Monday, August 30, 2010

Government Subsidized Universities Marketing

My son Daniel is senior in high school and he is getting a lot of marketing material from government subsidized universities.  How does this make sense?  This is from in state schools and out of state schools.  Should the tax payers support this?

I imagine that this low cost but still why market something that will costs you more expense.

You have a case where government subsidized universities are competing against each other.

One could argue that it could encourage more students to go to college (most people seem to that is good, I do not) but he did not start getting much marketing material until after he took the SAT signaling that he intended to go to college.

One could also say that it serves the function of funneling students to the school that is best for them but I find that pretty weak, the child could find that out on his own and marketing materiel does not cover much that would reveal that.

Wednesday, August 25, 2010

On Abolishing the Fed and Replacing It with Nothing

Why not abolish the Fed and replace it with nothing . . .

Producing money has historically been a sovereign monopoly, but it’s not a public good. Barons, kings, and bishops outlawed private mints so they could gain monopoly profits on the seigniorage.  Is monopoly ever good? 

The U.S. and Britain went the opposite way, charging zero seigniorage so that private mints were unprofitable. But when gold and silver were discovered in the American west, the government was a bit slow to establish a branch mint. A private mint quickly sprang up in Denver, charging seigniorage a bit below the cost of shipping metal to Philadelphia and back.

The Fed doesn’t need to be ‘replaced’, not by the government anyway. The market will provide money, one way or another.

I know, we would have to do without all the brilliant policies that central bankers use to smooth out the trade cycle. But they aren’t working out so well, are they?

The U.S. had its first trade-cycle downturn in the 1820s, when the Second Bank of the United States was in operation.

Has our economy been generally less unstable with central banking than without?  I do not think so. 

The median voters ideas about what money is and how the monetary system works are so far from reality that they cannot be expected to oversee the system and in a democracy the  median voters rules.

Tuesday, August 17, 2010

I Found a Great Quote

Men do not make laws. They do but discover them.
-- Calvin Coolidge, 1914        

Calvin is often quoted which is interesting because he is known as being very taciturn.