Ten Twelve

Today is the ninth anniversary of 10/12.

Lots of people commented on 9/11, including myself and some other bloggers I follow, echoing the media emphasis on that important and memorable event. But the media gets it wrong when they assert that it was Al Qaeda's second attack on US territory. It was the fourth. And it says something sad about us as a nation that we give more importance to an attack on a civilian office building than one that left dozens of our servicemen either killed or wounded.

I am, of course, talking primarily about the attack on the USS Cole on 10/12/2000, which killed 17 sailors and left 39 others wounded. (The other event I allude to was "8/7", the attack on two US embassies on 8/7/1998. Embassies, like US flagged military vessels, are considered sovereign US territory.) Al Qaeda's first attack on the World Trade Center was not viewed as an act of war. Oddly, even their attack on a US naval warship was not viewed as an act of war. Even more oddly, it was their second attack on the World Trade Center -- not the simultaneous attack on the Pentagon and/or the White House and probably the Capitol -- that got recognized as an act of war.

This attack on our warship is so far off of our cultural radar that, when I alluded to this event on Dean Dad's blog last week, even my reference to "naval warships" left him scratching his head about 10/12, thinking I was talking about Hitler rather than Japan. No, I was not talking about Japan invading China or Germany invading Poland or France. I was talking about Japan attacking US Navy ships while in port at what was then US colonial territory (Hawaii) as well as on the seas in and around another US colony (the Philippines). Al Qaeda attacked a US Navy warship visiting a port in Yemen, almost a full year before it attacked the Pentagon. Both attacks on naval vessels provided an abundantly clear indication that they were at war with us, whether we liked it or not. Some might argue that both were wars of "choice", we could have chosen to let Japan control the Pacific as its own private lake and we could have disengaged completely from the middle east (including Saudi Arabia and Israel), but neither were likely choices for us to make.

Al Qaeda's timing was perfectly bad, by the way.

They hit a pair of embassies in the summer of 1998, when the US was totally preoccupied with a sex scandal and the subsequent impeachment of the President. The Clinton administration, weakened as it was by those events, seemed to view it as an isolated act of terror rather than part of a growing campaign against the US. That view seemed to be shared by the professionals in the DoD and CIA, as reflected in the refusal to attack bin Laden when we had him in our sights.

They hit the USS Cole in the late stages of the 2000 Presidential campaign, and the information about the connections to Al Qaeda were developed during the interregnum period that included a delayed handover because of the contentious recount in Florida. The report of the 9/11 Commission makes it pretty clear that the Clinton administration, having been unable to get the CIA and DoD to attack bin Laden himself for previous acts of war, did not even try to push that point during its last weeks in office. It also makes it very clear that the Bush administration seemed to think that those were attacks on the Clinton administration rather than on the United States, blowing off the new information developed in December and January by the FBI and others.

Forgetting the USS Cole seems typical of the way we have, as a nation, downplayed the significance of the war against Al Qaeda in response to its war against us. We had 8 years of the Bush administration talking about how much it cares about US servicemen, yet they did nothing when 17 of them were killed by Al Qaeda and continued to do nothing when reports surfaced that the same people were planning more of the same. When they complained that Oh, we didn't think they would attack the US, all I could think was What do you think a ship flying the US flag is, if not part of the US? Did Bush and Cheney really think it would be no big deal if Al Qaeda sunk more ships?

The people questioning the war in Afghanistan need to remember that there is at least one target on their list that they haven't hit yet, the Capitol, and that past history says they will not rest until they carry out their plans ... unless we stop them first. We need to remember 10/12, or 9/11 won't be the last we hear from Al Qaeda.

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Breaking Even

Two recent articles got me wondering about college economics when facing tight budget years, a news story in IHE about San Joaquin Delta College, pointed to by Dean Dad, and an off-hand comment by Dean Dad claiming "My cc loses money on every student."

This, and much of the discussion about Delta, made no sense to me at first.

How can you lose money by enrolling more students?

Then I discovered that Delta College only gets $26 per credit hour in tuition (in a semester system)! Mind bogglingly low. Almost free! Based on that, I could begin to believe statements like the one Dean Dad made. Nonetheless, that funding system is so alien to me that it is no wonder that people can make blanket comments that look like total nonsense to educators in one state while seeming quite reasonable to those in another state or region. At my CC, we profit from extra students and take a serious private-college-like approach to attracting and retaining those extra students.

Why the difference between Dean Dad's school and ours?

Well, I don't actually know if there is a difference - because Dean Dad has never produced even a crude outline of his college's income structure within something like the normalized college budget I suggested and then modeled with a sample budget for my CC. However, I do know what is going on at Delta College:

Out of every 10.0 million dollars in the budget, they get 5.9 million from the state, 2.7 from local property taxes, 0.5 from tuition, and the other 0.9 from a variety of sources that includes 0.5 from the federal government. Compare that to our budget: 5.9 from the state, 3.9 from tuition, and 0.2 from other sources.

That explains quite a lot!

I won't give our specific tuition level, but suffice it to say that it is more than twice what Delta students pay. Based on what I can discern from obscure collective bargaining documents, their full-time faculty are paid quite a bit more than ours are (but not enough to make up for the housing differences) while their adjuncts make somewhat more (but not much more) than ours do. The faculty salaries explain the very high classroom body counts, but those are sunk costs that are (like ours) covered by state funds. They don't impact the cost of adding an extra 100 students to the college's enrollment.

What does matter is the ratio between adjunct pay and tuition. If we have to add a section, our tuition appears to more than pay for the adjunct's salary once we get 12 to 15 students enrolled. (I don't know what other per-class costs, such as copying exams and the like, add up to. I do know that FICA and Medicare adds almost 10% to it, however.) My guess is that Delta needs more than 32, getting close to their normal load of 39, to break even on salary for a typical adjunct. But that is just salary! Add in FICA and other direct costs, and they lose money even with a full class. Working on the margin, when you might open a class with only 20 students during the last week of registration, they lose money and we profit.

Worse, their state income is set by enrollment but capped at a fixed value. That means they can get less but can never get more. Our state funds are based on a far more predictable formula.

PS -
If you are interested in some data related to the rising cost of tuition vis-a-vis state funding, you might look at this old article based on actual data for an R1 university. It is only one story of many, but it shows that very little of the growth in tuition (only $1500 of the $7000 increase) is due to reduced state funding (in constant current dollars).

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Unemployment Inflection Point?

The September unemployment data bring to a close another "quarter", so we now have an additional data point to compare to the naive projections made back when the incoming administration was hoping this was going to be a recession rather than the depression (four quarters of negative GDP growth) it turned out to be. [I figure "The Mortgage Panic of 2008" will make a good name for the triggering event.]

With that point, the inflection point is much clearer:

Click on the image to enlarge it significantly.

I emphasize the quarterly average because that was what was used in the original predictions, but also because it smooths out the noise in the monthly data.

The monthly data are still very noisy, but the break away from the rapid and accelerating ascent that had started a year earlier is much clearer now than it was just three months ago. The green and pink lines are explained below. [*] The noise is probably a result of the unseasonable timing of various things, whether it is the stimulus of car sales in what is normally an off season for car sales or the layoffs of teachers in the fall when they would normally be hired.

Unemployment is still going up, just not as fast as it had been. It is starting to turn over, but it doesn't look like it has turned over. It will go up a lot more when people re-enter the work force once they see jobs appear.

But the good news from this end is that I have finally seen an actual stimulus-funded construction project putting people to work. (I saw a lot more in another state, one that must have had a lot of projects ready to go, while traveling recently.) It just got started, so the stimulus effects are running about 8 months behind the starting point for that program.

Time will tell if it is enough.

As to which prediction curve applies, well, that would require correcting them so they follow the Q1 2009 data point rather than the optimistic estimate used back in late December of 2008.

[*]
The green and pink lines were described in detail elsewhere in the "Predictions" section.

The green line is a straight-line extrapolation (zero curvature) based on Q3 2008 and Q4 2008. It shows that the original blue predictions of the transition team assumed a recovery was already in progress by Q1 2009.

The pink lines are a pair of extrapolations from the actual Q1 2009 data point and the Q4 2008 point. The lower line is a straight line extrapolation (zero curvature), while the higher one assumes a continuation of the acceleration of job loss (positive curvature) that took place in the previous quarters of 2008.

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