Alternatives to the GPA

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Mark Oppenheimer writes,

If grade inflation is bad, fighting it is worse. Our goal should be ending the centrality of grades altogether. For years, I feared that a world of only A’s would mean the end of meaningful grades; today, I’m certain of it. But what’s so bad about that?

I think that the best approach is to unbundle teaching from assessment. An enterpreneurial idea would be to start a national collegiate assessment service. This company would administer at least three types of examinations.

1. Exams for generic courses, such as calculus or freshman economics or freshman psychology. These exams would work like AP exams.

2. Assessments for more specific courses, such as the economics of sports, or 20th-century Japanese poetry. For these, the professor will provide a syllabus that includes a set of objectives for the students. The company will design and implement an assessment geared toward the syllabus. (At Swarthmore College, the honors exams used to work that way, with professors from other institutions writing and administering exams.)

3. Assessments of general areas of competence. Examples might be: the ability to read an essay and summarize its key points; the ability to read how a study was conducted and assess the weaknesses of the methods used; the ability to trace the historical roots of a contemporary political or economic phenomenon.

If this sort of enterprise could get off the ground, I think it holds the potential for radical change in the academy. My hope is that many students might decide that the best way to do well on third-party assessments is to take more control over their own learning.

On Climate Science

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Phillip W. Magness writes,

In a strange way, modern climatology shares much in common with the approach of 1950s Keynesian macroeconomics. It usually starts with a number of sweeping assumptions about the relation between atmospheric carbon and temperature, and presumes to isolate them to specific forms of human activity. It then purports to “predict” the effects of those assumptions with extraordinarily great precision across many decades or even centuries into the future. It even has its own valves to turn and levers to pull – restrict carbon emissions by X%, and the average temperature will supposedly go down by Y degrees. Tax gasoline by X dollar amount, watch sea level rise dissipate by Y centimeters, and so forth. And yet as a testable predictor, its models almost consistently overestimate warming in absurdly alarmist directions and its results claim implausible precision for highly isolated events taking place many decades in the future. These faults also seem to plague the climate models even as we may still accept that some level of warming is occurring.

Pointer from Don Boudreaux. Read the whole thing. I have this same instinct about climate models, which does not necessarily mean that I am correct in my skepticism.

Personality and Ideology

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Alan Gerber and others write,

Agreeableness is strongly, and consistently, associated with liberal economic positions and Emotional Stability is strongly associated with conservative economic positions.

… while previous research has rightly identified Conscientiousness and Openness as the traits most
consistently related to ideology, our analysis shows that the other Big Five traits—particularly Emotional
Stability and Agreeableness—significantly and substantially affect political attitudes.

Pointer from Tyler Cowen.

The authors departed from previous research by separating issues into economic and social issues. By not confounding the two, they find different patterns of relationships between personality traits and conservatism. People who dislike markets tend to score higher on agreeableness, meaning that they like to be seen as pleasing to others. They tend to score low on emotional stability, meaning that they are prone to worry and fear.

The Crowd in the Market and in the Voting Booth

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Concerning the issue of voter rationality, a commenter writes,

When applied to markets, this is known as the wisdom of crowds. Should we therefore be skeptical of that as well?

The arguments about voter irrationality say that individuals have less incentive to think carefully about their votes than about their purchases. As a result, they will act more wisely in markets than in the voting booth.

However, I do not make a “wisdom of crowds” argument for markets. Seeing the goods and services that many people consume but I don’t, as well as the goods and services that I consume that others don’t, I cannot say that I am a believer in crowd wisdom.

On the contrary, for me one of the main virtues of markets is that they allow for a diversity of preferences to be satisfied, so that I do not have to rely on the crowd’s wisdom, or lack thereof. The market offers me a spectacular array of goods and services to choose from, and the bundle that I select keeps getting better all the time. This fall, the voting booth may end up offering me a choice between Hillary Clinton and Donald Trump. Enough said.

3.

A China Bear Growls

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He writes,

It’s unprecedented. With almost 50 million empty houses and with big inventories of major commodities, China’s lenders, builders, and manufacturers are still going for more. As one small example, the world, led by China, is still on track to produce as much as 40 percent more iron and steel than it needs this year.

No, it’s not Tyler Cowen. It’s Richard Vague (what a name to live down!).

Dueling Inflation Stories

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Justin Fox writes,

Since 1995, durable goods (cars, televisions, computers and the like) have been getting cheaper in the U.S. That’s even as the prices of services and nondurables have mostly kept rising.

Read the whole post. Pointer from Mark Thoma.

At one point, Fox recycles the often-told tale of Fed Chairman Paul Volcker vanquishing inflation. My alternative view is that bond market vigilantes took over. That is, lenders got tired of generously offering borrowers negative real interest rates.

Beware the Lone Chart

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Tyler Cowen reproduces a chart from Sober Look purporting to show that house prices are now above their 2005 peak. Several commenters on Tyler’s post are skeptical, and so am I.

Consider figure 2 in this piece by San Francisco Fed economists. It shows the price/rent ratio, and while it has gone up considerably since the trough, it is nowhere near back to the peak. Their figure also shows that mortgage indebtedness is not in a danger zone, either.

Look, if you want to suggest that house prices in San Francisco and Los Angeles are hard to justify, I won’t argue with you. But at the risk of saying something that could look stupid later this year, I will say that most of the country is not yet in a housing bubble.

The Two Parties

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Tyler Cowen writes,

both the Democrats and the Republicans have their ready made, mostly true, and repeatedly self-confirming stories about the defects of the other. They need only read the news to feel better about themselves, and the academic contingent of the Democrats is better at this than are most ordinary citizens. There is thus a rather large cottage industry of intellectuals interpreting and channeling these stories to Democratic voters and sympathizers. On the right, you will find an equally large cottage industry, sometimes reeking of intolerance or at least imperfect tolerance, peddling mostly true stories about the failures of Democratic governance, absurd political correctness, tribal loyalties, and so on. That industry has a smaller role for the intellectuals and a larger role for preachers and talk radio.

It is characteristic of Tyler, and also of Robin Hanson and on occasion Bryan Caplan, to look at human behavior in terms of status competition. If you buy into that, as I do, then a reasonable way to differentiate the parties is in terms of whose status they wish to elevate and whose status they wish to demean.

1. I would say that for Democrats, the goal is to elevate the status of public sector workers, social scientists, well-educated people in general, urban residents, and members of groups who are willing to see themselves as oppressed groups fitting the Democratic narrative. They wish to demean the status of business owners, non-urban residents, strong religious believers, and working-class whites who fail to see themselves as an oppressed group fitting the Democratic narrative.

2. Note that Barack Obama hit most of the right buttons, in part simply by being black.

3. I would say that for Republicans, the goal is to elevate the status of members of the armed forces, non-urban residents, religious believers, small business owners, and working-class whites who prefer to blame their problems on society coddling immigrants and minority groups. They wish to demean the status of wealthy and successful progressives, particularly those in the media and entertainment industries. They wish to demean the status of unmarried individuals and of people they perceive as hostile to conventional families.

4. Note that Donald Trump has hit at least a couple of the right buttons spectacularly effectively: raising the status of working-class whites who prefer to blame their problems on society coddling immigrants and minority groups; and demeaning the status of wealth and successful progressives, particularly those in the media.

5. Note that many of Trump’s negative traits, including narcissism, authoritarianism, and uncharitable views of those who disagree with him, are shared by Barack Obama.

6. Denouncing Trump is a form of virtue signaling. That is, it is a cheap way to try to raise your status among well-educated people.

7. Notwithstanding all of these remarks on status competition, one may still think of politics in terms of ideology. And I think of Donald Trump as destroying the Republican Party as an ideological vehicle. In terms of Clay Shirky’s metaphor, the host (the Republican Party) has been taken over by a parasite (Trump). The Republicans I know tend to subscribe to a conservative/libertarian ideology. None of them would vote for Trump in a primary, and most of them would not vote for him in November.

8. From my point of view, the Trump candidacy has no upside and considerable downside. I doubt that a Trump victory would lead to policies that correspond to a conservative/libertarian agenda. And I think that he can only hurt Republican candidates for other offices. When those candidates are asked whether or not they support Trump, there is no answer that they can give that will not cost them votes.

9. Conversely, those on the Democratic side with an overt ideology are in a no-lose position. The ideological Overton window has moved very far to the left, somewhere between Bill Clinton and Bernie Sanders.

The Issue that Worries Me

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Alan J. Auerbach and William G. Gale write,

Although current deficits are reasonably low, the medium and long-term fiscal outlooks have deteriorated in the past year, due largely to legislative actions (and their implications for future policy) and changes in economic projections. Even under a low interest rate scenario, the long-term budget outlook is unsustainable. Moreover, the nation already carries a debt load that is twice as large as its historical average as a share of GDP and that makes evolution of the debt-GDP ratio much more sensitive to interest rates.

The necessary adjustments will be large relative to those adopted under recent legislation. Moreover, the most optimistic long-run projections already incorporate the effects of success at “bending the curve” of health care cost growth, so further measures will clearly be needed. These changes, however, relate to the medium- and long-term deficits, not the short-term deficit.

They say that the solution is to build a wall on our southern border.

Just kidding.

Really Bad Sentences

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Ilya Somin’s Democracy and Political Ignorance suffers from the fallacy of composition: It uses individual-level evidence about political behavior to draw inferences about the preferences and actions of the public as a whole. But collective public opinion is more stable, consistent, coherent, and responsive to the best available information, and more reflective of citizens’ underlying values and interests, than are the opinions of most individual citizens.

Those sentences, from Benjamin Page of the political science department of Northwestern University, were published in 2015. I don’t think that they hold up so well in 2016. I wonder how many of the critical participants in the symposium on Somin’s book (note: in several months, this link may lead somewhere else) would care to reconsider their views. As always with academics, I expect fewer to reconsider than should do so.

[Note: I wrote this post before Tyler also posted on the symposium, but I scheduled it for now.]

I think that a lot of conventional wisdom in political science is starting to look like pre-September 2008 conventional wisdom in macroeconomics. As Daniel Drezner put it,

the political science theories predicting that someone like Trump was highly unlikely to win a major-party nomination were so widely believed that they turned out to refute themselves.