Macro Roundup

though you would enjoy this Koo sentence, "... The extended periods of slow growth and low inflation seen in Japan since 1990 and in the west since 2008 arecaused by the disappearance of borrowers, not by the lack of lenders. Monetary policy, which controls the availability of financing, does not work well when there is no appetite for debt...."

Richard Koo, "Why aggressive monetary easing is pushing on a string,"Financial Times, September 10, 2019, https://www.ft.com/content/e8bc69c2-d2d9-11e9-8367-807ebd53ab77

“…Alas, even if your undergrad is happy with his English major now, other studies say he will come to regret it. In June, a Payscale survey of 250,000 college grads reported 1 in 5 with a humanities degree as saying that, next to their student loans, their choice of major was their biggest educational regret. A 2017 MarketWatch story was blunt: It called English “the most regretted college major in America.”…”

William McGurn, "Is Majoring in English Worth It?"Wall Street Journal, September 9, 2019, https://www.wsj.com/articles/is-majoring-in-english-worth-it-11568068987

Is Majoring in English Worth It?

The summer holidays have finally ended, and across America college students are returning to campus. But not before someone—most likely mom or dad—has written a hefty tuition check. If you’re a parent going into hock to pay for your son or daughter’s degree in English lit, you may be feeling a mite anxious about what you are getting for all those dollars.

A just-released Bankrate study won’t make you feel any better. In a ranking of 162 college majors by median income and unemployment rate, English majors landed among the bottom dwellers, at 132. At $47,800 in median income, they did better than those in drama ($35,500) or fine arts ($37,000), but they earned less than half as much as someone who majored in, say, electrical engineering ($99,000).

Alas, even if your undergrad is happy with his English major now, other studies say he will come to regret it. In June, a Payscale survey of 250,000 college grads reported 1 in 5 with a humanities degree as saying that, next to their student loans, their choice of major was their biggest educational regret. A 2017 MarketWatch story was blunt: It called English “the most regretted college major in America.”

Manifestly, English majors aren’t getting much respect these days—including self-respect. But don’t blame the kids. Colleges sell themselves as a ticket to upward mobility, without providing the data students and parents need to weigh college costs against expected benefits. Humanities students have it even worse, because the watering down of the curriculum has diminished the value of degrees such as English or history.

In marketing college to prospective students, universities like to cite the significant difference in lifetime earnings between someone with a bachelor’s degree and someone with a high school diploma. Fair enough. But as the Bankrate survey illustrates, the earnings differential among college degrees can be significant too.

Economist Richard Vedder, author of “Restoring the Promise: Higher Education in America,” has long urged colleges to give students many more measures along the lines of the Bankrate survey. What students especially need, however, isn’t averages but the worth of particular degrees from particular universities.

“When you spend $100,000 or more for something, you are entitled to know the probable value of what you are getting,” says Mr. Vedder.

No one is surprised to learn that STEM majors (science, technology, engineering, mathematics) out-earn English majors. After all, the purpose of what used to be called a “liberal education” has never been about a high-paying career. Even so, Jonathan Pidluzny, director of academic affairs for the American Council of Trustees and Alumni (ACTA), notes that employers nevertheless prize the critical thinking, communication skills and judgment cultivated by a liberal-arts education.

“The English major was once a guarantor of effective, formal writing skills and the ability to comprehend and analyze the complex thoughts found within centuries of brilliant and challenging poetry and prose,” he told Campus Reform. “Its decline into the epiphenomena of popular culture and identity politics is a self-inflicted wound that has rocked its credibility.”

In other words, what’s on offer today isn’t your father’s English degree. An ACTA study of English programs reports that 48 of 52 top schools (as ranked by U.S. News & World Report) allow English majors to graduate without ever having taken a course on Shakespeare. In the past ACTA has also highlighted studies showing that the average grad, even those from prestigious flagship universities, shows little or no improvement in critical thinking for having gone to college.

Here the much-maligned English degree is simply a proxy for what is wrong with college today. It isn’t that STEM subjects are the only majors worth anything. It’s that the humanities have disproportionately been infected by political correctness and the malignant influence of Herbert Marcuse, father of the “repressive tolerance” so prevalent on campuses these days.

In a phone conversation, Mr. Pidluzny maintains that a humanities major rooted in a rigorous core curriculum still provides value. The operative word is rigor. The 2018 Strada-Gallup survey reports that college grads who “strongly agree” they were challenged academically are 2.4 times more likely to say their degree was worth the cost.

So why have the sciences kept their integrity while the humanities haven’t? Mr. Pidluzny suggests it’s because the costs of a dumbed-down STEM degree can be both more obvious and more consequential.

“The university can’t get away with not teaching engineering students differential equations because we’d then have collapsing bridges all over the place,” he says.

“But for an English major who studies Harry Potter instead of Chaucer, or spends his time on gender theory instead of reading great literature, the costs aren’t as obvious—except to the graduate who only later realizes he never developed the keen analytical mind and precise style of writing college was supposed to cultivate.”

"...Yet that success didn’t come from socialism. It’s a product of China’s move away from socialism. And it came at the cost—at least by Mr. Sanders’s usual lights—of heightened inequality. A 2018 International Monetary Fund working paper reports that “China has moved from being a moderately unequal country in 1990 to being one of the most unequal countries.” The IMF dates that trend to 1980, shortly after Beijing began its capitalist experiment....."

Joshua Muravchik, "Sanders Praises Communist Capitalism,"Wall Street Journal, September 10, 2019, https://www.wsj.com/articles/sanders-praises-communist-capitalism-11568155904

Sanders Praises Communist Capitalism

Sen. Bernie Sanders’s praise for the government of China should raise eyebrows, and not only for the obvious reasons. His assessment of the Chinese economy knocks the pins out from under his political and economic philosophy.

In an interview last month with the Hill, Mr. Sanders conceded that China “is moving unfortunately in a more authoritarian way in a number of directions.” He then asserted that “what we have to say about China, in fairness to China and its leadership, is... they have made more progress in addressing extreme poverty than any country in the history of civilization.”

Unlike most of Mr. Sanders’s past words of praise for communist regimes—for Cuba’s health-care and education systems, the Soviet Union’s “youth programs” and “cultural programs,” and Nicaragua’s empowerment of “the poor people”—Mr. Sanders’s comment about China has a basis in fact. According to the World Bank, 88% of Chinese lived on less than $1.90 a day in 1981. Today less than 1% do. (These figures are in 2011 dollars, adjusted for purchasing power parity.)

Yet that success didn’t come from socialism. It’s a product of China’s move away from socialism. And it came at the cost—at least by Mr. Sanders’s usual lights—of heightened inequality. A 2018 International Monetary Fund working paper reports that “China has moved from being a moderately unequal country in 1990 to being one of the most unequal countries.” The IMF dates that trend to 1980, shortly after Beijing began its capitalist experiment.

At home, Mr. Sanders urges a “political revolution” and a “wholesale transformation of our society” from capitalism to socialism—the reverse of what China did 40 years ago. He burns with hostility for capitalists. We must “no longer tolerate the greed of Wall Street, corporate America and the billionaire class,” he rails.

Yet Mr. Sanders’s accurate observation about China’s record in ending poverty ought to give him pause. Mao Zedong’s China was the apotheosis of class warfare and of formal equality. Millions were slaughtered as “class enemies,” and, everyone wore drab tunics and shared poverty (except Mao himself, who lived like royalty with a few of his cohorts). With Mao gone, Deng Xiaoping called an end to the class war.

“To get rich is glorious” became the watchword. According to Forbes, China has more billionaires (in U.S. dollar terms) than any other country except the U.S., and is minting new ones far faster. At the beginning of this century, Forbes found only one in China. Today it counts more than 300.

No doubt Mr. Sanders would decry that, but is it too high a price to pay for a process that lifted hundreds of millions out of poverty? This question points to the core difference between socialism, which focuses on how to distribute wealth, and capitalism, which is concerned primarily with how to produce it. China’s experience teaches anew that the latter is more important than the former, for the poor as well as the rich. Mr. Sanders admires China for bringing its population the material benefits of capitalism. Why would he want to saddle his own countrymen with socialism?

Mr. Muravchik is author of “Heaven on Earth: The Rise, Fall, and Afterlife of Socialism.”