Archive for August, 2010|Monthly archive page

Any Experts on the German Economy Out There?

The Wall Street Journal has two articles about German. One describes how German wages are stagnating, despite the expansion.

Here is the first articles:

Thomas, Andrea. 2010. “German Workers’ Wages Belie Country’s Rebound.” Wall Street Journal (15 August).

“Germany has surprised the world with a sharp acceleration in its economic recovery, but perhaps the least impressed by this feat are Germans themselves. The German economy expanded a sharp 2.2% in the second quarter from the first — the fastest pace since reunification in 1990. But, despite the export-driven rebound, most German workers aren’t getting any richer.” Continue reading

Charles Walgreen, Chicago Economics, and Prohibition

Charles Walgreen was a major influence on Chicago economics, both leading witch hunts against unreliable academics and funding others, including George Stigler, who used these resources to significantly shape the discipline of economics.  Here is another take on his career.

Okrent, Daniel. 2010. Last Call: The Rise and Fall of Prohibition (New York: Simon and Schuster).

197: Charles Walgreen … who built his Chicago-based chain from nine locations in 1916 to twenty four years later.  In 1922, Walgreens introduced the milk shake, which family histories have credited the chain’s next growth spurt.  But it’s doubtful that milk shakes alone were responsible for Walgreens rocketing expansion from 20 stores to an astonishing 525 during the 1920s.  Something Charles Walgreen Jr. told an interviewer many years later suggests another possibility.  The elder Walgreen worried about fire breaking out in his stores, his son recalled, but this apprehension transcended concern for his employees: he “wanted to get in as fast as possible and to get out as fast as possible, Charles Jr. remembered, “because whenever they came in we’d always loose a case of liquor from the back.”

Administrative Bloat in Education

In addition to the higher salaries for university executives, academic management is continually becoming more bloated.  In effect, picking up the worst practices of corporate America.  Here is the report from the Goldwater Institute.

My fourth streaming video on the crisis

I tried to tie things together here

The url is:

Excessive Compensation — Academic Style

Higher education is not undergoing something like the financial reengineering craze that was so popular and so destructive in corporate America more than a decade ago — cutting back on the workers and loading university presidents of million dollar salaries and perqs.

Here is the New York Times take on the lavish housing expenditures for Mark Yudof, president of the University of California.  Everyone else is expected to willingly accept the necessary sacrifices for the good of the organization. The article begins with a “midnight move … the latest chapter in a two-year housing drama that has cost the university more than $600,000 and has drawn senior U.C. officials into an increasingly time-consuming and acrimonious ordeal over the president’s private residence.”

Fainaru, Steve. 2010. “University Head’s Housing Raises Ire.” New York Times (21 August): p.  A 23A.

Subprime Education Scam: Guaranteed by Government

At a time when the country is getting ready to gut Social Security, Pensions, …. Here is the way our government husbands its resources.

Winkler, Rolfe. 2010. “For-Profit Schools Put in Detention.” Wall Street Journal (21 August).

“Early death reports are known to be exaggerated. For-profit educators’ may be an example.  With Congress and regulators threatening to cut off federal funding, share prices for the industry’s top six by market capitalization have dropped by an average of 40% since May.  From 2000 to 2009, the industry grew explosively, thanks to increased government spending and Bush-era deregulation permitting aggressive sales tactics. Taxpayer-guaranteed loans and grants flowing to the industry more than quintupled during those years, to $26.5 billion from $4.6 billion.”

“Earning risk-free profits on taxpayer-guaranteed loans tends to lead to lower lending standards. Such is the case with firms like Apollo Group, ITT Educational Services and Career Education. They often market to low-income prospects — eligible for the most aid — and sell them high-priced degrees, maximizing government largess.”

Here is the URL for the GAO study: Continue reading

New Video Stream Now on Youtube

Sorry about the confusion.  I redid the talk on Youtube, which got rushed as I neared my 15 minute limit.

Redoing Last Night’s Video

My apologies. For some reason, my video did not record after 19 seconds.  I’m sorry for the inconvenience for those of you who sat through the Budweiser commercial only to find nothing more than 19 seconds. I’ll try to redo my talk this afternoon.

Here is the url for my latest video stream

My Video Stream This Week

I will be posting a new talk this evening. I intend to explain how the combination of competition and new technological economies of scale led to overaccumulation, which led to both deindustrialization and financialization, which, in turn, led to the current crisis.  I will start at 6:00 and will finish before 6:30.  Here is the link: