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What counts as a terrorist attack?

[ 141 ] July 15, 2016 |

nice

Apparently if you’re Muslim, that’s now enough evidence for even the staid and cautious New York Times:

The toll of a terrorist attack on a Bastille Day fireworks celebration in the southern French city of Nice rose on Friday to 84 dead and 202 injured, as the government identified the attacker as a 31-year-old native of Tunisia, extended a national state of emergency and absorbed the shock of a third major terrorist attack in 19 months.

“We will not give in to the terrorist threat,” Prime Minister Manuel Valls said Friday morning after a cabinet meeting led by President François Hollande. “The times have changed, and France is going to have to live with terrorism.” . . .,

Mr. Bouhlel had a history of petty crime, including burglary and theft, and received a six-month suspended sentence in March for assaulting a motorist during an altercation. “He is totally unknown to the intelligence services, both locally and nationally,” Mr. Molins said, and he had never appeared in any terrorism-related government database. [emphasis supplied]

French television station BFM TV reported that he was a divorced father-of-three who had become depressed following the breakdown of his marriage. . .

Neighbours described Bouhel as a depressed – sometimes aggressive – man who was not particularly interested in religion, and kept to himself.

They said that he had been unhappy since he divorced his wife two years ago, and that he suffered from financial problems.

Those who lived near him said he had been “depressed and unstable, even aggressive” of late. They put this down to his “marital and financial problems”.

One told BFM TV he was “more into women than religion”.

“He (didn’t) pray and like(d) girls and Salsa,” according to BFM’s crime correspondent.

One 40-year-old neighbour, who would only give her first name Jasmine, said: “He was rude and bit weird.

“We would hold the door open for him and he would just blank [us]. He kept himself to himself but would always rant about his wife. He had marital problems and would tell people in the local cafe. He scared my children though.”

Of course it’s possible that this will end up being terrorism-related, but at this point the evidence for that “fact” seems to consist of the killer’s name.

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Remedial Econ 101 For Dummies, Special Legal Academic Edition

[ 64 ] July 15, 2016 |

Updated below

gilded age

You may remember University of Chicago law professor Todd Henderson from such classic essays as “Why it’s really hard for an upper middle class family to scrape by on $400,000 per year in Hyde Park [Spoiler: Thanks Obama!].”

Now Henderson is explaining why lawyer salaries are skyrocketing:

In early June, the prestigious Manhattan law firm, Cravath, Swaine & Moore, announced it was raising the average salary for newly minted law graduates by nearly 13% to $180,000 per year. As expected, many of its competitors have followed suit, with some, such as Washington, D.C.-based Kellogg Huber, offering as much as $225,000. That 25-year-old lawyers with no experience can immediately be in the top 5% of U.S. earners (and within ten years in the top 1%) has generated some outrage, as well as claims that such salaries are needed to help overcome the high cost of law school.

But don’t blame these lawyers or the law schools. Lawyer salaries are driven by supply and demand, just like everything else. According to data from CEB, the average hourly rate charged by major law firm partners nearly doubled since 2000, while average hourly wages for both blue-collar and white-collar workers have increased less than 20%. Lawyer pay has also outpaced economic growth, which has averaged less than 1% per year in real terms over this period.

So what’s wrong? On the supply side, the American Bar Association operates a state-approved cartel, which uses a licensing regime to artificially limit the supply of legal services. In a recent white paper, the White House came out against occupational licensing in general, and breaking the ABA cartel would be a good first step in addressing the staggering growth in lawyer pay.

This is followed by a bunch of bog-standard glibertarian musings about how, in addition to the ABA cartel propping up lawyer salaries, Dodd-Frank etc. is driving up the cost of doing business, “perhaps” unnecessarily. How seriously should this sort of critique be taken?

It amazes me that at this late date people like Henderson (and there are still a lot of legal academics like him) can opine so confidently on things that they know nothing about. His views do tell us something about why the cost of legal education is so out of control, however.

I’m not trying to be rude here, but citing the growth in starting salaries at Cravath and the average hourly rate charged by major law firm partners for the proposition that ABA-created barriers to entry are propping up lawyer salaries is just astoundingly ignorant. It’s the equivalent of citing the growth in starting salaries for tenure track professors at Princeton and compensation packages of university presidents for the proposition that requiring university faculty to have doctorates is propping up academic salaries.

Henderson is using 2000 as his baseline, so let’s take a quick look at the numbers:

Median wage for all workers, 2000 (2014$): $28,811

Median wage for all workers, 2014: $28,851

So median wages for American workers have been completely flat over the past 15 years, while those of lawyers have seen staggering growth, because of a cartel that makes Ayn Rand cry. Not quite:

Median wage for lawyers, 2000 (2015$): $121,509

Median wage for lawyers, 2015: $115,820

Note that these are the numbers for wage-earning lawyers. For the majority of self-employed lawyers, earnings have declined more: the mean wage — the median is certainly a lot lower — for solo practitioners (half of all lawyers in private practice are solos) fell from $71,000 to $49,000 between 1989 and 2012, in constant dollars.

And note further that these two groups together don’t represent the earnings of law school graduates, 40% of which never have any sort of career practicing law.

Henderson’s perspective comes from assuming that the short-term economic prospects of the graduates of elite law schools provide a good guide to the state of lawyer compensation, which in turn provides evidence for the effects of regulatory licensing regimes on salaries. It’s nonsense piled on nonsense in other words.

It does help explain why law schools keep jacking up tuition three times faster than the rate of inflation year after year, however. I mean why not, if everybody is going to be a partner at Cravath?

Updated: Prof. Henderson has tweeted:

Sad response to @Forbes piece: ad hominem attack; arguing against position I didnt take http://goo.gl/0ES4ny U can do better @PaulFCampos
8:13 AM – 15 Jul 2016

The position in his piece is that over the past 15 years salaries for lawyers have gone up far faster than those of American workers in general, because of the supposed cartel power of the ABA (and too many regulations).

The problem with this argument is that lawyer salaries over that time frame have declined in constant dollars, and also relative to those of American workers in general. I’m not sure how pointing that out is an ad hominem attack, unless reminding people about his absurd whinging about his own salary counts.

If you can keep your head when all about you are losing theirs

[ 417 ] July 14, 2016 |

moreno

. . . then maybe you don’t quite understand the nature of the situation:

Hillary Clinton has emerged from the F.B.I. investigation into her email practices as secretary of state a wounded candidate with a large and growing majority of voters saying she cannot be trusted, according to the latest New York Times/CBS News poll.

As Mrs. Clinton prepares to accept the Democratic Party’s nomination at the convention in Philadelphia this month, she will confront an electorate in which 67 percent of voters say she is not honest and trustworthy. That number is up five percentage points from a CBS News poll conducted last month, before the F.B.I. released its findings.

Mrs. Clinton’s six-percentage-point lead over the presumptive Republican nominee, Donald J. Trump, in a CBS News poll last month has evaporated. The two candidates are now tied in a general election matchup, the new poll indicates, with each receiving the support of 40 percent of voters.

Mr. Trump is also distrusted by a large number of voters — 62 percent — but that number has stayed constant despite increased scrutiny on his business record and falsehoods in his public statements and Twitter messages.

But Mrs. Clinton’s shifting and inaccurate explanations of her email practices at the State Department appear to have resonated more deeply with the electorate.

I’m not saying it’s time to panic (polls four months before the election generally don’t mean much; the electoral map is still very favorable to Clinton etc.), but:

(1) Assume Trump has a 25% chance of winning, which is probably in the ballpark. In one sense those are long shot odds for a major party candidate. In another sense, a 25% chance of your house burning down in the next four months is . . . worrisome.

(2) The email “scandal” is largely if not completely fake, but it’s also incredibly exasperating (much like the Clintons themselves), because it was such a totally unnecessary self-inflicted wound.

(3) The fact that Donald Trump has a non-trivial chance of being the next president of the United States is still too surreal of a fact for this correspondent to absorb, even though I was calling this a year ago.

Oh well there’s always beer. Also I’m eligible for EU citizenship so there’s that.

When markets become too confident in markets

[ 51 ] July 13, 2016 |

predict

Andrew Gelman and David Rothschild have a really interesting piece on some paradoxes that may be arising in the workings of political prediction markets:

Prediction markets took a lot of heat for their prediction on Brexit (holding steady with a predicted probability 25 percent during the week leading up to the vote while polls did not flip from “Leave” to “Remain” until the final day). Probabilistic predictions can and will “fail, ” but it is good to understand why this is happening. Prediction markets have a strong track record and people trust them. And that actually may be the problem right now . . .

Prediction markets have developed an odd sort of problem. There seems to be a feedback mechanism now whereby the betting-market odds reify themselves.

What do we mean by that? In the case of Brexit, it goes like this: Different surveys give different results, and we all know not to trust the polls, which have notoriously failed in various British elections such as the 2014 Scottish Referendum and the 2015 British parliamentary elections. But we do watch the prediction markets, which all sorts of experts have assured us capture the wisdom of crowds.

So, serious people who care about the election watch the prediction markets. The markets say 25 percent for “Leave.” Then there’s other information, the latest poll, and so forth. How to think about this information? Informed people look to the markets. What do the markets say? Twenty-five percent. OK, then that is the probability.

This is not an airtight argument or a closed loop. Of course, real information does intrude upon this picture. But something is amiss when prediction markets stay stable for too long.

In the past, traders followed the polls too closely and sent the prediction markets up and down. But now the opposite is happening. Traders are treating market odds as correct probabilities and not updating enough based on outside information. Belief in the correctness of prediction markets causes them to be too stable. . .

The implication for bettors is that when the odds seem too stable, trade on the news. Don’t assume that the markets have already incorporated all openly available information. Right now the prediction market prices for the presidential election have been incredibly stable for nearly a month, despite waves of news on business scandals, fundraising money, poll swings, and possible indictments. A mature prediction market should show measured, but real, swings in prices in response to news.

Long term, or even medium term, this should right itself; as investors become aware of this bias (in part because of this article!), it should diminish or disappear. But right now, it appears that prediction markets have arrived at a paradoxical place: Their reliability, the very source of their prestige, is causing them to fail.

Read the whole thing.

Crazy man with a gun

[ 145 ] July 8, 2016 |

normandy

We have a lot of crazy men (it’s always a man). We have lot of guns (it’s always a gun).

Violence can be more or less political, and the concept of mental illness is itself a subject of moral, scientific, and political dispute (Thomas Szasz: “If you talk to God that’s called prayer; if God talks to you that’s called schizophrenia”), and the world and the people in it are very complicated, but when some young man who “kept to himself,” and lived in his mother’s basement — why it it always, always the same story? — kills a bunch of strangers with an assault rifle, that’s not politics in any but the craziest sense — it’s just madness, if that word means anything at all.

Related thoughts on madness, evil, and politics in the context of the Elliot Rodger murders.

You can vote for Hillary Clinton and not be too thrilled about it

[ 328 ] July 7, 2016 |

money politics

My column speculating on possible reasons why Bill Clinton chose to board Loretta Lynch’s plane for a half hour private chat with the AG last week, despite the horrendous optics of that decision, produced a flurry of semi-defenses of Bill’s behavior, including claims that he’s impulsive, possibly going a bit senile, too polite, a compulsive unthinking schmoozer, etc.

Most of these arguments either explicitly or implicitly assert that Clinton acted without realizing that his actions would be potentially harmful to his wife’s candidacy, and possibly even to her legal situation. That assertion seems literally incredible to me. Clinton is not only a lawyer: he’s a former attorney general. He was well aware of how improper his behavior was under the circumstances, but he did it anyway. (To call such an act “impulsive” is to give a very broad meaning to that word, as getting off your own plane to go over to somebody else’s is not what most people would think of as a snap decision).

Anyway, whatever Bill’s motivations may have been, his actions in this matter were of a piece with the Clintons’ consistently cavalier attitude toward things like avoiding the appearance that their favors can be bought for the right price.

Jon Chait is a strong supporter of Hillary Clinton’s presidential run: he utterly despises Donald Trump, and doesn’t think much of Bernie Sanders. He is also inclined to put the most charitable interpretation on the most dubious aspects of Bill Clinton’s presidency. But none of this stops him from making a fair-minded evaluation of the Clintons’ less admirable characteristics:

It should be conceded that the evidence against Clinton is fairly damning. After Bill Clinton left the presidency, the former First Couple intermingled career and personal interests in ways that, at minimum, exposed them to a high risk of contamination. The Clinton Foundation was not only a charitable endeavor but a vehicle for Bill Clinton to enjoy the comforts and exercise the quasi-official power of an active figure on the world stage. Donors to the foundation included many of the same businesses and individuals who paid the Clintons for private speeches, and who had an interest in cultivating close ties with a secretary of State and potential future president. Some of those figures had business interests that aligned with Russian strategic goals rather than American ones. The Clintons failed to promptly disclose all of their foundation donors and, on at least one occasion, appointed an apparently unqualified donor to a State Department board.

The evidence of Clinton corruption is circumstantial rather than direct. If they wanted to stay above reproach, they could have rigorously disclosed every dollar that passed through their personal and professional accounts, and made it plain that neither donating to their foundation nor hiring them for speeches would purchase any special treatment whatsoever — indeed, they bent over backward to demonstrate that they could not be bought. Instead, they profited from the ambiguity. . . It is altogether fair to condemn [Hillary] Clinton as a corrupt practitioner of the Washington cash-for-access culture.

My only quibble with this is that if Hillary Clinton wanted to stay above reproach, it would, for example, have been much better for her not to take millions of dollars from investment banks in exchange for giving a few speeches, as opposed to engaging in any amount of protestation that taking that money wasn’t going to buy anybody any favors.

And of course Chait’s criticisms come in the context of pointing out that while the Clintons have a strong odor of DC influence-peddling hanging about them, they are paragons of virtue in comparison to a straight-up con artist like Donald Trump.

All of which is to say that one can have no ambivalence at all about supporting Hillary Clinton’s presidential run, while still recognizing that both Hillary and Bill continue to represent a lot of what is wrong with the intersection of political power and money in American culture.

What was Bill Clinton up to when he dropped in on Loretta Lynch?

[ 255 ] July 7, 2016 |

bill and hillary

Three theories.

Theory #1: The subtle pressure gambit

On this account, Bill Clinton was trying to bring subtle psychological pressure on Lynch, apparently through the sheer force of his personality. . .

Theory #2: The long troll

Bill and Hillary Clinton like winning elections, but they clearly also like something else just as much if not more: yanking the chains of their many political enemies. . .

Theory #3: Scenes from a marriage

Bill may well have been indulging his taste for impish misbehavior and right wing trolling, but in the end this little stunt hurt his wife politically. After all, she’s not the POTUS yet, even though the GOP presidential campaign seems to be in full self-destruct mode.

Which brings us to a darker possibility. . .

Education, wages, and economic inequality

[ 59 ] July 6, 2016 |

photo

Thanks to commenter Howard for sending along a couple of interesting stories regarding what’s happening in the US economy to workers with different educational credentials.

This WSJ article looks at the long-term decline in the labor force participation rate among prime working-age men (the LFPR is the percentage of a group’s members who are either employed or looking for work). The LFPR among this group has been declining for more than half a century, and has now fallen to 83% among 25-54 men with a high school degree or less (it’s 94% among 25-54 men with a BA degree or more).

Meanwhile Georgetown’s Center on Education and the Workforce has put out a report estimating that 99.2% of the jobs created since the end of the Great Recession have gone to workers with at least some college education.

Now to the extent that estimate is accurate it would appear to mean that workers “need” at least some college credits to be competitive for new jobs. But “need” is a tricky concept in this context. Do workers need college credentials because the jobs that demand them require either enhanced human capital or skills training provided by college in order for the jobs to be done, or at least done adequately? Or are employers using higher ed as a sorting and signaling device because they can?

One clue is provided by wage rates. If employers are hiring the college-educated because these credentials indicate that employees are acquiring scarce assets, either in the form of enhanced human capital or practical skills, then the increased wages paid to them should reflect that scarcity. On the other hand, if credentials are simply being used as sorting devices to winnow a overly large labor pool, then we wouldn’t expect to see wage increases for the lucky winners of this lottery.

In fact, median wages for men with a bachelor’s degree or more have declined by about 7% over the past 15 years, and are only slightly higher than they were a quarter century ago. (I don’t have the comparable figures for women at hand). As Krugman notes when commenting on a recent paper regarding the “skills gap” for workers:

What strikes me about this paper — and in general what one still hears from many people inside the Beltway — is the continuing urge to make this mainly a story about the skills gap, of not enough workers having higher education or maybe the right kind of education. The paper acknowledges, sort of, that the trends people thought they saw in the 1990s aren’t visible in later data, but then jumps right back into discussing education as the solution as if nothing had happened.

But if my math is right, the 90s ended 15 years ago — and since then wages of the highly educated have stagnated. Why on earth are we still hearing the same rhetoric about education as the solution to inequality and unemployment?

The answer, I’m sorry to say, is surely that it sounds serious. But, you know, it isn’t.

It’s important not to get categories confused here: in regard to educational credentials, American workers fall into three groups of roughly equal size: those with four-year college degrees or more, those with some college but no four-year degree, and those with no college. Krugman’s sobering numbers apply only to the most-educated third of this population: for those with no college degree, or no college experience at all, wages have fallen even more.

This problem is addressed in an interesting article by Eric Levitz, who argues that Democrats would be making a big mistake in writing off white working class voters, as fully 34% of Obama’s 2012 vote total came from whites without college degrees.

Levitz argues that the cavalier attitude of some Clinton advisors in regard to the effects of globalization on American workers is both a moral and practical problem:

During a discussion on the links between Brexit-backers and the Trumpian proletariat, NPR’s economics reporter Adam Davidson offered the following explanation for right-wing populism’s current appeal:

I know Hillary Clinton’s economic team fairly well, and I’m very impressed by them. They really are top-notch economists and economic policy thinkers. They don’t have anything for a 55-year-old laid-off factory worker in Michigan or northeastern Pennsylvania. Or whatever. They don’t have anything to offer them. And so I think it’s intuitively understandable that a screaming, loud, wrong answer is more compelling than a calm, reasonable, accurate, right answer: Your life is going to be worse for the rest of your life — but don’t worry, these hipsters in Brooklyn are doing much better.

[…] The threshold for wages has gone up. There was a long period in the 20th century where, simply being willing to go to a building reliably everyday for eight hours or 12 hours and do what you’re told was worth a lot. […] And you didn’t need to read, you didn’t need to write, you didn’t need to have any kind of education. Those jobs are all but fully gone. […] So in this country, we don’t have demand for the high-school-only graduates and the high-school dropouts we have, and that’s a big population. Something like 80 million people.

The “accurate, right answer” is that your life is going to get worse because you’ve fallen beneath the threshold for wages. This is how a well-sourced reporter summarizes the consensus of the Democratic nominee’s policy team. And we wonder why so many voters disdain elite expertise.

Of course, no politician would ever phrase Davidson’s argument in such stark terms. But his basic premise — that the economic decline of America’s non–college educated workers is an inexorable fact of economics — is often implied in the rhetoric of Democratic politicians.

Levitz goes on to argue that policy makers have chosen not to try to protect the American working class from the effects of globalization and free trade, while at the same time they’ve been willing to shield professional class workers from competition:

Both Republican and Democratic administrations entered trade agreements designed to put downward pressure on the wages of domestic manufacturing workers. This was a deliberate choice and not a foregone conclusion — these same governments did not subject professional workers to similar international competition. As economist Dean Baker notes, our trade deals could have established clear standards that would allow “students in Mexico, India, and China to train to U.S. levels and then practice as professionals in the United States,” thus providing enormous savings to consumers in the form of cheaper health care and legal fees. But policymakers decided that maintaining the living standards of our professional workers was more important than consumer savings. They reached the opposite conclusion about the living standards of our blue-collar labor force.

At the same time, these governments did little to compensate the “losers” of globalization; made it more difficult for workers to unionize; and further decreased their leverage over employers by cutting the social safety net. This policy framework has left non–college educated workers — a group that makes up 65 percent of our labor force — with a median wage $1.30 lower than it was in 1980.

While I agree with a lot of Levitz’s analysis of the broader problem of stagnating wages, he exaggerates the extent to which middle class and even upper class workers below the top 1% or perhaps 5% have had their wages protected from the forces of globalization. Certainly lawyers have not had their wages protected by government policy: the average lawyer makes less money today than 20 years ago. And as the statistics Krugman cites indicate, median earnings for professional class workers have declined since the 1990s.

Where Levitz is right on the money is when he emphasizes that, contra the implications of much of Obama’s and other progressives’ rhetoric, creating increased opportunities for class mobility doesn’t necessarily do anything at all for egalitarian values, and in fact can be inimical to them:

In a 2011 speech in Osawatomie, Kansas, President Obama declared income inequality to be “the defining issue of our time.” But his overriding prescription for addressing this issue was higher education, which he described as “the surest route to the middle class.” The plight of those who failed to take that route was framed as tragic, but unavoidable:

It’s heartbreaking enough that there are millions of working families in this country who are now forced to take their children to food banks for a decent meal. But the idea that those children might not have a chance to climb out of that situation and back into the middle class, no matter how hard they work? That’s inexcusable.

Millions of working families reliant on food banks is heartbreaking — but, implicitly, excusable — so long as their children have a “chance” at escaping their parents’ deprivation. The president reiterated this emphasis on education throughout his speech, arguing that today’s “innovation economy” requires America to “up our game” — an effort that “starts by making education a national mission.”

Obama struck a similar note at the opening of his 2016 State of the Union, in which he argued that the central question facing America’s economic policymakers over the coming decades would be, “How do we give everyone a fair shot at opportunity and security in this new economy?”

The ambition here is not to ensure that all full-time workers enjoy economic security, but merely that they have “a fair shot” of attaining it.

All this indicates the extent to which among many progressives “more college education” has become a far too facile response to problems of growing economic inequality.

Word on the K street is that Gingrich is about to be announced as Trump’s VP

[ 163 ] July 5, 2016 |

far side

This would of course be very close to a best-case scenario, and indeed would indicate that Trump is either completely delusional or doesn’t want to win or maybe both. The only better picks would be (not necessarily in this order):

Sarah Palin
Patrick Bateman
The Nuge

How many ABA law schools are going to go out of business?

[ 12 ] July 2, 2016 |

bread line

The Chronicle of Higher Education has a piece ($$) on the not-good financial state of American law schools these days:

The growing number of universities that are subsidizing struggling law schools “are certainly not happy about the money running the other way,” said Paul F. Campos, a professor of law at the University of Colorado at Boulder whose biting critiques of law schools in blogs and books have made him a polarizing but influential figure in legal education. He estimates that at least 80 percent of law schools are losing money — a figure that an ABA spokesman said could not be confirmed.

“The attitude of a lot of the universities is, OK — we’re willing to carry you guys for a while, but you have to shed a lot of costs or come up with other sources of revenue because we’re not going to subsidize you forever,” Mr. Campos said. . .

Some legal-education experts say it’s been a long time since law schools could be counted on to fork over big profits to their universities.

That’s because the more money they brought in with steadily rising tuition, the more they spent on libraries, fancy buildings, and faculty members to maintain their position in all-important national rankings.

“Prestige-chasing leads to massive spending, which is sustainable as long as revenue is coming in,” said Mr. Campos. “But then you have a downturn, and all of a sudden, everyone’s bleeding red ink.”

Even before the downturn, many law schools were struggling to hang on to revenues that universities were eager to tap into.

Universities often required law schools to hand over 25 percent or more of their revenues, a portion of which covered the cost of maintaining buildings and providing common administrative services. But the days when law schools had healthy coffers to raid have long since passed. The flow, in many cases, is going in the opposite direction. Some schools are having to shower incoming students with scholarships that take some of the financial pressure off of the students but dig the schools deeper into debt.

So is anybody going to actually pull the plug? Paul Caron thinks so:

While many law schools are experiencing trouble, predictions of institutions closing have not come true. Caron thinks no university wants to be the first to close its law school but he believes eventually it will happen.

“I find it incomprehensible that we’ll have 200 law schools in business five years from now,” he said.

I’m not so sure. Even a place like Valparaiso can probably eventually break even if they just get back to the faculty-student ratio they had a generation ago, which, under administrative force majeure, they appear to be racing toward at the academic equivalent of warp speed:

Speaking recently to Indiana Lawyer, Dean Andrea Lyon, who will soon begin her third year at Valparaiso’s helm, was focused on the future. She said the worst is over for the school and she wants to look forward rather than second-guess past decisions. She noted remaining faculty was willing to roll up their sleeves to do the work that needs to be done.

Still, she acknowledged the past school year was very stressful with the most difficult part coming from the decision to cut employees. Ten tenured faculty members accepted the buyout and the school has given termination contracts to three junior tenure-track professors who will leave after the 2016-2017 academic year. Also, seven staff members were laid off.

Reducing personnel along with cutting other expenditures everywhere possible, the law school is slashing its annual budget by $4 million, which is roughly a third. Teaching loads for the remaining faculty will increase by one to two additional courses per semester. Also, the size of the incoming class this fall will number about 75 students compared to 130 in 2015 and 174 in 2014.

This isn’t rocket surgery in other words.

Again, as long as the federal loan gravy train stays on the tracks, and/or private educational loans remain non-dischargeable in bankruptcy, pretty much any law school should be able to totter back toward government-subsidized solvency, even if half their graduates fail the bar and half of the rest don’t get jobs.

The ABA’s proposed new standard that would require 75% of grads to pass the bar within two years will pose a real problem if it’s ever actually enacted and enforced. But a knowledgeable observer has some serious doubts about whether current reform efforts will amount to much of anything:

The capture of the ABA Section on Legal Education remains strong, and to group of solid law schools have demonstrated an unwillingness to call out bad actors, choosing solidarity over collective integrity. Law deans and the AALS will never say out loud that several dozen law schools (not just Infilaw’s) are filling their classes with unqualified students in clear violation of ABA rules, who will be financially ruined as a result. The NYT piece on Valpo brought out the human cost, but vocal legal educators quickly attacked it as another unfair, unbalanced hit piece.

We defend ourselves with talk of “providing opportunity”, “need for more minorities in the legal profession,” “let prospective students make the choice,” “peer review study proves it’s a great deal over the long run,” “rule of law important to society(!),” “Obama is a law graduate who did not practice law”—and replay the rationalization loop.

The ABA Section will scramble a bit in response, and make a few moves for show, but things will largely carry on. The new bar standards are significantly better than before, but it will be a drawn out process with various ways to avoid or delay serious action. The random audit plan is weak, poorly structured (an audit triggered by red flags would be much more effective), and non-transparent. And so it goes.

Sorry about the cynicism, but I have lost all faith that responsible internal actors will take real action to fix things.

I wish I could disagree, but for now I’d take the over on that 200 ABA law schools (there are currently 204) five years from now bet.

What are the meanings of “working class” in America today?

[ 291 ] June 29, 2016 |

class

This question is inspired by David Brooks’ latest pseudo-anthropological musings regarding the subject. (A curious feature of this column is that it’s obvious Brooks is discussing the white working class, but he never acknowledges this).

There’s now a rift within the working class between mostly older people who are self disciplined, respectable and, often, bigoted, and parts of a younger cohort that are more disordered, less industrious, more celebrity-obsessed, but also more tolerant and open to the world.

Trump (and probably Brexit) voters are in the first group. They are not poor, making on average over $70,000 a year. But they perceive that their grandchildren’s world is quickly coming apart.

Now obviously the phrase “working class” has multiple meanings in American politics and culture, but defining a cohort that has an average household income of $72,000 (about 30% above the national average) as working class stretches any plausible definition well past the breaking point. And Brooks’ cavalier use of the term underlines how amorphous this concept — a key one in contemporary political discourse — can be.

Anyway, what does “working class” mean in America today? I haven’t studied this question systematically or even thought about it much, which is probably representative of how most Americans think, or rather don’t think, about class matters in general. So these suggestions are very much off the cuff: (Note that the point here isn’t to describe the “real” working class, which strikes me as a pretty meaningless endeavor, but rather to suggest what the most widely held views of the concept are).

(1) No college degree, especially no four-year degree. It’s difficult or impossible to be working class if you’re a college graduate (The status of an associate’s degree is somewhat ambiguous in this regard.) In fact that’s probably the single biggest function of college in American culture: to work as as an all but formal class sorting mechanism.

(2) Working a job that doesn’t make much money and doesn’t confer much social status, with those involving significant physical labor or heavily managed customer interaction being the prototypes.

(3) Renting rather than owning one’s residence.

(4) Little or negative net worth.

All of these are of course subject to lots of exceptions, caveats, and gray areas, and it’s certainly possible to be considered working class while not fitting into one or even more than one of these categories. But it’s a start. Thoughts?

. . . In what ways is the concept of working class captured by the white collar/blue collar/pink collar/schema? Can a white collar job be working class?

Absurdities of American higher education, financial edition

[ 123 ] June 28, 2016 |

batty

Pictured: Annual performance review between Dean Tyrell of the School of Interdisciplinary Entrepreneurial Synergies, and Assoc. Prof. Batty, 2034, post-CE.

Oberlin College, the highly-regarded liberal arts college in Ohio (it has a world famous music school, and is also the oldest co-educational institution of higher education in the US), is offering buyouts to faculty and staff, purportedly because of financial stress:

To take the buyout, employees must be at least 52 years old and must have worked at Oberlin for at least 10 years. The college will then pay their salaries for a year after they leave and waive health insurance premiums during that time. . .

One tenured professor taking the buyout at Oberlin is Roger Copeland, who has been teaching dance and theater there for 41 years. The 66-year-old professor (whose former students include Girls creator Lena Dunham) said he was surprised to get the offer as the semester came to an end.

“I was completely dumbfounded,” said Copeland, a few hours before signing the separation agreement. “I don’t think anybody suspected that the [financial] situation could be so bad.”

Copeland hadn’t plan to retire for at least another four years, but said he couldn’t pass up the deal. He says he understands why the college is doing it, and thinks it will inject the faculty with fresh blood and new ideas. “For what they pay me, they can get two people out of grad school,” he says.

About 85 people so far have accepted the buyout (16 are professors and all are tenured; the rest are administrative and professional staff), representing about 25 percent of all eligible employees, Krislov says. He expects this to save the college about $3 million per year, depending on how many positions are replaced. According to him, the goal isn’t to replace tenured professors with non-tenure-track faculty. “Our commitment to tenure and tenured professors is iron clad,” he says.

Let’s take a look at just how dire the financial situation is at Oberlin. The following figures are taken from the school’s four most recent publicly available tax filings, for fiscal years 2011 through 2014. All figures have been rounded to the nearest million:

Average total revenue: $266 million

Average total expenses: $221 million

Average revenue over expenses: 20.4%

Twenty percent! A business with comparable figures would be considered fabulously successful — and unlike a business, Oberlin doesn’t pay taxes on its excess revenue, because it’s a charity. (A charity that in 2014 paid this guy $541,000. The median price for a house in Oberlin, Ohio is $133,000).

What’s been happening to the price of attendance? In FY2014 Oberlin collected $167,000,000 in tuition and room and board, which works out to about $57,600 per student. The school redistributed $52,000,000 of that in grants, so the average real charge to students was just under $40,000.

This coming fall tuition plus room and board will be running at $66K and change, so the college will probably be charging around $47K per student in average real attendance cost. (The average real cost to students and their families will probably be around $41K after taking into account third party payments, in the form of government grants, tax credits, and private scholarships).

I’ve only got tuition info on Oberlin going back to 1988, when tuition was $11,864 ($24,093 in constant 2016 dollars). At that time average room and board at four-year private non-profit colleges was about $3600 ($7300 in 2016 dollars), so in inflation-adjusted terms the discounted cost of attendance at Oberlin is more than 50% higher than the sticker cost of attendance 25 years ago (I don’t know what the discounted cost was back then).

Oberlin’s endowment has just about doubled in real terms since 1990, from $421 million (2016$) to $832 million. That’s about $13,000 in expendable income per student per year, assuming the standard endowment distribution structure of 4.5% per year. In other words, in real inflation-adjusted terms, Oberlin’s endowment by itself is throwing off enough income to pay what would have been 55% of sticker tuition in 1988, and probably close to 100% of sticker tuition in 1975 (average sticker tuition at four-year private colleges was $10,088 (2015$), although historically Oberlin tends to run at about 50% higher than average). Now of course that sum is only 25% of sticker tuition.

This site estimates that in five years sticker COA at Oberlin will be $88K, in ten years $112K, in fifteen years $143K, and if you’re having a baby this year you’d better plan to spend $165,000 (per year) to send your special snowflake to Oberlin, although since the faculty will have been replaced by Nexus 6 models by then, the immense cost savings will surely be passed on to “consumers.” (I kid — obviously they won’t be passed on, because the college’s administration will at that point equal the total population of Rhode Island).

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