Six on History: "our" Economy
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1) Wall Street is eyeing the new federal money for public school facilities,
"With battles raging over masks, books, and curriculums in the nation’s public schools, at least this week brought good news about the actual buildings those battles are raging in.
The White House announced a new plan to modernize public school buildings and reduce their climate footprint, including $500 million in grants for upgrades to heating, ventilation, and other systems.
Last year, a team of investors inked a deal with Maryland’s Prince George’s County to build six new K-12 public schools. The thing is, they aren’t just building them. The investors—including a Canadian private equity firm—are also fronting the cash to fund the construction, while also managing the buildings for 30 years after they’re built.
We’ve seen these sorts of deals—called “public-private partnerships”—being signed for highways, water systems, and other types of infrastructure. But it appears that Prince George’s County was the first state or local government in the U.S. to do it for a K-12 public school.
Private investors worldwide are now salivating over K-12 public schools, the second largest sector of public infrastructure spending in the U.S., after highways.
“With municipal budgets bearing the burden of the pandemic nationwide,” an executive with a multinational real estate firm said last year, “[public-private partnerships] can offer a real solution to ensure that schools can be built and maintained while providing budget certainty.”
“Local governments have recently expressed new interest in public-private partnerships for projects like school construction,” a managing director of public-private partnerships at a large construction firm told the New York Times. “Most of the conversations have been around K-12.”
Reason, the libertarian magazine, wrote, “Prince George’s County’s public-private partnership is something that other school districts should explore.”
Here are the reasons this is worrying (which we outline in a new guide on public-private partnerships for school facilities):
Public-private partnership contracts often contain clauses that guarantee profits for the investors by limiting the government’s ability to make policy and planning decisions. For example, in 2007, the Canadian province of Alberta signed a public-private partnership to build 18 schools. Not only did costs eventually triple from the original estimated budget, but the contract also strictly limited access to the new school facilities. Community groups couldn’t use the schools after hours for activities like child care and sports leagues.
Private capital is expensive. In 2013, a state courthouse in California became the first major public building constructed in the U.S. using a public-private partnership and proved to be very pricey, costing Californians an estimated $160 million more than it would have building it the traditional way using public debt.
Private contractors have incentives to cut corners. For example, school administrators in Edmonton, Canada, experienced problems with the private investors in a public-private partnership not responding to maintenance requests in a timely manner, forcing school district employees to perform the work.
Public-private partnerships are bad for workers. Public jobs, like janitorial and building maintenance positions, change into private sector positions with lower wages and less health and retirement benefits than their public sector counterparts. [non-union!]
Many public-private partnerships come with complex financial risks. Last year, Maryland was forced to rebid a public-private partnership for a transit line after the investors pulled out citing delays and rising costs, adding $250 million to the overall cost and four years to the project timeline.
Many public-private partnership have little transparency and little to no opportunities for public input. Can you imagine a school community having little to no stay in what their school building is like, who has access to the school, and other important decisions?
Odds are your local public schools need some modernizing. And odds are your school district will do it the right way, under public control, with input from your school community.
But there’s a chance private investors will come around promising the moon if they can add some private capital to the mix and manage the school for decades."
Download our latest guide and educate your local leaders on why that would be a mistake.
https://thenib.com/the-sugar-empire-of-puerto-rico/"A few months before she died in February at age 27, Hanna Wilt was living at her mom's home on the New Jersey shore.
"I'm tired and I'm very very bloated," she said. "I get fluid buildup in my belly."
It was a sunny morning, the living room filled with light that caught in Wilt's yellow hair, but she was having a tough day.
She sat in a big stuffed chair, hunched forward holding her stomach. "Essentially you starve to death, is the nature of this disease," Wilt said.
Wilt was a college athlete, a CrossFit instructor and an avid horseback rider. Then at age 22 she felt the first symptoms of an aggressive form of cancer called mesothelioma.
"It was really, really weird," Wilt recalled. "I started not being able to walk right."
Now, after years of unsuccessful treatment, she was terrified by the rapid advance of her illness. But along with the fear, Wilt also voiced outrage and frustration.
Her lawsuit against Johnson & Johnson, the company she blamed for making her sick, had been abruptly blocked a few weeks earlier.
Johnson & Johnson, which is headquartered in New Jersey, is valued at more than $400 billion. But in October 2021, the company used a controversial legal maneuver in bankruptcy court to freeze Wilt's case along with thousands of others.
The company had faced some 38,000 lawsuits claiming that trace amounts of asbestos contamination in Johnson's baby powder caused ovarian cancer and mesothelioma.
"I would use it every day, sometimes a couple times a day to be comfortable in the summer," Wilt said of J&J's talcum powder.
In her lawsuit filed in January 2020, Wilt accused company executives of knowing about the risk for decades and keeping the information from customers.
She pointed to the FDA's announcement in October 2019 that it had found asbestos in one sample of Johnson's baby powder.
"There's definitely an aspect of justice" in suing J&J and wanting her day in court to hold the company accountable, Wilt said.
"This powerful group of people, they lied and were able to potentially ruin so many people's lives."
A $400 billion company pulls the bankruptcy triggerJ&J pulled its iconic Johnson's baby powder off the shelves in the U.S. in 2020, but the company says it took that step only because bad publicity had hurt sales.
Company executives, who declined NPR's repeated requests for an interview, have long denied the product is contaminated or caused anyone's cancer.
"The overwhelming scientific evidence proves Johnson's baby powder is safe and does not cause cancer," said Allison Brown, a company attorney, in a statement J&J sent to NPR.
Normally this is the kind of dispute civil lawsuits are meant to settle. A judge or jury would look at the evidence in a case like Hanna Wilt's and decide whether J&J did anything wrong.
In recent years, Johnson & Johnson has successfully defended itself against many of these baby powder claims but has also lost on occasion.
After one baby powder trial in Oklahoma in 2018, J&J was eventually forced to pay 22 women with ovarian cancer more than $2 billion. That award survived an appeal to the U.S. Supreme Court last year.
But with most of the cases — including Wilt's — still pending, the company found a way to stop the legal process in civil court, using a complex bankruptcy strategy known in legal circles as the "Texas two-step."
Cancer patients and the Texas two-stepHere's how the maneuver worked. First, last October, J&J spun off a subsidiary in Texas called LTL.
Then, using a wrinkle in Texas state law, J&J was able to transfer all of the potential liability linked to the tsunami of baby powder asbestos claims into the shell of the new company, while keeping valuable assets separate.
LTL then quickly filed for bankruptcy in North Carolina. That move immediately halted the baby powder cases, which could remain on hold for months or years.
Speaking on a public conference call with investors in October, one of J&J's top executives defended the strategy.
"There's an established process that allows companies ... to resolve claims in an efficient and equitable manner," said J&J Chief Financial Officer Joseph Wolk. "It's really the bankruptcy courts that will ultimately decide this."
But for families seeking compensation from J&J, the move by one of the wealthiest corporations in the U.S. sparked anger and dismay.
"It's heartless; it's ruthless," said Hope Schiller Wilt, Hanna's mother. "It's disgusting that for monetary gain they will stop at nothing."
"It is so expensive being sick," added Hanna Wilt. "I can't work, so I'm not providing an income. My Mom can't work. She's taking care of me."
A separate justice system for "Bankruptcy Grifters"?Legal experts tell NPR that a growing number of wealthy companies, organizations and individuals accused of serious wrongdoing are using similar bankruptcy tactics, hoping to delay or permanently block lawsuits.
They've found openings in state and federal law that allow them to leverage the sweeping power wielded by bankruptcy judges when cutting deals.
But they're not being forced to endure the financial pain and exposure that comes with actually filing for bankruptcy.
Often this means creating a new subsidiary and pushing it into bankruptcy, as in the J&J case. In other instances, wealthy companies or organizations are able to "piggyback" on the bankruptcies of other companies that are actually insolvent.
"I think the level of concern [over this strategy] is high and it's going higher and higher," said Lindsey Simon, who teaches bankruptcy law at the University of Georgia.
Simon was one of the first to raise alarm about the practice in a legal paper called "Bankruptcy Grifters" that was widely circulated before being published this month in the Yale Law Journal.
"These 'bankruptcy grifters' act as parasites," Simon wrote. They get many of the benefits of actual bankruptcy while experiencing "only a fraction of the associated burdens."
These bankruptcy maneuvers have quietly reshaped some of the most important legal cases of recent years.
Members of the Sackler family who own Purdue Pharma aren't themselves bankrupt. But they're expected to piggyback on the bankruptcy of their insolvent drug company.
Under terms of the deal, they would pay roughly $6 billion in exchange for sweeping protections from lawsuits that accused them of marketing OxyContin in ways that fueled the opioid epidemic.
The settlement, which is still pending, requires no apology from the Sacklers, who have long denied any wrongdoing. It will also leave much of the $10 billion in revenue the family earned from opioid sales untouched.
In the end, if the deal is finalized, those harmed by OxyContin addiction will be forced to forfeit any right to sue the Sacklers, while often receiving only a few thousand dollars in compensation.
The Koch brothers, billionaires known for funding a wide range of conservative political organizations, also used a bankruptcy maneuver to freeze asbestos-related lawsuits linked to one of their companies, Georgia-Pacific.
In that case, also still pending, Georgia-Pacific spun off a new subsidiary in 2017 called Bestwall that quickly filed for bankruptcy. Georgia-Pacific offered to pay $1 billion into a compensation fund.
But no payments have yet been made. People attempting to sue over cancer claims in that case have seen their lawsuits frozen for nearly five years.
The U.S. Olympic & Paralympic Committee and the Boy Scouts have also used complex bankruptcy maneuvers to shield themselves and their affiliate organizations from lawsuits linked to claims of child sexual abuse.
Critics, including Republican and Democratic members of Congress, point out that these legal maneuvers are available only to those wealthy enough to pay large sums as part of bankruptcy settlements.
"There's a justice system for rich people, powerful corporations and then there's a justice system for everybody else," said U.S. Sen. Dick Durbin, D-Ill., in a recent speech on the Senate floor decrying these bankruptcy deals.
"Many days it seems the gulf between these two systems is just getting wider and deeper."
Is this even legal?The U.S. Justice Department's bankruptcy watchdog division has also condemned settlements of this type, describing them as unconstitutional.
In legal filings last year made after Purdue Pharma filed for bankruptcy, the DOJ argued that such deals force people who have filed lawsuits to "involuntarily settle" even if they prefer to have their case heard in court, effectively denying them due process rights.
In a statement in December 2021, U.S. Attorney General Merrick Garland said "the bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family."
That settlement deal, along with several others involving non-bankrupt players, is now being challenged. Some legal scholars believe they will eventually be declared improper nationwide by federal appeals courts.
"I think if you really look closely at what bankruptcy code allows, it's not altogether clear this is permitted," Simon said.
"I think there's a realistic chance that at some point a court will say it's not allowed."
Congress is also considering bipartisan legislation that would sharply limit these bankruptcy deals.
Opening the floodgatesBut for now, a relatively small number of bankruptcy judges are allowing and even encouraging wealthy companies and individuals accused of wrongdoing to use this kind of maneuver.
After J&J offered to create a fund worth billions of dollars through the bankruptcy court to compensate cancer victims, the bankruptcy judge presiding over the case praised the proposed arrangement.
"Justice will best be served by expeditiously providing critical compensation through a court-supervised, fair, and less costly settlement trust arrangement," wrote Judge Michael Kaplan in February.
Kaplan acknowledged concern that "allowing this case to proceed will inevitably open the floodgates to similar machinations" by other companies. He then added, "maybe the gates indeed should be opened."
During a hearing on the J&J matter this week, Kaplan also acknowledged this case is both controversial and precedent-setting and therefore warrants review by the federal appeals court.
"I'm being blamed for a lot," Kaplan said. "Clearly ... this impacts decisions and restructurings or potential restructurings beyond what's being litigated in this court."
But bankruptcy maneuvers of this kind, involving non-bankrupt companies and individuals, do have supporters.
Some judges, legal scholars and corporate executives see bankruptcy court as an efficient way to simplify and reach closure on complex litigation, even in cases where the main players aren't insolvent.
They argue that companies sometimes wind up paying victims and creditors faster.
Even some critics, including Simon, say these kinds of settlements should be available to bankruptcy courts as a tool in rare, carefully regulated situations.
Caught in a legal maze as time ran outBut individuals caught in this legal maze say it feels unfair and baffling to find their lawsuits sidelined because of bankruptcy maneuvers carried out by wealthy companies.
In cases involving ovarian cancer and mesothelioma, there's a high likelihood people will die while waiting for these maneuvers to play out.
"I'm a young girl, my entire life has been dramatically changed," Hanna Wilt said before her death on Valentine's Day. "I'm angry and I think there's a lot of sadness."
"For her to see justice would have not saved her life," said her mother, Hope. "But she would have felt like a company like this couldn't get away with doing what they've done and causing such horrible heartache."
Wilt's family said they do plan to continue her lawsuit — "It's what she wanted," her mother said — but the case could remain stuck in bankruptcy court for months or years.
It's not clear how a court will rule in any of the tens of thousands of remaining baby powder cases, if they are eventually allowed to move forward.
What is clear, according to legal experts, is that this Johnson & Johnson case is being watched and studied as a test case.
If this bankruptcy maneuver works for Johnson & Johnson, even more wealthy companies and individuals are likely to use bankruptcy court to delay or permanently block lawsuits when accused of wrongdoing."
"The word “‘billionaire” didn’t even exist until 1844. Fifty years later, we got “multibillionaire.” And for the next 127 years, that was enough.
But in 2020, while the working class faced near-record unemployment during the pandemic, the wealthiest Americans faced a different problem. Some of them had gotten so rich, there was no longer a word to describe just how rich they were.
That’s why today I want to bring you one of the newest additions to the English language: “centibillionaires,” people with $100 billion or more.
What’s it like being one of history’s first centibillionaires? It’s hard to even imagine, but let’s try it by comparing them to the less fortunate. By which I mean just … regular … billionaires.
If you’re a regular billionaire, you can afford a private jet. If you’re a centibillionaire, you can afford a brand-new Gulfstream jet every single day for more than ten years.
Not sure what you'd do with a new Gulfstream every day — maybe give one to each of your closest 4,000 friends?
A regular billionaire would struggle to buy their own professional baseball team. Sad, I know. But a centibillionaire could easily buy every team in the entire major league.
If you’re a regular billionaire, you can donate to your alma mater and get your name on a building. If you’re a centibillionaire, you could single-handedly give every teacher in America an $8,000 raise for 5 straight years.
Of course, that’s not all you could do. $100 billion is enough to wipe out all the medical debt in the United States. Or provide permanent shelter for every homeless person in America. Or buy Covid-19 vaccines for the entire world.
So here’s the big question. Are these centibillionaires so rich because they work two and half million times harder than the average American? Are they really 100 times smarter than the typical billionaire?
We’ve got two choices as a country. We can tax the richest Americans fairly, and invest that money in ways that benefit all of us.
Or we can keep doing what we’re doing, and watch as centibillionaires get even richer while the rest of us get left behind. If you think wealth and power are too concentrated in the hands of a privileged few now, just imagine what a few more years of trickle-down nonsense will bring.
Of course, it won’t be all bad. At least “trillionaire” is easy to say."
BY ROBERT REICH
"On July 1, 2002, I became president of Reed College in Portland, Ore. As I began to fill the shelves in my office with mementos from my previous life as a law-school dean, I could feel the weight already lifting from my shoulders. “I’m no longer subject to the tyranny of college rankings,” I thought. “I don’t need to worry about some news magazine telling me what to do.”
Seven years before my arrival at Reed, my predecessor, Steven S. Koblik, decreed that Reed would no longer cooperate with the annual U.S. News Best Colleges rankings. As a practical matter, this meant that college staff members would no longer have to invest hours in filling out the magazine’s annual surveys and questionnaires. Most importantly, it signaled that Reed would no longer be complicit in an enterprise it viewed as antithetical to its core values. And it would no longer be tempted to distort those values to satisfy dubious standards of excellence.
The fact that Reed had taken this rebellious stance was one of many features that attracted me to apply for its presidency. I took it to be a statement that Reed viewed education as a path to a genuinely fulfilling life, not just a ticket to a high-paying job. The college defined its goal as imparting learning, not just conferring credentials. It measured itself by internal standards of academic integrity, not just external applause.
- THE REVIEW | ESSAY
- THE REVIEW | ESSAY
- THE REVIEW | ESSAY
There is a growing cottage industry of college evaluators, many spurred by the commercial success of U.S. News. I call it the “rankocracy” — a group of self-appointed, mostly profit-seeking journalists who claim for themselves the role of arbiters of educational excellence in our society. It wasn’t just the U.S. News rankings that were incompatible with Reed’s values. Virtually the whole enterprise of listing institutions in an ordinal hierarchy of quality involves faux precision, dubious methodologies, and blaring best-college headlines. To make matters worse, the entire structure rests on mostly unaudited, self-reported information of dubious reliability. In recent months, for example, the data supporting Columbia’s second place U.S. News ranking have been questioned, the University of Southern California’s School of Education has discovered a “history of inaccuracies” in its rankings data, and Bloomberg’s business-school rankings have been examined for perceived anomalies.
Maintaining Reed’s stance turned out to be more of a challenge than I had realized. Refusing to play the game didn’t protect us from being included in the standings. U.S. News and its coterie of fellow rankocrats just went ahead and graded the college anyway, based on whatever data they could scrape up and whatever “expert” opinions they could sample. Every once in a while, when I saw that U.S. News had once again assigned us a lower number, I would feel those old competitive juices flowing. In moments like that, I had to take a deep breath or go for a walk. And throw the magazine into the trash.
I came by my rankings aversion honestly. In 1989, I became the dean of the University of Pennsylvania’s law school. The next year, U.S. News began to publish annual rankings of law schools. Over the next nine years of my deanship, its numerical pronouncements hovered over my head like a black cloud. During those years, for reasons that remained a complete mystery to me, Penn Law’s national position would oscillate somewhere between seventh and 12th. Each upward movement would be a cause for momentary exultation; each downward movement, a cause for distress.
My admissions dean reported that prospective applicants were keenly attuned to every fluctuation in the annual pecking order. So were my alumni. If we dropped from eighth to 10th, alumni would ask what went wrong. If we moved up to seventh, they would ask why we weren’t in the top five. Each year, Penn’s president would proudly present to the Board of Trustees a list of the university’s schools whose ranking numbers had improved. (She’d make no mention of those whose numbers had slipped.)
During that time, I also served as a trustee of my undergraduate alma mater, Amherst College. By the standards of the rest of the world, U.S. News treated Amherst very kindly, almost always placing it in the top two liberal-arts colleges in the nation. Amherst was far too genteel to boast publicly. But the topic often arose at the fall meeting of the Board of Trustees, right after the release of the latest U.S. News Best Colleges edition. If Amherst came in second, someone would always ask, “Why is Williams College ahead of us again?” I came to understand that, in the world of college rankings, everyone feels resentment, frustration, and anxiety. Everyone thinks they are being treated unfairly, except during those fleeting moments when they sit at the top of the sand pile.
Like many members of my generation, my education in gourmet cooking began by watching Julia Child’s syndicated TV show, The French Chef. Judging by my occasional attempts at haute cuisine, I was not a very good student. But I do remember one important lesson: When you combine a lot of ingredients into a stew, you want to bring out the flavor of each one. You should still be able to taste the bacon and the porcini mushrooms in the beef bourguignon.
The art of composing a college ranking is like preparing a stew. You select a group of ingredients, measure each one carefully, combine them in a strict sequence, stir, cook, and serve. If you do it just right, you might end up with a delicious, classic French dish. If you do it badly, you end up with gruel.
The rankings of U.S. News and its followers typically produce gruel. A careful look at the “recipes” for preparing these rankings shows why.
To create its 2022 listings of national universities, for example, U.S. News combined 17 different ingredients, grouped under nine headings (graduation and retention rates, social mobility, graduation-rate performance, undergraduate academic reputation, faculty resources, student selectivity, financial resources, alumni giving, and graduate indebtedness) to produce an overall score for each ranked college, on a scale of one to 100. The data fed into this recipe derive from replies to the magazine’s annual statistical questionnaires and peer-evaluation surveys. Most of the quantitative information is also available from the U.S. Department of Education, but some (such as class-size data or the alumni-giving rate) is not. Since there is often a time lag in federal reports, U.S. News takes some pride in publishing data that are, in at least some instances, more current.
In a practice begun back in 1997, U.S. News adjusts some of the metrics in its formula in an attempt to measure institutional value added. These calculations use proprietary algorithms to estimate the extent to which an institution’s performance on a particular criterion is higher or lower than one might expect, given the distinctive characteristics of the institution and its student body. For example, in addition to calibrating the raw overall graduation rate, U.S. News also includes something called “graduation-rate performance,” to reward institutions, such as Berea College, that achieve a higher graduation rate than might be expected, given the academic preparation of their students.
Other comprehensive rankings have used formulas that are broadly similar to those used by U.S. News. For its 2022 edition, the Wall Street Journal/Times Higher Education rankings employed 15 measures, grouped under four headings (resources, engagement, outcomes, and environment). Some of its factors (graduation rate, for instance) are also used by U.S. News. Several others, such as various survey-based ratings of student engagement and postgraduate salaries, are more distinct. Washington Monthly divides its rankings into three portions, each comprising many factors, while Forbes uses well over a dozen (including an institution’s alumni representation in the Forbes “30 Under 30" list). Niche, a platform that both recruits for colleges and helps parents and students find the right institutions, surely wins the prize for formulaic complexity, by somehow managing to incorporate over 100 ingredients (via Bayesian methods and “z-scores”) into a single ordinal list of 821 best colleges.
Taken individually, most of the factors are plausibly relevant to an evaluation of colleges. But one can readily see that any process purporting to produce a single comprehensive ranking of best colleges rests on a very shaky foundation.
Problem No. 1: Selection of Variables
How do rankocrats decide what to include or leave out in their formulas? What we call a “college education” has literally hundreds of dimensions that could potentially be examined. While there is widespread agreement about the general purposes of higher education, when it comes to rankings, that consensus quickly dissolves into argument.
Why, for example, does U.S. News look at spending per student, but not endowment per student? Why does it measure faculty salaries but not faculty research output? Why does it calculate graduation rate but not postgraduate earnings? Why do some rankings systems include racial and ethnic diversity, while most ignore it? Indeed, why do some formulas use just a handful of variables, while others incorporate dozens or even hundreds? At best, the rankers give vague replies to such questions, offering no supporting evidence for their preferred variables. Very rarely do they explain why they have left out others, including those that their competitors use.
Problem No. 2: Assigning Weights to Variables
Equally arbitrary is the process of determining what weights to assign to the variables. The pseudoscientific precision of the mathematical formulas used in the most popular rankings is really quite comical. For 2022, U.S. News decreed that the six-year graduation-rate factor was worth precisely 17.6 percent in its overall formula, and the freshman-to-sophomore-year retention rate, exactly 4.4 percent. Washington Monthly somehow divined that its Pell graduation-gap measure (comparing the graduation rate of lower-income Pell Grant recipients with non-Pell recipients) factored in at 5.55 percent of its overall rating, while a college’s number of Pell students receiving bachelors’ degrees deserved a measly 2.8 percent.
U.S. News has long been well aware of the arbitrariness of the weights assigned to variables used in its formulas. In 1997, it commissioned a study to evaluate its methodology. According to Alvin P. Sanoff, managing editor of the rankings at that time, its consultant concluded: “The weight used to combine the various measures into an overall ranking lacks any defensible empirical or theoretical basis.” The magazine evidently just shrugged its shoulders and kept right on using its “indefensible” weighting scheme. As have all the other formulaic rankers, one strongly suspects.
Problem No. 3: Overlap Among Variables
A third problem is the degree of overlap among variables — a condition statisticians call “multicollinearity.” In statistical terms, the ranking formulas purport to use several independent variables (such as SAT scores, graduation rate, class size, and spending per student) to predict a single dependent variable (numerical rank). It turns out, however, that most of the so-called independent variables are, in fact, dependent on each other. A 2001 analysis found “pervasive” multicollinearity in the formula then used by U.S. News, with many pairs of variables overlapping by over 70 percent. For example, a college’s average SAT score (for its entering students) and its graduation rate were almost perfectly correlated.
Problem No. 4: the Salience of Numbers
A further problem with the rankocrats’ systems is the outsized impact exerted by the numerical scores that those systems produce. Scholars call this quality “salience” — that is, the tendency of one measure to dominate all the others, simply because of its greater visibility. Taking an example from the 2022 U.S. News edition, we can ask whether the University of California at Berkeley (ranked 22nd among national universities) is really better than its downstate neighbor, the University of Southern California (27th). These two numbers said yes. Yet, when you look at the underlying data (to say nothing of all the qualitative factors ignored by the formula), the only plausible conclusion is that the two colleges, while very different, were equivalent in overall quality. Those colleges’ total scores on U.S. News’s magic 100-point scorecard (82 and 79, respectively) were also almost identical. Berkeley seemed to be superior on some measures (peer evaluation and student excellence), and USC on others (faculty resources and financial resources). Yet there it was, in neon lights: No. 22 versus No. 27 in rank.
As one moves further down the ladder, the numerical differences among the colleges — and surely the real quality differences — shrink to the vanishing point. Ursinus and Hendrix Colleges, two very fine small liberal-arts colleges, received overall raw scores of 58 and 55 from U.S. News. Yet Ursinus was ranked 85th (in a tie) among national liberal-arts colleges, and Hendrix 98th (also in a tie). The notion that, in this case, a student should choose Ursinus over Hendrix simply because of these numerical differences is ludicrous. But, as many scholars have documented, rankings numbers speak loudly, often drowning out other, more edifying ways of assessing an institution’s strengths and weaknesses.
In a 2007 study of the enrollment decisions made by high-achieving students who attended Colgate University between 1995 and 2004, Amanda Griffith and Kevin Rask noted that over half of the surveyed students chose Colgate merely because it was ranked higher than the other colleges to which they were admitted. This deciding factor, they observed, was independent of other measures of academic quality, such as student/faculty ratio or expenditures per student. A 2013 investigation examined the impact of a 1995 decision by U.S. News to increase the number of institutions that were ordinally ranked. Before 1995, colleges that received raw scores between 26th and 50th in its formula were merely listed alphabetically in a “second tier.” The researchers found that when the magazine began assigning a specific number to those additional institutions, they experienced a statistically significant increase in applications, wholly independent of any changes in the underlying quantitative measures of their academic quality.
Problem No 5: Fiddling With the Formula
Compounding the inherent arbitrariness of the rankings’ methodology, rankocrats keep changing it, so as to render comparisons from one year to the next essentially meaningless. Ever since 1983, U.S. News has made repeated alterations in the variables used in its formula, the weights assigned to those factors, the procedures for measuring them, and the number of colleges listed.
Why does U.S. News keep changing its recipe? Many observers accuse the publisher of instituting changes just for the purpose of shaking things up, to generate enough drama to keep readers coming back year after year. Its editors firmly deny that charge. Instead, they typically give rather vacuous explanations for the changes, often citing “expert” opinion. But, unlike academic experts, the magazine’s editors don’t cite the results of peer-reviewed studies to substantiate their assertions.
In fact, it’s not difficult to guess the reasons for at least some of the changes. One can readily explain several adjustments — for example, the belated inclusion of social mobility and college affordability — as responses to widespread criticism of the formula’s blatant wealth bias. Other revisions reflect efforts to discourage cheating. U.S. News has been engaged in an ongoing Whac-a-Mole exercise with institutions bent on gaming their system. Find a loophole, close it. Find another loophole, close that one. Ad infinitum.
Additional alterations may have been made to avoid the embarrassment of implausible results. In the magazine’s first ranking of law schools, Yale finished first, and Harvard wound up an ignominious fifth. That implausibility was quickly corrected by subsequent rankings formulas. Until quite recently, it’s been Yale (first) and Harvard (second) at the top. A more celebrated example involves the ranking of the undergraduate program at the California Institute of Technology. In 1999, the U.S. News statisticians made an obscure change in the way the magazine plugged spending per student into its overall score computation. As a result, Caltech (which spends much more per student than its peers) vaulted from ninth place in 1999 to first place in 2000. Oops! Soon Caltech settled back to its “proper” position in the pecking order, below the perennial top dogs.
The Caltech episode illustrates a related problem: buyer’s remorse. Since a college’s numerical position in the hierarchy can bounce around from year to year, often for reasons that bear no relation to changes in its underlying quality, applicants who rely on those numbers to make college choices can get unpleasant surprises. Imagine an applicant who, in 2000, chose Caltech because it was ranked first in U.S. News, in preference to, say, Princeton (then fourth). A year later, that person wakes up to discover that the two institutions have traded places. By graduation time, Princeton is still first, while Caltech has sunk to eighth.
Problem No. 6: One Size Doesn’t Fit All; the ‘Best College’ Illusion
Just as there is no single best stew, there can be no single best college. It takes real chutzpah to claim that a formula comprising arbitrarily chosen factors and weights, which keep changing from year to year, can produce a single, all-purpose measure of institutional quality. Of course, all of the rankocrats concede this fact and take pains to advise readers to use their numerical listings only as a starting point in the search, not as an absolute method for making decisions. In service to that advice, most publications offer numerous single-dimension assessments in addition to their comprehensive best-colleges lists. And many of them supply tools to help prospective applicants construct even more-personalized intercollege matchups. (Usually for a fee, of course.)
And yet all of the rankers use their best-colleges lists as public-relations bait to hook their audiences. By the time curious readers get to the underlying information and the specialized rankings, they have been told by a seemingly authoritative organization what the correct ordering of colleges is, from best to worst. The unstated message comes through loud and clear: “Berkeley is better than USC. Ignore that relative assessment at your peril.”
What we have, in sum, is a group of popular rankings that simplify the complexity of evaluating a college’s performance by arbitrarily selecting a collection of measures, many of which overlap substantially, and then assigning equally arbitrary weights in order to purée them together into a single offering. The result is a tasteless mush."
