education. If higher education is to be de-skilled and/or conducted mostly on-line, then the enabling technological advances will be motivational. In other words, don't imagine Wikipedia University; imagine Farmville University.

Saturday, April 21, 2012

Friday, April 20, 2012

Thursday, April 19, 2012

Monday, April 16, 2012

Sunday, April 15, 2012

Speech information rates:

IDL (#syl/sec)
English 0.91 (± 0.04) 6.19 (± 0.16) 1.08 (± 0.08)
French 0.74 (± 0.04) 7.18 (± 0.12) 0.99 (± 0.09)
German 0.79 (± 0.03) 5.97 (± 0.19) 0.90 (± 0.07)
Italian 0.72 (± 0.04) 6.99 (± 0.23) 0.96 (± 0.10)
Japanese 0.49 (± 0.02) 7.84 (± 0.09) 0.74 (± 0.06)
Mandarin 0.94 (± 0.04) 5.18 (± 0.15) 0.94 (± 0.08)
Spanish 0.63 (± 0.02) 7.82 (± 0.16) 0.98 (± 0.07)
Vietnamese 1 (reference) 5.22 (± 0.08) 1 (reference)

Saturday, April 14, 2012

A bit of economic geography:

In fact, refiners in the central U.S. have such a competitive advantage through their access to cheap locally produced crude that they have turned the U.S. into a net exporter of refined products like gasoline, despite the fact that we of course are still a huge net importer of the crude petroleum itself. We use pipelines to ship gasoline and diesel to the Gulf of Mexico, and tankers from there to sell refined products around the globe. The flip side of this is that refiners on the East Coast find themselves at a huge disadvantage. Refineries accounting for half of East Coast capacity are set to close.

That means that if you live in New York and complain about paying more than drivers in the central United States, you could soon see that differential increase even more.

Friday, April 13, 2012

Karl Smith, clear and concise:
If the economy is running at maximum employment and the prices are moving in a steady and predictable fashion then the central bank has done its job. What happens to growth is ultimately not the Fed's concern....

Offering sympathetic sounding bromides about the need for policy makers to work together may make Federal Reserve officials feel better about themselves but it disguises the deeper truth that the failure of the US economy to reach full employment is their failure.

The erosion of skills, the decline in capital formation and the destruction of lives that stem from high unemployment is the doing of one policy institution.

The Federal Reserve knows exactly what it needs to do remedy this situation: commit to zero interest rates until nominal spending in the US economy is within 2% of its 1990- 2007 trend line.

That the Federal Reserve refuses to do this is a choice that it alone must answer for.

Thursday, April 12, 2012

Tuesday, April 10, 2012

Calvin Coolidge Says

"If you see ten troubles coming down the road, you can be sure that nine will run into the ditch before they reach you." Case in point? (The question mark is unavoidable given the causal density involved.)