A leader who knew better than to heed the siren’s song of austerity budgeting. Or not:

Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.

The other interesting thing here is that judging by the President’s rhetoric, his expansionary monetary policy, though highly successful, was based in part on a misunderstanding. The idea espoused here is that if commodity prices were higher, commodity producers could afford to buy more industrial goods, which would decrease urban unemployment. That, however, is an issue of the real value of agricultural products which should have nothing to do with devaluing the dollar. Dollar devaluation worked, by contrast, worked to raise the nominal price of all sorts of products which boosted the economy by reducing real interest rates.

From Christopher Clark’s Iron Kingdom: The Rise and Downfall of Prussia, 1600-1947, a window into the fiscal policy dilemmas of a large north German state in the early 18th century:

Waldburg focused above all on the iniquities of the existing tax system, which tended to operate to the disadvantage of the smallholding peasants. Under the traditional arrangements in the province, every landowner paid a flat rate of tax for every Hufe of land in his possession (the Hufe was one of the basic contemporary units of land; the English equivalent was ‘hide’). But since the tax-collecting agencies of the administration were still largely in the hands of the corporate nobility, the authorities tended to turn a blind eye when noble landowners understated their taxable landholdings. The returns of peasant households, by contrast, were subjected to the most pedantic scrutiny, so that not a single hide was missed. Further iniquities arose from the fact that no account was taken of the quality and yield of the land in question, so that smallholders, who tended in general to occupy the less fertile land, were subject to proportionally greater burdens than the major landowners. The problem, in Frederick William’s eyes, was not the fact of inequality as such, which was accepted as inherent in all social order, but the depression of revenues that resulted from the operation of this particular system.

At the time, tax systems throughout Europe tended to be regressive since the nature of an Estates General (or a House of Lords) was to sharply overrepresent a given area’s wealthiest residents. At the same time, public expenditures went overwhelmingly to finance either the instruments of war or else the rituals of court. Consequently, Enlightenment-era calls for low taxes and “small government” were essentially left-wing political movements. The alternative was to tax the poor in order to finance the whims of dynastic politics. Today is a very different situation. But it’s a reminder that the questions of what’s the taxes are and what the money is spent on are more important than simple questions about how high or low the tax rate is.

One of the quirks of educational practice is that testing and teaching are typically done by the same institution and most often done by the very same person. But the main alternatives to doing it this way tend to invite the criticism that instructors will now merely “teach to the test.” Arnold Kling, in the course of outlining a larger project, offers a concrete example of an alternative method:

The practicality of “test to what you teach” as a model for independent grading has been demonstrated by the Swarthmore College Honors program. The courses are seminars, taken by juniors and seniors in their major and minor subjects. The professors who teach the courses have control over the curriculum. The college hires outside examiners who write exams, based on syllabus material supplied by the instructors. The college administers the exams, and the outside examiners grade them. In the Swarthmore program, the exams are all free-response, without any machine-graded component. They also include an oral component. For A Means A, the mix of machine-graded,, free-response, and oral examinations is yet to be determined.

That seems clever. Basically the teacher says in advance what he or she is going to try to teach, and then the exam-designer is responsible for building a test of that material and the teacher is responsible for teaching it.

Via Zunguzungu an interesting point that starts as a discussion of the debt ceiling deal’s reduced subsidies for graduate students but is really about the origins of protest culture:

Large debt–and the fear it creates–is a pacifying force. There was no tuition at the City University of New York when I attended one of its colleges in the 1970s, a time when tuition at many U.S. public universities was so affordable that it was easy to get a B.A. and even a graduate degree without accruing any student-loan debt. While those days are gone in the United States, public universities continue to be free in the Arab world and are either free or with very low fees in many countries throughout the world. The millions of young Iranians who risked getting shot to protest their disputed 2009 presidential election, the millions of young Egyptians who risked their lives earlier this year to eliminate Mubarak, and the millions of young Americans who demonstrated against the Vietnam War all had in common the absence of pacifying huge student-loan debt. Today in the United States, two-thirds of graduating seniors at four-year colleges have student-loan debt, including over 62 percent of public university graduates. While average undergraduate debt is close to $25,000, I increasingly talk to college graduates with closer to $100,000 in student-loan debt. During the time in one’s life when it should be easiest to resist authority because one does not yet have family responsibilities, many young people worry about the cost of bucking authority, losing their job, and being unable to pay an ever-increasing debt.

Obviously, though, neither college nor graduate school is ever “free.” The professors who teach the classes expect to get paid, as do the janitors who clean the classrooms. But higher education is usually subsidized by taxpayers, sometimes extremely subsidized. This creates a climate in which people have both the time, social capital, and sense of security necessary to engage in a lot of political activism. Reduced subsidization tends to cut that off. That said, it seems to me that it would be difficult to make the case to the country’s non-college educated majority in order to create the social and psychological conditions for left-wing political activism should be a high priority use of tax dollars. This does, however, cast the Tea Party movement in a suggestive light. The United States has moved to making students bear a much higher share of the cost of their education, but remains strongly committing to subsidizing senior citizens’ retirements. At the same time, one of the points of consensus in the fiscal policy debate is that today’s old people should be held harmless in any set of potential entitlement cuts. Is it a coincidence that so much of present-day activist energy is located in the heavily conservative senior cohort and its peculiar brand of nostalgic nationalism?