Depressing View, from across the Pond...

It is a good practice to understand how folks in other parts of the world are looking at our state of affairs.

With the US trapped in depression, this really is starting to feel like 1932 - Telegraph: "The economy is still in the gravitational pull of the Great Recession," said Robert Reich, former US labour secretary. All the booster rockets for getting us beyond it are failing. Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing," he said.
California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (�15bn) deficit.
Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. 'It is getting worse every single day,' said state comptroller Daniel Hynes. 'We are not paying bills for absolutely essential services. That is obscene.'
Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high.
Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP."

Right to Free Expression, Right to Bear Arms, Right to be an Idiot

Quite a few smart people including Andy Grove of Intel and Bill Gates have expressed concern about the education of students in the country. The biggest chunk of responsibility lies with the parents of students.

The following two incidents in Pennsylvania involved students who created fake online profiles of their school principals. Rather than beating the *%$# out of their kids, the parents are supporting the actions of their babies and suing the schools. If the parents are common-sense deprived, what hope is there for their offspring?

Free Speech in Question When Talking Out of School - WSJ.com: "In one of the Pennsylvania cases, a three-judge panel sided with the student, Justin Layshock of Hickory High School, who had created a phony profile of his principal on MySpace. The court ruled that by punishing Mr. Layshock, the school violated the student's right to free expression. The student had created the profile at his grandmother's house in December, 2005, according to court papers. MySpace is owned by News Corporation, which also owns The Wall Street Journal.

'He didn't do it in school,' said his father, Donald Layshock. 'We should have been the ones to punish him.'

The high school and its school district, Hermitage, had argued that they needed disciplinary power to keep order when activities off-campus affect school life. 'It's not where you throw the grenade, it's where the grenade lands,' said Anthony Sanchez, a lawyer who represented Hermitage school district. Eric Trosch, then Hickory High School's principal, declined to comment as the case is continuing.

In the other Pennsylvania case, a different three-judge panel decided that Blue Mountain Middle School did not violate the constitutional rights of one of its students when it suspended her for creating a fake online profile of her principal, also on MySpace, in 2007. The school's principal declined to comment and the student, identified as J.S. in court filings, declined to comment, according to her lawyer, Witold Walczak, legal director of the state's ACLU.

Mr. Walczak, who represented both students, said that ignoring the boundary between on- and off-campus activities gave schools too much power to reach into home lives of students.RIght

Manufacturing US Jobs

Dr. Andy Grove is perhaps the finest manager over the past thirty years, and his book "Only the Paranoid Survive" is one of the great classics on business life. Recently he wrote on the topic of US jobs and stated that in order to build our industrial base we should "Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.)"

One can disagree with Dr. Grove on an analytical basis. A tax of 20% or 30% is not going to have a serious impact on labor arbitrage- on the margin it will move production from south-eastern China to other areas. Taxes of the order of 1000% will begin to have an impact- but this would cause significant inflation as prices of domestically made goods will also go up steeply.

Dr. Grove is right about governmental intervention- the "visible" hand, and how it can benefit the country in the long run. However the lessons to be learnt from other countries should be learnt carefully, with discrimination. Companies will invest domestically if the directors on corporate boards push management. However management and board members are "answerable" to shareholders. The critical issues facing the US are: 1) quality of education, 2) willingness of the young people to work hard and under difficult conditions, and 3) the finance industry run amok.

Rather than taxing the product of offshore labor, the government should

1. increase corporate taxes in proportion to the % of offshore content in the products sold in the U.S.- as an example, a company whose products are completely manufactured overseas might have the highest tax rate of 60% or 70%.
2. Raise the personal income tax rate on managers of companies in proportion to the % of offshore content in the products sold
3. raise the tax rates on finance firms significantly. This will also have an effect of diverting talent from the finance business to other areas.

When managers and shareholders have to pay for neglecting the domestic economy, things will change in a hurry.

How to Make an American Job Before It's Too Late: Andy Grove - Bloomberg: "Financial Incentives

The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability -- and stability -- we may have taken for granted."

Taking a Page out of Plagiarism

Plagiarism is a big concern for educators. Then again, we live in a world where

• the government has spent more than a trillion dollars to save the financial system from apparent ruin, and not one banker has been prosecuted or jailed
• every professional game, including the WOrld Cup, features highly paid athletes cheating and getting away with it

Should students be expected not to plagiarize, when the world around them features a reward system that promotes unethical behavior?

To Stop Cheats, Colleges Learn Their Trickery - NYTimes.com: "Anti-plagiarism services requiring students to submit papers to be vetted for copying is a booming business. Fifty-five percent of colleges and universities now use such a service, according to the Campus Computing Survey.

The best-known service, Turnitin.com, is engaged in an endless cat-and-mouse game with technologically savvy students who try to outsmart it. “The Turnitin algorithms are updated on an on-going basis,” the company warned last month in a blog post titled “Can Students ‘Trick’ Turnitin?”

The extent of student cheating, difficult to measure precisely, appears widespread at colleges. In surveys of 14,000 undergraduates over the last four years, an average of 61 percent admitted to cheating on assignments and exams.

The figure declined somewhat from 65 percent earlier in the decade, but the researcher who conducted the surveys, Donald L. McCabe, a business professor at Rutgers, doubts there is less of it. Instead, he suspects students no longer regard certain acts as cheating at all, for instance, cutting and pasting a few sentences at a time from the Internet.

Andrew Daines, who graduated in May from Cornell, where he served on a board in the College of Arts and Sciences that hears cheating cases, said Internet plagiarism was so common that professors told him they had replaced written assignments with tests and in-class writing."