Tag Archives: jobs

Democrats in the Way, Again

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Interest rates on student loans are set to double on Monday after lawmakers failed to find a bipartisan solution to keep the federally subsidized borrowing costs down.
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[T]he current, 3.4% interest rate on Stafford loans—the most popular funding for college students—set to expire on July 1….
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The higher rates would add about $3,000 to the total interest on a $23,000 student loan repaid over 10 years.

In fact, the rates will double to nearly 7%.  However, those $3k are mostly partisan hype: they work out to an extra $12.50 per month on the loan payment for graduates with jobs.  Oh, wait….

On the other hand,

In May, House Republicans passed a bill that would index rates on new loans to the rate on 10-year Treasurys (currently about 2.6%), plus 2.5 per centage points, with an 8.5% cap.  But with little Democratic support in the Senate, that bill is dead in the water.

Thus, the Senate Progressives are perfectly willing to burn students and their loans because these self-important Democrats couldn’t get their way.

Then there’s this minor set of details, courtesy of Glenn Harlan Reynolds, law professor at the University of Tennessee, in that same Wall Street Journal op-ed:

According to an extensive 2012 analysis by the Associated Press of college graduates 25 and younger, 50% are either unemployed or in jobs that don’t require a college degree.  Then there are the large numbers who don’t graduate at all.  According to the National Student Clearinghouse Research Center, more than 40% of full-time students at four-year institutions fail to graduate within six years.  The National Center for Education Statistics reports that almost 75% of community-college students fail to graduate within three years.  Those students don’t have degrees, but they often still have debt.

And

Now here’s where the real immorality kicks in.  The skyrocketing cost of a college education is a classic unintended consequence of government intervention.  Colleges have responded to the availability of easy federal money by doing what subsidized industries generally do: Raising prices to capture the subsidy.  Sold as a tool to help students cope with rising college costs, student loans have instead been a major contributor to the problem.

In the end, the way to work the student debt problem is to reduce the need for the borrowing: get school costs down to saner levels.  Reynolds suggested a way:

Remove the incentives for universities to accept government-subsidized student-loan money regardless of a student’s prospects of graduation or gainful employment.

To which I add the following:

  • the schools shouldn’t receive the subsidized loan monies—i.e., the schools would have to be reimbursed after the fact—until the borrowing student has actually graduated and begun working
  • subsidized loan monies—taxpayer funds—should not be available at all except to students in majors that have serious prospects of bettering our nation’s strength and prosperity (stated differently, making better off the taxpayers on the hook for those monies).  STEM majors would qualify; Gender, Women’s, and Sexual Studies majors or majors in General Literary Studies need not apply.

Naturally, Progressives will have a herd of cattle over such criteria; money grows on the trees of the rich, after all.  Too bad.

Arrogance

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Fox News‘ headline says it all:

Obama planning to sidestep Congress for next phase in climate change agenda

He came through on that in his Tuesday speech: he intends to implement his climate change claptrap by diktat through his EPA, wholly ignoring the will of the people and our representatives.  In the realization of his speech, his

national plan to combat climate change…include[s] the first-ever federal regulations on carbon dioxide emitted by existing power plants….

In a speech at Georgetown University Tuesday Obama…announce[d] he’s issuing a presidential memorandum to implement the regulations….

And

…he is directing his administration to allow enough renewables on public lands to power 6 million homes by 2020, effectively doubling the capacity from solar, wind and geothermal projects on federal property.

But he won’t allow oil and gas drilling—or the associated jobs and cheap energy.  Expensive energy that the unemployed can’t get is better, you see.  Additionally, there’ll be

…$8 billion in federal loan guarantees to spur investment in technologies that can keep carbon dioxide produced by power plants from being released into the atmosphere.

Never minding that actual science, rather than the pseudo-science of his followers, has shown that CO2 is a trailing indicator of increasing health of the planet.

Congress?  I don’ need no stinkin’ Congress.

Counterargument

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Via The Spirit of Enterprise comes this plain language advertisement for Texas as the place to be for business (for freedom generally, say I as a proud citizen of Texas).  Naturally, I had to hear it via SoE, no business fool, Governor Rick Perry (R); he has no need to run it in Texas, no need to preach to the choir.

Another thing I’m not hearing in Texas: ads from California or Illinois making the case for high taxes and regulation and litigation and big government and so those states are the happening places to be.

I do see ads from another Bright Blue State, however, New York.  Governor Andrew Cuomo’s (D) advertisers aren’t making the case for high taxes and regulation, though: the Wonderful New York ads are touting the state’s lowering taxes and how the state is working for business rather than the other way around.

Hmm….

Racism of the Federal Government

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Here’s another example of the WilsonianObaman government’s racism.

The EEOC is haling Dollar General and a US unit of BMW into court, charging them with racism for the heinous practice—seriously—of using background checks to screen those convicted of

Murder, Assault & Battery, Rape, Child Abuse, Spousal Abuse (Domestic Violence), Manufacturing of Drugs, Distribution of Drugs, [and] Weapons Violations

from job applications.

Just to add racism to the EEOC’s racism, in the BMW case, there’s this: 70 black and 18 non-black contractors had criminal convictions, and the company declined to hire any of them.  The EEOC is only suing over the blacks’ non-hiring.  The non-blacks can go hang.

Indeed, the President Barack Obama’s EEOC has proudly codified its racism.  It said just last April that

an employer’s evidence of a racially balanced workforce will not be enough to disprove disparate impact.

Don’t worry about the inherently racist nature of disparate impact.  Such a worry would be racist.

Social Engineering with Taxes

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Dr Alan Blinder, Princeton University Professor of Economics and Public Affairs, is at it again.

First, some side issues which he raises:

Since the economy as a whole created 5.41 million net new jobs over the past three years, you might expect that about 4.51 million of them were in the private sector and about 900,000 were in the public sector.  In fact, the private sector created 6.56 million net new jobs over the past three years while about 1.14 million net government jobs were eliminated via layoffs and spending cutbacks.

Never before in postwar history has government employment declined during a recovery. Compared with historic norms, we’re down over two million government jobs.

Never mind that the private sector’s performance is about 2/3 of what President Barack Obama promised with his 2009 stimulus and less than that compared to other recoveries, held back by his interfering policies.

Separately, the reduction in government employment is a good start.  Government remains far too big, and it’s not a jobs welfare program: further cuts in Federal employment are warranted.

Then,

Real GDP growth has averaged a paltry 2% per annum over the past three years.  But growth of GDP excluding government purchases—the things governments buy, including hiring workers—has averaged 3%.

But this just confirms how much government interference is inhibiting recovery.

Next, he offers a partial solution:

So Congress could make a good start on faster job creation simply by ending what it’s doing—destroying government jobs.

There’s that employment security welfare claptrap made explicit.  Government actually has a few very specific tasks, named by the Constitution, and no other thing to do at all.  It doesn’t need to employ lots of workers, outside of soldiers, sailors, marines, and airmen, in order to do those few tasks.

Now, he comes to his tax policy as social engineering tool:

Virtually since the Great Recession began, many economists have suggested offering businesses a tax credit for creating new jobs.  While details matter, the basic idea is straightforward: Offer tax breaks to firms that boost their payrolls.

For example, companies might be offered a tax credit equal to 10% of the increase in their wage bills over the previous year.  No increase, no reward.

You might imagine that Republicans would embrace an idea like that.  After all, it’s a business tax cut….

Here’s that foolishness of using taxes to drive our economy to a government goal.  No.  The ways to help our businesses and spur hiring include reducing—or even eliminating—taxes on businesses, canceling the additive costs and outright taxes Obamacare imposes on businesses for hiring, and stopping paying the unemployed for not working.

And no, the “tax credit” isn’t at tax cut at all.  It’s an increase in spending.

Blinder also had this idea:

Suppose Congress enacted a partial tax holiday that allowed companies to repatriate profits held abroad at some bargain-basement tax rate like 10%.  The catch: the maximum amount each company could bring home at that low tax rate would equal the increase in its wage payments as measured by Social Security records.

Again, no.  Eliding the social engineering claptrap of the suggestion, temporary tax moves have no effect.  We’d be better off moving to a territorial tax scheme at the new reduced overall business tax rate.  Or eliminating the business tax altogether.

Blinder concludes with this:

My general point is that the fiscal cupboard is not bare.  There are things we could be doing to boost employment right now.  That we are not doing anything constitutes malign neglect of the nation’s worst economic problem.

Indeed.  Let’s reduce/eliminate business taxes, get Obamacare off the backs of businesses, and restore unemployment payments to the status quo Harding right now.