Data on US Trade Surpluses in Services

The graph below is from the Federal Reserve Bank of St. Louis.

In this election season when one of the candidates continues to insinuate that all the other countries are taking advantage of the US regarding trade, it is helpful to have some data.  Below is Tim Taylor's comment on the graph (from his blog "Conversable Economist"):

"A fair number of Americans and politicians argue that a trade deficit is in large part a result of unfair trade practices by other countries. Essentially all actual economists disagree with that claim. Economists instead see trade deficits are arising from broad patterns of national production, consumption, and saving. A low-saving economy like the US consumes more than it produces--which it can do by running a trade deficit and importing more than it exports. A high-saving economy produces more than it consumers--which it can do by running a trade surplus and exporting more than it imports. Unfair trade practices can certainly restrict overall flows of trade, but they aren't a main cause of trade deficits and surpluses."

Graduation Rates and Student income

There is an interesting piece on the New York Times (The Upshot) about the relationship between graduation rates and low income students.  The graph below is from the essay.  It relates graduation rates (six year rates) with the percentage of students receiving Pell grants.

The authors of the study discussed state:

Colleges that have high graduation rates tend to be more selective and tend to have students who are more affluent and more academically prepared. Colleges with lower graduation rates tend to admit a higher percentage of students with Pell grants, which usually go to lower-income students.

President tenures and jobs

Political arguments about principles and ideas are always part of America's ongoing discussion about the role of  government, the purpose of the Federal Reserve, etc.  I get that.  But the extent to which President Obama's tenure has been a kind of "fact free" zone regarding these debates is disturbing.  The CalculatedRisk blog provides us with some data which is often ignored (see http://www.calculatedriskblog.com).

States and Federal Aid

The graph below is from taxfoundation.org and shows the degree to which states rely on Federal aid.  The post says:

Mississippi, for instance, relied on federal assistance for 42.9 percent of its revenue in FY 2013, the largest share in the country. Also on the high end are Louisiana (41.9 percent), Tennessee (39.5 percent), South Dakota (39.0 percent), and Missouri (38.2 percent). States with heavy reliance on federal grants-in-aid tend to have a combination of modest tax collections (reducing the denominator) and sizable low income populations (correlating with greater per capita reliance on Medicaid, housing assistance, and other low income and poverty relief programming, and with a greater share of federal education support).

Maybe a New Year will bring a new result

I suppose it is too much to expect that in an election year (why would it be different??) some sanity would come back to fiscal policy.  That is, with all the GOP candidates promising to cut taxes, .... and continue to ignore the issues like infrastructure, there probably isn't much chance of a change.  The graph below ought to cause at least a reconsideration.  The graph is "Net Government Investment as a percentage of Net Domestic Product (annual data), 1959-2014" and is from moneyandbanking.com.  One can hope.  The authors say:

Switzerland is an amazing place, not least the skiing, the chocolate, and the punctual trains. The latter is part of the country’s exquisitely maintained infrastructure: there are no potholes, and no deferred maintenance of train tracks, tunnels, airports, or public buildings. Few countries go so far, but many can take a lesson: it pays to maintain infrastructure at least so that it doesn’t fail.

Data on Millennials and economic progress

From Zillow we have the following data:

"Some people are born lucky, lucky enough to have parents able to help finance their higher education. And some people are doubly lucky, lucky enough to have parents able to help finance both their higher education and a down payment to buy a home."  That's the way Zillow puts it.  Economists have known this for a long time, but the rest of us have to learn it.  I still encounter the myth of the "self-made person" on a daily basis.

US Homicide Rates

From Nate Silver at FiveThirtyEight:

Deadliest jobs (from the BLS)

CEO Pay

The latest data on CEO Pay (from the Economic Policy Institute):

The continued rise of adjuncts in higher education

The following is from the Wall Street Journal (see here)

Krugman brings the data

Paul Krugman, though often shrill, nevertheless is an economist who pays attention to the data (see here).  The graph below should make everyone involved in the debate (perhaps, a kind description of what passes for this in America today) think twice about their rigid views regarding fiscal policy.

Krugman says:

The point is that 2010 was a real moment of truth. Were you going to go with the logic of more or less Keynesian macroeconomic models, or were you going to decide that loose psychological speculation about confidence trumped the arithmetic of spending? Being a forthright Keynesian at the time meant sticking out your neck quite a lot: you were running very much counter to what the Very Serious People were saying, and you would have been ridiculed and possibly suffered some serious career damage if US or UK interest rates had soared the way the VSPs warned, if inflation had taken off, if the correlation between government spending and GDP had turned out to be negative instead of positive.

As it turned out, however, the Keynesian view came out looking very good, and siding with the VSPs was not a good move after all.

Some troubling data

The graph below is quite troubling to me - I just don't know what to make of it.

Data on Grade Inflation in American Universities

Tim Taylor (see here) points us to research by Stuart Rojstaczer and Christopher Healy regarding grade inflation (see the following graph).

Rojstaczer and Healy state:

Even if grades were to instantly and uniformly stop rising, colleges and universities are, as a result of five decades of mostly rising grades, already grading in a way that is well divorced from actual student performance, and not just in an average nationwide sense.

Taylor notes (see here)

Like so many other bad habits, grade inflation is lots of fun until someone gets hurt. Students are happy with higher grades. Faculty are happy not quarreling with students about grades...
 
To me, the real and practical problem of grade inflation is that it causes students to alter their choices, away from fields with tougher grading, like the sciences and economics, and toward fields with easier grading. 

Executive Orders

I "don't have a dog in this fight" as the saying goes, but for the record:

The fall of "faculty governance"

Timothy Taylor (see here) has a new post entitled "Administrators Take Over Academia."  Using recent research and data, he details how the notion of "faculty governance" - once a cornerstone of higher education - has declined to the point of irrelevance in some Universities.  It seems to be the norm these days as universities continue to spread the "we are a business" propaganda without ever making clear what they mean by that.  He shows the graph below which details the rise of this philosophy.

More on the Changing World of Higher Ed

In my previous post I highlighted a new report from The Delta Cost Project at the American Institutes of Research (click here for the report).  Below is another graph from the report:



Here is some of what Timothy Taylor (from the blog the Conversable Economist) says about it:

The picture that emerges from all this is fairly clear. When it comes to employment, colleges and universities have tried to hold down faculty costs in dealing with the expanding numbers of students by the use of time-contract faculty and part-timers. The nonprofessional staff are dealing with the increased number of students by using improved information technology and other capital investments, without a need for  a higher total number of staff. But the number of professional staff is rising, both in absolute terms and relative to the number of students. Desrochers and Kirshstein report these patterns in a neutral tone: "Growing numbers of administrative positions (executive and professional) and changes in faculty composition represent long-standing trends. The shifting balance among these positions has played out steadily over time in favor of administrators, and it is unclear when a tipping point may be near. Whether this administrative growth constitutes unnecessary “bloat” or is justified as part of the complexities involved in running a modern-day university remains up for debate."

I'll only add that institutions are defined by their people. As the full-time and tenured faculty become a smaller share of the employees of the institution and the professional administrators become a larger share, the nature and character of the institution inevitably changes. In this case, colleges and universities have become less about faculty, teaching, and research, and more about the provision of professional services to students and faculty. As far as I know, this shift was not planned or chosen, and the costs and benefits of such a shift were not analyzed in advance. It just happened.

His last paragraph is quite telling, since it is pretty clear to me that the "character" of many institutions has already changed.  For example, the practice of management in higher education now operates as a kind of "corporation envy" and the administrators view themselves as industrial managers in a "command and control" environment, not as colleagues engaged in the practices of teaching and learning.  One example of this:  the idea of "shared governance" is already diminished as faculty are increasingly viewed as "contract employees" who are necessary for the delivery of service, but unnecessary for the maintenance of the culture of the institution of higher education.  Whereas faculty tend to view their responsibility as educating students, administrators see their role as placating customers.  Whereas faculty tend to see the development and propagation of quality as a major challenge, administrators see "brand management" via "happy customers" as the key challenge.  The disparity of these two views of the role of institutions of higher education leads to predictable dysfunctions (for both faculty and administrators).

The changing world of Higher Ed

There are lots of opinions about what is wrong with Higher Ed., what has happened, what needs to be done, etc.  It's a big issue and, like most big issues, there are many ways to examine it.  One thing is pretty clear, however, and that is the fact that Higher Ed. has increasingly become an organizational form expected to address social problems.  Thus Higher Ed. continues to add departments that are, viewed in the best light, forms of social support for students who are less and less prepared to do college work.  The graph below is an interesting snapshot of this trend.

A Wasted Financial Crisis???

Adam Davidson at the New York Times asks: Did we waste a financial crisis?  (see here).  Davidson says:

Remarkably, five years after the crisis, the health of the financial industry is just as hard to determine. A major bank or financial institution could meet every single regulatory requirement yet still be at risk of collapse, and few of us would even know it.

So, while Republicans block every attempt at financial reform and Democrats (those who aren't secretly glad the Republicans are blocking reform) go on the talk shows and decry how "hard" they are trying, the rest of us are stuck with a huge bill for stabilizing the financial sector with the added insult that it most certainly can happen again.

Once again: Why we call it "the Great Recession"

CalculatedRisk updates it's (very informative) graph (see here for more ):

Read Robert Putnam's essay in the New York Times

Robert Putnam's essay "Crumbling American Dreams" is surely worth a read (see here).  Below is a quote from the concluding paragraph:

The crumbling of the American dream is a purple problem, obscured by solely red or solely blue lenses. Its economic and cultural roots are entangled, a mixture of government, private sector, community and personal failings. But the deepest root is our radically shriveled sense of “we.”