Saturday, September 24, 2011

FTL travel?

The discovery that particles may be traveling faster than the speed of light is still preliminary. But it cannot stop the imagination. So, spin up the FTL drives, folks, we hope to go on a magic carpet ride.

Advice on crime prevention

I have heard of the following:
  1. Leave your lights on - a) this will deter burglars since they will think some one is home, but b) won’t they also be able to see directly that no one is home? or provide the light they need to break into the house?
  2. Don’t plant shrubs near your windows or doors - a) this will provide hiding places for them, but b) won’t this also prevent them from getting too close to the windows and doors?
  3. Get steel doors and have good locks - err but can’t they just bust a window like they did to us?
If I had a choice of what to live in, it would be an earthship, with commercial grade glass - the ones used for office buildings - for doors and windows.

Day 2 of the day after

Was it a coincidence that I read this the day after?

Burglaries are up nine percent in the 4th Police District, which includes Shepherd Park, this year, according to police statistics. Citywide, they have increased by 14 percent. In 2010, property crime rose in the District while violent crime fell, according to FBI statistics.

Residents peppered the officers with questions and concerns. “I’m afraid to be in my own home again,” one woman said, recalling a series of break-ins last year.

I know that feeling.

Friday, September 23, 2011

Jobs versus work

Is there a difference?
I have a job. I have work.
We go to work, we go to our jobs.
I’ve got to work this weekend. I have a job to do.
I work from home. I have a job from home.
Is one more meaningful than the other?

These thoughts arise mainly out of the work (job?) that was done in our home remodel. In my mind, construction - working with hands - seem so much more rewarding than … what, putting out another study? “A study today finds that ….” In many ways, the word craftsmen describes those who work in the construction industry (among others). The older CPS data used to describe some workers in production jobs/work as “craftsmen and other kindred workers”. Perhaps this is why despite how much I despise painting (and yes, there’s still plenty of it to be done) I can always look back at it with some measure of satisfaction (even though it can be a horrible paint job).

Kevin Murphy probably has the best of both worlds:
Murphy’s house, 36.5 Mapquest miles southwest of the GSB in New Lenox, Illinois, is filled with his handiwork: elegant wooden cabinets, tables, and shelves, each carefully crafted but with one tiny, deliberate flaw. “I think it adds that handmade touch,” he says, “something personal. I also enjoy pointing them out.”

For years he and his family—wife Arlene, son Chris, daughters Erin and Ellen, and two Jack Russell terriers—lived about 16 miles to the east in the suburb of Flossmoor, where he joined the school board, “the most frustrating thing I’ve ever done,” and coached Little League. Earlier this year they moved farther out, to a heavily wooded subdivision outside New Lenox. In late summer, you can’t see another house from his backyard. Power tools and lumber take up three of the slots in his four-car garage, and the fourth is at risk. His next big home project is to furnish a new study, but that has to wait for the logs, remnants of a dead walnut tree out back, to dry before he cuts them into boards.

Despite the lumberjack look, he is a card-carrying, certified academic. In 1997 he won the John Bates Clark Medal, given every two years to an outstanding economist under 40. Last fall he was named one of 25 recipients of the MacArthur award—a $500,000, unsolicited, no-strings-attached prize popularly known as the “genius” grant.

Thursday, September 22, 2011


Someone broke into our home yesterday. A couple of laptops/electronics around $2000. Except for the digital pictures that were on the computer the rest were pretty much replaceable.  It took MoCo 20 minutes to arrive after the 911 call and we waited outside but the cruiser drove right past us! We had to flag it down!

What I vastly underestimated were the psychological costs. K1 and K2 seemed okay at the time when the police were around but by bed time they were feeling insecure and that is not a pleasant feeling. The feeling that we were unsafe even though the chances of the thief returning are virtually nil. Even more so, the feeling that our house is no longer our home.

Ah, the joys of living in Washington. Perhaps it’s a sign. Or that I need to develop higher tolerance. But small town living ain’t all it’s cracked up to be either:

In the small towns nestled throughout the Ozarks, people like to say that everybody knows everybody’s business — and if they do not, they feel free to offer an educated guess.

But of late, more people in this hardscrabble town of 5,000 have shifted from sharing the latest news and rumors over eggs and coffee to the Mountain Grove Forum on a social media Web site called Topix, where they write and read startlingly negative posts, all cloaked in anonymity, about one another.

And in Dee’s Place, people are not happy. A waitress, Pheobe Best, said that the site had provoked fights and caused divorces. The diner’s owner, Jim Deverell, called Topix a “cesspool of character assassination.” And hearing the conversation, Shane James, the cook, wandered out of the kitchen tense with anger.

His wife, Jennifer, had been the target in a post titled “freak,” he said, which described the mother of two as, among other things, “a methed-out, doped-out whore with AIDS.” Not a word was true, Mr. and Ms. James said, but the consequences were real enough.        

Wednesday, September 21, 2011

Natural beauty

Waterfalls. These seem to be obvious and universal. No matter where or no matter how high or puny these are, all can agree by looking at it that it is a natural beauty.  This was what I was thinking when I was at Artist Point.

Dark matter theory: RIP?

BBC reports:
Scientists' predictions about the mysterious dark matter purported to make up most of the mass of the Universe may have to be revised.

Research on dwarf galaxies suggests they cannot form in the way they do if dark matter exists in the form that the most common model requires it to.

That may mean that the Large Hadron Collider will not be able to spot it.

Scientists' best ideas for the formation and structure of the Universe form what is called the "cosmological standard model", or lambda-CDM - which predicts elementary particles in the form of cold dark matter (CDM).
Prof Carlos Frenk at Durham University, working with … the Virgo Consortium has created computer simulations to visualise how the dwarf galaxies formed, using their assumptions about CDM.
The team found that the final results of these simulations did not at all match what we observe....
Prof Frenk said that after working for 35 years with the predictions of the standard model, he is "losing sleep" over the results of the simulations.
But he believes he has found a solution to the CDM problem. He proposes that instead of "cold" dark matter that formed within the first one millionth of a second after the Big Bang, the Universe may instead be filled with warm dark matter (WDM).

Meanwhile at the other “science”:

One of the biggest issues confronting international macroeconomists is whether or not the large and persistent U.S. current account deficits are sustainable.

[One possible reconciliation is the]... the “dark matter” view of Hausmann and Sturzenegger (2007), henceforth HS. HS propose an alternative method to computing net international positions and current accounts.

… from a relative reliability perspective the dark matter view can be quickly dispensed with. HS suggest that the external position for all asset types should be estimated by capitalizing income at a common discount rate. They then compute the net position from  these capitalized values, and form the current account as the year-to-year change in their constructed net position. This explicitly assumes that investment income, a subcomponent of the current account, is the most reliable portion of the entire set of international accounts, and that it is  appropriate to construct positions in this manner. Given that approximately two-thirds of published investment income data are not measured, but are formed by applying estimates (of yields) to estimates (of positions), from a relative reliability perspective dark matter fails. Moreover, while we have sympathy for some parts of the hypothesis, we find the methodology of capitalizing income streams to be questionable. Even if the investment income numbers are entirely reliable, we doubt this method of constructing the current account or position is an improvement over the published estimates.

Tuesday, September 20, 2011

What can license plates say?

While we were at Yellowstone, we saw quite a few cars with Virginia license plates and one with DC tags but none from Maryland indicating that they drove out west.

Can I conclude that Marylanders are less adventurous than Virginians?

Is growth accounting really useless?

I came across this Mankiw’s comment on Oliner, Sichel and Stiroh (2007):

To be honest, in my own life as a practical macroeconomist, I do not spend a lot of time thinking about growth accounting. In fact, I can estimate with a fair degree of precision that I spend fifteen minutes a year on the activity. Those are the fifteen minutes that I teach growth accounting to undergraduate students in my macroeconomics course.

While reading this paper I found myself reflecting on my almost complete lack of attention to the growth accounting literature, to which this paper very ably contributes.

One reason is that this literature seems mired in a host of issues that quickly make a reader’s eyes glaze over. Some of these issues are technical, such as distinctions between gross output and value added and the index number theory that bridges that gap. Others involve data availability, such as the potentially important role of unmeasured intangible capital. Out of necessity, many of these issues get resolved by imposing assumptions on the production process which, although not outlandish, are neither compelling nor verifiable. This paper, for example, at times makes an assumption about the complementarity between information technology and intangible capital that seems to be just pulled out of a hat. But I think there is a more fundamental reason why the growth accounting literature fails to have a larger impact. Even if one grits one’s teeth to make it through all the technical issues, and even if one has enough credulity to buy into all the necessary assumptions, the exercise does not deliver what we really want. Ultimately, God put macroeconomists on earth for two reasons: forecasting and policy analysis. We want to know how the world is likely to look in the future, and we want to know how alternative policies would change the future course of history. Unfortunately, growth accounting contributes relatively little to either forecasting or policy analysis. Instead it is a deeply data-intensive exercise that often gets so deeply enmeshed in its own internal logic that it never returns to the big questions of macroeconomics.

Long ago, some economist—I believe it was Moses Abramovitz—called multifactor productivity “a measure of our ignorance.” That is, we account for changes in capital, labor, labor quality, and the many other determinants of output we can measure, and the changes in output left unexplained are called “multifactor productivity.” But that is really just giving a fancy name to something about which we are pretty clueless. When reading this paper I started playing a game where every time I read the authors say something about “multifactor productivity,” I imagined putting some version of “a measure of our ignorance” in its place.

Let me give an example. At one point the authors write, “MFP growth strengthened in the rest of nonfarm business, adding roughly 3/4 percent-age point to annual labor productivity growth during 2000–06 from its 1995–2000 average.” I rewrote the sentence as follows: “our ignorance strengthened in the rest of nonfarm business, adding roughly 3 ⁄4 percentage point to annual labor productivity growth during 2000–06 from its 1995–2000 average.” Framed in this alternative way, the statement carries an almost comical hollowness. It also makes it clear why statements about multifactor productivity are of limited use for either forecasting or policy analysis. Measured ignorance is probably better than unmeasured ignorance, but it would be a mistake to confuse it for real knowledge.


Self referencing

The NYT had an interesting article about failure being a better teacher than success. The underlying research that it picks up on is the idea of what makes children resilient. Having read the books (which have some good parts as far as practical advice on how to impart resilience), I found the literature to be sometimes self referencing/circular:

For instance (I’m paraphrasing from what I’ve read):
Q. What is resilience?
A. Resilience is a characteristic where someone who fails picks themselves up and tries again and eventually succeeds. This person does not let failures overcome them.
Q. What makes these people succeed in life compared to other people?
A. They are more resilient.
Q. Why are they resilient?
A. Because they do not allow failures to overwhelm them.

Eventually, we escape this circle:
Q. Can we teach resilience?
A. Yes. Here’s how....

A similar problem lies in economics and education when defining effective teachers.
Q. Who are effective teachers?
A. An effective teacher is one who raises the achievement score of its class by one standard deviation or more.
Q. How can teachers be more effective?
A. By raising the achievement score of its classroom by one one standard deviation or more.

Again, there is an escape hatch which is the question that matters most:
Q. Can we teach teachers to be more effective?
A. Perhaps.

Monday, September 19, 2011

City slickers

While we were at Yellowstone, I overheard this:

“Oh my god! A bird!”
“Look, a chipmunk!”

Later we found out that it wasn’t a chipmunk but a ground squirrel.

More jobs lost

Due to technology change:
Motorists’ bane, magnet for thieves, and memorialized in the Beatles’ “Lovely Rita,” the diminutive parking meter has led an outsize life. But its days in New York City are about to expire.

The city will remove its last decommissioned single-space parking meter in Manhattan on Monday, transportation officials said, the start of a yearlong process that will eventually eliminate all the steel-and-sludge-hued meters in the city.
But at the Transportation Department’s repair shop in Maspeth, Queens, where meter surgery is still performed with butter knives and nail files, mechanics are bracing for an era’s end. Stephen Kerney, the shop supervisor, wondered about his team’s fate as he surveyed shelves and tables filled with hundreds of discarded meter innards.
“At one time,” he said, “we were the largest shop in the world.”
Some of the meter shop mechanics will be retrained or reassigned, city officials said.        

Sunday, September 18, 2011

Greek American thoughts

This Economist article seems to imply that the “proper” diagnosis to Greece’s problem is not solely in its profligacy but also the absence of a “proper” political union. The implication is that if there is stronger political will in backing Greece then the uncertainty surrounding the crisis would not be as extensive as it has been and its contagion effects would have been smaller.

The United States is a political and monetary union. States can be profligate but is there really an implicit guarantee from the federal government that states are “too big to fail”? This does not seem to be the case as NYC itself has been on the brink of bankruptcy and no bailout was forthcoming from the federal government. This is also the case with California which has flirted with near bankruptcy for a while. Political union itself therefore does not appear to be a necessary condition for the political will to bail out the profligacy of states. In fact it can be argued that most of the country was ignorant or had more issues on their own plate to pay any attention to the problems of other states.

What’s different about Greece as a nation-state in the European Union and California as a state in the United States? Unfortunately, as they say - don’t know much about history - nor politics of U.S. states but it seems to be that the major difference is that states are not allowed to borrow on the open market. (Is this right?) Certainly, there are no California bonds except perhaps education savings bonds but is not the same as borrowing for general use.

Thursday, September 15, 2011

Rambling thoughts on job creation

In this earlier post, I had wondered how fiscal stimulus would translate into jobs when industries are undergoing structural change from one with a manufacturing base to a service based economy. If we think of structural change as one where the economy is dominated by changes in employment in the same direction before and after a recession (i.e. Groshen and Potter, 2003) we would find that the manufacturing industries have been declining before and after each recession while service based industries have been increasing their share of employment before and after recessions. But why would industries/firms create jobs in the first place, and are manufacturing and service industries different in terms of why they create jobs?

Haltiwanger, Jarmin and Miranda (2010) find that small and young firms are mostly responsible for job creation. They don’t address the question of why jobs are being created and some introspection indicates that they would probably be hiring in order to grow by either product development or revenue enhancement. It is possible that they are experiencing losses when they are doing this and the “up-and-out” hypothesis that Haltiwanger et. al advocates is consistent with the idea that after a certain period, some these firms are overextended and crash and burn.

In a recession or at least in uncertain economic times, these firms are unlikely to overextend or at least be more cautious. This certainly contributes to jobless recoveries. But how is their behavior any different when fiscal stimulus appear to have worked in the past? As previously mentioned, a fiscal stimulus (or a tax cut) that increases AD in manufactured goods shifts the demand for goods and increases the MP of workers therefore increases demand for workers by firms. But with this sector in decline any AD based policy cannot create that many jobs, especially when the bulk of goods are imported from overseas.

One possibility for the jobless recoveries is that job creation is not only concentrated among young and small firms but most of these firms are in the service sector (unfortunately, Haltiwanger et. al. do not break their study down by sectors). If this is indeed the case, then why and when would these firms engage in job creation? Does demand for services respond as elastically as goods? If not then fiscal stimulus/tax cuts would not increase demand as much and hence would not create many jobs.

In any case, it is unclear to me whether any policy can actually spur job creation given that uncertainty faced by small young firms are as much (or perhaps even more so) a matter of perception as it is of reality. Moreover, in order to create more jobs, the economy needs to also create more firms. But why firms and jobs are created is not a very well understood phenomenon. (the former falls under the study of entrepreneurship, but the dot-com bubble and the growing importance of ICT industries may have biased studies toward high-tech start-ups rather than firm formation in general.)

Wednesday, September 14, 2011

What I’ve been reading

  1. Nineteenth Street NW by Rex Ghosh: The characters were somewhat cliched and the plot predictable but Ghosh writes well. In a way the biggest weakness of the book was to focus more on the financial “thriller” aspect rather than character development. There were flashes of character development that were worth exploring and might have worked better if the book had been turned  into some kind of a “drama” rather than a thriller.
  2. The Curious Incident of the Dog in the Nighttime by Mark Haddon: Somewhat enjoyable. I am a little divided on this in that while the plot was predictable I felt baited and switched for some inexplicable reason. There was a somewhat unexpected reference to Malaysia when the protagonist talked about “orang utans” which took me by surprise.
  3. Case Histories by Kate Atkinson: I was taken in by all the endorsements, especially Stephen King’s: “Not just the best novel I read this year, but the best mystery of the decade..... I defy any reader not to feel a combination of delight and amazement.” In my case, I felt neither - in fact I felt deceived. This was chick lit disguised as a mystery. If it had been just chick lit I might have enjoyed it but the fact that it was being marketed as a mystery was a huge letdown. What was especially annoying is the device the author uses to keep the reader reading is to withhold key facts to be revealed later. I can take this once or twice in a book but she does this continuously through the use of flash backs and different points of views. Generally I feel that the reader should know what the protagonist knows the same time the character in the book knows it.
  4. The Geography of Bliss by Eric Weiner: This was enjoyable and good for a few chuckles. I read this while we were in Yellowstone and it’s a good vacation book.
  5. China Mountain Zhang by Maureen McHugh: I had to include the links because I am not quite sure to make of it. It was a good read and I agree with the review that says its a lot like reading Kim Stanley Robinson. Nothing much really happens but the setting and description of life in the future with China being the dominant economic force and America under socialist influences were particularly interesting.
  6. The Peace War and Marooned in Realtime by Vernor Vinge: Pretty good reads but not “deep” in the sense of McHugh’s book. Some have described Vinge as “hard SF” but I did not find these to be the case, especially compared to Charles Stross’ Accelerando.

How to use replicate weights with SAS - American Community Survey or Current Population SurveyFor some reason, there are negative replicate weights in the ACS data. (I don’t know if this is the case with the CPS data.) data acs; set a.acs; array temp(*) pwgtp1-pwgtp80; do i = 1 to dim(temp); if temp(i) < 0 then temp(i)=0; end; run; proc surveymeans data = indiana varmethod=jackknife; var agep; weight pwgtp; repweights pwgtp1-pwgtp80 / jkcoefs=0.05; run; The value for jkcoefs (4/80=0.05) comes from the documentation for variance estimation (chapter 12 of the design methodology):

For some reason, there are negative replicate weights in the ACS data. (I don’t know if this is the case with the CPS data.) See also IPUMS.

data acs;
 set a.acs;
 array temp(*) pwgtp1-pwgtp80;

 do i = 1 to dim(temp);
   if temp(i) < 0 then temp(i)=0;

proc surveymeans data = indiana varmethod=jackknife;
var agep;
weight pwgtp;
repweights pwgtp1-pwgtp80 / jkcoefs=0.05;

The value for jkcoefs (4/80=0.05) comes from the documentation for variance estimation (chapter 12 of the design methodology):
Update: I believe the following statements will also work but haven't verified this:

proc surveymeans data = indiana varmethod=brr (fay=0.5);
var agep;
weight pwgtp;
repweights pwgtp1-pwgtp80;

Tuesday, September 13, 2011

What is tolerance?

That is the emotion.
Is it ignoring something that bothers us?
Or is it thinking about it and then letting it go, saying “never mind

Or in theoretical terms, is it something called a decreasing increasing marginal disutility of a bad. We know what a good is - it is something that confers utility albeit with diminishing marginal returns. So a bad is something that increases our disutility. Tolerance is how quickly (or slowly) our marginal disutility increases, i.e. the second derivative is positive. A tolerant person is therefore someone whose second derivative of a bad is actually negative.

Some examples:
I’ve driven eight hours to get to my destination. Two miles from where I am supposed to be I encounter some heavy traffic. Every additional car or traffic light that goes against me increases my disutility. I am therefore intolerant. Alternatively, I say to myself, “I’ve already driven eight hours, what’s another couple of minutes.” Does this mean I am tolerant?

A hurricane just hit and we’ve lost power. After several days we get increasingly impatient and less tolerant. As more and more people get their power back except us (peer effects), each minute increases our disutility. Some greens move into our neighborhood. We don’t like those greens, but as more and more of them start moving in we become used to their presence. We are more tolerant.

But tolerance can also be tempered by constant exposure to hardship. Sometimes this is referred to as resilience. So we start off as being intolerant but exposure to lack of our creature comforts can harden some of us and at the same time make others less able to cope. Is this tolerance?

In economics, bads are the realm of public economics and analysis is usually confined to public bads, e.g. pollution, noise, etc. But the above examples are private bads. Is there any role for taxation/subsidy or regulation to increase the overall level of tolerance of a society? Should there be a role?

Monday, September 12, 2011

Three books on consulting

The three books are:
  1. Consulting Demons by Lewis Pinault
  2. Dangerous Company by James O’Shea and Charles Madigan
  3. The Witch Doctors by John Micklewait and Adrian Wooldridge
Pinault’s book is a personal look at the consulting industry and was the most enjoyable read. Not surprisingly it is apparently the only one out of the three that are still in print. While the subtitle of the book is “Inside the Unscrupulous World of Global Corporate Consulting”, to me it was no more unscrupulous than say the current subprime crisis. Ah yes, they are only all rationally responding to incentives. There was a surprising reference to Malaysia and Kuala Lumpur in the book while Pinault was in Singapore. He referred to going to a trip as ‘going out-station’. Yes, that was and probably still is the phrase we used when growing up. Surprisingly, management guru CK Prahalad did not come out well in this book. He was caricatured as a “self-help tear-them-down-then-build-them-up’ personality that bordered on messianic and maniacal.

In contrast to the up close and personal look of Pinault, O’Shea and Madigan, whose book is subtitled ‘Management Consultants and the Businesses they Save and Ruin’, take a look at a series of consulting ‘projects’ (if you will) or rather what happened to various companies who retained the the ‘expertise’ of management consultants. Some of the cases such as Bain and Company’s relationship with Guiness and the role they played in the Distiller takeover are recounted. This was interesting for me since it was the first time reading it. Likewise an account of how Figgie International went into bankruptcy as a result of too many consultants trying to do too much was also entertaining. Everything else was rather so-so. The authors tried to cover each large consulting firm through the lens of a company it advised and this approach can be interesting or not and mostly it was not. Many of the cases such as Gemini Consulting’s work with Cigna was at the time, too much in its infancy to draw any strong conclusions.

The last book (by which time I think I already had my fill) was subtitled ‘Making Sense of the Management Gurus’. This was written in a historical context beginning with Frederick Taylor but focusing on and Peter Drucker and Tom Peters. In many ways, it is a journalist’s attempt at synthesizing the fads that seem to come and go in management theory. They do an admirable job - and what they say is for the most part sensible. For instance, they don’t condemn all the reorganization fad that consultants sold and companies fell for. They note when it worked and when it didn’t as well as why it worked at this time but not at another time and so forth. However, they also fall into what I consider a journalistic trap of something that is quirky and unexpected must therefore be good. One example is the a company that sends its managers to Disney to be imagineers for a week (or something similar). They don’t say this good or bad, yet their citing it seems to indicate that they think that this novel approach is something to be celebrated. Their attempt is mainly a synthesis by anecdotes or rather management theory by anecdotes which perhaps is all management consulting is.

Sunday, September 11, 2011

Sept 11

I can’t do September 11 - whatever do is. All these memorials, television specials, magazine special issues... Why do we want to “remember” such an awful day. The anniversary (and the days before it) has brought back a lot of emotion from that day and the days afterwards. The pessimism, the grief, the anxiety... This day will be remembered and remembered and remembered but I’ll try to push it all away.

K1 was only 2 and yet she found enough meaning(?) in Sept 11 to celebrate(!) OBL’s death. I was neither celebrating nor was I disappointed. I just accepted. Perhaps this is what I should do.

Saturday, September 10, 2011

Half full or half empty

The difference between optimism and pessimism from the view of Generation Limbo
Half full:
WHEN Stephanie Kelly, a 2009 graduate of the University of Florida, looked for a job in her chosen field, advertising, she found few prospects and even fewer takers. So now she has two jobs: as a part-time “senior secretary” at the Florida Museum of Natural History in Gainesville and a freelance gig writing for, a “secret Santa” Web site.

But is Ms. Kelly stressed out about the lack of a career path she spent four years preparing for? Not at all. Instead, she has come to appreciate her life. “I can cook and write at my own pace,” she said. “I kind of like that about my life.”

Likewise, Amy Klein, who graduated from Harvard in 2007 with a degree in English literature, couldn’t find a job in publishing. At one point, she had applied for an editorial-assistant job at Gourmet magazine. Less than two weeks later, Condé Nast shut down that 68- year-old magazine. “So much for that job application,” said Ms. Klein, now 26.

One night she bumped into a friend, who asked her to join a punk rock band, Titus Andronicus, as a guitarist. Once, that might have been considered professional suicide. But weighed against a dreary day job, music suddenly held considerable appeal. So last spring, she sublet her room in the Fort Greene section of Brooklyn and toured the country in an old Chevy minivan.

“I’m fulfilling my artistic goals,” Ms. Klein said.        

Half empty:
“We did everything we were supposed to,” said Stephanie Morales, 23, who graduated from Dartmouth College in 2009 with hopes of working in the arts. Instead she ended up waiting tables at a Chart House restaurant in Weehawken, N.J., earning $2.17 an hour plus tips, to pay off her student loans. “What was the point of working so hard for 22 years if there was nothing out there?” said Ms. Morales, who is now a paralegal and plans on attending law school.

Some of Ms. Morales’s classmates have found themselves on welfare. “You don’t expect someone who just spent four years in Ivy League schools to be on food stamps,” said Ms. Morales, who estimates that a half-dozen of her friends are on the Supplemental Nutrition Assistance Program. A few are even helping younger graduates figure out how to apply. “We are passing on these traditions on how to work in the adult world as working poor,” Ms. Morales said.        


Sarah Weinstein, 25, a 2008 graduate of Boston University, manages a bar in Austin because she couldn’t find an advertising job. In her spare time, she volunteers, doing media relations for Austin Pets Alive, an animal rescue shelter.

“It’d be nice to make more money,” Ms. Weinstein said, but “I prefer it this way so that I have the extra time to spend volunteering and pursuing other things.” Volunteering, however, goes only so far. After three years without an advertising job, she is now applying to graduate school to freshen up her résumé.   

For Geo Wyeth, 27, who graduated from Yale in 2007, that means adopting a do-it-yourself approach to his career. After college, he worked at an Apple Store in New York as a salesclerk and trainer, while furthering his music career in an experimental rock band. He has observed, he said, a shift among his peers away from the corporate track and toward a more artistic mentality.

“You have to make opportunities happen for yourself, and I think a lot of my classmates weren’t thinking in that way,” he said. “It’s the equivalent of setting up your own lemonade stand.”        
Whatever happened to the free-agent nation?