Chart of the day

According to a new report by the Education Trust, the national graduation rate for Pell Grant recipients attending public and nonprofit private colleges and universities is considerably lower than the completion rate of non-Pell recipients: while almost 65 percent of non-Pell recipients graduate in six years, only half of Pell students leave with a bachelor’s degree in the same time frame.

This 14-point gap (which can be seen in Figure 1 above) is much larger than the average gap (of 5.7 percent) between Pell and non-Pell students who attend the same institution (see Figure 2).

How is this possible? This occurs because the national gap is more than the product of all the individual completion gaps between Pell and non-Pell students at colleges and universities. The national gap is also a byproduct of which institutions students attend, with Pell students much more likely to attend institutions with lower graduation rates for all students, and much less likely to attend institutions that graduate most of their students.

Update

The Education Trust refers to the university where I teach as “an ‘engine of inequality’ because very few students come from working-class and low-income family backgrounds, and it falls in the bottom 5% of all four-year colleges nationwide for its extraordinarily low enrollment of freshmen who receive Pell Grants, a type of federal financial aid for low-income students. This college is not very socioeconomically diverse.”

Only in America

source

At least fourteen people were shot—six of them killed, the others wounded—during a single 15-hour period in Chicago.

The burst of violence follows two straight weekends when more than 50 people were shot in Chicago. That’s the first time that has happened on back-to-back weekends over the four years the Tribune has been tracking shootings. In August, more than 40 were shot on four consecutive weekends.

So far this year, at least 2,300 people have been shot in Chicago, about 400 more than during the same period last year, according to a Tribune analysis. Through Sunday, homicides have risen to 359, up 21 percent from 296 a year earlier, according to preliminary data from Chicago police.

Cartoon of the day

Special mention

 

Economics of scarcity

Mike the Mad Biologist [ht: sm] casts doubt on the idea of scarcity. And for good reason:

While they seem to have receded somewhat, a couple of years ago, there were quite a few arguments about the fundamentals of economics (especially macroeconomics) and how to teach them. As an outsider, one thing that struck me as odd was the emphasis on scarcity (e.g., economics is called the science of scarcity). It’s odd because, at least in wealthy societies, there are very few scarce items. We’re definitely not slacking in our ability to produce calories, which arguably for most of human, if not hominin, history was the vital concern.

Mainstream economists, as I teach my students, start with the idea of scarcity—the combination of limited means and unlimited desires. And then, after a great deal of math and a wealth of assumptions, they prove that a system of private property and free markets provides a perfect balance between those limited means and unlimited desires.

But, as I also teach them, the mainstream presumption is that scarcity is universal—both transcultural and transhistorical. In other words, they start with the idea that all human beings, in all times and places, have had to confront and solve the problem of scarcity.

An alternative is to see scarcity as an institutional, historical and social, phenomenon. In particular places, at particular times, the existing set of economic and social institutions makes certain goods and services scarce. Thus, for example, oil is scarce because of the particular configuration of the energy industry, the personal car and truck culture, the government-sponsored expansion of the highway system, and so on. That’s what makes oil scarce. Similar stories can be told about the scarcity of water, arable land, good public transportation, high-quality mass education, and so on. Their scarcity is the product of particular sets of institutions in particular societies.

Why is that important? Because, as against the assumption of mainstream economists that scarcity is always with us (and therefore can’t be changed), the idea that scarcity is an institutional phenomenon means that changing economic and social institutions can change or eliminate scarcities.

The same applies, of course, to abundances. Right now, we’re living in a society that has created a surplus of labor (and, as a result, stagnant wages), which is part and parcel of capitalism’s law of population. If we get rid of capitalist institutions, then we can create a new law of population, one in which the labor workers perform and the value they create are not turned against them.

One-trick pony

In 2012, the Republicans ran their campaign on a single policy: tax cuts for wealthy individuals and large corporations.

With Donald Trump’s announcement on Monday (joining all the other leading candidates for the Republican nomination in announcing their economic plans), it’s clear they’re going to run in 2016 on a single policy: tax cuts for wealthy individuals and large corporations.

That’s what we call a one-trick pony.

And, just so people understand, working families with children who earn under $50,000 or so already benefit from the Earned-Income Tax Credit. So, Trump’s promised “I win” tax cuts are pure demagoguery.

Cartoon of the day

Special mention

 

Once more on the Second Great Depression

As readers know, I have long been referring to the aftermath of the crash of 2007-08 as the Second Great Depression. Best I can tell, on this blog, since at least October 2010.

Apparently, at least one other economist—none other than Ben Bernanke [ht: ja]—agrees with me.

Just one year after Ben Bernanke became Chairman of the Federal Reserve Board, the economic alarm bells started going off. Now, a year after leaving the Fed behind, Bernanke is putting the crisis into perspective — HIS perspective.

He described the financial crisis as “the “worst in human history.”

Worse than the Depression? “The financial crisis itself, the collapse of asset prices, the near-collapse of so many large financial institutions, in my view, was a worse crisis than even what we saw in 1929, 1930.”

The summer of 2008 saw panic across the globe.

“If you look at the major financial firms, most of them either failed or came close to failing or needed some kind of help,” he said.

“And it would have taken down the entire economy,” said O’Donnell.

“It did!”

Just sayin’. . .

The myth of busyness?

I’m certainly sympathetic with the questions Stuart Whatley [ht: ja] raises about the “lifestyle” associations of many popular busyness theses and the attempt to “avoid politics in search of some larger, elusive truth to succor the navel-gazing curiosity of the higher-income professional class they’re targeting.”

And there’s certainly an important distinction to be made between what we might call the conspicuous busyness of the small moneyed class and the real busyness of the many who attempt to juggle low-pay jobs and moonlight in the so-called sharing economy.

But neither the busyness studies commentators nor critics like Whatley identify one of the key sources of busyness in our lives, which has nothing to do with the latest technologies: the fact that we work part of the time for ourselves and an ever-growing portion of time for someone else.

It’s that unpaid labor that makes so many of us busy. We often complain about being busy in our nonwork lives (e.g., when we have to pack our own groceries, drive our kids to school, or learn how to install and use new apps). But we then ignore how, when we work, we’re doing so only part of the time for ourselves, for which we receive a wage or salary. When we’re done with that work (say, the first three hours of an eight-hour day), we continue to work (for another five hours)—but now we’re working not for ourselves, but for someone else. We’ve already created enough to compensate for our pay. The rest of the work we do is unpaid; it’s time spent working, the fruits of which someone else is able to appropriate.

That’s why we continue to be busy, on the job. We teach students or produce car parts or create new apps for many more hours than is necessary to make up for what we’re paid. The rest is unpaid labor.

The busyness of performing surplus labor is anything but a myth.

Map of the day

This map of the United States shows that, in sixteen states, many of which are in the South, there are more people in prisons and jails than in college housing.*

*To be clear, the map does not show there are fewer people in college than in jail and prison—just fewer people in college housing. The entire U.S. corrections population, which includes people in jail, prison, parole, and probation, totaled 6.9 million in 2013. In comparison, about 19.5 million people were enrolled for college that same year—but most students live off-campus.

Cartoon of the day

Special mention