Monthly Archives: June 2014

College Bashing…Just Another Outlet for Liberalism

A broken clock: MARK CUBAN: ‘The Student Loan Bubble Is Going To Burst’

In a clip on Inc.com, Cuban talks about the student loan bubble, which he says will burst and end badly for colleges.

The end of the student loan bubble, Cuban says, will be like the housing bubble, where tuition collapses the way the price of homes collapsed.

A Google search for ‘student loan bubble’ yields thousands of failed predictions dating back nearly a decade. Maybe instead of being a bubble, tuition is surging because of demand. It’s not that this is good or bad, it’s just how the market works. There’s probably other reasons, too. There are solutions such as trade schools or substituting diplomas with IQ & SAT scores, but the left prefers to live in a delusional world where everyone is college material, and everyone should go. However, unlike the college bashers on the left-libertarian spectrum, we think college is a good deal for those intellectually capable of completing it, provided you don’t spend too much and you choose a high paying major. For one, college really isn’t as expensive as purported by the gloomers.

For example, here is a specimen of a comment by a typical college critic:

Damn right…not sure if colleges will be going out of business, but the cost of a four year degree at a major university is HIGHWAY ROBBERY! When consider the death of the American Dream and lack of upward mobility…to me, this as exhibit A.

Notice how he infuses liberal class warfare themes in his screed against higher education, like a typical commenter on the NYT. These are the same liberals that support OWS, oppose the fed, want the stock market to crash, and the economy to fail. College is just another institution like Wall St. that needs to be uprooted and lit ablaze, reminiscent of Maoists burning books to cleanse the minds of the proletariat. Whether it’s attacking technology, higher education, or Wall St. – liberals seek crisis and societal regression to create a world where everyone is equal, but worse off.

Authenticity and Masculinity in the New Era

In today’s super-competitive economy and meritocracy, the value of an individual to society is measured by his or her income/wealth, educational attainment, professional contributions, online karma points, expert status and IQ/SAT scores. To have a lot of Karma means your contributions and opinions are valued by others; therefore, in the court of online public option, you’re an important person.

The left, starved for crisis, is looking for any excuse, no matter how small, for things to get worse. Recent examples include Carl Ichan’s alleged stock tips or BNP Paribas’ “secret weapon” to “violate U.S. sanctions against Sudan”. This is the apex of minutia. The absence of news has become news.

From Ross Douthat:

And I just don’t quite know what he’s talking about, because in our culture — Western, English-speaking, American — the traditional iconography of masculine heroism doesn’t really resemble this “Grand Theft Auto”/”Scarface” description at all. I mean, yes, if the “tradition” you have in mind is Pashtun honor killings, then I agree, traditional masculinity would be better off extinct. But where American society is concerned, when I look at the sewers of misogyny or the back alleys of “bro” culture, I mostly see men in revolt against both feminism and our culture’s older images of masculine strength and self-possession, not men struggling to inhabit the latter tradition, or live up to its impossible/immoral demands.

Ross Douthat is right about ‘traditional masculinity’ dying off or being re-defined. Unlike the last generation, in the collective American psyche, the idols of this generation are not macho men as embodied by Arnold and Stallone or glam/hair metal frontmen like Poison’s Bret Michaels, but beta-male INFP public figures and scientists such as Bill Nye, physicists like Neal Degrase Tyson, quirky YouTube celebrities and alternative comedy, baby-faced actors like Seth Rogan, and sociologists and provocateurs like Steven Pinker and Charles Murray. Even Malcom Gladwell is too alpha male and not empirical enough. This is because the millennials are smarter and more discriminating than any earlier generation, possibly due to the Flynn Effect, more rigorous schooling, and society’s recent preference of intellect over brawn. Many millennials, especially the older ones, look up to geniuses, the internet elite and socialites more than actors, athletes and singers. Doing work and practice has ceded to conceptualizing, generalizing and theorizing and whoever has the biggest theory, however impractical or esoteric, is the ‘winner’. In the smartist era of stocks always going up, to be an expert or an authority in a field is the pinnacle human achievement, but to try and come up short will subject one to considerable scorn and derision for being a poseur. We lavish praise and adulation on these empiricists and theoreticians, like ancient gods of the past, for their approval and in the hope that their powers can rub off on us. The beta male, a construct of the millennial generation, worships authenticity and experience, whether it’s a businessman like Warren Buffet, a rapper like 50 cent, a day trader that makes a lot of money, an expert of quantitative finance, a hedge fund manager like Steve Cohen or a physicist like Sean Carroll.

Seems like the world is changing faster than we can keep up. People are getting smarter and richer than ever as stocks keep going up. So much wealth to be had. So much stuff going on. We’re in a productivity and technology revolution. A paradigm shift or polar reversal where the rules of the game are being re-written. An economic boom where few seem to participate, yet so much wealth is being created. As quoted by Louis CK, ‘everything is wonderful and no one is happy’ As measured by technological progress and wealth, we are in the best of times and yet so many people seem to be permanently wedged between the cracks like coins under the cushion of a couch.

Our schools should not lower standards, they should raise them, for those capable of doing college work, whatever their race. At the same time, we must recognize that many cannot meet that standard, and we should be prepared to teach them to their abilities and give them sound fundamentals for life.

Saving the World From Book Clubs

Though, in fairness and with respect, I can’t think of any worse way to spend college than laboring over Heidegger for fun. Maybe if you take a shot every time you don’t understand something. Seriously, kids, you’re 20 years old. Live a little.

That’s because those who are’t interested in that stuff are less likely to go to college or more likely to not finish. In the smartist era, with stocks at historic highs and interest rates never going up again, people want to do things that make them smarter because that’s how you move up the socioeconomic ladder and gain approval from your peers, in accordance with Maslow’s hierarchy of needs. It’s not like any earlier decade like 80′s and 90′s when students liked to party and listen to pop music; many still do, but not like before. Times have changed. The youth are more serious, quixotic and introspective.

Thanking the Fed for Doing a Good Job

Stocks surge as the fed continues to taper. There a few things to take note: interest rates will remain at zero for a long time, we’re still in a Goldilocks economy of steady growth and low inflation, fed policy has been a resounding success at creating wealth, and the taper doom and gloomers were 100% wrong.

Unwinding the taper will take a year or longer and then there will be another long period before the first rate hike – maybe not until 2016 or later.

In May 2013, when the fed first announced its taper plan, many pundits predicted incorrectly that the taper could trigger a bear market; the S&P 500 has surged 25% since then. So much for that. Keep in mind that stocks can rally in the wake of rising interest rates, like in 2004-2007 when the fed raised rates from 1% to 6% and the S&P 500 rallied 60%.

Fed policy has been a huge success at creating wealth – benefiting rich, smart, and successful people. We’re in a STEM and start-up economy run by high-IQ people. With the fed showering money on the economy – from Facebook to Bay Area real estate – there has never been a better time to be in the socioeconomic elite.

Bank bailouts, ZIRP, and QE have indirectly created trillions of dollars of wealth in the form of this unending bull market, real estate boom, and general economic expansion, despite the majority of Americans feeling like they missed out of the recovery. Moral hazard is a small price to pay to have the best post-2008 recovery of any country in the developed world.

As an example of wealth creation, seemingly overnight, multi-billion dollar valuations for app start-ups such as Snapchat, Uber, Pinterest, and Dropbox can partially be attributed to the fed’s easy money polices. But these valuations are not a bubble and we expect the valuations for all these companies too keep rising until IPO or acquisition. There will be NO bubble bursting, no reset, nadda. There will be NO April 2000-style flame out. We predict within the next two years, the valuations for these major web 2.0 companies will double at a minimum: Uber will be worth $50 billion; Dropbox $20 billion; Pinterest $10 billion; Air BnB $40 billion; Snapchat will be worth $30 billion. Investors and founders flush with cash will inflate Bay Area real estate values even more, but again, there won’t be a crash – to the frustration of the libs who keep whining about wealth inequality, bubbles, speculators, how ‘bad’ the economy is, and so on.

Despite its size and duration, the fundamentals driving this bull market have not changed, and we anticipate the rally to continue for a considerably long time. Our target is Dow 20,000 within the next two years.

Keeping interest rates perpetually low will cause real price levels for food, gas, energy, healthcare, airline tickets, cable, and tuition to keep going up even as treasuries drift higher and core inflation remains low.

The way you get rich in this economy is to buy & hold stocks, create a web 2.0 app that goes viral, sell volatility (short sell VXX or short VX contracts..I’ll write a post about this show you how), buy the S&P 500.. It not rocket science. Capital in the 21th century is about people getting rich without much time or effort.

Thanks, fed, for doing a good job as Obama’s approval rating makes new lows.

The Daily View: Economic Data and Wages

Today’s good news:

The Economy May Be improving. Worker Pay Isn’t.

Better get that computer science, physics, math or econ degree. Those are the people making the $$ in this recovery. Smart people rule the world.

As shown above, real wages tend to rise during crisis such as the banking problem in 2008 & 2009 and again in 2011 during the Greece & debt ceiling scare. Inflation lagging wages is an indicator the economy is running smoothly, according to the neo-classical framework. The left, however, wants wages to rise too much, hurting profits and causing inflation. A research paper shows that raising the minimum wage from $7.25 an hour to $10.50 will cost fast-food restaurants 2.7%, which is the same as a Big Mac rising from $4.5 to $4.6; it’s not unreasonable to assume restaurants will pass the costs to the consumer. As we’ve argued many times, low wages help the economy more than they hurt it.

Price Index for Meats, Poultry, Fish & Eggs Rockets to All-Time High

“The index for meats, poultry, fish and eggs has risen 7.7 percent over the span [last year],” says the BLS. “The index for food at home increased 0.7 percent, its largest increase since July 2011. Five of the six major grocery store food group indexes increased in May. The index for meats, poultry, fish, and eggs rose 1.4 percent in May after a 1.5 increase in April, with virtually all its major components increasing,”

This is an example of bifurcated inflation we wrote about a few months ago, because treasury yields are still rock bottom even as real prices for important things such as food, gas, healthcare and tuition keep making new highs with no end in sight. As long as global growth keep booming, stocks keep going up, and interest rates never go up again, we anticipate this trend will continue.

An interesting article from The American Conservative about the impossibility of being on the right side of history.

If you had interrupted a Francis Galton lecture on the new “science” of eugenics and asked whether he was on the right side of History, what do you think he would have said?

He would have said yes, obviously. But maybe in retrospect he will be vindicated if eugenics makes a resurgence, which I at least predict it will in the next 50 or so years. China, for example, is investing heavily in technology that can be used for eugenics without the same restrictions that U.S. scientists would face. It can take a very long time to judge if one is one the right side of history – sometimes forever.

Worth ignoring U.S. economy: Not looking so good

Pundits purporting America’s economic decline or economic weakness should be ignored.

At the start of the year, economists were optimistic. Perhaps the economy would grow 3% this year, they said, instead of the measly 2% pace it’s been stuck at for the prior three years.

The difference between 3% and 2% growth is meaningless, according to Wall St. Looking back, if you plot economic growth with stock prices, there is pretty much no correlation. Same for profits and earnings, dividends, buybacks, or mergers. GDP growth tells us surprisingly little about the present or future state of the economy. It’s just noise

Stocks Rise, Ignoring Iraq Tensons

Stocks keep going up as Wall St., predictably, ignores tensions in Iraq.

Seeing some potentially good news for the economy and stock market: oil and gas prices are surging, tensions are rising in the Middle East, and Obama’s polls are falling to new lows. The former is probably contributing to the later because voters will blame democrats for pain at the pump.

I kinda hope things get worse in Iraq so that defense stocks rise in anticipation of intervention and oil and gas prices go up; this will enrich speculators, create wealth, and make Obama look more incompetent than he already is – assuming that is even possible.

$120 oil and $4.5/gallon gas will help the economy by forcing consumers to spend more on energy. Gas, TVs, or groceries – it all goes into consumer spending and GDP. This is the ‘bifurcated inflation’ we wrote about a few months ago because treasury yields refuse to budge even as gas and oil rip higher.

Consumers will spend more on the essentials such as food and gas while cutting back on the less important stuff like apparel; however, total consumer spending rises slightly. The left erroneously believes that rising energy prices will cause total consumer spending to fall, hurting the stock market and causing a recession.

The dow will hit 18,000 and consumer spending will keep being blowout even as oil crosses $130 and gas goes to $4.4 a gallon, guaranteed. Obama’s polls will fall, which will also help stocks because Wall St. wants the the liberals to lose.

Liberals will spread doom and gloom about pain at the pump being bad for the economy when there’s not a shred of empirical data that suggests it is.

Record high domestic oil production and fracking won’t make a debt in prices, sorry. Prices keep going up because of endless global liquidity, forever low interest rates, speculation, and markets being in ‘risk-on’ mode. To make prices go down we would need extreme fear to return.

As always, free market capitalism is still the best path to prosperity. Sometimes, an uneven economic recovery is better than none.

Immigration, Millennials, and the Smartist Era

In response to a post supporting more high-tech immgration, Derb replies:

Nobody “deserves” admission to anyone else’s country. Immigration has nothing to do with morality. It is the business of deciding whether we need any more people; and if so, from where, with what characteristics, taking into account all social and cultural factors, not merely economic ones (about which there is in any case no general agreement).

Derb is looking at the issue from a normative perspective – the law – while we’re looking at it from a positive perspective – what would be best for the economy under a meritocracy.

Yes, quality is more important than quantity, and we should be choosy, but more immigration of the best and the brightest can help negate the economic drain of the mouth breathers that are born here – and there’s no shortage of those. Smart Koreans, Chinese, and Japanese – to name a few – want to attend our elite institutions and can bring value to the economy by creating jobs and innovation, hence they deserve priority in admissions over lesser qualified U.S. citizens. It’s an unpopular opinion, but consistent in upholding the meritocracy. Many on the right are falling into the trap of the left by placing greater precedence on factors such as nationalism and citizenship over ability and achievement. The conservative party is supposed to be opposed to affirmative action, and rightfully so, but now they want affirmative action for Americans over foreigners, which seems hypocritical.

On Reddit, a post about Paul Erdos’ reliance on amphetamines to be a more productive mathematician got a massive 3,500 up-votes and 800 comments in 12 hours, surpassing major news stories and on par with celebrity ‘Ask-Me-Anythings’. This is evidence we’re in a smartist era, because when else has there been this much general public interest in a subject as arcane as the drug habits of a deceased octogenarian mathematician?

Authenticity, being an expert and being smart is the social currency of the smartist era. Among the millennial generation of Obama voters, unscientific platitudes – including those promulgated by liberal baby boomers – are out and originality, science, skepticism and empiricism is in – even if these views challenge leftist orthodoxy, such as supporting the right to bear arms, opposing affirmative action, and not being so quick to blame multinationals and rich people for wealth inequality. The millennials, the smartest and most educated generation ever thanks to the Flynn effect, won’t be ‘sold’ to the mouthpieces of special interests and political correctness as readily their parents. This is good news because academics and policy wonks – using facts and reason – can reach this demographic to promote pro-growth policy and HBD principles that earlier generations would have ignored due to not being smart enough or due to being brainwashed.

As recently as 20 years ago, behavior idiosyncrasies and eccentricity were viewed as defects to be masked; now they are worth ‘street cred’ and vaunted. Being anti-social and inscrutable will elevate one’s social status in today’s society – from being an outcast in an earlier generation – to a thought leader with throngs of disciples in the insular universities, but also increasingly in the mainstream on sites such as Buzzfeed, Reddit or Businessinsider.com or on Fox News or CNBC – in an era where intellect is revered and valued more than ever, and stocks keep going up. As a case in point, consider Slavoj Žižek – an eminent professor dubbed the “Elvis of cultural theory” and second only to Noam Chomsky in visibility – reveals in a video, speaking in his notoriously hard to understand Eastern European accent, that he doesn’t like teaching and, furthermore, showing indifference if one of his students were to commit suicide, going so far as to joke about it whimsically. Such remarks – however offensive – boost his stature because it’s ‘authentic’, going against the currents of normative social behavior. In the same way being a professional mathematician or physicist (amateurs are typically derided, unless they are better than the pros) gives you Stephen Hawking-like oracle qualities and adoration, taking recreational drugs exudes a down to earth hipness and open-mindedness. Combine the two and you have the archetype of a demigod in the smartist era – one that millions of people, many of whom are atheist or agnostic, worship on the alter of erudition.

If the left gets the economic crisis, real estate crash and bear market it so seeks, all of this will be derailed. The warrior class will gain a little ground on the cognitive elite – for example – the national aura of machismo and patriotism that immediately followed the events of 911.

Eric Cantor’s Loss – A Sign of the Times

Radio Derb 6/14/2014

Not surprising, many conservatives – with few exceptions such as this blog – are elated over the defeat of Eric Cantor. This is kinda funny because in 2009 and 2010, he worked with the Tea Party in his district and now they want nothing to do with him. He was even on the cover of National Review caricatured on horseback along with Sarah Palin and a few others as crusaders of the ‘Tea Party Revolution’. So what happened? He was too moderate on immigration and too deferential to crony capitalism, as the story goes. His loss speaks of a deeper woe is me attitude among some on the right, and particularly among the left – a wanting to blame the rich and successful for the ills of society, instead of taking personal responsibility. Even liberals, in their quest for crisis and failure, were celebrating Cantor’s defeat, because his loss makes the country more likely to default on its debt and possibly enter a recession. Killing immigration reform means more of those overpaid jobs liberals love. Defaulting on the debt would send a message to the Washington establishment that they, too, have to play by the same rules as individuals and households. We need entitlement reform, but defaulting on the debt when yields are at historic lows reeks of idiocy. Cantor was instrumental to forging compromise to get the ceiling raised, but David Bratt has no inclination to do so. It’s not worth facing the potential consequences of debt default to satisfy a small but vocal constituency. A good compromise would be to cut as much entitlement spending as possible and furlough the non-essental government employees without pay, but still pay the bondholders. Of course, the left would rather stick it to the bondholders and keep the overpaid, useless government employees. The left loathes the bondholder – in particular, the foreign bondholder – more than anyone else, because the audacity buy America when there’s supposed to be crisis and wealth inequality is so high. To the left, everyone should sell so inflation surges and they can fulfill their dream of America becoming Greece and the rich losing money.

There’s a small contradiction with the first part of the podcast about Eric Cantor and the part about race and achievement. In the part podcast about race and education, it’s evident Derb correctly supports the meritocracy, as do I. The best an the brightest earn more because they are better adapted to thrive in today’s hyper-competitive economy. The left, on the other hand, want equal equal outcomes to the detriment of those most capable and the overall economy. This ties in with David Brat, because if you support an economic system where the cognitive elite can reach their full potential, it behooves you to support policy that creates wealth (or at least prevents its destruction) and rewards success; such policy includes, but is not limited to: supporting the fed’s independence, raising the debt ceiling, deregulation, incentives for home ownership and more high tech immigration. If Asians, including immigrants, score higher don’t they deserve admission, so they can apply their skills to creating companies, wealth and advancing society after graduation? In the Marxist tradition of revolution, economic collapse and upheaval benefits the lowest classes. When the economy faltered in 2008, it was the elite that lost the most. The liberals are at constant war with success, so anything that causes many people to lose money or society to decay is embraced with open arms.

Some Much Needed Perspective in the Student Loan Debate

It’s a common misconception by some conservatives that only liberals are pro-college. The reality seems to be the opposite. Liberals such as Elizabeth Warren are leading the charge against higher education, laying blame on the overpaid faculty, the student loan lenders, and the colleges for failing to guarantee good job prospects for students. While the left was resolutely pro-higher education as recently as the Clinton administration, those days seem to be gone. Nowadays, you can find many instances of conservatives such as Marc Andreessen and Google’s Eric Schmitt championing the virtues of higher education; but if you go to sites such as the HuffingtonPost or the NYT, you can find droves of liberals disparaging higher education as a poor value, less important than ‘street smarts’ or lending anecdotal evidence of people that have dropped out of college and wildly succeeded – without fail, referencing the overused examples of Steve Jobs, Bill Gates and Mark Zuckerberg. No one is denying that it’s possible to be a success outside of college, but the college loan debate has often been predicated on lies and partisanship, rather than an objective look at the facts. The preponderance of evidence suggests a STEM degree (which should also include economics) – especially at a prestigious college – is worth the money. Let’s look at some famous dropouts. Yes, they didn’t finish, but notice they still enrolled in college, and in addition many of them attended prestigious colleges. The last point is important because entering a selective college typically means you’re the top five percent of intelligence and furthermore, attending college – even if you don’t finish – can give you connections that can serve you later. This is especially true with prestigious colleges that have large donors and resources that no-name colleges typically don’t have. Being exceptionally smart increases your odds of success without college; however, for everyone else, they are left with little choice because having a degree signals to employers that you are competent enough to get a degree and hence should be hired over someone who doesn’t have one. And as in the case with STEM, degrees are not always a bad value. But finally, what about those who never got accepted to a prestigious college or who aren’t majoring in STEM? A recent article (A Little Student Loan Debt Never Hurt Anyone) by Megan McArdle – using actual data instead of doom and gloom rhetoric – shows that the student loan situation isn’t as dire as those on the left are making it out to be. She writes:

Nonetheless, I do not think that we should use taxpayers’ hard-earned money to make their debt cheaper. Driving down the interest rates on education debt should not be a policy priority.

Agree. It’s the student’s responsibility to finish (As many as 50% don’t and not too many of them going to create the next Facebook, but more likely a burger with the toppings of your choice), to understand the terms of the loan, and to choose majors that will pay well, such as STEM and economics. The problem is too many people are being pushed into going to college that are not college material due to immaturity, a lack of interest, or to put it bluntly, simply not being smart enough. Advisors should encourage students that are unlikely to succeed in college to pursue vocational training, but in our politically correct world, this is easier said than done. To even intimate that someone isn’t smart enough to benefit from college is heresy and could possibly cost the advisor his or her job, or in the words of Upton Sinclair- ‘It is difficult to get a man to understand something, when his salary depends upon his not understanding it!’

It’s good to remember, as we discuss these plans, that people with college degrees are the best-off people in the U.S. They are a cognitive elite with substantially more earning power than almost anyone else,

The creative class and the cognitive elite are the most important people of all. In today’s hyper-competitive meritocracy, being smart is more important than ever. Stocks will keep going up and the treasury yields will remain low because the U.S. is still a safe haven full of smart, talented people and multinationals and elite institutions such as Harvard, Stanford and MIT that are the envy of the world.

Also included is this graph that puts the individual loan debt situation in perspective. In contrast to the six digit figure quoted by anti-college pundits, the majority of students borrow less than $10,000 and about 72% borrow less than $25,000, or about the same as new car.

The overwhelming majority of borrowers have less than $25,000 in debt, which is to say something more like a car loan than a mortgage. Yet we do not argue that we need to reduce the cost of car loans lest the Toyota Camry should keep yet another generation of Americans from the precious boon of homeownership.

Note how she gives the car example. This blog was the first to make the comparison; now others are seeing that we were right all along, that student loan debt is not much different than buying a car, yet no one on the left is castigating the auto industry. A new car losses half its value when you drive it off the lot – where is the outrage?

At the end of the article, making student loan debt dischargeable in bankruptcy is a bad idea because it absolves personal responsibility. Why should tax payers front the bill of your free education? Second, if everyone is discharging their debt, it will only make tuition rise even more, hurting those who do pay.

David Brat Sell-Off Day 2

Day two of the David Brat sell-off as the Dow Jones Industrial Average falls over 100 points in addition to the selling esterday.

CNBC’s Jim Cramer: Cantor’s Exit Brings Back Fear of Washington

Much more important than immigration reform, David Brat being the house majority leader may imperil future debt ceiling negations. This probably the main reason why stocks have fallen since his primary victory. Selling should be treated as a buying opportunity because the odds of default are still slim, and even if it does happen, our creditors will understand that this is due to politics and not fundamental economic weakness.

The uncertainty wrought by having David Brat in such a great position of power underscores why we need more money in politics, not less. Mr. Prat, a professor, is a person of modest means, which is fine, but he doesn’t have much to lose if the economy falters and the market tanks. He will still keep his job at the university and or in Washington. Now, someone who is a major economic stakeholder with lots of assets has more to lose if things get bad, so it will be in his best interests to try enact pro-growth policy than reckless policy for the sake of partisanship.

Did David Brat Cause the Market to Fall Today?

From the WSJ: Eric Cantor Defeat Imperils Prospects for Immigration Overhaul :

Mr. Cantor’s defeat is likely to be seen as confirmation immigration politics are too dicey for this election year and may spook rank-and-file members who advocates have been pressing for support.

In response to a questionnaire from the Richmond Times-Dispatch, David Brat wrote:

With 50 million Americans in their working years unemployed, the last thing we should do is provide amnesty or any form of work authorization to illegal immigrants. Yet, Eric Cantor believes that we need to import more low-wage foreign workers at the expense of lower wages and fewer jobs for Virginia families. Cantor also favors the Dream Act and Enlist Act principles. A vote for Eric Cantor is a vote for open borders and corporate handouts.

Did David Brat cause the market to fall today? This would not come as a surprise since stocks would respond favorably to amnesty and more corporate handouts and Cantor losing makes this less of a possibility. The market’s rationale for supporting amnesty is that wages are possibly are still too high (especially after recent efforts to raise the minimum wage) and immigrants would boost consumer spending, as well as helping the economy in numerous other ways. Crony capitalism, the ever reliable whipping boy for fanning populist support, has created wealth in the form of Tesla, defense spending, as well as the super-effective bank bailouts, which continue to pay dividends to this very day in the form of this massive bull market and economic expansion.

So while Brat’s message may resonate with voters, the market is not happy, which like many previous examples shows how what most people think is good for the economy, in reality, isn’t. Many of these people were content with letting the banks fail in 2008 or for the govt. to default on its debt, etc. The problem is putting emotion over sound policy; letting the wanting of higher wages and more overpaid jobs impede the natural progression of the economy towards one with fewer overpaid jobs and lower wages in exchange for higher productivity and higher profits. Wall St. would prefer that the status quo not be upset to appease the populists.

Just like IQ being important, why do we want policy that will empower the dumb?