Carpe Diem

Quotation of the day on what happens when oil companies get richer…

… is from Karr Ingham, economist for the Texas Alliance of Energy Producers, from a recent presentation in Houston where he predicted that crude oil production in Texas will surpass its 1972 all-time high within two years:

When oil companies get richer, they don’t pocket their money. They invest in future projects. They drill. They pay people. That’s how economic growth is generated.

MP: Damn those evil, greedy oil companies…. they make money, and they invest, they drill, they pay workers, etc……

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Refuting the false claim at The Federalist that ‘food inflation blows away wage growth.’ It’s just not true.

fed2Both Sean Davis and Ben Domenech at the web magazine The Federalist have used the chart above in their recent posts about food inflation here and here. As the title of the chart implies, Davis and Domenech are both claiming that “food inflation has blown away wage growth” since the end of the recession in June 2009.

But there’s a problem with that claim. Sure, certain food groups might have gone up in price over the last five years by more than the increase in average hourly wages. But a more realistic representation of what’s happened since June 2009 is shown in the chart below, and it’s just not true empirically that “food inflation has blown away wage growth.”

inflation2The blue line in the chart shows the 11% increase since June 2009 in the broadest CPI food category “Food and Beverages,” which is one of the eight major CPI groups according to the BLS, and includes (among hundreds of other items that cover all food and beverage groups): breakfast cereal, milk, coffee, chicken, wine, full and limited service meals away from home, and snacks (Note: This is a sample, see the full list of items here). It should be noted in any discussion about food prices that “food away from home” is almost 50% of total food spending for Americans, according to the most recent USDA data (see Table 10). Therefore, I’m using the most comprehensive measure of food and beverage prices, which would most accurately reflect the prices of food for the typical American household. Using different CPI measures doesn’t change the analysis much – the “CPI-Food” has increased 11.3%, “CPI-Food Away from Home” has increased the same 11.3%, and “CPI-Food at Home” increased 11.36%.

Here’s the key point – over the last five years, the BLS wage series “Average Hourly Earnings of Production and Nonsupervisory Employees: Total Private” has increased by 10.8% from $18.57 to $20.58 per hour (see red line in chart). Therefore, the broadest measure of food and beverage prices has increased by only slightly more (11%) than the increase in average hourly earnings (10.8%). Food inflation is not “blowing away wage growth” – it’s basically almost exactly matching it! The BLS wage series used here starts in 1964 and is the measure of hourly earnings used most frequently for historical analysis, given its 50-year history. A more recent measure of hourly earnings was introduced by the BLS in 2006 — “Total Private Average Hourly Earnings of All Employees: Total Private” — and that measure has shown a slightly lower increase in hourly wages since June 2009 of 10.4%, but is still just slightly below the 11% increase in food prices, and provides no statistical support for the claim that “food inflation blows away wage growth.”

Update: On an average annual compounded basis, wages have grown at a rate of 2.08% per year, just slightly less than the 2.11% annual compound growth in food prices. That 0.03% difference per year (1/33 of 1 percent) is negligible and provides no evidence that “food inflation blows away wage growth.”

Even more important than comparing wage growth to only one major CPI group (food and beverages), the chart above shows that overall consumer price inflation (CPI – All Items) has increased by 10.6% (see brown line in chart), which is slightly below the 10.8% increase in hourly earnings, meaning that there has been a slight increase in real, inflation-adjusted earnings since June 2009. Using the other measure of hourly earnings would indicate a slight decrease in real hourly earnings.

Bottom Line: Over the last five years, consumer prices, food prices and hourly earnings have all increased at almost exactly the same rate, and there is no statistical support for the claim that “food inflation blows away wage growth.”

Carpe Diem

Ticket scalping as a beneficial form of risk management?

In an interesting article that is forthcoming in the next issue of Economic Affairs, Vincent Geloso (Ph.D. candidate at the London School of Economics) presents an interesting defense of “ticket scalping,” arguing that it can provide an effective form of risk management and greater certainty of profits for artists, concert promoters and venue owners. By managing risk with ticket scalping on secondary ticket markets, there could be an increase in the overall supply of events, concerts and ticket sales, especially for lesser-known artists.

Here’s the abstract and part of the conclusion from the paper “Ticket Scalping As a Means of Managing Risk“:

Abstract:

Ticket scalping is often criticized for raising prices to consumers and producing unjustified profits. Conventional economic theory, however, shows that ticket scalping allows tickets to be reallocated in a more optimal manner with regard to the utility of consumers. This article points to an additional benefit from ticket scalping: by providing a secondary market it acts as a potentially powerful tool of risk management for event organizers. It is argued that curtailing ticket scalping may in the long run lead to a decline in the supply of privately provided events and concerts, especially for lesser-known artists. This in turn may stimulate a demand for public subsidy.

From the conclusion:

Since resellers are better at managing risks than site owners, they allow tickets to be reallocated to those who attach the greatest value to them. This leads to attendance at events being maximized, which also means greater certainty of profit for site owners, which in turn increases the supply of such events. Hence, curtailing secondary markets may imply a reduction in supply of these events, which will deprive consumers of opportunities for entertainment. In terms of political economy, it may also mean that organizations involved in sport, the arts and other cultural events seek subsidies to keep the supply at higher levels, which would have been unnecessary in the presence of secondary markets for tickets.

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US violent crime is lowest in 44 years and half the rate in 1991, so why have we become the United States of SWAT?

crimeJohn Stossel’s column this week is called “Policing America,” and he points to the fact that violent crime in America peaked in 1991 at 758.2 crimes per 100,000 population, and has consistently fallen in almost every year since then. Last year the violent crime rate was the lowest since 1970, and less than half the rate in 1991 (see chart above).

So why have we become the “United States of SWAT,” with 50,000 no-knock SWAT raids every year, almost six every hour, one every ten minutes, and more than 100 every day? In these no-knock, SWAT raids, people’s homes are often destroyed, infant children have been burned with stun grenades, hundreds of family pet dogs have been shot and killed, and dozens of suspects and some police officers have died in these violent paramilitary operations. Not all, but most of these SWAT raids are part of America’s cruel, expensive, senseless and immoral War on Drugs Otherwise Peaceful Americans Voluntarily Using Plants, Weeds, and Intoxicants Arbitrarily Proscribed by the Government. In some cases, these increasingly frequent SWAT raids are mobilized over the possession or sale of very small amounts of weeds or other controlled substances.

Here’s part of Stossel’s column:

SWAT teams were once used only in emergencies such as riots or robberies where hostages were taken. But today there are more than 50,000 “no-knock raids” a year. It’s not because crime got worse. There is less crime today. Crime peaked around 1990 and is now at a 40-year low (see chart). But as politicians keep passing new criminal laws, police find new reasons to deploy their heavy equipment.

Washington Post reporter Radley Balko points out that they’ve used SWAT teams to raid such threatening haunts as truck stops with video poker machines, unlicensed barber shops and a frat house where underage drinking was reported.

SWAT raids are dangerous, and things often go wrong. People may shoot at the police if they mistake the cops for ordinary criminals and pick up guns to defend their homes against invasion. Sometimes cops kill the frightened homeowner who raises a gun.

Because America has so many confusing laws, and also because cops sometimes make mistakes, it’s harder to assume — as conservatives often do — that as long as you behave yourself, you have nothing to fear. The raids should also trouble libertarians who sometimes believe that government can mostly be trusted when it sticks to “legitimate” functions like running police, courts and the military. Government always grows, and government is force. Force is always dangerous.

It’s healthy for conservatives, libertarians and liberals alike to worry about the militarization of police. Conservatives worry about a repeat of incidents like the raids on religious radicals at Ruby Ridge and Waco, Texas. Liberals condemn police brutality like the recent asphyxiation death of a suspect at the hands of police in New York.

This is a rare issue where I agree with left-wing TV host Bill Maher. On his TV show last week, Maher ranted about no-knock raids “breaking up poker games, arresting low-level pot dealers.” Maher’s right to point out that most SWAT raids are now done to arrest nonviolent drug offenders. “It’s a guy who sells weed,” says Maher. “You don’t need to shoot his dog and crash through his window.”

But they do. If cops continue to take a warlike us-versus-them approach to policing the population, they just might bring the left and right together. Government is reckless, whether it is intruding into our lives with byzantine regulations that destroy a fledgling business or with a flash-bang grenade like the one that critically wounded a child in a recent SWAT raid in Janesville, Georgia.

Regardless of our political leanings, we should be wary of big government in all its forms.

Carpe Diem

Chart of the day: Hourly wages vs. CPI-Food vs. CPI-All

foodUpdated: The chart above shows the percent changes between January 2000 and June 2014 for: a) Average Hourly Earnings (blue line), b) the CPI for Food and Beverages (red line) and c) the CPI for All Items. As the chart shows, average hourly earnings have increased over the last 14 years by more (49.6%) than food and beverage prices (45.7%) and all prices on average (40.3%).

Updated: This then provides more evidence that: a) average hourly earnings have increased more than the CPI for Food and Beverages since 2000, and b) real, inflation-adjusted average hourly earnings have risen since 2000.

Note: This chart is partly in response to a recent article in The Federalist by Sean Davis who claims that “food inflation blows away wage growth,” “food prices have soared since 2009,” and “food prices are growing 64 percent faster than wages.”

New Update: A more detailed response to Sean Davis, with a more exact match of his time period (June 2009 to June 2014), now appears here.

Carpe Diem

Chart of the day: Spending on food as a share of consumer expenditures, it’s been remarkably flat for a decade at 7.7%

foodconsRelated to my earlier post today on food inflation, the chart above shows that the share of consumption expenditures on food at home for Americans hasn’t changed in the last decade, and has remained remarkably constant at about 7.7%. In fact, it was slightly lower last year at 7.68% than in any year since 2007, when it was 7.56%. If we really were experiencing the high levels of food inflation that many claim we are, shouldn’t we be seeing an upward trend in this data series, and not a slight decline? And for those who wax nostalgic about the “golden age of the middle class” in the 1950s, consider that spending on food as a share of consumer expenditures was nearly three times higher then — more than 22% in the early 1950s — than it is today at 7.68%.

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Who’d a-thunk it? Liberal, anti-capitalist Michael Moore’s divorce reveals an ostentatious, lavish capitalist lifestyle?

MooreHouseFlint, Michigan native and ardent critic of capitalism Michael Moore is engaged in a bitter divorce battle with his wife of 21 years and details are now emerging about the couple’s ostentatious display of wealth. According to a report in today’s Detroit News:

Moore and [his wife] Kathy Glynn own nine properties in Michigan and New York, including a Manhattan condo that once was three apartments.

The breakup is scheduled to be finalized in a settlement Tuesday (today) at Antrim County Circuit Court in Bellaire, Michigan (near Traverse City). By reaching a settlement, Moore avoids a trial that could have aired dirty laundry common in high-proile breakups and impugned his long-hewn image as a common man by disclosing details of his comfortable life. In legal pleadings, Moore blames his wife for the expansion of their 10,000-square-foot home on Torch Lake, which has a market value of $2 million (pictured above).

He criticizes capitalism, but capitalism made him rich,” said Gary Tracy, owner of Bellaire Bait and Tackle.

Abby Phillip of the Washington Post asks exactly the right question:

What could be more ironic than the liberal, anti-capitalism firebrand Moore battling with his wife about an ostentatious display of his wealth?

And as Peter Schweizer said in 2006 when interviewed by NRO about his book “Do As I Say (Not As I Do): Profiles in Liberal Hypocrisy“:

Michael Moore professes to hate capitalism (“the last evil empire” he’s called it) but practices it in spades.

Exhibit A: CelebrityNetWorth.com pegs Michael Moore’s wealth at $50 million.

Bottom Line: Despite his professed hatred of capitalism, the free-market capitalist system has been very, very good to Michael Moore, and has allowed him to life a ostentatious, lavish lifestyle that most of us can’t even imagine. It’s almost like a love affair, or a love story about capitalism, or something like that… Maybe there’s a movie there….

Carpe Diem

Why it’s still the case that Americans should stop whining and complaining about rising food prices

Last September, I wrote a post titled “Americans love to complain about rising food prices; here are three reasons they should stop whining.” In an article today in The Federalist, Sean Davis responds to my post in an article titled “American Families Are Right To Be Worried About Inflation.” Davis levels a number of criticisms at my post, and also criticizes more recent posts about inflation by Ramesh Ponnuru and Jimmy Pethokoukis. Here are some of Davis’s criticisms:

A lot has happened since Perry told us ten months ago to stop whining. Did events prove him right or wrong? Was his inexplicably bizarre method of averaging four years’ worth of inflation data actually an effective way of predicting future price growth? Let’s take a look.

My “inexplicably bizarre method of averaging four years’ worth of inflation data” was actually explained in my post: Given the somewhat volatile history of food prices on a monthly basis, we can look at the average food inflation rate over a longer period of time to smooth out some of the volatility. I showed a chart of the 48-month moving average of monthly food inflation rates to provide a smoothed measure of food inflation back to the 1960s.

Here’s a different way to look at historical food inflation using an alternative method of smoothing out the extreme volatility in monthly food prices. The chart below shows food inflation on an annual basis, using the average values of monthly “CPI: Food” in each year from 1990 to 2013, and the June value of “CPI: Food” for 2014.

foodannualOver the last 25 years, annual food inflation has averaged 2.68%, and has been as high as 5.8% in 1990 and 5.5% in 2008. Over the last year, food inflation has been only 2.23%, or almost 0.50% below the 25-year average. So again, I say to Americans — “stop your whining” about food prices and food inflation, it’s really not that bad. It could be worse, and it was worse – in 7 out of the previous 10 years, inflation was higher than it is right now this year!

I’d also point out that I certainly wasn’t using past food inflation to predict future food inflation, I was merely pointing out that actual, historical food inflation as of last summer certainly wasn’t very high at all, by historical standards:

Food prices over the most recent 12 month period through July [2013] have risen by only 1.44%, following 12-month increases of 1.38% in June, and 1.37% in May. Over the last 12 months starting last August, the annual food inflation rate has ranged between 1.37% and 2%, and averaged 1.6%.

With those relatively moderate rates of food inflation a year ago, I think I was quite justified telling consumers to stop their whining. What food inflation? There was none!

Well, what’s happened since last September? According to Davis:

It turns out food prices have soared since Perry so confidently told us to shut up about them. The chart below shows the rapid disparity between food price growth and wage growth since Perry issued his “stop whining” directive. No joke: compared to less than a year ago, egg prices are up 13%. Beef is up 10%. Pork is up more than 9%. Fresh fruits are up over 7%. Overall, the prices of food at home are up 2.3%, while average hourly wages are up only 1.4%. In other words, food prices are growing 64% faster than wages.

Food Prices Since Sept. 2013

Now it’s Davis who is using an “inexplicably bizarre method” of picking six food categories to supposedly demonstrate that “food prices have soared” from September 2013 to May 2014 (June data only became available today). Here’s the problem with that “inexplicably bizarre method” — the overall CPI for All Food Items increased by only 2% from September 2013 to May 2014 (with beverages it was only 1.9%, and for food at home by 2.3% as Davis reported)! Therefore, Davis’s chart makes food inflation look artificially high by picking six food categories that all increased multiple times the 2% increase in the CPI: Food (and 2.3% for food at home).

There’s another issue with the Davis analysis – average hourly wages according to this measure increased from $20.21 in September 2013 to $20.58 in May 2014, which is a 1.6% increase. And that leads to another problem — the overall CPI increased by 1.4% between September last year and May this year, which was less than this 1.6% increase in average hourly earnings (and the same as the 1.4% wage increase used by Davis). In other words, average nominal wages by one measure increased slightly greater during that period than did overall consumer prices, meaning that real wages increased. For the measure Davis uses, real wages were flat, but not declining.

foodThe chart above displays a more realistic representation of changes from September 2013 to June 2014, and shows that both measures of hourly wages (available here and here showing increases of 1.83% and1.62%) have: a) increased by less than three measures of food inflation (1.95%, 2.1% and 2.2%), but b) by more than the increase in the CPI-All Items (1.4%), meaning that real wages have increased over that nine-month period.

Federalist Food Price Time Series 07072014

Davis then compares increases in his selective sample of six food groups to the increase in average hourly earnings over a longer period going back to June 2009 (see chart above), and concludes that “food inflation (of my six bizarrely selected food groups) blows away wage growth.” But we’ve got the same problem here as before. Average food prices increased only 11.26% between June 2009 and May 2014, nowhere near the increases of 20% to 35% in the six-item food sample. Also, average hourly earnings increased by 10.61% over that period, slightly higher than the overall increase in consumer prices of 10.38%, which means real earnings increased slightly since June 2009.

Here’s another problem for Davis’s food price analysis. The measures he uses are food price indexes constructed by the BLS, and not actual retail food prices. For whatever reason (maybe because of attempts to adjust for quality?), the BLS price indexes Davis uses for food items like eggs don’t match actual retail price that consumers actually pay at grocery stores, as also reported by the BLS here.

For example, Davis reports correctly that the BLS index measure for eggs increased by 13% between September 2013 and May 2014. But according to actual retail price data from the BLS, a dozen eggs increased in price by only 5.2% during that period, from $1.897 per dozen to $1.996, which is less than half of the increase reported by Davis using the egg index series. Now that June retail price data are available, egg prices fell last month, and the increase in eggs since last September through June is only 2.7%, from $1.897 to $1.948 per dozen. That increase in the retail price of eggs from September 2013 to June 2014 is displayed in the table below. Also displayed in the table below are percentage increases in the retail prices of 30 different food items over the last nine months since my September post. Those 30 items represent most of the BLS items (and categories) available from its “Average Price Data” database here.

Notice that over the last nine months, the retail prices of 19 food items have decreased, while 11 have increased. The biggest food price increases since last September have been for the various cuts of beef (see a detailed list here), which have all registered double-digit percentage price increases. Pork products like ham (3.4%) and bacon (7.5%) have also increased, as have milk (5.8%), eggs (2.7%) and cheese (2.3%).

On the other hand, other meats have declined in price since last September — turkey by almost 12% from $1.819 to $1.606 per pound, and chicken breasts by 2.9%, from $3.608 to $3.504 per pound. From the table, we can see that the retail prices of many other food items have fallen, many pretty considerably, since last September such as strawberries (-13.8%), coffee (-8.3%), potatoes (-8.2%), cookies (-8.2%), bologna (-7.5%), peanut butter (-7.3%), etc. Importantly, many of the food items that showed significant price declines (chicken, turkey, coffee, potatoes, sugar, etc.) weren’t included in the food items used by Davis.

Bottom Line: Also over the September 2013 to June 2014 period, average hourly wages increased by 1.83% (from $20.21 to $20.58), which was slightly higher than the 1.69% overall increases in all consumer prices during that period (including food). The CPI for Food increased 2.06%, although only by 1.95% when beverages are included. But it’s not food prices alone that determine our cost of living, it’s the cost of all consumer goods and services, as measured by the CPI-All Items. And by that measure of all consumers prices, average hourly earnings have been increasing greater than overall consumer prices, meaning that real wages have increased slightly.

To conclude by paraphrasing Davis, the prices of things people buy have really not been growing faster than most average workers’ ability to buy them. For example, over the most recent 12-month period, the increase in average hourly earnings (2.3%) has outpaced the increase in the CPI (1.9%), meaning that real wages have gone up. It’s time for pundits to stop pretending that rapidly rising prices are such a big deal, because they’re really not. And it’s still the case that Americans should stop whining about rising food prices, because they’re not. Especially if you’re eating strawberries, turkey, chicken, coffee, grapefruit, ice cream and peanut butter these days.

Food Item Change in Retail Price, Sept. 2013 to June 2014
Strawberries -13.8%
Turkey -11.7%
Coffee -8.3%
Potatoes -8.2%
Cookies, Chocolate Chip -7.6%
Bologna -7.5%
Peanut Butter -7.3%
Grapefruit -4.7%
Potato Chips -3.9%
Sugar -3.6%
Chicken Breast -2.9%
Oranges -2.6%
Spaghetti -2.5%
Ice Cream -2.2%
Broccoli -1.6%
Bread, White -1.3%
Margarine -1.0%
Apples -0.9%
Orange Juice -0.3%
Rice 0.1%
Bananas 1.0%
Flour 1.9%
Cheese 2.3%
Eggs 2.7%
Ham 3.4%
Milk 5.8%
Tomatoes 7.0%
Bacon 7.5%
Ground Beef 10.8%
Lettuce 14.4%
CPI – All Items 1.7%
CPI – Food 2.1%
Average Hourly Wages 1.8%
Carpe Diem

For ‘representational equity,’ Univ. of Wisconsin-Madison calls on professors to use racial profiling for assigning grades

In the summer of 2006, as the citizens of Michigan were getting ready to vote that November on a ballot proposal that would decide whether publicly-funded Michigan universities could continue their admissions practices of racial double standards and affirmative discrimination, I wrote an op-ed about Proposal 2 that appeared in the Detroit Free Press. An excerpt of that article appears below. (Note: The ballot proposal passed by a wide 16-point margin of 58% to 42%.)

To understand why it’s time to end racial preferences in higher education, consider the following scenario. A university professor walks into class at the beginning of the semester. After a review of required texts, assignments and examinations, the professor discusses grading. The professor explains that there is a new university policy that applies a double standard for grading and is an extension of the university’s race-based admissions policies.

A standard grading scale will apply to all white, Asian and Arab students. African-American and Hispanic students will automatically receive extra points for all assignments and will receive a final letter grade based on a preferential grading scale.

Most people would find this a blatant form of discrimination.

First, the students receiving academic favoritism might justifiably object that they are being stereotyped as a homogeneous group. It would be offensive to many of those students to assume automatically that they all need preferential academic treatment.

Second, this form of academic profiling creates a disincentive for black and Hispanic students to study as hard as they would otherwise. Moreover, these students could face a special-preference stigma when they enter the job market or apply to graduate school. Their academic credentials could justifiably be questioned.

Moreover, these students could face a special-preference stigma when they enter the job market or apply to graduate school. If a student graduates from college with a 3.5 grade point average, a prospective employer or graduate program would justifiably question the academic credentials and potential abilities of those students who received race-based adjustments in all of their undergraduate course work.

Finally, most everyone would object to the fundamental unfairness of giving preferential treatment to certain groups of students. The students who didn’t receive special grading preferences would rightfully feel they were being treated unfairly and being discriminated against. Why should an Arab or Asian student with an 85% score in an accounting class get a letter grade of B if a black or Hispanic student with the same percentage gets an A?

These and many other reasons explain why the only acceptable practice in the classroom is the equal treatment of all students as individuals, without regard to race, sex, ethnicity or religion. And yet the hypothetical classroom-based discrimination is exactly the type of admission-based discrimination that prevails at some public universities in Michigan. And it is the obvious objections to academic favoritism in the classroom that explain why racial favoritism in college admissions is being legally challenged.

Students are already treated as individuals without regard to race by university professors once they enter college. Treating all students as individuals when they first apply to college will ultimately move us further along toward the ideal of a colorblind society than maintaining the current admissions practices of double standards, special preferences and racial discrimination.

MP: Never did I think that the hypothetical example of race-based grading used in my op-ed to illustrate why race-based admissions are equally objectionable and offensive would ever be seriously considered. But I guess I underestimated the extent to which racial profiling, affirmative discrimination, and diversity remain so deeply embedded and entrenched in the liberal minds of college administrators and professors.

Exhibit A: In a major departure from race-neutral grading that has been a central part of higher education in America for hundreds of years, it looks like the University of Wisconsin-Madison is now actually calling on its professors to engage in racial profiling and affirmative discrimination when they distribute grades in their classrooms.

W. Lee Hansen, University of Wisconsin-Madison economics professor emeritus, explains in a recent op-ed (“Madness in Madison“) what is happening at his institution:

Many American colleges and universities are in the thrall of “diversity,” but none more so than my institution, the University of Wisconsin. This spring, the university adopted a new plan that, according to Board of Regents policy, “places the mission of diversity at the center of institutional life so that it becomes a core organizing principle.” That is, promoting diversity appears to be more important than teaching students.

This Framework for Diversity and Inclusive Excellence sailed through our Faculty Senate without the least bit of attention, much less the “sifting and winnowing” on which it prides itself.  Although much of the language is a thicket of clichés, no one dared challenge it. Moreover, there was no probing of the ramifications of the plan. Apparently, “diversity” has become such a sacred cow that even tenured professors are afraid to question it in any way.

…….

The new framework includes eight essential “working definitions,” among them the already-discussed diversity, as well as others: “compositional diversity,” “critical mass,” “inclusion,” “equity mindedness,” “deficit-mindedness,” “representational equity,” and “excellence.” Let us take a closer look at one of these working definitions included, namely “representational equity.”

It calls for “proportional participation of historically underrepresented racial-ethnic groups at all levels of an institution, including high status special programs, high-demand majors, and in the distribution of grades.”

Especially shocking is the language about “equity” in the distribution of grades. Professors, instead of just awarding the grade that each student earns, would apparently have to adjust them so that academically weaker, “historically underrepresented racial/ethnic” students perform at the same level and receive the same grades as academically stronger students.

At the very least, this means even greater expenditures on special tutoring for weaker targeted minority students. It is also likely to trigger a new outbreak of grade inflation, as professors find out that they can avoid trouble over “inequitable” grade distributions by giving every student a high grade. Is there any reason to believe that the UW system’s Inclusive Excellence plan implemented at UW-Madison is going to improve the education of its students? I can see no reason to think so. Actually, the contrary seems more likely.

The University of Wisconsin adopted its first diversity plan back in 1966 and every few years it launches a much-touted new one. During my 30-year teaching career at Madison, followed by more than a decade of retirement, I have seen not the slightest bit of evidence that the fixation on “diversity” has made the campus better in any respect.

Update: Patrick Sims, Chief Diversity Officer and interim vice provost for Diversity and Climate at UW-Madison issued a statement a few days ago disputing Professor Hansen’s article. In that statement Sims said that UW-Madison’s diversity plan “absolutely does not extend to how instructors should or could grade students.” Further, Sims called Professor Hansen’s column “a gross misrepresentation of our current efforts.”

HT: Morgan Frank