Monday, May 30, 2016

EU Defenders Spreading Nonsense

The EU defenders, who oppose the Brits leaving the EU, are repeating the same nonsense that bureaucrats always resort to.  They are claiming economic disaster if the Brits walk.

That is completely ridiculous.  There has been no real boom from joining the EU and there will be no economic collapse when they leave.

In fact, freed from the expense of the EU bureacracy, the average British taxpayer will have one more useless expenditure to deal with. 

Even better, the Brits need not turn over the sovereignty decisions on who can or cannot enter Britain to the unelected bureaucracy in Brussels.  That is the issue that stirs the Brexit folks and rightly,  People have a right to decide their own immigration policies.  You may not like what they decide, but the Brits should make that decision, not Brussels.

Sunday, May 29, 2016

CUNY and the End of An Era

There is an interesting story today in the New York Times about the budget woes at CUNY, the once-famous college for New Yorkers, who come from less-wealthy backgrounds. CUNY, originially known as CCNY, produced some brilliant scholars and many successful business entrepreneurs over its rich history.  Now, it is becoming a delapidated relic of itself.

Why?

The story, like most stories about the modern university system, looks at the "decline" in state funding.  There is, of course, no decline in state spending -- at CUNY or anywhere else.  What is declining is the percentage of school costs paid by the state.  And why is that declining?  Because the denominator -- spending -- is racing off to infinity.

Administrative budgets have ballooned in the last decade or so and spending on non-educational parts of these schools has mushroomed.  Spending on what you and I would think of as education has actually declined in real terms.  Chalk and classroom space are actually pretty cheap and have not been increasing in cost.

But take a look at administrative expenses at any of these places.  They are completely out of control.  Not only do the university presidents and deans have compensation packages that would make Wall Streeters blush, but their are a host of new centers, multi-cultural deans and staff, gender equality operations, and micro-aggression police forces on campuses.  These costs are enormous and contribute little or nothing to the education process.  These are mostly political centers, meant to influence student opinion on political matters.

The system of tenure makes sure that competent faculty are kept from competing for spots in the modern university.  What tenure means is pretty simple.  If someone else can do the job better than you can for less pay, so what?  You have tenure, so you can pretty much do what you want.  Notice who wins in this system.  Certainly not the education process.

Tenure was supposed to protect the political freedom of faculty.  Since almost 100 percent of the modern faculty have the same political identity -- moderate left to far left -- the protection afforded for those that don't share this monolithic view of the world are kept out.  Tenure, in fact, serves to keep diverse views from being represented at the modern university.  It also protects incompetence.


So, CUNY is going down the drain.  They will eventually have a lot of company as wealthy donors and unwitting taxpayers lose interest in supporting a modern club med for one-percenter administrators, tenure-protected faculty, and the plethora of university centers designed to separate one student from another.

With the rise of the internet, gaining knowledge has actually become ridiculously cheap.  It is only in the modern university, that education, what's left of it, has become so extraordinarily expensive.  That's because the modern university is less and less about education and more and more about social experience and the promotion of political ideology.

Saturday, May 28, 2016

Musings from Paris

Most everyone in Paris dresses in dark clothing, likely for good reason.  The future here is not bright unless you are installed in the massive bureacracy, a sinecure for life, or you come from wealth.  If you are not one of those, you are flat out of luck.  The same is true pretty much across the European plain.  In some countries, the chickens have already come home to roost -- Greece, and to a lesser extent, Spain and Italy.

The combination of stifling government regulations, enlarged by the Brussels regime of the European union, has all but wiped out innovation and change in the European continent.  Those Americans who believe that this is the best of all worlds should come visit (and listen to European TV).  The problems in the health care system and the fruits of denying economic opportunity to millions of Europeans are displayed daily.

Yes, Europe is great if you're set.  But, it's a disaster if you're not set.

Once free markets are obliterated, which they pretty much are in Europe, those without have no way to join those within.  These societies are totally economically stratified.

This is the direction that those who seek more and more regulations want to take the US.  By and large, those advocating more regulations come from the most comfortable section of the American society.  That's why students at elite colleges are in the forefront of the advocacy for more stifling legislation, aimed at shutting down opportunities for the poor.  Higher minimum wages effectively lock the poor out of any hope of moving into the middle class.

Eventually the politically centrist parties lose their clout as increasing numbers of their constituency realize that there is no hope for themselves.  In the US, that explains a lot of the Trump-Sanders appeal.  If there is no outlet for moving up the ladder because of an overzealous government, then the next step is to move to what appear to be more extreme political alternatives.  The recent vote in Austria is a clear indication of where this is all heading, as the Greeks demonstrated two years ago.

There isn't any path toward opportunity that doesn't include free markets.  There are no historical examples of middle class enlargement without free markets.  The world is rife with examples of entrenched bureaucracies trampling on the opportunities of the less privileged.

It's no wonder that American politics is now dominated by two extremely wealthy partisans -- Hillary Clinton and Donald Trump.

If you want to see where this is headed, come to Europe.  To cut to the chase, visit Greece first.

Thursday, May 26, 2016

Don't Get Excited About the Stock Market

At the end of the day, as they say, economic stagnation cannot bode well for business profits and future stock price growth.

The US and Europe are mired in a sinkhole of their own creation.  The US has regulated itself out of any hope of real economic progress.  The bureaucrats and the wealthy will do fine, but everyone else is left to fend for themselves with a declining economic pie.  This has been case for decades in Europe.

There are potentially catastrophic winds on the horizon.  Debt is the problem.  The massive wealth transfers that are now built into US and European fiscal policy are unsustainable and will prohibit any future economic growth of any substance.

The stock market, near its all time highs, is not a buy.

Scare Tactics Plague Brexit Vote

The European Union is a sinking ship and the Brits would be smart to abandon the EU.  All the scare talk about British home prices dropping twenty percent are pure nonsense.  The argument for that is based upon no economic analysis at all.  It is similar to the argument that raising prices has no impact upon demand (which is what the higher minimum wage advocates argue).  No wonder voters no longer listen to the established political leadership.  They just make up whatever stories they wish to justify their hegemony.

The problem with the European Union is the same problem that has developed in the American economy over the last half century.  Increasingly, more and more regulations, about everything, defeat the purpose of a common economic union.  In the US, Washington DC has taken over, even to the extent of regulating the use of bathrooms.  It's truly amazing.  Their is very little left for local folks to decide on.

Consider the American school system.  Local schools have zero autonomy.  Most of their marginal budget decisions are driven by federal mandates.  Increasingly that argument is applied to private as well as public schools.  Arbitrary executive mandates, without legislative authorization, deny local citizens the right to make their own decisions.

While everyone likes free trade zones, that isn't really what goes on in the European Union.  Worse, things like the Greek bailout, which could never, ever have occurred without the Eurozone and its larger partner the EU, have plunged Europe into a land of increasing debt and declining local sovereignty.  Who runs Greece today?

The Brits should bail to protect themselves from Brussels' bureaucrats.  This unholy alliance of bureaucrats and leftist politicians have destroyed any chance of economic growth in Europe and left younger people with no future, unless they were born with wealth in the first place or have personal ties to the bureaucracy.  Why would the Brits want to be a part of that?

Tuesday, May 24, 2016

Media Bias Is Everywhere

The latest evidence of media bias or media incompetence, sometimes it is hard to tell which is more pervasive, is the Associated Press story today about "disparate access" to retirement savings programs.  The story is complete and utter nonsense, as are many AP stories.

The truth is that everyone in the US has access to a retirement savings program if they have a cell phone or a computer or knows anyone that does.  The subset of the population not fitting into this category probably has nothing to save with, so they don't need access, they need money.

The effort to show discrimination in every nook and cranny of our lives typically results in rewarding incompetence, sloth, mendacity.  The AP is a master of that effort.

Friday, May 20, 2016

Blinder Puts on The Blinders

Princeton economist Alan Blinder, former Vice Chairman of the Fed, was quoted today in today's New York Times:

“Students learn in Economics 101 that lower taxes and/or higher levels of government spending can mitigate recessions by boosting aggregate demand,” he writes. “That simple Keynesian idea should be no more controversial today than Darwinian natural selection or global warming.”

Leaving aside Darwinian natural selection, Blinder is right on target.  Economics 101 teaches complete nonsense about macroeconomic policy.  If higher levels of government spending worked, as a macroeconomic policy, we and Europe would be in Nirvana.  The enormous growth in government over the past 40 years has lead to a dramatic reduction in economic growth.

Using the term "aggregate demand" is a fudge.  No one really knows what that term means -- neither did Keynes.  But, one thing we know: increasing government spending, as a policy, is a fools game.  If that worked, Venezuela would be the richest country in the world.

The reason Blinder is right on target is that global warming is another of the left's hopeful excuses to limit the economic potential of the world economy.  Blinder and others like him relish the idea of stunting economic growth for the masses so that they can preserve their own hegemony.  You don't see very many poor people or lower or middle income people carrying banners about global warming.

It is the wealthy and the elite who fancy the global warming alarms.  Throw in protected academics, insulated from competing with others for their jobs.  These elite snobs are the real champions of the religion known as global warming.  Unfortunately, the scientific backup for this is best described as slim to none.  What little trends were in the data have all but disappeared.  Even if the trend of the last decade of the last century had persisted, it is largely irrelevant.

We have billions of years of history of carbon dioxide penetration of the atmosphere and its impact upon global temperatures.  In fact, throughout most of the history of the earth, carbon dioxide had much, much higher penetration of the atmosphere than the pitifully small amounts of today that so alarm the elite.  We also have temperature data for this history.  Guess what?  No relationship -- at all!

So, yes, Professor Blinder.  The idea that big government promotes economic growth is about as valid as the "science" of global warming.  They are both religious tenets of the religion of the wealthy and the elite leftists who promote this nonsense.