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Peter Schiff Blasts Paul Krugman

2010-03-17T15:44:20Z

Schiff does a really good job in this 9 minute video pointing out several of Krugman’s fallacious economic assertions. Most of us can learn from it. Besides that, what is really hilarious, is when he suggests that if there was a reverse Nobel prize in which Prizes were taken back for subsequent ill-conceived work and statements, Krugman would top the list.

How Your Twitter Account Could Land You in Jail

2010-03-17T12:21:33Z

Land of the free, huh???

On the afternoon of September 24, 2009, Pennsylvania State Troopers, their guns drawn, broke down the door of room 238 of the CareFree Inn on the outskirts of Pittsburgh. The troopers were acting on a search warrant related to protests planned for the G20 summit—a meeting of the heads of state of the world's major economies. Thousands of protesters had descended on the city, presenting demands ranging from curbs on carbon emissions to the outright abolition of capitalism.

Anticipating hordes of black-masked, Starbucks-smashing anarchists, the Pittsburgh police and the Secret Service coordinated nearly 4,000 law enforcement officers, outfitting them with the latest in riot-dispersal technology. Crowds marching on the summit were met with pepper spray, stun grenades, and—for the first time on US soil—acoustic cannons that blast painful sounds as far as 1,000 feet. But the protesters had their own crowd-control methods, and that's what had brought the state troopers to the CareFree Inn.

What they found when they broke down the door were a couple of middle-aged housemates from Queens, New York. Elliott Madison sat at a desk with a laptop and a cell phone. A police scanner lay nearby...

continued...

http://motherjones.com/politics/2010/03/police-twitter-riots...
Read more...

Dylan Ratigan: Of Course Marijuana Should Be Legal!

2010-03-16T23:07:42Z

Note what else they say: The violence in Mexico is a result of the success of the war on drugs - a US government initiative. The drug lords have been killed! This was extremely destabilizing, like when they took out Sadam. Now there is a power struggle going on that is getting messy and spilling over into the rest of the country. Didn't they see the Godfather?

It seems that their whole mission is to destabilize the entire world. That is certainly the way they are behaving.

If the video had value to you, please donate to Mox News
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Numbers

2010-03-17T00:00:00Z

VC in Brief: Castlevania: Rondo of Blood (TG-16)

2010-03-16T14:15:00Z

As far as imports go, Castlevania: Rondo of Blood is a pretty sweet one. For $9, it's a great game to add to any Castlevania fan's collection and plays quite well on the Wii: casual players get a forgiving save structure and stage system, while the hardcore fans get the same tried-and-true gameplay. Rondo of Blood is suited for quick pick-up sessions or even long marathon outings. Basically: you should play this game. It's good -- seriously good.

Castlevania: Rondo of Blood (Turbografx-16 CD-ROM, 1 player, 900 Wii Points)

Every week, we like to check out what's new on the Virtual Console. We offer VC in Brief as a sort of taste to help you decide whether or not you would want the game in question. We also toss in our own two cents because we're pushy jerks like that.

VC in Brief: Castlevania: Rondo of Blood (TG-16) originally appeared on Joystiq Nintendo on Tue, 16 Mar 2010 09:15:00 EST. Please see our terms for use of feeds.

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Social Security: The Successful Government Program

2010-03-16T03:35:00Z

The other day I heard some federal politician arguing that folks who don't think the government should be running the health care system because government makes a mess out of everything it touches should look at Social Security and Medicare as examples of "successful" government programs.

Time for a reality check.

(Thanks to Melinda).

Misconceptions about Money and Velocity

2010-03-16T10:10:00Z

Inquiring minds are interested in velocity and money. John Mauldin discusses both in The Implications of Velocity. Unfortunately, Mauldin perpetuates three widely believed myths in his article.

Misconception #1: Money Supply Needs To Grow

"Now, there is no exact way to determine the right size of the money supply. It definitely needs to grow each year by at least the growth in the size of the economy, the population, and productivity, or deflation will appear. But if money supply grows too much then you have inflation."

Reality #1:

Money supply most assuredly does not need to grow each year by the size of the economy, by increases in population, or anything else as is widely believed.

An increase in money supply confers no overall economic benefit whatsoever. Over time, money simply buys less and less.

Please consider a few re-ordered sentences of Rothbard's classic text: What Has Government Done to Our Money?

Money is a commodity used as a medium of exchange.

Like all commodities, it has an existing stock, it faces demands by people to buy and hold it. Like all commodities, its “price” in terms of other goods is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. People “buy” money by selling their goods and services for it, just as they “sell” money when they buy goods and services.

Money is not an abstract unit of account. It is not a useless token only good for exchanging. It is not a “claim on society”. It is not a guarantee of a fixed price level. It is simply a commodity.

What Is The Proper Supply Of Money?

Continuing from the book ...

Now we may ask: what is the supply of money in society and how is that supply used? In particular, we may raise the perennial question, how much money “do we need”?

Must the money supply be regulated by some sort of “criterion,” or can it be left alone to the free market?

All sorts of criteria have been put forward: that money should move in accordance with population, with the “volume of trade,” with the “amounts of goods produced,” so as to keep the “price level” constant, etc.

But money differs from other commodities in one essential fact. And grasping this difference furnishes a key to understanding monetary matters.

When the supply of any other good increases, this increase confers a social benefit; it is a matter for general rejoicing. More consumer goods mean a higher standard of living for the public; more capital goods mean sustained and increased living standards in the future.

[Yet] an increase in money supply, unlike other goods, [does not] confer a social benefit. The public at large is not made richer. Whereas new consumer or capital goods add to standards of living, new money only raises prices—i.e., dilutes its own purchasing power. The reason for this puzzle is that money is only useful for its exchange value.

[Thus] we come to the startling truth that it doesn’t matter what the supply of money is. Any supply will do as well as any other supply. The free market will simply adjust by changing the purchasing power, or effectiveness of the [monetary-unit] gold-unit .

The online book is a great read and I highly recommend reading it in entirety.

Misconception #2: Falling Velocity Causes Economic Activity to Decrease, Requiring an Increase in Money Supply to Maintain the Status Quo

"If velocity does slow by another 10%, then money supply (M) would have to rise by 10% just to maintain a static economy."

Reality #2:

Falling velocity is a result of an increased demand to hold money as opposed to a desire to expand productive capacity or borrow to make purchases. In other words, banks do not want to lend and consumers and businesses do not want to borrow. The Fed can print, but it cannot determine where the money goes, or indeed if it goes anywhere at all.

If the Fed increased money supply by 10%, the most likely consequence would be for money to sit or perhaps make its way into non-GDP producing financial speculation. Thus, GDP would not rise by 10%, instead velocity would plunge.

Congress can get into the act by giving away money, as it does with various stimulus plans but that has encouraged little lasting economic activity. Unemployment checks maintain spending on food and essentials but those are low-velocity activities. And as boomers head into retirement, peak spending behind them, velocity is highly likely to continue its downward slide.

By the way, when figuring velocity is it correct to use M1, M2, MZM, Base Money Supply, Austrian Money Supply, or True Money Supply? Obviously the measure of velocity differs widely depending on what definition of money one uses. In general, the broader the measure of money, the lower the resultant velocity.

Misconception #3: In a normal scenario, banks take money and lend it out 9-10 times over.

"And now we come to the policy conundrum for the Fed. They have pumped a great deal of money (liquidity) into the economy. Normally, banks would take that money and multiply it by lending it out (through fractional reserve banking at a potential 9-times factor), increasing velocity and the overall money supply."

Reality #3: Lending Comes First, Reserves Come Second

Australian economist Steve Keen and I have emphasized reality number 3 on numerous occasions. Please consider Fictional Reserve Lending And The Myth Of Excess Reserves for a lengthy rebuttal to the idea that the Fed expands money supply then banks lend it 10 times over.

Those are three widely believed misconceptions. Unfortunately they continually make the rounds. By the way, John Mauldin is a friend of mine and his columns are usually worth a look.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

California House Speaker Gives Aide $65,000 Raise; Aide Now Makes $190,008

2010-03-16T02:19:00Z

Disgusted minds are reading a Sacramento Bee article New speaker grants Assembly pay hikes.

New Assembly Speaker John A. Perez gave his top aide an annual pay increase of nearly $65,000 - about $5,400 per month - upon becoming leader of the lower house, records show.

Ramirez's annual salary is now $190,008 -- $80,424 higher than that of Perez or Senate President Pro Tem Darrell Steinberg, D-Sacramento, whose pay was dropped from $133,639 to $109,584 last year by the state's independent salary-setting commission. Legislators not in leadership positions are paid $95,291 a year.

There are more examples in the article.

Perez Swearing In Speech

Please consider Speaker John A. Pérez: California Must Unite Around Solutions

March 1, 2010
At his swearing-in as California’s 68th Assembly Speaker at the State Capitol today, Speaker John A. Pérez (D-Los Angeles) said his top priority is to get Californians back to work. In his speech, which was delivered before several hundred community and business leaders, working men and women and elected officials, Pérez said he would work to implement innovative ideas around job creation and government reform and he also pledged to work across both sides of the aisle to deliver results for Californians.

Top Priority Is Spending Money

It took a mere two weeks for California Democratic Speaker John A. Perez to prove his top priority is not jobs, but rather spending money and padding the pockets of his friends and associates.

California voters, I have a simple question: Why do you put up with the likes of John A. Perez and his ilk?

Seriously how can you vote for this fiscal lunatic?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Children Belong to the State — 1860s

2010-03-13T19:44:29Z

Butler, it goes back further than that. Few Americans today realize that the public school movement began 150 years ago as part of an attack on the Catholic Church.

In the mid-nineteenth century, Protestant “Know-Nothings” railed against the millions of newly-arrived Catholic immigrants — “criminals” who had a lot of kids and were starting their own schools, complete with armies of foreign nuns and papist priests. According to Rousas Rushdoony’s history, Horace Mann, the founder of the public school movement in Massachusetts, believed that “the [public] schools are the means, instruments, vehicles, and true church by which salvation is given to society.” Given that goal, Mann “changed the function of education from ‘mere learning’ or religiously-oriented education to ‘social efficiency, civic virtue, and character” (by the twentieth century, character “ceased to be a concern” in the public schools, Rushdoony notes). Mann also demanded that control of community schools be transferred into state hands.

A decade later and a continent away, another pioneer took up the cause. John Swett was responsible for “framing the basic legislation of the state system” as California’s Superintendent of Public Instruction during the 1860s. Swett made his goals perfectly clear: “Children arrived at the age of maturity belong not to the parents but to the State, to society, and to the country,” he insisted — so children should be educated not according to the beliefs of their parents, but those of the government. The “civil religion” taught in government schools was designed to neutralize the papist heresies taught in the parochial schools. For the Know-Nothings, Catholic families were not only the competition: they were the enemy. Catholics were inferiors that had to be raised to the level of civic virtue expected of everyone else.

Obama's $3 Trillion Tax Increase; IRS To Track PayPal Transactions; Toledo Ohio Fiscal Emergency; Obama's Utopian Education Goals

2010-03-14T08:48:00Z

Here are a few stories this past week that caught my eye that I have yet to mention.

$3 Trillion Tax Increase

Obama's $3,000,000,000,000 Tax Hike

From the Heritage Foundation

When he released his new budget proposal on February 1, President Barack Obama asserted that the government "simply cannot continue to spend as if deficits don't have consequences; as if waste doesn't matter; as if the hard-earned tax dollars of the American people can be treated like Monopoly money; as if we can ignore this challenge for another generation."[1]

Yet the President's new budget does exactly that-- raising taxes by $3 trillion and federal spending by $1.6 trillion over the next ten years. If enacted, this budget would increase the 2010 deficit to more than $1.5 trillion, and leave a deficit of more than $1 trillion even after an assumed return to peace and prosperity. Overall, the President's budget would double the national debt over the next decade.[2]

President Obama's Budget

•Would permanently expand the federal government by 3 percent of gross domestic product (GDP) over 2007 pre-recession levels;

•Would raise taxes on all Americans by nearly $3 trillion over the next decade;

•Would raise taxes for 3.2 million small businesses and upper-income taxpayers by an average of $300,000 over the next decade;

•Would borrow 42 cents for each dollar spent in 2010;

•Would run a $1.6 trillion deficit in 2010--$143 billion higher than the recession-driven 2009 deficit;

•Would leave permanent deficits that top $1 trillion as late as 2020;

•Would dump an additional $74,000 per household of debt into the laps of our children and grandchildren; and

•Would double the publicly held national debt to over $18 trillion.

There's lots more in the article if you can stomach reading it.

IRS Will Track Online Sellers' Transactions Including PayPal

IRS to Track Online Sellers' Payment Transactions Beginning Next Year

Starting next year, any bank or other payment settlement company that processes credit cards, debit cards, and electronic payments such as PayPal will have to issue information returns telling the IRS what merchants receive. The new returns are Form 1099-K, Merchant Card and Third-Party Payments.

Purpose of Reporting
The IRS believes that many online sellers fail to report their transactions. Some don't report because they mistakenly believe that Internet sales are invisible. Others do so because they are trying to evade taxes.

Who's Subject to Reporting
All merchants who accept payments through credit cards, debit cards, gift cards and PayPal will receive information returns telling them - and the IRS - the gross amount of the merchant card transactions. This will be broken down month by month. While the form uses the word "card," the IRS has made it clear that this is interpreted broadly to include third-party network transactions (i.e., PayPal).

15,000 San Francisco Layoff Notices

15,000 San Francisco City Workers to Receive Lay Off Notices

Fifteen thousand San Francisco city workers began receiving lay off notices this weekend. Mayor Gavin Newsom said that many of those workers would be able to reapply for their jobs and get rehired, but at a 37.5 hour work week instead of 40 hours per week. That would amount to a 6.25 percent cut in pay for the employees that are rehired. The Mayor’s plan is projected to save the city $50 million as it faces a $522 million budget gap. In addition to the loss of pay the reduced hours will impact the amount of money going into worker pension funds. The city’s unions have come together to draft up a compromise and they have expressed they will file a lawsuit if the city can’t agree to it. One suggestion is reducing the amount of outsourcing. Newsom has also asked department heads to accept a pay cut of 10 percent.

Toledo Ohio Fiscal Emergency

Top Bell aide says Toledo likely to face 'fiscal emergency'

March 07, 2010

Unless there is a fundamental change in the way Toledo's government operates, the city will likely be unable to pay its employees before the year is through, a top official in the Bell administration warned.

That looming financial disaster leads people such as Mayor Mike Bell and Councilman D. Michael Collins to throw out words like "bankruptcy" or "receivership," two feared terms but ones that are not likely to become reality.

The truth is that receivership or bankruptcy is probably not an option for the city anytime soon. But being slapped by the state as a "fiscal emergency" municipality is a real threat - a label some dislike but others advise Toledo to embrace given its $48 million deficit.

Mr. Bell has proposed a number of options - including the controversial legal maneuver to claim what lawyers call "exigent circumstances" to get concessions from city unions that they have so far been unwilling to even entertain.

Wilma Brown, the most senior member of City Council and its president, mistakenly said the city would "go into receivership" if the budget is not balanced by March 31 and the union contracts would be "null and void."

That could happen under bankruptcy, but Toledo could not file for that federal protection without the state's permission and then would still have to ask a federal bankruptcy judge.

Mr. Herwat said he had not directed City Law Director Adam Loukx to prepare for the long process of a municipal bankruptcy.

Bankruptcy is the sensible action yet it appears to be the one action not under serious consideration, yet anyway. Hopefully stubborn unions make it the only choice.

300 Toledo Layoffs

Furlough of 300 city of Toledo workers threatened

The Bell administration plans to begin sending up to 300 layoff notices to city employees next week in case it cannot balance a $48 million deficit through union concessions and other measures, a top city official said yesterday.

Last week, Mr. Bell said he was willing to lay off police officers and firefighters but that funding for Toledo's parks, pools, and recreation programs would be the first things slashed under his contingency plan to balance the city budget.

Mr. Bell is also asking council to force concessions from city unions without them agreeing to renegotiate terms of their contracts by approving a controversial measure called “exigent circumstances.”

Unions representing police, fire, and other city employees have refused to open their contracts as requested by Mr. Bell, who has asked them to consider paying the employee share of their state pensions and a greater share of health insurance costs.

The only thing unions will react to is complete extermination. Give it to them. The correct solution is to declare bankruptcy and seek to void all union contracts.

Iowa Association of School Boards Director Gives Herself a $157,000 Raise

Director On Leave After Audit Shows $157,000 Raise

New allegations have emerged that the executive director of the Iowa Association of School Boards gave herself a $157,000 raise. Maxine Kilcrease was suspended from the private, nonprofit group, which is funded with taxpayer money. Recent reports said the group was running low on funds.

[An] audit uncovered details that said Kilcrease, who was hired last summer, raised her salary from $210,000 to $367,000 in September without the board's knowledge or consent.

This is an open and shut case. Kilcrease is headed for prison in my opinion.

Obama's Utopian Education Goals

Obama Calls for Sweeping Overhaul in Education Law

The Obama administration on Saturday called for a broad overhaul of President George W. Bush’s No Child Left Behind law, proposing to reshape divisive provisions that encouraged instructors to teach to tests, narrowed the curriculum, and labeled one in three American schools as failing.

The administration would replace the law’s pass-fail school grading system with one that would measure individual students’ academic growth and judge schools based not on test scores alone but also on indicators like pupil attendance, graduation rates and learning climate.

In addition, President Obama would replace the law’s requirement that every American child reach proficiency in reading and math, which administration officials have called utopian, with a new national target that could prove equally elusive: that all students should graduate from high school prepared for college and a career.

Let me get this straight. Requiring proficiency in reading and math is "utopian", but a much tougher standard requiring "students to be prepared for college and a career" is not.

Did drug laws get repealed last week or is Obama illegally smoking something?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Great Van

2010-03-10T17:55:56Z

(Thanks to Mark Fee)

America’s Newest Crisis: Walmart Cuts Price on Black Barbie Doll

2010-03-10T01:31:38Z

Just when you thought the various race issues cooked up by our mainstream media could not become more ridiculous, ABC News sets a new standard for idiocy. Apparently, a Walmart somewhere cut the price on its black Barbie doll, but not its white one, and all of the Usual Suspects are joining in the chorus of idiocy.

Read it here:

…critics say Walmart should have been more sensitive in its pricing choice.

“The implication of the lowering of the price is that’s devaluing the black doll,” said Thelma Dye, the executive director of the Northside Center for Child Development, a Harlem, N.Y. organization founded by pioneering psychologists and segregation researchers Kenneth B. Clark and Marnie Phipps Clark.

“While it’s clear that’s not what was intended, sometimes these things have collateral damage,” Dye said.

Other experts agree. Walmart could have decided “that it’s really important that we as a company don’t send a message that we value blackness less than whiteness,” said Lisa Wade, an assistant sociology professor at Occidental College in Los Angeles and the founder of the blog Sociological Images.

Is this a great country, or what?

Israel Becomes 51st State

2010-03-09T18:52:04Z

Joe Biden unofficially welcomed Israel into the Union today as he met with Prime Minister Netanyahu. Biden spoke of America’s “absolute, total, unvarnished commitment to Israel['s] security.” He said also “”Bibi you heard me say before, progress occurs in the Middle East when everyone knows there is simply no space between the US and Israel. There is no space between the US and Israel when it comes to Israel’s security.”

Pennsylvania State Troopers Are on the Job!

2010-03-09T11:56:10Z

Yes, never fear in Philadelphia, Pennsylvania, where the Declaration of Independence was written. The state police are protecting us from, well, beer. The Philadelphia Daily News reports that state police raided bars, claiming that they were selling…unlicensed beers:

IT WAS ELIOT NESS and the Untouchables, as played by the Keystone Kops.

More than a dozen armed State Police officers conducted simultaneous raids last week on three popular Philadelphia bars known for their wide beer selections. The cops confiscated hundreds of bottles of expensive ales and lagers, now in State Police custody at an undisclosed location.

The alleged offense: Although the bar owners had bought the beer legally from licensed Pennsylvania distributors and had paid all the necessary taxes, the police claimed that nobody had registered the precise names of the beers with the state Liquor Control Board – a process that requires the brewers or their importers to pay a $75 registration fee for each product they want to sell in Pennsylvania.

Apparently, there was an anonymous complaint (probably from a rival bar that insisted on selling just Bud Lite) that set off this act of bravery by these Costumed Creeps. Kudos to the reporters from the Daily News, however, as they wrote a good account, as opposed to what we might see in the New York Times, which is little more than a mouthpiece for the abusive state.

The Graph That Keeps on Giving

2010-03-08T15:28:31Z

Steven Horwitz

My very favorite graph for the last year, now updated for February:

You can find the original here.

Do you Really Want Government-Run Health Care?

2010-03-08T16:28:37Z

By Doug Bandow

Great Britain continues to remind us what happens when the government rations care to save money. Reports the Times of London:

DAMNING reports on the state of the National Health Service, suppressed by the government, reveal how patients' needs have been neglected.

They diagnose a blind pursuit of political and managerial targets as the root cause of a string of hospital scandals that have cost thousands of lives.

The harsh verdict on the state of the NHS, after a spending splurge under Labour between 2000 and 2008, raises worrying questions about the future quality of the health service as budgets are squeezed.

One report, based on the advice of almost 200 top managers and doctors, says hospitals ignored basic hygiene to cram in patients to meet waiting-time targets.

It says "several interviewees" cited the Maidstone and Tunbridge Wells [NHS Trust in Kent where 269 deaths during 2005-6 were caused by infection with Clostridium difficile bacteria].

"Managers crowded in patients in order to meet waiting-time targets and, in the process, lost sight of the fundamental hygiene requirements for infection prevention," the report stated.

Is that really what Americans want? If not, they had better make their views known in Congress before ObamaCare is crammed down their throats.

Doug Bandow, American Conservative Defense Alliance

University of California Campus Erupts In Riots; Student Loan Scam Drives Up Cost Of Education; Expect More Riots

2010-03-08T02:27:00Z

Inquiring minds are reading about student riots at the University of California.

Students at the University of California’s flagship Berkeley campus took to the streets on Friday night, vandalizing university buildings, burning trash cans and clashing with police in the latest expression of frustration over cuts to the educational budget in California.

In November, the University of California Board of Regents voted to raise tuition by 32 percent. At the same time, professors were asked to take pay cuts or be furloughed, classes were eliminated and class size increased. Protests erupted across the University of California system, particularly at UC Davis and UCLA.

Student Loan Defaults Soar

Please consider Defaults on student loans rising

Every year, tens of thousands of college students and graduates stop making payments on their student loans.

For more than a decade, that loan-default rate was in decline because the federal government toughened penalties for schools with high shares of defaults. Now, the rate is increasing again and not just because of the economy.

The problem is particularly acute in Arizona, which has the nation's highest overall default rate on federal student loans: 9.8 percent in fiscal year 2007, the latest figures available.

But more than default rates, it is the high levels of debt that are provoking alarm among consumer advocates. That has heightened scrutiny of for-profit schools.

Tuition at for-profit schools can easily top $10,000 a year. The average loans for a student who earned a bachelor's degree totaled $32,650 in the 2007-08 school year, compared with $17,700 at public universities. At community colleges, the average for two-year degrees was $7,125.

In Arizona, for-profit schools are booming. They have more than doubled the number of students they serve in the past five years, and more students are at for-profit schools than all three of the state's public universities combined.

Last school year, for-profit schools enrolled nearly 468,000 students, according to the Arizona State Board for Private Postsecondary Education, a state agency that licenses and regulates most for-profit schools. About 55 percent were from Arizona, and the rest lived elsewhere and attended school online.

In December, the University of Phoenix settled a whistleblower lawsuit in federal court for $78.5 million over recruiter-pay practices. Two former enrollment counselors sued in 2004, alleging the school defrauded the government of billions of dollars in financial aid and violated federal law by paying recruiters based on enrollment. The company said the pay practices were legal because enrollment was not the sole determinant. The university did not admit any wrongdoing.

Nationally, for-profit schools had the highest share of defaults in the United States in 2007: 11 percent. Community colleges had a nearly 10 percent rate, and private, non-profit universities had the lowest rates, at 3.7 percent, according to the U.S. Department of Education.

Student Loan Scam

The article mentions various reforms such as curbing recruiters, requiring more up-front disclosure, and educating borrowers about the loan process.

The real problem is the entire student loan system is a scam. The government guarantees student loans so colleges have every reason to make the loans no matter how poor the student or how high the cost of education relative to job pay upon graduation.

Government guaranteeing the loans makes the money readily available to all takers driving up the cost of education.

My friend "BC" had this to say....

Millennials had better learn quickly that they face coming of age through middle age and end of life in a world in which they will be forced to consume one-third to half as much in per capita energy terms and associated material production and consumption.

Thus, they should be rioting to cut taxes and to cut government including cutting funding for places like "Berzerkley" and the many worthless programs and costly administrative and pension payouts.

What "Berzerkley" or a state or private university confers on the vast majority of students is a "credential" and "legitimacy" within the existing division of labor and state tax farm. Their "education" is mostly in terms of being conditioned to conform to the costly state superstructure, including submitting to tax, wage, and debt servitude for life.

What they will "learn" in terms of actual occupational skills, self-reliance, and productive wealth creation they could learn at a much lower cost (and higher return to them) than 4+ years of university "education" by actually doing something productive, paid or not, as a youth.

Rioting for more government largess extracted eventually from their meager paychecks in the future is suicide and merely sustains for a while longer the system they perceive themselves to be opposing or attempting to reform.

They are wasting their valuable time and youthful vitality rioting against the intractable state when they could be using their time and efforts to form productive private associations in parallel or outside the existing division of labor and social and political superstructure.

Expect More Riots

My friend "HB" countered with ....

There will be more riots, and over more issues. Students are traditionally always the first to riot, since most of them are young and rebellious, and therefore it's easier to get them to engage in street protest and vent their anger.

The only groups that may even be more riot prone are French farmers and Greek public workers.

How Good Is That Education?

Pray tell what is someone going to do with a degree in English literature, social science, journalism, history, French, political science, or math?

Exactly how many jobs are available in those areas compared to the number of students getting such degrees?

Sadly, we can even ask the same questions about computer science. In the late 1970s all the way to 2000, a degree in computer science came with a near-guaranteed job. Now, computer science graduates must compete against someone from India or Russia who is willing to work for a lot less than they ever imagined.

In the early 1970s tuition at a top school like the University of Illinois was $250-$400 a semester. Now tuition is $10,000 with no guarantee of a job.

But hey, as long as government is guaranteeing student loans, places like the University of Phoenix are glad to offer an "education" to everyone coming their way.

Education System Benefits Recruiters, Administrators, Teachers, Staff

Funding schemes, loan guarantees, influence peddling, and especially government meddling have combined to make education a great deal for recruiters, administrators, professors, and staff.

Unfortunately, there is little benefit to the students for the price they pay. Indeed, the biggest education many students will receive is to learn how compound interest combined with poor salaries will make them a debt slave for life.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Preexisting Conditions

2010-03-07T14:15:19Z

Almost all politicians, and the whole MSM, seem to agree with Obama: there must be no discrimination against preexisting conditions in health insurance. And the sick must pay no more than the healthy. But why limit this generous principle? Preexisting conditions, especially death, are discriminated against in life insurance. Come on, Obama: give us real fairness.

Another Isolated Incident

2010-03-05T17:05:18Z

Police in Tennessee raid wrong side of a duplex, throw residents to the floor at gunpoint, manage to handcuff a recovering cancer patient. According to the residents and their neighbors, they then scratched off part of the address on the duplex to cover their mistake. They did get their guy in the end, though. He was selling pot.

(Via Pete Guither.)

Federal Pay Gap Reversed

2010-03-05T20:23:22Z

By Chris Edwards

I’ve long raised concerns about the rapidly rising costs of federal worker pay and benefits. Despite the obvious acceleration of federal compensation above private compensation in recent years, federal unions have continued to claim that federal workers suffer from a giant “pay gap,” which is currently supposed to be 26 percent.

Unfortunately, the pay gap mythology has been spread by Washington Post reporters, one recently writing, “The budget answers critics … who say federal civilians earn much more than private-sector workers… [G]overnment figures indicate that federal employees are underpaid by 26 percent compared with their counterparts in similar position in the business world.”

The Post is generally a great paper, but they seem to have blinders on with respect to federal pay issues. As a result, the USA Today has repeatedly scooped them. USA Today has a groundbreaking piece today revealing that in job-to-job comparisons, federal workers typically have wages 20 percent higher than private-sector workers.

Instead of federal workers suffering from a 26-percent “pay gap,” they actually have a 20-percent advantage over private sector workers. And that doesn’t include benefits, which are four times higher in the federal government than in the private sector, on average.

How could the federal unions get it so wrong? The calculation of the supposed 26-percent pay gap is reported in this annual memo. But the underlying calculations are extremely complex, non-transparent, and subject to a huge degree of statistical modeling.

One reason I’ve been suspicious of the official gap claim is that while Bureau of Economic Analysis data show that average federal wages have grown far faster than private wages in recent years, the official “pay gap” has remained very high. In 2001, the pay gap was said to be 22 percent. By 2008, the gap was said to have increased to 25 percent.

Yet BEA data show that average federal salaries rose 46 percent between 2001 and 2008, much more than the 26-percent average increase in the private sector. Since the BEA data are extremely solid, there must be something wrong with the official pay gap methodology.

Where should we go from here? The first step should be to freeze federal salaries, as proposed by Sen. Scott Brown (R-MA). Then we should start cutting back overly generous federal benefits.

And to get to the bottom of the ”pay gap” mystery, Congress should hire an independent human resources consulting firm to dig into the official methodology and propose a more accurate way to compare federal and private worker compensation.

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