Mish's Global Economic Trend Analysis |
- University of Oregon President Begs Legislators for $800 Million and Says "We are Not Asking for More Money"
- Saturday Listening and Reading: Bill Fleckenstein, Art Cashin, Ben Davies, Hugh Hendry
- 250,000 Stimulus Jobs Set to Vanish; Firing Bureaucrats in NY Easier Said than Done; Seeking Jobs "Nobody Else Wants to Do"
Posted: 02 Oct 2010 09:12 PM PDT The liar-whiner of the week award goes to University of Oregon President Richard Lariviere who wants the state to float $800 Million in bonds because "We have to do something." Please consider University of Oregon President Richard Lariviere asks legislators for $800 million in bond money. An impassioned University of Oregon President Richard Lariviere made his pitch before legislators today for funding his university with $800 million in state-issued bonds.Mish Comment: The reality is tuition is already outrageous and the key reason is absurd salaries to administrators and staff. "It is not fair," he told a legislative work panel reviewing a variety of proposals to overhaul the state's higher education system. "We have to do something."Mish Comment: The university of Oregon, like all universities churns out thousands of students a year, at an absurd cost to the students, many of whom graduate 10's of thousands of dollars in debt, with no realistic job opportunities and no way to pay off that debt. Yes, this is grossly unfair. The reason it happens is the staff is grossly overpaid with absurd pension benefits on top of it all. The cure is not to float bonds, but to slash pension benefits and salaries of the teachers, adminsitrators, and staff. Lariviere's controversial funding plan, which he says has never been tried anywhere in the country, will be introduced as a bill in the 2011 Legislature, said Sen. Mark Hass, D-Beaverton, co-chairman of the work group, which met at Portland Community College.Mish Comment: Controversial is not the right word, "idiotic" is the right word. The state absolutely cannot afford to go $800 million into debt on a chance the idea will work out. Lariviere said he also wants the university, now governed by the State Board of Higher Education, to have its own 15-member governing board appointed by the governor.Mish Comment: Excuse me for asking the obvious question, but why should the state have to exchange anything for performance goals? Why shouldn't the state cold turkey flat out mandate goals on retention and completion? The plan would be a bargain for the state, the president argued, because its annual obligation to the university would remain $63 million a year and not increase for 30 years.Mish Comment: The missing word in the sentence is "yet". The assumed rate of return on investments and donations guarantees the university would be back asking for more money. The university in turn would match the $800 million with private donations and put the entire $1.6 billion into its endowment, which would be invested by the university's foundation.Mish Comment: I have a better idea. Given the university feels it can raise $800 million and earn 9% on it, the university should do just that, and taxpayers should do nothing. The reality is Lariviere is promising $800 million in donations when he has no idea how much will come in. Moreover, rate of return assumptions of 9% a year with 10-Year treasuries yielding 2.5% is downright absurd. I would not be surprised to negative rates of return over the next 10 years. The long-term average is about 6%. However, the economy is smack in the midst of Schumpeterian Depression with no end in sight. Please see Creative Destruction for more about the theory behind Schumpeterian Depressions. Bob Davies, president of Eastern Oregon University, said Lariviere's plan is creative and has merit, but questions remain about how it would affect the rest of the university system.Mish Comment: Bob Davies wants his hand in the taxpayer's pocket as well. However, if Lariviere and Davies really want to do something different, why don't they slash pension benefits and salaries of overpaid faculty and staff? No such proposals are on the table for the simple reason Lariviere is looking out for the best interests of administrators and teachers, not the best interest of the kids. Choice Comments From The Oregonian Oregon000 writes: According to the Oregonian, their new AD is earning a pretty penny. We would be surprised to learn how much money all the university fat cats are earning. "Mullens, introduced July 15 to replace former football coach-turned-athletic director Mike Bellotti, will earn a base salary of $450,000 and deferred compensation of $50,000. Athletic and academic incentives could add up to $150,000 annually." Let's look at the rate at which the salaries for administrators, coaches, professors has increased vs. inflation. The poor students are funding a lavish lifestyle for many of them. Jacjsonstew asks: What cuts has OU made so far? Gnuut writes: "The foundation projects it could on average reap a 9 percent return on the endowment, which would grow to $6.9 billion in 30 years. " The same estimates that put PERS in the ditch. Won't these clowns ever learn that their lies don't sell any more? JojoValley writes: We, the tax payers, will not gladly pay you $1.9 billion tomorrow for $800 million today. Since when is floating a loan the way to pay annual expenses? It is however a great way to delay cutting back on the growth of salary expense per full time equivalent at U of O. Private sector jobs are disappearing and deflating as the supply of workers rises. But government jobs in any sector, education, police, prisons, etc. just keep getting more expensive. Will the last taxpayer left please turn out the lights? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Saturday Listening and Reading: Bill Fleckenstein, Art Cashin, Ben Davies, Hugh Hendry Posted: 02 Oct 2010 10:55 AM PDT Eric King has had a great list of guest interviews recently. Please see King World News Broadcast for a list. Ben Davies discussed currency frictions and how that might eventually lead to war. Also see Hinde Capital's Ben Davies: Currency Interventions Mark End Of Dollar Era And First Step Toward War on Business Insider. Bill Fleckenstein talked about how reckless and arrogant policies by Greenspan and Bernanke are contributing to strength in gold and silver. Art Cashin discussed the comments from the Walmart CEO regarding extremely significant and stronger sales at the beginning of the month. Meaning customers were coming into the store at 11 pm and shopping to get necessities like baby formula and other staples but shopping long enough for the government assistance cards to become activated at midnight and beyond. Hugh Hendry looks for a big deflation event to happen ahead of currency debauchery. Hendry is also very bearish on China and thinks that China is due for a fall in terms of GDP. Zero Hedge discusses the Eric King interview with Hugh Hendry in Interview With King World News: "If Inflation Is A Monetary Phenomenon, Hyperinflation Is A Political Phenomenon" In general, I side with Hendry. All King interviews are lengthy, discussing topics in detail. Please give one or more of them a play. The interview with Hendry is particularly interesting. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 02 Oct 2010 12:44 AM PDT Stimulus is running out and states will cut employees whether they want to or not. Some job seekers on Craigslist are willing to do anything. In New York, "fine print" has delayed many needed cutbacks. When Stimulus Runs Out CNN Money discusses the Latest unemployed: Stimulus-subsidized workers Tens of thousands of low-income workers lost their jobs Thursday as a stimulus-subsidized employment program came to an end.1,200 NASA workers to be laid off CNN Reports 1,200 NASA workers to be laid off More than 1,200 NASA workers will be laid off Friday, despite Congress passing a $19 billion budget for the space agency two days earlier. Lori Garver, NASA's deputy administrator, said Thursday she didn't believe the bill would affect planned layoffs, "certainly not for tomorrow."Tough to Get Rid of Unwanted Bureaucrats The Times Union reports State layoffs offering trial by fine print Word of impending layoffs sent shock waves and more than a little anger throughout the state work force Friday after Gov. David Paterson told state agencies they could lay off up to 2,000 people by the end of the year in order to achieve savings targets.The rules are preposterous, but arcane rules or not budget cuts, including layoffs are going to happen. Willing to Do Anything, Including Scooping Poop Some people are willing to do nearly anything. This ad in Craigslist (I corrected numerous typos) is proof enough. Please consider Poop Pick up (Cape Cod) Date: 2010-09-30, 9:53AM EDTExpect to see more ads like that as benefits expire and the last remnants of various stimulus packages fade into distant memory. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
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