Category: Economics

College Freshman

College Freshman

Consider the following (emphasis added):

“Higher education is an industry in danger,” says Clayton Christensen, the Harvard Business School guru and a senior advisor (unpaid) at Academic Partnerships. “It’s very plausible to say that 15 years from now half of the universities that exist will be bankrupt and in some fundamental way facing extinction and the need to totally change themselves.” (Caroline Howard, “No College Left Behind,” Forbes, 2/12/14)

Richard Lyons, the dean of University of California, Berkeley’s Haas School of Business, has a dire forecast for business education: “Half of the business schools in this country could be out of business in 10 years—or five,” he says. (Patrick Clark, “Half of U.S. Business Schools Might Be Gone by 2020,” Businessweek, 3/14/14)

What do you think? Are the doomsayers about the higher ed bubble generally too pessimistic? Are there discernibly different markets for different kinds of higher ed.? If Lyons is right about the dynamics of B-schools, are there similar dynamics at work for divinity schools and seminaries? Are such religious institutions more or less vulnerable?

There’s no shortage of those warning about various iterations of a higher education bubble. It’s almost a cottage industry. Are they Chicken Littles or true prophets?

For more reading, consider the Controversy in the Journal of Markets & Morality, “Should Students Be Encouraged to Pursue Graduate Education in the Humanities?”

Blog author: ehilton
Friday, March 14, 2014
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Todd Wilemon

Todd Wilemon

Admittedly, “stop being poor” sounds a bit like “let them eat cake.” The remark was made by Todd Wilemon, a managing director at NYSE Euronext, when he was asked what people should do if they could not afford health insurance. “Stop being poor,” was his answer.

Callous? Crude? Mean? Not really. Kevin D. Williamson explains how the ineptly-named Affordable Care Act isn’t providing insurance for all who can’t afford it.

Appropriating a certain amount of money and labeling it “health care for the poor” is not the same thing as providing poor people with access to doctors, hospitals, and medicine. It is easy to move money from one pocket to another, which is how we manage to spend a figure approaching a half-trillion dollars per annum on Medicaid with very little to show for it in terms of better health outcomes for poor people. In Tennessee, Medicaid alone spends about $10,000 annually for every poor person in the state, and poor Tennesseans of retirement age or older already have access to Medicare.

We spend the money, but we do not get the health care.

Why not? Because there aren’t enough doctors, there are too many doctors who won’t accept Medicare, and all the subsidies and mandates in the world aren’t going to fix that. The solution? Stop being poor.

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Blog author: abradley
Friday, March 14, 2014
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Untitled 4As much as progressives balk at the “imposition” of religious morality and the church in public and social spaces, secular humanism’s moral relativism is not working in America and continues to leave children vulnerable to profound evil. For example, the Urban Institute recently released a report on the economy of America’s sex industry — and the numbers are astounding.

The Urban Institute’s study investigated the scale of the underground commercial sex economy (UCSE) in eight major US cities — Atlanta, Dallas, Denver, Kansas City, Miami, Seattle, San Diego, and Washington, DC. Across cities, the UCSE’s worth was estimated between $39.9 and $290 million in 2007, but decreased since 2003 in all but two cities. In the study, interviews with pimps, traffickers, sex workers, child pornographers, and law enforcement revealed the dynamics central to the underground commercial sex trade.

Here are some of the key findings regarding those who manage the sex economy:
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One month ago, I posted a link to a survey asking ten questions about what people look for in a pastor, promising to post the results one month later. The idea was to try to shed some light on the disconnect between supply and demand when it comes to ministers looking for a call and churches looking for a minister.

The first thing that should be said is that, while I am grateful to all who participated, the sample size is too small to be significant. 71 people took the survey. Nevertheless, we can still reflect on the results with the hope that future studies may yield more insight.

By tradition, there were 1 Anabaptist, 7 Baptists, 1 Church of Christ member, 4 Eastern Orthodox, 2 Episcopalians or Anglicans, 2 Lutherans, 21 Prebyterians or other Reformed, 3 Methodists, 13 Non-Denominational Christians, 2 Pentecostals, and 16 Roman Catholics. (more…)

College-Fund-by-Tax-CreditsSenator Elizabeth Warren (D-MA), a potential 2016 presidential candidate, recently argued that Congress should hike taxes on families and small businesses making more than $1 million, then use the tax revenue to let debt-ridden students refinance their college loans.

As a progressive redistribution scheme it’s rather ingenious: It allows the government to take money from private individuals and businesses and give it to other businesses (i.e., college and universities), all while giving the impression of helping another group of private individuals (i.e., students who take indebt themselves by taking out college loans). Warren’s proposal is an brilliant blend of cronyism, special interest pandering, and “soak the rich” class envy – which is why it has a high likelihood of becoming law.

But if we look past the proposal we discovers something else that is fueling the student loan debt “crisis.” Whenever a nanny state solution like this is proposed, we should ask why the government is needed to serve as a governess. In this case, it appears the government is being asked to be a surrogate parent because of the failings of actual parents.

According to a study by sociologists at Rice University, college students whose parents are not married to each other face significantly heavier financial burdens for the simple reason that married parents, relative to other parents, contribute significantly more to their children’s college education:
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Comedian Andrew Heaton uses the move “Dallas Buyer’s Club” to explain economic issues, brought to life on the silver screen. Enjoy!

Blog author: jcarter
Wednesday, March 5, 2014
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bitcoin-deadLast year I wrote a series of blog posts about what Christians should know about Bitcoin. In response, one astute reader pointed out an odd juxtaposition: my conclusion seemed to imply that Christians should avoid Bitcoin “at all cost” and yet the Acton Institute accepts donations in Bitcoin. “I really want to know the rationale behind this,” he said.

Well, the rationale is easy enough to explain: Not everyone at Acton agrees with me. Like other nerds who have an interest in the intersection of economics, liberty, and technology, many of us at Acton disagree about the merits of Bitcoin. (I’d offer to place a gentleman’s wager on the future of the crypto-currency, but they’d want to bet using Bitcoin. Either way – whether it increased in value or went defunct – I’d end up the loser.)

Opinions are still divided, but the evidence that Bitcoin is doomed to failure piles up almost every day. Over the 8 month span from October 2010 to June 2011, the market value of Bitcoins skyrocketed 9667-fold from a value of $0.06 to $29. Later, when I wrote my series last April, a single Bitcoin was worth less than $100. Today, it is worth $660, and that’s after falling from a high of $1,100 in November 2013. A currency that can fluctuate from $0.06 to $1,110 in a three-year period is not a currency – it’s a speculative bubble.

Of course, we Bitcoin doomsayers have been waiting for the bubble to pop for some time now. We also tend to think that every new drop is a sign of it’s impending doom. Fellow naysayer Jonathan Last is sure, this time, that the end of Bitcoin is near:
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In an excerpt from the splendid PovertyCure series, Michael Fairbanks offers a helpful bit on why our attitudes about competition matter for economic development:

I can predict the future of a developing nation better than any IMF team of economists by asking one question: “Do you believe in competition?” When I go to Venezuela and I say, “do you believe in competition?,” they say “competition means the rich get richer and the poor get poorer.” They say “competition is the unnecessary duplication of effort because you have two firms doing the same thing.” They say “competition is a quaint North American concept that doesn’t apply here.”

But when I go to Silicon Valley and I say,“What do you think about the word competition?,” they say, “Well, I love competition, because even when I lose, I learn something. And my success is due to the fact that I speeded up my failures, and the only way to fail was to compete, and figure out where I wasn’t good enough.”

As Hayek put it, competition is a discovery procedure. If we neglect, distort, or downplay that process, we can expect the outcomes of discovery — the fruits of our sacrifice and service — to digress accordingly.

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protestOffering yet another contribution to a series of recent discussions about the religious liberties of bakers, florists, and photographers, Jonathan Merritt has a piece at The Atlantic warning that the type of protections Christians were fighting for in Arizona “could come back to hurt the faithful.”

“These prophets of doom only acknowledge one side of the slope,” Merritt writes. “They fail to consider how these laws could be used against members of their own communities. If you are able to discriminate against others on the basis of religious conviction, others must be allowed to do the same when you are on the other side of the counter.”

Merritt sets things up with the following hypothetical:

“I’d like to purchase a wedding cake,” the glowing young woman says as she clutches the arm of her soon-to-be husband. “We’re getting married at the Baptist church downtown this coming spring.”

“I’m sorry, madam, but I’m not going to be able to help you,” the clerk replies without expression.

“Why not?” the bewildered bride asks.

“Because you are Christians. I am Unitarian and disapprove of your belief that everyone except those within your religion are damned to eternal hell. Your church’s teachings conflict with my religious beliefs. I’m sorry.”

Would conservative Christians support this storeowner’s actions? (more…)

From The Independent:

He leads a company that some would consider the epitome of ruthless global capitalism. But Apple chief executive Tim Cook has shocked some in the US with an impassioned attack on the single-minded pursuit of profit – and a direct appeal to climate-change deniers not to buy shares in his firm.

Eyewitnesses said Cook, who succeeded Steve Jobs as boss of the technology giant in 2011, was visibly angry as he took on a group of right-wing investors during a question-and-answer session at a shareholders’ meeting.

And what were these (presumably) egregious and inappropriate questions levied by the “right-wing investors”?

Responding to calls from the National Centre for Public Policy Research (NCPPR), a conservative think tank and investor, for Apple to refrain from putting money in green energy projects that were not profitable, he shot back that Apple did “a lot of things for reasons besides profit motive”.  The chief executive added: “We want to leave the world better than we found it.”

Addressing he NCPPR representative directly, he said: “If you want me to do things only for ROI [return on investment] reasons, you should get out of this stock.”

So some Apple investors were concerned that the company might be throwing good money after bad (but socially chic) investments into green energy, and that is what set off the CEO of one of the world’s largest companies? Really? (more…)