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Alaska's University Cuts are Even More Short-Sighted Than You Think

Alaska Governor Mike Dunleavy shocked the state legislature last month when he vetoed over $400 million in state spending—a far steeper number than anticipated. Included in the veto was over $130 million in cuts to the University of Alaska. This comes as Alaska struggles to deal with a prolonged economic slump caused by low oil prices, forcing state lawmakers to make some tough decisions as tax revenue falls.

Lawmakers have since failed to override the governor’s veto. As a result, the university system may soon see an astonishing 41 percent cut to aid from the state, which will lead to layoffs and possibly outright closures of smaller campuses. The financial fallout from these cuts could be even larger as federal money and research grants fall through in response to staff and faculty cuts. The Anchorage campus, for example, could see 40 of its 105 degree programs eliminated. Moody’s dramatically downgraded the university system’s credit rating in response, which could further hamper the university’s finances down the road. 

Alaska’s case is extreme. Yet state universities nearly everywhere have seen substantial cuts to state aid in the aftermath of the Great Recession, putting further pressure on school budgets already strained by rising healthcare and pension costs. Some states have chosen to reduce their systems’ emphasis on research, and instead focus on teaching and career readiness, particularly at second and third-tier universities. 

As tempting as this may be, research-oriented universities produce long-run value for regional economic development. Research universities make regional economies more dynamic and resilient in the face of globalization, and create islands of economic activity in otherwise distressed parts of the country. For a struggling state like Alaska, this makes university cuts even more short-sighted than one might think.

Read the rest at the Niskanen Center.

Notes on National Conservatism: A Rethink or Rehash?

Last week’s National Conservatism conference was billed by its organizer, Yoram Hazony, as a “big tent” event for conservatives to coalesce around a new vision of American nationalism. But after two days of vigorous discussion, the only thing that clearly united attendees was their general contempt for the left.

If anything, the conference underscored the irreconcilable divisions in the modern conservative movement. Depending on who was speaking, “national conservatism” entailed either transcending U.S. imperialism (Tucker Carlson) or reasserting our national interests abroad (John Bolton); rejecting libertarian economics (J.D. Vance) or embracing Calvin Coolidge-style laissez-faire (Amity Shlaes); pluralism with respect to traditionalist communities (Rusty Reno) or assimilation to the national culture (Amy Wax).

It’s said that the conservative coalition is a three-legged stool supported by war hawks, business elites, and the Christian right. If so, the National Conservatism conference represented each leg taking turns proclaiming itself the true spokesman of American nationalism while attempting to sweep a different leg away. Little was said about what would support the stool should any leg be removed. Entreaties to national solidarity hold no weight on their own.

Yet this may be a case where diversity is our strength. At the very least, the conference provided a useful venue for frank and open ideological reassessment of many conservative sacred cows. From my vantage point, a few patterns emerged that point to a viable vision of national conservatism in the areas of economics, federalism, and culture (and foreign policy, which is not my wheelhouse). The only question is whether it can gain traction.

Read the rest at the Niskanen Center.

How Opportunity Zones Can Help the South Reach Its Full Potential

Economic divergence between urban and rural economies is as much a story about the South as the struggling Rust Belt. As the Wall Street Journal highlighted in a recent feature, the South’s decades-long convergence to the rest of the country has halted since the Great Recession:

In the 1940s, per capita income in the states historians and economists generally refer to as the South — Louisiana, Mississippi, Alabama, Georgia, the Carolinas, Virginia, West Virginia, Oklahoma, Arkansas, Tennessee and Kentucky — equaled 66.3% of the national average, according to historical data reconstructed by University of Kent economist Alex Klein and The Wall Street Journal. By 2009, that had climbed to 88.9%. That was the high-water mark. By 2017 it fell back to 85.9%.

It is true that incomes in the South have stopped gaining ground on the rest of the country, but the story is more complicated. The South is also home to some of the fastest-growing cities in the country, among them Atlanta, Charlotte, Raleigh, and Charleston. While their West Coast and Northeastern counterparts have enacted restrictive zoning laws that drive up the cost of living and deter in-migration, these fast-growing metros have so far avoided that temptation and remain magnets of economic opportunity. At the same time, places outside these cities have been struck by high poverty, job loss, and other forms of social hardship, driving overall regional economic outcomes away from the rest of the country.

The self-sorting of workers from struggling towns to places offering higher wages and living standards is an important driver of national growth. Policymakers in the South should continue to facilitate the migration of workers to the booming cities of the Sun Belt, but they must also pursue smart place-based policy to assist the communities that migrants leave behind. It is not a fact of life that vast swaths of the region are destined to succumb to stagnation and lag the rest of the country, and with a careful reconsideration of longstanding economic development practices, the South can reverse their divergence and spur more broad-based growth.

Read the rest at the Niskanen Center.

Elizabeth Warren wants an industrial policy. Here are the traps to avoid.

In a new campaign proposal for reviving American manufacturing, Sen. Elizabeth Warren (D-MA) argues that American companies have recklessly offshored industry, prioritizing shareholders at the expense of working- and middle-class jobs. To address this situation, she calls for aggressive interventions that include:

  • Weakening the U.S. dollar to spur export industries;

  • Expanding publicly funded R&D;

  • Requiring the government to purchase American-made products;

  • Investing in postsecondary apprenticeship programs;

  • and creating a “Department of Economic Development” to coordinate trade- and development-related agencies around a National Jobs Strategy.

Warren cites the experiences of Germany, Japan, and China as countries that have had success with industrial policies America is allegedly too timid and constrained to pursue. “If we want faster growth, stronger American industry, and more good American jobs,” she writes, “then our government should do what other leading nations do and act aggressively to achieve those goals instead of catering to the financial interests of companies with no particular allegiance to America.”

Sen. Warren’s proposal comes at a time when “industrial policy” — once a term of derision — is gaining plaudits among commentators and academics alike. But enthusiasm for what Warren calls “economic patriotism” must be tempered by careful analysis of the specific policies being proposed. In what follows, I take a closer look at the tools other rich countries have used to develop and sustain globally competitive manufacturing industries, and gauge their applicability in the U.S. context.

Read the rest at the Niskanen Center.

The Smart City: The Rise of Dockless E-Scooters

Much less than a “thing” or a “place,” a Smart City is the concept of integrating technology into the public realm and built environment. The deployment of sensors or other data-generating tools, and the collection, monitoring, processing of that data, will increasingly impact cities across multiple domains, from transportation, housing, and water to health and education. This blog series explores recent policy developments in the march towards smarter cities, with a special focus on transportation and information and communication technology (ICT).

The deployment of dockless transportation services across U.S. cities, from bikes to e-scooters, has elicited widespread excitement from early adopters, transportation wonks, and city governments alike. Each in their own way see dockless services as a promising solution to the nagging problems of congestion, vehicle emissions, and limited transportation options in low-income neighborhoods.

Yet dockless e-scooters, in particular, have also been met with considerable public and political opposition. E-scooters took advantage of a gap in the market, aided by the lack of regulatory barriers to dockless technologies. Cities, provider companies, and the public are now struggling to achieve an acceptable balance between an e-scooter Wild West and regulations that would threaten their very existence. The path forward lies in collaboration among all interested parties. As with any new technology being deployed in the public realm, robust public engagement and public-private cooperation is essential to address concerns and find an optimal solution. There is evidence that the policy process is moving in this direction, but not without growing pains.

Read the rest at the Niskanen Center.

A National Scholars Program for Struggling Regions?

In the wake of the college admissions scandal, the meritocratic nature of elite universities is under new scrutiny. The revelation that the ultra-wealthy and connected were bribing officers and fabricating application information struck a chord at a time when inequality is at the forefront of the national conversation. Even more dismaying is that these bribes likely weren’t necessary to begin with. Perfectly legal donations and alumni connections routinely land the unexceptional children of the rich and powerful into prestigious institutions.

Regression to the mean is one of the many anxieties of affluence. Yet entry into exclusive collegiate social networks can help to ensure class and status are reproduced across generations. If the black market for elite college admissions feels worse than the usual influence peddling, it’s only because this ulterior motivation is rarely expressed so explicitly.

Fortunately, there’s a simple way elite universities can atone for their role in perpetuating inequality by helping talented students from struggling communities and school districts move up in the world.

One model comes from Johns Hopkins University. It’s called the Baltimore Scholars Program (BSP) and it works like this: Students who attended either a Baltimore City public school or applicable charter school from at least the 10th grade are eligible for a means-tested scholarship. For those coming from families making less than $80,000 per year, tuition, room, and board are completely covered. For those making between $80,000 and $150,000 per year, the family’s contribution is capped at 10% of total family income.

This isn’t affirmative action for Baltimoreans. They still need to get into Hopkins, but once they clear that hurdle, all or most of the costs associated with going to school are taken care of.

The same model could easily be applied to other communities. For example, Stanford could have an Oakland Scholars Program; Harvard and MIT could have a Southie Scholarship; Princeton could have one for students from the Trenton and Newark public schools system, and so on.

On top of scholarships for needy students in their own communities, elite universities could adopt a nationwide focus, offering needs-based scholarships to talented high school graduates from struggling public school districts across the country.

Even if admissions skullduggery were done away with completely, children in low-income households and of limited social capital would still face substantial barriers to getting into top colleges. While these barriers are varied and require many different solutions, the inability to pay for tuition continues to discourages otherwise-talented students from applying at all.

While legislation and other bureaucratic hurdles may need to be cleared before a “Struggling Regions Scholars” program could be implemented in public universities, private universities could create such a program unilaterally. The quality of public education in struggling areas will naturally limit the supply of qualified applicants. Nonetheless, expanding something like the Baltimore Scholars Program to elite universities across the country would go a long way to making the college admissions process more equitable and accessible. Perhaps the best way for top universities to reclaim the mantle of meritocracy is to start practicing it.

OSRDaniel Takashblogs
The Hamiltonian Approach To Reparations

Reparations are now a consensus position within the 2020 Democratic primary.

Let that sink in. From the central plank of Rev. Jesse Jackson’s presidential platform in 1984 and 1988, to Ta-Nehisi Coates’s blockbuster Atlantic essay in 2014 — reparations for the descendants of slavery have gone from fringe to mainstream in roughly a generation. What Bernie Sanders called “divisive” only a few short years ago now even finds support among thoughtful conservatives like David Brooks and Michael Brendan Dougherty.
Yet behind the moral clarity of reparations is immense disagreement about what form it ought to take. Should reparations be direct cash payments or land grants? Does a race-neutral “Baby Bond” or refundable tax credit count if white families also benefit? Most Democratic primary candidates have kicked the can to an independent commission. “I support that we should study it,” in the words of Kamala Harris. While that may be smart politics, a backlash is already brewing among activists who insist reparations should be, by definition, directed to American descendants of slavery only.

Before going down that path, we should think carefully about what a program of direct cash payments to the descendants of slavery would signify. After all, an act of reparation is distinct from an act of restitutionor compensation. Reparations fall into the category of transitional justice — one part economic, one part symbolic redress for human rights violations that kicks-off a “reparative” process of truth and reconciliation. They are therefore as much about publicly confronting an injustice as repairing some discrete, calculable harm. A direct payment, in contrast, risks trivializing slavery as merely an issue of “unjust transfer and acquisition,” as if the stolen fruits of African American labor neatly correspond to an accounts payable hidden deep within the U.S. Treasury. 

Slavery was an act of theft, to be sure. But even moreso, it was an act of colonization — one that retarded the development of a population and entire region for generations after emancipation. To truly address that intergenerational legacy, struggling African American communities need investments in infrastructure and a strategy for developing a high-wage workforce. In other words, they need industrial policy.

Read the rest at NiskanenCenter.org.