Friday, February 5, 2010

New and Noteworthy (B.A.s and Earning Power, Hyman Minsky, The Return of Declinism?, Micro-Factories)

In today's rather economics-oriented edition:

* An article by Mary Pilon in this week's Wall Street Journal on the question of a college degree's dollars-and-cents worth-and in particular, the promise of an extra $800,000 to $1 million over a lifetime.

Pilon's article, as the title-"Earnings Gap Between College and High School Grads Small"-makes the case for that extra million dollars being a "million-dollar misunderstanding" due to a host of complicating factors raised by a number of experts she cite, including, as Mark Schneider of the American Research Institute notes, "account deductions from income taxes or breaks in employment. Nor do they factor in debt, particularly student debt loads, which have ballooned for both public and private colleges in recent years."

The result is that the number is more like $280,000, though the average conceals a lot of variation. (One might guess, of course, that a lot depends on the choice of major, but at the same time, it may be a mistake to think only "impractical" arts majors are looking at disappointing results.)

* From back in November, a five-pager in The Boston Globe on Keynesian economist Hyman Minsky, who developed a model of the emergence of financial crises. (Incidentally, this model is the basis of Charles Kindleberger's analysis of the phenomenon in his classic Manias, Panics and Crashes-now in its fifth edition.)

* A pair of articles, one from David Sanger of the New York Times focusing on the U.S.'s massive deficits, and their potential to damage U.S. power over the long run, and another from the New America Foundation responding to the State of the Union speech and comparing the U.S.'s progress toward a sustainable economy unfavorably with that of Germany, India and China.

Between them one can easily walk away with an image of a cash-strapped United States lacking the combination of ability and will to act decisively in regard to the "big problems," even as other countries take substantive steps in that direction, and I find myself reminded of the "declinism" of the kind widespread in the late '80s and early '90s (an example of which I recently revisited in my discussion of Lester Thurow's bestseller Head to Head last September).

In the mention of Germany in particular, it feels we are coming back to that moment to a degree I hardly expected when I speculated along these lines in Parameters five years ago.

* And finally, on a somewhat brighter note, by way of Futurismic, here is a piece from Wired on the technologies (like the 3-D printer) that hold out the prospect of sharply scaled-down, localized manufacturing-"micro-factories" to use one name suggested by the article's author.

This concept captured my attention back in 2002 when I first read about it in Douglas Mulhall's Our Molecular Future, but like so much else coverage of the issue has been intermittent (a check of the articles on this theme catalogued at shows nothing since 2005 on the subject), and progress has been slow. However, especially in a world where rising energy costs put new pressure on planetwide production sharing and long-distance exports via the expenses of transport (and any other diseconomy of scale you may care to name), micro-factories have an obvious attraction, and warrant much more attention than they have received, though I suspect it will be a long time, if ever, before this becomes a routine way of making the things we use in our everyday lives.

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