Bowdoin College study

An upcoming study by the NAS (National Association of Scholars) should be interesting for anyone interested in what is going on in institutions of higher learning these days.  A common complaint of David Horowitz's Frontpage Magazine is the idea that while most liberal arts colleges are committed to a diverse student body that "resembles America"  the only real diversity is in the color of their students and and perhaps the gender of the faculty.  Horowitz argues that the social studies departments are almost completely staffed with liberals and only occasionally does he find a conservative on the faculty of the hundreds of campuses he visits each year in the course of talking about the unfairness of speech codes and the toxic politically correct environment they produce.  This study, as described here, will explore the curricula at Bowdoin in-depth, and attempt to find evidence of bias that may reflect a particular political bent or tilt.  Since the NAS mission is to protect the integrity of the academic environment in which its members function, it is unimaginable that this study will be anything other than thorough and objective   The results will be in the Spring of 2012.

ADDED:  On the subject of higher education this post from Innovations - The Chronicle of Higher Education blog, presents a recent "incident" that occurred at the U. of Wisconsin, having to do with the interruption of a meeting held in a local hotel by a respected organization that studies the effect and results of affirmative action policies (diversity initiatives) by institutions of higher learning.  It seems this organization through the FOIA had acquired the records on admissions at the U of W and was meetig to discuss these results when a student "mob", at the direction of the vice provo of the school's "Diversity" department, interrupted the meeting by taking over the site and threatening the participants.  Obviously the university and the "students" feared the outcome of the meeting, which indeed was discussing the facts of the admissions policies of the school in a most unfavorable light as is seen in this link to a post describing the events.

This blatantly illegal action on the part of the students who were goaded on by a school administrator is an outrage but in keeping with what is going on at schools all over the country.  The facts of the admissions policies including the graduation rates of the affirmative action admits are laid out in the post and make for discouraging reading if you are at all concerned about the quality of education offered by our universities and the impact of the diversity outreach programs which flow from the affirmative action law.  Thank you Sandra Day O'Connor for your contribution to the blatant discrimination agains white and Asian students now rampant at universities around the country.

Worse than a Ponzi scheme

Robert Tracinski, who writes for TIA, is one of the more clear thinking pundits out there and he is always unafraid to speak his mind.  What follows is his take on Social Security and how it is undermining the middle class as well as our economy and form of government.  He's right on all counts:

Social Security Is Evil "Ponzi Scheme" Doesn't Quite Cover It by Robert Tracinski The Republican primary context has become a referendum on Social Security, with Texas Governor Rick Perry standing by his earlier statements denouncing the program as a Ponzi scheme, and Mitt Romney seeking to revive his presidential bid by defending Social Security. With Perry as the runaway front-runner, and only gaining in the polls, it looks like this will be a preview of the general election battle. So is Social Security a Ponzi scheme? Yes it is, in its own way, but that doesn't quite cover it. In reality, Social Security is much worse than a Ponzi scheme. The analogy to a Ponzi scheme is accurate and necessary, because it captures the basic economic unsustainability of the program. A Ponzi scheme is unsustainable because the returns it promises are backed, not by any underlying productive investment, but solely by the scheme's ability to recruit an ever increasing number of new suckers to contribute to it. Some have objected that Social Security is not a Ponzi scheme because it has the power to coercively recruit new contributors. But even that does not guarantee that the mathematics will work out. From its very inception, the number of contributors forced to pay into Social Security has been declining relatively to the number of beneficiaries. The numbers are well-known, and Charles Krauthammer rehearses them succinctly: "When Social Security began making monthly distributions in 1940, there were 160 workers for every senior receiving benefits. In 1950, there were 16.5; today, three; in 20 years, there will be but two." Krauthammer describes the results. To keep the scheme going, the amount that has to be wrung out of each new victim keeps increasing: "in 1940, the average worker had to pay only 0.2 percent of his salary to sustain the older folks of his time; in 1950, 2 percent; today, 11 percent; in 20 years, 17 percent." Correspondingly, what each new contributor gets back from the program keeps decreasing. As Andrew Biggs observes, this is another thing that Social Security has in common with a Ponzi scheme. [L]ike a Ponzi scheme, Social Security paid early participants incredible returns on their money, because they contributed to the system for only a few years but received a full retirement's worth of benefits. A person who retired in 1950 received around a 20 percent annual return on the taxes he paid (which happens to be exactly the same return that [Bernie] Madoff promised to his investors)....[A]n average wage earner born in 1950 will receive around a 2.2 percent return from the system, which is less than what you could earn on guaranteed government bonds. A person entering the workforce today will receive only around a 1.7 percent return. At some point soon, that return is going to become negative, meaning that Social Security will present every young person with the prospect of forty years' worth of dead loss the moment he enters the work force. From this perspective, the fact that Social Security can coercively recruit new contributions makes it worse. At least a private Ponzi scheme is self-liquidating. It collapses the moment its victims realize they are being defrauded. Social Security is a Ponzi scheme with no escape, as if Bernie Madoff had been exposed—and then promoted to Secretary of the Treasury. That brings me to the most important similarity to a Ponzi scheme. Both Krauthammer and Biggs grant that Social Security was not founded with the intention to defraud. They're dead wrong. Social Security is not an actual investment scheme or insurance plan, because its tax receipts are immediately spent rather than being invested in productive enterprises. Yet from the very beginning it has been relentlessly sold to the American people as if it were an ordinary pension plan. Even a group of South Carolina Tea Party supporters described the system in those terms, telling a reporter, "We paid into Social Security," "It's not an entitlement, it's ours," and, "That's my money that I put into Social Security—I deserve it." These people are the victims of an enormous, decades-long swindle, because the economic reality is that the money they paid into Social Security is long gone—and the legal reality is that the benefits they think they are owed do not belong to them. Court rulings have affirmed that the government isn't obligated to pay them any definite amount, only whatever Congress chooses to pay. The awful truth is that Social Security's beneficiaries, who have been misled into believing that they are merely collecting the funds owed to them by a pension plan, are in reality just another faction of welfare recipients. They receive benefits, not because they own money in an investment account, but only because politicians in Washington, DC, want to appease a pressure group, buying their votes by giving them handouts. If Social Security is actually a welfare scheme, then it is the most unnecessary welfare program in history. The system's primary beneficiaries are members of the middle class. Yet the middle class is, by definition, that segment of a society that does not need welfare. The defining characteristic of the middle class—what differentiates the middle class from the poor—is that they are prosperous enough to pay their own bills and to be independent and self-sustaining. The middle class are those who make enough money to support themselves and to build up savings. This is the really diabolical aspect of Social Security. It is designed in a way that openly discourages and prevents saving, particularly on the part of the middle class. The rich and the poor tend to escape the ravages of Social Security. The rich earn incomes well in excess of the maximum that is subject to payroll taxes, so a relatively small portion of their income is taxed to pay for Social Security. The very poor have various tax breaks, such as the earned income tax credit, designed to refund their Social Security taxes back to them. But there is no escape for the middle class. They are not poor enough for a tax credit, but all or most of their income is subject to the full payroll tax. They will see 13% of their income (counting the employers' portion of the payroll tax) drained out of their paychecks for their entire working lives. Now consider that number, 13%, and compare it the national savings rate—the percentage of his income that that average person puts into genuine, productive investments. After years of hovering near zero (and dipping below zero, i.e., a net drawdown of savings, shortly before the financial crisis), the national savings rate briefly climbed to 7% and is now somewhere in the neighborhood of 5%. Social Security suppresses that number, both directly, by seizing 13% of a middle-class worker's income and making it unavailable for savings, and indirectly, by lulling potential savers into a false sense that they have already set aside money for their retirement. This suppression of saving amounts to an enormous destruction of private wealth for the middle class. And for the overall economy, it means an enormous drain of capital from the primary capital-producing class. This is the mechanism by which the fraud of Social Security turns an independent, economically self-sufficient majority into just another welfare-state pressure group. The middle-class workers who have the potential, through their own diligent saving, to become "the millionaire next door" are instead encouraged to become the welfare dependent next door. If you think this is an accident or an "unintended consequence," think again. The defenders of Social Security have fought tooth and nail to prevent any reform that might move the middle class out of the system. That is why they have fought so hard against "means testing" that would reduce the benefits paid to the more well-off, and that is why politicians voted to expand Social Security benefits in 1970s by, for example, indexing benefits to the growth of wages rather than to the (usually smaller) rate of inflation. They did not want Social Security to become just a bare minimum designed to keep the elderly out of poverty, because such a program would become irrelevant to the well-being of the middle class. The supporters of the system made the deliberate decision to keep the middle class dependent on Social Security, because it wanted to retain them as part of the permanent constituency for big government. The economic independence of the middle class is why it has always caused such trouble for corrupt and tyrannical political systems. Every other segment of society can be bought. The very rich can be co-opted through cronyism (think Jeff Immelt and General Electric), and a demagogue can always tempt the poor with the promise of handouts. But the middle class is the segment of society that is both prosperous enough and numerous enough that its members are cantankerously independent of the state, making them a thorn in the side of power-hungry rulers—until the advent of the middle-class welfare state. That leads us to the final evil of Social Security: the destruction it has wreaked on our very form of government. As Robert Samuelson recently observed, "In 1960, national defense was the government's main job; it constituted 52 percent of federal outlays. In 2011—even with two wars—it is 20 percent and falling. Meanwhile, Social Security, Medicare, Medicaid and other retiree programs constitute roughly half of non-interest federal spending." The dominant business of the federal government used to be protecting our lives and property. Now the federal government's main job is sending checks to people who don't work. So we have a system that is fraudulent and unsustainable in its design, which suppresses capital accumulation for individuals and economic growth for the economy as a whole, and which reduces a self-sufficient majority to supplicants of the state. The whole system is intellectually dishonest, economically destructive, and morally corrupting. A mere Ponzi scheme? We should be so lucky. We will need to have a "national discussion," to use the standard politician's phrase, about the best and most politically palatable way to unwind this scheme. But it is a fraud and a monstrous lie, and the sooner we tear it down, the better.

Union skullduggery

For anyone who doubts the real goals and objectives of unions, the following from James Taranto's daily column in the WSJ online is a must read:

By JAMES TARANTO

In his Labor Day speech in Detroit, Barack Obama issued a ringing endorsement of government employee unions:

Having a voice on the job and a chance to organize and a chance to negotiate for a fair day's pay after a hard day's work, that is the right of every man and woman in America--not just the CEO in the corner office, but also the janitor who cleans that office after the CEO goes home. Everybody has got the same right.

And that's true for public employees as well. Look, the recession had a terrible effect on state and local budgets--we all understand that. Unions have recognized that; they've already made tough concessions.

From the president's hometown comes an example of what he is actually supporting. TheChicago Tribune reports that an investigation it conducted with WGN-TV found "23 retired union officials from Chicago stand to collect about $56 million from two ailing city pension funds."

That's an average of $2.4 million each, and some will rake in even more. Dennis Gannon, a former president of the Chicago Federation of Labor, stands to collect some $5 million. In line for $4 million apiece are Liberato "Al" Naimoli, president of the Cement Workers Union Local 76, and James McNally, vice president of the International Union of Operating Engineers Local 150.

"Since the 1950s," the Trib explains, "city workers who take leaves of absence to work full time for unions have been able to remain in city pension funds if they choose. The time they spend at their union jobs counts toward their city pensions."

Ill. Attorney General Office

David Gannon, pensioner

Union jobs, however, are far more lucrative than city jobs. Gannon's city salary was $56,000 a year; his union salary, $200,000. But he retired from his city job in 2004--at age 50, and 13 years after beginning a leave of absence. Between then and 2010, when he retired from the union, he collected both the $200,000 union salary and a $150,000 city pension.

How did the city end up paying him a pension nearly three times his salary? That's where things get interesting. Few labor leaders took city pensions, the Tribune reports, "until the law was changed in 1991 to base those workers' city pensions on their union salaries instead of their old city paychecks, dramatically boosting the amount they could receive"--a provision that "became law with no public debate among state legislators and, more importantly, no cost analysis."

And no accountability: "No one from either the state Legislature or city government will take credit for the law, which passed in 1991, and the process of drafting pension legislation in Springfield is so shrouded in secrecy that there's no way of knowing exactly whom to hold responsible."

And no possibility of reversal: "The state constitution says pension benefits cannot be diminished once they are earned."

"Gannon told the Tribune that he was only following the law in filing for a city pension," the paper reports. The scandal isn't that what they're doing is illegal but that it is legal.

This particular provision is unique to Obama's home state, the Tribune reports: "Pension experts from around the country say they've never heard of such a perk for union leaders." But unions have any number of perfectly legal ways to rip off the taxpayers. As we noted in July, the Wisconsin teachers union runs its own insurance company, the WEA Trust. Until Gov. Scott Walker's reforms took effect earlier this year, the union negotiated "collective bargaining" agreements obliging local school districts to pay above-market premiums for its health benefits.

And as The Daily's Jillian Melchior reported last month, state pension funds frequently make risky investments, knowing that if they don't pan out, taxpayers will have to make up the losses. What's more, the boards that manage these funds are stacked with union representatives and plitical appointees: "Because public unions are an influential constituency, they're inclined toward union priorities."

That is the system President Obama defended on Labor Day. And his support for it is not merely rhetorical. Both the 2009 stimulus and the recently proposed Stimulus Jr. include vast payments to states and localities--in effect, a federal taxpayer bailout for governments that have been so profligate with their own taxpayers' dollars. Some of that money, of course, gets kicked back as campaign contributions and independent expenditures to support the campaigns of Obama and other Democrats. It's all legal, but that doesn't mean it isn't a scam.

Fatherhood

 While it's extremely difficult to marry high pressure work with family responsibilities, the result of neglecting young boys by busy fathers is made clear in this article.  This Weekly Standard piece is must reading for all young fathers.

Milton Friedman & Palestinian videos

This video from Hoover Institute via Powerline is a keeper.  As is this unrelated one on the Jewish/Arab imbroglio.

Raising taxes on the rich

The argument over raising taxes on the "rich" is in full bloom.  Obama has come of his pronouncement of a year or so ago that it is a bad idea to raise any taxes in a bad economy by engaging in a class warfare strategy of raising taxes on the rich in the interest of "fairness", and to stir up his base for the coming reelection campaign.  In this article by Richard Epstein of the Hoover Institute we have an abstruse argument to prove Obama, once and for all, to be wrong about raising taxes.  It is abstruse because Epstein, an economist, uses mathematics to demonstrate how even minor rate increases in taxes causes a change in the behavior of those affected, and the concepts are not all that easy to grasp, at least for the mathematics deprived.  A simpler and perhaps more easily understood argument is that by raising taxes and increasing the "take" of the government, we are saying that the government needs more revenue to operate at its present size.  But, isn't that the point?  Conservatives believe that the government is way too big and intrusive and needs to be pared back.  Raising taxes acknowledges that government is not too big as presently constituted and that if anything is perhaps even too small.  Both Epstein's and the size arguments are valid, the latter is simply easier to understand, at least for the layperson.

The liberal intellectual at work

Salon, the strongly left-leaning website with a large following, has published a piece by Harvard Professor and Clinton cabinet member, Robert Reich.  Reich blames gridlock and all our other assorted problems these days on the cynicism of the Republicans who have single-handedly destroyed the public's faith in government as a solution to our manifold problems, past and present.  This is classic liberal reasoning, projection, and madness all rolled into one intellectual professor who, like the rest of his breed, really does not understand how the world works.  Somehow Reich is unable to come up with one single discrete occasion when Democrats may have been at fault for our present plight. It's all about the Republicans and their corporations wanting to get rid of all those pesky limitations on their freedom to plunder the downtrodden and have everything for themselves.  And these are the types Democrat administration after administration keeps bringing in to public service in order solve our problems and put us on the path to the correct way of conducting our civic and economic life. Wow, no wonder!  Of particular interest to this link to Reich's column is the letter of response from someone who signs himself as "Wang, Dang, Doodle".  It is truly on the money riposte and well worth reading.  Viva sound thinking!

Laying blame

Rex Murphy identifies the MSM as the real culprit in the Obama disaster, tragedy, fiasco, mistake, nightmare (pick one, or more).

More on Hayek

Powerline's new regular contributor Steve Hayward turns out to be a Friedrich Hayek acolyte which accounts for his refreshing common sense on matters economic and in general.  In this post Hayward quotes Hayek on the subject of the indivisibility of freedom and how liberals try to compartmentalize it into that of speech and economic activity, supporting the former and regulating the latter.  As Hayward points out, Hayek condemns this position as a contradiction which accounts for the liberals embrace of collectivism and socialism over the years.  The indivisibility of these two freedoms. if you will, goes to the heart of the Austrian's school of economics.