Educating Pie Makers: College (part 1)

"If you think education is expensive, try ignorance." --Derek Bok

Whenever someone points out the high, and rapidly increasing, costs of college education, Derek Bok's quote gets included in the open salvos of the argument. Often this leads to a round or two of competitive econometrics comparing employment rates, lifetime earning potential and even a "happiness" study or two which generally favor keeping high school graduates idle for another four years or so to give them a shot at a better life.

These statics make a compelling case for individuals, foundations and governments to provide large amounts of money for higher education. This has reduced the barriers to college entry to the point that a large percentage of the jobs available now require at least a bachelor's degree, and an increasing number require a masters' or PhD. For the student, between federal subsidies, family money, and private debt, the actual cost is generally hidden, and fear of the unknown, but presumably high cost of "ignorance" makes the choice simple.

What I haven't yet seen is someone actually trying to explain what one could do with the cost of a college education while remaining "ignorant." Any statistical approach is only as good as the assumptions behind the models they use to aggregate their data, often with the implicit narrative that there is a "generic person" of which we are all small variations. Here at P&P we harbor strong doubts about this idea, it sounding an awful lot like saying there is a "standard" pie. Your pie maker had a "standard" apple pie when he lived near Michigan's apple country and could buy them by the bushel for a few cents a pound. In different circumstances, he's moving into pumpkin and winter squash, and if the people to whom he's loaned pie plates do not return them, then he may be making a lot of form-free pies in the near future.* The point is, if we just look at econometrics, we're not fulfilling Mr. Bok's suggestion.

Instead, let's try ignorance. Or, to be more precise, let's imagine spending the cost of college on something else and see where that leaves us.

At first, that means defining our assumptions. For the "cost of college", this thought experiment will assume full tuition plus room and board at a private institution. This is significantly more than the "average" student pays, but it does cover the amount that is paid by states and private donors at other institutions. Based on College Board statics, $37,000/yr is a rough estimate if books and travel to and from campus are included. Over four years, that gives us $148,000 to work with assuming tuition doesn't rise at its typical 5% annual rate.

That's a lot of money. What if instead of college a hypothetical student bought a nice, seaworthy Beneteau 361 for $99,000? That could solve the non-student's housing needs, and allow precisely the sort of mobility that defines a modern career. With the rest of the money, it would be highly prudent to buy another ~$6000 worth of training (not education!) from a place like Sunshine Coast. That leaves $33,000 to provision a trip to sail around the world, at a cost of roughly $1250/month. Assuming the non-student takes it slow and completes one cirumnavigation per year, that allows 2 whole trips, with money left over for contingencies.

Now we can actually answer Mr. Bok's challenge. Putting a student through college costs the student, family, charities and government a really nice yatch and two trips around the world. Only a narrow definition of "ignorance" would describe the learning that would happen on such a voyage, and at the end the non-student would have a place to live, a global network of acquaintances and a better personal understanding of math, science and law than nearly every college graduate in the world.

What can a college offer its students that would compete? Comments are most welcome.

*If you currently have one of my pans, send a note and I'll bring you a free form pie in exchange. No, this is not meant to encourage people to "borrow" more of them.

This week in Pie Making (Dec. 17)

This week in pie making is a good one. Last week, we saw that the US Congress is perfectly willing to hold its nose and dole out goodies to everyone for as long as credit markets will allow it to do so. In a way, this is good, because it means that if circumstances change for the worse, as long as everyone suffers, the will to solve serious problems does in fact exist.

The "conservative" narrative that all government activity is bad, even when it's proposed and promoted by "conservatives", continues. It would appear that the central players in the USG have accepted that the major banks and pension funds are themselves vital instruments of national power, but that's old news. Very interesting that the current crisis hasn't yet produced a Charles Keating, but maybe that's coming next year with the BoA data dump. You'll note the lack a reference to any Australian-founded websites here in the spirit of this brilliant piece of information management by the State Dept. that's related to why all of the milblogs have been tying themselves in knots this week. Unfortunately, they are not in Congress and so can't have their porkcake and eat it too.

Interestingly, one of the preferred forms of pork (security) has hit the point where even in the DC metro area there is active resistance to committing substantial resources to the Metro system's security. In fact, the Metro proposal is pretty modest and very likely to not select stations randomly at all. A measured response to several serious threats (one suspicious package, one kid describing his pipe bombing plans and an FBI sting) is almost commendable. We'll have to see how it goes. Hopefully better than current anti-piracy efforts.

Meanwhile, your pie maker got to experience something very like skiing while riding home yesterday. He could have waited for a car to carry him home, but he has heard of people putting on warm clothes and subjecting themselves to high winds and wanted to give it a try. Also, one of the robots at work "attacked" him, and getting to an icy road seemed safer than giving it a second chance. Getting to watch two bald eagles, see trackless snow on a large meadow and the patterns of ice formed on the river more than made up for mild discomfort.

There seems to be a growing call for the President to fire the behavioral economists on his staff. This NYT article is a good example of them, essentially saying that the current administration is being too subtle about its means and objectives. The moment is clearly calling for something big to happen.

Sustainable taxation

This Week in Pie Making awarded a "double face-palm" to a deal that could potentially buy your pie maker a really nice bike and all the cold weather gear he could want. What's wrong with that? Has P&P "gone lib", supporting Big Government for its own sake and a radical redistributionist agenda?

Hardly. It is entirely possible to live below US poverty line and still make a pie every week (especially if you can move in with family, friends or to a lower cost of living). Outside the US, a farming village that meets its basic needs is effectively a PMCIN=1 society, and the history of any attempt at large-scale wealth distribution from the rich to the poor generally ends badly. So, P&P does not have a strong stance on the merits of a progressive, regressive or "fair" tax code with one huge caveat: it must be fiscally sustainable.

What we saw two weeks ago, and are actively discussing this week (there's a few NYT op-eds by Krugman and Brooks that are also worth reading for those with subscriptions) is that fiscal sustainability is not even on the agenda. This is troubling for three reasons:

(1) The United States cannot leave the era of "kicking the can down the road." Despite passing "landmark" health care reform legislation, we're still kicking a massive pay-cut for doctors under Medicare down the road. There is chronic uncertainty over the research and development tax credit (and some other Dem-favored goodies) that makes it tough for any company to invest in long term R&D. Ongoing uncertainty over pollution, energy and climate policies prevents companies without government backed loans from expanding or maintaining generating and transmission capacity.

Whatever the reason for this, it encourages stasis in the domestic economy and acrimony abroad. It is generally better for business to have draconian, certain regulation than substantial uncertainties between years, except in finance, where regulatory arbitrage counts as innovation. Capital intense industries, such as heavy manufacturing, are almost guaranteed to move abroad to countries whose laws are more stable.

(2) The narrative of taxes as an unalloyed evil was strengthened. This is incredibly bad because taxes are how we as a country pay for the promises that we as a country make. Since we as a country decided to pay less in taxes, we've added two countries with their populations to the administrative burden of the US (is Iraq able to pay its own way yet?), passed the largest expansion of the Medicare program (and any comparable social welfare program in the nation's history) and absorbed substantial portions of the debts of almost every major financial institution in the world. The original tax cuts were unaffordable before those expenses, now we're supposed to believe another two years is okay?

Meanwhile, the "off-balance sheet" liabilities of the USG are growing. State governments in the US find themselves in a situation very similar to European states, now that federal stimulus dollars are receding, and it's hard to imagine a state default not impacting the Federal government. Even after the US presence in Afghanistan winds down, there will be billions in veterans' benefits to cover. Norfolk, VA is sinking, the Metrodome collapsed and the massive drought that's broken the assumptions about rainfall in California continues. The longer this attitude of stasis lasts, the less likely it is that the next generation will enjoy a quality of life comparable to our own.

(3) It encourages willful intellectual blindness. This is perhaps the most damaging aspect, since what gets lost is a sense of objective history and agreed upon facts. If James P. Pinkerton can continue to get paid for saying the GOP's goal is to "starve the beast", one has to wonder how he explains how the GOP-run Congress and Presidency presided over the largest ever expansion of government during their last tenure. Meanwhile, Obama's supporters argue, earnestly, that they "won" the negotiation with Senate Republicans because they got a numerically larger tax cut, in addition to the temporary extension of some key benefits. All seem to have faith in Technological Progress, suggesting that the massive productivity gains of the last twenty years will be sustained. Given troubles with immigration, network security and wildly inconsistent energy policy, this is a tenuous hope at best.

Will these groups, which actively resist the deficit commission's recommendations and facts, actually be able to address comprehensive tax reform? Your pie maker would not let such people into his kitchen lest he be liable for someone intentionally believing that knives do not cut or ovens can't burn.


Unfortunately, I think Grover Norquist is right, and that the current view on taxation will have exactly the effect he desires. Unfortunately, the mechanism is going to be unpleasant and directly opposed to many other Redcoat Republican objectives. The empirical evidence today is that the best way reduce the government spending is actually to allow a tax increase on one's own constituents while demanding cuts to another's spending, but that's a really unpopular viewpoint. Gonna be an interesting couple of years . . .

Chinese five spice pumpkin pie

Your pie maker's loveliest assistant came home recently with not one but two sugar pumpkins. Your piemaker has already baked his way through Ken's supply of interesting recipes, so he borrowed the ratios from the "Libby's Famous Pumpkin Pie" recipe reproduced therein, with a few changes.


Start by rolling out a standard whole wheat crust into a standard 9" pie plan. I didn't this time, but you ought to partially pre-bake it (Ken's got great directions for this).

While that's happening, combine in a bowl:
1/2 Cup brown sugar
2 T Chinese 5 spice powder
2 Cup pureed pumpkin
3/4 Cup half and half cream
2 large eggs, gently beaten


Pour the mixed ingredients into a somewhat cooled pie shell and bake at 350F for about 40min, or until the sides are slightly puffy and the center jiggles like jelly.

Let it cool completely before serving!

Two weeks in pie making.

Your pie maker was going to write a "This Week in Pie Making" last week about the non-fallout from the DoS document dump. The gist of it was that SecDef Gates caught the essence of problem in this quote:

Now, I've heard the impact of these releases on our foreign policy described as a meltdown, as a game-changer, and so on. I think -- I think those descriptions are fairly significantly overwrought. The fact is, governments deal with the United States because it's in their interest, not because they like us, not because they trust us, and not because they believe we can keep secrets. Many governments -- some governments deal with us because they fear us, some because they respect us, most because they need us. We are still essentially, as has been said before, the indispensable nation.

So other nations will continue to deal with us. They will continue to work with us. We will continue to share sensitive information with one another.

Is this embarrassing? Yes. Is it awkward? Yes. Consequences for U.S. foreign policy? I think fairly modest.

The reason for this indispensability is largely because of our very large and powerful economy. The same one that mortgaged its future to pay for benefits for current workers on the assumption that it could refinance that mortgage with future productivity growth. Well, it almost worked. Fortunately, the tax cuts passed right before we got into two land wars in Asia are going to expire soon, and we'll avoid the worst sovereign debt projections from the recent deficit commission. Oh, wait.



Interests in the US ranging from the largest banks to public service unions seem bet on busting-out the US credit rating. The President we elected with a broad mandate to be an Andrew Jackson or an FDR has instead turned out to be a Woodrow Wilson. Mark Lilla does an excellent job explaining the cultural economic forces that have pushed us into this corner.

Not all of the news is bad. The body politic seems to have a lost its sense of history, but GE seems to have found theirs. It is possible for a strong personality to ram through unpopular cuts in a state budget and keep enough popularity to continue to govern. GOP Senators publicly endorsed raising the gasoline tax (among other deficit-reducing items), and car-crazy California voted convincingly to stick with their carbon reduction plans. Heck, maybe this latest capitulation was a subtle export-boosting, emissions-reducing plan devised by expert economists.