For those of you who are new to Supply Side For Survival, allow me to introduce myself. I am the Economist's Apprentice, and it is my intent to offer net surfers a place where discussion of true economic principles is encouraged and appreciated. If you love liberty, this is your blog.
Lesson 1 recap: America faces a crisis the likes of which she has not seen in decades, and many causes of that crisis have been identified by both the old and new media. However, what all of these causes have in common is that they might all have been avoided were the majority of voters residing within the U.S properly educated in economic theory and philosophy. This lapse in the education of so many Americans is due in large part to the unionization of America's educators; union members are self interested as are all human beings, however, the alliance of the unions with the left has created a situation in which there is no check on the union's ability to secure that which it desires. Not wanting to lose that nearly unlimited flow of resources, the teachers unions have actively sought to eliminate the enemy of socialist thought, which is economic science, from the classroom. As a consequence, policy after policy is enacted with far too few truly understanding the ramifications of those policies. In an effort to secure their existence, the unions have put in jeopardy the existence of many other institutions, not least of which are the U.S banking system and the U.S treasury. Through failing to educate, teachers expect to benefit; such a system cannot last, and the current crisis is the harbinger of that system's downfall.
Begin Lesson 2
Solutions. A word with three syllables. The shortness of the word is deceiving to say the least. At the individual level, a solution to a problem may take days to formulate. A single bankrupt person might spend hours on a phone speaking to a bank representative only to realize that the resolution to his problem might take months or even years of disciplined saving and sacrifice. The broken education system will not be repaired in one day or even one presidency, but just as a debtor who is forced to sell his house must necessarily take active steps to survive even though he knows it will be long before he feels the benefits of his actions, the process must begin at some point. Therefore I, with admittedly little hope of being heeded, urge our current policy makers to immediately begin drafting legislation aimed at abolishing government run public schools and replacing them with a voucher program.
Many might ask why not simply remove government influence from education entirely, however, it is beyond doubt that an educated populace is necessary for the continued growth of an economy. While I might be accused of trending normative, I posit that growth is a good thing. Growth alleviates poverty, growth makes a society better. Therefore, to maintain innovation and growth by extension, I wholeheartedly believe that Americans must educate and continue to be educated.
It only remains to be seen how this goal can be accomplished, the economic weight of the current system is crushing, the current U.S school system might be compared to a black hole into which money is poured, forever removed from the universe. It is here that a voucher system becomes absolutely necessary. A school voucher, by definition, is as follows, "A school voucher, also called an education voucher, is a certificate issued by the government which parents can apply toward tuition at a private school, rather than at the public school to which their child is assigned." (http://www.google.com/search?hl=en&defl=en&q=define:voucher&sa=X&ei=ggtNTJXgCoOKlwef_eX1DQ&ved=0CBIQkAE) While the difference between a monolithic public school system and a voucher program might seem superficial, the difference is actually profound. The difference is choice. Under current law, if a school is failing, public school parents are not permitted to send their children to a neighboring school. If a government school is teaching a student certain moral, or immoral, values of which a parent disapproves, it is difficult to remove the child from the situation. Vouchers, given the necessity of education, are freedom enhancing. Before the economics of vouchers are covered this central philosophy must be understood.
But with respect to the economics of vouchers, two aspects stand above all others as noteworthy. The first is the theoretical foundation of vouchers which demonstrates the effects of vouchers on a given market. The second is a breakdown of the cost of private education vis a vis the U.S public school system. The first aspect deserves an entire lecture dedicated to it in and of itself, so, in the interest of keeping this lesson focused, I will concentrate on communicating the statistical superiority of a voucher system here and cover the economics of vouchers at a later date in an appendix to this lecture.
In the year 2000, the average expenditure on a single student for one year in the public school system was $8,923 in terms of 2008 dollars. (http://nces.ed.gov/fastfacts/display.asp?id=66) I use data for public schools from 2000 because 2000 is the latest year for which my research yielded reliable data on private school costs. It would be incorrect to compare public and private schools using data taken from different years. Therefore, in keeping with statistical rigor, the average cost of putting a student through a year of private schooling in the year 2000 was $3,267. (http://www.cato.org/pub_display.php?pub_id=3231) So, even if the taxpayer were still stuck with the bill after the enactment of a voucher program, they would probably be much happier regardless as the average cost of putting a student through one year of private schooling is approximately one third the cost of one year in a public school.
As an aside, while I was unable to discover any aggregate descriptions of private school costs nationwide beyond the year 2000, I researched tuition costs at several specific private schools from several states. It is clear that the expense gap between public and private schools remains as public education has only continued to increase in cost ($10,041 for one year in terms of 2008 dollars as of 2007)(http://nces.ed.gov/fastfacts/display.asp?id=66) and these as well as many other private schools come in well below.
Name Variety State Cost
Holy Cross Academy High School Florida $2,800
Iverness Christian Academy Pk-12 Florida $3,560-$4,290
Hampton Christian Schools Middle/High Virginia $4,943-$5,938
Grace Christian School Pk-12 Virginia $4,968
Adventure Christian School Pk-8 California $4,600
Escondido Christian School Pk-8 California $4,875-$5,075
American Christian School Pk-12 Oklahoma $4,200-$4,700
of Bartlesville
Rejoice Christian School Pk-12 Oklahoma $4,590-$5,200
Penobscot Christian School Pk-8 Maine $1,560-$4,260
Vineyard Christian School Pk-12 Maine $1,500-$3,600
School Websites
http://www.holycrossacademy.com/Registration%20and%20Tuition.htm
http://l.b5z.net/i/u/10072803/f/Tuition_and_Fees_2010-2011.pdf
http://www.hamptonchristianschools.com/admissionforms/10_11/pricelist2010.pdf
http://www.gcswarriors.org/
http://teacherweb.com/CA/AdventureChristianSchool/Homepage/apt1.aspx
http://www.ecslions.org/Tuition%20Rates%2009-10.pdf
http://www.acsb.org/PDF%20docs/Tuition%20Schedule%20%282010-2011%29.pdf
http://rejoiceschool.com/index.php?nid=21529&s=ms
http://www.penobscot-christian.pvt.k12.me.us/TuitionandFees1011.pdf
http://www.vineyardschool.net/images/admissions/2010_Enrollment_Forms.pdf
Freedom and choice are the answer. Collectivism broke the education system and only returning the system into the hands of the millions of consumers who utilize it will repair it. Parents need the freedom to instill their own values in their children, not the values of the education "czar", congressional liberals, or unionized "educators". It is necessary that children have an education because without one their freedom is limited in ways too many to tabulate, however, while this is true, it is important to understand that many who support bureaucracy run schools use the same defense of their arguments. But, it must be noted, those who make use of the "necessity" defense while simultaneously promulgating the virtue of state schools commit an elementary error. To believe in giving children an education through public schools is not to be noble, but is simply to be confused. This is so because such a statement presumes that it is possible to receive a quality education from a public school and, given the flat or falling trend of SAT scores over the past years, it would seem that that is not the case. (http://nces.ed.gov/programs/digest/d09/tables/dt09_146.asp)
However, hope for our nation's education system yet remains. Unlike the "public schools because of necessity" argument, the necessity argument coupled with school choice for children through vouchers satisfies the requirements of logic. If the people of this amazing nation are able to rally themselves and vote into power lawmakers who understand the need of the people to be left free to make schools compete for their business, then parents will see reduced costs, students will see better teachers, and governments will see mercifully deflated budgets. The question posed by unionized education finds its answer in the principles laid down by our nation's fathers; individuals, when left free to choose their own destinies, are capable of creating marvels beyond the imagination of bloated, over-intrusive government agencies. When liberty is assured, knowledge derived from education reigns supreme.
Lesson 3 preview: Keynes....................... A General Theory on why Greece is so successful?
Sunday, July 25, 2010
Saturday, July 24, 2010
Lesson 1: Of Picket Lines And Lost Generations
Firstly I would like to introduce myself, I am the economist's apprentice and I started this blog for a very specific purpose, to spread economic truth in these times of economic insanity. It is my intent to discuss not simply current events, but the day's news in the context of the eternal economic principles which have guided humanity since the very first barter transactions all those thousands of years ago. Today our nation faces a crisis which threatens not only her most prominent citizens, but a crisis which looms over those who have the least, and yet so much, to lose. To save America, this nation which has brought freedom and success to countless millions, we must hold to the philosophy which made us great; capitalism built our nation once and it will renew it now. However, these precious principles have to be understood and then passed on or true recovery may not manifest for many years. The loss of these principles is in fact why we now find ourselves in need of a recovery, therefore, for the first lesson, I feel it is appropriate to discuss how exactly our philosophy of greatness has been forgotten.
Unions, for many, bring to mind security and togetherness, a particular form of Americanism from which there must be no deviation lest there be a terrible gnashing of teeth. For many, the sight of a picket line encircling a place of business or occupying the street outside of city hall is an inspiring spectacle. Ah yes, those many fine citizens might say, let the will of the common man be done! Let the man to whom these hardworking, decent people are enslaved be punished for his ill-treatment of them! Most of these individuals would most likely never pause their mental objections to the employer long enough to realize that without that same employer the opportunity for the picketers to become employees would never have existed. That much is true, but it is a superficial observation. What is more compelling is the difference between the idealistic onlooker, silently cheering for his supposed brethren down on the line, and the economist. The onlooker most certainly sees a victim, but only one, which is the group of striking workers. However, the economist sees three. The workers are victims, the strike imposed by the union denies them the opportunity to produce and, as wages are defined by productivity, they necessarily lose. Even if the union "wins" and concessions are made such as a nominally higher wage, the union still might lose if the employer refuses to higher any more union workers. As the union population ages and retires, a company very well may simply choose to contract with non-union workers as a substitute for the higher cost workers. Ultimately, union numbers dwindle, leaving them rather more vulnerable and far poorer than even before. The employer is certainly a victim, without his employees his income drops as surely as theirs does. And finally, and least obviously, the patron suffers. But how is that so? He does no work for the company, he does manage, he does not produce, so how is it that he suffers?
Imagine three teenagers are interested in starting a yard service. None are experienced and are therefore risky to hire, but, for the right wage they are able to find reasonable business. On average let us say that they are paid $10 per hour for their services for a total of $30 per hour. It is a wage that is freely offered and freely accepted, no coercion ever occurred. However, because the young entrepreneurs are so cheaply priced, it soon becomes apparent to consumers that it is in their interest to hire them as opposed to workers from the local yard work union. Losing business never makes anyone happy, least of all union bosses. Less business means less workers and that means less dues. And so, armed with the power to vote, a mass of union workers descends on the town hall of Anytown USA and demands that a law be enacted to require union membership for all new yard workers. Afraid of the union's power to persuade potential voters, the sitting politicians of Anytown quickly draft a law proclaiming that all yard workers must join the union and can, therefore, only charge union prices, say $20 per hour. Now, should a family wish to hire a lawn service, they must make a choice. Either hire three inexperienced teenagers at the cost of $20 per hour for a total of $60 per hour, or higher a single more experienced worker who can work alone for $59. Under conditions such as these, not only are three teenagers denied the opportunity to gain valuable work experience and income, but the town's consumers of lawn services are terribly hurt; they might have paid $30, now they must pay at least $59. That is nearly a 100% increase in their yard budget, under the rule of a free market, the same family might have gotten their yard mowed and then gone to the movies, but because of interventionism through unionization, the average family's budgetary discretion has been severely curtailed.
The value of a union is refuted easily enough through understanding economic theory. In fact, it must be emphasized that the crucial factor in refuting a union's value is in understanding economic theory. And it is this point, this fundamental point, which has brought our economy to the brink of collapse. Knowledge of economics is kryptonite to unions, every union boss whether he admits it or not understands that, if the underlying properties and effects of unionization were widely known, his very "industry" would be at stake. And, normally, the bitterness of the unions toward economic science would have little net effect on the propagation of knowledge as long as freedom of speech remained intact, however, if those whose job it is to propagate knowledge are themselves unionized a fundamental conflict of interest arises. Telling a union member to teach a room full of students about why unions are inefficient would be like an oil rig worker advocating for solar panels, and yet this is the situation that exists. Teacher's unions have brought much hardship upon America's education system, making it effectively impossible to fire sub-standard teachers and weighing down our school administrations with layer upon layer of cumbersome and expensive bureaucracy. Stated frankly, teacher unions represent teachers, not students. And so, to save their own positions, teachers in our nation's public schools have taken to either misrepresenting or completely ignoring the science of economics. In fact, upon researching the absence of economics from our nation's classrooms, I found that reports from our own Department of Education do not even list economics as a possible major for students on a 2009 report concerning the SAT (http://nces.ed.gov/programs/digest/d09/tables/dt09_145.asp).
The ramifications of this policy are astounding, students leave high school with only the knowledge necessary to perhaps balance their own personal check book. Students living in the age of liberal mob rule are being released to the world without the slightest idea as to, not only how, but why a business thrives or fails. There exists amongst students no appreciation for the precious liberty afforded them through the principles of capitalism, for these unfortunate individuals, economics, politics, liberty, and success are unrelated or even not worthy of their attention. But nothing is more necessary; economics is defined in many different ways in many different texts, I define it as the the science of wealth creation, as the philosophy of well-being. Our nation is at stake, either we teach and disseminate the same economic ideals which built America into what it is or we will fall.
And so I end the first lesson as I plan to end every lesson; America needs the help of every thinking man, woman, and child. I personally appeal to all those concerned to educate themselves, their families, and friends about this science which I have come to love and appreciate. Without this knowledge, without a deep passion for enlightened liberty, the teacher's unions, the IRS, the EPA, President Obama, the countless list of "czars", and so many more will continue to picket line our nation and our children; unionization of our nation's teachers is why we are here, it is because the only thing that those educators have taught their students is apathy. They have not taught the truth, they have failed in their appointed tasks. While they have stood year upon year at the picket line, how many generations have we lost?
Lesson 2 preview: The problems in the education system are apparent, but what are the solutions?
Unions, for many, bring to mind security and togetherness, a particular form of Americanism from which there must be no deviation lest there be a terrible gnashing of teeth. For many, the sight of a picket line encircling a place of business or occupying the street outside of city hall is an inspiring spectacle. Ah yes, those many fine citizens might say, let the will of the common man be done! Let the man to whom these hardworking, decent people are enslaved be punished for his ill-treatment of them! Most of these individuals would most likely never pause their mental objections to the employer long enough to realize that without that same employer the opportunity for the picketers to become employees would never have existed. That much is true, but it is a superficial observation. What is more compelling is the difference between the idealistic onlooker, silently cheering for his supposed brethren down on the line, and the economist. The onlooker most certainly sees a victim, but only one, which is the group of striking workers. However, the economist sees three. The workers are victims, the strike imposed by the union denies them the opportunity to produce and, as wages are defined by productivity, they necessarily lose. Even if the union "wins" and concessions are made such as a nominally higher wage, the union still might lose if the employer refuses to higher any more union workers. As the union population ages and retires, a company very well may simply choose to contract with non-union workers as a substitute for the higher cost workers. Ultimately, union numbers dwindle, leaving them rather more vulnerable and far poorer than even before. The employer is certainly a victim, without his employees his income drops as surely as theirs does. And finally, and least obviously, the patron suffers. But how is that so? He does no work for the company, he does manage, he does not produce, so how is it that he suffers?
Imagine three teenagers are interested in starting a yard service. None are experienced and are therefore risky to hire, but, for the right wage they are able to find reasonable business. On average let us say that they are paid $10 per hour for their services for a total of $30 per hour. It is a wage that is freely offered and freely accepted, no coercion ever occurred. However, because the young entrepreneurs are so cheaply priced, it soon becomes apparent to consumers that it is in their interest to hire them as opposed to workers from the local yard work union. Losing business never makes anyone happy, least of all union bosses. Less business means less workers and that means less dues. And so, armed with the power to vote, a mass of union workers descends on the town hall of Anytown USA and demands that a law be enacted to require union membership for all new yard workers. Afraid of the union's power to persuade potential voters, the sitting politicians of Anytown quickly draft a law proclaiming that all yard workers must join the union and can, therefore, only charge union prices, say $20 per hour. Now, should a family wish to hire a lawn service, they must make a choice. Either hire three inexperienced teenagers at the cost of $20 per hour for a total of $60 per hour, or higher a single more experienced worker who can work alone for $59. Under conditions such as these, not only are three teenagers denied the opportunity to gain valuable work experience and income, but the town's consumers of lawn services are terribly hurt; they might have paid $30, now they must pay at least $59. That is nearly a 100% increase in their yard budget, under the rule of a free market, the same family might have gotten their yard mowed and then gone to the movies, but because of interventionism through unionization, the average family's budgetary discretion has been severely curtailed.
The value of a union is refuted easily enough through understanding economic theory. In fact, it must be emphasized that the crucial factor in refuting a union's value is in understanding economic theory. And it is this point, this fundamental point, which has brought our economy to the brink of collapse. Knowledge of economics is kryptonite to unions, every union boss whether he admits it or not understands that, if the underlying properties and effects of unionization were widely known, his very "industry" would be at stake. And, normally, the bitterness of the unions toward economic science would have little net effect on the propagation of knowledge as long as freedom of speech remained intact, however, if those whose job it is to propagate knowledge are themselves unionized a fundamental conflict of interest arises. Telling a union member to teach a room full of students about why unions are inefficient would be like an oil rig worker advocating for solar panels, and yet this is the situation that exists. Teacher's unions have brought much hardship upon America's education system, making it effectively impossible to fire sub-standard teachers and weighing down our school administrations with layer upon layer of cumbersome and expensive bureaucracy. Stated frankly, teacher unions represent teachers, not students. And so, to save their own positions, teachers in our nation's public schools have taken to either misrepresenting or completely ignoring the science of economics. In fact, upon researching the absence of economics from our nation's classrooms, I found that reports from our own Department of Education do not even list economics as a possible major for students on a 2009 report concerning the SAT (http://nces.ed.gov/programs/digest/d09/tables/dt09_145.asp).
The ramifications of this policy are astounding, students leave high school with only the knowledge necessary to perhaps balance their own personal check book. Students living in the age of liberal mob rule are being released to the world without the slightest idea as to, not only how, but why a business thrives or fails. There exists amongst students no appreciation for the precious liberty afforded them through the principles of capitalism, for these unfortunate individuals, economics, politics, liberty, and success are unrelated or even not worthy of their attention. But nothing is more necessary; economics is defined in many different ways in many different texts, I define it as the the science of wealth creation, as the philosophy of well-being. Our nation is at stake, either we teach and disseminate the same economic ideals which built America into what it is or we will fall.
And so I end the first lesson as I plan to end every lesson; America needs the help of every thinking man, woman, and child. I personally appeal to all those concerned to educate themselves, their families, and friends about this science which I have come to love and appreciate. Without this knowledge, without a deep passion for enlightened liberty, the teacher's unions, the IRS, the EPA, President Obama, the countless list of "czars", and so many more will continue to picket line our nation and our children; unionization of our nation's teachers is why we are here, it is because the only thing that those educators have taught their students is apathy. They have not taught the truth, they have failed in their appointed tasks. While they have stood year upon year at the picket line, how many generations have we lost?
Lesson 2 preview: The problems in the education system are apparent, but what are the solutions?
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