[Guest post by DRJ]

Get ready, Californians.

Democrats in the California Legislature plan to solve the $20B budget shortfall by taxing your six-packs ($1.80 per pack), iTune downloads ($0.08 per download), and plastic grocery bags ($0.25 each). Other proposals include increased taxes on porn magazines, sex toys, yachts, and gas-guzzling vehicles.

At least they aren’t taxing California blogs. Yet.

– DRJ

[Guest post by DRJ]

InsideHigherEd discusses a new way to tax the rich that has caused a rift among Massachusetts’ Democrats:

“With college endowments a favorite target for politicians in Washington, and many states struggling to find enough tax revenue to make ends meet, it’s almost a surprise that it took state legislators this long to start casting their eyes on colleges’ funds. But it’s perhaps not a shock that if the issue were to emerge anywhere, it would be in Massachusetts, home to the university (Harvard) whose nearly $34.6 billion endowment has become the poster child for higher education wealth.”

The sponsor of the proposal, Democratic Rep. Paul Kujawski, is concerned that private colleges accumulate wealth and contribute little to the local economy because of their tax-exempt status. Defenders point out that Massachusetts does not have to spend as much money on higher education as other states because of the presence of so many private colleges. They also object to treating entities differently based on their wealth.

[Note to Self: Remember this when liberals argue that the rich should pay more taxes.]

The measure failed but it would have affected 9 Massachusetts colleges: Harvard, Massachusetts Institute of Technology, Williams, Boston, Amherst and Wellesley Colleges, Tufts University, Smith College and Boston University. During the debate, Democratic lawmakers asked some revealing questions:

“Why do we want to tax the poor all the time, but we let off the hook the richest of the rich?” said State Rep. Angelo Scaccia, a Democrat, said during the course of Monday’s debate, according to the Metrowest Daily News. “We’re not going to break them,” he added of colleges’ endowment funds. “We just want a little.”

The next time Democrats talk about taxing the rich, they should start with these 9 colleges in Massachusetts.

– DRJ

[Guest post by DRJ]

Texas Senator Kay Bailey Hutchison plans to introduce legislation that will freeze US biofuel mandates at current levels. She claims artificially inflating ethanol production was an energy and farming mistake that has resulted in rising food prices and starvation in some parts of the world.

– DRJ

[Guest post by DRJ]

Hampered by the housing sector and rising food and gas prices, the economy grew at just 0.6% in the first quarter 2008 but that was enough to hold off the diagnosis of a recession:

“The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down.

The country’s economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly.”

The economy is weak and a recession cannot be ruled out but it looks like Beldar was right.

– DRJ

[Guest post by DRJ]

It’s getting harder to gain admission to elite colleges, especially this year in which there are a record 3.3 million high school graduates and 60-65% are going to college.

Take the case of Navonil Ghosh, an Austin, Texas, magnet high school senior who scored perfect scores on the SAT and ACT, is 4th in his class, plays the piano, has a black belt in Kung Fu, and has more than 400 hours of volunteer time. Yet his applications were rejected at Stanford, MIT, Harvard, University of Pennsylvania, Princeton and the University of Texas Plan II honors program. Ghosh was waitlisted at Yale and plans to attend either CalTech or Rice, where he was accepted.

Stories like this aren’t that surprising for those familiar with current college admissions. There are so many impressive applicants at elite colleges that schools can afford to be selective. In addition, because colleges emphasize the US News ranking factors such as yield (the percentage of accepted students that actually attend the college), private colleges want to admit only those applicants who are likely to attend.

Not only is demand up but the cost of college tuition is increasing faster than inflation or household income. Steven Pearlstein addressed rising costs last November in an article at the Washington Post:

“Part of the problem is that it’s virtually impossible to have a coherent conversation about an industry that takes in Harvard, East Podunk Community College and everything in between.

It’s also hard to bring economic logic to a market in which the product is usually sold at a loss, competition tends to push prices higher rather than lower, and at many schools, half the customers are forced to subsidize the other half.”

Pearlstein identifies several problems that are contributing to spiraling tuition costs, including the financial assistance race to entice better students and the fact that demand for college is growing faster than supply.

Growing tuition costs have caused some applicants and parents to reconsider the benefits of an elite college education. As a result, lower-cost colleges and state schools may be benefiting from the increased competition and costs at elite colleges, although costs are going up there, too.

Of course, there will always be colleges like the University of Colorado that are attractive to applicants because of the special atmosphere:

“A crowd of about 10,000 people collectively began counting down on the University of Colorado’s Norlin Quadrangle just before 4:20 p.m. Sunday.

Yet the massive puff of pot smoke that hovers over CU’s Boulder campus every April 20 — the date of an annual, internationally recognized celebration of marijuana — began rising over the sea of heads earlier than normal this year.
***
Smoke-out participants — thousands of whom wore green or T-shirts promoting pot — climbed trees, played the bongos, snapped pictures and had miniature picnics. That, of course, after they sparked the weed they had come to smoke.

CU freshman Emily Benson, 19, of Kansas City, said she thinks the decriminalization of marijuana will become a hot topic in the upcoming political season and said she felt part of something bigger than just a smoke-out on Sunday.

“We’re at the starting point of a movement,” she said. “This is a big part of the reason I applied here — for the weed atmosphere.”

I’m sure Emily will have wonderful college stories to tell her children someday.

– DRJ

[Guest post by DRJ]

In an article dated December 26, 2007 (but available online at 3:00 PM EST Christmas Day), The New York Times reports “bleak” holiday sales based on disappointing MasterCard charges:

“American consumers, uneasy about the economy and unimpressed by the merchandise in stores, delivered the bleak holiday shopping season retailers had expected, if not feared, according to one early but influential projection.

Spending between Thanksgiving and Christmas rose just 3.6 percent over last year, the weakest performance in at least four years, according to MasterCard Advisors, a division of the credit card company. By comparison, sales grew 6.6 percent in 2006, and 8 percent in 2005.

“There was not a recipe for a pick up in sales growth,” said Michael McNamara, vice president of research and analysis at MasterCard Advisors, citing higher gas prices, a slowing housing market and a tight credit market.

Strong demand at the start of the season for a handful of must-have electronics, like digital frames and portable GPS navigation systems trailed off in December. And robust sales of luxury products could not make up for sluggish sales of jewelry and women’s clothing.

What did eventually sell was generally marked down — once, if not twice — which could hurt retailers’ profits in the final three months of year. “Stores are buying those sales at a cost,” said Sherif Mityas, a partner at the consulting firm A.T. Kearney, who specializes in retailing.”

However, online and luxury sales increased significantly:

“MasterCard found that online spending rose 22.4 percent, a healthy, if not robust, showing, given fears that Web purchases would slow after a decade of impressive growth.

Clothing sales rose a meager 1.4 percent, but there was a stark split between genders. Sales for women’s apparel dropped 2.4 percent. Sales for men’s apparel rose 2.3 percent. Analysts said women complained of dreary fashions. “Even when the dust settles, women’s clothing is likely to be one of the weakest categories in retail this season,” said John D. Morris, senior retail analyst at Wachovia Securities.

Luxury purchases rose 7.1 percent, as the nation’s well-heeled splurged on $600 Marc Jacobs trench coats and $800 Christian Louboutin shoes. Footwear, at all prices, proved a bright spot for the clothing industry, with sales surging 6 percent.”

An increase of 22% is definitely robust by anyone’s evaluation. I’m sure the New York Times would be glad to see its ad rates and stock price increase 22%.

The article noted Target’s sales were weak while Wal-Mart and Best Buy were big winners. That makes me curious how the author knows - as stated in the first line of the article - that people didn’t use their MasterCards because they were unimpressed with the merchandise. Apparently they liked the merchandise at Wal-Mart and Best Buy. This illustrates why it’s hard to extrapolate MasterCard’s data to the US Christmas market and answer “Why?” questions based on solely on data.

Nevertheless, the author’s conclusion may be correct. Certainly one reason that supports his conclusion that people are uneasy about the economy is that more people have reached their credit card limits or are in default. There can be many reasons for credit card defaults, including not only the reasons mentioned in the Times’ article but also things like changes in federal bankruptcy law and the ready availability of credit. Easy credit lets people use credit cards to incur debt far beyond what they can reasonably repay, and more and more people are taking advantage of that kind of credit.

In addition, I think health care costs are a factor for some households. Even with health insurance, catastrophic medical events can devastate a family’s budget. The nature of our health care system makes it almost impossible to determine what treatment will cost until it’s completed, so people have no ability or incentive to evaluate whether the costs are worth incurring.

– DRJ

[Guest post by DRJ]

The Instapundit notes the continuing downward spiral in value at the New York Times:

“MICKEY KAUS: “Maybe Murdoch Bid on the Wrong Company: New York Times stock falls below $20 a share, down from $50 in 2002. … Soon even Ron Burkle will be able to buy the place!”

UPDATE: Reader George Zachar emails:

Shareholder equity in the New York Times company is roughly $825 million. That’s about the value of the Times’ interest in its new headquarters tower opposite the bus terminal. The implicit value of the Times newspaper and other properties is therefore zero.

I blame excessive ad-discounting.”

Heh.

– DRJ

Writing in the New York Times, David Carr has a hilarious take on the L.A. Times mess:

Reporting on the contretemps at The Los Angeles Times last week brings to mind a scene in which you come upon a sinking vessel and see people scrambling everywhere. And then you realize they are not looking for buckets, but guns.

At The Times last week, editors took aim at other editors, writers sprayed shots at their own newspaper, and the publisher drew a bead on his own foot. The shootout went off on the Web in real time, with blogs annotating every ricochet. Fittingly, the whole thing ended when the editorial page editor, after resigning, explained himself on a blog, using the digital platform to throw a grenade on the way out.

Andres Martinez, who shows no signs of slowing down in his zeal to provide usable quotes, provides insight into the factions’ use of blogs (L.A. Observed comes to mind):

“[L.A. Times leadership] panicked — it was like a university administration besieged by student protests — and in the end, it was a rather pathetic cave,” said Mr. Martinez, whose romantic entanglement became the focus of people in the newsroom concerned about the paper’s credibility.

“What changed between Wednesday morning and Wednesday evening was a couple of blog posts,” he said. “It was a weapon that the newsroom used to ratchet up the pressure on Hiller. It was fascinating in its transparency, but it was also very disruptive.”

Like me (and many other people), Carr doesn’t think that Grazergate was equivalent to the Staples Center scandal:

This was not the Staples Center. The Current section is frequently an afterthought and in need of some rejuvenation. Connections aside — my reading of the facts suggest that the relationship between Mr. Martinez and Ms. Mullens had no effect on the selection — Mr. Grazer was not a dumb choice for the experiment.

Of course, Carr’s article preceded the revelation of Rummygate. But I don’t think that was the Staples Center either. I’ll explain in an upcoming post.

[posted by Justin Levine]

The solution? Give away your product for free and fund it through penis enlargement and breast augmentation ads.

– Posted by Justin Levine

Foodless Food

By this, the final segment of the Wishing Ring, you’re either desperate to know what the heck I mean by “foodless food” — or else you’re so overwhelmed by ennui that you’re gnawing your own leg off to escape.

On the assumption that those of you in the latter category will have other things to worry about (such as sudden, catastrophic blood loss), I’ll dive right into this last wish of our iconic three.

(more…)

The Federal government passed a law called the FACT Act a while back, which entitled U.S. consumers to request a free credit report from each of the three credit reporting companies.

You get one every 12 months.

The roll-out date for California was December 1. Want to get yours? Follow this link. You do, however, still have to pay for your FICO score, but now at least keeping an eye on identity theft is much easier.

This interesting post suggests that the falling price of LASIK surgery, as compared to the rising cost of most health care, may be related to the fact that LASIK is generally not covered by insurance, so the power of the marketplace works its magic. (Via Pejman.)

Incidentally, I had LASIK surgery done several years ago, and I am pretty happy with it. I declined the touch-up due to my doctor’s indictment for Medicare fraud . . . True story.