Category Archives: political economy

Short-Sighted and Narrow-Viewed

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The good editors at The Wall Street Journal opined on the leaked-to-the-press Compact for Academic Excellence in Higher Education. They’ve missed on a couple of their points.

Where the compact goes too far is with its demand that schools freeze tuition for five years….

The editors noted that Mitch Daniels succeeded in this for more than just five years, and they insist that the matter should be left to the schools. The editors missed the simple fact that the matter is still left to the schools: they still can set their own tuition rates; they don’t have to sign the Compact, which is an entirely voluntary thing. They’ll still have access to Federal funding, too; they just won’t get preferential treatment.

…cap the enrollment of international students at 15%.

The editors worried about where that threshold came from, since they couldn’t understand it. The short answer, and the long answer, is Who cares? It’s a cutoff point easily achievable that leaves predictable room for (qualified) American students. As this graph shows, there are plenty of schools that would create that room were they to similarly cap their international enrollment:

The only serious question here is whether international enrollment should be capped at all, not quibbling over limits.

The editors’ rationalization for their beefs are that

Limiting tuition and international students at the same time could leave schools with a budget shortfall.

This would be just silly if the editors hadn’t tacitly accepted the Left’s penchant for spending as sacrosanct. The schools always can reallocate their spending, and they always can reduce their spending to fit the revenues coming in. There’s nothing in the proposed Compact to prevent that exercise in fiscal responsibility.

And this:

Well-intentioned but hard to implement is the compact’s effort to combat grade inflation. The compact demands that schools “commit to grade integrity and the use of defensible standards for whether students are achieving their goals.” Good luck trying to figure that out. Will a fleet of auditors investigate if slackers really deserved an A- in Econ 101?

What, then, is the editors’ solution? Just roll over and give up on solving a difficult problem? Their silence on this speaks volumes. It also demonstrates that their comfort zone is up on the porch, whence they can yap in complete safety.

Disingenuousness in Health Coverage

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David Merritt, of the Blue Cross Blue Shield Association, demonstrates some in his Wall Street Journal Letters letter. He wrote to dispute the WSJ‘s opinion piece that Obamacare tax credits help those who don’t need help.

Consider a family of four that earns $64,000 a year. If the tax credit expires in December, it will see its premiums rise by more than $2,500 in 2026.

Merritt chooses not to say why his, or any other, health coverage company charges such high premiums in the first place. Neither does he specify to which of the several policies on offer in the Obamacare exchanges for this family this premium “spike” would apply.

You add that “making these plans ‘free’ has allowed insurers to get paid for people who may not even know they’re enrolled. Some 40% of those in fully subsidized plans had zero claims in 2024.” But the presence of enrollees with few or no medical claims is the sign of a healthy market. It is common in all insurance markets to find young adults who use less healthcare and therefore file fewer claims.

This is a cynical deflection from the fact that health coverage providers make their money off those unused (by the policy holder) premiums, which the providers invest in order to both make their profit and to fund their payouts. None of that is illegal; it’s even a smart use of those premiums. Merritt’s deflection is real, nonetheless.

Thanks to targeted efforts by the Centers for Medicare and Medicaid Services, enrollment integrity has never been stronger.

Except that, under the Biden administration, far too many illegal aliens have access to taxpayer-funded health coverage. More, those hard-working families of which Merritt pretends to be worried, are untouched by letting the subsidies expire. The only families whose coverage might be imperiled are those who are able to work but make no effort to do so.

Whose Shutdown Is It?

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The Progressive-Democrats in the Senate—nearly all of them, led by Minority Leader Chuck Schumer (D, NY)—have closed the Federal government over their demands to get their minority party way entirely. Senator Tim Kaine (D, VA), as cited by The Wall Street Journal,

said he could vote for a spending bill with a promise to extend the ACA subsidies later, provided that he could get a commitment from the White House to impose a moratorium on firings and spending cuts.

So much for Party’s blather about demanding negotiations on the subsidies as a condition of reopening the government. Now, it’s Party demanding an outright guarantee of the extension, no negotiation at all.

So much, too, for any possibility of the Progressive-Democratic Party ever being interested in cutting spending, only constant increases.

Senator Angus King (I, ME) made even more explicit who is responsible for closing the government:

the vote’s result (Friday’s Senate vote on the House-passed clean CR) “demonstrated that a vague promise about conversations about the ACA isn’t going to be enough to induce my colleagues to end the shutdown.”

This is King’s acknowledgment that it’s Party that has shut the government, and it’s Party that insists on keeping the government shut. With their determined closure, it’s Party that’s harming ordinary Americans with their cutoff of project funding that leads to private sector jobs being HIAed, even as Party bleats that it’s Republicans who are responsible.

Party ignores the fact that the Republicans in the House, despite Party’s best efforts, passed a clean Continuing Resolution—no pork for either party, just funding for seven weeks of government operations—and sent it to the Senate. It’s Party in the Senate that is demanding a Christmas tree worth of Party pork be added to the CR or they’ll leave the government closed, those projects unfunded, and those jobs HIAed.

How Many Bureaucrats?

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James Freeman asked this question in his Tuesday Wall Street Journal op-ed, regarding the bureaucrats in the Federal government.

The government, and I [ahem], answered this question during an earlier Progressive-Democrat-led Federal government shutdown, and we’re about to get an empirical demonstration with the current Schumer Shutdown which began Wednesday morning. Here’s what that earlier shutdown demonstrated about the number of bureaucrats actually needed:

Office Per Cent Nonessential
White House 74
Treasury 82
Labor 82
Interior 81
EPA 94
NASA 97
Housing and Urban Development 96
Education 94
Commerce 87
Smithsonian 84

 

There are others, also, with a different per centage of nonessentials:

Office Per Cent Nonessential
U.S. Commission of Fine Arts 100
U.S. Interagency Council on Homelessness 100
USDA Risk Management Agency 100
Federal Maritime Commission 100
Economic Development Administration 100
Minority Business Development Agency 100

There’s a more complete list over at Slate.

The short answer is: not many of the bureaucrats on the payroll are actually needed. The longer answer will be begun to be delivered with the RIF that the OMB has instructed Executive Branch Departments and Agencies to prepare lists for, with those lists beginning with programs and projects currently unfunded and that do not align with Presidential policy. The answer will be expanded on by all the Leftist and Civil Service union lawsuits objecting to the RIF, even to preparing for a RIF. Those lawsuits will prove the lack of need for those bureaucrats.

A Glittering Generality

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This one is from Republican candidate for Ohio Governor, Vivek Ramaswamy:

Instead of viewing AI as competition, the next generation should own a stake in improving America’s economic productivity. If every child has $10,000 invested in the S&P 500, every one of them would be a millionaire well before retirement.

From where would that initial $10k stake come? If it’s handed to “every child” from outside (vis., government), that child would have no skin in that game, and he would not find himself at pains to protect that stake by actively participating in improving our economic productivity—for instance, by getting a job and working to his employer’s goals or starting his own business and working to make it grow and prosper. The money would just be found money of no personal value.

On top of that, Ramaswamy did not address another aspect of this “plan:” what does he think the value would be of those millions of dollars in the child’s end game of retirement after a long and fruitful life of doing…something? An increase of all that nominal wealth without a concomitant increase in the supply of goods and services, will simply drive up the cost of those goods and services, which is otherwise known as inflation. Those millions of dollars may well wind up with the purchasing value of today’s thousands of dollars.

This is a plan that sounds good in its base outline, but it badly wants cold, clear-eyed fleshing out with facts; hard logic; and clear, publicly measurable steps to be taken. Especially, but not exclusively, the steps needed to keep productivity growth up with S&P 500 growth in an environment where today’s and lots of prior year’s S&P 500 growth—its price to earnings ratio—has been outstripping goods and services—productivity–growth.