Mauldin on Immigration

Each week John Mauldin produces one of the finest investment newsletters written in America today. His newsletter is free and in my opinion it should be required reading for anyone who thinks about investing.

This week John is focusing on demographics. I have chosen to cherry pick a few key paragraphs about immigration that I think you should take a look at. Both John and I see smart, hardworking people as a major key to national success. An immigration policy that brings in more smart, hardworking people would make our nation a better place to live regardless of how many people we bring in or what their nation of origin is.

"The United States needs its immigrants. Without them our Social Security and Medicare problems are greatly increased to the severe breaking point. We could see our problems become as large as Europe's. Forgetting the cultural implications, and from a pure economic standpoint, the US should be aggressively seeking to increase immigration of the right kind. Our policy today is haphazard and ill-informed, but at least allows for one million immigrants per year. If we were smart, we would be doing everything we could to get young educated people to come to the US. "

"Asian Indians are the second-largest legal immigrant group coming to America. There were 1.65 million of them in the 2000 census. Their household median income was $63,699 per year, the highest of any ancestral group. I had always assumed that Jewish household income would be the highest. A national study suggests that their household income is "only" 54,000."

Timothy Burger
timothyb@timothyburger.com

The Friday Five

1. John Kerry released his college grades this week. As most Republicans might suspect the supposedly intellectual and thoughtful Kerry actually did worse at Yale than President Bush. Astute observers might remember that the supposedly brilliant former Vice President Al Gore also posted worse grades than President Bush.

This means that, despite all the "Dumbest President Ever" signs and snickering about mispronounced words over the past five years, it appears that president Bush has been the most scholarly candidate in the past two elections.

2. On June 25th the Johnson County Republican Party will hold a straw poll for governor.

The poll asks "WHO WOULD YOU LIKE FOR GOVERNOR? Lynn Jenkins? Phill Kline? Doug Mays? Jerry Moran? Jim Ryun? Ron Thornburgh? Todd Tiahrt?" Of these candidates only one has entered the race for governor and five of the seven have actually said they will not enter the race, way to stay on top of your own party.

Since changing leadership after the November elections the County Party has produced some of the most embarrassing political communication I have ever seen. Unless there is a major shake up in the Party before the election season starts the Johnson County Republican Party my actually help the democrats win races in 2006.

3. Fortunately for us, Howard Dean, Chairman of the Democrat Party, is still a total lunatic.

4. President Bush's cabinet is more diverse than America in general. However, the great thing about his cabinet is that the people in it are there based on merit, not based on some one-of-each kind of affirmative action plan.

5. The KU School of Business is in the process of hiring two new professors to bolster the Business School's entrepreneurship program. There is a lot going on in this area at KU, the school may have an exciting new program by the beginning of the Fall Semester.
Timothy Burger

Glad I Have a "Risky" 401(k)

From MSNBC:

"The heads of three major airlines were called to appear Tuesday before the Senate Finance Committee. Its leaders are alarmed that the Pension Benefit Guaranty Corp. — the federal agency that insures private pension plans — already has a $23.3 billion deficit because of defaults.

More than half of the 100 largest plans had less than their promised benefits on deposit, which the committee’s chairman blames on lax rules that are supposed to guarantee full endowment.
About 34 million people — roughly 20 percent of the nation’s workforce — expect to receive payments from their employers through defined benefit plans."

Timothy Burger

Kansas Supreme Court Education Fiasco

A few things you should know about the recent Kansas Supreme Court ruling on Education Funding:

First, there is little in government more important than education. I think we should provide our children with an excellent education, not merely a suitable education. We should provided an education that prepares our children for the world they will face when they graduate, and we should be willing to pay for that. The recent decision by the Kansas Supreme Court to legislate an additional $142 million in selected funding does not further the goal of providing an excellent education.

Second, this court decision has nothing to do with grades, test scores, educational outcomes, or learning. If you don't believe me, read the decision. The court assails the Legislature for failing to provide a "suitable" education for Kansas students, but the only way "suitable" is measured is money. I think the performance of Kansas students, which is actually much better than average, indicates that a suitable education is being provided. The education may not be as expensive as you would like, and you could debate if it is an "excellent" education, but the constitution says suitable and it looks suitable to me.

If funding is item number one on the court's education plan, and learning falls somewhere lower on the list I think the court has its priorities out of order and I think it is creating a plan to fail, just look at the disaster that happened in Kansas City, MO when a judge did the same thing 15 years ago.

Third, Kansas spends a comparable amount per pupil, but less of that money reaches the class room in Kansas. Approximately 57% of education funding reaches Kansas class rooms vs. 61% on average. Reducing non-class room spending, or consolidating some of the hundreds of school districts in Kansas would bring more funds to bear where they make a difference without increasing taxes. Too bad legislators don't have the guts to do this.

Fourth, This ruling will actually reduce the amount of money spent on the best schools in Kansas. Many of the best districts use their local option budgets to raise extra money to make their schools places of excellence. The Kansas Supreme Court will substantially cut funding for Shawnee Mission, Olathe, and Blue Valley, hurting the education of those children and throwing their budgeting process into chaos, all in the name of fairness.

Fifth, the ruling has major internal logical flaws. The biggest is the repeated criticism of the legislative process and the political compromises that come from that process. However in their remedy for the case the court simply doubles the Legislature's political compromise rather than impose the full funding amount.

Sixth, The court relies on this one study done by some no name consultants over the decision of the legislature because it disregards historical costs and determines the "real" cost of education? Ridiculous, and couldn't the legislature just commission a new report and make up another number?

Seventh, don't worry despite years of trouble funding education, the $135 million renovation of the Capital will proceed on schedule, the Senate will have a newly refurbished chamber next year, it will be beautiful, ornate and new, I just wish our children could say the same thing about their schools.



Timothy Burger