Rectifying For-Profit College Problems

                           

For-profit schools are getting hit by government pressure  for reasons that, are similar to problems that are those of conventional colleges.

                           

Politicians often complain that for-profits are making too much money. Politicos love educational debtors they can support by throwing taxpayer funds at them. The fact that internet and similar schools are growing is an indication their students are getting value for tuition.

                                                   

Conventional colleges, which often are mismanaged, tend to lose money. They are thus highly subsidized by governments as a result. (Conventional schools must also continually solicit needed funds from alumni.)

                           

Conventional colleges actually can be run as a for-profit business, and teach students properly. They can rid themselves of archaic tenure and other management foibles, as I have noted before in my comments.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Government Meddling Has Become Acceptable?

                           

The economist, Walter Williams has quoted the philosopher Bertrand Russell, suggesting that "Men are born ignorant, not stupid. They are made stupid by education." Dr.Williams also quoted Albert Einstein: "Insanity: (is) doing the same thing over and over again and expecting different results."

                           

Professor Williams wanted to know whether it was stupidity, ignorance or insanity that explained the behavior of Americans who seek government involvement in their lives.

                           

A large percentage of Americans believe politicians are corrupt. Congress has consistently had about a 10% approval rating. People know the poor shape of Medicaid and Medicare. And how Social Security is bankrupt. The Post Office is inefficient. Public schools fail to teach kids the basics.

Why depend on government except for operating our defenses? Why? Politicians know that voters have a short memory. The media goes along with favored politicians. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Government Pressure on For-Profit Schools

                           

For-profit schools get hit by government pressure for reasons that, on investigation, are similar to problems that are those of conventional colleges. The latter, however, are treated far more favorably.

                           

The federal government is complaining that relatively too many students from for-profit schools are deficient in their loans. And that they do not finish their course studies as they should. And worse, they are not getting the jobs many had been promised when the students signed up for study.

Has Washington really taken a look at what conventional college students learn or accomplish after they go into massive debt of up to $100,000 or more?

                           

How many graduate? How many get decent jobs? Or are qualified for them?  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Half of America Pays No Federal Income Taxes

                           

 

                           

A terrible precedent is set in a country when almost half the working adults pay no fed taxes. Because you cannot have a true democracy with a divided citizenry.

                           

About 50% manage to do so because of the number of dependents claimed. And about 22% for the standard deduction for the elderly. About 15% get credit for their number of children, or for being working poor. About 3% get education credit. About 10% are classified as miscellaneous.

                           

Everyone should pay something; have “skin in the game.” Small amounts, so that their wallets are affected by government largesse. With no reimbursements of what they never paid the IRS. Those who need funds can get welfare assistance from a government agency other than the IRS.

                           

But you cannot have voters who pay nothing into a system; voting for politicians whose motto is "soak the rich.” Those rich are too many neighbors who are earning a little more that has become taxable.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

The Dodd-Frank Act and Job Reduction

                       

That certainly was not the function that Congress and the administration assigned to this bill in 2010. The administration said it wanted jobs, but that requires lots of blind hope.

Take bank regulation as only one illustration. And within that, look at just one bank, the Bank of America, which has announced layoffs of multi-thousands of  employees. All because of a loss of revenues dictated by only part of the many strait-jacket-type regulations.

Most of the Dodd-Frank regulations still haven’t been fully imposed. Great for a job recovery!!  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

           

 Why Expect Any Government Health Coverage Efficiency?

                       

The Post Office does not operate under restrictions that burden private businesses. It enjoys a legal monopoly on many types of letter mail. And it’s a perfect example of what happens when the government tries to operate as a business.

                       

The health care law will establish standards of care, to determine what are proper levels of coverage. The law generates an expansion of government in the health system, such as Medicare and Medicaid; much of what we have in the Post Office.

                       

The administration, when pushing ObamaCare, has made the point, "Private insurers should be able to compete, They do it all the time. I mean, if you think about it, UPS and FedEx are doing just fine, right? It's the Post Office that's always having problems."

                       

The feds are actually making an argument of government ineffectiveness.

See the Earl J Weinreb NewsHole® comments.)

Importance of Business Plans

                                      

Business plans never work out exactly as they are conceived. but they are most helpful. Too many small businesses fail to create an adequate plan.

                           

For several reasons: One, folks may be too lazy to put in the effort. It takes work and a bit of basic bookkeeping. Yet, all a small business man needs is a small calculator.

Secondly, after a start, many lose faith in its continued use. That occurs because business plans need to be adjusted as you go along. None of them are ever made in stone. The necessary adjusted figures are not a sign of error or misuse of the plan. 

The whole purpose of a plan, adjustments and all, is to guide the management of the business, It is not to exactly predict outcomes. It's to show trends, problem areas to be treated, and so on.

                       

You never need to have a fancy business plan.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Why Run a Business and be Demonized?

                           

Why bother to run a business when the federal government has a Bulls Eye on your back?

                           

Example: There is a little-used federal anti-business law on the books. So why not have feds use it during a deep recession when you say you’re creating jobs? When your deepest instincts are anti-business? The feds will still tell you they’re not anti-business; they’re looking out for your interest.

                                                   

The government passed the Food, Drug and Cosmetic Act in 1938, with a provision that authorized criminal action against corporate officers. No evidence was needed that an officer knew a crime was being committed. Being connected with the company at the top was the guilt.

                           

You can see why this section of the law was not used, until the administration got wind of it, with an eye on drug companies. How many top execs are willing to put their personal wealth and liberty at risk , to run a company of thousands of employees, one of whose transgressions would put that CEO in jail? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

ObamaCare’s Attempt at Cost Reduction

                           

We should always attempt to prevent illness. But prevention may actually increase costs not reduce them. So, that spending must be cost-effective over the years.

In an Aug.7, 2009 letter to Rep. Nathan Deal, Congressional Budget Office Director Doug Elmendorf’s aide, said: "Researchers who have examined the effects of preventive care, generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness."

"It is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway." This costs money that would not have been spent.

The study comes directly from the respected Congressional Budget Office. And it refutes the Administration’s claim for savings that will flow from ObamaCare. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Tricks With So-Called Job Training

                           

Good politics makes bad economics is an often used axiom. It’s especially fitting when it comes to the ruse politicians use when they hand out taxpayer funds for job training.

                           

It does sound good. People do lose jobs because of new technology for which they are not able to qualify.

The unfortunate unemployed are told they can be retrained, as they should be, But in truth, the federally-sponsored programs usually are a bust. Private efforts have been more successful.

A study as far back as 1969 showed that teens actually did worse in a federal jobs program once they started. Another study showed how tens of billions were spent on federal job training from 1961 through 1980 with no real success. Programs since then, with 1982 legislation, have fared no better.

But the charade still goes on. Promises of job training programs that sound good—the government is doing something. But nothing g is accomplished for getting skilled jobs.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

The Messy Dodd-Frank Act

                                       

Politicians love power wherever and however they can get it. Unfortunately, this has become a habit in Washington. Especially when it creates a source of contributions to help finance campaigns to get out votes.

                       

So, the Dodd-Frank Act has investors over a barrel in so many different ways, through onerous regulation. Yet, this type of error can sometimes be as easy to make as it is for a baseball outfielder to occasionally flub a fly ball.

While lawyers have gotten more advantages from all the new restrictions. Since Democrats get well over 90% of campaign funds from tort lawyers, guess why these messy tidbits are in the law? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

       

   

How Frequent Are Insurance Policy Cancellations?

                          

The Administration has demonized insurance companies for dropping policies, much as it demeans other industries.

                           

I was a senior banking and insurance analyst in the past and keep closely in touch with the business. I wish top members of the administration were as informed.

                           

A policyholder can have his or her policy dropped for a number of valid reasons:

                                               

One: Material lying about preexisting conditions. No one should be allowed to buy fire insurance while a fire is in progress.

                       

Two: Fraud. Material misrepresentation which is so basic that the company would otherwise not have accepted the risk

                       

In one of the insurance companies independently studied, only 0.1% of policies or 20,000 cancellations were made. It sounds like a lot when politicians talk, but it’s a study from millions of policies over a 5 year period.

                       

On the other hand, our government does not tell you that it cancels 6.8% of Medicare claims. Think of that the next time you consider truth in political advertising, especially when you hear about government health care.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Data Mishmash of ObamaCare

                           

Doctors and hospitals now use about 18,000 codes to indicate the procedures they use when treating patients.

However, federal mandates will increase the number to at least about 140,000, And this is just the beginning, as ObamaCare is yet to be fully implemented.

                           

The idea is to describe every and any procedure a doctor may do for a patient.

 I also smell a road map for tort lawyers.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Employee-Employer Agreements

                          

Be sure you’re agreeing to what you want, when you take a job. Don’t misread employment application fine print.

Many companies include a mandatory arbitration clause. That means you agree to give up your right to take disputes to court, even when the employer has broken the law. Employers in financial services, health care and pharmaceuticals usually favor arbitration because it keeps costs down. It also prevents cases from being out in the media.

                           

When the case goes to an arbitrator, the grounds for appeal are limited. The National Employment Lawyers Association estimates that more than 30 million Americans are bound by arbitration clauses at work.

                           

A recent study found that arbitrators decided in favor of employees about 30% of the time, and when the individual arbitrator had worked previously on a case with the employer, the employee won only 12% of the time. Employees can often fare better in court because jurors are more easily swayed.

                           

Arbitrators are not necessarily prejudiced. They may be wiser than jurors. But employees do not always have the better case.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Mass Layoffs Can Mean Employer Mismanagement

                     

I often wonder how smart management really is when they announce mass layoffs of personnel.

I know the experts among the financial media and journalists are elated when companies sharply pare back expenses. But then again, these observers really don’t have genuine business acumen.

                       

Something is amiss if management has overstaffed to a point where a sudden decision is necessary to lay off thousands of employees in one fell swoop. Forward planning to that point had to have been in considerable error.

Moreover, it’s costly to train lower, middle and then higher management, only to suddenly get rid of them; perhaps soon afterwards, to start new hiring cycles when times become better. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Pharmaceutical Costs

           

                               

The media often give the impression that drug prices are too high in the U.S., compared to Canada and Europe.

                               

Prices for the same pharmaceuticals are certainly much lower overseas. But pharmaceutical companies are forced to sell there below true cost.

                                                   

To do that with foreign governments holding guns to their heads, they must raise prices in the U.S, to make their profit. Otherwise, no business.

                       

And if there is no business, no drugs can be produced. A company spends as much as a billion dollars to find and research a new drug before it’s on the market.

                       

Think about this the next tine you get a lesson from a politician on the enormous profits drug companies make. Furthermore, if the companies are so profitable, why are not all the experts on Wall Street falling over each other buying drug stocks?

                       

You will notice that pharmaceutical securities are not investor favorites. They are merely politician scapegoats. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Get Genuine Unemployment Figures

                          

The conventional media overlooks the misstep attempts with various employment “stimuli.”

                           

As an example: There are those who, once jobless, find new employment within reasonable time. Then, there are those with in-between jobs that may be just temporary or part time. And others during a recession, who go off for work in totally fewer skills, for less work hours.

                               

The number of weeks someone is unemployed is an important statistic. While many unemployed give up seeking work and, if able, retire earlier under Social Security at reduced benefits.

                               

New job creation figures are important. Look also to see the type of jobs created. Government work is not creative. It does not have a multiplier effect as does private industry jobs.

                               

The Bureau of Labor Statistics provides a whole list of unemployment categories. The real, practical number varies greatly from public announcements. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Equal Pay For Women?

                         

No doubt women have been discriminated against in the past. The question is whether they still are, when anti-discrimination laws have been around for decades and penalties are severe.

Women still tend to earn less. But there can be valid reasons. Many women  leave jobs in mid-career for maternity reasons that distort statistical averages. Others prefer to spend more time with family,

Still, there are more variations in certain professions than others. Hostile environment may often remain. Occurrences depend on profession or industry.

Women’s needs may also differ within those jobs, especially where measures of hostility may actually exist. So you cannot evaluate discrimination charges in such instances without further investigation. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

A Misunderstood Term -- Government Job Creation

                        

Government statists have their own idea of creating jobs: Make work. Whether at a government office or at a construction site. Hand out a pick and shovel, if that’s what it takes. Or place folks on unemployment insurance. They say demand for goods and services will produce jobs.

                           

Good old Keynesian theory that does not work in practice and never does for long, if it ever does temporarily.

                           

Getting down to reality, left-leaning politicians have no concept of creating jobs, that of using the psychology of entrepreneurial spirit. That is why they will tax small business in the depths of a severe downturn. That’s why tax exemptions, not tax cuts, are only short-term.Why they raise minimum wages for small business during economic recessions.

                           

Through the use of such dampening forces to see that jobs are not created by what they consider questionable private business.

                           

Basically, the Left does not like business. They look at profits as criminal, to be taxed away for redistribution back to the community by wise governmental bureaucrats. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

   

Teacher Pay Reality

                       

Real dollars spent on education have more than doubled in the past forty years as teachers unions have gotten stronger. The bulk represent teacher salaries and pensions.

The number of teachers have increased by more than one third. Yet less than 40% of students who graduate are ready for college level. And, of course, do not measure up to international standards.

                       

A solution is possible, in the form of charter schools where union rules are somewhat relaxed and school vouchers, where funds are allocated to public education, set aside for parents to use for private school tuition.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Professor Political Bias

                          

Surveys at major colleges indicate the overwhelming bias toward the Democrat party candidates over Republicans by faculty.

                       

Example: Surveys showed that close to 80% of faculty voted for Democrat John Kerry In 2004, About 1% voted for Ralph Nader, and only 20% voted for President George W. Bush. Social science professors, gave Ralph Nader about 20% of the 2004 vote, as large as that for President George W. Bush.

                       

The pattern favoring Democrats continued apace in 2006, 2008 and 2012 elections.

                                              

And it gets more slanted when the studies delve into specific areas. Liberals outnumber conservatives by 11 to 1 among social scientists and 13 to 1 among the humanities professors. As many as 25% of those who teach sociology consider themselves Marxist.

                       

At major graduate schools offering Ph.Ds, over 60% of faculty are Democrats, 30.% are independents and 10% are Republicans.   (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Miscalculating Poverty

Thomas Sowell, one of my favorite economists, has noted that “ If there were a contest for the most misleading words used in politics, ‘poverty’ should be one of the leading contenders...”

                           

Having grown up in poverty, and oppressive discrimination, Mr. Sowell knows well of what he speaks.

                           

But the “poverty-stricken” of the U.S. today, for the most part, have cars, color cable TVs, air conditioners, their own homes and other amenities, that the poor of other nations would never dream of ever possessing.

                           

As Thomas Sowell says, “ This is not just a question of semantics. The whole future of the welfare state depends on how poverty is defined. 'The poor' are the human shields behind whom advocates of ever bigger spending for ever bigger government advance toward their goal. "

                                      

After all, how would the liberals sell their bigger government without poverty propaganda?  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Liberal Education at Graduate Schools

                       

Further to my ongoing comments on liberal professors, the problem is not confined to undergraduate schools.

                           

At major graduate schools offering Ph.Ds, over 60% of faculty are Democrats, 30% are independents and only 10% are Republicans.

                           

This demonstrates the problems in attempting to educate those who become our future teachers, community leaders, and members of the media.

                           

A further surprise: Business school professors who are believed to be chiefly conservative, actually vote as liberals.

                           

My experience on Wall Street indicates that many there tend to be liberal. This is, of course, contrary to what the media tries to impress on the general public.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Is There Really a Cost To Government By Cutting Taxes?

                       

Capital gains and dividends at only 15% is said to “cost” the government $403 billion each year. Capital gains at death are an additional $194 billion.

                       

But what if there were no capital gains and dividend taxes?

                       

The political left continues to think of tax "cost” in terms of “static" accounting. That is, they think solely in terms of what the government gives up in tax elimination, but not in potential revenues from such action.

                       

However, past experience indicates that lower tax rates produce higher tax revenues. A look at gigantic tax revenue increases after the Reagan tax cuts is positive proof. The George W. Bush tax cuts as well.

                       

For reasons known only to those who want higher tax rates because they produce more massive government, the left thus persists in mouthing antiquated tax “costs” jargon. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Non-Political Economics:and the “Taxing the Rich” Diatribe

                           

Whenever a politician uses the magic phrase “Tax the Rich” I suggest you put on your thinking cap and remember these facts:

                           

Taking representative 2009 figures,which closely hold today, about 8.2 million Americans earned $10 million dollars or more. They sure were rich. If you taxed those scoundrels 100% of their earnings, every penny they were “lucky” to get, the government would come up with $240 billion.

                           

That lasts Uncle Sam a few weeks.

                               

The truth: The top 1% earners pay about 37% of taxes The top 5% pay about 53% The top 10% pay about 68% of taxes/ The top 50% of income earners pay 96% of taxes, so if some folks are getting away with not paying taxes, it’s not the ‘RICH’.

                       

Furthermore, most of the rich earn, not inherit their wealth, so taxes are a burden on the entrepreneurial, job-producing economy.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)