Madeleine L'Engle

Madeleine L'Engle offers a mystic's perspective on the incarnation of Christ:

What I believe is so magnificent, so glorious, that it is beyond finite comprehension. To believe that the universe was created by a purposeful, benign Creator is one thing. To believe that this Creator took on human vesture, accepted death and mortality, was tempted, betrayed, broken, and all for love of us, defies reason. It is so wild that it terrifies some Christians who try to dogmatize their fear by lashing out at other Christians, because tidy Christianity with all answers given is easier than one which reaches out to the wild wonder of God's love, a love we don't even have to earn.

(source, via my mystic wife)   The idea that making Christianity "tidy" misses the point is in many ways the essence of being a mystic.

Merry Christmas to all of you from this mechanic!

Truth Claim of the Day

When I was young I thought I was experiencing a series of events.   Now I understand that I was experiencing the feeling of being young.  Sure you can go back and revisited a bunch of European countries, but it won’t seen the same as when you first tramped around Europe with a backpack, and the world seemed charged with mystery and meaning.

Please, discuss. The context is here.

What Zombies Are For

 People think that zombie stories are about humans doing what it takes to survive. They’re not. Zombie stories are, it turns out, about humans doing what they mistakenly think they need to do to survive. As it turns out, they’re wrong.

This is the gist of a post at OverThinkingIt.com, one of my favorite group blogs, on what really drives zombie fiction.

Every zombie war is a war of attrition. It’s always a numbers game. And it’s more repetitive than complex. In other words, zombie killing is philosophically similar to reading and deleting 400 work e-mails on a Monday morning or filling out paperwork that only generates more paperwork, or following Twitter gossip out of obligation, or performing tedious tasks in which the only true risk is being consumed by the avalanche.

That's Chuck Klosterman at the New York Times offering his take on the attractiveness of the zombie apocalypse.

I think both these articles make good points, but I would add a dimension they don't quite address.  I think one aspect that really captures people's interest is the deep seated paranoia of it all. Zombies are just ordinary folk who turned on you, and anyone can, at any time, cease being your best friend and come after your flesh. On top of that, we have to consider that in any good zombie story, the zombies are not the real enemy. Zombies are hardly ever evil, after all; they're more a force of nature, a disease or a storm to be endured. No, to have true evil in a zombie apocalypse you have to have other people:

Beware of your fellow survivors. Sometimes, they may be the biggest threat to your survival. Other humans who want your supplies or who have lost their minds in the disaster could try to kill you. Never let everyone know about all of your supplies, and never let your guard down completely.

What do you do when you can't rely on your community?*  I think this is a fear a lot of people feel deeply, but don't quite know how to express. And like all unexpressed fears, it expands and fills us up unless we have an outlet for it, like zombie stories.  For me, I see the zombie apocalypse as the Great Disaster: our civilization cannot possibly survive it; at best the human race might survive to build a new one.  If we do survive, we have a chance to repeat the same mistakes or learn from them and try to create a utopia.  Most likely, we will try to create heaven in our own image and end up with a hellish dystopia for a troubles, but that's another strain of fiction for another time.

So how do we deal with a disaster from which there is no bouncing back? If we really think those around us could betray us at any time, can we ever come together to build something with the resources we have left? How bad do things have to get before our greed and fear and need to come out on top keeps everyone on the bottom?

Oddly enough, those are some of the main questions of my research as a development economist.  Maybe we should take zombies a bit more seriously after all!

*Add to this OTI's observation that our defensive paranoia is always wrong--we need community to survive, we need to let someone else save us--and you're dangerously close to every Apocalypse bearing a gospel message. One with shotguns.

Are Recessions Possible?

The obvious answer seems to be 'yes.' The more difficult question is 'how?' WARNING: what follows is a more technical musing than I usually post here. I'll try to keep it as close to the principles level of accessibility as possible, but I won't be offended if those of you who are less economically interested skip this one.

The problem is that, at the macroeconomic level, there is an accounting identity that says INCOME=EXPENDITURE.  All of the income in an economy in a given period has to be spent on something.  All your income, after all, is just somebody else's spending, and all your spending is somebody else's income.  Every seller in one market is a buyer in another, and every buyer in one market is a seller in another (and yes, this even holds when some people live off other people's money, although it gets more complicated to sort out how).

This leads to something called Say's law, which basically says that if there are more sellers than buyers in one market (such as in the labor market when we have unemployment), there has to be some other market where there are more buyers than sellers, a shortage.  It's the only way for the accounting identity to be true, and it's true by definition.

So how can we have a recession, where it seems there are more sellers than buyers everywhere?  I've been thinking about this recently because of some recent discussion at EconLog (here, here, and here, for examples) about that very question. Scott Sumner and Nick Rowe argue that the excess demand has to be for money.  People want to hang on to (not to spend, but to have in their pockets) more of the good we use in exchange than they can get their hands on.  Brad DeLong and Paul Krugman, on the other hand, think there is excess demand for "safe assets," essentially places investors can store their value without any real risk that they'll walk away with less than when they started. Money is OK at this, but not great; a better option is typically government bonds, particularly when our faith in the quality of supposedly safe private firms is shaken.

Arnold Kling of EconLog, on the other hand, thinks we are in the middle of what he calls a recalculation, in which people find themselves working on things no longer in demand (more sellers than buyers) and don't yet know where the demand has gone. To my understanding, his story is basically that the recession, as we usually talk about it, is a myth. We don't have more sellers than buyers everywhere; it's just easy to see where we have more sellers than buyers, but it takes more time to figure out which markets have more buyers than sellers.

Well, the thing about markets is that when there's a shortage, it's a chance for some business to raise its prices and still sell more, thus making a ton of money. Sellers who want to make money (and don't they all?) in order to consume things they like (and don't we all?) will leave the market where there are too many sellers and enter the market where there aren't enough. Shortages and surpluses should always be rather brief.  Sumner and Rowe have an answer for this: the money market isn't normal, there's a single supplier of money, the Fed (and there are good reasons to have a single supplier as I've discussed in this series). DeLong and Krugman have a similar defense: the best safe assets are supplied by the government, and are thus influenced more by political pressure than market pressure.

What I haven't seen from the Recalculation Story (or, to use Kling's latest phrase, Patterns of Sustainable Specialization and Trade) is an explanation for why market adjustments are so slow. He has talked before about why economic busts happen much more quickly than booms, but that's not really what I'm after. What I want to know is why is the information that we have excess supply in many, many markets so easily obtained by everyone (this is what creates the unemployment in his story, after all), but information about where supply isn't keeping up with demand is so very hard for entrepreneurs to obtain. 

Is it that entrepreneurs have to borrow money to chase demand quickly, but it's hard to borrow during recessions? Is it that information transmits most quickly out of markets with many established firms (and if so, why)? Is it government intervention, particularly temporary attempts to undo the shift in demand?  I just really don't get what in Kling's view is holding entrepreneurs back, and make no mistake, if we don't have something holding entrepreneurs back, then recessions are just not possible.

Bad #6!  Let that entrepreneur go!

Some Insights from Practice Job Interviews

1.   Keep the summary of your job paper brief
1a. Don't summarize your job paper too briefly

2.   The fact that you can do Bayesian statistics is a selling point
2a. Don't sell the Bayesian stuff too hard; be as un-technical as possible

3.   Relax and be yourself, you're trying to find a good match
3a. Relax and be whatever it is they want, you're trying to find a job

4.   Ask questions about the interviewer to show interest
4a. Already know everything about the interviewer to show interest
 
5.   Similarly, asking about the town shows interest
5a. Similarly, asking about the town shows lack of interest

6.   If you're unclear, the interviewer might misunderstand you
6a. If you're clear, the interviewer might misunderstand you

7.   Be energetic and animated
7a. But not too energetic and animated

8.   Be careful about revealing personal information
8a. Reveal some personal information

9.   Have a long list of courses you can teach and research ideas you might explore

10. More specifics are always better (as long as they aren't technical)


If I promise not to unionize, do you think they'll hire me at the Wendy's?

Truth Claim of the Day

People who favor monetary and fiscal expansion worry about a 1930's scenario. People who favor restraint worry about a 1970's scenario.

Please, discuss. The context is here.

(Yes, I know this is a cheap excuse for a blog post. I'll try to do better for Thursday.)

Skepticism about Scepticism

Would that be Meta-Scepticism? Sckepticism? Bueller?

In any case, this post is a response to a piece by the Venerable Gentleman in which he describes his attitude toward modern science, and nutritional science in particular.  Aside from a link to a story in the Atlantic, the post essentially consists of a rationale and a rejection. The rejection indicates that the Venerable Gentleman (VG hereafter) is unconvinced of the unhealthfulness of drinking, smoking, highly processed food products, or saturated fats of any sort; it also includes a passing stab at Pasteur's germ theory.

The rationale is a bit more forceful:

The physical sciences are indeed brilliant and beautiful in harness, yoked to goals above themselves. But when these are abandoned in the name of Progress, we arrive at the same result as that of the coachman who to speed his horses onward cut their traces: the situation is certainly a vast improvement from their perspective, but the passengers had rather hoped to arrive at Brighton before tea-time.

The argument is that the sciences must be reigned by the Queen of Sciences, Theology.  Unless it is thus bound, it's conclusions are of little value or interest to VG.

But frankly, I'm not convinced.  I don't for a moment believe VG consumes Velveeta because the science that tells him it's unsafe has galloped in unbridled fashion from its theological roots. Why not? Because the only reason we've come to believe Velveeta is food at all is that science told us so.

It was modern physical science, which VG argues has little value in its modernist form, which invented highly processed foods and trans-fats. It was modern physical science which convinced our parents and grandparents' generations that these new inventions were healthy and good, contributions to human advancement thanks to the scientific age. And it is modern physical science which continues to argue that the sources of culinary and olfactory satisfaction for hundreds of generations prior to this scientific era are now dirty, dangerous, and outdated; we should turn to the modern Prometheus's of dietary engineering to provide us new, more potent, more sterile, and more safe forms of food and drink.

No, if I may offer a not-too-seriously-suggested narrative of my own, VG distrusts claims against processed food because his mother gave it to him when he was a wee lad, and his mother wouldn't give him something unsafe. He distrusts claims against the vittles which he loves because he loves them, not because he believes them more moral in character. But these claims are largely made by those outside the mainstream of physical science, those who see science as serving Mammon (meaning corporate profits) as master, a critique far more in line with what VG offers than with his opponents.

Perhaps he has reason to distrust mainstream science, too. After all, his cigar-chomping lush of a grandfather (whose character and very existence I have totally fabricated here) lived to the age of 95 before dying in a sword fight with a pirate, so the causal effect cannot be all that strong, can it? (unless we consider drinking and smoking as contributing factors to encounters with pirates, which come to think of it...)  In any case, though, while VG is free to follow or ignore such advice as he pleases, I must insist that he not try to hide his preference behind the curtain of Theology. I'm on to you, wizard.

Truth Claim of the Day

We are not good when we are happy and bad when we are down. We are simply experiencing the natural spectrum of emotions as part of our human experience. When we take the time to appreciate all of our experiences, they will have far less power over us, thus increasing our capacity for true joy and contentment.

Please, discuss. The context is here.

Social Science, Mad Science?

I love this recent news story. A respected psychologist at Brown University has shown that simple stimulus-response experiments with known results still produce the expected response (although with a weaker correlation) even if the stimulus happens after the fact. That's right, folks, precognition!

In one experiment, students were shown a list of words and then asked to recall words from it, after which they were told to type words that were randomly selected from the same list. Spookily, the students were better at recalling words that they would later type.

In another study, Bem adapted research on "priming" – the effect of a subliminally presented word on a person's response to an image. For instance, if someone is momentarily flashed the word "ugly", it will take them longer to decide that a picture of a kitten is pleasant than if "beautiful" had been flashed. Running the experiment back-to-front, Bem found that the priming effect seemed to work backwards in time as well as forwards.

The article says the effect was "small but statistically significant," meaning it's pretty unlikely that the relationship is due to happenstance.  That's not scientific proof of precognition, by any stretch, but it does mean the results are worth taking a look at, and others are.

A skeptical approach to the paper that I found pretty interesting can be found here.  I think the take-home point is great:

The real lesson? This is the level of methodological scrutiny every paper should receive, and not just the ones you think are crazy:[...]

But beyond that, I think this article also sums up one of the main reactions to the paper:

I don't believe a word of it because a) let's face it, it's about precognition [...]

Some would say that it is appropriate for scientists to be particularly skeptical about anything supporting stuff we "know is wrong" like paranormal activity. If we think of science as a Bayesian process (which I think we should, but that's a post for another time), then we are essentially updating our beliefs about different explanations of the world as new data arrives.  Our beliefs don't, and shouldn't, shift to whatever the latest results say, because we have a lot of prior knowledge that matters for how we form our beliefs.

That said, though, a Bayesian view of science also implies that total certainty doesn't exist, and that no matter how wacky or far-fetched a theory may seem, we never rule it out completely. We might want to prioritize and spend as little time as possible exploring things that contradicts our prior expectations, but the Dana Skully Scully refrain "It's scientifically impossible!" isn't an acceptable argument in a scientific setting. The sciences don't get to be so dogmatic.

PS - Happy Thanksgiving, folks!

Taking Offense

After what was essentially a six-week hiatus, I thought I'd hit the ground running with something substantial:

If you met this fellow on the street, would you be offended? If he told you he didn't know what the symbol in his arm meant, he just thought it looked cool, would that make it OK?

Unless he's an actor in a movie or some sort of reenactment, I think we would all generally agree that wearing a swastika armband necessarily associates you with something decent folk don't want to be associated with.  In this sense, what you wear communicates something, whether the wearer intends to communicate it or not.

What about this?

Nobody really thinks that wearing a bomber jacket tells others that you have a pilot's license, or that you have destroyed enemy bunkers using military incendiary devices.  It's entirely plausible for someone to be a complete pacifist but still wear a jacket like this just because you think it looks cool.

So there seems to be a spectrum of association and message when it comes to things like clothing. Somewhere in the vast space between swastikas and bomber jackets, there is a line that, if crossed, moves you from wearing something "because you like it" to wearing something to "send a message." And it's really not a matter of intent: the swastika sends a particular message, period.

I bring this up because I have been thinking about the issue of offending others with something you see as harmless.  This article, in particular, got me wondering.  As an example, I know a lot of people who find this...

...to be a simple expression of support for their home state, states rights, or simply a rejection of an overly intrusive central government. On the other hand, basically every African-American I know looks at that shirt and sees this:

These white hooded figures are Boogey Man, a fear passed from parent to child over generations until it becomes ingrained in the society as the thing we must fear, not unlike the Nazis to Jewish communities. (As an aside, I have a friend of Jewish ethnic heritage who was once called a Nazi by a political science teacher. Bad form, political science teacher; very bad form indeed.)  When you fly your confederate flag, you are linking yourself to the KKK in the minds of most onlooking African-Americans as surely as if you were burning a cross in your front yard. It doesn't matter whether you intend it that way, just as it wouldn't matter if you wore a swastika armband to a bar mitzvah. You are doing something with a distinct meaning to another people group, and that meaning doesn't go away just because you don't see it.

Should the offense done to this people group be reason enough for you to eschew the confederate t-shirt? My instinct is to say yes; there are ways to express your group identity with other Southerners without hurting African-Americans, so the loving thing, the Christlike thing, to do is probably to avoid giving unnecessary offense.

But of course there must be a limit to the application of this logic, since every attire and activity risks offending someone.  Is the offense to animal rights activists sufficient reason to avoid something like this?

Aesthetic arguments are a separate matter.

I'm not sure, but again my intuition is to say the offense is not enough.  We aren't required to avoid all offense at all cost, and I'm not sure it is even possible to do so.  So if someone wants to wear a Victorian explorer outfit to a convention, are you aligning yourself with European imperialism?  If someone informs you that, as descendants of a subjugated people, they find your outfit offensive, do you owe an apology?

Is this man just having fun, or basking in retro-futuristic irony?

How should the second greatest commandment guide our willingness to invoke terrifying images or hurtful history upon those around us?  Where is the line beyond which our aesthetic choices begin to speak without our consent?  Or is this an instance where the mechanic is simply asking the wrong sort of question, where the mystic's way of thinking yields greater light?

I wish I had the answer to these questions.  I tend to think academics in the humanities over-play the idea of "the other," but on balance how we relate to "the other" is something most people should probably be more intentional about.

The Labor Market

I've been putting a lot of work into it, and thus have been unable to post for a while. This could continue for another week or two.  I apologize for the inconvenience, as I know you are all desperate to hear my ponderings on all matters. The truth is all the topics I planned to comment on before my recent job market blitz are now so stale that I will probably have to find new ones.

In the meantime, though, I thought some of you might find this piece at VoxEU interesting. It offers a plausible explanation and some additional evidence that increased immigration (legal or otherwise) does not hurt wages in the host country. On the contrary, if anything they seem to increase wages for native workers:

Several studies find that immigrants do not harm the wages and job prospects of native workers. This column seeks to explain these somewhat counterintuitive findings by emphasizing the scope for complementarities between foreign-born and native workers. Examining 14 European countries from 1996 to 2007, it finds that immigrants often supply manual skills, leaving native workers to take up jobs that require more complex skills – even boosting demand for them. Immigrants replace “tasks”, not workers.

Non-economists may find the material a bit dry, but I did want to offer their explanation:

In a recent working paper (D’Amuri and Peri 2010), we provide a potential explanation for this phenomenon, analysing European labour markets and immigration over the period 1996-2007. Our paper follows a similar analysis one of us did for the US (Peri and Sparber 2009). Rather than considering the labour market as made up of homogeneous and identical workers with potentially different skill levels, we consider that production is divided into a series of tasks that can be organised in a continuum spanning from simple-routine and prevalently manual tasks to complex-interactive and prevalently cognitive tasks.

Companies have to perform a range of these tasks in order to produce goods or services; hence the increased supply of some of them may increase the demand for others. For instance, for a construction company the supply of more construction workers performing manual tasks (such as installing dry-walls and raising foundations) generates the need for more construction supervisors, technicians, engineers, clerks, and sale representatives (as the company grows) who typically perform more interactive and complex tasks. As these tasks are all needed to produce final goods (they are “complementary” with each other), if immigrants and native workers specialise in different segments of the task-specialisation spectrum, then more immigrants can generate higher demand for natives.

This work is hardly the final word on the matter, but the simple fact that differences between workers matter means simple supply-demand logic isn't good enough to sort out the effect of more immigrant workers on native workers. The empirical evidence in the literature is pretty strong, so the burden of proof is really on those who want to say immigration hurts natives, rather than the other way around.

Accountability Moral and Economic

The real guilty party.

Reader kenestral passed along this article, which highlights the occasional tension between moral and economic obligations. It seems in Obion County, Tennessee, if you don't want the local fire department to be on call, you don't have to pay for it. This seemed all well and good to resident Gene Cranick until his house caught fire:

I thought they’d come out and put it out, even if you hadn’t paid your $75, but I was wrong.

They did respond to calls from a paying neighbor.

This was a really thought provoking article for me. If I were calling the shots at the fire department, I probably would have put the fire out anyway, thus validating Cranick's attempt to be a free-rider supported by the payments of his neighbors. It's not OK to let people's homes burn.  But if I were in charge of investigating the fire department, as you know had to happen, I'd probably not accuse them of any wrongdoing. They fulfilled their contracted duty.

The author of the article, Daniel Foster, sees this as a pretty good argument for providing fire-fighting services to anyone in the jurisdiction, and just charging them through a tax (that is, nobody gets to opt out).  In one sense I tend to agree, but that left me wondering how this was different from the Obama Health Care plan, which I don't like. After talking it over with my wife (who has better economics instincts than I do, despite never having taken a class on the subject), we concluded that the main difference is that there is nobody else offering to put out fires; if you wanted to use another service to put out fires, too bad, there's nobody.  No amount of money is going to be enough to get someone else to provide fire-fighting services. That's not true when it comes to doctor's office visits, checkups, and prescription drug provision. Now, if Obama had proposed a plan for universal catastrophic health insurance (with correspondingly high deductible), then it would be a lot more like public provision of fire departments. I might be OK with that health insurance system, too.

But what this really got me wondering about was Cranick's homeowner's insurance. Do they have to pay out despite the fact that he could have gotten fire-fighting protection, but didn't?  How can you even get homeowner's insurance on a house that isn't covered by the local fire department?  If I'm the insurance company, I probably wouldn't sell to a guy who won't join the local fire department club, no matter how much he tries to reassure me "oh, they'll come anyway, trust me." They don't make premiums high enough for that kind of nonsense.

On the other hand, might Cranick be able to argue that he offered to pay them the cost of fighting the fire ex post, and they refused?  Could he say it's really their fault everything he had burned to cinders?  I suspect this wouldn't fly, but I really don't know. 

The gist is, I guess, that I don't agree with the fire department's call, but I'm having trouble drumming up sympathy for someone victimized by his own poor choices. Not too much of a surprise, I guess, since we've learned years ago from Yale psychology professor Paul Bloom (via Freakanomics coauthor Stephen Dubner) that economists are evil.

David Henderson offers a libertarian response here. Tyler Cowen is not moved.

Truth Claim of the Day

Japanese politics is less competitive and Japanese rent-seeking is less competitive than in the United States.  Sustained near-zero growth in the United States would mean that interest groups tear apart the social fabric and grab too lustily at the social surplus.  Whether we like it or not, we are "built to grow" and we use the fruits of that growth to buy off interest groups as we go along.  Japan in contrast has greater capacity to stifle these grabs for new redistributions because their politics is more of an insider's game.

In other words, American society is arranged such that we must "grow or die"; other countries might not be. Please, discuss. The context can be found here.

Hail Democracy?

Authoritarian regimes [...] cannot aspire to continued economic innovation or to global economic leadership.

That's the take home message from an article by Harvard economist Dani Rodrik. If that were all he said, I'd say he was playing fast and loose with the facts, since all of the top growing countries over the last fifty years or so have had very little democratic influence in their governments:

Of course, Rodrik knows this better than I do. So, being a good economist, he hedges his claims:

When we look at systematic historical evidence, instead of individual cases, we find that authoritarianism buys little in terms of economic growth. For every authoritarian country that has managed to grow rapidly, there are several that have floundered. For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo. [emphasis added]

As a friend working in the sciences once said, "data is not the plural form of anecdote." If what we're interested in is whether or not having a dictator or one-party government helps the country grow, we need to look at all countries, not just the top performers. That data looks something like this:

Low levels of democracy do give us the highest growth rates, but they also give us the lowest. If I were to plot a line on that graph, it would be sloping up, showing that on average, more democracy leads to more growth.

Now, we know that correlation isn't causation, so let's not get too carried away with this relationship. In fact, there's a lot of work suggesting that when you try to get at the real, causal relationship, more or less democracy doesn't seem to make much of a difference for how well a country grows. And further, we have some good reasons to believe dictators should generally hurt economic growth, so the fact that there are any really high growth authoritarian systems means something strange is going on.  So when looking for the economic superpowers of the future, I don't think we should be too quick to, as Rodrik says, "turn instead to countries like Brazil, India, and South Africa, which have already accomplished their democratic transitions and are unlikely to regress."

But Rodrik is right to consider the simple "democracy is related to better growth" position the correct default. As William Easterly (the source of the nice table and graph) notes, we can't just say the graph shows we need to have good dictators (who will lead to better growth) and fewer bad ones (who will lead to stagnation). If we label countries with the best growth "good dictatorships" and those with the worst "bad dictatorships" we're just begging the question. Unless we know in advance what made the top growers grow and what made the bottom ones fail, we can't very well pick out which dictators now will help their people and which will hurt.  On average, they're gonna do more harm than good.

Scholarly Critique Fail

To their minds, little of what takes place on college campuses today can be considered either "higher" or "education." They blame a system that favors research over teaching and vocational training over liberal arts.

 This is the main thrust of an interview at the Atlantic with the authors of the book Higher Education? (and yes, the question mark is part of the title). The authors do not like faculty who care about research to the point of avoiding teaching, an attitude I can sympathize with. Here is an excerpt on the perils of the Publish of Perish mentality:

The problem is that there are just too many publications and too many people publishing. This is true even in the hard sciences. If there's a research project on genetics in a lab, they will take certain findings and break them into eight different articles just so each researcher can get more stuff on his or her resume.

And many of the publications are too long. A book on Virginia Woolf could be a 30-page article. Somebody did a count of how many publications had been written on Virginia Woolf in the past 15 years. The answer is several thousand. Really? Who needs this? But it's awfully difficult to say, "Here's knowledge we don't need!" It sounds like book burning, doesn't it? What we'd say is that on the scale of priorities, we find undergraduate teaching to be more important than all the research being done. 

So far, so good. But they also have some very particular ideas about what constitutes good vs. bad ways to pick a college to attend. The bad way, in their view, is to go to college for signaling purposes:

[...] go to a prestigious college, and when you graduate the world will know you went to Princeton or Stanford. It doesn't matter what happened in the classroom as long as you have that brand behind you. Claudia and I were up at Harvard talking to students, and they said they get nothing from their classes, but that doesn't matter. They're smart already—they can breeze through college. The point is that they're going to be Harvard people when they come out.

So what do the authors advocate instead?

The second reason to go to college is get a good liberal arts education.

Wait, really? Liberal Arts? I thought having people write volume upon volume about Virginia Woolf was a bad thing. So why would we train students to do the same thing by having them read those very volumes? Or is this not what the authors mean by a liberal arts education?

There are two ways to look at it. First of all, freshmen come in at age 18. Let's suppose they've decided to major in sports management. What's an 18-year-old going to do in a freshman course in sports management? I've attended some undergraduate business courses. The students are young; they don't have business experience. Really very little is imparted.

To me this sounds more like an argument for skipping college and going into the workforce than anything else. Is that what they mean?

In our economy, they're not really ready for you until you're 28 or so. They want you to have a number of years behind you. [...] Besides, young people today are going to live to be 90. There's no rush.

The economy wasn't ready.

Oh. Nope, apparently the modern economy can't handle young people. Their labors aren't going to get them anywhere when they're young no matter what they do. So what should young people be doing with their time?

The second way to look at it is that liberal arts, properly conceived, means wrestling with issues and ideas, putting the mind to work in a way these young people will only be able to do for these four years. And we'd like this for everyone. They can always learn vocational things later, on the job. They can even get an engineering degree later—by the way, in two years rather than four.

This sounds like a good plan... for high school. But I don't quite see how it's an effective plan for college unless we are planning to greatly multiply the volumes of Virginia Woolf for these students to wrestle with, assuming they have any interest in doing so. Even if college were much cheaper than it is now (they do have a nice comment on massive borrowing for college, which at least for non-vocational, non-investment schooling is a pretty poor idea), many students would rather work at low wages than hang out wrestling with books they don't care about. Are they wrong to feel this way?

Good teaching is not just imparting knowledge, like pouring milk into a jug. It's the job of the teacher to get students interested and turned on no matter what the subject is. Every student can be turned on if teachers really engage in this way. [...] Some people say to me, "Your students at Queens, are they any good?" I say, "I make them good." Every student is capable of college.

No. I have to stop you there. Not every student is capable of college. I went to the local Vo-Tech in high school, and met some people who would not have been able to keep up with college level coursework at the local state college. Period. And they knew it. They knew they'd be frustrated and tired and hate every minute of it no matter how enthusiastic or capable the teachers. And you know what? It was OK.

They were studying something they found somewhat appealing, like computer repair or auto mechanic work or graphic design or what-have-you. They were learning something they could understand and appreciate and be good at that would also pay the bills, and possibly even leave them some free time to explore their side interests. And that's fabulous. I've had a fair number of students who I think would live happier, healthier, and possibly even wealthier lives if they stopped trying to finish college because everybody-who's-anybody-has-a-college-degree, and instead learned a trade. Mike Rowe of Dirty Jobs fame made a similar point here (second video), and there are some interesting links on the subject here.

Do I think liberal arts education can serve the consumption and productivity goals of students? Absolutely, given the right students (and there are a lot of them). I think we could do even better to have capable, demanding, well-trained, and enthusiastic teachers of these topics starting in high school and continuing into liberal arts schools for those so inclined. But I think we would do a lot better at promoting real higher education if we stopped pretending that "higher" means "top of the line but somehow still accessible to everybody." That's a waste of the students' time, creativity, and enthusiasm in too many cases. Those are resources we should take more care in managing.

(Craig Newmark comments briefly and to the point on the same article)

PS- Here's hoping the economy is finally ready for this:

Your Opinion

I'm leading a discussion for a graduate student discussion group next Sunday, and I need to decide what topic to present. Since my own research is not particularly general interest, I thought I'd get some thoughts on what my blog readers think would spark an interesting discussion. Therefore, I present Metadoxy's first ever Reader Poll:

For a look at possible reading material for mechanics and mystics, click here; for the purposes of education, click here. The How to Deceive with Statistics would focus on statistics education, such as in the video here (third video) from Arthur Benjamin. I've actually presented on The End of Civilization before, talking about William Burrows and the Alliance to Rescue Civilization; I'd probably take a more general "how should Christians think about and react to risks of global economic meltdowns / meteor strikes / climate disasters / (genetically engineered?) plagues / nuclear war" approach this time. Economic Growth vs. Human Progress would be a new topic, but would give us a chance to talk about the pros and cons of the modern age, as well as what our social and political goals should be in areas like foreign aid / immigration policy / national economic policy.

Please vote, the more feedback I get here the better decision I can make. Is there anything not in the poll that should be? Why did you vote the way you did? Please let me know in the comments!

Which Topic is Best for a Christian Grad Student Discussion?

Don't Be Too Certain

There's a fascinating graphic from Catherine Rampell that's been making the rounds on the economics blogs:

So what's the biggest problem facing business right now? Paul Krugman points out that it's insufficient demand, and

[...] the best thing government could do to help business would be to spend more, increasing demand. The fact that it's not going to happen doesn't change the fact that it's the simple truth.

Unsurprisingly, Brad DeLong agrees with Krugman, and adds that anyone who disagrees is clearly incompetent.

Tyler Cowen, however, doesn't see it as that clear-cut:

I didn't read this graph the same way. I saw poor sales as a "biggest problem" for fifteen percent (or so) of small businesses in periods of full or near-full employment. I also see "poor sales" as a "biggest problem" for about thirty percent of small businesses today. That change -- about fifteen percent of the total -- struck me as relatively small and indeed puzzlingly small, if indeed we are in a liquidity trap and weak AD is the overwhelmingly dominant problem. [...] I do think weak AD is an important problem to be addressed, I just don't think the absolute levels here imply "end of story."

Russ Roberts adds (like the good Austrian economist that he is) that if taxes plus regulation were a single category, it would take over the top spot from poor sales. Finally, the award for best additional information goes, as it often does, to James Hamilton:

The statement that businesses aren't hiring is simply false. According to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey, the U.S. private sector hired 3.9 million new workers every month, on average, over the first 7 months of 2010.

But if that's true, then why isn't total employment booming? The answer is that, according to the same JOLTS data, some 3.8 million workers quit or lost their jobs each month on average during Jan-July. [...] the fact that small changes in net employment figures mask a dynamic economy in which there are huge gross changes in employment status for individuals and firms is quite indisputable.

Firms are firing a lot of people, probably because of poor sales. Firms are also hiring a lot of people, just not enough to mask the firings.

So what's the take-away point of all this?

I have to go back to Chris's fascinating post on the rhetoric of the "third way." Although I hate to contend with someone who quotes Lewis, this sort of thing is precisely why we should be reluctant to pick one side to fight for: reality involves a lot more dimensions than partisans can allow themselves to consider. In particular, once we've identified the "most important problem" that needs fixing, we tend to act far more certain in our own conclusions than the evidence allows. We should this pitfall whenever we find it in ourselves.

I know I'll get some flak for this, but I would contend avoiding certainty (in this sense) even extends to spiritual matters, if only because we need to avoid placing our confidence in a favorite interpretation of Scripture rather than in Christ himself. Humility requires that we be willing to let go of a firmly held position and accept "middle things" if we learn we're wrong. If that's true even in matter's of God's Word, how much more true is it for empirical matters like economic and political arguments.

Holding a view like this basically insures I'll never get a job with the CEA or NEC, but then who wants to be Larry Summers, anyway?

This man is always right. Right?

A Little Undead

Just a short post today providing a link to last week's Zombie Week at Tor.com.  A lot of the posts are linked to the original, but look through Sunday's posts to see a few more. The available points of interest include samples of fiction, roundtable discussions of all sorts, essays on the mechanics of writing zombies, essays on the mechanics of zombies themselves, and a lot more.  Take a look.

Also, I may have linked to this before, but I like the animation so I thought I'd throw it in for good measure:

Teachers Good and Evil

In my recent post on education, I stirred up considerable debate by saying that the goals of education are consumption, productivity, and signaling, and essentially rejecting any idea of character building or promoting virtue. I stand by my view, even though I know there are many teachers out there who care primarily about character and virtue, because from the perspective of the student becoming a better person is still only a desired goal if it allows you to communicate something (signaling), to do something (productivity), or if you simply value your own character and want to enjoy something (consumption). It's not the only way to break down these motivations, but I believe it is the most intellectually helpful way.

But I don't want this view to suggest that I think teaching is a mechanical process, in which relationships don't matter and values aren't influenced. Far from it. Within this framework it is still possible for teachers to promote good or evil toward their students. An example of the latter came up in a post by Albert Mohler, in which an English professor at Northwestern indicates his goal of indoctrinating students:

“The children of red states will seek a higher education,” he explains, “and that education will very often happen in blue states or blue islands in red states. For the foreseeable future, loyal dittoheads will continue to drop off their children at the dorms. After a teary-eyed hug, Mom and Dad will drive their SUV off toward the nearest gas station, leaving their beloved progeny behind.”

Then what? He proudly claims: “And then they are all mine.”

That is creepy. Not the fact that the worldview of the professor will affect the students; as Mohler points out:

All teaching involves ideology and intellectual commitments. There is no position of authentic objectivity. Every teacher, as well as every student, comes into the classroom with certain intellectual commitments.

It's not the fact that the teacher is sharing his own ideology---or even that he is trying to influence the ideology of his students---that makes this approach to teaching bad. It's the fact that "winning" the ideological war is the only objective expressed here. This professor doesn't care about the objectives of the students, and he doesn't even seem to care about the students' virtuous character. All he cares about is shifting the student's worldview to be more in line with his own.  That's not education. That's brainwashing.

In subtle contrast to this terrifying approach to teaching, Chris links to someone's personal account of having his worldview dismantled by a professor. But this wasn't the work of someone lying in wait to pounce on an unsuspecting eighteen-year-old (or at least, it doesn't seem so). This was the patient, relationship building of someone who genuinely wants a student to understand the world better:

It was John who—in the course of one extended conversation on the political thought of John Locke—broke through my well-armored adolescent Marxism and first introduced me to the challenges of intellectual history. He managed this by the simple device of listening very intently to everything I said, taking it with extraordinary seriousness on its own terms, and then picking it gently and firmly apart in a way that I could both accept and respect.

That is teaching. It is also a certain sort of liberalism: the kind that engages in good faith with dissenting (or simply mistaken) opinions across a broad political spectrum.

Was this second teacher also brainwashing his student? Possibly. But it is at least as possible that he was trying to help build the student's character, or make him a more productive thinker with the capacity to enjoy the subtleties of philosophical thought.

So we have here two cases of teachers who seem to be ignoring the student-perspective goals of consumption, productivity, and signaling. While I believe thinking about teaching in the way I do precludes the brainwashing of the first teacher, I hope I can say it doesn't prevent the care and relational efforts of the latter.

The Nature of Conflict

Economist Robin Hanson has an interesting way of framing how we look at conflict between groups:

 Our fight, of [A] against [B] over [C], is but one battle in the ancient war over [F], along the great divide between [D] and [E]. Many do not realize how many of our apparently mundane conflicts are, in reality, battles in this ancient war. Today is a crucial day in this war, so we must not give up, and we must not lose hope, or someday [D] may lose [F] forever. Fight, fight!

(there are further comments at EconLog, if you're interested)  Hanson notes several group membership divides that can be used for [D] and [E], including "tyrants vs. freedom-lovers, rich vs. poor, faithful vs. heathen, urban vs. rural folk, men vs. women,[...]" and many others. Although it's never spoken of in these terms, I would say a lot of unnecessary conflict occurs along the Mechanics vs. Mystics divide, although most of the time we either like to frame it differently (Hanson's "intellectuals vs. ignoramuses" is a favorite of mechanics, while his "artists vs. undiscerning" seems preferred by mystics). This is an aspect Hanson doesn't explore, although I'm sure he would find it interesting: we often talk about the divide between [D] and [E], not because it is the real dividing line we care about, but because it sounds more important than the divide between [M] and [N].  When we notice and accept that a conflict is along mechanic vs. mystic lines, it becomes a lot easier to communicate and a lot harder to cling to being the "winner" of the conflict.

Aside from that admittedly minor contribution, I find it slightly terrifying to admit this is how many, many Christians I know think about their relationships with the non-Christian world. There is a divide between [D] Christendom and [E] Everybody else (Babylon?), and the war is over [F] civil society / American culture / our Christian nation / etc. Now, I'm not denying that this divide exists, nor that it is important. But I vehemently deny any version of the Christian worldview that says " Today is a crucial day in this war, so we must not give up, and we must not lose hope, or someday Christendom may lose civil society / American culture / our Christian nation / etc forever." If we believe Christianity, then we believe that Christ is God, and that no enemy can even vaguely approximate Him. He cannot lose anything He prefers to win!  Fear of losing something, anything, to the secular world simply doesn't compute with Christianity, and thus Hanson's 'ancient war' framing cannot rightly reflect a Christian view of the 'great divide.'

Again, this doesn't mean I think Christians shouldn't stand up for what they believe is right in public forums. Far from it. But we need to remember that we're not fighting a battle against an entrenched foe who may yet win the day if our courage fails.  We are spreading the world---with the gentle bedside manner of an oncologist (or the compassionate friend of an addict)---that sunrise is almost here, and will soon be here whether we want to keep our drunken nighttime revelry going or not. The change of seasons is not a war we need to win; it is a part of the nature of the world that we do well to keep in mind. And so it is with the victory of Christ.

Reich's Real Lesson

My friend Chris, never short of good questions and interesting articles, asked my opinion of Robert Reich's recent piece on the recession. I should perhaps start by admitting a certain presumption in critiquing the work of an academic much more accomplished than myself. He certainly knows more about the ins and outs of the American labor market than I do. But in the post, he ventures into the realm of macroeconomics and economic growth; here I think I still have the home-field advantage.

I'm hoping to make this into an educational opportunity. Like most educational opportunities, though, and especially those where the educator is unpaid, this is going to take some time. I'm going to try not to spend too much of my own time on this, which means I won't be economizing on words like I should. Sorry in advance. I'll try to compensate by including just enough snark to keep you awake; it's not wrong if it's for a good cause, right? My running commentary is below the jump break.

How to Deceive with Statistics

For this Labor Day post, I'm letting Alex Tabarrok of George Mason University handle this one for me:

Notice that nearly 30% of the smallest decile (10%) of schools were in the top 25 at some point during 1997-2000 but only 1.2% of the schools in the largest decile ever made the top 25.

Sounds like small schools are proven to be awesome! Oh wait, we've got a problem:

If for random reasons a few geniuses happen to enroll one year in a small school scores jump up and if a few extra dullards enroll the next year scores fall.

Thus, for purely random reasons we would expect small schools to be among the best performing schools in any givenyear.  Of course we would also expect small schools to be among the worst performing schools in any given year!  And in fact, once we look at all the data this is exactly what we see.

Tabarrok provides this really nice graph:

which shows that smaller schools tend to vary more, but on average they're not really any better than big ones in terms of test scores. We could argue that test scores are a bad metric of education quality, and that small schools are better for other reasons. But then we'd better not be pointing to test scores as the reason for supporting small schools.

This just goes to show that looking at extreme cases on one end of the spectrum only will almost always be misleading. This is one of the big reasons for the maxim "'Data' is not the plural of 'anecdote.'" Just remember that it's possible to reduce statistics to the level of important-sounding anecdotes if you do it wrong. Thanks to Marginal Revolution for the reminder.

What After the Three Rs?

What should students learn after they are literate and numerate at a functional level? Here's one argument for why mathematical proofs matter. Matt Rognlie offers some pros and cons of studying 'classics' (although he is less charitable towards some than others).

This question is tricky because it's really a matter of the purpose of education, but in a very specific sense. If we want to satisfy the consumption goal, should students read To Kill a Mockingbird? I mean, I loved it, but a lot of people don't. What about The Old Man and the Sea? That one I couldn't stand. From a consumption perspective, shouldn't we be telling everyone to read more Tolkien? Or letting students choose from an array of comic books? How do we know what readings now will give students more satisfaction in ten and twenty years time?

If, on the other hand, we are after productivity, then all education tends to become vocational, doesn't it? We could argue back and forth a bit about how best to develop "critical thinking skills" and other abstract tools many workers will need, but in general the idea becomes clear: let students try many things, and as they demonstrate interest or aptitude in one, narrow down their training to the specific skills they'll use in that profession. This makes moving between different kinds of jobs more difficult, but these days it usually doesn't pay to be a generalist.

If it's signaling we want to promote, of course, then we have a bit more leeway. The goal is to show a willingness and ability to endure the kinds of pain that you would only do if you really had the traits and talents employers are looking for. Of course, there are lots of ways to endure pain; Hemingway is just one option. Knowledge bowl with canings for the loser would work just as well.

Different cultures have relied on different mixes of these goals throughout history, and some are easier to figure out than others. China has had, since ancient times, a major emphasis on exams determining vocation; it seems to me that this is primarily a signaling education. In aristocratic societies, it seems to largely be a matter of consumption. Western societies have for at least a couple centuries now focused on creating workers with identical skill sets---particularly the "don't question the boss" skill---well suited for factory work, call centers, or middle management.

What should the mix of educational goals look like? What would education that served this mix well look like? What mix(es) would be acceptable from a Christian worldview, and are there any that must be categorically rejected?

(PS - I know some readers may want to say that none of these goals is in line with a Christian worldview, since the goal of education should be "raising children in the nurture and admonition of the Lord," and ultimately God's glory comes above all other goals. Well, OK, sure. I contend that you're still going to promote God's glory by nurturing and admonishing in a way that combines consumption, productivity, and signaling. The question is what types of consumption, productivity, and signaling best promote God's glory, and what combinations implicitly refuse to nurture and admonish. So I'm not looking for a Mardel's answer, nor even the Reformed equivalent. Dig deep here, people.)

Business vs. Creativity

I've got yer business model right here!

[W]hen I wrote comics, I lived in the moment, letting my stories tell me what to write about, riffing off the zeitgeist month by month.

This is the main thrust of a short post by Steve Englehart regarding the creative freedom that comic book writers had back before all the blockbuster movies were based on comic book superheroes. Englehart remembers the good ol' days fondly, as we all tend to do when waxing nostalgic: "Once we creators were Marvel or DC." He is less impressed with the modern comics industry:

Today, the comics companies are top-heavy with editorial interference.[...] They expect writers to give them synopses for the next twelve issues in their series, so that when the writer finally gets to that twelfth issue, the material is so old and stale that he might as well just blow his brains out, for all the satisfaction he can derive from it.

I find it pretty common that creative-types bristle when their activity is governed by business-types. Is this because they have different ideas about what customers really want? Or is it because they want their products to satisfy different people with fundamentally different tastes? Tyler Cowen and Alex Tabarrok have a paper on the topic (which I've mentioned before) that takes this latter view. This "different targets" view seems to imply that, as we develop technology that lets us mass produce goods that used to be produced by artisans, we should see see the influence of creative-types fall and the influence of business-types rise.

On the other hand, I know of many who would support the idea that the goal may be the same, but there are multiple ways of trying to satisfy a given target audience, and creative-types will have very different ideas on this than business-types. Sir Ken Robinson would say that we live in a world where we neglect and ignore creativity to our detriment. This "different techniques" view leaves open why one group would gain more influence than the other, but it also suggests that it's possible to reverse the trend if enough people are willing to try. No such reversal seems possible in the "different targets" view.

So which is it? Was Steve Englehart driven out of comics by the inexorable market forces acting on a good that is easy to mass produce? Or is his lament a rally cry to take the power from the suits and give it back to the creators? Or is there a consistent view in between with its own set of important implications?

Friday Video Extravaganza

I know I've done fake trailers before, but I couldn't help bringing it out again. Below the jump break, trailers for movies that don't exist.

What Schooling Is For

Today is the start of another semester, and that means the ever popular Opening Lecture. I sorted out several semesters back that I'm not the only one bored to tears when the first thing a professor does in a class is pass around a syllabus and then read it. Instead of doing that, now I open by explaining to students why they're in my class; not why they're taking microeconomics, but why they are in college in the first place. It allows me to bring up a lot of topics we'll cover over the semester, and I think it's pretty eye-opening to those who are likely to pay attention to the course.

Now, I don't really go into the historical sources of the university system, although that certainly would be suggestive. Matt Yglesias puts it this way:

[...]as Brad DeLong likes to point out the “get a bunch of people in a room to listen to some guy talk” model of education was an organizational response to the high price of books. In principle, it would seem to have been made obsolete by the printing press and the public library. Yet obviously that didn’t happen. Colleges and universities managed to make themselves indispensable sources of credentials and social prestige. And though they’ve of course incorporated information technology innovations into their work, they still engage in an incredible quantity of pre-Gutenberg educating.

So advancing our knowledge was once the primary purpose of schooling, but it hasn't been for a long, long time. This is why when I see questions like Arnold Kling's ("Yes, our kids do graduate, but could they have learned just as much on their own on the Web?"), I can't help but feel he's missing the main point.

As a teacher, I want how I teach to be shaped by the goals the students have when they sign up. As an economist, I know that these goals really fall into three broad categories: consumption, productivity, and signaling.

'Consumption' means some students go to school because they like it. Maybe the enjoy the social environment, or maybe they think the subjects are interesting. Perhaps, as one keen observer of the human condition has said, people go to college to become better conversationalists. In any case, all these reasons are just different ways of saying they derive satisfaction from the experience of school itself, and in economics, when people derive satisfaction from the thing itself, we call it consumption.

The problem with this is that formal schooling is usually only fun for those who are naturally good at formal schooling (i.e., people like me). For many others, it's a torturous, life-sucking experience that drains the creativity right out of them. Sure, college parties are fun, but why borrow money so your four years of partying can be interrupted by memorizing facts about price controls? Why don't we send everyone to Europe for two years, then send 'em to the workforce?

'Productivity' is what most traditional views of education focus on, and what all political posturing focuses on. Productivity means students go to school to make them better at whatever they are going to do when they stop going to school; sometimes schooling is viewed as a requirement to gain necessary skills, without which many people simply could never figure out how to do some jobs. Within this class is the idea that workers with higher productivity are more valuable to employers, and generally this will be reflected in higher wages / salaries and better benefits offered.

Productivity is what everyone worries about when it comes to education, but in reality it's probably the least important reason to go to school. Part of the reason is precisely Arnold Kling's point: intelligent individuals can learn most of the same things on their own. Formal education doesn't make kids smart, and it doesn't make them dedicated or hard-working. In some cases it can help by imposing a degree of discipline on students who aren't very good at self-discipline, but it's probably as likely to have the opposite effect. So what is formal education really good at?

'Signaling' is the primary purpose of education. It's all about credentials. The thing is, employers need to be able to distinguish people who are talented in the areas that matter to them most from those who are not very good in those areas. One of the best ways to do this (for technical reasons that I won't go into here) is to see who is willing and able to endure the most hardship in the name of the areas that matter to the employer. Hence, college majors. Of course, colleges need to be able to sort students into those most likely to succeed in a given area, too, so they look to those who dealt with the most (semi-relevant) pain in high school. High schools do the same, and so on.

In the end, most of what formal education is about is enduring hardship as proof that you have passion and talent for something. It sounds ridiculous, but it's actually quite important for employers to be able to make good decisions. Of course, this presents a problem the earlier you get in someone's life, because children usually don't know their talents yet, and if they are locked into a course early they never get the chance to explore and find what their real passions are. That doesn't mean formal education is bad. But it does mean we should use education for what it can do, and avoid using it for what it can't.

Friday Video Extravaganza

We're auto-tuning after the break (language warning on all videos, btw).

Truth Claim of the Day

We are at the beginning of the Death of Credentials. The ROI [Return On Investment] for 95% of college educations will be negative.

Please, discuss. The context is here. I'm particularly interested in the thoughts of those who are currently or plan to eventually be teaching at the post-secondary level.

High Tax, Low Tax

There has been a lot of talk among economics bloggers about Ezra Klein's informal poll regarding the Laffer Curve. The key is that how high we set our highest income tax rates (called "top marginal rates" by those who like using economic-y words like "marginal") matters a lot for how much money the government actually brings in, especially from the wealthiest citizens. Klein summarizes this favorite tool of conservative political discourse:

The idea, popularized by economist Arthur Laffer and writer Jude Wanninski in the 1970s and '80s, is simple. Tax rates of zero percent produce no revenue, for obvious reasons. Rates of 100 percent should produce no revenue either, as no one would bother making the money that falls into that bracket knowing it would all be taken away. Thus, presumably, there is some rate in between the two that maximizes revenue. Go above it and revenue would fall because people would avoid taxes or stop working; go below it and revenue would fall because less money would be taxed.

That is, as we raise taxes we increase government revenue, but at some point this has to stop being the case. The reasons put forward for this are many, among them the following:
(A) if taxes are too high people have a very strong incentive to lie about their income levels;
(B) if taxes are too high people have very little incentive to work more / harder (they won't see most of the benefits anyway);
(C) if taxes are too high the highest income earners have a strong incentive to take their business somewhere else more wealth-friendly, like Singapore or Hong Kong;
(D) if taxes are too high government will be too big a part of the economy, and since government is not as good at promoting long run growth as the private market, long run growth and overall income will suffer, and tax revenues will suffer along with them.

Some of these are much stronger arguments than others. (A) is a big one on a practical, year-in-year-out level. (C) probably plays an important role in the long run, on the order of several decades, and becomes more of an issue the more globalized the world becomes and the more high income earners get paid for their skill with information (which means its easy to do what they do from anywhere). (B) and (D) are tempting philosophically, but there's just not much empirical evidence to support them.

Still, one thing is certain: we definitely don't want to be on the wrong side of that peak, so knowing where it is could be very important. Thus, Klein decided to ask some experts where the peak is.

There were a lot of bad answers to his question. To be sure, figuring out where precisely government revenues can't go up anymore is hard, but a lot of the people Klein asked gave numbers based almost purely on ideology---as opposed to, I don't know, data, or even theory---but acted like it was based on research. Others gave a single number as if they'd seen the number written on stone tablets somewhere. But there were some pretty good answers among the bizarre ones.

Probably the best numerical answers were given by Emmanuel Saez and Bruce Bartlett, both of whom offer a way of getting a range, and both of whom put the number somewhere around 60% to 80%; in other words, the US was probably close to the edge at the beginning of Reagan's presidency (top rates were around 70%), but we're nowhere close right now.

Greg Mankiw pointed out that in a longer term situation people will probably respond more to the tax rates they face, although he does seem to put a lot of stock in the economic growth argument that, as I mentioned, isn't great empirically. Bruce Bartlett adds a pretty important insight:

I think 50 percent is an important threshold and I would be very reluctant to go higher even if it raised net revenue.

This is key, in my view. Yes, we might be able to raise revenue up to a certain point without crossing the threshold, but there are good reasons to not just stay on the left side, but stay significantly on the left side. If we reach the peak, we've already gone too far. For this reason, my favorite response is Marty Feldstein:

Why look for the rate that maximizes revenue? As the tax rate rises, the "deadweight loss" (real loss to the economy) rises so as the rate gets close to maximizing revenue the loss to the economy exceeds the gain in revenue.

If only my micro principles students could think like this.  Yes, it might bring in revenue. It might not even be hurting long term growth. There are still important economic reasons---distortions to the economy---not to go that far.

There's a moral dimension here, too, but that is, I suppose, a post for another time.

Friday Video Extravaganza

Final Frontier edition below the jump.

How to Deceive with Statistics

Someone Else Does My Job Edition

I realize I haven't talked about statistical errors in a while, but nothing readily accessible to the layman has really come up. That is, until this thorough article discussed a recent article on the topic of children and cow's milk:

Mothers who feed their babies cow’s milk in the first 15 days of life may be protecting their children from dangerous allergies later on, says a new study.

"O RLY?" the author of the above article said upon reading the above sentence. After all:

[...] given they claim the exact amount is unknown, making a suggestion to "give a single bottle daily" is highly unusual; not least because it contradicts worldwide recommendations which are based on extensive evidence.

Not given to trusting Prof. Yitzhak Katz of Tel Aviv University’s Department of Pediatrics, Sackler Faculty of Medicine---at least not as a default position---she (I think the author is a she) decided to look up both Professor Katz and the original study.

On Dr. Katz, she found he has received funding from the Israel Dairy Board, which presumably could benefit from adding the 0-6 months demographic to their target audience. In other words, everything he says is probably a lie, right? Well, I don't recommend going as far as the author on this. Partially this is because while the Dairy Board might benefit from an increase in sales to newborns, inducing health concerns and possible allergies later on means they'd lose a lot of revenue to the soy folk, so I'm skeptical that they are really pushing junk science. Follow the Money is good advice, but it not only tells you when someone has an incentive to lie, it also says when they have an incentive to be careful about which lies they tell.

But I also think we should be careful about dismissing Dr. Katz for his Dairy Board connection because this is what the debate kids call an ad hominem attack: namely, we're complaining about Katz's credentials, but not dealing with his argument. In a very real sense, if the science works, the science works, regardless of who paid for it. Follow the Money lets us know when we should be extra perceptive to things like wording, but it doesn't give us license to just dismiss evidence. Fortunately, although the article's author takes a hard line in her rhetoric, her practice is solid in this area. I do so love the magic words "So I decided to dig out the study."

The article is a great example of giving a close reading to the original sources cited in a piece of potentially biased news. It also highlights how a close reading and attention to the wording of claims is important when dealing with statistics. Really, there's not much I can add to this case study. Do read the whole article, please.

The bottom line, given what the study actually says, is I think accurate:

To suggest infants be given a bottle of cow's milk on the basis of this one study, is not only irresponsible, but really quite scary!

In other words, don't do this. The bottom line from the "don't be deceived" angle is this: Be wary of any news item that tries to convince you with the phrase "says a new study." The study might not say that at all; even if it does, it might not lay claim to the level of confidence the article suggests; and even if it does that, the study might not be very well done in the first place!

Astro-physics

Seriously, modern physics and astronomical sciences hurt my brain. Here are four reasons why.

Time travel could be real, involve portals

Excerpt:

Einstein’s theory’s of relativity only precludes travel at the speed of light, he never said anything about travel faster than light. Of course it will still take an incredible amount of energy, but crucially not an infinite amount.

Now it turns out that a little technique called quantum tunneling is used by electrons orbiting around atoms to instantly move from point A to point B without passing through the space in between.

If we could utilize a similar process and "quantum tunnel" through the barrier of the speed of light, we might just be able to travel faster than light, but never actually have to travel at the speed of light to get there.

It only looks like gravity smashed your face into that sidewalk

Excerpt:

“For me gravity doesn’t exist,” said Dr. Verlinde, who was recently in the United States to explain himself. Not that he can’t fall down, but Dr. Verlinde is among a number of physicists who say that science has been looking at gravity the wrong way and that there is something more basic, from which gravity “emerges,” the way stock markets emerge from the collective behavior of individual investors or that elasticity emerges from the mechanics of atoms.

Afraid of an asteroid strike? That's small potatoes

Excerpt:

Astronomers using NASA's Hubble Space Telescope have detected a blue star called HE 0437-5439 they say was unceremoniously expelled from the Milky Way and is now hurtling through space at 1.6 million miles an hour. Scientists say his rates as one of the fastest of the 16 so-called hypervelocity stars they've discovered since 2005.

Aliens probably use text message acronyms, too

Excerpt:

''Whatever the life form, evolution selects for economy of resources,'' said Gregory Benford. ''Broadcasting is expensive, and transmitting signals across light years would require considerable resources.''

Writing in the journal Astrobiology, the Benfords claim that an alien civilisation would strive to reduce costs, limit waste and make its signalling technology efficient.