Said a critic of higher education:
"It's (for many) a four-year vacation,
Which begets student debt
With no useful skill set,
As they'd have if they'd learned a vocation."
Bill Gross, co-founder and -CIO of Pimco, and manager of the world’s biggest bond fund, published a scathing outlook on the US education system. Noting that the average college undergraduate now leaves school with $24,000 of debt and diminishing job prospects, Mr. Gross concludes that, for millions of young people, college is “a waste.” Taking a suggestion from Fareed Zakaria, he proposes to get students out of the ivory tower and into German-style technical training for globally competitive skills.
A maritime man from Schenectady,
Surveying the seascape dejectedly,
Said: "A fifth of home loans
Are, like Davy Jones,
Underwater, with negative equity."
"Are homeowners fixing their balance sheets?" asks the Wall Street Journal's real estate blog, and cites lower-trending US mortgage default figures as a hopeful sign. However, it goes on to say that the "shadow inventory" of homes in foreclosure -- as well as those with defaulted or delinquent loans likely to be foreclosed on -- has remained consistent. CoreLogic recently estimated that 22.7% of all homes have negative equity, a figure essentially unchanged over the last two years. Bewarrrre Davy Jones locker, all ye mortgage lenders!
"When my debt service proved but a fiction,
The bank didn't press for eviction,
As experience showed
That an empty abode
Would only invite dereliction."
A visitor from Florida gave anecdotal evidence that many mortgage lenders there would prefer to allow a defaulted borrower to remain, and maintain a house, rather than foreclose and invite the unwanted attention of squatters and vandals in neighborhoods with many vacant homes.
"From one's mortgage," said Mr. DeLay,
"One cannot in good faith walk away;
When I got in a jam,
I stayed where I am,
And simply neglected to pay."
A visitor from Florida mentioned this increasingly common practice there, which renders quaint the old dilemma of whether to "walk away" from one's underwater mortgage. Anecdotal evidence is that some "home owners" continue to occupy their dwellings for up to three years without making the home loan payments. If only the Smiths at 212 Willow Lane had known about this...
A fellow was walking his dog
At midnight, through darkness and fog,
To find the right time
To capture a rhyme
To post on the page of his blog.
As personal acquaintances of Dr. Goose may know, most of these verses originate during late-night constitutionals with Gloria, the cairn terrier and poetic muse. Were it not for her nightly needs, there might never have been economic limericks.
Said Krugman, with skeptical wince:
"Employment just doesn't convince;
Though it tumbled off greatly
In 2008, we
Have seen no recovery since."
As a guest on the Charlie Rose program last week, Princeton's Nobel Prize-winning economist Paul Krugman poured cold water on the notion that the recovery is slowing, inasmuch as he does not believe there has been a recovery at all. Despite improvements in the official unemployment rate, notes Dr. Krugman, the percentage of adults actually employed has not increased. This apparent contradiction is explained by the "discouraged job seeker" effect, in which those who stop actively looking for work are no longer counted as unemployed.
* * *
A new page has been added to Limericks Économiques: "Dr. Goose and Mad Kane." Please visit this page for the best in Dr. Goose's contributions to "Mad Kane's Limerick-Offs;" blogger Madeleine Begun Kane supplies the opening line, and verse-writing hopefuls compete to see who can best complete it. Warning: some of the verses are a little spicy (if not too raw).
To lessen the deficits looming,
One must levy new taxes; presuming
That investment and work
One would rather not shirk,
One is taken with taxing consuming.
"Try This," says the cover of the current Bloomberg BusinessWeek, and the feature article inside includes nine innovative ideas from around the world to help America out of our current slump. As compiled by economics editor Peter Coy, such ideas include a Canadian-style national sales tax. A consumption tax could help to plug the deficit without discouraging productive activity in the way that greater income or capital gains taxes might. As the saying goes: "So crazy, it just might work."
Though intended to thwart something scandalous -
That those who have millions on hand do less -
The AMT's hardest
On households more modest
In Boston, New York and Los Angeles.
While watching Bloomberg TV, Dr. Goose listened to Veronique de Rugy (of George Mason University's Mercatus Center) point out that the US alternative minimum tax disproportionately affects families in high-priced states such as New York, New Jersey, California and Massachusetts. Introduced in 1969 to prevent the nation's 155 wealthiest taxpayers from slipping through tax loopholes, the AMT has never been indexed to inflation or regional changes in incomes, and disallows such deductions as state taxes. The result is a burden that falls heavily on upper middle class households in highly taxed, high-priced "blue" states - a tax on well-off liberals such as Dr. Goose.
"I can't say for certain it hadda be
A shot of my private anatomy,
As it's not ev'ryday
I confront in this way
A depiction of this or of that o' me."
If, as was recently the case for Rep. Anthony Weiner (Dem., NY), you should find that a photo of a male member (perhaps of the House of Representatives, perhaps not) had issued forth from your Twitter account and caromed around the internet and the mainstream media, the only logical response is a sincere profession of ignorance. After all, no-one can say from the evidence whether the man behind the photo is standing for Congress; and of course, all men are endowed by their Creator with the inalienable right to a presumption of innocence.
When home price declines were reported,
The press and the public deplored it,
Which may strike one as strange,
Since they're now in a range
Where the average Joe can afford it.
The latest release of the S+P/Case-Shiller Index of US home prices shocked many with the revelation that the average home value has fallen to 2002 levels; to which Dr. Goose asks: is this a completely bad thing? Sure, underwater homeowners and their mortgage lenders may not like it, but what of those first-time homebuyers who had been priced out of the market? The Wall Street Journal points out that today, the median wage earner can afford nearly 75% of all homes sold; that's a good thing, isn't it?