Noah Smith has an intriguing post in support of what he terms the “elite overproduction hypothesis”, i.e. expectations of what a college degree will do for you are exceeding reality. After lots of interesting analysis he begins his conclusion with this:

So if the Elite Overproduction Hypothesis is broadly correct, how do we get out of this mess? If happiness equals reality minus expectations, simple math tells us that we basically have two options for pacifying our educated youth — improve reality, or reduce expectations.

Improving reality is very hard, but we’re working on it. The industrial policies of the Biden administration are aimed at jump-starting faster economic growth, and more progressives are talking about an “abundance agenda” that would reduce the cost of living for Americans of all classes. But barring a lucky break like the simultaneous tech boom and cheap oil of the 1990s, boosting growth and abundance will be painstakingly slow going. It will also require overcoming the opposition of a whole lot of vested interests — particularly local NIMBYs — who themselves will be disappointed and angry if the government railroads their parochial preferences to fulfill its national objectives.

A more feasible strategy is to reset expectations to a more realistic — or even pessimistic — level. If we take humanities majors as a measure of economic optimism, we can already see this happening, as young people turn to more practical degrees. Interestingly, Google Ngrams for “a fulfilling career” have now ticked down as well. The over-optimistic angry Millennial generation may soon be supplanted by a Generation Z whose modest expectations echo those of their Gen X parents in the late 70s and early 80s.

I hate to be the bearer of bad news but switching from poli sci or art history majors to computer science, business, or engineering won’t help. The reason that big tech firms want more H1-B workers is not that there are no homegrown programmers or engineers. It’s that imported workers accept lower wages and job security. That will continue until the wages in India, Pakistan, the Philippines, etc. match those here.

Said another way a college degree is not a panacea.

After acknowledging that the Inflation Reduction Act will have little effect on inflation or climate change in her piece at Slate Kate Aronoff proposes another objective for the IRA—it’s about industrial policy:

While it’s been hailed as a historic piece of climate legislation, the Inflation Reduction Act is less a climate bill, per se, than a piece of industrial policy focused on building out domestic supply chains for clean energy that will benefit the climate. That’s a big deal. By international standards, though, the United States is still catching up and relying mainly on the kinds of demand-side incentives that have long speckled the U.S. tax code.

Sadly, I doubt it will have much impact on U. S. industrial policy, either. As others more learned than myself have pointed out, for that short term fixes are insufficient. You need permanent or at least long term reforms. Additionally, regardless of the incentives you can’t create something out of nothing. No matter how much domestic cobalt production is incentivized, we’ll still be using more cobalt than we have domestic reserves. And environmental regulations are a major impediment to the production of rare earths domestically. In the absence not only of lightening the restrictions on that but of long term confidence that they will be able to continue operations, IMO that’s pretty unlikely.

In an op-ed in the Wall Street Journal Bjorn Lomborg expands on his findings on the environmental implications of the Inflation Reduction Act:

Unlike most other nations on the planet, the U.S. has substantially reduced its carbon emissions over the past 15 years. This is largely owing to the fracking revolution that replaced a lot of America’s coal with natural gas, which is cheaper and cleaner. Even without the new law, the U.S. was on track to cut emissions substantially by 2030, according to research by the Rhodium Group. Averaging their high and low emission predictions, the U.S. would drop emissions by almost 30% absent the new law. With the new law, emissions will decline instead by a little over 37%. The “most significant legislation in history” will actually cut emissions by less than eight percentage points.

While the administration talks up its emission reductions, it never seems to tout the law’s impact on temperature and sea level—for good reason. If you plug the predicted emissions decline into the climate model used for all major United Nations climate reports, it turns out the global temperature will be cut by only 0.0009 degree Fahrenheit by the end of the century. This is assuming the law’s emission reductions end when its funding does after 2030. But even if you charitably assume they’ll somehow be sustained through 2100 without any interruption, the impact on global temperature will still be almost unnoticeable, at 0.028 degree Fahrenheit.

The law will similarly have little effect on the sea level. A model that calculates changes in ocean levels predicts waters will be somewhere between 0.006 and 0.08 inch lower in 2100 than they would have been without the Inflation Reduction Act.

To reach even this minuscule climate impact, the law would have to be kept intact over the rest of the decade, across four more Congresses and two presidential terms. Given the $369 billion price tag on the act’s climate policies, it’s hard to imagine the Inflation Reduction Act surviving a Republican majority. It might not even survive sustained Democratic rule.

Based on that it seems reasonable to conclude that the IRA isn’t about climate change. And in fairness the U. S. had a lot more to do in reducing its carbon emissions than France, Germany, or the UK so comparing our results over the last 15 years with theirs is a bit misleading.

And it clearly isn’t about reducing inflation, either? What is it about?

Yesterday afternoon President Biden announced a program to forgive student debt. The president’s announcement is here.

Today the reactions are beginning to come in. The editors of the Washington Post, who can generally be relied on to support the president’s initiatives, are critical:

Under progressive pressure to force grandiose policy changes, President Biden has generally embraced sensible reforms over flashy gimmicks. But his Wednesday student loan announcement did just the opposite.

They oppose the measure on the grounds that it is regressive and expensive, concluding:

Mr. Biden’s student loan decision will not do enough to help the most vulnerable Americans. It will, however, provide a windfall for those who don’t need it — with American taxpayers footing the bill.

In her Washington Post column Megan McArdle is even more critical, asking how many ways can a policy be bad? She criticizes the policy on the grounds above plus that it is likely to resemble the “doc fix”, well enough intentioned but ultimately political kabuki that accomplished little. She further suggests that loan forgiveness will actually increase college costs which I think is correct.

The editors of the Wall Street Journal are more critical yet, adding to the objections above questioning the president’s power to forgive student loans on his sole authority:

Waving his baronial wand, President Biden on Wednesday canceled student debt for some 40 million borrowers on no authority but his own. This is easily the worst domestic decision of his Presidency and makes chumps of Congress and every American who repaid loans or didn’t go to college.

The President who never says no to the left did their bidding again with this act of executive law-making, er, breaking. The government will cancel $10,000 for borrowers making less than $125,000 a year and $20,000 for those who received Pell grants. The Administration estimates that about 27 million will be eligible for up to $20,000 in forgiveness, and some 20 million will see their balances erased.

But there’s much more. Mr. Biden is also extending loan forbearance for another four months even as unemployment among college grads is at a near record low 2%. Congress’s Cares Act deferred payments and waived interest through September 2020, but Donald Trump and Joe Biden have extended the pause for what will now be nearly three years.

I doubt that the president will have much difficulty in securing whatever Congressional authorization he needs, probably with narrow majorities along party lines.

I do not believe that there is an educational debt problem. IMO there is a “not enough jobs that pay enough to service educational debt” problem. This seems like a good time to repeat a proposal I made some time ago.

The six largest states (California, Texas, Florida, New York, Pennsylvania, Illinois) could band together to create an online accredited degree-awarding university that offered bachelors degrees at no charge. Each of those states presently has at least one non-performing state university. Using the money they’re spending on those would provide the proceeds. Higher education at no cost beats the heck out of loan forgiveness.

Every administration since the Clinton Administration has at least paid lip service to the notion that the key to a brighter future was in higher education. They’re all been wrong, indeed, they’ve had it backwarrds but that’s been the policy. These days you can make more money as a welder or a plumber than working at most jobs that require a college degree.

You might find this article at the World Economic Forum which includes an infographic on the “canopy cover” (percentage of space shaded by trees) of European cities interesting. I was reminded a bit of that line in the movie Crocodile Dundee. Those are cities? Oslo has about the same population as Denver; Bern has about the same population as Elgin, Illinois.

In case you’re wondering Chicago’s “canopy cover” is around 20%—that’s about the same as Seattle’s and considerably higher than New York or Los Angeles.

I have a question about this piece at East Asia Forum:

China is the world’s largest trading nation and becoming more important. Whereas total US goods trade fell to US$3.8 trillion in 2020 from US$4.2 trillion in 2019 before recovering to US$4.7 trillion in 2021, total Chinese trade in goods increased from US$4.6 trillion in 2019 to US$4.7 trillion in 2020 and grew to a staggering US$6 trillion in 2021. China’s trade is predominantly market-driven, not state-driven. The private sector accounts for roughly 92 per cent of China’s exports, of which 42 per cent are from foreign invested firms. That is a huge constraint on policymakers.

Trade in goods between China and the United States grew 19 per cent in 2021 to US$693 billion according to US data, even though China fell short of the agreed purchases of US goods under their Phase One trade deal.

American companies expanded their operations in China with US$38 billion of new investment in 2021 to bring the US stock of direct investment in China to US$118 billion. Japanese investment into China also continued to increase, further integrating their economies. Total direct investment flows into China rose by a third in 2021 to a record high of US$334 billion for the year. That’s a lot of businesses committing to the Chinese market with new factories and operations even with Chinese borders closed and harsh domestic policies in pursuit of zero-Covid.

The mutually beneficial economic relationship runs counter to Washington’s instinct to counter every Chinese interest globally. The zero-sum approach to China dusts off the Cold War template.

Here’s my question. Is it true, as said later in the piece, that China has “fundamentally bought into the US-led order, not sought to overthrow it tout court”? I don’t see things quite that way. IMO the Chinese authorities see global trade as a zero sum game, are willing to reap whatever benefits they may from the “US-led order”, but chafe under the very order in which they’ve benefited so greatly.

I found this round table at Politico of a group of “coupologists”, i.e. scholars who study coups d’état, engaging and informative, particularly the historical references. As you might expect they did not settle on a consensus view. Descriptions they used include:

• Riot
• Coup
• Insurrection
• autogolpe

All agreed that whatever happened included a riot. Here are some sample snippets:

Ryan McMaken: Well, my view is that it is a riot in the sense that it’s difficult to attribute any particular goal to the people who were actually involved at the Capitol. I mean, certainly last I checked, 11 people were charged with seditious conspiracy. So that would imply that at least some people involved had some particular goal in mind.

But I just don’t think there was enough critical support from inside the regime to support the idea that it was actually a coup. In fact, the data coming out from the January 6 panel suggests that Trump was delusional if he thought he had any sort of meaningful support outside of himself. I mean, even his own family members seemed unenthusiastic. It was actually Mike Pence who was communicating with the military and they were taking orders from the vice president, not even the president. Trump did not really attempt to call in any sort of real support from the coercive arms of the government. If you can’t count on the police, if you can’t count on the military to provide some kind of support or at least some other elite group that has real power within the regime, then that strikes me as something that’s not a coup.

or

Matthew Cleary: I guess I fall somewhere in the middle. Certainly, riot is an easy way to describe it. Insurrection is better, and I think insurrection would be my preferred term for it. And I agree with Ryan that “coup” is a little too strong, and there are some important differences between what happened on January 6th, on the one hand, and your typical Latin American coup on the other hand. The most important being the lack of participation of any military or police forces of the state. In fact, Trump the man, the person, could not or did not count on the support of any institutional actors, so far as I know. Not the Supreme Court, not the Congress as a whole, although certainly he has some supporters in Congress, not other important institutions of the state.

The classic definition of a coup is the use of one part of the state apparatus to seize power of the state apparatus overall, and Trump just didn’t have that.

I have been extremely circumspect in my diction in discussing the events of the day, preferring the very neutral “breach” over other characterizations for the simple reason that it is not libelous. Given the multiple convictions to date I think it’s fair to say there was a riot.

I’m not sure how you’d go about disaggregating technical decisions about what happened from emotional or political ones.

There has been a lively discussion going on in comments about the Russia-Ukraine War. I am filled with questions:

• Isn’t Russia likely to escalate the war if the war becomes an existential issue for Russia?
• Is it possible for Ukraine to be secure without making the situation an existential issue for Russia?
• How is Russia likely to react to Ukrainians assassinating Russia politicians or media figures in Russia?
• How crazy is Dennis Rodman?

I find this story simultaneously tragic and comic. The editors of the Washington Post are irate that Texas Gov. Abbott is busing migrants who cross our southern border without authorization to DC, New York, and Los Angeles:

A recent slowdown in the stream of buses bearing migrant asylum seekers to D.C. from the southwest border has paused talk about what Mayor Muriel E. Bowser (D) has called a “humanitarian crisis.” Don’t be misled. It is likely that many more buses are on their way, owing to the Republican stuntmen who govern Texas and Arizona, and that D.C. will again be overwhelmed by migrants needing at least temporary shelter as well as medical and other assistance. That means the city, along with federal agencies and nonprofit organizations now handling the problem with little support, need to prepare now.

The buses are an act of political gamesmanship initiated this spring by Texas Gov. Greg Abbott (R); Arizona Gov. Doug Ducey (R) promptly followed suit. Their aim is to embarrass the Biden administration and generate headlines on the surge in illegal border crossings, which the GOP is using as a political cudgel in the midterm elections.

Some 7,000 migrants are thought to have arrived in D.C. since the spring. Others are being bused to New York City, where Mayor Eric Adams (D), by verbally sparring with Mr. Abbott, has positioned himself as a convenient foil for a Texas governor seeking a third term in office.

Some of the migrants — from Venezuela, Colombia, Peru and elsewhere — have suffered trauma in their trek north. Many have immediate needs on arrival, for food, shelter and medical attention. The large majority who arrive in Washington are transients who intend to board a bus, train or plane for another destination. But hundreds have stayed, and many more will do so in the coming months.

This story received substantial commentary in the talking heads programs yesterday.

The situation of the migrants themselves is tragic. The comic aspects are many including the consternation of leaders in cities that had declared themselves “sanctuary cities” and the observations by those in the media that Texas citizens are paying for the migrants’ transportation. I’m pretty sure that Texans are aware that the migrants cost them a lot more when they remain in Texas.

There are so many ways this issue could be remedied it’s hard to know where to start. The federal government could exert more efforts at stemming the flood of migrants pouring across our southern border, estimated to be over 2 million this year. If President Biden devoted as much energy to warning migrants not to come as he did to inviting them to come during the campaign, it might help. And then there’s always the proposal I made years ago: if Washington paid the entire cost of housing, feeding, educating, etc. migrants here illegally, I suspect the reaction of people in Texas and Arizona might well be different. After all securing the border is the federal government’s responsibility. Make it next to impossible for migrants without green cards to work in the U. S. as Canada, Australia, and New Zealand do.