The Wrongologist

What’s
Wrong Today:

Steven
Cohen on CNN
this weekend made a point that has not
been covered clearly about Ukraine’s proposed deal with the EU: (brackets
and parentheses by the Wrongologist)

Cohen
is professor emeritus at New York University and Princeton University. His
books include “Soviet Fates and Lost Alternatives: From Stalinism to
the New Cold War.”

So,
the West’s plan was to bring NATO through Ukraine right onto the Russian border.
Unsurprisingly, the Russians are not prepared to accept that. Specifically, they’re
not prepared to accept NATO forces in Ukraine, or the possibility that subsequently,
NATO could gain a base near that of the Soviet Black Sea Fleet based in Crimea.

The
grandstanding politicians (Sen. Lindsey Graham) and the pundits who say we need
to be more muscular in our response to Russia in Ukraine are morons.

Sen.
McCain (R-AZ) said this weekend that all Putin sees around the world is America’s
weakness and withdrawal from conflict and that emboldened him to move against
Ukraine. It was actually our “muscular” approach to snag Ukraine for NATO that emboldened
Mr. Putin (after Russia’s competing deal to the EU deal) with Putin’s puppet, Yanukovych, died when Yanukovych
fled Ukraine.

Putin’s move is no
threat to us, and we have no responsibility to come up with a counter-move in
Ukraine. Putin
wins this round, he out-thought the US and gets Crimea for his efforts.

Let’s
remember that Russia is no longer the USSR. It is not a threat to Europe, and
it is certainly not a threat to the US.  It is a corrupt, resource-rich
state with a big army and nukes. It controls a lot of
territory, but the idea that it would win a full-on war with America is moronic.

We
also should remember that Ukraine is poor, and mostly corrupt, run by wealthy
oligarchs who have skimmed off the top for years. Subsidized diesel fuel is a
huge part of Ukraine’s economic problems. Ukrainians pay about half the price for
diesel that people do in Europe. In fact, a liter of diesel in Ukraine is the
cheapest in the world. At the same time, Ukraine uses a lot of it, behind only
to Germany and Russia. One of the IMF’s and the EU’s early requirements for
loans was that diesel prices be raised. Next winter might have been very harsh
for the average person in the Ukraine if their government had agreed to that
IMF requirement.

Finally,
Ukraine has an industrial base, but their factories are Soviet era, and supply
nothing we want. They have agriculture, but they produce primarily for the
Russians. Our subsidized agricultural production would make buying from Ukraine
uncompetitive, so we are not an economic alternative for them.

Ignoring
any humanitarian issues, there is little reason for the US to get involved just
because Russia is involved. This kind of cold warrior, knee-jerk reaction has
caused us more financial problems since the 1950’s than any other US foreign
policy response, except for our Al-Qaeda global response for the past 12 years.

We
were out-strategized by Mr. Putin. Is Mr. Obama completely bereft of advisers who know
something about Russia? It should have
been a Rumsfeldian “known-known” that Mr. Putin would react to any
move that would possibly put NATO in his shorts.

Today, the “known unknown” question is how Ukraine will be
partitioned. The Western part of the country will reach towards Western Europe.
Crimea will default to Russia. The Eastern parts of Ukraine, where its industry
is located, could go either way.

In the all of our bouts of bluster with Russia over the past 50 years, the Cuban Missile Crisis was the scariest. Everything since then has been either theater
or a prelude to a proxy war the US wants, and gets.

Ukraine isn’t one of them.

Last
week, we learned that an Arizona Tea Party group believes that the 1st
Amendment is
only for Christians:

Hmmm. We also learned that
there is plenty of global unrest.
Here is a partial list of countries to be worried about:

Afghanistan

Burma
Central
African Republic
Libya
Iraq
Somalia
Syria
Thailand
Turkey
Ukraine
Venezuela

With so much
uncertainty in the world today, please use the chorus from Bob Dylan’s “Ballad of a Thin Man” as the inspiration
for your homily:

“But something is happening here
And you don’t know what it is
Do you, Mister Jones?”

Ukraine is a losing position
for Obama:

The BBC reports today
that Russia’s upper house of Parliament has approved President Putin’s request
for Russian forces to be used in Ukraine. This is essentially a Russian version
of our Authorization for the Use of Military Force (AUMF) that was requested by
George W. for Afghanistan and Iraq. Let’s spell out a few things:

• The
  US, the EU and NATO will, if push comes to shove, acquiesce in the partitioning
  of Ukraine

• The
  US, the EU and NATO will not offer Ukraine a serious bailout. The EU offered Ukraine
  $700 million. In contrast, the Russians offered $15 billion

So, Mr. Putin has
called Mr. Obama’s bluff. What will Mr. Obama do? Maybe cancel his appearance
at Sochi G-8. In the end, nothing. Let the bloviating begin!

In a related story,
Sec. of Defense Hagel announces cuts in Pentagon budget:

Facebook makes billionaire of welfare recipient founder of Whatsapp:

Arizona gets reprieve from corporate boycott:

Enjoy the Oscars tonight. Democrats want to run from their award:

What’s
Wrong Today:

The
Netherlands is emerging as Europe’s Delaware, so says The
Economist:

That’s
3 different locations for 3 of the company’s key functions. The Economist went on to say that “Even
the most industrious executive cannot be in three places at once”. Why are
firms doing this? More from The Economist:
(emphasis by the Wrongologist)

Having Fiat’s
tax residence in the UK is an immediate benefit since, unlike Italy or the
Netherlands, the UK levies no withholding tax on the distribution of dividends
from foreign operations. Multinationals play down tax as a reason for splitting
their legal residences, but it always
factors into the decision. British tax law looks kindly on firms
using complex ownership structures that involve other low-tax jurisdictions, structures
that allow them to shuffle payments between subsidiaries and thus minimize tax
bills.

The Economist closes with this
observation:

These
firms are moving from the realm of  the “multinational”
to the “transnational”. Their decision-making is driven by accountants and
lawyers as much as by markets.

The trouble with
transnational organizations is that while governments have a moral imperative
to look out for the interests of their citizens both rich and poor, to be good
stewards of infrastructure, human capital and natural resources, transnational
firms have no such imperative.

Only
their shareholders can call them to account and then it’s usually about profit.
While some firms show occasional moral awareness, it’s not a requirement, and
is often ridiculed by some of the global elites.

We are witnessing
the morphing of capitalism into a singular global system.

This shift in capitalism has created a transnational
capitalist class.
Capital is more mobile than people. Mobility between economic classes in a given country’s
population is less and less dependent on that particular nation’s big businesses.
It has become more dependent upon smaller, service-oriented firms that cannot
deliver their services from abroad, and do not offer the same middle class job
opportunities.

Transnational
capitalists have become a ruling class that operates the controls of a powerful
transnational superstructure, managing assets and production of both commodities
and goods. Members of this new class (and their companies) have deeper connections
to each other than to their home nations, since their business and financial interests
are globally linked, rather than exclusively local or national in origin.

The world
is still organized into discrete national economies, but the transnational
capitalists, and their lawyers and accountants, have constructed a
superstructure that overlays their interests on a world of markets and nations.
Like Fiat, their business interests may or may not coincide with those of their
country of origin or of its citizens. Yet, at the same time, this worldwide decentralization and
fragmentation of the production process has taken place alongside a centralization
of command and control of the global economy by these transnationals.

This has cemented
the world into a single production system. One outcome of transnational capitalism
is that a large gap between the global rich and the rest of us has developed,
one which exists not simply on a national level.

Forbes reported
that corporate wealth is becoming more concentrated. In fact, the top 147
transnational corporations control
roughly 40% of the entire economic value of the world’s transnational
corporations. And it is worse than that:

That is
out of a total of 43,000 transnational corporations analyzed by the Swiss Federal Institute of Technology in Zurich. They built a
model of who owns what and what their revenues are, and thus mapped the entire
edifice of economic power.

It
is not clear how this concentration of wealth which has no loyalty to country will
play out in the 21st Century. In America so far, it has meant that the
rich employing the near-rich to tell the middle class that everything is the fault
of the poor.

We
have accepted the fantasy of a free market, the acceptability of 6% unemployment
as the best we can do, of the uselessness of unions; that equality is unnecessary,
and that privatization is sacred.

And
above all, that it is absolutely necessary for private industry to
self-regulate.

Unchecked,
the transnational firm will be the triumph of fascism.

What’s
Wrong Today:

James
Surowieki in The
New Yorker:
(emphasis by the Wrongologist)

And
here is Krugman writing yesterday about Surowieki’s
article: (emphasis by the Wrongologist)

How
much social mobility occurs in a society if politicians think the only goal is “equal
opportunity for all”? In America, not much, and that hasn’t changed in 40
years, according to a study by a team of economists from
Harvard and Berkeley led by Raj
Chetty. According
to Chetty:

A
time-honored meme is the Horatio Alger story, the American dream that anyone
can, through dedication and a can-do spirit, climb the ladder of success. But,
according to Surowieki: (emphasis by the Wrongologist)

Horatio
has a smaller chance of making it big here than in say, France, since we have had the
same amount of economic mobility for the past 40 years. When politicians emphasize
mobility as opposed to decent living standards for all, or economic security, it becomes
easy to blame the “victims”, that is, the very poor, the unemployed, the fringe
members of society: What’s the matter with you, why aren’t you upwardly mobile
in this, the land of opportunity?


But today in the US, the pressure on mobility is mostly downward, not upward. That
is due to the confluence of several trends:

• Corporate
  influence on our tax and labor laws to the advantage of the few

• The
  mass movement of skilled, labor-intensive jobs to low cost countries

• The
  rapid development in computer-assisted manufacturing and design that has
  radically reduced the availability of solid middle class jobs

• The
  huge growth in liquid assets employed in foreign tax havens, not in US businesses

Then,
the Citizens United decision sealed the deal for those entrenched at the top. Today,
most Americans don’t even know if
there could be a better way to build the economy.

Ironically,
these trends have been sold to voters as the next stage of the American free
enterprise system. Thus, the upward wealth transfer has been institutionalized
and accepted by many as necessary to keeping our country strong and for ensuring future
job growth.

It
has done neither. When 40% of Americans can’t buy anything other than food and
gas, that hurts all of us.

What made
the US economy so remarkable for most of the twentieth century was the fact
that even if working people never left their economic class, over time they saw
their standard of living rise sharply. Median
income doubled in the US between the late 1940’s and the 1970’s. The
chart below shows that income growth has stagnated since the early 1990’s:

That’s
what has really changed in the past forty years. The economy is growing more
slowly than it did in the postwar era, the average workers’ share of the pie
has been shrinking, and fewer people are working today than in 2007. It’s no surprise that people in
Washington prefer to talk about mobility rather than about this basic reality.

Raising
living standards for ordinary workers is hard: you need to get wages growing,
or to “prime the pump” with infrastructure jobs. Talking about things like
“redistribution” and “more taxes” scares politicians, but austerity will not
improve economic growth, or lower our deficit.

Most
of us want a decent
society for everyone, including for the less talented and less fortunate. We
will always have some inequality, some people whose living standard is too low,
so there should be a decent floor which people can’t fall below.

We
call that the safety net and we can agree or disagree with where the floor
should be established, but without a concept of how to make our economy benefit
more of our citizens, we risk political upheaval.

Today there are rumblings of change,
but nothing coherent has emerged. People know something isn’t right, but they
can’t put their finger on it, and there is no organized push to develop a
coalition around modifying our capitalism to improve living standards for all
in the working classes.

The fact that the working
poor have flat screen TVs at home, or have iPhones does not mean that they have
a good standard of living. Many people
in the third world have those devices, along with the same food and job
insecurity we have here in America.

The next financial/economic
crisis will toss more people out of the middle class. The ladder of opportunity
will be shorter, excluding even more people.

 

We need to create a unifying
message that people will understand and rally behind, one that will cause them to stop voting
against their economic interests.

 

What’s
Wrong Today:

Turbulence in Turkey
is growing. It started with the Gezi Park demonstrations last year that the Wrongologist
reported on here,
that left six people dead and 8,000 injured. At the time, Prime Minister Recep
Tayyip Erdogan repeatedly accused outsiders of being behind the protests. In a NYT Op-ed, Elif
Shafak wrote:

In December came the
major corruption
case involving Mr. Erdogan’s administration and his AKP party. That led Prime
Minister Erdogan to frame the probe into the corruption as an “attempted coup”
by the US-based Sunni religious leader Fethullah Gulen. Mr. Erdogan also blamed
the US as the mastermind of a plot against his government. He raised
the possibility of expelling Francis Ricciardone, the US ambassador to
Turkey, soon after the scandal broke.

Then on
Feb. 15th, Reuters reported
that Turkey’s parliament approved a law boosting
Mr. Erdogan’s control over the appointment of judges and prosecutors,
after a heated debate and a brawl that left one opposition lawmaker
hospitalized. Mr. Erdogan blamed Fethullah Gulen for instigating the corruption
investigation, and is threatened by Gulen’s rumored control over many in the
judiciary. Lots ‘o turbulence.

So, little
reason to be surprised when Al-Monitor reported
that on Feb. 19th:

That phone call
should have been routine, because Mr. Erdogan has enjoyed the reputation
of being the foreign leader that Mr. Obama spends the most time with on
the phone. That was, until Gezi Park in the summer of 2013. Only two weeks before the
Gezi events, Mr. Erdogan’s visit to DC was received with the highest levels of protocol.
But, after Gezi, they had a chilly encounter at the G-20 meeting in St.
Petersburg on Sept. 5-6, and just one brief phone conversation since.

Their call took place
on the same day that the Turkish parliament passed
restrictive Internet legislation that would allow the government to block
individual URLs without judicial review. It also obliges ISPs to store users’
personal Internet data for up to two years.

You might get the
impression that previously, there were no regulations or controls on the Internet
in Turkey, but that is incorrect. According to al-Monitor,
40,000 websites are inaccessible
in Turkey today. YouTube has been blocked for months at a time, and Vimeo has
been temporary blocked in the last couple of months, there were also a lot of adult entertainment sites such as https://www.sexfreehd.xxx/ that have also been blocked.

If all of
this was not enough, whatsupturkey.com
along with many news outlets has reported on a new scandal:

Most of the
conversations on the leaked recordings allegedly took place between Tayyip Erdogan
and his son, Bilal Erdogan on the 17th of December, the same day as
a graft probe was unexpectedly initiated against ministers and sons in Mr. Erdogan’s own government.

The gist of the
conversations is that Mr. Erdogan needs to urgently move a LOT of cash.

In later recordings,
Bilal Erdogan calls back to his father and reports how the work is proceeding.
After a day of collecting enormous amounts of cash, allegedly about USD
1 billion from 5 different houses and making it disappear by buying apartments
and making advance payments to businessmen they work with, he still hadn’t been
able to hide it all. Bilal says: (emphasis by the Wrongologist)

Mr. Erdogan agrees on
the call. How these leaked phone call recordings will influence the upcoming
local elections March 30 is unclear. The opposition parties, naturally,
immediately called for Mr. Erdogan to resign, while the Prime Minister has claimed
that the 11 minutes of conversation was a fabricated montage.

Then
there is today’s report from the BBC:

Where is
all of this heading? Turkey has been an important US ally for a long time. The Turkish government has increased
its control over the judiciary and the media. It has exacted a high price in
terms of freedom of press, speech, and assembly, and has hurt Turkish economic
growth, which has been the strong point of the AKP’s appeal to voters.

In the process, the
“Turkish model” — a successful mix of democracy, market capitalism and Islamic
conservativism — that Mr. Obama and other Western leaders have celebrated, has
been endangered.

These major internal
tensions are unfolding just before municipal elections (Mar. 30, 2014). That
will be followed by the first-ever presidential election by popular vote
(August 2014) and then by a general election in June of 2015. The AKP should
make another strong showing in March, but it will be at the expense of government
transparency, the rule of law, the separation of powers, and a free media.

There’s little the US
or the EU can do to prevent Mr. Erdogan and the AKP from becoming more
dictatorial. The only force that can prevent that is the Turkish electorate, and it is
unclear whether it will embrace that idea. Mr. Erdogan and his Justice and Development Party have a
very different ideological worldview from that of the West. They gather in
protest in front of the US Embassy, they provoked the civil war in
Egypt and support the Salafi groups in Syria.

It is clear that the
Turkey-US relationship could be derailed at anytime.

In
the past, Turkey has concentrated power in the military or in the incumbent party.
In 2014, it appears that it is elections, the economy, and very limited international
pressure that will determine what happens next in Turkey.

 

What’s
Wrong Today:

The minimum wage was last
increased in 2007 by huge bi-partisan majorities. George W. Bush was
president, and the House and Senate were controlled by the Democrats. In the
Senate, only 3 Republicans voted against the bill, Messrs. Coburn
(R-OK), Kyl (R-AZ) and DeMint (R-SC), while 2 Democrats did not vote: Messrs.
Schumer (D-NY) and Johnson (D-SD). The bill passed 94-3.

In the House, the bill passed by 315-116, with all 233 Democrats voting
for it along with 84 Republicans, while 116 Republicans voted “no”. Today’s
Senate is different. Only 22 of the 45 Republicans who voted for the bill
in 2007 are still in the Senate, while Think Progress reports
that 67 House Republicans who voted for it in 2007 are still house members.

This year, it seems unlikely that there are sufficient votes to bring the
$10.10 minimum wage bill to the floor of the Senate, while the Republican House
leaders say they have no intention of voting on the legislation, even if passed
by the Senate.

President Obama and
congressional Democrats support an increase to $10.10, indexed to inflation.
Republicans plan to obstruct this. Indeed,
Republican governors called
out the minimum wage at the National
Governors Association meeting at the White House, with several governors
indicating that they opposed increasing the minimum wage in their home states. Mr.
Obama to the govs:

Reply from Gov. Bobby Jindal (R-LA):

So, what’s different today from the environment in 2007? Republicans
now hate the minimum wage increase. Rep. Paul Ryan (R-WI) said the
following to CNN after Mr. Obama’s SOTU speech:

Can raising the minimum wage be a defining political battle of the
2014 elections? Big
majorities of voters in both parties want the minimum wage raised. As the Wrongologist reported in December, when the public can vote on minimum
wage increases, they pass handily:

Even in
New Jersey, where voters re-elected Republican Chris Christie as governor, the
minimum wage was increased to $8.25, and indexed it to inflation, by 61% to 39%
of the voters.

Polls show
public support for an increased minimum wage: A December 11 Wall
Street Journal/NBC News poll found that 63% supported a rise to $10.10:

Here are a
few more polls: A November Gallup
poll
showed that 76% of Americans want the minimum wage raised to at least $9 from
the current $7.25. This is up 5 percentage points just since March. An August poll by the National
Employment Law Project (NELP) found that 80%
support raising the minimum
wage to $10.10,
including 62% of Republicans and 75% of southern whites. A March poll by the
USA Today/Pew Research Center found that 71% favor increasing the
minimum wage to $9.

Making the minimum wage a national election issue could succeed. Republicans will have to decide: Will they obstruct a vote on the
minimum wage and run in 2014 as opponents of fair pay for working people?

The
current salary (2013) for rank-and-file members of the House and Senate is
$174,000 per year. If you broke that down to a 40 hour work week and 52 weeks a
year then they would make $83.65 per hour.

You know
they don’t work 40 hours per week, and certainly not 52 weeks per year. BUT all
of the House Republicans tell you that you can live on $7.25 per hour.

Republicans will continue
to push the nonsense that joblessness will result from a higher minimum wage, as
did Mr. Ryan above. In fact, more consumer demand via a higher minimum wage
means more jobs. Raising the federal
minimum wage means all businesses must do the same thing at the same time, so
no business gains an advantage over other businesses.

Businesses can
decide how to cover their added costs. Some might raise prices, others might
pay top executives a bit less, and others would dip into some of the excess
cash. Companies that raise prices so top executives can retain their pay will
be at a disadvantage if their competitors don’t raise prices.

Raising
take home pay will not hurt our (now) growing economy; it will help it move
ahead.

Let’s
force Congressional Republicans to tell voters why they think a higher minimum
wage is a bad idea.

What’s
Wrong Today:

Last
Thursday, William Martini, a US District Judge, ruled that the New York Police
Department’s (NYPD) surveillance
of Muslim Americans in New Jersey was a lawful effort to prevent terrorism,
not a civil-rights violation.

In a decision
in federal court in Newark, NJ, Judge Martini dismissed a lawsuit brought in
2012 by eight Muslims who alleged that the NYPD’s
surveillance program was unconstitutional because it focused on religion,
national origin and race. Their suit accused the department of spying on
ordinary people at mosques, restaurants and schools in New Jersey since 2002.

Martini
said he was not convinced the plaintiffs were targeted
solely because of their religion:

But
as Samuel Bagenstos, a law professor at the University of Michigan and former
official in the civil rights division of the Justice Department, told MSNBC’s Adam Serwer, that’s not the way it works:

The ruling
also singled out the Associated Press, which sparked the lawsuit with a series of stories
based on confidential NYPD documents showing how the department sought to
infiltrate and surveil at least 20 mosques, 14 restaurants, 11 retail stores,
two grade schools, and two Muslim student associations in New Jersey. The
NYPD’s spying on daily life in Muslim communities in the region – with no
probable cause, and nothing to show for it – was exposed in a Pulitzer-Prize winning series by the AP.

The Judge’s
logic is that the reporters for AP, Adam Goldman and Matt Apuzzo, were
responsible for any injuries to the Muslim community by providing them proof of
the spying targeted at them. Here is a quote from Judge Martin’s opinion: (emphasis
by the Wrongologist)

The
most impressive thing that jumps out in the opinion is Judge Martini asserting,
not once but twice, that AP had published or released “without authorization”. Is it naive to think that a US
District Court judge would have heard of the First Amendment to the US
Constitution?

It appears
that Judge Martini actually hit a weird kind of trifecta: In one decision, he gets the 1st,
4th and 14th Amendments wrong, and maybe sets a record of some kind by getting
the 1st Amendment wrong three times. That would be Freedom of Religion,
Freedom of Association and Freedom of the Press.

OK, think
about it. By Judge Martini’s reasoning, you live on a farm, and you notice a
poacher on your neighbor’s farm. When you reveal this information to your neighbor,
he then sues the poacher for damages. The poacher’s defense is that you are responsible
for the damages since you disclosed the poaching that resulted in the lawsuit
against the poacher.

And to Judge Martini, this makes sense. Martini is a one-term Republican congressman from New
Jersey. He was appointed to the federal bench by George W. Bush in 2002.
Previous critiques of his judicial conduct have been unusually blunt and
public, including repeated rebukes at the appellate level and the local US
attorney’s describing him in court filings as “misguided” and “irrational.”

In other
words, this fool, who was appointed by another fool who was appointed by the US
Supreme Court, has again acted like a fool. Maybe we shouldn’t be surprised.

Omar
Sacirbey of the Religion News Service quotes
Hina Shamsi of the American Civil Liberty Union, about this case:

But the NYPD
wasn’t hunting for Muslim terrorists in places where the 9/11 terrorists were
known to hang out, like cheap hotels, gyms, and cybercafes. Rather, the NYPD
was hunting terrorists in schools in Newark, including one that taught Muslim girls
in fifth to twelfth grades, and another teaching first through fourth graders.

The NYPD
was hunting terrorists in a girl’s school. Was the 9/11 plan hatched in a girl’s
school?

Sadly, the nature of the republic for which we stand is changing. This court’s decision gives
legal sanction to the targeted discrimination of a minority, in this case Muslims, anywhere and
everywhere in this country, without limitation, for no other reason than their
religion.

Sochi tries to dominate the week’s news, but
Ukraine steals the headlines, pushing the Pussy Riot whipping by Russia’s
modern Cossacks off the front page.

Western bureaucrats and politicians work to
figure out if Ukraine is another proxy war between Putin and Obama, like Syria
and Iran, or an organic response to another autocrat’s excesses.

On the home front, Tom Delay tells the
nation that our Constitution was written by his god. A snake handling preacher,
who believed his god would protect him from snake bite, dies from a snake bite.
We learn that John Boehner has been against raising the minimum wage since
1996. We learn from a Bush-appointed judge that it is perfectly fine for the
NYPD to spy on Muslim girls in a grade school in New Jersey, but not OK for the
AP to reveal it.

We met with Iran to flesh out the nuclear weapons deal, with
modest progress, and with more hysteria from Israel. The UN orders the warring
parties in Syria to stop blocking the delivery of humanitarian aid, but without
any prospect of punishment for those who disobey.

We live in times that cry out for solutions,
but none will be forthcoming in Washington this year. Politicians on both sides
think ANY KIND of political action creates risk for their reelection this fall.
So, the only deal they will make is no deal at all. You can’t have better days, but you will get exhortations for more money from the congress critter who is doing nothing for you.

Use the following, adapted from Henry
Demarest Lloyd, as the inspiration for this Sunday’s homily: If our civilization is destroyed, it will
not be by barbarians at our gates. Our barbarians will come from inside, and above.

Be
sure you know the difference between these on Sunday:

The games are not always between Olympians:

And America still sucks at curling:

Canadian Men, following Canadian Women, beat US 1-0:

Congressional do-nothings should only get merit pay:

Photo taken in Aleppo on February 16, 2014:

There will be limited to zero blogging until late Sunday, when Sunday Cartoon Blogging will be published.

The Wrongologist and Ms. Oh So Right are escaping 20″ of snow and heading to Florida for a long weekend.

No salt, no shovel, no snow blower.

Well, maybe some salt on the rim of the margarita…

What’s
Wrong Today:

According
to the Federal Reserve Bank
of NY (FRBNY), student loan balances increased by $53 billion in the 4th
quarter of 2013, and totaled $114 billion for the year, ending at $1.08
trillion. Student loans now make up 9.4% of total consumer debt and 36.7% of
non-housing debt.

As the Wrongologist said last April, student loans are growth
market.

In 2003,
student loans accounted for 3.1% of total consumer debt and 12.2% of
non-housing debt. So, student loans have more than tripled in 10
years. It looks like student loans could bankrupt a
generation, not to mention really affect their credit scores. Most students in debt will need to use the best credit cards to build credit before even thinking about taking out another loan like a mortgage.

It’s
obvious that growing student debt is hurting not just those who attended
college or who have graduated. It also impacts any relatives who may have co-signed
for a student loan. Many look to UniTaskr and similar job desks to get jobs during their degrees to help repay the debts, and those graduates who do have jobs must also give top priority to
servicing their college debts, which means they must defer certain life
experiences, like buying a home, or getting married, or starting a family. Services like BenefitEd are avaliable to help you, but more needs to be done to prevent this problem!

Consider
this: Researchers at the FRBNY did their
own analysis of the student debt problem’s impact. From 2009 to 2012, the home ownership rate fell twice as much for
30-year-olds who had a history of student loans than it did for those
without such debt. The finding upends traditional thinking, which
held that student debt signaled higher earnings and higher chances of owning a
home.

Why is
this happening? Tuition has skyrocketed since 1980. Students are getting a
similar education as before, but at a much higher price. And afterwards,
they’re left with a mountain of debt. It is possible to consolidate your debts into one more manageable loan, like what is offered by debtconsolidation.loans.

Consider
the relative growth in inflation of college costs:

It
is a value judgment if today’s students are getting better (or more) education for
their money. It is not a value judgment that the jobs market is offering less
to someone with a college degree. As the chart below shows, median income for
those with a bachelor’s degree has fallen since 2003. Graphing median income
vs. student debt shows a very depressing gap has appeared since 2003:

Student debt is the symptom, not the problem. The real problems
are soaring costs of a college education and the sharply declining real-world
value of a diploma.

It
is true that at public colleges and universities, tuition has risen due in part
due to the states shifting funding away from their university systems. Other reasons
include the fact that it takes longer
to complete a degree today than in the past, so the borrowing goes on
for longer:

• Only
  37% of freshman at 4-year colleges graduate in four years

• 59%
  of full-time students at 4-year institutions graduate within 6 years

Also,
non-teaching positions have grown faster than teaching positions. According to
an analysis released this month by the New England Center for Investigative Reporting,
(NECIR) from 1987 until 2011-12, the most recent academic year for which comparable
figures are available, universities and colleges collectively added 517,636
administrators and professional employees. The ratio of nonacademic employees
to faculty has also doubled. There are now two nonacademic employees at public
and two-and-a-half at private universities and colleges for every one
full-time, tenure-track member of the faculty.

NECIR also reported that
the number of employees in central system offices has increased six-fold since
1987, and the number of administrators in them by a factor of more than 34.

With all
this borrowing by students, student loan delinquencies have increased rapidly.
They were around 6% in 2005, but they were 11.5% at the end of 2013.

American debtors
have always leaned heavily on credit cards. Therefore, credit card
delinquencies have always been highest category of past due debt, usually
ranging between 8.5% and 10.2%. They spiked to 13.7% during the Great Recession
before dropping again. In Q3, 2012, student
loan delinquencies exceeded credit card delinquencies for the first time.
Since then, the gap has widened, with credit card delinquencies at 9.5% and
student loan delinquencies at 11.5%.

As bad as
that sounds, real student delinquencies are worse than that. Many student borrowers
don’t have to make any payments while they are in school. So if the delinquency
rate were calculated based on those borrowers who have made payments as a
percentage of those who should be
making payments, the delinquency rate would be considerably higher.

It may not
be an exaggeration to call our student loan situation another subprime debacle waiting to happen. Here’s why: In
the below 30 age group, 38% of the borrowers had credit scores of under 621,
and 29% had scores between 621 and 680. And it is at that lower end of the
credit spectrum where student loans grew the most during the
year:

(HELOC
means Home Equity Line of Credit)

These
borrowers, who are at the low end of the creditworthiness spectrum, are least likely to pay off the debt they
took on in order to attend schools that have often leave them unprepared
for today’s job market, assuming they can even find a job in today’s tough job
market.

And these lucky duckies can’t even use
bankruptcy to create a clean slate! We should remember
that by law, student loan debt is treated differently than other kinds of
consumer debt. Among the differences:

• Student loan debt is not dissolved
  in bankruptcy

• Student loan lenders can garnish
  Social Security benefits without a court order

These “enhancements”
were passed in successive versions of the Higher Education Act over the past 15
years. The fact that the banking
industry lobbied for the ability to garnish SS benefits tells you they expected
high losses on student debt. That’s one more win for the Plutocracy.

What’s
the plan, Congress?

In
the 20th century, no other institution could say that it had a greater ability
to raise people out of poverty or, to have contributed more to the development
of a robust American middle class than higher education.

For nearly 30 years,
medical care and higher education costs have risen at rates substantially above the official rate of inflation. Since the Clinton administration,
Americans have agreed that health care is a national policy concern that
warrants serious public consideration.

Yet,
we fail to give higher education the same degree of attention, notwithstanding
the rising costs to students and families.

These kids
who have to borrow to get their bachelor’s degree will start out their working
lives broke, and they will stay broke as long as there is student loan debt to
repay. It will handicap their contribution to the economy for years to come. It
will delay their starting a 401k, or other lifetime savings program.

We used to talk about being wage slaves. While that is still true, this generation of students is on
track to becoming America’s first debt-slave generation.