302 (1 February 2017)

Welcome to week 302!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(26 January 2017): “What did NAFTA really do?” (http://rodrik.typepad.com/)

********This link takes you to the blog of Harvard University economist Dani Rodrik, which I found in the WSJ article “Nafta’s Net U.S. Impact Is Modest” [SR](http://www.wsj.com/articles/naftas-overall-u-s-impact-is-modest-1485469689).  Rodrik provides a clear, research-based summary of NAFTA’s impact.  You will need to scroll down a bit to read his post but it will be worth it.  He notes, “So here is the overall picture that these academic studies paint for the U.S.” NAFTA produced large changes in trade volumes, tiny efficiency gains overall, and some very significant impacts on adversely affected communities.”  In one of the studies he cites, by John McLaren and Shushanik Hakobyan, the largest impacts noted were in “parts of Georgia, North Carolina, South Carolina and Indiana.”  The workers who were most adversely affected were “high school dropouts in industries that depended heavily on tariff protections in place prior to NAFTA.  These workers saw wage growth drop by as much as 17 percentage points relative to wage growth in unaffected industries.”

(27 January 2017): “Homeowners’ Quest for the Best Schools” [SR](http://www.wsj.com/articles/homeowners-quest-for-the-best-schools-1485443381)

——–“Houston lawyer Anne Ferazzi Hammett spent about three months last spring looking for a great high school for her teenage daughters, Anna and Nora.  Then she discovered Westlake, a high school that gets top marks in academic rankings and draws strong reviews from parents.  The only drawback: The school is located in Austin, Texas, about 165 miles northwest of the Hammetts’ home.  Nonetheless, Ms. Ferazzi Hammett and her husband, Rick Hammett, bought a $2.25 million house in Westlake’s school district, and they and their daughters will move in June. . . . For some home buyers, there is no factor more important than the public schools their children will attend.  They analyze student-body performance on standardized tests, school rankings, what percentage of alumni go on to four-year colleges and which schools send students to Ivy League or top-tier states universities.  They then uproot their lives to move within these districts’ boundaries, where homes can cost hundreds of thousands of dollars more than nearby homes zoned to different schools.”

********No doubt the importance of public school quality is something that every realtor knows very well.  The article goes on to note: “In an analysis of 1.6 million home listings in the U.S. through the first six months of 2016, Realtor.com found that houses in public-school districts with GreatSchools ratings of 9 or 10, the highest scores possible, were priced, on average, 77% higher than homes in nearby districts with scores of 6 or lower.  Additionally, homes located in top districts sell four days faster—at 58 days—than the national median of 62 days.”  Evidently, as the article also notes, people who move to a school district frequently move away from it after their children graduate.

********The GreatSchools ratings were new to me.  You can learn more about them, and check out your area and schools, at: http://www.greatschools.org/.

(27 January 2017): “To Understand a Tax on Mexican Imports, Consider the Avocado” (https://www.nytimes.com/2017/01/27/business/economy/importers-tax-mexico.html)

********This article does a light run through of some of the consequences of a 20% tax on imported goods, taking the avocado as an example; “more than nine of every 10 imported avocados come from Mexico.”  Avocados are the primary ingredient in guacamole, but onions are used, too; “seven out of eight onions eaten by Americans are grown in the United States.”  This provides the reporter with an opportunity to explore how the import tax would affect the production of avocados in Mexico and the production of onions in the U.S.  The analysis seems sound to me until the likely downward revision of the corporate income tax is taken up.  Since this is a tax on profit, I do not see why it is at all likely that businesses will “share” their profits with consumers.

********Avocados and onions are interesting to think about.  As the article points out, it takes four or five years for a newly planted avocado tree to bear fruit, so a U.S. avocado production response would take time.  Onions, on the other hand, can be planted on an annual basis, so onion production could adjust within a year.  When dealing with things that grow, production lags are common.

(27 January 2017): “Uneasy About the Future, Readers Turn to Dystopian Classics” (https://www.nytimes.com/2017/01/27/business/media/dystopian-classics-1984-animal-farm-the-handmaids-tale.html)

——–Margaret Atwood’s The Handmaid’s Tale “is among several classic dystopian novels that seem to be resonating with readers at a moment of heightened anxiety about the state of American democracy.  Sales have also risen drastically for George Orwell’s ‘Animal Farm’ and ‘1984,’ which shot to the top of Amazon’s best-seller list this week.  Other novels that today’s readers may not have picked up since high school but have landed on the list this week are Aldous Huxley’s 1932 novel, ‘Brave New World,’ and Sinclair Lewis’s 1935 novel ‘It Can’t Happen Here.’ . . . The sudden prominence of such novels reflects a renewed public interest in decades-old works of speculative fiction as guides for understanding our current political moment.”

********The broader point of the article is that some (many?) are struggling to make sense of the changing landscape of politics and government in the U.S., and are turning to classic works of fiction to do so.  It is interesting to think about political change translates into book sales (or a loss of book sales).  A desire to understand is an important factor but so is whether one is a reader of books or not.  My guess is that those who are struggling to make sense of the changing landscape are also readers of books, so the impact on demand of dystopian novels has been pronounced.  In relation to this, I wonder has been the impact on books such as Trump: The Art of the Deal (https://www.amazon.com/Trump-Art-Deal-Donald-J/dp/0399594493/)?  Almost 50% of presidential voters chose Donald Trump in the last election.  What books would they be likely to buy in light of the election?  Are there fictional works that come to mind or are they more likely to be focused on nonfiction works?

********JSTOR Daily has a related piece this week: “Friday Reads: George Orwell’s 1984” (https://daily.jstor.org/friday-reads-george-orwells-1984/).  One of the foundation articles for it is “Crisis?  Whose Crisis?  George Orwell and Liberal Guilt.”  The article notes that “Orwell was fixated on what he deemed ‘one of the more embarrassing moments in twentieth-century liberalism: the failure of middle-class liberals to connect with the working class.’”

(29 January 2017): “What are the best NC colleges to improve your financial future?” (http://www.newsobserver.com/news/business/article129415924.html)

——–“The University of North Carolina released its strategic plan a couple weeks ago.  Documents like this usually aren’t very exciting, but this one has far-reaching implications for our state.  Included in the mix: a commitment to enroll more low-income and rural students and help them get all the way to graduation.  And a pledge to keep the system affordable and accessible for qualified in-state high school students.”  This commitment is important for the future of North Carolina because the state “has one of the lowest mobility rates in the country . . . [and education] is a proven way to” increase mobility.  “To track how well colleges and universities are fostering upward economic mobility, The Equality of Opportunity Project recently release a Mobility Report Card.  Using data from 30 million college students, the report looks at the distribution of family income when a student enrolls . . . and if students are able to ascend income brackets once they graduate.”  In light of that data, “the universities that have the strongest track record in promoting upward mobility are Elizabeth City State, Winston-Salem State, North Carolina Central, Fayetteville State and North Carolina A&T, in that order.”

********Here are three websites, identified from a link in the article, that provide relevant information:

The Equality of Opportunity Project (EOP)) homepage: http://www.equality-of-opportunity.org/

The EOP page for colleges: http://www.equality-of-opportunity.org/college/

A tool developed by The New York Times to identify “Economic Diversity and Student Outcomes at America’s Colleges and Universities: Find Your College” (https://www.nytimes.com/interactive/projects/college-mobility/).  Simply entire the college you are interested in the box near the headline.

A page that I found especially thought provoking was “Some Colleges Have More Students From the Top 1 Percent Than the Bottom 60.  Find Yours” (https://www.nytimes.com/interactive/2017/01/18/upshot/some-colleges-have-more-students-from-the-top-1-percent-than-the-bottom-60.html).  There is a box provided to add a school of interest to the list.

********The private benefits of higher education, of course, are only a part of the story—there are also public benefits.  The Chronicle of Higher Education has a nice article this week that summarizes the public benefits, which you can find at: http://www.chronicle.com/article/Beyond-the-College-Earnings/239013.  The governmental recognition of the social benefits has long be a guiding element of higher education policy at least as long as the Morrill Act of 1862 (https://en.wikipedia.org/wiki/Morrill_Land-Grant_Acts), which gave rise to the many land-grant colleges and universities that dot the U.S.  A data-filled and highly-graphical look at the impacts of higher education can be found in Education Pays 2016: The Benefits of Higher Education for Individuals and Society (https://trends.collegeboard.org/sites/default/files/education-pays-2016-full-report.pdf), by Jennifer Ma, Matea Pender, and Meredith Welch.  It is a publication of The College Board (https://www.collegeboard.org/).

********A different kind of mobility—geographic mobility—is examined in “The academy and the marketplace: Mediocre academic researchers should be wary of globalisation” (http://www.economist.com/news/science-and-technology/21715639-effects-foreign-competition-professors-mathematics-mediocre-academic).  In a “a forthcoming paper in the Journal of Human Resources, George Borjas of Harvard University, and Kirk Doran and Ying Shen of the University of Notre Dame, study the effects of globalisation on a select group of particularly brainy Westerners: professors of mathematics.”  By examining the “natural experiment” that occurred with China’s liberalization in 1978, they found that the scholarly productivity of Chinese-American professors increased from the influx of Chinese students and “the relative productivity of non-Chinese American academics fell, as weaker papers were crowded out.”  In an earlier paper Borjas and Doran examined the impact of the influx of Soviet mathematicians from the “abrupt collapse of the Soviet Union.”  The increased supply of mathematicians in the U.S. led to increased unemployment among “newly minted American maths graduates.”  Here are, what appear to be, the relevant paper and article:

“Ethnic Complementarities after the Opening of China: How Chinese Graduate Students Affected the Productivity of their Advisors” (http://www.nber.org/papers/w21096.pdf)

“The Collapse of the Soviet Union and the Productivity of American Mathematicians” (http://www3.nd.edu/~kdoran/Doran_Math.pdf)

I wonder if similar work has been done in relation to the scholars who fled Europe in the wake of the rise of Hitler.

********While we are on the subject of international labor markets, the piece “Brazilian Gang Enlists FARC Rebels for Drug Trade” [SR](https://www.wsj.com/articles/brazilian-gang-enlists-farc-rebels-for-drug-trade-1485858609).  The negotiated peace between FARC and the Colombian government, which resulted in the 2016 Nobel Peace Prize (https://www.nobelprize.org/nobel_prizes/peace/laureates/2016/), has identified FARC members as attractive recruits for Brazil’s “largest criminal organization . . . the First Capital Command or PCC.”  Vladimir Aras, who heads “the international cooperation unit of the Brazilian Prosecutor General’s Office,” notes that “The peace deal between Colombia’s government and the FARC is fantastic . . . But it generates a side effect, which will be the idling of many FARC members.”  In addition, some members of FARC “have opted out of the process altogether.  Guerilla units in the lawless jungles of southeast Colombia, near the Brazilian border, have broken ranks with the FARC over the peace pact.”  As is no doubt obvious, some members of FARC will conclude that they will be better off working for the PCC than in some alternative line of work.

********A very useful site identified by the article is InSight Crime: Investigation and Analysis of Organized Crime: http://www.insightcrime.org/.  The site is global in its coverage.

(1 February 2017): “Saudi Arabia Plans the World’s Cheapest Power With Solar and Wind” (https://www.bloomberg.com/news/articles/2017-02-01/saudis-plan-1st-renewables-bids-with-world-s-lowest-power-cost)

********The title of this very brief article pretty much says it all.  Saudi Arabia “plans to produce 9.5 gigawatts of power from renewable energy sources by 2023.”  Evidently the country with the world’s second-largest proven oil reserves (https://en.wikipedia.org/wiki/List_of_countries_by_proven_oil_reserves), following Venezuela, is actively pursuing renewable energy.

May you have a good week!


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