Thursday, November 27, 2008

Not a bad job, not a bad job at all

There's no doubt about it, being a professor is a great job. There's a lot to be thankful for.

First of all, there are opportunities to work with a range of students. The most fun is teaching (and learning from) the students who are at the top of their game. These students engage you by asking important questions that you never thought about and by bringing their own analyses and research into the classroom or office hours. The most rewarding students are those who start off struggling with material and then find their way. The biggest challenge is in finding what works for the class you are teaching; it's often different from what worked for the class before. For various reasons, I've done less teaching overall and no undergraduate teaching since coming to UNCG; I especially miss the undergraduate part.

Second, academic jobs provide time for research and thinking. They allow you the freedom to research questions that interest you and to follow evidence wherever it goes. In practice, this means unlimited access to libraries full of books and journals and also the chance to work with or collect new data. The research leads to many provocative conversations with colleagues and collaborators over how to pose, frame, and interpret analyses. It sometimes also involves being given extra resources from your institution, the government, or private sponsors to gather more data or conduct more analyses. This aspect of the job is pure "nerd-vana."

Third, there is a wonderful cycle to the job. Things are crazy during the term while you are teaching, with work spiking just before the term as you prepare materials and near the end as big assignments and tests are made and come due. Between terms, things are quiet (at least if you are successful in hiding from deans and other administrators with committee assignments). When you are not teaching, the work is mostly self-paced. Salaries are usually provided for nine months' work, meaning that the summer can be your own.

Fourth, the job can offer some neat travel opportunities. I'm not sure if my trip in a few weeks to Ann Arbor (burr) counts as something to be thankful for but trips this year to Bonn, Hong Kong, London, Los Angeles, Taipei, and Washington certainly do.

Lastly, there is tremendous job security, at least for those lucky enough to have made it over the twin hurdles of finding a permanent job and then convincing our colleagues to grant us tenure. Tenure-track positions usually come with multi-year renewable contracts, so you can be sure of your status for that period of time. Those who don't get tenure (it took two tries for me) are typically offered an additional year of employment, during which you can search for the next position. If tenure is awarded...well, you can't be thankful enough for that kind of job security.

Academic jobs don't come without a tremendous amount of support. While some people pay their entire way through undergraduate and graduate school, I was fortunate to be supported by my parents in undergraduate school and by fellowships, assistanceships, and grants in graduate school. Schools public and private also receive copious amounts of taxpayer support. Graduate students require a lot of advice and guidance, so there are many generous and patient professors to be grateful for; several of those professors continue to provide advice and support. Along the way, there are mentors inside and outside your institution. These colleagues read and offer advice on your research, answer questions, help you with your teaching, call and write letters on your behalf to potential employers and sponsors, invite you to their institutions, and generally serve as a sounding board on the days you might not feel so thankful (but should). The help from families is also invaluable, from the ramen-noodle days of school, through the ups and downs of the job, and even through disruptive relocations. I can't thank them enough.

Wednesday, November 26, 2008

Cutting subsidies, but not by much

Reacting to a Government Accountability Office (GAO) report that found that the U.S. Department of Agriculture (USDA) paid $49 million in farm subsides to wealthy people who were ineligible because they were making more than $2.5 million, President-elect Obama said, "If this is true, it is a prime example of the kind of waste I intend to end as president."

The President-elect and his team have the right idea in trying to cut wasteful spending. However, as this particular case shows, there may be less waste to cut than first meets the eye.

The GAO study looked at tax records of people who received farm payments over the period 2003-2006. Over that time, the farm subsidy programs paid $16 billion per year ($64 billion over the four years of the study) to some 1.8 million households. From the 2002 Farm Bill, payments were supposed to be limited to people and entities whose incomes over the preceding three years averaged less than $2.5 million.

The GAO found that $49 million in payments went to 2,702 individuals whose taxable incomes exceeded $2.5 million. The potential waste here is large in an absolute sense at a little over $12 million a year; however, it is puny when compared to the size of the program. The individuals who were identified represent just 0.15 percent of subsidy recipients, and the possible overpayments represent just below 0.08 percent of program costs. Yes, USDA should be more careful, and yes, it might be able to save money, but such small fractions of program costs are going to be hard to root out.

The use of the words "potential" and "possible" in the preceding paragraph is purposeful because the report may be overstating the amounts of overpayments. Eligibility for the payments is sometimes determined on the basis of entity (business) income rather than individual income. Some of the 2,702 individuals may have been partners in eligible businesses; if so, the business's subsidy would have been reduced by that partner's share, though the business would still get a subsidy. Also, there are some subsidies that were not subject to the $2.5 million limit.

Finally, the period of the study was covered by the 2002 Farm Bill. The new 2008 Farm Bill, which took effect in October, sets lower income eligibility limits and requires USDA to use additional verification tools may well reduce the identified expenditures.

In addition to the potential overpayments, the GAO also found that a very high proportion of subsidy payments went to people making more than $500,000 per year. For instance, while only 0.4 percent of tax filers had adjusted incomes between $500,000 and $1 million, 1.2 percent of farm subsidy recipients had incomes in this range. Again, though, the 2008 Farm Bill is supposed to address some of this.

Farm subsidies must be reined in, and payments to ineligible millionaires should be the first to go. However, we shouldn't overstate the possible savings, especially in a program that is slated to change. Bringing the budget into balance will require much harder choices.

Tuesday, November 25, 2008

Yet another problem for Rep. Rangel

The Washington Post reports today that

D.C. officials say that Rep. Charles B. Rangel (D-N.Y.), who recently has been buffeted by questions about his personal taxes and real estate dealings, was incorrectly given a tax break on a house he owned in the District.

Rangel received the "homestead exemption," a property tax break for people who live in a permanent, primary home in the city.

When asked about his numerous shady tax and real estate issues, Rep. Rangel "said that he did nothing 'morally wrong' and that, at worst, he could be accused of sloppy record-keeping."

Rep. Rangel is either as inept as he claims, dishonest and a cheat, or some combination of these. Either way he has shown himself, now for yet another time, to be unsuited for the chairmanship of the Ways and Means Committee.

Monday, November 24, 2008

Life is speeding up

The Southern Economic Association meetings were held this past weekend in Washington. For me, that meant a five-hour drive from Greensboro up to DC on Friday night, and another five-hour drive back on Sunday.

One pleasant surprise along the way was the continued drop in gas prices. I usually stop for gas along interstate 95 at exit 61, just north of Petersburg or about two-thirds of the way up to Washington. Gas prices there were below $1.70/gallon. Just a few months ago, prices were $2/gallon higher.

One less pleasant observation (it wasn't really a surprise) was a return to rampant speeding. On previous trips during the last year and especially this fall, the right-hand lane saw a good share of the traffic moving at the posted speed limits. That wasn't the case on this trip though. I set the cruise control at 65 mph for most of the trip, and increased it to 70 mph for the 60 miles of interstate 85 that are posted at that speed. With the exception of the truck traffic that seemed to be keeping to those speeds, it was a lonely vigil in the right-hand lane.

The relatively relaxed pace of the journey provided some time to think about the many costs of speeding.

  • Let's start with the obvious, speeders cost themselves money. The U.S. Department of Energy estimates that fuel economy falls about 10 percent for each 5 mph you travel over 60 mph. Even at the cheap prices along the NC-VA route, that works out to roughly a 17-20 cent a gallon surcharge for traveling 70 mph in a 65 mph zone or a 34-40 cent a gallon surcharge for traveling 75 in the same zone. Put another way, each 5 mph over the limit costs drivers the same as the federal gasoline tax (18.4 cents per gallon).

  • Multiplied many times over when you consider all of the speeding that occurs, that behavior also increases gasoline demand, which in turn pushes up gas and oil prices. One individual keeping to the posted limits doesn't bring down prices, but a large share driving this way does. Many things have contributed to the recent changes in gas prices, but reduced demand certainly plays a role. U.S. petroleum consumption has declined every month this year, with the August 2008 consumption figure being lower than at any other time since the end of 2001.

  • Energy prices are a component in most other prices; so, reduced demand helps to bring down the costs of many other goods.

  • Reduced speeding saves lives and property. Estimates from 1998 indicate that speeding was a factor in one-third of vehicle crashes and that those accidents cost $28 billion a year.

  • Speeding pollutes more and contributes to excess greenhouse gases; the extraction, refinement, and transportation of petroleum also pollute.

  • Because the U.S. produces only a fraction of the petroleum that it consumes, the excess demand from speeding adds to our net imports and weakens our dollar. That weaker dollar means that you pay more for other imported goods.

  • Where to those import revenues go? Directly or indirectly the revenues end up in the government coffers of a host of delightful countries, including Venezuela, Iran, Russia, and Angola (note that even though we don't purchase oil directly from Iran, other countries do). Each and every speeder brings smiles to the faces of Hugo Chavez, Vladimir Putin, and Mahmoud Ahmadinejad. Speeders are truly their friends.
The message from all of this is a simple. Following the speed limit saves money and lives; it benefits the environment, and it helps our security. All that it costs you is a little time.

Thursday, November 20, 2008

The last time the stock market was this low...

The last time the stock market was this low, my family and I looked like this:

And when I told my oldest son that the stock market would be at the same sorry level, 11 years later, he responded

I really don't want to drag out any earlier photos.

"Jet"-tisoning priorities

As has now been widely reported and roundly criticized, the chief executives of the Big Three automobile manufacturers flew from Detroit to Washington on separate private jets to beg for an additional $25 billion hand-out (just a month or so ago, Congress approved $25 billion in loans for the companies to help them develop more fuel-efficient cars).

The foolishness of their travel arrangements is evident and probably put the last nail in the coffin of their bail-out hopes. But let's consider for a moment what the trip and the general travel policies say about the executives' and their companies' priorities.

The cost figure tossed around in the articles is $20,000 for each of the round-trip flights; let's go ahead and work with that figure. If the three executives had simply jet-pooled, they could have saved $40,000, enough to pay one of the companies' $15/hour workers for a year, assuming a 33% fringe benefit rate.

First-class same-day tickets on Northwest Airlines with no advance purchase between Detroit and Washington cost less than $1,400. So, the executives could have flown even less expensively, while still enjoying first-class service.

Clearly, this isn't the only trip any of them will make this year. Assuming that each executive makes dozens of trips each year, there are dozens of jobs that could be saved just by simple economizing measures. We're not talking about a cut in the executives extravagent salaries, just some adjustments in travel arrangements.

A CNN article quotes a GM spokesperson as saying, "Making a big to-do about this when issues vital to the jobs of millions of Americans are being discussed in Washington is diverting attention away from a critical debate that will determine the future health of the auto industry and the American economy." But "a big to-do" should be made when a simple bit of coordination yesterday could have saved one of those jobs and when slightly more frugal policies could save dozens more.

It's telling that the trade-off never even occurred to the executives.

It could and has gotten worse

More negative portents:
Businesses cut prices at a record rate last month, builders started fewer new homes than anytime on record, and last week more people filed for new unemployment benefits than in any week since 1992, according to government data, as the outlook for the economy continues to dim.
And the Fed is becoming more bearish:
The economy "would remain very weak next year" and "the subsequent pace of recovery would be quite slow," the Fed said in its new economic projections. "The unemployment rate would increase substantially further."

The Fed projected that the national unemployment rate will rise to between 6.3 percent and 6.5 percent this year.
(The Fed isn't exactly going out on a limb with that last prediction, as the unemployment rate had already reached 6.5 percent in October.)

Oh, and the stock market continues its slide.

Monday, November 17, 2008

Glimpse of the end in Iraq

The Iraqi cabinet has approved a new status of forces agreement with the U.S. A key--and hopeful--feature of the agreement is that it calls for the withdrawal of U.S. military forces by the end of 2011.

The agreement, which must still be ratified by the Iraqi parliament, partly reflects the improved security situation. While the situation is still chaotic, Iraqis feel confident enough to go it alone in a few years.

The agreement also restricts U.S. military operations, starting next year. By next summer, U.S. forces are to withdraw from urban areas of the country. There are also restrictions on cross-border operations, like the one that just targeted Syria.

The plan is a boon for President-elect Obama, who has promised to withdraw troops on a somewhat faster schedule. Some months ago, it appeared that President Bush wanted to tie the hands of his successor to an open-ended commitment to Iraq. The agreement quashes that.

There are sure to be bumps along the road; however, the road map for ending substantial U.S. involvement in Iraq is in place. We should all hope that the Iraqis are up to the challenge.

Friday, November 14, 2008

It Could Be Worse

The drop in today's stock market reminds us that a lot more bad new could be out there.

Thursday, November 13, 2008

Fasten Your Seatbelts

Earlier today the OECD predicted a major downturn for the world's developed economies. The Dow Jones average responds by jumping 552 points. A bumpy night indeed.

"Too big to fail" but failing anyway

Bill Saporito at Time gives a detailed, but readable, analysis of GM's problems and the unpalatable choices facing policymakers. He points out that the $25 billion that's being requested is necessary just for GM to restructure to a smaller company.
GM needs an additional $10 billion simply to pay its bills next year and $15 billion more to close plants, compensate redundant workers and dump some of its lesser-performing brands.

On the other hand, if GM were to fall into bankruptcy it could drag the rest of the economy over the cliff. While employment at GM is down substantially from where it was in the past, GM purchases from many suppliers and still is responsible for many legacy costs.

It's heads we lose, tails we lose a lot.

Wednesday, November 12, 2008

Boogie Man

Frontline last night telecast a skewering biography of Lee Atwater's skeevy rise, including his influence on both the current President Bush and Karl Rove.

Fortunately, the Republicans' under-handed "big lie" approach didn't work in this election. It would be wishful thinking, however, to believe that this disreputable page is permanently out of candidates' playbooks.

Help for a few troubled borrowers

The Federal Housing Finance Agency yesterday announced a mortgage relief/refinancing plan for troubled borrowers who have mortgages backed by Fannie Mae and Freddie Mac.

The plan would help borrowers who have missed at least three mortgage payments, who are owner-occupiers, and who have not yet filed for bankruptcy, renegotiate their mortgages down to a level where payments would only be 38 percent of their monthly gross incomes.

Given the state of the housing market and home finances, such renegotiations are overdue. The plan is a good start and should provide some help. However, because of the limited coverage of the plan, we shouldn't expect much help in the broader market.

Gas price stimulus and tax II

Local letter writer, Don Hallock, also advocates for a gas tax increase in this morning's News and Record.
What act of Congress might be fairly easy to pass and might produce revenue for bridge and road repair while ensuring that energy innovation would be encouraged? How about pegging the price of gasoline nationwide at a level that accomplishes the above while retaining the relief that consumers now enjoy?
I like Hallock's opening paragraph more than mine.

One quibble with Hallock's plan is that he would adjust the tax up and down to keep the after-tax price in "the present range." Leaving an escape hatch to rescind or defer the tax for extraordinarily high increases makes sense, but price controls should not be a fundamental goal.

Tuesday, November 11, 2008

Immediate stimulus and taking some it back

Gasoline prices have continued their extraordinary drop. CNNMoney reports that the average price has fallen to $2.25 a gallon, a 45 percent decline from the prices this summer. Locally, a few gas stations here are flirting with prices below $2.

The lower prices provide immediate relief to families, many of whom are already struggling with debt and joblessness. The prices obviously make travel easier, but also free up some money for other purchases.

That said, there is also a downside to the lower prices. Since the start of the year, Americans have dramatically cut back on their energy use and begun to reassess their love affair with gas-guzzling SUVs and trucks. While people are better off with lower prices, somewhat higher prices do serve a purpose.

With gas prices where they are and possibly falling further, it's time for the federal government to consider raising the gas tax, perhaps by 25 cents this year and 25 cents next year. The federal tax currently stands at 18.4 cents per gallon, which is the same level that it was in 2003. An adjustment for inflation alone would increase the tax by 10 cents a gallon.

Revenue from the gas tax could go to much needed-highway infrastructure projects and to public transportation projects, like rail improvements along the Eastern U.S. corridor. Revenue could also go to deficit relief.

The increases could also be conditioned on subsequent gas prices. If prices shot back up, the increases could be deferred or temporarily rescinded.

Tax increases are never popular, but the timing is right here to raise gas taxes before consumers grow accustomed to the lower prices.

Friday, November 7, 2008

I Love L.A.

Only got to stay in Greensboro for a few days before flying out again to guess where...

Thursday, November 6, 2008

The holiday jeer comes earlier and earlier each year

Halloween was less than a week ago, and Thanksgiving, the traditional start of the holiday season, is still several weeks away. However, the first true sign of the holidays is here--the local News and Record has published its first "war against Christmas" letter. This first missive (more are sure to follow) is directed at retailers.

Some tidbits:
In the past few years retailers have been reluctant to acknowledge the reason for this shopping season -- Apparently, the whole sections of stores devoted to Christmas ornaments and decorations, Christmas cards, creches, etc.; the Christmas songs and carols blaring on the loud speakers, and the Christian churches every few blocks fail to get the message across.

Why shouldn't that employee say or hear the words "Merry Christmas?" It would be common courtesy -- Why shouldn't employees say "Happy Holidays," which would be a more common courtesy (i.e., a greeting appreciated by and applicable to everyone)?

The politically correct don't want Christ or God mentioned in promotions in or outside their stores -- Far from it, the politically correct are not reaching into homes and churches to stamp out Christian worship.
The letter and more generally the myth about the "war against Christmas" are really about one thing, putting some Christians' beliefs squarely in the face of others, regardless of how the recipients might feel. Rather than respect the many types of religious belief (and non-belief) that are present in our society, these busy-bodies would rather impose their particular beliefs on everyone.

The whole movement also reflects a sad and peculiar insecurity. After all, a person who was genuinely secure in his or her beliefs wouldn't need those beliefs acknowledged. And surely that person wouldn't need to demand extra acknowledgement beyond knowing that his/her belief was already shared by a majority of society, already fully protected in private worship, already enshrined in official holidays, and already reflected in the types of goods being offered in stores. A genuinely secure person wouldn't need more, right?

At one point the Romans threw Christians to the lions; now, merchants cater to their every shopping whim and wish them "Happy Holidays." The equivalence in persecution is pretty easy to see.

So a little earlier than usual and at some risk of giving offense, let me say "Happy Holidays" to all and "lighten up" to some.

Wednesday, November 5, 2008

Back to work?

The end of the political season doesn't mean that you have to be any more productive at work. Farhad Manjoo describes several web-surfing alternatives.

If all else fails, you can blog :)

Tuesday, November 4, 2008

"Exhilarating and empowering political acts"

Some people just don't belong on a college campus.

Phil Busse, a visiting professor at St. Olaf College in Minnesota, blogged on the Huffington Post, bragging about his exploits stealing McCain/Palin campaign signs. He wrote, "Yanking out the signs and running like a scared rabbit back to my idling car was one of the single-most exhilarating and empowering political acts that I have ever done."

He acknowledges that his actions were illegal but adds the weasel words that "because campaign laws regulate that candidates cannot give out gifts or anything beyond 'de minimis' value, a political lawn sign, by its very definition, has no value." He goes on to (falsely) equate his actions with free speech; regarding one large sign that he had stolen, he wrote, "I had said my piece."

Destroying property and interfering with people's political expression are the polar opposites of supporting free speech. As an academic, Busse had a responsibility to promote ideas, expression and discussion, not tear them down.

Upon hearing of Busse's antics, St. Olaf College forced his resignation, according to the Northfield News. The college officials got it exactly right.

Busse's moral confusion, however, remains. The Northfield News article quotes him, "Writing the essay was an opportunity to explore and talk about political speech and the desire that most of us have to express our politics — both in mature and immature ways, and sometimes a mix of the two... I’m disappointed that most readers seem to have focused on the thefts, and not on the larger thoughts."

Larger thoughts, right.

Monday, November 3, 2008

"Wining" about the recession

Mike Steinberger at reports that it may become easier to drown your sorrows at restaurants during the coming recession.

John Daly may have already discovered this over the weekend at the Winston-Salem Hooters.

Sunday, November 2, 2008

Time change blues

Normally, the fall day when we turn our clocks back is one of my favorites. Groggily waking up, seeing the clock, and knowing that you can sleep for another hour is just a wonderful thing.

The time change is not my friend this year, though. I'm still jet-lagged from the trip back from Taipei and the 12-hour time difference between here and there. So, this morning, I woke up, saw that the clock said a little after 4, knew that meant a little after 3, and then darkly realized that I was now going to be up for an extra hour today.

For those of you who were able to sleep in, enjoy the morning.

Saturday, November 1, 2008

Going home

I arrived home to the sad news that Studs Terkel had passed away. Terkel's great gift was letting people tell their own stories in their own words about subjects as diverse as the Depression, World War II, race relations, their jobs, and even death. He could get people to open up like few other journalists. His classic work on what workers do and how they feel about their jobs, Working, has long had an easy-to-reach spot on my bookshelf.

My guess is that he's now collecting an oral history of the saints.