Do you think He knows what “P/E ratio” stands for? I’ve listened to the video a couple of times and, even allowing for off-the-cuffiness of the exchange, it’s not clear to me that he does.
UPDATE (10 March 09):
Delta Foxtrot says I’m being cryptic. So here are some deeper observations that flesh out this particular complaint:
Well, the superficial observation is that at first and second listening Obama apparently refers to the “profit and earning ratios” of publicly traded companies. The problem with that is that the meaning of “P/E ratio” is “price / earnings ratio”, not “profit / earnings ratio”. To a market already badly shaken in its faith in our 44th President, to confuse “profit” with “price” is a faux pas that would only send the market down further. He should consider bringing a TelePrompTer before he says anything at all about the markets.
But this is a quibble. Perhaps he meant to say, “corporate profit [COMMA] and [IMPLICTLY: price / ] earnings ratios”. However, this reflects a deeper confusion about the meaning of the P/E ratio.
The “price” in “P/E ratio” means the per-share stock price times the number of shares outstanding. What determines the price? Conventionally, a company is ‘worth’ its net present value (NPV). The NPV is the total present value of all anticipated future net profit streams, discounted using the usual formula for time value of money. In quant form, the present value is discounted from the future value by a factor that depends geometrically on time, that is, PV(t) = FV(t)*exp(-k*t), where k is an interest rate.
Now, for a company working in a ’static’ (slow-growth) industry, like, say, a paper company, next year’s earnings are likely similar to this year’s earnings. So if you compute the NPV of a static income stream, the NPV is just (this year’s earnings) divided by (the discount interest rate k), e.g. if k=8%, the P/E should be about 12.5. So ceteris paribus, the companies in a given sector should all be priced with similar P/E ratios. This tells an analyst whether a stock is overpriced or underpriced. Small changes in a company’s prospects can shift the actual P/E up or down. If a company is in a high-growth sector (like computers 10 years ago), the P/E ratio can be very high, because the anticipated growth of the company’s revenue can exceed the discount rate(!). So many tech stocks were trading at P/E’s over 100 (until the bubble burst)….
So, here’s the rub — if a company, or an entire sector, has P/E’s lower than historical averages, it means that investors believe that profit streams are likely on a downward trend. It doesn’t necessarily mean that the company is a great buy. And when an entire market has low P/E, it means that the assessment is that the economy is in a long-term downward spiral. It doesn’t mean the market is a good buy at the low P/E. It just means that investors have taken into account all the currently available information and have concluded that the net present value of each and every stock that has a low P/E, is low.
So, when Mr. Obama gets up in front of international film crew and says, “Hey! Buy now! P/E ratios are really low!” that’s well, kind of ass-backwards, not to mention a little scary. The P/E ratios are low because he has convinced the market he is out to ruin the market system, or at least, he really doesn’t care enough about capital markets to learn the first thing about them.
More thoughts about the P/E ratio: stocks in general behave a bit like “martingales” (link to a book here), that is, a “martingale” is a random variable that changes erratically as time passes, in a way that the expectation of a future value is equal to its current value. Stocks are a bit different than pure martingales because of the time value of money (”TVM”), but the martingale concept can still be applied with some adjustment. What that means, in short, is that there really isn’t anything like a time when “stocks are a great buy” or when “stocks are overpriced”. Unless you know something about the future that the market doesn’t know. For example, you might “know” that Obama is about to repudiate all the economy-hostile measures he has promoted (like the trillion-dollar deficit). In that case, the market assessment of values (tied to the projection of the future profit stream) for nearly all stocks would increase. And before the repudiation, stocks would be a great buy. Or you might “know” that Obama is going to announce the forced merger of GM, Ford, and Chrysler into a single government-run “American Motor Company” — prior to the announcement would be a good time to sell your stocks (or buy “puts”).
Nonetheless, one of the ways in which stocks do not simply behave like TVM martingales is that their price includes an implicit risk deflator. That is, the projection for the expected value of GM stock might be that profits will start to grow year-on-year at say, 5%, leading to a per-share price of, say, $100. But there might be considerable uncertainty about the projection — some analysts might predict a 3% yearly growth, others, 7%. The effect of the uncertainty will be to depress the stock price. Even though the expected value of the net present value of the future profit stream is $100 per share, the uncertainty might drive the stock price to, say, $90 per share. The difference is called a “risk premium” by analysts. If the uncertainty grows, the stock price declines even further.
Now, it is quite apparent that a huge risk premium is attached to stock prices right now, in addition to the penalty exacted for the impacts of massive deficits, the impending cap-and-trade tax, and massive tax increases on the productive class. Not all of this is Obama’s fault, of course — we live in interesting times! But inasmuch as the market incorporates all available information, including, e.g. North Korea’s pronouncement that shooting down their missile will spark a wider conflict, Obama’s incompetence in foreign relations also exacts a toll on the markets.
Now, the thing is, as time passes, projected risk diminishes — a year from now we will know what GM’s profit in 2009 will have been. So, a year from now, we will have a better, albeit still incomplete, idea of how Obama’s policies will play out. By March 2010, we will know if he got his trillion-dollar deficit passed, we will know if foreign investors abandoned Treasury securities or stuck with us, we will have a better idea how the November 2010 elections will turn out. Thing is — even if the news is bad, removing the uncertainty can drive the market up. The catch is, as time passes, uncertainty can also increase. If Obama’s actions in the domestic and foreign policy arenas become increasingly erratic, it may keep the markets depressed even as the economy recovers.
Monday, 23 March 2009 at 11:12
I like your comments in general, but i think you do yourself a disservice by latching on to (unjustified) Republican talking point concerning the current administration. (I also think you over estimate the power of the President over the national economy).
Specifically you refer to the “massive tax increase on the productive class”. First, it’s not massive. Nor is it , really, an increase (depending on your perspective of course). the tax increase is actually extending the Bush cuts by a year, rather than making them permanent. i realise that it was the intention all alng that, when time came for them to expire, that they would be made permanent. Calling them temorary was a fiction (hopefully and presumably) advanced to disguise the long term effect of them on the USG’s balance sheet. Still, extending them for a year instead of forever isn’t a tax increase anymre than my loss from not shorting the DJIA on inaugaration day is a real loss
Further, the taxes merely go up to the level they were at the end of the Clinton administration. None of Clintons policies tanked the economy, since it remained strong through his term and into GWBs term(exactly when it went sour is an interesting question, but it was sometime in the past decade).
Lastly, you conflate “productive class” with “upper class’. Maybe you don’t consider 250 grand per year upper class, but it’s more than 5 times the median family income,wich I would definitely consider to be well-off. Anyway, to suggest that people working assembly lines delivering mail, nursing aren’t productive, while stock traders are is fairly contrary to what I consider prductive. In fact, my colleagues at the USPS considers us (carriers) and clerks (when we’re being generous ) productive and our supersivors (well short ofthe top tax bracket) to be people who never actually work themail. When you get high enough in our hierarchy to earn #250,000 you’re talking about the top people in regional and the upper falf on L’Enfant plaza, and their only discernible contributionto moving themail is to issue edicts about mandatory work methods without consideration of their efficiency. In fact, many of us (like me) think that their ultimate goal is to destroy the service so that Congress will go along with privatizing it, on the assumption that they’d still be running the show, just getting compensated like CEOs of comparably sized private companies.
Switching subjeects smoewhat, I’ve concluded that theprimary reason Obama picked and cntinues to support Geithner is that the financial sector will look at him and senior economic advisers like Summers and Volker as a sign that Obama will continue the national governments policy of making life comfy for bankers and other financial types. While we might not immediately think that Geithner-Volker-Summers means that shareholders and current management at the major banks will be protected at all costs, bankers will get that message; they know these people. Volker, for example, has proven that he’s willing to drive unemployment up as far as is necessary to destroy inflation. Inflation favors lenders over debtor, Volker underscored the fact that the role of the Federal Reserve is to pursue policies that favor the mortgage holder over the mortgage payer. (Inflation , for instance, really helped middle clas people who bought houses right after WW2; they bought a house now (after the recent slide) worth a hundred thousand for two or three thousand, and then paid with their then current wages (Feynmann made $5,000 dollar per year at his first teaching gig at Cornell. Similar jobs now rake in 1340 thousand or so- The house he orginally bought for 3 times his annual income can now be bought outright for a couple paychecks.
Thursday, 26 March 2009 at 02:07
Hey, Dave, great to have you visit here!
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A year ago I, too, would have belittled the power of the President to affect the economy. But the situation today has a through-the-looking-glass feel to it, don’t you think? Consider that six weeks ago Congress passed a trillion-dollar ’stimulus’ bill (okay: $787 billion… that’s 1 decibel lower than a trillion…) without even reading it. The bill that was passed had hundreds of hand-written (!) insertions. A TRILLION DOLLARS. WITHOUT EVEN READING IT. Just because the President said it had to be passed without delay. Do you recall the ’stimulus’ bill that Clinton proposed in 1993? $65 billion, I think? That was too much for even the heavily Democrat 103rd Congress to swallow. Now we’re got a trillion-dollar ’stimulus’, plus a requested trillion-dollar budget deficit for 2010. This isn’t just inflation, it’s megalomania.
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Not to mention the ’stimulus’ bill contains provisions that are simply staggering, like a mandate that my doctor send electronic copies of all my medical records to the federal government so some czar can dictate my diabetes treatment.
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And today we have a situation where the President is demanding the power to set salaries across major industries. This is insane. The President has not a clue about how wealth is created, yet he demands more and more power….
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No, I’m not conflating “productive class” with “upper class” — I am simply using the definition employed by economists. It doesn’t matter if you spend 60 hours a week volunteering at the local free clinic — if you’re not paid, you contribute ZERO dollars to GDP with your service. I think it’s you who are confusing “work” (a noble thing) with “production” (an economic thing). My wife and I “produce” somewhere north of a quarter million dollars of “domestic product” every year, even though what I do is far less “socially useful” than garbage collection. If you don’t mind my saying, this is a typical confusion of left-wing economic criticism, that somehow “salary” (production) should be commensurate with “work” (activity). The failure to understand that salary is determined by market dynamics and not by moral arbitration is at the root of a lot of waste and tragedy over the last few hundred years. As an aside, I would note that social class in this country is driven more by wealth than by income. My wife and I have a high income, but we are not wealthy.
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You write “none of Clinton’s policies tanked the economy” but I demur. In Bush 41’s last year of office the economy grew 4.2% in real GDP, at a steady rate (4.2, 3.9, 4.0, 4.5 percent annual growth rates in the four quarters of CY 1992). Clinton’s tax increases were part of the systemic problem that cut that growth rate in half, and then to zero. In Clinton’s last year in office, the economy grew 2.2%, and most of that growth was in the second quarter. The third quarter of 2000 even had negative growth. Clinton was also the beneficiary of the personal computer boom, which kept the economy growing even as the federal government started to suck money out of the economy by running budget surpluses. But — the economy is a complicated machine with lots of moving parts, with different people in different branches of industry and government throwing different mixtures of sand and oil in the gears, so I understand how someone could have a different interpretation.
BBB
Thursday, 26 March 2009 at 22:12
A year ago I, too, would have belittled the power of the President to affect the economy. But the situation today has a through-the-looking-glass feel to it, don’t you think?…
Friday, 27 March 2009 at 11:05
It seems most of my reply was dropped. So, yes- the numbers in todays economic world aremind-boggling. I remember-not that long ago- when 50 million shares was a heavy trading day. Now a billion before noon is common. And the budget figures are staggering; however, as a per cent of GDP they aren’t.
You read things into this administrations actions that I dn’t. For instance, the medical records provisions I don’t see as a power grab, particularly since Obama seems intent on keeping private insurers as a key compnoent, and not to be aiming for some kind of UK-ish National health. Not that I would automatically object if he were, but what’s relevant is that I don’t think that’s what he even is after.
Likewise, I don’t see him trying to set salaries, except in cases where the employer is only “solvent” because of government support.
Agreed,, we could jaw endlessly about the effects of Clintons policies. And a lot of the current mess cqan be laid at his feet, led by Larry Summers, who’s back. Indeed, the things Clinton did that were so deleterious were things that one normally associates with Republicans (deregulation). And yes, the rise of PCs made the 90’s a strtange era. Inflation,e.g., was attenuated drastically by plummeting memory costs. Further, applications of such technology- antilock brakes for instance- made nominal increases in auto prices “not inflation”, but rather an improved product. My only real point there is that Clinton era taxes rather manifestly didn’t kill industry.
I do think you’re confusing personal productivity with earnings. Yes, prductivity is measured in dollars, but the share of dollars you garner is not necessarily related to the number of dollars you create. A succesful con man, I would argue, produces nothing, no matter his tax bracket
I also disagree that a Dr working at a free clinic produces nothing. The production is manifested in medical services that an indigent person recieve that would ordinarily require payment. Not charging for a widget you made doesn’t make you an idler, nor the widget not of value.
Certainly none of the economists I’m familiar with would argue that Madoff was productive but the guy who wrote Lotus 1-2-3 was not.
Friday, 27 March 2009 at 18:03
I just noticed that von Mises spent twenty odd years as a professor at U of Vienna, where Hayek was his student. Was this unproductive?
On the subject of your post, I wouldn’t make anything of O’s reference of ‘Profit/Earnings ratio’ he just mis-spoke.
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I’m sure yu’re aware that more than a few economists don’t think the proposed trillion dollar deficit is ‘economy destroying’, except by not being large enough On a permanent basis, yeah, that’s not good. Facing a 4 trillion dollar shortfall in demand (it is argued by some I incline towards their arguments, but I’m really not competent to judge) a trillion dollars is not enough, and when it fails, it won’t be polically possible to get more
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On a different topic (somewhat) I see that Geithner et al want to install more regulation on institutions ‘too big to fail’;Simon johnson (among others, like me)(http://www.theatlantic.com/doc/200905/imf-advice) argue that if they’re too big to fail they’re too big to exist. Wasn’t Timmy working for johnson at the IMF when he didn’t pay his taxes, because turbotax somehow misled him to ignore the check the IMF sent him to cover those, with a letter to sign and return affirming that he had done so? No, he was there before Johnson never mind.
Saturday, 28 March 2009 at 04:14
And the budget figures are staggering; however, as a per cent of GDP they aren’t.
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I don’t think you’ve looked at the numbers. The Obama deficits are unprecedented in peacetime, as a percentage of GDP. See the Heritage Foundation summary, or the graphic at Greg Mankiw’s blog.
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I’ll repeat I’ve never been a deficit hawk. Almost every year of my life, the federal government has run a deficit. Deficits of 1-2% per year are simply not destructive. But now we’re in a situation where, for no good reason other than the Utopianism of the party in power, we will be running deficits an order of magnitude bigger. Who knows where this will lead?
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I am skeptical that any economists endorse Obama’s deficits. Where on earth did you get the figure that there is a 4 trillion dollar ’shortfall in demand’? The economy has NOT shrunk by 25%. On top of the two links I’ve already given, you may have noted that the Congressional Budget Office has also criticized the Obama budget. Can you point us to any economist who says a 12%-of-GDP deficit is a good thing?
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I assume von Mises was paid to be a professor. Ipso facto he was being productive, in the economic sense
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My only real point there is that Clinton era taxes rather manifestly didn’t kill industry.
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Take a look at the stock price history of Microsoft. It wasn’t just taxes that strangled the golden goose — it was also the Clinton Justice Department, which succeeded in halting the growth of Microsoft and killing the tech boom through antitrust litigation.
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I do think you’re confusing personal productivity with earnings. Yes, productivity is measured in dollars, but the share of dollars you garner is not necessarily related to the number of dollars you create. A succesful con man, I would argue, produces nothing, no matter his tax bracket
I also disagree that a Dr working at a free clinic produces nothing. The production is manifested in medical services that an indigent person recieve that would ordinarily require payment. Not charging for a widget you made doesn’t make you an idler, nor the widget not of value.
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GDP measures the total production of goods and services in the economy. The usual formulation is GDP = consumption + gross investment + government spending + (exports - imports), or, GDP = C + I + G + (X - M). To the extent that dollar transfers to a ‘con man’ fall in one of these categories, it is part of GDP; however, note that theft, for example, does not contribute to GDP. If I remove a ten dollar bill from your wallet while you’re not looking, that is not part of GDP. But if I sing you a song while you’re waiting for a subway, and you toss a ten dollar bill in my guitar case, that is part of GDP (it’s taxable, too).
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Your comment about the pro bono work reveals you are confused about this. The flow of dollars in an economy is distinct and in the opposite direction to the flow of goods and services. These are different kinds of flows, in fact, for services, it doesn’t even make sense to track the ‘flow of service’ through the economy.
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Your initial objection seemed to be that I was using the term “productive” to refer to activities that economists deem to be part of gross domestic product. I think your argument must be with someone else (probably someone dead) because I am using absolutely conventional terminology to refer to conventional concerns about economic growth.
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Having said that, there are shortcomings and numerous critiques of using GDP, as currently constituted, to measure economic activity. The Wikipedia article on GDP has a nice summary. However, it does not confront the root of leftist discomfort with modern economics, grounded in Marx’s labor theory of value. Which is, in a word, crap.
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BBB
Sunday, 29 March 2009 at 17:18
I am skeptical that any economists endorse Obama’s deficits. >I assume von Mises was paid to be a professor>The usual formulation is GDP = consumption + gross investment + government spending + (exports - imports), or, GDP = C + I + G + (X - M).
Sunday, 29 March 2009 at 18:00
This is frustrating. First my comment was deleted, except for the backquote, then an attempt to fix that was just rejected. Try again.
If you doubt that mmany economists endorse defeicit spending fiscal stimulous ala Keynes you need to get out more. The only person i can definitively cite as claiming Obamas deficit is too small is Krugman, but I’ve read others- I just don’t want to say DeLong and Simon Johnson without checking. i know DeLong, as well as Krugman, have cited the 4 trillion dollar demand shortfall, citing in turn some governement/fedReserve statistics.
von Mises was not paid as a Professor- that was my point. On that topic, I confess to thinking of production as increasing net social utility. To that extent we’re probably on different pages
My whole point about theft is that, since stolen money is taxable income, increasing the tax rate on e.g. B Madoff is not taxing the productive class, it’s taxing the upper class. I will agree that there is considerable overlap.
I’d go on, but that’s the main parrt of what I’ve been trying to say for too long already.
Monday, 30 March 2009 at 15:20
Sorry you’re having problems with the blogging software — I’m just using the (buggy) default installation of WordPress that is spoon-fed by my hosting service. Perhaps someday I will download and install an updated WordPress, but not today.
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I don’t want to criticize Krugman here, because that would be an ad hominem argument. But I will point out that he is a pretty far to the left, and a sufferer of BDS to boot. He lost a lot of credibility with me when he published a book with this cover. But that is beside the point.
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In any case, the only link I could find for Krugman’s quote of a demand shortfall is this brief note, which linked to a projection by the CBO. However, Krugman’s note cited an output “shortfall” of $2 trillion, not 4, over the next two years, not in FY2010.
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As an aside, you might want to note that Krugman’s specific assertion is deliberately misleading: he writes, “According to the CBO’s estimates, we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion.” Note that the CBO statement is that the GDP “shortfall” is 7% per year, not 14%. If you take two years worth of “shortfall” and compare it to one year’s GDP, you can call it 14%. But that is a dishonest way to discuss GDP, especially if you are trying (ludicrously) to argue that a 12%-of-GDP deficit is “not enough”.
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And here’s the real killer: the way the CBO defines “shortfall” is relative to an idealized economy, that is, they construct a straw-man “potential GDP” that assumes a high level of resource use. The economy never performs at this ideal level. In point of fact the CBO estimate is that only in FY2009 will real GDP contract, and then only by 2%, not 7%. In FY10 and beyond, growth is positive — it just doesn’t reach the “potential GDP” level.
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So again, we see that a deficit of 1-2% of GDP would be “normal” and stimulative. A 12% deficit in these circumstances is terra incognita.
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In re Keynes, if we’ve learned anything about macroeconomics since the Great Depression, it’s that it matters what you spend the money on. Keynes took an “aggregationist” approach, treating all government expenditure as equally stimulative — which is a zeroth-order result that matches data only if you fudge all the elasticities correctly. But blindly applying the same factor for all government expenditure is stupid and wasteful. There are better ways of managing the economy.
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In re production as net social utility, I recognize that it has been a long-cherished dream of the left to construct such an analytical instrument for managing and directing the economy. In practice, this never works. No one has successfully managed to capture “social utility” in a quantity that can be used as a yardstick against which to formulate policy. GDP is an imperfect measure, but at least it works, more or less. Our ability to quantify economic performance, even crudely with GDP, has been fundamental to our economic success over the last century. You’re welcome to keep trying to formulate a “social utility” metric, but I’m trying to discuss economics, not justice.
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BBB
Monday, 30 March 2009 at 23:16
This is not at all at odds with how I use “production”, and presumably ok by economists, since i lifted it from wikipedia and no ones changed it since yewsterday.
“In microeconomics, production is quite simply the conversion of inputs into outputs. It is an economic process that uses resources to create a good or service that is suitable for exchange. This can include manufacturing, storing, shipping, and packaging. Some economists define production broadly as all economic activity other than consumption.”
I don’t see anything there that implies that someone giving away their product is not being productive (volunteerism), nor does it implie that people that have higher incomes are more productive, although I’ll admit that that is often the case.
Utility does get talked about in econ, although my use stems from my history as a philosophy student. I wouldn’t think of Locke and Mill as leftist, and in fact they had a large influence on the notorous “founding fathers”
I may have mis-recalled the number I got (from both DeLong and Krugman), but I’d have to dig through lots of archives and I’m willing to let it go, other than to note that 1.2 trillion is still less than 2 trillion, so on it’s face it doesn’t seem excessive, that is, of course, assuming the forecast-estimates are accurate. WEstimates are estimates and forecasting-particularly the future- is tough. Still, your best forecast/estimate is the best you have to work with. And yes, I realize the alleged shortfall is from a maximally pe4rforming economy.
Still, I agree with those that say better to err long than short here. Gertting out of deflation is hard at best; inflation we know how to beat-take the money away.
Thanks for not getting into a war of ad hominem. I certainly don’t take Krugman to be the voice of God, just one of many smart economists. FWIW, he may be liberral but he’s not relilably a democrat- he’s as quick to call Clinton or Obamas policies dumb as he iwas Bushes, although he certainly thought GWBs (and the current GOP leadership) to be off-the-scale dumbMost of the economists UI read would, per you, be very liberal. Most, but not all..Gary becker certainly isn’t a leftist. I don’t think johnson or Delong are either, but they’re certainly left of you
But my interest in economics is as economics. That it is bound up in politics mnakes it hard to seperate out, and also I would want to use economics to pursue my idea of justice etc., just as I would my understanding of physics and biology (although they don’t get as entangled as econ does-economics is directly involved in happiness, while physics not so obviously and directly so. I think you understand my point. And,fwiw, our conception of what’s good is probably far closer to eaach other than might seem. Differences stand out, but the overwhelming number of case where we agree goes without saying. (of course, te same coould probably be said of us and Mao, but I’ll let you undercut my claim
Tuesday, 31 March 2009 at 05:01
A further comment/exampple concerning the conflation of income and productivity. For a citation I’ll give you http://delong.typepad.com/egregious_moderation/ , the 3-30-09 entry. he llinks to another article 9which he quotes almost entirely), but that’s pay via subscrition.
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Jim Calhoun waas paid 1.6 million dollars this year to coach u Conn’s basketball team. As it happens, the market for labour here is not free- a cartel called the NCAA controls it, and the primay employer of basketball players, the NBA, instituted a rule (practically) requiring prospective employees to work in the NCAA for at least one year. Those players are paid in scholarship money- the figure they give-an NCAA average- is $29,500. (and these peoppe are strictly limited in outside employment too- they can’t flip burgers for extra income). IIRC correctly, there are 15 players max on the team, for a rough salary of 450,000 total. Note that thats valuing tuition at what UConn would charge a reguklar student. Since only 1/4 of this players graduate, that’s ascribing a dollar value for something bartered that is probably in excess of it’s true value to the player. That’s irrelevant to the claim you see coming.
. Without quibbling a bit about the production-value of UConn basketball, or denying that calhouns contribution to te (financial) success of the program is greater than any individual player, I think it’s screwy to ascribe that much of the value to Calhouns productivity, and that little to the players. Further, the Universities willingness to pay him that much is, likley, related to the bargain they’re getting on the players labor.
It’s one thing to count these compensations up to arrive at a “Uon basketnall Product” and later the US GDP,. it’s wrong to think of Calhoun and his assistants as the “productive” classhe
I’m sure you see shades of labor theory of value here, but I wouldn’t go so far myself- in this case the player labor happens to be the product, which is sold at market
Much as I love jayhawk basketball (while my family is from near Lawrence and I’ve lived here since before I attended KU 30 years ago, I went to HS at a school that won the Indiana HS state tournament. I’mn a born basketball devotee with strong ties to KU) I would still like to see the cartel that is the NCAA disbanded. if Universities want to field wholly-owned minor league sports teams, fine, but pay the player a market wage. If they want too go to school, they can pay. Tuition can certainly be part of the pay package for that matter. But i don’t attribute the teams athletic or financial success to Bill Self to the degree indicated by his salary ( a lot of the success financially can be attributed to many people, many dead, who created a p[program with lots of goodwill value.)