We’ve been in a bull market for Treasury Bonds since the late 1970s, and, as a student pointed out to me recently, and I think I can confirm, we’ve been in a bull market for academic grades too.

As long-term rates have compressed towards zero, so have grades compressed towards A and even A+.

In grad school, many universities consider anything below an A- the moral equivalent of an F, even though a B sounds like one note below an A, and expect students to understand that. It’s hard to figure out why this happened — I remember the start of it during the Vietnam war, when low grades might have annulled an academic deferment. But it’s also part of some general feel-good thing. And the subtle pressure of student grading of faculty, and faculty being judged on it.

The day will come, though not too soon, when universities, like ratings agencies, will be held liable for the judgement implied in the grades they hand out.

Meanwhile, we need a new gold standard for grades.