It is worth reading what one of the African-American civil rights leaders, and a brilliant man, thought of Woodrow Wilson at the time of his candidacy:

As to Mr. Wilson, there are, one must confess, disquieting facts; he was born in Virginia, and he was long president of a college which did not admit Negro students…On the whole, we do not believe that Woodrow Wilson admires Negroes…Notwithstanding such possible preferences, Woodrow Wilson is a cultivated scholar and he has brains…We have, therefore, a conviction that Mr. Wilson will treat black men and their interests with farsighted fairness.  He will not be our friend, but he will not belong to the gang of which Tillman, Vardaman, Hoke Smith and Blease are the brilliant expositors.  He will not advance the cause of an oligarchy in the South, he will not seek further means of “jim crow” insult, he will not dismiss black men wholesale from office, and he will remember that the Negro…has a right to be heard and considered, and if he becomes President by the grace of the black man’s vote, his Democratic successors may be more willing to pay the black man’s price of decent travel, free labor, votes and education.

That is from pp.187-188 of August Meier, Negro Thought in America 1880-1915: Racial Ideologies in the Age of Booker T. Washington.  You can see that Du Bois did not “have it in” for Wilson.

And here is a letter from September 1913, from Dubois to Wilson, after Wilson had been in office for but half a year:

Sir, you have now been President of the United States for six months and what is the result? It is no exaggeration to say that every enemy of the Negro race is greatly encouraged; that every man who dreams of making the Negro race a group of menials and pariahs is alert and hopeful. Vardaman, Tillman, Hoke Smith, Cole Blease, and Burleson are evidently assuming that their theory of the place and destiny of the Negro race is the theory of your administration, They and others are assuming this because not a single act and not a single word of yours since election has given anyone reason to infer that you have the slightest interest in the colored people or desire to alleviate their intolerable position, A dozen worthy Negro officials have been removed from office, and you have nominated but one black man for office, and he such a contemptible cur, that his very nomination was an insult to every Negro in the land.

To this negative appearance of indifference has been added positive action on the part of your advisers, with or without your knowledge, which constitutes the gravest attack on the liberties of our people since emancipation, Public segregation of civil servants in government employ, necessarily involving personal insult and humiliation, has for the first time in history been made the policy of the United States government.

By the way, I’ve also learned that Du Bois, despite his Marxist sympathies, studied economics with Taussig at Harvard, had well-worked out views on Mill and Ricardo, and once wrote a paper defending the economics of the gold standard.  He also studied with Gustav Schmoller at what was then the University of Berlin, now Humboldt University.

Enter the Harvard economist Michael Jensen. Dr. Jensen, who is famous in financial circles for championing the concepts of shareholder value and executive stock options, had taken a Landmark course in Boston at the suggestion of his daughter, who mended a rocky relationship with Dr. Jensen after taking the course herself.

“I became convinced we should work to get this kind of transformational material into the academies,” he said, adding that he considers Mr. Erhard “one of the great intellectuals of the century.”

In 2004, with the help of a Landmark official, Dr. Jensen developed an experiential course on integrity in leadership at the Simon Business School at the University of Rochester. The class was offered there for five years, with Mr. Erhard signing on as an instructor during its third year. It has since been taught at several universities around the world as well as at the United States Air Force Academy.

As far as its philosophical underpinnings go, Mr. Erhard struggled a bit to describe the course without resorting to its Delphic phraseology (“ontological pedagogy,” “action as a correlate of the occurring”).

Sitting in front of a bank of computers in his hotel room, he read excerpts from the 1,000-page textbook he is working on, such as: “As linguistic abstractions, leader and leadership create leader and leadership as realms of possibility in which, when you are being a leader, all possible ways of being are available to you.”

The full NYT story, mostly about Erhard, with bits on Heidegger too, is here.  Here is more on Jensen and Erhard.

Danielle Douglas-Gabriel at the WashPost writes that Purdue is going to run an experiment with income contingent loans.

This week, Purdue University [partnered]…with Vemo Education, a Reston-based financial services firm, to explore the use of income-share agreements, or ISAs, to help students pay for college.

Through its research foundation, the school plans to create ISA funds that its students can tap to pay for tuition, room and board. In return, students would pay a percentage of their earnings after graduation for a set number of years, replenishing the fund for future investments.

The Federal government already offers an income based repayment program for student loans but private plans would likely be more flexible and generate more useful information.

Douglas-Gabriel makes a useful point:

Say a student agrees to pay five percent of her income for five years on a $10,000 agreement. If that student lands a $60,000 job after graduation, she could pay $15,000 by the time the contract is up, more if she gets raises along the way. Yet if that same graduate loses her job during that time, she wouldn’t be forced to find the money to pay.

But then concludes with an odd criticism:

Either way students would have to be pretty informed about the earning potential in their field before signing up.

What the example illustrates, however, is that being unlucky or uninformed is less damaging with an income share agreement than with a traditional loan. Loans have the greatest burden when a student overestimates their potential earnings and is poorer than expected. Thus, the loan offers no relief when relief is most needed. In contrast, payments under an income share agreement fall when income falls. An ISA does cost more than a loan when a student underestimates their potential earnings but in this case the student is richer than expected and can easily bear the extra burden. Thus, ISAs offer income insurance.

Douglas-Gabriel also writes:

Some observers worry that students pursuing profitable degrees in engineering or business would get better repayment terms than those studying to become nurses or teachers.

Actually, that is part of the point. An ISA is about improving idiosyncratic risk sharing. To the extent that engineers are reliably expected to earn more than nurses, they should pay a smaller share of their income so the total payment for an education is about the same for both engineers and nurses (fyi, business is not a profitable degree).

Indeed, one of the prospective benefits of ISAs is that differences in prices will better reveal which are the degrees, programs and schools that most generate value-added.

Hat tip: Kevin James.

Addendum: See previous MR posts on this topic.

That is the paper’s subtitle, the title is “An Offer You Can’t Refuse,” and that is the job market paper (pdf) of Sandro Ambuehl of Stanford University.  I found this to be the most interesting job market paper of the year, noting that “most interesting” and “best” are not synonymous, that said I found the quality to be very high too.  The main point is that having commercial economic incentives in place causes us to perceive new information in more positive-sum terms than otherwise would be the case, or at least that is how I interpret his results.

Here is the abstract:

Around the world there are laws that severely restrict incentives for many transactions, such as living kidney donation, even though altruistic participation is applauded. Proponents of such legislation fear that undue inducements would be coercive; opponents maintain that it merely prevents mutually beneficial transactions. Despite the substantial economic consequences of such laws, empirical evidence on the proponents’ argument is scarce. I present a simple model of costly information acquisition in which incentives skew information demand and thus expectations about the consequences of participation. In a laboratory experiment, I test whether monetary incentives can alter subjects’ expectations about a highly visceral aversive experience (eating whole insects). Indeed, higher incentives make subjects more willing to participate in this experience at any price. A second experiment explicitly shows in a more stylized setting that incentives cause subjects to perceive the same information differently. They make subjects systematically more optimistic about the consequences of the transaction in a way that is inconsistent with Bayesian rationality. Broadly, I show that important concerns by proponents of the current legislation can be understood using the toolkit of economics, and thus can be included in cost-benefit analysis. My work helps bridge a gap between economists on the one hand, and policy makers and ethicists on the other.

Of course it also can be said that incentives make individuals less Bayesian in their orientation.  I say who needs Bayesians anyway?  Society is built on a certain faith we all have in the benefits from cooperating with others.  When you know you might be paid to eat an insect, you sample more “yum-pro-insect” propaganda, and you interpret it more favorably.  Furthermore subjects do not in advance predict these self-persuasion effects.  So “bait and switch” marketing techniques may succeed in warming individuals up to ideas, even if the promised prize is eventually yanked.

In any case, how can you not love a paper which has, on p.4, the following sentence: “In the first experiment I use cash to induce subjects to eat whole insects, including silkworm pupae, mealworms, and various species of crickets.”

With or without chili sauce?  The future of commercial society may depend on it.

I enjoyed this sentence too, from p.18:

Participants cannot be forced to ingest insects.

Here is Sandro writing with Muriel Niederle and Al Roth in the AER on the moral plausibility of strong incentives.

Is it clever or stupid of us to be avoiding the problem of “overeducation” in our Army officer corps?

As shown previously, the higher an officer’s cognitive ability, the lower that officer’s chance at early promotion and battalion command selection. As a curious anecdote, the promotion rate to colonel for officers with PhDs was lower than the Army average from 2011 to 2013. Surprisingly, the Army does not actively invest in advanced civilian education for its personnel managers or OES instructors. In the 1980’s, the Army sent as many of 7,000 officers per year to graduate school. The Army reduced that to 415 in the 1990s. Currently, the Army sends 600- 700. A not-so-long ago discussion at the joint flag officer orientation course, typically referred to as “Capstone,” revolved around how much education “was too much” for senior officers. The quorum of newly selected flag officers from all services concluded that a public school or distance learning masters was fine, but certainly not a PhD or Ivy League masters.

That is from Spain, Mohundro, and Banks (pdf), via Paul Musgrave.

Principles of Macroeconomics, the new course by Tyler and myself, has just launched at MRUniversity. We will be covering unemployment, inflation, business cycles, growth and much more. The first section which is up now covers GDP including

As usual, all the videos are free and will work with any textbook although of course they go best with the best textbook, Modern Principles.

Here is the introduction to GDP:

Best non-fiction books of 2015

by on November 23, 2015 at 12:53 am in Books, Education | Permalink

These are in the order I read them, more or less, not in terms of preference.  And I would say this year had more good entries than ever before.  Here goes, noting that most of the links go to my earlier reviews of them:

First, here are the economics books:

Mastering ‘Metrics: The Path from Cause to Effect, by Joshua D. Angrist and Jörn Steffen-Pischke, technically late 2014 but it was too late to make that list.

Dani Rodrik, Economics Rules.

Richard H. Thaler, Misbehaving: The Making of Behavioral Economics.  Self-recommending.

Garett Jones, The Hive Mind.  Why national IQ matters.

Scott Sumner, The Midas Paradox.  Boo to the gold standard during the Great Depression.

Greg Ip, Foolproof: Why Safety Can be Dangerous, and How Danger Makes Us Safe.

And the rest, more or less the non-economics books:

Robert Tombs, The English and Their History.

R. Taggart Murphy, Japan and the Shackles of the Past.  The last section is brilliant on current Japanese politics.

Michael Meyer, In Manchuria: A Village Called Wasteland and the Transformation of Rural China.  Adam Minter has a very good and useful review of a good book.

Ian Bostridge, Schubert’s Winter Journey.  Will improve your listening.

The Mahabarata, by Carole Satyamurti.  Rewritten and edited to be easier to digest, intelligible and rewarding.  As “an achievement,” this book does have some claim to be number one.

Avivah Gottlieb Zornberg, Bewilderments: Reflections on the Book of Numbers.  You can never read enough commentary on the Torah.

Daniel Tudor and James Pearson, North Korea Confidential, how things really work there (speculative), rain boots for instance are a fashion item and black markets are rife.

Serhii Plokhy, The Gates of Europe: A History of Ukraine, a good general history of the country.

Guantánamo Diary, by Mohamedou Ould Slahi.  He’s a very smart guy.

Ashlee Vance, Elon Musk: Tesla, Space X, and the Quest for a Fantastic Future.

Sebastian Strangio, Hun Sen’s Cambodia.  Goes deep into a place most people are ignoring.

Michael Booth, The Almost Nearly Perfect People.  The Nordics, that is.

Timothy Snyder, Black Earth.  He succeeded in writing an original book about the Holocaust, which is hard to do.

Emmanuel Todd, Who is Charlie?  Background on France being screwed up.

Niall Ferguson, Henry Kissinger, vol. I.  Background on America being screwed up.

Landmarks, Robert Macfarlane.  How to talk, think, and write about the British countryside.

Andrea Wulf, The Invention of Nature: Alexander von Humboldt’s New World.  The best of the various recent books on Humboldt.

Frank McLynn, Genghis Khan.  Background on a whole bunch of other places being screwed up.

Daniel P. Todes, Ivan Pavlov: A Russian Life in Science. I didn’t have time to read all of this book, but it seemed very good in the fifth or so I was able to read.  By the way, the whole salivating dog at the bell story is a fiction.

Pierre Razoux, The Iran-Iraq War, readable and useful.

Charles Moore, Margaret Thatcher: At her Zenith: In London, Washington, and Moscow, vol.2 of the biography, 1984-1987.  This one I haven’t finished yet.  I ordered my copy advance from UK Amazon, it doesn’t come out in the U.S. until early January.  There is some chance this is the very best book of the year.

I don’t quite see a clear first prize.  If I had to pick, I would opt for a joint prize to the biographies of Musk, Kissinger, Thatcher, and Genghis Khan.  This was the year of the biography.

Sorry if I forgot yours, this list is imperfect in various ways!  And the year isn’t over yet, so I’ll post an update on the very good books I read between now and the end of the year, probably on December 31.

There is an ongoing controversy at Princeton over whether it should still be called the Woodrow Wilson School of Public Policy.  Wilson was a notorious racist and segregationist, bad even by the standards of his time, plus he was a terrible President to boot.  At Yale there are murmurings about a house named after John Calhoun.

Of course there is a slippery slope.  There are plenty of American institutions named after slaveholders, and for that matter was Amerigo Vespucci such a great guy?  For one thing, he helped Columbus commit genocide by provisioning one of his voyages.

Should George Washington stay on the dollar bill?  If you’ve decided that no university or other positive-sum institution should be named “School of Simon LeGree Satan,” it seems hard to draw a line in a meaningful, non-arbitrary manner.  Most famous people, especially in politics, have some pretty significant blemishes.  Yet we cannot open every can of worms in this regard, or so it seems.

No one seems to mind that the Nazi Party is called…the Nazi Party.  No one says “we can’t call the party that, those Nazis were the people who killed the Jews.  Can’t name anything after them.  Not even their own party.”  In fact calling them Nazis is designed to remind people of what they did, appropriately I would add.

I don’t mind if an institution names itself after a person of mixed moral quality, or allows such a name to persist, provided the institution, in both its framing of the name and its pursuit of its broader mission, is self-conscious about that person’s drawbacks and invests resources toward that self-consciousness beyond the usual rhetorical statements.  That said, others may mind more than I do, so it would be nice if we had a graceful way out of a slightly complicated situation.

I also would not be disturbed if they had kept the city names at Leningrad and Stalingrad.  Lenin and Stalin were evil guys, but it seems appropriate to remind people what a big role they played in the histories of those cities.  (At least for another hundred years, probably not forever.)  Of course if the citizens of the cities don’t want those names, I would not force the matter.

Perhaps in the longer run everything, including the Woodrow Wilson School, will be named after donors.

Why do we name things after people at all?

When I look at countries which are periodically renaming buildings, cities, and institutions, I get a little uncomfortable.  The renaming probably isn’t causing their bad or unstable qualities, but pushing for a world of constant renaming does not strike me as a useful goal.  It is not governed by a desirable feedback process, too much voice and not enough exit and competitive constraints.

There should be some kind of intermediate process where institutions can indicate that they take very seriously the moral failings of their namesakes, and publicize that message.  And then over time they can try to raise enough money so as to have a convenient excuse to rename the Wilson School after a wealthy donor, taking constructive action but not ending up in an endless game of renaming.

A simple concrete step would be to cut the price of the naming rights on the Wilson School by fifty percent.

That also could prove an efficient form of price discrimination, by selling the naming rights to one school for less, yet with a special circumstance so donors do not feel that every naming right now should sell for less.

Kenya Hathaway, a musician and vocal coach for television shows, has never talked with her husband about celebrity nannies, even in light of the unraveling marriages of the Afflecks and Rossdales.

There is more here, via the sharp-eyed Felix Salmon.  The NYT article is interesting throughout, with many good bits.

Perusing job market papers

by on November 21, 2015 at 2:14 am in Economics, Education, Science | Permalink

GMU isn’t hiring this year, but I still enjoy going through the job market candidates to see what is new in the profession.  I’ll be blogging a few of the more interesting pieces I found, in the meantime here are some summary remarks from my investigations.  Keep in mind these are highly subjective impressions for the most part:

1. MIT students had the most interesting papers overall, Harvard second.

2. Job market papers seem to be getting longer.  I was surprised how many 60-90 pp. papers I saw.

3. The concentrated distribution of students among a few advisors, within a department, seems to be increasing.

4. There are plenty of good but not interesting to me papers on economic development going around.  The “dairy farmers in Kenya” sort of paper, fine work of high quality, but I look for something more general to read and report on.

5. Industrial Organization continues to be a mostly boring field.  Development economics and health care economics are still “in.”  There are a variety of good papers on financial intermediation.

6. There are hardly any theory papers coming out of the top schools.

7. The differences in student quality, within a department, seem to be narrowing.

8. Harvard economics has the best and easiest to use web site for their job market candidates, some other very good schools still have very low quality web sites.

With the elimination of mandatory retirement, the average age of college and university faculty members has increased. While this has raised some concerns, relatively little research has tried to measure the impact of this aging on productivity inside the classroom. Using data from the website for a large sample of instructors in a broad cross-section of colleges and universities, we find that age does affect teaching effectiveness, at least as perceived by students. Age has a negative impact on student ratings of faculty members that is robust across genders, groups of academic disciplines and types of institutions. However, the effect does not begin until faculty members reach their mid-forties and does not seem to increase even when they reach the former retirement ages of 65 or 70. Moreover, the quantitative impact of age on student ratings is small and can be offset by other factors, especially the physical appearance of professors and how easy students consider them to be. When we restrict our sample to those professors deemed hot by student raters, the effect of age disappears completely. We conclude that ending mandatory retirement has had little impact on student perceptions of faculty quality.

That is from a new paper by Rovbert J. Stonebreaker and Gary S. Stone, via Kevin Lewis.

This sounds like a combination of a David Brooks column and a Robin Hanson blog post, and what could be better than that?:

Surprisingly, the most effective leaders did not have the highest level of self-awareness. Indeed, the more they underrated themselves, the more highly they were perceived as leaders. We assume this is caused by a combination of humility, high personal standards, and a continual striving to be better.

That is from Jack Zenger and Joseph Folkman, via the excellent Samir Varma.

Sang Yoon Lee, Yongseok Shin, and Donghoon Lee have a new NBER paper:

Going to college is a risky investment in human capital. However, we highlight two options inherently embedded in college education that mitigate this risk: (i) college students can quit without completing four-year degrees after learning about their post-graduation wages and (ii) college graduates can take jobs that do not require four-year degrees (i.e., underemployment). These options reduce the chances of falling in the lower end of the wage distribution as a college graduate, rendering standard mean-variance calculations misleading. We show that the interaction between these options and the rising wage dispersion, especially among college graduates, is key to understanding the muted response of college enrollment and graduation rates to the substantial increase in the college wage premium in the United States since 1980. Furthermore, we find that subsidies inducing marginal students to attend colleges will have a negligible net benefit: Such students are far more likely to drop out of college or become underemployed even with a four-year degree, implying only small wage gains from college education.

This is a very important result…Bryan Caplan, telephone!

Ungated versions of the paper are here.

London Scout poses for her mother, Sai De Silva, in Dumbo for her Instagram account.  The 4-year-old has more than 100,000 followers.

That is the photo caption to this NYT story.  And just so you are not confused, “London Scout” is a name, and “Dumbo” is a part of New York City.

How smart are CEOs anyway?

by on November 15, 2015 at 2:14 am in Data Source, Economics, Education | Permalink

Here is a new paper by Wai and Rindermann.  It seems to be saying that CEOs are quite smart, but perhaps not as smart as…journalists.  Hm..perhaps this may get some media pick-up, here is the abstract:

The path to becoming a CEO (and performance on the job) can be viewed as a difficult cognitive challenge. One way to examine this idea is to see how highly selected CEOs are in terms of education and cognitive ability. The extent to which Fortune 500 CEOs were selected on education and cognitive ability at an earlier age was retrospectively assessed at four time points that spanned 1996 to 2014 (Total N = 1991). Across the last 19 years, between 37.5% and 41.0% of these CEOs were found to attend an elite school which likely placed them in the top 1% of cognitive ability. People in the top 1% of ability, therefore, were likely overrepresented among these CEOs, at about 37 to 41 times the base rate. Even within each of the four samples, higher CEO education and cognitive ability was associated with higher gross revenue of the CEO’s company. Although Fortune 500 CEOs were highly selected on education and cognitive ability, when placed in the context of a broader array of occupations in the extreme right tail of achievement (e.g., politicians, judges, billionaires, journalists, academics, powerful people, and other business elites), CEOs were not at the top. This showed the wide cognitive ability range (and mental test difficulty) across various occupations that compose the U.S. elite. That Fortune 500 CEOs had similar education and cognitive ability selectivity over time shows that the CEO (and perhaps business) occupational and filtering structure has remained relatively unchanged across the last two decades.

I would gladly read more papers on this topic…