Talent hits a target no one else can hit;
Genius hits a target no one else can see.
Arthur Schopenhauer
On Stopping the Madness:
The College Cost Bubble
You have to wonder what people were thinking. During the maniac 1990's, even after then Fed Reserve Chair Greenspan fretted about the "irrational exuberance" of stock market gains, particularly the tech-heavy Nasdaq. A lot of Internet companies were intent on grabbing market share, building up infrastructure--and losing a lot money. "Never mind," said the traders, in the process of the Nasdaq pushing through an unprecedented 5000, "profits don't matter. It's a new economy..."
The US had a fairly stable percentage of homeowners whom had started out by saving for a conventional down payment. The Democrats wanted to extend the market to lower-income segments for which a traditional down payment was a barrier to entry. Money became available to non-traditional buyers; generally more buyers are to the seller's benefit. Easy money contributed, just as the Fed's 1990's policy, e.g., the exaggerated Y2K crisis, to a manic market. (I should point out that President Bush also hyped the fact of historically high home ownership and a GOP Congress had passed homeowner-friendly tax policies.) This is not Monday morning quarterbacking, but I questioned early on how sustainable it is in a country with a declining birth rate and struggling median household income, to maintain high price appreciation rates.
Whether the stimulus is monetary or fiscal (e.g., the federal government's dominance of the student loan program), it results in dysfunctional consequences. Increased numbers of students with college funding pushes up costs just like more applicants with loan approvals push up housing prices. And the government (i.e., the taxpayers) risks losses as many students drop out and graduates in many disciplines don't qualify for higher-paying jobs.
[Here is the video URL.]
The Minimum Wage
and Labels (Conservative, Liberal, Libertarian)
I've been fighting the good fight promoting economic liberty and against government manipulations of the markets, e.g., high tariffs, wage/price controls, the minimum wage. This has nothing to do with my empathy for families struggling day by day to make ends meet. A faithful reader knows I started college seriously considering becoming a Roman Catholic priest, in particular, considering a religious order with a vow of poverty. I have high regard for Catholic and other charities, and a lot of good conservatives tithe (like Mitt Romney). Like a number of Christians, I don't discuss my own charity contributions out of principle: I'm not looking for good publicity (Matthew 6:1).
The reason I oppose minimum wage laws and legislation is because it makes it difficult for workers to find a job, particularly inexperienced workers like teens: it's a barrier to entry to the labor market, a cruel one imposed by morally self-superior progressives (whom, by the way, are far less likely to tithe on their own).
According to the WSJ:
University of California at Irvine economist David Neumark has looked at more than 100 major academic studies on the minimum wage, and he says the White House claim of de minimis job losses "grossly misstates the weight of the evidence." About 85% of the studies "find a negative employment effect on low-skilled workers."But this is clear from first principles. I was delighted to see one of my favorite free market economists, Don Boudreaux write one of his classic pithy letters, this one to POTUS. He notes that Obama understood by supply/demand implications of raising tariffs on Chinese tire imports (a protectionist, anti-consumer policy), which has the effect of suppressing Chinese tire sales, but he doesn't seem to be aware that the same principle applies when you effectively raise an indirect tax (a minimum wage surcharge) on low-skill worker wages.
I admire Boudreaux's patience in dealing with progressives citing the same old same old poorly designed economic studies. But there's a limit to his patience: one email writer accused him of being a "conservative economist".
Bad choice of words: Boudreaux is a "classical liberal": not a "social liberal" like Obama and almost all federal Democrats. "Classical liberals" believe in maximizing individual liberty (including the right to offer wages based on the free market). Some conservatives (e.g., paleoconservatives like Pat Buchanan) espouse mercantilistic policies, not a free market. Boudreaux does not vote on principle. Like most libertarians, he probably doesn't agree with Big Defense, interventionist foreign policies, hypocritical big spenders and tariff-raisers, supporters of crony bailouts or Big Business, those whom voted for renewal of the Patriot Act, and the war on drugs. I'm sympathetic to these objections in principle.
My own conservatism is based on certain principles, institutions and values, not a Burkean style conservatism, say worried about stare decisis or the unintended consequences of eliminating, say, the Dept. of Education, or radically reforming Medicare.
Musical Interlude: My Favorite Groups
The Supremes/the Temptations. "I'm Going to Make You Love Me." You take two supergroups, an infectious song, and the result is pop music magic.
