Category Archives: Business

America’s New Mandarins

Thoughts on the narrow focus of those who would rule us. For our own good, of course:

I think that to some extent, the current political wars are a culture war not between social liberals and social conservatives, but between the values of the mandarin system, and the values of those who compete in the very different culture of ordinary businesses–ones outside glamor industries like tech or design.

What’s remarkable is that this is coming from me. It’s not like I came up on the mean streets of Camden, or come from a long line of dockworkers. Both my grandfathers were small business owners. My father and most of his siblings have spent at least some time as professors. I grew up on the Upper West Side of Manhattan and went through middle and high school at what is now the most expensive private school in New York City. (I should note that it wasn’t anything of the kind when I went there. But still.) My experience of working class life consists of some relatives, a few summer jobs, a stint in the secretarial pool at a nonprofit, three years with a firm that had a substantial cable installation practice, and one year in a construction trailer at Ground Zero. Most of my work experience is in writing stuff, and then talking about what I write. I’m hardly the Voice of the Proletariat. Or the Voice of Industry, for that matter.

And yet, this is apparently considerably more experience than many of my fellow journalists have, especially the younger ones. The road to a job as a public intellectual now increasingly runs through a few elite schools, often followed by a series of very-low-paid internships that have to be subsidized by well-heeled parents, or at least a free bedroom in a major city. The fact that I have a somewhat meandering work and school history, and didn’t become a journalist until I was thirty, gives me some insight (she said, modestly) that is hard to get if you’re on a laser-focused track that shoots you out of third grade and straight towards a career where you write and think for a living. Almost none of the kids I meet in Washington these days even had boring menial high school jobs working in a drugstore or waiting tables; they were doing “enriching” internships or academic programs. And thus the separation of the mandarin class grows ever more complete.

The president epitomizes this class of people. He has his credentials, but he is completely clueless as to how a business works, or what it takes to make one succeed. In fact, I suspect that’s true of many of his cronies as well. The route to become head of a major Wall Street firms lies largely through credentials and connections, often political (e.g., the revolving door between government and Wall Street — what real-life business skills does Franklin Raines have?), not in real-world experience.

Like Megan, I come from a family that worked with their hands (auto mechanics and carpenters), at least on my mother’s side. My grandfather built two boats from scratch in the thirties, inboard motors using auto engines, and a family cottage in northern Michigan. When I graduated high school (barely), I went to work as an auto mechanic, an experience that after a year persuaded me that I didn’t want to do it all my life. I do think it gives me a perspective, particularly as an engineer, that a lot of people with engineering degrees but no practical experience don’t have, and it certainly gives me a different one than many of the other policy wonks in DC.

It’s also worth noting that, as Angelo Codevilla’s latest essay describes, it’s a bi-partisan problem:

The ever-growing U.S. government has an edgy social, ethical, and political character. It is distasteful to a majority of persons who vote Republican and to independent voters, as well as to perhaps one fifth of those who vote Democrat. The Republican leadership’s kinship with the socio-political class that runs modern government is deep. Country class Americans have but to glance at the Media to hear themselves insulted from on high as greedy, racist, violent, ignorant extremists. Yet far has it been from the Republican leadership to defend them. Whenever possible, the Republican Establishment has chosen candidates for office – especially the Presidency – who have ignored, soft-pedaled or given mere lip service to their voters’ identities and concerns.

Thus public opinion polls confirm that some two thirds of Americans feel that government is “them” not “us,” that government has been taking the country in the wrong direction, and that such sentiments largely parallel partisan identification: While a majority of Democrats feel that officials who bear that label represent them well, only about a fourth of Republican voters and an even smaller proportion of independents trust Republican officials to be on their side. Again: While the ruling class is well represented by the Democratic Party, the country class is not represented politically – by the Republican Party or by any other. Well or badly, its demand for representation will be met.

…by the turn of the twenty first century America had a bona fide ruling class that transcends government and sees itself at once as distinct from the rest of society – and as the only element thereof that may act on its behalf. It rules – to use New York Times columnist David Brooks’ characterization of Barack Obama – “as a visitor from a morally superior civilization.” The civilization of the ruling class does not concede that those who resist it have any moral or intellectual right, and only reluctantly any civil right, to do so. Resistance is illegitimate because it can come only from low motives. President Obama’s statement that Republican legislators – and hence the people who elect them – don’t care whether “seniors have decent health care…children have enough to eat” is typical.

Republican leaders neither parry the insults nor vilify their Democratic counterparts in comparable terms because they do not want to beat the ruling class, but to join it in solving the nation’s problems. How did they come to cut such pathetic figures?

The Tea Party was/is largely a response to this.

A Calorie

…is not a calorie:

“Our current system for assessing calories is surely wrong,” said evolutionary biologist Richard Wrangham of Harvard University, the co-organizer of the panel.

In a wide-ranging discussion of how food is digested in everything from humans to rats to pythons, the panel reviewed a new spate of studies showing that foods are processed differently as they move from our gullet to our guts and beyond. They agreed that net caloric counts for many foods are flawed because they don’t take into account the energy used to digest food; the bite that oral and gut bacteria take out of various foods; or the properties of different foods themselves that speed up or slow down their journey through the intestines, such as whether they are cooked or resistant to digestion.

Of course, in addition to that, the thermodynamic theory of nutrition doesn’t take into account how your metabolism responds to different kinds of calories. In a just world, much of the lipophobic nutrition industry would be sued into oblivion, or in prison, bearing responsibility for millions of premature deaths, and sufferers of ill health. Instead, they still seem to be in charge of the FDA.

“Monopoly-Money Grades”

How universities have devalued their currency.

I had always thought that this kind of grade inflation started in the sixties, when many professors didn’t want to cost students their draft deferments by flunking them out, but a lot more has been driving it in recent decades. Time to rein it in.

[Update a few minutes later]

It’s not just grade inflation — it’s also degree inflation:

Of all the metropolitan areas in the United States, Atlanta has had one of the largest inflows of college graduates in the last five years, according to an analysis of census data by William Frey, a demographer at the Brookings Institution. In 2012, 39 percent of job postings for secretaries and administrative assistants in the Atlanta metro area requested a bachelor’s degree, up from 28 percent in 2007, according to Burning Glass.

“When I started recruiting in ’06, you didn’t need a college degree, but there weren’t that many candidates,” Ms. Manzagol said.

Even if they are not exactly applying the knowledge they gained in their political science, finance and fashion marketing classes, the young graduates employed by Busch, Slipakoff & Schuh say they are grateful for even the rotest of rote office work they have been given.

“It sure beats washing cars,” said Landon Crider, 24, the firm’s soft-spoken runner.

He would know: he spent several years, while at Georgia State and in the months after graduation, scrubbing sedans at Enterprise Rent-a-Car. Before joining the law firm, he was turned down for a promotion to rental agent at Enterprise — a position that also required a bachelor’s degree — because the company said he didn’t have enough sales experience.

His college-educated colleagues had similarly limited opportunities, working at Ruby Tuesday or behind a retail counter while waiting for a better job to open up.

“I am over $100,000 in student loan debt right now,” said Megan Parker, who earns $37,000 as the firm’s receptionist. She graduated from the Art Institute of Atlanta in 2011 with a degree in fashion and retail management, and spent months waiting on “bridezillas” at a couture boutique, among other stores, while churning out office-job applications.

“I will probably never see the end of that bill, but I’m not really thinking about it right now,” she said. “You know, this is a really great place to work.”

A lot of young people have sure gotten a lot of terrible advice over the past couple decades. Any other industry that committed this kind of massive, multi-billion-dollar fraud would rightly have its leaders in jail.

More “Surprises” In ObamaCare

Gee, it’s like they didn’t pay any attention whatsoever when we warned them:

Like most of the law’s most significant effects on economic incentives, this wasn’t actually done on purpose. It’s a function of the same attitude on display in the Times article: a view of economic actors as drones awaiting instructions rather than reasonable people considering their options. And so of course, the solution is to take away options. The Times’s description of the administration’s thinking is priceless:

The Obama administration is investigating the use of stop-loss insurance by employers with healthier employees, and officials said they were considering regulations to discourage small and midsize employers from using such arrangements to circumvent the new health care law. “This practice, if widespread, could worsen the risk pool and increase premiums in the fully insured small group market,” the administration said in a notice in the Federal Register.

How exactly the existence of a design flaw in the law somehow empowers the administration to fix it by “discouraging” self-insurance through regulation is so quaint and naïve a question as to not even merit mention—a vestige of our barbarous past.

Marxism is ever thus. We will build the New Soviet Man.

A Degree In Fine Arts

Pro tip: Don’t borrow money to get one:

Among the 4,000 colleges and universities in the federal database, the Creative Center in Omaha, Neb., a for-profit school that offers a three-year bachelor’s in fine arts, had the highest average debt load, at $52,035. Median pay for graduates of the school with five or fewer years’ experience is $31,400, according to PayScale.com.

“Salaries can be pretty darn high or pretty low” for the school’s graduates, who typically get jobs in graphic arts or advertising, said Creative Center President Ray Dotzler.

You don’t say. Of course, if they could figure that out, they’d have probably majored in economics or business. Interestingly, the majors with the best prospects for paying off debt seem to borrow the least, and vice versa.

The Conservative Critique Of ObamaCare

…was basically correct:

[“Liberal”] Kapur’s argument amounts to the following: Democrats passed a law that had and still has insufficient public support (points 1 and 4), that cannot achieve its goals without unconstitutional means (point 2), that did not allocate the necessary resources to accomplish its objectives (point 3), and that lacks and still lacks even minimal support across the political aisle (all four points).

That sounds very much like the conservative critique of ObamaCare. At this point it’s fair to say that ObamaCare opponents have won the argument. Of course, since supporters won the political battle three years ago (and Obama won re-election), this monstrosity is now the law of the land, ensuring that both sides’ victories will have been Pyrrhic.

And then there’s this:

It has become very clear to everyone involved who is analytical and not ideological that the rational strategy, for both large and small firms, is to cease providing health care insurance to employees.

No company wants to admit that they are considering eliminating health insurance as an option, or be the first one to drop their health insurance plan, but once a competitor does so, the preference cascade will begin. The clear sentiment is “We will not be the first one to drop our health insurance plan, but we would be a close second.”

The coming preference cascade for employer group health plans is what the Democrats fear the most, because Obamacare was sold to the masses as “if you like your health insurance plan, you can keep it.”

Which was always a lie, of course.

I think the Democrats will be reaping a whirlwind in the next two election cycles.

ObamaCare

Democrats are turning on it:

The about-face of these Democrats is a phenomenon worth pausing over. Many formerly supportive constituencies have grown wary of Obamacare in recent weeks as we’ve learned more about the effects it will have on the health care system. But these Senators’ 180-degree turns are something more severe.

The fate of the Democratic party in America over the next decade is tied to Obama’s healthcare reform. If it is seen to be a success, America could trend Democratic for the foreseeable future. If it fails, liberalism as we’ve known it will take a massive hit. But, so far, support for Obamacare has been waning instead of waxing. Even a recent piece by Talking Points Memo that placed the blame for Obamacare’s potential failure on Republicans noted that the law’s unpopularity with the public at large was the number one threat to its success. Democrats are getting nervous and consequently are trying to put some distance between themselves and the ACA.

Well, Queen Nancy told us we had to pass the bill to find out what was in it.

Strange Spam Du Jour

I just go this from the UK, subject, “Contract Dispute”:

Attention:

We seek an attorney who handles breach of contract matters.Let us know if
your firm takes such cases.

Thank you
Edward Scholes.

No attachment, no web site to click through, nothing, but it has a return address and a reply-to of someone with that name. What is the purpose of this?

I guess one (bizarre) possibility is that it’s exactly what it would appear to be — someone looking for an attorney, and spamming the Internet to find one. It’s not like it costs anything. But you might get a lot more responses, many of them scams themselves, than you know what to do with.