Archives: 03/2011

SEC Employees Hard at Work during Financial Crisis

Thanks to Denver lawyer Kevin Evans, who filed the Freedom of Information Act Request, we now know that several employees of the Securities and Exchange Commission (SEC) might have missed the financial crisis because their eyes were glued to their computer screens watching porn.

The chart below shows the number of incidents, as reported by the SEC’s Inspector General.  What caught my eye was that the number of porn-viewing incidents shows a massive spike in 2008, when the financial crisis was at its worst.

It should, of course, be noted that the overall level of incidents was small in number, so we shouldn’t draw too many conclusions about the SEC overall.  We should, however, be concerned at at least one of these employees was being paid $222,418 a year.  I might be able to accept someone getting paid $20,000 a year spending their work time watching porn, but not $222,418.  But then at least this employee has an excuse for missing the financial crisis; we are still waiting to hear the excuse for the SEC’s non-porn viewing employees (perhaps they were too busy on Facebook to keep an eye on Wall Street).

Tough Breaks for the Blame-Cheap-States Crowd

An explanation for explosive college prices that’s very popular with ivory-tower apologists is that state governments have been ruthlessly “defunding” higher ed for years, forcing schools to raise prices. Two new reports help to make clear – as I have argued many times in the past – that this simply doesn’t hold water.

The first report is the annual State Higher Education Executive Officers’ State Higher Education Finance Report.  While it shows that on a per-pupil basis state and local funding has declined over the last few years, total amounts have risen pretty steadily since 2000. Adjusted for inflation, total state and local support dipped from $81.3 billion in 2000 to $78.0 billion in 2005, ballooned to $87.1 billion in 2009, then dropped just a bit to $85.5 billion in 2010. Helping to put it all in perspective, SHEEO reports that in 1985 state and local funding totalled just $65.5 billion. In other words, the general trend line has gone steeply up. But don’t believe me? Take it right from the report:

Some observers have suggested that states are abandoning their historical commitment to public higher education. National data and more careful attention to variable state conditions strongly suggest that such a broad observation is not justified by the available data.

Of course, if total taxpayer funding is generally up but per-student funding is down, increases in enrollment must be significant. And indeed they are. Unfortunately, evidence suggests that that’s very likely not a good thing.

The other bad news for the blame-the-taxpayers crowd is a new report from the Center for College Affordability and Productivity that illustrates that external factors such as decreasing state subsidies are not the main culprit behind skyrocketing prices. Student aid is, because it allows colleges to increase their prices with impunity. Evidence of this includes college prices considerably outpacing overall inflation; hugely declining faculty productivity; tuition growing far beyond instructional costs; and ballooning financial aid that hasn’t been accompanied by decreasing net costs.

Unfortunately, much of this will likely either be dismissed out of hand or just ignored. But the evidence, when you examine it, is awfully compelling: Subsidies, not pennypinchers, are the big problem in higher ed.

Wednesday Links

The Tea Party, Real and Imagined

In the Washington Post, Dana Milbank rounds up a lot of bills introduced into state legislatures by conservatives, some of them a bit odd, and blames them all on “the Tea Party.” “Tea Party” has sort of replaced “neoconservative” as an all-purpose pejorative for liberals. Meanwhile, a tiny AP story down in the small type among the nail fungus ads reported some real Tea Party-style news. The Miami Herald covered it in more detail:

Voters swept Miami-Dade Mayor Carlos Alvarez out of office by a stunning margin Tuesday [88 percent], capping a dramatic collapse for a politician who was given increased authority by voters four years ago to clean up much-maligned county government but was ushered out in the largest recall of a local politician in U.S. history.

The spectacular fall from power comes after two years of missteps, ranging from granting top staffers big pay hikes to construction of a publicly funded stadium for the Florida Marlins to implementation of a property-tax rate increase that outraged an electorate struggling through an ugly recession….

Tuesday’s vote served notice that the public is thirsting for widespread reform at County Hall, long dominated by entrenched politicians and insiders. County Commissioner Natacha Seijas was similarly recalled Tuesday in a resounding defeat. For 18 years she represented a district that includes Miami Lakes and Hialeah and was widely regarded as the most powerful politician on the commission.

The two ousters come on the heels of Dorrin Rolle’s defeat in November, which marked the first time a sitting county commissioner has been defeated in 16 years.

More than 200,000 people cast votes in the election.

Miami is no right-wing hotbed. Obama got 58 percent of the vote there. This should worry tax-hikers everywhere.

Bastiat on the Japanese Tsunami

Nathan Gardels at the Huffington Post writes (emphasis added):

No one – least of all someone like myself who has experienced the existential terror of California’s regular tremors and knows the big one is coming here next – would minimize the grief, suffering and disruption caused by Japan’s massive earthquake and tsunami.

But if one can look past the devastation, there is a silver lining. The need to rebuild a large swath of Japan will create huge opportunities for domestic economic growth, particularly in energy-efficient technologies, while also stimulating global demand and hastening the integration of East Asia.

But as French political economist Frédéric Bastiat noted, destruction isn’t stimulative because it cannot create wealth:

Obama Administration to Take a Stand on Privacy, But it Ain’t Fixing the Strip-Search Machine Morass

At least one report has it that a Commerce Department official will announce the Obama administration’s support for “baseline privacy legislation” at a Wednesday Senate Commerce Committee hearing.

You mean, like, the Fourth Amendment? If only it were so.

The action is in the House Government Reform Committee, which is holding a hearing on the Transportation Security Administration’s strip-search machines. What’s the administration’s “baseline privacy policy” on that?

I’ve already written two posts in the last year (1, 2) titled “Physician, Heal Thyself”…