Macro Roundup

James Heckman and Rasmus Landersø, “Lessons from Denmark about Inequality and Social Mobility,” National Bureau Of Economic Research, March 2021, https://www.nber.org/papers/w28543

Conclusions, “…Many American policy analysts point to Denmark as a model welfare state with low levels of income inequality and high levels of income mobility across generations. It has in place many social policies now advocated for adoption in the U.S. Despite generous Danish social policies, family influence on important child outcomes in Denmark is about as strong as it is in the United States.More advantaged families are better able to access, utilize, and influence universally available programs. Purposive sorting by levels of family advantage create neighborhood effects. Powerful forces not easily mitigated by Danish-style welfare state programs operate in both countries….”

Note the increased spending had no impact on mobility btw cohorts in Denmark“….Fig. 4b shows cognitive test score ranks for the all males born in 1958 and 1988 in Denmark by their parents’ income percentiles,22 along with cognitive test score ranks across parents’ income percentiles for children from the CNLSY data. The figure illustrates two points: First, no striking differences appear when comparing the association between children’s test scores and parents’ income percentiles in Denmark and the U.S. Second, the association between children’s cognitive test scores and parents’ income is strikingly similar for Danish cohorts born 30 years apart. Although the 1988 cohort is born after the rapid welfare state expansion previously described and the 1958 cohort is born just before the expansion took off, the associations between test scores and parents’ resources are practically identical. Family influence retains its tight grip….”

First, “…. Intergenerational educational mobility is about the same in both countries for the most recent cohorts. Transmission of skills across generations is equally strong in both countries, despite stark differences in income inequality and offered public services….”
Second“….The traditional literature on the intergenerational transmission of economic status compares snapshots of lifetime incomes of parents and children. This approach gives only a limited picture of the transmission of lifetime well-being across generations. Using Danish register data on lifecycle income, we find that intergenerational elasticities of income (IGE) of lifetime well-being are much higher than those estimated using incomes measured over a small window of ages. Accounting for uncertainty and credit market restrictions increases estimated dependence across generations. Well-being is much more tightly linked across generations in Denmark than conventional snapshot measures of lifetime income indicate….”

Third, “….We expand the analysis of family influence beyond the traditional analysis of IGEs of income to include choices of neighborhood, peers, and schools as parental investments in their children. We present compelling evidence of purposive sorting by parents in making neighborhood choices. Our evidence calls into question the assumptions underlying the recent neighborhood influence literature – that timing of residential choice is random with respect to the lifetime gains for children….”
The key evidence, “…Despite the generosity of the Danish welfare state and equality in access for all citizens, substantial inequality of child outcomes remains across social and economic classes. Figure 1 documents these gaps and compares them to their U.S. counterparts. Children of college-educated women do substantially better than children of secondary school dropouts on many dimensions in both countries….”

Their core findings:

Likely very useful new Heckman demonstrates the limited utility of social policy to change mobility outcomes for children. Despite interventionist Danish social policy family influence on child outcomes in Denmark is ~ as strong as it is in the United States. Inequality of child outcomes remains across economic classes, for example children of college educated women do better in both Demark and the US. Their bottomline, “…However,if equal Danish provision of services does not eliminate inequality in many important life outcomes, the origins of inequality and social immobility lie elsewhere…”

good WSJ chart, uptick in home equity cash outs, highest level since pre-crisis.

Mian and Sufi bait (in terms of theirIndebted Demandpaper), "... Americans extracted more cash from their homes through cash-out refinancings in 2020 than in any year since the financial crisis.U.S. homeowners cashed out $152.7 billion in home equity last year, a 42% increase from 2019 and the most since 2007, according to mortgage-finance giant Freddie Mac. It was a blockbuster year for mortgage originations in general as well: Lenders churned out more mortgages than ever in 2020, fueled by about $2.8 trillion in refis, according to mortgage-data firm Black Knight Inc.....”

Worth noting, “…. Before the housing-market crash that followed the financial crisis, almost 90% of borrowers who refinanced chose to extract cash. Last year, about one-third of refinancers chose the cash-out option, according to Freddie Mac...."

Preliminary FBI numbers confirm major murder rate uptick last year“…the F.B.I. released preliminary statistics showinga major increase in murder last year, with a 25 percent rise in agencies that reported quarterly data. The F.B.I. did not receive data from several cities with known big increases in murder like New York, Chicago and New Orleans, but cities of all sizes reported increases of greater than 20 percent. A 25 percent increase in murder in 2020 would mean the United States surpassed 20,000 murders in a year for the first time since 1995.(The final official numbers for 2020 will not be released until late September.)…”

Jeff Asher, "Murder Rate Remains Elevated as New Crime Reporting System Begins,"New York Times, March 16, 2021, https://www.nytimes.com/2021/03/16/upshot/murder-rate-usa.html

And the rise is likely still ongoing, “…The big increase in the murder rate in the United States in 2020 has carried over to 2021. A sample of 37 cities with data available for the first three months of this year shows murder up 18 percent relative to the same period last year….”

Bari Weiss argues that elite private schools are moving in a new ideological direction which is fixed on racial grievance, "..“I am in a cult. Well, that’s not exactly right. It’s that the cult is all around me and I am trying to save kids from becoming members.” He sounds like a Scientology defector, but he is a math teacher at one of the most elite high schools in New York City. He is not politically conservative. “I studied critical theory; I saw Derrida speak when I was in college,” he says, “so when this ideology arrived at our school over the past few years, I recognized the language and I knew what it was. But it was in a mutated form.” This teacher is talking with me because he is alarmed by the toll this ideology is taking on his students. “I started seeing what was happening to the kids. And that’s what I couldn’t take. They are being educated in resentment and fear. It’s extremely dangerous.”..."

Example from Chapin“…Consider this story, from Chapin, the tony all-girls school on the Upper East Side, involving a white girl in the lower grades who came home one day and told her father:“All people with lighter skin don’t like people with darker skin and are mean to them.”He was horrified as she explained that that was what she had been taught by her teachers. “I said to her: that’s not how we feel in this family.” It’s worth taking a look at Chapin’s various affinity groups, which have become de rigueur at all of these schools. (Chapin did not respond to a request for comment.)…”

Bari Weiss, "The Miseducation of America’s Elites,"City Journal, March 9, 2021, https://www.city-journal.org/the-miseducation-of-americas-elites

The Miseducation of America’s Elites

The dissidents use pseudonyms and turn off their videos when they meet for clandestine Zoom calls. They are usually coordinating soccer practices and carpools, but now they come together to strategize. They say that they could face profound repercussions if anyone knew they were talking.

But the situation of late has become too egregious for emails or complaining on conference calls. So one recent weekend, on a leafy street in West Los Angeles, they gathered in person and invited me to join.

In a backyard behind a four-bedroom home, ten people sat in a circle of plastic Adirondack chairs, eating bags of Skinny Pop. These are the rebels: well-off Los Angeles parents who send their children to Harvard-Westlake, the most prestigious private school in the city.

By normal American standards, they are quite wealthy. By the standards of Harvard-Westlake, they are average. These are two-career couples who credit their own success not to family connections or inherited wealth but to their own education. So it strikes them as something more than ironic that a school that costs more than $40,000 a year—a school with Charlie Munger, Warren Buffett’s right hand, and Sarah Murdoch, wife of Lachlan and Rupert’s daughter-in-law, on its board—is teaching students that capitalism is evil.

For most parents, the demonization of capitalism is the least of it. They say that their children tell them they’re afraid to speak up in class. Most of all, they worry that the school’s new plan to become an “anti-racist institution”—unveiled this July, in a 20-page document—is making their kids fixate on race and attach importance to it in ways that strike them as grotesque.

“I grew up in L.A., and the Harvard School definitely struggled with diversity issues. The stories some have expressed since the summer seem totally legitimate,” says one of the fathers. He says he doesn’t have a problem with the school making greater efforts to redress past wrongs, including by bringing more minority voices into the curriculum. What he has a problem with is a movement that tells his children that America is a bad country and that they bear collective racial guilt.

“They are making my son feel like a racist because of the pigmentation of his skin,” one mother says. Another poses a question to the group: “How does focusing a spotlight on race fix how kids talk to one another? Why can’t they just all be Wolverines?” (Harvard-Westlake has declined to comment.)

This Harvard-Westlake parents’ group is one of many organizing quietly around the country to fight what it describes as an ideological movement that has taken over their schools. This story is based on interviews with more than two dozen of these dissenters—teachers, parents, and children—at elite prep schools in two of the bluest states in the country: New York and California.

The parents in the backyard say that for every one of them, there are many more, too afraid to speak up. “I’ve talked to at least five couples who say: I get it. I think the way you do. I just don’t want the controversy right now,” related one mother. They are all eager for their story to be told—but not a single one would let me use their name. They worry about losing their jobs or hurting their children if their opposition to this ideology were known.

“The school can ask you to leave for any reason,” said one mother at Brentwood, another Los Angeles prep school. “Then you’ll be blacklisted from all the private schools and you’ll be known as a racist, which is worse than being called a murderer.”

One private school parent, born in a Communist nation, tells me: “I came to this country escaping the very same fear of retaliation that now my own child feels.” Another joked: “We need to feed our families. Oh, and pay $50,000 a year to have our children get indoctrinated.” A teacher in New York City put it most concisely: “To speak against this is to put all of your moral capital at risk.”

Parents who have spoken out against this ideology, even in private ways, say it hasn’t gone over well. “I had a conversation with a friend, and I asked him: ‘Is there anything about this movement we should question?’” said a father with children in two prep schools in Manhattan. “And he said: ‘Dude, that’s dangerous ground you’re on in our friendship.’ I’ve had enough of those conversations to know what happens.”

That fear is shared, deeply, by the children. For them, it’s not just the fear of getting a bad grade or getting turned down for a college recommendation, though that fear is potent. It’s the fear of social shaming. “If you publish my name, it would ruin my life. People would attack me for even questioning this ideology. I don’t even want people knowing I’m a capitalist,” a student at the Fieldston School in New York City told me, in a comment echoed by other students I spoke with. (Fieldston declined to comment for this article.) “The kids are scared of other kids,” says one Harvard-Westlake mother.

The atmosphere is making their children anxious, paranoid, and insecure—and closed off from even their close friends. “My son knew I was talking to you and he begged me not to,” another Harvard-Westlake mother told me. “He wants to go to a great university, and he told me that one bad statement from me will ruin us. This is the United States of America. Are you freaking kidding me?”

These are America’s elites—the families who can afford to pay some $50,000 a year for their children to be groomed for the eating clubs of Princeton and the secret societies of Yale, the glide path to becoming masters—sorry, masterx—of the universe. The ideas and values instilled in them influence the rest of us.

That is not the only reason this story matters. These schools are called prep schools because they prepare America’s princelings to take their place in what we’re told is our meritocracy. Nothing happens at a top prep school that is not a mirror of what happens at an elite college.

What does it say about the current state of that meritocracy, then, that it wants kids fluent in critical race theory and “white fragility,” even if such knowledge comes at the expense of Shakespeare? “The colleges want children—customers—that are going to be pre-aligned to certain ideologies that originally came out of those colleges,” says a STEM teacher at one of New York’s prestigious prep schools. “I call it woke-weaning. And that’s the product schools like mine are offering.”

The parents I spoke with for this story are savvy and smart: they realize that it’s bizarre—at best—for a school like Harvard-Westlake to hold forth constantly about social justice as it drops more than $40 million on a new off-campus athletic complex. This is a school that sends out an annual report to every Harvard-Westlake family listing parents’ donations. Last year, the “Heritage Circle” group—gifts of $100,000 or more—included Viveca Paulin-Ferrell and Will Ferrell. A red paw next to Jeanne and Tony Pritzker’s names indicated more than a decade of cumulative giving.

Parents say that it is a school where giving more gets you more. Big donors get invitations to special dinners, and, most importantly, time and attention from the people in charge. Meantime, their children are taught radical-chic politics, which, of course, do not involve anything actually substantively radical, like redistributing the endowment.

“These schools are the privilege of the privilege of the privilege. They say nonstop that they are all about inclusion. But they are by definition exclusive. These schools are for the tippity top of society,” a young mother in Manhattan tells me.

Power in America now comes from speaking woke, a highly complex and ever-evolving language. The Grace Church School in Manhattan, for example, offers a 12-page guide to “inclusive language,” which discourages people from using the word “parents”—“folks” is preferred—or from asking questions like “what religion are you?” (When asked for comment, Rev. Robert M. Pennoyer II, the assistant head of school, replied: “Grace is an Episcopal school. As part of our Episcopal identity, we recognize the dignity and worth common to humanity.” He added that the guide comes “from our desire to promote a sense of belonging for all of our students.”) A Harvard-Westlake English teacher welcomes students back after summer with: “I am a queer white womxn of European descent. I use pronouns but also feel comfortable using pronouns.” She attached a “self-care letter” quoting Audre Lorde: “Caring for myself is not self-indulgence, it is self-preservation, and that is an act of political warfare.”

Woe betide the working-class kid who arrives in college and uses Latino instead of “Latinx,” or who stumbles conjugating verbs because a classmate prefers to use the pronouns they/them. Fluency in woke is an effective class marker and key for these princelings to retain status in university and beyond. The parents know this, and so woke is now the lingua franca of the nation’s best prep schools. As one mother in Los Angeles puts it: “This is what all the colleges are doing, so we have to do it. The thinking is: if Harvard does it, it must be good.”

“I am in a cult. Well, that’s not exactly right. It’s that the cult is all around me and I am trying to save kids from becoming members.” He sounds like a Scientology defector, but he is a math teacher at one of the most elite high schools in New York City. He is not politically conservative. “I studied critical theory; I saw Derrida speak when I was in college,” he says, “so when this ideology arrived at our school over the past few years, I recognized the language and I knew what it was. But it was in a mutated form.”

This teacher is talking with me because he is alarmed by the toll this ideology is taking on his students. “I started seeing what was happening to the kids. And that’s what I couldn’t take. They are being educated in resentment and fear. It’s extremely dangerous.”

Three thousand miles away, in Los Angeles, another prep-school teacher says something similar. “It teaches people who have so much to see themselves as victims. They think they are suffering oppression at one of the poshest schools in the country.”

It seems to be working. One Los Angeles mother tells me that her son was recently told by his friend, who is black, that he is “inherently oppressed.” She was incredulous. “This kid is a multimillionaire,” she said. “My son said to his friend: ‘Explain it to me. Why do you feel oppressed? What has anyone done to make you feel less?’ And the friend said: ‘The color of my skin.’ This blew my mind.”

The science program at Fieldston would make any parent swoon. The electives for 11th- and 12th-graders, according to the school’s website, include immunology, astronomy, neuroscience, and pharmacology.

But physics looks different these days. “We don’t call them Newton’s laws anymore,” an upperclassman at the school informs me. “We call them the three fundamental laws of physics. They say we need to ‘decenter whiteness,’ and we need to acknowledge that there’s more than just Newton in physics.”

One of her classmates says that he tries to take “the fact classes, not the identity classes.” But it’s gotten harder to distinguish between the two. “I took U.S. history and I figured when you learn about U.S. history maybe you structure it by time period or what happened under each presidency. We traced different marginalized groups. That was how it was structured. I only heard a handful of the presidents’ names in class.”

Brentwood, a school that costs $45,630 a year, made headlines a few weeks back when it held racially segregated “dialogue and community-building sessions.” But when I speak with a parent of a middle-school student there, they want to talk about their child’s English curriculum. “They replaced all the books with no input or even informing the parents.” The curriculum no longer features classics such as The Scarlet Letter, Little Women, To Kill a Mockingbird, and Lord of the Flies. New books include: Stamped, Dear Martin, Dear Justice, and Yaqui Delgado Wants to Kick Your Ass.

“The dean said to me, basically, it’s important to change with the times,” said the Brentwood parent. In a statement, Brentwood’s director of communications said: “Diversity, equity and inclusion are critical components of our education and our community at Brentwood School. The events of last summer created a call to action for all of us, in our school community and beyond.” Brentwood has announced a late-starting school day on March 10 for the lower school “due to our faculty book study of White Fragility.”

At Fieldston, an elective is offered to high school juniors and seniors called “historicizing whiteness.” At Grace Church School, seniors can take a course called “Allying: Why? Who? and How?” The curriculum includes a ’zine called “Accomplices Not Allies” that declares “the work of an accomplice in anti-colonial struggle is to attack colonial structures & ideas,” alongside a photograph of a burning police car. Harvard-Westlake, in its extensive antiracist plan announced this summer, included “redesigning the 11th grade US History course from a critical race theory perspective,” among many similar goals.

To question any of the curricular changes, parents say, is to make yourself suspect: “Every group chat I’m on with school parents, with the exception of my concerned parents’ group, they have a pattern of shaming anyone who shares anything remotely political or dissents from the group narrative,” one Brentwood mother wrote to me. “Once someone shames one person, many chime in agreement. The times I speak up to defend those they shame, they attempt to shame me.”

In this worldview, complexity itself is a kind of racism, nuance is a phobia, and skepticism merely a type of false consciousness. Ibram Kendi, author of How to Be an Antiracist, plainly spelled out the logic on Twitter recently: “The heartbeat of racism is denial. And too often, the more powerful the racism, the more powerful the denial.”

One teacher told me that he was asked to teach an antiracist curriculum that included a “pyramid” of white supremacy. At the top was genocide. At the bottom was “two sides to every story.”

“‘Two sides to every story,’” he said. “That was on the racist pyramid.”

But the most important consequence of the woke ideology isn’t a lesser English curriculum. It’s that the ideology, which seems to touch every aspect of schooling now, has changed children’s self-conception.

Consider this story, from Chapin, the tony all-girls school on the Upper East Side, involving a white girl in the lower grades who came home one day and told her father: “All people with lighter skin don’t like people with darker skin and are mean to them.” He was horrified as she explained that that was what she had been taught by her teachers. “I said to her: that’s not how we feel in this family.” It’s worth taking a look at Chapin’s various affinity groups, which have become de rigueur at all of these schools. (Chapin did not respond to a request for comment.)

For high schoolers, the message is more explicit. A Fieldston student says that students are often told “if you are white and male, you are second in line to speak.” This is considered a normal and necessary redistribution of power.

At Harvard-Westlake, the school recently administered the debunked implicit-bias test to tenth-graders. It was technically optional, but several parents I spoke with said that their children felt compelled to take it. One mother confided that her son said to her, “Mom, I just found out I’m a racist and I prefer White Europeans.” Her child is mixed race. “For my kid to come home and be told by his school you are a racist—I was aghast. I was so, so angry.”

A Brentwood parent says that she has tried, in small ways, to stand up to this. “They say I don’t understand because my skin is white.” Children like hers are being taught to give up ambition and yield positions that they might earn through hard work to others who are more marginalized. “My child is asking me obvious questions like: If I work really hard, shouldn’t I get rewarded?”

All of this “has made me think about race more,” said one teen boy in Manhattan. The curriculum, he explained, was trying to teach him to feel obsessed with his whiteness, the opposite of what his parents had taught him to do. Making students separate out by race in affinity groups is racist, he said. “MLK would condemn my school.”

Some students are rebelling, which, in this case, looks like becoming a Republican. But others go all-in on the ideology, which has created conflicts with parents who don’t. “The school has taken over as the moral guide, with me being the irritating person in the background who doesn’t really get it,” says one Harvard-Westlake mother.

So children learn how the new rules of woke work. The idea of lying in order to please a teacher seems like a phenomenon from the Soviet Union. But the high schoolers I spoke with said that they do versions of this, including parroting views they don’t believe in assignments so that their grades don’t suffer.

In Brooklyn, a STEM teacher known to be friendly among skeptical students laughed when he told me the latest absurdity: students told him that their history class had a unit on Beyoncé, and they felt compelled to say that they loved her music, even if they did not. “I thought: they aren’t even entitled to their own musical preferences,” he said. “What does it mean when you can’t even tell the truth about how music affects you?” One English teacher in Los Angeles tacitly acknowledges the problem: she has the class turn off their videos on Zoom and asks each student to make their name anonymous so that they can have uninhibited discussions.

No reliable survey data exist on free expression among high schoolers, but last week, Heterodox Academy published its annual Campus Expression Survey Report, which found that, in 2020, 62 percent of college students surveyed “agreed the climate on their campus prevents students from saying things they believe.”

Relying on word of mouth, parents are trying to suss out which, if any, of the private schools in their city avoid this ideology. They ask me what I know. “I don’t know where to move him to. I yank him and it’s the same thing. But I have a pit in my stomach about sending him back for third grade,” says a mother at Riverdale Country Day School in the Bronx, in a concern echoed by many parents. (Riverdale declined to comment.)

When I began working on this story, I didn’t feel that much sympathy for these parents. Some 18 million public school children have not set foot in a school in the past year. A study released in early December by McKinsey and Co. found that virtual learning hurt all students, but students of color the most: remote school set them back by three to five months in math, for example. Such numbers do not begin to capture the crippling effects, including suicidal ideation, that this past year has had on what experts are already calling a lost generation.

The parents in this story are not parents with no other options. Most have the capital—social and literal—to pull their kids out and hire private tutors. That they weren’t speaking out seemed to me cowardly, or worse.

The cynical answer for their silence: concern about viability for the Ivy League and other elite schools. “There are definitively rumors that the school has like, say, three picks for Duke and that if you stand up against this your kid will get blackballed,” says one mother.

Another explanation is groupthink and social pressure. “Sometimes the smartest people are the easiest ones to fool,” says a father who recently moved his son from one school to another that he judges to be marginally better. “If you made a decision to go on the board of Dalton having espoused all these leftist views forever and you want your kid to get into Harvard, you are not going to stand up and say, ‘wait a second, guys.’ You’re just not going to do it. Most people want to be members of the club.”

I think it’s true that many people would rather violate their stated principles than be iced out of their social network. But this is a situation that goes beyond getting shunted to a bad table at the Robin Hood gala. To resist this ideology is to go against the entire institutional world.

It’s not just Dalton, a school that has committed to being “visibly, vocally and structurally antiracist.” Bain & Company is tweeting about “Womxn’s History Month.” The Cartoon Network is imploring children to “see color.” Coca-Cola employees were recently instructed to “be less white.” You cannot buy or sell the newly problematic Dr. Seuss titles on eBay. This ideology isn’t speaking truth to power. It is the power.

Most alarmingly, the ideology is increasingly prevalent at the local public school. The incoming New York City schools chancellor is a vocal proponent of critical race theory. In Burbank, the school district just told middle- and high school teachers to stop teaching To Kill a Mockingbird and Of Mice and Men. The Sacramento school district is promoting racial segregation by way of “racial affinity groups,” where students can “cultivate racial solidarity and compassion and support each other in sitting with the discomfort, confusion, and numbness that often accompany white racial awakening.” The San Diego school district recently held a training in which white teachers were told that they “spirit murder” black children.

“I don’t mean to get emotional, I just feel helpless,” said one mother through tears. “I look at the public school and I am equally mortified. I can’t believe what they are doing to everybody. I’m too afraid. I’m too afraid to speak too loudly. I feel cowardly. I just make little waves.” Another tells me: “It’s fear of retribution. Would it cause our daughter to be ostracized? Would it cause people to ostracize us? It already has.”

I have a friend in New York who is the mother to a four-year-old. She seems exactly the kind of parent these schools would want to attract: a successful entrepreneur, a feminist, and a diehard Manhattanite. She’d dreamed of sending her daughter to a school like Dalton. One day at home, in the midst of the application process, she was drawing with her daughter, who said offhandedly: “I need to draw in my own skin color.” Skin color, she told her mother, is “really important.” She said that’s what she learned in school.