Carpe Diem

Wednesday afternoon links

1. The proportion of U.S. student loan balances that are in delinquency (unpaid for 90 days or more) surpassed that of credit-card balances in Q3 for the first time ever, according to the Federal Reserve Bank of New York, via CNBC.

2.  It’s no surprise that college tuition has increased 1,120% since 1978 when the number of college administrators has increased by 60% from 1993 to 2009, 10 times the growth rate for tenured faculty, via the Business Week article “The Troubling Dean-to-Professor Ratio.”

3. Another Arthur Laffer moment: It’s also no surprise that almost two-thirds of the UK’s millionaires disappeared (left the country or found ways to reduce their taxable income) after the top tax rate went to 50% in 2009.  Also no surprise the higher tax rate led to lower, not higher, tax revenue by about $11 million.     

4. Update on the legal troubles of the Massachusetts hotel owner whose family hotel is being targeted by the government under a federal drug-forfeiture law: The trial ended in early November and owner Russell Caswell (and ancillary victim of the U.S. Drug War) testified that he has never been fined, cited, arrested or told he could be in trouble for any third-party drug activity at hotel. He’s optimistic about the outcome, especially because the judge said at trial that she had “serious concerns” about the government’s case and its interpretation of the law.

5. Wall Street Journal – “The U.S. housing market, which plunged the economy into recession five years ago and was a persistent drag on the recovery, is now a key economic driver at a time when other sectors are slowing. An improving housing market is buoying consumers’ spirits and giving the economy its biggest lift since the real-estate boom. Macroeconomic Advisers projects the economy will grow at a 1.4% annual rate in the fourth quarter, with housing contributing 0.4 percentage point. IHS Global Insight is projecting a 1% growth rate, with housing contributing 0.53 of a percentage point—the largest contribution since 2005 (see chart below).”

8 thoughts on “Wednesday afternoon links

  1. So a government subsidy that encourages people to borrow more than they can repay leads to large levels of defaults while inflating the price of the underlying asset class? I think I’ve seen this before somewhere. Wait. It will come to me.

  2. I guess Britain discovered a little thing called “incentives”. Unsurprisingly the ragtag remnants of Fabian Socialism still haven’t learned the lesson.

  3. Perry may wish to check out a New Yorker article a few months back, on the use of coerced informants, in drug cases.

    In many cases, law enforcement agencies tell a minor user (often someone who likes to smoke pot) that unless they act as informant, and help set up a drug bust, they could go to prison for a long time.

    These informants are, needless to say, are unskilled at protecting themselves when things go wrong, as might be expected when dealing with lots of money and illegal activity.

    Sometimes they end up dead.

    The War on Drugs, like the War on Poverty and the War on Terrorism, is not intended to be won, but intended to stuff the coffers of public agencies, their employees, the public pensions, and their lobbyists pockets for generations into the future.

    Good luck taxpayers.

  4. House Speaker John Boehner’s War on Taxes & Big Government (which is really containment) makes sense, because when taxes go up, then spending can go up, or at least remain high.

    The economy, unlike the last years of the 18-year bull market in the late ’90s, is too weak for higher taxes, particularly, in this unnecessary deep depression (where the economy underproduces by $1 trillion a year).

    A depression brought upon by maintaining, expanding, and increasing excessive regulations; a massive and inefficient two-year federal spending spree (where the federal government now spends $1 trillion a year more than in 2007); and tax cuts that were too small and too slow to jolt the economy into a virtuous cycle of consumption-employment.

    In this depression, states like California, raised their taxes, fees, fines, fares, tolls, etc., while maintaining, expanding, and increasing their own excessive regulations (so, California has the highest poverty rate, by far, along with over a 10% unemployment rate).

    • I wish you were right about Boehner waging war on high taxes and big government, but all I’ve seen from Republicans are proposals to slow the rate of growth. Perhaps you’ve seen something I missed?

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