The Cynical Economist

You Paid for It! Stimulus Dollars Fund Studies into Sexual History and Erectile Dysfunction

The NBC Investigative Unit has raised questions about two grants totaling nearly $1.5 million dollars distributed to the University of California San Francisco. The money was part of the federal stimulus program and went to studies into the erectile dysfunction of overweight middle aged men and the accurate reporting of someone’s sexual history.

HHS Sends $5.9 Million to Program Run by Obama Buddy

The Department of Health and Human Services last week announced it had awarded a $5.9 million grant to a University of Chicago Medical Center program tied to Michelle Obama and run by Eric Whitaker, one of President Obama’s closest friends.

The Urban Health Initiative, which received the award, was originally based on a smaller program launched during the last decade by Michelle Obama, who was an executive at the University of Chicago Medical Center before she departed to become first lady. The UHI is headed up by Obama basketball and golf buddy Whitaker, who has known the president since Obama’s days in law school and who also vacations with the first family

Barack Obama’s convenient Wall Street hypocrisy

PUBLIC EMPLOYEES SECOND ONLY TO FINANCIAL PROS IN FRAUD, STUDY SHOWS

Government workers are among the employees most likely to cheat their employers, according to a new study.

The Association of Certified Fraud Examiners (ACFE), the world’s largest anti-fraud organization, found that public-sector administration employees are responsible for more than 10 percent of fraud cases, ranking behind only financial professionals. In 141 cases examined, the group found that a crooked employee costs taxpayers a median loss of $100,000.

Union Bosses’ Hypocrisy

The leaders of America’s unions have been very vocal lately in their criticism of Republicans and of business. According to them, Republicans care only about the wealthy and are unfairly targeting the workers of America with their reforms. These union leaders insist that only they can speak for regular Americans. In fact, their own salaries suggest that they have nothing in common with the average citizen. Here is a short list of some of the highest-earning, and most hypocritical, union presidents:………

DEVASTATING GRAPH REVEALS OBAMA’S UNEMPLOYMENT ECONOMY

Of the 13.3 million Americans who were unemployed in the first quarter of 2012, a staggering 29.5% have been out of work for 52 weeks or more (the official definition of long-term unemployment).   As the Pew Charitable Trusts point out, that works out to roughly 3.9 million people, or more than the population of Oregon.

The Fraud Of Austerity

When the current economic crisis began — largely caused by a government-created housing bubble — we were told that if the government spent an extra trillion dollars or so and ran up the deficit, all would be well. Did it work as advertised in the United States? No. In the United Kingdom? No. In France? No. In Italy? No. In Spain? No. And not even the left wants to talk about Greece.

The chart below shows that rather than the austerity the left is whining about, government spending has risen as a share of gross domestic product (GDP) in all of the major economies. Again, the left said unemployment rates should have come down by now, but the opposite is happening. The U.S. “official” unemployment rate has come down slightly, but the percentage of the labor force at work continues to decline, so the real unemployment rate is approximately 15 percent.

50 Years Of Government Spending, In 1 Graph

Of each dollar the federal government spends, how much goes to defense? How much goes to Social Security? How much goes to interest on the debt? And how has this sort of thing changed over time?

The graphic below answers these questions. It shows the major components of federal spending 50 years ago, 25 years ago, and last year.

Florida says 180,000 non-citizens may be on voter rolls

Florida election authorities are examining about 180,000 people who they say may not be U.S. citizens but are registered to vote in the state, an official said on Friday.

Project Veritas exposes non-citizens, dead people registered to vote in NC 

Federal Workers’ 2011 Salary Data Exposed Online

Can California Be Fixed?

To sum up why California has yet another deficit — this time a $16 billion whopper — is pretty easy: The number of demonized one-percenters who pay over 10 percent in their salary to the state has been shrinking, as thousands flee with their ideas, energy, business, and capital to nearby no-tax states, and others make less money due to more and more costs and regulations — while the number of those receiving all sorts of state housing, food, medical, education, and legal support is soaring

GEORGIA WELFARE DOLLARS SPENT AT CASINOS, LIQUOR STORES, SIX FLAGS

Obama’s Budget Would Double the Interest Rate on Student Loans–After the Election

President Obama’s fiscal 2013 budget proposal would double the interest rate on federally backed student loans from 3.4 percent to 6.8 percent–eight months after the November presidential election.

The White House fiscal year 2013 plan calls for maintaining the current 3.4 percent interest rate for federally guaranteed student loans, but only through July 1, 2013, at which point it would automatically increase to 6.8 percent. Neither the president’s plan nor the Democrats’ legislation would extend the low rate beyond another year.

Fat Future: 42% of Americans May Be Obese by 2030

By 2030, 42% of Americans will be obese and 11% of Americans will be severely obese, Duke University and CDC researchers predict.

These shocking numbers actually are conservative, note study researchers Eric A. Finkelstein, PhD, and colleagues.

Finkelstein’s team based its calculations on self-reportedweight and height from people participating in the CDC’s Behavioral Risk Factor Surveillance System. Obesity is defined by body mass index (BMI). People tend to underestimate their weight and overestimate their height. The researchers corrected for this. They also factored in state-by-state trends in factors affecting obesity, such as the number of fast-food restaurants per person and the cost of unhealthy, calorie-dense foods vs. healthy foods.

Check out the trailer for HBO’s documentary ‘The Weight of a Nation’

America’s Hidden 8% VAT: Sickcare 

From Of Two Minds 

by Charles Hugh Smith

American sickcare is sick for a number of reasons. One is that it is highly profitable to manage chronic lifestyle diseases such as heart disease and diabetes, while it is essentially profitless to encourage healthy lifestyles based on diet, fitness and positive mental health practices.

As a result, sickcare has zero interest (other than lip-service) in fostering (or emphasizing) prevention or in providing an integrated system of health which starts with what we do and eat every day.

This chart describes a few of the causal factors:

It’s also highly profitable to turn people into couch-potato media addicts who are also hooked on sugary, fatty, salty snacks, fast food and packaged food. Convincing people a handful of pills is all they need to restore health is also highly profitable.

The U.S. has seemingly intractable lifestyle-related health issues that sickcare simply isn’t dealing with effectively; it can even be argued that sickcare is actively making the problems worse in a multitude of structural ways. 86% of Workers Are Obese or Have Other Health Issue Just 1 in 7 U.S. workers is of normal weight without a chronic health problem.

If you don’t think chronic ill-health and the 8% sickcare VAT is a threat to national security, please consider this slideshow map of the U.S. which depicts the obesity epidemic on a state-by-state basis:

Centers for Disease Control, U.S. Obesity Trends 1985-2007

Here’s the key question: what else could we do with the $1 trillion that we currently squander every year on fraud, paper-pushing, duplicate/useless tests, highly addicitive prescription drugs, etc.? That $1 trillion is the 8% sickcare VAT. That’s enough to reduce the Federal deficit to a manageable level.

The second question is: is there a more effective way to spend the other $1.5 trillion we spend on healthcare? Answer: obviously yes. We could start by understanding health is integrated with lifestyle, diet, fitness and our environment, and that relying on quasi-monopolistic cartels and Federal agencies to provide “solutions” is what got us in this quagmire in the first place.

Our national security and fiscal viability both depend on radically transforming sickcare before it brings down the nation.

Read the entire article here… 

and

here is more data, statistics ,trends and graphs at the CDC web page

College Education! huh-yeah

What is it good for?

Absolutely nothing

Uh-huh

First lets start with Paul Krugman’s post at NYT April 29th  2012 - “Wasting Our Minds” .

In it he attacks Mitt Romney calling him a silver spoon born elitist, who doesn’t care about the struggles of the young people seeking higher education and just encourages them to borrow and risk money to get ahead…

Let’s start with some advice Mitt Romney gave to college students during an appearance last week. After denouncing President Obama’s “divisiveness,” the candidate told his audience, “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”

The first thing you notice here is, of course, the Romney touch — the distinctive lack of empathy for those who weren’t born into affluent families, who can’t rely on the Bank of Mom and Dad to finance their ambitions. But the rest of the remark is just as bad in its own way.

I mean, “get the education”? And pay for it how? Tuition at public colleges and universities has soared, in part thanks to sharp reductions in state aid. Mr. Romney isn’t proposing anything that would fix that; he is, however, a strong supporter of the Ryan budget plan, which would drastically cut federal student aid, causing roughly a million students to lose their Pell grants.

But Krugman fail to point who’s fault is that the college education cost more and more every year.

It is the colleges and universities that are raising the prices and it is because of the government willing to give almost everyone easy money to go to college.

If students has to be mad at someone for the ever rising tuitions, they should be  mad at their college/university administrations

Then you have the democrats accusing the republicans of not willing to vote to keep the interest rates on the education loans low. Well guess what - It Is Not The Interest Rates…It Is The Sticker Price

First of all, the current legislation that is sucking all of the air out of the room is just not very impressive, because it is not the interest rates that are compelling citizens to take up residence in public spaces across the country- it is the sticker price on colleges, and the predatory foundations of the lending system that stand behind them.

Secondly, the legislation in question only affects a small portion of loans, namely, undergraduate, subsidized Stafford loans.  Moreover, the current interest rate is 3.4%, and keeping this fixed as opposed to allowing it to double to 6.8% really does not impact the borrower’s bottom line very much. Most importantly, this legislation does absolutely nothing to control the (nearly) hyperinflation that has gripped academia for years and decades.  This is not to say this is unneeded legislation.  It is needed.  But if President Obama thinks that he can phone this one in, and be done with the student loan issue for a while, he had better think again.

The way to affect college pricing meaningfully is to freeze, or even lower the federal lending limits on federal student loans.  This will not happen until the Federal government has skin in the game on the side of students, instead of against them, due to the absence of bankruptcy protections.

And I really do not understand why everyone has to get a college education. We must promote a educational system that make people think rather than make drones knowing everything in the world but who do not have an opinion for anything. Consider the following reading - Creating Innovators: Why America’s Education System Is Obsolete 

“Today knowledge is ubiquitous, constantly changing, growing exponentially… Today knowledge is free. It’s like air, it’s like water. It’s become a commodity… There’s no competitive advantage today in knowing more than the person next to you. The world doesn’t care what you know. What the world cares about is what you can do with what you know.”

America was great not because everyone was entitled to college education, but because everyone was free to express their ideas and realize them even without going to college. A lot of America’s great companies were started by people who are college drop outs. Again - The world doesn’t care what you know. What the world cares about is what you can do with what you know.

And here is another good article that confirms the above - Get Over It: The Truth About College Grad ‘Underemployment’

It’s just plain arrogant for anyone to consider their job underemployment. We have two concerns about this idea of “underemployment”:

• First, when people get a job, there is nothing stopping them from making their own luck.
• Second, reinforcing this idea of “underemployment” contributes to a culture of “entitlement”.

Let’s talk about making your own luck:

• One woman we know was a graduate of one of the finest universities in the U.S. with a very high GPA. When she graduated, she wanted to live in Los Angeles. And the only way she could live there was to get a job. It was hard to get a job, so she took a clerical position. And over the next few years, she watched, listened and got a bunch of accreditations.  Eventually, she evolved in her career and is today one of the top people in her field and very comfortable.
• A young man we know got a joint dance and business degree. What, exactly, do you do with that? No worries. He got a job selling ladies shoes on a commission-only basis; today, he is the top sales person for a leading retail chain and well on the way to success.
• Another woman we know had a baby during her senior year at a prestigious research institution. She knew she had to get a job immediately upon graduation and that the job market was tough; her degree in Animal Science guaranteed her nothing. So she created a position supporting a research lab. Nonetheless, she distinguished herself as a go-getter with unique ideas. She became highly sought-after in her original field and, ultimately, created several new opportunities and grew them. She now makes more money and more important decisions than most people she knows with twice as much education.
• And then there’s the man who graduated from an engineering school in his home country. But when he came to this country, the only job he could get was serving food in one of the ethnic restaurants of his upbringing. Over time, he leveraged this and became the president of a company that consults to small businesses and restaurants. Clearly, he has done quite well.

We all know stories like these. They are not just the occasional “Horatio Alger” tale. They are all around us.

Now let’s look at this issue of reinforcing the idea of entitlement.

We are all surrounded by mass media about the rare few who live glamorous lives and, seemingly, have anything they want.  This, along with other things, have led to an increasing sense that anyone is entitled to that life, without working for it.

But if a person with a 4-year degree can only get a job at Starbucks, McDonalds or a relatively low-level clerical job, they should take it. Where on a college diploma does it provide a guarantee of a certain caliber job? University is not trade school. Although for anyone who believes they are underemployed upon graduation, perhaps trade school would have been a better choice.  Should any of the people described above have passed on their opportunities because they were entitled to more?

Yep, here is a flash news for you – the college education does not guarantee that  you will be successful in life…

Anyway…if you are graduating you may be as well read the 10 Things Your Commencement Speaker Won’t Tell You 

Class of 2012,

I became sick of commencement speeches at about your age. My first job out of college was writing speeches for the governor of Maine. Every spring, I would offer extraordinary tidbits of wisdom to 22-year-olds—which was quite a feat given that I was 23 at the time. In the decades since, I’ve spent most of my career teaching economics and public policy. In particular, I’ve studied happiness and well-being, about which we now know a great deal. And I’ve found that the saccharine and over-optimistic words of the typical commencement address hold few of the lessons young people really need to hear about what lies ahead. Here, then, is what I wish someone had told the Class of 1988:

1. Your time in fraternity basements was well spent…..

From Townhall
by Daniel J. Mitchell

I’ve occasionally commented on foolish public policy in the United Kingdom, including analysis on how the welfare state destroys lives and turns people into despicable moochers.

But if you really want to understand the horrifying absurdity of the welfare state, check out these passages from  a report in the Daily Mail.

Carl Cooper thought he was doing a public service by offering seven benefits claimants the chance to work for him. But the company boss was flabbergasted when none of them turned up on the first day. Astonishingly, not a single one even had the courtesy to tell the marketing firm boss they would not be coming in. Mr Cooper and other staff members called the new employees to ask them where they were. Initially, some refused to answer their phones  when they recognised the number calling them. When the staff finally got through, five said they would be better off staying on state benefits rather than doing the commission-based work. Four of the seven also claimed  torrential rain had put them off.

Wow. Five out of seven admitted that mooching off the taxpayers was a better way to live. What does that tell us about the over-generosity of handouts?

Let’s continue.

Mr Cooper, who runs Car Smart, a marketing firm for independent car dealers in Canterbury, Kent, criticised the benefits system and said it rewarded people for doing nothing. He added: ‘I was left stunned when none of the new recruits turned up for work. They are a bunch of workshy layabouts. ‘These are people who are so morally twisted that they would rather stay on the dole than work. ‘People keep saying there are not enough jobs in the UK but the real problem is that there are not enough determined or ambitious people. ‘The benefit system is too generous and encourages the unemployed to stay unemployed and just breeds more laziness.’

But it’s even worse than Mr. Cooper realizes. He’ll still be paying these people, but in the form of taxes that then get redistributed to subsidize idleness.

You might think the moochers would lose their benefits because they chose laziness over work, but you would be wrong.

Mr Cooper said all his employees received a basic retainer of £100 a week initially and are enrolled on to the company’s commission structure, which could see earnings rise to up to £400 a week. The jobseekers who failed to turn up will not lose their benefits because the basic pay is under the minimum wage.

I found the above story via Kyle Smith, who also cites a story from the Times about a crazy proposal to have bureaucrats scrub floors and serve as human alarm clocks for the welfare class.

Town hall officials have been told to get down on their hands and knees and “clean the floors” of the homes they visit under David Cameron’s Troubled Families programme. They have also been urged to turn up at family homes at 7am if necessary to get parents out of bed and children ready for school on time. The orders were issued by the programme head, Louise Casey… “I want to see people rolling up their sleeves and getting down and cleaning the floors if that is what needs to be done. If a family needs to be shown how to heat up a pizza, show them how to do it. If it takes going round three times a week at 7am to get Mum up, then do it.”

I would have included a link to the underlying story, but the Times has the most incompetently designed website I’ve ever encountered (presumably because they want to charge, but they don’t even give you a chance to click on the story and then pay).

Anyhow, I have three quick reactions to this bit of foolishness.

1. I’d like to see the head bureaucrat, Ms. Casey, spend a month scrubbing floors and waking people up at 7:00 a.m. She strikes me as the typical leftist clown, sitting in an office enjoying a cushy and overpaid job while dreaming up absurd ideas on how to waste taxpayer money. Maybe if she gets her hands dirty by “rolling up [her] sleeves,” she’ll learn the difference between blackboard theorizing and the real world.

2. My gut reaction is that the government should cut the handouts to these dysfunctional households. For every day the welfare bums aren’t up on time to get their kids to school, they lose 10 percent of their loot. If their floors are dirty, that’s another 10 percent. If you want to change their behavior, start cutting into the budget for cigarettes and booze.

3. More realistically, we’re dealing with a problem of people who have little if any self-respect, and they pass horrible habits to their children. Kicking them off the dole might wake up some of them, but I suspect more than a few of them are past the point of no return. Society would probably be better off if their kids were put in foster homes, but I’m sure government would screw that up as well.

Stories like this leave me increasingly convinced that the only good approach is radical decentralization. Get these programs out of capital cities like Washington and London. The U.S. welfare reform was a decent start, but get responsibility to the local level. And in cities, put neighborhoods in charge. Have those small communities in charge of raising the money and spending the money.

That approach is far more likely to generate good ideas and good solutions, though I confess I’m pessimistic about anything working.

But we should figure out ways to stop inter-generational poverty and welfare. I gather it’s considered bad form to suggest mandatory birth control for welfare recipients, so has anyone proposed a different approach that might work?

From WSJ
By Robert Frank

One of the most controversial issues surrounding inequality is work effort.  Some on the right argue that  top earners are successful in part because they work harder than others. Many on the left argue that the middle class and poor work just as hard – maybe even harder, with multiple jobs — but that the economic deck is stacked against them.

A new study offers evidence  that higher-educated (and therefore higher-earning)  Americans do indeed spend more time working and less time on leisure than poorer income groups. In fact, while income inequality may be growing, “leisure inequality” – time spent on enjoyment – is growing as a mirror image, with the low earners gaining leisure and the high earners losing.

The paper, by Orazio Attanasio, Erik Hurst and Luigi Pistaferri, finds that both income inequality and consumption inequality (the stuff that people buy) have increased over the past 20 years.

The more surprising discovery, however, is a corresponding leisure gap has opened up between the highly-educated and less-educated.  Low-educated men saw their leisure hours grow to 39.1 hours in 2003-2007, from 36.6 hours in 1985. Highly-educated men saw their leisure hours shrink to 33.2 hours from 34.4 hours.  (Mr. Hurst says that education levels are a “proxy” for incomes, since they tend to correspond).

read the rest here

From WSJ

Illinois is a lesson in why companies are starting to pay more attention to the long-term fiscal prospects of governments.

Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state’s future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, “You won’t recruit a business, you won’t recruit a family to live here.”

We’re likely to hear more such worries in coming years. That’s because state and local governments across the country have accumulated several trillion dollars in unfunded retirement promises to public-sector workers, the costs of which will increasingly force taxes higher and crowd out other spending. Already businesses and residents are slowly starting to sit up and notice.

“Companies don’t want to buy shares in a phenomenal tax burden that will unfold over the decades,” the Chicago Tribune observed after Mr. Emanuel issued his warning on April 4. And neither will citizens.

Government retiree costs are likely to play an increasing role in the competition among states for business and people, because these liabilities are not evenly distributed. Some states have enormous retiree obligations that they will somehow have to pay; others have enacted significant reforms, or never made lofty promises to their workers in the first place.

read the rest here

From Carpe Diem

From Jeff Jacoby in today’s Boston Globe:  

“For decades, American politicians have waxed passionate on the need to put college within every family’s reach. To ensure that anyone who wants to go to college will be able to foot the bill, Washington has showered hundreds of billions of dollars into student aid of all kinds — grants and loans, subsidized work-study jobs, tax credits and deductions. Today, that shower has become a monsoon.

The College Board, which tracks each type of financial assistance in a comprehensive annual report, shows total federal aid soaring by more than $100 billion in the space of a single decade — from $64 billion in 2000 to $169 billion in 2010. And what have we gotten for this vast investment in college affordability? Colleges that are more unaffordable than ever. Year in, year out, Washington bestows tuition aid on students and their families.

Year in, year out, the cost of tuition surges, galloping well ahead of inflation (see chart above). And year in, year out, politicians vie to outdo each other in promising still more public subsidies that will keep higher education within reach of all. Does it never occur to them that there might be a cause-and-effect relationship between the skyrocketing aid and the skyrocketing price of a college education? That all those grants and loans and tax credits aren’t containing the fire, but fanning it?

Directly or indirectly, government loans and grants have led to massive tuition inflation (see chart). That has been a boon for colleges and universities, where budgets, payrolls, and amenities have grown amazingly lavish. And it has been a boon for politicians, Republicans and Democrats alike, who are happy to exploit anxiety over tuition to win votes.

But for students and their families, let alone for taxpayers who don’t go to college, it has been a disaster. The more government has done to make higher education affordable, the more unaffordable it has become.”

MP: The chart above shows that the rising costs of a college education (7.5% per year) have far outpaced rising medical costs (5.7%)  and housing prices (4.2%), and have risen annually at twice the average inflation rate (3.8%).  The graph also illustrates that the rising costs of college and the resulting college tuition bubble make rising U.S. home prices and the resulting housing bubble look relatively inconsequential by comparison.