Michael Auslin lambastes President Obama’s kid-glove treatment of China:

Most glaring was Mr. Obama’s timid handling of cybersecurity. Knocked off-balance by news leaks about the National Security Agency’s Internet surveillance programs, Mr. Obama could barely muster any strong public words about the extent of Chinese theft of American industrial and technological information (worth perhaps up to $250 billion per year, according to the head of the National Security Agency), let alone the hacking into nearly every significant U.S. weapons system. After eight hours of private talks, the U.S. public could be forgiven for expecting more from Mr. Obama than a recital of Washington’s displeasure and an instruction to wait for the results of a Sino-U.S. working group that will convene this summer.

The fact that Mr. Obama’s negotiating partner is robbing America blind did not intrude on the U.S. president’s desire to make his guest feel welcome.

Though Auslin makes a strong case, his op-ed reminded me of Michael Beckley’s “China’s Century?,” which offers a more sanguine interpretation:

Economies and militaries used to consist primarily of physical goods (e.g., conveyor belts and tanks), but today they are composed of systems that link physical goods to networks, research clusters, and command centers. Developing countries may be able to purchase or steal certain aspects of these systems from abroad, but many lack the supporting infrastructure, or “absorptive capacity,” necessary to integrate them into functioning wholes. For example, in the 1960s, Cummins Engine Company, a U.S. technological leader, formed joint ventures with a Japanese company and an Indian company to produce the same truck engine. The Japanese plant quickly reached U.S. quality and cost levels while the Indian plant turned out second-rate engines at three to four times the cost. The reason, according to Jack Baranson, was the “high degree of technical skill…required to convert techniques and produce new technical drawings and manufacturing speciªcations.” This case illustrates how an intangible factor such as skill can lead to signiªcant productivity differences even when two countries have access to identical hardware.

Compared to developing countries such as China, the United States is primed for technological absorption. Its property rights, social networks, capital markets, ºexible labor laws, and legions of multinational companies not only help it innovate, but also absorb innovations created elsewhere. Declinists liken the U.S. economic system to a leaky bucket oozing innovations out into the international system. But in the alternative perspective, the United States is more like a sponge, steadily increasing its mass by soaking up ideas, technology, and people from the rest of the world. If this is the case, then the spread of technology around the globe may paradoxically favor a concentration of technological and military capabilities in the United States.

This is small consolation when the Chinese steal detailed information concerning U.S. weapons systems designed to counter Chinese investment in asymmetric warfare capabilities, and it doesn’t undermine Auslin’s essential argument. But it is worth keeping in mind that for all China’s success in stealing U.S. industrial and technological information, no one in their right mind would choose to be in China’s shoes rather than America’s. 

In this morning’s edition of The Transom, Ben Domenech juxtaposes two articles on child-rearing: the first is Scott Tong’s Marketplace profile of the Jackson family of Charles County, Maryland, a diverse middle-income suburb of Washington, D.C., and Adam Davidson’s new column on the market for baby products. Davidson draws on the work of the Princeton economic sociologist Viviana Zelizer:

In previous generations — and for most people currently living in poorer countries — having children was an economic investment. Viviana Zelizer, a Princeton sociologist, in her 1985 classic, “Pricing the Priceless Child,” tracked how childhood in America was transformed between the 1880s and the 1930s. During this period, Zelizer says, parents stopped seeing their children as economic actors who were expected to contribute to household finances. Families used to routinely take out life insurance plans on their children to make up for lost wages in the not unlikely event of a child’s death.

But eventually, increased societal wealth, child-labor laws and the significant drop in child mortality led parents to reclassify their children, Zelizer explained, as “a separate sphere, untainted by economic concerns.” This came along with “an increasingly sentimentalized view of children,” in which their comfort and protection can be given no price. Now, for the first time in human history, having a child in the United States is a net financial cost for a parent.

Meanwhile, Tong describes the extraordinary lengths Louis and Nikki Jackson go to provide their children with enriching extracurricular experiences – traveling constantly, sacrificing sleep and sanity, spending prodigious amounts on equipment and lessons, etc. – which they see as the surest route to eventual academic and economic success: 

The point of all this, Nikki and Louis explain, is to build their junior resumes with academics and activities, the currency of future school and job applications. Once, only the wealthy ran this kind of race. Now, kids from middle-class communities like Charles County (income per capita: $36,000) have entered, too.

This suggests that while Louis and Nikki Jackson recognize that their brand of energetic child-rearing is a net financial cost in the near-term, it will yield significant benefits for the Jackson family over time. That is, their implicit time horizon takes into account future income gains that will accrue to their children.

I mention this because our sense of the public policy implications of this rise in household expenditures associated with extracurricular enrichment, etc., depends to a large degree on our mental model of child-rearing. Some believe that child-rearing is best understood as a form of consumption or even self-indulgence, a view that was humorously distilled in the new Noah Baumbach film Frances Ha. Another view is that child-rearing represents an investment in the future — in the future of a particular family, like the Jacksons, and more broadly in the future of the wider society. Having socialized various forms of old-age provision, virtually all of the affluent market democracies, including the United States, depend on a productive workforce to sustain commitments to retirees. So the investments the Jacksons are making in the earning potential of their children benefit their children and (presumably) future grandchildren, but also everyone who at some point intends to take advantage of various old-age social insurance programs. This view is discomfiting for those who resent the idea that the modern mixed economy binds the economic fate of citizens together in this way. But it strikes me as a pretty good description of reality. 

And so this leads us to a few other questions. If child-rearing represents a form of investment in our collective well-being, is it appropriate to subsidize it more generously — or rather to equalize the treatment of parental investment in the human capital of children with investment in financial assets? Like Robert Stein and Ramesh Ponnuru, among others, I favor a substantial increase in the child credit as a strategy to ease the burden on middle-income households with children. Yet if we start thinking about child-rearing in this way, it might also raise questions about how families choose to deploy their resources. For example, one might believe that the Jacksons ought to spend less on sports and more on Kumon-style tutoring sessions. When we start from the premise that the Jacksons can do as they see fit with their disposable income, such questions don’t arise. When we see the choices the Jacksons make as relevant to our collective well-being, the issue potentially becomes more fraught. Because I believe that families should be given very wide latitude when it comes to child-rearing decisions, I can see why some conservatives and libertarians find the discourse of parental investment and collective well-being very problematic. But I think it’s pretty easy to both say that middle-income parents deserve a break on payroll taxes that reflects the fact that child-rearing isn’t quite the same as, say, buying a sports car and that this should not justify new levels of intrusiveness.

Over the past two decades, the charter school movement has had considerable success. In the 21 years since the first public charter school was established in St. Paul, Minnesota, the share of K-12 students enrolled in public charters has increased to 5 percent, and there is good reason to believe that this share will continue to increase. This is despite the fact that several states do not have laws authorizing charter schools, and many of those that do impose stringent caps on the number of public charters that can be established or on their enrollment. The main appeal of charter schools is that they grant administrators autonomy from certain regulations that govern traditional public schools. Yet some state governments have required that charter schools, or charter schools above a certain size, be subject to the collective bargaining agreements governing other schools in a given district, thus severely limiting autonomy in practice. And so one of the larger questions facing the charter school movement is how to govern public charters as they continue to expand. 

One city, New Orleans, has raced ahead in embracing public charters, having enrolled 76 percent of its K-12 students in them as of the 2011-12 school year. New Orleans’ Recovery School District (RSD) it has emerged as the country’s first true charter school district, which grants very wide autonomy to public charters while also aiming to impose rigorous accountability. Neerav Kingsland, the CEO of New Schools for New Orleans, a non-profit organization that aims to support the city’s charter school movement and the RSD, has emerged as a thought leader in the charter school movement, having argued that school districts across the country ought to learn from the RSD’s modest but real success. In a recent AEI paper on “The Recovery School District Model,” Kingsland describes how the RSD has built an alternative to the traditional district model, in which the school district is both the regulator and the service provider and autonomous charters are seen as either marginal or as threatening to the district’s interests. He proposes that charter school districts serve the following three functions:

Market creator. An RSD can break local government monopolies by utilizing charter schools, alternative human-capital pipelines, and vouchers. In short, it can reduce both the school operation and labor market share of a local monopoly. If well-executed, this should lead to increased talent levels, innovation and entrepreneurship in the system.

Ambassador and talent recruiter. The RSD leader can be a legitimate ambassador for a new way of doing business. She can brand the RSD around academic excellence, recruit charter operators and human-capital providers, and be a leading voice for a state’s most vulnerable children. The best RSD leaders are able to use their local and national networks to infuse the new system with the best educators in the nation. Market systems without great organizations and great people will provide limited results. A visionary RSD leader understands that people matter and that talent is a virtuous cycle. The best attract the best and so on.

Bankruptcy steward. An RSD’s legislative mandate is to turn around failing schools. However, unlike a typical takeover agency, the RSD’s goal should not be to directly operate schools. Replacing one government monopoly with another is a fool’s errand, and the history of district takeovers is dismal. Rather, the RSD’s job should be more akin to that of a traditional banking regulator. If a bank fails, a banking regulator will intervene and either sell or rehab the institution, the key point being that the government does not operate the bank in perpetuity. It is a temporary steward, not a replacement operator.

Broadly speaking, the RSD is designed to facilitate the establishment of new schools and new instructional programs, and the expansion of those schools and programs that prove most successful. More vexingly, the RSD is also obligated to shut down schools the prove unsuccessful. This churning process is disruptive, but the hope is that average performance across the system will improve as the most effective schools grow or are cloned and as the worst schools leave the scene. 

Kingsland’s vision for charter school districts is attractive. Separating educational governance from educational delivery does seem like a good strategy for increasing entrepreneurship and responsiveness in public education. But one of the lesser-known consequences of the rise of public charters is the decline of traditional private schools, as recently described by Chester Finn Jr. Parochial school enrollment has been declining alongside religious observance, and while elite private schools are flourishing, their less prestigious counterparts are not. There is a certain irony behind the decline of private education and the rise of charters. American private education has long been a reflection of the health of American civil society, and the charter school movement represented an attempt to inject a dose of private sector ingenuity into the public system. Now, however, the failure of U.S. private schools to adapt to a changing economic and cultural landscape, defined by rising diversity and inequality and declining social capital, is proving fatal, while charter schools benefit from their connection to the public sector, which relies on taxation rather than persuasion to secure a stable funding stream. Because private education is less subject to regulation and scrutiny, you’d think it would be a site of innovation. One can imagine a scenario in which low-cost private schools expanded to compete with low-quality public schools across urban America, as they have in India and other developing countries. In the end, it seems that the leadership of the private education sector proved too risk-averse to strike out in this direction. This could change, but I wouldn’t hold my breath. 

David Brooks’ latest column draws on a forthcoming book, The Metropolitan Revolution by Jennifer Bradley and Bruce Katz, to argue that power is shifting from the national government to municipal governments, which are less ideologically constrained and more closely tied to the day-to-day lives of citizens:

Metro governments deal with issues in their particularity, not as abstractions. Leaders in northeastern Ohio can focus on their region’s historic strengths, including a history of expertise with polymers. That leads to certain concrete opportunities — the chance to get into flexible electronics, which are very thin electronic components attached to flexible materials. They can design specific policies around concrete circumstances.

Because issues on the regional level are so tangible, it is possible to debate new proposals without getting immobilized by the big government-versus-small government frame. Republican mayors tend to be more activist than their Congressional counterparts, and Democratic mayors tend to be more business friendly. Katz and Bradley highlight New York City’s fantastically successful effort to lure the Technion-Cornell engineering school. That was an exercise in using government to set the table for long-term growth by luring human capital, not in trying to micromanage the future with shiny office buildings, a downtown stadium or a mall.

Finally, city governments actually have power over the basics, which are the key to promoting growth. American growth lags not because of higher order problems, but because of the bad elemental things, like lousy schools and bad infrastructure. Cities can change this. A study by the Economist Intelligence Unit predicted that Chicago will be the ninth most competitive city in the world by 2025. Its rise in the rankings is fueled by the fact that the city is taking care of fundamentals: $7.3 billion in infrastructure spending over the next two years, a community college program that links education to employment.

There is much to be said for municipal governments, and for the principle of subsidiarity. And David’s broader point is well-taken — cities have to be less ideological, in part because it is more difficult to achieve redistribution at the municipal level than at the national level (because municipal governments require steady revenue streams, they generally have to eschew mobile and volatile tax bases). But my sense is that many municipal governments are wasting time on industrial policy efforts when they ought to be upgrading transit, K-12 education, and crime control and encouraging density while limiting congestions cost (via road-pricing, etc.) — policies that facilitate “superlinear scaling.”

Technion-Cornell is a paradigmatic example, in my view, of ill-advised bauble-chasing. The effort to lure the school was certainly successful, but of course the value of the implicit subsidies associated with the new technology campus meant that it was never going to be terribly difficult to attract a respected research institution. What I find confusing is that Bradley and Katz seem to associate an expensive, high-profile effort to attract a new technology campus (Stanford, widely regarded as the first choice, balked at New York city’s conditions at the end) as a hands-off approach while “shiny office buildings, a downtown stadium or a mall” are characterized as micromanagement. Publicly-subsidized malls and downtown stadiums are worthy of condemnation. Shiny office buildings, however, wouldn’t need much in the way of subsidy, as there is a great deal of demand for new structures in the urban cores of Manhattan and Brooklyn. And besides: the point of Technion-Cornell is that it is supposed to be a shiny technology campus located in Roosevelt Island, far from the city’s technology agglomerations. 

New York city didn’t need Technion-Cornell to lure human capital. Talented workers are very eager to settle in New York city, including large numbers of aspiring technology entrepreneurs. The real barrier to luring more human capital is the high cost of housing, which will only be lowered through new development, i.e., shiny residential buildings. The long-term question is not whether Technion-Cornell will lure human capital. Rather, it is whether it will lure more human capital than alternative policies, e.g., relaxing zoning restrictions in the neighborhoods where technology firms have concentrated (Union Square, DUMBO, etc.), that will cost the city the same amount or less. Technion-Cornell strikes me as a paradigmatic example of empire-building on the part of a mayor about to leave office, whereas relaxing zoning restrictions in the city’s technology corridors (and elsewhere, really) is a less glamorous, and potentially more contentious, but almost certainly more cost-effective approach. This is why I think David Schleicher is the most important thinker we have on the subject of local government.

David Brooks’ latest column draws on a forthcoming book, The Metropolitan Revolution by Jennifer Bradley and Bruce Katz, to argue that power is shifting from the national government to municipal governments, which are less ideologically constrained and more closely tied to the day-to-day lives of citizens:

Metro governments deal with issues in their particularity, not as abstractions. Leaders in northeastern Ohio can focus on their region’s historic strengths, including a history of expertise with polymers. That leads to certain concrete opportunities — the chance to get into flexible electronics, which are very thin electronic components attached to flexible materials. They can design specific policies around concrete circumstances.

Because issues on the regional level are so tangible, it is possible to debate new proposals without getting immobilized by the big government-versus-small government frame. Republican mayors tend to be more activist than their Congressional counterparts, and Democratic mayors tend to be more business friendly. Katz and Bradley highlight New York City’s fantastically successful effort to lure the Technion-Cornell engineering school. That was an exercise in using government to set the table for long-term growth by luring human capital, not in trying to micromanage the future with shiny office buildings, a downtown stadium or a mall.

Finally, city governments actually have power over the basics, which are the key to promoting growth. American growth lags not because of higher order problems, but because of the bad elemental things, like lousy schools and bad infrastructure. Cities can change this. A study by the Economist Intelligence Unit predicted that Chicago will be the ninth most competitive city in the world by 2025. Its rise in the rankings is fueled by the fact that the city is taking care of fundamentals: $7.3 billion in infrastructure spending over the next two years, a community college program that links education to employment.

There is much to be said for municipal governments, and for the principle of subsidiarity. And David’s broader point is well-taken — cities have to be less ideological, in part because it is more difficult to achieve redistribution at the municipal level than at the national level (because municipal governments require steady revenue streams, they generally have to eschew mobile and volatile tax bases). But my sense is that many municipal governments are wasting time on industrial policy efforts when they ought to be upgrading transit, K-12 education, and crime control and encouraging density while limiting congestions cost (via road-pricing, etc.).

Technion-Cornell is a paradigmatic example, in my view, of ill-advised bauble-chasing. The effort to lure the school was certainly successful, but of course the value of the implicit subsidies associated with the new technology campus meant that it was never going to be terribly difficult to attract a respected research institution. What I find confusing is that Bradley and Katz seem to associate an expensive, high-profile effort to attract a new technology campus (Stanford, widely regarded as the first choice, balked at New York city’s conditions at the end) as a hands-off approach while “shiny office buildings, a downtown stadium or a mall” are characterized as micromanagement. Publicly-subsidized malls and downtown stadiums are worthy of condemnation. Shiny office buildings, however, wouldn’t need much in the way of subsidy, as there is a great deal of demand for new structures in the urban cores of Manhattan and Brooklyn. And besides: the point of Technion-Cornell is that it is supposed to be a shiny technology campus located in Roosevelt Island, far from the city’s technology agglomerations. 

New York city didn’t need Technion-Cornell to lure human capital. Talented workers are very eager to settle in New York city, including large numbers of aspiring technology entrepreneurs. The real barrier to luring more human capital is the high cost of housing, which will only be lowered through new development, i.e., shiny residential buildings. The long-term question is not whether Technion-Cornell will lure human capital. Rather, it is whether it will lure more human capital than alternative policies, e.g., relaxing zoning restrictions in the neighborhoods where technology firms have concentrated (Union Square, DUMBO, etc.), that will cost the city the same amount or less. Technion-Cornell strikes me as a paradigmatic example of empire-building on the part of a mayor about to leave office, whereas relaxing zoning restrictions in the city’s technology corridors (and elsewhere, really) is a less glamorous, and potentially more contentious, but almost certainly more cost-effective approach. This is why I think David Schleicher is the most important thinker we have on the subject of local government.

The Washington Post has published Phyllis Richman’s fascinating reply to a 1961 letter from a Harvard faculty member who asked her about how she expected to combine family and professional life after completing graduate studies. Richman’s reply is very intelligent and stimulating. It is worth reading alongside Joni Hersch’s important research on “opting out” among the graduates of elite universities. 

While writing on the limits of Abenomics, Evan Soltas points us to a really neat 2012 report by Takeo Hoshi and Anil Kashyap on various ways Japan might reform regulations, taxes, and monetary policy to promote productivity growth. 

Virginia Postrel, who is streets ahead of almost every other columnist in America, and you’ll note that I’ve been trying to cure myself of my tendency to overpraise, explores the decline of the Detroit Institute of Arts (DIA), a museum that has long benefited from the backing of the city of Detroit, yet which is now being forced to part with much of its collection as the shrinking city finds itself under severe fiscal constraints. Her basic point — which strikes me as obviously correct — is that it is no tragedy for art to migrate from a sparsely-attended institution in a shrinking metropolitan area to more popular institutions in more populous cities. And she has suggested that time share arrangements might be an acceptable compromise for Detroiters unwilling to part with various treasured artifacts. But I was most intrigued by an observation she made about “a common philanthropic pathology”:   

During the 20th century, the museum’s support group failed to build a significant endowment to subsidize operations. Rather, in an extreme version of a common philanthropic pathology, contributors gave money almost entirely for adding artworks and buildings — increasing operating costs without providing money to cover them. As a result, the museum spent the century lurching from financial crisis to financial crisis.

This pathology flowed from a sense of optimism that is not uncommon among empire-builders. But one wishes that the stewards of the DIA had been more prudent about the burdens they chose to bear. There is a lesson in the DIA’s experience for virtually all human institutions. 

Brad DeLong outlines scenarios for what the U.S. economy might look like if our current economic malaise ever draws to a close, the last of which is particularly intriguing:

The third possibility is that the economy recovers, the labor market normalizes, but interest rate normalization simply never comes. The 2001 and 2009 collapses of the equity market and the 2007-2009 collapse of the housing market means that for the next 50 years or so everyone is going to be back in their 1950s mode of believing that equities and housing are too risky, and that with a Federal Reserve that hits its inflation target you really want to have your money in safe nominal debt. And especially now the government is the only organization that can issue safe nominal debt–nobody is going to trust any securitizer at any rating agency to produce anything that’s really AAA for a long time to come. The US, the German, the British and the Japanese governments are thus the only places that can originate AAA assets. And in a world of a global savings glut, demand for their liabilities will be enormous. This is a point that Ricardo Cabellero at MIT makes.

The very high equity premium we have right now is a powerful argument that this scenario is the correct one.

In this scenario, we may well find ourselves in a situation in which the U.S; government can simply borrow and borrow and never have to pay it back because the economy grows faster than interest accrues. In which case the U.S. government looks much more like the Renaissance Medici Bank–an organization you are happy to pay to keep your money safe, rather than a debtor from whom you demand a healthy return. The treasury becomes a profit center for the government rather than a cost. We will know if this scenario is true when the labor market normalizes: do we then find the interest rates environment we have had in the past five years persisting, a new normal for the long term? [Emphasis added]

These realization of this scenario would create interesting temptations for Congress.

I’ve been neglecting the NSA story because, frankly, I’m having a hard time making heads or tails of it. Tim Lee has an excellent primer on the subject. Though I’m not particularly proud of it, and though Julian Sanchez of the Cato Institute and others have made strong arguments as to why we ought to be alarmed, I’m somewhat conflicted about the prospect of the NSA having access to, per Tim, “information like what numbers you called, what time you made the calls, and how long the calls were.”

One potential problem is that a data collection effort of this kind might have a chilling effect on political activists. Imagine that you’re working to coordinate a series of nationwide political protests, and you use a phone tree to plan and share information. The data gathered by the NSA could be used to determine the shape and structure of the political network behind the protests, and to undermine it. Assuming that the protests are peaceful and that the government is not entirely benign, this should give us pause. And Julian correctly observes that indiscriminate data collection efforts don’t have a very good track record:

This collection is probably well enough intentioned. The problem is that these records are likely to be retained in databases indefinitely. Which means we don’t just need to worry about whether the government’s motives are pure when they collect the information. Even if they are, someone with access to that data, maybe in five or ten years, may be unable to resist the temptation to use that information for other purposes. That could mean investigating ordinary crimes: If you can data mine for suspicious terrorist activity patterns—which as Jim Harper and Jeff Jonas have pointed out is likely to be extremely difficult—you can plug in “suspicious patterns” that may identify drug dealers and tax cheats as well. Still more disturbing is the possibility that, the intelligence community has repeatedly done historically, those records could be exploited for illegitimate political purposes, or even simple greed. (Imagine probing communications for signs of an impending corporate merger, product launch, or lawsuit.)

We are, predictably, being told that this program is essential to protecting us from terrorist attacks. But the track record of such claims is unimpressive: They were made about fusion centers, and the original NSA warrantless wiretap program, and in each case collapsed under scrutiny. No doubt some of these phone records have proven useful in some investigation, but it doesn’t follow that the indiscriminate collection of such records is necessary for investigations, any more than general warrants to search homes are necessary just because sometimes searches of homes are useful to police.

Like many Americans, however, I have two clashing instincts: a skepticism of concentrated power (milder than most of my libertarian friends, but still there) and a post-9/11 sense that small networks of hyperempowered individuals can pose a real threat, and that it is appropriate to use technological tools to mitigate such threats. The problem with the latter view, which has definitely been going out of style in the public if not in the national security bureaucracy, is that when the bad guys realize that mobile phones are not the best way to go (as the more formidable of them have long since realized), they will turn to some other, harder-to-detect means of communication. It is inevitable that the NSA will want as much information as it can possibly get, and I’m glad that they’re getting some pushback.

But here is the problem: as this kind of information gets cheaper and cheaper to collect, the government will have to exercise more and more restraint not to collect it. Fortunately, a more affluent society has more people who can dedicate themselves to policing the abuse of power, so there’s that. We’re in the middle of a race, in which changing norms around privacy, technological innovation that reduces the costs of surveillance, technological innovation that reduces the cost of evading surveillance, and the ever-increasing complexity of government are all interacting in complicated ways, and the outcomes are highly unpredictable. 

P.S. And for a pro-NSA argument, see Tim Worstall.

Shikha Dalmia observes that the Conservative Party of Canada (CPC) has fared well among foreign-born voters. She draws on this experience to make the following argument:

Republicans will be able to win national elections not by brandishing their limited government ideals but promising free goodies to minorities. But Republicans need simply look north to realize that such defeatist thinking represents a failure of imagination.

There is another implicit implication of this argument, namely that U.S. Republicans should not be concerned about how creating a path to citizenship for unauthorized immigrants, 62 percent of whom live in households earning less than 200 percent of the federal poverty level, or increasing the size of the less-skilled influx might shape the electorate. There is a small problem with this line of analysis, however. Canada’s immigration policy has long emphasized skills. Immigrants with a high degree of English or French language proficiency and with tertiary education are strongly favored over those who do not. And so Canada’s foreign-born population does not closely resemble its U.S. counterpart.

Moreover, as John Ibbitson, a columnist for Canada’s National Post, and Darrell Bricker, CEO of Ipsos Public Affairs, observe in their book The Big Shift: The Seismic Change in Canadian Politics, the shift to the political right has not been universal among foreign-born Canadians. Rather, it is concentrated among relatively affluent suburban voters of Asian origin who have lived in Canada for ten years or more. Canadian immigrants who’ve lived in the country for a shorter period of time and who live in low-income households are far less inclined to back the CPC.

So basically we know that affluent, upwardly-mobile, tax-sensitive Canadians of Asian origin living in intact families are willing to back a center-right political party that scrupulously avoids taking a stance on contentious social issues and that is famously (some would say infamously) pragmatic on matters of macroeconomic policy and that presents itself as a defender of the country’s single-payer health system. It is not obvious that this should lead us to conclude that immigrants living in households earning less than 200 percent of the federal poverty level, or indeed less than 400 percent of the federal poverty level, a nontrivial number of whom have children outside of marriage, will enthusiatically support a U.S. political party that, among other things, is committed to rolling back the expansion of the Medicaid program and the new health entitlements under the Affordable Care Act as well as other redistributive measures, and that favors substantial cuts in marginal tax rates. It could be that my skepticism as to whether large majorities of low-income voters will embrace a rigorously small government, anti-redistribution message centered on the importance of tax cuts represents a failure of imagination. But Canada’s experience certainly does not bolster the case that low-income voters, including low-income immigrants, have suddenly developed a strong distaste for redistribution. 

The Canadian government has pursued a number of new immigration initiatives recently. Provinces are now given some scope to recruit immigrants, some of whom are mid-skilled agricultural workers. This represents something of a departure. But the highest profile new initiative is that Canada is now looking to poach U.S.-based technology entrepreneurs, including skilled immigrants who have had a difficult time securing a visa. It does not seem as though the CPC is rushing to greatly expand the number of less-skilled immigrants who are allowed to work and settle in Canada on the grounds that doing so will bolster their political prospects. If anything, the party seems to recognize that they fare best with middle- and high-income immigrants.

The Pew Research Center finds that 69 percent of Americans believe that there is solid evidence of global warming. This is lower than the 79 percent that embraced this view in 2006, but it is higher than the 57 percent that embraced it in 2009. And while 41 percent thought it was a very serious problem and 33 percent thought it was a somewhat serious problem in 2006, the share has drifted down to 33 percent for very serious and 32 percent for somewhat serious. Not surprisingly, there is a partisan divide on the issue, with 87 percent of Democrats being convinced that global warming is real and only 44 percent of Republicans, and in turn 57 percent of Democrats believing that global warming is primarily caused by human activity as opposed to 19 percent of Republicans. (One wonders if these gaps would shrink if money were on the line.)

This reminded me of a recent Roger Pielke Jr. column, in which he lamented the fixation of climate activists on climate skeptics:

Studies of the relationship of public opinion and political action on a wide range of subjects show nothing unique or very interesting about the state of public opinion on climate change. Significant policy action has occurred on other issues with less public support on many occasions (as I documented in my recent book, The Climate Fix). Instead of motivating further support for action, efforts to intensify public opinion through apocalyptic visions or appeals to authority, have instead led to a loss of trust in campaigning scientists and a deep politicization of the climate issue. Citing the ample evidence of the ineffectiveness of such approaches, Dan Kahan complains of climate campaigners: “They keep pounding the data, and with a rhetorical hammer that drives home all the symbolism that generates distrust and resistance in larger parts of the population … Why?”

Pielke has long argued that the real obstacle to effective action on climate change is the appeal of cheap energy in a world in which 1.2 billion people have no access to electricity while 2.8 billion rely on wood, crop waste, dung, and other biomass to meet their energy needs. Rather than lambaste climate skeptics for championing cheap energy, he calls for a climate policy agenda centered on promoting the development of cheaper-than-coal zero-emissions technologies, on the grounds that measures that raise the price of energy will inevitably go down to defeat. 

When I was younger, I was a great enthusiast for proportional representation (PR). There are a number of PR electoral mechanisms, some of which are more compatible with our political culture than others. Some countries use party lists, either exclusively or through additional member systems that combine single-member constituencies with members drawn from party lists to make overall partisan representation reflect party support in an election. Others allow voters to rank-order individual candidates in multi-member districts, as in Ireland. Some fear that proportional representation necessarily leads to party fragmentation, but much depends on the rules governing elections, e.g., Germany sets a very high threshold to determine whether or not a party is eligible to win seats in a legislature, and this has led to a relatively stable party configuration. My enthusiasm has for the most part died down, though I’ve continued to believe that municipal and state governments ought to experiment with PR. 

Recently, Krist Novoselic made the case for proportional representation in congressional elections in Salon, and though he gets some things wrong (he exaggerates the importance of gerrymandering — see the work of Jowei Chen and Jonathan Rodden on “unintentional gerrymandering“) he reminded me of one of the chief virtues of Irish-style proportional representation in a country like the U.S.: multi-member districts in monolithically Democratic regions like New York city would yield more Republicans than single-member districts do at present, and monolithically Republican regions would yield more Democrats. And so the GOP caucus in the House would include more members who are interested in issues like mass transit.

Josh Barro points us to a new report from David Edmondson and Marc Scribner on one of my favorite subjects — the fact that FRA regulations drive up the cost of U.S. passenger trains, which in turn makes passenger rail less competitive than it might be against other modes of intercity travel. U.S. left-liberals often romanticize rail travel, and in particular high-speed rail travel, while conservatives are often just as reflexively opposed. But this is one area where a focus on cost-effectiveness, regulatory burdens, etc., could change the conversation for the better. This is one reason I was hoping that Kevin O’Toole, a Republican state senator in New Jersey, might consider running for the U.S. Senate. He has been a rare voice for cost-effective transit investment, with a nuanced understanding of the relevant issues. But as our own Robert Costa reports, O’Toole has now bowed out of the October special election, along with most other plausible GOP candidates.

Though Scott Brown was hardly perfect, he did demonstrate the potential appeal of a Republican attuned to the interests of suburban and urban voters in the northeastern U.S. Multi-member districts — pie-in-the-sky though the idea may be — would lead to more Scott Browns in Congress, from New York city, the Bay Area, and other dense coastal regions. 

Having suggested that Turkey’s rapid economic growth has (ironically) contributed to anti-Erdogan anger, I was delighted to read a new Bloomberg Businessweek article by Sarah Topol, Benjamin Harvey, and Selcan Hacaoglu on the social and political consequences of Erdogan’s economic revolution. As the country upgrades its infrastructure, the secular urban middle class, which has profited mightily from the economic boom, grows more resentful of Erdogan’s authoritarianism, particularly as it relates to the transformation of Turkey’s built environment.

“There’s been a steady drumbeat of projects and actions, especially dealing with Istanbul, that have made the secular middle class of Turkish society upset,” says Hugh Pope, the Turkey analyst for the International Crisis Group in Istanbul. An urban renewal project near Taksim will tear down a historic neighborhood to make room for luxury apartments and a shopping mall. Construction of a third international airport, projected to be the largest in Europe with a price tag of $29 billion, was approved on May 3. On May 29, Erdoğan broke ground on a third bridge over the Bosphorus connecting the European and Asian sides of the city. Despite opposition from environmental groups, the bridge project will cut a superhighway through a forest near Istanbul. The bridge has been named the Yavuz Sultan Selim Bridge, after an Ottoman sultan whose 16th century reign is known for expanding the Ottoman Empire and massacring the Alevis, a religious minority whom the Turkish Sunnis did not consider true Muslims. The bridge’s dedication has prompted controversy over Erdoğan’s perceived disregard for people who do not belong to his conservative, pious Sunni voting base.

The concern is not entirely aesthetic. To some degrees it reflects status anxiety — what do Erdogan’s various projects say about the groups he does and does not respect? Now that inflation has been tamed and GDP per capita has surpassed the $10,000 mark and Turkey remains Europe’s fastest-growing economy, it is questions of this kind that come to the fore. 

Peter Suderman of Reason describes how the debate over health insurance premiums has evolved in recent years. And Josh Barro of Business Insider raises broader questions about the wisdom of achieving redistribution via insurance mandates and community rating rather than the tax system. One takeaway: redistribution via taxes and transfers might be superior to redistribution via regulation, as the former is more transparent — but this transparency makes redistribution via taxes and transfers less politically attractive, and so we’re left deciding whether redistribution via regulation is better than nothing. I think this view is a little too cynical, but it’s not crazy.

One of the central arguments made by advocates of less-skilled immigration is that earlier waves of less-skilled immigrants assimilated without great difficulty in the first decades of the last century, and that this pattern is sure to repeat itself, despite dramatic changes in U.S. political economy, urbanization, and demand for skill. There is at least one glaring problem with this line of analysis, which is that the gap between the skill levels of immigrants from Ireland and southern Europe and native-born Americans was not nearly as large in 1900 as the gap between the skill levels of contemporary less-skilled immigrants and native-born Americans, and so this particular barrier to assimilation was much lower in that era. And the U.S. earnings distribution was markedly different during this period as well, as Ran Abramitzky, Leah Platt Boustan, and Katherine Eriksson observe in a 2012 paper on Norwegian immigrants to the U.S.:

In the modern context, the Scandinavian countries are more equal than the United States. In the late nineteenth and early twentieth century, however, the opposite was true. Figure 1 compares the occupation-based cumulative earnings distribution functions in the United States and Norway in 1900. We array individuals from lowest- to highest-paid with earnings represented in US dollars and the Norwegian distribution rescaled to share the US mean (the earnings data are described in more detail in Section II). United States workers below the fiftieth percentile of the earnings distribution out-earned similar Norwegians, while Norwegians above the ninetieth percentile commanded higher earnings than their US counterparts. These occupation-based earnings distributions suggest that Norway offered a higher return to skill than did the United States circa 1900, which is consistent with the historical evidence on 90-50 ratios in the two countries (Soltow 1965; Goldin and Katz 1999).

Not only was the occupation-based earnings distribution in the United States more compressed at a point in time, but the US economy also offered the opportunity for substantial occupational upgrading over the life cycle. Long and Ferrie (forthcoming) document that only 18 percent of men in the United States who held an unskilled, blue-collar job in 1850 remained unskilled workers by 1880. By comparison, 47 percent of men in unskilled, blue-collar occupations in Norway in 1875 remained unskilled workers in 1900. Men who started their careers in unskilled occupations were twice as likely to move up the occupational ladder in the United States than in Norway over their lifetimes; much of this mobility was accomplished by moving into owner-occupier farming.

Unfortunately, the economic status of less-skilled workers in the contemporary U.S. is much “stickier” than it had been a century ago, and this has important implications for labor market outcomes for less-skilled immigrants over the life cycle. 

On several occasions, I’ve touted Boston College political scientist Peter Skerry’s proposal that unauthorized immigrants be granted normalization without citizenship, as outlined in “Splitting the Difference on Illegal Immigration,” published earlier this year in National Affairs:

All of us should stop to appreciate that America is a remarkably open and absorptive society, where newcomers and their children put down roots and develop ties rapidly. Indeed, these forces are so powerful that they overcome much of the indecision and ambivalence of illegals who typically do not arrive planning to stay here. We should allow ourselves to feel good about this, and use such positive sentiments to help us address a dilemma that, in its intractability, does not reflect well on any of us.

Yet the equities that illegal immigrants build up over time cannot become an excuse to ignore or deny the understandable anxieties, and even outrage, that many Americans feel in response to their presence here — however intemperately such sentiments may at times be expressed. And while we should criticize politicians who pander to not irrational but nevertheless highly volatile fears about illegals, we must not lose sight of the need to sanction those same illegals. As President Obama put it at American University in 2010, “We have to demand responsibility from people living here illegally.” Indeed, as we have seen, the undocumented are hardly blameless for the difficult circumstances in which they now find themselves. Yet holding them accountable for their decisions need not be done in a punitive or vindictive spirit.

To strike this balance, we should offer lenient terms of legalization to illegal immigrants but prohibit them from ever becoming eligible for naturalization. They should instead become “permanent non-citizen residents.”

The chief virtue of Skerry’s proposal is that, as he explains, barring unauthorized immigrants who arrived in the country as adults is a straightforward, credible penalty that U.S. immigration enforcement officials can actually enforce, as opposed to the convoluted penalties dreamed up by the architects of comprehensive immigration reform. Imposing back taxes sounds attractive, but consider the economic profile of this population, as recently described by the Migration Policy Institute: as of 2011, 32 percent of unauthorized adults and 51 percent of children had family incomes below the poverty level; 44 percent of adults and 63 percent of children have incomes below 138 percent of the federal poverty level (FPL), which is the eligibility cutoff for the Medicaid expansion under the Affordable Care Act; and only 14 percent of adults and 8 percent of children have incomes above 400 percent of FPL, the level above which households are no longer eligible for means-tested subsidies under the ACA. That is, this is a very poor population, and unauthorized adults with children are poorer than unauthorized adults without children, which presumably will have consequences for the well-being of these children. Even if we deny this population access to various means-tested benefits, including subsidies for medical coverage, the problems that flow from its poverty won’t simply disappear. So the idea that the federal government will yield a significant amount in back taxes is faintly preposterous — it is more likely that the federal government will spend more to collect back taxes than it will actually yield, particularly since the tax liability of many of these households would be negative. (No, I’m not claiming that the Gang of Six proposal will retroactively pay out EITC benefits, etc.) It is possible that income is underreported for unauthorized immigrants, given that large numbers work in the informal sector. It seems difficult to imagine that the immigration enforcement bureaucracy will be able to determine the actual income levels of unauthorized immigrants over time to charge appropriate back taxes. 

Though the Skerry proposal has largely faded from the scene — a handful of congressional conservatives have suggested a path to legal status rather than a path to citizenship, but it hasn’t gone much further than that — a new champion has just emerged, New Mexico Gov. Susana Martinez. Reid Wilson of National Journal reports:

Martinez, a border-state governor who has been critical of the Obama administration’s efforts to secure the border with Mexico, also said that while she supports some aspects of the immigration, she has concerns with other areas of the bill — notably, the pathway to citizenship that undocumented immigrants currently in the United States would win under the current proposal.

“What I want to see come out is certainly securing our border, because otherwise I think all we do is have the next wave after we find a comprehensive solution,” Martinez said. “The goal would be legal status for those that are deserving of legal status, not a pathway to citizenship.”

“I don’t think we should disrespect the people who have done this the right way and have done all the things that the laws require of them to gain citizenship. If those that are here illegally right now want citizenship, then they should move forward in that direction but go to the end of the line. I think there are parts of it that I do support. I prefer a pathway to legal status and not a pathway to citizenship,” she added.

A Martinez advisor stressed that the governor would only support a pathway to legal status for those undocumented immigrants who go to the back of the line. Martinez singled out immigrants who come to the U.S. on educational visas and those who came with their parents as children as examples of residents who shouldn’t get the boot.

“We’re very open to immigration, but immigration doesn’t always necessarily mean citizenship. Some people don’t want to change their citizenship. But we shouldn’t have kids coming on a visa, for example a student visa, and then saying you’ve got to go back home. We want to keep them. Let them stay here and have legal status,” she said. [Emphasis added]

This might be the smartest, most articulate pronouncement on immigration I’ve ever heard from an elected official. I’ve always liked Martinez. Now I have another reason to do so. One slightly confusing aspect of her statement is the notion that unauthorized immigrants should go to the end of the line — this is consistent with the rest of her statement if she means that they ought to return to their native countries and apply from there, as provisional legal status represents an enormously valuable legal privilege that definitely does not represent the back of the line. My guess is that Martinez won’t actively insinuate herself into the national immigration debate, but one wishes she were in the U.S. Senate right about now. 

The surest way for Americans to avoid poverty is to work full-time. As Jed Graham of Investor’s Business Daily explains, however, the Affordable Care Act includes a powerful incentive for employers to reduce the work hours of their employees below a 30-hour threshold:

Employers who offer health coverage that is deemed either too pricey or too skimpy will owe $3,000 for each full-time, 30-hour-per-week, worker who taps ObamaCare subsidies.

Because the $3,000 fine is nondeductible, it’s equal to $5,000 in deductible wages for a profit-making firm facing a 40% combined federal and state tax rate.

Graham points out that this $5,000 annual cost of an employee working 30 hours a week, divided over 52 weeks, means his 30th hour of work will cost the employer $96.15 each week (this will be reduced if he works more than 30 hours). He continues:

The 31-hour, 32-hour, 33-hour and 34-hour workweeks also may become relatively rare.

For example, ObamaCare could tack on as much as $48 per hour for a worker clocking 31 hours, or two hours beyond ObamaCare’s care-free threshold of 29 hours per week.

Yet, even for those clocking 40 hours, the incremental cost of ObamaCare of $8.74 per hour beyond the 29th hour of work could effectively add 55% to a $16/hour wage.

In industries with low profit margins that employ less-skilled, low-wage workers, there will likely be a great deal of pressure to reduce employment levels or work hours or both.

Last month, I wrote a short post on immigration reform and health reform that raised a serious yet largely neglected issue. Conservative backers of the Gang of Eight immigration reform legislation have been touting the fact that unauthorized immigrants granted provisional legal status will not be eligible for various means-tested benefits, including subsidized medical insurance under the Affordable Care Act. One problem with this provision, however, is that state and local governments will find themselves in a bind. The following is from a report from Richard Simon of the Los Angeles Times:

The National Conference of State Legislatures is urging Congress to allocate to local and state governments some of the fees paid by applicants for legalization. The legislation, however, calls for that money to be used to secure the border, a key element for Republican support.

The proposed bill also would bar most of those applicants from receiving subsidies to buy health insurance for 10 years. These subsidies, which are part of President Obama’s 2010 health law, will be available next year to millions of low- and moderate-income Americans and legal immigrants who do not get health benefits at work.

Many of the applicants for legalization also would be ineligible for other federal benefits for more than a decade. In contrast, legal immigrants are eligible for many federal benefits after five years in the country.

Immigrant rights advocates said that because applicants for legal status will pay taxes, they should be entitled to a safety net.

The counterargument is that immigrants who are offered provisional legal status can always choose to return to their native countries, and so they are free to decide if they consider this arrangement acceptable or not. Moreover, the basic premise is faulty: lawful citizens are entitled to a safety net even if they don’t pay taxes while foreign tourists who generate astronomical sums in sales tax revenue are not, so there is no necessary connection between the two. Access to safety net programs is associated with membership in the political community, and the point of provisional legal status, as I understand it, is that it represents a transitional period during which the U.S. government decides whether or not unauthorized immigrants ought to be granted membership. Leaving this normative question aside, provisional legal status creates complications:

Although the county provides emergency care to all, regardless of legal status, county officials say the legislation could significantly increase its costs for non-emergency care. They point to an estimate that up to 446,000 of such immigrants in the county have no health insurance.

Los Angeles County spends roughly $600 million a year on healthcare for immigrants in the country illegally, officials said.

Republican lawmakers have proposed a solution to this dilemma. Rep. Mario Diaz-Balart (R-FL) has called for an individual mandate for immigrants on provisional legal status, per David Nather of Politico: 

Members of a House immigration group are considering a rule that would force immigrants to buy their own health insurance while they wait for citizenship.

The Republicans and other conservatives say their rule wouldn’t be like Obamacare’s at all.

Their argument: It’s simply fair to ask immigrants to show they won’t be a drain on the system before getting full citizenship.

“We’re dealing with a very specific circumstance and a very specific group of folks,” said Rep. Mario Diaz-Balart (R-Fla.), a member of the House immigration group. “There are going to be requirements that are not required for everyone else.”

Americans are willing to allow illegal immigrants to stay in the country, but only “if they’re not a public charge,” Diaz-Balart said. “It’s individual responsibility for these folks to earn their ability to stay in the United States, to work in the United States, and to be legalized in the United States, and a big part of that has to be that they’re not a public charge.”

This idea seems reasonable enough. There are huge implementation questions, but it would greatly reduce the burden on state and local governments. There is, however, an obvious problem: large numbers of unauthorized immigrants are likely to be public charges, a fact that advocates of less-skilled immigration and a path to legalization tend to avoid confronting head on. Fortunately, the editors of Bloomberg View are very forthright on this subject:

Requiring immigrants to buy insurance — with limited access to employer-based coverage, and without access to federal subsidies – imposes a large burden on a population in which 32 percent of adults and 51 percent of children live in poverty. If we want these future citizens to contribute to their communities, saddling them with steep financial obligations probably isn’t the best start.

Instead, Congress should ease their access to the health-insurance market. At a minimum, that should include access to coverage for the estimated 1 million undocumented immigrants younger than 18, and enabling immigrants to purchase insurance on state exchanges with their own money — even if Congress unwisely blocks subsidies. If no subsidies are available, a mandate to carry insurance can’t be justified.

Giving 11 million undocumented immigrants a chance at legal status makes economic and ethical sense. Denying them the chance to get affordable health coverage in the meantime does not. [Emphasis added]

To be clear, the editors are talking about unauthorized immigrants. They ought to have written “requiring unauthorized immigrants granted provisional legal status to buy insurance,” both because this would have been more accurate and because it would have underscored the fact that we are describing individuals who have violated U.S. immigration laws. I agree that it is more appropriate to offer subsidized coverage to unauthorized immigrants who arrived in the U.S. under the age of 18. But again, the takeaway from Bloomberg View is that the unauthorized population is by and large very poor. The editors claim that a mandate is unjustified. Yet it flows naturally from the (sound) logic that provisional legal status should only be granted to individuals who are not likely to be public charges. That is, there is a reasonable case that unauthorized immigrants who have very low earning potential should not be granted provisional legal status. Or perhaps relatives, friends, and civil society organizations, like churches and secular charities, can step in to fill the breach, thus allowing advocates of granting a path to citizenship to unauthorized immigrants earning low (and in some small number of cases no) wages an opportunity to make an investment in their future. 

Even if the Gang of Eight immigration legislation passes in something like its current form, the Bloomberg View view is likely to gain momentum over time, as state and local governments and medical providers stand much to gain from the expansion of subsidies to this population. And a similar logic applies to SNAP benefits. A substantial share of the self-reported hunger problem in the U.S. flows from the poverty of the substantial share of the foreign-born population that is ineligible for SNAP benefits. The libertarian solution — let’s allow in large numbers of less-skilled workers but deny them subsidized medical coverage and SNAP benefits — might appeal to libertarians, but many other voters are troubled by the idea of sharing their neighborhoods with people who through no fault of their own don’t have the skills or the networks they need to afford what Americans would recognize as a dignified life. Perhaps this is a valuable object lesson in the truth about global income and wealth disparities, and middle-income Americans should suck it up and either accept that the desperately poor should be allowed to live among them and (in relative terms) suffer or that they must pay the taxes necessary to provide any poor person who chose to settle in the U.S. before the provisional legal status window closed (and one assumes that another provisional legal status window will open at some point in the future) with the basics of life in an affluent market economy. 

I’m basically reconciled to the fact that there will be a path to legalization for unauthorized immigrants who arrived in the U.S. as adults. But I wish we would think more rigorously about its implications. One issue that has scarcely been addressed, for example, is what happens to unauthorized immigrants who choose not to accept provisional legal status. Should this decision be met with some penalty? Some will argue that provisional legal status will prove so attractive relative to living without it that this question won’t even arise, though of course conservative advocates of a path to legalization claim that its requirements will be very demanding. If that is correct — if acquiring provisional legal status really isn’t a walk in the park — surely some unauthorized immigrants will decide that applying for it is not in their interest. 

Matt Yglesias points us to Freddie de Boer’s recent call for tuition-free public higher education institutions 

If the state U’s can claw some funding back and compete on price, that’s a big start. But we should make the competition to lower costs while providing quality instruction even fiercer. Here’s my dream: a system of five federal universities. Northeastern American University, Southeastern American University, Central American University, Southwestern American University, and Northwestern American University. They would be explicitly oriented towards providing a cheap, quality education in the traditional sense. I’d like to shoot for a tuition of $0, and I think that is a achievable goal with the right governmental funding, charitable support, and ruthlessness about unnecessary amenities. I would settle for $2,500 a year for any student from within each geographical region and $5,000 for any students who want to go to a university from outside of their region.

Though I can’t find a working link, Vance Fried and I wrote an article last winter that ended on a related note:

There have been a number of promising recent developments in higher education. The most impressive may well be the rise of Western Governor’s University, a highly innovative institution built around entirely online delivery and a competency-based degree—i.e., WGU grants credits based on test performance, and does not require class attendance. A WGU student who is already very knowledgeable about software programming, having worked as a coder before starting work on her degree, might secure a credit in computer science by passing a final exam without actually taking a course. In essence, WGU offers the equivalent of a CPA exam for every subject.

Moreover, WGU charges its students based not on the number of credits they complete, but rather on an “all you can eat” basis over two semesters: If you can demonstrate competency in seven or eight semesters’ worth of credits in only two semesters, you pay the price for two. The beauty of the WGU model is that it allows students to seek instruction anywhere they can find it—they can read independently, study with a tutor, enroll in some other school, etc.—while turning to WGU to certify that they’ve mastered the relevant material.

In a somewhat similar vein, the Massachusetts Institute of Technology has sponsored MITx, a program through which students who take free online courses offered by the MIT can, for a modest fee, secure an MITx credential by demonstrating a thorough understanding of the material.

It’s not just online programs that show promise. Grace College, a small college in northern Indiana, uses a much more traditional, residential model. But it has recently trimmed some unnecessary spending and moved summer school totally online. As a result, a Grace degree can now be earned in three years for total tuition of $37,000, about the same as an Indiana resident pays over four years to get a degree from Purdue or Indiana University, Bloomington.

The combination of low profit margins and innovation-encouraging models might even allow higher-education costs to fall well below 1980 levels—and if current levels of subsidies at the state government level were retained, higher education could even be tuition-free. Through competition and innovation, we can achieve the dream of left-wing higher-education visionaries—but without breaking the bank. [Emphasis added]

Vance Fried has done a great deal of work on how colleges can reduce costs while increasing instructional quality. “Opportunities for Efficiency and Innovation: A Primer on How to Cut College Costs” summarizes some of his work on this subject. He focuses on five basic strategies:

1.Eliminate or separately fund research and public service

2.Optimize class size

3.Eliminate or consolidate low enrollment programs

4.Eliminate administrator bloat

5.Downsize student life programs

I assume that Freddie (and Matt) would disagree with Vance in many respects, but I found this convergence interesting.