"During my long journey through the world of evil, I had discovered three sources of power: the power of an individual's inner freedom, the power of a free society, and the power of the solidarity of the free world."-- Natan Sharansky, "The Case for Democracy"

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March 22, 2018

Insider-Trading Ninjas

Readers may recall the for-profit college shakedown during the last years of the Obama Administration. Blog patriarch jk presented one view of the matter on the occassion of "the historical Inauguration and swearing in ceremony for the 45th President of the United States!"

The other scandal is that the Obama Administration used the inflated Scorecard repayment data as a pretext to single out for-profit colleges for punitive regulation. The punishment was tucked into a rule finalized in October allowing borrowers who claim their college defrauded them to discharge their debt. It requires for-profits in which 50% or fewer borrowers are paying down their principal to post the equivalent of a surgeon general's warning in all promotional materials

Several large for-profit institutions closed down. But, had they practiced honest accounting:

If the regulation were applied evenly, a large number of nonprofit and public institutions would fail to meet the standard. But then the justification for the department's selective regulation of for-profits would vanish.

The department finalized the regulation in October anyway, perhaps anticipating a Hillary Clinton victory that would allow the repayment inflation game to keep going. Yet now it's taking credit for discovering and fixing the Scorecard error that likely would have been uncovered by the new Trump Administration.

But this week we learned of another reason why Obama Administration officials discovered and fixed the error that lead to massive devaluations of for-profit colleges. As revealed in Peter Schweizer's new book "Secret Empires: How Our Politicians Hide Corruption and Enrich Their Families and Friends" wealthy pals of President Barack Obama had bought up many of these institutions at fire-sale prices.

In the case of the University of Phoenix, its parent Apollo Education Group was suspended after a Federal Trade Commission investigation in 2015. The following year, three companies, including Vistria, swooped in to buy what remained of Apollo at a price 90% below its share price before the investigation.

As Vistria's education investment portfolio bulged, a number of Obama Education Department officials, including Secretary of Education Arne Duncan, ended up taking high-level jobs with Vistria.

That's just one example. There are others.

So when you hear media reports of this or that flavor of corruption or skulduggery in the Trump campaign or his administration, just remember that "all the news that's fit to print" apparently doesn't include banana republic tactics being employed with impunity in the Land of the Free and the Home of the Brave.

Blog Friend makes good

Again: Shameless "Fraternal" Promotion. But a good friend of this blog has an excellent piece in "The Weekly Standard."

But is it so surprising that young men have found inspiration in [Jordan] Peterson's musings? They are heirs to a faith tradition they no longer believe in. They are citizens of communities who have lost their cohesion. They are members of a generation trained to be cynical but exhorted since birth to somehow find a life full of "meaning." Peterson has compassion for these dispossessed and recognizes that bad things happen to societies full of brooding, listless, and hollow men.

It's totally awesome. (Partial, moi?) Read the whole thing.

But johngalt thinks:

Love it! Bravo TG.

Posted by: johngalt at March 22, 2018 3:27 PM

March 21, 2018

Online Poll

Okay -- hands up -- who here thought that ALL CAPS was going to stop the President?


But johngalt thinks:

Well, the briefing paper (if the story is accurate) did fail to say "please."

Personally, I'm still waiting for this President to whisper in a Russian leader's ear, "I will have more flexibility after my re-election." Like the last President did.

Posted by: johngalt at March 21, 2018 3:09 PM

March 15, 2018

Pointy Headed Elites! Right Here!

Shameless Fraternal Promotion!

Brother Bryan has written an interesting paper: Seigniorage in the Civil War South


Sad to see that he has not yet brought the Threesources style guide yet to George Mason. He could have used a few NAKED NATALEE HOLLOWAY pictures. Perhaps he is saving that for his dissertation.



Birth of the Blues

Ray Henderson, lyrics Buddy G. DeSylva & Lew Brown ©1926

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March 14, 2018

It's Official!


But johngalt thinks:

Steve Forbes:

Kudlow is no fan of tariffs, which are taxes, plain and simple. He will struggle hard to prevent a trade war with our trading partners. But he is also a fierce foe of trade abuses and here he will work to give the president options on how to best to fight this kind of lawlessness.
Posted by: johngalt at March 15, 2018 3:35 PM

March 13, 2018

All Hail Freeman

" Mr. Trump often entertains the crowds at his events by insulting powerful people in media and politics. At Hillary Clinton's events, the former secretary of State tends to insult people who can't afford to attend. " -- James Freeman

March 12, 2018

Because I'm Mean That's Why

This snarky-ass commentary will just make folks angry and won't convince anybody. What do I think this is, Facebook?


But johngalt thinks:

I have a strange feeling, having read this. I get it a lot these days. I think the woke gang has a term for it. Triggered, or something?

Now, if'n y'all will 'scuse me, I gotta git back to work on the farm, like my pappy did, and his pappy before him!

Posted by: johngalt at March 19, 2018 3:20 PM

March 11, 2018



(I Love You for) Sentimental Reasons

Ivory "Deek" Watson & William "Pat" Best ©1945

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March 9, 2018

C'est si Bon

Larry is usually wiser, and always more gracious than me. I would not be willing to join on immigration. But the rest, yeah:


But johngalt thinks:

Maybe it's a normal consequence of aging, but I remember liking ol' Larry a lot less than I have come to in recent years. Maybe he's mellowed too.

The problem with debating government trade policy is that economists want to treat it as a purely economic matter. But it's not. It's mostly a government, political, matter. There is no "correct" answer when one government seeks advantage over the people represented by another government.

Posted by: johngalt at March 11, 2018 8:41 PM

March 2, 2018

So, Here We Are

I don't intend to pile on. Not when it's been done so much better by the WSJ Ed Page:

Donald Trump made the biggest policy blunder of his Presidency Thursday by announcing that next week he'll impose tariffs of 25% on imported steel and 10% on aluminum. This tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies abroad, and undermine his tax and regulatory reforms. The Dow Jones Industrial Average fell 1.7% on the news, as investors absorbed the self-inflicted folly.

Mr. Trump has spent a year trying to lift the economy from its Obama doldrums, with considerable success. Annual GDP growth has averaged 3% in the past nine months if you adjust for temporary factors, and on Tuesday the ISM manufacturing index for February came in at a gaudy 60.8. American factories are humming, and consumer and business confidence are soaring.

Apparently Mr. Trump can't stand all this winning

More broadly, it has been a bad 48 hours for those who love liberty and were trying to come to terms with our quixotic cheif executive.

I know that neither Mr. Shapiro nor the WSJ Ed Page are natural allies of President Trump. Yet I cannot help but feel we are reaping what populism has sown. Ideology is abased, but it does provide one with a rudder.

UPDATE: If you're not convinced by liberty, or Adam Smith, or David Ricardo:

Molson-Coors warned in a statement, "Like most brewers, we are selling an increasing amount of our beers in aluminum cans and this action will cause aluminum prices to rise and is likely to lead to job losses across the beer industry." The company contends that domestically, "there simply isn't enough supply to satisfy the demands of American beverage makers."

Hat-tip: Jim Geraghty

But jk thinks:

Yes, we were tiring of winning...

And I do -- as always -- appreciate your engaging. I cannot lie, however: when the latest President Trump Imbroglio occurs I wonder "will this be the one over the line? I knew tariffs would not be it, but I thought "we'll take all the guns, and then due process later" might get an eye roll? A throat clear? A loud sigh?

I'll defend myself with consistency. I whacked President Bush for his reading of this craven lunacy. And he was "my guy," though I should have been tougher.

Most of our steel imports come from Canada (Tim Horton's-munching slave labor!!!) and the domestic industry is quite robust.

Much more to life than cheap goods, indeed. Economists are unjustly pilloried for that, and a fair reading of Adam Smith makes the case better than most. But consumption is a part of human flourishing. And the well being and professional opportunities 6.5 million who use steel and aluminum as inputs is important as well.

(When Bush did his, I heard from an acquaintance of blog friend SugarChuck that his boutique guitar amplifier business might close. Consumers are (legitimate) victims, but if their plight does not move you, think of the producers who will be hard pressed to compete (the steel in a complete amp made in China is not tariffed).

And: weren't you the self-professed "can snob?" Injustice!

Posted by: jk at March 2, 2018 3:11 PM
But johngalt thinks:

Injustice, yes. International trade partners should not have been waging trade war with us since the Eisenhower administration.

As a starting point, let me say that I don't see import duties as yet another "new normal." I see it as a tactic. You see, we can't negotiate reduction of THEIR tariffs without tariffs of our own to reduce.

And I see the choice of steel and aluminum as more symbolic than targeted. (Unless of course you consider the Pennsylvania special election in the coming weeks.)

Finally, the two apparent goals here are both laudable in my view: Make blue collar work pay better than it has since the dawn of NAFTA; and solidify the "Reagan Democrats" in his base for reelection in 2020.

Besides those two points, I see the vagaries of specific tariffs, duties, taxes and subsidies as mere "deck chairs on the Leviathan." Life's too short to get worked up over each individual plus or minus, that will change again soon anyway. Free trade is best. Yes. Yes. A thousand times yes. But trade requires partners.

As for the threat of gun confiscation from the lips of the Donald, two words: Republican Congress. Yet another tack to the middle for this amateur politician, who appears to be sailing along quite adeptly.

And if none of this is persuasive, two more words: President Oprah (Or Kamila. Or Michelle. Or Bernie. Or Fauxchahantas.)

Posted by: johngalt at March 2, 2018 4:41 PM
But johngalt thinks:

And by the way, didn't the Karl Roves of the world insist that Republicans could never win elections without being more moderate? And now Trump is criticized for reaching across the aisle.

Posted by: johngalt at March 2, 2018 4:47 PM
But johngalt thinks:

I'm not, first and foremost, an 'ad valorem' guy, but if I were I would link Kudlow, Laffer and Moore long before the GNTJ.* They almost make having certain sectors of our economy get pwned by predatory competitors sound like fun. But more importantly, they remind that trade duties are never a long-term solution to any problem.

In the early 1980s, Ronald Reagan's invoked anti-dumping provisions against Japanese steel. It was one of his few decisions he later confessed he wishes he hadn't made. ‚ÄéTrump will come to learn the same thing, and we hope it is sooner, not later.

If there's anything Trump has proven in his short history of policy positions it is an ability and willingness to "evolve." Like I said yesterday, I see the move as a tactic. Even if it only serves to make the President appear crazy and clueless, these unpredictable moves serve to free up an ossified status quo. Trump is taking the modern presidency out of its "conventional wisdom" straightjacket.

* "Globalist NeverTrump Journal


"Ad valorem." Ay yi yi. I meant ad verecundiam. "Argument from authority."

Although, reading further, this is a form of "defeasible argument" which is in turn a particular kind of non-demonstrative reasoning, meaning it produces a contingent statement or claim. This is stock in trade for engineers so, at long last, it turns out I AM, first and foremost, an ad verecundiam guy!

Posted by: johngalt at March 3, 2018 5:34 PM
But jk thinks:

I truly hope you're right that this is tactical and we end up in a very different place. I just said the same on a Facebook thread without having read this. So, yeah, it is possible.

(The TV news this morning did a long segment on "President for Life." I concede that his enemies go too far. BUT.)

But he campaigned as a protectionist. And he has wide latitude under this "Section 232." And he has Peter Nevarro hanging around.

I do not find the "predatory competitors" argument at all persuasive. The bulk of our Steel imports come from friendly nations and the numbers fro domestic production have been strong. To blunderbuss domestic auto and appliance production and risk retaliation over Chinese steel that is 2% and change if imports is indefensible.

A dime a beer case, $175 a car, $1 million on a plane -- it is all contrary to the spirit of liberty and very well established economics.

Posted by: jk at March 5, 2018 11:26 AM
But johngalt thinks:

Disclaimer: I don't aim to argue or persuade, merely to share "alternative" points of view.

I found authoritative data on this subject here. [PDF]

I'll begin with a Trump counterfactual. He has called America's steel industry "dead" due to unfair competition, but American steel production and consumption have been in the neighborhood of 80 MMT (million metric tons) and 100 MMT, respectively, since 2010. So we're importing 20% of our steel. A recent theory that this is a NAFTA renegotiation ante suddenly makes more sense than "saving American steel."

And while Canadia is indeed our number one import source, Mexico is number four. Note that these are our two NAFTA partners.

Further, Russia is number five. Wasn't the failed Democratic candidate for president just saying that POTUS needed to get tough with the Russians? (Okay, I'm being flippant.)

The rest of the top ten import sources are Brazil, South Korea, Turkey, Japan, Taiwan, Germany and India. These guys should cross their fingers that Canadia and Mehico play ball on NAFTA as fast as possible.


As for Trump's off-the-record joke with the press (did I mention he was kidding?) we may as well go ahead and describe it the way media members heard it with their ears and felt it with their hearts: "Fuhrer Trump." I'm sympathetic because I would have freaked out if Obama said it, even in jest. But in the end I must conclude that the compliant, complicit, double-standard news media in this country thoroughly deserves to have it pointed out to them that, as bad as they think he is, other world leaders (like China's) are much worse. Not that they even recognize the fact but, news flash, Xi Jinping is NOT kidding.

And finally, I don't have numbers for the tariff hikes on a car but I do for a Boeing jetliner - $33,000. That's .013% of the cost of a 787. (And just 3.3% of your own estimate.) Taking the $175 auto estimate on faith though, a driver could recoup that by recycling a case of beer cans per day for a year!

Gotta go - Professor Cutsinger is on line 1.

Posted by: johngalt at March 5, 2018 3:57 PM
But johngalt thinks:

I almost forgot...

You cited "very well established economics." My Bud drinkin' buddies call this by various names:

Status quo
Hedge Fund Corporatist B.S.
Swamp Business
NeverTrump mutual "back-scratching" rules.

In November 2016 a plurality of American voters decided it was time to change the established rules. I, for one, can't blame them.

Posted by: johngalt at March 5, 2018 4:03 PM
But jk thinks:

Speaking of that fellow who used to be President, how would you have felt had he presented a ruse of a phony national security scare so that he could enact a favored policy? Because that's the best-case scenario of the President's tactics.

Would you agree there is (subtract five, carry the one...) exactly zero national security risk of our proud nation's importing steel from our great allies? If we lose China and Russia, that's a blip.

So, Section 232 is a ruse -- there is no compelling national security interest. But it is a very convenient loophole for bypassing Congress so that he can have a bargaining chip in his high-stakes renegotiation of nafta. That's bad, right? Had President Obama pulled a similar stunt to fund SCHIP we'd've been pissed, right?

My numbers came from Peter Nevarro's appearance on FOX News Sunday through the imperfect medium of my memory -- exacerbated by the physical pain I was in hearing his explanations.

I guess the American consumer can always afford to pay more taxes. You're right -- it's really just "crumbs" when I think of it.

Posted by: jk at March 5, 2018 7:01 PM
But jk thinks:

Were Adam Smith, David Ricardo, Larry Kudlow, Art Laffer, Walter Williams, Don Boudreaux, Fredrich Hayek, Milton Friedman, Henry Hazlitt and Frederic Bastiat wrong? And an electoral-representation-of-a-plurality of American voters right?


I'm in a reflective mood. I read all but a few pages of Steven Pinker's "Enlightenment Now" over the weekend and just finished Nassim Taleb's ninth appearance on EconTalk. Two of the most esteemed intellects on the planet, and two that challenge my core beliefs very deeply. And I got a more brutal thrashing last week than even you did.

The common thread is holding core truths even as ancillary beliefs are shaken. From Pinker: do I love Enlightenment values and modernity more than I fear government? From Taleb: how can I dismiss "the God of risk assessment" when he spurns GMOs?

I cannot, however say "some Things were bad before Donald Trump was President, ergo, everything he disagrees with is right." Some things I believed in before he was president are still right.

Posted by: jk at March 5, 2018 7:10 PM
But johngalt thinks:

Well said all the way 'round. We're of a mostly like mind. Perhaps the biggest reason for my Trumpism sanguinity is that this president and the swamp are at loggerheads, not lockstep. The latter is what really scares the crap out of me. c.f. Obama. Bush.

Posted by: johngalt at March 6, 2018 3:03 PM

February 26, 2018



C'est si Bon

Henri Betti - André Hornez ©1947 English lyrics Jerry Seelen ©1950

Live at the Coffeehouse dot Com


February 23, 2018

Quote of the Day

But then, CNN is to journalism what those Broward deputies are to law enforcement: A contemptible example of failure. -- Glenn Reynolds
Posted by John Kranz at 10:30 PM | What do you think? [0 comments]

February 22, 2018

Dark Days

I can accept the GOP (especially the Colorado GOP) doing some things I don't like. I can roll my eyes and move on.

But. This is a HORRIBLE and antithetical to free people. And the CO GOP Facebook staff spikes the football as a great policy victory.


I may take up heroin, if this is the soi disant freedom party. Pass the needle!

But johngalt thinks:

Getting hooked on smack seems an extreme reaction. Perhaps just move to a different "laboratory of democracy?" If this is a bad idea it will be revealed as such, once we compare drug abuse in states with such regulations to those without. Eh?

Posted by: johngalt at February 23, 2018 11:46 AM
But Terri Goon thinks:

Wait, weren't you against marijuana?

Posted by: Terri Goon at February 23, 2018 12:38 PM

February 21, 2018

Quote of the (well, you decide...)

Just catching up with the phenomenon that is Jordan Peterson. If you're looking for a good entry point, might I recommend this week's EconTalk.

And moving beyond your domain of immediate competence would be grandiose and destructive. And I believe that it often is. You know, these--we take 18-year-old kids, we put them in Ivy League universities, and we tell them to criticize the system and to act as political activists. And I look at that and I think, "God, you kids, you don't anything. You don't know anything. You've never had a job. You've never taken care of anyone, including yourself. You can't organize your own household. You've never read anything. You don't know how to write. You don't know how to think. But, it's okay: Your professors can tell you that, now you are in a position to criticize the foundations of Western civilization. It's like--it's horrifying."

But nanobrewer thinks:

Let's remember the frontal lobe isn't fully developed until ~ 25 yrs. of age. I'm now convinced FB actively degrades it, or everyone becomes Benjamin Button, or both....

Posted by: nanobrewer at February 23, 2018 1:08 AM
But jk thinks:

I'll not argue with either.

One of my favorite books of all times is Michael Barone's "Hard America, Soft America." He points out that (Soft) America produces the most worthless 20-year-olds in the world, yet (Hard) America produces the most productive 30-year-olds. (He's speaking in averages and generalities, of course there are millions of exceptions).

I just think Peterson nails it that we ask the softies to remake the civilization.

Posted by: jk at February 23, 2018 10:59 AM

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