Category Archives: Economics

Miscellaneous economy stuff

Hillary Clinton’s Wall Street Speeches

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She was for releasing the transcripts before she was against it. The fact is, there could well be contractual requirements for not releasing them. However, I discount that because if such contract clauses existed, she’d cite them. Her latest weasel-worded excuse for not releasing is this, instead, in response to a George Stephanopoulos question about why she’d not yet:

Yeah, you know, here’s another thing I want to say. Let everybody who’s ever given a speech to any private group under any circumstances release them. We’ll all release them at the same time. You know, I don’t mind being the subject in Republican debates, the subject in the Democratic primary. That kind of goes with the territory.…

Couple things about this. One is the typical Clintonian (and others’) tactic of releasing the bad news within a deluge of good news, other bad news, and utterly irrelevant news. Everyone releasing at the same time would bury whatever embarrassing or outright bad stuff might be in the Clintons’ Wall Street speeches.

The other thing is this: why not show the way and be the first to release the transcripts? Because that would be taking the high road.

The Cost of Schengen

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The Schengen Agreement is a 1985 European Economic Community treaty, carried over into the European Union as the Schengen Convention, which essentially did away with border controls along the borders between participating nations. Today, those nations are the EU member nations. Schengen had, and continues to have, considerable economic benefits beginning with smoother, delay-free travel across borders for people, goods, and services; citizens of one nation being able to work in another nation; reduced costs of border policing; and on and on.

Given the explosion in refugees, and others, from the Middle East, those “refugees'” misbehaviors and outright criminality (see the rapes in Germany and Sweden), and other “refugees'” outright terrorism (see Paris), there now is a move to drastically modify or eliminate Schengen and reinstitute national border controls. Of course the EU leadership is objecting, and part of its objection is a claimed cost.

The French government’s economic planning agency, France Stratégie, estimated in a report released this week that the reintroduction of permanent border controls within the EU would cost the bloc €110 billion, and make the EU economy 0.8% smaller within a decade.

The cost to the EU may prove to be what France Stratégie estimates it will be. However, that’s the wrong measure and the wrong responsible body. It’s the individual nations that are at risk: it wasn’t French women being raped in Germany or Sweden, it wasn’t Italian citizens butchered by terrorists in Paris.

Neither is the EU as a whole doing anything—and it doesn’t intend to do anything beyond hectoring Turkey and Greece about their southward-facing borders—to protect the citizens of the member nations from the depredations and butcheries of the terrorists and thugs mixed in with the flood of refugees. The EU isn’t even prepared to help its member nations deal with the floods that have already arrived in those members.

The decision by particular nations to suspend (or, in extremity, to withdraw from) Schengen must be respected as those nations move to better safeguard their people. Moreover, the costs of doing so plainly are national costs, not EU costs.

[T]he Association of German Chambers of Commerce and Industry (DIHK) estimated that border controls would cost Germany €10 billion a year.

Perhaps it would be that much. However, this cost must be weighed against the cost of the damage done via insecure borders.

In the end, too, the putative EU costs aren’t worth the worry. A 0.8% move in the EU’s €14.3 trillion GDP “within a decade” is economic measurement noise.

Two Mistakes

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One is by the Department of Education, and one is by “some college presidents.”

Under Secretary of Education Ted Mitchell said he wants accreditors to “do more to address substandard and underperforming institutions” by focusing their efforts on weak schools while reviewing elite schools less rigorously.

Sure. Because the Harvards and Dartmouths of college-dom are such paragons of free speech, diversity of ideas, and quality teaching. Never mind that elite school elite professors spend more of their time doing government-funded research than they spend in the classroom doing actual teaching.

The “college presidents'” mistake is this:

[S]ome college presidents worry that judging schools by things like graduation rates could mean that high-risk students will have less access to higher education.

If these schools have poor graduation rates, to what education have their students had access? These college presidents are conflating access to higher education institutions with access to higher education. Apparently, they don’t take their own institutions’ Logic 101 courses seriously. Or those courses are poorly taught.

Left unaddressed by both is another matter, described by a college president who’s willing to be named. John Bassett, President of Heritage University, is on the right track.

I think you need a better measuring stick than how many diplomas you hand out. I think you have to be very careful of unintended consequences. If you focus on graduation rates, then you incentivize schools to target wealthy and middle-class kids and not go after anybody else.

Focusing on graduation rates also drives fudging standards in order to prop up graduation rates. There’s no higher education for students there, either.

Here’s a thought; bear with me, apparently I’m on new ground here. How about focusing on rates of employment in their chosen major field for graduating students in a period (say, six months to five years) following graduation?

Graduating students who do well and become employed will identify a number of useful trends for the schools who graduated them and the Federal government that hectors the schools: the schools are teaching well, the schools are teaching marketable skills, and the schools are producing graduates less likely to default on their student loans because they have actual jobs and an income that enables them to pay their debts.

Compromise

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The AP had a piece on FoxNewsOnline that, among other things, expressed hope that in President Barack Obama’s (D) last year sitting in the President’s chair, there can be some compromise between him and Congress’ Republican leadership, that the two can work together.

Searching for potential compromise, President Barack Obama brought the Republicans who run the House and Senate to the White House on Tuesday to try to hash out an agenda for his final year, even as his top legislative priorities appear to be losing steam.

The hope, though, hinges on a question for a man who has spent the last seven years denigrating and insulting the intelligence and patriotism of Republicans—every single one of them.

The question is this: when will Obama start working with Republicans, when will he actually be willing to compromise?

Home Buying Down Payment Requirements

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The PRC is reducing the size of down payment it requires for a Chinese citizen to buy a home from 25% to 20% of the purchase price. For those who already own a home and haven’t yet fully repaid that mortgage, the mandatory down payment on the purchase of a second home is being reduced to 30% from 40%. This is that government’s attempt to stimulate a slowing economy by inducing more consumption and thereby growing jobs. Supposedly.

The moves, though, raise the question: why is the PRC government mandating this sort of thing at all?

Oh, wait….