Will Demographics Solve the College Tuition Problem? (A: I Don’t Know)

November 14, 2014 14 comments

I’ve got two girls in middle school. They are lovely and (in my opinion as a proud dad) smart. I wonder, on occasion, what college will they go to and what their higher education experience will be like? No matter how lovely or smart my daughters are, though, it will be hard to fork over all of that tuition money.  It sure would be nice if college somehow got cheaper by the time my daughters are ready in 6 or 8 years!

How likely is this? There has been plenty of coverage about how the cost of college has risen so dramatically over the past decades. A number of smart people have argued that the reason tuition has increased so much is because of all of the amenities that schools have built in recent years. Others are unconvinced that’s the reason, pointing out that increased spending by universities grew at a lower than the rate of tuition increases.  Perhaps schools have been buoyed by a rising demographic trend – but it’s clear tuition increases have had a great run.

One way colleges have been able to keep increasing tuitions is by competing aggressively for wealthy students who can pay the full price of tuition (which also enables the schools to offer more aid to less than wealthy students).  The children of the wealthy overseas are particularly desirable targets, apparently.  I heard a great quote yesterday about this by Brad Delong – that his school, Berkeley, and other top universities presumably had become “finishing school[s] for the superrich of Asia.”  It’s an odd sort of competition, though, where schools are competing for a particular customer (wealthy students) by raising prices.  Presumably, this suggests that colleges have had pricing power to raise tuition due to increased demand (perhaps aided by increase in student loans, but that’s an argument for another day).

Will colleges continue to have this pricing power?  For the optimistic future tuition payer, there are some signs that university pricing power may be eroding.   Tuition increased at a slower rate this year (a bit more than 3%) but still at a rate that well exceeds inflation.   And law schools are already resorting to price cutting after precipitous declines in applications – down 37% in 2014 compared to 2010!

College enrollment trends are a mixed bag and frequently obscured by studies from in-industry sources.  Clearly, the 1990s and 2000s were a time a great growth for colleges – college enrollment grew by 48% from 1990 (12 million students) to 2012 (17.7 million).  But 2010 appears to be the recent peak and enrollment fell by 2% from 2010 to 2012. In addition, overall college enrollment declined by 2.3% in 2014, although this decline is attributed to the 9.6% decline in two-year colleges while 4-year college enrollment actually increased by 1.2%.

It makes sense that the recent college enrollment trend would be down – the number of high school graduates appears to have peaked in 2010 at 3.3 million or so and is projected to decline to about 3.1 million in 2016 and stay lowish for the next few years. The US Census reports that there was a bulge of kids that are college age now (i.e. there were 22.04 million 14-19 year olds at the 2010 Census), but there are about 1.7 million fewer kids that are my daughters’ age (i.e., 5-9 year olds in the 2010 Census).  That’s a pretty steep drop off (about 8%) in this pool of potential college students.  These demographic trends have got some people worried.  Moody’s, which rates the debt of a lot of colleges, has been downgrading a lot of smaller schools and says that this type of school has already been hit by declining enrollment and revenue. One analyst went so far as to warn of a “death spiral” at some schools due to declining enrollment.  Moody’s analysis of declining revenue is an interesting factor, in light of reports of ever-increasing tuition. Last year Moody’s reported that 40% of colleges or universities (that were rated) faced stagnant or declining net tuition revenue.

Speaking strictly, again, as a future payer of my daughters’ college tuition, falling college age population and falling enrollment would seem to point to the possibility that tuition will be lower for my kids when the time comes. Plus there are a lot of other factors that seem to be lining up against the prospects for college tuition –  like continued flat or declining wages, the enormous student loan bubble (it can’t keep growing, right?), the rise of online education…

And yet, I’m not feeling that confident.  Elite universities (and it certainly would be nice if my girls could get into such a school) seem to have found a way to collect a lot of tuition from foreign students (it’s hard to find a good data source for that though) which protects them from the adverse demographic and economic trends.  I’ve wondered if US students could get turned off by the perception that top US schools have too many foreign students and are too much, as Delong says, elite finishing schools.  But that’s hard to predict and may take many years to reach a tipping point.  Plus if tuition and enrollment drop a lot, that may cripple the schools that have taken out a lot of debt to build all of those nice amenities. A Harvard Business School professor rather bearishly projects that as many as half of the 4,000 US colleges and universities may fail in the next 15 years.  Would a sharp decrease in the number of colleges due to falling enrollment have the effect of reducing competition at the remaining schools?  If so, what impact would that have on tuition?

Both college tuition and student loans have been described as bubbles thanks to their recent rate of growth.  At some point, bubbles burst (in theory).  As someone who watched, first hand and with great discomfort, the growth of the subprime and housing bubbles before the crisis, I’ve painfully learned that bubbles can last much longer than you would rationally expect.  And despite all sorts of analysis and calculation about what should happen, the thing that triggers the bursting of the bubble is really hard to predict. As is when it will happen.  To the extent I’ve learned a lesson from mortgage land, it’s that you shouldn’t do anything stupid in anticipation of the bubble either bursting or continuing.  So, as much as I hope and even expect that the trend for increased college tuition will reverse in the coming years, I guess I’ll have to keep on trying to save for when my daughters will be heading off to college.

Categories: data science, education

Time to Short 57th Street?

November 13, 2014 2 comments

As a New Yorker, it’s hard to travel through the city these days without coming across construction sheds, scaffolding and giant cranes. New building construction is everywhere and much of it is for residential apartments. Midtown Manhattan and 57th Street in particular, sometimes referred to as “Billionaire’s Row”, seems to be overrun with giant new condo buildings going up (though the construction is hardly limited to that neighborhood). It’s not just my imagination.  An astonishing number of super high end apartments are being built – one recent report estimated that 7,000 new apartments will be coming on line in the next two years.  Sometimes, this can cause an average New Yorker like myself to get annoyed by the inconvenience of the construction sites, the altering of the city skyline, the rapid and radical changes to neighborhoods or the loss of an old, favorite haunt.  It can some cause a person to shake their fists at the sky and ask how much longer can this madness go on?  Just how many rich people in the are there in the world who don’t already have giant apartments in the city?

There are some people who are worried that the construction and development of some many high-end homes in New York might be entering a danger zone.  There are signs that the pace of expensive condos may be slowing.  London, a city similarly blessed with an influx of expensive apartments and the bankers and oligarchs who love them, has recently seen a sharp decline in high end home sales.  The fall in the prices of the Ruble and oil may start to make some overseas buyers more reticent.  The supply of high end homes may, perhaps, be exceeding demand, for now at least.

One New York City developer recently shared his concern and negative outlook for what he describes as a bubble in high end Manhattan real estate – he said he wished he could short 57th street!   In other words, this developer doesn’t see a bright future for high end New York City condos and he thinks there would be more money to make by betting on the prices of these condos falling.  Readers may recall that in 2007 a number of hedge fund managers, such as John Paulson and Magnetar,  and investment banks, such as Deutsche Bank and Goldman Sachs, made boatloads of money by using Credit Default Swaps to bet that subprime mortgage backed securities would fall in value.

Is this possible? Is there a market for betting on individual apartment buildings or neighborhoods falling in value?  Sort of?  Yale Professor Robert Shiller helped create something known as the Case Shiller Home Price Futures Exchange, which trades on the CME.  This exchange does let a person who might be inclined to make bets on the future price movements of Case Shiller’s national home price index, including either shorting (betting on a decline in price of homes underlying the index) or going long (betting on an increase in the prices of homes underlying the index).  However, it is still a relatively new concept and is relatively thinly traded.  In any event, the index is based on the home prices of the whole country (or at least the top ten regions of the country), so it really isn’t narrowly focused enough to get at the issue of over-priced billionaire condos in New York.

Alternatively, if you were a billionaire thinking about buying a $20 million pied-à-terre overlooking Central Park but worried that prices might go down, you could just decide not to buy right now.  Unfortunately, this might not be very satisfying until condo prices did eventually fall and you got to tell everyone “I told you so.”

Why would someone want to be able to short this segment of the market?  Is it just because they’re jealous of the rich and hope that they lose some (paper) wealth?  In the stock market, short sellers sometimes get attacked for being bad for the market or harming otherwise nice companies.  Defenders of short sellers (and there have been many similar defenses in recent years), however, argue that shorting stocks is good for market liquidity and price discovery.  Short sellers expose fraud and correct mis-pricing in the market.  Likewise, the hedge fund guys and bankers who shorted the subprime market argued in books like Michael Lewis’s The Big Short that they did provide a service (as well as make themselves wealthy) by helping to expose the shoddy mortgage underwriting practices and national housing bubble that dominated the early 2000s.

If there really is a bubble in multi-million dollar apartments in New York City, would New Yorkers benefit from having the bubble deflated or fraudulent apartment buyers or sellers exposed?  Potentially.  If this market is a bubble, it may have the effect of driving up land values throughout the neighborhood, or cause landlords to warehouse empty buildings in anticipation of future paydays.  Pricking the bubble might prevent the speculative construction of buildings that don’t, subsequently, find enough apartment buyers and then end up in bankruptcy, sitting vacant and neglected for many years.  If there really is a bubble, shouldn’t the speculative excesses of the billionaire condo market be exposed to price discovery and negative bets the way the subprime market was back in 2007?

Unfortunately, no such market really exists at this time.  Until Professor Shiller decides to narrow his index and futures exchange down to just Manhattan’s 57th Street, or some clever trader comes up with a new way to trade property values, we may be stuck having to wave our fists angrily at the skyscrapers blotting out the sun.  But it is interesting to think about.

Categories: economics

My annoying neighbor (and the banality of political corruption)

November 12, 2014 1 comment

Greetings! Thanks so much to Cathy for having me in to guest blog for her while she visits Haiti! While neither a math pro nor a babe, I do, on occasion confer with Cathy about her posts and contribute a few thoughts of my own about the world on Twitter at @advisoryA. And I also play bluegrass with her most Tuesday nights – so I guess that qualifies me as a substitute.

To start, I thought I’d share some observations about my new neighbor. West 22nd Street, where my family and I live, is a lovely, tree-lined area with a mix of modest townhouses, apartments and an occasional upscale single-family home mixed in.

In early October my street was lined with pink “No Parking Tuesday” signs. Through neighborhood scuttlebutt I learned the reason: President Obama was attending a fundraiser at a home across the street from me. The location of the fundraiser was at what had been, until recently, a modest townhouse owned by an old Chelsea family for decades. In 2012 the building was bought for $4.6 million. It received a lavish renovation and was put on the market a couple of weeks ago for …. $16.5 million (yes, nearly four times the price paid less than 18 months earlier). It’s being marketed by some real estate broker guy who is a regular on a TV show called Million Dollar Listing – i.e. a home flipping show. http://ny.curbed.com/tags/460-west-22nd-street For fun, check out the comments on Curbed.com (which note that a more “reasonable” flip might be $7 or $8 million, the layout of the narrow home is awkward because the dining room is on a different floor from the kitchen and the master bath that is down the hall from the master bedroom.  Plus, there’s a playground pretty much in the backyard and it’s in flood zone A – this area was hit during Hurricane Sandy).

As far as I can tell, the new owners have never lived there – I watched the renovation over the past several months and, since it was put on the market, the only people I’ve noticed inside have come from a stream of of black cars delivering their passengers to apartment viewings.

It didn’t take much effort to discover who was the mastermind behind this audacious exercise in house-flipping: the owners of this lovely home are Bill White and Bryan Eure. White manages to get his name in the paper with some regularity. He’s basically a professional fundraiser. His wiki is…interesting. http://en.wikipedia.org/wiki/Bill_White_(administrator) His big claim to fame is raising funds for, and subsequently managing, the Intrepid Museum. In 2010 he also formed a consulting company called Constellation Group for advice on charitable contributions, etc., and, within no time, he somehow got tangled up in the pay-to-play scandals. He was subpoenaed by then-Attorney General Andrew Cuomo (hmmm?) and ended up paying $1 million to resolve the mess. http://www.bloomberg.com/news/2010-09-16/ex-intrepid-president-said-to-settle-cuomo-pension-probe-for-1-million.html A million dollars sounds like a pretty big check and it came with some loss of status, including a “Disgraced” headline from the Daily News (“disgraced ex-head of the Intrepid” http://www.nydailynews.com/new-york/bill-white-disgraced-ex-head-intrepid-agrees-pay-1-million-settlement-pay-to-play-deal-article-1.443855 ). The New York pay-to-play scandal was pretty ugly and a few notables, including former New York City Comptroller Alan Hevisi, were convicted and sent to prison. White, however, was undeterred and instead, went about ramping up his political mover-and-shaker career. Within a year, his “disgrace” was fully rehabilitated.

Not one to let a romantic occasion go to waste, in 2011 White threw an elaborate, 700 guest wedding extravaganza at the Plaza to commemorate his wedding Bryan Eure. It wasn’t just any wedding – David Boies officiated! http://www.nytimes.com/2011/10/24/nyregion/wedding-of-bill-white-and-bryan-eure-is-extravagant.html http://nypost.com/2011/07/19/my-big-fab-gay-wedding/ And it was filled with luminaries and politicians, including Bill Clinton, both George Bushes, David Patterson, Scott Stringer, Christine Quinn, and, remarkably, White’s former Javert, Andrew Cuomo. Nothing like a wedding to help bury old grudges.

For some reason, White appears to be a bit fickle when it comes to his political affiliation. Despite supposedly being considered for senior military positions in the Obama Administration during Obama’s first term, White presented himself as a Romney supporter in 2012. He was back in the news for withdrawing support, and requesting his contributions back, from Romney in 2012 over Romney’s gay marriage stance http://politicalticker.blogs.cnn.com/2012/05/14/romney-donor-pulls-support-backs-obama-over-same-sex-marriage/.

White also calls on his political friends to help out the neighborhood sometimes, too. Even though he doesn’t spend much time at his 22nd Street home, White still has strong opinions on the neighborhood. He angrily petitioned Mayor Bloomberg over the CitiBikes station that would be a few feet from his front door. http://www.dnainfo.com/new-york/20140106/chelsea/mayor-bloombergs-friends-emailed-for-help-with-their-citi-bike-woes In an email to his old buddy, he argued that it was just plain unfair that the ugly bike rack would mess up the character of “his” block.

I’d estimate roughly 200 police officers and at least 50 Secret Service officers arrived on Tuesday, October 7th to prepare for the President’s arrival. Security gates were all over the place, the street was closed off to traffic and eventually the police and Secret Service required ID for anyone entering the block (the NY Times had a little commentary about the visit http://www.nytimes.com/2014/10/08/nyregion/before-a-visit-from-obama-a-chelsea-block-goes-on-lockdown.html?_r=0. At one point, the Secret Service came to my door to ask about the open window in the upstairs apartment – apparently it made the snipers (!!) uncomfortable (since my upstairs neighbor was out at the time, I’m not sure how this was resolved). Many thousands of dollars were spent securing this visit. The President showed up, hung out for about an hour and headed out to Greenwich, Connecticut for fundraiser part II. But the good news is Bill White can now say that the President (who he may or may not support, depending on the current tides) broke bread in his house, which should certainly help boost resale value – I bet they don’t have that happen every day on Million Dollar Listing!

The President’s visit was, for me, a rather sad window into the fundraising machine of rich guys and the politicians who need them. As a coda, investigative reporter Roddy Boyd provided an additional glimpse into my millionaire-next-door. As part of his many efforts to help Veterans, White worked as a fundraiser for New York City’s Veteran’s Day parade. Sadly, due to rising costs of throwing a parade, it almost didn’t happen this year.  But thanks to the fundraiser with Obama at White’s house, he managed to scrape enough money together to save the parade. As Roddy notes, there’s a little more to this story. http://observer.com/2014/11/stumbling-up-fifth-avenue/ Just ten years ago, the NY Veteran’s Day parade cost about $35,000 to run. Now, a much more elaborate, televised parade costs more than a million dollars to run each year, in part due to the $570,000 fund-raising contract for our old friend Bill White. Roddy has much more on the ugly sausage-making of charitable fund raising and I highly recommend you check out his article. I eagerly await the arrival of the Russian oligarch or Chinese official who’ll buy White’s house and help make the neighborhood a little more respectable.

Categories: Uncategorized

Alt Banking in Huffington Post #OWS

November 11, 2014 1 comment

Great news! The Alt Banking group had a piece published today in the Huffington Post entitled With Economic Justice For All, about our hopes for the next Attorney General.

For the sake of the essay, we coined the term “marble columns” to mean the opposite of “broken windows.” Instead of getting arrested for nothing, you never get arrested, as long as you work at a company with marble columns. For more, take a look at the whole piece!

Also, my good friend and bandmate Tom Adams (our band, the Tomtown Ramblers, is named after him) will be covering for me on mathbabe for the next few days while I’m away in Haiti. Please make him feel welcome!

Bitcoin provocations

Yesterday at the Alt Banking meeting we had a special speaker and member, Josh Snodgrass (not his real name), come talk to us about Bitcoin, the alternative “cryptocurrency”. I’ll just throw together some fun and provocative observations that came from the meeting.

  1. First, Josh demonstrated how quickly you can price alternative currencies, by giving out a few of our Alt Banking “52 Shades of Greed” cards and stipulating that the jacks (I had a jack) were worth 1 “occudollar” but the 2′s (I also had a 2) were worthy 1,000,000,000 occudollars. Then he paid me $1 for my jack, which made me a billionaire. After thinking for a minute, I paid him $5 to get my jack back, which made me a multibillionaire. Come to think of it I don’t think I got that $5 back after the meeting.
  2. There’s a place you can have lunch in the city that accepts Bitcoin. I think it’s called Pita City.
  3. The idea behind Bitcoin is that you don’t have to have a trustworthy middleman in order to buy stuff with it. But in fact, the “bitcoin wallet” companies are increasingly playing the role of the trusted middlemen, especially considering it takes on average 10 minutes, but sometimes up to 40 minutes, of computing time to finish a transaction. If you want to leave the lunch place after lunch, you’d better have a middleman that the shop owner trusts or you could be sitting there for a while.
  4. People compare bitcoin to other alternative currencies like the Ithaca Hours, but there are two very important differences.
  5. First, Ithaca Hours, and other local currencies, are explicitly intended to promote local businesses: you pay for your bread with them, and the bread company you give money to buys ingredients with them, and they need to buy from someone who accepts them, which is by construction a local business.
  6. Second, local currencies like the Madison East Side Babysitting Coop’s “popsicle currency” are very low tech, used my middle class people to represent labor, whereas Bitcoin is highly technical and used primarily by technologists and other fancy people.
  7. There is class divide and a sophistication divide here, in other words.
  8. Speaking of sophistication, we had an interesting discussion about whether it would ever make sense to have bitcoin banks and – yes – fractional reserve bitcoin banking. On the one hand, since there’s a limit to the number of overall bitcoins, you can’t have everyone pretending they can pay a positive interest rate on all the bitcoin every year, but on the other hand a given individual can always write a contract saying they’d accept 100 bitcoins now and pay back 103 in a year, because it might just be a bet on the dollar value of bitcoins in a year. And in the meantime that person can lend out bitcoins to people, knowing full well they won’t all be spent at once. Altogether that looks a lot like fractional reserve bitcoin banking, which would effectively increase the number of bitcoins in circulation.
  9. Also, what about derivatives based on bitcoins? Do they already exist?
  10. Remaining question: will bitcoins ever actually be usable and trustworthy for people to send money to their families across the world below the current cost? And below the cost of whatever disruptions are being formulated in the money business by Paypal and Google and whoever else?

Update: there will be a Bitcoin Hackathon at NYU next weekend (hat tip Chris Wiggins). More info here.

Categories: #OWS, economics, finance

Aunt Pythia’s advice

Holy crap! Aunt Pythia is in love with a new knitting pattern and has just completed her first reversible “flaming hat”:

The orange is cashmere. I got it on sale.

The orange is cashmere. I got it on sale. Ridiculously scrumptious.

The green is leftover from a sweater Aunt Pythia knitted for her husband years ago, a wool/silk blend.

The green is leftover from a sweater Aunt Pythia knitted for her husband years ago, a wool/silk blend. Also scrumptious.

And that’s all I got today, folks.

Just kidding! I’m here for you guys, of course! Let’s dig in. But before I forget,

please think of something

titillating, reversible, and scrumptious 

to ask Aunt Pythia

at the bottom of the page!

By the way, if you don’t know what the hell Aunt Pythia is talking about, go here for past advice columns and here for an explanation of the name Pythia.

——

Dear Aunt Pythia,

This may be too broad a generalization, but I feel that current practices of teaching math were developed in an era when computers were not available. In an age where powerful, open-source tools are readily available and it’s even possible to do symbolic math using a computer, is it still useful to teach traditional pen-and-paper math to students who have no interest in becoming professional mathematicians? Does one really need to know that a trigonometric substitution would convert a tricky integral to a familiar one? As teachers, should we just focus on “big picture” concepts and use computers to explore problems on a larger scale than are feasible by hand (e.g. 1000 X 1000 matrices instead of 3 X 3)? Or, will lack of rigor in teaching have long term consequences (dubious application of math in real world)? Are there examples of the use of computers in mathematical education that you would recommend?

Obsessive Correlator

Dear OC,

I kind of agree. I never saw the point of cosines and sines until Taylor Series, even though they theoretically help ships navigate in the ocean. I mean, maybe, but that connection was never made clear to us.

If I had my way, we’d spend a lot more time doing simple data analysis, trying to understand what “statistical evidence” means, so we train people to read the newspaper and scientific research papers and not be cowed by the math, which is usually pretty simple.

Also, there are new tools like this one (hat tip Josh Vekhter) which are taking care of the rote arithmetic already:

The good news is, there are efforts underway to modernize the mathematics curriculum. The bad news is they’ve gotten caught in a web of politics. But I do expect this stuff to get sorted out over time.

Aunt Pythia

——

Dear Aunt Pythia,

I’m an undergrad freshman studying physics and math. I absolutely adore physics and it’s what I want to be doing for the rest of my life. I’d really, really love to become a physicist but I fear I’m just not smart enough. Reading your sample question has worried me. I had always thought if I work hard enough I could do it, but it’s always in the back of my mind that I’m not creative/intelligent enough. When (if ever) will I know if I have what it takes?

Unsure and Insecure

Dear U&I,

Short answer: never.

The long answer has four parts.

First, I have actually never met anyone who thinks they are smart enough to be a physicist or a mathematician at the level they want to be. Just get used to it and enjoy the love for the subject anyway. Also, knowing that nobody ever feels smart enough might be comforting.

Second, in general the more time you spend with something, the better you get at it, and the more you love something the more time you want to spend with it. Sometimes insecurity can be debilitating, but if you remember you love it aside from your ability, you can try to keep things cool.

Third, when your teachers and others encourage you, believe them. If you don’t get into a grad school for math or physics, take it as a sign – probably – that it might not be for you, but if you do get into a grad school, just trust that other people see something in you that you can’t see yourself, yet.

Finally, I am not sure what you mean by my “sample question”, did I ask something that made a bunch of people feel not smart enough for physics and math? If so, I apologize. I never mean to do that. I really don’t think any one question could possibly be sufficient to size someone up in this kind of deep way.

Good luck!

Aunt Pythia

——

Dear Aunt Pythia,

Lately I’ve been a bit of a hermit. I do go out sometimes, but I often don’t really talk to anyone because of the well-documented awkwardness involved in starting conversations with strangers (which somehow seems to not bother some people).

I have a work friend in a similar predicament, and we came up with the idea for a “woman scavenger hunt” (we’re both single straight men) designed to help us get over our discomfort with talking to strangers (specifically, women). The scavenger hunt would be a race to meet women with particular characteristics such as:

  • wearing a bandanna
  • reading a book in a bar at night
  • has a driver’s license from Hawaii or Alaska
  • knows sign language

We would have to talk to the person in question and secure some sort of evidence, such as a photograph (consensually, of course!)

My questions are:

  1. Does this sound creepy? For some reason it feels like we’re plotting to invade other people’s privacy, and it’s hard to decide if this is real or if I’m just antisocial.
  2. If you endorse the idea, can you add to our list? It has to be something for which one can collect evidence; we ruled out “met Elizabeth Warren”, for example.

Tired Introvert Mulling Interpersonal Development

Dear TIMID,

First of all, I think it’s a goodish idea. I would like to suggest that you enlarge the goal to “meeting a person with the following characteristic” rather than a woman specifically, because the truth is you’re probably awkward meeting men and women, and this will give you practice, and although you are theoretically more interested in the women, meeting men is a good idea too. Plus, men have friends who are girls. If you give a good impression to the men you meet, the women will be like, “who’s this guy?”.

By the way, one of my good friends had a habit when she was single of hanging out with her girlfriends (wingwomen actually) and coming up with slightly artificial arguments at their table, which they would turn into “polls” for the entire bar. In other words, they’d argue aimlessly until they came up with something jicy enough to bring to every other group of men, women, and mixed groups at the bar and poll them. They might do this all night, gradually getting to know people at the bar, and they might have actually been interested romantically or sexually in only a few of the people they interacted with, but their friendliness and interactivity was a hit with everyone, assuming their polls questions were funny and smart, which they were.

In other words, it’s a good idea, and it’s quirky, and if you can play with it and have fun with it, and get other people to be into it and have fun with it, then it’s all good. You might not get laid, but in the worst case scenario you make friends.

Just to be clear, you gotta make sure the “characteristics” you’re looking for don’t get creepy or sexual. Don’t, for example, go up to women and say you’re looking for a woman with such-and-such sexual experience or physical attributes. Gross.

And never, ever, ever do anything this guy suggests.

Good luck!

Aunt Pythia

——

Dear Aunt Pythia,

I’m applying for (academic) math jobs at the moment. I’m also female (obvious from my name) and a lesbian (unsurprising once you meet me).

Occasionally, as part of the job application, I’m asked to comment on how I might contribute to diversity in mathematics. This is obviously a broad question, but part of my answer inevitably involves a discussion of women in mathematics. The way I talk about this issue is naturally colored by the fact that I’m a woman.

One of the prompts explicitly mentions the GLBT axis of diversity. It is not as clear to me how or whether to address this in my statement. My personal experience is that anti-gay biases in mathematics aren’t as pernicious as racial or gender biases, so I tend not to raise this issue on my own.

If I come out while saying that I’m supportive of GLBT students, then it sounds like I’m looking for extra credit for being a minority. I don’t need brownie points for being queer. But on the other hand, I’m out in my personal life and so it seems weird to be closeted in a discussion touching on GLBT diversity. But then again it seems weird to be discussing sexuality at all in the context of a job application.

In summary: would you come out in a “statement of diversity”?

Closeted Around Diversity

Dear CAD,

Things have changed since I applied for jobs! We didn’t have diversity statements back then. And it’s weird to think they’d be prompting you to disclose stuff like your sexuality – in fact it sounds downright illegal.

After some thought and a minimal amount of googling, I think maybe you should interpret this as prompting your experience in promoting diversity in mathematics. This idea is backed up by the advice on this webpage, although I don’t know if that makes it a universal truth.

In other words, have you mentored women? Have minorities of one type or another felt comfortable enough around you to come ask you questions? Did you organize or give a talk at a Sonia Kovalesky Day somewhere? Were you the faculty advisor for some other group that was diverse? That kind of thing.

I guess I think there’s no reason to talk directly about your sexuality when you talk about your experience promoting diversity, even though it might be inferred, rightly or wrongly.

To sum up, I would not come out in a “statement of diversity.”

Auntie P

——

Please submit your well-specified, fun-loving, cleverly-abbreviated question to Aunt Pythia!

Click here for a form.

Categories: Aunt Pythia

Inflation for the rich

I’m preparing for my weekly Slate Money podcast – this week, unequal public school funding, Taylor Swift versus Spotify, and the economics of weed, which will be fun – and I keep coming back to something I mentioned last week on Slate Money when we were talking about the end of the Fed program of quantitative easing (QE).

First, consider what QE comprised:

  1. QE1 (2008 – 2010): $1.65 trillion dollars invested in bonds and agency mortgage-back securities,
  2. QE2 (2010 – 2011): another $600 billion, cumulative $2.25 trillion, and
  3. QE3 (2012 – present): $85 billion per month, for a total of about $3.7 trillion overall.

Just to understand that total, compare it to the GDP of the U.S. in 2013, at 16.8 trillion. Or the federal tax spending in 2012, which was $3.6 trillion (versus $2.5 trillion in revenue!).

Anyhoo, the point is, we really don’t know exactly what happened because of all this money, because we can’t go back in time and do without the QE’s. We can only guess, and of course mention a few things that didn’t happen. For example, the people against it were convinced it would drive inflation up to crazy levels, which it hasn’t, although of course individual items and goods have gone up of course:

united-states-inflation-cpi

Well but remember, the inflation rate is calculated in some weird way that economists have decided on, and we don’t really understand or trust it, right? Actually, there are a bunch of ways to measure inflation, including this one from M.I.T., and most of them kinda agree that stuff isn’t crazy right now.

So did QE1, 2, and 3 have no inflationary effect at all? Were the haters wrong?

My argument is that it indeed caused inflation, but only for the rich, where by rich I mean investor class. The stock market is at an all time high, and rich people are way richer, and that doesn’t matter for any inflation calculation because the median income is flat, but it certainly matters for individuals who suddenly have a lot more money in their portfolios. They can compete for New York apartments and stuff.

As it turns out, there’s someone who agrees with me! You might recognize his name: billionaire and Argentinian public enemy #1 Paul Singer. According to Matt O’Brien of the Washington Post, Paul Singer is whining in his investor letter (excerpt here) about how expensive the Hamptons have gotten, as well as high-end art.

It’s “hyperinflation for the rich” and we are not feeling very bad for them. In fact it has made matters worse, when the very rich have even less in common with the average person. And just in case you’re thinking, oh well, all those Steve Jobs types deserve their hyper-inflated success, keep in mind that more and more of the people we’re talking about come from inherited wealth.

Categories: economics, modeling, musing
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