Cold War Fallout

The Cold War’s Most Dangerous Legacy - Jonah Goldberg

To me, the most obvious dangerous legacy of the Cold War would have to be the damage the Soviets did to the world. I don’t mean the millions they murdered; those dead do not threaten us now, even if they should haunt us.

I mean the relentless distortion of the truth, the psychological violence they visited on the West and the World via their useful idiots and their agents. I’m thinking not merely of the intellectual corruption of the American Left (which even folks like Richard Rorty had to concede), but the corruption of reformers and their movements around the globe. Soviet propaganda still contaminates, while nuclear fallout does not. Lies about America, the West, and the nature of democratic capitalism live on throughout the third world and in radioactive pockets on American campuses.

The Soviet effort to foster wars of national liberation, to poison the minds of the “Bandung Generation,” to deracinate cultures from their own indigenous building blocks of democracy, to destroy non-Marxist competitors interested in reform, to create evil and despotic regimes that are seen as “authentic” because they represent the “true will” of their subjugated and beaten down peoples: these seem to me to amount to the most dangerous legacy of the Cold War. Not least because it was those sorts of efforts that gave birth to North Korea in the first place.

College Education Trends

A Perfect Storm in Undergraduate Education, Part I - Thomas H. Benton

Unsurprisingly, Academically Adrift: Limited Learning on College Campuses (University of Chicago Press, 2011), by Richard Arum and Josipa Roksa, reveals that at least 45 percent of undergraduates demonstrated "no improvement in critical thinking, complex reasoning, and writing skills in the first two years of college, and 36 percent showed no progress in four years." And that's just the beginning of the bad news.

Marxist Economics

Marx Is Dead - Sarah Hoyt

I read somewhere, written by a more literate person - I believe an economist - that the weakest point of the Marxist theories was that Marx, as an economist, was such a bizarre failure he never understood the role of resellers.

...

But you really, really, really cannot study Marx for any length of time without seeing other holes. For instance, take his entire view of power relationships in society. It is clear these are modeled on Academic Relationships, which is why - poor bunny - he got the whole thing upside down and sideways. Marx didn't understand the concept of "mutual benefit."

...

Marx saw only exploitation.

Part of this was because of Marx's understanding of value, which is the pinnacle, or perhaps the foundation on which ALL his misunderstandings rest. It is also the most widely, insinuatingly pervasive of the Marxist concepts in our society.

To Marx value was raw material plus work. The means of producing that work (machinery, etc) were just sort of there. And he made no allowance for invention. (Which is why though Marxist revolutions often recruit intellectuals they're the sort of intellectuals who never had an original idea in their life.) Of course in our day and age, invention and original thought are at least as important as machinery in creating product. Also, the raw material fallacy means all the countries who have nothing else to sell feel "exploited" because we're taking their "value" away. Imbuing raw material itself with value means that it's sort of like stealing national treasure. This has given rise to an entire colonialist-exploitation-theory of history which has held more people in misery in developing countries than the most brazen robber baron could manage. And no one, NOT ONE seems to realize that their raw materials mean absolutely nothing if not used. If someone doesn't have an idea to use it. If the finished product is not good for something. In other words, if you're not producing something that someone else finds useful. (I.e. enough to pay for.) If the relationship isn't MUTUALLY beneficial.

...

Good old Marx is also responsible for that most insane of ideas, the minimum wage. Dictating a minimum wage people have to be paid is the same as saying that labor has an intrinsic, minimal value. And before you scream I'm cruel or heartless, what the heck do feelings have to do with economics? Economics is the science of value. Value is what someone is willing to pay for something. NOT "but they need this to survive." THAT is an idea that work in itself has a value.

If that were true, we could hire an army of unemployed workers to polish dog turds for the international market. We'd be rich, rich I tell you.

Public Employee Unions

Watershed Moment in Wisconsin - Roger Kimball

Obama is so keen to preserve and nurture public sector unions because they are the lifeblood of the contemporary Democratic Party. To an astonishing extent, the unions are the government in many locales. They elect officials and then sit down to bargain with them over their salaries and benefits. Since they are essentially bargaining with themselves, they generally make out quite nicely. It’s a corrupt and ultimately unsustainable practice. Sooner or later, as Margaret Thatcher observed about socialism, they will run out of other people’s money. Many of us believe that day is nigh, but the unions and their enablers apparently have calculated that there is at least a little more ruin they can inflict.

Still, the issue in Madison is not just the future of public-sector unions. In my view — it’s one thing I agree with FDR about — they should once again be declared illegal, as they were in all states until the 1960s (currently about 40 percent of government workers are unionized). No, important as the fight over public-sector unions is, that battle is only one aspect of a much larger battle: the battle over the fate of individual freedom in a neo-collectivist age. As I said above, Obama has done us the great service of dramatizing the stark choice that faces us. At least since LBJ and his preposterously misnamed “Great Society” programs, the United States has been lurching down the collectivist path. The government has intruded itself in one aspect of life after the next, always with ruinous results. It is ironic, I suppose, that a crossroads should be reached in Madison, Wisconsin, a city named for that great patron of limited government James Madison. “The powers delegated by the proposed Constitution to the federal government are few and defined,” Madison wrote in Federalist 45.

Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.

The Means of Coercion - James Taranto

In any case, it seems to have escaped Krugman's and Drum's notice that the Wisconsin dispute has nothing to do with corporations. The unions' antagonist is the state government. "Industrial unions are organized against the might and greed of ownership," writes Time's Joe Klein, a liberal who understands the crucial distinction. "Public employees unions are organized against the might and greed . . . of the public?"

The "labor movement" in America has increasingly come to consist of people who work for government, not private companies. As the BLS notes, the union-participation rate for public-sector workers in 2010 was 36.2%, vs. just 6.9% for private-sector workers.

There is a fundamental difference between private- and public-sector workers. A private-sector labor dispute is a clear clash of competing interests, with management representing shareholders and unions representing workers. In the public sector, as George Will notes, taxpayers--whose position is analogous to that of shareholders--are usually denied a seat at the table:

Such unions are government organized as an interest group to lobby itself to do what it always wants to do anyway - grow. These unions use dues extracted from members to elect their members' employers. And governments, not disciplined by the need to make a profit, extract government employees' salaries from taxpayers. Government sits on both sides of the table in cozy "negotiations" with unions.

Collective bargaining in the public sector thus is less a negotiation than a conspiracy to steal money from taxpayers. The notion that this is "in the economic interests of the middle class" for government employees in Wisconsin and elsewhere to get above-market wages and extremely lavish benefits is just laughable. Sure, government employees are "middle class," but so are the vast majority of taxpayers who don't enjoy the special privileges that come from owning the means of coercion.

The Rubicon of Wisconsin - Charles Krauthammer

In the private sector, the capitalist knows that when he negotiates with the union, if he gives away the store, he loses his shirt. In the public sector, the politicians who approve any deal have none of their own money at stake. On the contrary, the more favorably they dispose of union demands, the more likely they are to be the beneficiary of union largesse in the next election. It’s the perfect cozy setup.

To redress these perverse incentives that benefit both negotiating parties at the expense of the taxpayer, Walker’s bill would restrict future government-union negotiations to wages only. Excluded from negotiations would be benefits, the more easily hidden sweeteners that come due long after the politicians who negotiated them have left. The bill would also require that unions be recertified every year and that dues be voluntary.

Recognizing this threat to union power, the Democratic party is pouring money and fury into the fight. Private unions have shrunk to less than 7 percent of the working population. The Democrats’ strength lies in government workers, who now constitute a majority of union members and provide massive support to the party. For them, Wisconsin represents a dangerous contagion.

Hence the import of the current moment — its blinding clarity. Here stand the Democrats, avatars of reactionary liberalism, desperately trying to hang onto the gains of their glory years — from unsustainable federal entitlements for the elderly enacted when life expectancy was 62 to the massive promissory notes issued to government unions when state coffers were full and no one was looking.

Obama’s Democrats have become the party of no. Real cuts to the federal budget? No. Entitlement reform? No. Tax reform? No. Breaking the corrupt and fiscally unsustainable symbiosis between public-sector unions and state governments? Hell no.

The Political Economy of Government Employee Unions - Thomas J. DiLorenzo

Thus, when government bureaucrats go on strike they have the ability to completely shut down the entire "industry" they "work" in indefinitely. The taxpayers will complain bitterly about the absence of schools and garbage collection, forcing the mayor, governor, or city councillors to quickly cave in to the union's demands to avoid risking the loss of their own jobs due to voter dissatisfaction. This process is the primary reason why, in general, the expenses of state and local governments have skyrocketed year in and year out, while the "production" of government employees declines.

Day of reckoning on pensions - LA Times Editorial

The housing bubble and subsequent Wall Street collapse wreaked havoc on the nation's retirement savings, as many pension funds and 401(k) plans suffered losses of 30% or more. State and local governments are now facing huge unfunded pension liabilities, prompting policymakers to scramble for ways to close the gap without slashing payrolls and services. But a new report from the Little Hoover Commission in Sacramento makes a more troubling point: Many state and local government employees have been promised pensions that the public couldn't have afforded even had there been no crash.

...

A bipartisan, independent agency that promotes efficiency in government, the Little Hoover Commission studied the public pension issue for 10 months before issuing its findings Thursday. Much of the 90-page report is devoted to making the case that, to use the commission's blunt words, "pension costs will crush government." Without a "miraculous" improvement in the funds' investments, the commission states, "few government entities — especially at the local level — will be able to absorb the blow without severe cuts to services."

The problem is partly demographic. The number of people retiring from government jobs is growing rapidly, and longer life expectancies mean that a growing number of retirees will collect benefits for more years than they worked. But the report argues that political factors have been at least as important in driving up costs, starting with the Legislature's move in 1999 to reduce the retirement age for public workers, base pensions on a higher percentage of a worker's salary and increase benefits retroactively. The increases authorized by Sacramento soon spread across the 85 public pension plans in California.

Compounding the problem, the state has increased its workforce almost 40% since the pension formula was changed and boosted the average state worker's wages by 50%. Local governments, meanwhile, raised their average salaries by 60%. Much of the growth came in the ranks of police and firefighters, who increased significantly in number and in pay.

Federal Budget

"Steep Cuts?" Even the Left Is Starting to Notice - John Hinderaker

[T]his president is too weak, too cautious, too beholden to politics over policy to lead. In this budget, in his refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bullshit it makes it perfectly clear that Obama is kicking this vital issue down the road.

To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks you're fools.

Obama's game is transparent, isn't it? He is playing a game of chicken. He puts forward a series of proposals that he knows are more or less insane; but he also believes that Republicans will come to his rescue. They, not being wholly irresponsible, will come up with plans to reform entitlements--like, for example, the Ryan Roadmap. Ultimately, some combination of those plans will be implemented because the alternative is the collapse, not just of the government of the United States, but of the country itself. But Obama thinks the GOP's reforms will be unpopular, and he will be able to demagogue them, thus having his cake and eating it too. Is that leadership? Of course not. But it is the very essence of Barack Obama.

The Cee Lo Green Budget - Wall Street Journal

How unserious is this budget? Although the White House trumpets $2.18 trillion in deficit reduction over the next decade, those savings are so far off in the magical "out years" that you can barely see them from here. More than 95% of the savings would happen after Mr. Obama's first term in the White House is over, and almost two-thirds of the promised deficit reduction would arrive after 2016. Pretending to cut deficits by pushing all real cuts into the future is Budget Flimflam 101.

From hard experience, we know that what matters are the cuts and reforms a White House is willing to make now. The Obama budget doesn't cut a penny from the deficit in the last seven months of fiscal 2011. Over the next three years—through 2013—the spending reductions in this budget add up to a paltry $20 billion net, out of a projected $3.5 trillion deficit. That's a 0.57% reduction in red ink and less than what the feds spend every two days.

Obama budget plan shows interest owed on national debt quadrupling in next decade
Video - Steven Mufson

Starting in 2014, net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending. Only the amounts spent on defense and Social Security would remain bigger under the president's plan.

The soaring bill for interest payments is one of the biggest obstacles to balancing the federal budget, pushing the White House and Congress to come up with cuts deeper than previously imagined. Unlike with discretionary spending or even entitlement programs, the line item for interest payments cannot be altered except through other budget cuts.

The phenomenon is a bit like running up the down escalator. Without interest payments, the president's plan would balance the budget by 2017. But net interest payments that year are expected to reach $627 billion, up from $207 billion in the current fiscal year.

"This goes to the heart of why we have to address our fiscal problems," said Mark Zandi, co-founder and chief economist at Moody's Economy.com. "If we don't, we're going to get swamped by our interest payments."

Benjamin Friedman, a Harvard economic professor and author of "Day of Reckoning," about U.S. economic policy, said, "I think it's a reminder that we have a very serious problem and that the budget that's on the table does not address that problem."

Even with the cuts in Obama's budget, relief would not come until 2021, when the deficit as a percentage of gross domestic product would stop rising and plateau at 3.4 percent.

The explosion of interest payments comes from a double whammy of economic factors. First, the nation's debt is growing faster than the economy. Second, interest rates are rising. Over the next decade, net interest payments will amount to nearly 80 percent of the debt added, an indication of how past borrowing is forcing the country deeper into debt.
ad_icon

"We're running a gigantic deficit, and we're not growing very fast," said Kenneth Rogoff, an economics professor at Harvard University and former chief economist at the International Monetary Fund. "We're on a dramatically unsustainable path."

The Obama administration's latest forecasts starkly illustrate the phenomenon of generation shifting, moving today's costs to future taxpayers. The borrowing the United States did over the past decade - to pay for the 2001 tax cut, the wars in Iraq and Afghanistan, and propping up the economy during the steep 2009 downturn - is coming due this decade.

Newsweek's Evan Thomas: Obama's Budget a 'Profile in Cowardice' - Noel Sheppard

EVAN THOMAS, NEWSWEEK: Only the President, only the President can break the logjam. His State of the Union was a profile in cowardice. His budget is a profile in cowardice. I hope there’s a secret plan he has here to come forward to lead us, but he hasn’t shown it yet.

Ryan's Charge Up Entitlement Hill - Paul A. Gigot

Paul Ryan doesn't look like the menacing sort. He's amiable in a familiar Midwestern way, his disposition varies between cheerfully earnest and wry, and he uses words like "gosh." Yet to hear Democrats tell it, the 41-year-old Republican congressman is the evil genius, the cruel and mad budget cutter who threatens grandma's health care, grandad's retirement, and the entitlement state as we know it.

Senate Democrats like Chuck Schumer issue almost daily press releases attacking Mr. Ryan, Paul Krugman is obsessed and demeaning, and even President Obama can't stop mentioning him. Only this week, the president justified his own failure to tackle entitlements in his dud of a 2012 budget by saying that "the chairman of the House Republican budgeteers didn't sign on" to the final report of Mr. Obama's deficit commission.

What are they all so afraid of?

...

"The way I look at things is if you want to be good at this kind of job, you have to be willing to lose it. Number two, the times require this. And number three, if you don't believe in your principles, and applying those principles, then what's the point?" He mentions limited government and economic freedom. "I believe these are the best solutions. I believe they will result in growth and opportunity for the country."

But why will this attempt at reforming entitlements be different politically than the marches into fixed bayonets of 1985, 1995 or 2005?

"Politically, I also believe it's going to be the right thing to do. People want conviction politicians. People want the problem solved. People turn on their TV, they see the European debt crisis. They see California, New York, Illinois. They understand there is a sovereign debt crisis popping all over the place," he says. "And to see a president duck and punt, and then try to use it as a political wedge against the opposing party to manipulate his re-election is not going to fly in this kind of climate."

Budget 101 - Andrew Stiles

Before being elected to office in November, freshman representative Alan Nunnelee (R., Miss.) knew that the ballooning cost of entitlement spending was threatening the financial future of the United States. But only when he arrived in Washington did he begin to understand the full, frightening extent of the situation. “I knew it was a serious problem when I was campaigning,” Nunnelee tells National Review Online, “But not until I saw’s Paul’s graphs did I realize the magnitude.”

The Paul he is referring to is Rep. Paul Ryan (R., Wis.), chairman of the House Budget Committee and, as it turns out, dean of budget studies. Since the convening of the 112th Congress, Ryan has teamed up with party leadership to conduct “listening sessions” for new GOP members to give them a rundown on the national debt and other fiscal matters, or, as one aide describes it, “Budget 101” for freshmen. The meetings have become so popular that some members, such as Nunnelee, kept coming back “three or four times.” And while the sessions were initially intended for freshmen, the surge in demand prompted party leaders to open them up to the entire conference.

Paul Ryan's Graphs and Charts
Graphs and charts from the U.S. House of Representatives Committee on the Budget.

Telecommuting

Telecommuting Attractive Option for Gen-Y Workers - Emily Driscoll

“Studies have shown that telecommuters are more productive than their office-bound colleagues,” Davis says. “They use less sick time, there’s less tardiness, [they] have improved morale, and companies can draw from a wider pool of candidates because they're not geographically limited.”

Telecommuting cuts overhead expenses for companies because they need less office space and supplies. It also cuts down on inter-office socializing and distractions, leading to an increase in productivity.

Telecommuting is not for everyone; you have to be self-disciplined and independent enough to work on your own. If you thrive in a group setting, you may miss the interaction with your colleagues.

Business Climate

California taxes away jobs while Texas adds them - Mark Hemingway

In 2008, 70 percent of all the jobs in the country were created in Texas. In 2009, all of America's top five job-creating cities were in Texas.

More recently, "Texas created 129,000 new jobs in the last year -- over one-half of all the new jobs in the U.S. In contrast, California lost 112,000 jobs during the same period," according to "Texas vs. California: Economic growth prospects for the 21st Century," a new report by the Texas Public Policy Foundation released in October.

Texas is home to 64 Fortune 500 companies -- more than any other state in the union. (California has 51 and New York has 56.) For five years in a row, Texas has topped Chief Executive magazine's poll of the best state to do business.

Meanwhile, California is ranked dead last in the Chief Executive's survey. California state treasurer Bill Lockyer even went so far as to pen a Dec. 20 op-ed in the Los Angeles Times denying "the claim that we have a hostile business climate."

So why are businesses flocking to Texas and fleeing California? Well, as a recent headline from The Economist put it, in California "They paved paradise and put up the parking taxes."

Texas has no personal income tax. With a top rate of 10.3 percent, California has the third-highest state income tax after Oregon and Hawaii.

The tax advantage goes much deeper. The Tax Foundation cites California as having the 33rd highest corporate income tax topping out at 8.8 percent -- much higher than Texas' modest 1 percent gross receipts tax on business.

California's capital gains tax is the highest in the country, whereas Texas levies no tax on capital gains. California's sales tax is the second highest in the nation and its energy taxes are the highest in the country.

And as California's taxes have gotten higher, the state's revenue has become more unstable.

State Bankruptcy Debate

When States Go Bust - James Pethokoukis

It’s a solution of apparent Alexandrian elegance and simplicity: Empower America’s cash-strapped states to slice cleanly through a strangling knot of debilitating debt and government union cronyism by letting them file for bankruptcy. Long-term liabilities could be restructured, unaffordable labor contracts rewritten, fiscal health restored. No federal bailouts necessary.

This intriguing idea quickened last November when former House speaker Newt Gingrich gave it an animating shoutout during a speech at a Dallas think tank. That was followed by a detailed explanation in this magazine by David Skeel, a corporate law professor and bankruptcy expert at the University of Pennsylvania (“Give States a Way to Go Bankrupt,” November 29, 2010). As conservative Republicans on Capitol Hill began cooking up legislation to change the federal bankruptcy code, the concept exploded across the Internet—not to mention in Wall Street research departments.

Liberal bloggers, in particular, seemed to perceive the danger to a status quo where Big Labor elects state and local legislators who then return the favor by agreeing to contracts that, say, allow police officers to retire at age 50 with pensions equal to 90 percent of their highest salary. It’s a system that’s made government unions crazy powerful within the Democratic party while also helping states rack up some $3.5 trillion in unfunded pension and health care liabilities. (And that’s in addition to the anticipated $250 billion shortfall in state budgets over the next two years.) Kevin Drum of Mother Jones put it this way: State bankruptcy “promises to become a pretty serious battle. For Republicans it’s got everything: The tea parties will love it, it provides an alternative to raising taxes, and ... it helps defund a key Democratic interest group. What’s not to like?”

Surprisingly, quite a bit—at least among some Republicans and conservatives. In a January 24 session with reporters, House majority leader Eric Cantor brushed off the idea. “I don’t think [permitting states to declare bankruptcy] is necessary because state governments have at their disposal the requisite tools to address their fiscal ills.” The Virginia Republican added, “They have the ability to enter into new negotiations if there are any collective bargaining agreements in place. They have the ability to adjust levels of spending as well as revenues at the state level.”

A more pointed critique was offered by members of the highly respected free-market Manhattan Institute, Nicole Gelinas and E. J. McMahon, in the op-ed pages of the Wall Street Journal and other papers. Among their many objections to state bankruptcy: It would violate the constitutions of many states; it would damage the balance sheets of banks holding a quarter of a trillion dollars in state and municipal bonds; it might even cause such investor panic as to risk repeating the 2008 financial meltdown. “Bond-market brinkmanship and bankruptcy threats can’t save the states from themselves,” Gelinas wrote in the Boston Globe on January 23.

Obama to propose relief for states burdened by debt from unemployment benefits - Lori Montgomery and Brady Dennis

In recent years, states have been raising taxes, cutting services and firing workers in an effort to close record budget gaps opened by the recession. With the U.S. unemployment rate stuck at 9 percent or higher for nearly two years, 30 states - including California, Michigan and Nevada - have drained their unemployment insurance funds, forcing them to borrow to pay benefits to jobless workers.

Spiraling College Costs

Universities On The Brink - Louis E. Lataif

Higher education in America, historically the envy of the world, is rapidly growing out of reach. For the past quarter-century, the cost of higher education has grown 440%, according to the National Center for Public Policy and Education, nearly four times the rate of inflation and double the rate of health care cost increases. The cost increases have occurred at both public and private colleges.

Like many situations too good to be true--like the dot-com boom, the Enron bubble, the housing boom or the health care cost explosion--the ever-increasing cost of university education is not sustainable.

Just 10 years ago the cost of a four-year public college education amounted to 18% of the annual income of middle-income families. Ten years later, it amounted to 25% of that family's average annual income.

...

We're seeing articles with headlines like: "The End of Higher Education Enrollment as we Know It"; "Is College Worth the Investment?"; "Will Higher Education be the Next Bubble to Burst?"; and "Drowning in Debt: The Emerging Student Loan Crisis."

...

All this happened while total federal student aid more than doubled, in constant dollars, from $60 billion ten years ago to $120 billion today. Sadly, more federal student aid simply fuels the rising costs. The cost of education tracks with the growth in federal aid; the transaction cost for students is not lowered. The federal money effectively flows directly to the operating expenses of the Universities-which seem to rise in direct proportion to the flow of federal funds.

Because all universities offer some kind of financial assistance, the nominal tuitions are not the amounts universities actually take in. Discounting, often in the range of 25% to 35% of tuition, is offered as financial aid. But even after the discounting the average realized tuition revenue at universities continues to grow.

Perry proposes $10,000 bachelor degrees - Erin Cargile

During his state of the state address Tuesday, Gov. Rick Perry said it is time for colleges and universities to lay out a low-cost path to a degree.

"It's time for a bold, Texas-style solution to their challenge that I'm sure the brightest minds in their universities can devise," said Perry. "Today I'm challenging our institutions of higher education to develop bachelors degrees that cost not more than $10,000 including textbooks."

It is a goal Perry said could be reached with online courses and "innovative teaching techniques." Patrick said offering a packaged price for what a college education will cost is a good idea. Democrats blasted the governor said it would dumb down Texans.

HIGHER EDUCATION BUBBLE - Steve Schroeder via instapundit.com

While visiting with old college friends on New Years’ Eve we did a back of the envelope calculation on the cost and value of our BA degrees in Accounting from 1981. We attended a small well regarded Midwestern liberal arts college from 1977 to 1981. Tuition, room and board was between $3,000 and $4000 per year so around $16000 for our BA. As entry level accountants in public CPA firms we earned a salary of around $17,000 per year. So we earned in salary an amount equal to the cost of a BA degree in our first year of employment. Now that same college, which my youngest daughter is looking at attending costs $42,000 per year. If she earned her BA in Accounting it would cost her $168,000. Her possible first year salary as a CPA? Not even close to $168,000. Maybe around $45,000. What a change in 30 years in the value of that BA in Accounting.

HIGHER ED BUBBLE UPDATE - Glenn Reynolds

Administrative Bloat at American Universities: The Real Reason for High Costs in Higher Education. “Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent. Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent. Arizona State University, for example, increased the number of administrators per 100 students by 94 percent during this period while actually reducing the number of employees engaged in instruction, research and service by 2 percent. Nearly half of all full-time employees at Arizona State University are administrators.”

UPDATE: Related: Is The College Business Model Broken?

Obamacare in the Courts

Florida Judge Rules Obamacare Unconstitutional - John Hinderaker

Federal district court judge Roger Vinson issued his ruling today on summary judgment motions in the Florida case, State of Florida v. United States Department of Health and Human Services, in which 26 states allege that Obamacare is unconstitutional. Judge Vinson agreed with their arguments and granted summary judgment in favor of plaintiffs.

Judge Vinson's ruling evens the score at 2-2; two federal courts have upheld the act against constitutional challenges, while two have now found it to be invalid. The ultimate decision will be made, of course, by the Supreme Court, some time in the next few years.

Judge Vinson held that the Commerce Clause cannot be stretched so far as to require individual Americans to buy health insurance approved by the government. This conclusion may not seem surprising to those who simply read the clause--It gives Congress the power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes"--but beginning in the 1930s, broad interpretations of the clause have greatly expanded federal powers. Still, Judge Vinson was certainly correct in saying that "Never before has Congress required that everyone buy a product from a private company (essentially for life) just for being alive and residing in the United States."

Florida Ruling Requires Government to Stop Implementing Obamacare - Ilya Shapiro

As I continue digesting Judge Vinson’s ruling, I notice two key things beyond the facts that the “individual mandate is unconstitutional”:

1. In performing his severability analysis — determining which parts of the overall legislation survive — the judge threw out all of Obamacare.

2. In discussing whether to issue an injunction – a judicial command to do or refrain from doing something — the judge determined that his declaratory judgment in this context was the same as an injunction. That is, a federal court saying that a piece of legislation is unconstitutional is effectively the same as a decision mandating the government to act.

A judicial drubbing for Obamacare - Washington Examiner Editorial

In a rigorously reasoned decision that seemed to delight in turning the government's arguments on their head, U.S. District Court Judge Roger Vinson on Monday struck down as unconstitutional President Obama's signature legislative achievement, the Patient Protection and Affordable Care Act, aka Obamacare. In the suit brought by 26 states, Vinson found that "Congress exceeded the bounds of its authority" by including the individual mandate and held the entire act unconstitutional "because the individual mandate is unconstitutional and not severable" from the rest of the law. Vinson, who was appointed by President Reagan to the U.S. District Court in the Northern District of Florida in Pensacola, even tweaked Obama, pointing out in a concluding footnote that the president whose name is forever linked to the measure had backed a health care reform bill without an individual mandate when he was in the Senate. Vinson quoted then-Senator Obama as saying in 2008 that "if a mandate was the solution, we can try that to solve homelessness by mandating everybody buy a house."

Vinson said the government even conceded that its interpretation of the Commerce Clause to support the individual mandate "breaks new legal ground" and is "unprecedented." He concluded, "If it has the power to compel an otherwise passive individual into a commercial transaction with a third party ... it is not hyperbolizing to suggest that Congress could do almost anything it wanted. It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place."

A moratorium needed for Obamacare until its constitutionality is decided - Tom Fitton

President Obama's signature legislative "achievement" plunged deeper into legal limbo Monday with a decision by a Florida federal judge ruling the entire law unconstitutional. This follows the Dec. 13 Virginia court invalidation of the central component of the president's health care reform law requiring individuals to buy health insurance.

Both decisions hinged upon the constitutionality of the individual mandate. This individual mandate "exceeds the boundaries of congressional power" and would "invite unbridled federal police powers," U.S. District Judge Henry E. Hudson wrote in his 42-page December opinion.

How important is this mandate to Obama's health care reform law, or Obamacare, as it is widely known?

"Without an individual responsibility provision (or mandate), controlling costs and ending discrimination against people with preexisting conditions doesn't work," wrote Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius in an editorial published in the Washington Post the day after Judge Hudson's decision.

All Your Thoughts Are Belong To U.S. - William A. Jacobson

That seems to be the import of the ruling by federal Judge Gladys Kessler in upholding the Obamacare mandate in a suit brought by a group of private plaintiffs in Mead v. Holder (pg. 45, emphasis mine):

As previous Commerce Clause cases have all involved physical activity, as opposed to mental activity, i.e. decision-making, there is little judicial guidance on whether the latter falls within Congress’s power....However, this Court finds the distinction, which Plaintiffs rely on heavily, to be of little significance. It is pure semantics to argue that an individual who makes a choice to forgo health insurance is not “acting,” especially given the serious economic and health-related consequences to every individual of that choice. Making a choice is an affirmative action, whether one decides to do something or not do something. They are two sides of the same coin. To pretend otherwise is to ignore reality.

Our thoughts are now actions. There literally is nothing the federal government cannot regulate provided there is even a hypothetical connection to the economy, even if the connection at most is in the future.