Welcome to week 363! The articles below caught my attention this week. What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********). Article titles preceded by [SR] require a subscription.
(26 March 2019): “Infected U.S. Shale Oil Is Being Turned Away by Asian Buyers” Bloomberg.com
********U.S. shale oil is not “infected” in the biological sense, but it is frequently degraded by the presence of impurities, such as “oxygenates, metals and cleaning agents”—picked up in production and transportation by pipeline. “Two refiners in South Korea . . . have rejected cargoes in recent months due to contamination that makes processing difficult.” In at least one case, oil refused by South Korea was redirected to China.
(27 March 2019): “U.S. and China got into a trade war—and Mexico walked away richer” The Los Angeles Times
——–“The Trump administration’s trade war with China has turned out to be a windfall for another country the president frequently berates Mexico. . . . Mexico has seen gains in shipments to the U.S. in categories in which competing Chinese goods were hit with tariffs, including poster board and air conditioner parts. In all, U.S. imports of goods from Mexico surged 10% to almost $350 billion last year, the fastest growth in seven years. That helped widen the U.S. trade deficit with Mexico by 15% to more than $80 billion, while the growth in shipments from China slowed by about a third.” Mexico’s bonanza “underscores the difficulty in trying to win a trade war when companies can shift production or find new sources to avoid tariffs. Despite Trump’s vow to reduce it, the U.S. trade deficit for goods globally hit a record $891 billion last year as tax cuts boosted demand for imports and retaliatory tariffs weighed on American exports.”
********A nice illustration of what is likely to occur when a bilateral approach is taken to a “problem” that is multilateral.
(1 April 2019): “The Creeping Capitalist Takeover of Higher Education” HuffPost Highline
********Unfortunately, this is not an April Fools joke. Written by long-time higher ed reporter Kevin Carey, this lengthy article explores the interaction of for-profit education, online education, traditional and mostly elite universities, accrediting agencies, and the federal government. The result is a concerning mix of degrees that benefit universities a little and online program managers (OPMs) a lot; students may benefit a little. A key factor creating immense profit opportunities has been a pricing decision, i.e., charging students the same tuition for an online coursework as for campus-based coursework. The costs are nowhere near the same, so that opens up a large gap between marginal revenue and marginal cost of a course which OPMs have been eager and able to fill. A sobering article.
********Kevin Carey is the author of the 2015 book The End of College: Creating the Future of Learning and the University of Everywhere, which no doubt touches on some of the themes developed in the article. You can read a 10-page review of the book here. Here is its first paragraph:
While other books have outlined the crises that face institutions of higher education in America (Blumenstyk, 2015; Selingo, 2013), Carey (2015) argues that these crises have been, in part, caused by and can, in part, be solved by burgeoning enterprises in instructional technology. In The End of College, Carey fervently argues that soon, the “University of Everywhere” will arise. This university will be digital, it will serve millions, and, most importantly, in relation to teaching and learning, it will be more effective than traditional universities could ever hope to be.
Looking at this paragraph and the article, it strikes me that Carey has become disillusioned by the prospect of reconstructing higher education to the benefit of students.
(3 April 2019): “What Happens When an Economist Walks Into a Brothel?” Bloomberg Businessweek
——–“To learn how to manage risks in your life, don’t consult office-bound economists or actuaries. Aske the real experts: prostitutes, gamblers, magicians, paparazzi, big-wave surfers, movie producers, horse breeders, and soldiers. Their careers require them to take risks. They succeed by doing so smartly—deriving as much benefit as possible per unit of risk taken. Allison Schrager, herself an economist, though not of the office-bound variety, interviewed all of these exotic professionals for an intriguing new book.”
********The intriguing new book is An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk. I took a look at the Table of Contents and it seems to be meaningfully more than yet another book on “let’s look at X as an economist to see what we can say” effort. It does have some things to say about traditional topics such as insurance and moral hazard. Along the way Schrager discerns five rules relating to risk management. This is a very appreciative review and I’m willing to take chance on the book.
May you have a good week!