It ain't left or right, it's human nature

Any group of people with a 'magic money machine' will eventually become unaccountable and spin out of control.  Left or right, gay or straight, atheist or religious we are all prone to ego driven pride.  We think we know best.  And with the magic money machine gleaming out of the corner of our eye, and highly paid officials in glittering uniforms with shiny guns at the ready, we rarely can resist the temptation to bribe and bully.  Again this isn't a left or right thing, it's human nature.  The only hope for our Republic is to radically limit the Federal Government's ability to intervene on domestic affairs and their ability to print IOUs (aka Money).  Want to build your utopia?  Fine, do it in your state and bear the consequences, good and bad, of your choices.

The Founding Fathers - living in a much crueler time - knew this.  We need to relearn it.

The Economics of College Predation

Over the past thirty years colleges (and schools in general) have raised the cost of attendance, massively.  As Seth Godin points out this is clearly unsustainable.  It also (as I have pointed out) is tantamount to piracy.  To put it "charitably" charities that constantly raise the price for the same service are not behaving in a 'charitable' manner.  But this is an outrage that is well known, if not adequately protested.

What is less well know is how these institutions use monopolistic pricing methods to wring every last dollar out of their vulnerable young charges.  Indeed, how they use tactics that are illegal in almost every other setting than education.

Reach back for a minute to your college Microeconomics.  In a perfect competitive market, Supply and Demand curves intersect at a market clearing price and volume for a given commodity.  In any market there are large numbers of customers who derive far more value from the commodity than the price they paid ( a good example here is toilet paper).  This is represented by the blue triangle below.

This is called the consumer value surplus or the surplus caused by there being a single market clearing price.

Worse than Pirates

Growth in the cost of college educations vs. medical costs, vs. the cost of living.  Seth Godin has much more here.
As I've said many times:  to call the people who run our Colleges and Universities pirates is to insult the noble tradition of Piracy.  At least pirates fought for their country at New Orleans.  Our college administrators would hide in their (gender neutral) toilets.

And they call these predators "Charities".

The Key Point on Immigration 'Reform'

From Ramesh Ponnoru and NRO:

Nearly everyone in the immigration debate has claimed to favor enforcing the immigration laws. But if you think it is draconian to require that anyone have to show papers proving their legal status, then you're simply against enforcement. And if you really believe that, you're not going to change your mind just because the government has set up a "temporary worker" program or a path to citizenship for illegal immigrants: You're going to be against truly enforcing any conceivable set of immigration laws. Good to know.

Hey I know! Send the jack booted thugs in Quincy to the border to keep illegals out rather than in
Quincy keeping Americans down.  I'll tell the President.  I'm sure he wouldn't want the para military pointing its guns at citizens, would he?

The State: Out of control

Check out the storm troopers strutting down the street to a cadence to 'protect' Barack Obama from little ladies in blue hair and insurance salesmen.  In Quincy!!!!  These guys look like thugs.  The police and the state are increasingly out of control.

Looks like Quincy needs to send some 'public servants' to the showers.  Permanently.

Ad Hominem - what you do when you've lost.

Roger Simon makes a point that I've been making for some time:

ROGER SIMON: “The real reason liberals accuse Tea Partiers of racism is that contemporary American-style liberalism is in rigor mortis. Liberals have nothing else to say or do. Accusations of racism are their last resort.”

HT Instapundit

Is the Euro Tipping into the Dustbin of History?

Walter Russell Mead points out that the Chaos across the pond is just beginning.  Hmmm.  It seems that Social Democracy or whatever we want to call President Obama's governing philosophy isn't sustainable.  Europe once again shows the way....to failure.

The interesting question isn't that the PIGS are failing again, they always do the same things and their northern 'betters' are demographically destined to follow them.  No, the interesting question is why so many US 'elites' think following in their bankrupt path is such a sweet idea.

Bernie Madoff vs. Social Security: The "Ponz-off"

'Nuff said.

BERNIE MADOFF SOCIAL SECURITY Takes money from investors with the promise that the money will be invested and made available to them later Takes money from wage earners with the promise that the money will be invested in a "Trust Fund" and made available later. Instead of investing the money Madoff spends it on nice homes in the Hamptons and yachts. Instead of depositing money in a Trust Fund the politicians use it for general spending and vote buying. When the time comes to pay the investors back Madoff simply uses some of the new funds from newer investors to pay back the older investors. When benefits for older investors become due the politicians pay them with money taken from younger and newer wage earners to pay the geezers. When Madoff's scheme is discovered all hell breaks loose. New investors won't give him any more cash. When Social Securityruns out of money they simply force the taxpayers to send them some more. Bernie Madoff is in jail. Politicians remain in Washington .

Beyond Parody - How Gay is Gay enough

At some point all of this ludicrous identity politicking will collapse in on itself.  Until then an honest parodist like me won't be able to make a living.  From the National Law Journal:

The National Center for Lesbian Rights last week sued the North American Gay Amateur Athletic Association for discriminating against bisexuals. The lawsuit stems from the 2008 Gay Softball World Series, which was organized by the athletic association and held in Seattle. It alleges that the athletic association’s “two heterosexuals per team” cap violated Washington state’s laws prohibiting discrimination in public accommodation. According to the suit, a softball team from San Francisco came under suspicion of having more than two straight players, prompting organizers to interrogate five players about their sexual orientation and private lives before a group of 25 people. A panel of athletic association members then voted that three of them were not gay.  The team was forced to forfeit its second-place finish in the tournament.  The suit seeks monetary damages and suspension of the rules that limits the number of heterosexuals allowed on each team.”

What we got for those extra 5 points

Take a look at this graphic:

Essentially all of the subsidies and manipulation got us a 5 point temporary bump in the home ownership rate from the postwar norm of about 64 percent.  It also got us trillions in losses and bankruptcies and the Great Recession.  Trillions of wealth destroyed just to move a stupid statistic.  Liberalism isn't a coherent ideology, it's a cargo cult that worships statistics and union bosses.

Peak Everything

Ron Bailey uses several rare earth metals to illustrate the conceptual silliness of 'peak everything'.  If someone tells you we're running out of something and need to fund a program to subsidize it or shift away from it, the only thing you're likely to run out of is money.

"Peak this and that" is the modern equivalent to phrenology or the reverse of alchemy.  Short the Peakies - they're fools.

SEC Can't detect Madoff fraud, conjures Goldman Fraud out of thin air

Prof. Epstein on the uselessness of the SEC:
"In the end, we learn a lot from this latest SEC fiasco. The agency that cannot detect a Madoff fraud can conjure up a Goldman fraud out of thin air. At this point, some fundamental reform is in order. Forget the fancy stuff. Either the SEC should master its primary fraud prevention mission, or it should shut down altogether." 


H/T Carpe Deim

Heard on the Ether

"I'm no lawyer (which is why I can see my reflection in the mirror)"

Robert Mundell on the Causes of the Crisis

Valuable post linking to a video of economist Robert Mundell speaking at the Heritage foundation.  Mundell is highly credible and provides an explanation that makes sense.....

If something can't happen it won't

John Mauldin of Outside the Box makes a congent statement about our impending fiscal trainwreck:

" ... [the US Government Accounting Office] goes on to state, however, that using reasonable assumptions, 'roughly 93 cents of every dollar of federal revenue will be spent on the major entitlement programs and net interest costs by 2020.'"
That is an example of the economic truism that if something can't happen, then it won't. Long before we get to 2020, massive change will be forced upon the US. The question is, do we do it willingly or do we become Greece?


Greece.  We're going to become Greece

"Great" and "Good" howl at Arizona for enforcing existing Federal immigration law

It really tells you how much contempt the powerful have for the law that when a state attempts to enforce the laws that the Federals claim (falsely) that they are enforcing that every self righteous establishment figure comes screaming out of the woodwork.  "How dare you enforce the immigration laws of our nation you, you, you.....Nazi!".  See Rich Lowry here.

If our immigration laws are 'Nazi" then why haven't the 'great and good' repealed them?  Nope, they aren't Nazi, they're just lies ginned up by the establishment to deceive us 'rubes' into thinking that they're enforcing immigration laws.  How dare we call their bluff.  Why anyone gives these frauds power and money is beyond me.

That was then, this is now

Our "Maximum Leader" on how many Americas:

Then:

* “Even as we speak, there are those who are preparing to divide us–the spin masters, the negative ad peddlers who embrace the politics of ‘anything goes.’ Well, I say to them tonight, there is not a liberal America and a conservative America–there is the United States of America. There is not a black America and a white America and Latino America and Asian America–there’s the United States of America.”–state senator Barack Obama, Democratic National Convention, July 27, 2004

NOW:

* “In the video message to his supporters, [President] Obama said his administration’s success depends on the outcome of this fall’s elections and warned that if Republicans regain control of Congress, they could ‘undo all that we have accomplished.’ ‘This year, the stakes are higher than ever,’ he said, according to a transcript of his remarks provided by Democratic officials. ‘It will be up to each of you to make sure that young people, African Americans, Latinos and women who powered our victory in 2008 stand together once again. . . .’ “–Washington Post, April 26, 2010

Like I said, that was then, this is now.

The Knowledge Problem Once Again

Freidrich Hayek (another Chicago Boy) won a Nobel price for explaining how this works.  Pity our lawyer-leaders never learned any of this.  Hat tip Instapundit.

WAXMAN FAIL: “When major companies declared that a provision of the new health care law would hurt earnings, Democrats were skeptical. But after investigating, House Democrats have concluded that the companies were right to tell investors and the government about the expected adverse effects of the law on their financial results.”

There have been no tax cuts

Kevin Williamson argues persuasively that the Reagan and Bush 'supply side' tax 'cuts' were nothing of the sort.  Instead they were simply tax deferrals - because spending was never reduced, they simply will lead to tax increases in the future on our children or an inflation which is just a regressive tax.  He does acknowledge the incentive effects of low marginal rates.  In the long run what matters is the productivity of the dollars spent:  if private spending yields returns in excess of the interest required to support the debt, then we get richer.  Likewise for public spending:  if we got a ten percent return on every incremental dollar spent by the government, then we should run huge deficits.  But private returns, while positive suffer from diminishing returns over time while public returns are almost always catastrophically negative.  This argues for low public spending but not for deficits.

Questions I'd like asked (but doubt will be)

Berkshire Hathaway's annual meeting is coming up and 'El Buffo' famously solicits questions from the crowd.  Here is one that I'd like to see asked and answered (but I know won't be).

Oh Great One, Sage of Omaha, Slayer of Markets, Scourge of Boardrooms everywhere:

Given that your early endorsement of BHO was just about the only economic credential that the President ran on and given the gross economic mismanagement and profligacy demonstrated by him since election, do you regret your endorsement?

And if not, precisely what have the people that you are primarily accountable to:  the Berkshire Hathaway shareholders, gotten out of your very visible (and tightly tied to Berkshire) politicking?

Do you feel obligated to advocate policies that are good for our company or just ones that make you personally popular with the press?


Are the values and beliefs of a multi-billionaire like you consonant with the interests of your largely middle class shareholders?  Do  you have any obligation to represent  your shareholder's interests when speaking to public policy issues?