I just love your statement that we're all short duration, even though we don't act like it.
As a metaphor, it maps beautifully onto politics. Elected officials are “short duration” by design: most are up for re-election in 2 or 6 years, and their incentives are to deliver quick wins, like tax cuts, stimulus checks, or new subsidies. The political equivalents of corn chips—they feel good now but are gonna rot the fiscal teeth over time.
Meanwhile, long-duration policies—like fixing the debt, reforming Social Security or rebuilding infrastructure—have upfront costs and delayed rewards. They don’t poll well. They’re “low-yield, high-maturity”: necessary, but politically unattractive.
“Elected officials are short duration” - this perspective is genius, and so sad. Their integrity might be the shortest duration of all - given their understanding that only they can effect solutions to our long duration problems and choose not to.
"the medical, engineering, and business schools could form a new entity and keep doing important government-supported research, and let the college, arts and humanities and social work school do their activism thing on their own"
Too late. Academic medicine, for one, is now wildly woke. One example: for decades now, "racialized people" have had priority for admissions, and have been admitted with lower grades/MCAT scores. There is now serious discussion in academic medicine about instituting lower graduation standards for them. I suspect business and engineering are just as woke.
But it could be!! If you remember Ross Perot showing graphs and economic data during his (brief, aborted) presidential campaign, a lot of voters liked & respected that. People can handle math.
Break the universities into three parts: the teaching enterprise, the research enterprise, and the other service enterprise (primarily the clinical medical function which is huge). Let each stand on its own financial feet.
Universitates omnes in partes tres dividendae sunt.
This already exists. Research labs are a thing, same with non-research universities , and also hospitals. The divorce of teaching from the other two services is just a comforting lie. We keep teaching with research because teaching and research are intertwined.
The brightest minds of research should be the ones responsible for teaching the next generation, and similarly the greater accessibility of research introduces opportunities for the next generation to contribute to research.
What you're advocating for is the dissolution of these joint institutions altogether, even though the single institutions already exist. Consider why these single institutions aren't as powerful as these mega universities? It's likely because these intermeshed functions are mutually beneficial, and separating them would lead each to be less powerful.
I will remain with a short duration view regarding my fixed income investments with a reasonable chance that inflation will pick up at some point. And as to Trump and his defunding view of universities he clearly may be going a bit too far, but what incentives would you suggest to get them to change their behavior? The obvious one which Trump Admin sees is grants, and so forth.
"we can’t just raise taxes on higher earners to pay for [Social Security and Medicare]."
No but we can pay for it with a consumption VAT.
There is no reason to reduce benefits to the present arbitrary level of financing. And there is no reason to raise revenues to keep benefits at the present arbitrary level.
If there is a good reason to raise the age at which one starts receiving benefits it's that 65 does not mean the same either in terms of life expectancy nor in capacity to work in 2025 as it did in 1935.
But lets have a real conversation, not a standoff between "We've go to DO something" and "Never!"
Peak DEI came with the 'decolonization' of physics. A set of assertions and emotional appeals confected by hardened ideologues who have no business in higher education. But I do think we're winning the battles lately...thanks again Allison. PS you may want to check the recent U of M disclosures all over Twitter today.
Why not long duration TIPS? Inflation plus 2+% sounds pretty good and you mitigate the inflation risk you have with ordinary Treasuries (which are still best to hedge non-inflation-indexed liabilities like many pensions).
I don't know if these numbers pan out but I would keep SS tax the same but have earners pay 7 percent on all income above the top SS income tier. At the same time treat SS more like a pension fund, put some in the stock market, munis, etc (SS would flush with money if they had done this years ago but the post Depression fear of the stock market never went away I guess...or were politicians just lost at sea?).
To fix Medicare I think we need to go full bore into Medicare for All and get efficiency and volume pricing. Conservatives, whoever they are anymore, should like the reduction/elimination of government programs like Obamacare, Medicaid, and thousands of other federal, state, and county programs to subsidize health care in addition to Workman's Comp and Auto insurance medical portions, all the while keeping the doctors and such in the free markets. We would also be relieved of paying private insurance and companies could trim their HR departments back without the medical benefits burden.
Also I'm not crazy about the use of the word "entitlements". This is, in theory anyway, money we've been putting into the government "bank" for our eventual use, not redistributed wealth. Though if we put SS taxes on all income you can call that entitlement money.
I just love your statement that we're all short duration, even though we don't act like it.
As a metaphor, it maps beautifully onto politics. Elected officials are “short duration” by design: most are up for re-election in 2 or 6 years, and their incentives are to deliver quick wins, like tax cuts, stimulus checks, or new subsidies. The political equivalents of corn chips—they feel good now but are gonna rot the fiscal teeth over time.
Meanwhile, long-duration policies—like fixing the debt, reforming Social Security or rebuilding infrastructure—have upfront costs and delayed rewards. They don’t poll well. They’re “low-yield, high-maturity”: necessary, but politically unattractive.
Thanks for a great metaphor.
“Elected officials are short duration” - this perspective is genius, and so sad. Their integrity might be the shortest duration of all - given their understanding that only they can effect solutions to our long duration problems and choose not to.
BTW, great parenting is long duration too.
Damn. That metaphor applies to everything.
"the medical, engineering, and business schools could form a new entity and keep doing important government-supported research, and let the college, arts and humanities and social work school do their activism thing on their own"
Too late. Academic medicine, for one, is now wildly woke. One example: for decades now, "racialized people" have had priority for admissions, and have been admitted with lower grades/MCAT scores. There is now serious discussion in academic medicine about instituting lower graduation standards for them. I suspect business and engineering are just as woke.
Source for "radicalized people"?
Doing math in public has never been a congressional strong suit.
But it could be!! If you remember Ross Perot showing graphs and economic data during his (brief, aborted) presidential campaign, a lot of voters liked & respected that. People can handle math.
I keep saying people tend to be stupid about money, and they get EVEN WORSE when government money is involved.
Break the universities into three parts: the teaching enterprise, the research enterprise, and the other service enterprise (primarily the clinical medical function which is huge). Let each stand on its own financial feet.
Universitates omnes in partes tres dividendae sunt.
This already exists. Research labs are a thing, same with non-research universities , and also hospitals. The divorce of teaching from the other two services is just a comforting lie. We keep teaching with research because teaching and research are intertwined.
The brightest minds of research should be the ones responsible for teaching the next generation, and similarly the greater accessibility of research introduces opportunities for the next generation to contribute to research.
What you're advocating for is the dissolution of these joint institutions altogether, even though the single institutions already exist. Consider why these single institutions aren't as powerful as these mega universities? It's likely because these intermeshed functions are mutually beneficial, and separating them would lead each to be less powerful.
I will remain with a short duration view regarding my fixed income investments with a reasonable chance that inflation will pick up at some point. And as to Trump and his defunding view of universities he clearly may be going a bit too far, but what incentives would you suggest to get them to change their behavior? The obvious one which Trump Admin sees is grants, and so forth.
"we can’t just raise taxes on higher earners to pay for [Social Security and Medicare]."
No but we can pay for it with a consumption VAT.
There is no reason to reduce benefits to the present arbitrary level of financing. And there is no reason to raise revenues to keep benefits at the present arbitrary level.
If there is a good reason to raise the age at which one starts receiving benefits it's that 65 does not mean the same either in terms of life expectancy nor in capacity to work in 2025 as it did in 1935.
But lets have a real conversation, not a standoff between "We've go to DO something" and "Never!"
Don't confuse term (duration) with fixed rate.
Peak DEI came with the 'decolonization' of physics. A set of assertions and emotional appeals confected by hardened ideologues who have no business in higher education. But I do think we're winning the battles lately...thanks again Allison. PS you may want to check the recent U of M disclosures all over Twitter today.
Where has this 'decolonization' occurred?
Allison is Schrager is last sane person in the room. A very pleasant voice to listen to. I read everything from here
Why not long duration TIPS? Inflation plus 2+% sounds pretty good and you mitigate the inflation risk you have with ordinary Treasuries (which are still best to hedge non-inflation-indexed liabilities like many pensions).
The problem with foreign students is called The Thousand Talents Plan.
I don't know if these numbers pan out but I would keep SS tax the same but have earners pay 7 percent on all income above the top SS income tier. At the same time treat SS more like a pension fund, put some in the stock market, munis, etc (SS would flush with money if they had done this years ago but the post Depression fear of the stock market never went away I guess...or were politicians just lost at sea?).
To fix Medicare I think we need to go full bore into Medicare for All and get efficiency and volume pricing. Conservatives, whoever they are anymore, should like the reduction/elimination of government programs like Obamacare, Medicaid, and thousands of other federal, state, and county programs to subsidize health care in addition to Workman's Comp and Auto insurance medical portions, all the while keeping the doctors and such in the free markets. We would also be relieved of paying private insurance and companies could trim their HR departments back without the medical benefits burden.
Also I'm not crazy about the use of the word "entitlements". This is, in theory anyway, money we've been putting into the government "bank" for our eventual use, not redistributed wealth. Though if we put SS taxes on all income you can call that entitlement money.
Alison, when you speak of taxes, this is one of the few non-partisan factual views of taxes I’ve come across.
And I was surprised to hear there actually are a few congresspeople working across the aisle on solutions. But maybe way too few 🙁
https://freakonomics.com/podcast/ten-myths-about-the-u-s-tax-system/