A Sorry Excuse

Mike Kaplan, the CEO of Aspen Skiing has taken to the editorial page of the WSJ to make an extra special pleading for open borders.  Obviously, open borders advocates are received with open arms at the WSJ.  Mike, however, has an extra special pleading for open borders.  He doesn’t mention workers at Aspen.  All the ski areas we have been to recently have many international workers.  Mike says that the “xenophobia” emanating from the White House is causing legal Mexican tourists to stay away from Colorado.  He gives away the real story at the start of the last sentence which we have made bold:

Last year visitation to Aspen by Mexicans dropped 30% compared with the 2015-16 ski season. Bookings for 2017-18 aren’t looking much better. There are multiple reasons, but the xenophobia radiating from the Oval Office ranks at the top. As the head of the Mexico City public-relations firm that promotes Aspen in Mexico told us, “The dollar has been strong, which makes travel to the U.S. expensive, but Trump is the No. 1 reason.” [Emphasis added]

Sidebar: One question is: should we boycott places that say such things?  We say no.  Folks can do with their own money as that see fit.  We don’t want to rule out great places like Aspen and especially for us, Snowmass, just because the CEO makes silly excuses for an off year.  End Sidebar.

The dollar was strong last season when one would cost almost 22 pesos but today it cost less than 18 pesos.  It is time for Mike to get back to work and stop worrying about The Donald.  We hope Aspen has a great year.

 

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Profile In Courage

Aaron Hedlund has an article on conservative tax reform at NRO.  Two interrelated facts make the article notable.  First, Aaron is an assistant professor.  Typically, assistant professor denotes somebody without tenure.  At most schools, but not ours, tenure and promotion to associate professor are linked.  The second fact is that he is at the University of Missouri- Columbia.  Yes, that University of Missouri campus.

Aaron shows real courage to come out and say:

Finally, Republicans must take the social-justice fight to the Democrats. Liberals love discussions of “tax fairness” because it gives them a platform to divide Americans and to engage in class warfare. Democrats believe that collective society has a moral claim to every American’s income, and they would empower politicians to determine how much money somebody should be allowed to earn.

Do read the whole thing.  It is a good overview of what needs to be done.  The problem is that tax reform, like other political problems, will come down to difficult choices.  Are you willing to only reduce corporate rates and leave individuals alone? There will be choices and we need to recognize what is a debate and what is an actual choice.  We won’t get everything but we should argue like Aaron suggests.

His courage shows that universities are not quite the monolithic bastions of left that many think.  On the other hand, there is no doubt that he has risked his career by coming out.  It is good for universities in general and particularly his university to show everyone the diversity that exists.

The Market Strikes Back

The College Fix reports (h/t: Best Of The Web) that Evergreen State in Washington has a $2.1 budget shortfall.  Evergreen State is notorious for its behavior last year related to its Day of Absence.  If you missed it the Fix article has details.  The financial details are even more interesting:

In an Aug. 28 memo to the campus community titled “Enrollment and Budget Update,” officials report that fall 2017-18 registration is down about 5 percent, from 3,922 students to 3,713. But the problem is nearly all of the students they lost are nonresidents, who traditionally pay a much higher tuition to attend, officials explained in the memo, a copy of which was obtained by The College Fix. [Emphasis added]

At Evergreen State, like almost any four-year state university, out-of-state students support in-state students.  According to Evergreen State:

Evergreen’s tuition is about $6,700 per year for Washington state residents and about $24,000 per year for nonresidents.

Attracting and retaining out-of-state students is a critical budget item for for many if not most state schools.  The reason is that in-state tuition is somewhere near the marginal cost of education but out-of-state tuition is much higher than the marginal cost.  Is is easy to see why as the $17,300 per student difference times approximately 200 students (see bold above) would be almost $3.5 million.  As the budget shortfall is $2.1 million we would suggest that nearly all bolded in the first quote above might be an overstatement.

It is hard to be sure that Evergreen and the University of Missouri are being punished for their behavior.  It does look likely that that is the case for Evergreen because the out-of-state students are in demand and they can go almost anywhere for similar prices. It looks like the market is offering advice to state schools.  Will they take it?

 

Free Trade II

In the last post we were saying that the benefits of free trade were widespread and the costs were narrow.  We said that the government needed to be part of the solution as tariffs are reduced.  Mark Perry comments on and links to a paper by Scott Lincicome, Doomed To Repeat The Long History Of America’s Protectionist Failures, that quantifies the opportunity to benefit all involved.  Scott concludes:

These surveys show that, contrary to the fashionable rhetoric, American protectionism has repeatedly failed as an economic strategy.

Scott reviews the previous research and shows us the exorbitant costs of protectionism.  Here is Table 7:

So, there is an enormous opportunity for government to find a solution other than higher tariffs.  There is also an enormous opportunity to reduce or eliminate tariffs and provide net benefits.  As we said government should not be the whole solution to change but it can be part of it.  Eliminating tariffs is the best solution.  Not increasing tariffs is the minimum we can expect of responsible government.  Finding useful ways to facilitate change that will happen should be part of responsible government.

 

Free Trade

George Will is at his best on NRO touting the benefits of free trade.  And it gives him time for his favorite pastime of skewering The Donald.  We agree with George on this  one that The Donald is absolutely wrong on trade.  The MWG position is unilateral free trade.  The USA should eliminate all tariffs.  We would be willing to phase them out rather than require that they be eliminated immediately.

Do read it all but here are some juicy quotes.

Paul Samuelson, a leading 20th-century economist, cited this doctrine [free trade] when challenged to name a social-science proposition that is both true and not obvious.

We might argue that it is obvious that raising taxes is a bad idea but the behavior of individuals seems to argue for Paul’s position.

Foreigners, however, have their uses. After [The Donald] trumpeted that the Dow surpassing the 22,000 mark was evidence of America’s resurgent greatness, the Wall Street Journal rather impertinently noted this: Boeing, whose shares have gained 50 percent this year and which accounted for 563 of the more than 2,000 points the Dow had gained this year en route to 22,000, makes about 60 percent of its sales overseas. Boeing has a backlog of orders for 5,705 planes, 75 percent going outside North America. For Apple, the second-biggest contributor (283 points) to this year’s Dow gain at that point, foreign sales are two-thirds of its total sales. Foreign sales are also two-thirds of the sales of McDonald’s, the third-biggest contributor (239 points).

What serious folks should be thinking about is how do we cut tariffs and how do we facilitate the market so that the small percentage of folks that suffer can adjust to the changes.  The political problem is that the benefits are widespread while the costs are not.  One part of this solution might be to tax the large percentage of folks that benefit from trade.  Another part would be incentives to change.  A third part would be encouragement.  In addition to “Made In America” events at the White House there could be “Change In America” events.  The government should be part, perhaps only a small part, of the solution so we can capture the large benefits of free trade and absorb the small costs.

 

Too Slow And Too Good

We are too slow and Elliot Kaufman and Mike Rowe are too good.  Elliot discusses a NYT article while Mike shows that you can fight the mob and still maintain your independence.  Elliot quotes the NYT article gushes:

[A] surprising group of Americans is testing its moral voice more forcefully than ever: C.E.O.s.

Next Elliot tells us about the young adult site:

Vox upped the ante, explaining: “After Charlottesville, CEOs have become our public conscience.”

Of course, this is just appeasement.  The CEOs are hoping that the leftist crocodile eats them last.  Elliot explains:

The New York Times was right, in a sense. “The C.E.O.s had found their voice,” concluded their fawning article. But top-flight executives are not pre-teen girls who have finally mustered up the confidence to speak; they are savvy representatives of their shareholders’ interests. ESPN, like all the Fortune 500 companies that leapt to boycott or threaten Indiana and North Carolina over their religious-liberty and transgender-bathroom laws, knew that the safest thing they could do was to get out ahead of a left-wing mob.

Do read all of it.

It is the opposite of courage to give into the mob.  Business folk, particularly CEOs, are working for their shareholders.  It is a reasonable business judgment that it is in their shareholders’ interest to submit to the mob and is a moral judgment in the sense of serving their shareholders but VOX is exactly wrong to call the CEOs public conscience.   This is a private and perhaps profitable choice like paying protection to a different mob.

Sidebar: It is an interesting aspect of politics that the left supports CEOs when they do exactly the opposite of what the left wants.  The left wants CEOs, somehow, to work for the public rather than profits of their company.  In this case the CEOs are working to increase their profits but the left is happy.  The left is not the only side to confuse short-term gains with principles.  End Sidebar.

Mike, on the other hand, wants to combat the mob without taking political sides.  We agree.  We would describe it as the fight against violent socialism.  It doesn’t matter if it is the national socialists (Nazis) or world socialists, often, without intentional irony, called Antifa.  The important word is violent.  Here is how Mike takes issue with a commenter that calls him anti-intellectual and tries to associate him with the Nazis.  He does this without (entirely) taking a political side:

mikeroweWORKS is a PR campaign for the skilled trades. For the last nine years, we’ve partnered with numerous trade schools, raised millions of dollars for work-ethic scholarships, and called attention to millions of jobs that don’t require a four-year degree. But that doesn’t mean we’re “anti-intellectual.” We’re not even “anti-college.” We simply reject the popular notion that a four-year degree is the best path for the most people. And we’re hardly alone.

Millions of reasonable people – Republicans and Democrats alike – are worried that our universities are doing a poor job of preparing students for the real world. They’re worried about activist professors [R], safe spaces [R], the rising cost of tuition [R&D], a growing contempt for history [R], and a simmering disregard of the first amendment [R]. These people are concerned that our universities – once beacons of free speech – now pander to a relatively small percentage of students who can’t tolerate any political opinion that challenges their own. And they’re concerned – deeply concerned – that millions of good jobs are currently vacant that don’t require a four-year degree, or any of the catastrophic debt that comes with it. [R & D added]

We’ve put R for Republican and D for Democrat on Mike’s list of what reasonable people think.  Of course, Mike’s response is being lapped up by conservative sites like TheBlaze, The Daily Caller, and Fox News because conservatives like the list above, are generally pro-capitalism, and and are anti-violence.  As Mike shows, the CEOs could have done better.

Bad Rhetoric

Nicole Gelinas is taking aim at James Damore’s argument over at NRO.  She says that James has a right to his opinion but he is wrong:

[Google] claims to encourage internal dissent and debate, and that is what Damore provided. But the contents of his memo are nothing to celebrate: He said nothing that hasn’t already been said, in tiresome fashion, for decades.

Nicole then does what she accuses James of without even a change of paragraph:

Damore, like any novice rhetorician, relies on straw men. He is concerned that in aiming for perfectly equality of the sexes, Google will deplete its financial resources and become less competitive. Google’s tech workers, however, are 80 percent male, and its leadership is 75 percent male. If the company is indeed striving for numerical equality, it is a long way from the danger zone.

She actually does it right in the title: Biology Is Not Destiny.  Nowhere does James make such a claim.  Means are different.  Does Nicole think that the 39 percent Asian-American tech force at Google (her stat) is the result of bias?  The are two differences.  The first is that nobody can accuse Nicole of being an novice rhetorician.  The second is that James is explicit about using the extreme case.

Google has been emphasizing diversity for quite a period and spend lots of money without moving the needle.  Biology is not destiny.  But sexes and races can and do have different means.  Yes, John McEnroe is roughly right about Serena Williams.  If you don’t accept that you end up like universities.  You may remember that the provost at American University denied tenure to Carolyn Brown, who identifies as hispanic, because of her Student Evaluation of Instruction (SEI) scores.  More important for our discussion are the diversity reactions like her chair (well, actually director but it sounds like a chair):

But [John] Watson warned that scholars of her stature, particularly scholars of color, get offers to go elsewhere fast.

“It’ll be a yearlong process to replace her,” he said. “The likelihood we’ll get another woman who is a minority is a tick above zero.”

We understand John’s attitude.  Leadership, including the provost is all over him to get diverse faculty members but then the provost fires Carolyn.  All of the department’s work has gone for naught.  If you asked is there a separate market for diverse faculty the answer would be yes.  The prices are higher because the completion is intense.  Or Carolyn’s reaction:

“They used me as a face of diversity,” Brown said, “and when I went up for tenure, they threw me away. It’s really disappointing. I’m still kind of devastated.”

You can’t fire me because I add the diversity that you crave.  We interviewed for a chair position at another school.  Part of the interview was to meet each of the faculty individually.  One meeting was real short because the faculty member said that her diversity status made her untouchable.  She may have been right.

Nicole is wrong.  The outcome of Google is not going to be a few yoga classes.  Question: does Nicole want to exclude men from those classes?  Google has already spent years and many millions on this.  If they want to meet their goals they will move further towards the university model with different hiring standards and different retention standards depending upon your diversity value.  If you want diversity you can get it because universities do but the cost is high.