Charles Murray and the White Class Divide

Charles Murray has an article in the WSJ outlining America's class divide. Murray notes the emergence of the "Super Zip Codes" that all go to the same elite schools, hold the same elite jobs, live in a very few elite cities, and live a life very different from that of the rest of the country. While at the same time among Whites, a lower class has emerged that is outside the cultural traditions and values of this country. He calls it the "Super Zips" vs. "Fishtown" (a White working class part of Philly). Arguing that both have become hereditary stations, for a number of reasons, and for an informal moral campaign to change that.

While Murray is superb in describing the situation, he shies away (from Political Correctness, ingrained chivalry, or other reasons such as fear) from accurately describing the reason for the emergence of two hereditary classes, and the action needed to break them apart, and increase personal social mobility.

Why the Super Zips Emerged

Murray notes that the United States has always had an elite. But that only recently have the payoffs for being "smart" been so large, and permanent. This is a familiar argument, one made many times in the Financial Times, and one not very intellectually rigorous. Simply because the elites are characterized by heredity, not smartness. Indeed, the dirty secret is that the elites are not very smart at all.

Elites are concentrated in the media, entertainment, the law, politics, government, "activism" and a few other areas where heredity, being born to the "correct" parent(s), personal connections, wealth, and "proper" opinions on a whole host of issues is everything. Not cognitive ability.

You will find almost no elites in professions such as engineering, computer science, entrepreneurship, and the like. Apple Computer, Dell, Starbucks, Oracle, were all formed by non-elites from middle class backgrounds or worse. Microsoft remains the only major technology company arguably founded by a child of the elite. Elites do not work as petroleum engineers, geologists, physicists, electrical engineers, and medical researchers, all highly demanding cognitive professions.

Angelo Codevilla argues in the American Spectator that the Ruling Class of America, Republican and Democrat, all go to the same national schools, share the same interests, intermarry, and form the same social class:

No prominent Republican challenged the ruling class's continued claim of superior insight, nor its denigration of the American people as irritable children who must learn their place. The Republican Party did not disparage the ruling class, because most of its officials are or would like to be part of it.

Never has there been so little diversity within America's upper crust. Always, in America as elsewhere, some people have been wealthier and more powerful than others. But until our own time America's upper crust was a mixture of people who had gained prominence in a variety of ways, who drew their money and status from different sources and were not predictably of one mind on any given matter. The Boston Brahmins, the New York financiers, the land barons of California, Texas, and Florida, the industrialists of Pittsburgh, the Southern aristocracy, and the hardscrabble politicians who made it big in Chicago or Memphis had little contact with one another. Few had much contact with government, and "bureaucrat" was a dirty word for all. So was "social engineering." Nor had the schools and universities that formed yesterday's upper crust imposed a single orthodoxy about the origins of man, about American history, and about how America should be governed. All that has changed.

Today's ruling class, from Boston to San Diego, was formed by an educational system that exposed them to the same ideas and gave them remarkably uniform guidance, as well as tastes and habits. These amount to a social canon of judgments about good and evil, complete with secular sacred history, sins (against minorities and the environment), and saints. Using the right words and avoiding the wrong ones when referring to such matters -- speaking the "in" language -- serves as a badge of identity. Regardless of what business or profession they are in, their road up included government channels and government money because, as government has grown, its boundary with the rest of American life has become indistinct. Many began their careers in government and leveraged their way into the private sector. Some, e.g., Secretary of the Treasury Timothy Geithner, never held a non-government job. Hence whether formally in government, out of it, or halfway, America's ruling class speaks the language and has the tastes, habits, and tools of bureaucrats. It rules uneasily over the majority of Americans not oriented to government.

The two classes have less in common culturally, dislike each other more, and embody ways of life more different from one another than did the 19th century's Northerners and Southerners -- nearly all of whom, as Lincoln reminded them, "prayed to the same God." By contrast, while most Americans pray to the God "who created and doth sustain us," our ruling class prays to itself as "saviors of the planet" and improvers of humanity. Our classes' clash is over "whose country" America is, over what way of life will prevail, over who is to defer to whom about what. The gravity of such divisions points us, as it did Lincoln, to Mark's Gospel: "if a house be divided against itself, that house cannot stand."

The Ruling Class, or the Super Zips, are not very smart. They have managed to run America into the ground, while in search of temporary votes to keep out those who they HATE HATE HATE (Average White middle class and working class Americans) of any power, courted disaster. Detroit is 47% illiterate, among adults. Hispanics do little better, and remain like Blacks utterly dependent on money transfered and opportunities taken from White middle and working class people to well, non-Whites.

In other words, the entire Elite political system is dependent on, sustained good times for everyone to smooth over the massive transfer of wealth and opportunities from average White people to non-Whites (and elites). And given those demands, the elites have made economic recovery impossible — no oil drilling, no oil pipelines, green dreams of failed solar manufacturing, strangling business regulations, and crony capitalism. When faced with the obvious danger — a White middle/working class populist revolt, the elites, the Super Zips, the Ruling Class, did little to avert it. Not even allowing victories and military dominance (that gives relief in cheaper oil if crushing the Iranians) to satisfy the pride and desire of the populists. Arrogant over-reach characterizes the elites. Who ran sub-prime into the ground, and with it the Nation, from which state it is unlikely to recover for decades.

Codevilla argues implicitly that Murray's answer to the Super Zips rise is "schlock sociology" worthy of Thomas Friedman and David Brooks:

Who are these rulers, and by what right do they rule? How did America change from a place where people could expect to live without bowing to privileged classes to one in which, at best, they might have the chance to climb into them? What sets our ruling class apart from the rest of us?

The most widespread answers -- by such as the Times's Thomas Friedman and David Brooks -- are schlock sociology. Supposedly, modern society became so complex and productive, the technical skills to run it so rare, that it called forth a new class of highly educated officials and cooperators in an ever less private sector. Similarly fanciful is Edward Goldberg's notion that America is now ruled by a "newocracy": a "new aristocracy who are the true beneficiaries of globalization -- including the multinational manager, the technologist and the aspirational members of the meritocracy." In fact, our ruling class grew and set itself apart from the rest of us by its connection with ever bigger government, and above all by a certain attitude.

Other explanations are counterintuitive. Wealth? The heads of the class do live in our big cities' priciest enclaves and suburbs, from Montgomery County, Maryland, to Palo Alto, California, to Boston's Beacon Hill as well as in opulent university towns from Princeton to Boulder. But they are no wealthier than many Texas oilmen or California farmers, or than neighbors with whom they do not associate -- just as the social science and humanities class that rules universities seldom associates with physicians and physicists. Rather, regardless of where they live, their social-intellectual circle includes people in the lucrative "nonprofit" and "philanthropic" sectors and public policy. What really distinguishes these privileged people demographically is that, whether in government power directly or as officers in companies, their careers and fortunes depend on government. They vote Democrat more consistently than those who live on any of America's Dr. Martin Luther King Jr. Streets. These socioeconomic opposites draw their money and orientation from the same sources as the millions of teachers, consultants, and government employees in the middle ranks who aspire to be the former and identify morally with what they suppose to be the latter's grievances.

Professional prominence or position will not secure a place in the class any more than mere money. In fact, it is possible to be an official of a major corporation or a member of the U.S. Supreme Court (just ask Justice Clarence Thomas), or even president (Ronald Reagan), and not be taken seriously by the ruling class. Like a fraternity, this class requires above all comity -- being in with the right people, giving the required signs that one is on the right side, and joining in despising the Outs. Once an official or professional shows that he shares the manners, the tastes, the interests of the class, gives lip service to its ideals and shibboleths, and is willing to accommodate the interests of its senior members, he can move profitably among our establishment's parts.

Codevilla compares the US elites unfavorably to France:

Much less does membership in the ruling class depend on high academic achievement. To see something closer to an academic meritocracy consider France, where elected officials have little power, a vast bureaucracy explicitly controls details from how babies are raised to how to make cheese, and people get into and advance in that bureaucracy strictly by competitive exams. Hence for good or ill, France's ruling class are bright people -- certifiably. Not ours. But didn't ours go to Harvard and Princeton and Stanford? Didn't most of them get good grades? Yes. But while getting into the Ecole Nationale d'Administration or the Ecole Polytechnique or the dozens of other entry points to France's ruling class requires outperforming others in blindly graded exams, and graduating from such places requires passing exams that many fail, getting into America's "top schools" is less a matter of passing exams than of showing up with acceptable grades and an attractive social profile. American secondary schools are generous with their As. Since the 1970s, it has been virtually impossible to flunk out of American colleges. And it is an open secret that "the best" colleges require the least work and give out the highest grade point averages. No, our ruling class recruits and renews itself not through meritocracy but rather by taking into itself people whose most prominent feature is their commitment to fit in. The most successful neither write books and papers that stand up to criticism nor release their academic records. Thus does our ruling class stunt itself through negative selection. But the more it has dumbed itself down, the more it has defined itself by the presumption of intellectual superiority.

Where Codevilla goes wrong in describing the emergence of the Ruling Elite, the Ruling Class, the Super Zips, is describing the emergence in political terms, i.e. being merely the heirs of Wilsonian upper-crust elitism. But the elites of today are nothing like those of Wilson's day, holding attitudes towards race, sexual mores, nationalism, crime, punishment, wars, and everything else that are at opposite ends of the spectrum from the old Progressive Elites. Yes elites have always entrenched themselves in crony capitalism and regulations, tension between them and the ordinary people being as old as the Whiskey Rebellion.

He describes the hatred of traditional religion, of marriage, and the family, and the worship of big government. Which is held to be able to re-order society at will, but never win wars abroad.

There is a word for people who hold such views. The natural basis for the Super Zips. The Ruling Class. The New Elites. We call them ... women.

Specifically, White professional women. A new class, never seen before in America's history. With lots of money, lots of disposable income. Hostile to traditions and values of the "old America" and in particular, the military. Desirous of a New America, multicultural, multiracial, united in opposition to "Dead White Men" and icky, horrible, Beta White males. Fond of eternal apologies (name any elite dominated by men fond of apologizing itself, name any group of women not fond of ritual and thus meaningless abasement).

The growth of the New Elites, the Super Zips, the Ruling Elites, and their attitudes has been one that has been driven by the emergence of women into new territory. It is a fundamental truism that everything has its cost. Liberation of women from drudgework, from early marriage and early deaths (often in childbirth), from non-participation in the nation's affairs, from entering into and being amply rewarded from the workforce, has helped create a modern West (in the US and Europe) that is more robust, more wealthy, and more fair in many ways. But everything costs, and the cost of the emergence of women has been the creation of a hereditary elite, a ruling class of princes, kings, queens, princesses, dukes, and what not. The Cinderella, Sleeping Beauty, Disney-esque fantasy, complete with adult Oprah-ized "Wise Black Woman" companionship, pushing the interests of White Professional women to the exclusion of everyone else outside the female-Elite coalition.

That is what all that wealth, power, and stability cost — long term instability by a Ruling Class driven entirely by feedback loops of making Upper and Near-Upper Class White women happy. After all, the Ruling class as Codevilla notes, appeals to be "smarter" and more "moral" than the other guys. That's an appeal to female tastes. Name a football coach who pushes that he's more moral than his opposition, or "smarter" in terms of dress, comportment, and so on. Cleverness, devious tricks, and such like (when employed for your side) appeal to men in sports, business, and the military. Appeals to moral authority and general intelligence do not. Which is why Patton ironically meant as a hit piece is popular among conservative men and "the Help" among SWPL, Professional White women. It is why tough old football coaches are beloved by male sports fan and Oprah by White women.

The Super Zips emerged because the class that provided the support, the balance, White professional women, emerged. Yes Welfare made things worse, as did crony capitalism and credentialism. But the key had always been, the post-War emergence of White professional women, newly liberated, hostile to the old ways that kept them out of power, eager to embrace personal sexual liberation, disdainful of male peers who lacked sexiness (nearly all of them, because they were equal) and thus enamored of anything and everything foreign and non-White. "Authentic" came to mean foreign and exotic, and "White" a synonym for "boring" because newly liberated White women found them so, and through massive consumerism driven mostly by their buying decisions, shaped through advertising the culture to what it is today.

In the early 1960's, commercials ran on national television wherein housewives, even of working men at factories, agonized over the quality of their coffee. Today you have commercials where rock-climbing professional women eschew marriage for outdoor adventure. With their "boyfriend." And no one says anything. Because the culture changed so much. Organically, all around the West, all at the same time.

The Super Zip emergence is probably best shown by the old WB/CW television show "Gilmore Girls," and the current CW show "Gossip Girl." Both appeal to young women, the former depicts a glamorous young single mother and her hot young bright daughter, who gets into Yale. The mother dumps her long-time devoted blue collar hunk boyfriend for the guy who got her pregnant at 16, and never did anything for her or her daughter, but is rich and arrogant and an Alpha jerk. The daughter tellingly dumps a younger version of said blue collar guy, who worships her, for a rich and drunk jerk after he humiliates the blue collar guy. The female audience went NUTS for this, and could not get enough of it. They loved the rich, arrogant bastards because they were rich and arrogant. Inherited money too, which was the best kind. "Gossip Girl" does away with even the pretense of small-town-ish life, with glamorous soap opera hook-ups among the spoiled rich kids of Manhattan.

The very things that enrage the mostly White male non-elites, makes the elites extremely attractive to the female White professionals. Who under the elites have done well, to the point where income, education, and other status-markers are higher for White women than men.

Black voters will reliably vote Democratic (Elite) about 98% or so. Year after year. Hispanics vote around 70% for elites. White men and blue collar White women, on the short end of the stick, vote 70% non-elite (or against the most elite candidate). Those who swing, significantly, from elite to non-elite, are White professional women. The good news is that they can be persuaded to vote against Dems (always the elite candidate) some times. The bad news is that they require elite characteristics in candidates to do so: Scott Brown, Ronald Reagan, George W. Bush. Handsome and tall are best, at least not "angry" or "ideological" which is a Beta Male turn-off. Women voters outside the White blue collar group want fairy tales, handsome princes, and tales of hierarchy and aristocracy. In real life as in stories of vampire queens, kings, and princes. That is why the elites emerged.

Neither Codevilla nor Murray get that.

The Emergence of Fishtown

Murray notes that "Fishtown" or the hereditary lower class White hangouts have decisively rejected the idea of regular church attendance, marriage before kids, education, and males in the workforce. What Murray does not get, because perhaps he is an older male with attitudes and chivalry formed from another country (the past) is how the sexual revolution impacted all these things.

Just as most White professional women (seriously, lurk about on ANY Television discussion forum, to see the attitude) HATE HATE HATE Christianity because of its cultural limits on female sexuality, so too do lower class women. The modern era after WWII, with cheap and easy contraception, anonymous urban living (less so now with Facebook and Twitter), high personal mobility, radically increased income and freedom for women, meant a sea-change in how women viewed sex, love, marriage, and kids.

Basically, any woman that wants sex, and is half-way attractive, can have sex any time she wants with an Alpha male. Commitment and love is another thing, but sex is not. Sex with the most desirable of men (aggressive, dominant assholes) is there any time. The only threat is Christianity. Islam is a distant fire, limiting only Muslim women (who most White women don't really care about anyway) as they see it. Some pastor saying "don't be slutty and stupid" is a direct threat, because their parent(s) might echo it. No one wants to be shamed like Snooki. The popularity of Jersey Shore is as a vehicle for White women of all classes to laugh at Snooki and how stupid she is. She is the guido version of a minstrel show. Appealing mainly to women.

Of course lower class women don't attend church. Who wants a lecture on staying away from bad boys, when they are so, so sexy?

Marriage for kids is for losers, among White lower class women, not because of welfare (though it hardly helps) but because of sexiness among men. The sexiest of men, are those who are aggressive, dominant, hyper-masculine, and so naturally women want kids by them. There is not enough reason to hold out for commitment (the sexy men won't commit) and the non-sexy men who offer commitment just are not sexy enough. It is not welfare (most White blue collar women in Fishtown work, and quite hard too). It is their own income plus no social pressure (because of anonymity, and independence of income) to stay away from bad boys that drives high rates of illegitimacy (and low rates of church going).

In times past, women would compromise because lowering the bar on acceptable sexiness was the only way to have a family. Now they can earn enough, with marginal government assistance, to have kids by sexy bad boys all they want. That's better, as Roissy notes, than a lifetime of a beta male's devotion. As the proprietor of Heartiste notes, "five minutes of Alpha beats five years of Beta."

Education, and males in the workforce, are directly related to sexual rewards on the lower class. Bad boys who work part time, deal casual drugs, engage in fruitless endeavors to "make it as a musician" and layabout, get the best women. The most beautiful, the youngest, the most fertile, the most willing. Often some of the most intelligent too. Bad boys, casual criminals, are sexier. That is why they dominant fantasies oriented towards women, be they vampires or warlocks or whatnot.

The path to sex, and fatherhood, is based on not life in the work-force and provider beta loser-dom. But rather pure male sexiness. This is the model in the Black ghetto and Mexican barrio. It is how most of the world orders itself sexually and socially. It is how most families are formed, and have been formed, in human history. It optimizes for female satisfaction, at the expense of wealth formation for all but a few.

A man who observes the behavior of the women around him, from an early age, at Fishtown, learns hard lessons. Regardless of what women say, the most beautiful and desirable of them, those who can have any man, give themselves to the casual, bad boy criminal lay-abouts. What you reward, and perhaps no reward is worth more, you get more of. What you punish (dutiful providership and steady blue collar work among men) you get less of.

What Murray misses is the sexual component. Late marriage by a woman in her mid-thirties with many, many sexual partners (between 30 and fifty is not out of the question), kids by another man or men, often ending in divorce, is not the same as the passionate devotion of a sixteen year old beauty, a virgin or near virgin, who only has eyes for you. And will happily bear you a child. Newsflash, young women are more beautiful than the older ones.

This is borne out by Murray's own statistics. The Super Zips live 1950's lives. They might have "only" $10 million dollars, and rest assured the drudge on Wall Street is not sexy, as being sexy takes hard work (George Clooney basically works all the time to be sexy, as does Brad Pitt, and your local drug dealer). There is not enough time for Wall Street mid-level honchos to be sexy, they are busy making money. But as "the Nanny Diaries" showed, "enough" money to buy say, a Summer home in the Hamptons, or at least rent one in the Summer, and all sorts of social settings, can mitigate un-sexiness among husbands. Can cause at least regular church going (the women have already sold out sexy for the Hamptons and society) and legitimate child-birth.

For the super-rich, well the money is no object, so marriages don't last long and like Hollywood demonstrates, illegitimacy is no barrier. The Middle class is increasingly sliding towards the sexy vs. money side of things. The lower class has no hope of upward mobility (here illegal immigration has taken its toll on White blue collar wages). So that's a problem.

Women WILL trade sexy men for men with money. Will sacrifice that sexiness, that thrill of danger, that pure excitement (and even real danger, as Rihanna again pursuing Chris Brown for another Ike Turner style beat-down shows). But it takes money. Real money. Even for the Middle Class, a nice condo is no longer enough. Not even a nice house. All that frenzy over marble and granite counter-tops was really the frustration of the middle class wife or girlfriend over her man's lack of sexiness. Drowned with status consumption.

In the current situation, it takes a house (at least rented, preferably owned) in the Hamptons or about $10 million or so annual income to keep the nuclear family intact. That's the amount of money most, though certainly not all, White women require for monogamy and abjuring sexy men.

[Note, I am sure "not all women are like that." Who cares? I am describing the collective actions of White women as a whole, in society, for both good — such as increased wealth, productivity, resiliency, and stake-holders, and bad — collapse of church-going, the nuclear family, men in employment, and the rise of the elites, the Super Zips in strangleholds on most institutions of this nation. This is not a conspiracy, or the actions of "devious Jews" or "Gramscian Frankfurt School theorists" making a "long march" through institutions, nor even "women are evil." Because they are not. However, neither are women comprised of pure good and supernatural wisdom, collectively. Women, like men, respond to incentives, for either society's good or bad. I would not say a woman pursuing a bad boy and having kids with him outside marriage is "wrong" individually. In a free country it is her choice. But the social cost is horrendous, when normalized and free of stigma.]

Solutions

Murray rightly eschews Big Government solutions to this problem. Though he notes correctly that America should reform Welfare to remove incentives to single motherhood. He is correct for a campaign to make the old, church going, nuclear family, men in the workplace, value education America return to Fishtown. But he leaves Super Zips alone.

Murray is only partly right, in the solutions because again he does not understand the cause — the sexual liberation of women, and the concentration of wealth and power among Upper Class White women, who switch votes based on personal attributes of candidates. Thus, getting their way, more often than not (the power of being the deciding votes).

Fishtown won't embrace those old virtues, unless the sexual liberation of women is matched by social stigma for choices that while maximizing individual happiness for the woman, causes disaster upon society. It must be a campaign directed by women, for women, with perhaps the involvement of a few Alpha males. Beta males must and should stay directly out of it. The Mothers Against Drunk Driving (MADD) campaign is a good one. Women respond to this social pressure and stigma very well, perhaps because being part of the group is far more important than for men. Everyone knows "loner" men and they form the backbone of male oriented entertainment from John Wayne to Jason Bourne. Women on the other hand are never depicted as loners in anything directed at them. They might form their own groups, but never set themselves off deliberately and permanently the way loner men heroes in movies do.

The solution is simply on the behavioral front, "don't be slutty. Don't be Snooki." Delivered by almost exclusively women, with a few sexy Alpha guys. That's it. A simple message. But one powerful given women's group behavior. [Which is both a weakness, and strength, forming the backbone of the Temperance and Prohibition and Civil Rights and Feminist and Environmental movements.]

On the incentive fronts, blue collar White guys, and White collar White guys, need to have incomes raised. Women will understandably fight tooth and nail to deny any reduction in their wealth (I would too) so that's a non-starter. But concrete action can be taken to increase earning power of White guys: deport illegal aliens (and their kids); increase military spending particularly ship and plane building; eliminate most legal immigration (and H1-B visas and variants); put import quotas on (increase local factory production); increase the ability to file and make money off patents (money to backyard tinkerers). Oil and energy production must be increased, vastly, and spending on various government make-work stuff killed.

These are all things that are difficult, but achievable. None will happen overnight, but all have the possibility of being enacted.

The most important strategic objective, however, is destroying the Hereditary Super Zips. A few observations are in order. Hollywood used to be filled with guys like Mel Brooks. A guy from nowhere, who rose to fame on writing really funny things, and pushing the envelope, not in just dirty words or taboos violated ,but form. "Get Smart" was the first zany sitcom, based not on a family but a complete idiot who parodied the James Bond smooth spy guy. Don Adams is another out of that mold, a guy who survived Guadalcanal and was a Parris Island Drill Instructor. Nowadays, comedy in Hollywood is very restricted to the Harvard Mafia. Want a job writing for the Simpsons, or Conan O'Brien? Better have graduated from Harvard. Only South Park, created by a couple of guys from Colorado, fits the old Brooksian Hollywood open to new talent that produces.

To destroy the Super Zips, it is necessary to destroy its ecosystem, the female driven consumerism. And all that is needed to do that is frugalism replacing consumerism. Buying only when needed, and on value and price, not status. The dirty secret of the Super Zips is how dependent either directly or indirectly they are on female-driven consumerism. Network and Cable TV, much of the movies, advertising, marketing, and whole swaths of government depend on either direct expenditures or indirect revenues and taxes derived from that. If Americans and particularly American women just bought say, 40% less, entire major portions of the Super Zips would collapse. Others, particularly Hollywood, would rely on entertaining people rather than just a profitable sub-group (see "the Help" the book and movie, and Oprah's career).

For the Super Zips will not go away quietly. They are happy to wreck America to get one more day in power.
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End of the Empires: News Corp and Apple

Both News Corporation and Apple Computer are in the news, with News Corp. sliding downwards in stock price, and Apple share up, based on the phone hacking scandal in Britain, and increased Iphone sales for Apple, respectively. But both organizations face a downward slope to being "ordinary" corporations, like Time-Warner, or GE, or Sony, or Microsoft. Both Apple and News Corp. rely on a single man, exclusively, to focus their organizations towards maximum profitability. By doing things differently than their competitors, and reaping considerable rewards. Neither man, of course, has a replacement and the succession is likely to be a disaster.


News Corp. is a highly leveraged, media company. It must make payments of about $1 billion every year to service its debt, mostly bonds. As long as the company generates that cash, it does quite well. The leverage results in higher returns for equity investors, who are basically taking risks (currently satellite TV expansion in the UK and Asia) with other people's money (the bondholders) while reaping the rewards. But the key is servicing the considerable amount of debt. Which means, basically, Fox News.

Fox News produces on its own, about $1 billion a year in operating profit. Enough to fund the payment on debts year in and out. The Film division last year produced about the same, but the Film division is highly variable. Some years it can produce even a loss, and other years perhaps more. News Corp. MUST make those debt payments, and bondholders watch the cash flow quite carefully, as do shareholders. No other division within News Corp produces anything like the money Fox News produces to service the debt every year.

And this is a problem -- because the successors to Rupert Murdoch are stupid. James Murdoch, Lachlan Murdoch, and Elizabeth Murdoch have been quoted as saying they wish to fire Roger Ailes and turn Fox News into MSNBC. Wendi Deng, Murdoch's current wife, has been quoted as saying the same thing. This will gain them the admiration of "respectable people." The Guardian and BBC will cease to attack them. Jeannine Garofalo, Bill Maher, and Whoopi Goldberg will be happy. So too will Sting, Trudy Styler, and Bono, along with Ashton Kutcher, Demi Moore, and Jamie Foxx.

But no one will watch. Fox News is extremely profitable, a money-making machine, because its costs are low, and advertisers pay through the roof to get its huge audiences, which dwarf the other players, who fight among themselves for the small group of (to be sure wealthy) White people who are liberal. Most non-Whites lack money (little Lexus purchasing among the Black and Latino community) and don't care about news (Latinos if they watch news watch it in Spanish, and Blacks at 12% of the population watch little news anyway). Even as the non-White population grows, their share of disposable consumer income is not growing much anyway. Making the demographic change of America outpacing that of the political/consumer change. Importing millions of dirt-poor illegal alien Mexicans, has not made them rich. Their kids, born in this country, remain poor also.

Therefore, the action is split among Whites, the rich liberal faction, which spends a lot of money on things like TD Ameritrade, or Lexus autos, and the like, and the vast working/middle class White consumer base, which buys Fords, Toyotas, and Budweiser. The market for the White Upper Class Liberals, is already saturated. NBC, CBS, ABC, MSNBC, CNN, CNN Headline News, Oprah Winfrey Network, Lifetime, the New York Times, the Washington Post, the LA Times, NPR, PBS, and more all compete for attention, time, and money. Anyone NOT an Upper Class Liberal (or who does not aspire to be one) has only … Fox News.

Fox News only makes money because no one competes with it. No other Media organization can or will "sully itself" to make money by being slightly less left-wing, slightly more middle/working class, than the upscale, liberal, upper-twenty-percent income folks who watch CNN. As of 2009, according the US Census Bureau, the top twenty percent in income numbered roughly 23 million households, and they make more than $100,000 a year. The number of people in the middle, the 60% center, make from between $20,000 and $100,000 a year, and number about 69 million households. The people at CNN and the NYT and NPR don't care about the middle/working class, the 60% of the income around the median. That group is an alien people, living in places like suburban Dallas or St. Louis, with interests, views, and incomes totally alien to the urban coastal hiperati that makes up the alternatives to Fox News.

Rupert Murdoch understand this. He knows, from a brief experience on a working-class tabloid early in his career, that the middle/working class if catered to on a social level (which is the fundamental basis of Fox News) can make a lot of money. Not so much in newspapers now, but certainly in TV news. And perhaps on the internet, eventually. Fox News has been picking up money left on the table by all the other competitors, by being slightly less hard-left and more middle/working class oriented. [Even so, they've avoided carefully describing the race of the Flash Mobs assaulting/lynching Whites this Summer.]

Regardless of how the phone hacking scandals play out, someone not named Rupert Murdoch will take over News Corp. soon. Murdoch is a man in his eighties, he simply cannot run the organization much longer. If not James, then Lachlan. If not Lachlan, then Elizabeth. If not Elizabeth, then Wendi Deng. One of them will succeed Rupert Murdoch, and do exactly what they have promised interviewers time and again: fire Roger Ailes, and turn Fox News into MSNBC. Very soon after that, the Film division will have a bad year, losses instead of earnings, and News Corp. will struggle or miss debt payments. And so begin a long, slow, NYT-like decline. All because the remarkable attributes of Rupert Murdoch, understanding that there is money to be made catering to middle/working class conservative sensibilities, cannot be duplicated in his family.

The same is true for Apple, regardless of increased Iphone sales for now. Steve Jobs is a very sick man. His company has been terrible without his leadership. Alone among Apple CEOs, Jobs understands that what he sells is a mixture of hip-glitterati envy, and convenience in making things "just work," be it a smartphone offering all sorts of handy and convenient apps (at the expense mind you of privacy and security), or a music player that integrates completely with your computer, or a store to buy music and video and books and applications, that integrates completely with your computer and various devices. In addition, Jobs understands the model of generally well paid engineers to produce high-end software and hardware, and the integration between them, producing mostly high-end results, for which the company charges a high-end price.

Absent Jobs, there is no one with the vision and ability to make Apple competitive down the road as Google/Android gets better and bigger and cheaper in smartphone offerings. Absent Jobs, there is no one to push personal computing into the next space, perhaps recording and classifying and moving around video from Satellite, Cable, and over-the-air broadcasting the way a TIVO or VCR does, only with Itunes capabilities and the ability to synch with a portable player to take wherever and whenever you want. Absent Jobs there is no one with both a design and engineering eye that can produce products that look beautiful and function well enough to inspire gadget lust among Apple's well-heeled buyers.

In the meantime, Apple has become trapped like most computer makers in China. Manufacturing (contrary to what Steve Wozniak, Apple Co-founder argued) has long been sent to China, decades past, like nearly all computer manufacturers. Making tighter integration with hardware and software, last minute changes, and quality control and supply chain shock insurance much, much harder. The CEO has to be even more on top of things, because the factory is not five minutes or five hours away, able to quickly re-tool and deliver a changed antenna, on an Iphone, for example. Or a different screen on an Imac. This makes getting it right the first time vital, and only Jobs has been able to do this. No other computer exec, including Bill Gates, has been able to make as many design wins on hardware/software integration as Jobs has done. This is the fundamental basis for Apple's success.

And its downfall. Other than Jobs, can any exec on the horizon offer more than Carly Fiorina style cost-cutting and job-shedding? A "me too" attitude towards commoditization, or pie-in-the-sky business consulting (Xerox's Diversity CEO, Ursula Burns is a good example of the futility of this approach). Apple is not going to compete with say, Oracle, SAP, and Sybase for business integration money. The company has no expertise and no ability to execute that strategy. For better or worse, Apple remains consumer-wedded, and that means a strategy of not being the low-cost leader, but easy to use, integration already done, high-margin leader. The only person in the history of personal computing to execute this strategy continually and successfully is Steve Jobs. He simply is not replaceable.

Now, Apple and News Corp won't fall right away. They won't go bankrupt and liquidate like Borders. Or Circuit City. Or Compusa. They can muddle along for a good long while, like Xerox, or Kodak, or GM, or Palm (before it was bought by HP). Zombie companies, subject perhaps to periodic bailouts, eking out a not-dead, not alive existence. But absent their visionary CEOs, neither company has the ability to make the money they used to, by consistently beating the competition through a strategy that is obvious but near-impossible to duplicate. In many ways this speaks to decadence and debauchment of the elites. That both Murdoch and Jobs beat them for so long by doing the clear and obvious. With never a thought to beat them at their own game.
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Sleazy I-Banks and the End of Nationalism Among Elites

The Wall Street Journal is reporting (link through financialbin, WSJ behind the paywall) in their dead tree July 5th edition, that big Wall Street Investment banks and commodity firms are snapping up metals warehouses. In turn, their business practices are driving up indirectly consumer prices. More evidence of the utter corruption of the elites, and the vast social distance and disconnect between elites and ordinary Americans.


The Journal reports that about 25% of London Metal Exchange stocks of Aluminum, are sitting in Goldman-Sachs and other big Investment bank-controlled warehouses. The total rental income is about $171 million (for all the owners, combined). The warehouses in New Orleans, contain about 59% of LME supplies of zinc, netting the owners a rental income of $70 million. Also in New Orleans, about 25% of LME copper nets annual rental income of about $16 million, and 73% of LME nickel supplies nets owners about $13.4 million.

These warehouses used to be independent, until Investment banks like Goldman-Sachs, and commodities firms like Glencore, bought them up in the past few years. Users of the warehouses like Coca-Cola, complain that they were lured in by cheap rental rates, but when they asked to pull their stocks out, were told they had to wait seven months, in some cases. Goldman releases only 1,500 metric tons a day (the minimum requirement by LME) of their stocks. Obviously a short-term play designed to drive up the prices of metals on the spot market (by restricting supply from warehouses) and possibly on the futures market as well.

Further, critics like can-maker Novelis, and Coca-Cola, charge that the I-banks and big commodities firms are using a "birds eye view" of what clients put in and request to be pulled out, to spot trends and trade off customer information in the commodities markets. You might recall, it was exactly this "trading off the customer's information" that was one of the more damning things to come out of the sub-prime meltdown financial crisis investigations, largely bearing out the charges made by Michael Lewis in "the Big Short" and various other critics. Historically Goldman-Sachs has been suspected of using customers as ways to gather an information advantage, and screw everyone in the market. The preponderance of Goldman-Sachs executives in the first Bush Administration, the Clinton Administration, the Bush II Administration, and the Obama Administration only furthers that accusation.

That accusation seems spot-on with the purchase of the metals warehouses. Formerly a "backwater" the warehouses don't earn much profit. Capital expenses are large (warehouses, guards, security, people to move the metal in and out, contracts with barges and trucking firms, it is no accident these warehouses are located in major ports or on industrial traffic rivers). The expertise in running large warehouses and synergy with what amounts to trading firms are nil. But ... the information to be gathered on what customers are doing with metals (storing them, or asking to take them out) can provide a key edge in trading the metals. With deals like sub-prime a thing of the past, basically Goldman-Sachs is looking for new people to screw over.

The ABCD firms that dominate basic commodity trading (Archer-Daniels Midland, Bunge, Cargill, and Dreyfuss) do so by having a huge network of spotters, counters, and other information/intelligence operatives in places like say, Abidjan, Ivory Coast, counting how much cocoa is actually being loaded into warehouses or shipped abroad. In many cases these networks providing intelligence took decades to construct (and are often highly illegal in the countries they operate in, many of them providing basic economic/commodity information that are state secrets). Agriculture is a tricky business, because sudden weather events can change almost every prediction, and often in the Third World expected harvests come in radically different due to rampant cheating one way or another.

For now, the big I-banks are seeking profits by ... well blatant manipulation of the metals spot and likely futures markets. Naturally this benefits metals producers, basically big mining companies like Xstrata or BHP Billiton. They get higher prices by restricting the supply sitting in warehouses. Of course, eventually the major users of metals will simply build warehouses themselves. And keep their data (what they put in and pull out) as private as possible. But if Coca-Cola or Novelis must build and staff their own warehouses (and nothing of course prevents them from doing so) their overhead becomes larger. Thus the prices they charge the customer in the end becomes higher.

What should have remained a staid, sedate business serving the specialized needs of big metals consumers in the US and elsewhere, has been turned upside down by what amounts to a set of elites with no boundaries or national feelings. Even Gilded Age Robber Barons had some sense of propriety, a shared nationalism that moderated the urge to gouge every last penny out of the average person. Even Standard Oil's John D. Rockefeller had limits:

 In spite of the formation of the trust and its perceived immunity from all competition, by the 1880s Standard Oil had passed its peak of power over the world oil market. Rockefeller finally gave up his dream of controlling all the world’s oil refining, he admitted later, “We realized that public sentiment would be against us if we actually refined all the oil.”

What we can expect is far higher prices, for consumers, in almost every product using metals: every can of soda, every bit of consumer goods containing copper (such as blue jeans with copper rivets or a laptop), or zinc, or nickel, will cost more. Eventually, trust-busting such as brought Standard Oil to heel will be needed. But laws themselves will not be enough. The "smart guys" at Goldman-Sachs will always be searching for a new customer to screw, with the end "screwee" being the average American. The same is true of the other I-banks: JP Morgan, in particular, comes to mind. So too the massive firms like Glencore, incorporated outside the US (and trivia time, formed by a buyout of Marc Rich, yes THAT Marc Rich).

The US has always had people trying to say, corner the silver market. These individuals usually came a cropper because there was always the possibility of new supply over the horizon. Mining companies could mine more silver. Politicians could bust up trusts and force supply onto the market. No one individual no matter how wealthy could stand up to the government that had to act at least sometimes to avoid massive pain on the part of voters. But the problem today has gone far beyond individuals into institutions, with the institutions themselves becoming rotten to the core.

The rot is the result of an elite that fundamentally lacks any identification with, or even understanding, of the ordinary people in the nations in which they live and work. The folks at Goldman-Sachs are not only from all over the world, the ones born in the US feel little loyalty to their fellow citizens. In a word, they lack nationalism. A tie that binds the highest of the elite, the King or the Prime Minister or the President, and the lowly private, janitor, and factory worker.

While an excess of nationalism in its worst form can result in folks goose-stepping down the Champs Elysee, that's akin to saying since food can make some people grossly obese, no one should ever, ever eat anything. That strategy is only viable for supermodels (who have apparently the super power of not eating anything, ever, and existing on cocaine and smokes). For everyone else, eating is essential. So too for nations, nationalism is essential. Like everything good in life, all is well as long as no one goes overboard.

The modern globalized world is very very good at putting some of the smartest people, and some of the most privileged and hereditary privileged people, in powerful groups and letting them run amok in screwing over their ordinary peers in nations powerful and weak alike. Blogger Half Sigma has done outstanding work noting the privileged, rich background of most of the New York Times reporters and editors. The same people essentially make up Goldman-Sachs, or Glencore, or JP Morgan's executives. Plus of course elites from India, China, and other places. Their loyalty is to themselves, their own institutions, and their own hereditary interests. Like mini-royal families in Medieval Europe, they lack even the notion of a nation-state, and national interests, and shared ties with fellow countrymen. They deny even the notion of a country, instead seeing peasants, serfs, a few middling tradesmen, all interchangeable with others in other places. The modern, international corporate world is very good at producing people like this.

Indra Nooyi may be CEO of Pepsico, but how much loyalty does she possess towards Pepsi's American workers? To Americans as a whole? Her career encapsulates the modern elites lack of nationalism. Positions at Johnson and Johnson in India, then a textile firm, then consulting with Boston Consulting Group and strategy positions with Motorola and Asea Brown Boveri. Although a naturalized US Citizen, her main appeal as CEO is her extensive ties to India's elite. I am quite sure Nooyi is a fine person, but Pepsico could not find a more qualified CEO? The results of her leadership have not been good, with Pepsi sliding to #3 among US sodas, trailing both Coke and Diet Coke. Nooyi is quoted as saying she took steps to push "healthy foods" like Quaker Oats and Gatorade and such, and not sell "flavored sugar water." Pepsi has been neglected, lacking promotion compared to Coke, and the stuff Nooyi likes (an elite taste) account for only 20% of the US Pepsico revenues.

PC makes you stupid. So does pushing trans-national elites at a company where most revenues come from US sales. An Indian born Hindu understands US consumer tastes? When her entire career has been from one "strategy" posting to another? Nothing selling, well flavored and colored sugar water? That is what Pepsico is. But the pressure and power of the elites is frightening. [Trivia time, in the CW show "Gossip Girl," one of the characters, herself a "rich girl" plans to get an internship under Nooyi.] Reasoned Sceptic notes that the business press has been light on Nooyi despite her failures to match Coca-Cola because she is both Indian and a woman. Muhtar Kent, Coke's CEO, is of course also foreign born (a Turk) but is a Coke lifer, having started selling Coke out of trucks across the US. If I wanted someone to sell flavored colored sugar water, I'd pick Kent over Nooyi. The former seems to understand (having spent most of his life doing it) how to sell that stuff, and the other doesn't. Both are elites of course, having spoken at Davos (one is always an elite if one speaks at Davos).

Any nation can withstand some corruption and greed on the part of its elites. Those flaws are part of human nature, and can at best be only curbed, not eliminated. But in the end, it is not laws (nearly always evaded in one form or another) that curbs the greed, ambition, and power of the elites. It is, or at least has been since the late 1500s and the rise of the nation-state, nationalism that has curbed the worst excesses. By instilling among even the most greedy, ruthless, and powerful of the elites, a sense that there are lines better left uncrossed. That squeezing every spare penny out of the populace was a bad job, and better go across the ocean and squeeze it out of some other poor person from another country. Nationalism, and nationalism alone, promises a small shelter, perhaps poor, but the only one the ordinary person has got, from greed and cruelty and abuse by the elites.

Goldman-Sachs, JP Morgan, and Glencore will always seek advantage. They will always be looking for an edge. As long as there remain limits to what they will do, limits instilled by national feeling and solidarity, then while not perfect, the situation is tolerable for most people, most of the time. Good enough. But without those internal limits, no laws, no regulatory agency, no "perfect administration by perfect people" (not the least because no human being yet born has been perfect) will suffice. Making the urgent task not regulatory reform but the return of ...

Nationalism.

Only that promises to restrain the otherwise un-alloyed greed and shadiness of institutions run by elites like Goldman-Sachs.
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Why Selling New York Is Important

Sometimes reality TV can be simply silly. A diversion of no consequence. History Channel's "Ice Road Truckers" or "Axe Men" fall into that category. Shows of interest mainly to a male audience, that has entertainment value only. No lasting cultural consequence like E! Network's "Keeping Up With the Kardashians" (feeding the princess fantasy by pushing the spoiled brat becomes the girlfriend of a wealth/famous Black athlete). Or "Teen Mom" on MTV, which has normalized (by making famous "stars" out of its participants) and encouraged teen pregnancy. But likely most important of all, is HGTV's "Selling New York." Which shows just how different the uber-rich really are. And how, well shockingly gay and female the spheres they inhabit really are, compared to that of ordinary people. Since the uber-rich shape the culture, through their immense wealth and power, this is important.




"Selling New York" follows (this season) three different real estate brokerages, focused on high-end real estate that only the super-rich can afford. What immediately strikes everyone is how, well gay the men seem. Absent the pater-familias of one agency (the Kleiers) who is apparently not allowed near the clients, focusing on finances, and management, there doesn't seem one normal, straight guy in sight. The women all seem shallow, brittle, immensely uptight and nervous. While the men seem just on the verge of losing it, both sexes coming off as immense phonies constantly afraid they will be found out. Everyone seems profoundly uncomfortable in their own skin (in a Nixon, walking the beach at San Clemente in a three piece suit and dress shoes way).

Everyone is focused on appearances and status-jockeying. No one really makes any real contribution to much of anything, other than salesmanship. All the people, men and women both, are utterly replaceable absent personal relationships with clients, and it is likely they know it, hence the gnawing anxiety.

The only likable client from the first season was the hair dresser making millions (an immigrant) who exuded calm self-confidence and common sense. Though eventually humoring his wife who wanted to build out a shell of an apartment, he figured if you paid millions of dollars, you might as well buy something already done and just move in. Seeing as he had both a business to run and three kids, that attitude made sense. Every other client exuded an attitude that stank, right there on screen. That they were indeed, better than everyone else, and god's own gift to mankind. Arrogance mixed with status-seeking seemed the order of the day.

And this attitude is everywhere in the US and global elites.

The Atlantic has a new article on the global elites. In it, this gem is written:

If you are looking for the date when America’s plutocracy had its coming-out party, you could do worse than choose June 21, 2007. On that day, the private-equity behemoth Blackstone priced the largest initial public offering in the United States since 2002, raising $4 billion and creating a publicly held company worth $31 billion at the time. Stephen Schwarzman, one of the firm’s two co-founders, came away with a personal stake worth almost $8 billion, along with $677 million in cash; the other, Peter Peterson, cashed a check for $1.88 billion and retired.

In the sort of coincidence that delights historians, conspiracy theorists, and book publishers, June 21 also happened to be the day Peterson threw a party—at Manhattan’s Four Seasons restaurant, of course—to launch The Manny, the debut novel of his daughter, Holly, who lightly satirizes the lives and loves of financiers and their wives on the Upper East Side. The best seller fits neatly into the genre of modern “mommy lit”—USA Today advised readers to take it to the beach—but the author told me that she was inspired to write it in part by her belief that “people have no clue about how much money there is in this town.”

Holly Peterson and I spoke several times about how the super-affluence of recent years has changed the meaning of wealth. “There’s so much money on the Upper East Side right now,” she said. “If you look at the original movie Wall Street, it was a phenomenon where there were men in their 30s and 40s making $2 and $3 million a year, and that was disgusting. But then you had the Internet age, and then globalization, and you had people in their 30s, through hedge funds and Goldman Sachs partner jobs, who were making $20, $30, $40 million a year. And there were a lot of them doing it. I think people making $5 million to $10 million definitely don’t think they are making enough money.”

As an example, she described a conversation with a couple at a Manhattan dinner party: “They started saying, ‘If you’re going to buy all this stuff, life starts getting really expensive. If you’re going to do the NetJet thing’”—this is a service offering “fractional aircraft ownership” for those who do not wish to buy outright—“‘and if you’re going to have four houses, and you’re going to run the four houses, it’s like you start spending some money.’”

The clincher, Peterson says, came from the wife: “She turns to me and she goes, ‘You know, the thing about 20’”—by this, she meant $20 million a year—“‘is 20 is only 10 after taxes.’ And everyone at the table is nodding.”
…
The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.

I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

This is indeed the attitude of the global elite. But it is also, very gay, and very female-oriented. With all that money, chasing ever higher status, status seeking itself finds massive inflation. With elites no longer even caring about their nation, or their fellow nationals (indeed contemptuous dismissal of America is the norm), this attitude percolates downward from the new hyper-global hyper-rich hyper-elites.

America does indeed have an aristocracy. Not one of ancient families seeking ancient, feudal rights, but a recent one, no more in many cases than twenty years old, and international in allegiance. More akin to princes of the Catholic Church than anything else. Seeking not just temporal wealth, but spiritual dominion over the globe. Thus telling everyone how to live, what religion to worship, and what the rites are. The arrogance of a foreigner, a man not really American (foreign born) telling Middle Class Americans to take a pay-cut is astonishing. Yet there it is, and the attitude could certainly be replicated by any of the clients or brokers featured in "Selling New York."

What makes this toxic, is that this attitude is often aped, in the White Female College Educated class. The sorts of folks who read the New York Times, or New Yorker, or even (yes) the Atlantic, along with Vanity Fair, in an attempt to find out what the "important people" are thinking, saying, and doing. If Blue collar and lowbrow women are the targets of US Weekly, People, the National Enquirer, and Star Magazine, then the New York Times and New Yorker are aimed squarely at the White College Educated female reader.

You'll see the same dismissive attitude towards America, Americans, and the middle class in all sorts of entertainment aimed squarely at this upscale female demographic. Don't believe me? Watch any of these NBC shows: Chase, the Event, Law and Order Los Angeles, or Special Victims Unit. Cable shows like Nurse Jackie, Californication, Damages, and Mad Men certainly exhibit this same attitude. As does, of course, Fox's Glee, and almost anything on the CW (teen girl only) network. Movies made by and for this demographic, including Green Zone, Towelhead, American Beauty, Michael Clayton, Up in the Air, and Scott Pilgrim vs the World fall into the same attitudes.

Its not that every TV show or movie needs to be a "salt of the earth" worshipping Grapes of Wrath update. Rather, that the arrogant dismissal of all forms of national sentiment, attachment, or even concern for the American middle class is self-evident over and over again. The White middle class suburb is even depicted as hell on earth (for those tragically hip elites making do on only $20 million a year, it must be).

At least part of the solution must be Nationalism and populism, combined, to smash down this attitude. To intimidate, as much as possible, even the thinking of such sentiments. To suppress their spread from the global elites to those who follow them most closely: White college educated women.

Because make no mistake, the key battle for America will be fought in the minds of college educated female White professionals. They are the key, swing vote for victory or defeat in the alliance of the Democrats and Obama. Possession of nearly all of them gives forces aligned against Obama, Democrats, and the global elites at least the possibility of victory. If even a significant portion of college educated, White professional women hold to the attitudes of the global elites, then the global elites win. Get to hollow out America, in pursuit of greater wealth and more important to them, more status. Posturing as the great philanthropists (and anti-White anti-Racists) by discriminating against the "average White guy" as Ace of Ace of Spades noted, the pursuit of status by the Liberal Aristocracy is characterized by ever greater amounts of money chasing status. Hence the Gates Foundation, explicitly excluding White kids from any aid. While Gates pours money into Africa (to demonstrate his nobility). As Ace notes, a great deal of this pours out of the media, which tends to form the opinions particularly of the White female college educated professional, due to their status anxiety and low position of the PC driven caste system.

The media cannot be changed. They will always be hyper-liberal, because they aspire to please the global elite, their prospective employers, patrons, and backers. The media can be intimidated, however, by populist and nationalist anger. Nationalism has to be part of the equation, as well as populism, and enemies of both need to be made explicit examples of. By being given, of course, the full Wikileaks treatment. There are few media figures, whose personal failings, flaws, and family histories can survive unshaken, the unblinking eye of full disclosure and examination. Destroy a few, say a Katie Couric here, to the point where they are no longer welcome at Davos, and the point is made.

Otherwise it will be a "Selling New York" world. Where everyone is frantically nervous, desperate to appease the new global elites. Who rule with a nasty, celebrity-derived touch.
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The Elites Are Not The Elite: Harvard, Yale, Caltech, and Harvey Mudd

Clueless Anne Applebaum, at the Washington Post, writes the usual Liberal diatribe about how the lumpenproletariat don't know their place, and the wonderful leadership provided by the much smarter Ivy League people like Barack and Michelle Obama. Applebaum's argument, such as it is, amounts to the Ivy League taking the best and the brightest, sweeping away the old WASP aristocracy, in a glorious and multi-racial, multicultural technocratic elite, whom the resentful peasants are too stupid to realize are just that much smarter and better better than you! While the usual female-driven snobbery applies, it is useful to examine the flaws in Applebaum's thinking (such as it is) and examine just why she gets it so spectacularly wrong.


First, Applebaum correctly notes that the Ivies offer full scholarships. She neglects to note that the Ivies only offer the scholarships to fairly unqualified Blacks and Hispanics. Such as the pitiful Michelle Obama, whose senior thesis amounted to "I'm Black and You're Not!" in a poorly written manifesto against "White America" (that gave her a free ride to Princeton) in the typical angry, entitled, Affirmative Action reaction to the inner knowledge that against the best, they just did not measure up outside desired (non-White) skin color.

In How Diversity Punishes Poor Whites, Professor Russel K. Nieli of Princeton (hopefully this is enough for Applebaum, he's not at "icky" Cal Tech or Carnegie-Mellon) observes how "diversity" does indeed prefer lesser qualified Black and Hispanic students over more qualified (by test scores) White and Asian students.

When college presidents and academic administrators pay their usual obeisance to "diversity" you know they are talking first and foremost about race. More specifically, they are talking about blacks. A diverse college campus is understood as one that has a student body that -- at a minimum -- is 5 to 7 percent black (i.e., equivalent to roughly half the proportion of blacks in the general population). A college or university that is only one, two, or three percent black would not be considered "diverse" by college administrators regardless of how demographically diverse its student body might be in other ways. The blacks in question need not be African Americans -- indeed at many of the most competitive colleges today, including many Ivy League schools, an estimated 40-50 percent of those categorized as black are Afro-Caribbean or African immigrants, or the children of such immigrants.

As a secondary meaning "diversity" can also encompass Hispanics, who together with blacks are often subsumed by college administrators and admissions officers under the single race category "underrepresented minorities." Most colleges and universities seeking "diversity" seek a similar proportion of Hispanics in their student body as blacks (since blacks and Hispanics are about equal in number in the general population), though meeting the black diversity goal usually has a much higher priority than meeting the Hispanic one.
…
Most elite universities seem to have little interest in diversifying their student bodies when it comes to the numbers of born-again Christians from the Bible belt, students from Appalachia and other rural and small-town areas, people who have served in the U.S. military, those who have grown up on farms or ranches, Mormons, Pentecostals, Jehovah's Witnesses, lower-middle-class Catholics, working class "white ethnics," social and political conservatives, wheelchair users, married students, married students with children, or older students first starting out in college after raising children or spending several years in the workforce. Students in these categories are often very rare at the more competitive colleges, especially the Ivy League. While these kinds of people would surely add to the diverse viewpoints and life-experiences represented on college campuses, in practice "diversity" on campus is largely a code word for the presence of a substantial proportion of those in the "underrepresented" racial minority groups.

On an "other things equal basis," where adjustments are made for a variety of background factors, being Hispanic conferred an admissions boost over being white (for those who applied in 1997) equivalent to 130 SAT points (out of 1600), while being black rather than white conferred a 310 SAT point advantage. Asians, however, suffered an admissions penalty compared to whites equivalent to 140 SAT points.

The box students checked off on the racial question on their application was thus shown to have an extraordinary effect on a student's chances of gaining admission to the highly competitive private schools in the NSCE database. To have the same chances of gaining admission as a black student with an SAT score of 1100, an Hispanic student otherwise equally matched in background characteristics would have to have a 1230, a white student a 1410, and an Asian student a 1550.

Other studies, including a 2005 analysis of nineteen highly selective public and private universities by William Bowen, Martin Kurzweil, and Eugene Tobin, in their 2003 book, Equity and Excellence in American Higher Education, found very little if any advantage in the admissions process accorded to whites from economically or educationally disadvantaged families compared to whites from wealthier or better educated homes. Espenshade and Radford cite this study and summarize it as follows: "These researchers find that, for non-minority [i.e., white] applicants with the same SAT scores, there is no perceptible difference in admission chances between applicants from families in the bottom income quartile, applicants who would be the first in their families to attend college, and all other (non-minority) applicants from families at higher levels of socioeconomic status.

[Ed: In other words, poor Whites have little chance at the Ivies and top universities no matter how smart they are, as the top universities want Blacks and Hispanics, who are lesser qualified by test scores, to give limited scholarship money. Poor Asians fare far better, they are not those icky poor Whites.]

…
Distressing as many might consider this to be -- since the same institutions that give no special consideration to poor white applicants boast about their commitment to "diversity" and give enormous admissions breaks to blacks, even to those from relatively affluent homes -- Espenshade and Radford in their survey found the actual situation to be much more troubling. At the private institutions in their study whites from lower-class backgrounds incurred a huge admissions disadvantage not only in comparison to lower-class minority students, but compared to whites from middle-class and upper-middle-class backgrounds as well. The lower-class whites proved to be all-around losers. When equally matched for background factors (including SAT scores and high school GPAs), the better-off whites were more than three times as likely to be accepted as the poorest whites (.28 vs. .08 admissions probability). Having money in the family greatly improved a white applicant's admissions chances, lack of money greatly reduced it. The opposite class trend was seen among non-whites, where the poorer the applicant the greater the probability of acceptance when all other factors are taken into account. Class-based affirmative action does exist within the three non-white ethno-racial groupings, but among the whites the groups advanced are those with money.

When lower-class whites are matched with lower-class blacks and other non-whites the degree of the non-white advantage becomes astronomical: lower-class Asian applicants are seven times as likely to be accepted to the competitive private institutions as similarly qualified whites, lower-class Hispanic applicants eight times as likely, and lower-class blacks ten times as likely. These are enormous differences and reflect the fact that lower-class whites were rarely accepted to the private institutions Espenshade and Radford surveyed. Their diversity-enhancement value was obviously rated very low.

…
Besides the bias against lower-class whites, the private colleges in the Espenshade/Radford study seem to display what might be called an urban/Blue State bias against rural and Red State occupations and values. This is most clearly shown in a little remarked statistic in the study's treatment of the admissions advantage of participation in various high school extra-curricular activities. In the competitive private schools surveyed participation in many types of extra-curricular activities -- including community service activities, performing arts activities, and "cultural diversity" activities -- conferred a substantial improvement in an applicant's chances of admission. The admissions advantage was usually greatest for those who held leadership positions or who received awards or honors associated with their activities. No surprise here -- every student applying to competitive colleges knows about the importance of extracurriculars.

But what Espenshade and Radford found in regard to what they call "career-oriented activities" was truly shocking even to this hardened veteran of the campus ideological and cultural wars. Participation in such Red State activities as high school ROTC, 4-H clubs, or the Future Farmers of America was found to reduce very substantially a student's chances of gaining admission to the competitive private colleges in the NSCE database on an all-other-things-considered basis. The admissions disadvantage was greatest for those in leadership positions in these activities or those winning honors and awards. "Being an officer or winning awards" for such career-oriented activities as junior ROTC, 4-H, or Future Farmers of America, say Espenshade and Radford, "has a significantly negative association with admission outcomes at highly selective institutions." Excelling in these activities "is associated with 60 or 65 percent lower odds of admission."

There is much more, read the whole thing, but this is the meat of the argument. Which is entirely true. The Ivy League, and the top near Ivies such as Stanford, University of Chicago, Northwestern, and the like, are not, repeat not meritocratic. They merely take full-freight paying rich White kids, and unqualified non-Whites at a full or near full ride. Poor White kids particularly from rural, Red States in ROTC or 4-H need not apply. Ever.

Indeed, the career of Ivy-League educated non-Whites is pathetic. Michelle Obama made a nice living as a professional Black woman, at a pricey Chicago Law firm, before being hired at $300,000 a year by the University of Chicago to persuade poor Blacks not to use the University of Chicago Hospital system. The post was created when her husband Barack was elected to the Senate and abolished when he left to assume the Presidency. Even with the fairly substantial amounts of money both Obama's earned, they still could not pay off their debts, and ran a high-living lifestyle at the edge of their income, as Michelle Obama complained constantly.

Nor has Obama's time in office proved "brilliant," as the vacationer in Chief he's done what he did as Harvard Law Review President: play a lot of golf, and take a lot of time off.

Obama himself is hardly a rags to riches story. His grandparents lived in a Honolulu high rise, and sent him to an exclusive private prep school, one of the best in the nation. His father was a big shot in the Kenyatta government, until political indiscretions and drinking pushed him out of favor. Obama's mother was a CIA connected Phd, and Obama himself enjoyed patronage from a wealthy, Pakistani family at and after his time at Occidental College. Obama certainly wasn't ordinary, in terms of wealth, and power, and connections his own was certainly larger than John Kerry's for example, before he married Theresa Heinz.

For those doubting the total incompetence of the Ivy League, here is Sheila Jackson Lee, D-TX, graduate of Yale and the University of Virginia noting the lasting peace between North and South Vietnam:



Shades of Hank Johnson worrying about Guam tipping over:



Government, the legal system, entertainment, all are run by an Ivy and Near-Ivy elite that is … STUPID.

As bad as the Government is, filled with low-IQ people such as Johnson, or Lee, or Maxine Waters, or Charlie Rangel, from "safe" non-White massive majority districts, entitled, corrupt, and monumentally stupid, in a way that is aggravating (neither Sarah Palin, or Christine O'Donnell, working class White women, would have thought Guam would tip over or South Vietnam "at peace" with North Vietnam), the other main institutions of society are filled with the same group of entitled, arrogant and stupid "diverse" (non-White) Affirmative Action people, and the trustafarians. For every Barack Obama, there is a Patrick Kennedy, or John Corzine, or a Michael Bloomberg. But the media, or what is laughably known as "journalism" is no better: Exhibit A, Anderson Cooper, son of Gloria Vanderbilt. [H.L. Mencken would have laughed him out of town, before media became a "genteel profession" for "respectable" member of what Joel Kotkin calls the Gentry Liberals.] Entertainment is just as bad, from the Harvard Mafia entrenched at the Simpsons, to the same at Saturday Night Live, to TV in general (JJ Abrams, Joss Whedon, and many others hail from Ivies and near Ivies).

And, just how "smart" are the Ivy and near Ivy schools, anyway?

Yale's 2009 Admissions data is here.. Harvards is here. Caltech's is here. Harvey Mudd's is here. Leaving us with the following tables. The first is the 75th Quartile, basically the scores of the top admits on the SAT (grades vary so much by school that A's are not comparable across schools, much less school districts).

75th Quartile 2009 Data
School	SAT Verbal	SAT Math	SAT Writing
Ivies	790	785	785
Tech	770	795	770
Difference	-20	10	-15

For the top admits, the Ivies have better scores in Reading/Verbal, and Writing (negative means Ivies scored higher), but the tech schools do marginally better in Math.

25th Quartile 2009 Data
School	SAT Verbal	SAT Math	SAT Writing
Ivies	695	695	695
Tech	685	755	671.5
Difference	-10	60	-23.5

At the bottom, 25th Quartile, the Ivies again come out on top in Reading and Writing, but the difference in Math is very large, nearly 60 points.

The Ivies, and there is no reason to expect a radical change in the admissions policy nor quality of student since the 1970's when Affirmative Action really hit, are not filled with smart people. They are filled with verbally adept folks who don't know much math. Certainly not against the elite of the elite, the folks at Caltech or Harvey Mudd. And the demands of a modern society do not require a lot of free-flowing BS. All the verbal gymnastics in the world won't get an oil spill plugged. Or Chilean miners rescued. Or an economy restarted. Instead, we have a President so monumentally stupid, he's astounded that there is no such thing as "shovel ready infrastructure projects" that he touted, personally, as being the solution to the jobs crisis with the Stimulus bill. Because any infrastructure project requires about a decade and a half of legal wrangling before work can begin.

Something immediately observable to any ordinary person reading a newspaper, by the way.

The Ivy League and "meritocratic" elites are resented because they've failed. Failed to restart the economy, failed to deal with Muslim terror, failed to deal with Iran's nukes, failed to deal with demographic decline (except celebrating the demise of the ordinary White person majority), failed to deal with the broken nuclear family, failed to deal with a tidal wave of illegal immigration leaving America as Mexico Norte, with all the failure that implies for people stuck here, failed to fix the myriad ways in which their monumentally stupid policies wrecked America, indeed in anything and everything, you can say the elites failed. Failed to keep newspapers going, except the Wall Street Journal. Failed to keep broadcast TV networks going. Failed to keep GM and Chrysler going. Failed to keep Wall Street Investment Banks going. Failed to stop the subprime crisis (Barney Frank and Barack Obama being two of the worst offenders, the former offering the excuse of his "fear of Bush" making him not see the obvious).

Outside of Ronald Reagan, and Bill Clinton, both of whom left festering problems of Islamic terror, to crop up with later Presidents, nearly every President since Eisenhower has been nothing but an abject failure. Amiable dunces, lecturing and preening moralizers, devious compilers of enemies lists, or all three in the case of Obama. Jeff Zucker, Harvard University, ran NBC into the ground. The Sulzberger family has made the NYT a national joke, destroying shareholder value not seen since the AOL-Time-Warner deal.

Ordinary people have given about fifty years to the elites, and have nothing to show for it but a ruined economy, cheap Chinese electronic junk, declining real wages since the 1970's, mass immigration turning them into sudden (and discriminated against) minorities in their own country, and the prospect of even more of the same. Meanwhile, the elites have put up a "No Ordinary Whites Allowed" sign in the means to entry into the elites: the Ivies and near Ivies.

Why did O'Donnell brag she did not go to Yale? The same reason all the media looked down their nose at Sarah Palin for going to Community Colleges and the University of Idaho. Class.

In this country, rich White elites partner with non-White aristocrat Affirmative Action (idiots) to provide a perfect Idiocracy. Not technocracy. If anything America's leadership has gotten stupider. From Obama's insistence that Democratic Party politics take precedence over National Security, and belief he can "order" events and jihad in Afghanistan and Pakistan to his liking, to the use of near zero interest rates to "push on a string" the way Japan's two lost decades did, in "stimulating" growth (i.e. making carry trade profits for Wall Street), the idiocy of the elites knows no bounds, and ordinary people know about it.

Indeed, the extraordinary growth of the Teaching Company lectures and other places offering college style lectures, to ordinary people interested in learning, and reading for themselves, is astonishing. As idiocratic as the elites have become, to the point of worrying about Guam tipping over or citing the peace between North and South Vietnam, ordinary people have become the repository of more knowledge than ever. Famously pointing out the obvious forgery that Dan Rather swore was genuine in the infamous "Air National Guard Memos" alleging special treatment for George W. Bush during Vietnam. Who knew that the Texas Air National Guard had typewriters producing memos straight from the default setting of Microsoft Word, complete with superscript "th"s for dates and such? Ordinary men and women in their pajamas, certainly, but not elite journalist Dan Rather.

And this is why Applebaum, really, has it in for ordinary people. They are a threat. Anyone and everyone can do what she can do, better. It took me a few hours to write this post, and do the research, and format the tables, out of Excel. Modern computer technology gives me the same tools as Applebaum, and I am not alone. Anyone can do what I do. It is not that hard. Applebaum, meanwhile, is failing. Failing to check her assumptions. Failing to research the profound failure of the elites. Failing to note how at the bottom, the "elites" are far less skilled in math, than those from the true elites, the schools like Harvey Mudd or Caltech.

People from Yale, Harvard, Stanford, Columbia, Brown, Princeton, and all the rest have wrecked America. It will be up to those from Caltech, Harvey Mudd, Georgia Tech, Carnegie Mellon, Toledo, Idaho, Wyoming, Utah, Texas A&M, and schools like them to rescue America.



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UCLA Goes Private: The Start of the Higher Ed Bubble Popping?

UCLA is Going Private. Akin to the scene in "Robocop" where a character shouts excitedly, "We're taking this city private!" UCLA's Anderson School of Business wants to give up state funding and rely on private donors. This just might be the inflection point of the Higher Education Bubble popping.


Glenn Reynolds, Instapundit.com blogger and University of Tennessee Law prof, has predicted this bubble bursting. So has Michael Barone. The Seeking Alpha blog has predicted this as well (no, not the Roissy style Alpha, the Alpha indicating active return on an investment, usually associated with a benchmark index like the S&P 500 Index). The American Enterprise Institute Blog has also predicted this. The chart at the top of the story is courtesy the AEI Blog at the link.

It is worth noting, a year at the UCLA Anderson School of Business MBA program costs roughly the same as a year at Yale as an undergrad, around $50,000 a year. Yale is a little more. An MBA student graduating from Anderson, without any scholarships, can expect in excess of $100,000 in student loan debt. Most will never pay this off.

But it is worth noting what Top Tier schools like UCLA's Anderson School of Business is all about. Anderson is 15th in the US News & World Report ranking of business schools. UC Berkeley is seventh, and Harvard, Stanford, and MIT are the top three respectively. These schools are not selling unique learning. Accounting, Finance, and Marketing are the same at Harvard, as they are at say, UCI or Chapman University or any number of schools. What these schools are selling is exclusivity, for rich White people, and the exclusive social network (like a pricey Yacht Club or Golf Club) that allows for power-brokers to form backscratching arrangements. Prospective donors like the folks from Blackrock or Pimco, don't give charitable money for nothing. They expect things. Such as exclusive access to a social network comprised of only the most exclusive business school students (read: rich and connected) in the world.

First, the ugly details from the Financial Times:

A leading business school in the University of California system is preparing to forgo public funding amid increasing uncertainty about the state’s economic health and California’s ability to pay for higher education.

The UCLA Anderson School of Management plans to fill the funding gap with money from private donors, bolstering a roster that includes business figures such as Larry Fink, the founder of BlackRock, and Bill Gross, the founder of Pimco.

Its decision to opt out, which is awaiting the approval of Mark Yudof, president of the UC system, is a clear indication of the broad changes that lie ahead for the network, which was established in the 1960s with a public mandate to provide world-class education to deserving students regardless of their ability to pay [Emphasis Added].
…
California faces a budget deficit of more than $19bn while the UC system itself has a funding shortfall of $800m, forcing schools and colleges in the network to cut classes and raise tuition fees. This has prompted a wave of protests on campuses across the state.

Judy Olian, dean of UCLA Anderson, told the Financial Times that opting out of public funding was a “creative solution” that would allow the UC system to reallocate the money to UCLA’s underfunded undergraduate programmes.

“The UC system is arguably the greatest public university system in the world,” she said. “But we’re not going to keep it that way with the old model.”

About 18 per cent of UCLA Anderson’s $90m budget currently comes from state coffers, which includes the tuition students pay to the school. Tuition costs will rise as the school opts out of public funding but Ms Olian said the increase would be in line with previous years: tuition fees at UCLA Anderson have steadily risen as money contributions from the state has fallen, she said. “That train left the station a long time ago as state support declined.”

Tuition at UCLA Anderson costs $41,000 a year to California residents and $49,000 to non-residents but is likely to rise to a rate comparable with top-tier private business schools such as Wharton and Stanford when the school opts out of public funding. The move is set to come into effect by next summer.

Public funding for higher education in California has been squeezed in recent years. Thirty years ago, 10 per cent of California’s general budget was spent on the UC and California State systems and 3 per cent was allocated to prisons.

But in the past three decades spending on prisons has risen to 11 per cent of the state’s revenue, while higher education’s share has slipped to 7.5 per cent

Note by the way, the change from the mission of the original UC system, built by Pat Brown, and the old-style Liberal Democrats, to educate the mostly White middle and working class sons and daughters, regardless of ability to pay, to one of already, without the changes, skyrocketing fees. A full $41,000, and nearly $50,000 for out of State Residents (yes, Illegal Aliens pay in-state fees and benefit from Affirmative Action). The UC system, built for the White Middle Class, now aims to keep them out as much as possible.

Increasingly, an MBA from a "good school" i.e. one of the top twenty schools in the US News & World Report, or Businessweek rankings, is mandatory for management positions (those that are left) in marketing and corporate finance, accounting, and the rest. A few employers may tap regional schools that dominate their area (Notre Dame comes to mind, as does Emory, or University of Miami), but for the most part, it is Top 20 or bust, just as in Law Schools.

As Law has become something that is really, forbidden as a profession to make living wages for most of America's White Middle/Working class, so too is Business Management slipping away. Salaries at Ole Miss range from $66,000 to $47,000, with the lower end being more likely (it is the government vs. private sector salary, considering most graduates take the Mississippi Bar Exam and government is the only major employer in the state, well the lower salary is the most likely one).

The LA Times has a similar story:

Anderson, which offers master's degrees and doctorates, hopes to wean itself off state funds by 2015 and to replace that $5.6 million a year with additional private donations and tuition levels closer to that of private business schools. Under the plan's projections, annual tuition for California residents in a full-time master's program at Anderson would rise gradually from $41,000 now to about $53,000, including a $5,000 discount for in-state students.
…
Some critics say that Olian's plan, coming after several rounds of UC-wide fee increases, is another step toward privatizing the prestigious public university system. Olian and her supporters deny that, saying that Anderson would remain under UCLA's academic governance and policies, including its tenure and pension rules.
…
Business schools at two other public universities, the University of Michigan and the University of Virginia, have successfully implemented similar plans, and others are considering it, experts say.

Those schools "want to control their own destiny," according to Jerry E. Trapnell, executive vice president of the Assn. to Advance Collegiate Schools of Business, the schools' main accrediting agency. In addition to seeking more stable funding, they hope to respond more nimbly to market demands for new programs, Trapnell said. A major challenge would be to ensure enough financial aid to maintain the income and ethnic diversity [Emphasis Added] of public institutions, he said.

Anderson is not the only UC graduate school to consider doing without most public funding.

UC Berkeley's Boalt Hall School of Law explored a similar plan several years ago and could be a candidate for such changes in the future, along with other UC business and law schools. But officials said relatively few departments or schools in the UC system could forgo state support because of limits on what students in many programs are willing to pay and the difficulties of tapping alumni donations in many less-lucrative fields.

Anderson enrolls about 720 students in its full-time master's programs, which receive state support, and about 1,100 others in several part-time and executive MBA programs, which do not. There is also a small doctoral program in management. The school recently placed 15th in U.S. News & World Report's national rankings of graduate business schools, which put Harvard, Stanford and MIT in the top three spots. UC Berkeley's business school tied with Dartmouth's for seventh place, and USC's Marshall School placed 20th.

At Anderson, about a third of the tenure-track faculty are paid salaries higher than $200,000 a year, campus officials said. If the new plan is approved, the business school would be free to raise salaries even higher, without seeking approval from the university's central administration.

Officials say the plan is feasible because the school, which now has an annual budget of about $96 million, would keep all fees and tuition revenue it generates while forgoing other state funds that have been shrinking. The business school would continue to pay UCLA for facilities and other shared costs, and UC would still compensate Anderson for teaching undergraduate courses in accounting.

The plan assumes that donors would be more willing to support a self-sufficient school and that private gifts and endowment income would grow from about $10 million to $14.5 million annually. Olian also hopes to eventually triple the school's current $102-million endowment, which is much smaller than most of its public and private competitors.

Note three interesting things. Other public universities, including University of Virginia and University of Michigan, both elite Business (and Law) schools, have implemented similar plans. UC Berkeley may yet implement a similar plan. Next, the plan also allows payment of faculty at really, alarmingly high salaries, with no public input or check. Are a third of professors on tenure track really worth more than $200,000 a year? Certainly not for teaching, MBA professors being notorious for the most part for being relatively poor teachers (Grad Assistants do most of the teaching and exam preparation and grading). For research, perhaps, but who would gain access (preferential at that) to the research, and where would the research be directed? For the benefit of the State of California? The students in the program? Or large donors?

Lastly, note that "A major challenge would be to ensure enough financial aid to maintain the income and ethnic diversity." Or code words for "no working or middle class Whites need apply." Only rich White folk, and non-Whites (mostly Black and Hispanic) as non-threatening blocking pieces and nascent Barack Obama's to use as political favor banks.

This I think, is the inflection point. Where there are not enough students to make Graduate Schools profitable, not even with massive credit (student loans are not forgivable, nor can they be discharged in bankruptcy like mortgages). Unless massive fund-raising efforts concentrated on a few, fabulously wealthy donors, provide and indeed, produce a privileged social network, basically a country club with a research arm and a place to make deals.

This is not the end of the Education Bubble. But it certainly marks an inflection point. And a major challenge, politically, culturally, and socially.

Are voters (mostly White, middle and working class, even in California, where Mexicans just don't vote, mostly because many are illegal aliens) going to support a UC that excludes their sons and daughters? That has become, a country club for Rich Whites and privileged non-Whites, with a research arm attached? Can the state or indeed the nation afford the end of the California and larger American Dream? What kind of changes will the sudden, massive dashing of upward mobility for most White men and women in America, and the massive display of privilege by both rich White folks and selected non-Whites (smarter Blacks and Hispanics) do to the simple cohesion of America and California?

Are voters going to be OK with Professors at schools where their sons and daughters can never go, making over a quarter of a million dollars a year? For essentially, part-time work? Will citizen gadflys and Glenn Reynolds "Army of Davids" expose the inevitable sweetheart deals that UCLA Anderson and other schools do with major supporters like Blackrock and Pimco? Will this be another Bernie Ebbers, or Tyco CEO Dennis Kozlowski related scandal (appropriating resources, in this case public ones instead of shareholder resources for private gain?)

Neither Meg Whitman or Carly Fiorina (being part of the wealthy, corporate elite that believes keeping the great White unwashed, as opposed to selected non-White unwashed) are likely to make this an issue. This is the price of RINO-ism. But yes, inevitably even in California, someone will make this an issue. The betrayal of the California Dream. The death of middle and working class White aspiration. The closing off of the professional managerial ranks to non-connected, non-wealthy, White boys and girls. The rise of the new, connected Black and Hispanic elite. A nation of Barack Obamas, or Tony Villaraigosas, and a few Kennedy types, or children of corporate masters, and a nation of suddenly poor, angry, and resentful folks denied upward movement? Because they are White, and middle to working class? This bodes ill.

This is not a Jacksonian moment. It is likely to be far more severe, and far-reaching, in the inevitable White middle-working class reaction.

If the elites wanted to create their own White middle-working class revolution, they could not do more to provoke it than killing the UC system for White middle-working class people.
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