Simple question really: Where did all those trillions of dollars to bail out the rich go ?
Simple question really: Where did all those trillions of dollars to bail out the rich go ?
As the Conservative government in Ottawa pushes ahead with plans to expand the country’s prisons to make room for more convicts serving longer sentences, the head of the federal prison system has made an admission that should shock and alarm us all:
That’s hyperbole, but it does contain an obvious and painful truth. The most recent figures available reveal that of all those admitted to federal custody, a startling 11 per cent have mental-health problems. That’s up from seven per cent a decade ago. How many of them don’t really belong in prison?
This reflects both federal and provincial failures. In an interview last year former senator Michael Kirby, who heads the Mental Health Commission of Canada, summed up the way we got into this mess: As provinces closed mental-health beds in hospitals, he said, “the intent had been to open beds in the community. We opened some beds but clearly not enough. A lot of people being kicked out of institutions ended up on the street and many, frankly, ended up in prison. We converted the streets and prisons into the asylums of the 21st century and that is just outrageous. The policy decision was correct in that community-based services were better than institutional, but that implies you will actually have the community-based services.”
If you don’t, we see now, you end up with a lot of people in prison who shouldn’t be there.
The “we” in Kirby’s indictment is the provinces, which administer the health system. There can be no doubt that many of the homeless are mentally ill; it can be a short step from sleeping on a grate to ending up in prison.
Kirby, a respected civil servant before Pierre Trudeau named him to the Senate, was named by Stephen Harper to lead the Mental Health Commission in developing a strategy to improve a system which is failing Canadians. Kirby, who first grew interested in mental-health policy while helping a depressed sister, will soon present a report from his commission.
Tossing the mentally ill into jail does less than nothing to relieve the overall stigma which is, unfortunately, associated with mental illness. It might well do more harm than good to the people jailed. It is a disgrace to the country. If the government must spend money to lock up more Canadians, it should surely also find the money to treat those who need help more than punishment.
The contribution reported Tuesday by The Sacramento Bee is the single biggest donation from an individual other than Proposition 19′s main sponsor, Oakland medical marijuana entrepreneur Richard Lee.
Soros, a high-profile liberal and philanthropist, has long backed drug law reform. He was one of the top financial backers of California’s first-in-the-nation measure that legalized medical marijuana in the state in 1996.
But Soros held off on openly endorsing the current measure until writing an op-ed published Tuesday in The Wall Street Journal. In the piece, Soros said legalizing and taxing marijuana would save taxpayers the costs of incarceration and law enforcement while raising revenue for the state.
“Just as the process of repealing national alcohol prohibition began with individual states repealing their own prohibition laws, so individual states must now take the initiative with respect to repealing marijuana prohibition laws,” Soros wrote.
The $1 million donation comes a day after the Yes on 19 campaign launched its first television ad. The opposition’s campaign also recently took to the airwaves for the first time with a radio ad sponsored by the California Chamber of Commerce, claiming the law would threaten workplace safety and harm the state’s economy.
Soros’ money went to a campaign committee overseen by the Drug Policy Alliance, a drug legalization advocacy group. Soros sits on the group’s board and is a major donor.
The money will be spent on get-out-the-vote efforts, on-the-ground campaigning and television advertising, said Ethan Nadelmann, the alliance’s executive director and a longtime adviser to Soros on drug policy issues.
Soros has long supported medical marijuana and decriminalizing the drug for personal use but has in fact been ambivalent about broader legalization, Nadelmann said. The 80-year-old investor finally decided to support Proposition 19 after seeing how the ballot measure had “elevated the discourse” around drug law reform, he said.
“For him, it’s not been about legalization per se, but about rolling back the drug war,” said Nadelmann.
Until now, neither side in the ballot measure contest has seen a huge outpouring of cash, though supporters have significantly out-raised opponents. Supporters of the measure have raised about $3.8 million, including the Soros donation. The No campaign has raised about $300,000.
Other high-profile donations to Proposition 19 in recent days include $50,000 from Men’s Wearhouse chief executive George Zimmer and $70,000 from hedge fund president and Paypal co-founder Peter Thiel, according to campaign finance records.
Roger Salazar, spokesman for the No on Prop 19 campaign, called the big-ticket donations to the other side a sign of panic as polls show support for the measure dropping.
“We’ve always known that they would outspend us. In fact, they’ve outspent us from Day One,” Salazar said. “It seems to us the more they’ve spent, the more they’ve gone down in the polls.”
Despite the large sums, fundraising for Proposition 19 has been modest compared to other campaigns. For example, campaign finance records show supporters of Proposition 23 to suspend California’s greenhouse gas emissions law have raised more than $10 million, while opponents have raised more than $30 million.
The rising rate of obesity is a complex phenomenon, touching on issues of culture, economics and biology. Quickie solutions such as imposing big taxes on sugary food are not likely to do much.
Yet public health advocates feel compelled to do something. Right now, their No. 1 villain seems to be soft drinks. A panel of University of Toronto researchers, in a report sponsored by the Heart and Stroke Foundation, has argued that “adult weight is modestly responsive to soft-drink taxes.” In the U.S., meanwhile, President Barack Obama has said he, too, thinks a soda tax is worth exploring. Indeed, many American states have imposed such a tax. Proponents say that the consequences of obesity, as measured in individual health outcomes and also the larger burden imposed on the health-care system, justifies the tax.
Not everyone agrees. A recent Rand Corporation study of 7,300 school children found that small taxes on soda pop “do not substantially affect overall levels of soda consumption or obesity rates,” according to Health Affairs. A 2007 study, “Can Soft Drink Taxes Reduce Population Weight?,” suggests soda taxes would need to be as large as those on cigarettes to have any significant impact, but even then they “will not halt the obesity epidemic.”
The Toronto researchers point to the success of tobacco taxes in discouraging smoking to argue that soft-drink taxes might do the same thing. This is a questionable analogy. The decline in smoking is due in large measure to the “denormalizing” of smoking — in other words, education campaigns and other measures that have affixed a large social stigma to cigarettes.
Obesity is not just about what we eat and drink but about what do — or, rather, don’t do, namely, exercise our bodies. We lead sedentary lifestyles, thanks to a leisure-filled society. Television, the web, video games; all our electronic diversions have rendered us virtually immobile.
You don’t cure a culture of sloth with the heavy hand of government. Not only does lifestyle taxation smack of state intrusiveness, but it can also be regressive.
A 2009 report from the Washington-based National Center for Policy Analysis points out that sin taxes impose a greater burden on poor people who tend to consume cheaper, less healthy food than do those in higher income brackets. Such taxes also “fail to produce the full extent of desired behavioural changes” — less obesity — because the demand for these products is inelastic. “A 27.5 per cent tax on a 50-cent can of soda would only lower the number of the obese and overweight from 66 per cent to 65.3 per cent,” says the report, entitled “Not-So-Sweet Excise Taxes.”
Clearly, we have a clash of evidence. That alone warrants hesitation in imposing a soda tax. Besides, if any government seriously considered lifestyle taxation, why stop at soft drinks? How about an obesity tax on hamburgers, Sony PlayStations and cable TV subscriptions?
Such measures would extend the government’s reach to absurd levels. The essential attribute of a healthy society will always be self-responsible citizens. Of course, genuine freedom is not a matter of doing what you want, but doing what it is right and best. Choosing well — including lifestyle choices — requires education, not taxation.
via Taxing obesity.
On Tuesday, California will vote on Proposition 19, an initiative to legalize, tax and regulate marijuana. If passed, it would allow people 21 years old or older to possess, cultivate or transport marijuana for personal recreational use.Legalized marijuana in California would have a profound impact across North America, with prices plummeting and jobs lost. In British Columbia alone, experts say the move would wipe out about $2-billion in exports and 20,000 jobs.
But will Proposition 19 pass? Early polling found significant support for the initiative but, as election day draws nearer, the “no” side has been gaining traction. A USC/Los Angeles Times poll in the third week of October found 51 per cent of likely voters opposed to legalization and 39 per cent in support of the measure. Others polls have reported similar results.
If it does get support, get ready for massive changes in the drug industry.
PRICES: A REAL DOWNER
Some things, of course, remain uncertain if California does legalize marijuana. Marijuana will remain illegal under federal U.S. law and how the U.S. government will respond is unclear. There is also no indication of how the drug will be taxed and by how much.
But one thing on which all the experts agree is that prices will tumble. Right now, marijuana sells for about $300 to $450 per ounce in California. In larger quantities, it can sell for $4,000 a pound or more. Prices are set by demand, supply, the risk in providing an illegal product and the drug’s strength – the amount of intoxicating THC (delta-9-tetrahydrocannabinol).
If the drug is legalized, risk will disappear, and both demand and supply will almost certainly increase. Production costs could drop to about one-tenth of current levels. Those working with marijuana would no longer collect a risk premium. Growers could open larger production facilities yielding economies of scale. The pre-tax retail price could drop as low as $38 per ounce, about one-tenth its current price.
AN AMERICA-WIDE BUZZ
Prices won’t just tumble in California. With reduced production and processing costs, California growers would be more competitive with growers across the country. Marijuana produced legally would undercut prices throughout most of the U.S. The price of San Francisco marijuana after legalization could wholesale in Washington, D.C., at $2,575 per pound, compared to the current wholesale price in the Maryland/Virginia area of roughly $4,000 per pound.
Source: Altered State? Assessing How Marijuana Legalization in California Could Influence Marijuana Consumption and Public Budgets published by the RAND Corporation Drug Policy Research Center
MEXICO GETS TASTE OF COMPETITION
Mexican marijuana has carved out a niche in the drug trade as the supplier of a cheaper, commercial grade product. Its price advantage would disappear if California supports legalization. With reduced costs of production, California-grown marijuana could be priced about the same as the Mexican grass but would be considerably more potent – about 3.6 times more.
Mexicans would be left with exports to other U.S. states that could not obtain the California product. Mexico’s drug-trafficking organizations earn up to $2-billion annually from exporting marijuana to the U.S., but could lose as much as $1.5-billion of that should California legalize marijuana.
IN B.C, AN INDUSTRY WILL GO UP IN SMOKE
The marijuana trade is one of the largest – if not the largest – industry in B.C., generating around $4-billion in revenue annually for at least the past seven years. Domestically, marijuana sells for about $2,000 a pound.
About 70 per cent of marijuana produced – about $3-billion worth – is exported to the U.S. The price of B.C. Bud increases as the distance from B.C. grows – it sells for $2,500 a pound just south of the Canada-U.S. border but can go for as much as $5,000 a pound in San Diego. And at least half of the exports to the U.S. go to California, sales that would be lost if legalization occurs there.
Closing one grow-op with 700 plants would eliminate an operation with annual revenue of about $344,000 and jobs for electricians, gardeners, those who tend and harvest the crops, security people and brokers who arrange the sale of the product. The province has around 60,000 marijuana growing operations varying in size, from a few dozen plants to several hundred. Legalization in California could take away work for 20,000 people in B.C. The impact on organized crime – which distributes and sells the drug – would be significant.
Source: Criminologist Darryl Plecas, of the University of the Fraser Valley in Abbotsford, B.C. and Mayor Brian Taylor of Grand Forks, B.C., the first leader of the B.C. Marijuana Party
Submitted by Mike Krieger of KAM LP
The Tipping Point has Arrived
Our age is retrospective. It builds the sepulchres of the fathers. It writes biographies, histories, and criticism. The foregoing generations beheld God and nature face to face; we, through their eyes. Why should not we also enjoy an original relation to the universe? Why should not we have the a poetry and philosophy of insight and not of tradition, and a religion by revelation to us, and not the history of theirs? Embosomed for a season in nature, whose floods of life stream around and through us, and invite us, by the powers they supply, to action proportioned to nature, why should we grope among the dry bones of the past, or put the living generation into masquerade out of its faded wardrobe? The sun shines today also. There is more wool and flax in the fields. There are new lands, new men, new thoughts. Let us demand out own works and laws and worship.
- Ralph Waldo Emerson, Nature
I believe we have finally breached the tipping point in the socio-political landscape of the United States of America. There will be no going back from here. Everyone on all levels of society including the elites must make a choice. Will you stand for real reform and an end of the feudalistic rule of the oligarchs and their paid-off puppets that line the streets of Washington D.C., or will you keep your mouth shut and play the old and dying game in the context of a completely different cultural environment?
While many will disagree with what I am about to say, I believe the oligarchs and the Federal Reserve have already lost.
This will not be clear to the vast majority at this time because the powerful institutions that dominate and rob us will continue to fight for survival but the wind is already blowing in a different direction and cannot be reversed. The smart elites are starting to see this and are hedging their bets. The dumb or stubborn ones may want to start looking at countries with non-extradition treaties or start blowing the whistle on someone above them and fast. The window of opportunity to make the choice is closely quickly. “I was just following orders” will not cut it when the dollar collapses and Disneyland shuts down. There have not been any major arrests and people have seemingly gotten away with all their frauds and crimes. This too will change and 2011 will represent a change in trend in this regard. We have entered the terminal phase of this ponzi scheme economy and those responsible for its creation and its continued support at the expense of the vast majority of the populace will see their foul deeds rise to the surface.
Earlier this year I wrote two piece that I think are worth re-reading and I have attached links to them. The first was “A Time to Speak Out” http://www.zerohedge.com/article/time-speak-out and the second was the “The Elites Have Lost the Right to Rule” http://www.zerohedge.com/article/elites-have-lost-right-rule. When I wrote these articles many of the themes addressed were completely out of the mainstream, yet in an amazingly brief period of time many of the frustrations I voiced are now popping up everywhere I look. It’s strange and rewarding to see the topics I and countless others have been discussing on the “fringe” break into the light of day. Now that these concepts are out there is no stopping the avalanche that is about to hit the oligarchs smack in the face. As Gandhi said “An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it.”
This brings me to discuss what I think is one of the most important letters from an elite I have seen in 2010. I am referring to Bill Gross’ most recent piece. Now when I say he is an “elite” I am not saying he is part of some vast conspiracy to turn us further into serfs. What I mean is he is one of the most fabulously wealthy people in America. He also happens to have made his fortune in the financial services industry and runs the country’s largest bond fund. This is a person that has every reason and incentive to play nice with the other elites and their corrupt institutions at the top of which lies the Federal Reserve banking cartel. What he did in his latest letter was far from “playing ball.” Here are some of the notable quotes and the entire letter can be found here http://www.pimco.com/Pages/RunTurkeyRun.aspx.
“Was it relevant in 2004 that John Kerry was or was not an admirable “swift boat” commander? Will the absence of a mosque within several hundred yards of Ground Zero solve our deficit crisis? Is Christine O’Donnell really a witch? Did Meg Whitman employ an illegal maid? Who cares! We are being conned, folks; Democrats and Republicans alike.”
“Perhaps, as a vocal contingent suggests, our paper-based foundation of wealth deserves to be buried, making a fresh start from admittedly lower levels. The Fed, on Wednesday, however, will decide that it is better to keep the patient on life support with an adrenaline injection and a following morphine drip than to risk its demise and ultimate rebirth in another form.”
“Check writing in the trillions is not a bondholder’s friend; it is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme. Public debt, actually, has always had a Ponzi-like characteristic.”
“The Fed, in effect, is telling the markets not to worry about our fiscal deficits, it will be the buyer of first and perhaps last resort. There is no need – as with Charles Ponzi – to find an increasing amount of future gullibles, they will just write the check themselves. I ask you: Has there ever been a Ponzi scheme so brazen? There has not.”
Ok, so what is Bill Gross up to you ask? I will give you my two cents. This guy is not as fabulously wealthy as he is for being a dope (although this cannot be said for a lot of people in this industry that are merely financial engineers that would become extinct overnight without 0% interest rates but that’s another story). Bill Gross sees the writing on the wall. He see the winds of change and is hedging his bets. He is throwing out a carrot to those that criticize the completely corrupt and ponzi scheme economy and financial system we have today which benefits only those that speculate on the taxpayers dime. We could end this fake and destructive economy by ending the Fed in its current form (at the very least everything they do must be transparent) and restoring the rule of law. He attacks the false left/right paradigm and rightly points out that both the Democrat and Republican establishment have sold out the people to line their own pockets. In the second quote he actually explores the notion that “our paper-based foundation of wealth deserves to be buried.” Then finally he points out what many others have but almost no one is the mainstream ever admits. The U.S. government is running a giant ponzi scheme with regard to its debt. Hmmm do you want to own gold or treasuries?
Truth be told, what Bill Gross did in this letter is to create the ultimate hedge for himself. He didn’t say these things earlier when they were just as true as they are today and certainly must have been clear to someone of his intelligence. He said it now. He said it now because he can see the writing on the wall. The important thing is not that he ultimately defends what the Fed is doing (which he unfortunately does) but that he felt the need to hedge himself and distance himself from the system. As he writes in the final paragraph, “We haven’t been around for 35+ years and not figured out a way to avoid the November axe. We are a survivor and our clients are not going to be Turkeys on a platter.” Indeed, the axe is going to fall on the oligarchs and if you don’t want to be a turkey on a platter you had better choose sides and fast. As the great Ralph Waldo Emerson wrote in his 1836 essay Nature, “There are new lands, new men, new thoughts. Let us demand out own works and laws and worship.” Well said sir, well said.
All the best,
The rich and their paid false prophets are doing a bang up job deceiving the poor and middle class. They have convinced many that an evil socialism is alive in the land and it is taking their fair share. But the deception cannot last – facts say otherwise.
Yes, there is a class war – the war of the rich on the poor and the middle class – and the rich are winning. That war has been going on for years. Look at the facts – facts the rich and their false paid prophets do not want people to know.
Let Glen Beck go on about socialists descending on Washington. Allow Rush Limbaugh to rail about “class warfare for a leftist agenda that will destroy our society.” They are well compensated false prophets for the rich.
The truth is that for the several decades the rich in the US have been getting richer and the poor and middle class have been getting poorer. Look at the facts then make up your own mind.
Poor Getting Poorer: Facts
The official US poverty numbers show we now have the highest number of poor people in 51 years. The official US poverty rate is 14.3 percent or 43.6 million people in poverty. One in five children in the US is poor; one in ten senior citizens is poor. Source: US Census Bureau.
One of every six workers, 26.8 million people, is unemployed or underemployed. This “real” unemployment rate is over 17%. There are 14.8 million people designated as “officially” unemployed by the government, a rate of 9.6 percent. Unemployment is worse for African American workers of whom 16.1 percent are unemployed. Another 9.5 million people who are working only part-time while they are seeking full-time work but have had their hours cut back or are so far only able to find work part-time are not counted in the official unemployment numbers. Also, an additional 2.5 million are reported unemployed but not counted because they are classified as discouraged workers in part because they have been out of work for more than 12 months. Source: US Department of Labor Bureau of Labor Statistics October 2010 report.
The median household income for whites in the US is $51,861; for Asians it is $65,469; for African Americans it is $32,584; for Latinos it is $38,039. Source: US Census Bureau.
Fifty million people in the US lack health insurance. Source: US Census Bureau.
Women in the US have a greater lifetime risk of dying from pregnancy-related conditions than women in 40 other countries. African American US women are nearly 4 times more likely to die of pregnancy-related complications than white women. Source: Amnesty International Maternal Health Care Crisis in the USA.
About 3.5 million people, about one-third of which are children, are homeless at some point in the year in the US. Source: National Law Center on Homelessness and Poverty.
Outside Atlanta, 33,000 people showed up to seek applications for low cost subsidized housing in August 2010. When Detroit offered emergency utility and housing assistance to help people facing evictions, more than 50,000 people showed up for the 3,000 vouchers. Source: News reports.
There are 49 million people in the US who live in households which eat only because they receive food stamps, visit food pantries or soup kitchens for help. Sixteen million are so poor they have skipped meals or foregone food at some point in the last year. This is the highest level since statistics have been kept. Source: US Department of Agriculture, Economic Research Service.
Middle Class Going Backward: Facts
One or two generations ago it was possible for a middle class family to live on one income. Now it takes two incomes to try to enjoy the same quality of life. Wages have not kept up with inflation; adjusted for inflation they have lost ground over the past ten years. The cost of housing, education and health care have all increased at a much higher rate than wages and salaries. In 1967, the middle 60 percent of households received over 52% of all income. In 1998, it was down to 47%. The share going to the poor has also fallen, with the top 20% seeing their share rise. Mark Trumball, “Obama’s challenge: reversing a decade of middle-class decline,” Christian Science Monitor, January 25, 2010. http://www.csmonitor.com/USA/2010/0125/Obama-s-challenge-reversing-a-decade-of-middle-class-decline
A record 2.8 million homes received a foreclosure notice in 2009, higher than both 2008 and 2007. In 2010, the rate is expected to be rise to 3 million homes. Sources: Reuters and RealtyTrac.
Eleven million homeowners (about one in four homeowners) in the US are “under water” or owe more on their mortgages than their house is worth. Source: “Home truths,” The Economist, October 23, 2010.
For the first time since the 1940s, the real incomes of middle-class families are lower at the end of the business cycle of the 2000s than they were at the beginning. Despite the fact that the American workforce is working harder and smarter than ever, they are sharing less and less in the benefits they are creating. This is true for white families but even truer for African American families whose gains in the 1990s have mostly been eliminated since then. Source: Jared Bernstein and Heidi Shierholz, State of Working America. http://www.stateofworkingamerica.org/swa08_00_execsum.pdf
Rich Getting Richer: Facts
The wealth of the richest 400 people in the US grew by 8% in the last year to $1.37 trillion. Source: Forbes 400: The super-rich get richer, September 22, 2010, Money.com
The top Hedge Fund Manager of 2009, David Tepper, “earned” $4 billion last year. The rest of the top ten earned: $3.3 billion, $2.5 billion, $2.3 billion, $1.4 billion, $1.3 billion (tie for 6th and 7th place), $900 million (tie for 8th and 9th place), and in last place out of the top ten, $825 million. Source: Business Insider. “Meet the top 10 earning hedge fund managers of 2009.” http://www.businessinsider.com/meet-the-top-10-earning-hedge-fund-managers-of-2009-2010-4
Income disparity in the US is now as bad as it was right before the Great Depression at the end of the 1920s. From 1979 to 2006, the richest 1% more than doubled their share of the total US income, from 10% to 23%. The richest 1% have an average annual income of more than $1.3 million. For the last 25 years, over 90% of the total growth in income in the US went to the top 10% earners – leaving 9% of all income to be shared by the bottom 90%. Source: Jared Bernstein and Heidi Shierholz, State of Working America. http://www.stateofworkingamerica.org/tabfig/2008/01/19.pdf
In 1973, the average US CEO was paid $27 for every dollar paid to a typical worker; by 2007 that ratio had grown to $275 to $1. Source: Jared Bernstein and Heidi Shierholz, State of Working America. http://www.stateofworkingamerica.org/tabfig/2008/03/SWA08_Wages_Figure.3AE.pdf
Since 1992, the average tax rate on the richest 400 taxpayers in the US dropped from 26.8% to 16.62%. Source: US Internal Revenue Service. http://www.irs.gov/pub/irs-soi/07intop400.pdf
The US has the greatest inequality between rich and poor among all Western industrialized nations and it has been getting worse for 40 years. The World Factbook, published by the CIA, includes an international ranking of the inequality among families inside of each country, called the Gini Index. The US ranking of 45 in 2007 is the same as Argentina, Cameroon, and Cote d’Ivorie. The highest inequality can be found in countries like Namibia, South Africa, Haiti and Guatemala. The US ranking of 45 compares poorly to Japan (38), India (36), New Zealand, UK (34), Greece (33), Spain (32), Canada (32), France (32), South Korea (31), Netherlands (30), Ireland (30), Australia (30), Germany (27), Norway (25), and Sweden (23). Source: CIA The World Factbook: https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html
Rich people live an average of about five years longer than poor people in the US. Naturally, gross inequality has consequences in terms of health, exposure to unhealthy working conditions, nutrition and lifestyle. In 1980, the most well off in the US had a life expectancy of 2.8 years over the least well-off. As the inequality gap widens, so does the life expectancy gap. In 1990, the gap was a little less than 4 years. In 2000, the least well-off could expect to live to age of 74.7 while the most well off had a life expectancy of 79.2 years. Source: Elise Gould, “Growing disparities in life expectancy,” Economic Policy Institute. http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20080716/
These are extremely troubling facts for anyone concerned about economic fairness, equality of opportunity, and justice.
Thomas Jefferson once observed that the systematic restructuring of society to benefit the rich over the poor and middle class is a natural appetite of the rich. “Experience declares that man is the only animal which devours his own kind, for I can apply no milder term to…the general prey of the rich on the poor.” But Jefferson also knew that justice can only be delayed so long when he said, “I tremble for my country when I reflect that God is just, that his justice cannot sleep forever.”
The rich talk about the rise of socialism to divert attention from the fact that they are devouring the basics of the poor and everyone else. Many of those crying socialism the loudest are doing it to enrich or empower themselves. They are right about one thing – there is a class war going on in the US. The rich are winning their class war, and it is time for everyone else to fight back for economic justice.
In all, about 17 million people in this country have completed college only to end up working jobs that require a skill level below that of a bachelors degree, according to the Bureau of Labor Statistics.
For politicians, boosting college graduation rates has always been a fairly uncontroversial goal to support. The Obama administration is doing so, rather relentlessly, through a number of initiatives designed to better prepare students for college and support them once they get there.
The assumptions are 1) that students who graduate from college have increased potential for economic mobility, and 2) the more students who earn college degrees, the more our economy will grow. But are either of those assumptions still true, in light of our new economic reality? Or are we wasting money investing in a sector that’s producing thousands of janitors with Ph.D.s?
One thing’s for sure: our higher education system has produced thousands of janitors with Ph.D.s or other professional degrees — about 5,057 of them, in fact, plus more than 8,000 waiters and waitresses. When you look at all college degrees, there are more than 317,000 over-educated Americans serving us our meals, more than 80,000 shaking our martinis and some 62,000 mowing our lawns.
In all, about 17 million people in this country have completed college only to end up working jobs that require a skill level below that of a bachelors degree, according to the Bureau of Labor Statistics.
You can be sure that many college-educated McDonald’s workers have career goals that they’ve been unable to achieve because of the nation’s crippling 22.5% underemployment rate; some of them will, theoretically (and hopefully), move into their intended career one day. But what of the millions of people who don’t switch over to careers that require a degree, either by choice or because of circumstance?
Richard Vedder of the Chronicle of Higher Education argues that this is one sign the U.S. has over-invested in higher education. He points to a new National Bureau of Economic Research report written by three acclaimed economists, which concludes, “In general, marginal and average returns to college are not the same.” In layman’s terms, that means that even if our investment in higher education is yielding a decent return on average, efforts to build on that investment might yield a less-good return. Or, even more simply put, there is a point of diminishing returns in higher education. And, according to these indicators at least, we appear to have reached it.
Over at the blog for the Center for College Affordability and Productivity, Christopher Matgouranis makes a similar argument, noting that the 4.4% unemployment rate for college grads may be better than the abysmal national rate (9.6%), but still suggests that a bachelor’s degree is no longer “a guaranteed path to a cushy middle class life-style.”
When considering public policy aimed at increasing the percentage of college graduates in the labor force, it must be an imperative to consider what these people will be doing after graduation. Is it socially responsible for us to encourage individuals to enroll in college and accumulate massive debt when the benefits are becoming increasingly uncertain? I think not. An increase in the overall percentage of college graduates will just see that more will end up underemployed (or unemployed altogether).
Encouraging students to go to college regardless of their skill level or inclination and with dwindling potential for economic benefit can lead to “credential inflation” — the phenomenon whereby college degrees are “watered down” and employers start requiring a degree for jobs that do not warrant one. (Despite what some employment ads suggest, you probably do not need a college degree to answer a phone, or to build cabinets.)
An obvious solution is to the invest a greater percentage of our resources in vocational and other professional certification programs, which would cost less for both students and the government and could produce people who are more appropriately trained for the careers they want to and/or will pursue.
On the other hand, it could be that there’s nothing wrong with encouraging young Americans to pursue degrees as long as we can ensure that they’ll receive a high-quality education. After all, students go to college for more than just career training — they also go to expand their minds, find their place in the world, meet new people and, quite often, to grow up a bit before entering the workforce. And there’s nothing wrong with that, per se.
But either way, the blind assumption that dumping more money into the higher education sector will lead to certain economic gains is naïve, if not irresponsible, and requires a deeper look.