Dear Class of ’13: You’ve been scammed
Commentary: How the College-Industrial Complex drove tuition so high
By Brett Arends
Class of 2013,
No one else is going to tell you this, so I might as well.
You sit here today, $30,000 or $40,000 in debt, as the latest victims of what may well be the biggest conspiracy in U.S. history. It is a conspiracy so big and powerful that Dan Brown won’t even touch it. It’s a conspiracy so insidious that you will rarely hear its name.
The dean of the Tuck School of Business at Dartmouth College says his MBA graduates still aren’t heading into finance jobs in the numbers they did before the financial crisis.
Move over, Illuminati. Stand down, Wall Street. Area 51? Pah. It’s nothing.
The biggest conspiracy of all? The College-Industrial Complex.
Consider this: You have just paid about three times as much for your degree as did someone graduating 30 years ago. That’s in constant dollars — in other words, after accounting for inflation. There is no evidence that you have received a degree three times as good. Some would wonder if you have received a degree even one times as good.
According to the College Board, in 1983 a typical private American university managed to provide a bachelor’s-degree-level education to young people just like you for $11,000 a year in tuition and fees. That’s in 2012 dollars.
Instead, those of you at private colleges paid this year an average of $29,000.
And back then a public college charged in-state students just $2,200 a year in tuition and fees — in today’s dollars. You could get a full four-year degree for $8,800. Today that will get you one year’s tuition, or $8,700.
Notice, please, we are not even counting the cost of all the “extras,” like room and board. This is just the cost of the teaching.
It is, as a result, no surprise that total student loans are now approaching $1 trillion. They have easily overtaken credit-card debts and car loans. According to the Federal Reserve Bank of New York, total student loans have basically tripled since 2004. Fed researcher Lee Donghoon says that in the last eight years the number of borrowers has gone up by about 70%, and the average amount owed has also gone up about 70%.
Sarah Azad, a senior majoring in telecommunications at New York City College of Technology, waits to meet with potential employers at the Big Apple Job and Internship Fair.
Donghoon calculates that about 17% of those with student loans are more than 90 days’ delinquent on their interest payments. Yet he also calculates that 44% haven’t even entered the repayment period at all.
If you turn to the pages of any newspaper, you will read a lot of hand-wringing about this. You will hear attacks on “predatory” student-loan companies and “predatory … for-profit colleges.” You will hear about cutbacks in Pell Grants and federal aid and proposals to lower the interest rate on subsidized federal loans. But all of these comments ignore one basic problem.
It’s the cost, stupid.
U.S. colleges are a rip-off. Two decades ago I spent six years at Cambridge and Oxford universities, and it didn’t cost me a nickel. Admittedly, one reason was social policy: The taxpayers paid the bill (and a very good return they earned too, given the British taxes I paid once I graduated and started work). But the second reason was that these universities did not charge an arm, leg and other appendage for the act of teaching.
My undergraduate course at Cambridge largely consisted of one hour a week with a tutor, a weekly essay question and research list, and a library card. This teaching model hadn’t changed much, really, since the days of Aristotle. Student, teacher, discussion. See you same time next week.
How on earth do colleges today ramp up costs to $40,000 a year?
Statistics: Posted by yoda — Fri May 17, 2013 10:15 am
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Why Has $1 Billion in Gold been Shipped from New York to South Africa?
Posted on May 14, 2013
In what may be the strangest story I have seen in a while related to the gold market, it appears $982 million worth of gold has left JFK international airport in New York to some undisclosed location in South Africa. While it remains unclear what purpose this gold serves, it seems the most likely explanation is to fulfill demand for Krugerrands (South Africa’s popular gold bullion coin) to meet elevated demand in the face of constricted mine production. This story is timely coming on the heels of the article I posted yesterday about how Dubai’s gold demand is running at 10x normal levels. This is a bizarre story, so if anyone has further color I’d love to hear it. From Quartz:
Examining US trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why?
It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)
The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.
However, the strikes that rocked South Africa’s mining industry last year briefly caused gold output to fall sharply, around the same time as last autumn’s big gold shipment from JFK. Overall 2012 production declined by a relatively modest 6% (pdf) over the year before, according to a preliminary figure from the US Geological Survey; but those first estimates have sometimes proven wide of the mark. (In 2009 the USGS estimated South Africa’s 2008 production to be 250 tons; it subsequently revised the figure to 213 tons.) So it could be that the strikes dealt a more severe blow to the country’s gold industry than the data show.
Still, even if gold output did fall precipitously, it’s not clear why South Africa would need to start importing it. One possible destination for the gold is the South African Mint, which produces legal-to-own gold coins called Krugerrands; the gold used in them is first refined by the Rand refinery. Calls to the South African embassy in Washington, DC were not returned.
Meanwhile how about this chart, courtesy of the Quartz article.
Full article here.
Statistics: Posted by DIGGER DAN — Thu May 16, 2013 10:58 pm
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Major Precious Metals Retailer: “We Have Been Experiencing Astounding Volume”
April 17th, 2013
Were one restricted to watching just the paper market spots prices for precious metals, one might assume that there is major panic selling of gold and silver around the world.
A few days ago gold saw its biggest drop in thirty years, and silver was right behind it, leaving many investors concerned that gold’s decade-long run-up was nearing its end.
With all of this selling you’d think there’d be lines of panicked investors standing outside of brick and mortar local dealers and an overstock of precious metals at online retailers.
Curiously, it seems to be that exactly the opposite is happening. As the price of gold and silver collapsed to two-year lows, retailers in local markets and online have been scrambling just to keep up.
A spokesperson for JM Bullion, a major online supplier of gold and silver to the retail market, suggests that they are experiencing unprecedented demand, all the while gold and silver prices as reported by the mainstream media have been “falling” precipitously:
We still have certain things in stock, like 10 oz bars, while others, like Silver Eagles, are a bit of revolving inventory.
The shipments are going out as soon as inventory comes in.
Our main challenge right now is actually getting the silver into the boxes and shipped out – we have been experiencing astounding volume.
Gold is in much better shape. We have all of our 1 ounce gold coins and bars in stock.
While JM Bullion still has gold and silver in stock and is able to meet demand, investors are being advised that they may have to wait five days or more to receive their orders as the company works to clear their backlogs.
Many other online retailers, however, are reporting significant shortages. So much so that some are being forced to cancel customer orders because there is simply no inventory, especially as it pertains to silver.
A subscriber alert from Future Money Trends indicated that the shortage is quickly becoming more widespread:
Several bullion dealers are reporting low or no inventory, others are just outright overcharging their customers. Wholesale dealers are also reporting they are out of several products including the American Eagle.
“…there is basically a silver shortage right now. Dealers are starting to run out of products and delay the shipping times.” David Smoler, DBS Coins
Here is a message from my good friend who works in the bullion industry when I asked him if there were real shortages happening.
“Across the board, sold out. Delivery delays up to 4-6 weeks, premium rising. Friday was our busiest day ever; until today. Which was much busier.” Andy Hoffman, Miles Franklin
Renaissance Precious Metals also reports having inventory of silver and gold available, but has advised that demand is so high, supplies are so low and paper prices are under such manipulation, customers should be prepared to pay higher premiums.
This shortage of physical metals may be due in part to wholesale suppliers like CNT, the company which supplies gold blanks to the US mint, having run completely out of silver.
Two of the largest wholesale suppliers in the US, including Amark and CNT, who is the supplier of gold blanks to the US Mint for Gold Eagles, and is a registered COMEX depository, HAVE JUST SOLD OUT OF ALL PHYSICAL SILVER!!!
Additionally, a major collapse of a Rio Tinto silver and copper mine in the United States last week has essentially vaporized about 16% of the physical precious metals market for potentially years to come.
Adding further pressure to the supply shortage, just a week prior to the mine collapse, the U.S. mint reported that it sold over 15 million silver eagles so far this year, leaving them so shorthanded that they have begun rationing supplies to primary dealers.
The number one driving force, however, seems to be investor demand amid what many perceive to be the next leg down in the financial crisis.
By all accounts, there is a gold and silver buying frenzy all over the world as prices have reached levels that are appealing to investors who were, as recently as last year, paying in excess of $1700 per ounce for gold and $35 per once for silver.
The shake out of ETFs and futures has left the Australian mint short of deliverables and Japanese and Chinese gold retailers seeing a “frenzied” surge in demand.
The customers are not just the ‘rich’ or ‘elderly’; in China “they tend to wear water shoes and come directly from the market…;”
in Australia, “the volume of business… is way in excess of double what we did last week,… there’s been people running through the gate,” and Japanese individual investors doubled gold purchases yesterday at Tokuriki Honten, the country’s second-largest retailer of the precious metal.
Thus, despite a significant crash in precious metals prices recently, investors are not only ignoring the media hype, but they are doubling down on the historic relics in anticipation of runaway inflation and continued uncertainty in the global economy and financial markets.
Statistics: Posted by yoda — Thu Apr 18, 2013 12:25 am
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Michael F. Cannon
From today’s Politico Pulse:
OBAMACARE LAWSUIT RECRUITMENT 101: START WITH THE INTERNS - Cato Institute’s libertarian mastermind Michael Cannon appealed to former interns of the right-leaning group to join an “exciting” legal challenge to Obamacare. Cannon is among the top proponents of a legal theory that suggests the health law forbids federal subsidies to people accessing insurance through a federally run insurance exchange.
—”To see if you might qualify, have a look at this checklist,” Cannon writes in a “Dear former Cato Intern” letter. “There are income criteria, plus you must live in one of 33 states, prefer to purchase no health insurance (or low-cost catastrophic insurance), et cetera. If you believe you meet the criteria for at least one of the three categories, email me … to learn more about how you can get involved in this exciting legal challenge, and jump on this chance to make history. Feel free to forward this email to others who may be interested.” The checklist: http://bit.ly/12lJ8Yb.
Thanks, guys. Might as well tell everybody, now. (And “right-leaning”? Seriously?)
View full post on Cato @ Liberty
Senator Menendez is a powerful guy from New Jersey. From New Jersey.
The Daily Caller broke the Menendez story and the Washington Post is trying to poke holes in the story. As it should if it can do it using good sources etc. However the Post’s methods may be suspect and Tucker Carlson, editor of the DC, is taking it to the Post.
Regardless of the hookers, I don’t particularly care about that, Menendez has much more important things to answer to, as we discussed in THIS POST. He did fly around on the jet of a guy who owes the taxpayers millions of dollars and who apparently has used his connections to Menendez to intimidate competition in South Florida.
The post Crony Washington Post? “Their reporting on the Menendez story has been amateurish.” appeared first on AgainstCronyCapitalism.org.
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The Trigger has been pulled, the Crash has begun. How are things going to play out? My take…
February 22nd, 2013
We have obviously crossed the threshold folks, things are falling apart by the day and the game of Kick the Can has at long last gone as far as it can. The rest of the World no longer has a choice, the United States is no longer the big bully on the playground who won WWII and their fingers are no longer so firmly around the throat of the planet. The long lunatic nightmare of Bernanke monetary ponzi schemes cannot continue.
It will be interesting to see what their plan is to try and switch the U.S. (and possibly the World) to a new currency system. My take?
There will be an immediate bank holiday across the board, stopping all transactions of any kind in all avenues of banking and stock markets. This will likely happen on a Friday afternoon, and there will be no warning. A temporary state of martial law will be instituted, in which people are told to basically stay at home as though they are taking a sudden ‘cheap holiday’ and things like trucking of supplies of normal groceries and the like will be the only thing still going on under strict military rules, keeping all emergency supplies of diesel available to those lines of credit used for that infrastructure. Military escorts of supply convoys will be the only thing moving on U.S. highways for perhaps several weeks until they restart the engine under the new rules. Police in all cities will be given total freedom to ‘shoot first, ask questions later’ for any deviation from total movement restriction of citizens. Examples will be made, and the media will carpet bomb the public with this message.
The U.S. will lock down the dollar (both digital and paper) to a complicated SDR basket of currencies around the World, the Canadian dollar will figure heavily in this. This will obviously include devaluation across the board of many world currencies, and some of the currencies (like our Canadian dollar) will also be strictly controlled during this time (wanna know why we care so much? 90% of our economy is still directly tied to you Yanks) The U.N. and IMF will be token heads of an emergency council that all countries of the World will have no choice but to agree to (barring a few examples in the Middle East and North Korea, Cuba, a few South American countries, etc).
Debt restructuring will be performed from top to bottom. The 1.4 Quadrillion derivatives bubble will pop like the veritable tree falling in the forest that no-one hears. The wage structure of the entire United States will be chopped off at the knees when jobs are ‘started’ again, and people are going to learn rather bluntly that their standard of living is going to drop by a large margin. Even when financial markets are loosened on the leash enough to make it look like things are ‘running’, foodstuffs and all energy (gas, diesel, natural gas, propane, etc) will be price controlled from that point on. This could be seen as an enforced Socialist military junta rule, which it is, but honestly there really is no choice.
Production of goods will continue by force if necessary, people will clamor to the new low wage positions because they won’t have a choice. It is either that or starve.
Inner cities could collapse entirely during the transition period, the military in all forms will setup blockades around zones in these areas and food rations will be handed over in exchange for firearms and ammunition. It doesn’t even bear mentioning the horrors that await some areas during this period. Within two weeks of supply infrastructure collapse things like rape, murder, and cannibalism will be commonplace. People are exactly three square meals away from becoming savages, it is as simple as that. In San Fransisco there are 17,500 people per square mile, I won’t go into lurid details but let’s just say there will be shoot-outs in the local 7/11 for the last bag of Doritos a lot sooner than most people think.
Slowly but surely ‘zones’ will form, protected areas where people are moved (perhaps forcibly) and live under what seems like a fairly free system but is obviously locked down military camps. Again, is this a bad thing? They aren’t necessarily trying to clamp down control, they have known for many decades the collapse would happen under a fiat currency system and have planned accordingly.
There will be a lot of hardship, a lot of deaths, in a lot of areas of the World and United States things will collapse into ‘One Second After’ conditions where attrition will reduce population drastically over the next several years. The media will cover some of this, but not the true horrors, and it goes without saying that ‘the revolution will not be televised’. This means that the Internet will no longer be free, and when and if an ‘Internet’ is brought back up and running it will be the government sanctioned AOL style system with no freedom of any kind. There will be no anonymous communication, any Internet Service Providers will be under total government control and it will be technically impossible to transmit encrypted packets. As a result communication can be controlled, and when it gets to that point a smattering of free Ham Radio will be the only true source of freedom.
There will be pockets of resistance, even entire States that balk at the new way of things, at first they will be treated with hands off respect but in time they will be forced with simple supply blockades to conform to the new rules. They have the technology, and the patience, and the means to cut off outside supply. There will obviously be a lot of ‘free people’ out there, entire communities where they are self sufficient in every way – but these will be small Colonial technology areas that are visited by smiling officials on a regular basis to let them know the limitations of such existence.
I obviously can’t say exactly when this banking holiday will happen, but I think it is safe to say it is going to happen sometime in the next 18 months for sure, and possibly a LOT sooner than that. They simply cannot keep pretending things are okay for much longer. Anyone who isn’t a Prepper yet, there is still time as long as the stores are open and your debit/credit card still works. Lay low, don’t brag about supplies, and stockpile simple foodstuffs for the time when your family needs to hunker down.
What do you guys think? I have spent my life as an Eschatological High Priest, studying and preparing for the inevitable Crash of our soft Western Civilization. We have lived the easiest life of any Humans in our History, but that ride is about to come grinding to a halt. How do you think the United States (and the rest of the World) will handle the ‘adjustment’ that is in the mail?
Read more at http://investmentwatchblog.com/the-trig … axWkLTH.99
Statistics: Posted by yoda — Sat Feb 23, 2013 11:31 am
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Beltway politicians like to pretend that smaller spending increases amount to spending “cuts.” As Dan Mitchell has pointed out numerous times (see here for one example), that’s baseline budgeting baloney. Now that the 2011 Budget Control Act’s spending caps are in place, politicians are making an even more ridiculous claim: the so-called “cuts” have already occurred.
The caps apply to spending over ten fiscal years – the last year being 2021. We are obviously not in the year 2021, so it’s impossible for the so-called “cuts” to have already been implemented. Yet here are two examples from a recent Politico article where politicians suggest that to be the case:
“There are people that think we need to cut more,” House Armed Services Committee Chairman Buck McKeon (R-Calif.) acknowledged in an interview. McKeon said he’s been pushing back against budget hawks in the GOP conference by pointing to the nearly $600 billion in spending cuts that the Pentagon has already absorbed in recent years — and that’s before sequestration would even begin.
“I think there’s spending that can be taken out of all departments,” said freshman Rep. Ted Yoho (R-Fla.). “And I’ve talked to people from the Pentagon. There’s just areas that, yeah, we can pull back a little more, even though they did their $470 billion already. They said it hurt, but we possibly could.”
I’ll cut Rep. Yoho a little slack because the article indicates that he’s open to cutting defense. Rep. McKeon, on the other hand, deserves no such leniency. (Why McKeon said $600 billion and Yoho $470 billion I have no idea.)
The following chart illustrates why it is ridiculous to act as if smaller future increases in projected spending amount to realized spending cuts. The chart shows the Congressional Budget Office’s August 2001 baseline estimate of defense spending from 2002 to 2011 versus the actual outlays:
The combined difference turned out to be $1.8 trillion.
But, you might respond, those estimates were published a month before the attack on September 11th, 2001, so of course they turned out to be way off!
And that’s my point. With the exception of Keynesian economists, no one can predict the future. All it will take is another major terrorist attack or another war and it’s adios spending caps. I would argue that such unfortunate scenarios are a distinct possibility given the Beltway crowd’s love for empire, but I’ll leave that topic to Cato’s foreign policy experts.
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A new article by Ivan Eland describes how wars have stimulated growth in the American welfare state. I was interested in his discussion regarding the overexpansion of pensions following the Civil War:
In 1879, the Arrears Act caused many veterans, who hadn’t realized they were disabled until the government offered $1,000 or more for finding aches and injuries, to flood the Bureau of Pensions with claims. Although, according to its commissioner, the bureau was the largest executive bureau in the world, it had few means to detect fraudulent claims, which were rampant. During election years between 1878 and 1899, Republicans used the bureau to dole out pensions rapidly and heavily in key electoral states.
In 1890, a quarter century after the Civil War ended, pension eligibility expanded to include any soldier who had served 90 days or more during the war and was unable to do manual labor—whether or not he was injured during the conflict, or even whether he had seen combat. Similarly, widows of soldiers serving in the war for 90 days or more got pensions, regardless of whether their husbands had died in the conflict.”
Republicans supported lavish pensions to groups in their political constituency (Union veterans) to justify continued high tariff walls to protect Northern industries, which were among the most influential supporters in their political coalition. The interests of such industrialists coincided with those of pensioner lobbies and the bureaucratic empire of the Bureau of Pensions to widen the program over time.
Politically driven overspending and waste is nothing new in Washington. In the 19th Century, there was tons of waste in federal agencies such as the Army Corps of Engineers. The Bureau of Indian Affairs (BIA) was also a very troubled agency:
Fraud, corruption, and bribes were common in the BIA during some periods in the 19th century. One reason was because local BIA officials had substantial discretionary control over cash, goods, trading licenses, and other items handed out by the agency. In the years following the Civil War, “Indian rings” of government agents and contractors colluded to steal funds and supplies from taxpayers and the tribes. The New York Times railed against the “dishonesty which pervades the whole Bureau.” And the newspaper argued that “the condition of the Indian service is simply shameful. It has long been notorious that rascally agents and contractors have connived to cheat the Indians. … It now appears that a ring has long existed in the Indian Bureau at Washington for the express purpose of covering up these frauds and facilitating others.
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