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The Case against Student Aid - Aaron Smith - Mises Daily: "The unintended consequences of [Federal Financial Aid] are numerous, indeed. Skyrocketing tuition, high default rates, and pathetic graduation rates — to name a few — are all byproducts of a system that incentivizes inefficiency, largess, and misguided decisions. Oddly, while many students aren't legally permitted to take a sip of alcohol, they are systematically encouraged to contract into years of, essentially, indentured servitude."
"teaching loads plummeted an astounding 36 percent between 1987–1988 and 2003–2004. It has been estimated that such reductions have increased costs by $2,850 per student at public four-year colleges.
Of course some research is indeed productive. However, it is highly unlikely that many of the 21,674 scholarly publications written on Shakespeare between 1980 and 2006, for example, had a demonstrable impact on student success. Colleges have much to save — and students even more to gain — when college officials reprioritize the work of their faculties."
"The national six-year graduation rate from four-year institutions is an abysmal 57.3 percent. For African Americans, whose well-being statists are supposedly trying to promote, this figure is 42 percent. In addition to wasted time and the dark cloud of failure for those who don't graduate, 8.8 percent of all borrowers were in default in 2009. In fact, 2 million senior citizens have student-loan debt, 11.2 percent of which are in default."
"Every degree type, after all, is indiscriminately given a four-year curriculum. It is rarely questioned why a student studying engineering and another studying business are to attend college for precisely the same number of years."
"In the absence of FFA, a student would be more cognizant of their return on investment (ROI). Of course, actually having to pay for an education, and not merely buy one, would immediately increase their sensitivity to price."
"True, fewer students would eventually enroll in higher education, as critics will likely point out with vigor — but is this worse than having myriad students dropping out with debt and many more graduating with impotent degrees?"
"Currently, the costs of student-loan default are borne predominantly by taxpayers. If colleges are, indeed, confident that their programs will result in successful outcomes — then why shouldn't they assume this risk?"
Thursday, May 31, 2012
Embracing Progress | Marian L. Tupy | Cato Institute: Commentary
Embracing Progress | Marian L. Tupy | Cato Institute: Commentary: "In the 1970s, hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.” Thus began The Population Bomb"
"Since those now infamous words were written, world population has doubled from 3.5 billion to 7 billion, inflation-adjusted average annual income per person has risen from $3,147 to $5,997, and life expectancy at birth has increased from 59 years to 69 years."
"In sub-Saharan Africa, the caloric intake increased from 2,290 to 2,420 in just 16 years."
"[Africa]’s population has more than trebled — from 280 million to 854 million — since 1968, and life expectancy has increased from 44 years to 54 years."
"In 1981, 70 percent of people in poor countries lived on less than $2 a day, while 42 percent survived on less than $1 a day. Today, 43 percent live on less than $2 a day, while 14 percent survive on less than $1. “Poverty reduction of this magnitude is unparalleled in history,”"
"“Violence has been in decline for thousands of years, and today we may be living in the most peaceable era in the existence of our species.” Indeed, studies have shown that hunter-gatherer societies experienced about 524 violent deaths per 100,000. The rate of violent deaths in the war-torn 20th century, by comparison, amounted to a mere 60 per 100,000."
"Why are we as a species so willing to believe in doomsday scenarios that never quite materialize?"
"Since those now infamous words were written, world population has doubled from 3.5 billion to 7 billion, inflation-adjusted average annual income per person has risen from $3,147 to $5,997, and life expectancy at birth has increased from 59 years to 69 years."
"In sub-Saharan Africa, the caloric intake increased from 2,290 to 2,420 in just 16 years."
"[Africa]’s population has more than trebled — from 280 million to 854 million — since 1968, and life expectancy has increased from 44 years to 54 years."
"In 1981, 70 percent of people in poor countries lived on less than $2 a day, while 42 percent survived on less than $1 a day. Today, 43 percent live on less than $2 a day, while 14 percent survive on less than $1. “Poverty reduction of this magnitude is unparalleled in history,”"
"“Violence has been in decline for thousands of years, and today we may be living in the most peaceable era in the existence of our species.” Indeed, studies have shown that hunter-gatherer societies experienced about 524 violent deaths per 100,000. The rate of violent deaths in the war-torn 20th century, by comparison, amounted to a mere 60 per 100,000."
"Why are we as a species so willing to believe in doomsday scenarios that never quite materialize?"
Bad Idea of Cellphone-Driver Bans Could Go National | Walter Olson | Cato Institute: Commentary
Bad Idea of Cellphone-Driver Bans Could Go National | Walter Olson | Cato Institute: Commentary: "A federally prescribed traffic code imposes uniformity on a subject for which the optimal rule might well be different on a North Carolina country lane than in Los Angeles. That may be one reason the Constitution's framers wisely excluded such authority from among the federal government's enumerated powers."
" "states with cellphone bans have seen no real decrease in accident rates," and even bans on texting don't seem to have had the intended effects, perhaps because furtive drivers begin lowering their gaze to a phone held below dashboard level, making the risk worse."
"The feds insist that driver distraction is "linked" to 3,000 fatalities a year; even if you accept that number as accurate, most of the cases arise from distractions other than phones. But the number itself is suspect: the feds blame a crash on distraction if a cellphone is so much as "in the presence of the driver at the time of the crash." There's seldom any real effort to reconcile the supposed epidemic of phone distraction with the reality of accident statistics, which show per-mile highway fatalities continuing to fall to all-time lows."
"The near-ubiquity of cellphones in vehicles bolsters societal safety in all sorts of ways. For example, it improves the chance that other drivers will call a wreck in to 911 speedily enough for rescuers to make a difference, and it cuts crime rates by multiplying the number of "eyes on the street" in immediate touch with authorities. Disturbingly, LaHood seemed to suggest that he wants to ban cellphones even for commercial drivers, who pioneered mobile communication and have been using it reasonably safely for decades."
"he was not as concerned about people who eat, apply makeup or perform other distracting activities in cars because 'not everyone does that.'"
"According to Washington radio station WTOP, he personally combats the problem while driving around the capital by honking his horn at drivers he sees holding devices to their ears.
Points out Mike Riggs at Reason magazine: "Which is more of a distraction while driving: holding a phone up to your ear, or having a stranger pull up behind/beside you and lay on the horn for no apparent reason?" Riggs also notes in a second Reason article that concern about driver distraction circa 1930 led to crusades in high places to ban the newly developed car radios, which, fortunately, was resisted by the motoring public."
" "states with cellphone bans have seen no real decrease in accident rates," and even bans on texting don't seem to have had the intended effects, perhaps because furtive drivers begin lowering their gaze to a phone held below dashboard level, making the risk worse."
"The feds insist that driver distraction is "linked" to 3,000 fatalities a year; even if you accept that number as accurate, most of the cases arise from distractions other than phones. But the number itself is suspect: the feds blame a crash on distraction if a cellphone is so much as "in the presence of the driver at the time of the crash." There's seldom any real effort to reconcile the supposed epidemic of phone distraction with the reality of accident statistics, which show per-mile highway fatalities continuing to fall to all-time lows."
"The near-ubiquity of cellphones in vehicles bolsters societal safety in all sorts of ways. For example, it improves the chance that other drivers will call a wreck in to 911 speedily enough for rescuers to make a difference, and it cuts crime rates by multiplying the number of "eyes on the street" in immediate touch with authorities. Disturbingly, LaHood seemed to suggest that he wants to ban cellphones even for commercial drivers, who pioneered mobile communication and have been using it reasonably safely for decades."
"he was not as concerned about people who eat, apply makeup or perform other distracting activities in cars because 'not everyone does that.'"
"According to Washington radio station WTOP, he personally combats the problem while driving around the capital by honking his horn at drivers he sees holding devices to their ears.
Points out Mike Riggs at Reason magazine: "Which is more of a distraction while driving: holding a phone up to your ear, or having a stranger pull up behind/beside you and lay on the horn for no apparent reason?" Riggs also notes in a second Reason article that concern about driver distraction circa 1930 led to crusades in high places to ban the newly developed car radios, which, fortunately, was resisted by the motoring public."
Herding Lizards - Doug French - Mises Daily
Herding Lizards - Doug French - Mises Daily: "The fact is, without the constant inflation of fiat money, people would (or have to) spend very little time thinking about their money or savings. Squirreling a little money out of every paycheck would suffice for retirement preparation."
"investors gravitate en masse to investments that are overpriced"
"Dopamine neurons are stimulated only if the rewards exceed the expectation. If investments work as planned, even if the result is good, there will be no rush at reward. And when results are less than expected, dopamine neurons are depressed — creating immense regret."
"Burnham points out that numerous studies show that people "reveal themselves to be proud. They are willing to lose money to retain their self-esteem." "
"Like thirsty animals on the African Savannah, humans are attracted to the speculative gains that financial markets promise. But, stopping for a drink is likely hazardous to our financial health."
"investors gravitate en masse to investments that are overpriced"
"Dopamine neurons are stimulated only if the rewards exceed the expectation. If investments work as planned, even if the result is good, there will be no rush at reward. And when results are less than expected, dopamine neurons are depressed — creating immense regret."
"Burnham points out that numerous studies show that people "reveal themselves to be proud. They are willing to lose money to retain their self-esteem." "
"Like thirsty animals on the African Savannah, humans are attracted to the speculative gains that financial markets promise. But, stopping for a drink is likely hazardous to our financial health."
Cost Shifting Does Not Justify Obamacare | Jeffrey A. Singer | Cato Institute: Commentary
Cost Shifting Does Not Justify Obamacare | Jeffrey A. Singer | Cato Institute: Commentary: "when people don’t pay their medical bills, somebody has to bear that cost. But who?
A study from the National Bureau of Economic Research found that in many cases, it’s other uninsured patients. Many uninsured patients who do pay their bills wind up paying the “list prices” for the services they received. The list price is well above what any provider expects to receive from an insurance company. Physicians collect more from those uninsured patients than they would from insured patients. That extra money often covers the cost of uninsured patients who don’t pay."
"cost shifting due to the uninsured raised private insurance premiums 1.7% “at most.”"
"Much of the current uncompensated care problem is due to a 1986 law called EMTALA (the Emergency Medical Treatment and Labor Act). This law bans hospitals from transferring patients to facilities set up to provide care to the indigent. In the process, it encourages people not to purchase health insurance and to use emergency rooms for primary care. People know that hospital emergency rooms must treat them, and cannot transfer them, even if they have no intention of ever paying for their care. So, for many, the urgency to purchase health insurance becomes less acute."
A study from the National Bureau of Economic Research found that in many cases, it’s other uninsured patients. Many uninsured patients who do pay their bills wind up paying the “list prices” for the services they received. The list price is well above what any provider expects to receive from an insurance company. Physicians collect more from those uninsured patients than they would from insured patients. That extra money often covers the cost of uninsured patients who don’t pay."
"cost shifting due to the uninsured raised private insurance premiums 1.7% “at most.”"
"Much of the current uncompensated care problem is due to a 1986 law called EMTALA (the Emergency Medical Treatment and Labor Act). This law bans hospitals from transferring patients to facilities set up to provide care to the indigent. In the process, it encourages people not to purchase health insurance and to use emergency rooms for primary care. People know that hospital emergency rooms must treat them, and cannot transfer them, even if they have no intention of ever paying for their care. So, for many, the urgency to purchase health insurance becomes less acute."
Inflation Isn't the Point of Monetary Easing | Timothy B. Lee | Cato Institute: Commentary
Inflation Isn't the Point of Monetary Easing | Timothy B. Lee | Cato Institute: Commentary: "In late 2008, the Federal Reserve screwed up and allowed the left-hand side of the equation, MV, to decline sharply."
They only control M and AFAIK it hasn't declined sharply.
"while NGDP fell by much more than that. Math tells us the rest of the decline had to be absorbed Q declining."
Sounds backwards. Falling NGDP didn't cause production to drop -- dropping production cause NGDP to drop.
"In other words, because prices didn’t fall fast enough, we got layoffs instead."
The government artificially restricts falling prices (especially labor)
"by expanding the money supply (M), the Fed can increase MV, which will necessarily increase PQ"
Since the Fed doesn't control V, increasing M can decrease V and not increase MV. So increasing M doesn't necessarily increase PQ. This is basic math and logic...
"If the economy is already humming along nicely, there’s not much room for Q to increase"
Productivity increases constantly increase Q and decrease P even(especially?) in a good economy.
"But if the economy is in a recession, with lots of idle workers and factories sitting around, then monetary stimulus will cause an increase in Q"
Workers and factories aren't easily changed to drastically new uses. It isn't easy for idle construction resources to be moved to manufacturing.
"We just need to convince them that a bit of extra inflation is a price worth paying for getting people back to work."
Getting people back to work is easy (force labor, drop pay, etc) but increasing NGDP isn't easy to do by just increasing M.
They only control M and AFAIK it hasn't declined sharply.
"while NGDP fell by much more than that. Math tells us the rest of the decline had to be absorbed Q declining."
Sounds backwards. Falling NGDP didn't cause production to drop -- dropping production cause NGDP to drop.
"In other words, because prices didn’t fall fast enough, we got layoffs instead."
The government artificially restricts falling prices (especially labor)
"by expanding the money supply (M), the Fed can increase MV, which will necessarily increase PQ"
Since the Fed doesn't control V, increasing M can decrease V and not increase MV. So increasing M doesn't necessarily increase PQ. This is basic math and logic...
"If the economy is already humming along nicely, there’s not much room for Q to increase"
Productivity increases constantly increase Q and decrease P even(especially?) in a good economy.
"But if the economy is in a recession, with lots of idle workers and factories sitting around, then monetary stimulus will cause an increase in Q"
Workers and factories aren't easily changed to drastically new uses. It isn't easy for idle construction resources to be moved to manufacturing.
"We just need to convince them that a bit of extra inflation is a price worth paying for getting people back to work."
Getting people back to work is easy (force labor, drop pay, etc) but increasing NGDP isn't easy to do by just increasing M.
Lagarde expresses regret about Greece comments | Fox News
Lagarde expresses regret about Greece comments | Fox News: Rice says the IMF has "great respect for Greece and the people and the sacrifices that many are making to overcome the economic crisis."
Sacrifices?
Sacrifices?
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