Meltdown

[Scarpia]

Hundreds of billions dollars have been spent over the last 30 years in an attempt to arrest the decline in science and math in the US with little to show.  Go check out the math and physical science departments at most graduate schools and you will realize the majority of their PhD candidates are foreign students from Asia.   

I'd like to know where that figure of hundreds of billions of dollars comes from.

The US University system is still strong, however you are right that it is increasingly difficult to find qualified students from the US.   The alarming thing is that it used to be that funding of science research in the US was so far ahead of the rest of the world that those foreign students all stayed here and contributed to the US economy.  Now they are increasingly finding the environment here unattractive and are returning to their native countries with PhD's from the US.  Much has been made of the projection that the economy of China will be larger than that of the US soon.  Less widely known, but perhaps more significant, China is also projected to surpass the US in the number of papers published in western scientific journals within a decade or two.

[Scarpia]

The fact that they come here for their education, and most will stay here to work, undermines your overly negative prognosis.  For sure, the US economy does have weaknesses, it's just that I don't find that a reason to diagnose the US with a terminal disease.

I said "used to" stay here.   Some stay, obviously, but my perception is that a larger fraction do not chose to stay than in the past.

I do not think the decline is irreversible.  It is due to the rest of the world catching up, and to the US making bad decisions.  The US has cut it's tax rate to the lowest fraction of GDP since 1950, and an increasing fraction is going to supporting retired people, rather than investing in young, productive people.  The US government simply does not have the money to invest in human and physical resources.   Aside from that, I think the biggest problem is the attitude of young people, who think prosperity is a birth right and that college is mainly a social center.  Soon they will confront reality.

[Coopmv]

The fact that they come here for their education, and most will stay here to work, undermines your overly negative prognosis.  For sure, the US economy does have weaknesses, it's just that I don't find that a reason to diagnose the US with a terminal disease.

You still do not get it.  Years ago, when the US was the envy of the world when it came to math and science, the lion share of science and math PhD candidates at most US graduate schools were American.  The US dominance in Nobel Prize is probably in its last leg as well.

[Lethevich]

Aside from that, I think the biggest problem is the attitude of young people, who think prosperity is a birth right and that college is mainly a social center.  Soon they will confront reality.

Shouldn't that be less of a problem in the US than Europe, as there is less state help for people who don't work super hard (and indeed, similarly less for even those who do)?

[Todd]

Well, the point is people keep wondering when the recession will end, but there is no recession.  This is the new economy.   I suspect that US has entered a period of long-term economic decline and the only question is whether it will be smooth or bumpy.

It does not require the mind of a rocket scientist to realize the US is in a long-term irreversible decline.  When our kids cannot even rank in the top twenty in math and science on a wordwide basis, the US faces an extremely bleak future.

What pessimism!  This isn't new.  Exactly the same sentiments have been stated before – remember the jobless recoveries from the 1991 and 2001 recessions?  In the early 90s, economists great and small lamented that the new "natural" rate of unemployment would have to be readjusted from 6% to 7%, and perhaps even 8%!  Then it proceeded to drop to 4%.  Just as people who claim that new, limitless expansions are the new norm, people make similar claims during recessions.  This is the new normal.  The new economy.  Etc, etc, etc.  This time it's different.  Except it's not. 

The US is in relative economic decline, and has been since its absolute peak in 1946.  China and India are indeed reemerging as great powers, though both have a long way to go before they reach their potential – if they ever quite get there.  (Both countries face formidable issues, with China also facing a demographic squeeze of its own making.)  Assuming that the US gets its mid-term and long-term fiscal house in order*, long-term projections of economic growth put the US as the third largest economy in the latter part of the century and into the next century, behind the two Asian giants.  The EU by comparison shrivels substantially.  If memory serves, Brazil is projected to be roughly as large as the EU.  Yes, long-term projections are not exactly accurate, though they can be startlingly close.  Schumpeter's post-war Capitalism, Socialism, and Democracy had some surprisingly accurate forecasts for 30-40 years out, and when they erred on growth, they erred on the low side.  While no one can tell the future, some trends are clear, and the doomsayers are wrong.

And I suppose one must also wonder what exactly constitutes decline.  If the average material welfare of Americans improves, is it really important for the US to have unipolar political and military power, which it never really had anyway?  Does the future really have to adhere to nationalism and other ideas carrying over from the 17th Century? 

I rather like this quote from Thomas Macauley, from almost two centuries ago:

On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us.

It seems to be just as valid today. 


* And the US will get its house in order, if for no other reason than it has to.  This is not the first fiscal crisis the US has faced, it is not the last, and past political strife has been worse than now. 

[Scarpia]

My post was not in response to yours but to the same one you responded to, and we agree more than we disagree - but this is not something that keeps me awake at night.

It keeps me awake at night. 

Given that our young people in the US perform much more poorly than those in Urban China, India, etc, what basis does the US have for assuming it is a high-wage country and China and India are low-wage countries?  Why should the iPad be designed in the US and assembled in China if people there are smarter than here?  The natural order of things is the reverse, future technical advances will be discovered, developed and designed in China, India, Korea and made in American sweat shops, to be sent to be used by consumers in Asia.  We just have to pray that they don't manage to get protection of intellectual property working in the "undeveloped" countries.

[Scarpia]

I would not judge this generation of young people so harshly.  After all, some of the biggest companies were created by young people, in the US, and have become worth billions (Microsoft, Google, Facebook, etc.) - and the young people who created Google and Microsoft, did not even have college degrees.

There will always be both energetic and enterprising as well as slacker young people - in every generation - and sometimes the slackers end up being very productive later in life.

Google was started by Stanford University PhD students.  Bill Gates dropped out of Harvard, not because he was a slacker, but because he was so driven to make Microsoft a success he had no time to finish his degree.  Microsoft, Apple, Facebook may be driven by lunatic founders, but they are staffed by legions of extremely well trained engineers who actually make the stuff work.  What will happen when the US startups founder because they can't find competent engineers, but Shanghai and Mumbai startups have brilliant engineers packed to the rafters?

[Coopmv]

I would not judge this generation of young people so harshly.  After all, some of the biggest companies were created by young people, in the US, and have become worth billions (Microsoft, Google, Facebook, etc.) - and the young people who created Google and Microsoft, did not even have college degrees.

There will always be both energetic and enterprising as well as slacker young people - in every generation - and sometimes the slackers end up being very productive later in life.

The two cofounders of Google actually met in Stanford graduate school, though I am not sure if they actually finished their masters.  At any rate, both clearly finished college or they would not be in grad school.

Will history like Microsoft repeat, i.e. Bill Gates founded a company that set the pace for an industry?  Given the general lack of drive and good work ethics of the younger generation that continue to think having a good life is a birth right, I am not optimistic ...

[Todd]

but Shanghai and Mumbai startups have brilliant engineers packed to the rafters?

There may be more to the stats than meets the eyes.  Though I suppose it is a few years old and things have changed dramatically since then.  And I mean it's BusinessWeek.

The "shortage" of engineers, if that's what it is, would really only be a problem if labor flows didn't change to meet demand.  Of course, the US visa policy is not exactly in the best shape, and it needs to be revised. 

[Todd]

Given the general lack of drive and good work ethics of the younger generation that continue to think having a good life is a birth right, I am not optimistic ...

Do you have empirical evidence to back up this statement?  If not, it reads like a variation of "In my day . . ."

[Scarpia]

Do you have empirical evidence to back up this statement?  If not, it reads like a variation of "In my day . . ."

Time college students spend studying has dropped by almost 50% between 1960 and 1993 (as reported by the American enterprise institute).

http://www.econ.ucsb.edu/~babcock/LeisureCollege_4.pdf

I know someone who has taught introductory physics at the same major US university for 20 years or so.  He says that teaching the same material with essentially the same textbook and giving an identical final exam the average score is 15% lower than it was when he started (i.e., mean is 65% instead of 80%).    There are still some brilliant students out there, but most sit in lecture slumped in their chair watching youtube videos during their lectures.

[Todd]

The alarming thing is that it used to be that funding of science research in the US was so far ahead of the rest of the world that those foreign students all stayed here and contributed to the US economy.

Your assertion seems rooted in something other than empirical reality.  According the National Science Foundation, R&D as a percent of GDP rose 1981 and 2007 in constant dollars.  Sure, the OECD rate of growth was higher, but so what?  The allocation has changed to be funded more by corporations than the government, which is as it should be, but the money is being spent.  Maybe the gains have all been reversed since 2007, though I doubt it.

[Scarpia]

That could also be because of technology changes which allow students to accomplish more studying in less time, or studying in ways which are not quantified by this kind of study, for example social media is where a lot of studying takes place today, not in the library.

The study address that specifically and showed evidence that this is not the case.  Deployment of such technology in college teaching is a relatively recent innovation and most of the decline occurred before this the new technology was introduced.

[DavidW]

I think that grade inflation is the culprit, these days an A has no meaning and a B is for those students that can't be bothered to try, anything lower is for students that simply can't be bothered to show up for exams.

But there is an important missing variable-- time spent in college.  Been on the rise I think.  People used to get their degrees in 4 years, now it is taking more like 5-6 years.

[Todd]

Time college students spend studying has dropped by almost 50% between 1960 and 1993 (as reported by the American enterprise institute).

Yes, but I must ask: So what?  How does this translate to a dimished work ethic?  The average number of hours worked has increased in the past several decades, as has productivity, at least according to the Labor Department.  If college were truly a good predictor of work ethic and productivity, one would have thought the opposite would have occured.  (I do acknowledge that productivity numbers are not always spot on.) 

In that same time, there have been some pretty impressive technology advances, new industries created, old ones reinvented, and so on.  I'm failing to see how the study shows much beyond some shortcomings of colleges themselves. 

[Scarpia]

Your assertion seems rooted in something other than empirical reality.  According the National Science Foundation, R&D as a percent of GDP rose 1981 and 2007 in constant dollars.  Sure, the OECD rate of growth was higher, but so what?  The allocation has changed to be funded more by corporations than the government, which is as it should be, but the money is being spent.  Maybe the gains have all been reversed since 2007, though I doubt it.

Your claim is contradicted by the graphic.  It shows gross R&D funding, not normalized per GDP.  It is hard to read but it shows the US level doubling from 1980 to 2007.  During that time GDP went up by a fact of more than 5, so R&D funding as a fraction of GDP went down by more than a factor of 2.

I am also concerned about Federally funded R&D, which is the seed from which commercial R&D grows.  This has also declined as a fraction of GDP, and even in absolute dollars recently.

[Todd]

It shows gross R&D funding, not normalized per GDP.

Wrong.  The graph states that it is in constant 2000 PPP dollars. 

Per the NSF: "According to OECD statistics (figure 4-13 ), total R&D by the EU-27 nations has been growing in real dollars over the past 10 years at an average annual rate of 3.3%. The pace of real growth during the same period for Germany, France, and the United Kingdom has been slower: averaging 2.9%, 1.8%, and 3.0%, respectively. By comparison, the U.S. pace of growth, on the same basis, has averaged 3.3%. Growth in Japan has been slower, at an annual average rate of 3.0%. For the OECD as a whole, real growth in R&D expenditures has also expanded on average at a rate of 3.6% annually over the past 10 years."

That's 3.3% real growth per year.  Not nominal.  Real.  R&D did not shrink by a factor of two.

[Scarpia]

Yes, but I must ask: So what?  How does this translate to a dimished work ethic?  The average number of hours worked has increased in the past several decades, as has productivity, at least according to the Labor Department.  If college were truly a good predictor of work ethic and productivity, one would have thought the opposite would have occured.  (I do acknowledge that productivity numbers are not always spot on.) 

In that same time, there have been some pretty impressive technology advances, new industries created, old ones reinvented, and so on.  I'm failing to see how the study shows much beyond some shortcomings of colleges themselves.

So you're argument is that we should not be worried that US students are behind students from almost every other developed countries in math/science knowledge, and that US students can't be bothered to study, because the US is doing so great?   

[Todd]

So you're argument is that we should not be worried that US students are behind students from almost every other developed countries in math/science knowledge, and that US students can't be bothered to study, because the US is doing so great?

No, I'm saying that the Cassandra-esque warnings of doom are both silly and wrong.  A study of college students, during a period when the college population and number of colleges jumped rather dramatically, does not at all reflect on the work ethic of "kids today."

[Scarpia]

Wrong.  The graph states that it is in constant 2000 PPP dollars. 

Per the NSF: "According to OECD statistics (figure 4-13 ), total R&D by the EU-27 nations has been growing in real dollars over the past 10 years at an average annual rate of 3.3%. The pace of real growth during the same period for Germany, France, and the United Kingdom has been slower: averaging 2.9%, 1.8%, and 3.0%, respectively. By comparison, the U.S. pace of growth, on the same basis, has averaged 3.3%. Growth in Japan has been slower, at an annual average rate of 3.0%. For the OECD as a whole, real growth in R&D expenditures has also expanded on average at a rate of 3.6% annually over the past 10 years."

That's 3.3% real growth per year.  Not nominal.  Real.  R&D did not shrink by a factor of two.

I am correct.  Constant PPP dollars means it is normalized to inflation.  You stated it increasing as a fraction of GDP (gross domestic product).  From 1980 to 2007 R&D shows an increase from 140 billion to 300 billion, a bit more than a factor of 2.  From 1980 to 2007 the GDP grew from 2.8 trillion to 14.7 trillion, an increase of a factor of 5.  R&D grew more slowly than the economy in general, and became a smaller fraction of the economy (GDP).

However, I am more concerned about federally funded basic R&D, which is the seen from which commercial R&D grows, and which is a predictor of future growth.  That has been declining in absolute inflation-corrected dollars in recent years.