Obamanomics

COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good Subject. Terrible Times. It’s 7.8%.

COSTELLO: That many people are out of work?

ABBOTT: No, that’s 14.7%.

COSTELLO: You just said 7.8%.

ABBOTT: 7.8% Unemployed.

COSTELLO: Right 7.8% out of work.

ABBOTT: No, that’s 14.7%.

COSTELLO: Okay, so it’s 14.7% unemployed.

ABBOTT: No, that’s 7.8%.

COSTELLO: WAIT A MINUTE. Is it 7.8% or 14.7%?

ABBOTT: 7.8% are unemployed. 14.7% are out of work.

COSTELLO: IF you are out of work you are unemployed.

ABBOTT: No, Obama said you can’t count the “Out of Work” as the
unemployed. You have to look for work to be unemployed.

COSTELLO: BUT THEY ARE OUT OF WORK!!!

ABBOTT: No, you miss his point.

COSTELLO: What point?

ABBOTT: Someone who doesn’t look for work can’t be counted with
those who look for work. It wouldn’t be fair.

COSTELLO: To whom?

ABBOTT: The unemployed.

COSTELLO: But they are ALL out of work.

ABBOTT: No, the unemployed are actively looking for work. Those who
are out of work gave up looking and if you give up, you are no longer in
the ranks of the unemployed.

COSTELLO: So if you’re off the unemployment roles that would count
as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don’t look
for work?

ABBOTT: Absolutely it goes down. That’s how the current administration
gets it to 7.8%. Otherwise it would be 14.7%. Our govt. doesn’t want you
to read about 14.7% unemployment.

COSTELLO: That would be tough on those running for reelection.

ABBOTT: Absolutely.

COSTELLO: Wait, I got a question for you. That means there are two
ways to bring down the unemployment number?

ABBOTT: Two ways is correct
.
COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking
for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and
the easier of the two is to have administration supporters stop looking
for work.

ABBOTT: Now you’re thinking like the Economy Czar.

COSTELLO: I don’t even know what the hell I just said!

ABBOTT: Now you’re thinking like our current President.

Obamanomics

COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good Subject. Terrible Times. It’s 7.8%.

COSTELLO: That many people are out of work?

ABBOTT: No, that’s 14.7%.

COSTELLO: You just said 7.8%.

ABBOTT: 7.8% Unemployed.

COSTELLO: Right 7.8% out of work.

ABBOTT: No, that’s 14.7%.

COSTELLO: Okay, so it’s 14.7% unemployed.

ABBOTT: No, that’s 7.8%.

COSTELLO: WAIT A MINUTE. Is it 7.8% or 14.7%?

ABBOTT: 7.8% are unemployed. 14.7% are out of work.

COSTELLO: IF you are out of work you are unemployed.

ABBOTT: No, Obama said you can’t count the “Out of Work” as the
unemployed. You have to look for work to be unemployed.

COSTELLO: BUT THEY ARE OUT OF WORK!!!

ABBOTT: No, you miss his point.

COSTELLO: What point?

ABBOTT: Someone who doesn’t look for work can’t be counted with
those who look for work. It wouldn’t be fair.

COSTELLO: To whom?

ABBOTT: The unemployed.

COSTELLO: But they are ALL out of work.

ABBOTT: No, the unemployed are actively looking for work. Those who
are out of work gave up looking and if you give up, you are no longer in
the ranks of the unemployed.

COSTELLO: So if you’re off the unemployment roles that would count
as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don’t look
for work?

ABBOTT: Absolutely it goes down. That’s how the current administration
gets it to 7.8%. Otherwise it would be 14.7%. Our govt. doesn’t want you
to read about 14.7% unemployment.

COSTELLO: That would be tough on those running for reelection.

ABBOTT: Absolutely.

COSTELLO: Wait, I got a question for you. That means there are two
ways to bring down the unemployment number?

ABBOTT: Two ways is correct
.
COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking
for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and
the easier of the two is to have administration supporters stop looking
for work.

ABBOTT: Now you’re thinking like the Economy Czar.

COSTELLO: I don’t even know what the hell I just said!

ABBOTT: Now you’re thinking like our current President.

Subsidies Create Glut Of College Grads

So billions have gone to student loans and Pell Grants to give people pseudo-educations and credentials that are worthless.  But it kept academics and administrators who vote for statism employed at high salaries.

If the billions had instead been invested in plant, property and equipment in firms selling goods demanded by consumers, it would have raised productivity and wages and created jobs, including blue collar jobs that do not require a college degree.

It’s another case of boom and bust and misallocation of resources, due to government control of money and credit.

Higher Education: A new study finds almost half of Americans with college degrees are working at jobs that don’t require one. It’s the latest example of how federal subsidies are creating a massive higher-education bubble.

The study, by the Center for College Affordability and Productivity, found that an incredible 48% of college graduates — about 13 million of them — hold jobs that don’t require a bachelor’s degree. About 5 million have jobs that don’t even require a high school diploma.

There are, for example, roughly a million sales clerks, 300,000 waiters and 100,000 janitors with college degrees.

This mismatch is up sharply from four decades ago, the study found. While 1% of taxi drivers had a college degree in 1970, to take one example, 15% do today. Back in 1967, fewer than 11% of college grads were overqualified for their jobs.

And this problem is not likely to get better anytime soon. Only seven of the 30 occupations projected to see the biggest growth over the next decade require any post-secondary education, the study found.

As a result, while colleges will churn about roughly 19 million college graduates between 2010 and 2020, the market will likely create fewer than 7 million new jobs that require at least a bachelor’s degree.

Weirdly, at the same time, the country faces a shortage of skilled labor — plumbers, electricians, carpenters and the like.

A study by Deloitte out last year found manufacturers couldn’t fill as many as 600,000 jobs due to the lack of skilled workers.

Another by the Boston Consulting Group found that this shortage could reach 875,000 by the end of the decade.

In a normal market, a huge excess in supply would send a signal back up the chain to produce less, and as a result, demand for expensive college degrees would drop. At the same time, the number of people learning a skilled trade would increase to fill that shortage.

But while college enrollment has declined slightly in the past year, it continues near historic levels. College costs continue to skyrocket, shooting up at three times the rate of inflation, which in turn has led to a doubling of average student debt.

In fact, the amount of student loan debt now tops $1 trillion, and is growing fast, while default rates are climbing.

If this all looks strange and mysterious, it is. Until, that is, you realize a big reason for all these distortions is the massive federal effort to encourage and subsidize college education.

Over the past three decades, financial aid has rocketed 438% — and that’s after adjusting for inflation — driven largely by huge increases in federal grants, education tax breaks and subsidized loan programs.

It’s worked. Where only about 10% of 25-year-olds had a college degree in 1970, more than 30% have one today.

But, just as with the federal effort to encourage home ownership, which led invariably to the disastrous housing bubble, these federal policies have wildly distorted the education market. It’s not far-fetched today to talk of a higher-education bubble.

The problem is that President Obama wants to pump in still more air. He’s nearly doubled Pell Grant spending, for example, added another college tax break — the $2,500 refundable American Opportunity Tax Credit—took over the student loan business, and promises more of the same in his second term.

None of this is to say that a college degree isn’t a valuable thing. For many, if not most, it clearly is.

But pushing more and more people to get degrees ends up hurting many of those who are supposed to be helped — the millions of college students who will graduate with a huge pile of debt but few good job prospects.

Read More At IBD: http://news.investors.com/ibd-editorials/012813-642236-subsidies-create-glut-college-graduates-student-aid.htm#ixzz2JLPpBEF0