I find American foreign policy increasingly baffling. In Afghanistan, Pakistan, and Yemen we’re killing people who aren’t our enemies on behalf of governments that aren’t our friends. In Libya and Egypt we brought down dictators on behalf of people who weren’t our friends and there are some in the Congress and, presumably, the White House who want to do the same thing in Syria.

Robert Samuelson reports on a new study that contradicts what many people believe about the late financial crisis:

Now comes a study that rejects or qualifies much of this received wisdom. Conducted by economists Manuel Adelino of Duke University, Antoinette Schoar of the Massachusetts Institute of Technology and Felipe Severino of Dartmouth College, the study — recently published by the National Bureau of Economic Research — reached three central conclusions.

What were the conclusions?

First, mortgage lending wasn’t aimed mainly at the poor. Earlier research studied lending by Zip codes and found sharp growth in poorer neighborhoods. Borrowers were assumed to reflect the average characteristics of residents in these neighborhoods. But the new study examined the actual borrowers and found this wasn’t true. They were much richer than average residents. In 2002, home buyers in these poor neighborhoods had average incomes of $63,000, double the neighborhoods’ average of $31,000.

Second, borrowers were not saddled with progressively larger mortgage debt burdens. One way of measuring this is the debt-to-income ratio: Someone with a $100,000 mortgage and $50,000 of income has a debt-to-income ratio of 2. In 2002, the mortgage-debt-to-income ratio of the poorest borrowers was 2; in 2006, it was still 2. Ratios for wealthier borrowers also remained stable during the housing boom. The essence of the boom was not that typical debt burdens shot through the roof; it was that more and more people were borrowing.

Third, the bulk of mortgage lending and losses — measured by dollar volume — occurred among middle-class and high-income borrowers. In 2006, the wealthiest 40 percent of borrowers represented 55 percent of new loans and nearly 60 percent of delinquencies (defined as payments at least 90 days overdue) in the next three years.

That dovetails nicely with observations I made early on in the crisis. It wasn’t wrongdoing that made the crisis. It was bad policy. Everyone was acting consistently with the incentives they had. Lenders were protected from the adverse effects of loans defaulting both by the apparently monotonic increases in the prices of houses and the certainty based on experience they’d be protected from the consequences of their folly. Borrowers were similarly protected. Consequently, lenders lent and borrowers borrowed until the who house of cards collapsed.

Not a lot has changed since then.

In a 649 word editorial the editors of the New York Times have only these as suggestions for actions the federal government could take to improve U. S. economic growth:

The economy, in short, is still wounded, and the route to recovery runs through government. Direct policies could raise wages in the near term, including the minimum wage. Policies can also change norms that keep wages depressed. Currently, for example, corporate executives are fighting to delay a new rule under the Dodd-Frank law to require companies to disclose the ratio of a chief executive’s pay to the median pay of the company’s employees. The information could expose indefensible disparities and lead to higher employee pay. Still other policies could set the stage for healthy growth in the longer term, including immigration reform, infrastructure spending and education initiatives.

and unless I’m mistaken not one of those would do much to improve economic growth. Pretty clearly they’re so intent on divvying up a shrinking income they have no ideas on how to increase it.

I’ll present several. Reduce the amount of money spent on roads and bridges. Increase the amount spent on energy and communications infrastructure. More mass engineering projects. The federal government’s history with those has been pretty successful and they inevitably prepare the way for future economic growth.

Charles Blow laments the low percentage of African American or women students seeking science degrees:

The Associated Press said in 2011 that “the percentage of African-Americans earning STEM degrees has fallen during the last decade” and that this was very likely a result of “a complex equation of self-doubt, stereotypes, discouragement and economics — and sometimes just wrong perceptions of what math and science are all about.”

It continued: “Black people are 12 percent of the United States population and 11 percent of all students beyond high school. In 2009, they received just 7 percent of all STEM bachelor’s degrees, 4 percent of master’s degrees and 2 percent of Ph.D.s, according to the National Center for Education Statistics.”

It doesn’t get better in the workplace. In a 2013 editorial, The New York Times pointed out: “Women make up nearly half the work force but have just 26 percent of science, technology, engineering or math jobs, according to the Census Bureau. Blacks make up 11 percent of the work force but just 6 percent of such jobs and Hispanics make up nearly 15 percent of the work force but hold 7 percent of those positions.”

I think there are all sorts of reasons for this. Science is hard. If you’ve received a poor preparation for college, college science will be that much harder and people tend not to participate in activities in which they believe they will inevitably fail. Regardless of the advance press other than in healthcare and education there aren’t that many science jobs out there these days and it might be that African American or women students recognize this.

It might be prejudice as Mr. Blow suggests in his column.

It also might be that they just do not see jobs in science as a possibility for themselves. No role models. When most of the adults you’ve seen who have jobs have jobs as teachers, cops, firefighters, in fast food, or as retail clerks it’s not all that surprising that you wouldn’t think of a job in science.

I had one major objection to Mr. Blow’s column. When he writes “minorities” he appears to actually mean blacks. Off-hand I’d guess that if by minorities he meant Asians his conclusions about the proportions of students pursuing STEM degrees might be somewhat different.

When I was in college (and dinosaurs ruled the earth), out of a couple of hundred students in each year in the engineering school you could count the number of black or women students on the fingers of one hand. Apparently, despite all of the other changes that have occurred since then that hasn’t changed that much.

Chicago received 16 inches of snow yesterday. That makes it the 7^th heaviest snowfall on record here.

The snow we’re having today isn’t your New England postcard sort of snow, falling gently and silently from the sky. It’s not a snow as it’s expereienced in the Great Plains states like Kansas or Nebraska where snow is a horizontal phenomenon rather than a vertical one.

Today our snow defies photography. It’s a swirling, roaring snow, horizontal and vertical at the same time. It surrounds and envelopes you.

When I awoke this morning in my bed on the Northwest Side of Chicago, it was to find that between four and five inches of snow had fallen overnight. The picture above was taken from my living room window.

It’s still snowing heavily and at least an inch has fallen since I rose. Besides writing this post I’m girding my loins to walk the dogs. Smidge and Kara would be fine without a walk—they’re indoor girls at heart—but Nola simply won’t eliminate without a walk. In a few minutes I’ll be trudging through that.

Through the window right now I can see Mr. Tran, my neighbor across the street, shoveling the street. I think he must be the hardest-working man I have ever known. Not only does he shovel his own walks and the street in front of his house but helps his neighbors shovel theirs.

My next step after walking the dogs will be shoveling the walk in front my house and, perhaps, shoveling out our cars. It’s better to shovel four inches now and two or three later than it would be to try to shovel the entire snowfall at once.

It will be an interesting Super Bowl Sunday. Those who’ve already planned to curl themselves up at home are all set. Those who’ve planned to attend Super Bowl parties may reconsider or we may be hearing about a lot of spinouts and fender benders on the roads.

While I agree with the bottom line conclusion of Megan McArdle’s recent post, that while paying for quality in healthcare rather than quantity is an appealing idea it’s a lot harder to do in practice than it might sound:

The Barack Obama administration has announced plans to tie 90 percent of all Medicare fee-for-service payments to some sort of quality or value measure by 2018. Sounds exciting! Who wouldn’t like to ensure that their doctors are paid for delivering value, rather than just randomly sticking needles into us?

Unfortunately, as both the Official Blog Spouse and Aaron Carroll of the Incidental Economist have noted, there is less to this announcement than meets the eye. Saying you want to pay for quality instead of procedures is quite easy to say; indeed, many an administration has said so, because “paying for outcomes instead of treatment” is the holy grail of health-care economists everywhere. But actually doing this, rather than just saying it, turns out to be really hard.

I disagree in detail. For example, Megan writes:

Unfortunately, doctors don’t treat statistical universes; they treat individual patients.

That’s not completely true. Most physicians treat a hypothetical average patient, at least at the start. Doing anything else would violate the standard of care. They prescribe or do what works for most patients. If that isn’t effective they proceed in continuing approximation to treat the individual patient.

And that can vary from place to place in the country. When one of my siblings presented herself to her family physician in Des Moines with a health problem not only her family physician but a chain of specialists proceeded to treat her as though she were an average patient and in Des Moines the average patient is an overweight post-menopausal woman of primarily German descent with heart problems. Unfortunately for this course of treatment, my sister is not an overweight post-menopausal woman of primarily German descent with heart problems. She actually had to seek care outside Des Moines to receive the care she needed. Since she also shares a familial characteristic of perverse reactions to medications. You know the fine print on the prescriptions that begins “In very rare cases…”? We’re the “very rare cases”. That means she went through quite a bit of misery along the way.

My point in all of this is that not only is paying for quality or paying for outcomes difficult and perhaps even impossible doing it will require the retraining of two generations of physicians.

Docs are smart men and women. They’ll figure out how to game the system faster than any conceivable system of paying for quality will possibly be able to adapt.

As Megan points out (although not in so many words), “paying for quality” will inevitably mean that the federal government will inevitably pay suburban doctors more than it does inner city doctors because the population treated by the latter have different and more serious health problems. Is that really the kind of healthcare system we want?

You might want to take a look at this Washington Post article outlining the findings of business prof Alan Benson suggesting that a college education isn’t quite the guarantee of prosperity its advance billing might suggest:

Earlier this month, after announcing his plan to make community college free, President Obama lauded a college degree as “the surest ticket to the middle class.”

New research in the prolific field of “Is College Worth It?” suggests it’s not that simple.

“‘Ticket’ implies a college degree is something you can just cash in,” said Alan Benson, assistant business professor at the University of Minnesota. “But it doesn’t work that way. A college degree is more of a stepping stone, one ingredient to consider when you’re cooking up your career. … It’s not always the best investment for everyone.”

and

College is still worth it for the average student. But Benson’s study found returns are particularly modest for young men at the CSU system, mostly because of high dropout rates, delayed graduation and a lower effect on labor force participation compared with women.

“The return to a college degree in 2010,” researchers wrote, “could be less than the interest on unsubsidized Stafford loans.”

As should be apparent, by definition half the population will not be average students.

Historically, a college education combined two things. It provided a forum for the children of the upper crust to make social and business connections, something not nearly as useful today as it was a century ago. And it provided preparation for the professions, i.e. medicine, law, the ministry, college professors. I question whether we should be subsidizing either of those objectives.

Nowadays a college degree provides a competitive advantage for those who have them against those who don’t. In other words when there are two candidates for that job at McDonalds a college degree sets you apart. I don’t think that necessarily means the degreed candidate will be a better McDonalds employee but that’s a decision for McDonalds to make. I’m not sure we should be subsidizing that, either.

If your view of the future is one in which workers are competing for a dwindling pool of jobs, getting a college degree makes a certain amount of sense but only if you focus your attention on skills that are likely to be saleable and you finish in four years. As the article points out, that’s a minority of students.

Higher education makes a lousy industrial policy. We need something that takes seventy or eighty percent of the young people into account rather than just the top quarter.