There’s Free and There’s Free

There’s an article over at the Washington Post on an interesting project that could reduce the cost of higher education considerably:

President Obama is proposing to make community college tuition-free for qualified students nationwide. But what if anyone could take the first year of college free online?

A New York philanthropist announced a $1 million donation Wednesday that aims to make that possible through an online venture overseen by the Massachusetts Institute of Technology and Harvard University.

Steven B. Klinsky’s idea is for students to take foundational courses through the online venture edX that would prepare them for College Board examinations in various subjects. Those who pass enough Advanced Placement or College-Level Examination Program tests conceivably would be able to enter college as sophomores. That would cut the price of a bachelor’s degree by a quarter.

That’s closely related to something I’ve proposed here from time to time. The main difference is that I proposed a cooperative venture on the part of several states which would use funds presently being used to support non-performing brick and mortar colleges.

Nick Anderson, the author of the article, editorializes a bit:

Klinsky’s vision — “freshman year for free” — echoes in spirit what Obama proposed last week. The president wants Congress to approve $60 billion over the next decade for a partnership with states that would eliminate community college tuition for “responsible students” who get adequate grades and make academic progress.

I think the vision being offered is significantly different from President Obama’s proposal in a number of ways. The most obvious, of course, is that it’s a private initiative and wouldn’t crowd out or compete with other federal government spending priorities. Another way is that Mr. Klinsky is proposing something that is free while President Obama is proposing something that is “free”, i.e. it would not increase the student’s spending or indebtedness but it would increase the federal governmenet and state governments’ spending on higher education.

Still, I’m glad to see creative approaches being offered to the problem of the expense of higher education whether it’s being offered by a private individual or the president. Lord, send us a cure! The disease is already here.

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What Then?

Newt Gingrich has an op-ed in the Wall Street Journal in which he proposes that Congress should conduct a series of hearings. Here they are:

1. The current strength and growth rate of radical Islamists around the world. We need a detailed sense of the total picture. The scale of the threat from this nihilistic global movement, I suspect, will be stunning.

2. The country-by-country danger. Americans simply don’t realize how dire the situation is in specific areas. Boko Haram has killed thousands more people in Nigeria alone than Ebola has in all of Africa, according to data compiled by the Council on Foreign Relations and the Centers for Disease Control. One or more hearings should focus on each center of radical Islamism, including Somalia, Yemen, Syria, Afghanistan and Pakistan.

3. The role of the Muslim Brotherhood. The group is vital to the global radical Islamist movement, yet so little understood by Washington elites that it deserves its own set of hearings.

4. The primary sources of radical Islamist funding, especially Saudi Arabia, Qatar and Iran.

5. The Arab countries—including Egypt, Jordan, Morocco, Tunisia and Algeria—that have successfully contained and minimized radical Islamists. We must learn how this was accomplished and what aspects should be replicated.

6. Radicalization in mosques and on social media. How are young Muslims being drawn into terrorism? What can be done to counter a seductive message that has reached deep into Europe and the U.S. and inspired jihadists by the thousands to travel to the Middle East for terrorist training that can be exported back home?

7. The Islamist cyberthreat. The hacking of the U.S. Central Command’s social-media accounts this week apparently didn’t inflict serious damage, but the episode was evidence of a new front in the fight against terrorism.

and then conduct another hearing to review alternatives for “achieving victory”. He might think about a hearing to define victory first.

My objection to this process is the problem that has dogged our campaign against terrorism for the last fourteen years and can be summed up in two words: what then? You end the Taliban government in Afghanistan. What then? You bring down Saddam Hussein. What then? You bring down Moammar Qaddafi. What then? We removed the Taliban, Saddam Hussein, and Moammar Qaddafi. If anything there is more violent radical Islamist terrorism than there was fourteen years ago. The tactical moves we’ve engaged in have not resulted in strategic victory and I see little evidence that more of the same will have better results.

You kill one or one hundred or one thousand or one million violent radical Islamist terrorists. And that’s assuming you can distinguish among violent radical Islamist terrorists, non-violent radical Islamists, and garden variety Islamists (which probably includes a very high proportion of Muslims). What then?

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If This Is Assault…

I’ll have some. JPMorgan Chase’s stock is very near the peak it reached 15 years ago and a lot higher than it was six years ago. We could all stand a little persecution like that. Some people just don’t appreciate the benefits they’ve been given.

Hat tip: memeorandum

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Autres pays, autres mœurs

Here’s a good example of my point that the idea of what constitutes inalienable rights is not universal and may not even be shared among countries that are closely related. The French have arrested a comedian on the charge of being an apologist for terrorism:

Notorious French comedian Dieudonné M’bala M’bala has been arrested for being an “apologist for terrorism” after suggesting on Facebook that he sympathised with one of the Paris gunmen, a judicial source has said.

Prosecutors had opened the case against him on Monday after he wrote “Tonight, as far as I’m concerned, I feel like Charlie Coulibaly” – mixing the slogan “Je suis Charlie”, used in tribute to the journalists killed at magazine Charlie Hebdo, with a reference to gunman Amédy Coulibaly. Dieudonné was arrested on Wednesday.

Here in the States Dieudonné’s remarks would have made a lot of people angry and you might even have been able to get a warrant for his arrest in Podunk, Mississippi but it would have been thrown out in court as a violation of the First Amendment.

Hat tip: memeorandum

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Creeds and Bloodlines

Walter Russell Mead adds this to the discussion of Europe’s problems:

That’s unfortunate, not least because Europe really does have immigration and assimilation problems—as the immigrants, who often face discrimination, experience alienation, and are shut out from many of the guarantees of European life, will tell you themselves. (See this excellent Patrick Weil piece from the TAI archives on life in the banlieues, for example.) Europe writ large has not found a way to offer its immigrant populations the same opportunities given to “natives” (a distinction that often stretches to the second or third generation), but at the same time it has been largely unwilling to decrease the volume of immigrants or discuss new measures for integrating them.

America has some answers to offer from our experience as the “melting pot,” but they’re not as simple as we often like to tell ourselves. As Reihan Salam recently pointed out, our assimilation of the massive “Second Wave” in the late 19th and early 20th centuries (one of the most successful such endeavors in history) involved a heated national conversation, decades of assimilation efforts that bordered on indoctrination, and the effective banning of immigration for two generations. But the end result was something that pretty much everyone could live with: the acceptance of the once heavily contested idea that you could be both ethnically Irish and patriotically American, or an observant Jew and patriotically American, or (as they will tell you in Dearborn, Michigan) Muslim-American.

The countries of Europe’s problems may be even deeper depending on the degree to which their systems are actuarially dependent on not treating their immigrants (unto the third generation) the way they treat “natives”. Additionally, as George Friedman pointed out, echoing Chesterton’s observation that America is not a country founded on a bloodline but on a creed.

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Computer Hardware As Ephemera

As you are presumably aware Google’s Android operating system is the dominant smartphone and tablet operating system. iPhones and iPads get all of the press (they use Apple’s iOS operating system) but Android has about 90% of the market. If you don’t know what an operating system is, a quick summary is that it’s the computer program that makes your smartphone something other than an inert hunk of chips and circuit boards. It’s not the computer program that you as a user interact with but it’s the program that makes the connection between the programs you do interact with and the hardware itself. This post at Ars Technica highlights an important point:

Just as Google is coming under fire for publicizing a Windows bug two days before Microsoft released a fix, the company is now in the crosshairs because of its approach towards updating its own software.

Not for the first time, a bug has been found in the WebView component of Android 4.3 and below. This is the embeddable browser control powered by a version of the WebKit rendering engine used in Android apps.

Android 4.4 and 5.0, which use Blink rather than WebKit for their WebView, are unaffected. But by Google’s own numbers, some 60 percent of Android users are using 4.3 or below. As such, this is a widespread, high-impact bug. The normal procedure would be to report the bug to Google, and for Google to develop a fix and publish it as part of Android Open Source Project release.

The problem is that Google has no plans to fix the old versions. The first unaffected version was released waayyy back in September 2013.

I think this reveals an important conceptual issue. You shouldn’t become dependent on a smartphone or tablet you aren’t planning on replacing every year or so. They aren’t durables. They’re ephemera. They’re consumables.

For most of us that places a limit on how much we should be willing to pay for a smartphone or tablet and, again, for most of us that’s a heckuva lot less than $500.

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What Is To Be Done?

I have been engaged in a backchannel discussion with my fellow members of the Watcher’s Council on the appropriate response to the Charlie Hebdo murders. That was the topic of this week’s Council forum. Most of the members of the Council favor a much more, er, kinetic response than I do. As I’ve said before I think that France’s issues are different from ours and no generalized response is productive.

A good point of departure on this discussion might be George Friedman’s recent post at RealClearWorld. It’s lengthy and hard to summarize but this

The United States is different in this sense. It is an artificial regime, not a natural one. It was invented by our founders on certain principles and is open to anyone who embraces those principles. Europe’s nationalism is romantic, naturalistic. It depends on bonds that stretch back through time and cannot be easily broken. But the idea of shared principles other than their own is offensive to the religious everywhere, and at this moment in history, this aversion is most commonly present among Muslims. This is a truth that must be faced.

is very much the point I’ve been making.

Mr. Friedman’s post is full of interesting observations. For example:

The current crisis has its origins in the collapse of European hegemony over North Africa after World War II and the Europeans’ need for cheap labor. As a result of the way in which they ended their imperial relations, they were bound to allow the migration of Muslims into Europe, and the permeable borders of the European Union enabled them to settle where they chose. The Muslims, for their part, did not come to join in a cultural transformation. They came for work, and money, and for the simplest reasons. The Europeans’ appetite for cheap labor and the Muslims’ appetite for work combined to generate a massive movement of populations.

which is as good a summary of how France, Germany, Sweden, and other European countries arrived at the point they’re facing now.

So, what is to be done? Please persuade me.

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The Libya Folly

The editors of the Washington Post woke up this morning and noticed how bad the situation in Libya has become:

WHEN LIBYA’S attempt to construct a new, democratic political system faltered after 2012, the Obama administration and NATO allies who had intervened to support the overthrow of dictator Moammar Gaddafi could still rationalize that they had headed off the mass bloodshed and civil war that the Gaddafi regime threatened and that later overtook Syria. The respite, however, proved to be temporary. As 2015 begins, Libya is well on its way to becoming the Middle East’s second war zone — with the same side effects of empowering radical jihadists and destabilizing neighboring countries.

The sprawling but sparsely populated country of 7 million is now split between two governments, parliaments and armies, one based in the eastern city of Tobruk and the other in the capital, Tripoli. While Syria’s war is fought along the Arab world’s Sunni-Shiite divide, in Libya the contest pits the region’s secular Sunnis against Islamists (along with minority Berbers). Since that same divide dominates the politics of Egypt, Tunisia, the Palestinian territories and much of the rest of the Maghreb, outside powers have predictably picked sides: Egypt and the United Arab Emirates back the secular forces in the east, while Turkey, Qatar and Sudan support the Islamist Libya Dawn in the west.

May I point out that this is exactly what I predicted? At the time I said that we had intervened in a civil war between what amounted to two old Ottoman provinces on the side of one of the provinces.

If you are a knee-jerk supporter of every move that President Obama makes, you think that Libya is a splendid victory and, since it has already achieved its objective (whatever that was), you have lost interest in it. If you are a knee-jerk opponent of the president, your primary interest, apparently, continues to be the events that happened in Benghazi when our embassy was attacked and sacked and our ambassador murdered.

Neither of those interest me. IMO our intervention in Libya has resulted in a tactical victory and a strategic defeat. It has also had the effect of driving a third of the Libyan population from their homes. Italy is already sheltering no fewer than 200,000 Libyans and 1,000 more try to reach its shores every day. The Italians are painfully aware of the magnitude of our defeat there.

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What Will President Obama’s Community College Plan Do?

Megan McArdle outlines some of the possible outcomes of President Obama’s proposal to subsidize community college tuition:

  1. Offer a subsidy to middle-class kids who don’t really need the money?
  2. Encourage middle-class families to transfer their kids to community college for the first two years of school, and thus help to moderate college costs?
  3. Encourage financially constrained students who might not have gone to college to enter the system en route to a degree?
  4. Encourage marginal students with a low chance of completing a career-enhancing degree to attend school, mostly wasting government money and their own time?

I can’t speculate as to which of those outcomes will take place or what combination of them will take place. However, there’s one outcome which the plan would definitely cause: community colleges would receive more money than they might otherwise. I think another reasonable follow-on effect is that it would tend to boost the wages of community college faculty and staff.

If the price of community college tuition rises at the same rate or more slowly than the subsidy, it will also reduce indebtedness. Otherwise, it might even increase indebtedness. That’s not so far-fetched. Our steadily increasing subsidies of higher education have been accompanied by increased student indebtedness for the better part of the last forty years.

If you think that’s something worth spending tax dollars on, you’ll support the program. Otherwise you might think there are better things it could be used for. Apprenticeships or wage subsidy programs, for example.

To me it sounds like another example of the cat and rat farm.

Update

It just occurred to me that one of the unforeseen consequences of the plan could be increased public pension indebtedness on the part of the states.

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State and Local Governments Slammed by Low Inflation With Rising Costs

If that caption confuses you, keep in mind that price increases and inflation aren’t the same thing. “Inflation” generally refers to a sustained increase in the general level of the prices of goods. Basically, it just means that your money is buying less of everything. Price increases may or may not reflect sustained increase in the general level of prices. However, when the things that you buy increase in price it sure feels like inflation to you. One of the problems that state and local governments have is the very low rate of inflation and in this post I’ll try to explain why.

Over at the Wall Street Journal Steve Malanga has a jeremiad of the problems that public pensions are causing for state and local governments:

Decades of rising retirement benefits for workers—some of which politicians awarded to employees without setting aside adequate funding—and the 2008 financial meltdown have left American cities and states with somewhere between $1.5 trillion and $4 trillion in retirement debt. Even with the stock market’s rebound, the assets of America’s biggest government pension funds are only 1% above their peak in 2007, according to a recent study by Governing magazine.

Under growing pressure to erase some of this debt, governments have increased pension contributions to about $100 billion in 2014 from $63 billion in 2007, according to the Census Bureau’s quarterly survey of state and local pension systems. But the tab keeps growing, and now it is forcing taxes higher in many places.

I can’t speak to the situation in California, Pennsylvania, or West Virginia but I’m painfully aware of Illinois’s problems which Mr. Malanga highlights here:

In April two-dozen Illinois mayors gathered to urge the state to reform police and fire pensions, which are on average 55% funded. The effort failed, and municipalities subsequently moved to raise taxes and fees. The city of Peoria’s budget illustrates the squeeze. In the early 1990s it spent 18% of the property-tax money it collected on pensions. This year it will devote 57% of its property tax to pension costs. Reluctant to raise the property levy any more, last year the city increased fees and charges to residents by 8%, or $1.2 million, for such items as garbage collection and sewer services.

Taxpayers in Chicago saw the first of what promises to be a blizzard of new taxes. The city’s public-safety retirement plans are only about 35% funded, though pension costs already consume nearly half of Chicago’s property-tax collections. Strong opposition forced Mayor Rahm Emanuel to temporarily table a proposed a $250 million property-tax increase to help pay off pension debt. Instead, as a stopgap measure Chicago instituted a series of smaller tax and fee hikes, including a boost in cellphone taxes, to raise $62 million. But the city’s pension bill will double next year to more than $1 billion, so a massive property tax hike is still on the table.

Chicago residents also face an enormous state retirement bill. The Civic Committee of Chicago recently estimated that if the Illinois Supreme Court sustains a lower-court decision overturning 2013 pension reforms, Illinois taxpayers will pay $145 billion in higher state taxes over the next three decades.

To place Chicago’s problems in some perspective Chicago’s total revenues are somewhere in the vicinity of $3 billion. Given that a $1 billion increase is nothing to laugh about. Mayor Emanuel did not mention Chicago’s pension problems in his annual message to the city. It’s an election year and it’s not hard to guess the reasons for this omission.

What does all this have to do with inflation? Pensions are nothing more than deferred compensation. Rather than offering your employees a raise, you offer to pay them a pension after they’ve retired. If you expect your revenues to continue to grow, kicking the compensation can down the road is a prudent strategy. When your revenues are flat or decreasing, it’s not nearly as prudent.

State and local governments formed their policies during a multi-generation post-war period during which inflation was persistent and reliable. When inflation is running at 5%, expecting a return of 7% isn’t a bad bet and even 8% isn’t beyond the realm of possibility. When inflation is between zero and 1%, that’s a sucker’s bet but that’s where state and local governments find themselves.

Over the period of the last thirty years or so they’ve made promises in the full expectation that the conditions they saw when the promises were made would continue forever. That’s hasn’t been the case. It’s an entirely different world now than it was thirty years ago and state and local governments are scrambling to adapt.

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