The Real Reason College Costs So Much

We have 115,520 janitors in the United States with bachelor's degrees or more

By ALLYSIA FINLEY

Another school year beckons, which means it's time for President Obama to go on another college retreat. "He loves college tours," says Ohio University's Richard Vedder, who directs the Center for College Affordability and Productivity. "Colleges are an escape from reality. Believe me, I've lived in one for half a century. It's like living in Disneyland. They're these little isolated enclaves of nonreality."

Mr. Vedder, age 72, has taught college economics since 1965 and published papers on the likes of Scandinavian migration, racial disparities in unemployment and tax reform. Over the last decade he's made himself America's foremost expert on the economics of higher education, which he distilled in his 2004 book "Going Broke by Degree: Why College Costs Too Much." His analysis isn't the same as President Obama's.

This week on his back-to-school tour of New York and Pennsylvania colleges, Mr. Obama presented a new plan to make college more affordable. "If the federal government keeps on putting more and more money in the system," he noted at the State University of New York at Buffalo on Thursday, and "if the cost is going up by 250%" and "tax revenues aren't going up 250%," at "some point, the government will run out of money."

Note that for the record: Mr. Obama has admitted some theoretical limit to how much the federal government can spend.

His solution consists of tying financial aid to college performance, using government funds as a "catalyst to innovation," and making it easier for borrowers to discharge their debts. "In fairness to the president, some of his ideas make some decent, even good sense," Mr. Vedder says, such as providing students with more information about college costs and graduation rates. But his plan addresses just "the tip of the iceberg. He's not dealing with the fundamental problems."

College costs have continued to explode despite 50 years of ostensibly benevolent government interventions, according to Mr. Vedder, and the president's new plan could exacerbate the trend. By Mr. Vedder's lights, the cost conundrum started with the Higher Education Act of 1965, a Great Society program that created federal scholarships and low-interest loans aimed at making college more accessible.

In 1964, federal student aid was a mere $231 million. By 1981, the feds were spending $7 billion on loans alone, an amount that doubled during the 1980s and nearly tripled in each of the following two decades, and is about $105 billion today. Taxpayers now stand behind nearly $1 trillion in student loans.

Meanwhile, grants have increased to $49 billion from $6.4 billion in 1981. By expanding eligibility and boosting the maximum Pell Grant by $500 to $5,350, the 2009 stimulus bill accelerated higher ed's evolution into a middle-class entitlement. Fewer than 2% of Pell Grant recipients came from families making between $60,000 and $80,000 a year in 2007. Now roughly 18% do.

This growth in subsidies, Mr. Vedder argues, has fueled rising prices: "It gives every incentive and every opportunity for colleges to raise their fees."

Let Them Work!

The First Step to a Free Detroit

By Patrick Barron

I have received more personal emails regarding my earlier essay Declare Detroit a Free City than all my other essays put together. Some have been especially poignant. For example, one lady said that she and her husband, who has been unemployed for two years from a company for which he worked for twenty-five years, would move to a Free Detroit themselves, confident that her husband could find work. I pointed out to her that Ludwig von Mises explained that the only real barrier to economic expansion was the limited supply of labor, which puts a practical limit to the expansion of the division of labor. In other words, the larger the pool of labor, the more specialized is the economy, which results in lower costs of production.

No Unwilling Unemployment in a Free Market

By himself an individual cannot exist much above basic survival, if he can even do that. However, larger groups who engage in peaceful cooperation develop a division of labor which allows each individual to specialize according to his comparative advantage, accumulate capital, and provide everyone else in the group with goods and services that would be impossible for them to produce in a hermit’s existence. Given the fact of an unlimited desire to improve our condition that is limited only by the size of the labor pool, Mises explained that under free market capitalism there is no unwilling unemployment. There is always more work to be done than there are people to it. Therefore, the first step to freeing Detroit from its downward economic spiral is to remove whatever barriers exist that prevent people from working.

Step One–Free the Market for Labor

The greatest of these barriers to work are the myriad and complex laws that interfere in the ability for labor and capital to arrive at mutually agreeable terms of employment. Minimum wage laws should be the first to go, but also the many costly labor regulations that business must consider when hiring. Government has been piling on costly mandatory benefits, whether these benefits would be valued by the employee in a free labor market or not. Again, Mises explained that business must take into account the total cost of labor, not just the wage cost. If business must pay for other benefits, then that cost must be added to the explicit wage cost to arrive at the real, total cost of labor.

Protecting the All Important First Rung of the Ladder

Minimum wage laws and onerous regulation raise–or eliminate altogether–that critical first rung on the employment ladder for many workers, preventing them from gaining that all important first step on the road to independence and self-reliance. The entry level employees and younger workers, those who have less marketable skills and whom labor laws are supposed to benefit, are the ones who are harmed the most by labor laws. These workers are locked out of the labor market by the inexorable laws of economic reality. If their skills provide business with less revenue than their total costs of employment, no business can employ them for long without running out of capital. Hence, they never get on the ladder at all. This is a tragedy not only for them but for all of us, too.

Dismantling the Ladder: Cooperative Relations Under Constant Attack 

Our lawmakers seem to live in an alternative world where they believe that wages may be mandated ever upward with no adverse economic consequences. In this tragic world–where unfortunately WE live–they are doing everything possible to stop new entrants from entering the labor force and gaining the skills that businesses would be willing to give them. Currently there even is a movement afoot to outlaw the practice of “employing” interns. Internships are one way for workers with low marginal productivity to gain skills and contacts in the careers of their choice. Typically, an intern works either for free or perhaps for room, board, and a small stipend. Hypocritically, Congress itself “employs” many interns. My son was an unpaid intern for our congressman for two summers while in college. Needless to say his eyes were opened to the ways of the world, which have served him well as an attorney.

The most egregious attempt at interference in what has always been a free labor market occurred recently in the great farm state of Iowa. The U.S. Department of Labor, with assistance from the U.S. Department of Agriculture, attempted, unsuccessfully, to bring the children of farm families under their regulatory umbrella! The rest of us benefited immensely when Iowa’s farm families said NO!. Not only was this an intrusion into the hearths and homes of some of the most hard working and independently reliant people in America, it would have created a precedence for even more intrusions into American families’ everyday lives. Tell junior to take out the garbage and mow the grass? Make sure you pay minimum wage, buy workers’ comp insurance, and file that W-2 at the end of the year! (Don’t think that this could not have happened!)

Detroit Could Become a New Beacon of Freedom

What might ordinary people achieve if all barriers to the free use of their labor were removed? Might they not be inspired to move to such a place, set up shop, take on interns, establish apprenticeships, and produce the goods and services that all of us need and cannot produce for ourselves? They would be following in the footsteps of all those who crossed an ocean to do just that, seeking only the opportunity to live and work freely. Detroit could become the new beacon of freedom and liberty for the oppressed people of America, like the lady who told me that she and her husband would move to a Free Detroit. She and her husband would follow in the honorable tradition of our pilgrim ancestors and all who came here later seeking only freedom. Let us establish such a place, a haven free of the oppressive hand of the parasitic state. And let us establish it in the most dysfunction real estate in America–the bankrupt city of Detroit. All that our oppressors have to fear is our success. 

The Fallacy of the Public Sector

Any reduction of the public sector, any shift of activities from the public to the private sphere, is a net moral and economic gain

By  Murray N. Rothbard

We have heard a great deal in recent years of the “public sector,” and solemn discussions abound through the land on whether or not the public sector should be increased vis-à-vis the “private sector.” The very terminology is redolent of pure science, and indeed it emerges from the supposedly scientific, if rather grubby, world of “national-income statistics.” But the concept is hardly wertfrei; in fact, it is fraught with grave, and questionable, implications.

In the first place, we may ask, “public sector” of what? Of something called the “national product.” But note the hidden assumptions: that the national product is something like a pie, consisting of several “sectors,” and that these sectors, public and private alike, are added to make the product of the economy as a whole. In this way, the assumption is smuggled into the analysis that the public and private sectors are equally productive, equally important, and on an equal footing altogether, and that “our” deciding on the proportions of public to private sector is about as innocuous as any individual’s decision on whether to eat cake or ice cream. The State is considered to be an amiable service agency, somewhat akin to the corner grocer, or rather to the neighborhood lodge, in which “we” get together to decide how much “our government” should do for (or to) us. Even those neoclassical economists who tend to favor the free market and free society often regard the State as a generally inefficient, but still amiable, organ of social service, mechanically registering “our” values and decisions.

One would not think it difficult for scholars and laymen alike to grasp the fact that government isnot like the Rotarians or the Elks; that it differs profoundly from all other organs and institutions in society; namely, that it lives and acquires its revenues by coercion and not by voluntary payment. The late Joseph Schumpeter was never more astute than when he wrote, “The theory which construes taxes on the analogy of club dues or of the purchase of the services of, say, a doctor only proves how far removed this part of the social sciences is from scientific habits of mind.”[1]

Apart from the public sector, what constitutes the productivity of the “private sector” of the economy? The productivity of the private sector does not stem from the fact that people are rushing around doing “something,” anything, with their resources; it consists in the fact that they are using these resources to satisfy the needs and desires of the consumers. Businessmen and other producers direct their energies, on the free market, to producing those products that will be most rewarded by the consumers, and the sale of these products may therefore roughly “measure” the importance that the consumers place upon them. If millions of people bend their energies to producing horses-and-buggies, they will, in this day and age, not be able to sell them, and hence the productivity of their output will be virtually zero. On the other hand, if a few million dollars are spent in a given year on Product X, then statisticians may well judge that these millions constitute the productive output of the X-part of the “private sector” of the economy.

One of the most important features of our economic resources is their scarcity: land, labor, and capital-goods factors are all scarce, and may all be put to various possible uses. The free market uses them “productively” because the producers are guided, on the market, to produce what the consumers most need: automobiles, for example, rather than buggies. Therefore, while the statistics of the total output of the private sector seem to be a mere adding of numbers, or counting units of output, the measures of output actually involve the important qualitative decision of considering as “product” what the consumers are willing to buy. A million automobiles, sold on the market, are productive because the consumers so considered them; a million buggies, remaining unsold, would not have been “product” because the consumers would have passed them by.

Bombing Syria: War as Therapy

It is the height of adolescent stupidity to take action without thinking of the consequences

By Brendan O’Neil

War used to be the pursuit of politics by other means. Today, if the statements made by the Western politicos and observers who want to bomb Syria are anything to go by, it’s the pursuit of therapy by other means. The most startling and unsettling thing about the clamour among some Westerners for a quick, violent punishment of the Assad regime is its nakedly narcissistic nature. Gone is realpolitik and geostrategy, gone is the PC gloss that was smeared over other recent disastrous Western interventions to make them seem substantial, from claims about spreading human rights to declarations about facing down terrorism, and all we’re left with is the essence of modern-day Western interventionism: a desire to offset moral disarray at home by staging a fleeting, bombastic moral showdown with ‘evil’ in a far-off field.

Easily the most notable thing in the debate about bombing Syria in response to Assad’s alleged use of chemical weapons against civilians is the absence of geopolitical considerations, or of any semi-serious thought about what the regional or international consequences of dropping bombs into an already hellish warzone might be. Instead, all the talk is of making a quick moral gesture about ourselves by firing a few missiles at wickedness. In the words of a Democratic member of the US Foreign Affairs Committee, there might be ‘very complex issues’ in Syria, but ‘we, as Americans, have a moral obligation to step in without delay’. Who cares about complexity when there’s an opportunity to show off our own moral decency?

All the discussion so far has focused, not on the potential moral consequences of bombing Syria, but on the moral needs of those who would do the bombing. US secretary of state John Kerry says failing to take action on Syria would call into question the West’s ‘own moral compass’. Others talk about Syria as a ‘test for Europe’, as if this rubble-strewn country is little more than a stage for the working-out of our values. So intense is the narcissism of the bomb-Syria brigade that that one of its number describes the slaughter caused by the use of chemical weapons as ‘a question mark painted in blood, aimed at the international community’. They’re so vain, they think someone else’s war is all about them. Onepro-bombing commentator says the situation in Syria ‘holds a mirror up to Britain’, asking ‘what sort of country are we?’. Like Narcissus, the beaters of the drum for war on Assad are concerned only with their own image, their own reflection, and the question of whether they’ll be able to look at themselves in the mirror if they fail to Do Something.

Strikingly, not only do bomb-Syria folk fail to think seriously about geopolitical matters – they actively brush aside such pesky complex questions in their pursuit of the instant moral hit that comes from dropping a bomb on evil. One observer says of course military action in Syria is not ‘guaranteed to succeed’, but it nonetheless gives us Brits an opportunity to advertise our moral resolve and principles. Philip Collins, a former speechwriter for Tony Blair, has openly admitted that ‘intervention… will mean chaos’. ‘But there is chaos already’, he says, and at least the chaos we might cause will be giving voice to our ‘revulsion’ at Assad’s crimes, a ‘revulsion too profound to be written off as adolescent or unrealistic’. ‘It is important to add weight to our moral impulse’, Collins wrote.

Think about what is being said here: that it doesn’t matter if our attack on Syria doesn’t succeed (at whatever it is meant to do, which no one has spelled out), or even if it intensifies the bloodshed and chaos in that benighted nation. All that matters is that we in the West add physical weight – in the shape of bombs – to our ‘moral impulse’. Such blasé barbarism was taken to its logical conclusion by Norman Geras, co-author of the pro-war Euston Manifesto, when he wrote: ‘Since it is urgent that we respond somehow, out of solidarity, of our “common human heritage” with the victims, action must be taken even if it means meeting chaos with chaos and (by implication) that the chaos we cause turns out to be worse than the chaos we’re trying to bring to an end.’ (My emphasis.)

This is extraordinary stuff. It exposes what lies at the heart of modern Western interventionism – a desire to make a massive, fiery display of our own ‘moral impulse’, of the West’s flagging sense of ‘common human heritage’, regardless of the consequences on the ground or around the world. In our era, Western intervention is increasingly demanded and pursued, not as a specific, targeted thing that might change the shape of a conflict or further the geopolitical interests of Western nations, but as a kind of bloody amplifier of the presumed probity of the Western political class. At a time when both politics and morality at home are in a profound state of disarray, when there’s little of substance that can unite Western elites or populations, we’re seeing a desperate turn to foreign fields in search of the sort of black-and-white clarity and sense of mission that eludes our rulers domestically. That’s why John Kerry says opposing wickedness in Syria is a ‘conviction shared even by countries that agree on little else’. Firing some rockets at Syria might just provide a thrilling if fleeting boost to the ‘moral impulses’ of a confused Western elite. And if it ends up making things worse? Doesn’t matter. Tough shit. At least we’ll have given voice to our collective revulsion.

Obama set for holy Tomahawk war

Mix Kosovo with Libya and voila!

By Pepe Escobar 

The ''responsibility to protect'' (R2P) doctrine invoked to legitimize the 2011 war on Libya has just transmogrified into ''responsibility to attack'' (R2A) Syria. Just because the Obama administration says so. 

On Sunday, the White House said it had ''very little doubt'' that the Bashar al-Assad government used chemical weapons against its own citizens. On Monday, Secretary of State John Kerry ramped it up to ''undeniable'' - and accused Assad of ''moral obscenity''. 

So when the US bombed Fallujah with white phosphorus in late 2004 it was just taking the moral high ground. And when the US helped Saddam Hussein to gas Iranians in 1988 it was also taking the moral high ground. 

The Obama administration has ruled that Assad allowed UN chemical weapons inspectors into Syria, and to celebrate their arrival unleashed a chemical weapons attack mostly against women and children only 15 kilometers away from the inspectors' hotel. If you don't believe it, you subscribe to a conspiracy theory. 

Evidence? Who cares about evidence? Assad's offer of access for the inspectors came ''too late''. Anyway, the UN team is only mandated to determine whether chemical weapons were deployed - but not by who, according to UN secretary-general Ban Ki-moon's spokesman. 

As far as the Obama administration and UK Prime Minister David ''of Arabia'' Cameron are concerned - supported by a barrage of corporate media missiles - that's irrelevant; Obama's ''red line'' has been crossed by Assad, period. Washington and London are in no-holds-barred mode to dismiss any facts contradicting the decision. Newspeak - of the R2A kind - rules. If this all looks like Iraq 2.0 that's because it is. Time to fix the facts around the policy - all over again. Time for weapons of mass deception - all over again. 

The Saudi-Israeli axis of fun

The window of opportunity for war is now. Assad's forces were winning from Qusayr to Homs; pounding ''rebel'' remnants out of the periphery of Damascus; deploying around Der'ah to counterpunch CIA-trained ''rebels'' with advanced weapons crossing the Syrian-Jordanian border; and organizing a push to expel ''rebels'' and jihadis from suburbs of Aleppo. 

Now, Israel and Saudi Arabia are oh so excited because they are getting exactly what they dream just by good ol' Wag the Dog methods. Tel Aviv has even telegraphed how it wants it: this Monday, the Yedioth Ahronoth newspaper headlined with ''On the Way to Attack'' and even printed the ideal Order of Battle. (see photo) 

Months ago, even AMAN, the Intelligence Directorate of the Israeli Defense Forces (IDF) concluded that Assad was not a fool to cross Obama's chemical weapon ''red line''. So they came up with the concept of ''two entwined red lines'', the second line being the Syrian government ''losing control of its chemical weapons depots and production sites''. AMAN then proposed different strategies to Washington, from a no-fly zone to actually seizing the weapons (implying a ground attack). 

It's now back to the number one option - air strikes on the chemical weapons depots. As if the US - and Israel - had up-to-the-minute intelligence on exactly where they are. 

Bernanke: Maestro of misery

Obama and Bernanke's model offers a perfect model of chaos and misery

By Noureddine Krichene 

The US enjoyed two decades of prosperity initiated by Ronald Reagan's policies. Come Ben Bernanke, the top economic policy maker of the George W Bush administration, and prosperity ended and was succeeded by falling real incomes; financial chaos spread in the United States and elsewhere. 

Bernanke's cheap money policy set off housing, stocks, and commodity booms; all these booms had to crash in 2008 leaving behind bankruptcies; millions of foreclosures; inflation and poverty; debt crises; massive unemployment in the US and Europe; record fiscal deficits; and rapidly rising public debts. With all this lousy record, Bernanke should have retired as Federal Reserve chairman in 2008, along with Bush and the Bush team, or even rightly been dismissed by the US Congress.

No surprise, Barack Obama entrusted Bernanke to restore prosperity and full-employment. The CEO of Asiana would never retain the pilot of the recent doomed 214 flight; nor would the owner of the Costa Concordia retain the captain of the doomed cruise liner. 

Yet Obama wanted a most extreme fiscal policy, which relied on Bernanke's most extreme policy of near-zero interest rates and rivers of money called quantitative easing for its financing. Fanatical about their ideologies, both men were confident that ultra-expansionary policies would yield prompt prosperity and full employment. 

Unfortunately, these policies are failing now as they did in the past; economic growth is slow; unemployment and inflation remain high; stock prices have shattered records amid economic stagnation; a housing boom is underway; a currency war is raging; crude oil prices remain high; and massive wealth redistribution is under way via asset speculation, credit, and welfare. Europe and Japan are forced into producing cheap money. 

Uncertainty is very high. Bernanke keeps reassuring speculators that near-zero interest rates and rivers of money are to stay around forever (though occasionally hinting at the prospect of a change in tack). He considers money printing a panacea for all: firing up stock and home prices; depreciating exchange rates creating full employment; financing deficits; growing corn; pumping oil; constructing houses; and so on and so on. 

Obama and Bernanke have created the most unmanageable fiscal and money disequilibria. US government debt, at 120% of GDP, is still building up due to exceptionally large fiscal deficits; domestic debt, at about 400% of GDP, is rising fast. Bernanke has tied himself to no exit except push forward with more inflation. 

Bernanke is like a man who jumps from a tall building and thinks he can stop anywhere he wishes in mid-air. Gravitation forces work differently. He is out of control. If interest rates rise, as in 2005, all credit will tumble; stocks, already highly overvalued, will crash. 

To avoid a gigantic collapse, he has to keep printing trillions of dollars. Moreover, Obama has created a large dependency on welfare programs; any cut will severely affect the livelihoods of 100 million or more people who depend on these programs and will be met by ferocious opposition. It is difficult to roll back government spending once it has been put in place.

U.S. Once Again Flouts Russian and Chinese Interests

Both myopic and counterproductive 

By Ted Galen Carpenter

The apparent use of chemical weapons in Syria's civil war has produced shrill calls for launching air strikes on the regime of Bashar al Assad. Even the inconvenient detail that the source of the chemical attack is not clear has not deterred advocates of a U.S-led military response. Some proponents have latched onto the 1999 NATO war in Kosovo as an ideal precedent. Kosovo is a precedent all right-an object lesson for why going to war in Syria would be morally dubious and strategically unwise.

Adopting that approach especially has the potential to cause serious tensions in Washington's already delicate ties with China and Russia. Policy regarding Kosovo has been a festering sore on U.S. relations with those countries since the original crisis in the late 1990s. The supposedly inadvertent U.S. bombing of China's embassy in Belgrade in 1999 was only the most spectacular example of the diplomatic carnage.

Indeed, for Chinese and Russian leaders, Kosovo has become a symbol of Washington's contempt for international law and disdain for the prerogatives of other major powers in the international system. No rational person should wish to replicate that outcome by pursuing the same high-handed strategy in response to the Syria conflict.

President Bill Clinton and his supporters insisted that adequate international support was sufficient authorization for U.S. action against Serbia over the Kosovo issue, even absent congressional approval. International support typically meant a UN Security Council resolution-an argument that George H.W. Bush made before belatedly deciding, under domestic public pressure, to seek congressional authorization for the Persian Gulf War.

The Kosovo conflict, though, posed a problem for pro-war internationalists in the U.S. foreign policy community. Both Russia and China vehemently opposed intervention against Serbia, and there was, therefore, no chance of passing a Security Council Resolution authorizing the use of force. Clinton administration officials overcame that impediment by simply bypassing the Council just as they bypassed Congress. "Sufficient international support" now meant support from the U.S.-dominated NATO alliance.

Washington's subsequent actions under the administration of George W. Bush further antagonized Beijing and Moscow and undermined international security cooperation. Bush took the Kosovo precedent one step further with the invasion of Iraq. Once again, Russia and China believed that military action was unwarranted and threatened to use their Security Council vetoes. This time, even NATO was divided, so U.S. leaders could not use the alliance's imprimatur as supposed sufficient justification for an armed intervention. Washington overcame that problem by arguing that endorsement by an ad hoc "coalition of the willing" (or as cynical wags described it, the coalition of the bribed and bullied) constituted adequate international support. Seething leaders in Russia and China disagreed.

The Bush administration was not done showing its contempt for the views and rights of its fellow permanent members on the Security Council. Although the Council had reluctantly authorized the NATO-led postwar occupation of Kosovo under nominal UN auspices, Beijing and Moscow assumed that the province would not be granted independence from Serbia without another Council vote. But the United States, Britain, and France adopted a markedly different course. They recognized Kosovo's unilateral declaration of independence in February 2008-once again over the strenuous objections of China and Russia.

Golden Rice, Green Idiocy

The Marie Antoinette crowd strikes again

By Walter Russell Mead

On August 8th, 400 protesters ripped out seedlings of a new genetically modified plant called golden rice at a testing ground in the Philippines. Genes from bacteria and corn have been added to the rice to make it a source of vitamin A. Vitamin A deficiency can lead to blindness and weakens the immune system, contributing to 2 million deaths every year. (Golden rice is being developed by a non-profit organization, not Monsanto.) As the Philippine government prepares to rule on whether or not to allow farmers to grow the wonder-crop, the anti-GMO movement is digging itself in for a fight. The New York Times reports:

If the rice gains the Philippine government’s approval, it will cost no more than other rice for poor farmers, who will be free to save seeds and replant them, Dr. Barry said. It has no known allergens or toxins, and the new proteins produced by the rice have been shown to break down quickly in simulated gastric fluid, as required by World Health Organization guidelines.

But the facts haven’t deterred the misinformed from campaigning against the technology. Greenpeace flatly rejects any and all biotech advances in agriculture, a Luddite and ludicrous position that is distorting the public debate:

“There’s so much misinformation floating around about G.M.O.’s that is taken as fact by people,” said Michael D. Purugganan, a professor of genomics and biology and the dean for science at New York University, who sought to calm health-risk concerns in a primer on GMA News Online, a media outlet in the Philippines: “The genes they inserted to make the vitamin are not some weird manufactured material,” he wrote, “but are also found in squash, carrots and melons.”…

“A lot of the criticism of G.M.O.’s in the Western world suffers from a lack of understanding of how really dire the situation is in developing countries,” he said.

With golden rice, we have a real, cost-effective way to safely provide millions of people with healthier food. The anti-GMO crowd is doing its best Marie Antoinette impression, saying the world’s poor should get the vitamin A this new rice provides by eating more fruits and vegetables. A well-balanced diet is a luxury many can’t afford. Cheap, nutrient-rich golden rice can save lives. 

10 Immutable Laws Of Money

If you live like no one else today – you will be able to live like no one else tomorrow

by Lance Roberts

Money – we all want it, but few of us are willing to sacrifice to get it. Those that have it generally don't understand it, and those that don't have it come up with excuses why they can't get it. If this sounds confusing – it is.

For all that we have accomplished in the United States in the last 200+ years we have failed miserably at teaching our children the basics of money management. I am not talking about stock and bond portfolios but rather the basics of spending less than you make, understanding of credit, and how to balance a check a book.

We are inundated daily with credit card commercials that show how great life can be – just charge it. We are enticed to buy things that we don't really need though the use of zero percent financing – but only while it lasts. We are motivated to consume anything and everything in pursuit of the American dream but no one ever talks about the consequences of our actions.

The Secret To Wealth

I could literally be kicked out of the financial community for divulging the one secret that has been so closely guarded by the credit card companies, the mortgage companies, the banks and Wall Street for so many years. This secret, of course, is the true road to wealth and happiness. It is irrefutable, undeniable and absolutely achievable. If you implement this one secret in your life – you will be rich and you won't be able to stop it.

The Secret: Spend Less Than You Make

That's right. This is the one secret that no one wants you to know because the more you save – the less the credit card companies make.  The more you save the less in fees that Wall Street makes.  The more you save the wealthier you get.

The 10 Laws Of Money

1) Money Doesn't Grow On Trees

My father used to always tell me several things – all of which I am beginning to find out weren't exactly true – such as; "When I was your age I had to walk uphill to school in the snow – both ways!", "I could go to a double feature and eat all the popcorn and soda I wanted for a nickel and have change left over!" and, of course, my personal favorite; "Where do you think that comes from – money doesn't grow on trees!"

What my father was trying to teach me was to respect the effort that goes into making money in the first place. My whole life my father worked two jobs, and sometimes three, to support me and make sure that I had everything I needed – not always everything I wanted – but always what I needed. As a young boy, of course, I didn't fully understand the impact of what he was trying to teach me until I got a family of my own.

Financial Times: "World Is Doomed To An Endless Cycle Of Bubble, Financial Crisis And Currency Collapse"

A stable international financial system has eluded the world since the end of the gold standard.

by Tyler Durden

It's funny: nearly five years ago, when we first started, and said that the world is doomed to an endless cycle of bubble, financial crisis and currency collapse as long as the Fed is around, most people laughed: after all they had very serious reputations aligned with a broken and terminally disintegrating economic lie. With time some came to agree with our viewpoint, but most of the very serious people continued to laugh. Fast forward to last night when we read, in that very bastion of very serious opinions, the Financial Times, the following sentence: "The world is doomed to an endless cycle of bubble, financial crisis and currency collapse." By the way, the last phrase can be written in a simpler way: hyperinflation.

So ok then: we are happy to take that as an indirect, partial apology by some very serious people. Partial, because the piece's author, Robin Harding, doesn't explicitly come out and state that this cycle of boom and bust is a direct function of ever encroaching central-planning being handed over to a few economists with zero real world experience, whose actions result in ever more devastating blow ups once the boom cycle shifts to bust. Instead, it is their admission that this is what the world has come to. But, being economists, they naturally fail to see that it is all due to them. Instead, just like pervasive market halt, flash crashes, and everything else that now dominates a broken New Normal, this cycle which eventually culminates with currency collapse, or said otherwise, hyperinflation.

The FT's read on the paradox of modern finance and central banking is surprisingly accurate: in fact, it is almost as if it comes not from the FT but from a textbook on Austrian economics, or a Zero Hedge article:

All [the central bankers'] discussion of the international financial system was marked by a fatalist acceptance of the status quo. Despite the success of unconventional monetary policy and recent big upgrades to financial regulation, we still have no way to tackle imbalances in the global economy, and that means new crises in the future.

Indeed, the problem is becoming worse. Since the collapse in 1971 of the old fixed exchange rate system of Bretton Woods, the world has become used to the “trilemma” of international finance: the impossibility of having free capital flows, fixed exchange rates and an independent monetary policy all at the same time. Most countries have plumped for control over their own monetary policy and a floating exchange rate.

The rest of the article is also like reading early Zero Hedge. Or middle. Or late: in a world of instantaneous fungibility and global capital flows, the Fed is in charge of hot money everywhere, which incidentally is why it is the Emerging Markets that are getting destroyed (first, for now) as the global Fed-funded carry trade slowly but surely unwinds.

Obama's Bad Syria Bluff

He never thought al Assad would be so reckless

By George Friedman

Images of multiple dead bodies emerged from Syria last week. It was asserted that poison gas killed the victims, who according to some numbered in the hundreds. Others claimed the photos were faked while others said the rebels were at fault. The dominant view, however, maintains that the al Assad regime carried out the attack.

The United States has so far avoided involvement in Syria's civil war. This is not to say Washington has any love for the al Assad regime. Damascus' close ties to Iran and Russia give the United States reason to be hostile toward Syria, and Washington participated in the campaign to force Syrian troops out of Lebanon. Still, the United States has learned to be concerned not just with unfriendly regimes, but also with what could follow such regimes. Afghanistan, Iraq and Libya have driven home the principle that deposing one regime means living with an imperfect successor. In those cases, changing the regime wound up rapidly entangling the United States in civil wars, the outcomes of which have not been worth the price. In the case of Syria, the insurgents are Sunni Muslims whose best-organized factions have ties to al Qaeda.

Still, as frequently happens, many in the United States and Europe are appalled at the horrors of the civil war, some of whom have called on the United States to do something. The United States has been reluctant to heed these calls. As mentioned, Washington does not have a direct interest in the outcome, since all possible outcomes are bad from its perspective. Moreover, the people who are most emphatic that something be done to stop the killings will be the first to condemn the United States when its starts killing people to stop the killings. People would die in any such intervention, since there are simply no clean ways to end a civil war.

Obama's Red Lines

U.S. President Barack Obama therefore adopted an extremely cautious strategy. He said that the United States would not get directly involved in Syria unless the al Assad regime used chemical weapons, stating with a high degree of confidence that he would not have to intervene. After all, Syrian President Bashar al Assad has now survived two years of civil war, and he is far from defeated. The one thing that could defeat him is foreign intervention, particularly by the United States. It was therefore assumed he wouldn't do the one thing Obama said would trigger U.S. action.

Al Assad is a ruthless man: He would not hesitate to use chemical weapons if he had to. He is also a very rational man: He would use chemical weapons only if that were his sole option. At the moment, it is difficult to see what desperate situation would have caused him to use chemical weapons and risk the worst. His opponents are equally ruthless, and we can imagine them using chemical weapons to force the United States to intervene and depose al Assad. But their ability to access chemical weapons is unclear, and if found out, the maneuver could cost them all Western support. It is possible that lower-ranking officers in al Assad's military used chemical weapons without his knowledge and perhaps against his wishes. It is possible that the casualties were far less than claimed. And it is possible that some of the pictures were faked.

The folly of striking Syria

Obama’s third war

By RALPH PETERS

You might as well try to teach a snake to juggle as hope the Obama administration will think strategically. The “peace president” is about to embark on his third military adventure, this time in Syria, without having learned the lessons of his botched efforts in Afghanistan and Libya. He hasn’t even learned from the Bush administration’s mistakes — which he mocked with such delight.

Before launching a single cruise missile toward Syria, Team Obama needs to be sure it has a good answer to the question, “What comes next?”

If Obama does a Clinton and churns up some sand with do-nothing cruise-missile strikes, it will only encourage the Assad regime. But if our president hits Assad hard and precipitates regime change, then what?

If al Qaeda and local Islamists seize Damascus, what will we do? The enfeebled “moderate opposition” we back rhetorically couldn’t dislodge hardcore jihadis, no matter how many weapons we sent (the jihadis would simply confiscate the gear).

What if we weaken the regime to the point where the fanatics rev up their jihad to drive out Christians and other minorities? What’s your plan then, Mr. President? After your night of explosive passion, will you still love the opposition in the morning?

Exactly which American vital security interests are at stake in Syria, Mr. President? Your credibility? Put a number on it. How many American lives is your blather about red lines worth?

Chemical weapons use? Horrible and illegal, a war crime. So is the mass slaughter of civilians. Is it really so much worse to be gassed than tortured to death by al Qaeda or burned alive in your church? Which is more important, the number of dead, or the means that killed them?

Islamist terrorists have killed tens, if not hundreds, of thousands, of innocent Muslims. Aren’t they the real enemies of civilization?

Mr. President, do you really think it’s wise to send our missiles and aircraft to provide fire support for al Qaeda? That is exactly what you’ll be doing, if you hit Assad.

Assad’s an odious butcher, filth on two legs. But in the world of serious strategy, you rarely get a choice between black and white. You choose between black and charcoal gray.

Employing our military assets to support either side in Syria would be a mistake. Employing them without a worst-case plan for what might follow would be criminal.

We just can’t seem to learn, though. Invading Iraq, the Bush team, egged on by ideologues who never served in uniform, refused to allow our military to plan for an occupation. That sure worked out. Then, in Libya, the Obama administration deposed Khadafy, but refused to plan seriously for the aftermath. Welcome to Benghazi.

There are wars worth fighting. It was essential to go to Afghanistan in the wake of 9/11 (although staying there was idiocy). There will be future conflicts that demand our blood to defend vital interests. But we’ve now had a decade of do-gooder wars that haven’t done much good.

For the record, I don’t regret getting rid of Saddam or Khadafy. I regret the ineptitude with which we did these things. When you propose a war, don’t ever expect a cheap date.

Now there’s an unholy alliance pushing for attacks on Syria. We have liberal zealots, such as our UN ambassador, Samantha Power, who believe that our military’s primary purpose is to protect people who hate America. We have a few Republican senators like John McCain and Lindsey Graham who support any war, any time. We have a president who thinks that, “Gee, maybe, well, gosh, I said I’d do something, so maybe I should...” And we have elements in the defense industry who long for a return to our free-spending years in Iraq and Afghanistan and view a war in Syria as a great way to beat the sequester.

And the one thing every member of that bomb-Syria-now coalition has in common? Not one will have to fight. 

A Disappearance Act for Italy

Entire Factories Are Shipped Out of Italy Overnight

by Pater Tenebrarum

One day you see it, the next you don't. Fabrizio Pedroni's Firem Srl., a maker of electrical car components, that is. According to a report at Bloomberg late last week, the owner of the factory just had the entire thing packed up, lock, stock and barrel, and had it secretly shipped it to Poland overnight, a place where capital is evidently treated better than in Italy.

It is interesting to read why exactly he decided to act under the cover of darkness:

“Earlier this month, Fabrizio Pedroni wished his employees a happy summer holiday and told them to return to work in three weeks. That night, he began dismantling his electric component factory in northern Italy and packing its machinery off to Poland.

“Had I told them earlier about any plans to shift the production abroad, they would have occupied my factory and seized all my stuff,” Pedroni said in an Aug. 21 telephone interview from Poland. “The plain truth is that I wanted my business to survive and there weren’t the right conditions for me to operate in Italy any longer.”

The news that Firem Srl, based in Formigine near Modena, was shifting to Eastern Europe reached the 40 employees too late. On Aug. 13, 11 days after Pedroni activated his plan, a group of employees suspicious of the movements around the plant rushed to its gates just in time to stop the last of 20 lorries packed with machinery. Firem’s move became a national controversy and the fate of its workers is still unclear.

The loss of the factory highlights the struggle Italy faces to revive manufacturing and its economy, which remained in recession in the second quarter even as the broader euro area returned to growth. Italy ranks 128th in the World Economic Forum’s global pay and productivity table, one place behind Burkina Faso, compared with 39th for Poland.”

The fate of the workers is in fact clear: they are now jobless. Pedroni had to do what he did to escape the inevitable blackmail and violent disregard of private property of militant Italian unions, as his tale reveals. Meanwhile, Italy's appalling productivity ranking (behind Burkina Faso? That really takes some doing) proves one of our main contentions when we discussed Mario Monti's so-called 'reforms'. There were no reforms. All he did was raise taxes and put pressure on the citizenry with intimidation tactics (his financial police took pride in terrorizing the citizenry and regarded it as a major objective). Obviously, Italy's labor market reform has at best been cosmetic.

Democracy’s Dog Days

We all want democracy to thrive and flourish, but can it?

By Victor Davis Hanson

The Obama administration was quite pleased that the anti-democratic Mohamed Morsi and his Muslim Brotherhood had come to power through a single plebiscite. That confidence required a great deal of moral blindness, both of the present and past.

Like other once-elected authoritarians who believe that democracy is similar to a bus route — in the words of Mr. Erdogan of Turkey, once you get to your stop, you get off — Morsi had no intention of fostering the sort of consensual institutions so necessary for republican government. Almost immediately he gave a de facto green light to cleanse the government of his opponents, to Islamicize a once largely secular society, and to persecute religious minorities.

Like a Hitler, Mussolini, Mugabe, or Hugo Chavez, Morsi was counting on the legitimacy from a once-in-a-lifetime largely free election, and then the use of state power, if not terror, to institutionalize his authoritarian rule. Morsi’s legacy is that he was both a beneficiary of the Arab Spring in Egypt and almost singlehandedly ended it.

Unfortunately, there seem to be no signs of democracy’s revival elsewhere in the Arab world or, for that matter, all that many recent vibrant examples in the world at large these days.

In contrast, after the end of the Cold War there was a giddy “end of history” moment. By the new millennium, “democratic” government and free market capitalism were accepted as the natural — indeed, the foreordained — final stage in civilization’s evolution. And why not? The Soviet Union was in shambles. Eastern Europe was democratizing. Latin American democracies were starting to crowd out both communist and right-wing dictatorships. The European Union was ushering in the euro to self-congratulatory proclamations of a new social democratic heaven on Earth. The betting was when, not if, a newly capitalist China democratized. Bill Clinton, under duress, had moved America to the democratic center, and was helping to balance budgets.

Only the Islamic Middle East resisted the supposedly inevitable democratic urge. As the world’s regional holdout, the region was seen as well overdue for its turn at majority rule. Democratization, we Americans argued, might force the Muslim world to emulate those consensual systems with far better records of stable governance and widespread prosperity. With freedom and affluence, the age-old Middle East pathologies — misogyny, religious intolerance, tribalism, fundamentalism, anti-Semitism, and statism — would fade along with terrorist-driven violence. Or so it was thought.

Now, in the second decade of the new millennium, democracy is not just having a rough time, but failing in a way that its harsh critics so often predicted, from Plato to Nietzsche and Spengler.

Often the recent world confused plebiscites with democracy, as if the two were synonymous.