EconomistMom.com

Before Christmas, Matthew Yglesias had this nice “economist’s guide to giving Christmas presents” in which he urged gift givers to get the most “bang per buck” by being both redistributive (not just reciprocal) in gift giving and taking risks by actually choosing a gift (avoiding the economist’s tendency to opt for cash for efficiency sake).

A few days ago (pre-Christmas) I felt like writing my Economist Mom corollary to Matthew’s column; I wanted to put in a plug for gift cards.  But I got too busy.

So, for the record (and as my advice for your future gift giving occasions), here are a few reasons why this economist and mom does not view gift cards as a “cop out” gift:

1. A gift card to anyone is at least slightly more thoughtful than cash as long as one gives some thought to the selection of the merchant as having some correlation with the gift recipient.  It shows you made the effort to think about what the gift recipient might need/want and took the time to purchase the gift card (at least a tiny bit harder than visiting the ATM).
2. From a mom’s perspective, giving gift cards to the kids is a perfect compromise to satisfy one’s urges to control the kids’ consumption (steering them toward particular merchants at least) while letting the kids to do their own fine-tuning.  It’s a great “maternalistic” alternative to giving cash.
3. The “bang per buck” of the gift card is maximized when Christmas gift cards are redeemed at post-Christmas sale prices.
4. Buying those gift cards before Christmas, even if they aren’t redeemed until after Christmas (or ever, actually) still contributed to economic activity when the cards were purchased.  It’s good stimulus even if the cards for pre-paid goods and services are never transformed into the actual goods and services.  (The purchase of the gift card itself is effectively purchasing the “service” of postponed explicit goods and services.)  In fact, businesses don’t seem to mind if you never redeem the gift cards and just end up giving them money!  But as a good gift-giving economist, if you care about overall welfare/utility maximization and not just business profits, you really should urge your recipients to use their gift cards before they lose them.

So maybe you can figure out where the bulk of my spending on my gifts to my kids went this year.  I’m spending the next few days driving them to the particular stores and advising them on their online shopping.

Hope you all have happy holidays.  Now go use your gift cards! 

My latest “positive thinking” piece that came out in the Christian Science Monitor this week, just in time for Thanksgiving.  I have to admit I did a little live holiday shopping on Black Friday (but at the “safe” hour of 11 am) and will probably do a little online shopping before today (”Cyber Monday”) is over, but I’ll also be doing a lot of “shopping” for myself and others with the loads of good, but neglected, stuff I have right under my roof already.

In the CSM column, I also find reason why we should be grateful that our fiscal problem is indeed solvable, once we get our politics to cooperate.  (All hope is not yet lost with the super committee’s “failure.”)  I elaborated on that point in my column in Tax Notes (subscription only access) today as well, where I explain why Nobel laureate economist Peter Diamond is right when he says (and said at the National Tax Association meetings earlier this month) that the fiscal problem is just a “problem,” while the (lack of) jobs situation qualifies more as a “crisis.”  I’ll summarize my Tax Notes column for you all later.

I hope you readers had a very happy Thanksgiving holiday with your loved ones.   –Diane

An article in Wednesday’s Wall Street Journal struck me as related to the overall financial woes facing the public sector more broadly–and not just the state and local level financing of public schools that is the focus of the story by the WSJ’s Stephanie Simon.  She explains:

Budget shortfalls have prompted Medina Senior High [in Medina, OH] to impose fees on students who enroll in many academic classes and extracurricular activities. The Dombis had to pay to register their children for basic courses such as Spanish I and Earth Sciences, to get them into graded electives such as band, and to allow them to run cross-country and track. The family’s total tab for a year of public education: $4,446.50.

“I’m wondering, am I going to be paying for my parking spot at the school? Because you’re making me pay for just about everything else,” says Ms. Dombi, a parent in this middle-class community in northern Ohio.

Public schools across the country, struggling with cuts in state funding, rising personnel costs and lower tax revenues, are shifting costs to students and their parents by imposing or boosting fees for everything from enrolling in honors English to riding the bus.

At high schools in several states, it can cost more than $200 just to walk in the door, thanks to registration fees, technology fees and unspecified “instructional fees.”

Well, I can vouch for that.  At my kids’ public high school in Fairfax County, VA (which I assume is one of the wealthiest public school districts in the nation), I’m paying for the second year in a row of graduating seniors’ fees.  If you want to see your kids donning honors cords atop their graduation gowns, you have to pay for them–just like you have to pay fees for them to join the honor societies in the first place.  And yes, at my kids’ school, we do pay for a parking spot in the school lot.  And I have other strange and seemingly random examples of things I’ve had to pay for this year, which I won’t get into because I don’t want it to come across as my griping about it.

I’m not griping, because it’s still undeniable that my kids’ public educations are still an exceptionally good deal for me.  And I’m willing to help the school district with my private contributions, however they are labeled or to whatever specific purposes they are “earmarked,” to keep my kids in that high quality educational experience.

As the WSJ article continues:

Public-school administrators say the fees—some of which are waived for low-income families—allow them to continue to offer specialty classes and activities that would otherwise fall to the budget ax. Some parents support that approach, saying they’d rather pay for honors physics or drama than see those opportunities eliminated altogether.

Some educators, too, argue that fees are good public policy. In a time of fiscal austerity, they say it’s not fair to ask taxpayers to fund an all-inclusive education that offers Advanced Placement Art History, junior varsity golf and fourth-year German with little regard for the cost…

The concern though is how to get private contributions from those who can afford them without limiting the educational opportunities for those who cannot:

Many states require schools to waive academic, but not extracurricular, fees for the poorest students, generally those with an annual income less than $29,000 a year for a family of four. Those above the cutoff, however, can be sanctioned if they don’t pay in full. Schools may withhold their diplomas or ban them from commencement, which itself often carries a $30 to $60 “graduation fee.”

Even when waivers are available, advocates for the low-income contend that it violates the spirit of a free public education when parents must, in effect, seek charity to pay for their child’s math workbook. In California, the American Civil Liberties Union is suing the state for allowing districts to charge a wide array of fees.

Administrators and parents also worry that fees might affect some students’ chances of getting into good colleges. Schools across the country now charge substantial “pay to play” fees not only for sports and arts programs, but also for more modest activities, including community service.

This is how this particular issue of public school funding having to become not quite so publicly funded is not really that distinct from the challenges facing the public sector as a whole.  The debate about what to do about the federal entitlement programs is pretty similar.  If the government cannot afford to continue to subsidize the programs for all households (regardless of income) as generously as they have in the past, then how can we reduce the government’s contribution (and get private contributions to fill in at least part of the gap) without adversely affecting the quality of services provided by these still inherently-publicly-provided programs to those who rely on these services the most?

The public schools are approaching this problem by reconsidering what’s “basic and essential” in a K-12 education–a lot like what federal policymakers will have to contemplate about the services Medicare or Medicaid will pay for in the future (and who will pay for them):

Though the right to free education is now enshrined as an American value, when written into state constitutions, it typically carries a qualifier: Students are entitled to a “suitable” or an “adequate” education on the public dime.

That has long been interpreted expansively. As far back as the 1920s, schools were offering a wide variety of courses designed to serve many aptitudes and interests, [New York University professor Jonathan] Zimmerman said.

Today, however, educators and lawmakers are wondering if that’s sustainable—or necessary. As the population ages and fewer voters have children in the public schools, some communities are questioning whether an “adequate” education really requires the public to fund a full menu of arts courses, or advanced science classes that may draw just a handful of kids, or a debate club or a gymnastics team.

Seeking to define the extent of taxpayers’ obligation, Kansas House Speaker Mike O’Neal suggests that “what should be required is more than the 3 Rs, but it is decidedly less than everything school districts choose to offer.”

Because ultimately, our budget constraints–at all levels of government (besides within our own households)–are binding tightly these days, forcing us to make tradeoffs that we hope are wise ones.  The WSJ article concludes with a local public school official sounding like a federal budget expert:

While it has pained him to put price tags on so much of the public-school experience, [Medina, OH public schools] Superintendent Randy Stepp said the new cost structure may not be all bad.

“Students have to realize, as our country is realizing, that you can’t have everything,” Mr. Stepp said. “We all have to make tough choices.”

I wrote the largest check I’ve ever written to the IRS this weekend (I can’t even say how much–it’s so painful), but it was understandable given it was related to my withdrawal of my retirement savings to pay my legal and medical bills over the past year.  So I was devastated to see my bank account wiped out, but on the other hand still believe that my taxes pay for good things–and that what goes around, comes around.

I still believe in the vision of government that President Obama suggested in his speech the other day.  I have been pretty darn lucky in my lifetime so far, even as hard as the past couple years have been as I’ve gone through a divorce.  I got a good, public-school education and went all the way to getting my Ph.D., and I’ve never had a hard time finding work.  I have four beautiful kids who have also benefited from public schools and government-subsidized, employer-provided health care and who are very smart and healthy as a result.  And I know that most families struggle much, much more than I do, and that (as President Obama reminded us) “there but for the grace of God go I.”  I don’t consider the taxes I pay to be none of the government’s business.  I know that I’m paying my dues for government being there for me.  I know that if it turns out I am not so blessed in the future, there will be a safety net there for me and my kids.

So I still feel the way about taxes as I did five years ago when I wrote this piece for the Boston Globe.  There are still lots of good reasons for taxes and why we shouldn’t begrudge paying them today.

My daughter, Emily, has been accepted into Sarah Lawrence College with a very nice merit scholarship of theirs–their “Presidential Scholarship.” We are headed up there today to check out the campus and the people. I am also going up there with a mission of getting us some need-based aid, because even a scholarship that would cover all the costs at an in-state, public university doesn’t even cover half of the costs of a Sarah Lawrence education. And yes, I really am “needy” now–having been through a divorce that has taken two years and depleted my entire retirement savings with the legal and medical (therapy) bills alone.

But back to the positive focus. My older daughter, Allie, is finishing her first year at Princeton, so my two older daughters’ college paths are likely to be as different as they are from each other. (Look them up in the U.S. News rankings and you’ll see part of what I mean–but don’t jump to simplistic conclusions just yet.)  It’s really wonderful that there are places seemingly “just right” for each of them. I recently wrote a column for the Christian Science Monitor related to these different types of students and the different kind of “human capital accumulation” that best brings out their talents–and how broad the definition of what makes us “valuable humans” really is. I’ll write more on this in a week or so, when I can share my CSM column and more on the David Brooks book that inspired it (as well as my kids who inspired it).

A friend of mine sent me a link to Matthew Kahn’s latest guest blog post on the Christian Science Monitor website; she sent it along with an “I believe in you” sort of note, because as Matthew was implicitly pointing out, I am not on the list of top economists to which he refers–while he is (as he explicitly points out).  He ponders (emphasis added):

REPEC provides an objective measure of who is “Royalty” in the economics profession. The current list of the top 5% is here. I am ranked #681 out of 27,365 economists so that’s not bad (and my 3 books aren’t counted here). But, here is the interesting part. There are 52 women who rank in the top 1000 and 0 of them blog. Contrast that with the men. Consider the top 100 men. In this elite subset; at least 8 of them blog. Consider the men ranked between 101 and 200. At least, six of them blog. So, this isn’t very scientific but we see a 7% participation rate for excellent male economists and a 0% participation rate for excellent women. This differential looks statistically significant to me. I have searched for Nancy Folbre among the top 1369 economists (the 5% cutoff) and she is not counted in the elite subset.

Not being a female economist himself, Matthew then theorizes–as men love to do–about why we women aren’t as able to be both “excellent” economists and blogging economists.

I find it ironic that Matthew’s blog post would appear on the Christian Science Monitor site in the same area that my guest blog posts do, and that the photo that goes with the CSM post is of…an Asian woman!  (Ok, a much younger Asian woman, but Asian nonetheless.)  Huh!  There’s a female economist blogger blogging right “next” to Matthew, right under his nose!

Oh, but I’m not an “excellent” female economist.

I think we female economists have our own empirical (not just theoretical) reasons why those of us who blog aren’t the same people as those of us who are at the top of the REPEC list.  In my case, it’s also closely related to why those of us (even non-excellent female economists) who blog don’t typically blog at the same frequency as the (even most excellent) male economists who blog.  It’s called we have and care about other things and people in our lives, not just our own individual, introspective views about how the supposed world around us supposedly works (in our own opinion)!  And that’s even things and people other than what Matthew counts so endearingly as the “home production” sort of things–you know, “cooking and rearing children.”

But yes, we female economists who happen to have families do typically end up doing most of the home production, as our typical husbands who are typically other economists typically are oblivious to what needs to get done.  You know, because the guys are so busy thinking their own deep, important thoughts about how the world swirling around them works, while in theory the guys are convincing themselves that they are the better, more successful, more “excellent” economists (or whatever they are professionally which they confuse with what defines them personally).

Which is why it should not be too hugely shocking that this particular non-excellent female economist who used to be married to an “excellent” male economist (top 5%, like Matthew!), is no longer married to that economist.

Objective, standardized statistics don’t always very accurately or comprehensively measure the quality (or “human capital”) of an economist–or a college applicant, or an economy as a whole, for that matter.  (I am working on a new column on this point for the Christian Science Monitor right now, actually.)  It’s actually part of a broader question and answer about why there aren’t more women in economics more generally (leaving aside whether they blog or not), or in other very quantitative fields for that matter.  It’s not just because we’re worse at math, by the way, because we’re not.  (Let me mention that my oldest daughter, now at Princeton, got a perfect math SAT score.)  It could be because we women often find disciplines that assume everything can be objectively, precisely, formulaically valued, very limiting at best and maybe downright wrong at worst.

And as to why this particular non-excellent female economist blogs, I’ve written about that before in a newsletter of the American Economic Association’s Committee on the Status of Women in the Economics Profession (CSWEP).  But perhaps this very blog post might make for more entertaining reading for CSWEP members than that column did. 

To all you other “non-excellent” female economist bloggers, let me hear from you here!  Are we really not as “excellent” as our male counterparts?  Really?!

My dog, Taco, a (speculated) chihuahua-dachshund-miniature pinscher mix dog I adopted in the fall of 2009 (as an estimated 8-month-old pup), came violently ill late last week from something that was delicious to him but ended up effectively “poisoning” him.  (The circumstances under which he got himself into that situation were beyond my control and will not be elaborated on here.)  I rushed him to the emergency vet late Friday night after he had very uncharacteristically refused food for over a day and couldn’t even hold down any water.

The emergency facility I took him to was incredible.  State-of-the-art technology, the best of trained veterinarians–and even a coffee bar in the waiting room(!).  Taco stayed overnight hooked up on IVs to rehydrate and medicate him, and was subjected to a battery of tests to rule out more serious conditions.  I received regular, comprehensive updates over the phone and also by email.  By Saturday afternoon, I was able to visit him (that’s when the photo above was taken), and by Saturday night–a bit less than 24 hours after his admission–he was able to come home with me.

The bill was a real shocker for me.  Nearly exactly equivalent to one month’s rent (which in the DC area isn’t very cheap).  And I don’t carry “pet health insurance.”  Was it worth it?  Of course.

I’ve explained how the health care market when it comes to demand for the care of one’s loved ones does not exactly follow economic theory, where one is supposed to compare marginal benefits with marginal cost.  In the case of health care for our loved ones, we ask what is the marginal cost?  And then, can I come up with that money?  I suppose that implicitly, we are saying the marginal benefits to us are infinite or at least priceless.

And as long as there are rich enough people around who willingly pay for these health services–even pet health services–out of their own pockets, then reforming health care even in the most efficient ways will not necessarily reduce overall health care costs as much as we might hope.  Health care is not like any other market.  There will always be a ton of demand for health care even when the out-of-pocket prices aren’t held artificially low by subsidized health insurance.

So the first time the Bush tax cuts were signed into law (by President George W. Bush), my beloved golden retriever “Sunny” (short for “Sunshine”) unexpectedly and very suddenly died in my backyard under her favorite tree.  This was on a rainy Saturday over Memorial Day weekend, 2001–making it a miserable, tragic weekend all around.

I’m relieved to report that at least my dog didn’t die this time around, now that President Obama has signed them into law and turned them into the “Obama tax cuts.”

From the signing ceremony (video above), there’s a lot of happy talk about “bipartisanship” and “compromise.”  But it’s easy to “compromise” when you don’t have to give up anything–when instead you just have to stop resisting what the other side wants.  As Vice President Biden explains (emphasis added):

The famed 18th century British statesman, Edmund Burke, once said, “All government, indeed every human benefit and enjoyment, every virtue, and every prudent act, is founded on compromise and barter.”  Today, we have a crystal clear example of what he meant.

This package — this package is a result of leaders from both sides coming together to act on behalf of the American people at a time they need it most…

It means accepting some things we don’t like in order to get the job done for Americans as needs to be done.

But that’s not exactly the “barter”–or “give and take”–kind of “compromise.”  It’s the easier “take and take” kind that policymakers have mastered over the past decade that has resulted in such fiscally irresponsible policymaking, where seemingly-free deficit financing becomes the easiest “bipartisan” way out of gridlock.  As I’ve said before, it’s not mutual sacrifice; it’s mutual grabbing.

The President seems to know this was the easy part–”compromising” on a tax cut package that gave him all the deficit-financed tax cuts he wanted in exchange for just accepting a few more the other side wanted, too.  He said (emphasis added):

[W]e’ve got to make some difficult choices ahead when it comes to tackling the deficit. In some ways, this [tax cut deal/"compromise"] was easier than some of the tougher choices we’re going to have to make next year.

Yes, a LOT easier.  We can do this kind of policy making with our eyes closed.

But like I said (optimist that I am), at least my dog didn’t die.

Don’t worry, I’m still here– still trying to keep up with the developments on the tax cut deal (and still have my opinions about it all)…. BUT preoccupied with my daughter Grace’s “Nutcracker week” (coming to a close this weekend) and about to leave for far, far away for a few days, very likely with no opportunity to blog.

Will be back next week sometime.  In the meantime, keep up with some of my fiscal policy musings on Concord’s website.

More than two years ago I blogged about a major infrastructure project I witnessed in its early stages while I was vacationing–the Hoover Dam bypass project.  Well, the project has just been completed, as I learned this weekend from the cover story in Parade Magazine.  Impressive story about its design and construction, and great photos–so check it out.

At the same time more than two years ago I likened my family to a major infrastructure project, as my husband and I were celebrating our 20th wedding anniversary during that family vacation.  Well, just as one of these “major infrastructure projects” has been completed, the other is nearly finally dismantled.  I guess this is sort of my “coming out” as “Divorced Economist Mom.”  (At least a little more to come in the coming weeks and months, but that’s enough said for now.)