Macro Roundup

"...While roughly 22% of incoming students want to major in fields like anthropology, art history, and English, 63% of administrators have backgrounds in the arts, humanities and social sciences - three times the number of students. As for pre-professional business and health professions, only 9% of administrators have backgrounds that speak to students with those needs. Just 7% of administrators have backgrounds in technical fields like engineering and computer science, and this is 5 times smaller than the number of students who are entering college wanting to study in those areas. The data reveals that although almost two-thirds of students want technical and pre-professional training in college, only 16% of administrators have any experience in those areas which is a shockingly limited amount of intellectual diversity among administrators..."

Samuel J. Abrams, "Want Viewpoint Diversity on Campus? Here’s How,"Minding The Campus, April 16, 2019, https://www.mindingthecampus.org/2019/04/16/want-viewpoint-diversity-on-campus-heres-how/

Want Viewpoint Diversity on Campus? Here’s How

From supporting shout-downs and intimidation of conservative speakers to denying due process to students accused of sexual assault, stories regularly emerge that chronicle the liberal lopsidedness and lack of true viewpoint diversity among campus administrators.

It is widely known that these omnipresent administrators - mid-tier staffers who occupy dozens of offices including diversity and inclusion, student achievement and success, deans of students, and student affairs — set the political agenda from orientation programs to residential life policies and are far more progressive than those in the professoriate and the students.

The question remains: what can be done to bring more balance to higher education?

After spending a number of years studying this problem, I have an answer: we need more scientists, engineers, and business-focused college administrators who sync up with the interests of students and bring in drastically alternative values from those in the humanities who now dominate the administrative class.

This conclusion comes from a national survey of over 900 students in 2018, which shows not only are the humanities dominant among administrators but also that there is a significant disconnect between what incoming students want to study in college and those who set the tone and tenor of so much life on campus.

Specifically, UCLA’s Higher Education Research Institute asks incoming students about their intended major, and just under 11% are interested in the arts and the humanities while another 11% state the social sciences are what they hope to study. In contrast, 26% of new students state that they are interested pre-professional courses of study like business and health-related fields and another 35% hold that technical fields like computer science, engineering, and hard sciences are their planned fields of study. There is a real diversity in student interest, and this breakdown of majors fits nicely with narratives that show lower demand for humanities of late and significant shortages for classes in programming and related technical fields.

While roughly 22% of incoming students want to major in fields like anthropology, art history, and English, 63% of administrators have backgrounds in the arts, humanities and social sciences - three times the number of students. As for pre-professional business and health professions, only 9% of administrators have backgrounds that speak to students with those needs. Just 7% of administrators have backgrounds in technical fields like engineering and computer science, and this is 5 times smaller than the number of students who are entering college wanting to study in those areas.

The data reveals that although almost two-thirds of students want technical and pre-professional training in college, only 16% of administrators have any experience in those areas which is a shockingly limited amount of intellectual diversity among administrators.

Going further, the fact that the humanities are so pronounced and the disparities between student interests and the background of administrators are so great, we now have a clear basis for the problems with campus discourse today.

As a professor of politics, rarely does a week go by when I do not have a student in my office who is upset about the socio-political currents on campus. So many students are interested in careers and internships, pursuing their passions (which may not be art history or anthropology) and are looking to have a bit of fun; they are not interested in regular fights about social justice and political correctness in their social spaces.

Students tell me that campus administrators regularly present programming with messages about diversity and inclusion that are unwanted and one-sided, are told about how they are pressured to talk about sexuality and identity even when they consider these topics private, and are barraged with seemingly never-ending socio-political narratives from their dorms to the dining halls that are distracting and disruptive to their collegiate goals.

Taking this new background about administrators into account, the extreme liberalism in indoctrination makes total sense. Whereas humanistic inquiry is often subjective, is fixated on the human condition where facts are hard to define, sees activism as ethically essential, and views engagement as necessary to address wrongs of the past, those in business, science and engineering value clear evidence, the scientific method, and often eschew politicizing their inquiries and questions.

If administrators are overwhelming from the humanities, which now explicitly promote liberal activism and engagement, and there are few scientists around to work with students and bring the evidence-based values to the table, it is no wonder that our college and university extracurricular programming has taken a sharp turn to the left.

Thus, one solution to this ideological imbalance is clear: If our institutions of higher education and their administrators really value viewpoint diversity, these schools will actively recruit administrators who will match the intellectual needs of their students and move beyond a population that deeply values political promotion.

True viewpoint diversity is so much greater than identity politics, and it includes divergent intellectual paths as well. Engineering and computer science students have their own norms and culture, and that is notably different from those in the arts and social sciences. Varied cultures can and should co-exist, and more intellectual balance among administrative personnel should help provide more balance for our students.

Administrators with broader views will change campus culture for the better because questions of social justice and righting past wrongs may be crucial to some students, many students do not want liberal politics infused into every aspect of their lives outside the classroom, they just want real personal and professional guidance.

The OECD series for Prime Age Population is incomplete but here's what we have, so the Working Age Population (25-54, All Persons) as a Share of the total population in 2005 Was 42% for the US, 40% for France and 43% for Germany. As of 2014 those percentages have declined to 39% for the US and France and 41% for Germany. They don't have population estimates post 2014. OECD, "Working age Population, Aged-25-54, All Persons" and "Population mid-year estimates Total," Organisation for Economic Co-operation and Development, Accessed April 24, 2019, https://stats.oecd.org/Index.aspxhttps://stats.oecd.org/Index.aspx

Working on the prime age population now, as a stand in this is the OECD's primary metric for working age is 15-64 measured as a percentage of population. This is what that looks like for the "core four" from 1970-2014.

Going through the CEA report now, haven’t seen anything specifically on the Swedish liberalization.

So Richard Freeman (the Harvard Labor Economist) did an NBER chapter that did a good job capturing the Swedish experience with structural reforms,

"...The first important policy change was that Sweden adopted flexible exchange rates and inflation targeting. This caused an immediate and substantial weakening of the currency, leading to a prolonged period of export- led growth. The growth of exports put the current account into surplus for over a decade. Other critical policy changes included a contraction of the public sector, reduced generosity in social insurance systems, and the deregulation of many markets. The accompanying appendix provides a broad overview of important reforms and shows that the country adopted more market- oriented policies in many domains. In the government sector, Sweden sought to eliminate its budget deficit through expenditure cuts, tax hikes, and a slimmer public sector. These policies and the rapid economic growth in the recovery reduced government spending to 52 percent of GDP in 2006—higher than in most advanced countries, but significantly below the pre-crisis level—and reduced central government debt from nearly 80 percent of GDP in 1996 to about half that in 2006—bringing Sweden in line with other advanced economies and well within EU guidelines.....We began this introduction by noting that the Swedish welfare state was arguably the most ambitious effort by a capitalist market economy to reduce inequality and eliminate poverty. The 1990s crisis and the slow economic growth that preceded it highlighted the Swedish model’s deficiencies and fragility. During our first study, there was fear that the Swedish model was no longer viable. If the pre-crisis assessment of the Swedish model was overly optimistic, the crisis- period assessment was overly pessimistic. Sweden’s recovery shows that it is possible to run a reasonably successful market economy while still devoting considerable resources to a welfare state that maintains economic equality and to surmount an economic crisis. This is probably easier to do in smaller economies than in larger ones and in more homogeneous countries than in more heterogeneous ones, so Sweden’s experiences are not easily transferable to the United States or other large economies. It is also easier to do so in a society where the vast bulk of the citizenry is committed to egalitarian goals, as in Sweden, rather than in societies where the polity is divided over the weight to place on equity compared to efficiency. Faced with crisis, Sweden modified policies and reduced some benefits that had substantial efficiency costs. It became more market reliant and open to competition and to individual choice, giving a stronger economic base for maintaining the welfare state. Sweden’s market- oriented reforms arguably had a first- order impact on efficiency but only a second- order impact on equity, buttressing the welfare state while improving the general economic welfare of Swedes..."

Richard Freeman, Birgitta Swedenborg, and Robert Topel, "Reforming the Welfare State: Recovery and Beyond in Sweden," National Bureau of Economic Research, February 2010, https://www.nber.org/chapters/c5357.pdf

Fernández-Villaverde is the Penn professor you've traded emails with "Just your opinion man" according toOECDin 2015 general government spending was 49.6% of GDP versus 63.48% in 1995

"... By the early 1990s,government spending and transfer payments ballooned to 70% of gross domestic product,and debt had increased to 80% of GDP. Between 1966 and 1974, Sweden lost some 400,000 private jobs—proportionate to 16.7 million in today’sU.S.In1991 a market-oriented government came to power and undertook far-reaching reforms. Policy makers have privatized parts of the health-care system, introduced for-profit schools along with school vouchers, and reduced welfare benefits. Since 1997, government ministries that propose new spending plans have been required to find offsetting cuts in their budgets. As a result, public debt has declined from 80% of GDP in the early 1990s to 41%...."
Jesús Fernández-Villaverde and Lee E. Ohanian, "How Sweden Overcame Socialism,"Wall Street Journal, January 9, 2019, https://www.wsj.com/articles/how-sweden-overcame-socialism-11547078767

How Sweden Overcame Socialism

Nearly half of millennials say they prefer socialism to capitalism, but what do they mean? “My policies most closely resemble what we see in the U.K., in Norway, in Finland, in Sweden,” Rep. Alexandria Ocasio-Cortez told “60 Minutes.” Yet Sweden’s experiment with socialist policies was disastrous, and its economic success in recent decades is a result of market-based reforms.

Until the mid-20th century, Sweden pursued highly competitive market-based policies. By 1970 Sweden achieved the world’s fourth-highest per capita income. Then increasingly radical Social Democratic governments raised taxes, spending and regulation much more than any other Western European country. Economic performance sputtered. By the early 1990s, Sweden’s per capita income ranking had dropped to 14th. Economic growth from 1970 to the early 1990s was roughly 1 percentage point lower than in Europe and 2 points lower than in the U.S.

Before its socialist experiment, Sweden had a smaller government sector than the U.S. By the early 1990s, government spending and transfer payments ballooned to 70% of gross domestic product, and debt had increased to 80% of GDP. Between 1966 and 1974, Sweden lost some 400,000 private jobs—proportionate to 16.7 million in today’s U.S.

In 1991 a market-oriented government came to power and undertook far-reaching reforms. Policy makers have privatized parts of the health-care system, introduced for-profit schools along with school vouchers, and reduced welfare benefits. Since 1997, government ministries that propose new spending plans have been required to find offsetting cuts in their budgets. As a result, public debt has declined from 80% of GDP in the early 1990s to 41%.

To increase incentives to work, Sweden reduced unemployment benefits and introduced an earned-income tax credit in 2007. The electricity and transportation industries were deregulated in the 1990s, and even the Swedish postal system was opened up to competition in 1993. The corporate tax rate was cut from its 2009 level of 28% to 22% today, and is scheduled to decline to 20.4% in 2021.

This policy mix has earned Sweden a Heritage Foundation ranking as the 15th freest economy in the world. The U.S. is 18th. And it’s paid off. Since 1995, Swedish economic growth has exceeded that of its European Union peers by about 1 point a year. Sweden is now richer than all of the major EU countries and is within 15% of U.S. per capita GDP. While Sweden still has a larger government than the U.S., its tax code is flatter. The progressivity of the U.S. tax code distorts incentives. These distortions would become even larger under the tax-increase proposals of democratic socialists like Ms. Ocasio-Cortez.

There is an example for the U.S. here, but the lesson isn’t what Ms. Ocasio-Cortez thinks. Command-and-control economic policies undermined Sweden’s prosperity, and they would do the same to America’s.

Mr. Fernández-Villaverde is a professor of economics at the University of Pennsylvania. Mr. Ohanian is a senior fellow at the Hoover Institution and professor of economics at UCLA.