Topic: General

Ukraine’s Fight With Russia Isn’t America’s Business

Ukraine’s military has lost control of the Donetsk airport and the rebels have launched another offensive. Fortune could yet smile upon Kiev, but as long as Russia is determined not to let the separatists fail, Ukraine’s efforts likely will be for naught.

As I point out on Forbes online:  “Only a negotiated settlement, no matter how unsatisfying, offers a possible resolution of the conflict. The alternative may be the collapse of the Ukrainian state and long-term confrontation between the West and Russia.”

Ukraine’s most fervent advocates assume anyone not ready to commit self-immolation on Kiev’s behalf must be a Russian agent. However, there are numerous good reasons for Washington to avoid the fight.

1) Russia isn’t Serbia, Iraq, Afghanistan, or Libya.

While the Obama administration has resisted proposals for military confrontation with Moscow, a gaggle of ivory tower warriors has pushed to arm Ukraine, bring Kiev into NATO, and station U.S. men and planes in Ukraine. These steps could lead to war.

Americans have come to expect easy victories. However, Russia would be no pushover. In particular, Moscow has a full range of nuclear weapons, which it could use to respond to allied conventional superiority.

2) Moscow has more at stake than the West in Ukraine.

Ukraine matters far more to Moscow than to Washington. Thus, the former will devote far greater resources and take far greater risks than will the allies. The Putin government already has accepted financial losses, economic isolation, human casualties, and political hostility.

Greeks Vote Against Euro and For Democracy

Greece’s parliamentary elections could reshape Europe. In voting for the radical left the Greek people have reinvigorated home rule and democracy across the continent.

Greece has been in economic crisis seemingly for eternity. Even in the Euro the system could not generate the growth necessary to repay the debt:  the economy was hamstrung by enervating work rules, corrupting political influences, profiteering economic cartels, and debilitating cultural norms.

The inevitable crisis hit in 2009. Athens couldn’t make debt payments or borrow at affordable rates. Nor could Greece devalue its currency to make its products more competitive. The European “Troika” (European Central Bank, European Commission, and International Monetary Fund) developed a painful rescue plan.

Syriza, meaning Coalition of the Radical Left, arose to challenge the two establishment parties. Headed by Alexis Tsipras, Syriza won 36.2 percent and 149 seats, two short of a majority, on Sunday.

Syriza offered dreamy unreality:  free health care and electricity along with food subsidies, pension increases, salary hikes, and more public sector jobs. Billions in new revenue is to magically appear.

Banks Are ‘Under Assault’

J.P. Morgan Chase’s CEO Jamie Dimon has it right when he asserts that banks are “under assault.

This has put a damper on the source of 80 percent of the U.S. money supply, broadly measured. The CFS Divisia M4 is growing at an anemic 2.2 percent on a year-over-year basis.

Since the course of nominal national income is determined by the money supply, it’s not surprising that U.S. growth is also anemic. Final Sales to Domestic Purchasers, the best proxy for U.S. aggregate demand, has still not reached its trend rate of growth. In the face of these facts,

I don’t anticipate that the Fed will (or should), “tighten” at its Federal Open Market Committee meetings on January 27–28. Nor do I think the Fed will tighten as soon as most people think. 

The World Misery Index: 108 Countries

Every country aims to lower inflation, unemployment, and lending rates, while increasing gross domestic product (GDP) per capita. Through a simple sum of the former three rates, minus year-on-year per capita GDP growth, I constructed a misery index that comprehensively ranks 108 countries based on “misery.”

Below the jump are the index scores for 2014. Countries not included in the table did not report satisfactory data for 2014.

The five most miserable countries in the world at the end of 2014 are, in order: Venezuela, Argentina, Syria, Ukraine, and Iran. In 2014, Argentina and Ukraine moved into the top five, displacing Sudan and Sao Tome and Principe.

The five least miserable are Brunei, Switzerland, China, Taiwan, and Japan. The United States ranks 95th, which makes it the 14th least miserable nation of the 108 countries on the table.

Cato Scholars Respond to the 2015 State of the Union

Cato Institute scholars Alex Nowrasteh, Aaron Ross Powell, Neal McCluskey, Mark Calabria, Bill Watson, Chris Edwards, Gene Healy, Chris Preble, Julian Sanchez, Pat Michaels and Trevor Burrus respond to President Obama’s 2015 State of the Union Address.

Video produced by Caleb O. Brown, Austin Bragg and Tess Terrible.

Did Supreme Court Telegraph Its Ultimate Ruling on Gay Marriage?

That’s the question I pose in my latest Forbes piece. Here’s a taste:

As any good lawyer knows, framing the question you ask a court is just as important — often more important — than providing a well-argued answer that helps your client. Well, when the Supreme Court, as expected, decided to take up gay marriage, it unexpectedly reframed the “questions presented” in the four cases it took up and consolidated for argument. Instead of accepting any of the formulations presented in the four petitions for review, it asked the parties to brief these two questions:

  1. Does the Fourteenth Amendment require a state to license a marriage between two people of the same sex?
  2. Does the Fourteenth Amendment require a state to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state?

This was unusual; typically the justices simply decide whether to take a case based on the petitioners’ articulation. That’s why first-year legal-writing classes spend so much time working on those “questions presented.”

So what does this mean? UC-Irvine law professor Rick Hasen found the first question “odd” because it focused on state powers and obligations rather than individual rights, which ”perhaps keeps the court from getting into questions about heightened scrutiny for sexual orientation discrimination.” Harvard law professor Larry Tribe suggested that the reframed questions “technically leave open a middle path along which the court would prevent states from discriminating against same-sex couples lawfully married in their home states without requiring any state to take the affirmative step of issuing its own marriage licenses to same-sex couples.” (In my initial reaction to the cert grant, I speculated on the same compromise possibility but ultimately concluded that this was less likely than a clean win for the challengers on both questions.)

Read the whole thing. And I also recorded a podcast reacting to the Court’s decision to take up these cases.

Community College Courtesy of the Federal Taxpayer? No Thanks

Word came out last night that in a speech in Tennessee today President Obama will propose that two years of community college be made free to all “responsible” students, primarily funded by federal taxpayers. But one look at either community college outcomes or labor market outlooks reveals this to be educational folly.

The fact of the matter, according to the federal government’s own data, is that community college completion rates are atrocious. The federal Digest of Education Statistics reports that a mere 19.5 percent of first-time, full-time community college students complete their programs within 150 percent of the time they are supposed to take. So less than 20 percent finish a two-year degree within three years, or a 10-month certificate program within 15 months. And that rate has been dropping almost every year since the cohort of students that started in 2000, which saw 23.6 percent complete. Moreover, as I itemize in a post at SeeThruEDU.com, even when you add transfers to four-year schools, the numbers don’t improve very much. Meanwhile, interestingly, the for-profit sector that has been so heavily demonized by the administration has an almost 63 percent completion rate at two-year institutions, and that has been rising steadily since the 2000 cohort.

The other huge problem is that the large majority of job categories expected to grow the most in the coming years do not require postsecondary training. Of the 30 occupations that the U.S. Department of Labor projects to see the greatest total growth by 2022, only 10 typically need some sort of postsecondary education, and several of those require less than an associate’s degree. Most of the new jobs will require a high school diploma or less.

Of course, one of the biggest problems in higher ed is that for so much of it, someone other than the student is paying the bill, tamping down students’ incentives to seriously consider whether they should go to college and what they should study if they do. This proposal would only exacerbate that problem, essentially encouraging people to spend two years in community college fully on the taxpayer dime while they dabble in things they may or may not want to do—and as they maintain a pretty low 2.5 GPA—then maybe focusing a little more when the two years is up and they have to pay something themselves.

Unfortunately, there is no way to look at this proposal (at least as it has been spelled out so far), investigate the reality of community college, and conclude anything other than it is a terrible idea.