29.7.14

MARKING OFF.

Perhaps later this summer, we'll see how the nature preserve turns out.


Updates before the new academic year starts.

REFLECT ON THIS.

Margaret Soltan recommends a speech her Rutgers colleague William Dowling delivered to the Peithessophian Society.  By all means go, read, understand, and think.

Consider first his summary of the false analogy between opening up a country club or the Eagles or Elks, and lower admission standards in the name of inclusion.
Americans, precisely because of our nation's long and tangled history of various kinds of baseless prejudice, tend to misunderstand selective college admissions as a form of social>discrimination.

We all know that there was a time, now properly hideous in our collective memory, that Jews couldn't be admitted to the country club, or African- Americans had to sit in a different section of the restaurant than white people, or women weren't allowed to join all-male organizations. So why isn't it exactly similar to say that keeping someone out of Columbia or the College of William and Mary on the mere basis of low reading comprehension or poor mathematical ability is just another form of discrimination on arbitrary grounds?

The answer is that the country club model is a wildly misleading analogy in relation to college admissions. Admitting a freshmen class at a real college or university is much more like auditioning potential members of an orchestra, or choosing players for a basketball team.

The crucial point is that no college or university can be better than its students, any more than an orchestra can be better than its musicians or a basketball team better than its players.

If you fill an orchestra with people who can't read a musical score or play an instrument, you can pretend that the screeches and honkings they produce are music, but you won't fool anyone who has ever heard a Haydn symphony.
In like manner, access-assessment-remediation-retention fails to educate anybody.
There's a more important point about selective admissions. It's that bright and intellectually engaged students educate each other. A group of social scientists at Williams College calls this the Theory of Peer Effects.

If you're in a class where every student present has spent hours on an intellectually demanding assignment, and where the professor is then able to bring out implications no student had so far seen, you're in college. Anything else is not college but an empty charade.
And thus, the strategy for a university that's losing enrollments might be to tighten standards. There's a long case study, which may or may not generalize, that is worth your study.  And in tightening standards, a university might become more student-centered.
Bright and intellectually engaged students want to go to school with other bright students, for the same reason that a talented musician wants to play in an orchestra with other talented musicians or a talented athlete wants to play on a team with other talented players. Students themselves determine the level of each other's education.
That's not, however, the Rutgers experience.
[A colleague],Murray Sperber, wrote a book entitled Beer and Circuses, where he argued that when a large public university loses all sense of its higher mission it becomes essentially the educational equivalent of the reality television show Jersey Shore.

One point he makes concerns commercialized college sports. If you've got a campus swarming with people who have no interest in reading or thinking or learning, who almost or never go to class and, when they do, spend the hour surfing the internet or checking their Facebook page or texting their friends, you've got to give them something to keep them occupied, just as you do with children stuck inside on a rainy day.
But that's not the proper way to be student-centered.
By tightening standards at the rate of 3% a year, the party animal influence at Rutgers could be eliminated in ten to twelve years. That would be an enormous improvement. Teachers would once again begin to enjoy walking into the classroom. Serious students would begin to sense that they were what the institution was all about. Rutgers would have embarked on the process of becoming Rutgers again.
Perhaps there is a strategy for ensuring legislative buy-in. Why should legislators appropriate money to help run a reality show, or even the most inclusive of country clubs?

THE FUNDAMENTALS STILL APPLY.

William Major, professor of English at Hartford, proposes to save the humanities by closing the business schools.  But his argument falls to pieces when he contemplates the higher salaries finance faculty earn.
The higher education market for business professors and legal scholars, for instance, is one in which the professor is paid as if she took her services and sold them on what is commonly call the market. Which is where she, and her talents, manifestly are not. She is here, in the building next to ours, teaching our students and doing the same work we are. If my daughter cuts our lawn, she does not get paid as if she were cutting the neighbor’s lawn.
No. Your daughter gets compensated in kind (room. board, perhaps Daddy picks up the smart phone contract or the car insurance, and he's there for difficult conversations) and doing household chores is part of the bundle.  If she goes into business, the neighbors compensate in cash: and if the cash compensation exceeds the value received at home, she runs away.  The same thing is true of business faculty that hire out at universities rather than on Wall Street.
The business professor has sacrificed the blandishments of the other market for that of the university, where she can work softer hours, have her December/January vacation, go to London during the summer on a fellowship or university grant, and generally live something approaching the good life — which is what being employed by a college or university allows the lucky who earn tenure. She avoids the other market — eschews the long hours in the office, the demands of travel, the oppressive corporate state — so that she can pick up her kids from school on occasion, sleep in on a Saturday, and turn off her smartphone. She may be part of a machine, but it is a university machine, and as machines go she could do worse. This “market” is better than the other one.
There is only one market. There may be compensating differentials and incompletely substitutable workers.  The mathematically competent introvert is likely to do better in the academic setting: it's worth the smaller university salary to avoid the demands of travel or what the author calls the oppressive corporate state (better viewed as the false bonhomie of being perpetually on display).  At the margin, though, that compensating differential reflects substitution behavior by individuals.
But does she bring more value to the university? Does she generate more student hours? These are questions that administrators and business professors do not ask. Why? Because they wouldn’t like the answers. They would find that she is an expensive acquisition. Unless she is one of the Wharton superstars and appears on CNN Money and is quoted in The Wall Street Journal, there’s a good chance that the university isn’t getting its money’s worth.
Really? Only those faculty who are also public intellectuals merit the relatively generous academic salaries? None of the students, anywhere, are being served, at all?  Bizarre.

28.7.14

BRAGGING WRONGS.

Jeff Shaara has continued his novelization of the Western Campaign.  We've previously reviewed A Blaze of Glory, focusing on Shiloh, and Chain of Thunder, with the liberation of Vicksburg.  My earlier reviews commented on a forthcoming trilogy from Mr Shaara.  But Book Review No. 5 gets to review The Smoke at Dawn, which ends with the rebels pushed out of Chattanooga, and the anticipation of at least a tetralogy should the Georgia campaign, or the sack of South Carolina, become material for future writing.

If you're interested in the military history, Nothing but Victory provides that.  Mr Shaara's approach deals more with the interaction of the imagined and actual characters -- Rebel general Braxton Bragg comes off as a particularly nasty piece of work -- and the military accomplishments (lifting the siege of Chattanooga, occupying Lookout Mountain, and clearing Missionary Ridge) play a supporting role.  Perhaps we have read the conclusion of the trilogy, with at least one of the supporting characters invalided home, or perhaps there will be more.

(Cross-posted to 50 Book Challenge.)

CONTEMPLATING RETURNS TO CAPITAL.

Among the stack of books to read is Thomas Piketty's Capital in the Twenty-First Century.  I'll hold off on my view until I've finished reading it.  (And there are plenty of other distractions this summer, so it may be a while.)  My reading might be colored by the commentary, of which there has been plenty.  Here are a few reactions, primarily from serious economists.  There are plenty of other serious economists weighing in: good for them taking the time to read and understand.

I start, though, with the populist reading that might have contributed to widespread sales among non-economist readers.  The author is Noel Ortega.
Before the Industrial Revolution, and for most of our human history, economic growth was about 0.1 percent per year. But during and after the rapid industrialization of the global north, growth increased to a then-staggering 1.5 percent in Western Europe and the United States. By the 1950s and 1970s, growth rates began to accelerate in the rest of the world. While the United States hovered just below 2 percent, Africa’s growth rates caught up with America’s, while rates in Europe and Asia reached upwards of 4 percent.

But as Marx observed in the 19th century, economic growth did little to reduce inequality. In fact, as Piketty demonstrates, wealth has grown ever more concentrated in the hands of the few, even as the pie has gotten bigger.
Yes, and that's the fundamental problem of political economy. Reduced to Arthur Okun language, it's the tradeoff between equality and efficiency. Or, taking the longer view, it's about improving the condition of ordinary people, such that even the most desperate American enjoys better health and a better material condition than a medieval prince.

Somewhere in the populist perspective, though, is a tension between improving the material condition of the poor, and running out of stuff.
The traditional approach to inequality is to bring down those at the top while raising up those at the bottom. But to what level should we bring people, considering our finite planet?

Do we want everyone to live a mythical American middle-class lifestyle? Where every family of four lives in a two-car-garage home with a TV in every room, and every family member has a smart phone, tablet, and computer? Where they take a vacation to the other side of the globe once a year, and send their children away to a university and buy them a car when they are of age?
To Mr Ortega, there is thus a second tradeoff.
Piketty is right that our political economy favors the growth of inequality, and that inequality in turn poisons our politics. But while we should aspire to create a society that shares its prosperity, we need to address a much bigger gap than the one between rich and poor. We need to address the gap between what’s demanded by our planet and what’s demanded by our economy.

At the center of the rapidly growing New Economy Movement are ecological balance, shared prosperity, and real democracy. If we can’t find a way to build all three, then the only economy worth measuring is the number of days we have left.
That's where neoclassical growth theory comes in.  Fortuitously, The New Republic enlisted Robert Solow to review Piketty.
For example, if the rate of return is 5 percent a year and the stock of capital is six years worth of national income, income from capital will be 30 percent of national income, and so income from work will be the remaining 70 percent. At last, after all this preparation, we are beginning to talk about inequality, and in two distinct senses. First, we have arrived at the functional distribution of income — the split between income from work and income from wealth. Second, it is always the case that wealth is more highly concentrated among the rich than income from labor (although recent American history looks rather odd in this respect); and this being so, the larger the share of income from wealth, the more unequal the distribution of income among persons is likely to be. It is this inequality across persons that matters most for good or ill in a society.

This is often not well understood, and may be worth a brief digression. The labor share of national income is arithmetically the same thing as the real wage divided by the productivity of labor. Would you rather live in a society in which the real wage was rising rapidly but the labor share was falling (because productivity was increasing even faster), or one in which the real wage was stagnating, along with productivity, so the labor share was unchanging? The first is surely better on narrowly economic grounds: you eat your wage, not your share of national income. But there could be political and social advantages to the second option. If a small class of owners of wealth — and it is small — comes to collect a growing share of the national income, it is likely to dominate the society in other ways as well. This dichotomy need not arise, but it is good to be clear.
Professor Solow contributed to the theory of balanced economic growth, as evidenced by the invocation of the capital and labor share: in a balanced growth equilibrium, these are constant, but in a growing economy, that small class of owners can collect a growing share of the national income.  But perhaps life is messier than a balanced growth equilibrium, and out-of-equilibrium incentives to equilibrium matter.
There is no logical necessity for the rate of return to exceed the growth rate: a society or the individuals in it can decide to save and to invest so much that they (and the law of diminishing returns) drive the rate of return below the long-term growth rate, whatever that happens to be. It is known that this possible state of affairs is socially perverse in the sense that letting the stock of capital diminish until the rate of return falls back to equality with the growth rate would allow for a permanently higher level of consumption per person, and thus for a better social state. But there is no invisible hand to steer a market economy away from this perversity. Yet it has been avoided, probably because historical growth rates have been low and capital has been scarce. We can take it as normal that the rate of return on capital exceeds the underlying growth rate.
And thus Professor Piketty's now-famous r > g becomes a new stylized fact.  But don't throw out your growth theory, not yet.
Suppose it has reached a “steady state” when the capital-income ratio has stabilized. Those whose income comes entirely from work can expect their wages and incomes to be rising about as fast as productivity is increasing through technological progress. That is a little less than the overall growth rate, which also includes the rate of population increase. Now imagine someone whose income comes entirely from accumulated wealth. He or she earns r percent a year. (I am ignoring taxes, but not for long.) If she is very wealthy, she is likely to consume only a small fraction of her income. The rest is saved and accumulated, and her wealth will increase by almost r percent each year, and so will her income. If you leave $100 in a bank account paying 3 percent interest, your balance will increase by 3 percent each year.

This is Piketty’s main point, and his new and powerful contribution to an old topic: as long as the rate of return exceeds the rate of growth, the income and wealth of the rich will grow faster than the typical income from work. (There seems to be no offsetting tendency for the aggregate share of capital to shrink; the tendency may be slightly in the opposite direction.) This interpretation of the observed trend toward increasing inequality, and especially the phenomenon of the 1 percent, is not rooted in any failure of economic institutions; it rests primarily on the ability of the economy to absorb increasing amounts of capital without a substantial fall in the rate of return. This may be good news for the economy as a whole, but it is not good news for equity within the economy.

We need a name for this process for future reference. I will call it the “rich-get-richer dynamic.” The mechanism is a little more complicated than Piketty’s book lets on. There is some saving from labor income, and thus some accumulation of capital in the hands of wage and salary earners. The return on this wealth has to be taken into account. Still, given the small initial wealth and the relatively low saving rate below the top group, as well as the fact that small savings earn a relatively low rate of return, calculation shows that this mechanism is not capable of offsetting the forecast of widening inequality.

There is yet another, also rather dark, implication of this account of underlying trends. If already existing agglomerations of wealth tend to grow faster than incomes from work, it is likely that the role of inherited wealth in society will increase relative to that of recently earned and therefore more merit-based fortunes.
And we have yet to introduce factor-augmenting technical change or resource constraints that might limit either increases in income from work, or returns on capital.

Never a shortage of interesting questions.  Or perspectives.  Foreign Affairs retains Tyler Cowen, who offers an interesting twist on Paul Samuelson's quip about Karl Marx being a minor post-Ricardian.
Piketty, in a way, has updated the work of the British economist David Ricardo, who, in the early nineteenth century, identified the power of what he termed “rent,” which he defined as the income earned from taking advantage of the difference in value between more and less productive lands. In Ricardo’s model, rent -- the one kind of income that did not suffer from diminishing returns -- swallowed up almost everything else, which is why Ricardo feared that landlords would come to dominate the economy.

Of course, since Ricardo’s time, the relative economic importance of land has plummeted, and his fear now seems misplaced. During the twentieth century, other economists, such as Friedrich Hayek and the other thinkers who belonged to the so-called Austrian School, understood that it is almost impossible to predict which factors of production will provide the most robust returns, since future economic outcomes will depend on the dynamic and essentially unforeseeable opportunities created by future entrepreneurs. In this sense, Piketty is like a modern-day Ricardo, betting too much on the significance of one asset in the long run: namely, the kind of sophisticated equity capital that the wealthy happen to hold today.

Piketty’s concern about inherited wealth also seems misplaced. Far from creating a stagnant class of rentiers, growing capital wealth has allowed for the fairly dynamic circulation of financial elites. Today, the Rockefeller, Carnegie, and Ford family fortunes are quite dispersed, and the benefactors of those estates hardly run the United States, or even rival Bill Gates or Warren Buffett in the financial rankings. Gates’ heirs will probably inherit billions, but in all likelihood, their fortunes will also be surpassed by those of future innovators and tycoons, most of whom will not come from millionaire families.
Democracy Journal brings in Lawrence Summers, who characterizes the book as an important first word on a challenging topic, yet suggests there is room for further research.
Economists universally believe in the law of diminishing returns. As capital accumulates, the incremental return on an additional unit of capital declines. The crucial question goes to what is technically referred to as the elasticity of substitution. With 1 percent more capital and the same amount of everything else, does the return to a unit of capital relative to a unit of labor decline by more or less than 1 percent? If, as Piketty assumes, it declines by less than 1 percent, the share of income going to capital rises. If, on the other hand, it declines by more than 1 percent, the share of capital falls.

Economists have tried forever to estimate elasticities of substitution with many types of data, but there are many statistical problems. Piketty argues that the economic literature supports his assumption that returns diminish slowly (in technical parlance, that the elasticity of substitution is greater than 1), and so capital’s share rises with capital accumulation. But I think he misreads the literature by conflating gross and net returns to capital. It is plausible that as the capital stock grows, the increment of output produced declines slowly, but there can be no question that depreciation increases proportionally. And it is the return net of depreciation that is relevant for capital accumulation. I know of no study suggesting that measuring output in net terms, the elasticity of substitution is greater than 1, and I know of quite a few suggesting the contrary.
And yet, owners of capital are getting richer.  But understanding that dynamic takes work.  Dissent engages James Galbraith to elaborate.  Aggregation is necessarily perilous, and Professor Galbraith might send some future dissertators to the stacks.
But the argument of the critics was not about Keynes, or fluctuations. It was about the concept of physical capital and whether profit can be derived from a production function. In desperate summary, the case was three-fold. First: one cannot add up the values of capital objects to get a common quantity without a prior rate of interest, which (since it is prior) must come from the financial and not the physical world. Second, if the actual interest rate is a financial variable, varying for financial reasons, the physical interpretation of a dollar-valued capital stock is meaningless. Third, a more subtle point: as the rate of interest falls, there is no systematic tendency to adopt a more “capital-intensive” technology, as the neoclassical model supposed.

In short, the Cambridge critique made meaningless the claim that richer countries got that way by using “more” capital. In fact, richer countries often use less apparent capital; they have a larger share of services in their output and of labor in their exports—the “Leontief paradox.” Instead, these countries became rich—as Pasinetti later argued—by learning, by improving technique, by installing infrastructure, with education, and—as I have argued—by implementing thoroughgoing regulation and social insurance. None of this has any necessary relation to Solow’s physical concept of capital, and still less to a measure of the capitalization of wealth in financial markets.
And thus, understanding the dynamics of capital accumulation, or wealth concentration, might be much more work than simply noting the presence of either.

There's plenty more out there: start with the Marginal Revolution collection if you'd like.

I close, for now, with a commendation of Professor Solow for stating a gripe I have long held with contemporary publishing practices.  "I call down a painful pox on publishers who put the footnotes at the end of the book instead of the bottom of the page where they belong, thus making sure that readers like me will skip many of them." Indeed.

WHO ARE THE REAL NOSTALGICS?

I found this essay, written by the founder of an organisation calling itself Share the World's Resources, questioning a division of labour structured by specialisation and trade.
How can we share when the influence of selfishness and greed has such a grip on our societies, and when we continue to worship success and achievement? Through its clever and manipulative ways of conditioning our minds, commercialisation has moulded the principle of sharing to become the miserable shadow of the poor and the helpless mother of the starving millions. In the face of its abysmal power and perpetual deluge, it is very normal that people will see the principle of sharing as na├»ve or utopian, and will think you are deluded if you say that sharing is the key to solving the world’s problems.
Perhaps because life before specialisation and trade was solitary, poor, nasty, brutish, and short. Which is how those parts of the world that reject the principles, or have yet to properly adopt them, still live?

And yet, to live better, we must revert to the social organisation of hunters and gatherers, or agrarian tribes?  Dumb.

RAILROAD PRESERVATION NEWS.

Among twelve winners of this year's National Railway Historical Society National Railway Heritage Grants is the Illinois Railway Museum, for repair work on the Electroliner.


That's one in service, at Norwich Street in Milwaukee's Tippecanoe neighborhood.

"The Mysterious Train" is a study of Electroliner images employed by the North Shore Line in visual design and branding.

IS IT BETTER FOR AN INCOMPETENT PRESIDENT TO PLAY GOLF?

Matt Lewis, of The Daily Caller, suggests Our President "has emotionally checked out of his job."  To Rick Moran, "A president going through the motions while the rest of the world is blowing up is inherently dangerous."  Jazz Shaw suggests it's what happens when the masses don't follow the Messiah.
Obama’s vision of the future never involved compromise. It relied on everyone suddenly seeing just how right he was and how wrong they were. That didn’t happen, and not having a backup plan in the event that the rabbit failed to emerge from the hat, Barack Obama threw in the towel.
That's more charitable than Andrew Klavan's verdict.
Obama has been right about only one thing in his entire life and it is this:  If you play on Americans’ racial shame and their fears of conservative repression, you can convince them to follow a False Messiah. The Hapless Putz part is this: He didn’t know he was a False Messiah. He thought he was for real. He believed his political ideas were true. He thought making America less of a presence in the world would make the world more peaceful. He thought ordering up some sort of health care thingie would make everything cheap and everyone happy. He thought he could phone and pen his way to greatness.

But in fact he is a Hapless Putz. And rather than face that truth, he has turned off the world.
When the planet does not begin to heal itself, dear reader, is it really better to double down on the policies that, five-plus years on, have thus far failed?

TOO OFTEN, RESTRUCTURING IS A ONE-WAY TRIP.

Last week, I quoted Trains's Fred Frailey. "Long term, pissing off your customers is not a viable business strategy."  And the long term is an aggregation of short term decisions.  The BNSF Railway is clogged with freight traffic, and subject to a higher level of regulatory supervision.  Disgruntled shippers are, wherever possible, routing Union Pacific.  Burlington management intends to purchase 500 locomotives and 5,000 freight cars to help alleviate the congestion.  Providing additional trackage takes longer.

For years, railroads, and other businesses, have used "downsizing" or "restructuring" or "re-engineering" as an excuse to shed physical and human capital.  Such decisions, though, are not so easily reversed.  The approach might make sense in a shrinking industry, but it can leave that industry in poor shape to deal with expansion.  (And Union Pacific have their own history of strategic errors).

SUMMARIZE IN ONE SENTENCE.

Belmont Club captures what happens when bad ideas prevail.
The last 70 years have been spent dismantling the mental world of our fathers; in teaching us about the corruption of America, the emptiness of patriotism and the hypocrisy of organized religion. But along the way it has been impossible to deny the brutality of Communism, the fatuousness of manufactured causes, and the perversity of Hollywood.

That cumulative deconstruction has cheapened everything we fought for and everything we might fight for
More precisely, the old structures have been deconstructed, but there are no new structures, worth fighting for or not. Enjoy the decline.

27.7.14

JUNIOR HIGH GOES ON FOREVER.

Book Review No. 4 is Dave Eggers's The Circle.  It's fiction, dealing with the adventures of a young lady hired on the recommendation of a highly-placed college friend to work in an antitrust nightmare of a technology company combining social-media, search engines, and business software.  This company also appears to manufacture some kind of super-smart 'phone, and thus develops proprietary operating systems.  Thus pick and choose among Google and Yahoo and Apple and Microsoft as one company offering products on sufficiently attractive terms that everybody uses them.

I adapted the title of my post from one of the supporting cast, a former boyfriend of the protagonist who is not impressed with a wired age in which everything can be seen and shared and approved of or not instantaneously.  In his view, it's Perpetual Superficial.  And the life of the protagonist does little to contradict that view: if she's not following up with customers to get favorable evaluations, she's finding stuff to like and share (this now being converted into the single action, zing) and observing and approving of the stuff others zing, lest her productivity be seen as lagging, and her uncommunicative behavior be interpreted as insufficiently part of the community.  (Yes, communism has the same root, and I'll address that before I'm done.)  So her life, and the life of her co-workers, is one of being perpetually on, perpetually superficially involved, perpetually incapable of introspection, and probably perpetually tired -- but running on designer coffee.  And when the protagonist engages in some hashtag activism on behalf of her parents, her parents then encounter the attitude of people who sent supportive electronic mails or zings or what have you and did not get immediate responses.

And yes, this is art imitating life:  how often, dear reader, have you come into work and encountered a person whose greeting is "did you get my e-mail?", rather than "good morning," and have you gone off the social media for a few days only to return to an electronic mail inbox full of "You have missed 26 alerts?"  And the people who believe in hashtag activism might not recognize the satire in the Circle Company attempting to make public everybody's behavior, all the time.

Thus, Mr Eggers has clearly written a dystopian novel, if not as explicitly downbeat as Brave New World or the Hunger Games series.  There may, be, however, a deeper political economy message.

I have long attempted to answer student questions about non-capitalist economic organization by appeal to habit.  That is, if two cigarette-rolling machines are capable of producing more cigarettes than the adult population is capable of smoking, the embedded knowledge of running the machines may be sufficient to keep the populace in cigarettes.  And embedded knowledge of other industrial processes may be sufficient for producing other things for the populace to use.  And thus might the owners and the managers become superfluous.

But what happens when one server is capable of keeping track of all the embedded knowledge, and that server (mild spoiler alert) also turns off bank accounts and social media for people who don't vote?

There's also a challenge posed to the more traditional planned economy model laid out by Barry Lynn in a Salon interview conducted by Thomas Frank.
What we needed to do, [Theodore Roosevelt] thought, was make sure that system works for the public benefit, and to do that we had to impose our public government on top of their private government. So we will hire a bunch of experts, a bunch of engineers and scientists to run this new system so that it always works for the public benefit. Rather than let the feudal lords determine how much oil and sugar is produced, and what they cost, and how much the workers get paid, we’ll have government experts do all that instead.
It's called regulating business by independent commission, and President Roosevelt failed to anticipate regulatory capture, and Messrs. Lynn and Frank would rather gripe about Ronald Reagan gutting the antitrust laws.

But when there is one company operating the servers, and the servers also tabulate public opinion and monitor the voting of the citizens, whether the automata become the de facto dictators, or whether any kind of citizen takeover of the means of production (which are now also the means of knowledge) poses an even deeper challenge.

(Cross-posted to 50 Book Challenge.)

CRYING WITH HIS MOUTH FULL?

Inside Higher Ed reports on the troubles of one Robert Breuder, president of the College of DuPage, for engaging in rent-seeking.  At stake, some $20 million in state capital appropriations.
The state had appropriated the money for projects that the 28,000-student college had already completed using its own funds.

To Breuder and his supporters, this story is about the unpredictability of state support and the need for scrappy community colleges to work every possible angle to get enough money to thrive. But to critics who have pounced on the situation, this is a story about a community college that was able to pay for projects itself, yet tried to grab every penny it could from taxpayers -- for the sake of luxury, not necessity.
The article hints at other disagreements between the president and the faculty and some of the trustees.  Whatever the sources of the money, and whether or not it has been properly spent, since 2009 there has been tremendous expansion of the College of DuPage facilities.  One almost needs rapid transit to get from the new buildings practically in Winfield to the original gym.

TEACH THE CONTROVERSIES.

Dinesh D'Souza's recent movie, America, with its invocation of the "shame narrative," might be an attempt to counter Howard Zinn's influence on the way Americans perceive their country.  But perhaps among the failings of public education is its failure either to indoctrinate or to teach.  Here's John Tamny in Forbes.
Quick, how many of you readers have heard of Howard Zinn? If you’ve heard of him, how many of you have read the late historian’s “A People’s History of the United States”? D’Souza’s America would have us believe that Zinn’s (according to D’Souza he’s the most read historian of the last 50 years) fabulist telling of our allegedly sordid history is accepted as fact in Obama’s America. Really? In truth, Americans probably know Zinn’s negative history about as well as they know Paul Johnson’s more positive account of this great country; as in not very well.
Mr Tamny's point is that Zinn's People's History may be much-assigned and not-much read. And thus a patron of America might not be that familiar with the origins and the intellectual foundations of the guilt narrative.  Or for that matter, with Johnson's A History of the American People (not explicitly a rebuttal to Zinn, although the author's preface notes, "I have not bowed to current academic nostrums about nomenclature or accepted the fly-blown philacteries of Political Correctness."

Howard Zinn well might have done great damage to scholarship.  But if students are not reading or understanding, what difference, at this point, does it make?

Advanced Placement students might have the opportunity to compare Zinn with Johnson.  The rest of the school population?  Not so much.  I finished Johnson years ago, before the Fifty Book Challenge, and have Zinn in the stack of things to read on chilly afternoons.

THE FOLLIES OF CULTURE STUDIES.

July is usually the month in which a lot of summer research projects hit the journals (ah, the sweet joy of being able to mark off on any request that doesn't Really Excite Me).  These days, part of establishing your reputation is getting your work into more public fora by way of the internet.  And the Reverend Awdry stories are just more material for the mill.  Thus, the resignation of the actor who does Thomas the Tank Engine's voice gives one Tracy Van Slyke the chance to ring all the identity politics changes.  "But if you look through the steam rising up from the coal-powered train stacks, you realize that the pretty puffs of smoke are concealing some pretty twisted, anachronistic messages." Derivative scholarship.  Some years ago, some other critic got all worked up about Tootle, being advised to Stay on the Tracks and Always Stop for a Red Flag Waving.  Yeah, going off the rails and disregarding all the danger warnings works real well, doesn't it?

Here's a corrective from Charles Cooke at National Review.
This is not adult literature, and nor is it a lecture at Berkeley. It is a series of stories aimed at young children, who need to rebel and to play, but who also need – indeed, who crave  – rules. Hatt is not capricious or mean or violent. He doesn’t cheat or steal, or abuse his engines. He’s just in charge of the railway, as parents are in charge of their kids. If there is any lesson to be taken from his personality, it is that those in a position of responsibility can often be inadvertently amusing. Awdry himself considered the character to be something of a parody of “‘pompous railway officials” who “gave out plenty of orders, but never actually did anything.”
For the adult literature, or perhaps for those Berkeley workshops, I recommend Harry Bedwell or E. S. Dellinger.  There, the pompous railway official's errors can lead to the death of a good man.

And what would Ms Van Slyke make of Thomas on American metals being subject to the dictates of the Federal Railroad Administration?


I'll let M.C.J. complete the order. "Get help, Tracy."

25.7.14

MORE WISDOM FROM ED TENNYSON.

This tribute at Light Rail Now includes a picture of Mr Tennyson at Speedrail.



Here's his response to embattled Toronto mayor Rob Ford, who apparently enjoys getting high and trashing streetcars.
A lane of autos waiting at traffic signals can move only 900 passengers per hour, not enough to keep a city busy or healthy. I do not know the streetcar headway, but with 56,700 weekday passengers, it sounds like 4,500 one-way in the peak hour, 5 times auto capacity. With 90 people per 4-axle car, that would require a 1.2-minute headway, 50 cars per hour. With articulated cars, a 1.8-minute headway could handle it.

The point is, who wants to allow 900 [Mayor Rob] Ford supporters to block the movement of 4,500 people per hour? Polls will not move anyone, but those 800 automobiles with 900 people will block 4,500. That is stupid, uneconomical, and grossly unproductive. When gridlock gets bad, transit speed falls to three (3) miles per hour. A streetcar costing $235 per hour will cost $78 per mile at three miles per hour; but at 6 miles per hour, which might be possible with no autos, the streetcar cost falls to $39 per mile, a saving of 50 percent for farepayers and taxpayers. If the media had the integrity and equity to explain it that way, I am sure the polls would change drastically in favor of streetcars.

[Misguided] politicians like Mayor Ford were running the U.S. Congress in 1959 when they banned streetcars from the District of Columbia [i.e., Washington, DC]. They did it to speed auto travel, but it did not work that way. It sped auto travel, all right — away from the city instead if into it.

Back then, Washington’s streetcars were almost as busy as Toronto’s streetcars. They made a profit to subsidize bus service, but they annoyed motorists. Traffic engineers wanted the streetcar lanes for auto left turns, a very low-volume use. Traffic engineers were trained at the Eno Foundation, then subsidized by General Motors. They were required to teach the need to eliminate streetcars.

The last [Washington] streetcar ran in 1962. Buying new buses escalated fares drastically and drove away most riders. Many downtown department stores went out of business. People with good jobs moved out of the city to escape auto congestion caused by automobiles, not streetcars.
Yes, and those left-turn lanes only contribute to further traffic congestion, as each traffic light now gets a left-arrow cycle to go with the conventional stop-go cycle.

One gripe: it's up to the Passenger Rail and Rail Transit advocates to make the case in such a way that people will get it.  At best, a reporter exists to report.  But you have to think of a reporter the same way that you think of a computer, or any other moron.  Garbage in, garbage out.  Clarity is not optional.

PRICES FUNCTION TO ALLOCATE DEMAND.

Some months ago, Cold Spring Shops linkbuddy John Palmer noted that water is not exempt from that proposition.
Oh, some people will be hurt when the price of water is raised? Yes, that happens. They have been benefiting from a price that has been held too low for far too long. Time to face reality.
He was referring to California, but his argument holds equal force in Detroit. Detroit's rates are high, particularly to the naive view that sees nothing but Great Lakes all around Michigan. The city has been cracking down on residents who are behind in their bills, which creates a political economy problem when governmental and business deadbeats owe a lot.
Over the past decade, sales have decreased by 20 to 30 percent, while the water department’s fixed costs and debt have remained high. Nonpayment of bills is also common. The increasing strain on the department’s resources is then passed on to customers.

But residents aren’t the only ones with delinquent accounts. Darryl Latimer, the department’s deputy director, told me that the State of Michigan holds its biggest bill: $5 million for water at state fairgrounds. (The state disputes the bill, arguing that it’s not responsible for the costs of infrastructure leaks.)
Detroit's water utility faces a stranded cost problem. In the presence of falling average costs, decreasing usage means a greater divergence between average cost and incremental cost, and piecemeal scrappage of water mains on abandoned blocks is unlikely to raise enough cash to cover the costs, nor is it likely to produce a more efficient water network.  But the editorial writers of the New York Times don't get it.
But cutting water to homes risks a public health crisis.

Instead, the water department should more aggressively target delinquent commercial customers who carry a large share of the unpaid bills. It should enact a comprehensive plan to fix leaking pipes; flooded streets are common here, and water customers — whether the state or ordinary residents — must pay for sewerage, not just running water, and often are billed erroneously for these leaks.

The department must also ensure that water is shut off to abandoned buildings, and eliminate errors in address transfers.
There's a public utilities research project here, identifying the death spiral that ensues as residents leave, revenues fall, maintenance is deferred, mains break, and more residents become disgruntled and leave.

Here's Detroit News columnist Daniel Howes summarizing the discontent.
Blame the water department, partly. Blame a political culture steeped in favoritism and victimization. Blame mismanagement that perpetuated a system in which half of the city’s property owners don’t pay their taxes and thousands ignore their water bills because, well, they can and elected officials willingly wield influence to keep it that way.

“There was no rigid enforcement policy or practice at the water department for years,” Bill Johnson, a department spokesman, said in an interview Thursday. “Some of it was under pressure from the mayor’s office, some of it from City Council.

“You allow the situation to languish and some people think you don’t care,” or that the department won’t pursue those who aren’t paying their bills.

Now they are, sparking the kind of backlash that is predictable in the ossified ways of Old Detroit. Thursday, protests continued over the water shut-offs; one radio report quoted a guy explaining, rightly, that Detroit has a high poverty rate even while complaining that council just agreed to hike water rates nearly another 9 percent.

Why is that? In large part, Johnson explained, the increase is driven by the disproportionately high number of water customers in Detroit who consume water they do not pay for.
As Doc Palmer puts it, "Raise the friggn price and watch the quantity demanded drop."

Meanwhile, in California, long the poster child for easy living made possible by subsidized water, when drought comes, the authorities try everything but the price system.
Mostly, we use prices to match supply and demand. When supplies of some item are short, rising prices provide incentives for conservation and substitution, as well as the creation of creative new sources of supply.

When we abandon prices, often out of some sort of political opportunism, chaos usually results.

California, for example, has never had the political will to allow water prices to rise when water is short. They cite all kinds of awful things that would happen to people if water prices were higher, but then proceed instead with all sorts of authoritarian rationing initiatives that strike me as far worse than any downsides of higher prices.
Yes, even NBC's "water police" segment has trouble sugar-coating the authoritarian impulse.
At the East Bay Municipal Utilities District, we met someone trying a new approach. Rachel Garza is a water conservation technician who is going door to door, responding to complaints about water violations. With her calm and maternal demeanor, Garza talks to people about the drought, suggests ways they can cut back on water use, and helps homeowners to make their lawns more drought-friendly.
The ve haff unpleazant methodz to ensure your compliansss comes later.

THE NEWS ISN'T QUITE THAT BAD.

Wisconsin's W. Lee Hansen, whose contributions to public policy include a hitch with the Walter Heller era Council of Economic Advisors, and whose contributions to economic education include suggested proficiencies for majors, recently took issue with a diversity task force report that appeared to be calling for race-normed grading.  Two of his colleagues, Donald Downs and David Canon, ask observers to chill.
As professors at UW-Madison, we can vouch for the fact that there has been no effort to impose diversity-based grading in the past five years. Had such effort emerged, there would have been an immediate strong response. Certainly no one in our department has encountered such pressure. Five years is a long time.  If marching orders had been issued, those of us on the front lines would have heard about it by now.

Our interpretation is that the part of the “inclusive excellence” framework that referred to diversity grading is just another one of hundreds of documents/memos/plans that routinely get ignored in a big organization like ours. It was never an actual University policy that was approved by the Regents and it certainly was never imposed on the faculty.

But herein lies one of the problems that lurk inside the Pandora’s Box of many diversity plans. The people who write such plans are often true believers whose words exceed their grasp. And such words are often draped in bureaucratic language that can be subject to multiple explanations. Furthermore, such programs can foster institutional pressures to conform—never a good idea at a university. The drive for diversity must never trump or compromise the traditional commitment to academic freedom and standards.

And Hansen is right when he points out that the “Inclusive Excellence” framework presented to the Regents in 2009 and the UW System’s web site on the topic does indeed contain the language on proportional representation in grading. And, Hansen is also right that the faculty have not been conscientious enough in scrutinizing, overseeing, and critiquing questionable programs and features of programs. In this respect, he has performed his traditional service to the University. And we hope that his claim will put us on guard not to let diversity grading take place down the line.
Let's cut through the fog of bureaucracy. "The people who write such plans are often true believers whose words exceed their grasp."  Deanlets and deanlings, endlessly meeting, retreating, and strategizing?  "And such words are often draped in bureaucratic language that can be subject to multiple explanations."  Because consensus means none of us is as dumb as all of us?  "And, Hansen is also right that the faculty have not been conscientious enough in scrutinizing, overseeing, and critiquing questionable programs and features of programs."  Because faculty governance has broken down, or because administrators have become accustomed to going around faculty governance?

How best to preclude diversity grading?  Insist that the common schools do their job properly.

THEY DIDN'T TAKE CARE OF IT.

At the time the Coalition for High Speed Rail went public with its plans to restore Santa Fe 3463 to steam, the locomotive looked like a candidate for the Scrap Line.


Railroad Picture Archive photo from Jeff Carlson.

Trains reports, though, that the Coalition did not establish clear title to the locomotive.
Former Santa Fe 4-6-4 No. 3463 is in the middle of a legal battle between a Minnesota-based group, the Coalition for Sustainable Rail, who wants to restore it and a group of Topeka residents who say the engine should stay in Kansas. In May, CSR filed a lawsuit asking a judge to determine who owns the historic engine. CSR claims that it purchased the engine in 2011.
The ownership trail, however, is tangled.
The engine was retired in 1953 and later donated to the city of Topeka. As the railroad prepared to donate the locomotive a group of volunteers formed a nonprofit group, the Topeka Children and Santa Fe Railroad, to build a display site and help maintain the engine. The engine was officially put on display at the Kansas Free Fairgrounds during a small ceremony on Nov. 3, 1956.

Kansas Legislature revised state law to require all corporations to file annual reports. In 1972, the secretary of state requested an annual report from the group but no one from the original nonprofit was left or around to respond. In 1973 the entity was deemed revoked.

In the mid-1980s, the engine was moved from its present location due to construction and a few years later, according to court documents, ownership of the engine was transferred to Topeka Railroad Days Inc., operator of the Great Overland Station Museum. Later Topeka Railroad Days became Railroad Heritage Inc.

In 2011, CSR began its search for a locomotive for its project and discovered No. 3463. Negotiations took place and on Nov. 15 of that year a purchasing and sales agreement was signed. The following year, CSR began a cosmetic restoration and, on Jan. 11, 2013, a bill of sale was executed between Railroad Heritage and CSR. But a few months later three local rail enthusiasts, Phillip Dittmer, Thomas Dittmer, and Jerry Petrel, claiming to represent the revived Topeka Children and Santa Fe Railroad nonprofit, stated that their group was the proper caretaker of the engine and that it could not be moved.
Tools. Where were these guys while the engine was rusting away, or while Coalition staff were doing a cosmetic restoration?

Does there come a point when the costs and lead time of litigation exceed the costs and lead time of building a new fast steamer (Milwaukee 106, anyone?) from scratch?

WE MAY SEE 49 AGAIN.

With the Packers returning to camp, The Lombardi Sweep.


Unattributed Packer Perspective photograph.

In those days, the nine hole was to the right.  Starr has handed off, Lombardi watching, Taylor carrying, Kramer and Thurston blocking.

A fan from Tennessee asked Packer Question Man Vic Ketchman about the return of the sweep.  Apparently, the personnel are different these days.
The sweep wasn’t about Taylor and Hornung as much as it was about Kramer and Thurston. You have to have guards that can get out in front of the backs. Kramer was 6-3, 245, and Thurston was 6-1, 247. Those guys could move and they were small enough to maneuver in traffic. Today’s guards are 70 pounds heavier and much higher cut than the pulling guards of yesteryear. It’s a different game. The guards of yesteryear had to be able to move because they couldn’t use their hands. They had to get guys out in space and cut them. Today’s guards are bigger and stronger and have a rules advantage Kramer and Thurston didn’t enjoy. Everything about today’s guards favors walling off instead of pulling out. It can be done once in a while, but not as a staple, as it was in the Lombardi era. As big as today’s guards are, their tongues would be hanging out of their mouths if they were made to run like that.
Walling off, though, is part of the Lombardi lexicon.
The 2013 Packers have also resurrected a version of the most famous play in Green Bay history, the legendary Lombardi Sweep, also known simply as the Packers Sweep. The play was the backbone of the Lombardi teams that won five NFL championships and two Super Bowls. On the Packers Sweep, Paul Hornung or Jim Taylor would sweep behind the blocks of pulling guards Jerry Kramer and Fuzzy Thurston, who would create, in Lombardi’s famous words, “a seal here and a seal here,” forming an “alley.” The 2013 Packers have repeatedly run a version of this play in order to get [back Eddie] Lacy on the edge with pulling linemen paving the way.
There's a video at the link.  The nine-hole is now to the left, but the play call is probably not "Green left 49 on two" any more.
Though these Packers often run the sweep from the shotgun and with three split receivers, it’s the same basic concept that Lombardi’s teams executed to perfection. In the GIF above, the pass-first formation caused Chicago to put its safeties so deep to defend the threat of Rodgers throwing that they were nonfactors against Lacy.
The team that blocks better and tackles better ...

ECONOMIC TRICKS.

So, the legend goes, a newly-hired typist once referred to "econometrics."  But that might be a truthful description of what goes on in research, according to recent work by Sarah Necker of the London School.
Almost every economist reports having engaged in at least one practice considered unacceptable by peers. For example, one third of the participants admit to having cherry-picked results – the selective presentation of empirical results that confirm one’s argument is rejected by 84%. Even though 64% consider it unacceptable to divide one’s work into small units to maximize the number of publications, 20% confess salami slicing. Strategic behavior in the publication process is considered unjustifiable by two thirds. However, 39% admit that they have taken into account suggestions of referees or editors even though they thought that they were wrong. Even 60% report that they have cited strategically to raise publication prospects.
Deans may not be able to understand the arguments, but they can count. Does it come as a surprise that much of the research enterprise turns into a quest for the minimal publishable unit?  Or that average people cut corners?
For example, it is 14 percentage points more likely that an economist perceiving “very high” pressure admits to having cherry-picked results than that an economist perceiving only “moderately high” pressure confesses the deed. Although the results cannot prove causality, they are consistent with the notion that pressure motivates researchers to act dishonestly.
Better to get that significant result, than to be thought of as a journeyman?

That, despite the possibility of research programmes, including trendy methodologies, emerging as a way of generating minimal publishable units rather than answering serious questions.  More on this score in a few days.

THE RED QUEEN WOULD UNDERSTAND.

Football training camps are opening, and Northern Illinois athletics director Sean Frazier teases fans with the prospect of home-and-home tilts.
"We'll be rolling something out in the next couple weeks on specific home-and-home contests with major conferences. I'm excited about that," Frazier said. "There's some name-brand institutions that will be in DeKalb, and we'll go to their place, and we'll have a whole balanced approach to that.

"I know it's something I've talked to coach (Rod) Carey about, and it's something that's in my DNA. We don't mind going on the road, but we want them back in DeKalb."
Trust but verify. I've heard this song before, and sometime between the enthusiastic announcement, and the home game in four or five years, comes a switch to Soldier Field.

But Mr Carey understands that if you're standing still, you're falling behind.
Carey called college football recruiting "an arms race."

Carey said the Chessick Practice Center, which opened last year, has played a big part in the Huskies' recruiting success so far.

"Recruiting is an arms race, you've just got to call it what it is," Carey said. "Like Sean (Frazier) said earlier, you're either moving forward or moving back. That was a big step forward for us. It's made a big difference."
For now, although with the five major conferences positioning themselves to render the NCAA redundant, the Mid-American conference might be the football equivalent of Upper Volta with (Toledo) Rockets.

And I have seen no evidence of the university recognizing, and responding to, a similar arms race where the recruitment of accomplished students and a faculty worthy of those students is concerned.

21.7.14

A TRANSIT PROFESSIONAL PASSES.

Edson Tennyson, 1922-2014.  Mr Tennyson was a long-time member of the Central Electric Railfans Association, and one of his first projects was the Milwaukee Rapid Transit and Speedrail, where his advice, if heeded, might have prevented the September 2, 1950 collision that took ten lives, and might have protected the carrier's cash flow.

WE DON'T KNOW WHAT CHANGES WE MUST MAKE.

That's an observation I referred to in a previous evaluation of the folly of disruption.  Here are a few more pithy comments in the same vein.  Paul Krugman. "[M]aybe we need to do less disruption and put more effort into doing whatever we do well."  That follows from thinking of disruption as emergent and spontaneous, rather than something that can be consciously willed. "'[D]isruption' is the process by which smaller, faster, more innovative competitors come along and make preexisting incumbents obsolete."  Perhaps there is some merit in a management devoting some resources to thinking about those sorts of product or process innovations that could render their company useless, but that's not the same thing as the snake-oil peddled by business gurus.
The rapid pace of disruptive innovation happens because their low cost allows a lot of experimentation. Most of the experiments fail, but the successes push the industry forward. So the fact that the specific disruptive companies [Clayton] Christensen backed failed doesn't really contradict his theory, which doesn't say anything about which firms will best capitalize on a disruptive trend or even which disruptive technologies will have the biggest impact.
And perhaps thinking about how to do better things one already does well heads off a lot of disruption.  This essay, which will reward careful study, suggests that there's more to effective management than the latest fad or the latest airport-bookstore best-seller. "Corporate America, health care, manufacturing, and the contemporary university have all tied their reputations to their delivery of innovation. Innovation comes with lots of turmoil, unilateral management decision making, and interference with how people do their jobs." Ultimately, though, the containers have to be delivered, the steel cast, the code installed.  One of these days, consumers will become even more resistant to service degradation in the name of offering better service.

THE PRODUCTIVITY TRAP.

Fred Frailey nails it.  The railroads are running out of capacity.  That's the predictable consequence of years of cost-cutting.  Lower costs translate into lower rates and the traffic clogs the railroad.  But the analysts focused on the next quarter's results are cheerful.  For the moment.
Meanwhile, Wall Street remains adamantly enamored of low operating ratios. To some degree, spending to expand capacity and achieving low operating ratios are incompatible. Not every railroad may need expanding as much as BNSF. But as I’ve tried to explain, there will be consequences for standing still. Long term, pissing off your customers is not a viable business strategy
Yes, and the Chicago Great Western at one time led the Class Ones in gross-ton-miles-per-train-hour.  For all the good that did it.

15.7.14

INCOME AND SUBSTITUTION EFFECTS.

It has long been the Cold Spring Shops position that people, particularly talented people, hold out for terms other than the standard we-pay-you-a-lot-and-own-your-spare-time contract.
There's no intellectual basis for criticizing the individual who is willing to outwork others in order to secure income, or promotions.

On the other hand, there's no reason for a corporation to restrict its promotion opportunities to the most conspicuous time-servers, or to restrict its flexible job descriptions to mothers.
Now comes Echidne of the Snakes, in a sympathetic response to the domestic difficulties of Pepsi chief Indra K. Nooyi.
[M]y guess is that most every single high-powered CEO out there spends relatively little time with his or her family, because that's what the cultural expectations are.  The enormous salaries are based on the assumption that the CEO is married to the corporation (or that the CEO is the parent of the corporation.)
Yes, and perhaps there's an efficient separating equilibrium in which the most committed strivers self-identify. But that need not be the optimal form of corporate management, or the sole employment contract.
More men need to start demanding work-life balance (proper vacations, more time at home than it takes to sleep, the chance to see the children when they are not asleep and so on), because if that balance is seen as a girly issue it will not be taken seriously.
Perhaps, though, tighter supply sides of the labor market?  Asking for more favorable working conditions is risky in the prolonged slow recovery of the past five years.

REFINING IN TRANSIT.

Crude oil can be partially refined before it's loaded onto tank cars.  The resulting cargo is safer.
The stabilization process involves heating and pressurizing the oil to force out light hydrocarbons, such as ethane, butane, and propane, which can then be transported separately. These light hydrocarbons are the truly combustible components that make the light sweet crude coming from both Eagle Ford [Texas] and Bakken [North Dakota] susceptible to explosions in the event of a derailment. Heavy crude, such as from Alberta’s oil sands, is nowhere near as dangerous as the Bakken and Eagle Ford crude; as I’ve said before, you could probably blast such oil with a flamethrower, to no effect.
There's something in the behavior of North Dakota crude producers and the railroads that calls for further scrutiny, though.
The railroads could ask that the oil be stabilized, but their common carrier obligation to handle all business offered them perhaps prevents them from requiring such processing. Ditto the pipelines. And if the rails insist and pipelines do not, guess what happens then? So it appears to come down to government, in particular the Pipeline & Hazardous Materials Administration, which has the authority to order stabilization.
I was under the impression that the railroads (BNSF in particular) were hauling so much Bakken oil for lack of any convenient pipelines (there's a complication involving the Cushing, Oklahoma basing point).  If so, that puts them in a better position to refuse dangerous shipments, particularly dangerous shipments that are straining capacity and on at least one occasion, catastrophically derailing at a choke point on the railroad.

TIME TO CUT THE GORDIAN KNOT?

Paul Rubin of Truth on the Market offers a second-best defense of convoluted public policies.
Corporate taxes are too high, retarding investment. But when cutting rates is impossible, maybe tax breaks that encourage investment of various sorts is the second-best response. Environmental Protection Agency regulations are costly and inefficient. In some cases waivers or exceptions are less a payoff to cronies than a way to counter inefficient restrictions.

A second-best world is messy, and there may be better ways to overcome government-induced inefficiency. Yet sometimes what appear to be special favors may actually be moves in the direction of efficiency.

Of course, some examples of crony capitalism are worthy of the term, and the scorn that goes with it. For example, the various farm price-support programs, including sugar quotas and the ethanol program, which raise food prices world-wide and increase poverty, would be very difficult to justify under any second-best theory.

Nonetheless, as long as there is a push for more regulation, and particularly inefficient regulation, with little opportunity to rein in the already severe drag that these regulations impose on the economy, second-best solutions may be useful to temper some of their costs.
Perhaps, although designing a second-best-optimal set of policies strikes me as orders of magnitude more difficult than designing first-best-optimal policies and tax rates in the first place, with even more opportunities for rent seekers to seek rents.  Here's a meditation on the aftermath of Brazil's recent hosting of the World Cup that, more directly than mine, lays out the consequences of rent-seeking not to the benefit of the masses.
Apart from passionate support for their national sports teams, hatred of government corruption and “crony capitalism” is one of the few issues that unite all social groups in developing countries.

Corruption is often the main issue of opposition parties seeking to get into elected office in democracies. And along with anger at dictatorial abuse, disgust with corruption has been one of the driving forces in the toppling of authoritarian regimes, which was particularly evident during the Arab Spring.

An alliance between civil society and reformist groups in government can be a powerful force in curbing corruption.
Little good done by those who affect to trade for the common good, indeed, particularly when taking advantage of the average Brazilian (or resident of the rougher parts of Chicago) is so much more lucrative.
Reducing corruption can undoubtedly contribute to reducing inequality, both directly and indirectly. Nevertheless, campaigning against corruption is not usually high on the agenda of progressive groups.

For instance, for the Brazilian Workers’ Party that President Lula da Silva led to power in 2002, corruption was an issue, but it was subordinate to changing Brazil’s highly unequal social structure. But once Lula came to power, dealing with corruption became a central concern, especially when people close to the popular progressive president were discovered bribing parliamentarians to get support for government-initiated legislation.

For many progressives, the corruption issue is a double-edged sword. Multilateral agencies like the World Bank and the Asian Development Bank have promoted the view that “good governance” is the central problem in development, by which they often mean that government intervention in the economy creates opportunities for corruption. This view is particularly popular among the middle classes, whose discourse dominates public discussion.

In other words, the anti-corruption cause is often tied to an ideological neoliberal agenda.
Interesting how the term "progressive" shifts meaning. Apparently it stands in for "communist" in the essay, rather than for "technocrat" in the way Theodore Roosevelt or Herbert Croly would have it.  (Not that the intellectual developments of the past century, Welfare Economics Paradigm or not, have made the Good Government Instruction Manual any easier to implement.)  The "neoliberal agenda" might have more promise in helping the poor, as limitations on the powers of government agencies can be limitations on the generation and dissipation of rents.  In the essay, some people have not yet gotten the memo.
Perhaps the best illustration of the transmogrification of anti-corruption discourse was this assertion from a supposedly liberal Thai academic, who told me: “For me democracy is not the best regime. I’m in this sense an elitist. If there are people who are more capable, why not give them more weight? Why should they not come ahead of everybody else? You may call me a Nietzschean.”
There it is: the aspirations of LaFollette or the Brain Trust or The Best and Brightest, shorn of any pretense.  But grant to the Brain Trust no powers you wouldn't want a Less Enlightened Authoritarian to have.
The movement against corruption can be channeled into a mobilization of the middle class to oust governments that promote popular political and economic empowerment, as in Thailand.

So even as they embrace fighting corruption as part of a broader movement for social transformation, progressives would be well advised not to get trapped into using anti-corruption rhetoric for anti-democratic ends.
Interpret that passage as a warning to leftists in the United States not to get too close to libertarians or Tea Partiers. Or interpret it as recognition of the limits on social engineering.

FIRST, IDENTIFY THE ROOT CAUSES OF THE PROBLEM.

Inside Higher Ed reports on a conference of university administrators seeking to Do. Something. about sexual assaults on campus.
Rather than addressing campus sexual assaults directly, the first sessions of the weeklong summit largely focused on the broader context in which colleges must deal with sexual crimes – the federal regulations governing how colleges react to sexual assaults, as well as the larger culture that normalizes gender violence.
Round up the usual suspects.
“Sexual assault on college campuses is a public health problem that affects all of us,” said Jean Kilbourne, a media critic and filmmaker. “We need to pay attention to the environment. Just as it’s difficult to be healthy physically in a toxic environment, it’s the same with sexual assault in an environment that is culturally toxic.”

Kilbourne has been studying advertising and its messages for decades; she said she believes advertising has never been more problematic in its depiction of sexuality and violence. Women are constantly depicted as objects, as being in danger, or as disparate body parts, she said. Grown women are infantilized, young girls are sexualized, and men are often depicted as controlling and even violent.

When those depictions are targeted at college students to sell products like alcohol, Kilbourne said, the message can be dangerous.

“Marketers create a toxic cultural environment on college campuses that make sexual assault more likely,” she said.
Businesses, particularly businesses that aren't part of the university, and entertainers make easier targets than the pernicious notions of if-it-feels-good-do-it or transgressivity that provide the structure of gut courses and victim studies departments.
Sut Jhally, a media critic and communications professor at the University of Massachusetts at Amherst, compared colleges’ growing awareness of the issue to “getting fish to see the water.” It’s slow, but the good news is that more people in higher education are starting to “see the water,” said Jhally.

The bad news? Colleges lack the political will to pursue any substantial change, he said.

“No one has been prepared to take up that challenge,” Jhally said. “If universities wanted to do it, they have the power to change the culture on their campus. If they can change one campus, then it will be easy to change others. But that requires political will.”
Perhaps because it isn't simply taking on beer companies that make their money selling colored water in blue cans to dumb guys, or the Greek letter organizations with influential alumni, or even the culture-studies faculty.  It might be easier to organize presidential task forces, as new Northern Illinois president Doug Baker has, and say the Right Bromides.
"We want to be proactive and on the leading edge to see what we can do to improve our policies and procedures to prevent violence against women and also to deal with anything that does occur," Baker said. "We’re just trying to get out in front of this issue and really show some ethically inspired leadership."
Right.

You must remember this.


And the enrollment bonanza that followed.  "Football-inspired enrollment in quest of beer-'n-circus may not be best for our campus."

But it sells.  Thus, cleaning up the rabbit culture becomes more difficult.

CIVICS LESSON

The posts are two years old now.  The lesson bears repeating.  First, the expression constitutional republic means something.  Neither the "general welfare" clause of the Constitution nor the "To secure these rights, Governments are instituted among Men" passage of the Declaration of Independence are blank checks for the National Government to mandate a universal policy for everybody.  Second, "freedom and compassion are not enemies."  Go, read, and understand.

FACTOR PRICE EQUALIZATION.

The Germans have historically imported Turks and Poles to do the scut-work.  They're now importing Chinese to do the thinking.  "Germany is one of many European countries now dealing with the consequences of embracing a culture of very low birthrates."  Here's the elaboration.  The United States is still a net importer of scientists.  Germany is a net exporter.  Both countries, however, contribute to rising incomes in China.  The United States benefits, however, from being a country in which the qualification for citizenship is ideological (buying into core principles, contested though those may be) rather than tribal, as is the case in all the nations of Europe.

YES, BUT AD-HOC TWEAKS AND PRIORS ALSO MATTER.

Climate forecasting, years in advance, is hazardous.  Macroeconomic forecasting, six months in advance, more so.  I note, though, that macroeconomic forecasting as undertaken for business or government purposes is a very different project than the kind of research academic macroeconomists engage in.
And keep in mind, this is true of fields where mistakes are vastly more consequential than in cosmology. We’re only a week or so into July, so you can still hear echos of chatter about the various economic reports that come out in late June– quarterly growth numbers, mid-year financial statements, the monthly unemployment report. These are released, and for a few days suck up all the oxygen in discussion of politics and policy, often driving dramatic calls for change in one direction or another.

But here’s the most important thing about those reports: They’re all wrong. Well, nearly all– every now and then, you hit a set of figures that actually hold up, but for the most part, the economic data that are released with a huge splash every month and every quarter are wrong. They’re hastily assembled preliminary numbers, and the next set of numbers will include revisions to the previous several sets. It’s highly flawed provisional data at best, subject to revisions that not infrequently turn out to completely reverse the narrative you might’ve seen imposed on the original numbers.

Somehow, though, the entire Policy-Pundit Complex keeps chugging along. People take this stuff in stride, for the most part, and during periods when we happen to have a functional government, they use these provisional numbers more or less as they’re supposed to be used. which is what has to happen– you can’t wait until you have solid, reliable numbers from an economic perspective, because that takes around a year of revisions and updates, by which time the actual situation has probably changed. What would’ve been an appropriate policy a year ago might be completely wrong by the time the numbers are fully reliable. So if you’re in a position to make economic policy, you work with what you’ve got.
True. But the way in which people make economic policy takes into account the controversies the academic macroeconomists have created over the years.  Yes, the Policy-Pundit complex might be able to prescribe tweaks to public spending or to the money supply based on relatively simple income-expenditure models, but the best policy makers will be sensitive to monetarist or new classical or rational expectations objections to the simpler stuff high-school kids learn.  But the forecasting models often get revised (the fancy term is "calibrated") on the basis of new evidence.  (I don't want to get into all the logical complications that follow therefrom.)  The most telling criticism of the climate-change forecasters is the "hide-the-decline" scandal of a few years ago, in which the facts that did not conform to the theory were discarded.  Recalibration involves updating forecasts on the basis of new information.