EclectEcon

The Market for Adjuncts?

Supply and demand in some portions of the market while the protected few enjoy quite different circs.

As one commenter noted, being an adjunct doesn't pay at all well, but it's a fun retirement gig now and then.

Success Academy

Success Academy, a network of charter schools in New York, seems to be doing very well for its students. And their success seems to be the result of more than just selection bias [see this].

What if those Success Academy kids had been distributed among all of the top schools in the city? Would they have done better or worse in math?

Brown found that they would have performed significantly worse: 310 fewer kids would have gotten a level 4 on the exam, the top score. And 203 more kids would have received a 1 or a 2, which are considered to be failing grades. That would have been a tremendous waste of potential.

Of course, this assumes that all of these schools are drawing from the same pool. That's difficult to determine with any certainty, but we know that Success Academy students, who are selected through a random lottery, tend to come from disadvantaged backgrounds. [emphasis added] Seventy-seven percent of its students qualify for free or reduced school lunch. Ninety-two percent of test takers were black or Hispanic.

Let's hear it for private alternatives!

Related articles

NYC report on charter school boom aids school choice push

Unsolicited Email from a Wannabe UWO Student

Subject line: Eager registrant whom contacted Western University in winter, currently Juggernaut student attempting to add to your finance program.

About once every 2-3 months, I receive an unsolicited letter from someone who would like to study at The University of Western Ontario. Often the letter is from someone hoping to do graduate work in economics and asking if I have some funding I can provide (all this despite my having been emeritus for five years).

The letter received by many of us earlier this week beats all the previously received letters.  It is reproduced in full below (with the sender's name and some personal information deleted). A few spots each year should be reserved for applicants like this one, just to see what happens.

Background: The UWO sports teams are known as "The Mustangs", and Amit Chakma referred to in the email is the UWO president [see this and this].

 

 To all of my future acquaintances that this does concern,

 

Firstly, thank you, you are an elite group at an elite school and time cannot be wasted. My name is Xxxxx X. Xxxxxx, I am zzzzz years old, proud of my name, and I am from [EE: some other city in Canada]. I enrolled at YYYYY University during the 2014-2015 academic season and now I am currently enrolled in reputable university preparatory courses. These courses include Intro to General Chemistry(XXXXX University), physics(YYYYY University), and precalculus-plus(YYYYY University).

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 

  During the 2014-2015 academic year I incurred excusable academic issues which I have now been advised with positive outlook by career counselling to have used as reason clear my unsavory academic transcript. It is all a complete excuse and i'm going to use that excuse in order to attain my CFA at a copiously reputable school. I have decided I want to become a chartered financial analyst after my first year of political science, within this year I explored capitalism and realized the most comfortable fit for me within this political system is to understand the methods in which all political power is obtained.

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 

  I grew in love with the mysterious aura an outstandingly non-ordinary essence of investing when I began reading a large amount of books to stay on a scholastic path during my time off last year. Teach yourself Investing with 24 easy lessons was my first book on the topic. It was so utterly hilarious how many times they suggested I go ahead and invest after chapter 13, 15, or whichever it may have been. To truly attack the stock markets you need to be bred to challenge wolves. Benjamin Graham's intelligent investor as suggested by Warren Buffet was necessary, Think and Grow Rich is surely a major building block of a financially optimized mindset as well. I read somewhere around 15 books on the topic, one repeating name on many informative reads was "Peter Lynch".

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 

  PWC is a reputable corporation which released a report in February 2015 http://www.pwc.com/gx/en/issues/the-economy/assets/world-in-2050-february-2015.pdf, this report projected China's GDP to land around sixty to seventy trillion and the United State's GDP to land around thirty to forty trillion in 2050. Afterwards ETF's such as IShares MSCI China Small-Cap returned upwards of 30% in a span of three months. This was my first broad view of the method of investing, how intricate, and based on many variables it truly can be. 

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 

  Through my search for a degree I liked I chose initially engineering due to the fact it produces most millionaires.Thus I am currently finishing up a nine hour study session of physics and sending along this email. I am completely capable of attending a fantastic engineering school, XXXXX University for Mineral Resource engineering, or attending ZZZZZ for financial engineering. That being said, I enjoy business and I believe my life would be absolutely perfect at what is in my opinion the best school in Canada, Western University, as researched and suggested by close friends. I have researched Western University extensively, I know it is all it's hyped up to be, and [EE: personal information deleted].

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 

  I am the most serious, determined, focused, and outright dedicated student you could receive. I may not arrive perfect, but obedience after obedience is how you perfect something, how you become successful. If some magical, and it would be magical I must say, if through a magical way I was able to be enrolled for September into your first entry DAN school, then move on to my specialization in finance or possibly entrepreneurship, I would literally fall out of my seat into a puddle of utter infinitesimal joy. I haven't currently been able to gather means to apply to the OUAC or I would have an application in, I often walk across the city to the library to prepare for my current path which is engineering in September. If given the thumbs up by any faculty at Western University, the best university in Canada, to apply and have a great chance of acceptance, I would send you along a biography, a resume, and agree to clean the halls for fifty hours a week to begin in September.

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 

 My high school average lies somewhere around 72%, that being said I by August 20th have three exceptional marks in physics, chemistry, and pre-calculus, which were very condensed and add credibility. I also believe my IQ to be somewhere among the top 10% of your students and guarantee you the only thing accepting me on such whim would do to any of you is give you a really feeling. I will enter every classroom looking for the alpha student and competing with them, I will join any society I can and hopefully prepare myself to work within an investment bank, or at least gain the financial literacy to pursue my own company without economic downfall. Goldman Sachs workers probably had to impress, and so I have to impress. Give me this chance and you will likely read about it in a book someday, I kid you not I have had my physics teacher this summer suggest to me to write one.

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 I am an intelligent investor and i'm asking anyone who has been so outrageously courteous as to read this far to be one themselves. Invest your time and a bit of effort to gain a premier student, you will turn an unsure world into a wonderland, yes school as a wonderland, and I apologize if i'm being too wordy but the words that would come out of my mouth if accepted are insurmountable and so I must give insight. Western University, the decision is yours, if i'm accepted to Goldman Sachs I will send diagnostics of the trajectory back as they say in physics.

(GO MUSTANGS!)(SALUTE PRESIDENT AMIT CHAKMA)

 

Western University, honorable faculty members, thank you for reading, please inform me of any possibility to turn myself into the most fully agile student I could ever become. Your school will prepare me for things of a substantial magnitude.

 

Sincerely,

Xxxxx X. Xxxx

What Do Joe Maddon and EclectEcon Have in Common?

Joe Maddon is currently the manager of the Chicago Cubs. Previously, he managed the Tampa Bay Rays. Besides enjoying baseball, he and I have something else in common.

From an interview with Baseball Prospectus,

DL: You majored in economics in college. What role do economics play in the baseball world of Joe Maddon?

JM: Honestly, I was not a very good student. With economics, "ubiquitous" was probably my favorite term. I guess that the number-crunching is something I liked. I've always been into that. I've always like analyzing statistical information, even before it was fashionable. When I was back in the minor leagues, as a roving hitting instructor back in the mid- to late '80s, I probably had a more simplistic perspective, but nevertheless I saw the value in it. But my economics days at Lafayette College were probably a case of having to declare a major more than anything.

Like Joe Maddon, I was an economics major and I was not a very good student (as an undergrad). I liked number-crunching at an intuitive level then, too. But I did fail a math course and get Ds in two different economics courses. I don't know about him, but I was lucky I didn't fail out.

Related articles

The Tale of Two Tutees

The Tale of Two Tutees

When I was in gradskool, I tutored football players in economics to earn some extra cash from the athletic department. The two that I remember taught me a great deal about teaching, learning, and the goals of education.

1. A young quarterback

The first player I tutored was the team's backup quarterback who was destined to be the starter in the next year or two. He was clearly a bright young man, and he went on to great things later in life. And yet he was struggling with economics.

I invited him to our apartment, where we met for hours. I laid out the essence of introductory macroeconomics for him. I wrote out clear, lucid notes for him to work from. I knew it was a superb set of notes, and he seemed to follow everything I wrote for him.

He failed anyway.

2. The struggling middle linebacker

The next tutee I dealt with completely differently. He was the star "monster-man," and the educational advisor/coach for the athletic department said to me, "John, we have a big investment in this man. If you get him to pass the course, we'll give you a bonus."

I took that as an implied invitation to get the exams in advance and give the player the answers. Of course I didn't do that.

Instead, I met with the player once a week. I dragged him through the multiple-choice questions in the study guide for the textbook. For each question, I got him to explain why the correct choice was correct and why the incorrect choices were incorrect. He did the work between sessions, and so the sessions were productive.

He got a "C" in the course and I received, in addition to my hourly pay, a $40 bonus (the equivalent of about $400 today).

-------

I generalized from these experiences. On the basis of just these two examples, I concluded that learning-by-doing was more important than lecture-chalkboard education (despite loving to present and pontificate and have a captive audience for my "performances").

In the case of standard, university-level introductory economics, the learning that was being tested was the ability to take economics multiple-choice exams. And the way to prepare for them was to do, study, and explain lots of economics multiple-choice questions.

I told this story to my students nearly every year that I taught introductory economics, encouraging them to use the study guides that were published along with the textbooks. Some did, but many didn't bother because the study guide took a lot of time to work through and wasn't required work for the course.

Another thing I learned from this experience was that there are so many different levels of knowledge, ability, and understanding that are tested with multiple-choice questions. I tried to make sure that my exams had a reasonable mix of questions, testing the different components of economics knowledge and understanding. [some of my old exams are here, for your perusal.] I refused to give exams comprising only barf-back questions.

About a decade ago, major publishers began marketing online study guides or quiz programmes. These textbook supplements allowed instructors to incorporate doing something like the study guides of old into the required coursework. Keeping in mind my experience with the two tutees, and because I had done some other work to help develop online learning tools, I embraced the new products, making sure they had a heavy learning component (in addition to just being weekly quizzes) by giving students explanations and by giving students a chance to redo the quizzes (albeit with different questions on the same material) several times. I also made the online quizzes count for 10% of the students' grades.

The result was astounding. In one year, using the same final exam, the average grade improved by five percentage points with the class using the online quizzes (compared with a class the previous year; and no, the final exams had not been allowed out of the exam room the first year and had not been circulated).

The conclusion, of course, is that people respond to incentives. But the incentives must be clear and short-term. Just telling the students my stories of the tutees, had far less impact than making the online quizzes count.

And given this conclusion, it has become clear as well that the online quizzes need to be more clearly based on what we want the students to remember ten or twenty years from now --- opportunity costs, trade-offs, downward-sloping demand curves, gubmnt failure as well as market failure --- and not just definitions and line-pushing. It is hard to write good quizzes and good exam questions that go in this direction. The late Paul Heyne did as a good a job as I have ever seen in The Economic Way of Thinking (which I had the privilege to adapt for the Canadian market). But more needs to be done along these lines.

.

Related articles

Crass Commercialism

Six Truths about Life after Graduation

Sarcastic, but with just enough grains of truth to make them sound pithy (via Clickhole, so also with a grain or more of salt):

Get ready for a harsh dose of reality.

1. There is no job fairy giving out jobs; there’s a job troll, and you have to kill him to get hired: Sorry, new grads, but nobody is just going to hand you a job. You have to seek out the troll’s cave and bash in his skull if you want to get employed.

2. Graduate fuzz will sprout all over your body: Don’t be freaked out by the white, peach-like hairs covering your skin. They’re a normal part of entering the real world.

3. If you show your diploma at a bank, they’ll give you $1,000: Remember, all college graduates can collect their weekly stipend of $1,000 from any bank just by flashing their degree.

4. Instead of reading textbooks, you gain knowledge by slaughtering birds and examining their entrails: Nobody is going to package information in nice, neat little study guides. If you want to learn something, you have to interpret the viscera of seabirds.

5. Life isn’t graded on a curve. When your boss asks how much opportunity you’d like, say, “Eight opportunity”: If you want to be noticed in an office, you have to work hard and ask for the maximum amount of opportunity. Don’t take it easy and just ask for two or three opportunity.

6. Your college years aren’t the best years of your life. Your 40s are the best years of your life:

No Shortages When Prices Are Free to Fluctuate A Good Egg-zample

The extreme reduction in the supply of eggs as a result of widespread incidences of avian flu did not cause any shortages of eggs, no queuing or waiting lines, no widespread accusations of cronyism. [see this from the NYTimes, which possibly confuses a reduction of the quantity demanded with a drop in demand but which otherwise is quite informative].

Here's the scenario as it unfolded:

• Lots of birds contracted avian flu and were killed.
• the supply of eggs shifted to the left (a reduction in supply)
• The short-term supply curve and the short-term demand curve are both pretty steep (price inelastic at relevant prices), and so the price of eggs more than doubled as a result of the reduction in supply.
• Over time, the higher price induced buyers to reconsider their purchasing habits, to look for substitutes. I.e., as with most products, the longer-term demand curve is more price elastic than is the short-term demand curve.
• As the demand curve rotated counter-clockwise (going from short-term to longer-term), the equilibrium price of eggs declined a bit (more than 13%, according to the article).

The real take-away from this experience is that the price system works. When the supply of eggs declined, the price system rationed the available eggs to those who valued them most, i.e. those who were most willing to pay higher prices.

Contrast what happened with eggs and egg prices in the US with what would have happened had this occurred in Venezuela or any other country where the gubmnt intervenes in price-setting. Even if the bureaucrats had wanted to use prices to help ration the eggs, they would have responded slowly and shortages would have developed at the artificially low prices.

The smooth functioning of the price system as it was used to allocate eggs should be held up as one of a multitude of examples of how markets work.

Pedantic addendum:

I always tell my students that it is meaningless to talk about "shortage". They must talk about a shortage at a certain price instead. The reason is that a shortage can be eliminated by letting the price rise enough to reduce the quantity demanded and increase the quantity supplied. That is exactly what happened in the market for eggs.

If the price of eggs had been fixed, there would have been shortages at the fixed price. But because the prices were free to fluctuate, there were no times when the quantity demanded exceeded the quantity supplied at the equilibrium price.

Related articles

Egg-o-nomics

Second Grade Economics Lesson

Timeline for getting new birds in avian flu facilities still up in the air

Student Debt and the Value of Higher Education

I find the willingness of students to go into massive debt to finance college and university living to be puzzling and astounding. Why accumulate debts of up to $100K or more to attend a college or university only to study topics that have little-to-no marketable value? Do these students have no idea what they are doing?

Perhaps more articles like this opinion piece in the NYTimes, despite its whiny self-centered tone, will help more students and parents make better-informed decisions in the future. I read most of the comments there and fully agreed with the ones that took the writer to task for everything said in the piece.

By the end of my sophomore year at a small private liberal arts college, my mother and I had taken out a second loan, my father had declared bankruptcy and my parents had divorced. My mother could no longer afford the tuition that the student loans weren’t covering. I transferred to a state college in New Jersey, closer to home.

Years later, I found myself confronted with a choice that too many people have had to and will have to face. I could give up what had become my vocation (in my case, being a writer) and take a job that I didn’t want in order to repay the huge debt I had accumulated in college and graduate school. Or I could take what I had been led to believe was both the morally and legally reprehensible step of defaulting on my student loans, which was the only way I could survive without wasting my life in a job that had nothing to do with my particular usefulness to society.

I chose life. That is to say, I defaulted on my student loans.

The writer is Lee Siegel, a successful journalist/author. If it's the same Lee Siegel as in the Wikipaedia link, he can afford to repay the loans. He sounds more like a creep than an exploited student. For example, from Wikipaedia,

In September 2006, Siegel was suspended from The New Republic, after an internal investigation determined he was participating in misleading comments in the magazine's "Talkback" section, in response to criticisms of his blog postings at The New Republic's website and vicious attacks on his character.^[5] The comments were made through the device of a "sock puppet" dubbed "sprezzatura", who, as one reader noted, was a consistently vigorous defender of Siegel, and who specifically denied being Siegel when challenged by another commenter in "Talkback". In response to readers who had criticized Siegel's negative comments about TV talk show host Jon Stewart, 'sprezzatura' wrote, "Siegel is brave, brilliant, and wittier than Stewart will ever be. Take that, you bunch of immature, abusive sheep".^[6] The New Republic posted an apology and shut down Siegel's blog. In an interview with the New York Times Magazine, Siegel dismissed the incident as a "prank".

 So this guy is basically a schmuck who is trying to use the plight of students today to justify not repaying his student loans from 30 years ago?

Read the comments on his piece. They are mostly devastating.

As I said, I hope young high school students today will learn from him. But I hope they will learn to look ahead and carefully assess their decisions about higher education, course majors, and student loans. I hope they will not take this piece as a justification for borrowing big and not repaying the loans.

A Programme that Appeals to Me

My younger son, Adam Smith Palmer, recently wrote that our granddaughter has been admitted to the "...3 G&T program..." 

Where do I apply? Is that three gin and tonics per afternoon?

 

[btw he was writing about Lara, for those of you who remember her.]

Egg-o-nomics

A great example of supply-and-demand in action: What would happen in the market for eggs if a disease wiped out a huge chunk of the laying-hen population?

It has happened in spades over the past month. Wow!

Avian flu, which has proven lethal in other parts of the world, has spread throughout the United States like wildfire. Since April, when cases began spreading by the thousands each week, the virus has escalated to a point of national crisis.

As of this month, some 46 million chickens and turkeys have been affected, according to the U.S. Department of Agriculture. Nearly 80 percent of those are egg-laying hens, a reality that has been crippling for the egg industry.

But it's becoming increasingly clear that it isn't merely those who produce eggs that will suffer. Those who eat them will pay a price, too.

The wholesale price of eggs sold in liquid form (a.k.a. egg beaters, the kind used by large food manufacturers) has skyrocketed — from $0.63 per dozen to more than $1.50 — since the virus began to spread. While that stands to affect the price of breads, pastas, cakes and other commercial confections made with eggs, it also bodes poorly for food service providers, such as McDonald's, which sell millions of egg-filled meals every morning. Texas-based fast-food chain Whataburger recently announced that it will be shortening its breakfast hours for the foreseeable future.

• The disease shifted the supply curve of eggs to the left
• causing a shortage of eggs at the old prices [see the original story for examples!]
• leading buyers to offer and sellers to ask higher prices
• with a resultant increase in the equilibrium price of eggs

 

 

There, but for the grace of god...

I recently came across this article about why associate professors are such an unhappy lot.

New national data show that associate professors are some of the unhappiest people in academe.

I was a career associate professor. Being an associate professor for three decades can be difficult in many ways, including but not limited to those set out in the article. [You'll have to follow the link to read the explanations because I have been unable to copy-and-paste from it.]

Fortunately I developed interests and friendships outside my academic life, and I found other venues in which to pursue my academic interests at times. As a result, over the last decade or two I developed a sense of gratitude, adventure, and happiness that helped overcome the things I didn't like about the job. 

New national data show that associate professors are some of the unhappiest people in academe. They are significantly less satisfied with their work than either assistant or full professors, according to the data, which were collected this year from 13,510 professors at 56 colleges and universities by the Collaborative on Academic Careers in Higher Education, at Harvard University. - See more at: http://m.chronicle.com/article/Why-Are-Associate-Professors/132071/?utm_content=buffer66b82&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer#sthash.zFdFZc2t.dpuf

New national data show that associate professors are some of the unhappiest people in academe. They are significantly less satisfied with their work than either assistant or full professors, according to the data, which were collected this year from 13,510 professors at 56 colleges and universities by the Collaborative on Academic Careers in Higher Education, at Harvard University. - See more at: http://m.chronicle.com/article/Why-Are-Associate-Professors/132071/?utm_content=buffer66b82&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer#sthash.zFdFZc2t.dpuf

New national data show that associate professors are some of the unhappiest people in academe. They are significantly less satisfied with their work than either assistant or full professors, according to the data, which were collected this year from 13,510 professors at 56 colleges and universities by the Collaborative on Academic Careers in Higher Education, at Harvard University. - See more at: http://m.chronicle.com/article/Why-Are-Associate-Professors/132071/?utm_content=buffer66b82&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer#sthash.zFdFZc2t.dpuf

EclectEcon -- Your Next Commencement Speaker?

Once again we hear of controversies surrounding the invitations to some people who have been invited, not invited, disinvited, uninvited, etc. to give commencement addresses.

I have a solution. Invite me.

I have openly and unashamedly in the past campaigned to be invited somewhere --- anywhere --- to give a commencement address. Here is a posting (revised, updated, edited) from 2007.

This is a revised repost of an open solicitation I made several years ago:

Invite Me to Speak at Your School's Graduation CeremoniesThis is an open solicitation.

I would like to give the commencement address at your school.

Here are some reasons you should invite me:



1. I have a cap and gown that have been described as cool or sexy


2. I look very professional and academic with my gray beard and glasses.

3. I have considerable experience listening to bad commencement addresses, so I know what not to do or say. (e.g. don't try to get the crowd. to sing a kid's song with you, as one speaker did).

4. I am an award-winning professor, with considerable acting and speaking experience.

5. I promise not to cuss (unless you want me to).

6. I will charge no fees (until the demand increases considerably).

7. I will pay (some of) my own transportation expenses, within reason.

8. You have your choice of opening lines (and topics):

• "Never apply latex paint over glossy alkyd enamel."
• "There are no refunds for losing lottery tickets."
• "If you're going to save the world, do it yourself — don't ask the gubmnt to do it."
• "You're never too young to have a happy childhood."
• "Old people are grumpy because they hurt."
• "Cronyism ain't capitalism."

    or any other topic from my blog.

 

Second Grade Economics Lesson

My granddaughter recently completed the following economics lesson for her grade 2 class:

The lesson has the right idea: don't reason from a price change but instead ask, "What might change to cause prices to change?"

It also asks the students to analyze what might cause a shortage at the current price [at least I think that's what the question means when it asks about what might cause oranges to become scarce.].  And then it asks what might happen to the price after the shortage at the original price occurred.

In this case, my granddaughter offered the possibility of a reduction in the supply of oranges; I hope the teacher (or more likely the teachers' manual) would also accept some change such as "People begin to believe that oranges make you healthier," thus shifting the demand curve rightward rather than shifting the supply curve leftward. Either would cause an increase in the price (unless you live in Venezuela or some other jurisdiction where prices are kept artificially low by gubmnt fiat).

Addendum: I forgot to put this in the original post. I might also want to put in a question about whether people will want to buy more or fewer oranges when the price goes up.

BEDMAS -- misleading mnemonic

There's a math problem raging on Facebook that depends on the order of operations.

Too many smart people have memorized the mnemonic BEDMAS and misapply it.

From Wikipaedia,

These mnemonics may be misleading when written this way, especially if the user is not aware that multiplication and division are of equal precedence, as are addition and subtraction. Using any of the above rules in the order "addition first, subtraction afterward" would also give the wrong answer to the problem:

.

The correct answer is 9 (and not 5, which we get when we do the addition first and then the subtraction). The best way to understand a combination of addition and subtraction is to think of the subtraction as addition of a negative number. In this case, we see the problem as the sum of positive ten, negative three, and positive two:

A different perspective that might help clear things up: Within the multiplication and division groups, start at the left and work right. Similarly, within the addition and subtraction groups, start at the left and work to the right.

But I doubt if this will stop or slow the battles on Facebook.

If only people would Google things and look at Wikipaedia...

Good Grief -- Medical Marijuana

This is NOT from The Onion:

 A [police] spokesman confirmed that officers had searched Banda’s home, though he denied it was a raid. He also said the initial anti-drug program was put on entirely by the school — the police had no involvement. At that event Banda’s son apparently contradicted some of the claims made about marijuana. The school then contacted the child protection agency, which then contacted the police. Officers from the department showed up at Banda’s at home and asked her permission to conduct a search. She refused. They then obtained a warrant and searched her home. The spokesman wouldn’t comment on exactly what was found, except to say that there was “evidence” of drug activity. Banda was then arrested and her son was seized from the home. Currently, there are no criminal charges against her. The spokesman wouldn’t comment on whether charges may be forthcoming. He added that possession of marijuana is illegal in Kansas, without exception.

The absurdity here of course is that a woman could lose her custody of her child for therapeutically using a drug that’s legal for recreational use an hour to the west. It seems safe to say that the amount of the drug she had in her home was an amount consistent with personal use. (If she had been distributing, she’d almost certainly have been charged by now.)

This boy was defending his mother’s use of a drug that helps her deal with an awful condition. Because he stuck up for his mother, the state arrested her and ripped him away from her. Even if he is eventually returned to his mother (as he ought to be), the school, the town, and the state of Kansas have already done a lot more damage to this kid than Banda’s use of pot to treat her Crohn’s disease ever could.

"Who could imagine that they would Freak-Out in Kansas?" [Frank Zappa]

IslamoTerrorists

I know not all Muslims are terrorists. But the continued use of terrorism by some/many Islamists is a serious threat. See this from the BBC.

Gunmen from the militant Islamist group al-Shabab have killed at least 15 people and taken students hostage at a university in north-eastern Kenya.

Reports say 65 others were wounded when gunmen stormed the campus in Garissa. Troops are engaging the gunmen.

More than 500 students were still unaccounted for, a minister said. The number of hostages is unclear.

Al-Shabab, which is linked to al-Qaeda, said it was holding Christians hostage and freeing Muslims.

Hostages from the two groups had been separated, and 15 of the Muslims had already been released, a spokesman for al-Shabab told the BBC.

What's the Quid Pro Quo for Amit Chakma?

Earlier today I put up two posts about the prez of UWO, Amit Chakma, and how he had taken double pay in lieu of taking an administrative leave [here and here]. The pressure was strong and this afternoon, he announced he would return $440K and wouldn't exercise that option in his new contract. Further there will be an independent investigation into the situation (and I hope into the Board of Governors who approved such a contractual option for him).

From his email,

My employment contract with Western, executed in 2009, provided for payment in lieu of one year of administrative leave at the end of my five-year term. When I was reappointed, for the sake of continuity, I received payment in lieu of the administrative leave.

Although contractually sanctioned, in hindsight, I should have carried over my administrative leave to the end of my current term.

Today, Western’s Board of Governors retained the Honourable Stephen T. Goudge to conduct an independent and impartial review of my compensation. I am confident that Justice Goudge will complete a full and fair examination and I will whole heartedly cooperate. I look forward to his findings and intend to abide by his recommendations.

In the interim, as a demonstration of my commitment to Western and to address the concerns that many have expressed, I have decided voluntarily to refund the in lieu payment to the University. I have also decided not to exercise my right under the contract to receive payment in lieu of administrative leave at the end of my second term.

 My prediction:

The judge will recommend that since prez Chakma returned the money, he get both the administrative leave he should have taken this year AND the administrative leave to which he is entitled at the end of the next contract.  (in a sense Chakma set the stage for this saying he should have carried over the administrative leave to which he is entitled until the end of his next contract). I.e., the judge will recommend that Chakma serve as prez for 3 more years and then be paid on an administrative leave for the next two years and then not be rehired.

This is a good solution, given the mistakes that have been made already. UWO should get rid of this guy soon, and paying him for his administrative leaves would not be exorbitant or outside the terms of his contract. It would certainly be cheaper than what I proposed here. I'd just as soon see him and at least some of the members of the Board of Governors fired but that probably won't happen, so this would not be a bad solution.

At any rate, I shall be surprised if there isn't SOME form of quid pro quo for his having returned $440K.

Related articles

Pay This Guy $2m and Fire Him

I'd Guess a Lot of Faculty Members Would Like to Do This: Draw Double Salary

Chakma and The University of Western Ontario: it just keeps getting worser and worser

How did Western University president double his salary to $924,000 in 2014?

The Political Economy of Envy

Chakma and The University of Western Ontario: it just keeps getting worser and worser

I just posted a item urging The University of Western Ontario to fire it's prez, Amit Chakma, and to get back to striving for excellence instead of incompetence. Clearly the Board of Governors must go as well.

Here is why: They renewed his contract for another five years despite a record of incompetence. From the London Free Press:

When Chakma came to Western, he promised to boost its international standing and pointed to annual rankings done by The Times of London in England.

At the time, he thought the school was well positioned to break into the top 100.

“As a first step, it would be wonderful to be among the top 100 universities that The Times of London (lists). Western is very close,” he said in 2009.

But Western has since fallen in the rankings to between 225 and 250. Those behind the ranking don’t disclose the exact placement of schools not in the top 200.

Another ranking publication that splintered off the Times ranking had Western sinking to 199 and 191 the past two years.

Even the Richard Ivey School of Business at Western slipped badly: It ranked as high as 27th in 2007, ranked in the 40s the following four years, and this year dropped to 97th, hanging by a thread to a top 100 ranking.

A university spokesperson defended the school’s standing, writing that Western ranked in the top five in Canada and top 150 globally in philosophy, psychology, economics and accounting and finance.

“As for Ivey, all Canadian business schools are seeing a downturn in global rankings . . . That said, the most notable, recent business school ranking for Ivey comes from Bloomberg Businessweek, (which) ranked Ivey as the No.1 business school for MBAs outside of the United States,” spokesperson Keith Marnoch wrote.

Note: in the 1980s, when Stan Liebowitz and I did some serious ranking of economics departments, the UWO economics department ranked somewhere between 7th and 30th in the world, depending on the criteria used. [see this: "Assessing Assessments of Economics Departments" (with S. Liebowitz), Quarterly Review of Economics and Business 28 (Summer 1988): 88-113.]

The department is now in the top 150??? Sheesh. Not all the decline is due to Chakma, for sure. But being one of the top 200 economics departments claiming to be in the top 150 is nowhere near being one of the top 30 claiming to be in the top 20.

Related articles

Now it's a triple take

I'd Guess a Lot of Faculty Members Would Like to Do This: Draw Double Salary

Sunshine List shows London schools and hospitals have top public salaries

Pay This Guy $2m and Fire Him

Amit Chakma is the reigning Prez of The University of Western Ontario (which he induced people to spend hundreds of thousands of dollars to rename as "Western"). He is clearly not the person who should be leading a major post-secondary education institution.

I really doubt that he has done anything illegal.

However, his so-called "leadership" has been incompetent, as has that of his administration.

In addition to the renaming farcical exercise, he has irritated numerous alumni, faculty members, students, and fellow administrators by having negotiated, and followed through with, a contract whereby he could draw double pay in lieu of taking an administrative leave. It turns out he did something pretty similar before coming to UWO.

As much as jaws dropped when people learned Western University paid its president nearly a million bucks last year, it wasn’t even his biggest pay day.

In 2009, Amit Chakma moved to London from the University of Waterloo, where he’d been a vice-president, and raked in $972,440 in salary and benefits, $5,000 more than last year’s total.

He did so by cashing in an unused academic sabbatical at Waterloo, raising the ire of some faculty. [EE: I haven't heard of faculty members being able to cash in unused sabbatical leaves when they change institutions. This is indeed rare.]

“There was quite a bit of alarm expressed by UW faculty over this, since if (a regular) faculty (member) resigns, they never receive anything for any unused sabbatical credit,” a retired faculty member recalled in an e-mail Wednesday to The Free Press.

Chakma was paid more than $741,000 by Waterloo in 2009 and another $229,000 in pay and benefits after his move to London. He became Western’s president in July that year.

Both he and the people who hired him need to leave UWO. As it is, his presence as prez will detract from what the university needs to be doing and will seriously hamper fund-raising efforts by the university.

Even before all these shenanigans came to light, people were raising questions about his presidency.

A person whom I respect and whose information I tend to trust told me the other day that a major donor decided not to make a massive donation to UWO. In announcing the decision, the donor raked the UWO admins over the coals and said UWO would not get a nickel of donations so long as Chakma was the prez.

He clearly has to go. Buy him off and send him away.

At the same time, get rid of the people on the Board of Governors who hired him and who (amazingly) renewed his contract. The sooner they are gone, the sooner UWO can get on with higher education.

I am so disappointed.

Marxism in Higher Education

The title of this post seems like an oxymoron. Here is why (from Bryan Caplan):

If 18% of biologists believed in creationism, that would be a big deal.  Why?  Because creationism is nonsense.  Similarly, if 18% of social scientists believe in Marxism, that too is a big deal.  Why?  Because Marxism is nonsense.  Furthermore, if 18% of a discipline fully embrace a body of nonsense, there is also probably a large bloc of nonsense sympathizers - people who won't swallow the nonsense whole, but nevertheless see great value in it.  Suppose, plausibly, that there is one fellow traveler for every true believer.  That would bring the share of abject intellectual corruption to fully 35% - and 51% in sociology.

The data on which he based this remark are in his post. The comments following his post at Econlog are worth reading, too.

I worry at least as much about the infestation of higher education by planners and elitist interventionists. They all need to spend some time reading and discussin Hayek.

 

Related articles

The Political Economy of Envy

I Spent My Career Training Students to Be Bad People

According to Professor Wade at Occidental College, if you studied economics, you are likely to be a bad person.

Dr. Wade writes that if you have taken classes on Economics, you “are less likely to share, less generous to the needy, and more likely to cheat, lie, and steal.”

She largely bases her belief on a study from 2010. In the study, students were asked if they would like to contribute money to a liberal political group or a group that is pushing for lower tuition, possibly by asking for more subsidies from taxpayers.

Students with an understanding of economics were less inclined to donate to these groups than students with other majors. And for that reason, Dr. Wade has declared that they are “anti-social.”

But as the article points out,

The flaws in this assessment [are] blatant, however. The first and most obvious is that there were no conservative groups to donate to. To say that donations to liberal groups correlate with the goodness of people is patently ridiculous.

Second, it could very well be that people who understand Economics are more aware of the consequences of just giving money to political groups. Or perhaps they know more about the effectiveness of using money to solve a problem instead of having a plan to actually fix things.

These things do not run through Dr. Wade’s head as she is all too happy to declare that Economics majors are anti-social. Further, she says that Econ majors need to take ““balancing” classes, ones that present a different kind of economics.”

Here is the link to Professor Wade's piece [via J Alan, who notes the comments on her piece make good points as well.].

I'd Guess a Lot of Faculty Members Would Like to Do This: Draw Double Salary

The Prez of The University of Western Ontario worked through his "administrative leave" and so he collected double salary last year. No foolin'.  This is the guy whose main claim to fame (so far as I can tell) has been to change the name of the university from "The University of Western Ontario" to "Western University". From CBC:

The university based in London, Ont., issued a news release Friday explaining the salary jump this way: 

"To ensure continuity of leadership at a critical time, Chakma received payment in lieu of a one-year administrative leave that was included in his first five-year contract, which concluded in June 2014. ...

Western's board of governors chair Chirag Shah told CBC News that instead of taking one year of paid administrative leave included in his contract, Chakma opted to stay and work through 2014 at what Shah said was a "critical time" for the university. 

Doesn't that mean Chakma was essentially paid twice his salary for one year of work?

Shah told CBC News it doesn't. He says Chakma was permitted to take a year of salary for not working and instead chose to stay and work, meaning he was essentially entitled to twice his annual salary in one calendar year.

I can imagine a lot of faculty members would loveto forgo their sabbaticals and draw double salary. Look for the faculty union to be negotiating for this option in the future.

Sheesh. Critical time? Hunh.

Myron Scholes to Visit UWO Next Week

I will definitely be making an effort to see/hear this. I expect it will be jam-packed.

More on Freedom of Speech vs. Freedom of Religion

Ever since I started writing this blog over a decade ago, I have argued that when "freedom of expression" and "freedom of religion" clash, I want us to choose freedom of expression.

I much prefer competition in the marketplace of ideas to stifling the expression of ideas. But, sadly, this competition is being blocked and thwarted by too many people with strong political voices, saying essentially, "If you say that, we will shut you down."

A recent example comes from Trinity University in Dublin [why is it so often universities that try to limit freedom of expression?]:

[T]he cancellation of yesterday's planned lecture on 'Apostasy and the rise of Islamism' by Iranian human rights activist Maryam Namazie is something that should worry us all. ...

There was a telling insight into the mentality of the organisers, the Society for International Affairs (SoFIA) who expressed concerns about their ability to host the event: "In a safe environment where individuals are free to express themselves without fear of being threatened after the discussion."

Just who did they think would cause a disturbance after the event? Namazie's fellow apostates who face an automatic death sentence in 11 countries around the world for seeing sense and leaving their faith?

Or maybe they were worried about how some of Trinity's Muslim students might have reacted? After all, the Trinity Muslim Student Association recently hosted a radical cleric called Sheikh Kamal El Mekki, who was there to explain why apostasy and infidelity are sufficient reason to kill people.

Freedom of expression for me but not for thee? This sounds amazingly unbalanced.

Universities used to be bastions of the defence of freedom of expression. They used to defend mightily their explorations of unpopular ideas. And yet, it appears, many universities nowadays shy away from challenging the extremist Islamists.

It's time for universities to regrow a backbone. It is time for universities to renew their role of encouraging students (and faculty members!) to explore diverse views and to provide a safe, if uncomfortable, environment for these journeys.

Addendum: See this, in which a professor strongly negative views about Hamas and is bullied by students at Connecticut College. It is a lengthy piece, but it looks as if he was targeted not just for that expression but for his other views as well.

Also, see this, which I wrote many years ago about my late friend BenS and his confrontation with the speech police.

 

 

Why Aren't Norway and Finland Being Over-run with Students?

I have read from several friends on Facebook that Finland lets anyone from anywhere attend public university there for no charge. And other friends have been circulating this photo about Norway:

I Snoped these assertions because I'm not always sure about things I read on Facebook, but Snopes has nothing about them.

So here is my question: why aren't the universities in these countries being swamped with students? Is it because students from other countries (supported by their parents?) would rather beg, borrow, and/or take part-time jobs than learn a new language (or travel? really? or live in a foreign country? really?)?

It seems to me that learning the new language would be a bonus. Study the language, then go there to study whatever, and both have a university education and be bilingual.

How many foreign students are there in public universities in Norway and Finland? How good are the educations they receive?

The Education of Islamic Extremists

A writer who opposes Israel's policies toward Palestine writes about his experiences at The University of Westminster, the alma mater of Jihadi John in today's Washington Post. Excerpts:

As a vociferous critic of the Israeli government, I have participated in demonstrations and activities supporting Palestine for many years. Yet in a discussion about the conflict, I was horrified to hear a fellow student, supposedly a scholar of international relations and politics, complaining about “the f---ing Jews.” What bothered me even more than such bigoted rhetoric was that the individuals who voiced these extreme positions appeared to do so with impunity. ...

From my experiences, I believe that the university is unwittingly complicit in perpetuating such radicalization, as it has often allowed Islamist extremism to go unchallenged. I don’t think the university itself is advocating extremism, but by failing to prevent the advocacy of such ideas, the institution is attracting students who are sympathetic to them. Students who do not identify with extreme Islamist ideology are being put at risk of discrimination, intimidation and potentially radicalization by the university’s failure to properly handle the situation. ...

I hope that the humiliation of having Jihadi John among its alumni leads Westminster to implement big changes to quell extremism. If it does not, I fear for how many new recruits the Islamic State might garner from the graduating class of 2015.

 

 

Freedom Week in Montreal in August

I received this information last week. If I were a student, I'd apply for this programme in a flash. The speakers are among the best in the field.  Just hearing Munger, Jaworski, and Horwitz [the three with whom I am familiar] will be an experience you won't forget!

What a terrific opportunity!

  On August 10-15 the Institute for Liberal Studies will be hosting our second annual Freedom Week seminar in Montreal. This five-day seminar is designed for students who are interested in learning about classical liberal ideas and the foundation of a free society and is open to undergraduate and graduate students, as well as those who have recently graduated. A faculty of six professors with backgrounds in economics, political science, philosophy, and law will deliver lectures and lead discussion groups designed to give students a chance to talk over important ideas with their peers.

This seminar is totally free, and room and board will be provided. Participants will be selected through a competitive application process and all applications must be submitted by April 15. All students who apply by March 15 will receive a free book.

Faculty for this the seminar:

• Jacob Levy (Political Science, McGill University)
• Michael Munger (Economics and Political Science, Duke University)
• Peter Jaworski (Philosophy, Georgetown University)
• Moin Yahya (Law, University of Alberta)
• Diana Thomas (Economics, Creighton University)
• Steven Horwitz (Economics, St. Lawrence University)

  Applications can be submitted online at www.liberalstudies.ca/freedom-week.

 

Another Area Where Economics Has Gone Wrong: its inability to dispel the inaccuracies of Keynesian macroeconomics

I have been following Scott Sumner's blog, The Money Illusion, intermittently pretty much since he started writing it. I mentioned him here and here back in 2009.

I was ecstatic when he joined EconLog, along with regulars Bryan Caplan and former student David Henderson. His insights and his energy contribute to making  EconLog one of my favourite blogs.

His recent posts about how the Keynesians [typically of the Alvin Hansen type: spend big and forget about the deficits] had it all wrong are persistent in demonstrating how awfully incorrect the Keynesians have been. This one from a couple of days ago says it all best, I think, with his criticism of the Congressional Budget Office's forecasts using what are basically Keynesian models.  His concluding remarks:

Two grand Keynesian experiments and two abject failures. Followed by two times where the Keynesians started crowing about how they'd been right about everything. You can't make this stuff up.

PS. Some people ask me; "If the Keynesian model is so bad then why do experts like the CBO use that model?" Good question.

To see his explanations in detail, follow the link. It's clear and careful.

And what the Keynesian models invariable miss or mis-estimate is the importance of money, monetary policy, and central bank behaviour.

 

Jurassic Park

The Economics Department at The University of Western Ontario maintains an office for its retirees to use now and then. They jokingly refer to the office as "Jurassic Park".

I had some concentrating to do today, so I came to the office to work:

Marginal Costs of Oil Production

With the price of oil having plummeted, there has been considerable discussion in the media and elsewhere about what will happen to the quantity supplied (pedantic note for colleagues and students: quantity supplied, NOT supply) of oil in the short run and in the long run.

This article in Slate has it almost right. The average costs per barrel of oil include considerable sunk costs that are unrecoverable. If the price of oil is expected to stay below these expected long-run average costs, then no more new wells will be started in those oil fields.

In general, if the price of oil is expected to remain below $65/bbl, then there won't likely be many new shale oil facilities that will make it beyond the planning stage. And if the price of oil is expected to remain down nearer to $50/bbl for a long period, no new projects are likely to be begun in the arctic, tar sands, or deep sea [graph from Slate link]:

But for the short run, very little if any of the existing wells will be shut down. Here's the Econ 100 explanation:

The cost of drilling those wells has already occurred. It is a sunk cost (both in jargon and literally, I guess). The only relevant decision for an oil company is whether the revenue from continued pumping will offset the extra costs of doing the pumping, transportation, and marketing. These extra costs are generally referred to by economists as marginal costs, but what we mean is "extra" or "incremental" costs. Accountants sometimes use the term "direct costs" to refer to approximately the same thing.

What are the extra costs of pumping an additional barrel of oil, and how do they compare with the extra revenue the firm gets from selling that barrel? In economics jargon, pump another barrel so long as the MR>MC. In the case of oil pumping firms, MR=P probably.

Here is a graph (also from the Slate link) of the marginal costs of pumping and selling oil from various sources. The graph labels these as "cash costs" but it means marginal costs:

This graph makes the point really well. So long as the oil companies are receiving enough to cover these marginal costs, they will keep pumping the oil. And that will occur so long as the spot price of oil exceeds about $40/bbl.  Pumping oil at those prices will cover the variable costs of pumping andmake some contribution toward covering some of the overhead/fixed/sunk costs.

There is an exception not addressed in the article, however. If the costs of stopping and starting the pumping process are low, some oil companies may choose to stop pumping if they expect oil prices to rise in the future.

In this case, the marginal cost of pumping oil now is not just the extraction, transportation, and marketing cost; it is also the present value of lost higher revenues in the future, which of course depend on the expectations people in each oil company have about future prices for oil. If they expect prices to rebound in the near future, they may want to curtail some pumping; if they expect prices to remain low for the foreseeable future, they may decide to keep pumping.

Note, though, that this decision depends only on their expectations about future prices of oil and has very little to do with the marginal costs of pumping. Or, to put it differently, the marginal opportunity costs of selling oil for cheap now are the possible foregone revenues from waiting.