Category: folly

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Accountability folly free trade & free markets ideological culture media and media people national politics & policies

Next Bubble to Pop?

bubble, Paul Krugman, recession, student loans, debt, folly, David Stockman

There was a great and wondrous moment, a decade and a half ago, when economist Paul Krugman, Nobel Laureate and New York Times’s unregistered shill for the Democratic Party, suggested that what the economy really needed was another housing bubble.

What he wrote, specifically, was this: “To fight this recession, the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

Krugman later reinterpreted that statement in a clever (if not convincingly honest) way. After the subprime loan industry collapsed in 2008, he attributed that bust to financial market malfeasance, not the Fed-inflated bubble we got . . . and that he had previously called for.

Now we are looking at several ready-to-burst bubbles:

  • The student loan debt problem seems scary.
  • The sovereign debt problem is undoubtedly more dangerous and far larger, but is perhaps still able to take on more fake money — all the world’s 1s and 0s have to go somewhere!
  • So the current bets seem to be on a huge auto loan industry bubble, about to pop.

Loan terms have increased in duration, and the average amount new car buyers are financing has jumped over 17 percent in five years. The idea has been “to continually lower monthly payments,” says David Stockman, “so people can get behind the wheels of vehicles they can’t really afford.”*

Which bubble does Krugman favor? I don’t have the stomach to check.

But, be certain, as we play pop goes the bubble, he’ll play pop goes the weasel.

This is Common Sense. I’m Paul Jacob.

 

* Stockman seems to be echoing warnings made by Eric Peters, of Eric Peters Autos.

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folly ideological culture media and media people meme national politics & policies

CNN, You’ve Been Trolled

CNN, Trump, meme

The Cable News Network, known popularly and un- as CNN — and satirically as the “Clinton News Network” and “Fake News” — so hysterically hates the president that it has become completely unhinged.

Well, unhinged from decency and journalistic standards, anyway.

The latest slips downward?

First, some pseudonymous guy* on Reddit created a little gif** that placed a CNN-logo on the head of a wrestler whom Donald Trump “took down” in some weird bit of nonsense publicity the entertainer-entrepreneur was prone to, pre-presidency. Trump then retweeted a version of the gif, calling CNN (once again) “fake news.” This made CNN look silly,*** so CNN tracked the originator down and pressured him to make a humiliating apology — for it and other, more tasteless contributions. He deleted most of what he had done on Reddit.

CNN looks petty: a bully. And clueless about the free-for-all that is the Internet.

The Twitterverse erupted against the news outfit.

This went super-viral on July 4, the same day that CNN tried to humiliate Mr. Trump by tweeting a quote from Abraham Lincoln: “Let the people know the facts, and the country will be safe.”

How apt!

And yet . . . Lincoln did not say it. Not exactly. The “fake news” network faked a presidential quote.

CNN apparently doesn’t understand that responding to trolls feeds the trolls and makes you look bad, to boot.

I suppose you could blame Trump for all this. His ridiculous tweets and whoppers have so corrupted the culture that his enemies (CNN being the obvious media leader) have adopted his methods.

But I won’t. Not this time.

Just blame the people at CNN.

This is Common Sense. I’m Paul Jacob.

 

* He referred to himself as a “shitposter,” which is what satirists and trolls on the Web are called.

** A “gif” is an image file, and has been around since the beginning of the World Wide Web. Nowadays, when we talk about “gifs” we usually are referring to brief animated gifs.

*** Frankly, it made the president look silly, too.

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CNN, Trump, meme

 

Categories
Accountability education and schooling folly local leaders moral hazard

Ugly Scrutiny

Prince George’s County Public Schools, grading, education, incentives,

Prince George’s County Public Schools have increased their graduation rates faster than all other schools in Maryland. Measuring from 2013 to 2016, the graduation rate jumped from 74.1 percent to 81.4 percent.

Great! 

Well . . . a fly has stuck itself into the soothing salve of their success — what county principals called an “unfair, ugly scrutiny.” Said scrutiny came from the Old Line State’s Board of Education, which voted to pursue an investigation* into what the Washington Post described as “grade tampering” to “drive up graduation rates.”

Keith Maxwell, the county schools’ CEO, says he welcomes the investigation. 

Dozens of whistleblowers have reportedly come forward. Several spoke with the Post, anonymously, for fear of retaliation: 

  • “We knew that it wasn’t real,” said a teacher at a high graduation rate school. “It’s just common knowledge that they push kids through who shouldn’t be pushed through.”
  • “I’m not averse to helping a student pass,” one educator explained. “But when people are pressuring you to do it, when it happens behind your back, that’s when it’s problematic.”
  • “For a child not to come to class — maybe been in class three days in a whole quarter — and you’re going to change their grade?” questioned another teacher. “It’s not right. If they don’t come to school, and they don’t do the work, they deserve to fail.”

She added, “It doesn’t help them.”

Which is the point: the students are being cheated. If graduation doesn’t mean anything, then . . . their diplomas don’t mean anything.

This is Common Sense. I’m Paul Jacob.

 

*The investigation had been requested by Governor Larry Hogan.

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Accountability folly general freedom ideological culture moral hazard nannyism national politics & policies privacy responsibility too much government

UK Death Panel

healthcare, socialism, rationing, government

Six days ago, the European Court of Human Rights sided against the parents of Charlie Gard, a severely ill boy, refusing to allow them to take their infant son to America where he could receive full (and privately funded) experimental treatment. The court ruled that removing the child from the hospital would cause him “significant harm” — and authorized the termination of life support.

Yesterday, this site quoted Ben Shapiro on the case. Shapiro sees this sad story as a grand demonstration of what is wrong with government-funded and -managed health care:

Bernie Sanders tweets about how nobody should be denied care because they can’t afford it? But that’s what happens all the time under socialized medicine — the difference being, it’s not about you not being able to afford it, it is about the government not being able to afford it.

Economists tell us that, in a world of scarcity, there will be rationing, willy nilly: either by price (according to consumer and producer choices) or else by government diktat.

Last week, the European Court of Human Rights did its due diligence to ration resources — serving as a Death Panel.

The scheduled to pull the plug on Charlie last Friday, but there’s been a last-minute reprieve — no doubt a result of pressure from America and the Vatican.

Though the doctor who testified before the court insisted that any American medical institution would have provided the treatment he offers, the best the Gards can apparently hope for, now, is to be allowed to take Charlie home to die.

Think of it as socialized medicine in action.

This is Common Sense. I’m Paul Jacob.

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Accountability folly free trade & free markets general freedom local leaders moral hazard nannyism national politics & policies property rights responsibility too much government

Against Flexibility?

Seattle, Oregon, unintended consequences, work hours, scheduling, Fair Work Week, labor

Do politicians have any idea what they are doing?

In Oregon, Senate Bill 828 just passed the Senate and is now being favorably reviewed in the House. The law would require “large employers in specified industries to provide new employee[s] with estimated work schedule and to provide current employee with seven days’ notice of employee[’s] work schedule.”

But will the measure help employees? Really?

The notion is called the “Fair Work Week.” Pushed by Democrats, it has gained bipartisan support. The basic idea: allow time (under full force of law) for workers to manage their own schedules and personal economies.

Trouble is, in the name of making work easier to manage, it attacks flexibility.

Which is something many workers want. More than notification.

Indeed, the study commissioned by the City of Seattle for their similar regulatory scheme acknowledged that reducing flexibility is not necessarily a godsend for workers.

“A more predictable schedule,” the report noted, “is not always one that an employee would prefer. A schedule known with certainty is a cold comfort if it yields too little income to survive.”

The report went on to explain that many of the labor market’s scheduling inconveniences are themselves the result of other government regulations, such as ObamaCare.

Christian Britschgi, writing at Reason, predicts that passing the Oregon law would mean “a fairer worker week” for some, but for others, “no work week at all.”*

Meanwhile, the Seattle study noted that it was workers in small businesses who are most likely to be discomfited by last-minute scheduling changes. The Oregon law applies only to big businesses.

This is Common Sense. I’m Paul Jacob.

 

* A standard, negative consequence of most “well-intended” legislation.

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folly free trade & free markets general freedom ideological culture moral hazard nannyism national politics & policies property rights responsibility too much government

Minimally Mugged By Reality

minimum wage, business, pay, workers, fallacy, profit, Bernie Sanders

It should shock no one: forcing businesses to pay steep minimum wages ends up pushing some businesses out . . . of business. Yesterday I looked at what minimum wage laws can do to low-skilled workers. Today, consider the employers. When we make it harder to turn a profit, it becomes harder to profit. Businesses that can’t at least break even close their doors.

Many business owners are inclined to promote, politically, politicians who in turn support minimum wage hikes. Do they change their minds when mugged by reality? Alas, the trauma alone won’t convert a person to principled allegiance to free markets.

I was reminded of this fact by a story about business owners in Minneapolis who stress their Sandernista credentials.  

“I’m a bleeding-heart liberal and I’m a big Bernie Sanders supporter,” says businesswoman Jane Elias, an art store owner. “But this whole flat-out, $15, one-size-fits all is just wrong.” Another victim, restaurant owner Heather Bray, says she’s a “proud, proud progressive.” But: “The arithmetic doesn’t work. People will not continue to go to budget-conscious restaurants when they’re no longer budget-conscious.”

So . . . arbitrary minimum-wage demands don’t add up in light of the demands of running their businesses under their particular circumstances. Well, no disagreement here. But take it further, please. Keep doing the math. The bottom line is that everybody, not just you — and always, not just sometimes — has the right to make his own decisions about his own life and property.

And profit by it.

This is Common Sense. I’m Paul Jacob.

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crime and punishment folly free trade & free markets general freedom nannyism national politics & policies responsibility too much government

Serving Consumers? Punish!

Amazon, monopoly, trusts, antitrust, trade, free trade, big business, economic myths

New media ballyhooer Douglas Rushkoff made waves this week. Citing an un-named friend who went hysterical about Amazon.com’s purchase of Whole Foods, he asserted that such “unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force.”*

The company has “surely,” he claimed, “reached too far.”

Apparently, serving customers exceptionally well is bad for business.

Yes, he almost totally ignored the pro-consumer benefits of Amazon. Had to — his case makes no sense when you factor in us consumers. He focused, instead, on Amazon’s success in terms of its recent “online and offline retail sales growth” and its control of 40 percent of cloud storage and streaming services.

He went on to spin a bizarre fantasy about how disruptive bigness is in business. His economically illiterate farrago reminds me of the sad case made against pre-antitrust Standard Oil, a company which, during the whole time of its growth prior to break-up, kept on producing more fuel at ever-decreasing prices.** Broken up because of . . . fears about how businesses change. And of bigness itself.

As long as consumers are being served, this reaction strikes me as paranoid. When businesses get big (and even near-monopolistic) and then cease to serve customers, they fail. While serving customers, there is no call for fretting over businesses that move from one success to another  — which is what Rushkoff has the gall to worry about.

The call for Amazon’s break-up over-sells government and necessarily under-serves consumers.

This is Common Sense. I’m Paul Jacob.

 

* Rushkoff’s piece in Fast Company was the first I heard of such a “call.” Rushkoff is the coiner of the term “media virus” and a sort of populist pusher of market skepticism.

** For the bizarre story of the Standard Oil case, and how it made no economic sense whatsoever, see Dominick T. Armentano, Antitrust: The Case for Repeal (Ludwig von Mises Institute, 1999), p. 41-43, and Antitrust and Monopoly (Independent Institute, 1990), pp. 57-60.

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Accountability folly free trade & free markets general freedom initiative, referendum, and recall local leaders moral hazard porkbarrel politics responsibility too much government

Go Nats?

stadium, Potomac Nationals, pork, free markets, taxes, referendum, crony, welfare

Just a few miles away from where I live sits the stadium of the Potomac Nationals. I’m a fan. I’d hate to see the team we call the P-Nats leave.

But . . . Hasta la vista.

The owner of this minor league affiliate of Major League Baseball’s Washington Nationals is demanding a new stadium. He threatens to move out of Prince William County, Virginia, if he does not get it.

The Prince William County board of supervisors has already expressed interest in floating bonds to raise the $35 million the fancy new stadium would require — with the privately owned team paying the money back, with interest, over the next 30 years.

Compared to other crony-ish deals around the country, not such a terrible taxpayer swindle. Still, zillions of wrongs don’t make this right. County taxpayers would be on the hook in case of default. And if the marketplace believed the team could actually make such payments, a bank or other investors would come to the rescue.

Thankfully, a monkey wrench has been thrown into the deal. A county supervisor has proposed that voters should get a chance to decide, via a November referendum. The board of supervisors will consider the referendum tonight.

Voters should get the final say. But if there is a referendum, as much as I love having the team here, I will vote NO. I don’t cotton to forcing others to pay for my preferred entertainment.

Government has certain legitimate roles. Subsidizing sports is not one.

Even if the new stadium would be closer to my home than the old one.

This is Common Sense. I’m Paul Jacob.

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folly free trade & free markets general freedom moral hazard nannyism responsibility too much government

Signature Nonsense

nanny state, too much government, books, authentication, California, busybody, Brian Doherty’s Radicals for Capitalism, Jerry Brown

Did anyone really need this?

Last year, California’s Governor Jerry Brown signed into law Assembly Bill No. 1570, which concerns collectibles, particularly signed-by-author or artist books. But it doesn’t mention books, and is confusingly written. What a mess.

Who asked for it?

It certainly wasn’t the struggling booksellers who have come to depend on signed authors’ copies. In the Age of Amazon.com, book vendors need to add value to stay afloat.* Author-signed copies help.

The law says that for signed-by-creator collectibles sold for more than $5 — yes, a mere five smackers — sellers must provide customers a Certificate of Authentication. The law specifies nine “helpful” directions for said certificates. So imagine an edition of Brian Doherty’s Radicals for Capitalism, signed by the author at, say, a non-profit dinner, or at a bookstore signing, or even a late-night bar —discounted to not much over five bucks.** The bookseller must not only provide a certificate, but list the book’s provenance. Talk about an added cost of doing business.

I mention Mr. Doherty not merely because of his excellent book, but because he has not unreasonably confessed that “my own interests could be harmed by any attempt to actually enforce the letter of this law.”

This week on EconTalk, economist Mike Munger mentioned the market’s built-in regulatory features — reputation being the most obvious — for helping consumers avoid getting ripped off buying books . . . and paintings . . . and anything else improved by creator signature.

But, really, can’t we make do with a little caveat emptor as well as caveat lector? Better than regulations this dense.

This is Common Sense. I’m Paul Jacob.

 

* The number of independent bookstores plummeted (down a thousand) around the country between 2000 and 2007. But there seems to be an increase since then, despite (or because of?) Abebooks and Alibris and other dot coms.

** I found a signed copy of Doherty’s history at Abebooks for $10.

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Accountability crime and punishment folly ideological culture moral hazard responsibility

Sticks & Stones

James Hodgkinson of Belleville, Illinois, came to Alexandria, Virginia, shooting, blame, scapegoat, excuses, rationalizations

James Hodgkinson of Belleville, Illinois, came to Alexandria, Virginia, where for the last few months he lived in his van . . . undoubtedly down by the river. Yesterday, he wielded an assault rifle, attempting to massacre Republican congressmen at a park practicing for tonight’s annual charity Congressional Baseball Game.

He shot House Majority Whip Steve Scalise, who remains in critical condition; a lobbyist also in critical condition; a staffer, hit in the leg and released from the hospital; and two Capitol Police officers, who still shot and captured the shooter. Hodgkinson later died in custody.

Politically, the down-on-his-luck, 66-year-old assailant was a big fan of MSNBC’s Rachel Maddow and volunteered for Sen. Bernie Sanders’ presidential campaign. So, what does his act of violence say about Maddow? Nothing. How much is it Sen. Sanders’ fault? Zero.

The Washington Post reports that Hodgkinson was “angry with President Trump,” noting this violence came “amid harsh political rancor and a divided country.”

Michelle Malkin declared she had “warned for more than a decade about the unhinged left’s rhetoric.”

“The hatred is raw, it is undiluted, it’s just savage,” Rush Limbaugh offered. “These are the mainstream of the Democrat base, and I don’t have any doubt that they are being radicalized.”

It harkens back to then-President Bill Clinton’s success in blaming the 1995 Oklahoma City Bombing on “loud and angry voices” (read: Rush Limbaugh) who “spread hate. They leave the impression that, by their very words, that violence is acceptable.”

Sure, we should hold speakers accountable for dehumanizing verbal attacks on their opponents. But not for acts of violence these speakers do not commit, nor condone.

Condemn the violence. Stop using it to smear your opponents.

This is Common Sense. I’m Paul Jacob.

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