Questioning Student Loan Subsidies

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Obama and other statists are proposing extra subsidies to student loan borrowers. As Megan McArdle points out, the proposed breaks are questionable public policy at best: “It’s good to remember, as we discuss these plans, that people with college degrees are the best-off people in the U.S. They are a cognitive elite with substantially more earning power than almost anyone else….” These borrowers are highly visible, of course, so political opportunists like Obama and Elizabeth Warren can’t resist such proposals. 

St. Louis Cab Cartel Blocks Uber, Lyft

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Ride-sharing services Uber and Lyft have been thwarted in their efforts to enter the St. Louis market thus far. These would-be competitors offer local politicians “insufficient opportunities for graft,” according to Glenn Reynolds. Uber and Lyft are doing business in many major markets in the U.S. and abroad, but entrenched interests continue to fight their existence, not through market competition, but via influence on local governments. The St. Louis Business Journal ran a video on the local efforts of Uber and Lyft in early May — linked here. Lyft now awaits the decision of a St. Louis Circuit Court judge, discussed here, as to whether its business model falls under the regulations of the Metropolitan Taxicab Commission. Coincidentally, the MTC is controlled by local taxi companies.

Green With Irony

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The relatively brief increase in global temperatures during the late 20th century took a pause over the past 15 years or so, but worldwide carbon emissions have continued to grow (now at the “alarming” level of 4 parts per 10,000 in the atmosphere, despite significant decreases in the U.S. over the past few years, and even bigger decreases in U.S. carbon emissions relative to real output). This disconnect is a major reason why climate models have failed so miserably in recent years. Ironically, the warming that did occur last century, and the continuing increases in carbon concentrations, have increased the earth’s vegetative cover and “greened” the planet, as described by climatologist Roy Spencer. This appears to have occurred in certain desert regions as well as areas of more moderate conditions. Coincidentally, this greening is a source of increased carbon uptake as well.

In the meantime, President Obama has announced new carbon emission rules for U.S. power plants. Here’s another Roy Spencer post on that topic. The new rules will raise energy costs, damage the economy, and contribute climate benefits of approximately zero.

Is Community Service So Praiseworthy?

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Community service is always praised as an honorable activity, at least when it isn’t assigned in court, but should it be given extra emphasis by schools in admission decisions? Should schools (or society) expect some minimum level of community service of college applicants (or anyone)? Should it be viewed as experientially or ethically superior to time spent developing one’s talents? Time spent gaining job experience? Time spent earning income? Arnold Kling takes a hard line on this question, arguing that community service deserves no more praise than other endeavors. He believes the topic is worthy of a high school graduation speech.

One commenter on Kling’s post noted that Milton Friedman once asked William Buckley (who advocated national service) whether cleaning the toilet in a public school does more to serve the community than cleaning the toilet in a McDonalds. I’m inclined to agree with Kling that there are many activities that have at least as much value as community service. He says:

“If you judge people by how their life’s work contributed to better lives for people and less poverty in the world, then I will gladly stack up the Henry Fords and Thomas Edisons against the Mother Theresas. Collectively, the capitalists and entrepreneurs have a much better claim on our gratitude than do the icons of community service.”

But I also assert that it all depends on the nature of the activity, which should be self-evident. Community service might also reflect on the breadth of an individual’s experiences, or their “well-roundedness.” Still, even “having fun” has value, sometimes great value. If you like your work, your productivity and enjoyment count for a lot. Like Kling, I have strong reservations about conferring special status to time spent doing community service activity. It can be good or it can be of less value than other choices. It can even be a fraud.

Fed’s Make Bad Loans, Blame The Banks

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An unfortunate side effect of federal student loan programs has been to inflate tuition at institutions of higher learning. Subsidized lending creates demand; higher tuition is the next step as schools ration the limited number of admissions they can offer (or attempt to defray the added costs of a higher number of enrollees). The ease with which borrowers can default is likely to exacerbate this cycle, and the administration has made it easier to do so. The federal government issues well over 90% of student loans for higher education in the U.S., and default rates are very high relative to private student loans. But a representative of the Consumer Financial Protection Bureau testified before a congressional committee today to recommend that “Congress consider putting in place more consumer protections in the private student-loan market….” Uh-huh. See Let’s Blame The Market for some background, and this article for a brief review of the hearing.

Politics Over Science At The IPCC

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Daniel B. Botkin “dismantles” the IPCC 2014 report on climate change in testimony before the House Committee on Science, Space and Technology. Well worth reading. A point he makes up front: “I have … been dismayed and disappointed in recent years that this subject has been converted into a political and ideological debate.”  

A brief bio: “Daniel B. Botkin, a world-renowned ecologist, is Professor (Emeritus), Department of Ecology, Evolution and Marine Biology, UC Santa Barbara, and President of The Center for The Study of The Environment, which provides independent, science-based analyses of complex environmental issues. The New York Times said his book, ‘Discordant Harmonies: A New Ecology for the 21st Century* is considered by many ecologists to be the classic text of the [environmental] movement.'”

Smartest Guy Strikes Again

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I shouldn’t lead with a sarcastic headline like that, but the prisoner trade executed by the White House is almost beyond belief. Almost, but this is the Obama White House, after all. Here’s The Hill’s latest report: Prisoner Swap Blows Up On WH. Even if you want Guantanamo closed, the trade is grotesque: behind Congress’s back, in violation of recent legislation, we have the release of five high-level Taliban, who themselves are very likely to have played a role in killing Americans, in exchange for a deserter who’s disappearance is strongly alleged to have cost the lives of several American soldiers. So far, it seems that everyone except Harry Reid is upset. Mad Magazine’s take is shown in the pic above, but Bergdahl is a sergeant, not a private. 

Can The VA Bureaucracy Be Reformed?

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Yuval Levin assesses the VA in the aftermath of the waiting list scandal, damning the fraud but also giving credit for good performance where credit is due. He debunks some recent defensive claims and apologia, especially concerning comparisons of the VA to the private health care system. Levin concludes that powerful political interests are likely to prevent any big structural changes at the VA. Bad news!

Megan McArdle thinks that fixing the VA bureaucracy is impossible short of a major upheaval, citing the kinds of experiences that have led to successful and unsuccessful corporate restructurings. “Over time, institutions develop a strong culture, a set of institutional practices, customs and norms that control what the organization is capable of doing. To see what I mean, imagine the staff of the New York Times producing Gawker — or the staff of Gawker Media producing the New York Times.” Only sweeping changes, which are often cruel to the old guard, can lead to a successful transition. This is unlikely at the VA.

Ma Jones Writer Fair To Koch Bros.

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A book on the the Koch brothers by a senior editor of Mother Jones is “mandatory reading,” according to libertarian Nick Gillespie, for those “who care about politics” and the country’s cultural direction. By Gillespie’s telling, the book by Daniel Schulman is a fair treatment of the brothers and their history within the libertarian movement, which has championed smaller, less intrusive government and civil liberties (which is really saying the same thing). 

Gillespie’s review of the Schulman book is structured around a three-part history of Libertarianism, with Part III yet to unfold. Will Libertarians continue to alter the direction of the Republican Party? Or, as Ralph Nader has suggested, will they engage to a greater extent in “issue politics” with others outside the orbit of the major parties, forming coalitions that span right and left to achieve success. 

Gillespie: “Imagine, if you will, a country in which government at every level spends less money and does fewer things (but does them more effectively), doles out fewer perks to special interests (from Wall Street banks to sports teams to homeowners), regulates fewer things across the board, engages in fewer wars and less domestic spying, and embraces things such as gay marriage, drug legalization, and immigration. …Schulman reminds readers that while the Koch brothers remain staunch opponents of Obamacare and government spending, ‘they are at odds with the conservative mainstream’ and ‘were no fans of the Iraq war.’ As a young man, Charles was booted from the John Birch Society (which his father had helped to found) after publishing an anti-Vietnam War newspaper ad, and David told Politico of his support for gay marriage from the floor of the 2012 Republican National Convention. In the past year, the Charles Koch Institute cosponsored events with Buzzfeed about immigration reform (which angered many on the right) and with Mediaite about criminal justice reform.”

One reservation: Gillespie (and quite probably the book) exaggerates the Koch’s political contributions by linking them directly to the total contributions of organizations they back. In reality, the Koch’s direct contributions would rank them as no more than “mid-major players” in the world of campaign finance.

Government Failure: Quicksand For the Quixotic Left

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Progressives have always placed great faith in the ability of government technocrats to correct perceived social ills and do economic planning. This attitude inevitably leads them to drift into elitism. The naive Left, on the other hand, really don’t think much about how the government will do it, but both groups dream the impossible. That’s the general theme of the essay at the link, with more specific application to Obamacare. The opening paragraph is fun:

“They had a dream. For almost a hundred years now, the famed academic-artistic-and-punditry industrial complex has dreamed of a government run by their kind of people (i.e., nature’s noblemen), whose intelligence, wit, and refined sensibilities would bring us a heaven on earth. Their keen intellects would cut through the clutter as mere mortals’ couldn’t. They would lift up the wretched, oppressed by cruel forces. Above all, they would counter the greed of the merchants, the limited views of the business community, and the ignorance of the conformist and dim middle class.”

To quote Tyler Cowan, “The technocratic utopia is not on the menu.” Worse yet, by tilting ever-more government (and taxpayer) resources at windmills, leftist initiatives displace and discourage private activity, the real engine of economic growth. Prosperity tends to solve social ills quite effectively.

I confess that I’ve ceded too much La Mancha to the Left in this post. Perhaps the Libertarian Capitalist is better cast in the role of Don Quixote, and many of us are severe critics of subsidized wind power!