Workin’ in the Mill

Apparently, Craig Bouchard has decided to build a new aluminum mill – in Ashland Kentucky. That’s something that ‘t doesn’t happen very often. In America, at least. Allysia Finley, over at The First Street Journal took a look at it following a story in the Wall Street Journal.

In April the CEO of Braidy Industries, Craig Bouchard, announced his company would build a $1.3 billion aluminum mill in Ashland, Ky., creating 550 jobs. Within the past few weeks, he has received 2,600 applications—many with heart-wrenching personal anecdotes.

Ashland, a small Appalachian town on the Ohio River, was once an industrial powerhouse. Fifty years ago, nearby coal mines churned out cheap energy and raw materials for steel production. But in recent decades the region has suffered a series of blows. In 1998 Ashland Oil relocated to the Cincinnati suburbs. Two years ago, AK Steellaid off 600 workers. Last year CSX Railroad cut 100 jobs due to reduced traffic from the coal mines. Unemployment in Greenup County stands at 8.9%.

Last month President Trump —who won the county with 71% of the vote—ordered an investigation into whether aluminum imports were jeopardizing national security. It’s a step toward the tariffs that protectionists hope will revive America’s Rust Belt. But the best hope for towns like Ashland is innovation and investment by men like Mr. Bouchard.

He’s the kind of businessman who might appear on a union hit list. The CEO cut his chops in derivatives trading before buying the scraps of a bankrupt Chicago steel company in 2003 with his brother James. Within five years, the Bouchard brothers had built their company, Esmark, into the nation’s fourth-largest steel conglomerate.

They sold it for $1.2 billion to the Russian steelmaker Severstal in 2008, shortly before the stock market and steel industry crashed. Thousands of workers subsequently lost their jobs. Mr. Bouchard blames the United Steelworkers. He had first tried to sell a partnership stake in Esmark to the Indian company Essar Steel. But the United Steelworkers sought to force a sale to Severstal, which the union perceived as more labor-friendly. Had the Essar deal been consummated, Mr. Bouchard says, “every one of those people would have their jobs today” because all of the company’s debt would have been paid off.

The episode soured him on organized labor, and it’s one reason he was determined to build his new aluminum plant in a right-to-work state, where workers can’t be compelled to join a union. Before choosing Ashland, he drew up a list of 24 potential sites. The logistics favored Ashland, and Kentucky offered $10 million in tax incentives as well as low-cost electricity. But Mr. Bouchard says he was prepared to build elsewhere had Kentucky’s Republican governor, Matt Bevin, not signed right-to-work legislation in January.

Pay at the plant, which is expected to be up and running in 2020, will start at $50,000 a year and average $70,000—about twice the median household income in Ashland. Workers will also have access to health insurance, fitness facilities and a day-care center.

There’s more at the WSJ link, although it is subscriber only. But there is enough here to draw some conclusions.

First, Ashland is a superb location, especially for heavy industry, on the Ohio River, only a few miles from an Interstate Highway, lots of railroad infrastructure, and lots of unemployed people, both a legacy from coal mining. Nor does it hurt, that the Kentucky government offered $10 million in tax incentives and cheap electricity (aluminum production takes a lot of electricity, I seem to remember).

And finally, Kentucky is a right-to-work state, and Bouchard, like so many of us, has been turned anti-union, by the unions, themselves. Many of us watched as the were the main actors in destroying many of the industries that dominated my childhood, primary steel, the big 3 automakers, and many others. Apparently including Bouchard’s Esmark Steel. Nor does he appear to be exactly planning on exploiting his workers, starting them at $50K, and averaging $70K, that’s a pretty decent living, and working conditions are no longer really a contract condition, they’re a government regulation. Yes, often a silly group of them.

One of the things that the unions used to kill enterprises, and why it is a very silly move anymore to buy a legacy business, are the defined benefit pension plan, Allysia says this.

The pension decisions of decades in the past are still weighing down American manufacturers today. Those decisions cannot all be blamed on unions; management too frequently took decisions concerning pension plans and funding which worked fine for the individual managers in the fifties and sixties, but are unsustainable today. Defined benefit plans are being replaced by 401(k) plans, and the like, plans which do not depend upon the company’s future contributions to those plans. The defined benefit plan, if not properly funded as the company moves along, is, in effect, paying retired personnel a wage for no longer working.

That’s correct, and a good deal of that was taking the easy way out, rather than fighting the union. And by the way, it is not only business, it’s the basic problem (besides corruption, of course) with government, in Chicago, in Detroit, in Illinois, in California, and pretty much anywhere that government employees have unionized, because politicians, being the weak-willed creatures they are, have almost always not funded the retirement systems as required (often the unions haven’t, either).

And that’s why smart people go for a 401k these days, which was originally designed for the self-employed. If you fund it yourself, it tends to get funded, if you depend on other people’s money, well people are subject to the temptation of shinier objects than taking care of those who used to work with them.

Trump in Arabia

Remember this picture of the Swedish PM (and others) in the UAE?

Well, compare and contrast.

See a bit of difference in the attitude that Melania’s dress, and the whole scene portrays? Look, this isn’t earthshaking, there a lot of difference between Sweden and the US, as well as between the UAE and Saudi Arabia. But it does speak to attitude. The US is obviously being respectful, but so are the Saudi’s. The reception tells you, as it should, that the Saudi government has a good deal of respect for President Trump, and also that they want something. Which they do, but then again, Arabs and Americans, and especially this President are traders, and always have been, and signals are important.

It always signifies something, when the President’s daughter, Ivanka, an Orthodox Jew, looks quite comfortable in Riyadh, as here. But then again, what are the Saudi’s really going to say about it. But later today, for the first time (officially) AF 1 will be the first flight directly from Riyadh to Tel Aviv. That too is significant.

It speaks to the growing alignment of the Saudis and this Israelis against the Iranians, and it speaks of the gradual reform that is becoming evident in Saudi Arabia, not least because of America’s growing importance in the oil market, and thus still another way that the Arabs are losing their power.

And he gave a speech, worthy of an American President, here it is.

Now mind, words are not actions, but words often define actions we will take. It strikes me as a very good start.

A Conversion Story

Sadly, not Bookworm, as far as I know.

Bookworm takes a look in the mirror:

Cultural appropriation be damned.  I am finally coming out of the closet as a trans-cultural Redneck and proud of it.  Allow me to explain.

I was raised in the belly of the beast, San Francisco, by European immigrant parents who fully embraced upper class, European culture in all of its arrogant glory.  We didn’t have the money, but I was taught to have all the right attitudes.  They were drilled into me from the cradle: imported cheese, classical music, foreign movies, and a sneering disdain for the ordinary Americans who liked working with their hands, watching fights and drinking beer.

Still, despite this pressure to be an American elite, I kept slipping up. While the family was cooing over a nice runny Brie, I was in my room, squirting quick hits of canned Velveeta in my mouth, hoping no one would catch the tell-tale orange stain around my lips. Instead of being grateful for my Mom’s carefully packed school lunches, complete with brown bread and vegetables, I was desperate to get my hands on my schoolmates’ Wonderbread™ sandwiches and Hostess Twinkie™ snack cakes.

Music was an issue too. I kept my face politely bright when I was dragged to the symphony or the opera, feigning interest in Mozart’s Requiem or Verdi’s Madama Butterfly, but my heart wasn’t in it. Even as the musicians played and the singers sang, I had a separate track in my head playing Slim Whitman, Hoyt Axton, Marty Robbins, and Johnny Cash. I wasn’t a purist, by any means, of course. There was plenty of room throughout my school years for Top 40s music, but opera made me wish I could break out in hives as an excuse to leave the room.

Things got worse when I hit my hard-Left, highly-ranked college. With every passing year, it became harder to feign respect for the professors who droned on at the front of the room, reading off of stale old notes. As they preached Marxism in the classroom, either directly or indirectly, I couldn’t get past the fact that they lived in expensive homes, complete with Hispanic maids and Japanese gardeners, dined out at fine restaurants (organic before it was in), and regularly traveled to (of course) Europe. My classmates revered them; I thought they were pompous, hypocritical windbags, and the fact that I got good grades from parroting their cant back to them only increased my disdain.

It was at college that, for the first time, I grappled with the fact that, despite my upbringing and credentials, I was living a lie. I hated to be something I wasn’t, but I didn’t yet know enough to express what I was. As far as I and everyone else knew, I was just your usual slightly weird Euro-immigrant, Jewish-Liberal Bay Area Democrat.

My years at law school in Texas were the first time in my life that I felt I fit in. Sure, I had still had whole grain brown bread cravings, but saying “y’all” just felt right. It rolled off my tongue, if you know what I mean. And being friendly to people — saying “howdy” to everyone — that felt right too. It was a world away from college’s snide cliques and studied rudeness. I loved hanging out in dives and dancing all night long to the live blues and country bands.

Still, the pull of my upbringing was strong. Instead of giving in to what felt was right for me, I forced myself to return to the rarefied world in which I grew up. It was still too painful to admit to what I really was and I knew that I wasn’t strong enough to face the backlash from family and old friends.

And so for the next two decades, I hid my true self. I listened to NPR, voted Democrat, called myself a feminist, ate at restaurants that served food with names I couldn’t pronounce, periodically went to the symphony, had my collection of gay friends (who always made nasty remarks about women), and pretended I had black friends (in fact, as a young professional in San Francisco, I only knew one black person and, while I liked her, she wasn’t really a friend….). At the same time, I became a cynical, embittered, contrarian person, always pushing back at chimeras. I knew my life was wrong, but I didn’t know what was right.

What changed all this was 9/11. In the subsequent years, I realized I wasn’t a Democrat at all. I was a conservative! Oh. My. God! That was incredibly liberating. Even more liberating was writing a blog that (a) allowed me to express my thoughts without being socially ostracized and (b) put me in contact with people who didn’t sneer at Velveeta in cans, disliked opera, wanted to shoot guns, listened to country and pop music, watched MMA fighting, and thought traveling within America on vacation was cool, not pathetic.

Keep reading, it’s good all the way through A fair amount of it parallels things in mine, although I was never politically liberal, even as a kid it didn’t make sense to me. Yep, one of the few thing dad and I argued about occasionally, he was conservative, but a New Dealer, well I understand why, but don’t condone such contradictions. Maybe that’s why I have a soft spot for Tories, and in fact, anyone who reads too much Burke, and not enough Locke.

I certainly do approve of Daisy Dukes, though! 🙂

Special Counsel

So, we have a Special Prosecutor Counsel. Isn’t that special, well we have it because there is a lot of smoke, not least to find out if there is a fire, swamp gas is burning off, too much grilling in the fog, or somebody bought some army surplus smoke generators and are manufacturing smoke. I think I may know, and so may you, but that doesn’t seem to matter. The farce must play out.

But I suspect it may not go the way the writer of the script thinks, former FBI Director Robert Mueller is fairly obviously well connected, that does not necessarily mean that he is dishonest. He’s also a former Marine Officer decorated for his service in Vietnam. One thing it will do is reduce the volume a bit, and let the Administration do a bit of administrating rather than running around like fools all day long. Well, one hopes anyway!

Best I’ve seen on it comes from Joshuapundit, here’s some…

Rosenstein may even have been told by Trump to appoint a special counsel. It puts this garbage on the back burner somewhat, and will hopefully shut it down. That’s because there’s nothing for Mueller to find on the president and no crime. But just look at Mueller’s actual brief! To supervise the investigation of:

“(i) any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump; and (ii) any matters that arose or may arise directly from the investigation; and (iii) any other matters within the scope of 28 C.F.R. §600.4(a).”

Regulation 28 C.F.R. §600.4(a) is part of the federal regulations that authorize appointing a special counsel. It expands a special counsel’s jurisdiction to all crimes, such as perjury or obstruction of justice, that interfere with his original responsibility.To wit, (ii) any matters that arose or may arise directly from the investigation; and (iii) any other matters within the scope of 28 C.F.R. §600.4(a).”

Think of the ground that could cover! It could definitely include investigating Seth Rich’s murder* and reopening the investigation of the Clinton Foundation that FBI Director Comey closed on Obama AG Loretta Lynch’s orders after she met will Bill Clinton on that plane. It could include compelling testimony from Loretta Lynch herself. It could expand to exploring President Obama’s surveillance of the Trump campaign by President Obama and the clear violations of FISA laws that took place. Imagine some of these juicy scandals coming to light just in time for the midterms…talk about a total reversal of fortune.

In any event, the supposed ‘Comey memo’ if it even exists amounts to hearsay evidence no judge would take seriously. And even if Trump suggested Comey ‘go easy on Flynn’ after he had been fired, that is not obstruction of justice. That crime involves actual overt actions like destroying evidence, perjury, inducing other people to commit perjury, you know, the sort of felonies the Clintons did routinely.

And recall that both ranking member Senators Feinstein (D-CA) and Richard Burr (R-NC),the chairman both said that Trump was not under investigation based on the classified briefing they were given.

Another thing to consider. Comey is a lawyer. As such, he is an officer of the court who is legally obligated to report a crime like obstruction of justice. Yet he did not…until now. That could be grounds for disbarment.

Do read it all at the link above.

Who knows, Special Counsels are official loose cannon, nobody (usually including them) know where an investigation like this is likely to go, and that’s if the Counsel (and staff) are honest. It may be the worst thing Trump could do, it may also be the best, only time will tell.

Fixing Education

We return today to one of the subjects that have continued here since we began: education. What’s wrong with it, and sometimes: how to fix it. Peter W. Wood had a very good (and quite long) article yesterday in The Federalist on this subject. I found it very good, both in identifying problems and proposing cures. See what you think.

How much would it cost to fix American higher education? Think big. In 2015, colleges and universities spent about $532 billion to teach 20.5 million students enrolled in two-year and four-year colleges.

That $532 billion figure is the lowest estimate in circulation. The National Center for Education Statistics gives the figure as $605 billion for 2013-14. But let’s stick with the humble $532 billion.

So how much would it cost to fix our $532 billion worth of colleges and universities? The answer depends, of course, on what you think is wrong with them and which of the possible repairs you favor. But let’s not get overly complicated.

Here’s What’s Wrong with Higher Education

American higher education is subject to five broad categories of complaint.

The progressive left criticizes it for reinforcing oppression based on race, class, and sex. American higher education favors the rich and abets unjust capitalism.

Pro-market and libertarian observers criticize its dependence on public funding; guild-like stifling of innovation; and hostility to capitalism. American higher education privileges itself.

Liberals, moderates, and conservatives criticize it for putting identity politics at the center of curriculum and student life. It fosters inter-group hostility, a grievance culture, psychological fragility, incivility, and contempt for free expression. American higher education is illiberal.

Those who support the classical liberal arts criticize it for trivializing higher education, turning the curriculum into a shopping cart, neglecting the formation of mind and character in favor of political advocacy, and estranging students from their civilization by elevating the false ideal of multiculturalism. American higher education is culturally corrosive.

A wide variety of people criticize its high price, frivolous expenditures, and increasingly uncertain rewards for graduates. The gigantic growth in the number of campus administrative positions relative to the faculty comes under this heading too. American higher education is too expensive.

It would be easy to add more items or expand any of these into a whole book. Many have done just that. But my goal here is to cut a path through the forest, not to linger over the variety of trees.

When I speak of fixing higher education, I discard the first category, the criticisms of the university as a font of capitalist oppression. It simply has no basis in reality. Each of the other four categories is cogent, and any real repair would have to address all of them. Moreover, they are deeply connected.

I won’t linger over their interconnections either, but it is important to keep in mind that the guild-like or oligarchic aspects of higher education undergird its illiberalism, incoherence, and excessive expense; and its culturally corrosive quality licenses its voracious appetite for public funding, suppression of intellectual freedom, and frivolity.

Four Proposed Repairs to Higher Education

Corresponding to the four legitimate categories of complaint are four broad categories of possible repair:

Fix the financial model. Reduce and restructure federal and state support for colleges and universities. Eliminate the regulations that favor the guild and prop up oligarchy. Unleash the marketplace, including for-profit, online, and other entrepreneurial alternatives to the dominant model of two and four-year colleges. Steer Americans away from the idea that a college degree is necessary for a prosperous career. Find new and better ways to credential people as competent in specific endeavors. The general-purpose undergraduate degree should face competition from alternative credentialing.

Dismantle the infrastructure of campus illiberalism. Eliminate grievance deans and programs; rescind all government programs that subsidize identity politics; insist that colleges and universities punish those who disrupt events or otherwise undermine free expression. Some call for eliminating tenure because it has become a bulwark for the faculty members most intent on redirecting higher education into political activism.

Restore a meaningful core curriculum. This repair has three varieties: create an optional core curriculum at existing colleges, leaving everything else alone; create a mandatory core curriculum for all the students at a college; create new colleges that start out with their own core curricula. Reversing the cultural corrosion of American higher education will take more than reviving core curricula, but by common consent, that is the first step.

Restructure federal student loans. This is, of course, part of fixing the financial model, but it is crucial if the goal is to reduce the ballooning costs of higher education. Colleges and universities are expensive for several reasons, including their very high labor costs and tendency to compete with one another by increasing their amenities (e.g., rock-climbing walls), but the underlying cost-driver is their ability to rely on federal student loans to subsidize their ever-expanding budgets. […]

Continue reading How To Start Fixing America’s Higher Education Crisis

I found it all very good, and some of it outstanding. Part of what I like is that he recognizes that not everybody needs a to go to a four-year college. In truth, most don’t. College (except perhaps engineering) is not supposed to be a trade school. And when you make it one you end up with BA degree holders flipping burgers, a very silly outcome, particularly since in our setup they owe impossible amounts of money.

Part of the problem that I see is that our secondary (and primary) schools are no longer fit for purpose, graduates are far too often both illiterate and innumerate, and so the private sector, pragmatic as always, simply requires a degree, thinking they will at least get a candidate that can read at some level and maybe do arithmetic. It’s not a solution really, but in reality, their problem is to do whatever they do with whatever widget they do it with and make a profit, not to fix the education system.

At some point, it may become bad enough for them to find it cheaper to fix the problem than to use avoidance strategies like degrees, but we aren’t there yet. If we get to that point – well we’ll pretty much have failed as a country so it won’t really matter all that much.

Fracking OPEC

Well, we’ve mentioned that this would happen a few times, here and elsewhere. And it has. Jazz Shaw wrote back in December.

If you’ve been watching the oil market half as closely as Wall Street in general you’ve seen something rather remarkable happening this week. At the end of last month, OPEC finally decided that they were getting beaten badly enough with scandalously low oil prices and decided to jointly cut production. Since oil is always a significantly volatile global market, the system responded almost immediately, with oil climbing back up above the $50 per barrel mark for the first time in a couple of years. That helps out some of the member nations while not being high enough to significantly spike gas prices at the pump back in America.

So why not trim the flow back even further and bump those prices higher still? One OPEC spokesperson was extremely open about their strategy. The low prices have largely pushed U.S. shale oil production into low gear. It’s simply not profitable to produce when the price is down in the forties or even thirties. But if the price gets up to a few bucks above sixty dollars per barrel it will be rich times in the shale fields again and we’ll bust the market open, leading to another round of depressed prices. The Nigerian petroleum minister was quite clear about it in an interview this week. (Bloomberg)

Later on, he refers to it as not an evil conspiracy but just business, which is kind of true. It’s a would-be monopoly trying to set the price of a commodity, instead of letting the market do its thing. And you know something, it never works for long. Something always changes things. Here too.

Last Thursday, John Sexton wrote this.

OPEC, the oil cartel really cares about the world. That’s the message of a new monthly report issued Thursday. OPEC says what the world needs now is a bit less supply on the global oil market. In particular, they would really appreciate it if the United States would stop producing so much damn oil…for the good of the world of course. From CNN Money:

The report said that balancing the market would “require the collective efforts of all oil producers” and should be done “not only for the benefit of the individual countries, but also for the general prosperity of the world economy.”

OPEC said that one producer in particular is to blame: The U.S., where shale producers have continued to ramp up their drilling despite lower crude prices.

The increased production has undermined OPEC’s efforts to keep prices between $50 and $60 per barrel.

But the OPEC effort didn’t work for long. Prices are back below $50 a barrel now and thanks to increased efficiency, U.S. producers can still make money at those prices. Now OPEC has to decide whether to extend the production cuts into the latter half of the year or simply give up on the effort. Nitesh Shah, a commodity strategist at ETF Securities, says OPEC’s strategy has been a bust. He writes, “repeating the same strategy for another six months will do little to shore up oil prices.” “OPEC nations have given up market share and have barely reaped any price gains,” he adds.

OPEC could try even deeper production cuts but OPEC members won’t like that. So OPEC is left begging the U.S. to give them a break for the good of the world economy. We could do that, but here’s another thought: Let’s continue taking their market share and reducing their control over the world’s energy market.

Heh! Yep, we could do that, but why would we? Our people like to work and make money for their families, and they’re damned good at it, as well. Our country is designed for cheap energy, that’s why we have been a bit sluggish since the seventies. We are also free marketeers, buccaneers, really, who always find a way to make money while providing a better service, cheaper.

It’s our way in geopolitics as well, it’s how we destroyed the Soviet Union. And for anybody who still harbors the risible notion that Putin wanted Trump as President, well, this is certainly not in Russia’s interest either. Interesting, isn’t it, that American fracking that only last year needed oil prices of ~$60 per barrel to be profitable, is now profitable in the mid to high $30 dollar range.

The free market: What can’t it do?

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