Thursday, February 9, 2017

Should Elizabeth Warren Run for Governor of Massachusetts?

Should Elizabeth Warren Run for Governor of Massachusetts?

First, let me state my bias, which is one of great admiration for the Senator from Massachusetts.  She has lead on numerous financial issues throughout her career including – advocating for a fair bankruptcy law, documenting issues with TARP, creating an agency that has protected consumers, issues pertaining to student debt and the problem of debt related to medical bills.   She is the rare politician that has a genuine interest in the details of policy proposals.

The decision by Republicans to silence her in the debate over Sessions was disgusting.  In my view, Elizabeth Warren can maximize her impact by leaving the Senate and by becoming governor of Massachusetts.

It is hard to predict the timing of future events but the general direction of the country is clear.   The Senate is broken.   I suspect that Dodd Frank will be dismantled and that within four to eight years there will be a new major financial crisis.  There is zero chance that this Congress and President Trump will do anything about student debt, will enact useful changes to the ACA, will improve Social Security, or will make any progress on any of the issues that Elizabeth Warren and the progressive wing of the Democratic Party care about.

Elizabeth Warren would likely beat the incumbent Republican governor of Massachusetts.  It is likely that the Republicans would waste $20 million or more trying to stop her.  Senator Warren’s replacement in the Senate would be a Democrat.   Politically, this is a win/win for the Democrats.

Governor Warren would have a much bigger impact on the world in Boston than in Washington.  She could implement a program to eliminate student debt for first-year college students perhaps similar to the one described below.

She could promote tougher regulation of banks inside Massachusetts perhaps by issuing executive orders.

She could respond to the problems caused by the ACA repeal at least inside her home state. 

It would be difficult to run for President in 2020 after taking a new job in 2018.   I don’t believe that Warren is the Democrat’s best shot in 2020.  Generally, the more affable candidate wins.  (Clinton beat Bush 41 and Bush 43 beat Gore.)  However, the nomination and probably the presidency would be hers if there was another financial crisis. 

She could become the Democratic Vice Presidential pick in 2020.   Senator Warren reminds me a bit of Teddy Roosevelt who became vice president because people wanted him out of Albany. 

2020 is a long way away.   The bottom line is that the senate is broken and Elizabeth Warren will accomplish much more as governor than as senator.   

Saturday, January 28, 2017

The Democratic Party and Charter Schools

The Democratic Party and Charter Schools

Barack Obama’s views on Charter Schools were unambiguous and generous.   The paragraph below was from a White House Press release in April 2016

During National Charter Schools Week, we celebrate the role of high-quality public charter schools in helping to ensure students are prepared and able to seize their piece of the American dream, and we honor the dedicated professionals across America who make this calling their life's work by serving in charter schools. 

Charter schools play an important role in our country's education system. Supporting some of our Nation's underserved communities, they can ignite imagination and nourish the minds of America's young people while finding new ways of educating them and equipping them with the knowledge they need to succeed.

Arne Duncan who ran the Department of Education under President Obama realized that charter schools often do provide quality educational outcomes for lower-income households. 

Hillary Clinton equivocated on this issue.   On July 15, 2016 she gave a speech praising charter schools.   On July 19 she gave a more critical talk.  Below are links to two news articles on these speeches.

Both Sanders and Clinton sought the support of the teacher’s union.   The 2016 contest resulted in the Democratic Party moving towards the teacher union’s view that charter schools had no role.

This stance may have cost the Democrats some key states and maybe even the election because there are a lot of students and parents of students in charter schools exist in swing states including Michigan, Florida, Pennsylvania, and Wisconsin.

One source of data on student enrollment in charter schools is the following study:

Some Data:

There are around 52,000 charter school students in Detroit Michigan and around 6,000 in Flint Michigan.

Philadelphia has around 64,000 charter school students.

Miami Dade has 55,000 charter students and Broward countyhad 41,000.

Milwaukee Wisconsin has around 17,000 charter school students.


Comment One:  How many parents, grandparents, aunts and uncles of charter school students had their vote affected by Hillary Clinton’s lack of clear support for charter schools.   How many of these people voted for Trump instead of Clinton?   How many chose to not go to the polls?   How many Trump supporters might have stayed home if Clinton had been more consistently supportive of what some charter schools can offer?

Comment Two:  The Democratic fight against Betsey DeVos is misguide.   Had I been in President Trump’s shoes I would have gone for Michelle Rhee the bee-eater. 

Bee Eater

The teacher’s unions would probably have the same problems with Rhee.  Even if one was skeptical of the impact of charter schools it seems as though other battles -- including Tillerson, policy towards Russia, the ACA repeal, immigration, and trade wars -- are more important than this nomination.

Comment Three:  Teachers claim that charter schools simply take the best students out of the neighborhood public school.   However, economists almost always favor some level of competitions and choice over a pure monopoly.    One exception to the argument for competition may be health insurance because health insurance companies tend to compete by seeking to attract the most health customer.   Teachers unions argue that charter schools attempt to attract the smartest most motivated kids.

I am not sure that adverse selection in the market for education is necessarily a bad thing because it seems entirely reasonable for motivated students to seek a better choice when the public school is failing.   In a previous essay I argued that there should also be competition between different course providers inside public schools.

Consider for instance the situation where a math department performs poorly but other academic departments perform reasonably well.   It would be cost effective to allow private firms that specialize in the teaching of mathematics the opportunity to compete for students in the public school.

Authors Note:  I have been spending a lot of time on my health care blog and my math blog.   Below is a piece on a potential ACA replacement plan.

Also, this math post teaches and important statistical concept while also providing information on an important ACA issue.  

Monday, July 25, 2016

Out of state admissions in Californis universities

Out of state admissions into California state universities

Two recent articles in the N.Y. Times discuss the implications of recent increase in the number of  out of state and international students admitted to state universities in California.  The controversy.stemmed from a report by a California auditor of state universities.

Recent articles on out-of-state admissions to California state universities:

The articles in the NY times focused on the political reaction to the finding that California universities were increasingly turning away in state students.  

Public colleges chase out of state students

Response to recent increase in out of state admisissions into California state schools

Audit of California State University Admissions

The basic gist of these articles is that California has reduced enrollment of in state students and  increased the enrollment of foreign and out of states students in order to make up revenue from state budget cuts.  

It is clear that California state universities have a motive for increasing admittance of out of state students.  They pay around $25,000 per year more in tuition than in state students.

However, the evidence presented in the auditors report and many reactions to the issue in the NY Times articles overstate the extent to which in state students have lost places in California schools.  

Report findings

The main findings of the report are:

After 2011 the California State university system made it easier for non residents to gain admittance to state universities.

In a three year period 16,000 out of state students with scores below the median were admitted with scores below the median.

Increasingly,  many in state students while accepted to the state university system do not get accepted to the first choice school.  Only around 2 percent of these students actually enroll in the state system


In my view the auditor cherry picked its numbers to make its case that out of state students are displacing in state students.

It would be useful to divide 16000 students by the number of admitted students in the three academic years in all schools in the system.   This is a really small percentage.   Also, how many out of state students are in the bottom 10 percent.   If there are any I bet they are great athletes.

The statistics in the report appear to indicate a much larger growth in the number of out of state applicants than in state applicants over the last ten years.   The number of in state applicants rose from around 66000 applicants to 97,000 applicants per year over the last ten years while the number of out of state applicants rose from around 10,000 to around 48,000.  It is  now harder for both in and out of state applicants to get in California state universities probably because of a huge influx of out of state perhaps foreign applicants.

The auditor points out that many in state applicants even when admitted do not get their first choice school and that most accepted applicants who are denied their first choice do not enroll in the state system.   I am not surprised by this result.   The brightest students in China. India, Russia, Western Europe and Africa want to go got the best schools in America and at least two California schools --- UCLA and Cal Berkeley --  are highly competitive.  I suspect that the out of state and foreign entrants to theses two schools have higher test scores than in state entrants.  

The auditor does not present any data on in and out of state text scores and acceptance rate across the schools in the California system. Such data could help resolve whether in state students are being treated unfairly or not.

Concluding Remarks:  

The California auditor says some relatively weak foreign and out of state students are displacing in state students.    This is probably not occurring at the top schools and if admissions to the top schools are to remain based on merit many in state students will not get their first choice.   These students are likely to go out of the California state system.

The only way to prevent this from happening is to force the  top California schools to favor in state residents regardless of the quality of out of state residents.


The case could be made that California universities should target their services toward teaching in state students.     Costs could be cut by firing the Nobel laureate professors who teach only a few graduate students.  This would lead many foreign and out of state applicants to apply elsewhere.

The potential conflict posed by the additional money obtained from admitting out of state students will be exacerbated by the adoption of the Clinton/Sanders promise of free or at least debt free in state tuition.  

Thursday, July 21, 2016

Trump on NATO and his wife's birth country.

Trump's approach to NATO and Melania's  birth country

I am in France on vacation so my blogging is sparse.  I have a quick statement and question regarding Donald Trump's statement that he would not automatically defend new entrants to NATO.  

Slovenia the country where Melania Trump was born and still has family and friends is a new entrant to NATO.   Slovenia joined NATO in 2004 with several other countries.   Would Trump not come to the defense of Slovenia if Russia attacked and if Slovenia did not contribute 2 percent of GDP?    Can Slovenia and many other countries with lower per capita income reasonably afford 2 percent of GDP for NATO?

Monday, June 6, 2016

Performance and Debt Incurred at For-Profit Schools

Performance and Debt Incurred at For-Profit Schools

The post today provides data on the performance and debt incurred by students at 10 large for-profit schools.

The first table provides information on average annual cost, the graduation rate, the salary after attendance at the 10 schools.   The numbers are compared to national averages.

Debt is available for 9 of the 10 schools.   (I exclude the school in Puerto Rico because students at that school did not incur much debt.)   The second table looks at percent of students with federal loans, typical federal loan debt incurred and percent of former students who repaid some debt.

These debt numbers for the for-profit schools are compared to the debt numbers at California State University at Los Angeles, a large state university with a fairly low graduation rate.

The Performance Data:  

The source of the data is the college scorecard database.   I looked at all for-profit universities that had more than 15,000 undergraduate students.   The chart is sorted from largest school to smallest school.

Performance Statistics for Large For-Profit Schools
Average Annual Cost
Grad Rate
Salary After Attending
University of Phoenix On-line
Ashford University
Kaplan University
American Public University System
Grand Canyon University
Everest University
Devry University
Full Sail University
Colorado Technical University
Institutio de Banco y Comercie Inc.
National Average

Comments on the data in the table:

Eight of the ten for-profit schools have an average annual cost greater than the national average of average annual costs for all schools. 

One of the two schools with low average annual cost was in Puerto Rico.  This school was the only school with a graduation rate over the national average.   The low salary after attending the school reflects differences in the economy of Puerto Rico and the mainland. 

Eight of the ten for-profit schools have a graduation rates below (in many cases substantially below) the national average.

Two of the ten schools do not report salary after attending the school.

The national average of salary after attending is really low probably because of community colleges.  

Five of the for-profit schools have a salary ten years after attending below $40,000.

The Debt Data:

The data on debt incurred and repaid at the for-profit schools are presented below.

Debt Statistics for Large Non-Profit Schools
% Students with Federal Loans
Typical Debt Incurred
% Students who Repaid Some Debt
University of Phoenix On-line
Ashford University
Kaplan University
American Public University System
Grand Canyon University
Everest University
Devry University
Full Sail University
Colorado Technical University
Instittutio de Banco y Comercie Inc.
Median for-profit schools
California State University Los Angeles


Median percent of students with debt at the for-profit schools is 74%.  By comparison, the percent at Cal State LA is 39%

Median typical debt incurred at for-profit schools is $30,843.  Debt at Cal State LA is $14,125.

Median % of students in repayment at for-profit schools is 43%.  At Cal State LA this figure is 66%.

Concluding thoughts:  Society and the affected students would be much better off if fewer students attended for-profit schools and instead enrolled in public universities. 

People interested in the economics and politics of the growth of for-profit schools may also want to look at the following posts:

Graduation rates at Phoenix University:

Hillary Clinton's ties to for-profit schools: