Monthly Archives: October 2013

La Voix Passive

François_Hollande_(March_2010)_5Jeremiah does not share the National Front’s view on globalization, among other things, but he was happy to see a party labeled by The Economist as “far right” take votes away from … the left!  We hope this is the beginning of a new dimension in French politics.  It may also mark a setback for President Hollande.

He believes that things will improve, growth will return and problems will be solved.

The president is unconcerned, thanks to his abiding faith in socialism.  “He believes that things will improve, growth will return and problems will be solved.”  This is why your English teacher told you not to use the passive voice.  Problems will be solved … by whom?

Most socialists are cynical opportunists, like Hugo Chavez.  It is quaint that Hollande actually believes the stuff.  That’s why Nigel Farage calls him “the biggest idiot in the modern Pantheon of idiots.”

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Just Plain Dumb

IdiocracyJeremiah differs from Ilya Somin, who writes that political ignorance is a rational choice – leaving others to do the work of electing an honest government.  That may be true for Somin’s lawyer buddies.  Jeremiah is more inclined toward Jim Quinn’s view, that we have developed a culture of ignorance.

Quinn’s post is long.  You might at least skim it for the statistics and the block quotes.  Here is our favorite, from Martin Luther King:

Nothing in the world is more dangerous than sincere ignorance

We have reported on the TIMSS study, the PISA study, and the PIAAC study, along with other OECD studies and the European press.  There is an undeniable connection between good schools, smart people, and successful economies.  Smart people are not only more productive, they elect better governments.  It’s a virtuous cycle.

The cycle also spins in the other direction.  Ignorant voters elect corrupt leaders, who have little incentive to improve education.  Jeremiah’s estimate, among others, suggests the process has been ongoing since the 1960s.  That means many of you, reading this, have never seen quality education.

Conspiracy theorists worry about Prozac in the water supply, or whatever.  Destroying the schools was much simpler, and it’s a perfectly natural process.  That’s why we have breathtaking corruption in America, a bubble economy, and a police state.  The people are too dumb to protest.

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Filed under Education, Liberty

The College Bubble

Another of Jeremiah’s wacky ideas has gone mainstream.  Here is the Pope Center’s George Leef discussing the “college bubble” on Bloomberg.  He makes the same analogy as here, that government policy helped inflate both the college bubble and the housing bubble.

Any degree, from any place, at any cost [was] going to be a great investment

This contrasts with the view of College Board’s David Coleman that “a college education is the best investment a young person can make.”  It’s worth four minutes to watch Mr. Leef.  He is lucid, and sympathetic to the cause.  He allows that college is a good investment for some people, but not all – just like buying a house.

The rest of the story, as you know from Amanda Ripley and Angel Gurria, is that many American students leave public school unprepared for college, and then they sit through four years of an overpriced diploma mill before finally settling down to work at Starbuck’s.

The whole process is reminiscent of Soviet factory production, in which products are churned out – college graduates, in this case – with no attention to quality or market demand.

See also:  Poder a los Estudiantes

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Bow Down, Peasants

KingJoffreySen. Rand Paul (R-KY) has proposed a Constitutional amendment that Congress must be bound by its own laws.  Critics say this is all about Obamacare, and their exemption therefrom.  Opinions are divided on that, but – this is not the only special privilege Congress has.

Critics also say that the language of Paul’s amendment is vague and could backfire.  That’s probably true, in its rough draft – but we hope that our nation’s lawmakers can clean that up.  The only reason this language is not already in the Constitution is that no one ever imagined Congress would be handing down laws for the rest of us to obey.

No one ever imagined Congress would be handing down laws for the rest of us to obey.

Finally, critics say Paul’s idea is quixotic, because Congress will never vote to curtail its own privilege.  Can this be true?  Are we serfs now?  A better question is – who are these critics?  The logic of Paul’s proposal, if not the details, is unassailable.  So, why assail it?

As usual, it’s the partisan charade.  Because Sen. Paul is a Republican, the left reads this as an insult to Obamacare.  If he were a Democrat, it would somehow be a threat to national security – or baseball, or some damned thing.  Like domestic surveillance (which Sen. Paul also opposes) this is another case of partisans willing to be ruled.

See also: No One Is Above The Law But Congress

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Filed under Justice

Frack with Crude

WaterBarrelContinuing our series of “iconoclastic environmentalism,” we consider hydraulic fracturing.  Jeremiah is a huge fan of cheap natural gas.  This is a clean and abundant source of energy – especially for electrical generation, where it displaces coal.  He does not believe the hype about setting off earthquakes or contaminating groundwater.  Groundwater is miles above the typical gas deposit.

The environmental damage from fracking is in the huge quantities of fresh water consumed by the fracturing process.  If only there were an alternative.  It would have to be an incompressible liquid, like hydraulic fluid, and it would have to be readily available at the site.  Hmmm.  What liquid could that be?

Since oil and gas are often extracted together, by the same driller, it would seem natural to use oil as the fracturing fluid – unless you’re a petroleum engineer.  They are hardwired to pull oil out of the ground, not pump it back down.  Plus, oil is $100 a barrel and water is basically free.  This highlights a famous paradox of resource pricing – water must be cheap because life depends on it, but keeping water cheap opens it up to abuse.

Water must be cheap because life depends on it, but keeping water cheap opens it up to abuse.

You may think that oil is $100 a barrel and water is eight cents – but neither of these is the relevant price.  The relevant price for the oil is the cost to pump it down, install the proppant, and pump it back out.  It’s not going to escape.  Normally, you would pump out the contaminated water anyway, so the cost is invariant.

Obviously, this glosses over some engineering challenges, but it illustrates the key point.  Drillers use water as an industrial fluid costing eight cents a barrel.  They are making an arbitrage profit on the artificially low price of water.

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Gleaning the Truth

SebeliusJeremiah is always coaching you to seek the truth, so that you can plan – and vote – objectively.  This is harder than it sounds, because all news sources are biased.  Part of the fun is watching theories ripen into facts.  Here are a few we have been watching:

 

  • Employers are holding back on hiring, and cutting hours, due to Obamacare.  We started following this when it was a theory in the business press, and then we looked for it in the BLS figures, and now it’s in the Beige Book.

Many contacts also commented on reluctance to expand due to uncertainty surrounding the Affordable Care Act; some employers cut hours or employees.

  • Employment is restricted due to onerous regulation of business.  This is a perennial complaint from business, but now there is current research in The Economist.
  • Quantitative easing will never end.  This is typical of the cynics at Zero Hedge – the Fed has painted itself into a corner, addicted, enabling, etc.  Today, we have Societe Generale saying the Fed is more likely to increase QE than to taper it.

We are still watching this third one.  QE can’t go on forever, but we should know in January whether it’s ticking up.  The first one, about Obamacare – that’s a fact.  So, why do we see Secretary Sebelius boldly dismissing it?  Maybe she thinks you (and Jon Stewart) are stupid.

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More from the Skills Survey

We really like the way the OECD writes about skills.  They refer to a nation’s “stock” of skills, because skills are an earning asset, like roads and factories.  Without strong skills, we cannot expect to succeed in the modern economy.  This applies to us, individually, and to America as a whole.

Smart PeopleThe survey looks at variations in skill levels across nations and within nations.  We have already mentioned the impact of skills on inequality.  Here are a few more insights from the report:

  • In America, skill levels are inherited.  Jeremiah has discussed this before.  If you were born into the bottom quintile, chances are you will stay there, because our schools are no good.
  • We have an abnormally large proportion of these unfortunates.  The OECD calls them “below level 1.”  That’s a strain on our social safety net.
  • Older Americans are better at math than younger Americans.  The OECD calls that a “declining stock of skills.”  When Jeremiah’s generation dies off, you kids will be dead last in the world.
  • Having an education is not the same as having skills.  We rank near the top in going to college, but Dutch high school graduates have more skills.  Jeremiah thinks college in America is a fraud, and so does Simon Black.
  • The survey makes some borderline capitalist observations about labor force participation.  Tax and benefit systems can make work unprofitable for low-skilled adults.  This bit of arithmetic, they’re good at.
  • Employers complain of a skills shortage, even though unemployment is high!  That’s why we beg the INS for more H-1B visas.
  • Unions may lock workers in to jobs for which they’re unsuited, while locking out younger workers, and generally distorting the allocation of skills.
  • Immigrants must learn the host language.  We figured they would pick it up eventually, but the OECD says this is a big problem and requires government intervention.

Again, the OECD – Sec. Gen. Angel Gurria – is to be commended for an objective look at the issue.  Some media outlets have been spinning the results to suit an agenda.  The Economist, for instance, thinks that “more egalitarian societies have better skills,” an obvious misreading of cause and effect.

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Filed under Education