Wednesday, March 25. 2009
We have often opined here that the real purpose of a liberal arts education is life enrichment rather than to enhance one's future in commerce.
As usual, my views are hopelessly old-fashioned. Tim Black at Spiked discusses the subject in The Modern University: You Get What You Pay For. It's the UK, but it applies in the US too. One quote:
Underpinning the fees debate – indeed the thing that makes the fees debate possible – is this contemporary degraded idea of university education. Gone is the ivory tower; in its place stands the glass-fronted hub of much-mooted, never-seen economic growth. The establishment of the UK Department of Innovation, Universities and Skills is itself testament to the shiny new role laid out for the twenty-first century university. In his first speech as secretary of state for the department in 2007, John Denham stated: ‘To compete and prosper in this world, to respond to the needs of leading global and national businesses, we must enable many thousands more people to study and graduate each year. To become a world leader in skills, as Lord Leitch recommended, we must aim for at least 40 per cent of adults to have higher level qualifications by 2020.’ (6)
How Chaucer helps a nation compete in international business is beyond me, but I would not want to live in a world without him. Tim Black, like me, wonders what this is all about. Another quote from his piece:
The transformation of higher education into a glorified, paid-for training service has, likewise, turned what might once have been aspirant scholars into very demanding customers. Students today come not so much to learn, as to consume the ‘educational product’ on which they have just splashed several thousand pounds. In the proud words of the 2003 government white paper, The Future of Higher Education, students are at university for the ‘acquisition of skills’ (8). Their future earning potential depends on it. In this sense, the NUS’s alternative to tuition fees – a loan to be paid back dependent on earnings – seems like the demand of little more than a consumer watchdog.
It has not always been this way. In his 1853 treatise The Idea of a University, JH Newman defined it as ‘a place [for] teaching universal knowledge’ (9). Such notions of the integrity of university education were not nineteenth-century oddities. They were informed by a deep, anti-utilitarian sense of the intrinsic value of culture and knowledge, something perhaps best expressed by Newman’s contemporary, Matthew Arnold, as the ability to ‘turn a stream of fresh and free thought upon our stock notions and habits’. The university enshrined such freedom. It demarcated a place outside the demands and interests of commerce and business. The value of education bore no relation to monetary value; indeed its ‘uselessness’ was its virtue. Such humanistic ideas of the university accompanied the expansion of higher education provision in the 1960s. In the 1963 Robbins Report on giving more social classes the opportunity to attend university, the committee wrote ‘[the] search for truth is an essential function of the institutions of higher education, and the process of education is itself most vital when it partakes in the nature of discovery’ (10).
Bring me up to date, please. What is college for these days? Life enrichment? Creating an informed citizenry? Nurturing of scholars? Work certification? Job training?
Unbelievable. Did she leave her tin-foil hat in the cloakroom? She doesn't have the brains to last three hours as a receptionist at Goldman. h/t Riehl:
"A poem doesn't mean, it just is."
Does anybody know who said that? I forgot. Maybe Archibald MacLeish? And does it make any sense? Or does the quote itself just "is" and doesn't "mean"?
 Mr. Free Market offers the contents of the Ladybird Easy-Reading series on People at Work: The Policeman.
Sadly, we do not have the contents of the Ladybird "How it Works" book pictured here.
No teleprompter. Quite remarkable and wonderful. It applies to us, too. (h/t, Drudge):
 Are we becoming a nation of spineless weenies? RWNH
In poor taste: Ted Kennedy memoir book covers
From our friends up north:
NDP President Anne McGrath said [Marshall] Ganz stressed the left needs to do a better job of connecting its message with people's values.
"The right-wing has had a real ability to promote particular values such as self-reliance and competition," said McGrath. "We need to be more obvious about what (our) values are," she said. (Ottawa Citizen)
How about no self-reliance and no competition?
Obama's attack on the Second Amendment. Pajamas. Related: Obama is a bold-faced liar
Does the US have any energy policy?
House passes Hitler Youth Bill
From anger to madness: A class-warfare government run amok. Sounds about right.
Memo to the pres: There is no free lunch
What a human catastrophe is the doctrine of human rights!
Stolen from Dr. X:
Tuesday, March 24. 2009
There may or may not be a 1-3mm/yr sea-level rise ever since the last Ice Age, but the Maldives are holding up pretty well, contrary to alarmists. Watts Up. (I enjoyed the comments there too.) h/t, SDA
And yes, the Maldives have gone green - if you don't count the tourists jetting to their vacations.
If we had had this congress in 1920, we'd still have buggy-whip factories all over the place, feeding off the public trough. Just like GM. Senator proposes non-profit option for newspapers.
Mrs. B comments from the next room "They are mostly already not for profit, aren't they?"
Change, adapt, adjust, or go away if nobody needs you. I have always loved newspapers but, funny thing, I hardly read them anymore except on planes or trains - and online every day.
For some today, and for just about everybody in the past, medical insurance was something everybody bought, just like life insurance or disability insurance, to cover extraordinary expenses. It is called Major Medical, and it is still readily available.
Over the past 20-30 years, governments, businesses, and union contracts began expanding their coverage by reducing deductibles and covering more routine things. Medicare, of course, was the model for that. During the same time, costly medical technology and new drugs were developed in a near-miraculous way, mostly in the US.
With those changes, folks began wanting "insurance" to cover their routine maintenance medical expenses instead of the things that would financially overwhelm them. When that shift was combined with the CYA style of medicine which results in $5000 work-ups for dizzy spells (fed by the ambulance-chasers), everybody expected everything.
That isn't sustainable, and will never happen. Medical technology has grown to an amazing extent, but those machines are expensive.
I have no idea what the folks in power are trying to plan for us, but I know it will be an entitlement disaster, filled with unintended consequences, that people would not be happy with. It will end up with politically-determined rationing.
Our family bought Major Medical insurance many years ago. It cannot be cancelled. It's more important than a cool car. Why everybody does not do that when they are young and healthy is beyond me, because it would seem like the logical and prudent thing to do. Over the years, we have increased the deductible so that it is quite affordable, and we keep a money market savings account specifically for medical bills to the amount of the deductible. As I recall, we began with a $2000 annual deductible, and now we finally have a dirt-cheap $20,000 2-year deductible on the original policy. It does not cover any routine or preventive medical care, which is as I think it should be. Nobody owes me medical care, in my view, any more than anybody owes me auto insurance.
We have kept this policy whether or not I or my husband had some form of insurance through work, because you never know how long you will want to keep a position - or when you will be let go.
Off-topic: Around 30% of Medicare expenditures occur in the last year of life. In other words, on failing and terminal people. Interestingly and unsurprisingly, when docs hold end-of-life conversations with these patients (as we should), the costs go way down.
If this new study is correct and replicated, I can only wonder why it took so long to notice such a simple thing.
I have always suspected that most mental illnesses are due to hard wiring, not chemistry. The fact that medicine can help says nothing about their causes: it makes no more sense than it would to call headaches a Tylenol deficiency disorder. Given the complexity of the brain, miswiring is a common phenomenon and gives people plenty to cope with - in addition to the ordinary travails of life.
The human brain is an ongoing experiment of nature.
Wiki has a good entry on the S&L banking crisis of the 1980s. A quote:
L. William Seidman, former chairman of both the Federal Deposit Insurance Corporation (FDIC) and the Resolution Trust Corporation, stated, "The banking problems of the '80s and '90s came primarily, but not exclusively, from unsound real estate lending,"
And the unintended consequences of government decisions always play a key role.
Waiting for Spring and some warming. It was 23 F here in NYC this morning.
The states that are begging for bailouts. Talk about moral hazard. It's a terrible precedent.
Of course AIG paid their money out to banks and funds. That's what the money was for.
Dem tax crook of the day.
From Tiger:
I ... do not think that anger improves any argument ever, or that the intensity of anger influences the morality or justice of an argument. The merits of an argument are quite independent of the emotion with which the argument is conveyed. Finally, it is the job of elected leaders in any serious country to dampen anger rather than accelerate it. To the extent our politicians (of either party) are exploiting or promoting anger rather than calming people they are doing their constituents and their country a great disservice. The exploitation of anger is the specialty of demagogues and dictators, and is not worthy of American leaders. Not even members of the House of Representatives.
The CBO on the federal gummint's share of the economy:
As a share of GDP, CBO says this means spending will hit an astounding 28.5% in fiscal 2009, which ends this September, and still be at 25.5% next year, staying at close to 23% to 24% of the economy for the next decade. As CBO dryly notes, this is "above the average of 20.7 percent over the past 40 years." Even CBO's estimate is conservative because it assumes that most of the spending in the stimulus bill will be temporary, though Democrats are already planning to make much of it a permanent part of the budget baseline.
John at Powerline has become a warming denialist. Just in time: the rationalists have won the debate.
Nobel Economist Gary Becker: This is no time to concede to big government
False Solutions and Real Problems. Jarhead
Why financial regulation never works. Mankiw
Dodd's wife was a Director of an AIG company
Predator drones are killing Al Qaida
 The MSM should resign over Obama's failures.
Related, Steyn:
The trouble with all this off-prompter stuff — the Special Olympics joke, the whining about everyone in Washington being a Simon Cowell wannabe — is that the glimpses of the unscripted Obama are disquieting in what they reveal.
And one thing they reveal is that O doesn't seem to know much:
All terrific press for Orion, except that Obama kept pronouncing the company's name wrong, calling it OAR-ee-on.
Unbelievable. Orion is one of the best-known constellations, mostly because it actually looks like its namesake. So evidently we have to add astronomy to history and economics as subjects of which Obama is remarkably ignorant. I'm beginning to fear that our President has below-average knowledge of the world. Not for a President, but for a middle-aged American.
To what extent is his self-confidence and reputation for brains justified? Or is he just another slick and shallow narcissistic pol?
While searching info about Kenyon (it was Paul Newman's alma mater, along with EL Doctorow, Robert Lowell, William Rehnquist - and Rutherford B. Hayes), I stumbled upon an op-ed written for the NYT by Kenyon's Director of Admissions: To All the Girls I've Rejected.
It's about how colleges are dealing with the disproportionate numbers of female applicants they have been seeing over recent years, and why they feel forced to raise their admissions standards for them. It's Gender Discrimination!
Photo: Kenyon College
Monday, March 23. 2009
Fascinating story. From Kimball re AIG bonuses and the CDSs:
...Epstein explains, for more than a decade some 400 traders in a London-based subsidiary of AIG have managed $1.6 trillion in derivative contracts for the company. It’s an interesting story:
In 1998, this tiny group got into the newly-created credit default swap business when JP Morgan Chase came to it with a proposition to transform debt on its books into security packages that could be sold off its books. To make these bank debt packages salable to other institutions, they needed credible insurance against default to get Triple-A rating. So the AIG financial product group, seeing no risk of default, sold it in the form of credit default swaps. Soon afterwards, with the support of Treasury Secretary Lawrence Summers (now President’s Obama’s economic advisor), the Commodity Futures Modernization Act was passed, which excluded credit default swaps from being considered a “security” under the jurisdiction of the SEC or any other government agency. This act allowed these swaps to be deployed on a massive scale to convert all kinds of debt, including even subprime mortgages and car loans, into triple A securities and turned AIG’s arm, now headed by Joseph J. Cassano, an aggressive Brooklyn-born alumni of Drexel’s back office operations, into a multi-billion dollar profit center for the insurance behemoth. Even though the unit’s 400 or so traders constituted less than one-third of one percent of AIG’s loyal employees, it produced close to twenty percent of its total operating profits. While Cassano kept the list of his counterparties in the credit default swaps a closely held secret, he bragged at a conference in 2007 that they included a global swath of “investment banks, pension funds, endowments, foundations, insurance companies, hedge funds, money managers, high-net-worth individuals, municipalities and sovereigns and supranationals.” By 2006, his group was raking in nearly $4 billion in profits, and, as is the tradition in the derivative game, he and his traders got a rich cut of the loot, which on average amounted to roughly $1.1 million a trader.
So far, so good, right? No complaints then. These guys were coining money and a lot of people got rich, spent their money, and made a lot of people happy.
But into every life a little rain must fall. Epstein continues:
With the collapse in 2008 of the debt AIG was insuring, came such massive losses that Cassano resigned, and AIG, unable to post collateral, faced bankruptcy. At this point in September 2008, the US government rescued AIG, pouring in $173 billion of tax payers’ money. Even so, there remained a $1.6 trillion in potential liabilities that could be triggered by thousands of the credit default swap contracts, many of which would not expire until 2012. To prevent hundreds of billions of losses, these custom-designed contracts had to be continually watched, and, if necessary hedged, by traders who understood each one’s particular vulnerability.
So what would you do if you were Obama, Maxine Waters, or some other moralistic scold? Deplore the bonuses? Easy to do, but at what cost?
All those complex contracts: who was going to deal with them?
To perform this critical task, the remaining 370 or so remaining traders in the group wanted the same sort of guaranteed compensation in the form of retention bonuses as had in their two year contracts. The situation for AIG, and the US government that now owned 80 percent of it, was not unlike the one in Mario Puzo’s Godfather in which an offer is made that cannot be refused. In this case, even without a bloody horse head under the blankets, AIG and its federal overseers could not risk falling into a $1.6 trillion black hole by turning down the demands of the traders in the financial product group. It was not that these traders had such unique skills in managing derivative contracts that they could not be replaced by other people but that they knew the business’ crucial secrets, including the identities of he counterparties to the credit default swaps and the vulnerabilities in their positions. The implicit threat: they could use the secrets to which they were privy to trade against AIG’s positions as it attempted to unload its $1.6 trillion dollar portfolio.
Maybe, all things considered, AIG did the right thing, the prudent thing, the fiscally responsible thing?
Under these circumstances, rather than risking immense losses from having their secret book compromised, AIG paid to keep its traders from defecting. Their compensation, when approved by the Fed and Treasury, would amount to about $500,000 a trader a year ( less than half what they had been getting in 2008.) The staff at the NY Fed, while Timothy Geithner was still its head, in fact helped negotiate the terms for these retention bonuses. When Geithner moved on to become Treasury Secretary in January 2009, he presumably understood how financially dangerous it could be to do otherwise, since he intervened with the Senate Banking Committee Chairman in February to get a provision dropped from a bill that would have prevented AIG (and other recipients of federal money) from paying such huge bonuses. In fairness to Geithner, the alternative to making these pay-offs might have proven a thousand times more costly to AIG, and its defacto owner, the US Government.
Moralistic outrage can be a delicious emotion. But it is worth making sure that you have the right target before going to town with it.
So this London group sold the insurance (CDS) based on a low-risk prediction, predicted wrong, and left us looking at such vast and disruptive counterparty risk that something had to be done. The bankruptcy of AIG was not a reasonable or responsible option. Apparently making CDSs "non-securities" made the whole mess possible, but I understand why the Clinton admin did that at the time: they did not anticipate that it would make it possible to put lipstick on pigs, and that one could run out of lipstick.
It's all about the unintended and unexpected consequences of financial legislation. Even the smart Larry Summers was the biggest supporter of CDSs, and tons of supposedly savvy folks wanted to get into the CDS market for speculation, hedging, or arbitrage. Wiki has a good description of the CDS markets.
It's not your parents' humanism. Scruton never disappoints. His main point is that the Old Humanism was about building up mankind's strengths and virtues, while the New is negative, and stands for nothing worthy. A quote from The New Humanism:
Like so many modern ideologies, the new humanism seeks to define itself through what it is against rather than what it is for. It is for nothing, or at any rate for nothing in particular. Ever since the Enlightenment there has been a tendency to adopt this negative approach to the human condition, rather than to live out the exacting demands of the Enlightenment morality, which tells us to take responsibility for ourselves and to cease our snivelling. Having shaken off their shackles and discovered that they have not obtained contentment, human beings have a lamentable tendency to believe that they are victims of some alien force, be it aristocracy, the bourgeoisie, capitalism, the priesthood, or simply the belief in God. And the feeling arises that they need only destroy this alien force, and happiness will be served up on a plate, in a garden of pleasures. That, in my view, is why the Enlightenment, which promised the reign of freedom and justice, issued in an unending series of wars.
That is, I think, a profound observation.
Have you ever heard of "The Belgian Dream"? No, you haven't, because there isn't one.
Mark Steyn, on the radio today
Re our video post on Pledging your loyalty to Obama, this image from Theo:
Americans are Lockeans: recognizing that work is necessary and will produce well-being; following their natural inclinations moderately because their passions are balanced; respecting the rights of others so that theirs will be respected; obeing the law because they made it in their own interest. From the point of view of God or heroes, all this is not very inspiring. But for the poor, the weak, the oppressed, it is the promise of salvation. As Leo Strauss put it, the moderns "built on low but solid ground."
Allan Bloom
 Andy McCarthy says:
Congratulations to our friend Mark Levin on the publication of Liberty and Tyranny — A Conservative Manifesto, which is officially released this week. It's going to be a huge bestseller, and deservedly so. Mark has written a crystal clear and coherent summons to first principles against the statist onslaught — whether the issue is religious liberty, the free market, federalism, national-security, immigration, the environment or the welfare state. Through and through, Mark's love of country, his passion for our history, and his mastery of the Founding and constitutional law are striking. Yet the book is completely accessible to the non-lawyer: it is written for conservatives and recognizes, first and foremost, that the law and the state are meant to serve American freedom and self-determinism — not the other way around. And best of all: it's a great read. Do yourself a big favor and read it.
Why would Obama reach out in friendship and supplication to Iran's government, while insulting the UK a week ago, and now Sarkozy?
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