Low, Stable Housing Prices: What’s Not to Like?

by Edward Glaeser at Bloomberg.com

Illustration by Evah Fan

The Case-Shiller Housing Price figures for March were released Tuesday, and they reveal a second month of modest price increases.

These slightly rising prices don’t portend a housing comeback.  Instead, the seasonally adjusted figures illustrate that since March 2009, we’ve been bumping along the bottom of the housing market, just as we did for six years after the last housing bubble burst in 1991.

Although a new surge in housing prices might improve the macroeconomy, there is plenty to like in low and stable housing prices, and that’s what we should now expect in a world free from bubbly delusions of constant price appreciation.

The two-month increase in the Case-Shiller 20-city index between January and March 2012 still leaves us only 0.2 percent above the post-2006 market bottom.  In real terms, the 20-city index is about where it was in March 2000.  The 10-city index, which goes back to the 1980s, is about the same today, in real terms, as it was at the end of the Ronald Reagan presidency.  Let’s hope that U.S. homebuyers will never again believe the lie that housing is a fail-safe investment strategy. | Read Full Article at Bloomberg.com.

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College Crackup and the Online Future

by Mark C. Taylor at Bloomberg.com

 
Illustration by Keith Shore

In the coming decade, emerging technologies will thoroughly transform higher education.  Although distance learning and computer-assisted education have been around since the 1960s, financial pressures are forcing institutions to develop aggressive online programs.

When education goes online, how professors teach, what students learn and how institutions are structured will change significantly.

Some changes are well under way.  In 2009, about 29 percent of college students took at least one course online; by 2014, that number is projected to increase to 50 percent.  Much of this growth has been driven by for-profit schools, but in the past couple of years, traditional colleges and universities have designed their own programs in an effort to increase tuition income without expanding the physical plant.  It remains to be seen whether this financial bet will pay off.

The most promising initiatives involve cooperation between and among schools.  Massachusetts Institute of Technology and Harvard University recently announced a $60 million initiative to create edX, described as “a transformational partnership in online education” that will “enhance campus-based teaching and learning and build a global community of online learners.”  Through video and immediate feedback, students will be able to take online versions of MIT and Harvard courses that include exams, papers and even laboratories. | Read Full Article at Bloomberg.com.

Jobs Vary by State, Showing Why Education Matters

by Edward Glaeser at Bloomberg.com

Friday’s state-level employment figures remind us that this economic recovery, like the recession that preceded it, is astonishingly uneven across America.
 
The unemployment rate remains more than 11 percent in Nevada and less than 4 percent in Nebraska.  This heterogeneity poses great challenges to any nationwide stimulus policy, which will inevitably deliver its supposed medicine both to healthy Nebraska and ailing Nevada.  Attempts to target aid to faltering states, or industries, slow the positive process of relocation across space and job.  A far better path is to focus on helping poor people, not poor places, especially by improving education.

Two-and-a-half years ago, widespread travails made it easy to make the case for national economic interventions.  In October 2009, there were only eight states with unemployment rates of less than 7 percent; collectively they made up 4.4 percent of the 50 states’ populations.

In April 2012, a total of 22 states had jobless rates of less than 7 percent.  Our economic troubles are not over, but there are wide swaths of the country where joblessness is back to reasonable levels, which makes it harder to build the case for more nationwide action.  | Read Full Article at Bloomberg.com.

How To Survive (Mentally) After Graduation

by Steve Keller.

So you’re about to graduate college, and you don’t have a career yet?  Or you’re planning on moving back in with your parents, and picking up any job just to make ends meet for the time being?

Welcome to world of being a Recession Graduate.  Not only are today’s college graduates dealing with the sudden loss of all they’ve known for the last four years – the friends, the familiarity, the social reputation they’ve built up since Freshman move-in day – but Recession Graduates have to deal with the real prospect that there currently seems to be no place for them in the workforce.

Even a month before my graduation in 2011, I didn’t really think I’d be moving back home and unemployed on top of it.  But as graduation day got closer and closer, it began to dawn on me that the life I’d thought I was going to start would have to be put on hold for a bit.

My personal situation could be better, and it could also be a lot worse.  When you’re comparatively lucky, (something for which I am very thankful), you want to make something of it and give back; not just return to where you began.  I didn’t want to go home and just end up on the couch, and then later in my parents’ basement, so the first day home I went on an applications binge that lasted about two weeks.  I got no responses, no interviews, and certainly no paycheck.

But I kept on trying, albeit without as much vigor as before.  It wasn’t until about a month into my first summer back home that I was actually making some money doing odds and ends – sometimes related to my degree, sometimes just manual labor.  But it was enough to pay for minimal expenses, and make me feel like I was doing something while my parents were going to work everyday.

Now, as the Class of 2012 goes out into the world, and with my own so-called “adulthood” at its one-year birthday, I have some words of advice for young people who were similarly told they would bust out of college with a job – no, a career – and be ready to change the world, but instead are going back home to a recession.

1. Network like a boss.

You might be introverted or at least only used to social interaction within your college’s bubble.  So, networking with people you don’t know, who aren’t on your “level,” might seem a little intimidating.  It’s not.  You don’t even need to network in-person anymore.  Has someone you know given you an email address of someone with a job vaguely related to your major?  Email that person.  Do it, right now.  Don’t be overbearing, but be forward.  The only progress I’ve made post-college has been through forward moves on my part, for instance emailing someone I didn’t think would get back to me.

And if they don’t respond?  Well, the heck with them.  Now you have practice communicating with people you don’t know.

2. There is no shame in living with your parents.

I know, you don’t want to feel like a kid anymore.  You don’t want to feel like a loser, either – you already don’t have a career going, and you thought you would.  But the only thing worse than feeling like a loser is feeling like a broke loser.  Don’t try to make it on your own if you financially can’t.  The stigma of living at home is gone, and most of the world recognizes that things are different now – most people respect not trying to live outside your means.  Living at home is really what you make of it – so if you are living at home, use it as a platform, however you can.

3. You’re not in college anymore, so don’t drink like you are.

Do I enjoy a good brew and a night out with friends?  Of course I do!  But post-college, it’s very important to recalibrate your lifestyle, especially if you’re going home.

You might be used to imbibing to celebrate after finishing a paper or a project – or just getting to the end of the week.  You might be used to waking up every Saturday hung-over and rationalizing it, saying you deserved the good time because of your hard work.  But things are different now.  Not only do you have the crushing feeling your whole world has reverted back to the way it was when you were 17, but sending out job applications and hearing nothing back doesn’t produce the same sense of accomplishment that might well be topped off by a celebratory end-of-the-work-week drink.

Worse than that, you’re probably alone – or at least more alone than you were when you were in school.  And you’ll wake up alone, too.  There’s not much worse than being hung-over in your parents’ house, not to mention the fact that you’ll be hung-over while they’re off for the weekend – also at home.

Remember, you’re already unemployed – do you want to wonder whether or not you’re an alcoholic too?  Okay, maybe you just want to drink out of boredom.  Or, as a reward for spending the day looking for a job.  But remember, it’ll be that much harder to do anything productive when the sun comes up again.

That doesn’t mean don’t drink, it means be mindful that your situation’s changed.

4. If you don’t have a job, make projects for yourself.

Back in college, you might have been used to procrastinating.  But if you’re unemployed, you’re soon going to find that there are no due dates for assignments anymore.  And if you’re not self-motivated, you’re not going to be able to get anything done.  A “To-Do” list helps with this.  My typical day is some combination of writing projects, interning from home, piano practice, and work on nascent business ventures.  I relax, but make sure not to relax too much, since staying busy keeps my self-esteem up.  Even if I’m not getting paid.

I think the fear everyone has nowadays is that this time, which is supposed to be the best time in a young person’s life – exploration, career-building, and a strident march towards adulthood – seems more likely to be just the opposite.  The only comfort is this: Lots of people are being forced into a gap year, but it’s only a “gap” in your life if you make it so.  Take the time, if you have it, and commit yourself to self-improvement.  You might find that the year post-graduation was the year when you improved your character, work ethic, skill set, and reasoning abilities, more than you ever thought possible – and that it wasn’t a waste at all.

Steve Keller is a 2011 Vassar College graduate, and a liberal Democrat with some conservative tendencies.

City Plans to Offer Buyouts to Idled Teachers

by Anna M. Phillips at NYTimes.com

The city is proposing to offer buyouts to a pool of teachers who draw full salaries but have no permanent jobs, abandoning efforts to have them laid off but potentially solving one of Mayor Michael R. Bloomberg’s most intractable education issues.

At a speech Thursday morning before the Association for a Better New York, the New York City schools chancellor, Dennis M. Walcott, did not say how much the teachers would be offered but said the buyouts would be “generous.”

John Moore/Getty Images
Chancellor Dennis M. Walcott announced the plan Thursday

The pool, known as the absent teacher reserve, now numbers around 830 and consists largely of teachers whose positions have been lost through budget cuts or school closings but who cannot be laid off under the teachers’ contract because they have done nothing wrong. | Read Full Article at NYTimes.com.

Comment by Rick Lazio:

The next time you see a television ad run by the teachers union claiming that more money is needed “for the kids,” think of this fiasco.  Consider, how much of a difference $100 million could make in terms of upgrading science facilities, investing in energy efficient buildings or technology upgrades - if it were really about the children and not protecting income for the adults.  At a time when our nation is slipping behind major competitors in the race for human talent, we have never had more incentive to challenge these types of “business as usual” demands.  The defense of the indefensible by the union leadership makes the case for charter schools.

How Rich Economies Must Adapt to Tomorrow’s Job Market

By the Editors at Bloomberg.com

Illustration by Bloomberg View

The worsening crisis in Europe and the slow recovery in the U.S. are distracting attention from a longer-term problem.

Across the developed world, well-paid jobs in the middle of the labor market are in decline.  The issue isn’t simple, nor are the remedies, but governments must start paying attention.

The name for what’s going on is job polarization.  Wages at the top are still rising, and at the very top they’re rising fast.  Wages in a lot of menial and low-skill occupations are at least holding their own.  But as research by David Autor, an MIT economics professor, and others has demonstrated, earnings in the middle of the labor market have been falling for years.

This issue is distinct from the heated debate over structural versus cyclical unemployment.  To the extent that the U.S.’s 8.1 percent unemployment is structural — because people have the wrong skills or are living in the wrong place and can’t move — increasing demand through fiscal or other stimulus won’t work.  To the extent it’s the result of cyclical changes in the economy, adding to demand is the answer.

Structural unemployment has always been lower in the U.S. than in other advanced economies, thanks to its famously flexible labor market. In this recovery, however, long-term unemployment has surged, and many workers have dropped out of the workforce altogether. If structural unemployment is rising, that’s grounds for concern. | Read Full Article at Bloomberg.com.

Comment by Rick Lazio:

There is data that suggests that the economic recovery in America is slowly gathering steam.  To be sure, the growth rates that we have seen since the most recent recession ended are the most anemic of any recovery following a deep recession over the past 50 years.  More worrying is that one key gauge of economic health, the unemployment rate, is no longer a fair indication of the state of employment.  The workforce participation rate, which is the measure of all working age adults that are in or looking for work is now at a 30 year low.  Americans are bailing out of the workforce and not coming back.  Some say it’s because baby boomers are retiring, but that doesn’t account for most of the deterioration.  It could be that we truly have a structural problem and the root of the problem is a mismatch between training, education and the skills that are required by employers.  Our current unemployment rate is around 8.1%.  But if the workforce participation rate were the same today as it was when President Obama took office, the unemployment rate - a percentage of those who are actively looking for work or have full or part-time jobs - would be about 11%.  If the headline unemployment number reflected this reality we’d have a better sense of just how bad the employment picture is.

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College Voters

by Eli Lehrer.

If he wants to both win the election and govern the country, Mitt Romney — and all other Republican candidates — will need to do better than recent prominent Republicans have among college-educated voters.  Doing so is more than just a path to victory; it’s necessary in preserving the GOPs place as a party of enterprise, growth, opportunity, and smaller government.

The facts first: Until recently, higher education tended to correlate with voting further to the political Right.  In his 1984 landslide, President Reagan beat Walter Mondale among college-educated voters by a very healthy 62.7 - 36.9 margin.  Before 2008, even victorious Democrats received only a minority of the college-educated vote.  Barack Obama, however, made history as the first Democrat to win an outright majority (53 percent) of those with college degrees.

And college-educated voters will become more important every year.  Already, people with degrees are the largest non-gender-related demographic group in most polls, and, by 2016, they will make up an absolute majority of those voting on election day.  Since college degrees correlate strongly with higher earnings, such people provide a hugely disproportionate share of the money needed for campaigns.  And this is one of the many reasons Obama will almost certainly retain his big cash advantage over Romney.

But the reasons for recruiting college-educated voters transcend mere political bean counting.  Having educated voters pull the “R” lever is key to the GOP retaining its identity.  With a college degree a prerequisite for most economic success, a party cannot possibly run on a platform of promoting enterprise, providing opportunity and cutting government if it does not attract the votes of successful (that is, college-educated) people.  While some social issues may attract the support of some older and lower-income people, such voters simply don’t see short-term benefits from the GOP economic agenda.  It’s simply impossible to sell free trade agreements to workers who could lose their jobs because of them, Medicare benefit cuts to people now on Medicare, and smaller government to families that know they would have to rely on unemployment insurance, food stamps and Medicaid if even one parent looses a job.  Likewise, doing better among non-Hispanic “white” voters is cold comfort since, unlike college graduates, their ranks are certain to slip as a share of the electorate.

The path then, for Romney, is simple and doesn’t even involve any wholesale changes in his platform or conservative principles.  A lot of it, actually, is just a matter of style.  What he has to do is shy away from the anti-intellectual rhetoric some of his peers have engaged in, say that he too “cares” about student loans, and release some sort of plan for encouraging more Americans to attend college.  If he panders at all, it should be to the economically and electorally powerful college-educated voters rather than, say, evangelical groups who want to teach creationism or “intelligent design” in public schools.  Doing these things isn’t going to cost Romney the Republican base.  It dislikes Obama enough that it will vote for Romney no matter what.

Without such a strategy, Romney could do even worse than McCain did amongst college-educated voters.  This would almost certainly cost him the election and leave the GOP as little more than a coalition of older, less educated white voters whose ranks shrink every year.  This isn’t a recipe for governing.  

Eli Lehrer is Vice President of the Heartland Institute, a free market think tank.  He was previously a speechwriter for Senate Majority Leader Bill Frist, an editor of the American Enterprise Institute’s magazine, and a fellow of the Heritage Foundation.

That Others May Live Foundation - Gran Fondo New York

by Dr. Stephen Rush, Lt Col, USAF/NYANG.

In the past four years, I have spent a lot of my time as an Air Force Flight Surgeon devoted to working with US Air Force Pararescuemen (PJs).  They are an amazing group of brave and selfless individuals who literally risk their lives to rescue Soldiers and Civilians in Afghanistan, Alaska, in the Atlantic and beyond.  PJs are tactical rescue specialists with advanced trauma training who perform Combat Search and Rescue (CSAR), Civilian SAR and humanitarian operations worldwide.

My friends at the North Shore-LIJ Health System asked me to participate with them in a 100 mile bike ride and raise money for the PJs.  I quickly responded that it would be my privilege.

We will be directing funds raised to two projects through the “That Others May Live Foundation”:

1. The Eagle Fund - To pay for rehabilitation and physical therapy, at Athlete’s Performance Institute, for the US’s elite warriors recovering from injuries and surgeries.  API is known for its work with NFL and NBA players, and more recently PJs and other special operators we are sending there.  We are very excited to support API’s efforts on behalf of our country’s finest heroes.
2. To support a retreat in July on Mt. Hood in Oregon for injured PJs and their families.

Please consider sending $20, or whatever you can afford, to show your support.  And please share this with your friends and family, who may also wish to contribute to support those who serve us, and have made a tremendous sacrifice in doing so. They need our support now.

Donate to “That Others May Live” Foundation
http://www.firstgiving.com/fundraiser/NSLIJ_Cyclists/granfondonewyork

Learn More About Gran Fondo New York
http://www.granfondony.com/

To learn more about Pararescue, or just see some really cool videos, go to youtube.com and search under pararescue.

Man, goose form odd-couple friendship

As part of CBS News’ continuing series “Assignment America,” Steve Hartman meets a retired salesman from Los Angeles who shares a special bond with a Gray Toulouse goose named Maria.

http://www.cbsnews.com/video/watch/?id=7358041n

Credit on Video: CBS News

It’s Broken and We All Know It — How to Fix the Primaries (And Our Democracy), Part 2

by Steve Keller.

Rick Santorum is going to feel like Al Gore for the rest of his life.  After dropping out and effectively conceding the Republican nomination to Mitt Romney, Santorum will likely always wonder what would have happened if it had been a two-man race to the end.

So too will the other losing candidates.  It’s easy to blame the other candidate for stealing your votes, but it’s pretty well-known that a spoiler effect does exist.  The spoiler effect doesn’t stop an open field in the primaries, but it usually stops losing primary candidates from running on a third-party line in the high-stakes general election – unless, of course, they are super-wealthy, radical, or self-assured.  Our current system dooms us to a two-party square-off, time and time again.

We’re always upset by these problems but we seem to be content enough not to demand change.  Ballot reform is just not an issue that raises a lot of hot passions.  Even with determination, and given the chance, most people would still not know what the right fix is.

But, believe it or not, there is a way to completely eliminate the spoiler effect in both the primaries and the general election.  You read that correctly: Completely eliminate it.

If we count whoever has the most votes in a two person election, the person with the most votes is obviously the preference of the voters.  But in a race with three or more candidates – as many primary contests are and general election contests could be – it’s not so obvious who the people’s true choice is.  To find that out, we’d need to whittle the field down to the two candidates with the widest support.

But how can we do so without forcing others out of the race early?  To elect the choice of the people and still allow for multiple candidates, we’d need “Instant Runoff Voting,” or “IRV.”

It’s simple – on Election Day, instead of marking in your preferred candidate, you’d rank all the candidates in your preferred order.  When the results are tallied, if no candidate gets 50% of the vote, all of the people who voted for the least popular candidate automatically shift to their second choice.  This process continues until one candidate reaches a majority level of support.

Here’s a really simple example of how this would work.  Say that there are three candidates running in a Democratic primary: Smith (a liberal) and two moderates called Jones and Brown.  Smith is universally despised by Jones and Brown supporters, but happens to get 40% of the vote with Jones polling second at 31% and Brown receiving 29%.

In our current system, Smith would win the election despite being loathed by 60% of the party.  But with IRV, Brown’s supporters would then see their votes go to Jones, who would end up with 60% of the votes.  Jones would be the winner of the election, and there would be no spoiler effect.  With IRV, Brown still gets his voice heard, and no one wins simply because the opposition was fragmented.

Keep in mind, I didn’t just invent this system for this article – a number of municipal elections already use this system, along with some other countries and even the Oscars.

Reform like this for general elections would require a Constitutional Amendment, an unlikely proposition, but political parties could easily turn the primaries into a good testing ground for this system’s effectiveness.

But therein lies the problem: If people saw how IRV would do away with the spoiler effect on a party level, they might find they want it for all elections too.  The debate would be widened, more dynamic, and no third party would be afraid to spoil the election anymore, since people would be able to vote first for whomever they liked best – rather than who they feared least out of the most “viable” two options.

Regardless of the interest of the parties, it all comes down to what democracy means to us as Americans.  If the voting process limits choices and narrows debate to a national duel, that’s really unhealthy.  Reforms like IRV would certainly be trouble for partisan bigwigs, but not for America.

Steve Keller is a 2011 Vassar College graduate, and a liberal Democrat with some conservative tendencies.

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