Archives for November 2011
It appears that many do not understand why college costs so much, even though it is relatively simple to explain. Some—who I will leave nameless—even go as far to say that the reason tuition is rising is because states are subsidizing less of it! Well, Holy Postnominal Letters, Batman, where did you get that idea?
In reality, the situation is a bit more complicated than that, though not by much. Here’s a simplified explanation:
- Federal government guarantees education money
- Pell Grants
- Stafford Loans (Both subsidized and non-)
- Backstopping all other education loans
- Private lenders lend wildly, as their loans are guaranteed by Uncle Sam
- Students take on loans to pay for their education
- Universities notice this, realize their customers are guaranteed to have money, and jack up prices
- Students suffer, while university presidents and lenders prance around in glee
Okay, so maybe the prancing part is a bit much.
Mish Shedlock, who I regard as one of the finer macroeconomists out there, has taken some stabs at this. You can read here. Or over here. Or yes, even more on this one. Mish also wrote, in response to Obama’s aide, David Plouffe, saying that they will “safeguard” student loans: “Bragging about safeguarding student loans is like bragging about safeguarding the plague.”
Lashing out at the tea party movement this weekend, Secretary of Labor Hilda Solis called them “teabaggers,” a favorite term from the Left to describe the protesters that have been a headache for the Obama Administration and Democrats:
Secretary of Labor Hilda Solis embraced the derogatory term used to describe members of the tea party in an appearance at the Florida Democratic Convention over the weekend.
“I’ll be darned if I’m going to set that aside now because a few tea baggers want to somehow muzzle my voice,” she said, according to the Tallahassee Democrat. “We don’t have to sit back and allow a minority in the Congress, known as the tea party, to dominate the discussion in our households.”
This story is just getting picked up in the national press, so expect to hear more about it in the coming days — perhaps even a call for an official repudiation from the White House.
Maybe it’s me, but this sort of childish rhetoric seems beneath a public official. You don’t have to agree with the tea party movement, but they’ve proven to be a formidable obstacle for Democrats both at the ballot box and in implementing policy. And just because you are sitting at the top doesn’t mean you’re entitled to have your agenda forced through, which is where this frustration is coming from.
Seriously, if you want the discourse to change, as President Obama has said before, then he needs to start with his own administration.
Muammar Gaddafi may be dead and his regime removed from power, but reports out of Libya are that al-Qaeda’s flag is flying over the so-called birthplace of the recent uprising that removed the dictator from power:
The black flag of Al Qaeda was hoisted in Libya yesterday as Nato formally ended its military campaign.
The standard fluttered from the roof of the courthouse in Benghazi, where the country’s new rulers have imposed sharia law since seizing power.
Seen as the seat of the revolution, the judicial building was used by rebel forces to establish their provisional government and media centre.
The flag has been spotted on the courthouse several times, prompting denials from the National Transitional Council that it was responsible.
Complete with Arabic script declaring ‘there is no God but Allah’ and a full moon underneath, it was hoisted alongside the Libyan national flag.
There are reports that extremists have been seen on Benghazi’s streets at night, waving the Al Qaeda flag and shouting ‘Islamiya, Islamiya! No East, nor West.
Oh, that’s good. And while I’m not one to panic over Sharia Law coming to the United States, it does concern me that our overly aggressive foreign policy may very well lead to an Islamic government in Libya. Conor Friedersdorf also points to comments made recently John Burns, a foreign policy analyst, that leave a very bleak view of Iraq’s future:
While Occupy Wall Street and other Leftists are whining endless about the rich and oppressive corporations and costing local taxpayers millions, Morgan Housel of the Motley Fool notes that many of these protesters would likely find themselves in the 1% income earners…in the world:
The recent Occupy Wall Street protests have aimed their message at the income disparity between the 1% richest Americans and the rest of the country. But what happens when you expand that and look at the 1% richest of the entire world? Some really interesting numbers emerge. If there were a global Occupy Wall Street protest, people as well off as Linda Frakes might actually be the target.
In America, the top 1% earn more than $380,000 per year. We are, however, among the richest nations on Earth. How much do you need to earn to be among the top 1% of the world?
That was the finding World Bank economist Branko Milanovic presented in his 2010 book The Haves and the Have-Nots. Going down the distribution ladder may be just as surprising. To be in the top half of the globe, you need to earn just $1,225 a year. For the top 20%, it’s $5,000 per year. Enter the top 10% with $12,000 a year. To be included in the top 0.1% requires an annual income of $70,000.
Of course, goods and services cost different amounts in different countries. These numbers only apply to those living in the U.S. To adjust for purchasing power parity, those living in Western Europe should discount their dollar-denominated incomes by 10%-20%, Milanovic says. Those in China and Africa should increase their incomes by 2.5-fold. India, by threefold.