Category Archives: Economics

Business, Economics, Media Criticism, Political Commentary

Corporate Cronyism

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…in the age of Obama:

Obamacare, and the hundreds of waivers the administration continues to issue, represents a new form of corruption, as well as cronyism, that I believe was invented by the Obama administration. The idea is to pass a terrible piece of legislation, and then exempt your friends from it, so that only those without political influence have to suffer from the lousy statute you imposed on them.

So that is a very quick overview of the kinds of corporate cronyism that have emerged during the Obama administration. This private sector cronyism is, I think, much more damaging than the public sector cronyism of the 19th century. Why? Because it doesn’t just waste money, it distorts the entire private economy. It is notable that the era when traditional cronyism flourished was also the time when the United States experienced its most explosive economic growth.

This ought to be the theme of the campaign, but it probably won’t be, at least with any of the current candidates.

Business, Economics, Political Commentary

Rick Santorum

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Is either a fool or a liar, when it comes to libertarians. But then, straw men are always the first refuge of the political hack, as the president demonstrates on a daily basis.

[Update a while later]

Jeez, Santorum is almost as clueless of economics as Romney is:

“I’m not against the minimum wage,” Santorum remarked. “When the minimum wage drops below a certain level, it’s usually a floor of about 7 percent of wages at minimum wage, I’ve supported increasing it back it up to make sure it stays above that level so there is in fact a minimum wage.”

He should talk to Tom Sowell, since he doesn’t seem to understand what a devastating policy this is for young people, and black youth in particular.

Business, Economics, Media Criticism, Political Commentary

“Tax Cuts They Don’t Need”

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That was a phrase that Jack Lew used this morning on This Week. Ignoring the ongoing lack of distinction between “tax cuts” and “tax-rate cuts,” any use of the word “need” in federal policy betrays an intrinsically Marxist mindset. It indicates that benefits of the collective should be distributed based on need, rather than merit, economics, or constitutionality. Tax rates should be chosen to maximize revenue, not redistribute wealth, or on the basis of some government official’s opinion of what someone else “needs.” This should be pointed out each and every time it occurs, but of course George Stephanopolous isn’t going to do it.

Business, Economics, Education, Media Criticism, Political Commentary, Social Commentary

The Disastrous State Of Higher Education

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This isn’t really news, but it’s depressing anyway, indicative of a massive failure of government policy and misincentives:

What the study found is not the least bit surprising. Students who learned little in college (as evidenced by scoring in the bottom quintile on the College Learning Assessment) were three times as likely to be unemployed as students who scored in the top quintile, twice as likely to be living at home, and somewhat more likely to have run up credit card debts.

Those findings throw cold water on the smiley face idea that going to college is necessarily a good “investment.” Even some of the top graduates were unemployed and living with their parents and a much higher number of low-performing graduates were. Unfortunately, the study did not seek to find out how many of those graduates were “underemployed” in jobs that high schoolers can do. (Perhaps no further evidence on that is necessary, though, in view of this study.)

Another particularly interesting finding from “Documenting Uncertain Times” is that employers pay little attention to what students majored in and how good their academic records were. The authors write, “That nearly two-thirds of these recent graduates’ employers did not require them to submit transcripts speaks to the perceived limited value and trust employers currently place in this traditional record of achievement in higher education.” If, as I have argued for years, many employers are simply using the presence of a college degree as a screening device, that behavior makes perfect sense.

A company that, for example, needs to hire someone to handle a car-rental desk might insist on a college degree as evidence of trainability, but not think it worth the added cost of checking to see how he or she did in college. Whatever education might have been absorbed is irrelevant; all that matters is the credential itself.

A credential becoming worth less and less. This all started when it became difficult for employers to test job applicants. As noted there, if we can’t get government out of the student loan business, which is a large part of the problem, we need to force the schools to put some skin in the loan game themselves, because as the situation is currently, they’re not punished for their failure to educate, but rewarded.

Economics, Media Criticism, Political Commentary, Science And Society

Damn Gaia

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Why will she not obey our theories?

The world’s greatest snow-capped peaks, which run in a chain from the Himalayas to Tian Shan on the border of China and Kyrgyzstan, have lost no ice over the last decade, new research shows.

The discovery has stunned scientists, who had believed that around 50bn tonnes of meltwater were being shed each year and not being replaced by new snowfall.

Unexpectedly!

Of course, they have to maintain the politically correct line:

“The new data does not mean that concerns about climate change are overblown in any way. It means there is a much larger uncertainty in high mountain Asia than we thought.

Yes. Now consider what else you don’t know that you thought you did. And yes, let’s spend trillions now to prevent the ocean from rising by one meter a century from now. Because that makes perfect economic sense.