Wednesday, February 23, 2011

It's coming...

I tried to summarize...short attention spans and all...but Richard Fernandez gets it so right:

(Hey Pat! It all comes down to Basic Economics.)

What is going on in Wisconsin?  Are Republicans against teachers? Its about Unions. Its about Unions? It is about basic economic principles.  Just like the dangers of Obamacare - Fernadez explains that Wisonson, Tunisia, Egypt, etc. all share similarities with the housing bubble.  When you cloud up the relationship between buyer and seller - by trying to make the transaction easier, or by trying to make the transactions happen faster, with more frequency, by trying to help some buyers who can't afford what the sellers have (all good intentions to be sure) distort the product (Education, Houses, Cars, etc.).  The buyer can't see exactly what it is they are getting.  They lose the ability to judge its worth.  Blame the seller too - they sell easier, faster, with more frequency, and they think they'll get out before the bubble bursts.  Well, some of them do.

That's my take, read Fernandez, click here.

"...A New York Times profile last week described Courtney Munna, a 26-year-old graduate of New York University with nearly $100,000 in student loan debt — debt that her degree in Religious and Women’s Studies did not equip her to repay..." (Glenn Reynolds)
If BANKS instead of the GOVERNMENT were giving out student loans, do you think a bank executive would have lent her the money, expecting a return on his investment?

"...Beyond the notions of “collective bargaining” rights, or “the right to food”, “right to migrate”, “right to carbon credits”, “right of return”, or the “right to welfare” or whatever rights people thought they had, was the crass question of whether the society on whose transfer payments were going to underwrite it could afford it. The unrest that is sweeping the world is underlain by a struggle between the core idea of market economics that you can’t get something for nothing and the fundamental promise of every statist politician that of course you can..."
Beware of Democrats...AND Republicans!

"...Social policy — things we wanted and thought we could afford — whether food subsidies, biofuel manias or higher education bubbles, have created shortages and gluts that cannot now be resolved without changing the underlying policies themselves..."
Farm subsidies! They don't help farmers!

"...Would you like your college education to be free? Sure, who wouldn’t? Better question: Would you like the results of free education? Well, the people of Tunisia and Egypt are learning that whenever the government supplies something, it is never really “free.”..."
Think we dumbed down our schools - wait until socialized medicine removes the profit motive.  SOME will still make it work, some will still invent, and make money - but in the aggregate, it will be destroyed.

"...At its most basic nonpolitical level, the showdown in Wisconsin is about the price of teachers; about a bubble. It is about whether Wisconsin can continue to afford a union/monopoly supplied product whatever the disparity with the true market value of their ‘value added’ represents. And in other parts of the world it is about the price of food, energy, or the price of maintaining juntas, politburos, kings, emirs or presidents for life..."
How about Presidents and members of congress taking tax payer funded trips to 'talk to the people.'  Why don't the twits just use twitter?

"...Their (bursting bubbles around the world) frequency and persistence are a sign that they are cascading on to each other, like a collapsing house of cards. The growing crisis over the federal deficit, like unrest over food prices, fuel supplies and job allocations in the Middle East — even the troubles in China — are about prices which have been distorted by government policy and now seek an equilibrium it can’t attain..."

...One day we may all miss Time and Newsweek or the Ivy Leagues the way we miss vaudeville. But there’s no way back..."
I, for one, enjoy vaudeville!


Patti said...

I'm down with this.
Also(I am commenting about your previous post)- when Pot starts talking to've smoked too much. Just sayin'.
ALSO...your playlist is empty.

Race Bannon said...

I'll find something set the mood.

nicole said...

It's going to take me a few read-throughs before I'm "down with this."

LL said...

The government needs to get OUT of people's lives to the extent possible, which means that student loans are not a government problem.

And this is my point: Sally Mae loan money pouring into universities jacked the relative price of education up. Because the money was there, the institutions of higher learning were empowered to offer "garbage majors" like womyn's studies and ethnic studies that have NO relevance (as majors - as liberal arts elective classes, who cares?). If you are a chemistry major or an accounting major and want to take a class on arcane French literature, I think that's fine - maybe even commendable. However the point is that you'll get a degree that prepares you for a JOB.

If people couldn't 'afford' to pay more, universities would charge less. The bubble theory applies completely here. And there is a government program to blame. The same is true of the housing market. If government programs didn't underwrite unqualified people, there would have been no massive mortgage defaults -- or bubble in the price of homes.

Socialism doesn't work and eventually you run out of other people's money.

Race Bannon said...

I'll bet (not my money) there is a market, (niche for sure, and not quite the people I hang with) for arcane French Lit..but NOT at State Universities. I can't think of the movie, but the character got a degree in philosophy, and the older man asked him - "Oh, so you can think...about not having a job."