The Great Unbundling: Testing Creative Ways to Cut College Costs

A faculty member cheers on graduates from California State University San Marcos during a car parade. (Mike Blake/Reuters)

In my column on the “Gap-Year Gap,” I looked at the potential financial impact on college campuses if the minority of students who pay full tuition are disproportionately missing when the fall semester starts, especially in schools that are not reopening their campuses. That could just be the start of a shakeout in the college and university sector, which has become overpriced, overextended, and overly dependent upon taxpayer subsidies.

On Friday, I spoke with Aaron Rasmussen, the CEO of the online-learning startup and previously a co-founder of the ubiquitous MasterClass to get his thoughts about online learning and how it could compete or cooperate with traditional colleges.

Outlier launched in the fall of 2019, little expecting how the college world would be stood on its head a few months later. Its business model is simple: For a comparatively low price (currently $400), students can take a 3-credit course. The courses are still partnered with a traditional university, the University of Pittsburgh, and can be accepted most anywhere that Pitt credits would be good. For now, Outlier is strictly a cash-on-the-barrel business, without financial aid eligibility, but that means it has every incentive to keep prices low. Rasmussen started the business with just two core course offerings in the fall (calculus and psychology), but is expanding the offerings.

Online colleges are not a brand-new thing, but this is an intriguing approach, more geared to offer modular, low-cost alternatives to accumulate credits and reduce the need to spend four full years on campus. Rasmussen told me that they started with calculus in part because so many students fail it, so aiming to get more students to pay less and pass the class is a double-barreled way to get more bang for the educational dollar.

Of course, online courses can’t substitute for three big things: the credentialing value of admission to a selective college, the campus-life value of sports and activities, and the socialization value of being on campus to make connections and learn how to behave around the college-educated. But then, a whole generation of students is getting an education in what education looks like without two of those three things. What I like to think of as “the Great Unbundling” of college education from the full campus experience is worth exploring, for students who are strapped to afford tuition or debt to pay for the whole experience.

Moreover, a model like Outlier doesn’t really aim to replace elite four-year colleges so much as provide alternatives (both for 17-to-19 year olds and for continuing-education students) for students looking to spend fewer than four years on campus or, in the case of more marginal students, to try their hand at a couple of courses at a lower price. A lot of our college-debt crisis is students who borrowed big and didn’t finish school; better for those students in particular to seek out ways to test their academic readiness and prepare for college without borrowing the full cost of a standard semester.

The world of American colleges is going to look very different five or ten years from today. The coronavirus pandemic is likely to accelerate that. Creative competition can help accelerate that trend and bring more affordable options that don’t require colossal infusions of taxpayer money.

Politics & Policy

Oversimplifying the Working Class


Salena Zito makes the case that President Trump’s promotion of American manufacturing will aid his reelection. But in the course of making that point, she generalizes too much:

Trump’s brashness and unorthodox dealings also made members of his own party and the Washington political class cringe and recoil to their enclaves. But it made people who are not just good at making things but are proud to do so feel championed — even if the deals weren’t perfect, even if they got shortchanged, even if they didn’t like his style.

The problem with the people who cringed is that they’ve never worked with their hands, known anyone who works with their hands, or known anyone who likes working with their hands. If they did know what that’s like before they moved to the wealthiest counties in the country, they’ve left those memories behind.

“Brashness and unorthodox dealings” are at best a euphemistic way of describing the Trump traits and behaviors that turn some people off; and those people are hardly confined to the wealthiest counties of the country.

We don’t have data on the political attitudes of people who work with their hands. We do know that Trump got around 51 percent of the votes of Americans without college degrees in 2016, a four-point improvement over Mitt Romney’s performance in 2012, and that he got around 41 percent of those voters making less than $50,000 a year, a three-point improvement over Romney. Huge numbers of Americans without college degrees and with low incomes voted for Hillary Clinton; huge numbers of affluent Americans voted for Donald Trump; and the changes from previous elections, while very important, were on the margin.

I’m sure Zito knows all of these facts, but pundits and political reporters (including me) are often tempted to reduce people into categories and flatten the complexity of voters’ behavior. Sometimes we do it on the basis of race, sometimes of religion, sometimes, as here, of occupation. One way of guarding against that temptation is to keep in mind the interplay of these categories. We can safely infer that the vast majority of African Americans who work with their hands do not feel championed by Trump.


It’s Time to Mothball the IMF

Flags at the International Monetary Fund headquarters in Washington, D.C. (Yuri Gripas/Reuters)

The International Monetary Fund’s new managing director, the Bulgarian Kristalina Georgieva, has learned how to play the game. The game is to never let a “crisis” go to waste. And in the IMF’s case, crises should be exploited in ways that ensure that the scope and scale of the IMF’s bloated and ineffective bureaucracy can be expanded further.

Established as part of the 1944 Bretton Woods agreement, the IMF was designed to be primarily responsible for extending short‐​term, subsidized credits to countries experiencing balance‐​of‐​payments problems under the post-war, international, pegged‐​exchange-rate system. In 1971, however, Richard Nixon, then U.S. president, closed the gold window, triggering the 1973 collapse of the Bretton Woods agreement and, logically, the demise of the IMF. It was then that the IMF should have been mothballed. But since the Bretton Woods collapse, the IMF has used every crisis as a chance to dream up a new mandate and expand.

The oil crises of the 1970s were the first to allow the IMF to reinvent itself. Those shocks were deemed to “require” more IMF lending to facilitate, yes, balance‐​of‐​payments adjustments. And more lending there was: From 1970 to 1975, IMF credits more than doubled in real, inflation-adjusted terms.

With the election of Ronald Reagan in 1980, it seemed that the IMF’s crisis‐driven opportunism might be reined in. Yet with the onset of the Mexican debt crisis, more IMF lending was “required” to contain the crisis and prevent U.S. bank failures. That rationale was used by none other than President Reagan, who personally lobbied 400 out of 435 congressmen to obtain approval for a U.S. quota increase for the IMF. Once again, IMF lending ratcheted up, increasing 27 percent in real terms during Reagan’s first term in office.

Then came the collapse of the Soviet Union. What a “jobs for the boys” bonanza that was! And, the list goes on and on with every crisis providing yet another opportunity for the ineffective IMF to pump out more credit and advice.

Never one to miss an opportunity, Georgieva has made her move. Banks and the property rights of bank shareholders are her targets. The title of the IMF Managing Director’s Financial Times op-ed of May 22nd says it all: “Banks Must Halt Dividends and Buybacks or Be Forced to Do So.”

Don’t the owners of bank stocks decide whether the banks they own will pay dividends or buy back their shares? And, if there are restrictions of bank shareholders’ property rights, aren’t they imposed by laws and regulations mandated by sovereigns? Well, that was then, not now. Today, things have become so politicized that even an international organization, like the IMF, has been able to grant itself a license to meddle in what used to be none of its business — namely, the rights of those who own bank stocks.

While the IMF’s protean attributes are truly breathtaking, its most recent meddling gives yet another reason to put an end to it.


Envision a Presidential Campaign without Handshakes, Rope Lines, or Rallies

President Donald Trump speaks at a campaign rally in Charlotte, N.C., March 2, 2020. (Lucas Jackson/Reuters)

I’m not sure the political world has fully grasped how odd and different this upcoming presidential campaign is going to be, barring some sort of miraculous and rapid solution to the coronavirus pandemic. Joe Biden has probably shaken his last hand in 2020, worked his last rope line, and held his last rally. President Trump is no doubt itching to hold one of his traditional boisterous rallies, but that will depend upon whether it’s safe for people to get together in groups.

Modern campaigns are almost entirely focused upon getting the candidate in front of large groups of people, which is what we’re supposed to be avoiding in the era of “social distancing.”

Candidates will be traveling significantly less; what’s the point of being in a particular state for a “virtual” rally? Will the Biden campaign even have a press plane? Will reporters want to spend a lot of time on planes, hopping from swing-state city to the next? Press conferences were already growing rarer in recent cycles. Will any reporter ask Joe Biden a question in person for the next five months or so?

There probably won’t be any campaign rally/concerts featuring Jay-Z and Katy Perry for the Democratic nominee this year. Biden is unlikely to sit on the couches on the set of Jimmy Fallon or Jimmy Kimmel or Stephen Colbert; all his late-night joke-filled appearances will be by remote. The candidates will still hold photo opportunities, but the menu will be smaller. School classrooms are unlikely. Candidates may still “drop in” on iconic bars, restaurants and small businesses — if they’re still open — but presumably those establishments will have a reduced number of patrons at any given time. No more hanging out with the bikers, with a woman on Biden’s lap. There is likely to be a 9/11 ceremony in New York in September, but it may not be such a big gathering. Visiting a hospital will carry its own risks, and reminders of the candidates’ ages.

Getting-out-the-vote will involve fewer knocking on doors — or perhaps standing a safe distance away from the door. There will be fewer big gatherings such as festivals, sporting events, or concerts for voter-registration drives. Some college students will be back on campus, but some won’t, and they probably won’t be hosting big events. As noted in today’s Jolt, the party conventions will probably be nothing like what they have been in recent cycles.

The next couple months of the campaign are probably going to look a lot like the previous few months of the campaign.


Science, Coronavirus, and Notre Dame

University of Notre Dame campus in South Bend, Ind. (Matt Cashore-USA TODAY Sports)

A few weeks back, the University of Notre Dame outlined its plan for reopening campus in the fall, detailing the way in which the administration hopes to bring students back to South Bend to resume in-person classes. Like the overwhelming majority of colleges and universities in the U.S., Notre Dame shifted all of this past semester’s classes to online learning immediately after the school’s mid-March break.

The proposed plan will bring students back to campus in August two weeks earlier than usual, cancel the week-long fall break in mid October, and conclude the semester before Thanksgiving. The university has said it plans to conduct orientations for new campus policies due to COVID-19; institute testing protocols, contact tracing, and quarantining as needed; and promote preventive measures, such as hand-washing, social distancing, and some mask wearing.

Notre Dame was one of the first major universities to propose a plan for how it aims to reopen in the fall. Other universities, such as Princeton, have said they’ll wait another month to announce a plan. This contrast has earned Notre Dame some derision, for instance in the Washington Post, where education writer Valerie Straus characterized Notre Dame as “jumping to a decision” but called Princeton’s president “thoughtful” for announcing that he’ll wait to decide.

In today’s New York Times, Notre Dame president Fr. John Jenkins has an op-ed entitled “Why Science Alone Could Not Tell Us Whether to Reopen Notre Dame,” explaining the thinking behind the reopening plan. Though I am often quick to criticize his administration for its lack of attention to preserving Notre Dame’s Catholic identity, I appreciated several of the points he made on this subject.

He opens by praising the work of Dr. Anthony Fauci but writes that “there are, however, questions that a scientist, speaking strictly as a scientist, cannot answer for us. For questions about moral value — how we ought to decide and act — science can inform our deliberations, but it cannot provide the answer.”

This point often seems to be left out in our debates over how best to respond to the coronavirus outbreak, how soon certain states or regions ought to reopen, and what reopening should look like at different times and in different parts of the country. Some pundits seem to believe that, in crafting their policies, institutions and local officials ought to consider only the views of a certain taskforce or certain set of officials, accepting their preferred policy because the science is settled, so to speak. In this view, the “experts” have the ability to craft a policy response that will serve us all best and necessarily be the best way to solve the complex situation we face.

Fr. Jenkins rightly acknowledges that there is more to the equation than consulting the information made available through science. Medical professionals and scientists are invaluable and can tell us much about how a disease behaves, and they can project a number of situations that might come about depending on how we act, but they can’t offer us a foolproof, one-size-fits-all plan for how a vast country can mitigate the risks and balance the potential harms of responding to a global pandemic.

Here’s more of what Fr. Jenkins writes:

Our decision to return to on-campus classes for the fall semester was guided by three principles that arise from our core university goals. First, we strive to protect the health of our students, faculty, staff and their loved ones. Second, we endeavor to offer an education of the whole person — body, mind and spirit — and we believe that residential life and personal interactions with faculty members and among students are critical to such an education. Finally, we seek to advance human understanding through research, scholarship and creative expression.

If we gave the first principle absolute priority, our decision about reopening would be easy. We would keep everyone away until an effective vaccine was universally available.

However, were we to take that course, we would risk failing to provide the next generation of leaders the education they need and to do the research and scholarship so valuable to our society. How ought these competing risks be weighed? No science, simply as science, can answer that question. It is a moral question in which principles to which we are committed are in tension.

One can disagree with the reopening plan Notre Dame has outlined and its decision to reopen — a decision that other schools have reached, too, and that many others surely will reach before August rolls around — while still acknowledging the truth of what he has written. In a situation as complicated as the one we face, there is no easy, simple, scientific answer offering leaders a roadmap out of crisis. To say otherwise undermines the effort to protect public health and prevent more harm than we’ve already seen.

Politics & Policy

How Democrats Lost the White Working Class


. . . and why they’re not likely to recapture it: my latest Bloomberg Opinion column.

The party’s economic agenda, even on its left wing, increasingly reflects the priorities of its new upper-middle-class supporters. . . .

Proposals for free college would primarily benefit students from high-earning households and those who are likely to be high earners themselves. Two-thirds of the benefits of Senator Elizabeth Warren’s student-loan forgiveness plan — and remember that her platform was widely described as the cutting edge of progressive policy thinking — would go to the highest-earning 40% of households.

As Brian Riedl explains in an analysis for the conservative Manhattan Institute, much of today’s Democratic agenda serves to redistribute income from the very richest Americans to the merely affluent. . . .

Law & the Courts

COVID and Prisons


The pathogen has had a serious outbreak in state and federal prisons — jails have proven to be the leading COVID-19 hotspots — and this side of the curve-bending seems to be a slow affair. The toll has been significant. The Marshall Project/Associated Press tabulates (through May 22nd) that nearly 30,000 prisoners have contracted the virus, with 415 deaths. As for prison staff, there are 33 reported deaths (only 16 states are releasing information about the virus’s toll on personnel).

What to do? One partial solution — which has caused some conservative angst — is the early release or pardoning of chunks of the population (typically those with non-violent records or on the verge of parole) to relieve pressure on the contamination spread, exacerbated by jailhouse density.

An alternative to prisoner-release — and a sensible strategy for implementing general safety to contain viral spread — might be the aggressive use of masks and other safety devices. Which is exactly what is the intent of a joint effort by the National Sheriffs’ Association (sheriffs oversee the vast majority of U.S. jails) and the hip-hop-influenced REFORM Alliance. The two (unusually paired) organizations announced today the launch of a $10 million private-funded partnership to send millions of PPE masks to America’s prisons to protect the incarcerated and law-enforcement staff. The purpose is not only to provide protection, but to crush the contagion’s spread. Here’s hoping it works.


Seeing the Meaning in Suffering: A Coronavirus Conversation with Author Gary Jansen


Do you find yourself frustrated with these coronavirus times? Spiritually or emotionally lost or angry or confused or otherwise suffering and trying to find the meaning in it? A book by Gary Jansen called Station to Station: An Ignatian Journey through the Stations of the Cross — which is currently being offered for free as an e-book — may help. It is a meditative walk through the suffering of Christ in the Passion. Jansen, executive editor at Loyola Press, with longtime experience in religion publishing, is the latest conversant in this occasional “virus-free” offering with faith, culture, and civil-society leaders during these coronavirus times.

Jansen is also the author of MicroShifts: Transforming Your Life One Step at a TimeThe 15-Minute Prayer Solution: How One Percent of Your Day Can Transform Your Life and Life Everlasting: Catholic Devotions and Mysteries for the Everyday Seeker.

We talk about the hopeful struggle of faith. I hope you find it beneficial.


Do Scots Hate the English?


I have written an essay for the British magazine, Standpoint, on the supposed animosity Scots feel for the English.  


Apparently, Democrats Really Are Worried about an Economic Rebound

President Donald Trump talks to reporters on the South Lawn of the White House, May 1, 2020. (Carlos Barria/Reuters)

This story in Politico will add fuel to the fire to the GOP argument that Democrats are rooting against signs of an economic recovery before November. Jason Furman, a top economist in the Obama administration and now a professor at Harvard, contends that “we are about to see the best economic data we’ve seen in the history of this country.” As the country gradually figures out how to function with the coronavirus, the sudden steep drop in economic activity will climb back up again.

In fact, it may be happening already, although it may not show up in economic statistics for a while. The Wall Street Journal reports: “Truck loads are growing again. Air travel and hotel bookings are up slightly. Mortgage applications are rising. And more people are applying to open new businesses . . . . For the first time since the pandemic forced widespread U.S. business closures in March, it appears conditions in some corners of the economy aren’t getting worse, and might even be improving.”

Furman believes “the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and GDP growth ever.” And Politico offers this eye-popping quote:

Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”

If the opposition party’s argument against an incumbent president is strong and compelling and aligned with the values of the electorate, the economic conditions in the fall shouldn’t matter that much. Democrats believed they had a virtual encyclopedia of arguments against the president before the coronavirus hit. An economic rebound shouldn’t derail their argument against the president; if it does, maybe those arguments weren’t as strong as Democrats thought.

Public approval of Trump’s response to the virus is falling along the lines of his overall approval rating.

No matter what happens from here on out, Joe Biden and the Democrats will be arguing that President Trump fumbled the initial response to the coronavirus and will likely argue that Trump and Republican governors reopened parts of the country too fast, increasing the risk of more casualties from the virus. And Democrats will still argue that Trump is xenophobic, racist, ignorant, filled with rage, reckless, selfish, unhinged, etc.

Democrats might want to spend some time examining if the Biden economic agenda that was largely put together in a 2019 boom will look as appealing if the economy isn’t rebounding in autumn.

Back during one of the debates, Tim Alberta of Politico asked Biden, “As president, would you be willing to sacrifice some of that growth, even knowing potentially that it could displace thousands, maybe hundreds of thousands of blue-collar workers in the interest of transitioning to that greener economy?”

Biden responded, “The answer is yes. The answer is yes, because the opportunity — the opportunity for those workers to transition to high-paying jobs, as Tom said, is real.”

Biden pledged “no new fracking” during a debate, then walked it back; he wants to set a price on carbon to be used for either a carbon tax or cap-and-trade; Biden endorsed California’s AB5, the anti-“gig” law; he would raise the corporate tax rate from 21 percent to 28 percent, and he insists he can raise taxes by $4 trillion over the next decade, without raising taxes on anyone making $400,000 per year or less.

If the Democrats’ argument against Trump can’t work if there’s a partial economic rebound before November, they truly deserve to lose.


‘Where Are You Going? Dancing?’

Britain’s Princess Beatrice and Edoardo Mapelli Mozzi attend the wedding ceremony of Jean-Christophe, Prince Napoléon, and Olympia von und zu Arco-Zinneberg at the Saint-Louis des Invalides Cathedral in Paris, October 19, 2019. (Benoit Tessier / Reuters)

My Impromptus today begins with an old idea, an old bone of contention: race as destiny, ethnicity as destiny, religion as destiny — you know the drill. Last week, Joe Biden cracked, “If you have a problem figuring out whether you’re for me or Trump, then you ain’t black.” (He quickly apologized for this.) Last year, President Trump said, “I think any Jewish people that vote for a Democrat, I think it shows either a total lack of knowledge or great disloyalty.”

Ay caramba, as our friend Bart Simpson would say.

In my column, I move on to North Korea, the USS Theodore Roosevelt, anti-lockdown protests . . . A little excerpt: “Recently, I have had a debate with some colleagues: What is good, rambunctious, ‘Don’t Tread on Me’ protest and what crosses the line into mobbish goonery?”

I note two instances in which people have hanged a governor in effigy: one in Kentucky, one in Michigan. Here is Tim Alberta — formerly of NR, now with Politicoreporting from Michigan (his home state, and mine): “One man hoists a Betsy Ross-era flag from his fishing pole, with a naked brunette doll — ‘Governor Half-Whit!’ he cries, echoing a presidential putdown — dangling from a noose.”

My comment: “The Spirit of ’76 is one thing, the Spirit of ’89 another. I feel we need to teach our children the difference (even if it’s too late for others).”

I then meander through a variety of political issues — all of them touchy — and finish up with music and sports.

In a column last week, I talked about clothes. Very unusual for me, I realize — what do I know about the subject? — but I was talking about getting dressed up and the mental effect this has on some people. I even quoted a song: “Put on your Sunday clothes when you feel down and out. Strut down the street and have your picture took.”

I would like to publish two letters, which I think you will enjoy, as I did. A reader writes,


A few weeks ago, my wife and I were supposed to see Swan Lake at the Michigan Opera Theatre. The show was canceled, but I put on my tux the afternoon we were supposed to go and took my wife to the living room to watch a taped version on the TV. Obviously this was a faux pas as it was before 6 p.m., but there’s a pandemic of sorts going on.

Fabulous. And our second letter:

Hi, Jay,

I could tell many stories about dressing up, but I’ll share only one. I used to install fences during the summer (I taught) — fences as in what makes good neighbors. A very physically taxing job whose full-time workers were grizzled, hard-scrabble-type guys. They talked mostly in grunt, and they never called you by your name. If they even cracked a smile at something you said, your day was made.

So what did this crew — which I and others grew very fond of — say if we wore clean-looking clothes or something new? “Where are you going? Dancing?”

Tough guys, but, to paraphrase a commercial, installing fences required tough men. Probably of all the jobs I had, I was most proud of what I accomplished in the hard-pan, rocky soil of Rhode Island.

Beautiful. Have a good day, y’all.


Students: College Shouldn’t Be Your Default Now


How much economic upheaval will COVID-19 cause? Nobody knows at this point. What the labor market will look like in a year or more is subject to enormous conjecture. And that being the case, the way most young Americans used to treat going to college — as the only conceivable option — should change.

In today’s Martin Center article, Chloe Anagnos argues that it makes sense for them, whether they’ve already graduated, were in college when COVID-19 hit, or are still in high school, to look for work and training options that will give them immediate benefits. Laying out lots of money for college courses that might never pay off is a bad idea.

Anagnos points to numerous alternatives to enrolling in a college or university now:

LinkedInGoogle, and Hubspotfor example, have a mix of paid and free courses you can take that will make you more employable. From software development to basic digital tool training, those online classes offer students and recent grads a golden opportunity to stay relevant.

By earning valuable marketing certificates and a variety of important skills such as video and social media marketing, SEO, public relations, branding, Google and Facebook advertising, proficiency in Google Analytics, and content drafting, you will be much more competitive when the labor market warms up again.

At this time, it makes sense to put actual work experience on your resume rather than biding your time (and spending your money) for college, Anagnos argues. The best approach to our uncertain future is to adopt a “craftsman mindset.”

She concludes:

At the end of the day, employers will feel much more compelled to hire people who have put their time to good use during the lockdown by working instead of simply waiting or getting deeper in the red for a degree that might not make a huge difference.


They, Too, Gave All: American War Deaths from Disease

At Arlington National Cemetery in Virginia, Memorial Day, May 25, 2020 (Erin Scott/Reuters)

On Memorial Day, we take a single day out of the year to remember Americans (both by birth and adoption, both volunteers and draftees) who died for our country in war. The holiday conjures up iconic images of valor and dramatic death in battle: Minutemen at Bunker Hill, the motley defenders of New Orleans, bluecoats on Little Round Top, Rough Riders charging up on San Juan Hill, doughboys in the Argonne Forest, Navy torpedo bombers at Midway, G.I.s wading ashore at Normandy, Marines on the blasted hellscape of Iwo Jima and in the snowy passes below Chosin, soldiers besieged at Khe Sanh, firefights in the mountains near Kandahar, convoys on the road to Baghdad.

Death in wartime, however, has long had another face, especially in the nation’s first century and a half: disease. Bringing men from far-flung communities (often farms and small towns) and packing them together in close quarters, exhausted by marching and fighting and sometimes ill-clothed and fed, disease ran rampant. Indeed, in every American war before 1941, more soldiers died of disease than from battle. George Washington’s army was ravaged by smallpox, which he described as more dangerous than “the Sword of the Enemy”; the Continental Army lost ten men to disease for every one in battle. Two-third of the Civil War dead were from disease; in the Spanish-American War, that number rose to five-sixths. Half of military deaths in the First World War were from disease, mainly the Spanish Flu, and more died from contracting it just while signing up to serve. The Second World War saw heroic efforts to fight tuberculosis and malaria, but even with battle casualties rising to two-thirds of deaths, there were still 113,842 fatalities from disease or non-battle injuries (including the war’s many training accidents). For the wars between 1861 and 1918 in particular, the numbers and array of causes are grim:

During the Civil War in the United States, of 304,369 troops lost by the Union Armies from all causes, 186,216 died from disease. Dysentery and diarrhea accounted for more than 44,000 of these deaths; typhoid fever killed nearly 35,000, and malaria caused the death of about 8,000 soldiers.

When the Spanish-American War broke out…[a] call for volunteers quickly brought some 125,000 men into training…14,000 cases of typhoid fever had appeared among them. A government Typhoid Commission, headed by Dr. Walter Reed, reported that “more than 90 per cent of the volunteer regiments developed typhoid fever within eight weeks after they came into camp.” A force of about 17,000 men landed in Cuba at the end of June but [faced] outbreaks of typhoid fever, dysentery, malaria, and finally yellow fever…[in the First World War,] the [American Expeditionary Force] lost 50,510 men as a result of enemy action…disease killed 50,714 men..

These were, for the most part, miserable and pathetic ways to die, full of vomiting, diarrhea, sores, fevers, chills, and gasping for breath. The dead won no decorations for bravery. Their losses were not commemorated in movies, novels, statues, poems, or murals. Yet they, too, gave all for their country’s wars. In a year when most of us are spending Memorial Day in some form of quarantine, it is particularly appropriate to remember them as American heroes.


The Party’s Over — No More Guest(worker)s

Google headquarters in Mountain View, Calif. (Stephen Lam/Reuters)

Last month’s Presidential Proclamation temporarily suspending a tiny sliver of permanent immigration in response to Great Depression 2.0 also called for a review of the alphabet soup of foreign-worker programs. The relevant cabinet departments were instructed to offer recommendations “to stimulate the United States economy and ensure the prioritization, hiring, and employment of United States workers.”

Those recommendations were to be delivered to the White House this week and a follow-up proclamation is expected soon.

My staff put together a list of 20 steps the president should take immediately to limit work visas and work permits, plus several regulatory changes that require going through the notice-and-comment process.

Nothing unusual about that — it’s what think tanks do.

Lobbying groups, likewise, have been making the case for maintaining or even expanding the foreign worker programs that they’ve foolishly incorporated into their business models.

But it was both surprising and encouraging to see one group that’s severely affected by the importation of foreign labor finally become self-aware and stand up for itself. More than two dozen College Republican and Young Republican chapters came together to send an open letter to the president asking him to end the Optional Practical Training (OPT) program and suspend the H-1B program.

As the letter notes, “Suspending all guestworker programs is ideal, but the OPT & H-1B schemes are especially egregious.” The OPT program has no basis in law, and in 2008 (at the instigation of Microsoft’s D.C. lobbyist) was converted from a one-year internship opportunity into a three-year worker program for tech firms. In OPT, foreign students who have graduated are permitted to masquerade as students while working and waiting to receive an H-1B visa. Absurdly, because they’re pretending to be students, neither the OPT employees nor their employers have to pay payroll taxes, resulting in a subsidy for hiring foreign graduates instead of Americans.

The H-1B program at least has the virtue of having actually been created by Congress, but other than that, it represents a similar threat to the life prospects of young Americans. It’s a cheap-labor program, mainly for the tech industry, importing people mainly from India to do routine IT work. It’s most notorious for its (entirely lawful) use as a means of replacing American tech workers with cheaper foreigners. (The most widely reported instance of this was Disney, which fired its American IT staff and then forced them to train their not-especially-competent replacements, but it’s been used that way by hundreds of companies.)

Despite this, I don’t have high expectations for the Presidential Proclamation on guestworkers. Media fairy tales notwithstanding, Steven Miller doesn’t single-handedly determine administration immigration policy. In fact, with regard to foreign-worker programs, White House policy seems mainly to be formulated by former lobbyists and libertarians. Former Jeb Bush operative Derek Lyons, another influential figure on immigration in the White House, is reported to have warned the president, when he tweeted that he wanted to temporarily suspend immigration due to the Wuhan coronavirus, “Tim Cook isn’t going to like this.”

In fact, I fear that the proclamation will be merely cosmetic, protecting the rice bowls of employers who’ve built businesses on the expectation of unfettered access to cheap indentured labor, while including some meaningless incentives to encourage the hiring of some of the tens of millions of Americans thrown out of work (and millions of new graduates entering the job market). I hope to be proven wrong.

Economy & Business

No J in ESG?


Over at Bloomberg, John Authers takes a look at ESG funds:

Amid all the horrors of 2020, ESG ETFs have so far suffered only two weeks of outflows, both of minimal amounts. Meanwhile, when it comes to investment performance ESG has also had a good crisis. Prices are down but in all the main regions of the world, MSCI’s index of ESG companies outperformed the main benchmark during the first quarter….

As a reminder, ESG is shorthand for Environmental, Social and (corporate) Governance. An ESG ETF is a fund screened to ensure that the companies in which it invests satisfies certain environmental (‘E’), social (‘S’) and governance (‘G’) standards. The ‘G’ tends to be rather less controversial than the ‘S’ and the ‘E’, but as Authers points out, citing academic research, quite what these standards are is far from fixed:

Any number of different financial data groups offer their own ratings, while a number of investment houses have created their own proprietary versions. That competition has created confusion.

Indeed, but out of confusion comes opportunity. One of the features of ESG is the return it offers, not necessarily to shareholders (I’ll touch on performance a bit later), but to a growing eco-system of rent-seekers ranging from investment banks peddling their own ‘proprietary’ definitions of ESG, to a host of consultancies offering their services both to companies to help them comply with these standards and to investors keen to be sure that they are putting their money in the ‘right’ sort of company. This confusion is also useful to activists, particularly those pushing the ‘E’ (and particularly those focused on climate change), for whom no degree of compliance is ever enough. As those aware of the history of some of the world’s more effective cults, whether political or religious, will know, the quest for ever greater degrees of a purity that is somehow just out of reach is a powerful way of firing up the faithful and bullying the unbeliever.

Looking at performance, Authers (who is by no means unsympathetic to ESG investing) notes some research that appears to show that “ESG’s current popularity owes more to the fact that it offers a simple way to jump on the current hot stocks than to any greater desire to do good.”

For my part, I don’t think that explains why ESG is on the march. For that, I’d look at both a genuine — if often misguided — desire to insist on doing or choosing the right thing, as well (as mentioned above) at the opportunities for profit that ESG can offer those who feed off it. But it does give rise to a line of thinking which, as Authers observes, can be taken in a ‘subversive’ direction:

It is possible that ESG is undermining itself — or at least that the E and the S are in conflict with each other. Vincent Deluard, of INTL FCStone Inc., suggests that ESG funds are people-unfriendly. Tech and pharma companies tend to look good by ESG criteria, but they tend to be virtual as well as virtuous. These are the kind of companies that need relatively few workers and which churn out hefty profit margins. When Deluard looked at how the big ETFs’ portfolios varied from the Russell 3000, the results were spectacular. They are full of very profitable companies with very few employees… A further look at companies’ market cap per employee showed that investing in the current stock market darlings who are making their shareholders rich is a very inefficient way to invest in boosting employment. They include hot names like Netflix Inc., Nvidia Corp., MasterCard Inc. and Facebook Inc….

The problem, Deluard suggests, is that ESG investing, intentionally or otherwise, rewards exactly the corporate behavior that is creating alarm. Companies with few buildings, few formal employees and a light carbon footprint tend to show up well on ESG screens. But allocating capital to them leads to a deepening of inequality, and intensifying the problem of under-unemployment. On the face of it, they aren’t the companies that should be receiving capital if employment is to recover swiftly. If investors want to behave with the interests of “stakeholders” rather than “shareholders” in mind, and that is surely central to the ESG philosophy, then their current approach is directly counter-productive. No good turn goes unpunished.

Oh well. You can’t make an omelet without breaking eggs.

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