RISING TO THE CHALLENGE: MT. EVEREST AND COLLEGE

It’s not the mountain we conquer, but ourselves. ~ Sir Edmund Hillary 

There’s a straightforward relationship that explains both the horrendous end of Mt. Everest’s spring climbing season this year and the added challenges increasing numbers of students face of graduating from US colleges. These two trends in one sense display a victory for the marketing of these arduous “projects” to a larger, broader public that’s not completely ready for them. In cold economic terms, it’s consumer demand exceeding available supply. But at what cost? Deaths and drop-outs.

The recent deaths on Mt. Everest have once again peaked the media’s interest. The adventure media while berating the agonies of defeats and deaths fawns over the thrills of the quest each and every season.

Why has this season seen 11 climbers die on the mountain, the most since 2015 when at least 22 people perished due to avalanches? There were 5 deaths last year. For a change, it wasn’t this year’s weather or earthquakes or avalanches. It was because climbing Everest has for some time been commercialized and sold as something folks beyond just the hardest of hard-core, capable alpinists can successfully attempt. Nepal’s tourism ministry, seeking hard currency, issued permits to summit Mt. Everest to a record 381 climbers this season, at a cost of about $11,000 each. Beyond the permit, the trip itself can cost $45,000 or more.

That’s a very long way from Sir Edmund Hillary and Tenzing Norgay’s initial ascent 65 years ago. According to veteran mountaineers, this year there have been too many inexperienced climbers who have bought their way into attempting Mt. Everest who haven’t been adequately trained or supported. Dreadful results have precipitated. These results were created in no small part because of the sheer numbers of climbers attempting to simultaneously reach the peak, shown in the picture below. This is what it looked like last week when too many people (probably over 200) were waiting to capture their moment of glory on the narrow, cold (-13^oF) confines of the summit at 29,029ft. Fascinatingly, Mt. Everest continues to grow about 0.25” each year. With the extended wait, often two hours or more, unprepared climbers can run out of oxygen among other life-threatening challenges.

The summit jam at the top of Mt. Everest, May 2019.

Source: Getty Images via The Washington Post.

Meanwhile back in the lowlands, more than 16.8 million undergraduates traversed the academic slopes at colleges and universities last fall, representing a 27.8% increase since 2000. The number of US adults that have a B.A. or higher degree has increased 36.7% since 2000.

For decades, post-high school academic education has been proclaimed by many authorities, including educators and politicians, as the very best way of ensuring career success. Students and their families have listened and acted on this advice. In 2018, 35% of US adults have received a B.A. or higher degree. This proportion of college-educated adults has never been higher, as shown in the chart below. College enrollment has been increasing for young adults for over a century. This is a very good thing because a more educated, skilled workforce is more productive and more engaged. This achievement reflects not just individual successes but collective ones that have benefited society.

Percent of US adults with a B.A. or higher degree

 Source: NCES.ed.gov 

This chart illustrates that the growth of adults having at least a B.A. degree follows a logistic curve during the nearly 90 years shown. From the 1970s through 2000, the percentage of adults with college degrees rapidly increased; it more than doubled. After 2010 the incremental increases in adults with a college degree are smaller than before. This is expected to continue. The total number of undergraduates enrolled in US colleges peaked in 2010, at 18.1 million.

There are certainly sound reasons why growing numbers of young adults have elected to follow the college pathway to hopeful success. One reason, beyond possessing increased knowledge, is being able to receive higher compensation at work. In his superb Kenyon College commencement speech, This is Water, David Foster Wallace offers a much different and appropriately broader perspective when he stated, "It is about the real value of a real education has almost nothing to do with knowledge, and everything to do with simple awareness; awareness of what is so real and essential, so hidden in plain sight all around us, all the time, that we have to keep reminding ourselves over and over: ‘This is water.’”

The median annual earnings of young adults with a B.A. were $50,000 in 2016. The college income premium is often used as a justification for those of us who are fiscally-focused. It offers a rationale for devoting the considerable time, effort and expense required to receive a B.A. Several studies that have examined the size of the college income premium have found that it has ranged from about 70% to 100% more than income earned by people without a college degree. This premium has neither grown nor fallen very much over the last two decades; it’s plateaued. Other studies imply that the premium may have started to decline for specific cohorts of college students.

What has grown are college tuition and fees, which have greatly climbed for two reasons. First, states have provided a much smaller proportion of public university budgets; and second, the demand for an A.A. or B.A. degree has increased significantly. It’s been a sellers’ market for a long time, especially at “selective” schools. Since 1978, college tuition and fees have increased more than three times as fast as consumer goods and services’ prices have. Student debt has consequently risen; 69% of all college students have taken out at least one loan; the average loan owed is $29,800; the median monthly payment is $222.

I don’t think this necessarily comports as a general, capital “C” Crisis that’s often mentioned in the media. Student debt has increased because a lot more students have chosen to go to college. It’s principally demand-driven. Student debt that enables earning a college degree eventually provides added value to each and every student who graduates, as mentioned above. But defaults on student debt are the highest by a large margin of any type of private debt, especially for students who don’t graduate.

Entering and thriving in college, like climbing Everest, is not for the unprepared. As more and more students are going college, more have found it difficult to summit the academic mountain facing them. According to one report, anywhere from 40% to 60% of first-year college students now require remediation in English and/or math. These remedial courses cost students crucial money – about $1.3 billion each year. Also, these courses don’t count towards graduation requirements. On-time graduation rates of students who take remedial classes are consistently less than 10%. Basically, remedial education in college represents a deep crevasse into which all too many students are unlikely to emerge. The “who’s responsible for this” fingers are pointed in many directions regarding why this increased level of needed remediation has occurred and, of course, who should pay for it. More remediation is needed.

Today’s first-year entrants into college are more broadly representative of all our young adults, rather than a much narrower slice of them in decades gone by. This breadth is requiring more support services on the part of colleges and secondary schools, and more determination on the part of these students. Students who have the required determination and available resources graduate. But a lot don’t.

The travails of our ever-increasing number of college attendees have also risen, with only 40.7% graduating within four years across all US post-secondary educational institutions. For-profit schools’ graduation rate is contemptibly much lower, only 17.6% which is less than one-third the rate for non-profits.

Interestingly, there were several for-profit colleges named after the Earth’s highest peak. Unfortunately, none of the Everest Colleges ever reached high-altitude academics. Their owner/operator, Corinthian Colleges Inc., was successfully sued by the State of California in 2016 for defrauding their students. Everest College graduates have legitimately expressed concerns that their Everest degrees are effectively worthless. If colleges like Everest have been offering worthless degrees, perhaps they should be removed from the education business.

Higher education in the US now is far different than it was even 20 years ago, let alone in the more distant past. When I graduated from college, just after the Iron Age, having a B.A. was quite extraordinary, just one-in-ten adults received a B.A. or higher degree.

Neither the industrial-education complex, nor politicians, nor young people will allow a return to even the 2000s, when just one in four young adults graduated with a B.A. Now it’s one-in-three, which sounds like a small change, but it most assuredly isn’t. Getting a college degree has never been so culturally and socially hard-wired into our successful futures. Some folks even believe it’s a right, rather than an option. Go figure. For now and forever-more, returning to the recent past isn’t going to happen in terms of college access, and shouldn’t. And there are consequences when college degree holders become ever more widespread and less extraordinary.

Student loans have always been subsidized, reflecting the positive externalities associated with being a college graduate. Recently, several Dem presidential hopefuls have proposed increasing these subsidies in several ways. I do not think we should adopt policies like free public university that consequently will incent even more high-school grads and others to enter colleges. Visually think of such programs’ aftereffects as similar to the above picture of the overly long queue of cramped climbers waiting for the momentary grandeur of summiting Mt. Everest. Instead, multitudes of additional college students will be waiting and waiting not only to get into already-filled classes, but also to find a place to sleep and eat. Will these additional collegians, who would not have otherwise applied if it weren’t “free,” be adequately prepared academically? I have my doubts.

Policies like those Bernie and Elizabeth have been pushing for “tuition-free” and “debt-free” college are a doomed fantasy without also dramatically increasing public colleges/universities’ federal funding for expanded faculty, facilities and especially for remediative programs. If such free college programs were to see the light of day, listen for the anguished cries of progressives who whine that such policies will end up subsidizing un-poor people, mon dieu how inequitable! Such expensive, expansionary programs are likely to devalue the worth of attaining a college degree and increase drop-out rates. An A.A. or B.A. would become less exceptional and more normal. More eateries, and other businesses, would begin requiring wait-person jobs to have a post-high school degree. At best, smaller wage premiums would be willingly paid for such normality, just like when high-school degrees became ordinary starting in the 1970s; 55.2% of US adults had a high-school diploma in 1970. So, regarding “free college;” be careful what you wish for.

As Sir Edmund stated, it’s not a real adventure when you have to pay for it. Nevertheless, here’s to prepared adventuring in high places and higher education.

SOYBEAN SORROWS AND LOBSTER LOSSES

How’s Trump’s trade war going for you? 

Trade is the mother of money. ~ Thomas Draxe (1613)

News about the US-China trade war has been eclipsed by the midterm elections. The elections are now (almost) over; the trade war continues.  

     Thousands of products’ prices have been increased by the US and subsequent Chinese tariffs. The US tariffs, started in May by the president, are imposed on $200 billion (B) of Chinese imported goods, 40% of 2017 Chinese imports to the US. You can see the full list of tariffed items from the US Trade Representative here. This document is 194 pages long; starting with “Frozen retail cuts of meat of swine, nesoi” all the way to “Furniture (o/than seats/than of 9402) of plastics (o/than reinforced or laminated).” In retaliation and predictably, China has imposed tariffs on roughly $60B US exports to China, which represents 46% of 2017 US exports to China. Although China has certainly stretched WTO protocols to its advantage and broken others, it’s highly doubtful that hardball tactics like 194 pages of tariffs is worth the pain and cost that’s harming soybean farmers, lobstermen and thousands of other business-people and citizens.  

The US imports more goods from China than any other nation in the world. This fact is reflected in the sizeable trade deficit the US has with China, $375.6B in 2017. China’s dramatic economic growth over the past decade has been export driven. It is the leading exporter of goods in the world, ahead of the US. China’s exports of goods represent a large 18.6% of its GDP. In contrast, US exports of goods represent just 6.9% of our GDP. As a consequence of the trade war, the monthly US trade deficit increased in September from $53.3B in August to $54.0B in September; extra costly imports increased more than curtailed exports.

In examining the current trade conflict with China, I here focus specifically on US farmers, who are enduring heavy and direct economic cross-fire from the president’s trade war. Currently, more than 20% of US agricultural exports face reciprocal tariffs from China and other countries.

I examine an incongruous pair of harvested products, soybeans and lobsters, which are now subject to Chinese tariffs. Last year, before the president initiated his tariffs, the US exported to China $21.6B of soybeans and $128.5 million of live lobsters. Before we dive into marine crustaceans, let’s first consider soybeans.

Soybeans.  The soybean (Glycine max) is a legume species native to East Asia, widely grown for its edible bean. US  farmland is awash with soybean plants, shown below. For the first time in 35 years, soybeans are now planted on more acreage than any other crop– 89 million acres. In other words, soybeans are big, very big agriculture. Soybeans are the nation’s single largest agricultural export, more than double that of corn. In part this is why China imposed a retaliatory 25% tariff on US soybean exports. The other part is based on where soybeans are grown – in true red Trump country. The top 6 soybean-producing states are rural parts of Illinois, Iowa, Minnesota, Nebraska, North Dakota and Indiana. In addition to being the source of all things in the tofu universe, unfermented soybeans are used in animal (especially pig) feedstocks, and as an ingredient for biodiesel fuel and crayons. Fermented soy foods include soy sauce.

Over the past 6 years American soybean production has increased 44% in part to meet ever-growing export demand. In 2016 US exports represented 47% of total US production. The Chinese market dominates US soybean exports; it’s 6.5 times as large as the EU, the second largest foreign market for US soybeans.

The Chinese tariffs likely have changed all that. US soybean sales to China plunged by 98% since the beginning of this year. Prices have fallen 22% since April. “It’s a big concern,” understates David Williams, a Michigan soybean farmer. In addition, the USDA expects farm incomes to drop by 13% this year. The ratio of farm debt to assets is forecast to rise to its highest level since 2009. The trade conflict, which the president initiated with steel and aluminum tariffs, has spread far afield.

Some optimistic soybean farmers hope that because they help feed the growing Chinese middle class, where soybean-fed pork has become a mainstay of their diet, China’s need for US soybeans will become more acute later this year when Brazilian soybeans – the world’s second major producer that China has recently turned to – grow scarce as their growing season ends. Hope springs eternal.

In any case, US soybean farmers have taken it in the beans with respect to their livelihood. Those of us outside the soybean belt may remember that the Trump administration has offered $3.6B to soybean farmers to offset price drops. This new subsidy will end up being about 82.5₵ per bushel, covering less than half of the farmers’ losses. Half a soybean is better than none at all, but as a non-farmer, I cringed when I learned of this announcement. Why? Because industrial ag commodity growers, like soybean farmers, already receive sizeable government subsidies – about $25B per year for “farm income stabilization,” Now they’re receiving billions more because the president initiated a trade war that’s hurting some of his political flock.

Are soybean farmers upset at the president? Some are, most aren’t. Grant Gebeke, a large soybean grower in North Dakota, isn’t happy. “I’m trying to follow and figure out who the winners are in this tariff war,” Gebeke said. “I know who one of the losers is and that’s us. And that’s painful.” In addition, he laments that “They [the US and Chinese trade negotiators] could get together tomorrow and iron this thing all out and I don’t think we’ll ever get all of our market back.” Just like happened in 1979-81, when President Carter embargoed wheat exports to the Soviet Union. Soybean farmers have been thrown under the tractor as the president’s tariff war bumbles along.

Lobsters.  Lobsters are large marine crustaceans. North Atlantic lobsters, Homarus ameicanus, are found off the ocean coasts of New England and Canada. Lobsters are sold and shipped as living animals. They can live up to 50 years in the wild. The largest lobster ever caught weighed 44.4 lb. in Nova Scotia. The preferred commercially harvested lobster is much smaller, weighing 1.25 lbs., aka “a quarter.” The largest producer and exporter of American lobsters is the state of Maine, which I’ve written about before.

The famed author David Foster Wallace wrote his “Consider the Lobster” article that was published in Gourmet magazine about the State Crustacean of Maine. Being Wallace-written, the treatise contains a fair amount of food for thought, but not about lobsters per se. He likened these creatures to giant sea insects. Wallace tells about his attending the 2003 Maine Lobster Festival, an “enormous, pungent, and extremely well-marketed” affair. Perhaps in finite jest, Wallace called these benthic denizens of the depths “garbagemen of the sea, eaters of dead stuff.” He also reminds us that our fondness for lobster meat is recent. During US Colonial times until into the 1800s lobster was considered low-class food, only given to poor and institutionalized folks and prison inmates. The inmates only ate lobster once a week because more often would have been considered cruel and unusual punishment. My how times change. 

For the majority of the essay Wallace travels way beyond the festival and discusses the “inconvenient” moral issue directly connected with eating lobster: because each lobster is supposed to be alive (as shown in the above picture) when you, or the cook, kills it in a kettle of scalding water. Basically, the lobster’s pain issue boils down to whether it feels pain when this happens, and how a lobster-eater deals with this likelihood. The vast majority of lobster eaters attempt to disregard the issue completely, much to PETA’s chagrin.

But enough lobster philosophizing. For New England, and especially Maine, lobsters have been a large and growing business. In 2016, the US “landed” 161.1 million (M) pounds of live lobster. Maine’s 5,400 independent lobster fishermen alone provided 132.5M lb., worth $540.3M. Both numbers are records. The lobster industry has experienced significant growth; in the last dozen years the lobster catch has sustainably increased 76.3%. As mentioned above, the US exported $128.5M worth of live lobsters to China in 2017. But in 2018 lobster exports to China have shrunk by 17% so far, due to China’s retaliatory 25% lobster tariff imposed in July. Similar to soybean growers, some lobstermen are upset, most apparently are not.

Kristan Porter, the president of the Maine Lobstermen’s Association, has said the issue of China’s tariffs and Trump’s trade wars “is a long way down the list for most guys” of things they worry about. From Porter’s perspective other concerns are more important; including revised regulations that will increase the cost of lobster bait (herring), the rising temperature of ocean waters that reduces lobster catches, and stronger protections for migrating North Atlantic whales that swim in the same waters as lobsters. The reality is that recent times have been wonderful for the Maine lobster industry, which provides some pluck – others would say complacency – for the nonchalance regarding tariffs.

 “We’ve been kind of spoiled the last few years,” Porter says. Other lobstermen are concerned because exports to China during the past 5 years have increased 322%, accounting for much of the industry’s expansion and added profit. The Chinese tariffs may change this complacency.

Mark Barlow, owner of Island Seafood, a large business that ships live Maine lobsters around the world, has a view very different from Kristan Porter’s. Barlow mentions that as soon as China slapped its 25% tariff on US lobster exports, I said to my sales team, “China’s dead.” His Chinese customers confirmed his expectation. “I don’t think there is [a] way to import US lobster,” one Chinese buyer stated. Barlow believes the Chinese tariff is a significant blow for Maine. As Barlow put it, “The orangutan in Washington woke up from a nap and decided to put tariffs on China, and the Chinese stopped buying [Maine lobster] immediately. We’re getting absolutely slaughtered.” Trumpian tariffs have thrown lobstermen overboard.

Introducing US tariffs on thousands of imported goods may ultimately benefit US exporters and citizens, but right now everyone from Maine lobstermen to Minnesota soybean farmers are seriously suffering, along with millions of consumers who are paying more for all kinds of imported goods.

As Thomas Draxe perceptively stated over 400 years ago, trade is the mother of money. Soybean and lobster exporters – and virtually every US consumer – now have less money than they expected due to the president’s myopic, contemptuous, hardball trade tactics. Too bad we can’t trade him in before 2020.

A Coda Regarding Nancy.  The upcoming election of a new House Majority Speaker will surely anoint Nancy Pelosi. But the media’s recent swirl of stories makes it seem that someone else will also be in contention to challenge her. No other Dem has yet announced his/her candidacy and most likely won’t. No matter. Sixteen Dems are now on record opposing Ms. Pelosi, without anyone else to vote for. The vexation of the Dem progressives, who seem to think their political power transcends their numbers, is based principally on ageism. The Congressional Progressive Caucus represents about one-third of the Democratic Caucus. [At last count 4 years ago, there were 697 caucuses in the House.]

I believe there isn’t anyone else who should be Speaker. No other Democrat is as qualified, capable or proven as Ms. Pelosi. Her legendary ability to achieve success was reaffirmed on Nov. 20, when Ms. Pelosi offered Rep. Marcia Fudge, the only other Dem to say she was "interested in considering" a run for Speaker, a subcommittee chairpersonship. This was an offer Rep. Fudge could not say no to; she accepted. Rep. Fudge is now firmly in Ms. Pelosi's camp.
Other than eagerly seeking influence, there are no direct benefits to the circular firing squad approach the Progs now have been using. Their media-centric tactics magnify the chants of a small number of newly-elected Prog Dems, who have negligible substantive power, but do have the media’s focus. Their momentary dramas in hallways, letters or press statements have produced no alternative candidate for the speakership. It’s completely appropriate for multiple Dems to vie for this important job, but the Progs’ candidate-less approach wounds their cause in many voters’ minds. The media’s attempts to make it seem viable simply compound the miscalculation.

I offer two suggestions. First to the Progs; realistically look at the midterm elections results. The Prog candidates won in House districts that are already blue. The soon-to-be Rep. Alexandria Ocasio-Cortez, a media-darling, is a sterling example. She deserves her victory. But guess what; if the Dems really aim to take control of the Senate and the White House 2 years from now, there simply aren’t enough cobalt blue districts to do it with strongly progressive placards. As a reference, consider the state-wide defeats of dynamic Prog candidates in Florida, Georgia, and Texas. Going lefty left isn’t yet a viable election strategy beyond geographically-limited House seats. And in 2019 they will surely need proven leadership. 

Second and as I mentioned on Nov. 11, after winning the Speakership this January Ms. Pelosi should nobly announce a year from now she’s resigning. The concerns of younger House Dems about the hoary nature of their current leadership have merit. Even before January 3, and certainly afterwards, she should work with Dems who represent all the flavors of Democratic progress (perhaps as many as 233 flavors?), to facilitate younger Dems’ entry into the hallowed halls of Democratic House leadership.