Monthly Archives: October 2017

College Entrance Criteria

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In an op-ed nominally centered on the failure of affirmative action in college admissions, John Katzman (o Noodle CEO and Princeton Review and 2U founder) and Steve Cohen (co-author of Getting In! The Zinch Guide to College Admissions & Financial Aid in the Digital Age) wrote this.

But the work of admissions officers is more complicated than finding the highest test scores. …. They want to put together an incoming freshman class that has aspiring journalists for the school newspaper, great athletes for all the teams, debaters, musicians, actors, dancers, legacies, and development prospects.

No, the work of admissions officers isn’t more complicated than finding the highest test scores. The added “goals” are just artificial complexification for the purpose of justifying admissions officers’ jobs and high salaries. Even the the authors’ jibe of “finding the highest test scores” is a cynical distortion. The task for quality schools is to find the the most academically capable entering freshmen and the freshmen with the best academic fit for the school’s expertise.

The school’s admissions goals most assuredly are not to fill a quota for the school paper or marching band or the semi-pro sports team or whatever else makes the deans feel good.

The Bigotry of the Left’s Identity Politics

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…writ large.  Here’s Van Gosse, of Franklin & Marshall College (I hesitate to call him a professor, even though that’s what he’s pleased to profess to do at the school) in his op-ed in Newsweek:

Why has the ascent of a bunch of people who in an earlier period might have been called Micks drawn no notice at all?

Maybe because they’re all Americans, who happen to have Irish ethnicity, and not Irishmen and -women who happen to have American citizenship.  This is the bigotry of the identity politics of ex-President Barack Obama (D), of ex-Presidential candidate Hillary Clinton (D), of Progressive-Democratic Party Chairman Tom Perez, the Party in general, and the Left exposed.

This is the bigotry of the folks who would run our government and remake our nation made plain.

The silence of the Left, of the Party’s rank and file—of its politicians in Congress—on this rank racism is deafening.

Overstating the Case

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Defense Secretary Jim Mattis, on the occasion of his visit to the DMZ separating the Republic of Korea from northern Korea, had this to say, among other things:

North Korean provocations continue to threaten regional and global security….

We shouldn’t be feeding Baby Kim’s ego by puffing up the level of influence northern Korea has on security.  We should stick to “regional security,” and leave off references to “global,” even if the real impact might be global.

Tax Cuts and Business Planning

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Some large businesses are claiming that, rather than being good for job growth, the tax reform plan currently on offer in outline form would be good for investors.

As if these are mutually exclusive outcomes.

The chief executive of Honeywell International, Darius Adamczyk, said tax reform will “offer greater flexibility for Honeywell,” adding that the industrial conglomerate would invest more cash in the United States to pay for dividends, mergers and acquisitions, share buybacks and paying down debt.

Amgen CEO Robert Bradway said on Wednesday any tax reform would be incorporated into its capital allocation plans, noting the drugmaker expects to continue to raise its dividend and buy back shares.

However (there’s almost always a however).

Greater flexibility is always a good thing for business, especially in contrast to government fetters telling a business (or pressuring one through, say, a tax code) what its investments ought to be, what its products ought to do, how it ought to produce its goods and services.

Investing more cash in dividends is good for the stereotypical widows and orphans—folks who live on fixed income sources and who have been hammered by the last eight or more years of government-suppressed interest rates.  Dividends also are a way of attracting investors—which is cash for the business.

M&A are a way (not the only way) businesses can grow, increase efficiency, achieve greater economy through greater scale.  Which adds up to lower prices for consumers and greater demand for the product.  Achieving functional monopoly (or oligopoly—monopoly by a few) power and abusing it?  There’s a law for that.

Share buybacks?  Those are a wash, with no economic effect good or bad—for the company or anyone else.

Paying down debt?  That’s always good.  It gets a monkey of too much debt off the business’ back, reducing its cost of money when it needs to borrow again.  Or pay existing dividends.  Or otherwise increase the business’ flexibility.

All of which is good for job growth, even in if it might not increase hiring on the instant of, say, a significant corporate tax reduction.  Good for investors means good for businesses.  Increased flexibility means good for business.  Increased efficiency, lowered price to consumers, increased consumer demand means good for business.  And that means the business grows and hires.

And, yes, there will be relatively prompt increases in hiring, also.  That’s more of that flexibility: businesses won’t put all of their eggs in one basket, if they’re (allowed by government to be) flexible.  They won’t be any more likely to put all of their tax cut into dividends or share buybacks than they would be to use it all for hiring.  And I haven’t even mentioned committing some of that tax cut to increased R&D, which produces more and better products, which increases demand for output, which facilitates growth—which leads to increased hiring.

But, but….

The situation could be a replay of the massive 2004 repatriation “holiday” under President George W Bush, in which 843 US-based multinationals brought back $362 billion in overseas profits at a deeply slashed tax rate of 5.25%.

Most of that money went to stock buybacks and dividend increases.

This is a non sequitur.  The tax reform on offer isn’t a holiday, a one-time event.  What’s on offer is permanent, so actual long-term planning will be able to be done, and the funds more efficiently allocated for the long game.

The Reuters piece at the link didn’t discuss the other major aspect of the proposed tax reform, the tax rate cuts and general reform from the individual taxpayer perspective.  Those rate cuts and reforms represent more money in the hands of taxpayers.  That means more stuff getting bought and more money being saved and more money being invested by those individual taxpayers (often referred to as retail investors, because the vast majority of us are not institutional or professional investors).

Greater demand by individuals means more production by business.  More money being saved means more money in the banks’ hands to lend to businesses and individuals—which means business expansion, more houses being bought, and on and on.  More investment by us retail investors means more money in business hands to fuel R&D, production, expansion.

And all of that means a growing economy and increased jobs.

“Good for investors” and job growth, far from being mutually exclusive, are mutually supportive.

Tax Deductions

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Republicans disagree among each other about the deductibility on Federal personal tax returns of property and sales taxes levied by States, with most of the objections coming from Republicans whose constituents are in high-tax States (which is to say, primarily Progressive-Democrat-led States like New York and California).  I’ve written elsewhere about the nature of that beef.

In my infinite wisdom, I offer a couple of alternatives for compromise.

One is to allow Federal income taxpayers to deduct either their State’s property tax or its sales tax, but not both.  Another is to allow the deductibility of both, but only part of the taxes—say 50%—not all of them.

In either case, after a year or two for transition/adjustment by both the taxpayer and the State of which he’s a citizen, eliminate altogether the deductibility of State taxes on individual Federal income tax returns.

The NLMSM touts the deductibility as Federal government redistributions, but the plain fact is those redistributions are of the monies paid by citizens of other States laundered through the Federal government.

I repeat my chorus: there’s no reason the citizens of Texas or Illinois should pay for the spending decisions of New York or California.  It’s true enough that all the States are in the Union together, and we’re all bound to help each other.  But that’s a two-way street: no State should be creating itself a burden on the other 49 by being irresponsible in its spending and taxing and then demanding those others make it whole from its foolishness.