GSPP student Jonathan Stein has written a piece for the Huffington Post entitled “The Most Important Vote for Higher Ed.”

Funding for the UC has dropped consistently over the last 25 years, during the rule of both Democratic and Republican governors, and with a variety of administrators at the helm of the UC. Students in California are finally awakening to the fact that it is not the political leadership of the state or the administrative leadership of the UC that should be the subject of their ire. California’s state governance is so fundamentally (and uniquely) screwy that we’re all set up to fail.

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The time has come for reform. In November, there should be at least one initiative on the ballot that would replace the 2/3rds requirement for passing a budget with a simple majority.

One hears a lot about financial literacy as a critical skill for the citizenry of today.  But an interesting article by Lauren Willis of Loyola Law School (dating from February 2008) suggests that this is a canard.

A prior article demonstrated that belief in the effectiveness of financial literacy education lacks empirical support. This article argues that the belief is implausible.

…. The gulf between the literacy levels of most Americans and that required to assess the plethora of credit, insurance, and investment products sold today—and new products as they are invented tomorrow—cannot realistically be bridged.

…. For some consumers, financial education appears to increase confidence without improving ability, potentially leading to worse decisions. When consumers find themselves in dire financial straits, the regulation through education model blames them for their plight, shaming them and deflecting calls for effective market regulation. Consumers are not required to serve as their own doctors and lawyers and for reasons of efficient division of labor alone they should not be required to serve as their own financial experts. Opportunity costs should not be overlooked; a single-minded focus on financial education inhibits pursuit of other policy tools for improving the financial welfare of Americans.

More broadly, it’s been a common theme of policymaking for some time that consumer welfare problems can be overcome by better-informed, more self-reliant consumers.  Certainly, when information asymmetry is the main problem in a market, it’s satisfying to discover you can correct it with a judicious minimum of regulation.  But often, the real problem is power asymmetry, and that ultimately needs a heavier hand.

In this case, even supposing consumers can be effectively taught to navigate a morass of complex alternatives, lenders and other financial actors will always have the resources to bring that complexity to the next level - plus the wherewithal to research and exploit normal human cognitive biases.  The article lists the cognitive biases associated with financial decisions in some detail: overwhelming information and choices, high financial and emotional stakes, discomforting thoughts, uncertainty about the future, opaque attributes and incommensurate tradeoffs, and the tendency to passivity.

Also, financial education’s tendency to cast debt delinquency as a moral failing is a bit unsettling when you think about it, considering that credit card companies make much of their profits through interest and late fees.  How many people try to pay back crippling debt when they ought to be declaring bankruptcy, because they think they’ll be a bad person otherwise?  I wonder.

Instead of financial education - which, if this article is correct, is like preparing someone to run a minefield by giving them a chemistry lesson - why not require that financial products be comprehensible and hazard-free?

Yesterday’s Congressional vote for H.R.3590 - which will both expand Medicaid and require nearly all Americans to buy health insurance – comes not a moment too soon. Health care reform is crucial to the well-being of our country, and we cannot wait until we have a perfect solution to implement it. Our policymakers have gone far too long using the excuse of not having a perfect solution as a way to avoid overall responsibility, and the time has finally come to take risks in an effort to promote social justice and further equality. This will be a learning process, and there are bound to be tremendous bumps in the road. The main bumps that I foresee are: 1) Insurance is still too costly, especially for poorer Americans; 2) The penalty for failure to buy insurance is poorly structured; and 3) There is an inherent conflict between the guaranteed issue clause (which requires all insurers to accept applicants regardless of health status) and low penalties for failing to self-insure.

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Congressman Paul Ryan–ranking Republican on the House Budget Committee–released a budget proposal that solves the long-term U.S. deficit.  So honest it’s crazy…  Or crazy like a fox?

Given that federal health care programs are the biggest driver of long-term projected deficits, something has to be done:

Also see the Congressional Budget Office’s 2009 - 2019 Budget Outlook Summary.

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An analysis conducted by the Pacific Northwest National Laboratory for the Department of Energy found that full deployment of smart grid technologies could reduce annual GHG emissions from the U.S. electricity sector by 18% by 2030. The study found that the greatest effects on emissions would result from smart grid technologies dealing with: demand response programs for consumers; deploying diagnostics in residences and buildings occupied by small businesses; supporting additional electric vehicles, and supporting the integration of wind and solar energy into the grid.

In the January 20 issue of Geophysical Research Letters, the most extensive survey of pH levels in the Pacific Ocean will confirm what spot measurements have recently suggested, namely that the upper reaches of the sea are becoming more acidic in concert with rising carbon dioxide (CO2) levels in the atmosphere. Robert Byrne, a marine chemist at the University of South Florida and lead author of the upcoming paper, collaborated with Seattle scientists on the survey, which was 15 years in the making. It is the first time measurements have been taken across such a wide area, said co-author Richard Feely of the National Oceanic and Atmospheric Administration’s Pacific Marine Environmental Laboratory in Seattle. “The fact that we saw this very significant change over the last 15 years is a reminder of how mankind is affecting the oceans at an ever-increasing rate,” Feely said. The study’s scientists calculated that since the start of the Industrial Age the acidity of the world’s oceans has increased 25 to 30 percent. Under a business as usual scenario, Feely said, ocean acidity could triple by the end of the century. Although extrapolating future rates of acidification is difficult because the ocean and atmosphere are so complex, and should thus be viewed cautiously, the authors argue that the trend of increasing acidification is clear.

Polling shows US climate bill off-message: “American” jobs, not “Green” jobs & “reliable” not “smart” tech http://bit.ly/626vrR #energy

James Hansen versus Cap-and-Trade #energy #environment http://bit.ly/5G0Fn3 - http://bit.ly/7BGWm7

Study: Teach for America graduates show lower rates of civic involvement #education http://bit.ly/5vxg3E

“Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments.” …More>>