Nick Timiraos notes today that Federal Reserve governor Elizabeth Duke is worried about the fact that after years of being too loose, mortgage standards may now be too tight:

So why haven’t mortgage credit standards eased up even a little bit, as they have for other consumer loans such as credit cards and autos? First, home prices have fallen so sharply that lenders are worried future price declines and job losses will leave them with more defaulted mortgages.

But Duke noted another more surprising cause: the Fed’s campaign to push down interest rates means lenders haven’t had to work very hard to drum up business. Together with federal efforts to ease refinancing rules, low rates have produced a surge of refinancing business. This has delivered a steady stream of high-quality, low-risk borrowers in an industry that already has shrunk significantly. Capacity-constrained lenders have “less incentive to pursue harder-to-complete or less profitable loan applications,” said Duke.

I dunno. I was chatting with a friend the other day who's trying to refinance his house. You'll have to take my word for this, but he's basically about the most reliable, creditworthy, upper middle class person you could hope to meet. Good income, reliable job, longtime bank customer, etc. etc. And yet, his bank keeps finding things to be nervous about. This should be a slam-dunk refi, but it keeps dragging out.

It's just an anecdote. But it makes me wonder if even the refi biz is quite as healthy as Duke suggests. If you have any horror stories of your own, feel free to share them in comments.

The New York Times ran a piece yesterday about all the shiny new teacher evaluation systems being used around the country, and how they're basically rating nearly every teacher as effective (or, better yet, highly effective). Only about 3 or 4 percent of teachers are being rated ineffective. Dana Goldstein comments on whether ed reformers think this is a reasonable number:

I've asked a number of prominent accountability hawks that question over the past six years and the answer I've heard most frequently is "5 to 10 percent." As Matthew DiCarlo explains, that estimate is culled from the research of the ubiquitous Stanford economist Eric Hanushek, and by that standard, these evaluation systems are already half way to where they are intended to be, a reasonable outcome for something so new.

My gut feeling is that 5 percent is probably about right and 10 percent is too high. This isn't based on anything specific about teaching, just on my experience in white-collar jobs. Go to any large corporation and take a look through the annual reviews given to its white-collar workers. How many are rated at the bottom level, the one where you're in danger of being fired if you don't improve? I'd say about 5 percent. I don't have any good reason to think teachers are much different from other white-collar workers, so I'd guess that about 5 percent of them are ineffective too.

Goldstein has some interesting historical background on teacher evaluation systems that makes her skeptical that the new ones will work any better than they have in the past. But what struck me about the Times article was the way it described how various school districts came up with their numbers. There was nothing subtle about it in Florida:

One Leon County principal, Melissa Fullmore of Ruediger Elementary school in Tallahassee, said that had it been solely up to her, one or two of her teachers would have been graded “highly effective,” the top category. Three would have been marked “needs improvement,” one rung up from the bottom, and the rest would have fallen under “effective.”

But because Leon County set the test-score bar so low, when their marks came out, all but one were highly effective, and the other was categorized as effective. “I wouldn’t put stock in the numbers,” Ms. Fullmore said.

The same was true at Springwood Elementary School nearby. “We had three or four teachers that were rated as ‘needs improvement’ on the observation, but due to changes in the cut scores, they were all bumped up to effective,” Dr. Christopher Small, the principal, said.

Officials in another county, Alachua, set scores relatively high, but when only 78 percent of teachers were deemed highly effective or effective, and when they saw how lenient other districts were, they set them much lower; ultimately, 99.4 percent of teachers were rated effective or highly effective. “It’s inconsistent, it’s unfair and it’s unscientific,” the superintendent, Dan Boyd, wrote in a letter to The Gainesville Sun criticizing how the state’s new evaluations had been carried out.

So test scores, far from tightening up evaluations, actually made them looser because districts deliberately set the cut scores to insure that very few teachers would be graded as ineffective.

This is only one state, and Florida's new evaluation system is, well, new. What's more, even the 2 or 3 percent of failing teachers under this system is apparently more than under the old system, in which "roughly 100 percent of them were rated satisfactory." So it would be unwise to rush to any conclusions about this. Still, it gives you pause for thought.

California has recently enacted two electoral reforms. In June 2010, we passed an open primary initiative that allowed the top two finishers to go on the general election, even if both are from the same party, and a few months later we passed a second initiative that created a nonpartisan commission to draw district lines in congressional races. Supporters of these initiatives hoped that they would push Californians to vote for more moderate candidates.

Over at the Monkey Cage, a team of researchers reports on a study suggesting that the open primary law failed to accomplish this. Their methodology strikes me as a bit iffy, so I'd take it with a grain of salt, but I was interested in what their data said about why the open primary system seemingly failed to change things:

While voters are generally quite moderate and were willing to cast crossover votes (roughly 12% of our participants who voted for a major party candidate did so), they largely failed to discern ideological differences between extreme and moderate candidates of the same party, particularly if they were challengers.

....Of particular interest in the second graph—which includes only Republican candidates—are the respondent placements for District 24. Abel Maldonado is a well-known moderate politician in California....His potential constituents rated him at roughly 5.25 on the 7-point scale. However, they gave almost the same rating to his fellow GOP challenger Chris Mitchum, a little-known actor and Tea Party candidate.

Again, I'd take this with a grain of salt. It's one study, the sample sizes are fairly small, and it's early days for open primaries. Still, I'd like to see further research specifically on the question of how accurately voters assess candidates. Certainly it's my sense that plenty of primary campaigns are brutal affairs in which it's crystal clear who the more extreme candidates are. But maybe that's true only in the high-profile races that tend to get national coverage. In others, maybe voters really don't have much of an idea of who's the centrist and who's out on the fringe. I'd certainly be curious to see this studied further.

The New York Times features a short video today about Warby Parker, the online eyeglass company that "wants to do everything themselves, from designing to manufacturing to selling the product." I didn't learn much about Warby Parker from this piece, but I question the Times' claim that they truly "want" to do all that stuff. More likely, they simply have no choice because the United States government no longer bothers enforcing antitrust law. Luxottica's stranglehold on the design, manufacture, and retail sales of eyewear is so strong that any wannabe competitor has no real choice except to do everything themselves. This is why a simple pair of replacement lenses now costs 300 bucks at LensCrafters, even though the technology existed to sell them for a hundred bucks two decades ago.

Anyway, good for Warby Parker, and I hope they manage to build a retail presence someday too. But their attempt to make an entrepreneurial buck is a lot harder than it ought to be. It's just one small example of the demise of antitrust enforcement over the past few decades, which is itself a small example of the way that the rich have not just rigged the rules of the capitalist game for their own benefit, but convinced everyone it's for their own good. We are all victims of economic Stockholm Syndrome these days.