Please! Spare Me, Enough Already!

Recently, I overheard a discussion from a pair of Bernie Sanders fans about how horrible capitalism is because America allowed child labor in the 19th century, during our Industrial Revolution. These people complained that the “Robber Barons” only achieved their great fortunes because they exploited workers, created monopolies and jacked up prices on goods. Thank God, the government intervened in the market and set things right!

Where do we begin? There was so much bovine scatology flying around, one had to make sure their tetanus shots were up to date. First and foremost, when someone uses the term “Robber Baron” they are telegraphing to the recipient that they have a prejudice against someone having more wealth than they do. Those early entrepreneurs didn’t steal anything from anyone and America doesn’t have “barons” for there is no aristocracy. Evidently, someone lost at Monopoly too many times. The record shows that the prices of goods produced during the latter 19th century were actually decreasing at a steady pace, the same time wages were increasing, I might add. Nowhere does the actual history record show a monopolistic increase in prices. Nowhere. The era from the 1870s to about the early 1920s was the greatest increase of wealth this country had ever experienced. Standards of living rose to unimaginable levels in two generations.

Being no fan of the Rockefeller dynasty, I have to remain true to the facts that J.D. Rockefeller’s Standard Oil Company did more for saving the whale than any endangered species protection act ever could. Up to that time whale oil was used to light people’s homes and the plight of the whale population was at serious levels. Rockefeller’s innovation in marketing kerosene staved off the extermination of the whale. He was actually able to sell kerosene at a much cheaper price than whale oil and allowed even more people to escape the dark of night. Mind you, his intention was to extend the work day for his workers by allowing them to work at night. The positive side effect of his “corporate greed” was more families being able to afford lighting. Adam Smith’s “invisible hand” strikes again!

Secondly ask yourself, Why were all of those immigrants practically killing themselves to come to America only to be exploited in a sweatshop? The US had no welfare state at that time. No subsidized housing. No labor laws and very few regulations. If it was so god-awful during the 19th century in America, why did the US experience immigration at such gargantuan levels? Where capitalism channels self-interest into a net benefit, as with Rockefeller, so to with people wanting to be left better off. The standards of living on the farms and in poor European countries like Ireland, were low enough that a job in a dark dank factory was a step up. The wages alone outstripped those found in the agrarian regions. If it wasn’t for that Robber Baron, John Deere, America might of starved due to the lack of sufficient farm labor. Mechanized farming produced more food for the country than ever before, plus at lower prices. Capitalism 2, Socialism 0.

Now on to child labor. Yes, children worked in factories. They worked in coal mines. They worked in the farm fields. Children have always worked throughout human history. That is nothing new or unusual. It was either work or starve to death. That has been the normal state of affairs for human beings up to the advent of capitalism. As all developing countries experience, it takes time to amass enough capital through the free market system to relieve children from having to work. Once production increases, so to the standards of living. After the production from labor increased to the level that only the adults had to work, the children went to school for the day and received an education. They later were able to do something only the aristocracy of Europe could afford to do, namely, get a college education. Average people were able to get degreed and move on to professional occupations for the first time. Yes, capitalism did that. Another goose egg for the socialists.

Most importantly, before Sanders supporters try to convince America that more socialism is the answer, they first have to step over 100 million dead bodies. That’s right. Since the Bolshevik “Red October” Revolution in 1917, there have amassed over 100 million deaths due to socialism and its twin brother communism. Socialists still have to give an account for the likes of Lenin, Stalin, the Khmer Rouge, Pol Pot, Mao Zedong, Fidel Castro, Pinochet, Ceausescu, Che Guevara, Idi Amin Dada, East German Chancellor Ulbricht and his Berlin Wall and so many more atrocities done in the name of the new socialist man. So far only platitudes, denials and the typical, “If only the right people get in charge, then socialism can work.” Please, spare me. This fact alone leaves socialism morally bankrupt. Anyone denying the amount of totalitarian hardship and bloodshed that mankind had endured during the 20th century at the hand of State run socialism would have to be a liar or simply stupid. Over 100 million dead voices demand an answer.

Finally, according to the socialist gospel Das Capital, capitalism should have, by now, run America down the road of abject poverty for the worker, mass degradation of the infrastructure and extreme civil unrest of the masses. The workers were supposed to have united and overthrown their exploiters and took over the means of production. Well, still waiting. Of course, only the opposite is true. Average people today live better than the wealthiest monarchs of old. Our scarce resources produce even more goods than was ever conceived. Maybe with enough State injected socialism and intervention into the market they can finally achieve their goals. They can continue to put more people on the the government’s dole, run down the purchasing power of the worker’s wages through monetary inflation, invent more give-aways and run up even more national debt. A presidential win for Bernie should do the trick. I feel better now that I got that off my chest.

Thank you for listening.

Free Colleges: More Students, Less Quality

„Bernie Sanders is wrong.“ It’s a phrase that we have heard so often over the last few months, often enough at least to even get a book with the title. That is no surprise considering how the candidate for the Democratic Party, who at the moment polls in second place behind Hillary Clinton, keeps uttering false facts, keeps promising freebies and keeps promoting the holy „democratic socialism“.

In an op-ed on October 22 for the Washington Post, Mr Sanders again got confused. This time he took a stance for free colleges and used some countries – including Germany, as examples of how great this system would work:

„In Finland, Denmark, Ireland, Iceland, Norway, Sweden and Mexico, public colleges and universities remain tuition-free. They’re free throughout Germany, too, and not just for Germans or Europeans but for international citizens as well. That’s why every year, more than 4,600 students leave the United States and enroll in German universities. For a token fee of about $200 per year, an American can earn a degree in math or engineering from one of the premier universities in Europe. Governments in these countries understand what an important investment they are making, not just in the individuals who are able to acquire knowledge and skills but for the societies these students will serve as teachers, architects, scientists, entrepreneurs and more.“

As a German who currently goes to universities in this country I couldn’t resist to write something about this.

First of all, it is true, here in Germany you can study (basically) for free. I for example only have to pay a fee of about 120 Euros each semester for a bus ticket. And it is true as well that this is not limited to German citizens only. Everyone can visit a college, no matter if he or she – or the parents for that matter, have ever paid into the system.

However, this has consequences: Erich Barke from academics.de took a closer look at the budget of a university in Germany, compared to one in the US. For that, he selected the Leibniz University in Hannover and the University of Texas at Austin – both of them are good universities, but not elite, compared to other colleges in the respective country. Even so, the differences in quality are enormous:

Bildschirmfoto 2015-11-26 um 00.57.06 (2)

Remember, this are two solid universities, so Barke also compared the Leibnitz University with two of the better institutions in the world (which are both located in countries with tuitions):

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Compared to the MIT and Stanford it’s even worse.

As you can see, the Leibnitz University has less funds per student and less staff and at the same time is financed nearly entirely by the government.

There’s no doubt that this miserable situation hurts the German universities. Actually, it’s pretty much demonstrable. Let me tell you two short anecdotes:

Just a few years ago, at the time I was still deciding which course I should choose, I visited an information event at a university in Munich. It was a presentation on civil engineering and the professor who introduced us to this course showed us the structure of it, the content etc. At one point he said that because tuitions have been cut (in Bavaria this happened only in 2013, so quite late), his faculty already has problems to finance research programs.

Since my first semester I have experienced this as well: To put it simply, there is not enough … enough of everything. There are not enough rooms for everyone, there are not enough employees, which leads to long waiting periods for students if there are problems or other requests, and there are not enough professors to teach (or they are totally stressed out). It’s an acute situation in which everyone is overextended and irritated.

It’s easy to see this drop in quality in global university rankings as well. Let’s take a look at the top five colleges from the US and Germany respectively in the most important lists and where they rank:

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Sources: QS 15-16: www.topuniversities.com/university-rankings/; Times Higher Education 15-16: https://www.timeshighereducation.com/world-university-rankings/2016/world-ranking#!/page/0/length/25; ARWU 15: www.shanghairanking.com/de/ARWU2015.html; CWUR 15: cwur.org/2015/; US News: www.usnews.com/education/best-global-universities

In the CWUR 2015 ranking, which lists the top 1,000 colleges on this planet, a total of 55 German universities are mentioned – compared to 229 for the United States.

At last, you can recognize a clear trend similar to the one in the United States: Because of the lower costs and easier access to these institutions there are more and more students and because of that, a Bachelor’s degree possibly won’t be enough soon. In 2009, the number of students passed the amount of apprentices, and it’s getting more extreme as the years pass by, as you can see in this chart (blue are the number of apprentices, red the students, the numbers are in millions):

infografik_1887_zahl_der_studierenden_und_auszubildenden_n

This are just some of the consequences of a free college system as Bernie Sanders proposes it, a system in which, as Mr Sanders says, „governments […] understand what an important investment they are making, not just in the individuals who are able to acquire knowledge and skills but for the societies these students will serve as teachers, architects, scientists, entrepreneurs and more.“

At the end of the day the result will be the following: More students, less job opportunities (or higher job requirements), less money for the universities and less quality. You can certainly #FeelTheBern in Germany already.

GOP “Debate”

After the grueling 3 hours of banter between the top republicans over who can lie and bribe the public more “effectively”, Carly Fiorina has moved up in the poles to second place. The disgruntled Donald Trump did not hesitate to attack her on her previous business experience as the ex C.E.O of H.P. Accusing her of “running the company into the ground” by expanding the company too quickly then hitting the tech crash, causing a massive H.P. liquidation. She responded with “we doubled the size of the company”. Donald Trump responded with “the company [HP] was a disaster”

While the two discussed both business ventures during the “debate”, Donald Trump missed the point on all of this. The fact that Carly Fiorina was able to expand her company so quickly makes her a great politician. The fact that she was capable of expanding her company, means she can expand government. If elected, she can continue to expand the government right on track and will not hit that pesky market to restrict the growth.

Since the government has free access towards monopoly power, and does not require on bending towards consumer demand, means she will no longer need to worry about hitting a tech bubble to stop her expansion from occurring. However, not one candidate even discussed the fact that the Fed was adjourning to discuss the raising of interest rates!

Considering the fact that the Fed will not raise interest rates, means that dollar devaluation will continue to flourish. Initially, the access to easy credit is there for investors. This means that the traders within the stock market are still able to leverage debt continually on top of previous financial assets, which will speed the ultimate fall of the US dollar.

The fact that not one single nominee even discussed this, shows the complete lack of care the runners really have towards how devastating this can be for our standard of living. Leveraging debt on top of other highly leveraged debt, has caused a leverage effect. When the dollar fails, that will liquidate a majority of US financial assets, due to highly pyramided debt, which is based on a US Dollar, that is quickly being devalued.

All we need to stop this from occurring is to replace the dollar with specie. Seemingly since the leverage ratios are so high, no one will replace the dollar with specie. This is the inevitable destruction of the dollar, the fact that Carly Fiorina is excellent at expanding business, and excellent at missing the mark on bubbles, makes me wonder that if she is elected will she expand the government even more in the face of this currency bubble, like she did with HP?