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January 15th Pickings had an item about the law school dean paid $867,000 a year. Megan McArdle writes about that and other horror stories from academia. She said that salary reminded her of …
… an earnings call I once listened to with the president of a major casino group (I won’t say which one). It was fascinating listening to all the ways they had to keep “avid gamblers” (read: compulsive gamblers) in the casinos. The analysts asked a bunch of good questions about marketing, investment, and cash flow, but none of them asked the question I really wanted to hear answered, which was “How do you sleep at night?”
No, I don’t think that gambling should be illegal. Yes, I understand that if he didn’t do it, someone else would. Nonetheless, I could not myself spend my days thinking up ways to shake the last dime out of the bleeding pockets of people who were ruining their lives. (As in other “vice” industries like alcohol, a disproportionate share of the revenue comes from the small minority who have a serious problem).
Similarly, I do not think that should be illegal for Mr. O’Brien to run a law school. But how do you keep enrolling people at such exorbitant tuitions, knowing that the majority of them will not be able to get jobs with their degree? (And a larger majority still will not be able to get jobs which permit them to repay their loans). And pay yourself such a handsome salary to boot?
But let’s not forget that there are lots of people out there exploiting students these days. A while back, I observed that academics tend to describe the job market as an improbably Dickensian welter of exploitation, a description which matches only one job market: their own. I asked why such a left wing environment had produced one of the most radically unequal and exploitative job markets in the country, which drew the following story from a reader:
The entry of new job applicants into this labor market has nothing to do with the availability of jobs. University administrators control how many tenure track jobs there are, but the faculty controls how many new graduate students there are. Faculty decisions about how many grad students to admit are usually based not on how many new PhDs they can place in jobs, but how many graduate assistants the faculty feel they need. I went to a fairly prestigious Midwestern university, and I entered the program with a cohort of 14 first-year grad students. In about my second or third year, the Department Chair and Director of Graduate Studies informed us that new cohorts would be smaller, 7-8 students at most, because they could not in good conscience admit students who they knew they couldn’t place. After less than a year, the faculty were furious because there were not enough TAs to do all their grading for them. The next year, the incoming class of grad students went back up to 14.
Presumably, the marginal six or seven candidates were less likely to get a job than the first choices. The oversupply of graduate students in the humanities is much, much worse than the oversupply of lawyers. The odds of a PhD student from a third tier program getting a tenure track job approaches zero in many fields (and falling every year), yet the schools keep cranking them out. …
Roger Simon on Schumer, Hagel and the administration’s “good Jews.”
… Just a few days ago, the New York senator was in the eye of a storm surrounding Chuck Hagel’s nomination as secretary of Defense. After a private interview with the former Nebraska senator (he of the well-documented slurs against gays and Jews contrasting with a more laissez-faire attitude toward Hamas, Hezbollah and Iran), Chuck Schumer — in the role of wise counsel for all Jewish-Americans — announced he was “convinced” Hagel had changed his noxious opinions.
Well, good. But imagine if Hagel had not really changed his opinions (or if he semi-hemi-demi changed them). What would Chuck Schumer, as the president’s inaugural emcee and chief factotum of his second inauguration, have done then? Excoriate Hagel and demand he not be nominated, thus humiliating his mentor?
Not likely. But Schumer would never have had to do that — would never be put in that position — because the game was already rigged. Hagel would say the right things to Schumer who would relay those words to the world, reaping glory less than a week later in the role of president’s “best man” on national and international television.
The game has similarly also been rigged against the state of Israel. Schumer, consciously and/or unconsciously, has been one of the riggers, he and a squadron of Obama’s other “good Jews” including David Axelrod, Jack Lew, and Rahm Emanuel.
Meanwhile, the president — actually treating Israel like the fifty-first state she has been accused of being — has reportedly said the Jewish state doesn’t know what’s good for her.
Israel, for her part, is moving to the right. The reason is simple – although contra everything Obama thinks or wishes. The Israeli public is finally facing – years after the Oslo Accords and after unilaterally departing from the Sinai and Gaza only to be the recipient of endless missiles and terror attacks — that the Palestinians, leadership and public, have no real interest in a two–state solution. It is only the Israelis, ironically, that want one. For reasons of tribalism, vengeance, and religious primitivism, the Palestinians seek only a one-state solution. Theirs. If they had wanted a two-state solution, they could have had one of their own decades ago. …
James Delingpole posts on the German move to get their gold home.
Back in the mid-1920s, the head of the German Central Bank, Herr Hjalmar Schacht, went to New York to see Germany’s gold. However the NY Fed officials were unable to find the palette of Germany’s gold bullion. The Chairman of the Federal Reserve, Benjamin Strong was mortified, but to put him at ease Herr Schacht turned to him and said ‘Never mind, I believe you when you when you say the gold is there. Even if it weren’t you are good for its replacement.’ (H/T The Real Asset Company)
But that was then and this is now. In the eyes of the Germans – and who can blame them? – America has lost its mojo to such a degree that it can no longer be trusted to honour its debts, even in the unlikely event that it were financially capable of doing so. Which is why, following in the footsteps of Venezuela’s Hugo Chavez (who may be an idiot but is definitely no fool), Germany is repatriatriating its gold from the US federal reserve. It will now be stored in Frankfurt.
This is an important story. One of the most spectacular con tricks of the last twelve months, pulled off by our political class with the connivance of much of the media, is that we’ve escaped the global economic armageddon which looked till quite recently as if it was going to engulf us. The Euro didn’t collapse; Europe isn’t in flames; QE hasn’t led to Weimar-style hyperinflation; the fiscal cliff has been dodged; Britain hasn’t yet lost its triple A credit rating; the bond markets haven’t gone postal…
Well it may look calm on the surface, but this latest move by the Bundesbank gives us a pretty good indication that beneath the surface that serene-seeming swan is paddling for dear life. …
Peter Schiff posts on the debt ceiling debate.
President Obama said the Republican reluctance to raise the debt limit was the equivalent of a diner who had ordered and enjoyed a meal who then decides to leave the restaurant without paying the bill. The President is actually arguing that if the diner had no cash on hand, it would be much more responsible to simply use a credit card. In taking this moral high ground, the President ignores the fact that the diner (who has indebted himself through habitual restaurant meals) intends to pay his credit card bill with another card, and then repeat the process until he runs out of cards. So in the end, it’s not the restaurateur who gets stiffed, but the issuer of the last card the diner is able to acquire. As with the platinum coin, this is a distinction without a difference.
Currently the Federal Government counts more than $16 trillion in funded obligations. Over the next 10 years we are expected to add another $10 trillion or more. At no point in the foreseeable future are we expected to approach balance in our annual budget. All of our future bills are expected to be paid by future borrowing on a massive scale. Anyone with an ounce of integrity would have to plan for the possibility that an ever increasing debt rollover is a limited prospect. Such an understanding will mean that eventually someone will get stuck with the bill. How is this any more responsible than dining and ditching?
In truth, a failure to raise the debt ceiling is not a commitment to renege on obligations. It is simply a decision to stop borrowing. The government could still meet obligations by cutting spending, raising taxes, or making reforms to entitlements. But it chooses not to take this difficult step.
More important than that is the message America is sending its creditors. By informing them that the United States will not use its taxing power to repay its debts, but will only rely on its ability to borrow more (ironically from the same creditors), it effectively admits to running the world’s largest Ponzi scheme. It’s a shame that more people can’t seem to grasp these very simple truths.