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Brown University becomes latest college to drop SAT, ACT essay for applicants

Brown University becomes latest college to drop SAT, ACT essay for applicants Brown University this week became the latest school to cease requiring prospective students to take SAT and ACT essay tests, joining a burgeoning variety of selective universites and colleges that have eliminated the necessity this current year. Brown was the last Ivy League school to require the writing

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“Affordable” Utility Service: What is Regulation’s Role? Utilizing the nation’s economy stressed, politicians are pressuring regulators to make utility service “affordable.” This picture has three problems. Wealth Redistribution is Not Regulation’s Department Under embedded cost ratemaking, the regulator identifies prudent costs, computes a revenue requirement to pay for those costs, then designs rates to produce the revenue requirement. Rate design makes each customer category bear the expenses it causes. None among these steps—prudent cost identification, revenue requirement computation, cost allocation—involves affordability. Affordability becomes an issue only we lower rates for the unfortunate by raising rates for others if we jigger the numbers—if. Achieving affordability through rate design means cost that is compromising to redistribute wealth. It resembles taxation of just one class to profit another, using this exception: With taxation, citizens can retire representatives whose votes offend; but with utility service, captive customers are stuck aided by the rates regulators set. In place of shifting costs between customer classes, regulators might redistribute wealth in different ways: by “taxing” shareholders, i.e., reducing shareholder returns below the otherwise appropriate level. But taxing shareholders is no more the regulator’s domain than is taxing some other clients. And it’s likely unconstitutional: Having invested to serve the general public, shareholders expect “just compensation,” undiminished by a forced contribution for affordability. Moving money among citizens is important to a fair society. Poverty is intolerable and charity that is private suffices, so government steps in. But helping the luckless should be done by political leaders, who must justify their actions to the electorate; not by professional regulators, whose focus must certanly be industry performance. Affordability of any product—groceries, a Lexus, or utility service—depends on a single’s wealth and income, and on the cost of other products. The poor could better afford utility service when we raised their income and increased their wealth. Or if perhaps we lowered their price of housing, medical care, transportation, or education. However these initiatives are outside regulators’ authority. To help make regulators accountable for affordability is illogical. Cheap Energy is Cheap Politics Politicians who argue for affordability take the easy road. All efforts that increase costs, while commanding the regulator to make service “affordable,” is low-risk politics, responsibility-avoidance politics, cheap politics to legislate economic development, greenness, reliability, energy independence, and technology leadership. When politicians call for “lower rates,” the electorate feels entitled to get as opposed to encouraged to contribute. But no family, no congregation, no society that is civil thrives if its key verb is “take” instead of “give.” So when lower rates now result in higher costs later, citizens become cynical. Self-doubting, also, because they question their ability to differentiate pander from policy. They are the total results when politicians avoid their responsibility for affordability. “Affordability” Undermines Regulation’s Responsibility Mathematician Carson Chow says he is found the explanation for our obesity epidemic: low food prices. Studying 40 years of data, he spotted both causation and correlation between girth growth and value declines. He traced these trends to government farm policy shifts (from spending money on non-production to stimulating production that is full and technology boosts (which lowered production costs). The low the price, the greater amount of production; the greater production, the greater (fast) food; the greater amount of food, the greater amount of calories available; the more calories available, the greater amount of calories consumed. See C. Dreifus, “A Mathematical Challenge to Obesity,” The New York Times (May 14, 2012). We are both over-consuming and under-appreciating: Dr. Chow found that “Americans are wasting food at a progressively increasing rate.” (Fairness point: Chow has his doubters. See Michael Moyer, “The Mathematician’s Obesity Fallacy,” Scientific American (May 15, 2012). What does food want to do with “affordable” utility service? A regulator’s job is always to regulate—to performance that is establish, then align compensation with compliance. In this equation, affordability just isn’t a variable. To create service affordable into the unlucky, the commission would have to lower the cost below cost. That leads to overconsumption, to Dr. Chow’s “waste.” This inefficiency hurts everyone. Economic efficiency exists when no further action can create benefits without increasing costs by a lot more than the huge benefits. Conversely, economic inefficiency exists once we forego some action that, if taken, could make someone best off without making anyone worse off. To over-consume, to waste, to behave inefficiently, to leave good results on the table, makes everyone worse off. Underpricing when you look at the name of affordability makes someone worse off, unnecessarily. How sensible is that? Actions for Affordability: Just The Right Roles for Regulators Unless essential services are affordable, government shall never be credible. Regulators, being section of government, need certainly to help. (A commission staff chief told me 25 years ago, “Sometimes you need to put aside your principles and do what’s right.”) Plus some regulatory statutes explicitly require the regulator which will make service “affordable.” (as it is the scenario, i will be told, in Vanuatu, an 83-island nation in the South Pacific.) Here are three ways, in keeping with economic efficiency, for regulators to deal with affordability. Assist the reduce usage that is unlucky. Regulators can advocate for affordability by pressing for policies that produce consumption less costly, like improved housing stock, “orbs” that signal high prices, and lighting that is efficient appliances. Analogy: Doctors save lives not only by treating gunshot wounds, but by advocating for gun safety. (American Academy of Pediatrics: “The lack of guns from children’s homes and communities is one of reliable and measure that is effective prevent firearm-related injuries. “) Interpret “affordability” as long-term affordability. Getting prices right and preventing overconsumption, even when it does increase prices within the short run, reduces total costs within the long run. Expose the dark side of under-pricing. As opposed to follow politicians along the low-price, low-risk, cheap politics path, regulators, like Dr. Chow, can talk facts: in regards to the real costs of utility service, the problem of overconsumption, the error of under-pricing. With regards to credibility rooted in expertise, regulators can pressure legislators to behave on affordability directly by enacting income-raising policies. Better education, housing, and health care—all these lead to higher incomes, in order that citizens are able to afford utility service priced properly.

“Affordable” Utility Service: What is Regulation’s Role? Utilizing the nation’s economy stressed, politicians are pressuring regulators to make utility service “affordable.” This picture has three problems. Wealth Redistribution is Not Regulation’s Department Under embedded cost ratemaking, the regulator identifies prudent costs, computes a revenue requirement to pay for those costs, then designs rates to produce the revenue requirement. Rate design

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