Monthly Archives: May 2017

The Supreme Court Ends Patent Troll Friendly Forum Shopping

Walter Olson reports:

This morning’s Supreme Court opinion in TC Heartland v. Kraft Foods… A unanimous Court (8-0, Thomas writing, Gorsuch not participating) rejected the broad reading of a venue statute by which the Federal Circuit had empowered lawyers to forum-shop disputes from all over the country into a few decidedly pro-plaintiff venues, above all the largely rural Eastern District of Texas. From here out, defendants can still be sued in a district such as E.D. Tex. if they have a regular and established place of business in it, but the decision is likely to shrink what I called in my January preview a “jackpot patent litigation sector… that shifts around billions of dollars.” By redirecting cases into more neutral venues, it should bring outcomes closer to reflecting cases’ actual merits, which would in turn do much toward restoring confidence in this sector of the law…

New Record High Revenue per Student for Public Colleges in Fiscal Year 2016

Reanalysis of SHEEO data reveal that public college revenue per student reached a new record high for the second year in a row. For the most recent year (fiscal year 2016), revenues increased by $140 to set the new record of $13,259.

(Previous posts describe why reanalysis of SHEEO data is necessary – to adjust for inflation rather than costs.)

Three points stand out from this reanalysis.

  1. There is a small upward trend in revenue per student at public colleges.

As the chart below shows, there is a slight upward trend in revenue per student at public colleges. Revenue in 2016, was $2,789 higher than in 1991, an average increase of $107 per year.

  1. There is no long-term trend of state disinvestment. State funding is cyclical while tuition revenue steadily increases.

The second chart unstacks the bars by revenue source which makes it easier to see two things.

First, despite numerous assertions to the contrary, there is no long-term trend of state disinvestment in higher education. While educational appropriations in 2016 were $780 less than in 1991, the pattern is driven by the business cycle rather than showing a consistent long run trend. Indeed, appropriations are up $885 from the recession low of 2012.

Second, in contrast to changes in state funding, which swing from positive to negative with the business cycle, tuition almost always increases. Only two years saw decreases in tuition revenue (2000 and 2008). In 2016, tuition revenue per student was $3,569 higher than in 1991, an average annual increase of $137.

  1. Increases in tuition are not driven by changes in state funding.

Declines in state funding are the most common explanation for why tuition keeps increasing. But as the chart below shows, there is little relationship between the two. Each year label illustrates the change in state funding and the change in tuition revenue for that year. For example, the 2012 in the upper left corner indicates that between 2011 and 2012, state funding per student fell by $645 and tuition revenue per student increased by $391.

If tuition increased to offset declines in state funding, then each of the years should fall along the red line, which simply plots a $1 for $1 relationship. But statistical analysis does not support the idea that changes in tuition are driven by changes in state funding. In fact, historically, tuition only changes by 8 cents when state funding changes by $1, as shown in the blue line, a relationship that is not even statistically significant at conventional levels (p = 0.27). A more promising avenue for exploration is hinted at by the intercept term ($140, p < 0.01), which indicates that even if there is no change in state funding, tuition revenue would still increase by $140. Figuring out what’s driving this result is more likely to yield solutions to the problem of rising tuition than continuing to believe in the myth that tuition increases are driven by cuts in state funding.

Recalling when the NYT hinted that inventor Thomas Edison should be hanged

From a 1878 New York Times editorial:

Something ought to be done to Mr. EDISON, and there is a growing conviction that it had better be done with a hemp rope. Mr. EDISON has invented too many things, and almost without exception they are things of the most deleterious character. He has been addicted to electricity for many years, and it is not very long ago that he became notorious for having… invented the phone- graph, a machine that catches the lightest whisper of conversation and stores it up, so that at any future time it can be brought out…

Thanks to Mr. Edison’s perverted ingenuity, this has not only become a literal truth, but every shelf, closet, or floor may now have its concealed phonographic ears…

 The phonograph was, at the time of its invention, the most terrible example of depraved ingenuity which the world had seen; but Mr. EDISON has since reached a still more conspicuous peak of scientific infamy by inventing the aerophone–an instrument far more devastating in its effects and fraught with the destruction of human society…

 From morning till midnight our ears will be tortured with the uproar of aerophonic talk, and deaf men will be looked upon as the favored few to whom nature has made life tolerable…

 The result will be the complete disorganization of society. Men and women will flee from civilization and seek in the silence of the forest relief from the roar of count- less aerophones. Business, marriage, and all social amusements will be thrown aside, except by totally deaf men, and America will retrogade to the Stone Age with frightful rapidity... Far better is it to starve in solitude than to possess all the luxuries of civilization at the price of hearing every remark that is made within a radius of four miles…

Thomas Babington Macaulay on copyright extensions (circa 1841)

Thomas Babington Macaulay:

The question of copyright. Sir, like most questions of civil prudence, is neither black nor white, but gray. The system of copyright has great advantages and great disadvantages; and it is our business to ascertain what these are, and then to make an arrangement under which the advantages may be as far as possible secured, and the disadvantages as far as possible excluded…

The advantages arising from a system of copyright are obvious. It is desirable that we should have a supply of good books; we cannot have such a supply unless men of letters are liberally remunerated: and the least objectionable way of remunerating them is by means of copyright…

Copyright is monopoly, and produces all the effects which the general voice of mankind attributes to monopoly…

monopoly is an evil. For the sake of the good we must submit to the evil; but the evil ought not to last a day longer than is necessary for the purpose of securing the good…

the evil effects of the monopoly are proportioned to the length of its duration. But the good effects for the sake of which we bear with the evil effects are by no means proportioned to the length of its duration. A monopoly of sixty years produces twice as much evil as a monopoly of thirty years, and thrice as much evil as a monopoly of twenty years. But it is by no means the fact that a posthumous monopoly of sixty years gives to an author thrice as much pleasure and thrice as strong a motive as a posthumous monopoly of twenty years. On the contrary, the difference is so small as to be hardly perceptible…

The principle of copyright is this. It is a tax on readers for the purpose of giving a bounty to writers… I admit, however, the necessity of giving a bounty to genius and learning. In order to give such a bounty, I willingly submit even to this severe and burdensome tax…My complaint is, that my honorable and learned friend doubles, triples, quadruples, the tax, and makes scarcely any perceptible addition to the bounty…

an evil, which is perhaps more to be apprehended when an author’s copyright remains in the hands of his family, than when it is transferred to booksellers. I seriously fear that, if such a measure as this should be adopted, many valuable works will be either totally suppressed or grievously mutilated…

Just as the absurd Acts which prohibited the sale of game were virtually repealed by the poacher, just as many absurd revenue Acts have been virtually repealed by the smuggler, so will this law be virtually repealed by piratical booksellers…

At present the holder of copyright has the public feeling on his side. Those who invade copyright are regarded as knaves who take the bread out of the mouths of deserving men… Pass this law: and that feeling is at an end… once it ceases to be considered as wrong and discreditable to invade literary property, no person can say where the invasion will stop. The public seldom makes nice distinctions. The wholesome copyright which now exists will share in the disgrace and danger of the new copyright which you are about to create. And you will find that, in attempting to impose unreasonable restraints on the reprinting of the works of the dead, you have, to a great extent, annulled those restraints which now prevent men from pillaging and defrauding the living.

The College Transparency Act would be the best thing to happen to higher education in years

Melissa Korn of the WSJ reports that

legislation that would overturn a decade-old ban on collecting individual student data that track enrollment, completion and graduate success…

The bill, the College Transparency Act…

The legislation is backed by a number of higher-education industry groups, including the Association of Public and Land-grant Universities, the American Association of Community Colleges and the National Association of Student Financial Aid Administrators…

This would be a huge improvement for higher education. As I wrote in Minding the Campus a few years ago:

The fact that we spend hundreds of billions of taxpayer dollars on higher education and can’t determine something as basic as a national graduation rate is a dereliction of duty. The solution to this problem is deceptively simple: turn to Student Unit Records. SURs are straightforward – they are databases that assign each student an individual number so that their educational history can be tracked. With a SUR, the pace of part-time students could be accounted for, and transfer students would no longer vanish, making it possible to calculate an accurate and meaningful graduation rate.

There’s a second advantage from having a SUR: it would allow a better understanding of each college’s and even each program’s performance. For example, while post-college earnings are certainly not the only thing that matters, they are an important consideration for many students. Matching educational records from a SUR with earnings data from the IRS would allow for accurate employment outcomes to be published for each college and program. Such information would help students make better decisions which would in turn help discipline and focus colleges. This can’t be done without a SUR.

There are two main groups opposed to SUR. The first are colleges. In an unusual alliance, both the best and the worst colleges fear SURs. The bad colleges like being able to say things like “Our 9% official graduation rate ignores transfer students and is therefore not an accurate depiction of the quality of our college.” The fact that they oppose a SUR system which would allow for accurate graduation rates to be calculated tells us that they are more interested in maintaining plausible excuses than in actually finding an accurate number. Meanwhile, the best colleges are terrified of being compared to other schools on something like value added earnings. At best, such a comparison would confirm that they are indeed the best. But a comparison might show that they do not deserve to be on top, and they are terrified that some no name college will be shown to be just as good or better. Thus, for top colleges, there is nothing to gain, and potentially everything to lose from such comparisons. While colleges’ opposition to SURs are understandable, there is absolutely no reason for policymakers to indulge them.

The second group opposed to SURs are Republicans concerned about privacy violations. To an extent these were legitimate concerns as any database has potential privacy issues. But recently, convincing methods of safeguarding privacy while implementing a SUR have been developed. Republican Governor of Virginia Bob McDonnell has done great work in this area, as has Democratic U.S. Senator Ron Wyden and Republican U.S. Representative Duncan Hunter. The Republicans that have opposed SURs to date deserve credit for ensuring that privacy was taken into account, but it is now time to acknowledge that their concerns have been addressed.

America has some great colleges that are the envy of the world. But we also have some terrible colleges that waste student and taxpayer money. A SUR would help us separate the wheat from the chaff.