Friday, June 28, 2013

Last Call For Prop 8

The Ninth Circuit Court of Appeals officially lifted its injunction against gay marriage in California in light of the Supreme Court's decision on Wednesday, meaning same-sex marriages can proceed immediately as Gov. Jerry Brown has advised county clerk's offices to be ready to issue marriage licenses as soon as the injunction was lifted.

The U.S. 9th Circuit Court of Appeals on Friday cleared the way for gay marriages to resume in California.

The court lifted its stay on an injunction which ordered state officials to stop enforcing Proposition 8. With the court's action, counties can now begin issuing same-sex marriage licenses.

A spokesman for the U.S. 9th Circuit Court of Appeals had originally said it would takes the court at least 25 days to act after a Supreme Court ruling. Immediately afterward, Gov. Jerry Brown ordered his public health agency to advise the state's counties to "begin issuing marriage licenses to same-sex couples in California as soon as the 9th Circuit confirms the stay is lifted."

Among the first to be married today:  Prop 8 plaintiffs Kris Perry and Sandra Stier.

Well played, California Democrats.  Well played indeed.  And good riddance to enshrined discrimination in the Golden State (and hopefully soon the rest of the country as well!)

Schooling Instadope Yet Again

It seems like every six months or so, Glenn "Instapundit" Reynolds disgorges his regular "How to fix US colleges" post in an actual publication of record.  This graduation season it's the WSJ (natch) as he recycles oldies but goodies on making higher education subject totally to the "free market", calling student loans "immoral".

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 truth, America's student loan problem won't be solved by low interest rates—for many students, the debt would be crippling even if the interest rate were zero.

If we want to solve the very real problem of excessive student-loan debt, college costs need to be brought under control. A 2010 study by the Goldwater Institute identified "administrative bloat" as a leading reason for higher costs. The study found that many American universities now have more salaried administrators than teaching faculty. 

Actually the major problem in universities and colleges is that states have made massive cuts to university system budgets since the 2007 financial crash.   If they were serious about lowering tuition and loan costs, states would invest more in higher education, not less.  That's pushing college tuition up.

Second, student loans were, until recently, a massive cash cow for the same banks that nearly collapsed our economy.  They were profiting handsomely on student debt and will still continue to do so for older loans for some time.  Also pushing prices up.

Third, the influx of H-1B visas used to recruit science, technology, engineering and math graduates from other countries isn't covering any shortages.  If there were shortages, engineers would be making tons of money.  They're not.  What's going on is that firms that hire these folks are hiring them at garbage salaries and then complaining they can't find anyone to fill the positions except for immigrants.  That's pushing prices up too.

Fourth, for-profit higher education universities continue to push prices up by again using profit motive on an oligopoly to move prices higher.  His fixes address none of these issues:

A serious student-loan fix would change this incentive. First, federal aid could be capped, perhaps at a national average, or simply indexed to the consumer-price index, making it harder for schools to raise tuition willy-nilly. Second, schools that receive subsidized loan money could be left on the hook for a percentage of the loan balance if students default. I would favor allowing students who can't pay to discharge their loan balances in bankruptcy after a reasonable time—say, five to seven years, maybe even 10—with the institutions that got the money being liable to the guarantors (i.e., the taxpayers) for, say, 10% or 20% of the balance.

You can bet that under this kind of a rule, universities would be much more careful about encouraging students to take on significant debt unless they are fully committed first to graduating, and second to a realistic career path that would enable them to service that debt over time. At the very least, schools would be more likely to warn students of the risks.

What Reynolds's recommendations would do is make college completely unaffordable and unavailable for Americans who don't have $150,000 or so to attend a university.   In fact, his plan would be to shut down all but the most profitable college degree programs and get rid of most university faculty.  If we only send people to college because of profit motive rather than to learn, universities stop becoming universities, and start becoming even more of a barrier to income equality than they are now.

Which is the point:  to limit universities (and the ability to land an upper-class job) to the rich and the rich only.  That's immoral, but don't tell Instadouche here.

The Keys To Ben's Helicopter

Don't look now, but Helicopter Ben Bernanke's term as Fed Chairman is almost up.  Somebody's going to need to fly the thing without crashing it into a mountain. The White House has made it pretty clear that spending political capital on getting Ben another term in January isn't going to happen, so much so that the search for his successor is starting now, seven months ahead of time.

Wall Street Journal reporters Peter Nicholas and Jon Hilsenrath are reporting that the White House has "quietly begun assembling a short list of candidates" to take over as chairman of the Federal Reserve when current Fed Chair Ben Bernanke's term expires in January.

Earlier this month, President Obama said in an interview, "Well, I think Ben Bernanke's done an outstanding job. Ben Bernanke's a little bit like Bob Mueller, the head of the FBI - where he's already stayed a lot longer than he wanted or he was supposed to."

Yeah.  The smart money is on current Fed Vice Chair Janet Yellen.

By every account, Yellen is a thoughtful and brilliant economist, which has allowed her to rise to where she is today.

"Ms. Yellen climbed the Fed ranks by being methodical rather than iconoclastic," writes Wall Street Journal reporter Jon Hilsenrath in a recent profile of the Fed vice-chairman. "She shows up at policy meetings with carefully crafted statements. Those who work with her say she arrives at the airport hours early."

"[Yellen] is very low-key, but impresses people quickly with the depth of her understanding and the sincerity of her views," said fellow Berkeley professor Andrew Rose in 1994, describing her as "collegial, persuasive and effective."

She has also worked with the academic elite of the economics sphere her entire career. Her mentor at Yale, where she received her Ph.D. in 1971, was Nobel-Prize winning economist James Tobin, whose legacy is enshrined in today's economics textbooks. After graduating from Yale, she taught at Harvard for five years. Then, she did a two-year stint (1976-1978) as a staff economist at the Federal Reserve, where she met her husband, fellow economist and future Nobel Prize winner George Akerlof.

After the Federal Reserve, Yellen was faculty at the London School of Economics for two years. Then, in 1980, she accepted a position at the University of California, Berkeley, where she stayed until her appointment to the Federal Reserve Board of Governors in 1994 by President Bill Clinton.

Having been kicking around the Fed for 20 years is a pretty big bullet point on the resume, admittedly.  Republicans on the other hand are going to extract their pound of flesh, since both they and the Paultards believe the Fed created the financial crisis by themselves (and the banks had nothing to do with it, which is like blaming the fire department for arsonists.)

We'll see.


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