Monday, May 30, 2011

What Would Spock Say About Affirmative Action?

Affirmative Action, like most liberal policies has positive intentions, but when you explore its underlying assumptions and concrete manifestions, you encounter a host of problems. The ACLU presents an interesting argument for affirmative action, namely that it is justified on the grounds that diversity enriches classrooms and campuses:

"A culturally and racially diverse environment enhances the quality of our educational system because it prepares students to live and work effectively in a global society. Diversity enriches students' educational experience by exposing them to different races, cultures, languages, philosophies, and ideas both inside and outside of the classroom. By valuing diversity as a goal, the University of Michigan's admissions process ensures that all students, regardless of background, benefit from being immersed in an intellectual and social environment akin to what they'll experience in American life."

While this may be valid, it is important to explore the underlying assumptions and implications. When we assume that an individual will enrich a classroom or corporation simply because of their race or ethnicity, we are assuming that they possess noteworthy differences in values, culture and conduct that stem from their identity. Afterall, if their differences are simply cosmetic, how will they "broaden their classmates intellectual and social environment?" There are multiple problems with this notion:

First, there is a great deal of convergance between students of similar class and educational levels. For example, the white, black, hispanic and asian medical students I met were virtually identical in values and conduct. In fact, I can say with confidence that the upwardly mobile and erudite African-American medical students that I met had far more in common with their white counterparts than with poor and working class African-Americans. So, while the presence of diverse classmates may help make students comfortable interacting with people of different backgrounds, I cannot see how it categorically enriches their experience. Of course, my friendships with diverse individuals enriched my university experience, but not because of their background, but because of the wonderful qualities they possessed as individuals.

Second, students who were truly distinct from their classmates in culture and conduct, rarely interacted (beyond a bare proffesional level) with classmates outside of their group. For example, while there was a good deal of friendship, dating and intermarriage between secular Jews and assimilated Asians, Orthodox Jews, devout Muslims and unassimilated Asians rarely formed friendships outside of their ethnic circle. And the friendships that do exist between culturally distinct students very rarely touch upon their culture and traditions. In other words, I never went to church with my Armenian Orthodox friend or discussed Hindu Philosophy with my Indian friend. I went out with them to the pubs on Friday night, drank beer and hit on girls, just like I did with my less diverse buddies.

Third and most importantly, assuming that someone is distinct in culture and conduct because of their identity logically contradicts assumptions that underly anti-discriminatory efforts. It is correctly considered unjust to make negative assumptions and discriminate against someone because of their background. For example, to not rent to some because you you believe that all African-Americans behave distinctly as tenants is illegal and immoral. And to not admit an applicant into your university because you believe that the norms and conduct of Jewish-Americans is distinct from other students, is equally impermissable.

With good reason, the landlord must only reject the individual, based on their credit, income and rental history. And the university must only decline the individual if they don't meet their uniform requirements. In other words, we must never pre-judge a person because of their background. But, in effect, isn't that what the ACLU's argument is asking us to do? Does it not encourage us to make assumptions about a person's characteristics and conduct, based on their background? To ask us to engage in positive prejudice (assume that an individual possesses a set of positive traits because of their ethnic identity) and reject negative prejudice may be appealing, but as the great Spock would say "it's highly illogical." And FYI, Spock became the First Officer of the Starship Enterprise not through affirmative action, but because he was the best candidate!

Addiction Intervention For Illinois

Illinois, we, your family and friends have gathered here to confront you about your addiction to government spending. It is hurting you and the people around you. By every definition, your have a behavioral addiction:

"a recurring compulsion condition whereby a person engages in a specific activity despite harmful consequences to the person's health, mental state, or social life.[4][5] Behavioral addiction is considered harmful or deviant if it results in negative consequences for the person addicted and those with whom they associate."

I know that you keep saying that you can stop anytime, but for years, you have been spending way beyond your means to the point were you have billions in unpaid bills, billions in debt and even more in unfunded liabilities, yet you are unable to make serious budget cuts. You blame this on everyone but yourself, you blame this on "revenue issues," when Illinois has among the highest tax burden in the country. Enough is enough! We are going to cut you off until you are ready to face your problems!

Illinois Is On 'Verge Of Financial Disaster,' State Treasurer Says

llinois is "on the verge of a financial disaster" as payments on the state's debt have skyrocketed, Treasurer Dan Rutherford said on Monday.

Illinois faces an estimated $45 billion in principal and interest payments on its outstanding debt over the next 25 years, up nearly four-fold from the $12 billion owed in 2002, according to a position paper from the Republican treasurer, who took office in January.

Adding to the state's debt burden is $140 billion in unfunded pension and retiree health-care liabilities and $8 billion of currently unpaid bills, the paper said.

"Every household in Illinois is responsible for the repayment of $10,000 to reimburse our bondholders in the coming years," Rutherford said in a statement, adding that unpaid bills and pension and health-care liabilities would boost that total to $42,000 per household.

Illinois' widening structural deficit, huge unfunded pension liability, inability to pay the state's bills on time, cascading bond ratings and its propensity to borrow its way out of financial problems have made the state a major worry in the $2.9 trillion U.S. municipal bond market.

"We need to cut our spending and break our unsustainable borrowing cycle before we realize a further financial disaster," Rutherford said.

Even with a big income tax rate hike passed in January, Illinois is still spending about $5 billion more a year than it receives in revenue, according to the position paper, which also said the state's low bond ratings have resulted in higher borrowing costs compared with other states.

Governor Pat Quinn has been pushing the legislature for anywhere from $2 billion to $8.75 billion of bond authority to pay off bills and other obligations incurred this fiscal year.

His office said in a statement on Monday that this plan is not new borrowing, but a restructuring of debt the state owes to vendors and service providers who have been waiting months for payments.

"Governor Quinn is 100 percent committed to making good on all bills due and feels restructuring debt the state already owes at attractive rates is the least costly option for taxpayers in order to address this bill backlog," the statement said.

Copyright 2011 Thomson Reuters. Click for Restrictions.

Sunday, May 29, 2011

Don't Throw Away A Dog Because Of Its Fleas (and other useful political advice)

In the last year, I have had the pleasure and frustration of debating politics with a good, astute friend of mine. In the course of our discussions I have encountered some flawed lines of reasoning that I believe lead many citizens to make uninformed decisions. Here are a few points worthy of your consideration:

Don't Throw Away A Dog Because of Its Fleas: My associate has categorically written off the Tea Party largely because of the presence of some extreme fringe elements. But, in any open, dynamic, democratic movement, some undesirable individuals will enter and inevitably the opposition will focus on them as a means to invalidate the entire movement.  Those familiar with history will recall that this was also the case with the Civil Rights & Anti-War Movement; their opponents chose to focus on the presence of a few communists and radicals as a means to evade a more substantive debate. The wise course of action is to focus like a laser on the core issues and policies in question.

Focus On The Desirability Of A Movement, Not Its Followers: Frequently my friend will point to the supposed characteristics of Democrats over Republicans as grounds for voting for the former. While I can understand the intuitive appeal of this line of reasoning, history shows that it is spurious. For example, outstanding cultural figures, like the Noble Prize winning poet Pablo Neruda and the philosopher Jean-Paul Sartre were vocal supporters of communism, in fact Mr. Neruda wrote an Ode to Stalin! And the much esteemed philosopher, Martin Heidegger was supportive of nazism. Equally, conservative thought is not invalidated because of Sarah Pailin and other buffoonish followers. Again, my advice is to base your decisions on the validity of a philosophy and a policy.

Focus On Actions, Not "Values": Many voters determine who they will vote for based on the stated values of a candidate. GW Bush was able to garner votes through his support of "family values" and "conservative principles." And Obama energized many voters with his "progressive values." But, when we look carefully at GW Bush's policies, we can find few that were truly conservative; domestic spending, entitlements and even regulation grew under his watch. And in spite of Mr. Obama's rhetoric, he has continued many of his predecessors policies, including military intervention against non-belligerent nations, corporate welfare and the presence of Wall Street insiders in his cabinet.

Think More Like An Accountant: Much of President Obama's rhetoric is very appealing; after all, who does not want "health care for all" and a "green revolution," but when we approach his policies like an accountant, they become deeply troubling. Anyone who has seriously looked at the hard numbers of the federal debt and unfunded liabilities cannot possibly look at President Obama in a favorable light and will see the need for radical reform of entitlements.

You Don't Have To Choose Between A Giant Douche Or A Turd Sandwich: An increasing number of voters have become completely disenchanted with most Republican and Democratic candidates, as demonstrated by the 83% disapproval rating for congress.. Rather than vote for a candidate they vote to keep out the more distasteful option, much like the South Park satire in which students are forced to choose between a "Giant Douche" and a "Turd Sandwich." For example, my good friend has expressed very strong misgivings about President Obama, but will vote for him because he "refuses to let the horrible Republicans back in..." Equally, a great many conservatives are turned off by the Republican prospects, but are willing to swallow the bitter pill in order to "throw Obama out of office..."  While I understand the appeal of this line of reasoning, especially in close elections, it is a major impediment to real reform. It shields mainstream Republicans and Democrats from competitive pressure, allowing them to continue the awful bipartisan policies of: gross fiscal irresponsibility, excessive military intervention and a ruinous war on drugs. At a certain point, the only ethical option is to "throw away your vote" on "unelectable reformists" or to declare that you will not lend your support to awful policies, even if that means abstaining from voting.

A White Male Scholarship?

On CNN, the existence of a scholarship for white males was discussed. It's founder Colby Bohannan is the President of the Former Majority Association for Equality, whose mission is

" fill in the gap in the scholarships offered to prospective students. There are scholarships offered for almost any demographic imaginable. In a country that proclaims equality for all, we provide monetary aid to those that have found the scholarship application process difficult because they do not fit into certain categories or any ethnic group.

Our short term aspiration is simple: Award a $500 scholarship to five individuals that meet or exceed our qualifications on July 4, 2011. Upon achieving this we look forward to giving at least five scholarships for each Spring and Fall semester. Awardees remain eligible for future semesters as long as one's overall GPA exceeds 3.0. Scholarship applicants should be Caucasian, male, demonstrate a commitment to education, and substantiate financial need.

One obstacle that we immediately anticipate is to not appear racist or racially motivated. We do not advocate white supremacy, nor do we enable any individual that does. We do not accept donations from organizations affiliated with any sort of white supremacy or hate group. We have no hidden agenda to promote racial bigotry or segregation. FMAE’s existence is dedicated around one simple principle, to provide monetary aid for education to white males who need it"

I was pleasantly surprised by the supportive commentary offered by the vast majority of posters on CNN and the lack of radical and racist rhetoric. I believe this is the beginning of a significant political shift in the United States. As more states reach a minority-majority status, where no single group predominates, more Americans of European descent will begin to explore the identity politics that virtually every other ethnic group engages in. Currently, the unwritten rule is that minorities can openly promote the interests of their community, whereas whites can only promote policies that broadly benefit the public and can never partake in movements that explicitly seek to benefit their group. In other words, it is considered permissible for Jewish-Americans, African-Americans, etc. to support politicians, policies, scholarships, etc. that explicitly seek to further the (perceived) interests of their respective communities. But, it is considered a grave taboos for whites to do the same, one that only the most appalling racists like David Duke are willing to infringe. The only acceptable options was (for liberals) to support the ethno-political aspirations of minorities, such as affirmative action or (for conservatives) to oppose all ethno-identity politics and promote the merits of individual over group rights. For this reason, environmentalist and tea party rallies are almost exclusively white, while many whites partook in civil rights marches. This scenario is without parallel in history; in every other country and every other culture, majorities have promoted their own interests and under the best scenario, they exercised benign neglect and were indifferent to the affairs of minority populations. In most cases, to varying degrees, the majority was antagonistic to the welfare of other groups.

I believe that paradoxically these unique dynamics can only be sustained with the the continued status of whites as a demographically and culturally dominant majority. When minorities constitute a relatively small percentage of the population, the majority does not feel the effect of affirmative action, contract set asides and other preferential policies. In fact, the majority believes that their prosperity affords them the luxury, nay the responsibility to enact magnanimous policies towards less prosperous minorities. And they feel secure, because  while other groups may be able to create their own autonomous organizations, the balance of power allows for well established institutions and practices to remain relatively undisturbed. But, as in the case of California, when the former majority is reduced to 40.1%, they begin to feel the pinch of preferential policies that place them and more importantly their children at a competitive disadvantage.  When they realize that whites only account for 32% of the undergraduate student body in Berkeley, they begin to question the need for policies that seek to "increase diversity and equity" by relaxing entrance requirements for "protected classes." And when it becomes clear that the new found minority-majority status of their locality has not resulted in a shift towards the pursuit of broad, public interests, it is only natural that they will reconsider their long held political notions. If there is no longer a majority and every other minority groups unabashedly pursues their own group interests, why should whites not do the same?

Ideally, I would like this to serve as a spark for a serious debate on the need for all groups to reject narrow ethno-identity-politics, in favor of the pursuit of the common good. But, since open, honest debate of race and policy is next to impossible in "progressive" California, the people troubled by these developments will "vote with their feet" and move to other states. And I predict in more conservative localities, we will see a rise in expressions of white ethno-identity politics. I believe that these expressions will largely be benign, such as the growth of like minded scholarships. This is a prospect that should not inspire dread, because true racism grows best in the shadows and withers in the light of open, rational debate.

Brief Reflection on Safety Nets (part III)

In our previous posts we explored the nature of safety nets. While I recognize the necessity of government  run welfare programs, the manner in which they are administered are problematic. I do not believe that these problems can be legislated away, because they are products of the culture and values that underlie and guide the decisions made by individual administrators and larger organizations. For example, I showed an apartment to an gentleman with a section-8 voucher. As with all apartment seekers I asked him "where are you moving from?" To which he responded, "I am moving from my mother's's really nice and spacious...she loves having me there...but I want my own space." In another incident, a well off associate of mine asked me to help his mother find section-8 housing, even though he, as well as his siblings were able to accomodate her in their own homes.

While I sympathize with the desire of both individuals to live independently of their family, I do not believe that it should be subsidized by tax payers. Scarce housing subsidies should only go towards individuals and families who truly do not have any other options. If the section-8 administrator had taken a few minutes to investigate the circumstances of both individuals, they would have discovered that they did not fall under this category. So, the question is, why doesn't the Chicago Housing Authority, as a matter of policy, ask each voucher seekers: "Do you have any family members or friends that you can reside with?" If not, "have you sought assistance from any private charities?" And if the individual absolutely requires assistance, what is the most cost effective housing option they can find? If these administrators considered themselves guardians of limited public resources these questions would be a given. If they believed that dependency on government services is a temporary aberration,  these need for such questions would be a given.

Regarding the former, zero incentives exist to control expenditures, rather department heads seek to maximize their share of public resources and like minded politicians seek to maximize the amount of resources usurped from the private sector. In fact, if a department head were to achieve their mission with less resources, they would see their budget cut and staff cut. This is a prospect that would be painful for them, but one that they would pursue if they were truly "public servants" concerned with the fiscal health of local communities and the nation as a whole. Cuts are always forced from above and are almost always first felt by the recipients, rather than the administrators of government services.

Regarding the questions of why administrators rarely if ever demonstrate concern about large scale dependency on government services, the answers are two hold: institutional culture & incentives. In the texts and lectures of social work courses that I reviewed, not once did I encounter sentiments that held dependency on governments as a social pathology to be avoided. Early progressive efforts to encourage hard work, thrift, assimilation and independence among the poor were held to be "regressive" and an example of "blaming the victim." This vision compliments the incentive structure that administrators enjoy; if they were able to lessen or eliminate dependency, they would diminish the ranks of their clientele, which would lead to a reduction in the resources and influence that they command.

As fiscal realities start closing in, government welfare institutions will be faced with shrinking resources. Their choices will be to maintain their current modus operandus, which means that safety nets will be undermined. Or, they can undertake cultural and institutional reformation that will allow them to wisely allocate resources to the our neediest citizens, while not placing an undue fiscal burden on the productive economy. Under such a system, the gentleman may have to "suffer the indignity" of living with his mother for a few extra years: a small sacrifices to maintain a viable safety net.

Thursday, May 19, 2011

Awesome Cartoon (Hats Off To Ben Garrison)

Is Ron Paul Secretly A Wizard?

Various friends and family have commented that they could never support a Ron Paul Presidency because "his positions are too extreme...he is an isolationist...he would cut all aid to all countries...he would radically slash spending and shrink the size and scope of government to dangerous levels..."

Unless Dr. Paul is secretly a wizard who possesses magical powers that would enable him to become the first politician in American history to push through their entire platform without making huge compromises, these concerns are totally groundless.

Such a wizard would have to magically disarm the very powerful interests and their well funded lobbyists who would fight tooth and nail to protect the programs, policies and subsidies that benefit them.

Such a wizard would have to invoke a powerful spell to change the minds and hearts of the millions of Americans who would raise high hell if anyone touched the entitlements that they have become addicted to.

And to forge a completely non-interventionist foreign policy, he would have to cast a powerful spell that would return the United States to an epoch (over 100 years ago) when the majority of Americans were not yet convinced of the merits of being "globo cop."

So, if Dr. Paul and his followers could not achieve their end goals, what good could they accomplish? And better yet, why should you support someone whose end goals you may not share?

The answer is that even the best of mainstream democratic and republican reformers have only been able to shift our trajectory by a few degrees, when real change is needed to address unsustainable domestic and foreign policies. As president Dr. Paul would quickly learn that his only options would be to get his reforms voted down or to pass them by making significant compromises. This means that he would have to focus on reforms that would generate manageable resistance from lobbyists and the American People.

So, while he would not be able to achieve "isolationism," he might be able to curb our nation building impulse, which has cost us countless lives and trillions of dollars. A more modest, reserved foreign policy is a prospect that most liberals and conservatives could agree upon.

And while he may be able to eliminate aid to the unpopular regime in Pakistan, he would almost certainly compromise on "political landmines," like aid to Israel and funding HIV Treatment in Sub Saharan Africa.

In his quest to eliminate subsidies, he would score victories against easy targets like oil, tobacco, petroleum and bio fuels (that have driven up food prices), but would face stiff resistance if he were to go against student loans. In other words, he may be able to achieve a more balanced, rational regimen of subsidies.

Regarding social issues, he might be the least contentious president of our time, because he would seek to maximize the extent to which states determined their own drug, marriage and abortion policies. It would take a great deal of effort to shift the debate away from divisive national cultural wars towards a more intelligent one centered on a discussion of merits of self governance and tolerance for culturally and politically diverse communities, but it would be tremendously beneficial for the nation. And while Dr. Paul would never be able to achieve the level of local control that he hopes for, he may be able to curb the worst examples of centralization of power.

Under the best of circumstances he might be able to curb the most noxious examples of waste, warfare and welfare, but he would never be able to create the libertarian heaven or hell that his followers dream of his and opponents fear. But, it doesn't take a wizard to see that if we keep on choosing the same Democrats and same Republicans, we will continue down the path to fiscal ruin.

Tuesday, May 17, 2011

Reflections on the (Real) Unemployment Rate (part II)

In our previous post we discussed the government's dishonest economic figures, that seek to obfuscate the true level of unemployment. While it would be quite challenging to determine what portion of unemployed Americans pass up jobs that they consider below them, anecdotal evidence leads me to believe that this figure is high. A young and healthy neighbor of mine bemoaned his unemployment, yet (unlike many local Mexican & Polish immigrants), it did not even cross his mind to pick up a shovel during the great storm or a rake during autumn and make some money. So, to a certain degree there is truth in the statement: "immigrants do jobs that Americans won't do." 

But, rather than simply accept this as a given, it should serve as the beginning of a broad discussion on culture, work and welfare. The first question should be "how did we arrive at this point?" The second and more important question should be "is the widespread preference for welfare over work economically and socially sustainable?" And lastly, "what can we do to change this reality?" It's stunning how so few mainstream "experts" have failed to seriously explore these questions. I assume that only a minority of these individuals enjoy living in a state of idleness and dependency. It is more likely that their choices are driven by the belief that they are entitled to economically and personally rewarding employment, regardless of the time and energy they invested in developing marketable skills and regardless of the availability of such positions. And in many cases a distorted incentive system has made it all too easy to choose this option. While economists are troubled by the under-utilization of skilled labor (i.e. the engineer who is forced to become a cab driver), it makes zero economic sense to spend scarce public funds to allow low skilled workers to opt for unemployment over work that reflects their level of education and ability. And equally it makes no sense to import workers to fill low skill positions, while millions of American laborers are unemployed.

A sustainable employment policy would push the unemployed to choose one of two paths: develop skills that the market demands or "take the jobs that Americans won't do." To put it simple, after being unemployed for X amount of time, you would be mandated to take any available job. An economically sound approach would focus on  increasing human capital by shifting resources away from unemployment benefits towards education and job training. Such a policy would encourage and generously subsidize students and unemployed adults to pursue fields with low unemployment rates, such as engineering, medicine and mathematics. Those who were not so academically inclined would be encouraged to enter blue collar trades with comparatively low unemployment. More than anything we must reinforce the belief that all honest labor is preferable to sloth and dependency. No American is above washing dishes and picking fruits, unless ill conceived government subsidies allow them to be. We cannot escape the consequences of forty years of wanton spending, waste, warfare and unsustainable entitlements. But, if we work hard, exercise thrift, save and invest, perhaps our children will regain the path to the American Dream.

Monday, May 16, 2011

Reflections on the (Real) Unemployment Rate

According to the Department of Labor the unemployment rate is 8.7%. Evidence abounds that this number is artificially low and largely reflects the disingenuous manner in which the government calculates the rate. To start off with they count the rate of job seekers who are unable to obtain employment and exclude the growing number of individuals who for lack of opportunity or desire have stopped looking. Furthermore, the expanding number of individuals who legitimately and illegitimately receive disability benefits are not counted. In fact, the number of applicants for disability benefits increased by 27% in just 2 years.

This is not just the perspective of "right wing nuts," in 2003 President Obama's economic advisor Austan Goolsbee published an article discussing how the government "cooks the economic books" for its political benefit. Using a more conventional definition of unemployment the Christian Science Monitor calculated the rate at 16.7% and the fascinating website arrived at the figure of 21.5% If we included superfluous public sector workers, excess military personnel and the incarcerated, these figures would be even larger. When fiscal realities force the government to cut its bloated ranks, a significant portion of these workers will make their way to the ranks of the unemployed.

A recent report issued by the Labor Department points in this troubling direction; it stated that the employment rate for white males is 68.1% and for African-American males that figure is a shocking 56.9%. When we include women in our calculations, the employment rate further drops, but it is difficult to determine what portion of this group is comprised of women who choose to stay home with their children. Arriving at the true number of Americans who are unable or unwilling to obtain employment is a vital task if we are to formulate wise economic, welfare and immigration policies. But I doubt that "change we can believe in" will include changing how we calculate unemployment.

Employment rate for black men at record low

By Zachary Roth
May 10, 2011
Yahoo News

If the election of America's first African-American president was expected to give blacks an economic boost, it hasn't emerged yet. Indeed, the percentage of African-American men with a job has dropped to its lowest level since records began in 1972, according to the government's monthly jobs report released last week.

Even as the economy added a better-than-expected 244,000 jobs, the percentage of black males over 20 who are currently employed dropped slightly to 56.9, the Labor Department's April report shows. For whites, the equivalent figure is 68.1 percent.

Before this recession, the percentage of black adult men with a job had never dropped below 60 percent, according to Labor Department statistics.

And among blacks, it's not just men who are suffering. Just 51.5 percent of African-Americans across the board--compared to 59.5 percent of whites--have a job, the numbers show. That's the lowest level for blacks since 1984. (That group includes 16- to 19-year-olds, who are employed at a far lower rate than their elders.)

These employment rates are calculated differently from the top-line unemployment rate, which includes only those actively looking for work, and inched back up last month to 9 percent.

Heather Boushey, an economist with the liberal Center for American Progress, told The Lookout it's not just African-Americans who have been hit particularly hard. It's also other traditionally struggling groups, such as ex-offenders and those without a college degree.

"Anyone who would be last on an employer's list to get a job is really in bad shape" in the current downturn, Boushey said.

And employers' hiring practices may be making the problem worse. As we've reported, online job listings telling the unemployed not to apply have proliferated in recent years. The federal government is currently probing whether such listings illegally discriminate against African Americans, who are disproportionately likely to be among the jobless.

Nonetheless, much of the media has focused on the travails of educated white men--still a comparatively flourishing group--during the downturn.

(Faye McWilliams Pearson, a volunteer at Miami's Pass-It-On Ministries, left, works with Douglas Willock, center and Stephen Smith, both unemployed, giving them information about job fairs and a box of food that will last a week: J Pat Carter/AP)

The Progressive Contradiction: Undocumented Immigration

Underlying most progressive positions is a support for greater regulation and government planning. From finance to pharmaceuticals, fair housing to farming, health care to hiring practices, gas mileage to green house gases; it is a given that social, economic and environmental welfare are furthered by greater government involvement. Free markets must be tamed and guided by a wise use of subsidies and penalties. Little is left to choice or chance.The one exception to the rule is the manner in which most progressives approach undocumented immigration.

Those who seek to regulate virtually every facet of the lives of American Citizens refuse to support measures to control the unregulated entry of non-citizens. Those who are normally averse to free trade and free markets extol the virtues of the free movement of labor. Individuals who view permits and licenses as sacrosanct turn a blind eye to unlicensed activities of undocumented plumbers and carpenters. These same individuals fight for higher wages and better working conditions, yet refuse to address a phenomena that has eroded both. And those who promote the micromanagement of restaurants, via the elimination of trans fats and happy meals, ignore the proliferation of completely unregulated immigrant street vendors. Some may respond that they seek to take undocumented immigrants out of the shadows into the "regulatory light," but do not mention how they would address the future waves of individuals who would "fill the shadows."

I would welcome this laissez faire approach if it were applied across the board, if it originated in a new found respect for economic freedom. But, I believe that it stems from a vision in which diversity and a fear of being perceived as racist trumps all other values and social goods. Even though the progressive approach to immigration is motivated by humane sentiments and noble intentions, its unintended consequences are the de facto formation of different rules, standards and expectations for members of different groups. De factor sancutaries and other accommodations have their economic and social benefits, but we should take heed, because in the long run they are inimical to the rule of law and true equality.

Here's Where I (Sort Of) Take The Side Of The Left

Brace yourself for this historic moment, I am going to take the side of the left! While my ideal is a limited, fiscally responsible government, if we must bury ourselves in a mountain of federal debt and bureaucracy, it is better to do so in the pursuit of welfare than needless warfare. I would rather see failed efforts of nation building in the West Side of Chicago than in the West Bank. As previously documented, the debt crisis cannot be solved without significantly reforming social security, medicaid and medicare, however for political and psychological reasons, austerity measures must begin with defense spending and foreign aid. Then we must reluctantly raise taxes first on the wealthy and then on the nearly 45% of Americans we do not pay federal taxes. Only when the public sees that these politically appealing measures did little to eliminate the debt, will they be ready to focus on reforming the true fiscal behemoths of social security, medicaid and medicare. Any other approach would allow Democrats to paint fiscal conservatives as "heartless friends of the rich."

Brief Reflections on Safety Nets (part II)

In our previous post we discussed the concentric vision of safety nets. Traditionally, most progressives are dismissive of the American Ideal of the industrious self made man. Some are outright hostile to it, believing that it has encouraged many to "blame the victims" of capitalism. Yet, it is clear that a multifaceted safety net in particular and a health civil society in general, are made possible by the existence of a large, confident class of prosperous, entrepreneurial Americans. Historically, this group has formed the foundation of the charitable class. The boldest examples are Bill and Melinda Gates who have given billions to a myriad of noble causes. But of greater importance are the millions of Americans who donate their time and energy to helping family, friends, churches, charities and provide the lion's share of tax revenue that fund state, local and federal safety nets.

 Progressives should be just as concerned as their conservative counterparts about the rising number of Americans who are possessed by the entitlement mentality. The reason being is that those who have become dependent on the state are rarely willing or able to contribute to the welfare of their communities. Why should they? It is the responsibility of the state to care for their neighbors, to care for the poor and even to care for their own children. It is the responsibility of "the rich" to fund these programs. The fiscal ramifications are clear; the growth of the dependent class is unsustainable and will bankrupt the social programs that progressives cherish. And as the state becomes more coercive and covetous, the entrepreneurial class that forms the backbone of safety nets and civil society will become less willing or able to share the fruits of their labor, like their counterparts in most other societies.

Why Protests In Wisconsin, But Not In Illinois?

In the last few months we have seen fierce protests in Wisconsin against Governor Walker, but none against Governor Patt Quinn of Illinois. While I am not particularly fond of Walker and his reforms, unlike Quinn he has not left Wisconsin in a deplorable fiscal state, with billions in unpaid bills and one of the worst credit ratings in the country. So, how do we explain this? I believe this is because the vast majority of people are not willing to protest on behalf of broad public interests. There are few direct incentives to march against policies that broadly harm general public welfare. Most people only indirectly feel the cost of Quinn's mismanagement and will not put 2 + 2 together when businesses start fleeing Illinois because of the governor's terrible policies. As unwise and nepotistic as the $100,000,000 tax break that Quinn offered Motorola is, it only comes to a few dollars from the wallet of each tax payer. This may anger many people, but not sufficiently to motivate them to march. In contrast, (for good or for bad) Walker's reforms directly hit the members of well organized special interests, providing them with sufficient personal incentives to protest. And as long as Quinn doesn't challenge public unions and other special interests, he can continue pushing Illinois to the brink of bankruptcy without inspiring a single protest.

 Illinois deep in debt, doesn’t pay bills

Crisis pushes businesses, organizations to edge of bankruptcy

Seth Perlman / Associated Press Writer


SPRINGFIELD, Ill. — For 35 years, frail senior citizens in southern Illinois could turn to the Shawnee Development Council for help cleaning the house, buying groceries or any of the chores that make the difference between living at home or moving to an institution.

No more. The council shut down the program Thursday because of a budget crisis created by the state of Illinois' failure to pay its bills.

Paralyzed by the worst deficit in its history, the state has fallen months behind in paying what it owes to businesses and organizations, pushing some of them to the edge of bankruptcy.

Illinois isn't bothering with the formality of issuing IOUs, as California did last year. It simply doesn't pay.

Plenty of states face major deficits as the recession continues. They're cutting services or raising taxes or expanding gambling to close the gap. But Illinois is taking the extra step of ignoring bills.

Right now, $4.4 billion worth of bills, some dating back to October, are sitting in the Illinois comptroller's office waiting to be paid someday.

Shawnee Development, for instance, is waiting on about $380,000 in back payments, officials say. That amounts to one-quarter of the council's budget for senior care in seven southern counties. "It makes me mad as heck," said Georgia Smith, a 66-year-old volunteer at the agency. Seniors, she said, "are used to paying our bills, paying our way."

Prisons refused bullets

Illinois' deadbeat reputation has created some embarrassing situations.

A supplier refused to sell bullets to the Department of Corrections unless it got paid in advance. Legislators have gotten eviction notices for their district offices because the state wasn't paying rent. One legislator said he had to use campaign funds to pay the telephone bill after service was cut off at his office.

The practice of simply putting off payments became commonplace under ex-Gov. Rod Blagojevich, who liked to spend but adamantly opposed a tax increase to help cover costs. Before he was arrested and kicked out of office, Blagojevich's toxic relationship with legislators essentially paralyzed government, so bills just piled up.

The strategy also may have been helped along by Illinois' "anything goes" political culture. When voters believe government decisions hinge on campaign contributions and shady deals, they're less likely to expect responsible fiscal practices.

..Some schools have tried to shame Illinois into paying by posting signs announcing how much the state owes. The website details the state's financial mess. Associations hold rallies and write letters to the editor.

$6 billion in unpaid bills

The state still remains months behind.

Illinois is on track to end the current fiscal year with about $6 billion in unpaid bills. Budget proposals for the coming year — when the state faces a $13 billion deficit — assume the same thing will happen again.

The state owes money for all kinds of services provided in its name, such as medical care for the needy, home care for the elderly and disabled and day care for the working poor.

State government promises to reimburse all those organizations for at least part of their costs.When the state doesn't pay its bills, they're stuck trying to figure out how to make ends meet.

Most have spent their reserves and cut corners wherever they can, laying off employees, cutting back hours, requiring workers to take furloughs.

Recovery Resources, a substance-abuse treatment center in Quincy, is waiting for $200,000 from the state, which provides about two-thirds of the center's annual budget.

The center has cut 10 jobs over the past two years, said executive director Ron Howell. It shut down its services for adolescent addicts. People who call for help now wait three to four weeks for an appointment.
'This has numbed us'

"The situation, for us, has been almost normalized, and that's the scary part," Howell said. "If I'm not screaming on the edge of self-destruction, it's because this has numbed us."

Many agencies have borrowed money to keep the doors open, but service providers say that's getting harder to do — banks are more reluctant to lend money on a promise that the state will pay up someday.

"We have had members whose banks have told them it is the creditworthiness of the state of Illinois that is their primary concern," said Janet Stover, executive director of the Illinois Association of Rehabilitation Facilities.

State leaders have no plan to catch up on the bills anytime soon, not with a $13 billion deficit to tackle. The Pew Center on the States said last year that in percentage terms, Illinois' deficit is nearly as big as the gap in California, the gold standard for states in crisis.

Call for tax increase

Democratic Gov. Pat Quinn has called for an income tax increase, but any money from that would be allocated to other areas, not paying routine bills. Republicans want to tackle the deficit through spending cuts, which would also mean letting old bills go unpaid.

It's likely that no dramatic movement in either direction will take place until after the November elections.

Illinois government owes about $2.5 million to Sparc, a Springfield organization for people with developmental disabilities, said chief executive officer Carlissa Puckett.

Sparc has borrowed up to $1.1 million through a line of credit. Turning away clients would be the last resort, she said.

Puckett sounds matter-of-fact as she discusses scrimping on paper and pencils. "Why cry if nobody is going to listen to you?" Puckett said. "We're going to keep our head up and figure out how to make it work."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Brief Relfections on Safety Nets

Of all the conservative philosophies, that which pertains to safety nets is most frequently misunderstood. Most critics wrongly believe that conservatives are opposed to "social security and other safety nets," which is rarely the case. In fact, I and most conservatives believe in the necessity of strengthening multiple, concentric levels of safety nets. The overemphasis on federal programs has inadvertently eroded other safety nets, leading to greater social insecurity. In a more ample and dynamic system, the first resort would be to utilize the rich tapestry of family, community and civil society and then local government, only turning to federal solutions as the last resort.

The first level of social security comes from fostering self reliance, a strong work ethic, the value of thrift, planning and pursuit of education. Government policies and philosophies that foster dependence, passivity and a sense of victimhood leave individuals more vulnerable.

The next and perhaps most essential safety nets are family and friends. In the absence of viable government programs, Mexicans, Indians, Chinese and other groups have developed an impressive level of familial support and cooperation. Rather than rely on government sponsored daycare, working families relied on aunts, uncles and grandparents. And until recently it was considered unthinkable in most cultures to outsource the care of elderly parents to private and (especially) to public institutions; that was the job of children. And what of individuals who could not afford housing? With the absence of section-8 and other such subsidies, most families understood that it was their duty to at least temporarily take in family members of limited means. And of course they understood that the good graces of their family implied that they had to contribute their labor and limited wealth to that household. Sadly, the introduction of many immigrant families to government programs have eroded cooperative behavior.

To this day, there exists communities in which a high degree of mutual assistance exists between neighbors, which serves as an important concentric level of social & economic security. In addition, churches and charities are expected to assume a central role in assisting the downtrodden. This is most often found in communities bound by shared values and culture and less prevalent in culturally diverse communities.The best examples being the remarkable degree of cooperation seen among Amish, Mennonites & Orthodox Jewish communities.

Next, we come to local and state government. Although they can be just as corrupt and inefficient as the federal government (welcome to Illinois!), their social programs tend to be more adaptive and accountable. Much of this reflects the fact that unlike the federal government they cannot print money or endlessly borrow from the Chinese. But, as the federal government's role has increased, more individuals have become indifferent to local politics.

And last we come to social security and other federal safety nets. I believe that they should exist, but as last resorts, after an individual has fallen through the other concentric levels of social & economic security that we just discussed. But, more than anything I question the wisdom of mandatory, universal entitlements that applies to the rich, middle class and the poor. To take care of the poor is a noble endeavor, but to mandate that economically productive middle and upper class families place their wealth and welfare in the hands of a federal ponzi scheme, rather than save & invest for their future defies common sense and basic economics. This poses a moral hazard in which many families who would have saved and invested opted not to based on their belief that their welfare was ensured by the federal government. Furthermore, this diminished the incentives of many individuals to "invest in"  the multiple, concentric safety nets that we discussed. These safety nets do not exist in a vacuum; in order to have your family, friends, neighbors, church and charity support you during hard times, you must cultivate positive relationships with them during the good times. A wise and frugal federal government would seek to strengthen, rather than usurp the role of these essential facets of social and economic security.

Sunday, May 15, 2011

Ask a Russian! (part I)

I have had the pleasure of studying and working with many immigrants from the former Soviet Union. I encourage my progressive readers to chat with a Russian, many will offer you a unique perspective on social and economic life in United States that comes from being outsiders. Having lived in a society in which the state controlled economic and social life, few have a positive opinion about the path that we as a nation are headed down. What we call "change," is old and familiar to them.

Perspective Of A Russian Immigrant (No. 4)


Posted 12/08/2009

IBD Exclusive Series:

Perspectives of a Russian Immigrant

I look at the people who support the transformation of America in disbelief: They are destroying the very land that gave them so much opportunity.

Groomed, well-fed and educated, comfortably living in a prosperous society, they need a mission to give meaning to their lives. These "fighters for the less-fortunate among us" glaze over the fact that hundreds of millions of people from around the world desperately try to come to this country for all it offers, regardless of their economic status, race, class, or gender.

Immigrants rightly see this country as the best place to obtain a decent life for themselves and their families.

When I immigrated to America in 1980, I was overwhelmed with the amount of food and goods available at any store, at the numerous charitable organizations helping the needy, and even the government programs that helped people to obtain necessary skills to find a job.

Later, I realized that the country was in the midst of a deep recession. Compared to where I came from, it seemed like the pinnacle of prosperity.

As a secular Soviet Jew, my first Christmas in America was amazing. The proud display of religious symbols was a celebration not only of the holiday, but of a population free to express their beliefs without fear of oppression.

I understand why at the beginning of the 20th century Jewish immigrants in America wrote many beautiful Christmas songs; these songs were born out of grateful hearts. Churches and synagogues coexist without issues. Nobody is forced to practice or not practice a religion.

Soon, however, I noticed darker aspects underlying life in America. Political correctness had seeped into everything like cancer. Under the pretense of multicultural diversity, suppression and intolerance of uniquely American traditions such as liberty, private property, and e pluribus unum (out of many, one), became not only acceptable, but necessary in supposedly enlightened society.

Under the pretext of helping the needy, liberals eliminate people's drive to better themselves and their families. Instead, they obsess about events of the past and exacerbate the victim mentality in the very people they claim to help.

The stranglehold of political correctness has only grown stronger. I see in today's governmental policies a replication of the very things I escaped from.

In the USSR, representatives of the Communist party — partorgs (literally: party organizers) — were ingrained into every aspect of civilian, official and military life. These political organizers controlled public order by observing the behavior and speech of every citizen.

People who wanted a more secure and privileged life found it necessary to join the propaganda machine. In order to survive, citizens were silent out of fear of retaliation by the authorities.

Government-controlled medical care and poorly compensated medical personnel stimulated corruption at every level of service. People had to resort to bribery in order to get the help they needed, and underpaid medical personnel were open to the payouts.

Those who could not pay had to beg for help. The only hospitals comparable to American hospitals were in Moscow and a few other cities, where government officials were treated. In the rest of the country, medical care was substandard. This was the reality of free health care for everyone.

No one can dispute that America has issues with its medical system, and here too, some people struggle to get the help they need. But the solution to the problem is not more bureaucratic control. The quality of medical care will inevitably decline for everyone.

I came to this country in the middle of a recession, and I saw the economy revive and prosper when the government eased the tax burden on people and businesses. People were free to use their talents without the interference of central planning. Today the opposite is taking place, and we see the opposite results because central planning results in wasteful spending, corruption and the suppression of initiative.

I am afraid these transformers of America are destroying the future of our children. I hope the free spirit of America triumphs.

• Kunin lived in the Soviet Union until 1980. She now lives in Connecticut

The Jimmy Carter Prize for the Advacement of Douchebagery: Toni Preckwinkle

And the winner for the Jimmy Carter Prize for the Advancement of Douchebagery goes to Cook County Board President Toni Preckwinkle!

Preckwinkle plans $43,000 raise for campaign backer

By Lisa Donovan Staff Reporter/ Mar 14, 2011 12:24AM

Cook County Board President Toni Preckwinkle is recommending the board approve a substantial pay raise — of more than $43,000 — for one of her newest hires, a high-ranking staffer who’s been a regular contributor to Preckwinkle’s campaigns.

Mary Laraia, tapped by Preckwinkle in December to be second-in-charge at the Cook County Forest Preserve District, would see her salary rise from $111,908 to $155,172, under Preckwinkle’s plan.

Commissioner Liz Gorman, a suburban Republican, questioned the nearly 39 percent pay boost.

Forest Preserve General Supt. Arnold Randall responded that Laraia’s duties are expanding beyond the “executive assistant to the superintendent” job title of Laraia’s predecessor in the No. 2 post and that her pay and new title — expected to be deputy superintendent — will reflect that.

“We want to make some significant changes and reforms to the district, and, frankly, Mary Laraia, with her experience in finance and administration, brings a whole new level of expertise to the role,” Randall said in an interview.
Laraia formerly was Cook County’s head of capital planning and also was executive director of the Metropolitan Planning Council.

Laraia contributed $2,250 to Preckwinkle’s campaign for Cook County Board president last year, according to campaign-finance reports.

Laraia’s husband, Andrew J. Mooney, appointed by Mayor Daley last year as the acting Commissioner of the Department of Community Development, contributed $3,250 to Preckwinkle’s campaign for board president, plus another $581.65 to cover the catering tab at a campaign event last year, campaign-finance reports show.

Laraia and Mooney also contributed to Preckwinkle’s aldermanic campaigns during her 19 years on the Chicago City Council.

“It makes you wonder: Are longtime contributors being rewarded?” Gorman said.

In an interview, Preckwnkle responded by saying: “I’m not excluding people who contributed to my campaign from working for the county. She’s a very smart and intelligent person. We’re lucky to have her.”

© 2011 Sun-Times Media, LLC. All rights reserved. This material may not be copied or distributed without permission. For more information about reprints and permissions, visit To order a reprint of this article, click here.

Obama And The College Question

President Obama has expressed his belief that the United States must increase the number of college graduates if we are to improve our economic competitiveness. Mr. Obama is mistaken; at least from an economic perspective, our focus should be on the quality rather than the quantity of degrees.

To start off with, the emphasis on quantity has led to significant degree inflation, in other words, the cost of obtaining a liberal arts degree has significantly increased, while the employment opportunities that such a degree offers have declined. The unintended consequence of this quantitative (but not qualitative) increase is that a host of employers now seek degree holders for low paying administrative and service industry positions. This has led to a massive increase in student debt and loan defaults. Those unable or unwilling to incur such debt will face diminishing job opportunities, which will lead to decreased economic and social mobility within the United States. This has also encouraged more graduates to seek their fortunes in an already bloated public sector and the near bankruptcy of federal, state and local governments means that fewer individuals will be able to pursue this option.

If Obama were to think outside of the quantitative box, he would focus on increasing the number of Americans obtaining degrees that are vital to economic competitiveness, such as mathematics, engineering & physics. He would ask questions like why so few native born Americans pursue their studies in these fields, as demonstrated by the increasing number of foreign born doctors, engineers & scientists. I must emphasize I am in no way attacking these economically vital immigrants, rather I am troubled by the cultural factors that I believe had lead fewer Americans to pursue an education in engineering and the sciences.

Economic reason dictates that rather than redistribute wealth (via expanding federal entitlements) towards the surplus of low skilled workers, we should focus our efforts on shifting workers to fields that face real labor shortages, such as engineering. And those who are not willing or able to pursue this path should be encouraged to seek employment in relatively high paying blue collar jobs that do not require a 4 year degree, such as plumbing and carpentry. For this to occur, Mr. Obama and his team of "experts" will have to undergo significant changes (that we could believe) in the way they envision the causes of and solutions to the educational and economic challenges that we face.

Bad Students, Not Bad Schools??? (part II)

In a previous post we briefly touched upon Professor Robert Weissberg's thesis that educational outcomes are determined much more by the quality of students than the quality of schools. More specifically, he believes that the performance of individuals and groups are more reflective of the value that they (as well as their families & communities) place in learning, rather than shortcomings of the schools. In the piece "Demand, Not Supply Drives Educational Achievement" he explores the essential, but rarely asked question:

"to what degree do students in failing schools utilize the resources available to them, such as free tutoring?" 

And he presents data that indicates that only a small percentage do. For example, in California only 5% of students utilized free afterschool tutoring. And during the time I spent in low achievement schools, the primary issue that I encountered was not a lack of resources, but a lack of discipline and motivation among students. Good teachers spent much of their time and energy maintaining order and and pushing students to attend to the light homework requirement, in other words most students did not utilize the resources that were available to them. So, while I believe that for ethical reasons the issue of inequitable funding must be addressed, I am skeptical that this would have a major impact on educational outcomes of failing students and poor performing schools. On one hand this is quite depressing, because it implies that the power of government policy to improve academic performance of individuals and groups is quite limited. On the other hand, it is an empowering vision, because it implies that individuals and families do have the power to direct their educational destiny.

Of course it would be unfair and logically unsound to compare the performance of students that languish in poor urban schools to their wealthy suburban counterparts and strictly attribute the vast disparities to the "values" and "efforts" of the students. It would be far more revealing to analyze the relative performance of similar students within the same school. It would ask questions like "what are the common characteristics among the top 25% of students within poor, mostly African-American schools?" I am certain that the answer is that relative to their lower performing peers, they place a greater value in education and are more disciplined. I believe that these factors are also highly relevant when we analyze the common characteristics of individuals and groups (such as the African-American middle class) who have achieved upwards socio-economic mobility. This is obvious to all but the most dogmatic progressives. Sadly the chance of these achievement oriented students influencing their peers is slim, while the risk that the negative environment will hinder their performance is significant. The policy implications is that we must do whatever we can to expand options available to education oriented students, even if this means that we will "skim the cream" from poor schools.

This leads us to the question: what can the government do to promote values, habits and norms that lead to educational achievement and upward socio-economic mobility? I, am skeptical of the power or wisdom of the state to engage in social engineering, but a first step would be to cease promoting narratives that emphasizes the role of individuals and communities as "helpless players' whose destiny is primarily determined by "complex socio-economic factors" rather than the values they hold and the choices that they make.

Demand, Not Supply Drives Educational Achievement

April 26, 2009

By Robert Weissberg

Free market conservatives passionately insist that school choice will solve America's education woes. So as schools proliferate and competition heats up, academic achievement will soar just as fierce market competition has delivered better and cheaper computers and TVs. This seductive analogy is, unfortunately, hardening into unchallenged dogma. Worse, it misdiagnoses the problem. It is demand, not supply that drives academic attainment. In economic terms, Say's Law -- supply creates demand -- is wrong and Keynes -- demand creates supply -- is correct. If youngsters and parents truly desired academic excellence, the market would happily supply it. Absent demand, no amount of supply, regardless of price, can whet appetites for learning.
This misdiagnosis is also a recipe for wasteful political futility, for an uncertain benefit. Why lobby legislatures to permit charters or vouchers when after-school tutoring facilities can be created cheaply, and be economically self-sustaining to boot? Ironically, free-market reformers mistakenly believe that only the state can permit free-market solutions. Capitalism, not government permits free-market choice. As Yogi Berra said, you can see a lot by looking around. The market already overflows with school choice, none of it dependent on government authorization, much of it free or low cost for those craving academic excellence. Moreover, options are exploding independently of pressuring legislatures. Piling on additional options will not reverse academic apathy.

The current choice option menu is staggering. In New York City hundreds of so-called "cram" academies populate Asian neighborhoods and elsewhere, often catering to recent immigrants forgoing worldly pleasures to buy grueling lessons for their college-obsessed offspring. Most are Spartan storefront operations hiring teachers as needed and easily firing incompetents. A quick web search for New York City's "trapped parents" uncovers A+ Home Tutoring, Forde's Professional Tutoring, ClubZ!, Home Tutoring Services, among countless others. Many advertise of a willingness to accommodate customers with special needs or meeting pupils at community centers. Add national chains like Stanley Kaplan and Sylvan Learning that offer after-school coaching for state-mandated tests (especially reading and math), and given that parents demand results for their out-of-pocket fees, Kaplan's pedagogy (and technology) is constantly updated. Sylvan Learning Centers have more than 1100 locations in the US and Canada, with after school, evening and week-end hours, offering various courses, including study skills.
The Internet has greatly expanded parental options nationally. An internet learning program typically costs less than a basic cell phone plan or cable TV. SMARTHINKING since 1999 has provided over a million lessons on multiple subjects. Blackboard likewise offers web-based interactive instruction between students and teachers. Parents unhappy with local math lessons can help junior by logging on to for advanced math for grades 6-12 (as of February 2008 there were 37,000 registered users). The site also lists math books, competitions and a gateway to mathematics organizations. MIT provides K-12 science courses (including video) free to students nationally via the web.

Tutoring is now even out-sourced to non-US experts. TutorVista ( offers 24 hour online instruction from K-12 plus college in nearly all academic subject as well as preparation for all the standardized tests. Unlimited sessions begin at $99.00 per month. Lessons begin by assessing each individual's current knowledge to create customized study plans, and this service includes voice and instant messaging, an electronic whiteboard and a toll-free fax number. Instructors all have college degrees or teaching credentials, undergo weeks of intensive training, and adhere to US state requirements, and by 2008 it had 10,000 subscribers worldwide. On Oct 21st 2008 Brightstorm announced that it had secured $6 million in financing to launch a new online tutoring service targeting teens with expert video lessons provided by star teachers across the entire US. Besides lessons on all usual high school subjects and standardized tests, each student can choose his or her own teacher and preferred teaching style.

For those not inclined to web-based technology, the home schooling industry supplies a plethora of help, and parents need not withdraw junior from school to take advantage of these resources. Just shut off the TV and insist that the lessons be done. Those who have not looked into this burgeoning industry will find the variety and subjects covered are amazing. It is a genuine marketplace where approaches range from the highly traditional, including religious-themed, to the most cutting edge. Lessons can be geared from those lagging behind to budding geniuses. Again, it is just a matter of investing the time and energy, and even those overwhelmed by jobs and housework can arrange local cooperative ventures in which parents take turns instructing small groups (many private schools began as these "living room" academies and expanded as local kids showed up).

Naturally choice movement defenders will insist that these bountiful options (and we mention only a tiny handful) are still inadequate since they cost money and may be inconvenient for harried poor families. This is willful blindness -- options are there if wanted and reasonably affordable. Public libraries often supply free Internet service and professional librarians regularly teach school-related subjects (perfectly rational client-building). Surely even the computer illiterate can request the librarian to find home school options and help with ordering materials.

But if there is a decisive argument about insufficient demand, not supply, being the culprit, it was the utter failure of No Child Left Behind's free tutoring, including the same high-quality tutoring available to ambitious students. Until late 2008 NCLB permitted low-performing schools to spend up to 5% of their federal grants on outside tutoring, more if necessary (this program may soon be restored, however).

With "free money" waiting, one would predict a rush to find enrollees. No such luck. Even illegally bribing students and school officials failed to generate business. Nor did holding classes in the student's own school help. One would guess that ample NCLB money would have encouraged tutoring firms to invent ways to lure struggling students.

This version of Say's Law was a disaster and school actually returned unspent funds. The national average for eligible students enrolling was 12% and even these dreary figures exaggerate enthusiasm since many (perhaps most) of the enrollees never completed the course.[i] In New York City's struggling schools, as of late 2002, only 10,000 of the 240,000 eligible students had signed up for free tutoring.[ii]

The news from Detroit was worse -- "only a handful" out of 51,237 had signed up as of early 2004[iii]. But even this exceeded the percentage in Pittsburgh where zero of 2900 sought free help.[iv] California in 2004 had some 397,000 eligible students and 20,000 -- 5% -- sought assistance, or at least signed up.[v] In New Orleans during 2003 some 7,500 public school students were eligible and 500 signed up -- 6.6%.[vi] After all, why should slackers suddenly be energized by hearing the same old boring stuff yet one more time? These figures are typical and it appears the worse the school system, the lower the enrollment for free help, and this help could come from any number of competing tutoring firms.

A powerful message lies here for free-market-oriented philanthropists anxious to invest millions to bring quality education to those lagging behind. Spend a few thousand dollars instead. Rent a second-story suite of offices month-to-month; buy a few Internet-ready computers and some used furniture; peruse off-the shelf teaching materials from the home school marketplace; hire some moonlighting teachers or university graduate students by the hour, but only as needed; advertise in local newspapers or church bulletin boards and if rivals are successful with their methods, just knock them off since none of this is protected by patents or union rule. Now, almost in an instant, help for those anxious to learn is available. This broken shoe string operation will provide exactly what education-obsessed parents offer their children denied a decent public school education. No political battles, no confrontations with the teachers' union and barely any capital outlays. If demand is insufficient and tinkering with services and prices is futile, just close up after a year versus pouring yet more money into supplying what is not wanted. This is real market-driven education innovation.

The problem is upping appetites for learning, an extraordinarily difficult task in a society subordinating the acquisition of knowledge to non-academic pursuits. Compared to lighting these fires, lobbying a legislature to pass a charter school or voucher law is a snap and this, unfortunately, may explain the unthinking embrace of Say's Law. Giving the proverbial horse a greater selection of expensive bottled waters will not cure the lack of thirst.

[i] Saulny, Susan, "Tutor Program Offered by Law is Going Unused," New York Times, February 12, 2006. Late edition, final edition, online version.

[ii] Goodnough, Abby, "Free Tutoring Fails to Draw Many Students," New York Times, November 15, 2002. Late edition, final edition, online version.

[iii] Associated Press State and Local Wire, "Thousands of tutoring spots for Michigan Students Going Empty," February 21, 2004. Online version.

[iv] Associated Press State and Local Wire, "Thousands of students missing out on free tutoring," October 18th, 2004. Online version.

[v] Associated Press State and Local Wire, "Only 4 percent of those eligible apply for free tutoring," May 17th, 2004. Online version.

[vi] Associated Press State and Local Wire, "Free Tutoring: 7,500 eligible, 489 sign up," October 15, 2003. Online version.

29 Comments on "Demand, Not Supply Drives Educational Ahivement"

Sunday, May 1, 2011

Keeping Oil Profits In Perspective

A great uproar has emerged over record profits by oil companies. Of course I do not approve of government subsidies and I believe that the industry does not merit some criticism, but when we rationally consider this issue, we should keep in mind the following:

1. Global supply (which have been reduced due to conflicts in the Middle East and the Gulf Spill) and demand (which has risen primarily due to economic growth in China and India) are the primary factors that drive prices.

2. While speculation is a factor, American Petroleum firms (to the best of my knowledge) are not allowed to engage in it. Furthermore, speculation is largely a response to anticipated drops in production.

3. Government taxation must be taken into account; rapacious Chicago has the highest cost of gas in the country, $4.27 versus the national average of $3.88. So, why do so few people complain about "greedy government"? And when the government institutes price controls to make gasoline "affordable," shortages always ensue.

4. Although there may environmental benefits to limiting where we can drill, this limits the growth in supply, which results in higher costs. Whether this equals a net benefit or net burden is up to each individual to decide.

5. I did the math and if we take the conservative estimate of $1.00  for a 12 ounce bottle of water, the cost of bottled water is $10.65 per gallon! Keep in mind that some firms fill their bottles with tap water, whereas the gas in your car must be: drilled (from miles beneath the earth) from a field using very costly equipment, transported hundreds or even thousands of miles, refined and then once again transported to the gas station.

6. For various reasons a company's or industry's profit margin is more relevant than the actual profit. Surprisingly, the petroleum industry was ranked 7th among profit margins. On average "greedy" oil companies" earned an 11.5% margin, whereas "progressive" railroads earned 12.6% and telecommunication equipment firms enjoyed a whopping 20.4%.

7. Rising costs provide firms the incentive, as well as the capacity to invest billions in exploring new sources of petroleum to meet rising demand.

8. Rising stock prices and dividends of petroleum firms have kept many pension and retirement plans solvent.

9. As the cost of gas rises, so do incentives to: purchase fuel efficient and environmentally friendly cars, use public transportation, choose a smaller home that is closer to work (rather than a McMansion in the distant suburbs) and  (last but not least) to develop viable alternative sources of energy.

10. History shows that just as oil costs and profits rise, so shall they fall.

The heated rhetoric of politicians and misguided state intervention may sway voters, but they do nothing to ensure the continued flow of petroleum that is vital to every segment of the American Economy; that is the job of the "evil oil companies."

Putting Defense Spending In Context

Those who are familiar with our blog are aware that I am no great fan of massive military spending and I do favor its reduction. However, those who believe that the primary solution to our spiralling debt is slashing defense spending are mistaken. As high as it may be, if we calculate it as a percentage of our GDP it's still at a historical low. On the other hand, since 1965, entitlement spending as a percentage of our GDP, has grown nearly 4 fold. It is and will continue to be the main engine that drives our growing national debt. If we do not get this under control:

It will continue to squeeze resources available for available discretionary spending, which means less money will be available for education, the environment, research and development, infrastructure, etc.

Eventually defense spending will be squeezed.

Taxes will go up, placing a greater burden on productive citizens and sectors of the economy.
Interest rates will be pushed upwards.

Any politician, be they Republican or Democrat, who is not willing to take the necessary steps to address the trillions in unfunded liabilities that await us, should under no circumstance receive your vote.