Mitchell's Musings

  • 20 Jul 2015 9:18 AM | Daniel J.B. Mitchell (Administrator)

    There has been a succession of stories concerning universities attempting to deal with complaints about sexual harassment and assault. Growing pressure on universities to do something about the issue has led to creation of internal adjudication processes that sometimes take on Orwellian aspects and sometimes simply lack appropriate and basic due process. Legal scholars have been pointing out the problem for some time. But two recent cases have highlighted the issue.


    The first involved a professor – Laura Kipnis at Northwestern University - who was accused of writing an op ed about Title IX [1]– a federal requirement related to discrimination on the basis of sex - that made some students uncomfortable (they said). While anyone can file anything, at some point in the investigation, the university authorities began to take the charge seriously and seemed to forget about academic freedom. Prof. Kipnis was writing about a public policy matter. When Prof. Kipnis exposed the proceedings, there was an Internet storm and the charges were dropped.[2]


    The second case involved a court decision that went against the University of California, San Diego. In that matter, one student accused another of non-consensual sex. Note that an accused student is likely to have fewer resources than a tenured professor for challenging university procedures (as in the Kipnis matter). Nonetheless, after the accused student was suspended and took his case to court, the judge in the case found that basic due process had been lacking. There was also evidence that a university official had added to the penalty imposed on the accused student in retaliation for his eventual recourse to the judicial system.[3] Whether the university will appeal the verdict is not known at this writing. However, the court decision led to an editorial in the Los Angeles Times questioning the ability of universities to provide fair proceedings. The editorial concluded:


    If schools are going to remain in the business of handling allegations of sexual assault, they must be sure victims are treated with respect, that complaints are taken seriously and pursued vigorously, and that the basic rights of the accused are not abridged.[4]


    What seems clear is that universities are not well equipped to handle such cases. If they hire officials whose job it is to prosecute as well as investigate, there is a built-in conflict of interest, as the San Diego case makes clear. As it happens, the University of California’s Board of Regents is at present trying to come up with rules and procedures to deal with sexual harassment and assault adjudication. There have been vague assurances from the university’s central administration that the eventual machinery to be proposed will be fair to the accused. However, as long as the adjudication process is entirely in-house and run by university officials (sometimes with student panels), the issue of lack of due process will remain.


    But there is a potential solution: outsourcing the final step in the process to professional arbitrators. Note that this solution is one which universities that have unionized employees regularly use in the labor relations context. If it can work there, why should it not be utilized in the area of sexual harassment and assault?


    I am going to put aside the issue of whether university adjudication processes should be used for complaints of conduct that, if it occurred as charged, is criminal. There is an argument to be made that at least some complaints should be referred to local police or – if the university has its own police department – to that agency. Nevertheless, let’s assume, for purposes of this musing, that universities – perhaps because of Title IX or for other reasons – will feel that they need to have an internal mechanism for all complaints.


    Because the union sector has declined drastically over the past few decades, its procedures for grievance adjudication may not be well known by top university officials. Even in universities that have collective bargaining for some employees, labor relations may be compartmentalized so that those decision-makers not directly involved in union-management issues may not be fully aware of the workings of systems of grievance and arbitration. So let’s review what a typical system entails.


    If an employee has a grievance, there is generally some informal review which may resolve the matter. Absent an informal resolution, there follows a more formal step procedure in which the grievance is taken up by the union on behalf of the employee with management. If a settlement is not reached after the step process is completed, an outside professional arbitrator is selected. The arbitrator then hears the case in a procedure that is less formal than might occur in an outside court, but does involve
    witnesses, evidence, cross examination, briefs, etc. Both sides are able to present evidence and rebuttal. In the case of an employee who has been subject to discipline, the grievance is framed in the context of “just cause.” Was the discipline imposed for just cause? That question starts with whether the alleged infraction occurred and then whether – given all the circumstances – the discipline imposed was appropriate.


    Over many years, the concept of just cause has been developed in arbitration as a kind of common law. Nonetheless, it suggests due process. Relevant would be the thoroughness of the investigation by management, the consideration of available evidence, consistency with past discipline in similar cases, etc. Arbitrators will consider what the union-management contract has to say in terms of procedures
    that must be followed and about the meaning of just cause. The decision of the arbitrator, which could be a voiding or lessening of the discipline imposed or upholding the discipline, is then binding on the parties. Note that managers who have the authority to impose discipline know that it is always possible that their judgments might be tested in the grievance process and could ultimately be reviewed by an outside neutral arbitrator.


    Of course, it is possible to try and reverse labor-management arbitration decisions in the external courts. But courts tend to “defer” to arbitration decisions. There is a practical component to such deferrals. Court caseloads are crowded. If there is an alternative process that incorporates due process, second guessing professional arbitrators is not something that courts would want to do on a regular basis.


    There is a difference, of course, between a labor relations grievance and a complaint of sexual harassment or assault. There is no direct analogy to a labor-management contract in the latter situation. Neither the person making a complaint nor the accused has the equivalent of a union to be a representative in the process. But the key point is the potential – known to all involved – that if the matter is not settled informally or through the step process, there will be an outside neutral reviewer and arbitrator who will make a final decision.


    The fact that there are differences between an employment-related grievance in the union-management context and a complaint of sexual harassment or assault is not a barrier to using an outside arbitrator. In place of the contract and general rules of the workplace are university policies regarding sexual harassment and assault. The process can include permitting both the person making the complaint and the accused to have a representative present as an advisor at every point in the procedure. (Indeed, the university could offer to provide such a representative.) In short, there is nothing that prevents an outside neutral professional from being used as the final decision-maker. Indeed, not using a neutral outsider invites external review of the type universities don’t like – either an Internet fury as in the Kipnis affair or an adverse court decision as in the San Diego case.


    [1] http://www2.ed.gov/about/offices/list/ocr/docs/tix_dis.html
    [2] http://dailynorthwestern.com/2015/06/06/campus/investigators-find-prof-laura-kipnis-not-violate-title-ix/
    [3] http://www.latimes.com/local/education/la-me-ucsd-male-student-20150715-story.html
    [4] http://www.latimes.com/opinion/editorials/la-ed-sexual-assault-uc-san-diego-case-20150717-story.html

  • 13 Jul 2015 8:17 AM | Daniel J.B. Mitchell (Administrator)

    Has the labor market changed since its last business cycle peak in 2007? Between then and now, we had the Great Recession which presumably could have made structural alterations to the way the labor market functions. The most widely used measure of labor market conditions is the official unemployment rate. Unemployment by that index is falling towards levels similar to the last peak as can be seen on the chart below. So, although we are not necessarily at the next peak, are we coming back to “normal”?
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    There are other measures of the labor market which suggest that things now are “different” relative to what they were at the 2007 peak. Among them is the job openings rate (or vacancy rate) which is currently above the previous-peak levels even though unemployment is still higher than at prior-peak levels. The chart below illustrates that shift between the prior peak and now. It shows, as just noted, that the job openings rate is higher now than then.

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    Moreover, the job openings rate shift seems to have occurred at around the time the Great Recession bottomed out in 2009. That is, it is not just recently that job openings could be viewed as higher than you might have expected given the condition of the labor market. The U.S. Bureau of Labor Statistics (BLS) provides a chart of the so-called “Beveridge curve,” the (inverse) relation between the job openings (vacancy) rate and the unemployment rate. A standard interpretation is that if the Beveridge curve shifts up and to the right on the chart, there is some kind of new inefficiency that has been introduced into the labor market. You can view the curve shift as indicating that it takes more vacancies than “normal” (with “normal” meaning what the relation was before the 2007 peak) to bring the unemployment rate down to any given level.


    But what is the nature of that inefficiency? Whose fault is it? BLS provides a standard interpretation of the curve shift along with its chart [1]:

    The position of the curve is determined by the efficiency of the labor market. For example, a greater mismatch between available jobs and the unemployed in terms of skills or location would cause the curve to shift outward (up and toward the right).


    Although the BLS doesn’t specify the nature of the inefficiency, a standard story is that worker skills don’t match employer needs; worker skills have somehow eroded or become outmoded.
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    There is a puzzle to the worker skill mismatch story. While it’s possible for worker skills to become outmoded over time if they are not employed, as with capital depreciation, the effect should take a while to set in. The fancy word for this explanation of depreciating skills is “hysteresis” in the labor market. Whatever you call it, the skill erosion story seems to put the onus for the problem on the supply side (worker side) of the labor market. Workers, the story implies, should update their skills to meet employer needs. When they do, they will get jobs more easily. If you are more liberal in your political orientation, you might alternatively say that we need public programs to subsidize retraining. Workers need retraining, in that view, but government should help them obtain it.


    However, labor markets have two sides. What about the demand side (employer side)? When a sharp recession occurs, there is a period thereafter during which recruitment is easy for employers. Applicants are plentiful. Employers need not do much more than let it be known that jobs are available to have a queue of applicants. That phenomenon – long queues - is a sudden effect that emerges with a sharp recession.


    Unlike unemployed worker skill erosion which occurs over time, no gradual change is involved on the employer side. So it could be that the skill that has eroded is not a worker skill but an employer skill. The lost skill – if that is the right word - is employer aggressiveness in recruitment. Employers, in this alternative story, have forgotten that it is sometimes necessary to reshape jobs to worker needs and skills, and to outbid other employers in terms of pay and conditions.


    If that demand-side explanation doesn’t suit you, here is another story, also on the demand side. Hiring can be loosely considered indefinite or temporary. Temp hiring can be done through an employment agency or directly by an employer. In either form, it puts the new hires on notice that their jobs are of short duration or are explicitly temporary.


    Our labor market data only measure hiring through temp agencies. The data don’t reflect any distinction between temporary or indefinite hires. So if workers are hired directly by employers but with a temporary understanding, we have no measure that distinguishes such hires from “regular” employment. We do know, as the chart below shows, that the proportion of hires through temp agencies is now higher than it was at the previous peak. Temp agency hiring can be taken as a proxy for more temporary hiring in both forms (direct and through agencies).


    If employers have shifted their hiring toward short-duration labor market contracting, perhaps after having experienced the trauma of having to do mass layoffs of regular employees during the Great Recession, one would expect more vacancies now. Short duration hiring means frequently having vacancies as the temp hires are let go and replaced. Put another way, there will be more churning in the labor market which is likely to be associated with more vacancies at any point in time.



    The point of this musing is not to produce a definitive story of why the Beveridge curve, as charted by BLS, has shifted up and to the right. Rather its point is that assuming the explanation is entirely on the supply (worker) side of the labor market is unwarranted. The supply-oriented explanation of outmoded job applicants has implications. It suggests that there is a skill mismatch problem and that the onus is on the worker (perhaps with government assistance) to fix it. One way or another, workers should get themselves retrained. For example, the recent interest in policies to promote tuition-free community college seems linked to such a diagnosis.


    But if what we are observing is a change in employer behavior, an exclusive focus on community college tuition or similar measures is aimed at the wrong target. We know from past experience with high-demand labor markets that employers eventually come up with ways to adapt to the worker supply that is available. In past periods of high demand, employers have boosted their own training efforts. They have bused in workers from more distant areas. They have redesigned jobs. We might start, therefore, by promulgating reminders of such past efforts and by highlighting examples of whatever current efforts in that direction are now occurring.


    [1] http://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf

  • 06 Jul 2015 9:49 AM | Daniel J.B. Mitchell (Administrator)

    From time to time in these musings, I have referred to a paper I wrote back in 1998 – before the Eurozone was fully in place – entitled “Eur-Only as Sovereign as Your Money: California's Lessons for the European Union.”[1] The paper appeared in the June 1998 edition of the UCLA Anderson Business Forecast publication as an excerpt from a longer presentation I made subsequently at a meeting of an international group that took place in Bologna. The theme of the paper – as the title suggests – was that countries joining the Euro-zone were giving up an important element of their macroeconomic policy.


    Specifically, countries joining the Euro-zone were surrendering their conventional monetary policy (control of interest rates) and the ability to change their exchange rate, i.e., to vary their competitive costs of production, relative to those of their major trading partners. In recompense for that loss of control, those countries that joined would get lower cross-border transactions costs and an end to exchange rate risk with other countries within the Euro-zone. So was the upcoming sacrifice worth the benefit? That was the key question and it seemed to me at the time that there was insufficient recognition of the trade-off prospective Eurozone members were facing.


    The paper noted that the State of California was effectively a member of the “dollar-zone” within the U.S. Thus, while benefiting from lower transactions costs and an absence of exchange rate risk with the rest of the U.S., California had no independent state monetary policy. Put another way, California’s monetary policy was effectively in the hands of an external Federal Reserve, the U.S. central bank. And when California experienced a negative shock – the end of the Cold War around 1990 and the resultant decline of its then-large aerospace/military industry – it could not change its exchange rate to facilitate the adjustment relative to the other areas of the U.S.


    There were two results of this lack of economic sovereignty in California. A mild recession in the U.S. in the early 1990s could not be escaped by California since it was part of the overall dollar-zone. And the structural negative shock (end of the Cold War) played out as an ongoing state budget crisis, a decline in employment, an out-migration of those workers displaced by the shock, etc. Californians who were around at that time will recall those developments and adjustments as painful.


    Californians might also recall something else that happened in the aftermath of the downturn of the early 1990s. Just as the state government was adversely affected by the economic shock (reduced tax revenue), so, too, were local governments within California. One of those local governments, Orange County – located just south of Los Angeles – went into bankruptcy in late 1994.[2]


    There is an old joke that you can find out who is swimming naked only when the water recedes. It turned out that Orange County had been engaged in financial speculations which, for a time, provided high returns on investment that helped sustain local services by supplementing tax revenues. But with high returns inevitably comes risk. And one day the economic tides receded and there were big losses rather than high returns for Orange County. The County’s financial misbehavior was exposed and it could not pay all its bills. Some creditors would not be paid on schedule.


    As are the other counties in California, Orange County is run by an elected Board of Supervisors.[3] In 1995, the Board put a proposition on the County ballot asking voters whether they wanted to raise the local sales tax to maintain services and avert bankruptcy-related cuts. The tax was rejected by the electorate. And after some missed debt payments, arrangements were worked out with creditors and eventually the County recovered. There is more to the story, but now you have the general outline.[4]


    The article I referred to at the outset of this musing drew lessons for the impending Euro-zone from what happened at the state level in California in the 1990s. But there are also lessons from what didn’t happen at the local level in California for the current Greek crisis. But let’s start with what did happen. The private sector in Orange County continued its recovery from the larger California recession that developed earlier in the decade as can be seen on the chart below.


    Having an unstable local government that was in financial difficulties was certainly not a plus for the County’s business climate. But those difficulties didn’t create a local recession, either. In particular, there were no financial panics. There were no runs on banks in Orange County. County residents had full access to their bank accounts. They didn’t empty grocery store shelves and hoard food. They didn’t hoard currency. ATMs operated normally. Residents’ credit cards continued to be accepted. Stock markets in the U.S. and around the world did not tremble because Orange County’s government couldn’t pay all its bills.



    Now imagine a very different scenario. Suppose the Federal Reserve had declared in 1994 that if Orange County’s government couldn’t or wouldn’t pay all its debts, the Fed would stop providing the ongoing backup to banks in Orange County that central banks typically provide. Suppose that the Fed had announced that if Orange County’s government could not pay its debts, the County could no longer even be in the dollar-zone and therefore the County would have to introduce its own currency or somehow cope on its own. Clearly, there would have been a more drastic fallout from the Orange County bankruptcy than actually occurred if any such announcement had been made. Surely, there would have been runs on Orange County banks. Since those banks are connected to financial institutions outside Orange County, the panic could easily have spread nationally and even internationally.


    But none of these things happened. In fact, it is unthinkable that the Fed or other central government institutions in the U.S. would take such a position. They simply wouldn’t say that because a local government within the dollar-zone was not meeting its obligations to creditors, all central obligations to maintain financial and general economic stability within that jurisdiction’s private sector would cease. They wouldn’t say that the local jurisdiction would have to create its own currency thereafter. Instead, they would view the residents, banks, and businesses of areas within the dollar-zone as remaining in it, regardless of what their local government authorities might do.


    Indeed, anyone reading this musing would say that my hypothetical story above is ridiculous – because it is ridiculous. I have no idea how the Greek electorate will vote on the planned referendum on the Eurozone’s terms.5 I have no idea what the Greek government may do. And it really doesn’t matter for the purpose of this musing. If the story above seems ridiculous as a policy for U.S. central authorities to have followed in Orange County’s government debacle, why isn’t it a ridiculous policy for Euro-zone central authorities to be following in the Greek debacle?


    ---------------------------------------------------------

    [1] http://www.anderson.ucla.edu/documents/areas/fac/hrob/Mitchell_Eur-Only.pdf

    [2] Orange County at the time had a population of about two and a half million people. Its population today is over three million and it has a gross product of over $200 billion. See http://www.fullerton.edu/cdr/ocff.pdf. In dollar terms, that gross product is roughly comparable with Greece’s.
    [3] Counties in California’s complicated hierarchy of governments provide health and welfare services, run local jails, and provide services such as police and fire in unincorporated areas (areas that are not part of cities) and in cities that contract with the county of such services.
    [4] See http://www.ppic.org/content/pubs/op/op_398op.pdf

    [5] Although this musing is dated the day after the planned referendum, it was written before. Mitchell’s Musings are typically dated the Monday of the week in which they appear.

  • 29 Jun 2015 9:19 AM | Daniel J.B. Mitchell (Administrator)

    In last week’s musing, I discussed the issue of academia’s struggles with such matters as “micro-aggressions” and “triggers.”[1] Basically, the message was that university policies around such matters have the tendency either to provoke external ridicule – political correctness gone wild – or abuse by university administrators. Those are the downsides.


    What I did not provide in that musing was what university administrators should do – as opposed to what they shouldn’t do. Of course, sometimes it is enough just to point out what shouldn’t be done. However, university administrators do receive complaints about alleged micro-aggressions and apparently do feel compelled to do something. Furthermore, what got me to thinking further about this matter was a public radio broadcast here in the Los Angeles area which was triggered (pun absolutely intended) by an op ed in the Los Angeles Times by libertarian-leaning UCLA law Prof. Eugene Volokh. His op ed was basically taken from a blog he wrote called the Volokh Conspiracy which is carried by the Washington Post website.[2] As you might expect, Volokh’s op ed and the earlier blog post opposed the micro-aggression training program at the University of California that was mentioned in last week’s musing. Subsequently, the Los Angeles Times published an editorial essentially endorsing the Volokh position.


    The broadcast featured as guests Prof. Volokh and Prof. Derald W. Sue of Teachers College at Columbia University. Volokh essentially repeated the stance taken in his op ed; Prof. Sue took the position that micro-aggressions were real. But he went off track in two ways. First, accepting Sue’s point – it remains unclear that universities should take steps that suggest to students and faculty that individuals who say things that seem innocent on their face (“Where were you born?”), or even controversial or provocative things about public policy (“Affirmative action is racist”), should be threatened with penalties.


    Second, when asked about such statements that are said to be micro-aggressions such as “America is the land of opportunity,” Prof. Sue said that particular statement wasn’t true because not everyone who comes to America has equal opportunity. But there is nothing in the statement “America is the land of opportunity” that requires the interpretation that “America is the land of equal opportunity.” The statement presumably can simply mean that there is more opportunity in America than in some other places (which is presumably a major reason why folks immigrate to the U.S.).


    In effect, the conversation veered off from the topic of whether a specific statement might be taken as a “micro-aggression” and whether something should be done to repress it, if so, to whether the statement was true under Prof. Sue’s interpretation. There are statements that are true – “you’ve gained a lot of weight” – but that might not be the best thing to say to someone. We all know that there are statements in everyday conversation that aren’t necessarily true, but sometimes can be the best thing to say. “You look great” said to someone returning after a long illness may not be strictly true, but it can be encouraging to the recipient.


    The micro-aggression idea is really a subcategory of a large body of work in psychology and other fields – nowadays even in economics – that involves framing and subtle “nudges” that can influence behavior. My favorite example is a presentation I heard a few years ago by a colleague at UCLA describing an experiment. As I recall it, Asian female student volunteers were randomly divided into three groups and given a math test. Before the test was administered, some students were asked a question about what language their parents spoke at home – a reminder of race/ethnic background. Another group was asked if their dorm was co-ed, a reminder of being female. The third control group was asked a neutral question: something about phone access in their dorm.


    The purpose of the experiment was to see what impact the stereotypes of Asians being good at math, but women being poor at math, would have on the results of the math test given to students who fell into both categories (Asian and female). Those students reminded of being Asians scored best. The neutral group came out in the middle. And the group reminded of being female scored the lowest. Apparently, a seemingly-irrelevant question to math produced a behavioral response in math performance.


    The math experiment is only one of many such cases. In fact, there is a substantial literature documenting these types of results. There are behavioral labs in universities devoted to research in this area. But note that the behavioral response to what was done in the math experiment could have positive, as well as negative, outcomes. Doing better than the control group on a math test was surely a positive outcome. Put another way, the students reminded indirectly of being Asian were “triggered” to perform better. Perhaps the students in the group who were indirectly reminded of being female by a seemingly-neutral question could be viewed as being the victims of a “micro-aggression.”


    Clearly, advertising and marketing are longstanding fields entirely devoted to the notion that what is said – even if irrelevant to a rational choice by consumers - can influence behavioral responses. And there has been no secret about that fact for decades. In the 1950s, for example, there was a popular book – The Hidden Persuaders – devoted to informing the public that it was being manipulated in subtle ways that were seen as positive by advertisers but perhaps negatively by the consumers of those advertisements.


    Some forms of insurance are denoted by the bad thing they insure against: fire insurance, collision insurance, flood insurance, earthquake insurance. However, there is a reason why what is called “life insurance” is not called “death insurance” even though such insurance is taken out against the risk of dying. In principle, whether you should buy life/death insurance should have nothing to do with its label. But obviously those who sell insurance think that the label matters and that death is not a popular subject. Similarly, there is a reason why opponents of the estate tax call it the death tax instead. Presumably, the label put on a tax should not affect appropriate choices of fiscal policy. But someone evidently thinks that having a tax with “death” in its name it will influence legislative outcomes.


    So if you are a university administrator, what can you do to improve “campus climate” without getting yourself into situations where you are held up to ridicule or find yourself defending the indefensible? The fact that condemnation of campus anti-micro-aggression/trigger policy excesses is now moving from libertarian blogs to mainstream news sources (such as the LA Times editorial page) should be a warning to university administrators. Mandatory training sessions that resemble authoritarian re-education camps are definitely NOT the way to go. Orwellian investigations without reasonable due process are not the way to go. So what is the way to go?


    Academics like research; that’s what they do. The kinds of behavioral studies such as the math experiment noted above if presented as just that – interesting research studies – would attract the attention of many academics. So why not start by making such research widely available? Such an effort might well attract an audience – even among the more socially-challenged members of the community. It might even influence their behavior. But the emphasis should not be only on the negative – which is the focus of the “micro-aggression” approach - since the research in fact points to a range of responses, positive and negative, to subtle cues and framing. There are micro-encouragements – the research suggests – as well as micro-aggressions.


    Beyond the circulation of research information, administrative interventions should focus on situations of explicit exclusion. Recently, for example, a high-profile scientist mused in public that women in scientific laboratories were trouble because they caused romantic relationships to develop that diverted lab attention from research.[3] That statement was more than a micro-aggression. A university would be remiss in having a person who made public exclusionary remarks of that type as a director of a research center, a department chair, a dean of a school, or heading some other program. Remarks of someone in charge of a university program that he/she doesn’t care to deal with members of group X (race, sex, religion, national origin, etc.) should disqualify that person from a leadership position.


    You don’t need elaborate experiments to see that targeted individuals might well feel unwelcome in a research program, department, or school led by someone making such exclusionary remarks. Universities are bound by law and acceptance of federal funding to ban discrimination on the basis of race, sex, religion, national origin, etc. So administrative action might well be warranted when someone in charge of a university program makes exclusionary remarks of that type since they violate university policy and legal obligation.


    Exclusionary remarks might also work to discourage students from enrolling in someone’s classes. If you say you don’t want to deal with group X or that group X is trouble, surely someone in group X would have to worry about being in your class. But positions on sensitive public policy issues such as affirmative action cannot be taken as exclusionary by themselves unless there is firm evidence that alternative viewpoints are not presented or tolerated in the classroom.


    There has to be a rule of reason applied and, if you are a university administrator, you are going to have to determine what is reasonable, particularly in the light of traditional values of academic freedom. (Sorry, but if you are an administrator, that is what you are paid for – reasonable judgments.) If you need a more definite rule than that, consider this one: As a university administrator, when you move away from explicit statements of exclusion and get into the realm of micro-aggressions, you would be well advised to avoid actions that make yourself the subject of editorial derision.


    [1] http://employmentpolicy.org/page-1775968/3400944#sthash.gMa9n9EC.dpbs
    [2] The broadcast (“Airtalk” on KPCC) can be heard at http://media.scpr.org/audio/upload/2015/06/24/Microaggressions_-_Should_they_be_censored_on_college_campuses-d855f9ab.mp3.

    The original Volokh blog posting is at http://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/06/16/uc-teaching-faculty-members-not-to-criticize-race-based-affirmative-action-call-america-melting-pot-and-more/ and his op ed is at http://www.latimes.com/opinion/op-ed/la-oe-0623-volokh-uc-microaggressions-20150623-story.html.

    The LA Times editorial is at http://www.latimes.com/opinion/editorials/la-ed-microaggression-what-not-to-say-at-uc-20150624-story.html.

    [3] http://www.dailymail.co.uk/news/article-3117648/Ban-women-male-labs-distracting-cry-criticised-says-Nobel-prize-winner-Sir-Tim-Hunt.html

  • 15 Jun 2015 2:51 PM | Emily Smith (Administrator)

    Much was made of a “slowdown” of the economy in the first quarter of 2015. According to the latest release from the U.S. Bureau of Economic Analysis – which is the second estimate for that period – in the first quarter real GDP declined at an annual rate of 0.7% in contrast to an initial report of an annualized increase of 0.2%.[1] The estimate of a decline brought headlines which didn’t always reflect the fact that these are annualized numbers, i.e., the actual decline (if there was one) was only about one fourth of 0.7% per quarter.[2] CEOs are said to have revised down their growth estimates, perhaps after hearing from their corporate economists about the decline.[3] (Question: Are CEOs fully conversant with BEA methodology for producing real estimates from nominal data and then seasonally-adjusting the results? It is likely that most economists who use the BEA data would have to look up the technical details.)


    Real GDP data are typically presented in seasonally-adjusted form so the fact that the winter is a slow period generally shouldn’t affect the numbers. However, the winter was especially severe and therefore the seasonal factors – which are based on historical patterns – possibly understated the effects of bad weather.[4] Then again, as we have noted in prior musings, the methodology for calculating real GDP from the nominal figures is arcane. So we are talking about questionable seasonal factors imposed on arcane and preliminary estimates.


    Given the uncertainties, let’s look at the labor market and see if anything really exciting has occurred in early 2015. Below is a chart of twelve-month percentage nonfarm payroll employment growth. It is based on actual employment levels (not seasonally-adjusted levels) compared with the same month a year earlier.[5] So if winter was extra-severe in 2015 (which it undoubtedly was), this method of dealing with the seasonal effect will understate the impact of weather.



    When you look at the chart, you see a slight slippage in the employment growth rate in early 2015. But even with the slippage – which may be entirely a weather-related event – the growth in employment was above the level we have seen earlier in the recovery. If we look only at the private sector, growth rates on a 12-month basis are a bit higher than when government is included. Nonetheless, except for a brief period back in early 2012, growth rates were generally below those so far in 2015.



    If we look at the employment-to-population ratio from the Current Population Survey (Household Survey), the results are similar. The improving trend continued into early 2015 and in fact was stronger in that period than in much of the earlier recovery. In short, when you look at the labor market and put the numbers into perspective, it appears that there really wasn’t a meaningful slowdown. At most there was a snow-down, CEO pessimism notwithstanding.



    What matters in terms of employment and the general direction of the economy is the underlying trend, not short-term noise. Blips up and down are often just statistical aberrations and should not be heralded as a structural shift. The most recent UCLA Anderson Forecast for the U.S. economy as an example tells a story of a long and painful deviation from capacity due to the Great Recession and a slow recovery thereafter. As the chart below from that Forecast indicates, at current rates of (projected) growth, it will take another couple of years to get back to where we should be. Of course, it is possible that some unforeseen events could intervene before we get there. But nothing fundamental happened in the first quarter of 2015 that should change that perception.



    [1] http://www.bea.gov/newsreleases/national/gdp/2015/pdf/gdp1q15_2nd.pdf.

    [2] The headline in the New York Times was “U.S. Economy Contracted 0.7% in First Quarter.” See http://www.nytimes.com/2015/05/30/business/economy/us-economy-gdp-q1-revision.html. The article’s text noted that the estimates were annualized.
    [3] http://www.reuters.com/article/2015/06/08/us-usa-economy-ceo-survey-idUSKBN0OO24I20150608.
    [4] It has been argued that there are other problems with the winter seasonal adjustment. See http://www.frbsf.org/economic-research/publications/economic-letter/2015/may/weak-first-quarter-gdp-residual-seasonality-adjustment/
    [5] All employment data cited are from the U.S. Bureau of Labor Statistics.

  • 08 Jun 2015 8:26 AM | Daniel J.B. Mitchell (Administrator)

    An item in the news caught my eye dealing with the Federal Reserve and “transparency.” Specifically, a column appeared in the Los Angeles Times – apparently reflecting a similar column in the Wall Street Journal – indicating that you shouldn’t rely on Federal Reserve chairs for stock market advice.[1] The column noted that after former Fed chair Alan Greenspan made his famous “irrational exuberance” warning, you could have lost a lot of money if you had pulled your investments at that time from the stock market, even taking account of subsequent events. One such event was the dot-com bust and another was the later housing bust. Nonetheless, timing is everything; if you sold at the bottom you might have lost but if you held on to your shares you would have come out ahead.


    The column goes on to note that current Fed chair Janet Yellen has noted high valuations of some techy sectors of the stock market but those shares also went up after she sounded a cautionary note. Pay no attention to the Fed chair seems to be the lesson to be drawn. But is that so?


    There is the old bit of (useless) advice that you should “buy low” and “sell high” to make money. Indeed, a quick Google search failed to reveal even an attribution of that quote – because it is so commonly used to illustrate how it really tells you nothing. The advice is useless since it fails to tell you about timing – when exactly is the market low and when is it high? By itself, it is as unhelpful as advising you that when betting on a horse race, you should always bet on the winning horse.


    Useless though they are, both buy low/sell high and bet-on-the-winning horse are bits of micro advice. They may be useless but they are aimed at individual investors or betters. Fed chairs don’t purport to be micro advisors who are competing with stock brokers or race track tip sheets. They do have macro concerns, however. Sometimes bubbles and the bursting of those bubbles can be costly to the overall economy. The dot-com/boom/bust provoked a mild recession. On a regional basis in my home state of California, its impact was greater than in the U.S. as a whole, leading to – among other effects – a state budget crisis and the recalling of a governor.


    The housing bubble/burst, on the other hand, produced the Great Recession. By many measures, particularly in the labor market, we are still not fully recovered from that recession. So surely, Fed chairs have legitimate concerns about such episodes. Their concerns are not whether you as an individual could make money by a long-term buy-and-hold stock strategy but what happens to the general economy when there are panics and market collapses.


    It may well be that making statements about irrational exuberance is not especially effective at avoiding such exuberance and that it has no effect on financial busts. It may be – in fact it likely is – the case that statements by Fed chairs are no more useful at telling you at the micro level how to time investments than telling you to buy low/sell high. But it seems wrong to imply that Fed chairs shouldn’t openly share their macro policy concerns in public forums. Surely, those folks who call for more “transparency” at the Fed would be unhappy with such a position. What could be more transparent than a Fed chair sharing her policy concerns?


    If Janet Yellen is expressing nervousness about stock market valuations, she could be telling you that she is leaning toward raising interest rates to cool things down. It’s likely that she is not alone in such leanings among Fed policy makers. She might be wrong in her evaluation about the market. But now you know how she – a significant player in monetary policy – feels. Whether you want to sell your stocks on hearing what she has to say is your business. Whether your investment choices should be made on that basis is your affair. But whether the Fed raises interest rates is everyone’s business because of the macro effects, even the business of those who have no stock market investments and are just doing such real world things as seeking employment.


    [1] http://www.latimes.com/business/hiltzik/la-fi-mh-want-to-make-money-in-the-stock-market-dont-listen-to-the-fed-chair-20150602-column.html

  • 01 Jun 2015 8:53 AM | Daniel J.B. Mitchell (Administrator)

    In past musings, I have noted problems in interpreting opinion polls taken about complex public policy issues in which the pollster has to explain to (and frame for) respondents what the issue is. Such polls tend to produce opinions about issues on which the respondent didn’t have a real opinion since the explanation (framing) was needed to produce answers.


    On the other hand, it is interesting to look at public sentiments on general circumstances in which respondents are likely to have knowledge or, at least, opinions. One such circumstance is the condition of the labor market. Another is personal economic well-being. Respondents are likely to have some perception of the labor market, either from personal experience or from observations based on family, friends, and what is happening at their own employer. Such opinions may or may not be accurate for the labor market as a whole, of course. Respondents are likely in addition to have knowledge of their own personal circumstances.


    California was harder hit by the Great Recession than average in the U.S., in part because the housing bubble/bust and shaky mortgage problem was disproportionately located in the state. Nonetheless, as the chart below indicates, the unemployment rate has been falling steadily and its latest reading on a seasonally adjusted basis was 6.3%. That level is higher than the U.S. average of 5.4% but during the recovery the California-U.S. gap has been narrowing. Say what you want, things are better now than they were and have been improving.




    The California Field Poll regularly asks respondents about their labor market and general economic perceptions and whether they are better off than a year before. So what did Californians think about the unemployment situation and the general economy in prior periods when the unemployment rate was about 6.3% and trending down?1 Such earlier periods turn out to be 1987 (the era of “Morning in America”), 1997 (the dot-com boom), and 2004 (the housing boom). What were respondents to the Field Poll saying then and now?


    Let’s start with the labor market. Respondents – registered voters - were asked “How serious a problem do you think unemployment is in California at this time?” Below are their answers:




    Very Serious Somewhat Serious Not Serious
    May 2015 39% 46% 14%
    Morning 1987 22 45 25
    Dot-com 1997 na na na
    Housing 2004 35 43 19


    Although we don’t have poll data for the corresponding dot-com year, it appears that respondents during the Morning in America period were more blasé about unemployment than are current respondents. Housing boom respondents were somewhere in between the two perceptions. The perception that the labor market has problems carries over into the characterization of the general economy. When asked to characterize the current state of the California economy, registered voters responded as shown below:




    Bad Times In-Between/ Not Sure Good Times
    May 2015 50% 17% 33%
    Morning 1987 22 24 51
    Dot-com 1997 42 23 33
    Housing 2004 53 22 24


    Again, the Morning in America respondents were less likely than those in subsequent corresponding period to perceive conditions as bad. Respondents in the later periods seem to have experienced a lag in recognizing the recovery. An interesting question is whether the respondents were reacting to their personal circumstances. Did they have a perception that their own situations had not improved? Registered voters were asked if their personal financial conditions or those of their family had improved (Better Off) or worsened (Worse Off) over the past twelve months.




    Better
    Off
    No       Change Worse Off
    May 2015 48% 25% 27%
    Morning 1987 49 26 25
    Dot-com 1997 42 31 27
    Housing 2004 41 32 27


    As the table indicates, a strong plurality of registered voters report an improvement at present, about the same proportions found during the Morning in America era. In fact, none of the periods show much difference from current perceptions of personal circumstances. So what accounts for the post-Morning perceptions of fewer problems in the labor market and in the general economy in California than we found now? The poll data themselves don’t answer that question so only a guess can be ventured. But it does appear that a structural shift occurred after the 1980s.


    There was indeed a structural shift around 1990 that corresponded to the end of the Cold War and thus the stimulus that had been provided to the California economy through federal military spending. As the chart below shows, whether measured by population or employment, California grew faster than the U.S. until the 1990s. [2] Thereafter, it grew in population only at around the U.S. national rate. And its employment level fell relative to the state’s population. Until the late 1980s, California population and employment more or less tracked each other. Now California’s population share is around 12% of the U.S. level but its employment share is around 11%. So state growth slowed with the end of the Cold War and there are also fewer workers in relative terms available to provide income support to the population.




    In short, the end of the era of super-normal Cold War growth seems to have left a permanent scar on the California psyche. You can point to falling unemployment. You can point to the current respite from the state budget crises that afflicted California during the first half of the 1990s and much of the period after 2000. But Californians – or at least those who are registered to vote – still have a sense that things are not what they should be. It’s no longer Morning in California and hasn’t been for a quarter of a century. Day is supposed to follow night but how long we will have to wait in California for a new dawn is unclear.


    [1] Data cited from the Field Poll can be found at http://www.field.com/fieldpollonline/subscribers/Rls2508.pdf


    [2] The chart is taken from the UCLA Anderson forecast of March 2015.

  • 25 May 2015 8:29 AM | Daniel J.B. Mitchell (Administrator)

    You have probably seen the headlines about the Los Angeles city council adopting a minimum wage ordinance that would raise the minimum in steps to $15/hour by 2020. [1] There has been the usual debate about the impact of the minimum, i.e., would it cause job loss or reduced hours or how well does it target low-income families as opposed to low-wage workers? Raising the wage in the City of Los Angeles is more complicated than doing it at the state or federal level. The City is part of a larger metropolitan area in Los Angeles County with over 80 other cities and unincorporated areas and so the impact of raising the wage in one city depends partly on what the other areas do.


    However, much of the attention has been focused on the political side. The standard view is that the minimum wage increase in LA is a sign of the increased influence of organized labor which backed the wage hike. And it comes in the context of other political events in California, not just in LA, in which union political influence has been at issue.


    It should be noted that the notion that all politics are local comes into play in such discussions. For example, there was recently a city council election in LA in which an “outsider” candidate up-ended another candidate said to be favored by the political establishment. But if you look at that race, you find that both the outsider and the insider had union support, albeit support from different unions. And the issue on which the outsider ran was a local concern about excessive development in the council district. [2]


    It is certainly the case that even when unions side with just one candidate, their pick does not automatically win. In the San Francisco Bay Area recently, two Democrats ran against each other as part of the state’s “top-2” non-partisan electoral system. [3] One of them, however, was the target of union enmity, apparently due to his earlier opposition to a transit strike and certain other activities. But he nonetheless won the race for a seat in the California state senate despite heavy union support for his opponent. The result has been debate on whether union influence is now on the wane in California. [4] A more accurate view, however, is that influence ebbs and flows and nothing is a sure thing in close political contests.


    Coming back to the LA area, but this time in the school district, there was a recent race for two seats on the district board. The teachers’ union backed a candidate in both races. One won and the other – opposed by a candidate linked to the charter school movement – lost. [5] As in the Bay Area case, the outcome led to political analyses concerning union influence in elections and whether the election signaled a rise or fall of such influence.


    It is stating the obvious to note that unions can influence elections through monetary contributions and direct get-out-the-vote actions. Apart from elections, unions can lobby and mobilize support for legislative actions at the local, state, and federal levels. But is there more than that which can be said and which the current political debates are missing?


    If we go back to the public policies that emerged from the Great Depression of the 1930s, there was a mix of public regulation combined with an assumed role that unions would play in the labor market. In essence, certain minimums and safety nets were established by law, e.g., the federal minimum wage, unemployment insurance, and Social Security. But it was widely assumed that workplace standards above the minimums would be set through collective bargaining once the federal government, through the Wagner Act of 1935, set the ground rules for union representation elections and for bargaining.


    As is well known with hindsight, unions certainly became more influential over time in setting workplace standards. But they never achieved significant penetration in some sectors of the economy and in the southern states. And after the 1950s, their position in the private sector began to erode, a process of decline that accelerated in the 1980s and continues. Public sector unionization, which grew in the 1960s and beyond, initially tended to mask the private decline. But nowadays, the image of a union worker is more likely to be a teacher or police officer than a factory operative.


    The upshot is that as the realities of the labor market depart more and more from the Great Depression-era assumptions underlying public policy, i.e., that unions would be the primary instrument of private employment regulation. A vacuum has developed. Unions regulate only a small fraction of private employment and so there is latent pressure for governmental regulation to fill the vacuum. I use the word “latent” because absent an organizing force, the ability to express those pressures is lacking.


    What has occurred in California is that although private sector union decline has followed the national trend, public sector union coverage has exceeded the national average. Private unions have only a limited direct influence in the workplace in California, but they are linked to public sector unions which provide a base for developing political influence. Indeed, one of the largest and most influential unions in California is the Service Employees International Union (SEIU), which has both public and private membership.


    In short, to some extent the bargaining role of unions and the political approach to labor market regulation are substitutes. As the former has declined in the private sector, there is latent pressure for the latter. And in California, in part because of union strength in the public sector, unions provide a mechanism for activating that latent pressure. In short, unions are necessary to activate the latent pressures for workplace regulation. But they tend to do so when they have limited influence in affecting conditions in private employment via bargaining. Overall strength but private weakness are the necessary and sufficient conditions for the kind of political activity seen in LA and California.


    At least in states which have a significant public sector union base, you are likely to see more emphasis on legislative labor market regulation. The line between what is a floor minimum standard and what is something more will tend to blur. For example, at the state level in California, there is a bill pending in the legislature at this writing requiring that fast-food restaurants give employees two weeks advance notice of their work schedules. [6] More broadly, there is a current push to create requirements for paid sick leave nationally. [7]


    Under the old Great Depression model, such conditions of work were expected to be left to collective bargaining. Now they find their way to legislatures and city councils. [8] Under the old model, there was an element of imitation in union-management settlements, i.e., features negotiated in one contract might be adopted in another. The same thing now tends to happen in regards to political regulation. All politics are local but they tend to spread from one locality to another.


    [1] http://www.latimes.com/local/lanow/la-me-ln-minimum-wage-hike-20150518-story.html


    [2] Details of the race are at: http://www.latimes.com/local/lanow/la-me-ln-polls-close-20150519-story.html; http://www.latimes.com/local/lanow/la-me-ln-strong-support-in-koreatown-propels-david-ryu-to-la-city-council-victory-20150520-story.html.


    [3] Voters by ballot proposition created the top-2 system. There is first a primary in which all candidates, regardless of party, run against one another. The top-2 vote getters then oppose each other in the general election. Because the primary is non-partisan, the top-2 candidates may both be from the same political party.


    [4] For details, see http://www.sacbee.com/news/politics-government/article21331569.html; http://www.sacbee.com/news/politics-government/capitol-alert/article21451875.html; http://www.latimes.com/local/political/la-me-pc-labor-state-senate-democrats-20150520-story.html; http://www.foxandhoundsdaily.com/2015/05/steve-glazer-won/.


    [5] For details, see http://www.latimes.com/local/education/la-me-lausd-election-money-20150515-story.html and http://www.latimes.com/local/lanow/la-me-ln-first-for-la-charters-20150520-story.html.


    [6] http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0351-0400/ab_357_bill_20150501_amended_asm_v93.pdf


    [7] http://www.sfgate.com/nation/article/Paid-sick-leave-emerging-as-next-front-in-6273938.php


    [8] At one point in the enactment of the Los Angeles minimum wage, there was also going to be some form of paid leave. It was dropped from the recently enacted law but may return as a supplement.

  • 18 May 2015 10:28 AM | Daniel J.B. Mitchell (Administrator)

    Two recent events suggest to me that there are certain lessons which – despite repeated experience – seem hard to learn. One such lesson or non-lesson involves a micro issue: employer-based incentive systems. The other involves a macro issue: international trade policy.


    Incentives
    During the past couple of weeks, there have been headlines about litigation against Wells Fargo Bank because employees engaged in marketing the bank’s services apparently opened accounts for customers which they hadn’t ordered.[1] But Wells Fargo is not unique in such activities. Readers may be familiar with the practice of “cramming,” the putting of charges on phone bills that weren’t ordered. [2]


    If you reward employees for undertaking certain actions – or penalize them if they don’t reach certain goals – such practices are inevitable. Recently, for example, school teachers in Atlanta were put on trial for faking student test scores (the results of which affected their careers).[3] From time to time, there are complaints involving traffic ticket quotas within police departments.[4] I recently attended a presentation on the use of forbidden drugs by athletes at the Olympics and other contests.[5] The list is endless.


    Usually, explicit incentive systems are promoted in human resources circles as “pay for performance.” The abstract concept seems so enticing. Employers have an “agency” problem, which in non-economics jargon terms comes down to saying they need to find ways to get the help to do what they want. So why not just pay the help on the basis of what they accomplish for the employer rather than just for time spent on the job? Align the interests of the help with those of the employer, etc., etc., etc., blah, blah, blah.


    You don’t have to be a true believer in rational economics to be attracted to the idea of pay for performance. Research in behavioral economics – the intersection of economics and psychology – in no way contradicts that idea that you can influence behavior through systems of reward and penalty. The key word, however, is “behavior.” Behavior can definitely be altered. But it is unlikely that any reward system can fully align interests of the agent and – to continue the jargon – the “principal,” i.e., the employer. You will induce a behavioral change by altering the surrounding set of rewards and penalties. Whether you get the desired behavior is entirely another issue.


    So when you read…


    “Wells Fargo officials said they make ethical conduct a priority and punish or fire employees who don't serve customers properly. They acknowledged the bank's strong focus on selling, but said it is intended to benefit customers by identifying their needs.”[6]


    …just take it as a symptom of a lesson that seems hard to learn. Pay for performance is a great slogan, but tough in practice to implement effectively. The fact is that you can never do it right, if by “right” you mean perfect. At best there are some arrangements that may work better than others and all systems will produce some degree of perverse behavior. But “may work better than others” is not a catchy slogan, particularly if you are in the business of trying to pitch a particular system.


    Trade Policy
    President Obama is trying to obtain “fast track” authority from Congress on an international trade agreement known as the Trans-Pacific Partnership (TPP) and is running into resistance, especially within his own party.[7] Under fast track, the Congress can’t amend the proposed deal but essentially can only accept or reject it as a whole. One of the sticking points in Congress is a demand that the deal include a mechanism for dealing with foreign currency manipulations. Such manipulations occur when exchange rates relative to the dollar are kept at levels that make foreign production costs artificially cheap. The result has been a chronic negative trade imbalance – about which past Mitchell’s Musings have repeatedly dealt - that ends up particularly hurting manufacturing in the U.S.


    It’s a Good Thing that the currency manipulation problem is being raised in the context of TPP although, as we have long noted, the problem much pre-dates TPP and has been an issue since at least the 1980s. However, as those folks now emphasizing the issue concede, in theory currency manipulation is already against the formal international rules that are supposed to govern trade. Their approach, however, is to improve the enforcement mechanisms.[8]


    The fact is, however, that negotiated bureaucratic enforcement mechanisms are ill-suited to deal with the issue. They are slow moving and a form of political litigation. A complaint – to be successful – must prove manipulation and inherently must single out countries doing it. But singling out villains is a problem since the same countries that would be singled out are those from which the U.S. wants cooperation in other matters. To be blunt, China would be named in any such complaint mechanism. But the U.S. wants cooperation from China in dealing with Iran and North Korea, to take two current examples. Japan would surely be named in a complaint. But the U.S. seeks Japanese cooperation in dealing with China.


    What would be the likely result were complaints made against offending nations? A probable outcome would be that the offender would make a relatively minor currency adjustment for some period and the result would be heralded as a sign that the problem would be addressed over time. Villains reluctantly named, complaints, and assurances of corrections over time has in fact been the history of the currency manipulation issue. It hasn’t fixed the problem in the past. New bureaucratic procedures are not likely to make much difference in the future.


    We have noted in past musings – in fact a musing as recent as April 27 - that there is a remedy that was proposed in the 1980s and that involves no tribunals and no villains. It relies instead on a market mechanism.[9] It was proposed by financier Warren Buffett in an op ed in the Washington Post, received its 15 minutes of fame, and then was promptly forgotten.[10] In essence, Buffett’s proposal was a variation on what we now call the cap-and-trade approach that is used for air pollution control purposes in order to substitute a market mechanism for bureaucratic regulations and procedures.


    Under the Buffett plan, U.S. exporters would receive vouchers allowing imports of the same value as their exports. They could exercise them directly (for imports) or sell them in the market to other importers. Imports could only occur with the requisite vouchers. The result would be balanced trade, i.e., value of U.S. exports = value of U.S. imports with beneficial effects on U.S. manufacturing in particular, both on the export side and for those sectors facing import competition. The de facto exchange rate – the combination of the actual exchange rate and the cost of the voucher – would be the exchange rate consistent with a zero trade balance. And, yes, there would be some administrative costs and complications. But there would be no villains, no tribunals, and no token adjustments to smooth international relationships.


    What is the actual prospect of our learning lessons from the history of the currency manipulation issue and adopting some variant of the Buffett plan? The odds, unfortunately, are about the same as the prospect that there won’t be periodic waves of excitement in the future over the concept of pay for performance. The only thing we learn from history is… well, you know the rest.


    [1]
     
    http://www.latimes.com/business/la-fi-wells-fargo-class-action-20150515-story.html. Full disclosure: The author is a Wells Fargo customer and has not had the problem described in the article.

    [2]
     
    https://www.consumer.ftc.gov/articles/0183-mystery-phone-charges
     
    and http://www.cleveland.com/consumeraffairs/index.ssf/2015/05/does_sprint_or_verizon_owe_you.html

    [3]
     
    http://www.usatoday.com/story/news/nation/2015/04/30/atlanta-educators-resentenced/26643997/

    [4]
     
    http://www.latimes.com/local/lanow/la-me-ln-whittier-ticket-quotas-20150304-story.html

    [5]
     
    https://ia800309.us.archive.org/33/items/EmeritiReceptionAwards51315/Emeriti%20meeting%20Catlin%20presentation%205-13-15.mp3

    [6]
     
    http://www.latimes.com/business/la-fi-wells-fargo-sale-pressure-20131222-story.html

    [7]
     
    http://www.huffingtonpost.com/2015/04/24/obama-tears-into-elizabet_n_7137854.html

    [8]
     
    http://s2.epi.org/files/2015/stop-currency-manipulation-in-the-trans-pacific-partnership.pdf

    [9]
     
    http://employmentpolicy.org/page-1775968/3318550#sthash.WuKmYVo9.dpbs

    [10]
     
    https://drive.google.com/file/d/0BzVLYPK7QI_4NmYyOGQzYzQtMWU1MC00MDEwLWI0ZGUtMzYxYmM2OTY5NjMz/view?usp=sharing. Warren E. Buffett, “How to Solve Our Trade Mess Without Ruining Our Economy,” May 3, 1987, Washington Post, page B1.
  • 09 May 2015 10:39 AM | Daniel J.B. Mitchell (Administrator)

    Once upon a time, you could write a letter to the editor of a newspaper and, after a review process, it might be published. Most such letters, of course, ended up in the waste basket and never appeared in print. But when the web came along, newspapers started allowing comments to be posted on articles and what appeared in those comments was to put it politely – unfiltered. While some comments were thoughtful, what often appeared (and still often does appear) were (are) rants exhibiting poor grammar and spelling and a sense of paranoia.


    Some newspapers tried to provide a level of filtering in response. Recently, for example, the Sacramento Bee has developed a system which attempts to deal with the rant problem. The Bee’s guidelines for commenting are an attempt to reduce offensive ranting without having to employ editors to pre-screen every comment.[1] But there is one element in the guidelines that illustrates the problem: “We do not screen comments before they post.” So even if offensive comments are deleted eventually, they may appear on the Bee website for at least a time.


    There are similar issues regarding other popular social media sites such as Twitter, YouTube, or Facebook. Eventually, items that don’t meet whatever guidelines those sites have will be (or might be) deleted. But they will be posted for a period before the deletion occurs and persistent commenters may simply repost them repeatedly. Beyond reposting, web users can also create their own websites and blogs where even token filtering is absent. In short, the world of communication – while more accessible than ever before – has become a nasty place. Read what is there at your own risk.


    While the norms of the outside world have become nastier, there seems to have been an opposing reaction on university campuses. Universities have increasingly attempted to prevent “micro-aggressions” that might offend someone at a time when the norms of the Internet rarely block far more insensitive macro-aggressions. You may recall the brouhaha in the past year or so when there was agitation for inclusion of “trigger warnings” on university syllabi just in case there were topics or readings that might offend.


    More controversially, various commencement and other invited speakers have been effectively barred from campuses because of complaints that their views might be objectionable to somebody. These complaints came with threats of disruption. At a time when anyone could increasingly say anything on the Internet, in the university anyone could be a de facto censor.


    All around the university there are external web services that carry far more offensive messages than anything likely to be found on a college syllabus or in a graduation speech. Indeed, some of these web services are specifically directed at universities – particularly students - and their very appeal is that they don’t do much filtering and allow anonymous commentary. For example, there is a popular service called “Yik Yak” in which students can say just about anything using made-up names. As a result, Yik Yak tends to feature sexual references, racial and ethnic references, and whatever else flickers through the heads of young adults who are bored with doing their homework. And, of course, there are various outside professor-rating services with even less filtering than Yelp.


    Note that when everyone is speaking loudly, the only way to be heard is to shout. Presumably, that principle is why restaurants have become progressively noisier. Similarly, if everyone is speaking offensively, the only way to be noticed is to be yet more offensive. University administrators can try to encourage everyone to play nice when untoward behavior strikes – a recent occurrence on my own UCLA campus.[2] But the ability of university officials to change the norms that are imported from the outside is limited.


    Indeed, the recent UCLA event is in fact a repeat of an earlier episode four years ago.[3] But there one big difference; in the earlier case the offender didn’t act anonymously and ended up having to withdraw from the university. So the lesson really learned was that if you want to deliver an offensive missive, you should take care not to put your real name on it. Behave anonymously as is so often the case on the Internet.


    Universities tend to display their problems publically so that the tensions that arise between outside norms and inside exhortations not to follow those outside norms receive publicity. However, students who are exposed to such conflicts will eventually graduate and go into the workplace where issues of norms and acceptable behaviors are handled more privately. Workplaces have rules about behavior on the job (and sometimes off the job) that do not accord with the anything-goes approach of the Internet.


    A key difference between private workplaces and universities is that the former don’t necessarily feature all of the due process procedures and other legal protections that university students are provided. And private sector employees seldom have the equivalent of the tenure protections that university faculty members enjoy. As more and more students flow from colleges and universities into employment, it will be interesting to see how the widening gap between internal workplace norms and external Internet norms plays out.


    [1] http://www.sacbee.com/site-services/article2583731.html.


    [2] In the UCLA episode, someone anonymously pasted stickers with offensive messages in university buildings. The result was a plea in the student newspaper from a senior administrator to avoid such behavior [see http://dailybruin.com/2015/05/06/letter-to-the-editor-bruins-should-debate-complex-issues-with-empathy-sensitivity/] which was followed by an email from the chancellor saying that “regardless of our politics or backgrounds, we are at our best when we acknowledge the humanity of others, appreciate diverse viewpoints and respond with empathy.”


    [3] https://www.youtube.com/watch?v=6feGp0GQVJ8.

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