Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

 

Chart of the day

source

The New York Fed reports that, for the first quarter of 2013, outstanding household debt decreased by $110 billion, or 1.0 percent, driven largely by declines in housing and credit card balances.

However, debt associated with auto loans and student loans continued to increase, by $11 billion and $20 billion, respectively.

Outstanding student loan balances, now the largest component of nonhousing debt, increased to a total of $986 billion as of 31 March 2013. That leaves an average of $24,810 of student debt per borrower in the United States.

Class struggles

It should come as no surprise that, as reported in the Chronicle of Higher Education [paywall], students on college campuses are struggling over the issue of class.

The situation is particularly difficult for first-generation college students (as I was back in the day), who are cast as subjects of “socioeconomic diversity” within institutions of higher education that are increasingly targeting the sons and daughters of the wealthy in order to increase revenues and move up in the rankings.

The class problem in relation to higher education, of course, is an old one, as Thorstein Veblen discussed in the Theory of the Leisure Class:

Ritualistic survivals and reversions come out in fullest vigor and with the freest air of spontaneity among those seminaries of learning which have to do primarily with the education of the priestly and leisure classes. Accordingly it should appear, and it does pretty plainly appear, on a survey of recent developments in college and university life, that wherever schools founded for the instruction of the lower classes in the immediately useful branches of knowledge grow into institutions of the higher learning, the growth of ritualistic ceremonial and paraphernalia and of elaborate scholastic “functions” goes hand in hand with the transition of the schools in question from the field of homely practicality into the higher, classical sphere. The initial purpose of these schools, and the work with which they have chiefly had to do at the earlier of these two stages of their evolution, has been that of fitting the young of the industrious classes for work. On the higher, classical plane of learning to which they commonly tend, their dominant aim becomes the preparation of the youth of the priestly and the leisure classes—or of an incipient leisure class—for the consumption of goods, material and immaterial, according to a conventionally accepted, reputable scope and method. This happy issue has commonly been the fate of schools founded by “friends of the people” for the aid of struggling young men, and where this transition is made in good form there is commonly, if not invariably, a coincident change to a more ritualistic life in the schools.

And, of course, it’s become much sharper in recent years, with growing inequality in the wider society and soaring debt for those students who are trying to follow the American Dream.

While I’m certainly not against the “dialogues” featured in the Chronicle article, what students in fact need is a clear and rigorous discussion of how class works—in the economy and in the wider society. They need academic courses—in economics and sociology but also in literature and the sciences—that explicitly treat the issue of class, which given students the concepts and methods to understand how class works and how it shapes their lives, before, during, and after their studies.

Otherwise, all we’re doing is participating in the “growth of ritualistic ceremonial and paraphernalia and of elaborate scholastic ‘functions’” and watching students struggle, outside the classroom, with the issue of class.

Cartoon of the day

Special mention

Cartoon of the day

Special mention

Cartoon of the day

Magic numbers and iron laws

 

Mainstream economists often complain the public doesn’t listen to them. The rest of should complain that, sometimes, as in the case of Reinhart-Rogoff, members of the public (including Harvard colleague Niall Ferguson, at the 1m20s mark) actually do. . .

Still think economics is a science?

What’s it going to take to finally bury the idea that mainstream economics is a science?

We all know mainstream economics is not a science at the microeconomic level, taking into account something as studied and debated as the minimum wage. And it’s certainly not a science at the macroeconomic level, give the fact that mainstream economists failed to predict the timing, severity, or duration of the current crises, not to mention the “pay-to-play” activities of such luminaries as R. Glenn Hubbard and Larry Summers.

And now we have the sorry spectacle of the Reinhart-Rogoff mistakes (as noted by Mike Konczal [ht: ms] and Dean Baker, based on new research by Thomas Herndon, Michael Ash, and Robert Pollin, and then weakly defended by Carmen Reinhart and Kenneth Rogoff), which call into question the much-vaunted 90 percent (debt-to-GDP) threshold.

We might be able to simply dismiss mainstream economists’ claims to scientificity, and then move one, if we didn’t also have to consider the widespread misery—of poverty and unemployment, in the United States and around the world—their work has directly caused and otherwise served to justify.

Art of the day

Molly Crabapple, “Debt and Her Debtors”