The Congressional Budget Office (CBO) weighed in today on the fraught subject of whether federal employees are paid more than comparable workers in the private sector (full report here). Their analysis attempted to control for occupation, years of work experience, geographic location (region of the country and urban or rural location), size of employer, and various demographic characteristics (age, sex, race, ethnicity, marital status, immigration status, and citizenship). Their conclusion should come as no surprise: When you account for both wages and benefits, Uncle Sam is generous toward those with less than a college degree and stingy toward those with PhDs or professional degrees.

According to the CBO, the federal government employs a lot more workers with doctorates or professional degrees than private sector companies do (7 percent of the workforce vs. 3 percent of the workforce). Nonetheless, when you look at the overall number, they figure that the federal government's payroll is 16 percent higher than it would be if it paid its workers private sector scales.

Another interesting result: If you look at the range between the lowest and highest paid workers, it's about the same in the public and private sectors for both high school grads and college grads. But the private sector has a way higher range for those with doctorates. The federal government tops out at about $70/hour in wages for the top decile of workers while the private sector tops out at about $140. If you were to look at the top 1 percent instead of the top 10 percent, the difference would probably be even starker.

None of this should come as a big surprise. Federal jobs have always been plum positions for blue-collar workers, while for highly-educated professionals it's something you do if you either want a lot of job security or are really dedicated to public service. If you're a doctor or a lawyer, you can almost certainly do better in private practice than you can working for the government.

Would the quality of the federal bureaucracy improve if we paid less for low-level jobs and used the money we saved to compete better for top-level managers and other professionals? Maybe! But the CBO punts on this: "A key issue in compensation policy is the ability to recruit
and retain a highly qualified workforce. But assessing how changes in compensation would affect the government’s ability to recruit and retain the personnel it needs is beyond the scope of this analysis." Maybe next time.

POSTSCRIPT: Just to be clear, this study is for federal workers only, not all government workers. Other studies I've seen suggest that state and local governments show similar dynamics (high school grads paid more than private-sector workers, professionals paid less), but the difference isn't as large and the overall impact on payroll is close to zero.

Jesse Eisinger and Chris Arnold report on Freddie Mac's latest wheeze:

Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates. Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.

No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are “walled off” from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules.

Ah, the old Chinese wall. I remember it well from the dotcom bubble days, when investment banks supposedly erected an impenetrable barrier between the bankers who helped go public and the analysts who told clients whether was a good investment. After it all blew up, of course, it turned out the wall wasn't quite as impenetrable as everyone thought.

So how is Freddie doing this? After telling us the story of the Silversteins, who want to get a refi on their current high-interest loan but can't because of Freddie Mac policies, the authors explain:

Here's how Freddie Mac’s trades profit from the Silversteins staying in “financial jail.” The couple’s mortgage is sitting in a big pile of other mortgages, most of which are also guaranteed by Freddie and have high interest rates. Those mortgages underpin securities that get divided into two basic categories.

One portion is backed mainly by principal, pays a low return, and was sold to investors who wanted a safe place to park their money. The other part, the inverse floater, is backed mainly by the interest payments on the mortgages, such as the high rate that the Silversteins pay. So this portion of the security can pay a much higher return, and this is what Freddie retained.

In 2010 and '11, Freddie purchased $3.4 billion worth of inverse floater portions — their value based mostly on interest payments on $19.5 billion in mortgage-backed securities, according to prospectuses for the deals. They covered tens of thousands of homeowners. Most of the mortgages backing these transactions have high rates of about 6.5 percent to 7 percent, according to the deal documents.

So as long as homeowners have to keep paying high interest rates on their loans, Freddie's investment is gold. If they refi into a lower-interest loan, the value of the inverse floater goes down and Freddie is in trouble. Naturally, it's all just a big coincidence that Freddie is simultaneously making it hard for families to refi into lower-interest loans. Chinese wall, you know.

Read the whole thing for more. It's good to see that the American finance industry hasn't lost a step just because of that whole financial collapse thing a couple of years ago.

Aaron Carroll flags a study suggesting that spending a lot of time in front of a screen (TV or computer) doesn't actually have any effect on your life span:

On the whole, I think consuming amounts of technology that would stagger mere mortals has not hurt me too much; I think I've turned out OK…It may be that there are other factors that are correlated with lots of TV time that may make kids or people worse off. Perhaps parents who let their kids watch enormous amounts of TV are more likely to be bad parents. Perhaps parents who let their kids watch enormous amounts of TV are working three jobs, struggling to make ends meet, and can’t play with their kids as much as they would like.

…Many of the studies account for that as best they can. But the media likes to run around extrapolating a small statistically significant correlation into headlines like "TV WILL KILL YOU!" The sensationalism is pretty staggering. This leads to a publication bias, where results that are likely to shock and garner headlines are more likely to get accepted and printed.

So I'm glad to see a negative study get published. I bet you didn’t know about this study, though. It was published last week with almost no fanfare, and I doubt you will see any news stories on it. When it comes to science, I fear the media isn't nearly as fair and balanced as many think they are.

Well, yeah. But this seems to be part of a bigger problem linked to the actual effects of lifestyle choices, not just the reporting on them: Surprisingly few seem to have much impact on mortality. Just in the past few years, new studies have raised pretty serious doubts about the supposed effect on mortality of obesity, salt, saturated fat, routine mammograms under 50, colonoscopies, prostate screening, LDL levels, and lots of other things. Now even a sedentary lifestyle is under attack. I would have expected that to be the last holdout.

One problem, of course, is our focus on mortality in the first place. Obesity may or may not kill you, for example, but it does make diabetes more likely and it does make your joints wear out faster. Modern medicine may be able to control the diabetes and replace your knees, allowing you to live as long as you otherwise would have, but you're still stuck taking lots of medication, paying for joint replacements, and being less mobile.

It turns out that there's just a helluva lot of uncertainty around a lot of things we once thought we had a pretty good handle on. On a broader note, this is one of the reasons that I'm skeptical of studies about health care policies that focus on mortality, even though many of them provide evidence for policy positions that I support. It's just too narrow a lens, because too few things have a major impact on mortality. We'd be better off, I think, spending less time on crude measures of death rates and more time on other good/ill effects of various policies. That would create problems of its own, but at least we'd be looking at things that are more sensitive indicators of whether our policies are working or not.

E.J. Dionne makes the liberal case today that the Obama administration screwed up when it issued rules requiring insurance companies to cover contraceptives:

Speaking as a Catholic, I wish the Church would be more open on the contraception question. But speaking as an American liberal who believes that religious pluralism imposes certain obligations on government, I think the Church’s leaders had a right to ask for broader relief from a contraception mandate that would require it to act against its own teachings. The administration should have done more to balance the competing liberty interests here.

I'm just a big ol' secular lefty, so I guess it's natural that I'd disagree. And I do. I guess I'm tired of religious groups operating secular enterprises (hospitals, schools), hiring people of multiple faiths, serving the general public, taking taxpayer dollars — and then claiming that deeply held religious beliefs should exempt them from public policy. Contra Dionne, it's precisely religious pluralism that makes this impractical. There are simply too many religions with too many religious beliefs to make this a reasonable approach. If we'd been talking about, say, an Islamic hospital insisting that its employees bind themselves to sharia law, I imagine the "religious community" in the United States would be a wee bit more understanding if the Obama administration refused to condone the practice.

I can understand compromising over a very limited number of hot button issues. Abortion is the obvious one. But in general, if Catholic hospitals don't want to follow reasonable, 21st century secular rules, they need to make themselves into truly religious enterprises. In particular, they need to stop taking secular taxpayer money. As long as they do, though, they should follow the same rules as anyone else.

In my email today, the Washington Times passes along some great news: "Global warming trend ended in 1997, new data shows." The link is to a piece in the Daily Mail that, sure enough, tells us that our real worry isn't warming, it's the possibility of the Thames freezing over. And to prove that the world is no longer heating up, they include one of my all-time favorite graphs. I've recreated it using NASA data:

Look! No warming trend! But do you see the problem? I've given you a hint by embedding the 1997-2011 data within a larger chart, instead of just producing it on its own, as the Mail did. So that should make things pretty obvious. But in case you need a bigger hint, click the link for the full set of data, not cherry-picked to begin with the huge El Niño spike of 1998.

So what happens after Tuesday if, as expected, Mitt Romney wins a convincing victory in Florida? John Heilemann tagged along as Newt Gingrich visited a couple of Florida churches today (his appraisal of the second visit: "By no small margin, it was the worst and saddest campaign event that I have witnessed in this presidential cycle") and reports that Newt is promising to keep running all the way to the end no matter what happens:

Pledges to continue the fight unabated in the face of harsh and/or humiliating outcomes are staples of presidential campaigns. And they are also patently meaningless....But in Gingrich's case, he might be serious, so much has he come to despise Romney and the Republican Establishment that has brought down on him a twenty-ton shithammer in Florida, and so convinced is he of his own Churchillian greatness and world-historical destiny. The same antic, manic, lunatic bloody-mindedness that has made him such a rotten candidate in the Sunshine State may be enough to keep him the race a good long time.

This strikes me as....surprisingly plausible. And you know what? Rick Santorum strikes me the same way. He's a true believer who's always been in this more for the attention than because he really thinks he has a chance to become president, and people like that can keep going forever. And of course, we already know that Ron Paul will stay until the bitter end.

I don't know how likely this is, but it's at least possible that all four of the current candidates will keep running all the way to the convention. But here's the real question: if Romney builds up a big enough head of steam, he'll declare victory and withdraw from future debates. Without Romney, no one will be much interested in airing the debates, and no one would watch them even if they were aired. So all three of the also-rans would have to keep up their campaigns even though they weren't getting regular time to yak on national TV and the press corps was no longer taking the race seriously.

Would they do that? I can hardly believe they would, but I guess you never know.

Suzy Khimm points us to the latest survey of economists and the general public sponsored by Northwestern University. She highlights their finding that while economists all agree that raising tax rates by one percentage point on the rich would bring in more revenue, only 66% of the public believes this. That's a big victory for Rush Limbaugh and Fox News. But I actually find this result more disturbing:

Survey respondents appear more confident than economic experts about one’s ability to predict the stock market. In response to the statement, “Very few investors, if any, can consistently make accurate predictions about whether the price of an individual stock will rise or fall on a given day,” 64 percent of economists strongly agreed whereas only 54 percent of the Index sample agreed. [Emphasis mine.]

More accurately, I might find this result disturbing, because it suggests that 36% of professional economists think that lots of investors can consistently and accurately predict the price of a specific stock on a specific day. Oddly, though, the 64% figure for economists is for those who "strongly agree," while the 54% figure for the general public is for all those who merely "agree." So perhaps 64% of economists strongly agree with this statement and 36% merely agree. That would be OK. But then again, maybe 36% of economists don't agree at all. That would be a travesty.

I'm curious to know which it is. But I'm even more curious to know why this survey project reports its results in such an ambiguous fashion and doesn't make the raw results available. What's up with that?

UPDATE: Thanks to Twitter, I have my answer. If I had only realized that the raw data was available at an entirely different website, based on a poll done three months ago, I would have gone straight here and discovered that, in fact, 100% of economists agreed with this statement. The only distinction is that 64% strongly agreed and the other 36% agreed.

So the relevant comparison, I think, is that 100% of economists agree with this statement but only 54% of the general public agree with it. It's not clear to me why the Northwestern folks seem to have rather egregiously fudged that.

Atrios writes about the growing cost of a university education:

The basic thinking seems to have been that it was wonderful for university to be free back when most people who attended were quite wealthy, but once the masses started getting ideas about going it was time to force them to pay. And there again is your generational divide.

Actually, I think the dynamic is a bit different from that. It was back in the early 20th century that most people who attended college were wealthy — or at least upper middle class — and at that time, universities were expensive, not free. Private universities cost a lot of money (and handed out only a few scholarships here and there to salve their consciences), and state land grant universities, while not as expensive as Harvard or Yale, still cost too much for most ordinary working class schlubs. Neither of my grandfathers could afford to attend college, for example, even though they wanted to. (One of them joined the Navy instead, and the other drove out to California to make his fortune.)

That changed after World War II, when the economy was booming and everyone suddenly woke up to the fact that there were lots of working class kids who were plenty smart enough to attend college. This happened at exactly the time that America needed lots of college-educated workers, so we made sure they could all go. The GI Bill helped lots of them while all-but-free public universities helped lots of others. This was the golden age of low-cost higher education, and it was an era with more class mixing than ever before or after.

This started to erode in the post-Reagan era, but I don't think it's because of a generational divide. That's just the symptom, not the disease. It's largely a class divide. For a few decades following World War II, when state universities were a legitimate ticket into the white collar world for everyone, they were supported by everyone. But after the first generation or two got their tickets punched and moved out of the old neighborhoods and into middle-class suburbia, all the low-hanging fruit was gone. Poor and working class neighborhoods were no longer producing lots of kids who had the smarts for college but couldn't afford to go. More and more, universities were populated by the grandchildren of the GI Bill generation, all of whom were already middle class or better.

And as that happened, public universities began to lose public support. Why should working class and lower middle class taxpayers subsidize the education of children who had already benefited from a privileged upbringing and whose college degrees would provide them with a lifetime of higher earnings? After all, if some well-off kid wants a sheepskin that will make him rich, why shouldn't he pay for it himself?

And with that, universal support for cheap higher education dwindled, but not really for generational reasons. If poor and working class families still felt like their kids had a good shot at going to college, I'll bet they'd still support low-cost public universities just as much as they used to.

Yesterday I suggested that fighting bullshit is every bit as important as fighting genuine misunderstanding. Karl Smith takes issue with this:

This is an important point but we should define a line between where the contributions of professional intellectuals end and where the contributions of professional advocates take over.

If there is genuine misunderstanding then there is a role for intellectuals to say — well actually I think it's like this.

However, once an issue simply [becomes] a proxy for which team you want to win, this is not our fight. There are good men and women who are paid to do that and they should.

However, our role is the spread of knowledge. Once people are no longer concerned with knowledge but simply scoring points, we should move on.

I don't get this at all. The case at hand was a Mark Zandi op-ed debunking the BS that Fannie Mae and Freddie Mac caused the 2008 financial crisis. This wasn't a case of fighting BS with BS. Zandi was fighting BS with facts. Nor was it a case of harmless BS that only a small lunatic fringe believes. The Fannie/Freddie myth is believed by millions of people, some of them very influential, because they think the BS sounds plausible and they don't have the tools to evaluate it.

Generally speaking, the contagion vector for misinformation goes something like this:

Liars/hacks ---> Bullshitters ---> General public

Now, I do think public intellectuals have a responsibility to fight this stuff in a sober, factual, evenhanded way. They should leave the histrionics and cherry picking to partisan shills like me. Still, fight it they should. Their duty is to inform, and that duty stands regardless of where the misinformation comes from, what the motivation behind the misinformation is, or who the misinformers are targeting.

This task can't be left solely to popularizers and party wheel horses while academics limit themselves to conferences and professional journals. Public education is too important for that, and hearing the facts frequently and forcefully from those with the deepest knowledge of a subject is important since they bring with them with a level of credibility that no other source can match. Academics and other intellectuals don't have to take partisan sides, but they should take sides, and they should take them as publicly as possible.

POSTSCRIPT: By the way, just in case anyone is offended by the repeated use of the word bullshit in this exchange, it's worth noting that Karl and I are both using it in its technical, analytical sense as explicated by Princeton philosophy professor Harry Frankfurt in his famous essay, On Bullshit. There's a short summary here if you don't want to read the whole thing.

Via Tyler Cowen, Benjamin Campbell and Samuel Wang report that your college major depends a lot on which particular psychopathologies are common in your family:

We surveyed an entire class of high-functioning young adults at an elite university for prospective major, familial incidence of neuropsychiatric disorders, and demographic and attitudinal questions. Students aspiring to technical majors (science/mathematics/engineering) were more likely than other students to report a sibling with an autism spectrum disorder. Conversely, students interested in the humanities were more likely to report a family member with major depressive disorder, bipolar disorder, or substance abuse problems.

Is it science or is it bullshit? You make the call! But there's a chart to go with it, along with the usual throat clearing that this could all be due to nature, nurture, or a combination of both, so please don't send them any death threats. In any case, it all seems pretty plausible, doesn't it?