Mish's Global Economic Trend Analysis

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Irony of the Day: National Inflation Association Declares "America's College Bubble Next to Burst" Posted: 08 May 2011 06:01 PM PDT The National Inflation Association whose purpose is "Preparing Americans for Hyperinflation" says America's College Bubble Next to Burst The National Inflation Association (NIA) is pleased to officially announce that it will soon be releasing its hour long documentary 'College Conspiracy', which will expose the U.S. college education system as the largest scam in U.S. history. NIA has been producing 'College Conspiracy' for the past six months and plans to release the movie on May 15th. NIA members will be given the first opportunity to watch this must see documentary, which we hope will change the college education industry for the better. NIA expects 'College Conspiracy' to take college education by storm and expose the facts and truth about tuition inflation to prospective college students. Almost everybody applying to college has heard the oft-repeated statistic that Americans with college degrees earn $1 million more in lifetime income than high school graduates without a degree. This is one of those statistics that gets repeated so many times that just about everybody accepts it as fact, but nobody actually does the research to confirm whether or not it is true. 'College Conspiracy' will prove once and for all if indeed this so-called statistic is true or just a myth. American college tuition inflation has been out of control for the past decade. During the financial crisis of late-2008/early-2009, almost all goods and services in America at least temporarily declined in price. The only service in America that continued to rise in price throughout the financial crisis, besides health care, was college education. Despite real unemployment in America reaching 22%, students were brainwashed into believing that if they were lucky enough to be blessed with the privilege to get half a million dollars into debt to obtain a college degree, they will be on a path to riches and have a guaranteed successful career; whereas those who don't attend college are destined to be failures in life. The current college education bubble is one of the largest bubbles in U.S. history. The college bubble has been fueled by the U.S. government's willingness to give out cheap and easy student loans to anybody who applied for them, regardless of if they will ever have the ability to pay the loans back. Student loan debt in America is now larger than credit card debt, but unlike credit card debt, student loan debt can't be discharged in bankruptcy. For the vast majority of college courses, there is absolutely nothing that students can learn in a huge multi-million dollar lecture hall with hundreds of other students that they can't learn at home listening to that same professor on a computer. The only reason online colleges haven't taken off yet in America and still have less than a 1% market share of U.S. higher education is because America has a college-industrial complex that cares only about profits and not educating students. The people who control the system simply don't want the system to change, because they are making way too much money by turning American students into indentured servants. 'College Conspiracy' was made possible by the personal stories that were submitted to us by thousands of NIA members. NIA's staff spent the past six months traveling across the country, interviewing our country's top expert guests in nine different states. Please tell all of you family members and friends to become members of NIA for free immediately so that they along with you can be among the first to see 'College Conspiracy'. Humorous Rant I am 100% in agreement with the National Inflation Association that the cost of college education is in a bubble that will burst and costs will come down. Please note that the busting of bubbles with falling prices to boot is without a doubt a deflationary phenomenon. In the same article the NIA also mentioned the success of Amazon vs. Walmart. That is clearly a second deflationary force. The irony is the NIA has its mission 100% ass backwards. It ought to be preparing people for deflation, given its stance on education, Walmart, and Amazon. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Illinois Boosts Corporate Tax Rate 46% to Raise Money, then Hands Motorola $100 Million to Stay in Illinois Posted: 08 May 2011 09:18 AM PDT As proof of the misguided, counterproductive policies of Illinois, Governor Quinn hiked corporate incomes taxes to bail out a state deep in fiscal trouble, (it did not and will not work), now grants corporations hefty incentives to not move to Texas. The Chicago Tribune reports $100 million keeps Motorola Mobility in Illinois Gov. Pat Quinn put up more than $100 million in financial incentives to persuade smartphone company Motorola Mobility to keep its corporate headquarters in Libertyville — the largest package he has offered a company to date and a signal of how badly the state wants to hold on to high-tech jobs. To persuade the maker of mobile devices and cable TV set-top boxes to stay, rather than move to California or Texas, state lawmakers sweetened terms of its tax-credit incentive program as it has for automakers, including Mitsubishi, and truck- and engine-manufacturers, including Navistar International Corp. Navistar landed a $64.7 million package last year to keep its headquarters in Illinois, the second-largest deal during Quinn's tenure. The deal, announced Friday, breaks down to about $34,750 for each of the 3,000 jobs Motorola Mobility has agreed to retain, considerably more than the $15,000 to $20,000 per job that is more typical when the state awards tax credits to keep or attract businesses. "We don't want folks to leave," Quinn said. "We want them to stay and grow with great companies like Motorola." Inane Actions Hurt Small Businesses Most Note the silliness of Governor Quinn's explanation. "We don't want businesses to leave". If Quinn did not want corporations to leave, then why did he hike the corporate tax rate to an effective 9.5% thereby giving businesses a huge incentive to leave? I discussed the tax situation of Illinois at length recently in Governor Quinn Holds Illinois Cities Hostage Over Budget Proposal; Cities Face Massive Cash Crunch. Please give it a look if you missed it. I cover gas taxes, sales taxes, corporate taxes, prevailing wages, right-to-work, home rule taxes, and blatant lies by Quinn. Quinn gave Navistar and Motorola a combined $167 million to stay in Illinois just to keep 3000+ jobs here. Who is hurt by these actions? The answer is everyone except the public unions screaming for higher taxes. Unfortunately, small businesses will bear the brunt of Quinn's nonsense. Small businesses get no tax breaks, yet it is small businesses that create most new jobs, not giants like Motorola. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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