Wednesday, October 8, 2014

Can you imagine that politicians have mortgaged our future? Say it ain't so.

I am shocked do you hear, SHOCKED!

The New York Times wrote on October 6 that there is a problem with the Tobacco Master Settlement Agreement (November, 1998). If you remember that far back the deal was that 46 States had an agreement that exempted the tobacco industry from legal liability for any harm caused by tobacco use. For this exemption the tobacco companies agreed to make annual payments,forever, to fund anti-smoking and public health programs. The tobacco companies “guaranteed” a minimum of $206 billion during the first 25 years.

The only problem with the agreement was that the states were not required to use the money as intended. Of course we can trust government to do what it tells us it will do without a written agreement.

Can't we?

Maybe not since of the money that the tobacco companies gave the states only a very small part has gone to anti-smoking and public health programs.

In Alaska some $3.5 million was spent on shipping docks. In New York $700,000 went for a sprinkler system at a public golf course and $24 million went for a county jail and office building. Oh yes, in North Carolina $42 million went to tobacco farmers for modernization and marketing (huh?).

Now 12 governments (9 states - Alaska, California, Iowa, Michigan, New Jersey, New York, Ohio, Rhode Island and West Virginia, plus Washington, D.C., Puerto Rico and Guam to be exact) felt that they needed the money faster than the annual payments were scheduled to pay so they used the future payments, read mortgaged, as collateral for bonds. About these “capital appreciation” bonds...they defer all interest payments and repayments for about 50 years and there is no plans in place concerning how the bonds will be repaid (in a lump sum). Just so you will know most of the legislators who approved this use of the tobacco funds will be dead or retired by that time (we can only hope).

Just checking the numbers (thanks to Jim Estes who wrote the article) that the 12 governments issued $22.6 billion in bonds, receiving $573.2 million in cash (that low price is because who is going to buy something that is next to worthless). With the wonders of compound interest these 12 governments will have to repay $67.1 billion. One prime example is the state of Michigan that will have to repay 1,800 times the amount it borrowed.

You may ask who would buy these bonds if they knew they can't be repaid? The answer is that the majority of the bonds are held by banks and mutual funds. Remember the housing bubble/bust? These banks and mutual funds are betting that the state and/or federal government will bail out these bonds with more future settlement payment. Remember the forever part of the settlement, from the tobacco industry that includes a little help from our friends (the U.S. taxpayer). The problem is that the tobacco industry is in a state of decline and many analysts see that a big default in the settlement payments will happen in the future so it looks like the taxpayers will get stuck with the bill.

Who is going to make money of this deal? For the most part it will be the investment bankers who convinced the state politicians that some money in the treasury now is better than any future consequences. I wonder how much money was kicked back into political campaigns from the investment bankers?

BTW, a report shows that 1.9% of the states settlement payments and tobacco taxes was spent on prevention programs this year. I am surprised that it was that much.


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Thursday, October 2, 2014

Are women being oppressed in our colleges and universities?

A bit of data (2013) on Graduate School Education from the Council of Graduate Schools. I will leave you to draw your own conclusions after you look the following over.

Here is the data on Doctoral Degrees awarded by field and gender in 2013:

These are the fields that are very closely represented by both men and women: Arts and Humanities - 47.7% male – 52.3% female, Biological, Agricultural Sciences – 48.7% male – 51.3% female, and Business – 55% male – 45% female.

The following are the fields that are not closely represented: Education – 32.3% male – 67.7% female, Health Sciences – 28.3% male – 71.7% female, Public Administration – 35.8% male – 64.2% female, Social and Behavioral Sciences – 38.2% male – 61.8% female.

How about what we call the 'Hard' sciences STEM [Science, Technology, Engineering, and Math? Engineering – 76.9% male – 23.1% female, Mathematics and Computer Sciences – 74.2% male – 25.8% female, Physical Sciences – 65.3% male – 34.7% female.

By the way, the total awarded Doctoral Degrees in all fields are 47.8% male and 52.2% female.

Master's Degrees are about the same except that the total awarded degrees are 40.8% male and 59.2% female. The big difference is Health Sciences, 19.5% male and 80.5% female, Education, 23.4% male and 76.6% female, and Public Administration, 22.5% male and 77.5% female. In the STEM majors the numbers are about the same as for Doctoral Degrees awarded.

Just a few other bits of information about men and women in graduate schools across the U.S. For the fifth year in a row, women have earned a majority of doctoral degrees. According to the Department of Education, 2009 marked the year when men officially became the “second sex” in higher education by earning a minority of college degrees (this at all college levels from associate's degrees to doctoral degrees). Also, in 2013, there were 137.5 women enrolled in graduate school for every 100 men. From this we see that men are underrepresented in graduate school enrollment overall, men received fewer masters and doctoral degrees than women, and men were underrepresented in 7 of 11 graduate fields of study (master's and doctoral level).

I have seen no calls for government studies, or increased government funding to address this significant gender disparity. There was, in 2009, an executive order that created the “White House Council on Women and Girls” but I have heard no talk about an executive order for a “White House Council on Men and Boys”.

Now Walter Williams did ask, and I am paraphrasing here, if the folks that value diversity see any female under representation as a problem or as proof of some type of gender discrimination what do these same folks plan to do about the over representation of women in higher education? Is this not the same injustice but just from the other side?

Regards, and thanks to Mark Perry for pointing me to this thought,


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