| Wednesday,
April 7, 2010 The credentialism
conspiracy continues. University lobbyists have managed to get the Federal
Government involved in ending internships on the grounds that it is
exploiting young workers and violates the minimum wage laws.
A Wall Street Journal editorial says
The Times also quotes Trudy Steinfeld,
director of New York University's Office of Career Services, regarding
opportunities for unpaid internships. "A few famous banks have called and
said, 'We'd like to do this,' said Ms. Steinfeld. "I said, 'No way. You
will not list on this campus.'" To be fair, she doesn't want a Labor
Department enforcer knocking on her door next week. But we wonder what NYU
students trying to get their feet in the doors of financial firms think
about Ms. Steinfeld rejecting opportunities on their behalf.
What the students ought to think is that NYU benefits nicely
from all this. You can't get an education on business practices for free by
doing an internship; better you should pay NYU for course or workshop. Look
for an increase in requirements for credentials. You must pay to earn
'credentials' while you can get experience free as an intern. Not
surprising. Of course no one is forced to take an internship.
Whatever happened to freedom?
===================
Today's WSJ also has an
op ed piece on the Dodd Bill that's worth your attention. The title says
it all: "The Dodd Bill: Bailouts Forever." Instead of allowing institutions
that are "too big to fail" to be eliminated and their assets sold to smaller
and more efficient companies, Dodd -- reportedly the upper half of the
famous Kennedy-Dodd Waitress Sandwich -- wants to set things up so that even
more too big to fail institutions will be built up and bailed out and kept
in homage to the Feds.
Whatever happened to capitalism, which is to say freedom?
==================
Los Angeles, like the State of
California, is broke. One reason is that during boom times they spent money
on everything, but particularly on new employees and raising wages and
pensions on existing employees. If you were to ask taxpayers what they like
spending money on, pensions for former government employees would not be
high on the list, veterans excepted of course. At one time government
employee pensions wasn't a big problem, because the government workers paid
into the pension fund as did the government. Over time that transmogrified
and in many places -- California in particular, but there are plenty of
others -- not only do the employees not contribute to the retirement fund,
but the fund must pay a stipulated amount even if the fund's managers have
lost all the money. This has made for massive time bombs that will be going
off for a decade. There is over half a trillion dollars in unfunded
obligations by California funds. Meanwhile the annual California budget
remains in deficit and can only be 'balanced' by borrowing or selling assets
or both because cost reduction is "balancing the budget on the backs of the
poor." People with liquid assets are, for some reason, fleeing the state...
Government at all levels is not merely broke but so deep in
the hole that it can never tax its way out. Either some of these debts have
to be restructured, or there will be runaway inflation. We can't tax the
economy to pay off these debts. We are already at the stage where increased
taxes don't bring in much -- if any -- more revenue, while their effect on
the economy is severe.
Add to all that the new entitlement obligations of the
Health Care Act, and you have the recipe for something a lot worse than
Carter's stagflation. Many of you will not remember that era of national
malaise, and the "misery index" which figured in both Carter elections. The
misery index is formed by adding the inflation rate to the unemployment
rate. Carter castigated Ford because the misery index was above 13% in 1976.
At the end of Carter's term it was over 22%, and Reagan made much of that.
Given current unemployment rates which aren't likely to plummet, and the
need for more money to pay off the enormous debts, we can only speculate on
what the misery index will be in 2012.
The situation is critical, but apparently not considered
serious.
===============
As to what happened to the pension funds: the managers got
sucked into the derivatives and kiting bubbles at the same time that the
Democratic legislature and governors kept reducing the employee
contributions to the pension funds while raising the pensions and lowering
the age of retirement. California is in more trouble than Greece. Greece
having joined the Euro can't inflate it's way out of its debts, and no one
knows how to get out of this: Germany isn't really interested in financing
Greek pensions, and the Greek unions answer all this by strikes and riots.
One wonders how that will play out in California, where we can't inflate out
way out either.
Los Angeles for years has had hidden taxes in the electric
and water rates -- the Department of Water and Power makes huge profits,
which are handed over to the City. DWP has big surpluses, but wants to raise
rates again. The City Council, under fire from voters, offered DWP all but
$6 million of the loot it wanted, but that wasn't enough, so DWP in a fit of
pique withheld $73 million that it was due to pay in tribute. This has
brought on the current Los Angeles financial crisis, and the Mayor is going
to shut down the city by furloughing employees several days a week. There is
no discussion of, say, cutting back employment to 2002 levels. Unions are of
course threatening to strike, or take to the streets, or quite probably
both.
When I was deputy mayor of Los Angeles we had 81 civil
service exempt employees. There are over 600 now.
We live in amusing times.
=================
They're rioting in
Kyrgyzstan
because the utility bills are too high and there's corruption. Sounds like
Los Angeles. Police have killed 40 rioters according to the radio. Taking to
the streets has its costs.
There
is mail concerning deterrence and defense.
================
I got this email, and wonder why I think it is disturbing:
What determines the price of a
woman's eggs? SAT scores
http://www.slate.com/id/2249098/
"If you think you can control
this market, good luck. Bans on kidney selling haven't stopped
worldwide commerce in human
organs. Levine suggests a cap on egg-donor compensation at $8,000 or
$10,000. But it's easy to supplement the official payout, as people
seeking organs or adoptable children have learned. No "death panel" will
stop rich men from buying high-end medical care. And no
fertility-regulation panel will stop rich women from buying high-end
eggs."
That is, I am not astonished that SAT scores
determine the price; the question is, I suppose should there be a price?
Then I think egalitarian thoughts and worry: think of a really bright girl
born to a family that won the egg in a lottery. Might make a good novel. You
are bright. You must donate an egg. Report tomorrow to the Public Health
Institute. Failure to do so will incur a severe penalty. Have a nice day.
==============
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