This is a bubble?...  

Maybe not. Student debt is a monstrous problem but can a liability be a bubble?

An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is "trade in high volumes at prices that are considerably at variance with intrinsic values".^[1][2][3] It could also be described as a trade in products or assets with inflated values.
While some economists deny that bubbles occur,^{[4][page needed]} the cause of bubbles remains a challenge to those who are convinced that asset prices often deviate strongly from intrinsic values.
While many explanations have been suggested, it has been recently shown that bubbles appear even without uncertainty,^[5] speculation,^[6] or bounded rationality.^[7] It has also been suggested that bubbles might ultimately be caused by processes of price coordination^[8] or emerging social norms.^[7]
Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone. [More]

Well, that cleared that up!

I suppose those holding student debt financial instruments such as Sallie Mae bonds, are susceptible to "bubbleconomics".  "Not so" says the boss.

SLM, known as Sallie Mae, boosted its originations of non- government-guaranteed education loans to $1.2 billion in the first quarter, up from $940 million in the year-ago period, according to a statement yesterday. The Newark, Delaware-based company is forecasting $3.2 billion of originations in 2012.
While rejecting claims that a bubble is forming in the student-loan market, Lord said that the $200 billion in new loans taken out during the past two years was surprising.
“I confess to being a bit wide-eyed myself at the $200 billion number,” he said.
Less than $20 billion of that debt was private, or non- government guaranteed, he said. Sallie Mae is increasing private loan originations after legislation passed in 2010 cut companies out of the market for government-backed lending. [More]

Certainly the hysteria is bubble-like. And it seems to me to have some justification.

 [Source]

Also, the introduction of asset-backed securities in this market (which worked out so well for mortgages) is an ominous sign.

As Business Insider noted in the summer of 2012, federal student loan debt is only part of the equation. According to a report by the Consumer Financial Protection Bureau dated August 29, 2012, U.S. consumers have in excess of $150 billion in private student loans on their books. The report notes that the market for private student loans grew alongside investors' demand for asset-backed securities and between 2005 and 2007,

...the percentage of [private] loans to undergraduates made without school involvement or certification of need grew from 18% to over 31%...[as lenders] originated loans to borrowers with low credit scores...[making] private student loans riskier for consumers."

The private loans were securitized and those doing the securitizing could realize a 5% profit upon the sale of student loan asset-backed securities (hilariously called 'SLABS') to investors. Of course, the SLABS effectively transferred the risk of default to the investors and as such, it made little difference to the originators of the loans or to those doing the securitizing whether the borrowers ever intended to repay the debt or not. All of this changed when the credit bubble burst of course and as the demand for asset-backed securities declined, so too did the amount of private student loan originations. [More]

Seriously, SLABS? For the most part I feel scant sympathy for investors who would buy a product with this name. Meanwhile, this reinforces my opinions of most in the financial community who will sell you anything if the pass-through fee works for them.

Still, this whole debacle reinforces my belief that we do not truly understand how much idle wealth there is available for chasing even dubious investments. The predicted collapse will affect far fewer of us than the oft-compared mortgage bubble because they cannot evict you from your education. They can cripple your credit rating for life, but at some point, that becomes a problem for the credit rating agencies.

The investment class will feel this far more painfully than the consuming class. As long as we don't bail them out, it works for me. 

This will also deliver a clear market signal to higher education, something that is badly needed.


 

Why the University of Illinois...  

Is an embarrassment to me and a few other residents.  No, not the routine administrative malfeasance.  Not the football team.

It's the quality of scholarship in which they should excel: agriculture.

Exhibit A

[Source]

It is not nitpicking to expect published work to be edited by people who can spell.  This is not a tweet or e-mail, it is an widely distributed study purporting to show the level of serious analysis our state's major university is capable of.

Seriously, how many spelling errors can you spot?

Man up, Illini.  Purdue is giggling.

No wonder marketing is harder...  

The other side is using more educated people.

At the very least it seems as if more employers are using bachelor’s degrees as a signal of drive or talent, regardless of of the relevance of the skills actually learned in college.
That is one implication of an analysis from Burning Glass, a company that analyzes job ads from over 20,000 online sources ranging from major job boards to small and midsize employer sites. The company’s chief executive, Matthew Sigelman, says that employers are increasingly requiring college degrees for positions that did not traditionally require higher education.
I asked his company to compile a list of occupations that have shown the most “up-credentialing” in the last five years — that is, occupations whose job ads were significantly more likely to name college diplomas as a prerequisite in 2012 than they were in 2007.
Here is a look at the 10 occupations with the biggest percentage increases in requiring a college degree.

Occupation title	2007-12* Growth in % of Posted Jobs Advertising for a Bachelor’s Degree	2007 % of Ads Requiring Bachelor’s Degree	2012* % of Ads Requiring Bachelor’s Degree
Dental Laboratory Technicians	175%	12%	33%
Chemical Equipment Operators and Tenders	83%	6%	11%
Medical Equipment Preparers	55%	11%	17%
Buyers and Purchasing Agents, Farm Products	43%	54%	77%
Electronics Engineering Technicians	38%	21%	29%
Dental Hygienists	38%	40%	55%
Architectural Drafters	37%	41%	56%
Cargo and Freight Agents	36%	33%	45%
Photographers	36%	25%	34%
Claims Adjusters, Examiners and Investigators	35%	48%	65%

*2012 data is from Nov. 1, 2011, to Oct 31, 2012 

  
(I am assuming that the "Buyers and Purchasing Agents, Farm Products" would be Cargill marketing reps or similar jobs. Maybe Monsanto field reps?)

If you wander through the comments, you'll notice several possible implications from this report. I agree a tough employment market makes "up-credentialing" an easy way to winnow, but also agree that more jobs simply need better education levels than high school seems to be providing. 

With some exceptions, I am not persuaded that college degrees certify the same level of education as they used to. Dumbing down is a crude way of putting it, but it could also be the relative rigor in key academic areas I associate with college degrees from my own era is unnecessary given the compensatory power of computers. Why master any topic when you can google the info you need when you need it?

My Dad used to bemoan the fact I didn't learn the multiplication tables all the way to 25x25 as he did, so I'm guessing my lament is just geezer harrumphing. When skills can become obsolete almost overnight (floor traders), what exactly should colleges teach?

Meanwhile, in our own ranks, the percentage of college graduates seems stagnant.

[Source]

Of course, this is before the Great Return that started in 2008 as farm incomes suddenly made going back home more attractive to graduates. We'll have slightly less dated info from the 2012 Census of Ag in a couple of years when USDA gets around to it with their usual alacrity.

All you need to know about...  

 Population, religion and fertility in less than 15 minutes.  Simply brilliant.



This information certainly did not match my supposedly informed views on demographic trends,  but I think I have a much better handle on the problem than before.

While I have long since wearied of PowerPointless presentations, succinct talks and stunningly explanatory charts such as above are lifting our power to transmit even complex information to  more people more accurately.

Peak Child - who'd have thunk it?

As you head out...  

To a graduation ceremony, try not to think about these troubling trends.

First, the sad job situation.

The research, done at Rutgers University, found that of the kids who've graduated from college since 2006, only 51 percent of them have full-time employment, and eleven percent of them are not working at all. That's bad enough, but when you look at just those people who have graduated since 2009, it gets even worse. Fewer than half of them found a job within a year of graduating; whereas 73 percent of those who graduated between 2006 and 2008 found jobs in the first year. Kids who graduated after 2009 are three times more likely to not have a fulltime job than the kids who finished between 2006 and 2008. Carl Van Horn, one of the study's co-authors, says,

The resilience of this year's and recent college graduates are being tested. Students who graduated during the past several years are facing historic obstacles in achieving the foundations of the American dream.

Well, the idea that they've got to go out there and dream the impossible dream really ought to motivate everyone currently busting ass to finish up school and get out into the "real world." [More][Source study]

But wait - there's more!

The study also determined that of those post-2009 grads who did end up finding full-time employment, 43% have jobs that do not require a college degree, prompting many to agree with their mothers' advice four years ago that you probably shouldn't have wasted four credits on that "Hegelian Dialectics in Buffy the Vampire Slayer" course you took sophomore year. Employed, post-2009 graduates also have an average starting salary of $27,000, $3,000 less than the average starting salary for the classes of 2006 and 2007; experts estimate that given the fragile state of the post-2009 economy, these wages are likely to stay depressed for the next ten or fifteen years. [More]

At the same time, student debt could be the next financial debacle we have to manage.

Over the weekend, the NYT had a great, in-depth look at soaring student debt figures, and the picture is not pretty: over the last decade, tuition and fees at state schools have increased 72%, and public funding per pupil has dropped 24%.
Student loans are now a generational rite of passage – 94% of students borrow to earn a bachelor’s degree, up from 43% in 1993. The total value of student loan debt has passed $1 trillion, up from $852 billion halfway through 2011. As the Federal Reserve shows, it’s not just the young who bear the burden: a third of the value of outstanding student loans is owed by those older than 40.
Congress, for its part, is currently wrangling over a bill that would prevent federally subsidized student loan rates from doubling to 6.8% beginning July 1. Looking at that debate, Will Wilkinson makes the point that interest rate subsidies are just another form of spending that could be better directed at scholarships for students of modest means. And Conor Friedersdorf takes that argument one step further, calling indebted college graduates a “privileged class” on whom spending money “in a country with impoverished immigrants and struggling high school dropouts and hard-pressed single mothers” is pandering at its worst.
While lower interest rates would help, Mark Kantrowitz and Mark Schneider point to students’ bleak income prospects: “Debt is a problem only if students don’t graduate or if graduates can’t get jobs that pay enough to allow them to repay their loans. Taking on $25,000 in student loans to earn an additional $25,000 per year is a good investment; borrowing $100,000 to earn an additional $5,000 per year is not.” Josh Barro also notes that loans are just one way to fund higher education – direct state funding of public universities is the most obvious alternative. [More]

As hard as it is to imagine, perhaps the basic impossibility of these two trends co-existing means college costs may soon have to become subject to ordinary supply-demand economics. One possible outcome would be new rankings from US News and World Report, et al, based on placement - Is our children working? - so to speak.

It is no small coincidence that young people are lined up ten deep waiting to get into farming. Notice how there are precious few articles in the ag media about getting kids back to the farm, just laments about how hard it is to get them started.

It also increases my skepticism that not allowing them to do dangerous work as an employee for another farmer is necessary to lure them back. I can't believe we sold ourselves that whopper to justify our wretched child safety record.

Good listens...  

Haven't done this is a while, but I can vouch for and highly recommend the following Great Courses (which you can download as a podcast for planting season)

• Before 1776: The American Colonies:  Great info, good delivery, incredible voice.
• The American Revolution: all the war stuff, very little politics, superb delivery (although he gets a little weird with ll the "87th Foot, 79th Dragoons" detail) This guy loved this war!
• WW I: The Great War: Simply great. For Americans who have forgotten how this war shaped Europe, and why it was a really different war for Poland, Latvia, etc. Wonderful mix of detail and overview.
• The History of England from the Tudors to the Stuarts: This was one of my favorites, and I now have about 6 dozen places I want to see in Merry Ol'.

Also I'm working on Lost Christianities: Christian Scripture and the Battles over Authentication. This is deeply troubling information delivered clearly by an authoritative biblical scholar. It makes you think about why and what you believe. 

I had hoped...  

To have grandchildren earlier.  This wasn't the reason, but...

New moms and dads with visions of Ivy League degrees dancing in their heads should be prepared to face a bill of $422,320 in today’s dollars if Junior heads off to one the country’s priciest colleges as a member of the class of 2034.

If college costs keep rising as they have for the last three decades, the inflation-adjusted price of four years of tuition alone will more than double at private colleges and nearly triple at public universities by the time a baby born this year is ready to enroll, an analysis by The Daily shows.

Even after adjusting for inflation, college tuition has increased by an average of 3.5 percent a year at private schools and 4.5 percent a year at public schools, the analysis showed. When room and board are factored in, the total cost of college has gone up by an average of 3.08 percent a year at private schools and 2.96 percent at public schools. [More depressing projections]

I wonder how this would compare to my own education cost and calculated in acres of farmland. If I remember correctly, it was about $6000 total at RHIT (1966-1970).  I think land was selling for about $600, so it cost ten acres to educate me.

Pricing land at $12,000/A, today's 4-year private education cost looks like about $160,000 or 13 acres. 

These are quick and dirty numbers - just thinking out loud.

College doesn't pay...  

For some - it just costs.  College is no longer the guarantee of a good or even adequate job. Especially considering the enormous increase in the cost.

Yes, the college grad will spend years paying off her loans. But eventually her earnings net of loan payments will pull ahead of the high school graduate's. So, case closed. It may hurt to write the checks, or borrow, but college pays.
Well, maybe not.
According to the College Board, it takes 14 long years before the four-year college grad's income, net of loan payments, starts to beat what the high school grad earns. During all those 14 years, college doesn't pay. High school pays. [More]

Recently there has been a vigorous debate about the how much choosing the wrong degree is contributing to this problem. Ryan Avent has the best answer to this criticism, I think.

Personally, I think this kind of blog post—Mr Cowen's—goes a long way toward explaining the current job market malaise for the young. It is remarkable to me how readily old, successful professionals dismiss the labour-market difficulties of young adults as the product of their poorly-chosen majors and general lack of ambition, and on what flimsy evidence they're prepared to base these views. There are now 3.3m unemployed workers between the ages of 25 and 34. That's more than twice the level in 2007. There are over 2m unemployed college graduates of all ages; nearly three times the level of 2007. There are many millions more that are underemployed—unwillingly working less than full-time or unwillingly working in a job outside their field which pays less than jobs in their field. As far as I know, the distribution of college majors didn't swing dramatically from quantitative fields to art history over the past half decade.
Meanwhile, the Wall Street Journal provides us with a handy interactive graphic examining unemployment rates by major according to the 2010 Census. Coming in toward the top of the list and ahead of "art history and criticism" are the sorts of degrees you'd expect, like those falling into "miscellaneous fine arts", but also "computer administration management and security", "engineering and industrial management", "international business", "electrical and mechanic repairs and technologies", "materials engineering and materials science", "genetics", "neuroscience", "biochemical sciences", and "computer engineering". I bet those graduates are all trying to break into puppetry!
I am sure that many young graduates feel entitled to better work than they've managed to find, and some of them probably chose poorly when it came time to matriculate. But I see little evidence that high unemployment is due to the shiftlessness of youths and far more evidence that high youth unemployment is due to systematic weakness in labour markets associated with a shortfall in aggregate demand. [More worth reading]

While I agree there seems to be no evidence students are flocking to dubious majors more so than before, it seems obvious the demands of a thin job market accentuates discriminates against them more. Now add in the the decline in public employment (teachers, administrators, government workers, etc.) which was often the employer of last resort for such degrees and you have the "Dustin" phenomenon.

Trying to laugh at this problem is probably healthy, but there is growing concern among economists - not to mention parents - that the economy is trending away from a solution to this problem.

And the idea of forcing everyone to become engineers or doctors isn't working either. For one thing, there is a huge attrition rate is those fields.

Politicians and educators have been wringing their hands for years over test scores showing American students falling behind their counterparts in Slovenia and Singapore. How will the United States stack up against global rivals in innovation? The president and industry groups have called on colleges to graduate 10,000 more engineers a year and 100,000 new teachers with majors in STEM — science, technology, engineering and math. All the Sputnik-like urgency has put classrooms from kindergarten through 12th grade — the pipeline, as they call it — under a microscope. And there are encouraging signs, with surveys showing the number of college freshmen interested in majoring in a STEM field on the rise.

But, it turns out, middle and high school students are having most of the fun, building their erector sets and dropping eggs into water to test the first law of motion. The excitement quickly fades as students brush up against the reality of what David E. Goldberg, an emeritus engineering professor, calls “the math-science death march.” Freshmen in college wade through a blizzard of calculus, physics and chemistry in lecture halls with hundreds of other students. And then many wash out.

Studies have found that roughly 40 percent of students planning engineering and science majors end up switching to other subjects or failing to get any degree. That increases to as much as 60 percent when pre-medical students, who typically have the strongest SAT scores and high school science preparation, are included, according to new data from the University of California at Los Angeles. That is twice the combined attrition rate of all other majors.

For educators, the big question is how to keep the momentum being built in the lower grades from dissipating once the students get to college. [More]

I also wonder that an oversupply of engineers, etc. might not soon remove these last "safe" degrees, reducing job searches to more a matter of luck and connections than merit.

What I do know is this. I don't recall clearly my sons' graduation ceremonies, but I have a clear recollection of the days they accepted job offers.

At any rate, employing all who want to work is our largest economic problem, IMHO. If others disagree, it may be because their kids are too young or non-existent.

Rural schools...  

Won't fit in any of the answers for America's education system. Consider this otherwise good idea for our economy and school system from Kim Manzi:

1. Deregulate schools. A publicly-funded private school is a contradiction in terms; with predominantly public funding comes the inevitable and appropriate demand for public accountability. But we need public schools to have greater flexibility in how they do their work—both in order to discover improved methods and also to tailor approaches to different kinds of students—while simultaneously exposing them to the kind of unsentimental feedback loop for school performance that markets can provide. Education is an industry representing about 4 percent of GDP that is badly in need of deregulation. 
School deregulation is much broader than “school choice,” and should have two key components. First, the federal government should establish a comprehensive national exam by grade level to be administered by all schools that are materially publicly funded. We should require each school to publish all results, along with detailed data about school budgets, performance, and so on, each year. Second, continued federal funding should be contingent on states’ passing model-schools legislation that creates simple, uniform rules for establishing new charter schools, and establishes the absolute requirement that funding follows students. 
The primary role of the federal government would be to ensure consistent, high-quality information, provide normal market regulation to allow education providers to achieve efficient scale, and sponsor rigorous basic research on educational practices. The role of education providers would be to compete entrepreneurially within this framework.
This is not a panacea. In a nation in which about 40 percent of all births occur out of wedlock, many children will be left behind. But better schools will create material improvement. And this method is not theoretical: Versions have already been implemented successfully in Sweden and the Netherlands, and a similar program is being implemented in Britain now. [More]

As always, vouchers and choice mean little when the only school for miles is the one you already have. But the teeny number of students and lack of political clout hint at even further degradation for small schools.

Nor is the idea of spending massive amounts to keep them up to the pace of city schools a good one either. Like much of our rural culture (churches, recreation, retail, etc.) demographics is the obstacle you can't finesse. As long as we continue to lose people, I see no alternative to losing local services, and Australian-like outback lifestyles.

Next up might be rural mail delivery.

I'm not opposed to small towns having a post office. I am not opposed to small, low-population counties continuing to exist as they were drawn at statehood. I am opposed to government spending money to maintain something that is inefficient and obsolete only because it is politically too painful to change it. The reality of rural America is that we've had a great deal for a long time and it's become an entitlement in our minds.
Rural Free Delivery started in 1902 across most of the United States. It cut the number of post offices by two thirds but added a lot of jobs for rural letter carriers, and a valuable service for farm families. The system worked so well that it endeared the "mail carrier" to those who saw the car or truck stop at their mail box each day. What most people don't see is the massive infrastructure behind the letter carrier and the incredible cost of transferring mail across the country so that each of us gets ours in our box, six days a week. [More]

I think Ken is right. From roads to RFD to schools, many of the elements of our wonderful way of life were heavily subsidized by urban taxpayers. That's going to stop, IMHO, regardless of who is president or Speaker.

He may be on to something...

The "science" of bubble-calling is debatable, but this is about as reasonable as I have read lately.

Instead, for Thiel, the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.

Like any good bubble, this belief– while rooted in truth– gets pushed to unhealthy levels. Thiel talks about consumption masquerading as investment during the housing bubble, as people would take out speculative interest-only loans to get a bigger house with a pool and tell themselves they were being frugal and saving for retirement. Similarly, the idea that attending Harvard is all about learning? Yeah. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life.  It can lead to an unhealthy sense of entitlement. “It’s what you’ve been told all your life, and it’s how schools rationalize a quarter of a million dollars in debt,” Thiel says.

Thiel isn’t totally alone in the first part of his education bubble assertion. It used to be a given that a college education was always worth the investment– even if you had to take out student loans to get one. But over the last year, as unemployment hovers around double digits, the cost of universities soars and kids graduate and move back home with their parents, the once-heretical question of whether education is worth the exorbitant price has started to be re-examined even by the most hard-core members of American intelligensia. [More]

From law school grads amazed to find no interviews after graduation to humanities majors looking at dismal salaries, the cost benefit ratio has shifted fro college educations.

Worse still, we've only started shrinking the state contributions to higher ed. And education is one of the the biggest losers in the budget cutting frenzy. But as Thiel points out even when obvious, bubbles last longer than they should.

What I wonder about is what the collapse if this purported bubble will look like at large universities? How will it affect private colleges?  Who will ge to college in the future?

Another comment hiccup...

Don't know why this didn't post below:

Steve has left a new comment on your post "The politics of "broke"... The new fear word for ...":

You make a good point in your previous post about how it is a drop in revenues rather than a jump in spending that is causing the current problem. You imply that a better response is to increase debt rather than reduce spending.

Where I live teacher pay is significantly above the average wage for the community. Teacher average is $60,000 with benefits while average person is $30,000.

What isn't said in most of the reports is that teachers hold more degrees so a masters or a PhD is compared to others who have the same educational level. When compared that way, the teacher is receiving average compensation. But since most others in the community do not have such degrees, they receive less compensation but the reports say they each receive the same amount when adjusted for educational level. Keep in mind, that there is no correlation between educational level and teaching ability. There is a correlation level between education and compensation though. So a teacher has significant financial incentive to amass educational credits during summers and the frequent in-service days even though it doesn't appear to help them teach better.

Gates on Compensation

To be fair, the community is becoming feudal in nature with the 20% who are land owners becoming wealthy while the 80% who do not own land having a hard time keeping up.

Where I live, the union has negotiated a guaranteed 5% return on the pensions and required that the State employees and teachers pension funds be invested in the stock market with the public employees pensions getting any greater return that the stock market might provide but with a 5% floor. The taxpayer makes up the difference if the stock market goes down.

In addition, the union has used the collective bargaining process to leapfrog compensation each year. Anytime someone's compensation is below average then they go to the arbitrator/court and have their compensation moved to average or above. Nothing the local board can do. That moves the other half below average, so they repeat the process. At any point in time, half are below average and have a complaint to file.

The unions by themselves are not breaking the Country. But they have managed to create a system that is inflexible, protects poorly performing people, costs more, and is the primary financial supporter of one political party and opponent of any kind of limit on taxes.

The process to fire a teacher in Illinois according to the Chicago Tribune.

Steps to Fire a Teacher

Steve:  I do not argue your points, and when Jan was president of the school board in our tiny district, it struck me as absurd all the work necessary just to keep the place running.

But my point is do we actually expect these essentially economic and efficiency reforms to make any difference in our abysmal educational outcome? If we're already struggling to attract high quality entrants now, as referenced in the excerpt below, those actions certainly don't strike me as corrective.

I really don't know what reform is needed to make our educational results better, and I also think this is really bad for our future. Leaving a broken educational system could be even worse than leaving a deficit.

Re your other point: I did not mean to imply debt THE solution to the exclusion of other remedies. In fact, I think starting with the Bowles-Simpson plan our best bet. It recognizes the importance of long term deficit reduction and also the tenuous nature of our recovery. Slashing federal programs at the same time state layoffs are dragging down employment is not a bad idea, but bad timing. Again, the bond market tells us the level of urgency needed. What is of primary importance is growth to return revenue to former levels.

I also think tax expenditures to be the place to cut first (after the wars). (Yeah - I'm talking about Sec 179, bonus depreciation, etc.) I would also welcome a return to Reagan-era tax rates.

Sorry about the foul-up.

The politics of "broke"...

The new fear word for deficit hawks is broke.  And they can't utter it often enough.

House Speaker John Boehner routinely offers this diagnosis of the U.S.’s fiscal condition: “We’re broke; Broke going on bankrupt,” he said in a Feb. 28 speech in Nashville.
Boehner’s assessment dominates a debate over the federal budget that could lead to a government shutdown. It is a widely shared view with just one flaw: It’s wrong.
“The U.S. government is not broke,” said Marc Chandler, global head of currency strategy for Brown Brothers Harriman & Co. in New York. “There’s no evidence that the market is treating the U.S. government like it’s broke.”
The U.S. today is able to borrow at historically low interest rates, paying 0.68 percent on a two-year note that it had to offer at 5.1 percent before the financial crisis began in 2007. Financial products that pay off if Uncle Sam defaults aren’t attracting unusual investor demand. And tax revenue as a percentage of the economy is at a 60-year low, meaning if the government needs to raise cash and can summon the political will, it could do so.
To be sure, the U.S. confronts long-term fiscal dangers. Over the past two years, federal debt measured against total economic output has increased by more than 50 percent and the White House projects annual budget deficits continuing indefinitely.
“If an American family is spending more money than they’re making year after year after year, they’re broke,” said Michael Steel, a spokesman for Boehner.
A person, company or nation would be defined as “broke” if it couldn’t pay its bills, and that is not the case with the U.S. Despite an annual budget deficit expected to reach $1.6 trillion this year, the government continues to meet its financial obligations, and investors say there is little concern that will change.[More]

It is the equating of a sovereign nation to a household that creates this misapplication of the concept, I think. That and a poor understanding of public finance. 

Still, as has been pointed out by experts like Bruce Bartlett, and the above article, there is no argument in the bond market. To be sure, predicting higher interest rates is a sure winner if you don't specify at time, but we've already got plenty of commodity analysts working that angle (Better buy options!!).

It will be interesting to see how effective this demagoguery to achieve what are essentially targeted attacks against political foes, such as we see with teacher unions. It looks like union-busting may be on a roll, despite public sentiment in the other direction, and screaming "broke" will be one of the tools used. In the case of states, it is actually a more accurate term, but again the test is bond ratings.

What I'm trying to figure out is how our school system will adapt to this. We're already recruiting below the top for teaching (not all teachers, of course, but in general) and wiping out collective bargaining, possibly tenure, and other perks probably will accentuate that trend.

The second thing I know for sure is that we'll never attract the kind of talented young people we need to the teaching profession unless it pays far more than it does today. With starting teacher salaries averaging $39,000 nationally, and rising to an average maximum of $67,000, it's no surprise that we draw teachers from the bottom two-thirds of the college class; for schools in poor neighborhoods, teachers come largely from the bottom third. We're the only leading nation that thinks it can stay a leading nation with a "strategy" of recruiting mediocre students and praying they'll prove excellent teachers.

And I know one more thing - which is as inconvenient for me to acknowledge as it should be for others who've criticized archaic teacher union practices in the United States. The highest-performing school systems in the world - in places such as Finland, Singapore and South Korea - all have strong teachers unions. Anyone serious about improving American schooling has to reckon with this paradox: Unions here are often obstacles to needed reform, even as the world's best systems work hand in glove with their unions to continually improve their performance. [More of a helpful article]

 I really don't have much affinity for unions per se, but cannot agree they represent the threat currently being attached to them. This looks like a group-scapegoating, and blatantly politically targeted. Plus it may backfire - nothing like an attack to rally the troops.

Lost in all this is what it means longer term for a government to turn pretty harshly on its own workers and how that suggests it will function in the future. Like Shakespeare's suggestion to "Kill all the laywers", tactics like this are really just good for applause or laughs on stage, not public policy, IMHO.

Raising your hand in soooo over...

Behold what is happening in classrooms today. 

It looks to me like the choice to NOT participate is suddenly unavailable.

[via delong]

Baxter Black is becoming more unique...

If that is possible.  It seems the transformation of veterinary medicine to a female dominated profession continues unabated.

[More]

I think there are several reasons, and some of which feed on each other.  As more women enter a profession, more women are comfortable working in and promoting the work as a viable choice for young people. Plus I would imagine they are making the professional conduct standards, both officially, and in the hotel bars after seminars, more attractive to females as well.

But another powerful factor could be child-bearing, and which professions offer the greatest chance to have a career and family successfully.

And compared to their equally educated counterparts from the early 1990s, these advanced-degree women are much more likely to have borne children. More than a third of women with professional/Ph.D. degrees in 1992-94 decided to remain childless; in 2006-8, less than a quarter of such women made the same choice.
Perhaps this has something to do with Claudia Goldin’s findings that some of the fields that require the most educational investment upfront — like pediatrics, or veterinary medicine — also happen to be fields whose work schedules allow for a healthy work-family balance. High-achieving women who want children may be discovering this, and making their career choices accordingly. [More]

From simple anecdotal evidence - which can be misleading, I'll admit - I see more ag support professions like vet medicine being a popular choice for young women.  Few of us are surprised by female seed/chemical reps for example, although machinery still seems to be a masculine enclave.

That could change too, along with male bastions like farm management.  Ag lending could be slower simply because one of the largest players  - Farm Credit  - has virtually no female lending officers. Which is curious given the fine line it walks with government linkage.

The more powerful enabling attitude may come from farmers themselves. I know there is a completely different response from Aaron's generation than from geezers like me - even though many of are trying to shed old prejudices.

Another domino was Home Ec...

As part of the last generation to remember schools preparing women to be primarily mothers and housewives, it now seems there was more than a little logic to it.  People who know the basics of kitchen sanitation are the best defense against food-borne pathogens.

"We're paying Martha Stewart to teach us the home ec stuff that's been taken out of the schools. Parenting, fashion, food. That's all home ec. The reality TV shows are merely picking up on that and making money from it."

She offers more evidence of the popularity of human ecology in noting the knitting club at Western, the farmers' market held Tuesdays at Brescia and the fact the Bernardin Canning Company can't offer enough courses in canning to meet demand. "They're backed up for months and months."

And she discusses the need now, and more than ever, for the skills taught in this field.

There is the obesity crisis in North America, with 26% of young people aged two to 17 deemed to be overweight.

The necessity of ensuring safe food and water for all is another example, and a local one, with lead water pipes back in the news. [More]

Say what you will about fried chicken, but hot grease kills pathogens pretty effectively.  But as we placed less emphasis on things like cooking and kitchen basics, the health responsibility for food passed up the line, especially hitting the meat industry.  Demands for food safety led to intense regulation which led to this:

What struck me as a high fastball directed at my head was a report by the U.S. Department of Agriculture that the number of slaughterhouses nationwide declined from 1,211 to 809 between 1992 and 2008 while the number of small farmers of livestock increased by 108,000 in the last five years.
At first blush, I considered this uptick in farmers naive and committing economic suicide if they can’t get their product processed in a timely fashion to sell at their markets starving for locally produced meats. It is akin to crates of lettuce rotting on my dad’s packing platform because the truck transporting the goods to the produce market broke down.
That is precisely the scene described by the Times for many livestock farmers in Vermont and upstate New York. By the time they travel long distances or wait for an opening at a slaughterhouse, the animals are stressed and unfit for butchering. Some farmers make reservations for the slaughterhouses before their cows, pigs or sheep are even born.
The decline of slaughterhouses is both economical and environmental. Animal rights activists such as People For The Preservation of Animals (PETA) play a small role. Even in farming communities, no one wants them in their back yards.
Agriculture Secretary Tom Vilsack said in a Times interview “It’s pretty clear there needs to be attention paid to this. Particularly in the Northeast, where there is indeed a backlog and lengthy wait for slaughter facilities.”
The increase of small, independent livestock farmers is part of a movement for America’s local-food movement, championed by so-called locavores. But, it is what my dad would say was “putting the cart before the horse” if the supply chain is interrupted.
“There are a lot of people out there who raise great animals for us to use, and they don’t have the opportunity to get them to us because the slaughterhouses are going away,” said Bill Telepan, chef and owner of Telepan, a high-end restaurant in New York.
The newspaper quotes Randy Quenneville, program chief for the Vermont meat inspection service,. that small, family-owned slaughterhouses started closing when strict federal rules regarding health control went into effect in 1999.
The result was large corporations such as Cargill began to take over much of the nation’s meat market. [More]

I agree with the author that the greater threat will not be HSUS and PETA, but a broken value chain for agrarian production. Perhaps market demand will encourage new small slaughterhouses, but I am skeptical.

It could be the trend to industrial food production is irreversible within the current risk-tolerance of our culture. I'm not sure this can't be changed, however. But of all the threat to meat consumption they are on the horizon, I think food safety in the home is where we should be focusing.

The first log cabins...

So I'm listening my way through yet another history lecture series, and it's pretty good.

Before 1776: Life in the American Colonies by Robert J. Allison

Strongly recommended, but as always, don't buy it until it's on "sale", which is darn near always.

Anyhoo, I'm plodding through the part when the Dutch still controlled New York (Amsterdam), but what I did not know was anything about New Sweden to the south, essentially around Wilmington, NJ.

It was at this point Allison (who has a massive bass voice, BTW) interjects that the first log cabins in America were built there by Swedes (who were actually Finns).

In the present-day United States, settlers first constructed log cabins in 1638. Swedish settlers in New Sweden (present-day Wilmington, Delaware) used log structures. Later German and UkrainianScots and Scots-Irish had no tradition of building with logs, but they quickly adopted the method. The first English settlers did not widely use log cabins, building in forms more traditional to them.^[1] Few log cabins dating from the 18th century still stand, but they were not intended as permanent dwellings. When settlers built their larger, more formal houses, they often converted the first log cabins to outbuildings, such as chicken coops, animal shelters, or other utilitarian purposes.    [More]

Makes me wonder what kind of shelter the New Englanders used.

He also had revelations about the unique slave culture of South Carolina, which, looking back at my years in Charleston during the Navy, helped some pieces fit together.

Also highly recommended: The Art of Critical Decision Making by Michael Roberto.  Great content, poor delivery (sloppy, rushed articulation) but still well worth it, especially if you work with or in groups.

The job drought...

Our position in the economy is peculiar in many ways. As small businessmen, with few or no employees, the nature of the job loss of this recession has been disguised. I'm going to talk about that this week on USFR. But more ideas and analyses are coming out that offer to me at least a possibility of a new world of employment.

First some atypical employment data.  For instance, this graph.

[More]

This one strikes home for me, because recently at a speech, a farmer came up to me and we had the following conversation:

"You were in the Naval Nuclear Power Officer Candidate program, I take it?"
"Yeah - I was a NUPOC, but remember, the subs were wooden back then."
"My grandson just signed up - he's a mechanical engineer."
"Great - I hope he finds it every bit the adventure and leadership training experience I did."
"Thanks for saying that. I hope he does too. But the problem was he couldn't find a job."

The idea of a shortage of entry-level engineer jobs is chilling. I always thought bullet-proof employability was the compensation for being a nerd.  But along with teachers, MBA's and practically all other professions, the difficult truth about this job environment is sinking in after enough time to move us past "temporary".

In past recessions, the most educated carried the lowest unemployment rate. But this economic downturn has been anything but typical. College graduates who have been in the work force for several years are being laid off. Those just leaving school apply for dozens of jobs and receive few, if any, responses.
"Unemployment rates for college graduates are higher than they are in normal (downturns)," Orazem said. "But while the unemployment rate has risen for people with college degrees, they are still much lower than people with a high school degree. They have really gotten nailed in this recession."
According to the U.S. Bureau of Labor Statistics, unemployment rates for college graduates with a bachelor's degree who are 24 years old or younger are close to 9 percent this year. Typically, that group has a 2 percent to 3 percent rate, Orazem said.

In general, the industries hit the hardest by the recession in Iowa include accounting, finance, marketing, manufacturing and mechanical engineering and durable goods manufacturing, Orazem said. [More]

The real nature of this downturn in employment is a combination of both economics and technology, I believe. But not since the Great Depression have we had an employment situation that may well shape a whole generation, as this forecast prolonged job-recession seems to portend. My fear is the most wrenching of these dislocations will be felt by men, and carry over to families and social structure.

The weight of this recession has fallen most heavily upon men, who’ve suffered roughly three-quarters of the 8 million job losses since the beginning of 2008. Male-dominated industries (construction, finance, manufacturing) have been particularly hard-hit, while sectors that disproportionately employ women (education, health care) have held up relatively well. In November, 19.4 percent of all men in their prime working years, 25 to 54, did not have jobs, the highest figure since the Bureau of Labor Statistics began tracking the statistic in 1948. At the time of this writing, it looks possible that within the next few months, for the first time in U.S. history, women will hold a majority of the country’s jobs.
In this respect, the recession has merely intensified a long-standing trend. Broadly speaking, the service sector, which employs relatively more women, is growing, while manufacturing, which employs relatively more men, is shrinking. The net result is that men have been contributing a smaller and smaller share of family income.
“Traditional” marriages, in which men engage in paid work and women in homemaking, have long been in eclipse. Particularly in blue-collar families, where many husbands and wives work staggered shifts, men routinely handle a lot of the child care today. Still, the ease with which gender bends in modern marriages should not be overestimated. When men stop doing paid work—and even when they work less than their wives—marital conflict usually follows.
Last March, the National Domestic Violence Hotline received almost half again as many calls as it had one year earlier; as was the case in the Depression, unemployed men are vastly more likely to beat their wives or children. More common than violence, though, is a sort of passive-aggressiveness. In Identity Economics, the economists George Akerloff and Rachel Kranton find that among married couples, men who aren’t working at all, despite their free time, do only 37 percent of the housework, on average. And some men, apparently in an effort to guard their masculinity, actually do less housework after becoming unemployed.
Many working women struggle with the idea of partners who aren’t breadwinners. “We’ve got this image of Archie Bunker sitting at home, grumbling and acting out,” says Kathryn Edin, a professor of public policy at Harvard, and an expert on family life. “And that does happen. But you also have women in whole communities thinking, ‘This guy’s nothing.’” Edin’s research in low-income communities shows, for instance, that most working women whose partner stayed home to watch the kids—while very happy with the quality of child care their children’s father provided—were dissatisfied with their relationship overall. “These relationships were often filled with conflict,” Edin told me. Even today, she says, men’s identities are far more defined by their work than women’s, and both men and women become extremely uncomfortable when men’s work goes away.
The national divorce rate fell slightly in 2008, and that’s not unusual in a recession: divorce is expensive, and many couples delay it in hard times. But joblessness corrodes marriages, and makes divorce much more likely down the road. According to W. Bradford Wilcox, the director of the National Marriage Project at the University of Virginia, the gender imbalance of the job losses in this recession is particularly noteworthy, and—when combined with the depth and duration of the jobs crisis—poses “a profound challenge to marriage,” especially in lower-income communities. It may sound harsh, but in general, he says, “if men can’t make a contribution financially, they don’t have much to offer.” Two-thirds of all divorces are legally initiated by women. Wilcox believes that over the next few years, we may see a long wave of divorces, washing no small number of discarded and dispirited men back into single adulthood. [More of a superb exploration of the jobless recovery]

Already we are seeing a change in the cultural stages of adulthood. I use a standard laugh-line in my presentations: "Adolescence lasts until 30 now". Only fewer are laughing and more are grimacing.

Especially for fathers of daughters, the hope of their child independence is fading. (It's not much better for young men, in all fairness.) Not only are jobs hard to come by - let alone jobs that pay the rent - the odds for matrimony (for women) even at college are plummeting, thanks to overwhelming female/male ratios in higher education today.

North Carolina, with a student body that is nearly 60 percent female, is just one of many large universities that at times feel eerily like women’s colleges. Women have represented about 57 percent of enrollments at American colleges since at least 2000, according to a recent report by the American Council on Education. Researchers there cite several reasons: women tend to have higher grades; men tend to drop out in disproportionate numbers; and female enrollment skews higher among older students, low-income students, and black and Hispanic students.
In terms of academic advancement, this is hardly the worst news for women — hoist a mug for female achievement. And certainly, women are primarily in college not because they are looking for men, but because they want to earn a degree.
But surrounded by so many other successful women, they often find it harder than expected to find a date on a Friday night.
“My parents think there is something wrong with me because I don’t have a boyfriend, and I don’t hang out with a lot of guys,” said Ms. Andrew, who had a large circle of male friends in high school.

Jayne Dallas, a senior studying advertising who was seated across the table, grumbled that the population of male undergraduates was even smaller when you looked at it as a dating pool. “Out of that 40 percent, there are maybe 20 percent that we would consider, and out of those 20, 10 have girlfriends, so all the girls are fighting over that other 10 percent,” she said. [More about college life that makes me weep to read, having gone to an all-male engineering school in the paleolithic era]

Just anecdotally, this seems to ring true for many of my friends with daughters. Now in their 30's, these attractive, accomplished young women can't find men of even modest caliber. Add in the recession effects on male careers, and the result is not hopeful.

But as I said in the distant beginning, on the farm we often miss these cultural upheavals, since there are no "unemployed farmers". They just disappear. And while many of us are beginning to experience some survivor guilt, it is only through our children, grandchildren and friends that the full trauma of this economic storm becomes real.

Indians and chiefs...

This e-mail from an old Navy buddy (and my former boss):

I just finished reading my January  “Seapower 2010 Naval Almanac”, in which the Navy League national president, Dan Branch, laments that the current building rate will not maintain the CNO’s stated goal of 313 ships. He writes that the current building rate will sustain a long term level of only 240 ships.

In the back of the same magazine I found the listing of flag and general officers in the Navy Department. I counted 325 flag officers. Am I the only one who thinks this ratio (313 to 325) is really screwed up? What do you say we trade some flag officers for some ships?

I rely on my friends to tell me when I am mistaken. What do you think?

J-----

P.S. I also counted the blue-water, power-projection ships (i.e. FFGs or better) and came up with less than 200.

P.S. I can remember when I was working in the Pentagon and John Lehman was trying to build a 600 ship navy. At the same time we were joking about the Air Force having more General Officers than aircraft. Now, I guess the joke is on us.

[Note: for non-navy folks, flag officers are admirals]

It reminded me of the curious tipping point academia reached a few months ago.  I cannot find the link, so feel free to be skeptical, but it explained there are now more tenured professors in administration than teaching.

This pattern, I think asserts itself in protected sectors. Certainly the military is one - who would argue for defense frugality with 2 wars in progress?  Another sector has been higher education which has been able to operate outside the normal laws of supply and demand for some time.

That may be ending for universities as both endowments and state aid are plummeting.

An economist with the state's Legislative Finance Committee met with the University of New Mexico's Board of Regents this week and suggested nearly in $10 million cuts.
The LFC said that UNM could make up some of those losses by raising tuition.
High education could be hit hard when lawmakers convene for the legislative session in Santa Fe next week to cover the state's multi-million dollar budget deficit.
One proposal calls for steep tuition increases at universities and two-year colleges.

Included in the recommendation would be a two percent wage cut for all state employees, including teachers and professors. [More from one of any number of similar stories]

There tends to be a delayed reaction to economic downturns in certain sectors. As the slow budget cycle of state legislatures grinds to an ugly end, higher education is facing some seriously bad news. 



Meanwhile, the military is obviously adding forces at the top.

No guy left behind...

Men are not getting degrees like women.  Especially in Canada.

The chart above shows the number of female college graduates (bachelor's degrees) per 100 male graduates in both Canada (data here) and the U.S. (data here) from 2003-2007. For the most recent year of actual data (2007), there were 163 female college graduates in Canada for every 100 male graduates, as women received almost 62% of all bachelor's degrees. In the U.S. women received almost 58% of all bachelor's degrees in 2007, and therefore earned 137.4 degrees for every 100 males. [More]

It would be interesting to see a plot of beer consumption imposed on the data. 

Seriously, I think many young men don't take higher education and the college experience all that seriously until they are excluded from the "good job" market.

Brains with feet...

A mobile society means people can move, if they want, to better their living.  It would appear at the top we are certainly becoming more restless.  After years of importing brainpower from Asia especially, the flow has reversed, turning our brain gains into a brain drain.

"What was a trickle has become a flood," says Duke University's Vivek Wadhwa, who studies reverse immigration.

Wadhwa projects that in the next five years, 100,000 immigrants will go back to India and 100,000 to China, countries that have had rapid economic growth.

"For the first time in American history, we are experiencing the brain drain that other countries experienced," he says.

Suren Dutia, CEO of TiE Global, a worldwide network of professionals who promote entrepreneurship, says the U.S. economy will suffer without these skilled workers. "If the country is going to maintain the kind of economic well-being that we've enjoyed for many years, that requires having these incredibly gifted individuals who have been educated and trained by us," he says.

Wadhwa surveyed 1,203 Indian and Chinese immigrants who had worked or been educated here before returning to their homelands and found the exodus has less to do with the faltering U.S. economy than with other factors:

•Career opportunities. At NIIT, an information technology company based in New Delhi, about 10% of managers in India are returnees, mostly from the U.S., says CEO Vijay Thadani.

Most go into mid- to senior management and make "excellent employees," he says. "They're Indian, so they understand India, and they have lived outside the country."

China's government entices some skilled workers to return with incentives such as financial assistance and housing, says Wang Baodong, spokesman for the Chinese Embassy in Washington. "China needs a lot of well-trained personnel" in fields such as finance and information technology, he says.

•Quality of life and family ties. People return to India to reconnect with their families and culture, Dutia says. "They have a support system there, family and friends."

Purchasing power is greater, he says, which allows returnees to afford more luxuries than they did in the U.S. Dutia describes a complex of "magnificent homes" in Bangalore. In the club room, there were "all these Americans and Europeans and expats on the treadmills with iPhones, watching CNN and BBC," he says. "Things have changed."

•Immigration delays. Multinational companies that belong to the American Council on International Personnel tell Executive Director Lynn Shotwell that skilled immigrants are discouraged by the immigration process, she says. Some can wait up to a decade for permanent residency, she says. "They're frustrated with having an uncertain immigration status," she says. "They're giving up." [More]

One possible consequence of this change is pressure on salaries for folks with the needed skills. This will only skew the education-based income inequality further, I would guess. It will also add fuel to rural America's own brain drain.

The most dramatic evidence of the rural meltdown has been the hollowing out—that is, losing the most talented young people at precisely the same time that changes in farming and industry have transformed the landscape for those who stay. This so-called rural "brain drain" isn't a new phenomenon, but by the 21st century the shortage of young people has reached a tipping point, and its consequences are more severe now than ever before. Simply put, many small towns are mere years away from extinction, while others limp along in a weakened and disabled state.

In just over two decades, more than 700 rural counties, from the Plains to the Texas Panhandle through to Appalachia, lost 10 percent or more of their population. Nationally, there are more deaths than births in one of two rural counties. Though the hollowing-out process feeds off the recession, the problem predates, and indeed, presaged many of the nation's current economic woes. But despite the seriousness of the hollowing-out process, we believe that, with a plan and a vision, many small towns can play a key role in the nation's recovery.

Civic and business leaders in the places most affected by hollowing out will tell anyone willing to listen how it is their young people, not hogs, steel, beef, corn, or soybeans, that have become their most valuable export commodity. Richard Russo, the Pulitzer Prize-winning observer of small town life, believes that any story of small-town America is, at its core, the story of the people who stay and the ones who go. Yet, what is different at this moment is how, in a postindustrial economy that places such a high premium on education and credentials, the flight of so many young people is transforming rural communities throughout the nation into impoverished ghost towns. A new birth simply cannot replace the loss that results every time a college-educated twentysomething on the verge of becoming a worker, taxpayer, homeowner, or parent leaves. And as more manufacturing jobs disappear every day, the rural crisis that was a slow-acting wasting disease over the past two decades has evolved into a metastasized cancer. [More]

I could have written about this same phenomenon forty years ago, and the trend has been unfazed by good times and bad, well-intentioned and well-funded measures, and relentless hand-wringing.  Somehow we can't get the image of idyllic small town America from our minds, and have decided it somehow represents the optimal choice of demographic dispersal.  But I'm no longer sure that is even close to the truth, much less real expectations.

The depopulation of my county (Edgar) is typical.

1969 - 21,752
2000 - 19,657
2007 - 18,831

I have wandered though various reactions to this very obvious trend in my life.  But after this long, it begins to dawn on you this is occurring for powerful reasons and strongly presages the future.

Maybe it's just mental adaptation, but I'm not quite as alarmed by it as I was. To begin with depopulation makes this area a great place to farm.  Let's face it, industrial ag works best all by itself without sharing roads or odors, to name two examples.

There is virtually no urban expansion pressure on farmland prices, other than secondhand 1031/investor bargain hunting. The tiny number of farmers exert oversized political influence, and the elderly population so typical of our very-low-cost towns make a pool of savings available for local banks to lend to agriculture.

So just speaking in terms of a good place to farm, this ain't the worst.  But what about the social aspects of withering communities?

I am worried about the schools. There are simply no resources to improve them and size alone rules out many advantages such as AP classes. In fact, the day may come when those who can affor better will consider boarding schools for promising students.  But that problem I lay squarely at the feet of the absolute refusal to consolidate even the high school level.  In short, our schools are failing because we prefer bad local schools to better schools 10 miles away, not because we don't have a manufacturing base.

The other problems of thin populations may be exaggerated.  Between phones and e-mail active friendship groups are possible. We drive 60 miles for dinner with friends without complaining.  Shopping has been largely replaced with Amazon, et al.

Even my church, which I had frankly given up on two decades ago, is showing remarkable grace is its quiet decline. Besides, given upcoming demographics, I'm not sure more population would be the answer there either.

In 1990, 8 percent of Americans reported that they had no religious beliefs. Twenty years later, that's 15 percent. But when you look at younger Americans, you see that the proportion of "nones" is reaching 22 percent. The 1990s were the boom years for the Nones; and a huge 35 percent of the new Nones are ex-Catholics. No doubt, some of this is a reflection of the sex abuse crisis. But the intellectual collapse of Christianity under the leadership of Protestant fundamentalists and Catholic theocons is surely relevant. The well-deserved inability of literalists to win many converts among educated people is also surely salient. The emergence of the politicized Christianist right - and its assault on Christianity as a freely chosen spiritual process - will surely lead to a continued and accelerating flight from organized religion.


But the Nones are not Ditchkins atheists. They express their position primarily as a form of skepticism and Deism. They are agnostics who do not dismiss the religious life but remain at a cool distance from it. This is, of course, one of the deepest American religious inheritances:

"American nones are kind of agnostic and deistic, so it's a very American kind of skepticism," says Barry Kosmin, director of Trinity's Institute for the Study of Secularism in Society and Culture. "It's a kind of religious indifference that's not hostile to religion the way they are in France. Franklin and Jefferson would have recognized these people."

The study estimates that in twenty years, the Nones will make up 25 percent of Americans. [More]

So looking back over 60 years of concern over the "decline" of rural communities, I have mixed emotions. The futility of bucking this trend is now apparent, even for those towns that enjoyed a period of success.

The presence of a college, hospitals, and a significant government employer seems to be the key to those towns that are growing by cannibalizing places like Chrisman.  Meanwhile, my home area will be a place for the poor, elderly and agriculture - all of which have to be somewhere.  The idea we will reverse the loss of young bright minds is far-fetched, I think.

I like living here, and am willing to cope with the circumstances and manage the disadvantages.  And I have wearied of grieving over something that was lost fifty years ago.

[Thanks, Mark]