American Elephants

The Economy: What to Do? What to Do? What to Do? by The Elephant's Child

Austan Goolsbee has resigned after just eight months as the chairman of Barack Obama’s Council of Economic Advisers.  He is leaving, he said, to preserve his tenured professorship at the University of Chicago.  Goolsbee stopped teaching at the university in 2007 when he became and adviser to Obama’s presidential campaign.

Goolsbee spent Friday answering questions about the increase in unemployment and the dismal job creation, most of which came from McDonald’s.  Goolsbee has often had the ear of Obama, urging the president to adopt more of a market-driven approach to economic policymaking.

Goolsbee replaced Christina Romer who also left to return to her University of California post to preserve her tenured professorship.   Romer argued that the White House needed to spend government money to stimulate the economy. Other economists who have left are Lawrence Summers, Jared Bernstein, and Peter Orszag.

Also ended are Obama’s daily economic briefings initiated by Rahm Emanuel. The only one left of Obama’s original crew is Treasury Secretary Timothy Geithner.

According to the Washington Post, “Goolsbee has been an advocate for letting the market drive administration policies such as housing and the auto bailout.  He opposed the rescue of Chrysler and has expressed skepticism about allowing the government to continue to play a large role in housing finance.”

Obama, unfortunately” has not always hewed to Goolsbee’s view, but has made sure to consider his perspective, even before he became chairman.”

Obama is not interested in a market approach. In spite of his claims that he does too like business: business clearly feels that the Obama Administration is anti-business and does not understand the marketplace. The members of the administration have the least business experience of any in history, and it shows.

Obama still wants to spend and to stimulate the economy. Some Liberals, predictably, insist that the problem is that the stimulus just wasn’t big enough.  Obama’s only change of position is that now he calls it “investment” instead of stimulus.

Is College Worth the Cost? Maybe Not! by The Elephant's Child

College students are graduating with some of the highest debt in history, and the bleakest job outlook.  A lot of questions are being raised about college costs. The benefits of the degree are not as clear as they once were.  Large numbers of grads are taking low-paying and low-skilled jobs.  Is it worth upwards of $40,000 a year?

Texas, already a business magnet, is asking some hard questions. According to new data from the University of Texas at Austin, there are ways to make college more affordable.  In an article for the Wall Street Journal today, Richard Vedder talks about that study and its conclusions:

[T]uition fees at the flagship campus of the University of Texas could be cut by as much as half simply by asking the 80% of faculty with the lowest teaching loads to teach about half as much as the 20% of faculty with the highest loads. The top 20% currently handle 57% of all teaching.Such a move would require the bulk of the faculty to teach, on average, about 150-160 students a year. For example, a professor might teach one undergraduate survey class for 100 students, two classes for advanced undergraduate students or beginning graduate students with 20-25 students, and an advanced graduate seminar for 10. That would require the professor to be in the classroom for fewer than 200 hours a year—hardly an arduous requirement.

Faculty will likely argue that this would imperil the university’s research mission. Nonsense. First of all, at UT Austin, a mere 20% of the faculty garner 99.8% of the external research funding. Second, faculty who follow the work habits of other professional workers—go to work from 9 a.m. to 5 p.m. and work five days a week for 48 or 49 weeks a year—can handle teaching 200 hours a year while publishing considerable amounts of research. I have done just this for decades as a professor.

Goodness, work from nine to five? Professor Vedder goes even further.  He suggests that much research consists of “obscure articles published in even more obscure journals on topics of trivial importance.” Ouch. Jeffrey Litwin, looking at 70 leading U.S. universities estimated that the typical cost of writing a journal article is about $72,000.  Another scholar estimated that 21,000 articles have been written on Shakespeare since 1980.  I guess that’s what they meant by “publish or perish.”  Not going to make the inhabitants of the faculty lounge happy. He also suggests slashing bureaucracies, using buildings more efficiently and phasing out tenure.

I had heard that Governor Perry had asked if it was possible to offer a college education for just $10,000 a year for 4 years.  It looks as if he has started something. Naomi Schaefer Riley has a new book titled The Faculty Lounges that explains how colleges are spending your money, and it’s not pretty. Recent studies suggest that kids will do most of their learning in high school— and if that’s the case, we’re in real trouble. Obama’s notion that every young person should go to college and their education should be subsidized is part of the problem, not part of the solution.

Professor Vedder is an economist, and this is simply basic cost-effectiveness.  No serious questioning of the curriculum, the country-club amenities, and the unserious classes designed to attract unserious students.  Nor does it question the basic knowledge of a new college graduate. That’s the big question.  After nearly $200,000 invested, do they know anything?


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