Industrial clusters and thick labor markets

I’m waiting for a huge piece of code to rerun and I should not be working on a cognitively intensive revise and resubmit on a Friday afternoon, so I want to go back to what I originally went to grad school for — urban economics and economic development — for a minute to respond to a seemingly populist and really dumb proposal to strip the federal government of expertise proposed by Andrew Yang.

Let’s think about Washington DC’s primary export industry as government and more specifically federal government leadership and top level analysis and management. The federal government is an industrial cluster in DC much like venture capital fueled technology firms are an industrial cluster in San Francisco-San Jose region, bio-tech is a cluster in Greater Boston and steel was a cluster in Pittsburgh. Clusters are interesting in that they are often positive feedback loops until they run into hard constraints or a massive external shock.

There is a huge literature on the positive feedback loops on economically successful clusters. One of the major drivers is that a cluster creates a rich and thick labor market. This means that at any given point, there are lots of good jobs available to anyone who is qualified to work in the cluster. People aren’t locked into a “good enough” job because that is the only job available that utilizes any specific human capital/education/tacit knowledge available to them, but that people can readily shift between positions to maximize their personal gain. In Washington DC, if someone is a research economist, there are a hundred opportunities within seven Metro stops of their current place of employment. If someone is a research economist in Sault Ste. Marie, there may be one or two within an hour of their current place of employment. The same applies for geneticists who work in Boston vs. geneticists who work in Boise.

Employment concentration creates specialization and optimization. It allows for work to be more productive as the cluster grows and the labor market becomes even thicker and deeper. This is all pretty standard.

There is another labor market point to make; large urban areas have lots of jobs that are not in the primary export industry. This could matter for me at some point in the future as I could easily see myself spending a couple of years working for either the federal government in the DC-Baltimore region or working for an entity that directly services the federal management and analysis industrial cluster. My wife has a skill set that could translate into this industrial sector but her current experience is in a general professional environment. If my options for moving to DC for federal work or Boone, North Carolina, my wife will far more readily find a good enough job in DC.

Dispersing the vast majority of the DC/Baltimore/NOVA government management and analysis cluster that has been built up over four generations is a great way to make the federal government less efficient and less attractive to top tier talent especially if the dispersion would be going to smaller urban clusters with far shallower and thinner labor markets.

Late Night Open Thread: “Mostly Harmless”

Turns out Human Ham Loaf Erick Erickson is still making bank off the beanfests TBoggs once mocked as Tragic: the Gathering. Not drawing a whole lot of mainstream-media attention, which is probably as Erickson prefers.

And yet, Recrudescence: the Homecoming was only the second most pathetic political convo this weekend. Presenting: RoseBros 4Evahcon:

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This Shouldn’t Be So Hard

Our Maggie Haberman is not the only reporter at the Grey Lady to use the framing of facts to create crap journalism. Kevin Carey writes on higher education from time to time at The New York Times, and in his latest he describes a new move to show which choices of majors are the most lucrative in order to deter students taking on debt for frivolities like…wait for it…social work.

Here is the lede, the nut graf and the first sentences of the body of the piece:

The Department of Education on Tuesday released detailed information showing the average amount of debt incurred by graduates of different academic programs at each college in America. This focus on programs, rather than institutions as a whole, is gaining favor among political leaders and could have far-reaching effects.

With anxiety about student debt soaring — the billionaire Robert F. Smith made headlines last weekend with his surprise promise to pay off the debts of Morehouse College’s 2019 graduating class — the program-level information has the potential to alter how colleges are funded, regulated and understood by consumers in the marketplace.

The new, more detailed debt information was created in response to an executive order issued in March by President Trump.

Other lawmakers have called for similar approaches. In February, Senator Lamar Alexander of Tennessee, chairman of the Senate Education Committee and a former university president, gave a speech outlining his plans to revise the federal Higher Education Act.

There’s a lot of fig leafs within that second paragraph. “Has the potential” does a lot of work, and “consumers in the marketplace” accepts a whole conception of higher ed., that is, to put it most kindly, in dispute.

But there’s more than merely a boatload of unexamined assumptions within the piece to raise concerns.  Here, Carey clearly lays out what he thinks the story is emerging from the facts (not in dispute) that people are collecting information about income and majors (not in fact a new thing) and are doing so in the context of a phenomenon, college debt, that has economic, social, and political implications.

Carey’s story is that more data will enable policymakers and would be students to tailor decisions about money in the most efficient manner; more information will lead to better approaches to what slices of higher education gets funded and by whom.

Carey does hint that there might be something else going on around the undisputed facts (this information is being gathered and politicians are making choices):

There are still many disagreements and details to resolve. The Trump approach relies on the idea that if students have better information, choices in the higher education market will be enough to ensure quality. But there is little evidence to support this view. Even with program data, students will still be vulnerable to the deceptive marketing and aggressive sales tactics that remain widespread in the for-profit college industry.

The measures matter, too. Mr. Alexander’s plan is to evaluate programs based on loan repayment rates. But it isn’t known whether those rates are a good measure of program quality. The Obama method of comparing debt levels to student earnings, by contrast, was so accurate that many colleges pre-emptively shut down their low-performing programs before the sanctions were even applied. Education Secretary Betsy DeVos is now working to repeal those regulations.

Of note: these two paragraphs are numbers 17 and 18 of 20 in this piece.  Now go back up to the opening passage above: the two measures he cites as evidence for this new move to apply data to college major choice are those he here decries as likely to be ineffective, at best: Trump’s executive order, which relies on, inter alia, the market behavior of for-profit colleges, and Senator Alexander’s, which replaces a (Carey-attested) effective Obama policy with one that reeks of bullshit.

Again: I’m not arguing with Carey’s facts. I’m quite sure that if I re-reported this piece, it would check out.  But only children and John Chait (see the GoS link re Haberman above) believe that journalism is merely the accumulation of stacks of facts like pebbles in a cairn.  The order in which a reporter lays out those facts; the qualifiers and modifiers employed; and above all, the explicit choices made about which facts to emphasize (the lede!) and which to bury (paragraph 17) construct a never-neutral account of reality. Every story is shaped thusly, and it can be done well, clumsily, and, often maliciously — whether that malign outcome is intended or not.

And so it is here: it would seem to me that the story is the Trump and GOP allies are continuing to use bad or at best untested criteria to emphasize technical education at the expense of not just of the liberal arts’ ideal of students equipped for civic and moral reasoning — but of anything that bears on social life as well, all those low-paying jobs (social work!) that do not serve the machine.

More, this version of the story fits with another, larger story: the way the Trump administration and the GOP are pursuing a broad, government-and-society-wide attack on institutions and government policies that have a conception of society large than the nuclear family. The use of selectively acquired or deployed data to undermine, say, social work (hey–it’s his example, not mine!) is not a neutral assessment of the economic value of this program or that.

There’s a lot to be argued about the liberal arts, of course, and some academic disciplines and individual departments do indeed go off the rails on occasion — no argument there.  But the point I’m making here is that Carey had a choice about how to construct his story, and he decided to present it as another advance of a data-driven approach to life, and not at least highlight in his opening the gap between the rhetoric (data! economic efficiency!) and the actual measures being offered to address the alleged problem. A better edited newspaper might have caught some of this.

TL:DR Framing matters. And in this case, the choice of frame glosses a set of pre-existing beliefs never clearly stated or interrogated, while burying the actual news of more GOP taking advantage of a crisis (student debt) to achieve other goals (fucking higher ed)(..  It’s bad journalism, in other words, not because it’s wrong or even because it points to stuff I don’t like, but because it makes it harder, not easier, to understand what its facts actually mean on the ground.

Image: Gerbrand van der Eeckhout, Scholar with his Booksbefore 1674.

Late Night Cheap Laffs Open Thread: Glib Takes for Shallow People

Yes, it’s from Politico, but I’m liking this Bill Scher review…

Have you lived through the past three presidents and managed to still believe that Republicans and Democrats share a single corporatist overlord? Do you casually use “neoliberal” as an insult, even though nobody has spotted a neoliberal in the wild since Gary Hart’s 1984 presidential campaign? Do you enjoy history lectures, but only when they are delivered by sarcastic, self-righteous people who conveniently omit anything that conflicts with their ideological worldview? Well then do I have the book for you!

The Chapo Guide to Revolution: A Manifesto Against Logic, Facts and Reason lives up to its ironic title. The freshly published polemic is co-authored by the hosts—Felix Biederman, Matt Christman, Brendan James, Will Menaker and Virgil Texas—of the socialist, satirical podcast Chapo Trap House. The podcast rakes in six figures a month from more than 20,000 Patreon subscribers. It built its following on withering takedowns of insufficiently leftist liberals who serve up “thin, flavorless gruel” in the dying news media.

The book, which aims to expand the reach of “the Chapo Way,” begins with a self-consciously over-the-top sales pitch. By imbibing the authors’ words, “you’ll become an initiate in the Chapo Mindset and take control of the neurons that govern your weak, fragile emotions.” Apparently, we should take our “Ironic Left” cult leaders seriously, but not always literally.

Yet by the end of the book, it’s hard to escape the nagging feeling that Chapo—the podcast and the book—is, at bottom, an actual, unironic infomercial scheme. They make bank by selling you a candy-coated version of socialism, one that may offend real socialists even more than liberal gruel-peddlers like myself…
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The Opposition To The Iran Deal Is Intellectually and Morally Bankrupt

Reuel Marc Gerecht has an article titled “The Iran Deal Is Strategically and Morally Absurd” at the Atlantic website. It is a good example of the repetitive and tendentious tripe that the opponents consistently offer up.

I am not fond of the bloggy format of dissecting a piece of writing sentence by sentence by sentence, although Gerecht’s piece could easily provoke such a response. Each sentence presents a misrepresenation or other ugliness that it seems wrong to allow to pass. But I’d like to make my response more succinct.

Since the title begins with “The Iran Deal,” one might expect that that would be the subject of the article. But few words are expended on the substance of the deal compared to, for example vituperation against Barack Obama. The personalization of Gerecht’s argument is typical of criticism by opponents on Twitter and elsewhere. Read more