Tuesday, February 22, 2011

Where to cut?

Michael Gerson on the continuing struggle with state and federal finances:

The cost of maintaining government structures is making it impossible to maintain government functions. To fund commitments made to the providers of services, services must be cut. So piles of money go to government pensions and benefits instead of roads, education or mental health services. This is one of the primary reasons the public resists tax increases. A tax increase used to provide an actual public service might have a shot at support. But a tax increase to prop up a system that consumes endless resources while cutting services is a harder sell.
 ....
But events in Madison are also a preview of the federal debt debate. On the continuum of pain, Obama has targeted home heating oil subsidies for the poor and Teach for America. House Republicans' reductions have been broader but included foreign aid and low-income housing. Few protesters have emerged to scream and chant. But these cuts are distractions from the problem of unsustainable entitlement obligations to the middle class and the wealthy, which threaten to eventually consume the other functions of the federal government. Structural change is required - reforming benefits to reduce costs while focusing benefits on those in the greatest need. 
What are they doing in Illinois? Cutting state funding to drug and alcohol abuse programs. Druggies do not demonstrate, state union workers do.

Friday, February 18, 2011

Radical-in-chief

From Stanley Kutz, author of Radical-in-Chief:
We are destined for still more polarization. Neither side can pull back, because the financial crunch is going to have to be resolved one way or another. We either scale back government and the power of public employee unions, or we move toward a structurally higher tax burden and a permanently enlarged welfare state. The very nature of the American system is now at stake. The emerging populist movements on both the right and left recognize this, and so cannot turn back from further confrontation.
Two years at the University of Wisconsin-Madison during the peak of student protests exposed me to the radical Left, so what Kutz is saying about Obama is no surprise to me. People without that exposure have a hard time understanding what Obama is because he is outside of their range of experience.

Thursday, February 17, 2011

The essence of Obama

From Powerline:

Obama's game is transparent, isn't it? He is playing a game of chicken. He puts forward a series of proposals that he knows are more or less insane; but he also believes that Republicans will come to his rescue. They, not being wholly irresponsible, will come up with plans to reform entitlements--like, for example, the Ryan Roadmap. Ultimately, some combination of those plans will be implemented because the alternative is the collapse, not just of the government of the United States, but of the country itself. But Obama thinks the GOP's reforms will be unpopular, and he will be able to demagogue them, thus having his cake and eating it too. Is that leadership? Of course not. But it is the very essence of Barack Obama.

Thursday, February 10, 2011

Adverse selection and college teaching

From Inside Higher Education:
If the potential employer makes an offer to a candidate and that candidate is in fact a gifted teacher, the home institution will make a counter offer. If the candidate is in fact a poor or average teacher, the home institution will not make a counter offer and the potential employer is likely to hire a poor or average teacher. This leads to what economists call “adverse selection” for job offers to potential teachers. Since the prospective employer knows it is likely to hire a poor or average teacher rather than an exceptional teacher, it does not make offers designed to attract exceptional teachers, and the market for exceptional teachers does not exist. Clearly, this problem is made worse by tenure, since tenure greatly increases the cost of making a bad hiring decision. In short, the “market for superior teaching” has unraveled due to insufficient information about teaching quality.

Tuesday, February 8, 2011

Monday, February 7, 2011

What is a website worth?

Quantcast.com ranks Huffington Post as the 27th most visited website with 30.5 million monthly U.S. visitors and 39.5 million monthly global visitors. AOL is buying it for $315 million. Quantcast.com currently ranks ingrimayne.com, which contains the on-line Cybereconomics textbook, as the the 49,853rd most visited website with 30.9 thousand monthly U.S. vistors and 57.3 thousand global visitors. Both are Quantified, which means that more visits get recorded by Quantcast than would get recorded for sites that is not Quantified. Based on these numbers, ingrimayne.com is roughly 1000 times smaller than Huffington Post. Is it worth 0.1% of what Huffington Post is worth? Anyone willing to make such an offer will find a very receptive audience.

Update: AOL collects $250 million dollars each year from people who do not understand that it is free, but keep paying for it:
A friend of mine has an AOL e-mail address, so I called her and gently asked if she is still paying the AOL subscription fee.

“Well, yes, I like the service, and everybody already has my AOL address,” she said.

I tried explaining that all this is free, but I’m sure she was skeptical. How can something that’s valuable now be free?

AOL’s paid subscriptions are declining each year, down from about 8 million five years ago. Folks are getting the message, but not a certain group that basically doesn’t care to understand how the Internet works.

Wednesday, February 2, 2011

Death panels

James Taranto argues that Sarah Palin got it right with the term "death panels:"
Palin put the term "death panel" in quotes to indicate that she was using it figuratively. She was not lying but doing just the opposite: conveying a fundamental truth about ObamaCare. Proponents were describing it as a sort of fiscal perpetual-motion machine: We're going to give free insurance to tens of millions of people and reduce the deficit! As a matter of simple arithmetic, the only way to do that is by drastically curtailing medical benefits.
Palin is a tremendously talented politician with the ability to take complex ideas and put them in terms that ordinary people can understand. She did it in this case, highlighting the fact that the government would inevitably ration health care as it does in every country that has nationalized it.

Some on the Left keep wondering why this private citizen remains in the news. Taranto has an answer:
Palin got the truth out with the help of journalists determined to bolster the deceptions at the heart of ObamaCare. She was instrumental in winning the political argument that looks increasingly likely to render ObamaCare's legislative victory a Pyrrhic one. Sarah Palin outsmarted the formerly mainstream media simply by being blunt and honest. That is why they burn with a mindless rage against her.
However, I think we will hear less from her and she will be less newsworthy in the next year. She can offer only rhetorical opposition to Obama and the Democrats. With a majority in the House of Representatives, Republicans in congress can now offer real opposition to Obama and the Democrats, and that opposition will be more important and more newsworthy. She could play the role as leader of the loyal opposition when the Republicans in Washington were powerless, but now that they have some power, the leadership will pass to them.

Egypt, wheat, and China

Spengler has an unusual take on the trouble in Egypt--China is the cause because they are getting rich.
It wasn't the financial crisis that undermined dysfunctional Arab states, but Asian prosperity. The Arab poor have been priced out of world markets. There is no solution to Egypt's problems within the horizon of popular expectations. Whether the regime survives or a new one replaces it, the outcome will be a disaster of, well, biblical proportions.