1978 students working min wage were able to pay full yrs tuition at 4 yr public univ

[Spungo]

There is not a single thing Austrians have said, long-term, that has come true. Not a single fucking thing. They keep saying rates will skyrocket, gold will skyrocket...blah blah blah. Why? Because they can't see past their noses at exogenous variables. They just simply say X + Y = Z. However, there are a million other variables in the regression that they cannot get past.

It's why Gundlach runs circles around Austrian theories.

The Austrians said gold and oil would skyrocket after leaving the gold standard. Since 1970: gold is up 3700% (from $35 to 1300). Oil is up 3300% (from $3 to $98).
Austrian economist Marc Faber has averaged about 20% per year over his investing career, and he's consistently saying the exact opposite of what the keynesians on CNBC are saying.
Jim Rogers has a stellar track record as well, starting with nothing and accumulating hundreds of millions of dollars over his career.
Porter Stansberry's another Austrian with an excellent track record. All of his past newsletters are available online for anyone who wants to read them.

If the Keynesians have such a strong understanding of economics and credit cycles, why do they all have government jobs? Why don't we see any Keynesians making billions by speculating in the stock market? Why did Janet Yellen and Ben Bernanke both say they didn't see the 2008/2009 crisis coming, yet Austrians like Kyle Bass and Peter Schiff were making millions by shorting stocks, buying bonds, and buying gold? Why do we have videos from 2003 showing Ron Paul predicting a credit crisis down the road as a result of dropping interest rates to 1%?

Greece and Japan are the most recent examples of Keynesians being wrong while Austrians are proven right. Austrians said spending your way to bankruptcy causes bankruptcy. Keynesians disagreed and said that driving your economy into the ground creates "aggregate demand" which would improve the economy. Coming as a shock to absolutely nobody except the Keynesians, Greece went bankrupt after blowing billions on the olympics, and Japan's economy completely tanked after attempting Abenomics, which was probably the largest government stimulus plan in human history. Japan's stimulus plan was so large that it would be enough money to send every single Japanese person on a 2 week vacation pretty much anywhere in the world. The result? Absolute disaster. Japan's misery index is at a 33 year high, the number of people on welfare is at an all time high, there's no demand at all for Japanese bonds. There have been bond issuances with zero bids other than the central bank. The Austrians said that destroying your currency would either cause interest rates to rise or nobody would buy the bonds. That's exactly what happened - nobody is buying Japanese bonds.

Of course, the Keynesians will say the same thing they always say - the stimulus wasn't big enough. If Greece build an olympic village that was 10x larger and 10x as expensive, it would create enough aggregate demand to boost the economy to repay the debt. They always say this. We should build ____ because it will create aggregate demand. We should build a football stadium, we should host the olympic games, we should build a hockey arena, we should build ____. Without exception, it fails every single time. You can't spend your way out of debt.
Of course, that never stops anyone from trying

 

[Atreus21]

"In 1978, a student who worked a minimum-wage summer job could afford to pay a year's full tuition at the 4-year public university of their choice."


Source Link

Everything was better in the old days, apparently -- including the chore of paying for college, at least according to a social media meme sent to us recently by a reader.

The meme -- created by OurTime.org, an advocacy group for young Americans -- said, "In 1978, a student who worked a minimum-wage summer job could afford to pay a year's full tuition at the 4-year public university of their choice."

Really? We figured this was worth a look.

First, the minimum wage. Starting on Jan. 1, 1978, the minimum wage was $2.65. Someone working at the minimum wage for 13 weeks, and 40 hours per week, in the summer of 1978 would have ended up with $1,378 for their labors.

For the tuition they would have faced in the 1978-79 school year, we turned to figures from the National Center for Education Statistics, the federal government’s repository of education data.

The cost of tuition and fees (in that year’s dollars, not adjusted for inflation) was $688 for in-state residents attending a four-year, public university.

So the meme’s claim is correct except for a few caveats -- two minor and one more significant:

• The cost of tuition and fees plus room and board was significantly higher that year -- $2,145 -- but the meme was careful to cite "tuition" only, so we’ll ignore the impact of room and board.

• The tuition-and-fees figure we used is a national average, so some states may have had in-state tuition rates out of reach of minimum wage workers.

• The meme’s only notable failing has to do with overly broad wording -- specifically its use of the phrase "of their choice." The data we used refers to in-state tuition, meaning that the student would have access to this sweet tuition rate only at their home-state university. That’s not the same thing as "of their choice."

Our ruling

The meme said that "in 1978, a student who worked a minimum-wage summer job could afford to pay a year's full tuition at the 4-year public university of their choice."

If you use the national average the figure is correct. The only problem is the part about a university "of their choice." The data is correct for in-state tuition -- not for any university in the country, where out-of-state rates may well have kicked up the tuition amount beyond a summer’s minimum-wage haul.

On balance, we rate the claim Mostly True.


----------------------------------------------

....and they could afford their rent, and transportation and all without Government assistance. All the more reason we need to bring the Federal Min. Wage up to par and have it set to increase along with inflation.

Possibly because in 1978 we didn't have ubiquitous student loans inflating tuition prices.

 

[JMapleton]

Don't blame the wages, blame the out of control spending of universities who are intent on building more and more luxurious campuses.

 

[LegendKiller]

The Austrians said gold and oil would skyrocket after leaving the gold standard. Since 1970: gold is up 3700% (from $35 to 1300). Oil is up 3300% (from $3 to $98).
Austrian economist Marc Faber has averaged about 20% per year over his investing career, and he's consistently saying the exact opposite of what the keynesians on CNBC are saying.
Jim Rogers has a stellar track record as well, starting with nothing and accumulating hundreds of millions of dollars over his career.
Porter Stansberry's another Austrian with an excellent track record. All of his past newsletters are available online for anyone who wants to read them.

If the Keynesians have such a strong understanding of economics and credit cycles, why do they all have government jobs? Why don't we see any Keynesians making billions by speculating in the stock market? Why did Janet Yellen and Ben Bernanke both say they didn't see the 2008/2009 crisis coming, yet Austrians like Kyle Bass and Peter Schiff were making millions by shorting stocks, buying bonds, and buying gold? Why do we have videos from 2003 showing Ron Paul predicting a credit crisis down the road as a result of dropping interest rates to 1%?

Greece and Japan are the most recent examples of Keynesians being wrong while Austrians are proven right. Austrians said spending your way to bankruptcy causes bankruptcy. Keynesians disagreed and said that driving your economy into the ground creates "aggregate demand" which would improve the economy. Coming as a shock to absolutely nobody except the Keynesians, Greece went bankrupt after blowing billions on the olympics, and Japan's economy completely tanked after attempting Abenomics, which was probably the largest government stimulus plan in human history. Japan's stimulus plan was so large that it would be enough money to send every single Japanese person on a 2 week vacation pretty much anywhere in the world. The result? Absolute disaster. Japan's misery index is at a 33 year high, the number of people on welfare is at an all time high, there's no demand at all for Japanese bonds. There have been bond issuances with zero bids other than the central bank. The Austrians said that destroying your currency would either cause interest rates to rise or nobody would buy the bonds. That's exactly what happened - nobody is buying Japanese bonds.

Of course, the Keynesians will say the same thing they always say - the stimulus wasn't big enough. If Greece build an olympic village that was 10x larger and 10x as expensive, it would create enough aggregate demand to boost the economy to repay the debt. They always say this. We should build ____ because it will create aggregate demand. We should build a football stadium, we should host the olympic games, we should build a hockey arena, we should build ____. Without exception, it fails every single time. You can't spend your way out of debt.
Of course, that never stops anyone from trying

I was referring more to the near-term where Schiff and others have made these ridiculous statements.


Do you really think a rare item, which is running out of ability to be mined or extracted, that is naturally deflationary in that situation, is a great measurement of how it has done in the last 40 years? Furthermore, your returns are paltry compared to the S&P500 returns with dividends reinvested. In fact, it beats both gold and oil by a factor of 3. So suck a big fucking fatass egg on that one.

Schiff? The guy is a complete fucking loser. Calling housing in 2005, wow, I was doing that in 2005 and I made just as much money on it as he did. And guess what? He had millions to make it and still DIDN'T DO ONE FUCKING THING. Yet people like Paulson, and others, shorted the fuck out of it and made hundreds of millions, if not billions, yet Schiff is revered. He's such a fucking loser he lost the Republican primary to Linda McMahon. Linda. Fucking. McMahon. Do you even understand how big of a fucking loser you have to be to lose to Linda Fucking McMahon? I lived in CT at the time, you had to be a loser of epic proportions. If you can't do anything better, or at least get people to believe you can, in a place like CT, which loves investors (Greenwich, anybody?), then you are considered a joke.

And Rogers? LOL - run to Asia/China and say that their centrally planned government is *so* much better than ours, yet bemoan central planning. To claim that he was some Austrian visionary is laughable. He rode the largest manipulated market in history to the top, on the backs of the US taxpayers, as China artificially pegged their currency to create a trade/labor arbitrage. Wow, he was a fucking Austrian genius on that one! He is a whore, not a proponent of Austrian economics.

What is Marc Fabers net worth? Ohh wait, it's estimated to maybe be a few tens of millions. What a massively successful investor there. Austrian economics is such a road to fortune!

Ron Paul has been predicting everything for the past 30 years, so fucking what if he got one thing right? How many things has he gotten wrong?

 

[ivwshane]

Possibly because in 1978 we didn't have ubiquitous student loans inflating tuition prices.

Before Reagan (in CA) public schools gave private schools a run for their money, competition is what kept prices down. We then stopped investing in public (ok not stopped but reduced) education and private schools only had each other to compete with. How did they compete? It seems to me they competed via sports, facilities, and who could charge the most.

We now have a relatively new player in the game, online schools. Costs came down but then the online schools started merging and buying up smaller accredited schools and prices went back up.

We need more public universities to counter rising prices. In a perfect world the consumer would hold the power and they would choose cheaper but more effective schools to go to and schools would compete against each other for new students in ways that mattered to the students. However in the real world that doesn't happen, in the real world, the equalizer is government. I've got plenty of history that backs me up on that.

 

[soccerballtux]

I challenge you to find a high school student today, willing to work.

they understand, not the value of a dollar, but of an hour of freedom

 

[soccerballtux]

Really? This is the problem that Libertopians and anti-FRB people have, they think the money multiplier is true. It isn't. If you take all forms of money and applied the money multiplier you would get a much larger actual reserve balance, but you don't. It's because money creation isn't at the banks, it is at the FRB. How? Because banks don't have the same function they did before, most assets are now funded through the hard money investors. Even if you took how much in deposits at JPM and apply the money multiplier, you'd see a far different picture for balance sheet size than you actually see. This is where you are logically wrong.

Where is a car loan funded? Not really at the banks, they are mostly funded in the Securitization market. Where does that get its money? Not the banks, through mutual funds, pensions, and separately managed retirement accounts. That is *real* money, not deposit * reserves = money multiplier. I know because I see that market *every* day.

There are far more reasons for wages not keeping up than rates or money creation.

There is not a single thing Austrians have said, long-term, that has come true. Not a single fucking thing. They keep saying rates will skyrocket, gold will skyrocket...blah blah blah. Why? Because they can't see past their noses at exogenous variables. They just simply say X + Y = Z. However, there are a million other variables in the regression that they cannot get past.

It's why Gundlach runs circles around Austrian theories.

the money multiplier is what, 2 or 3? When it could be, 12 or whatever.

Tell me more about the reasons you think wages not keeping up

 

[bryanl]

Guys like Krugman have been blasted by bankers because they keep saying banks don't matter, and that banks don't create money. This is factually wrong.

I seriously doubt that any economist, especially one like Krugman, would make such a statement.

Loans expand the money supply. Expanding the money supply without increasing economic output leads to inflation. This is why tuition continually rises as interest rates drop and federal loans continually expand. This is why housing near universities is always very expensive. The value of money drops significantly when the supply of it is very high. If you go to a place like rural Mississippi, money is very valuable because there's much less of it.

And can you guess why? Peak interest rate = early 1980s. Interest rates have been falling since then, and just as the Austrians said would happen, the cost of everything has exploded while wages have remained flat.

Interest rates peaked in the early 1980s because central bankers made money scarce to fight inflation. Austrian economists had no uniquely correct insight into that.

 

[shortylickens]

Why teach military people two years of electronics if they're only in for four years and modern electronics is so reliable it isn't worth equipping everybody with a full bench. If they can figure out which card has the problem the central shop can fix it. This is how the USPS does it.

I was an ET in the Navy.

We spent most of our time just swapping cards. Even those of us who had micro/mini PCB training rarely used it.

However, saying modern electronics are SO reliable isnt entirely correct. We spend plenty of time working with broken gear. And its supposedly military grade.

 

[Londo_Jowo]

Even those of us who had micro/mini PCB training rarely used it.

It sure came in handy replacing bad capacitors on Abit motherboards and swapping out frequency generators on normally locked aftermarket Xeon motherboards to allow overclocking.

 

[Spungo]

Do you really think a rare item, which is running out of ability to be mined or extracted, that is naturally deflationary in that situation, is a great measurement of how it has done in the last 40 years? Furthermore, your returns are paltry compared to the S&P500 returns with dividends reinvested. In fact, it beats both gold and oil by a factor of 3. So suck a big fucking fatass egg on that one.

This might be the most awesome conspiracy theory I have ever read. I thought printing money was the cause of inflation because that's what what school text books always said, usually next to a picture of a woman burning money in Germany, but you're saying inflation is actually caused by the S&P 500. I'm a huge fan of conspiracy theories, so I'm all ears on this one.

Schiff? The guy is a complete fucking loser. Calling housing in 2005, wow, I was doing that in 2005 and I made just as much money on it as he did. And guess what? He had millions to make it and still DIDN'T DO ONE FUCKING THING. Yet people like Paulson, and others, shorted the fuck out of it and made hundreds of millions, if not billions, yet Schiff is revered.

Schiff did make millions by shorting it. Back in 2006, he said he was shorting it:
November 2006
"Now let me tell you a little bit about the subprime market, which I'm actively involved in shorting right now..."

And Rogers? LOL - run to Asia/China and say that their centrally planned government is *so* much better than ours, yet bemoan central planning. To claim that he was some Austrian visionary is laughable. He rode the largest manipulated market in history to the top, on the backs of the US taxpayers, as China artificially pegged their currency to create a trade/labor arbitrage. Wow, he was a fucking Austrian genius on that one! He is a whore, not a proponent of Austrian economics.

So you're saying that him being able to front-run government-created bubbles demonstrates he does not understand how government-created bubbles work? I guess that makes sense. If I take my car to a mechanic and he fixes the engine, this demonstrates he doesn't understand engines. I know I have a good mechanic when he starts doing random things and he can't predict what will happen as a result of doing those things.

What's interesting about your statement is that it explains much of our current situation. If Rogers being able to predict the economic effects of government actions proves he doesn't understand economics, then it could logically follow that not being able to predict economic effects demonstrates a strong understanding of economics. That perfectly describes the federal reserve. Bernanke and Yellen both admit they didn't see the credit crisis coming. Their complete inability to front-run the market and make billions, according to you, proves their strong understanding of economics. Guys like Schiff or Jim Rogers or Kyle Bass making millions or even billions of dollars merely proves that they don't know anything about economics. I'm glad we could clear that up.

What is Marc Fabers net worth? Ohh wait, it's estimated to maybe be a few tens of millions. What a massively successful investor there. Austrian economics is such a road to fortune!

I love how you don't even know who Marc Faber is. If you took 5 seconds to google his name, you would know that he writes a newsletter. All of his stock picks are in writing. Of course you didn't know that, so you immediately start saying there's no way of knowing how good his stock picks are. Next you'll say there's no way of knowing how many stars are on a US flag. Sure, one could just look at the flag, but that's difficult. It's much easier to say there's no way of knowing how many stars are on a flag.

I seriously doubt that any economist, especially one like Krugman, would make such a statement.

Krugman has said lots of really weird things. He literally said the treasury could mint a 1 trillion dollar platinum coin and it would not cause inflation. The 50 billion dollar Zimbabwe note on my desk disagrees with Krugman's logic. Krugman also said the fed should replace the tech bubble with a housing bubble. We all know how well that turned out. Krugman also said that a theoretical invasion by aliens would be great for the economy, and he further clarifies his point by saying World War 2 ended the Great Depression. Rather than try to use numbers or logic to explain why Krugman is an idiot, I'll just use this picture:

According to Paul Krugman, that's what a thriving economy looks like. He actually said this. link

 

[LegendKiller]

This might be the most awesome conspiracy theory I have ever read. I thought printing money was the cause of inflation because that's what what school text books always said, usually next to a picture of a woman burning money in Germany, but you're saying inflation is actually caused by the S&P 500. I'm a huge fan of conspiracy theories, so I'm all ears on this one.

Except that textbooks are often out of date and very, very, topical. It doesn't take into account WHY hyperinflation in the Weimar happened. It just says it did because monetary inflation, yet forgets to even mention faith in the currency, or the usage of the currency, both are far more important than the actual amount of currency in the market. Does it mention that gold extraction is becoming increasingly scarce, thus, more costly, leading to higher prices? Nope - just monetary inflation. Does it mention that as India and China increase in wealth their demand for gold increases, leading to higher prices? Nope - just monetary inflation. What about oil? Does it mention China's insatiable appetite for additional oil? Nope - just monetary inflation. What about declining production in easier to extract wells, leading to more expensive wells and higher costs leading to higher per-barrel prices? Nope - just monetary inflation.

This is why your measurements and idiotic correlative ideas that 1 =1 is juvenile and veneer. You spew this bullshit everywhere, chewing somebody else's cud only to regurgitate it again and again to chew endlessly without feeding yourself new food. It's pathetic and only highlights you don't anything about economics. You don't even have a single thought on your own.

Schiff did make millions by shorting it. Back in 2006, he said he was shorting it:
November 2006
"Now let me tell you a little bit about the subprime market, which I'm actively involved in shorting right now..."

Yes, because we can see the direct result of him shorting those stocks. He's still worth next to nothing compared to people who don't pimp gold. Linda McMahon spent almost his entire net worth personally funding her campaign. If he had purchased CDS written by AIG, or others, to short CDOs or RMBS he'd be worth hundreds of millions, if not billions, by now. And BTW, I was predicting, far ahead of 2006, that housing was going down, I just didn't have the money to take shorts.

So you're saying that him being able to front-run government-created bubbles demonstrates he does not understand how government-created bubbles work? I guess that makes sense. If I take my car to a mechanic and he fixes the engine, this demonstrates he doesn't understand engines. I know I have a good mechanic when he starts doing random things and he can't predict what will happen as a result of doing those things.

What's interesting about your statement is that it explains much of our current situation. If Rogers being able to predict the economic effects of government actions proves he doesn't understand economics, then it could logically follow that not being able to predict economic effects demonstrates a strong understanding of economics. That perfectly describes the federal reserve. Bernanke and Yellen both admit they didn't see the credit crisis coming. Their complete inability to front-run the market and make billions, according to you, proves their strong understanding of economics. Guys like Schiff or Jim Rogers or Kyle Bass making millions or even billions of dollars merely proves that they don't know anything about economics. I'm glad we could clear that up.

No, it just shows that they are self-interested and know that all systems suck and are more interested in profiting from it than changing it. Rodgers is more than willing to extoll the virtues of Asian economies and bash US ones, because the US is a propped up bubble, implying Asia isn't, yet they are. He is a whore, not a truth teller. And you love what he has to sell merely because it fits your whorish attitude also.

I love how you don't even know who Marc Faber is. If you took 5 seconds to google his name, you would know that he writes a newsletter. All of his stock picks are in writing. Of course you didn't know that, so you immediately start saying there's no way of knowing how good his stock picks are. Next you'll say there's no way of knowing how many stars are on a US flag. Sure, one could just look at the flag, but that's difficult. It's much easier to say there's no way of knowing how many stars are on a flag.

I know *exactly* who Marc Faber is. In fact, I personally met him at this event. I was a member of the NYSSA but also knew a lot of people in the Hartford chapter that invited me to the Hartford event.

http://www.cfasociety.org/hartford/Lists/Events Calendar/DispForm.aspx?ID=32

Have you ever met Marc Faber?

Didn't think so.

Krugman has said lots of really weird things. He literally said the treasury could mint a 1 trillion dollar platinum coin and it would not cause inflation. The 50 billion dollar Zimbabwe note on my desk disagrees with Krugman's logic. Krugman also said the fed should replace the tech bubble with a housing bubble. We all know how well that turned out. Krugman also said that a theoretical invasion by aliens would be great for the economy, and he further clarifies his point by saying World War 2 ended the Great Depression. Rather than try to use numbers or logic to explain why Krugman is an idiot, I'll just use this picture:

According to Paul Krugman, that's what a thriving economy looks like. He actually said this. link

Not sure why you think I think Krugman is a great guy.

 

[Spungo]

Except that textbooks are often out of date and very, very, topical. It doesn't take into account WHY hyperinflation in the Weimar happened. It just says it did because monetary inflation, yet forgets to even mention faith in the currency, or the usage of the currency, both are far more important than the actual amount of currency in the market.

Indeed. Inflation is a product of money supply and how quickly the money changes hands. Right now the US is not seeing insane inflation because money velocity is near all time lows. This worries a lot of people because it means there's potentially a tsunami of inflation if the money velocity increases, which is very likely to happen as China continues to create currency swap agreements to bypass the dollar. This is why big fund managers like Soros and Paulson are heavily invested in gold right now.

Does it mention that gold extraction is becoming increasingly scarce, thus, more costly, leading to higher prices? Nope - just monetary inflation. Does it mention that as India and China increase in wealth their demand for gold increases, leading to higher prices? Nope - just monetary inflation. What about oil? Does it mention China's insatiable appetite for additional oil? Nope - just monetary inflation. What about declining production in easier to extract wells, leading to more expensive wells and higher costs leading to higher per-barrel prices? Nope - just monetary inflation.

What about countries that are experiencing inflation right now? Why is Venezuela ravaged by inflation while our inflation is very mild in comparison? Why does the price of everything go up 20%-50% in Argentina per year, but not in America? You've stated that inflation is the result of people losing faith in their currency, which is absolutely true, but why would people lose faith in their currency? What would cause someone to panic sell something as fast as possible? The Austrian view is that it's because Venezuela and Argentina are money printing basket case countries. People instinctively act in their own self interest; they know their money is being destroyed every day, so they get rid of it as fast as they can, and this further accelerates the inflation. This isn't even a speculation. This is what people living during high inflation say. "I would exchange my (local currency) for (foreign currency) as soon as I got paid." The Keynesian view is that Venezuela exists in a parallel universe where things magically get expensive, possibly due to a conspiracy (Maduro literally believes this), and the rising prices have nothing to do with money printing

This is why your measurements and idiotic correlative ideas that 1 =1 is juvenile and veneer. You spew this bullshit everywhere, chewing somebody else's cud only to regurgitate it again and again to chew endlessly without feeding yourself new food. It's pathetic and only highlights you don't anything about economics. You don't even have a single thought on your own.

I think I'm starting to see a pattern here.
Jim Rogers --> you say he's retarded --> he made millions of dollars from investing
Marc Faber --> you say he's retarded --> his published investment record is excellent
Peter Schiff --> you say he's retarded --> he made millions betting against a credit bubble that central bankers and millions of Americans couldn't see even though it was extremely obvious
George Soros --> you likely think he's retarded because he's buying gold miners --> he's one of the richest men on the planet
Now you're saying I have zero understanding of economics, yet my investment portfolio since inception has crushed the S&P 500. Isn't it strange how that works? The people who know the least seem to get the best returns? I don't even care if I'm right about the economics. As long as I get rich while everybody else gets poor, I'll be happy.

Yes, because we can see the direct result of him shorting those stocks. He's still worth next to nothing compared to people who don't pimp gold.

So you're saying people should retire after they make X number of dollars. Bill Gates is rich enough, why does he gotta be all like "hey, you should buy Microsoft products." What a whore.

No, it just shows that they are self-interested and know that all systems suck and are more interested in profiting from it than changing it.

So you hate them because they are lazy? That's fair enough. In my younger days, I was enraged by our broken political system. Politicians steal our money then give it to their friends. Sometimes it's oil companies, sometimes it's banks, sometimes it's defense companies. Many people have tried to fix the system, and 100% of them have failed. Has anyone managed to get money out of politics? No. Money still dictates the winner of something like 90% of US elections. Has anyone successfully reduced the amount of corruption in our system? No. If anything, corruption is worse than ever. So far 0 bankers have gone to jail for the fraud related to selling junk mortgages with fake AAA bond ratings. It wasn't always like that. There was a bond scandal some time around the early 1990s, and some bankers actually went to jail for that. Knowing the system is this broken, you can do two things. 1 - You can dedicate your life to fixing the system and live of a life of constant disappointment, or 2 - you can try to profit from the corruption by front running the government. I watch a lot of videos by Cenk Uygur of The Young Turks, and I've seen probably every TV appearance Marc Faber has done in the past few years. Cenk seem to get more stressed every year because the system gets worse every year. Marc still looks like he doesn't have a care in the world. The government wants to blow trillions of dollars on endless wars? Whatever, buy shares of the companies that will benefit from this, avoid the countries being bombed, don't worry about it. The government is going to steal another trillion dollars of taxpayer money and give it to bankers? Sure, whatever, buy some bank stock and don't worry about it. Warren Buffet is 83 years old and he still looks great. Do you think a go-getter like Cenk Uygur has any hope of living 83 years? No way. The stress of wanting to fix things will get him long before that. If you want to live a long and stress free life, stop trying to fix things or help people. It's much easier to profit from the stupidity of people. If your aunt says she's rich because her shares of pets.com are worth 3 million dollars, just smile, give her a hug, and buy some long dated put options on whatever she owns.

Not sure why you think I think Krugman is a great guy.

I'm sorry if I lumped you in with Krugman, but most people I argue with are fans of Krugman. They say all of the usual things Krugman says - high crime and property damage are good for the economy because they increase demand for replacing broken windows and hiring private security, etc. All of the usual stuff related to demand-side economics. The people supporting demand side economics are often strong supporters of inflation because it increases demand without increasing supply. I'll never understand why increasing demand relative to supply is a good thing. I rarely find myself saying "Ya know, this computer is too cheap. I wish computers still cost $3,000."

 

[OverVolt]

..

 

[Exophase]

The way I see it, the university situation is closely coupled with the job situation.

Overall workplace productivity has gone up, so fewer hours per person are needed, particularly with less specialized/skilled positions. But the standard work week has stayed at 40 hours with overtime being desirable over hiring more people, so the demand for jobs has gone up. This leads to more people wanting bachelors or more advanced degrees to increase their chance of getting better jobs. Increased demand raises tuition, and fostered the creation of for-profit universities that are especially focused on raising tuition as much as possible and cannibalizing failed colleges. Eventual inability to pay loans on time or at all further drives up tuition (the old health care situation where the more people default on their hospital debt the more it drives up the cost for everyone who doesn't). Shrinking opportunities in the job market also encourages high school graduates to go to college even if it won't improve their chances of getting a job later on, just to delay having to look for work for a few years (or to go even further, delay having adult responsibilities all around)

Reform really has to start with how we approach employment resources.

 

[Thump553]

Been there, done that.

Where are the liberals arguing that prices of education are crazy today? Oh, yes, they are arguing for more deficit spending.

-John

Also been there, done that-including law school. Completed seven years of post high education and paid for it all myself-and no student loans.

And I'm a liberal. In fact most financially irresponsible people I've met in real life are so-called conservatives. Far too many people claim government interference, etc. as responsibility for their failings.

But that would not be possible today. Tuition has greatly exceeded the rate of inflation for decades now. In part because of declining state subsidies (to keep taxes down) and partly as an unintended consequence of the vast increase in the amount and availability of student loans that only require a signature to get.

And don't get me going on the recent trend of high priced, for profit online education-paid for with nonchargeable student loans-that is one of the worst scams pulled on the public in decades.

 

[LegendKiller]

Indeed. Inflation is a product of money supply and how quickly the money changes hands. Right now the US is not seeing insane inflation because money velocity is near all time lows. This worries a lot of people because it means there's potentially a tsunami of inflation if the money velocity increases, which is very likely to happen as China continues to create currency swap agreements to bypass the dollar. This is why big fund managers like Soros and Paulson are heavily invested in gold right now.

Velocity is unimportant at this point. It won't be important for a long time. There are a confluence of factors that make this so including demographic, economic, size of the overall economy, labor slack, available replacements, geopolitical...etc. It's why economists like Jan Hatzius won't even go there.

Paulson's gold bet has been an utter failure. how much does Soros have in gold?

You still haven't answered my question - have you ever met Marc Faber?

What about countries that are experiencing inflation right now? Why is Venezuela ravaged by inflation while our inflation is very mild in comparison? Why does the price of everything go up 20%-50% in Argentina per year, but not in America? You've stated that inflation is the result of people losing faith in their currency, which is absolutely true, but why would people lose faith in their currency? What would cause someone to panic sell something as fast as possible? The Austrian view is that it's because Venezuela and Argentina are money printing basket case countries. People instinctively act in their own self interest; they know their money is being destroyed every day, so they get rid of it as fast as they can, and this further accelerates the inflation. This isn't even a speculation. This is what people living during high inflation say. "I would exchange my (local currency) for (foreign currency) as soon as I got paid." The Keynesian view is that Venezuela exists in a parallel universe where things magically get expensive, possibly due to a conspiracy (Maduro literally believes this), and the rising prices have nothing to do with money printing

The Austrian viewpoint is utterly wrong. They aren't even really "printing" money in the QE sense, they devalue it repeatedly because there is no faith in it. If one day you say an Argentinian Peso is worth $50 and the next day it is worth $5, how can you have faith that it won't be worth $.50 tomorrow? You can't, thus, your stability is gone and faith is gone. For whatever the Fed has done, people know that we suddenly won't say "Well, shit, let's devalue by a factor of 10".

Furthermore, those countries are corrupt as fuck and the capital controls also cause problems. At my last job I managed a workout credit against an argentinian toll road. The politicians constantly blocked an increase in the toll, because its "bad for politics" so they let the inflationary wages put the road under water (that is, after they pesified the loan, at a fraction of dollar face, in the early 2000s after the default). Every couple years they would allow an increase and the road would marginally cashflow for a couple more years. In order to get the loan payments out of Argentina you had to buy bodens, sell them in Uraguay, and convert them to dollars, paying a big bid-ask spread the whole way.

Another loan was to a mega-farm in LatAm where they used corrupt courts to block foreign creditor payments. Same thing with this bullshit with Argentina now.

I had a Brazilian credit once, they refused to follow the docs. They don't give a shit about law so nobody has faith in their country.

I think I'm starting to see a pattern here.
Jim Rogers --> you say he's retarded --> he made millions of dollars from investing
Marc Faber --> you say he's retarded --> his published investment record is excellent
Peter Schiff --> you say he's retarded --> he made millions betting against a credit bubble that central bankers and millions of Americans couldn't see even though it was extremely obvious
George Soros --> you likely think he's retarded because he's buying gold miners --> he's one of the richest men on the planet
Now you're saying I have zero understanding of economics, yet my investment portfolio since inception has crushed the S&P 500. Isn't it strange how that works? The people who know the least seem to get the best returns? I don't even care if I'm right about the economics. As long as I get rich while everybody else gets poor, I'll be happy.

I don't say they are retarded, I just say that their investment performance, both past and present, isn't indicative of their core ideologies, or the result of that performance isn't because they were right, it could be just because they got lucky or followed something they didn't hold as a core belief.

It's like Rogers ripping on non-Libertarian/centrally planned US, yet cheerleading China, one of the most centrally planned economies in history and one that is only that way through pegging the Yuan to the dollar at an artificially low rate to bootstrap the economy up. Is his Asian performance a result of his core beliefs, or just him riding a profiteer wave?

He is a huckster, saying one thing and doing another. "Hey, lets hate the Fed, but buy into communist party enterprises". Really? Is he such a great example of Libertopian thinking?

If he made a go of it using Libertopian principles and still knocked it out of the park, then I'd buy into it.

At least Buffett stuck to "gold sucks" and won. These guys stick to "gold wins because the Fed sucks" and is either winning for exogenous variables (scarcity, not the Fed) or just aren't winning.

Faber = DOOM DOOM DOOM - right sometimes, wrong most of the time.

Schiff = fucking utter failure. You can't see one thing he's gotten right - even Mish agrees with that.

When I started my current job my boss, who is a very smart guy, said to me "know what you know and do it, just because something worked when you didn't know it doesn't mean you should have done it or do it in the future". I keep that in my mind constantly.

So you're saying people should retire after they make X number of dollars. Bill Gates is rich enough, why does he gotta be all like "hey, you should buy Microsoft products." What a whore.


So you hate them because they are lazy? That's fair enough. In my younger days, I was enraged by our broken political system. Politicians steal our money then give it to their friends. Sometimes it's oil companies, sometimes it's banks, sometimes it's defense companies. Many people have tried to fix the system, and 100% of them have failed. Has anyone managed to get money out of politics? No. Money still dictates the winner of something like 90% of US elections. Has anyone successfully reduced the amount of corruption in our system? No. If anything, corruption is worse than ever. So far 0 bankers have gone to jail for the fraud related to selling junk mortgages with fake AAA bond ratings. It wasn't always like that. There was a bond scandal some time around the early 1990s, and some bankers actually went to jail for that. Knowing the system is this broken, you can do two things. 1 - You can dedicate your life to fixing the system and live of a life of constant disappointment, or 2 - you can try to profit from the corruption by front running the government. I watch a lot of videos by Cenk Uygur of The Young Turks, and I've seen probably every TV appearance Marc Faber has done in the past few years. Cenk seem to get more stressed every year because the system gets worse every year. Marc still looks like he doesn't have a care in the world. The government wants to blow trillions of dollars on endless wars? Whatever, buy shares of the companies that will benefit from this, avoid the countries being bombed, don't worry about it. The government is going to steal another trillion dollars of taxpayer money and give it to bankers? Sure, whatever, buy some bank stock and don't worry about it. Warren Buffet is 83 years old and he still looks great. Do you think a go-getter like Cenk Uygur has any hope of living 83 years? No way. The stress of wanting to fix things will get him long before that. If you want to live a long and stress free life, stop trying to fix things or help people. It's much easier to profit from the stupidity of people. If your aunt says she's rich because her shares of pets.com are worth 3 million dollars, just smile, give her a hug, and buy some long dated put options on whatever she owns.

I don't hate them because they are lazy - I can't stand the two-forked nature they espouse and the stupidity the Libertopian crowd buys into when they hold these people up as paragons of virtue saying "see, they hold our values and make lots of money". They don't, they are financial whores, just like non-libertopian financial whores. Call a spade a spade.

I'm sorry if I lumped you in with Krugman, but most people I argue with are fans of Krugman. They say all of the usual things Krugman says - high crime and property damage are good for the economy because they increase demand for replacing broken windows and hiring private security, etc. All of the usual stuff related to demand-side economics. The people supporting demand side economics are often strong supporters of inflation because it increases demand without increasing supply. I'll never understand why increasing demand relative to supply is a good thing. I rarely find myself saying "Ya know, this computer is too cheap. I wish computers still cost $3,000."

I don't buy into that. I am far more pragmatic.

 

[Zorkorist]

Also been there, done that-including law school. Completed seven years of post high education and paid for it all myself-and no student loans.

And I'm a liberal. In fact most financially irresponsible people I've met in real life are so-called conservatives. Far too many people claim government interference, etc. as responsibility for their failings.

But that would not be possible today. Tuition has greatly exceeded the rate of inflation for decades now. In part because of declining state subsidies (to keep taxes down) and partly as an unintended consequence of the vast increase in the amount and availability of student loans that only require a signature to get.

And don't get me going on the recent trend of high priced, for profit online education-paid for with nonchargeable student loans-that is one of the worst scams pulled on the public in decades.

I've often told my friends that I would like to go back to University as a Freshman, for a vacation. They laugh, but I am entirely serious.

Today I guess it would be an expensive vacation...

-John

 

[Thump553]

I've often told my friends that I would like to go back to University as a Freshman, for a vacation. They laugh, but I am entirely serious.

Today I guess it would be an expensive vacation...

-John

Make sure you pick a good party school. If I was doing it again I wouldn't have to pass up the Spring Break trips like I did the first time around.

Seriously though, one of my ex-employers started out for a MBA in his late seventies (on top of a law degree and a pharmacy degree). So it is possible.

 

[Attic]

So you hate them because they are lazy? That's fair enough. In my younger days, I was enraged by our broken political system. Politicians steal our money then give it to their friends. Sometimes it's oil companies, sometimes it's banks, sometimes it's defense companies. Many people have tried to fix the system, and 100% of them have failed. Has anyone managed to get money out of politics? No. Money still dictates the winner of something like 90% of US elections. Has anyone successfully reduced the amount of corruption in our system? No. If anything, corruption is worse than ever. So far 0 bankers have gone to jail for the fraud related to selling junk mortgages with fake AAA bond ratings. It wasn't always like that. There was a bond scandal some time around the early 1990s, and some bankers actually went to jail for that. Knowing the system is this broken, you can do two things. 1 - You can dedicate your life to fixing the system and live of a life of constant disappointment, or 2 - you can try to profit from the corruption by front running the government. I watch a lot of videos by Cenk Uygur of The Young Turks, and I've seen probably every TV appearance Marc Faber has done in the past few years. Cenk seem to get more stressed every year because the system gets worse every year. Marc still looks like he doesn't have a care in the world. The government wants to blow trillions of dollars on endless wars? Whatever, buy shares of the companies that will benefit from this, avoid the countries being bombed, don't worry about it. The government is going to steal another trillion dollars of taxpayer money and give it to bankers? Sure, whatever, buy some bank stock and don't worry about it. Warren Buffet is 83 years old and he still looks great. Do you think a go-getter like Cenk Uygur has any hope of living 83 years? No way. The stress of wanting to fix things will get him long before that. If you want to live a long and stress free life, stop trying to fix things or help people. It's much easier to profit from the stupidity of people. If your aunt says she's rich because her shares of pets.com are worth 3 million dollars, just smile, give her a hug, and buy some long dated put options on whatever she owns.

Poignant point here.

Reminds me of this.

This is a very important lesson. You must never confuse faith that you will prevail in the end - which you can never afford to lose - with the discipline to confront the most brutal facts of your current reality, whatever they might be.

From a guy in a brutal POW camp who watched the optimists die off.

Accepting the current reality is important in our corrupt system. Successful people, in terms of amassing wealth, accept it and profit from it, they don't fight it.

The student loan system is corrupt, but it is what it is, for the most part if you want a college education or if you want your children to have one, you are going to have to navigate it and where possible take advantage of it. The student loan debacle here does sink individuals and families who don't respect it.

 

[mirageracerx]

regardless of "libertopian" or "keynesian" the fact you have to sell your soul to amount to anything worthwhile is ridiculous. At this point i could care less what either side says. they both think they have a plan which both never works out. we are paying for the mistakes of our grandparents and great grandparents in the US. i went through the education system and barely have a leg up on the competition.

 

[hal2kilo]

Well, there's plenty of old stuff needs repairin' too. I think you are dead wrong about the modern stuff though.

Also, RoHS has led to tens (hundreds?) of billions of dollars of broken out-of-warranty devices including bad GPUs in notebooks (ATI and nVidia have both had related recalls), XBOX 360s (highly publicized though few know that brittle Pb-free RoHs-compliant solder was to blame), and PS3s (yellow/red light issue).

Electronics are now designed to break. There is no good reason to be using so much glass on phones that are increasingly designed to have limited lives (no expandable storage, built-in battery). I repair several of these a week just from the coworkers, friends, and family I bump into (used to be several a month).

Modern stuff breaks for no good reason. It's an epidemic that has worsened today. All my old consoles from my childhood still work great while only one of my four PS3s work.

It's hilarious to the point, that the last upgrade of our system we sold the Navy on the idea that it would be zero maintenance for the crew member. For the most part its a true statment but, even with redundancy things still break. Oh well, they are more dependant on the shore facilities than ever. Keeps us sand crabs employed.

 

[Mai72]

I challenge you to find a high school student today, willing to work.

Work? Losers work.

Kids today want to become internet stars!

 

[Subyman]

I'm glad I went through the system when I did, got out with a masters two years ago. The fees and tuition are ridiculous now. I remember tuition and fee increases every year while in school for several hundred dollars. In that time period we went through 3 different university presidents...

 

[OverVolt]

Plan to have a small paid off house and say meh... $%^& it. Let the economy swish back and forth like water in a boat as everyone complains about every ripple, wave, and splash.