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    • A word on Abenomics, QE and doing Stimulus right
      Quantitative Easing, to put it simply, no matter what form you do it in, is only marginally effective. Most of the money goes to the rich, you may or may not get a technical win in GDP, and in many cases the money may flow out of the country. If you want to improve the [...]
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Back to the Pipe and the Pole

Here is a letter I received a few days ago from the President of my University.

Last summer, I formed an advisory task force to assist the University in developing a plan to prepare for probable reductions in state funding for higher education and to assist the University in developing a new instructional resource model. The task force consists of faculty, academic deans, administrators, and staff.

On December 18, 2010, the task force held an open forum. At that forum, Provost Mearns, who is co-chair of the task force, discussed the status of the task force’s efforts to assist in developing a contingency plan for next year’s budget. I attended the forum.

Since then, the task force has continued to provide me with additional recommendations. Those recommendations are detailed in a written report that is now available on the task force’s webpage.

This report recommends overall budget target ranges for each of the University’s major sectors: academic colleges, academic support units, and university administrative units. I have accepted these sector recommendations. In December, I provided differentiated budget targets to each of the vice presidents who manage university administrative units, and I directed them to prepare a contingency plan to meet their unit’s respective target. They have submitted their plans to me, which I am currently reviewing.

The task force’s report also provided specific recommendations about differentiated targets for each of the academic colleges. After developing a list of strategic factors and applying those factors to readily available data, the task force assigned each academic college to one of three groups, or bands. As discussed in the report, a college or an administrative unit can meet its proposed budget target through both permanent expense reductions and reliable revenue enhancements.

After reviewing an initial draft of the report, I met at length with Provost Mearns, Vice President George Walker and Tim Long, the University’s Budget Director, to review the strategic factors and the data relied upon by the task force to develop its differentiated recommendations for each of the academic colleges. In making my decisions, I relied upon the same strategic factors developed by the task force, including: how a college’s programs aligned with the University’s primary strategic goals; a college’s financial performance relative to the other colleges at the University; the extent to which a college has programs, including doctoral programs, with relatively few students; an assessment of the productivity and impact of the college’s research faculty; the success of a college’s students as measured by undergraduate retention and graduation rates and post-graduate licensing exams; and the ability of a college to develop differential tuition plans or increase enrollment above existing limits.

After this review, I accepted all of the task force’s recommendations with respect to the colleges’ budget targets, with one exception. I have delegated to Provost Mearns the responsibility of establishing differentiated targets for the various academic support units that report to him.

Provost Mearns has communicated the college targets to the deans, and he has asked them to provide him with their college’s plan by February 22, 2011. He has also directed the deans to consult with their respective faculties and staff in developing their college’s plan.

By early March, I anticipate that our collective strategy for meeting this financial challenge will begin to become more clear. Governor Kasich will present his proposed budget to the legislature on or before March 15. I anticipate that, when his budget is released, we will know much more about two of the most important factors that are driving this process: the approximate amount of any reduction in the state subsidy for higher education, and the limit on any possible increase in undergraduate tuition. By that time, we will also have had an opportunity to evaluate the various college and administrative plans that have been submitted.

When we have more information from the Governor, I will hold an open forum in March to discuss our University plan.

I know that this process is difficult and that it is causing some anxiety and uncertainty. I believe, however, that we have established a collaborative and transparent process that will enable the University to overcome this challenge. Indeed, I am encouraged by the constructive contributions that so many of you have already made to our contingency planning process. Therefore, I am confident that we will emerge from this process as a stronger institution — which is our goal.

Thank you for your service to our students, our University, and our community.

Indeed. To those of you who still believe in the American Dream, let me explain how it really works for you. Say Jane wants to grow up and become a Doctor. But Jane and her family live piss poor, so she works hard in High School, gets good grades in accelerated courses and takes part in track and cheerleading or some such other extracurricular nonsense that will look good on college applications. She gets accepted into a good school and manages to keep from getting pregnant. What a stand up gal Jane is, don’t you think? She gets some scholarships. Good for her! She gets Pell Grants and subsidized and unsubsidized loans through FAFSA. That’s our girl.

Before you know it she is accepted into Harvard Medical School and graduates with honors. Bravo! The problem is, now Jane has upwards of $200,000 worth of student loans to pay back. She gets married and begins practice as a pediatrician, her lifelong dream. But it will be a while before she begins to really rake in the dough and there are medical malpractice lawsuits on the horizon. Nonetheless, she and her husband, a college professor, are living well, having babies and attending church on Sundays. Everything seems fine until disaster strikes. Her mother is still piss poor and has just suffered from a stroke. A neighbor finds her laying face down in her apartment surrounded by urine and her own feces. Jane’s mother is admitted to the hospital and is soon discharged. Incontinent, paralyzed from the waist down and unable to take care of herself, Jane’s mother is just above the income threshold for medicaid and there are limited funds. She has no Health Insurance and therefore cannot afford to live in a Nursing Home or Assisted Living Facility, so Jane has to quit her job to take care of her mother, as her husband is unwilling to quit his. The financial problems caused by the fact that Jane can no longer supplement the family income as well as the demands of taking care of a sick elderly woman takes a toll on their marriage, and Jane’s husband starts banging his secretary. They get a divorce and the children are heartbroken. Jane is now a single mother with no job. She still has student loans and legal fees to pay back, no home because she can’t afford a mortgage, and three kids to put through college. Her oldest daughter Sarah is devastated by the break up of her family and commits suicide. Three months later, Jane’s mother dies due to inadequate medical care. Jane’s American Dream has turned into an American Nightmare.

Sounds extreme, right? Wrong. Things like this are happening everywhere. I can tell you that it is extremely difficult to pay for college, and I will explain why. Most people have an idea of the average college student’s financial situation. A freshman will have mom and dad foot most of the bill and private loans will take care of the rest, right?

Wrong.

Take me for example. I graduated from that Shithole High School a semester early with decent grades and community service. Go me, right? I figured I might as well try to go to college, so I briefly (and by briefly, I mean for about two seconds) thought about going into the military and even told the Hell Hole High School that those were my plans so they would let me graduate early. I took the ASVAB tests and got excellent scores, fielding calls from every military branch recruiter known to man telling me to join so I could become an officer. Of course, I am not going to go into the Military. I am a pacifist. So I changed my phone number to get rid of the recruiters and enrolled at the local junior college, with plans to save money on Gen Eds in mind. Problem was, my Dad makes too much money for me to get FAFSA and we are somewhat estranged. I had to work my tail off and go to School part time so I could get taken off of his tax returns, as a student has to be enrolled in school full time to be on their parents tax returns after they’re eighteen and to still be on their parents health insurance plan.

In any case, I no longer have Health Insurance but now that I’m off his taxes I go to School overtime, supplemented by a hefty financial aid award. But get this!

President Obama and his aides have spent a good bit of time over the last several weeks talking about the importance of education. Now they announce that they plan to cut spending on Pell grants, the big student-aid program that helps students in (roughly) the bottom half of the income distribution. As Jackie Calmes explains:

Pell grants for needy college students would be eliminated for summer classes, and graduate students would start accruing interest immediately on federal loans, though they would not have to pay until after they graduate; both changes are intended to help save $100 billion over 10 years to offset the costs of maintaining Pell grants for nine million students, according to administration officials.

Oh, fantastic! Keep in mind that my situation is not unique. Many students are like me, with families either too poor or too unwilling to help pay for school. I have a friend, for example, who had to run away from home when she was in Hell High School because her Step Father was beating her mother. She supported herself with two jobs and help from family and friends until she graduated, and now she has classes with me. I don’t know how she does it, because she is forced by FAFSA to file as a dependent even though she receives no help from her family and supports herself completely. She is awarded funds based on the assumption that her parents help her when in reality she has to pay for full time school as well as everything else.

And why is it that school is so expensive? Gods only know. The cost of living has increased exponentially since my parents were in college. It is easy for some stuck-in-the past 1950′s holdover to lecture one of us stupid delinquent teenagers about how THEY did it when they were our age so why can’t we? Well, I feel like saying to these idiots, you’re the ignorant fools who elected conservative Presidents and congresses for the past several decades and caused the inflation and budget cuts that led to all of these problems. Get over yourself.

Not only that, but tuition is obscenely expensive since now colleges are run more like businesses instead of academic institutions that shape young minds and prepare the leaders of tomorrow. I have to pay thousands of dollars for Professors to teach me the same bull shit I’ve been learning since the sixth grade (which is not to say I don’t learn a lot in College these days from certain professors, but I digress) and then once I and many students have paid several more thousands to complete an undergraduate degree two thirds of us STILL won’t be able to get a job. And people wonder why our education system is so behind.

Well, one might say, you may not be achieving all of your fancy starry eyed dreams but at least you are bettering yourself for the real world. Maybe you’ll be a hospital administrator instead of a chemical engineer but at least you have the right to a comfortable lifestyle and a reasonable retirement, right? Wrong.

So far, Obama has had the following “bright ideas” and has proposed them to Congress:

(1) Obama proposed (and Congress passed) a $112 Billion REDUCTION in revenues coming into the Social Security trust fund for this year; that is a cut of 30% in workers’ contributions to the Fund. I think we can be pretty sure this $112 Billion annual cut in Social Security taxes will be made permanent with the full agreement of Obama. It won’t take long, at that rate, for Social Security to drain its fund (and current surplus) and go out of business.

(2) Obama has proposed a 50% REDUCTION in federal aid to the program that helps poor people pay heating bills for their homes

(3) Obama is proposing that Fannie Mae and Freddie Mac go out of business, which will make it harder — if not impossible — for lower-income and middle-income people to buy their homes instead of paying endless rents

(4) Obama is proposing that the interest homeowners pay for their mortgages NO longer be fully deductible on their income taxes. In the early years of any mortgage, the bulk of the monthly mortgage payment goes to pay the interest on the mortgage; having that great sum be deductible has made it possible for people to buy homes and not default on their mortgages when finances are tight (as they often are when new homeowners are just starting out).

The result of Obama’s “bright” ideas, numbers (3) and (4), will be to make it harder for current homeowners to SELL their homes, will DEFLATE the value of their homes, will cause more people to default on their mortgages, and will create a situation where communities will take in LESS in the way of property taxes because of the number of vacant, abandoned homes that will become liabilities.

- – – – – – – – – – – – – – – – – – -
And Obama is doing all of this cutting less than two months after signing into law tax CUTS for the wealthiest Americans.

The Republicans have the EXACT right Democrat in the White House for their evil purposes. Obama is: (1) helping the Republicans realize their decades-long goal of destroying the Social Security program, (2) proposing policies that will create an even wider division between the “haves” and “have-nots” in America, and (3)proposing policies that will create a sub-class of Americans that the top one percent of Americans will be able to reduce to economic slavery.

That’s right. So long house in the ‘burbs. Bye bye white picket fence, 2.4 children and Labrador Retriever. S’later retirement fund, pensions, IRA. Hi poverty, what it do destitution? We’re the leaders of tomorrow. Nice to meetcha!

It just won’t do. Obama is a Republican Dream, not an American Dream. Why, just look at the cover of one of his famous “books.”

The Audacity of Nope

To Obama, this is the American Dream. Jane’s life would be everyone’s life with the policies he is currently championing. Can you believe this is happening? Well, I can. I’ve been saying who Obama is from the get-go. All it took was reading his idea of the American Dream in the pages of this book, where he talked about cutting Social Security and used Reagan as an example of a President to emulate. He’s stuck to his word, too. And has managed to unite this divided nation of ours- against him. On the 100the anniversary of Reagan’s whatever it was I was subjected to fawning book covers and pages about Obama’s hero for days. And now he is cutting Social Security with his bipartisan Republican pals, just like he promised.

I don’t know about you, but this doesn’t jive with the Obama the fauxgressives were selling us. This whole thing just isn’t going to work for me. I’m sure it won’t work for a lot of you, either, so run for office instead of electing more morons who will continue to pull this crap on us and expect to get reelected. My plan is to go to Law School and try to change these problems from within instead of sitting here and bitching about it.

But Isis, I can hear some people saying. Law School is expensive. You depend on those Pell Grants Obama and the Tea Party losers are cutting left and right and spending on unnecessary wars, a shitty Health Care Law and Michelle’s vacations in Spain to pay for your tuition, books and other fees. Won’t you be just like Jane, busting your hump for a dismal future? What are you going to do?

Well, shit. Whatever FAFSA doesn’t cover anymore I’ll supplement with scholarships. I just got a job that will pay for my Master’s Degree in Social Work so long as I get a good GPA. And certain agencies and non profits in my field of study will pay back all of my tuition if I end up working for them. As for the rest, it’s back to the pole and the pipe. And don’t think I’ll be the only one.

Ginger for President!

Change we can believe in, and she doesn’t even use a teleprompter!

And on top of that, she can yodel.

Your Breakfast Read, Served By The Confluence

Morning Read

The other downside of “swine” flu
American Airlines passengers held for flu test

Passengers on an American Airlines flight from Los Angeles were detained for several hours in Tokyo after Japanese officials suspected one passenger of having swine flu, according to the airline.

Mexico to start China flu airlift

Robert Barro has an op-ed column about the economic toll the swine flu could take
Pandemics and Depressions

We’re all waiting with bated breath
Obama assures Hatch he’ll pick a pragmatist

Orrin Hatch: White House may announce Supreme Court nominee this week

G.O.P. Picks Conservative for Senate Judiciary Post

After Specter switch: buyer’s remorse?

GOP, Quo Vadis?
GOP Tries to Dig Out of Its Hole

Young Ross Douthat and David Brooks have some thoughts about how to save the GOP from a massive shrinkage
A Hole in the Center

The Long Voyage Home

The GOP leadership meanwhile is grasping at straws
For GOP, it’s Coleman or bust

With former Sen. Norm Coleman now standing between Democrats and their 60-seat supermajority, the GOP is prepared to back the Republican’s appeal to the federal level if even a shred of doubt emerges in the case currently before the Minnesota Supreme Court.

How do we fix the economy?
Nation Ready To Be Lied To About Economy Again (The Onion via Yves Smith)

Fed Stress Test Results May Show 10 U.S. Banks Need Capita

Matthew Richardson and Nouriel Roubini say we shouldn’t keep throwing money and banks
We Can’t Subsidize the Banks Forever

Wall Street and ZOMBIES

What financial crisis? A George W. Bush library. Quel oxymoron!
Bush Library Raises $100 Million in 100 Days

[T]he Bush center will not be used to “defend or promote something that he did in the past” but will offer a record to help future generations learn about what happened during a presidency, so they make better decisions.”

Ergh!!!

Obama proposes tax fix. Not everyone is happy

President’s Tax Proposal Riles Business

President Barack Obama’s plan to revamp international tax rules stirred opposition from many multinational businesses and questions among a few leading lawmakers. But even if the proposal doesn’t advance rapidly, policy makers said a broader corporate-tax overhaul is becoming increasingly likely over the next two years.

Corporations cry foul over tax fix

Silicon Valley voices concern over new rules

Tax Salvos

The Obama proposals oversimplify the challenge, both technically and politically.

The other headaches
In Preview of Surge, U.S. Calms Afghan Valley but Peace Is Fragile

U.S. military says Afghan bibles have been destroyed

Stay classy Newt, stay classy
Gingrich: ‘Obama endangering Israel’

Forty-four killed in attack on Turkish wedding

Watch out Blackberry
Companies Shed Initial Resistance to iPhone

Malcolm Gladwell penned a great piece in the New Yorker about David v. Goliath
How David Beats Goliath

Vive La France
Sleeping and eating – the French do it best

True to their reputation as leisure-loving gourmets, the French spend more time sleeping and eating than anyone else among the world’s wealthy nations, according to a study published Monday.

Why we love Europe
US shock-jock, Jewish extremist and Hamas MP on list of 16 banned from UK

The list includes Erich Gliebe, the leader of an American neo-Nazi group, Michael Savage (real name Michael Weiner), a radio presenter in America, Mike Guzovsky, a Jewish extremist, and Stephen “Don” Black, a former Grand Wizard in the Ku Klux Klan.
Also on the list is Fred Waldron Phelps Snr, an American Baptist pastor and his daughter, Shirley, who were barred last year for their homophobic views.

WTF?
Girl finds condom in McDonald’s Happy Meal

Your Breakfast read, served by The Confluence

Morning reading

  • Considering the mood of the country after the Republican rule, the enormous mandate the Democratic agenda received from the American people and his shellacking of McCain, Obama had the opportunity to bury Reagonomics once for all and decisively shift the direction of the country. He did some of it but I think he wasn’t bold enough, at least in the first 100 days.
    Obama Overthrows Reagan’s Government-Bad Dogma to Rescue Market
  • Are these still the US of A, or has the Bush cabal turned this into some Banana Republic?
    US refuses to let jet into its airspace because it is carrying a journalist who criticizes US foreign policy

    Hernando Calvo Ospina has written articles about the United States involvement in Latin America, and is currently writing a book about he CIA. The exact reason for him being on the terrorist watch list is unknown, and we’ll probably never know what criteria are used for adding people to it.

    And here’s the account of that “evil” journalist:
    The criminalization of journalism

    Again in the air, and preparing for another four hours of travel, a man who identified himself as the copilot came to me. Trying to look discreet, he asked if I was “Mr. Calvo Ospina.” I told him yes.

    “The captain wants to sleep, that’s why I came here,” he said, and he invited me to accompany him to the back of the plane. There, he told me that I was the person “responsible” for the detour. I was astonished.

    My first reaction was to ask him: “Do you think I’m a terrorist?” He said no, that’s the reason I’m telling you this. He also assured me that it was strange that this was the first time it happened on an Air France plane. Shortly before we landed in Martinique, a stewardess had told me that, in her 11-year career, nothing like that had ever happened to her.

  • This is getting scary.
    U.S. Declares Public Health Emergency Over Swine Flu

    Asia on high alert for flu virus

    Mexican swine flu spreads to Europe

  • SoS Hillary Clinton engaged in a very delicate dance.
    Clinton’s Mideast Pirouette

    She’s transitioned with aplomb from the calculation of her interests that she made as a senator from New York to a cool assessment of U.S. interests. These do not always coincide with Israel’s.

  • Paul Krugman is still shrill.
    Money for Nothing
  • The latest of Timmy countdown. How much longer is he going to last?
    Geithner, as Member and Overseer, Forged Ties to Finance Club

    Today, Mr. Geithner is Treasury secretary, and as he seeks to rebuild the nation’s fractured financial system with more taxpayer assistance and a regulatory overhaul, he finds himself a locus of discontent.

    Even as banks complain that the government has attached too many intrusive strings to its financial assistance, a range of critics — lawmakers, economists and even former Federal Reserve colleagues — say that the bailout Mr. Geithner has played such a central role in fashioning is overly generous to the financial industry at taxpayer expense.

  • Gulp! Even Larry doesn’t see the end of the tunnel yet.
    US economy to continue down, says Summers

    “I expect the economy will continue to decline,” Mr Summers said in an interview on Fox News, predicting “sharp declines in employment for quite some time this year.”

  • Huh! We’re using Monte Carlo Simulations to stress-test the banks?
    Gambling on Monte Carlo simulations

    If the inputs and assumptions are wrong then the Monte Carlo simulations will be of very little use. In that sense they’re very similar to the magic worked by David Li’s Gaussian Copula. They give a false sense of security.

    And that’s precisely, some might argue, what the US government is going for with its bank stress tests anyway.

    (For geeks out there here is the stress test methodology)

  • A former Wall Street insider talks about what went on. For those who read Liar’s Poker nothing surprising but still…
    American excess: A Wall Street trader tells all

    I understood it well. I put on 45 pounds in my first year at the bank, and, as you might guess, it was not from eating McDonalds. Occasionally I ate stuff like sushi, but mostly it was steak. We went to the good places like Sparks, Peter Luger’s, and the Strip House. We tended to look down on chains like Morton’s and Ruth’s Chris-they were for car dealers or stock brokers, not traders. Regardless of where we ate, we ate in quantity. My standard strategy was to order half a dozen appetisers, plus a steak and lobster, plus a few desserts and much wine as I could drink, as long it was under a few hundred dollars a bottle. Followed by a digestif, typically a 30-year-old port. There’s not any way to justify this except to say I was trying to catch up to my colleagues. We would treat those restaurants like Roman vomitoriums. And it wasn’t the food so much as the wine. Being a junior employee, I couldn’t really order bottles that cost more than a few hundred dollars, but the senior guys could get nicer stuff – Opus One, Chateau Latour. As long as we were out with a client, the bank paid. I remember being stunned the first time I saw a dinner bill for ten grand. But that was just the beginning.

    What it boiled down to was austerity for everyone else and rampant consumption for ourselves. I never saw anyone literally set fire to money, but I did drink most of a bottle of 1983 Margaux ($2,000).

  • Is this story ever going to end?
    U.S. forces say kill 7 al Qaeda suspects in Iraq

    Iraq says U.S. raid violated security pact

  • Brilliant! IBM program to take on ‘Jeopardy’ champions
    Computer Program to Take On ‘Jeopardy!’
  • Oh great! Some Australian trying to suck up to Riverdaughter by beating up on us. What have we ever done to people besides fixing companies to make them more efficient and more competitive. Sigh!
    MBAs: Most Bloody Awful, Aussie radio documentary on the problem with biz-school
  • Why does the church hate “great sex”?
    Church giving ‘great sex’ sermons might get booted
  • Inside joke

    While we’re all waking up and getting our act together, this is an open thread.

    Is Stimulis Right For You?

    “Are you an economy with performance issues?”

    Stimulis That Makes You Go Mmm-mm-m

    “Stimulis” was written and produced by Ted Balaker, and edited by Alex Manning.

    [cross-posted from Lady Boomer NYC]

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