Category Archives: Pols and Pundits

Karen de Coster on Matt Yglesias on Public School Funding…

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Hmm..some flying fur:

Matt Yglesias has a blog post called “School for Rich Kids Isn’t Charity” to which Karen de Coster administers several unkindest cuts.

The gist of Yglesias’ argument is that private school tuition money should be taxed because it’s money that really ought to be going to public schools, if those varmint parents only knew their duty to the state.

Well, first, as Ms. de Coster points out, those private school parents (and everyone else) are already paying for public schools through property taxes. So what Yglesias is asking for is a punitive second tax, for the sin of opting out (with your own money) of the free goodies the state wants you to have to make you yet another dependent. A dependent who will then be a reliable vote for expansion of the state.

Ms. de Coster is a CPA who’s probably (?) never taught in a school, private or public. I have.
[Note: this seems to have come off as a brush-off. It’s not meant to be. Just explaining why I think I have something to add, from anecdotal experience, to a theoretical debate].

So let me toss my two cents in.

From my experience (and it’s not extensive), public schools have problems but they’re not caused by lack of money primarily For my part, I made better money teaching in a public school for troubled inner-city children than I ever did teaching in private schools. There was grant money coming to the school. Whether it was usefully spent or not I don’t know. Everyone worked, but the students came from such difficult backgrounds (routine gun fights in their neighborhood, missing parents, pervasive drug addiction, an AIDS patient in one case, malnourishment, street life with its attractions and traps, it was an uphill and probably futile task. The school folded up in three months when the funds suddenly vanished.

Private school wasn’t always much richer but it was different. One of my first jobs teaching in the US was teaching music at a private boy’s school. It was supposedly part-time but I got into the classroom at 6:30 and left only at 3:00, with my time entirely taken up by classes and prep. I was paid $4000 a semester for that. (Fortunately it was only one of three jobs I held at the time). It was probably the hardest work I ever did. There were between 20-35 rather rambunctious boys between the ages of five and 14 who didn’t take kindly to choral instruction, music theory, or my accent. One asked me with disdain why I didn’t look like Vanna White, his heroine (he was nine). Another was so disruptive I had him stand in the corner, where he created more disruption by announcing sotto voce that the art teacher was being undressed by the geography teacher, and he could see it through a hole in the wall. (There was no hole in the wall. Like Saki’s heroine, he was a specialist in romance at short notice).

He was all of five, had a tow head and a face like a cherub, but it didn’t stop him from calling everyone a “d*** face” whenever he had a chance. I finally had to talk to his mother, who received my complaints frostily. Angel-face had already told her that naughty teacher has used the word “wimp” to his preciousness (I’d jokingly told him not to be a wimp but to come up and join the rest of the band)…. which had left him too shaken, poor darling, to continue.

As for “d*** face,” she was sure he would never use such language, she said, in a tone that let me know she was sure I would…..

What I’m saying is that private school can be as tough and underpaid as any public school. And there can be just as uncooperative parents and difficult children.

Money isn’t the main problem with public schools. The problem in the inner cities is the environment in which the school and the children are forced to function; the administrators who have no conception of what’s needed; and a culture that doesn’t support learning.

My high school in India was half-built and lacked running water in one of the labs. I remember sitting on sand in one class. We had no xerox machines, no computers, no type-writers or calculators in the class. There was a broken-down piano (an enormous luxury in India), old books sent to us from America for the library. We loved them for the glossy pictures, lively text and smooth pages. Our own Indian text-books were printed smudgily on cheap paper, rarely had pictures, and tended to be litanies of facts. It was in those old discarded text books that I first read about Robert Fulton and the steam ship and the duel between Burr and Hamilton. It didn’t make a difference that I read it leaning against an old pile of bricks, doodling in the sand, while a nineteen-year old, in a green sari and a huge rose in her bun, sang out the endless details of the Tree-tee of Ver-sigh-liz, while the boys tried to catch her eye.

It didn’t make a difference to our education because there was a culture of learning. The students came from households that were often struggling to pay the bills, for whom uniforms and books and lunch boxes on small middle-class Indian salaries was an enormous sacrifice. But those households placed an extremely high value on learning and accomplishment. They were largely professional or academic families. If a teacher scolded or punished us, our parents took the teacher’s side (for the most part). We didn’t have television to distract us. We had structured time to study at home. We had standards demanded from us. We had people who had a firm grasp, if not of their subject, of the role they had to play in the class room.

Matt Yglesias often has interesting things to say. But on this one, Ms. de Coster is right. He doesn’t know what he’s talking about. Money isn’t the central problem in public schools. I doubt that it’s even really a major problem.

If Pigs Flu……

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From Bill Engdahl via Financial Sense.com:

The Pew study notes, ‘That is where the real investigation ought to begin, with the health and sanitary dangers of the industrial factory pig farms like the one at Perote in Veracruz. The media spread of panic-mongering reports of every person in the world who happens to contract ‘symptoms’ which vaguely resemble flu or even Swine Flu and the statements to date of authorities such as WHO or CDC are far from conducive to a rational scientific investigation..

Tamiflu and Rummy

In October 2005 the Pentagon ordered vaccination of all US military personnel worldwide against what it called Avian Flu, H5N1. Scare stories filled world media. Then, Defense Secretary Donald Rumsfeld announced he had budgeted more than $1 billion to stockpile the drug, Oseltamivir sold under the name, Tamiflu. President Bush called on Congress to appropriate another $2 billion for Tamiflu stocks.

What Rumsfeld neglected to report at the time was a colossal conflict of interest. Prior to coming to Washington in January 2001, Rumsfeld had been chairman of a California pharmaceutical company, Gilead Sciences. Gilead Sciences held exclusive world patent rights to Tamiflu, a drug had developed and whose world marketing rights were sold to the Swiss pharma giant, Roche. Rumsfeld was reportedly the largest stock holder in Gilead which got 10% of every Tamiflu dose Roche sold.14 When it leaked out, the Pentagon issued a curt statement to the effect that Secretary Rumsfeld had decided not to sell but to retain his stock in Gilead, claiming that to sell would have indicated something to hide.’ That agonizing decision won him reported added millions as the Gilead share price soared more than 700% in weeks.…….

….. Avian Flu was traced back to huge chicken factory farms in Thailand and other parts of Asia whose products were shipped across the world. Instead of a serious investigation into the sanitary conditions of those chicken factory farms, the Bush Administration and WHO blamed ‘free-roaming chickens’ on small family farms, a move that had devastating economic consequences to the farmers whose chickens were being raised in the most sanitary natural conditions. Tyson Foods of Arkansas and CG Group of Thailand reportedly smiled all the way to the bank.”

Anne Applebaum on Ted Kennedy

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Robert Bork’s America,” Kennedy declared, “is a land in which women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police could break down citizens’ doors in midnight raids, schoolchildren could not be taught about evolution, writers and artists could be censored at the whim of the government, and the doors of the federal courts would be shut on the fingers of millions of citizens.”

That image – the women in the back alleys, the doors shutting on the citizens’ fingers – was powerful enough to prevent Bork from winning Senate approval. It is thus not unfair to say that the vitriol that has surrounded Supreme Court nominations ever since is one of Kennedy’s legacies, too….”

— Anne Applebaum in The Telegraph.

My Comment

Ms. Applebaum nails it. The “borking” of not just Supreme Court nominations but of political figures in general goes back to this sad episode in media history.

The Kennedys are American royalty, like the Bushes. So on an occasion like this, it’s probably not appropriate for an outsider to say more. Anyway, I was glad to see that conservatives, even rather shrill ones like Michelle Malkin, have been restrained enough and allowed Ted Kennedy’s family a few days of solemnity and sympathy, before discussing his political or personal flaws.

George Kennan on the Realities Behind US Foreign Policy (Links added)

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I have been meaning to post the surrounding text of the famous passage in which George F. Kennan, a noted Sovietologist, cold warrior, and advocate of realpolitik, expressed his view that US policy in the post-war years should be unsentimental in its attitude toward Asia. As director of the State Department’s Policy Planning Staff from 1947 to 1950 (under George Marshall and Dean Acheson), Kennan was one of the principal architects of US post-war strategy and the formulator of the policy of long-term “containment” of the Soviet Union. So the piece makes for interesting reading today, especially in light of the following:

*the destruction of Asian savings by the US government-generated debt & dollar tsunami
*the rise in food prices in Asia
* the ongoing rush by Asian governments (along with everyone else) to buy up world farmland
* the potential for global water-wars in the immediate future.

KENNAN:

II. Far East

“We are deceiving ourselves and others when we pretend to have the answers to the problems which agitate many of these Asiatic peoples.

Furthermore, we have about 50% of the world’s wealth but only 6.3% of its population. This disparity is particularly great as between ourselves and the peoples of Asia. In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.

For these reasons, we must observe great restraint in our attitude toward the Far Eastern areas. The peoples of Asia and of the Pacific area are going to go ahead, whatever we do, with the development of their political forms and mutual interrelationships in their own way. This process cannot be a liberal or peaceful one. The greatest of the Asiatic peoples-the Chinese and the Indians-have not yet even made a beginning at the solution of the basic demographic problem involved in the relationship between their food supply and their birth rate. Until they find some solution to this problem, further hunger, distress, and violence are inevitable. …..

…In the face of this situation we would be better off to dispense now with a number of the concepts which have underlined our thinking with regard to the Far East. We should dispense with the aspiration to “be liked” or to be regarded as the repository of a high-minded international altruism. We should stop putting ourselves in the position of being our brothers’ keeper and refrain from offering moral and ideological advice. We should cease to talk about vague and — for the Far East — unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better……”

— George F. Kennan, Policy Planning Study 23 (PPS23), Foreign Relations of the United States (FRUS), 1948

[From Russell Wvong’s website, via
Gilles D’Aymery in a piece on the improper use of this quote by Noam Chomsky and others atSwans Commentary.

Government Conspiracy Theory Blames Hybrid Mortgages for Depression

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Tom di Lorenzo at Lew Rockwell blog has this:

“Following Alan Greenspan’s pathetic “don’t blame me” speeches and books, various Fed branches have parroted his view that the Greenspan Depression we are in was caused by thrifty Orientals whose savings drove down interest rates.  So imagine my surprise upon receiving a hard copy of a Dallas Fed publicaton entitled “Taming the Credit Cycle by Limiting High-Risk Lending” and reading that “The present troubles emerged to a large extent from the growing use of hybrid adjustable-rate mortgages . . .”   Huh?  What happened to The New Yellow Peril?

There is no mention at all — not one word — of the role of Fed monetary policy in creating the housing bubble. The culprits, say these self-serving excuse makers (the author is Jeffrey W. Gunther), are “lightly regulated institutions” that are in need of the Fed’s “disciplining force.”

My Conment

Mr. di Lorenzo can relax –  this new tack does nothing to exonerate Greenspan. Look at this USA Today piece from early 2004, when housing was already showing bubbl-y tendencies:

“He [Greenspan] said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs. Those savings would not have been realized, however, had interest rates shot up.

“American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage,” Greenspan said.”

Read through the whole piece and it’s  clear that American house buyers actually “preferred the stability” of the traditional fixed rate mortgages. In other words, it was only a concerted PR effort by Greenspan & Co. that changed people’s tastes in this.

Let that put an end to any moralizing of this issue.  Yes – rampant consumerism and debt binging exacerbated the problem. But the problem wasn’t caused by some moral defect in American consumers. It was caused by policies deliberately pushed by the federal government in the hope that the consumer would succumb. The chairman of the Federal Reserve thus acted no differently from any confidence man or grifter who spots a mark (a naive, uninformed person easy to manipulate), then sets about winning the mark’s confidence before baiting the trap….

You can see the chairman’s own words to the national association of credit unions on February 23, 2004. (Skip down to the last 2-3 paragraphs to catch the gist)

And now, just like any con man, the Fed chairman too blames his victims.

They had it coming to them...


Roubini, the Insider

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Robert Wenzel over at Economic Policy Journal points out that the new head of the Commodity Futures Trading Commission is Gary Gensler, who spent 18 years at Goldman Sachs as co-head of finance.

He also  has a nice hat-tip to me for spotting Roubini’s insider status first. Well, I did spot it first, but it wasn’t hard to do.  His bio on wiki has the links. You’d just need to think of looking at it. What are the chances that policy wonks who go to the same schools, attend the same conferences, live in the same neighborhood and work at the same places are going to to be “independent”?

From Wenzel:

More and more the picture that is emerging of Roubini is that of a major insider. Writes The New Republic: He has a

…swelling portfolio of clients–the World Bank, IMF, 50 central banks,and 30-odd finance ministries among them….”

Judged by the Elitest of Elites

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I knew the Supreme Court of the US was weighted heavily in favor of the elite products of high-powered law schools, high-powered federal work experience, and high-powered theories.

But this chart of the make-up of the Supreme Court in recent years at the New York Times (May 2, 2009) was still something of a stunner to me.

One hundred percent of SC justices are former federal judges.

How many now are state judges? Nil.

How many now are private lawyers? Nil.

How many now are elected officials? Nil.

How many now are government lawyers? Nil.

How many now are law professors? Nil.

As Adam Liptak, the SC correspondent at The Times, justifiably complains,

“None of the justices have held elective office. All but one attended law school at Harvard or Yale. And the only three justices in American history who never worked in private practice are on the current court..”

But then Liptak holds up as a model, David Souter, a former attorney-general of the State of New Hampshire.

This, as trial lawyer Norm Pattis points out, is like depending on a sprinter to win a marathon.

“When is the last time a lawyer who made his living from fees earned
representing ordinary working people sat on the Supreme Court?”

But the question could be asked of many more government insitutions.

When was the last time the SEC was staffed with officials from small banks and  thrifts?

When was the last time a mayor from a small-town made it to the White House?

We talk about localism a lot. But in practice we’re heavily prejudiced against it.

A small-town resume, we presume, is fit only for small-towns.

There are a lot of reasons for this but I’ll focus on a couple that strike me at once (and I’ve blogged on them recently):

(1) It used to be that education fitted you to exercise judgment. These days we avoid judgment altogether, confusing it with judgmentalism.

In the absence of the ability to judge (and any common standard to judge by), we become victims of public relations and marketing. When no one can agree on substance, image becomes everything.

Brands rule. Harvard and Yale are the best known national brands, so we outfit our justices in them.

(2) Increasing specialization means that fewer people feel capable of pronouncing judgment about something, even if they felt it was permissble to. They look instead to experts to make their choices for them. The media, which has a disproportionate effect on nearly every choice made,  tends to focus on experts who come from the same educational and socio-economic background. The circle of the elite thus tends to get smaller and clubbier with every year.

Jack Kemp Dies Of Cancer

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Jack Kemp, former Congressman and star quarter-back, George Bush Senior’s housing secretary and Bob Dole’s running mate, noted “compassionate conservative,” good-natured supply-sider and defender of Reagonomics, died of cancer today.

Kemp seemed to me to be one of the truly genial and sincere figures in politics. Here’s a characteristic quote:

“Pro football gave me a good perspective. When I entered the political arena, I had already been booed, cheered, cut, sold, traded, and hung in effigy.”

And a quick bio from Yahoo News.

“Kemp was born in California to Christian Scientist parents. He worked on the loading docks of his father’s trucking company as a boy before majoring in physical education at Occidental College, where he led the nation’s small colleges in passing.

He became a Presbyterian after marrying his college sweetheart, Joanne Main. The couple had four children, including two sons who played professional football. He joined with a son and son-in-law to form a Washington strategic consulting firm, Kemp Partners, after leaving office.

Through his political life, Kemp’s positions spanned the social spectrum: He opposed abortion and supported school prayer, yet appealed to liberals with his outreach toward minorities and compassion for the poor. He pushed for immigration reform to include a guest-worker program and status for the illegal immigrants already here….”

In January this year, around the time Kemp’s cancer was diagnosed, The American Conservative ran a long piece on his contributions.

The Am Con piece notes that Kemp would send his children out into the world everyday with three words:

“Be a leader.”

The rest of us might find them worth remembering too.

R.I.P. Jack Kemp.
(More later)

Paul Volcker Praises the Grace of Government

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The Bureau of Economic Analysis released the Q1 ’09 GDP numbers.

The annual rate of decline came in at the expected 6.1%  (a decline of 6.3% in real GDP).

Calculated Risk has an optimistic assessment of the Q1 numbers.

The optimistic case rests on the following:

  • Declining residential investment contributed more to the GDP slump in Q1’09 than in Q4 ’08 and will likely come to an end by Q2’09, in keeping with its role as a leading indicator of recession.
  • Simultaneously, the contributions of lagging indicators (like unemployment, declining investment in equipment & software, and declining non-residential investment) have increased.
  • The over-weighting of lagging indicators in the decline of GDP signals the end of recession.
  • Real personal consumption expenditure (PCE) was up in positive territory (2.2%) in Q1’09, where it was negative (4.3%) in Q4’08.

Mish Shedlock is less optimistic. He says that the Q1 ’09 rise in PCE is either an outlier  or temporary, and will be followed by another dip in 2010-11 and more trough for a few years.

Meanwhile, former Fed chairman Paul Volcker, head of Barack Obama’s economic team, thinks the economy is “leveling off,” according to this Bloomberg report.

Highlights of what Volcker is reported to have said:

  • Bernanke is “doing a great job”
  • the economy is functioning “by the grace of government intervention”
  • a strong recovery is “going to take a while”
  • “systemically important institutions” are going to be kept afloat
  • the expansion of the Fed’s balance sheet to more than $2.2 trillion as of last week will likely lead to inflationary problems in 2-3 years, but not immediately
  • Glass-Steagall (repealed in 1999) isn’t likely to be resuscitated but proprietary trading and commercial banking activity should be kept apart (Lila: how?)
  • no regulation of hedge funds is likely but in the case of those that get too big capital requirements and a cap on leverage might be imposed (Lila: this is vague and opens the door to selective regulation)
  • regulation of executive compensation isn’t likely but there could be a “quid pro quo” for federal aid. It would have to be a “culture of exchange” with Wall Street (Lila: more weasel words that allow for selective regulation).

Altogether, I thought Volcker’s comments were evasive, inadequate, and temporizing.