Jordy Blog

Economic Woes: Understanding the Cause and the Cure

Robert Lefevre observed that “Government is a disease that masquerades as its own cure.“

Obama’s “Economic Stimulus” package, like Bush’s and Bernanke’s banking bailouts, typify this statement. No sooner is the economic knife twisted in on our belly than our haggardly assailant disappears into the night. Immediately our saviour appears, riding on his white horse and swearing revenge. But how did he get here so fast?

Obama’s Economic Stimulus Package

Let’s just look at the Obama’s so called “economic stimulus” package logically.

Was our current economic situation really caused by a lack of green energy? Did we really just not have enough STD prevention education? Was it all this really because we didn’t have enough high speed internet in rural areas? Was it because our current highway system is inadequate? Did we just not have enough food stamps?

If none of these problems were part of the underlying problem, how does fixing them constitute a solution? Yet that’s literally what we’re being billed. Government simply changes out the labels in its pork processing plant, and all-of-a-sudden we can’t get enough. In government, just re-brand whatever your selling as “Economic Relief”, “Stimulus Package”, or “Cure to Whatever Happens to Ail You Today”, and it’s bound to sail right through.

Sure, there’s much more to Obama’s “Economic Stimulus” plan than funding STD prevention education, but it’s all crap because it all ignores the recessions’ underlying causes. Even the tax cuts are crap because, just like the Bush tax cuts, there is no associated cut in spending. In fact, to say that we’re getting quite the opposite of spending cuts is a remarkable understatement.

Cutting taxes without cutting spending requires either inflation or debt. The former (like taxation) steals from current citizens, while the latter steals from future citizens. Both payment vehicles are immoral. Should income taxes be decreased or even eliminated? Absolutely. But the only lasting way that government can stop stealing the wealth of its citizenry is to stop spending it!

Our Current Recession: the Cause and the Cure

If we really want to fix our economic problems, we need to fix them at the cause. But remarkably few people understand the cause –and that’s what makes us so vulnerable to government deception.

To understand the cause and the cure of our current recession, shouldn’t we look to the people with proven track records –you know, the people that actually foresaw the current crisis before it happened? Remarkably, the solutions offered by people like Peter Schiff and Ron Paul –people who were dead right about the economy even before the bubble burst– are still being relatively ignored. The alternative approach: what our economy really needs is more people teaching kids how to use condoms. Good grief!

If you want to understand the cause of recession, as well as its cure, Ron Paul says it pretty succinctly:

Cures for Our Economic Disease

I have recently had several opportunities on various news programs to discuss the economy and what is wrong with the so-called economic stimulus package. I have said over and over what we shouldn’t be doing, and now I’d like to explain what we should be doing.

But to improve the situation, you must first have a solid grasp of how we got here. Government policies and central planning created the housing bubble, now going bust. About a decade ago the government made expanded homeownership and affordable housing a public goal. Through Fannie Mae, Freddie Mac and the secondary mortgage market the government incentivized creative, low down-payment, more widely available mortgage products, and discouraged the market-proven lending standards of the past. The Federal Reserve kept interest rates artificially low, which added more fuel to this fire. Many related sectors temporarily flourished because of this, and many people got into homes they otherwise could not have afforded. The increased demand for housing sent prices soaring until in many markets housing became even more unaffordable, necessitating even more creative mortgages, and impossibly leveraging homeowners. Many risky investment vehicles such as mortgage-backed securities, derivatives, credit default swaps grew out of this unsustainable situation. As the foreclosures began, the house of cards started to tumble. Too many people have confused the symptoms and the pain of the bust with the problematic policies that caused the bubble, which is really what needs to be treated.

First of all, just as the best cure for a hangover is not to drink so much, the best cure for a recession is a recession. It is time to sober up and return to free market sanity, risk and reward, supply and demand, without political intervention. Politicians are good at catering to the needs of special interests, but very bad at determining what needs to take place in the market. Government should stick to punishing fraud and enforcing contracts. When they use the tax code, bureaucratic departments and their manipulative rules and regulations to dictate social and economic behavior, we end up with distortions and malinvestments. Bailing out banks, continuing failed Fed policies and strapping the taxpayer with toxic debt will worsen the pain, and punish the innocent.

If Congress really wanted to do something helpful, it would cut taxes. Ideally, we would repeal the income tax altogether and get the IRS off the economy’s back, which would be a huge boon. We should also cut spending. Cut every unconstitutional department and program, every wasteful governmental encroachment on the people’s liberty and money, starting with our massive overseas empire. The cost of our empire is bringing us to our knees, just as the Soviets’ empire did to them. Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests.

These things would constitute real change, real economic stimulus. The plans being bandied about Washington are just more of the same. As long as no one seriously considers the cure, we are unfortunately destined to prolong the disease.

There it is, refreshingly simple.

Now that we’ve identified our assailants as big government and central banking, maybe we can go after them! Or wait, here come a couple brave knights who seems more than willing to do that for us. Hold on a second… Don’t we know you?

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Republican Party Bones Up?

Now we’re talking:

EXCLUSIVE: RNC draft rips Bush’s bailouts
Ralph Z. Hallow (Contact)

Republican Party officials say they will try next month to pass a resolution accusing President Bush and congressional Republican leaders of embracing “socialism,” underscoring deep dissension within the party at the end of Mr. Bush’s administration.

Those pushing the resolution, which will come before the Republican National Committee at its January meeting, say elected leaders need to be reminded of core principles. They said the RNC must take the dramatic step of wading into policy debates, which traditionally have been left to lawmakers.

“We can’t be a party of small government, free markets and low taxes while supporting bailouts and nationalizing industries, which lead to big government, socialism and high taxes at the expense of individual liberty and freedoms,” said Solomon Yue, an Oregon member and co-sponsor of a resolution that criticizes the U.S. government bailouts of the financial and auto industries. Republican National Committee Vice Chairman James Bopp Jr. wrote the resolution and asked the rest of the 168 voting members to sign it.

I hope this resolution passes. It would be a clear sign (to me) that the Republican party is worth saving.

Peter Schiff on the Collapse of the Dollar

It’s End-the-Fed day today. I thought I’d commemorate it by posting a video featuring Peter Schiff (Ron Paul’s campaign finance advisor), who accurately predicted the sub-prime meltdown and the ensuing recession.

Some great quotes (emphasis added):

Our markets are going lower. This is not just a financial crisis; this is an economic collapse. Our entire phony economy is collapsing around us. There’s nothing the government can do to stop it; they should get out of the way and let it happen.

—-

Look, you have to understand: for the past several years everybody thought we had a real economy. We didn’t. We had a bubble. All we did was borrow trillions of dollars from the rest of the world, and we blew all the money on consumption. We can’t pay the bills. The asset bubbles that were inflated by reckless monetary policy are deflating around us, and we’re going to have to rebuild a viable economy; and it’s not going to be easy. A lot of companies are going to go bankrupt during the process. A lot of people are going to lose their jobs, but this has to happen: we have to go back to a sane economy where we save our money and actually make stuff.

—-

I’d be … getting out of the dollar because it’s a bottomless pit. When this dollar stops rallying, it’s going to fall like a stone. That is the next major economic crisis we are a setting up, a major major run on the dollar, and that’s going to have tremendous repercussions for our economy and our markets.

—-

We manufactured our way into becoming the wealthiest economy country in the world, and now we’ve consumed our way into bankruptcy.

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It’s time Americans take a long, hard look at the flawed monetary policy that’s behind all of this funny business; and that means understanding the history, operations, and goals of the Federal Reserve. If we don’t figure this out and get back to system of sound money, we may well “wake-up homeless on the continent their fathers conquered“.

It’s frustrating that the only major party presidential candidate that was talking about these issues in any substantial way was written off from the very beginning. But you wanted empty platitudes? Well, you got ‘em.

Ask Congress to Stop Socialist (Fascist) Bailouts

Today the US House of Representative is very likely to pass one of the most stupid pieces of legislation I have ever seen. They’re getting MAJOR pressure by the president, majority and minority leaders in congress, both major party presidential nominees, the Federal Reserve, and everyone else you can think of to pass an “emergency” bill that does NOTHING to help people stay in their homes.

Instead the proposed bill introduces liquidity into the market by purchasing garbage mortgage-backed securities from private companies, thereby socializing their risks while privatizing their profits. Warren Buffet described the derivatives we are to buy as financial weapons of mass destruction. Incidentally, they’re the same kind of stuff that brought Enron down, but do you see anybody going to jail from our current scandal? No, instead we reward them purchasing these bad assets at above-market prices.

Believe me, if these things had real value, the free market would be forking out the dough for themselves. Ask yourself, “Why in the world should you and I be forced to purchase ’securities’ that cannot sell on an open market?” It’s analogous to having congress force you to buy every car in the junkyard and then have the nerve to tell you it might actually be a good investment.

“But surely,” you ask, “people who are upside-down in their homes will finally get some much-needed relief?” Absolutely not! This bill does nothing for them –not that it should. But since the whole seductive point of socialism is supposedly to benefit the working class, you would think they would make some effort at it. This bill actually hurts upside-down buyers because it reduces their bargaining power by flooding the coffers of their debtors.

“You mean that congress might not be acting in our best interests?,” you ask.

The Center for Responsive Politics, a Washington nonprofit group that studies money and politics, reports that on average, lawmakers who voted in favor of the bailout bill have received 51 percent more in campaign contributions from sources in the finance, insurance and real estate industries.

Hmmm… Could congress possibly be acting in their own interests? Might those be directly opposite yours? One commenter hits it right on:

Why wouldn’t America, the greatest nation on earth, have the best congress money can buy?

This is especially true considering the sheer amount of pork added to the bill to insure that it passes in the house.

Wait, you thought the a motivated Senate might insuring passage by actually adding something substantive to the bill, or maybe cutting out some of it’s blatant threatening verbiage? Nope, too hard. Just throw on a bunch of tax-credits from a completely unrelated bill to make sure it has enough earmark grease to squeak through. Tax credits for green appliance manufacturers? That should get some Democrat votes. Oh NASCAR needs some tax credits? Republicans will like that. Tax rebates for Puerto Rican rum duties? Sure, throw it in. All of a sudden the bill is 451 pages of meaningless pork, which by the way our maverick hero John McCain swore to veto. Can you say double-speak?

Seriously, any house member who changes to an approval vote this time around has clearly been bought and sold. There are almost no differences whatsoever that relate to the main subject matter at all. Just more grease.

Want more?

This bill rewards companies that behaved foolishly (and probably dishonestly). It consolidates unprecedented power to the Federal Government, the Treasury, and the Federal Reserve. It increases the average American citizen’s tax burden. It grants unprecedented power (with no oversight whatsoever) to a consummate banking insider. And it undermines our so-called “Free Market” system at every step of the way.

And just in case you thought I was kidding that there’s no oversight whatsoever in how the $700 billion is spent, here’s the verbiage directly from the bill:

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

By the way, how did they come up with the $700 billion figure in the first place? The answer: it had to be a lot. Now that’s good math in action. What’s it for? Well, if we knew we could have come up with a real number by now.  Besides, wouldn’t you rather leave that up to one man with no recourse to the American people whatsoever. He alone decides who wins and who looses. Checks and balances be damned!

Oh yeah, and did I mention that nobody is saying that this thing will work? It’s always pitched as a “band-aid” at best. But when this $700 billion band-aid is saturated with blood, it will need to be ripped off so another one can be applied. This is a slippery slope, a terrible precedent. Bad companies need to be allowed to fail so that markets can adjust gracefully, and so that basic market principles can be reinforced.

Make no mistake: this is power grab, a consolidation of wealth, and a giant step toward socialism. Furthermore, it does NOTHING to address the actual problems at their source. This bill actually prolongs the problem by side-stepping the free market with heavy-handed government intervention. And on top of everything it’s blatantly unconstitutional! No wonder everyone is in such a hurry to get it passed! But seriously, if people took time to read and think about this, it would never pass; thus the rush.

Please tell your congressmen that failure to honor their oaths to uphold the defend the constitution will disqualify them from every getting your vote again. They already know that this bill is vastly unpopular, but they need to hear it from you. They actually do keep a tally, and letting them know how you feel really can work –so long as their phones are ringing off the hook.

For background, here’s how House members voted last time around (when it failed). Here’s how the Senate voted on the bill that they will try to jam through the House today.  Here’s a list of House members that may change their vote. Here’s a list of all congressmen with their contact info.

Please contact House members first since this bill has already sailed through the Senate.  A simple 2-line email will do. This legislation is insideously dangerous, so please contact them right away.

Utah to Monitor Gas Prices

The Deseret News is reporting that Governor Huntsman has ordered the Utah State Department of Commerce to monitor gas prices.

That’s just politics as usual, but I’m alarmed by how many people here in “conservative” Utah are commenting that they want the government to step in and “do something” rather than just “monitor”. It’s like we’re all living in some fantasy land where socialism works…

Attention people: price controls only ruin your quality of life. Prices that are artificially low cause shortages, and shortages mean hoarding, rationing, and long lines at the pump. Some days you just won’t get any. Do you seriously want that?

We should be thankful that the State is only “monitoring” for now. Ideally it wouldn’t be monitoring at all, because that’s a slippery slope –especially because political motives are involved. Plus, “monitoring” could be easily be done by an activist group or a not-for-profit –and they could do it without spending your tax money. That said, I will be interested to read the DoC report; I just wish it were generated by someone else and on someone else’s dime.

By the way, where were the government monitors a couple months ago when Utah enjoyed the lowest prices in the nation?

Prices fluctuate. If they’re unfair to either party, the market will insure that they become fair. That’s how free markets work. No intervention is necessary; in fact, intervention is almost always counterproductive.

Utah, the nation, and the world need a healthy dose of Econ 101. We shape our governments by our will, and if the voting public is ignorant of basic economics, our stupid will may well lead to our own demise.

I highly recommend Sowell’s Basic Economics: A Citizen’s Guide to the Economy to anyone who wants an excellent treatise on economics, especially as it pertains to government.

Big Government Responsible for Housing Bubble

 I wish more people understood the substance of this recent article from Ron Paul:

Big Government Responsible for Housing Bubble

The House passed two bills attempting to rehabilitate the housing and mortgage market this week.  There doesn’t seem to be any shortage of criticism and blame for the bad decisions, and rightly so.  Lenders and banks do share much of the blame for the overheated market.  Lending standards were relaxed, or even abandoned altogether, creating an exaggerated pool of homebuyers that led to ballooning home prices that many, especially real estate investors, expected to continue forever.  Now that the bubble has burst, the losses are staggering.

However, many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place.  The Federal Reserve’s artificially low interest rates created the loose, easy credit that ignited a voracious appetite in the banks for borrowers.  People made these lending and buying decisions based on market conditions that were wildly manipulated by government.  But part of sound financial management should be recognizing untenable or falsified economic conditions and adjusting risk accordingly.  Many banks failed to do that and are now looking to taxpayers to pick up the pieces.  This is wrong-headed and unfair, but Congress is attempting to do it anyway.

These housing bills address the crisis in exactly the wrong way, by seeking to hide the problem with more disastrous government bail-outs and interventions.  One measure, HR 5830 the Federal Housing Administration (FHA) Housing Stabilization and Homeowner Retention Act would allow the FHA to guarantee as much as $300 billion worth of refinanced home loans for those facing threat of foreclosure.  HR 5818 the Neighborhood Stabilization Act, would provide $15 billion in loans and grants to localities to purchase and renovate foreclosed homes with the object of then selling or renting out those homes.  Thankfully, President Bush has vowed to veto both of these bills.  It is neither morally right nor fiscally wise to socialize private losses in this way.

The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some.  We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them.  It is a terrible idea to spread the financial crisis any wider or deeper than it already is, and to prolong the agony years into the future.  Socializing the losses now will only create more unintended consequences that will give new excuses for further government interventions in the future. This is how government grows – by claiming to correct the mistakes it earlier created, all the while constantly shaking down the taxpayer.  The market needs a chance to correct itself, and Congress needs to avoid making the situation worse by pretending to ride to the rescue.

The only change I would make is to note that, despite its intentionally misleading name, the Federal Reserve is not a government entity; it’s a privately owned bank.

By the way, if everybody wants “change”, and everybody is worried about the economy, why does the Utah GOP (and the GOP in general) go out of their way to ensure that the only presidential candidate that is talking about meaningful change at the very root of our financial problems gets no serious consideration from the mainstream.  Ron Paul has been talking about sound monetary policy for years; and even thought the bubble has burst (making the validity of his tenets even more painfully obvious), he still gets no love from the powers that be at the Utah Republican Party Convention.

Be sure to follow Ron Paul’s weekly columns. They really are excellent.

Wall Street Journal Voucher Editorial

Here it is in its entirety.

Wall Street Journal
Union Libel

November 5, 2007
REVIEW & OUTLOOK
Utah’s children may not excel in math or English, but their teachers are very good at instructing them in how to run a political campaign. As 2007 achievement test data show another disappointing year for the state’s children, the teachers union is running a multi-million-dollar campaign to insulate itself from competition.

On Tuesday, Utahns will vote on whether to proceed with a statewide voucher program enacted in February. The plan passed both houses of Utah’s legislature after a rough-and-tumble debate, and was signed by Governor Jon Huntsman, Jr. But the teachers union immediately launched a ballot initiative to overturn the law and succeeded in blocking it from taking effect prior to Tuesday’s vote.

A new report from the Utah Foundation shows the state’s public education could certainly use a shake-up. The states most similar demographically to Utah, by measures such as student poverty and parental education, are Iowa, Montana, Nebraska, South Dakota and Wisconsin. Utah finishes last in this group, based on eighth-grade scores from the National Assessment of Educational Progress (NAEP). Utah youngsters trail the pack across the range of core subjects — last in math, last in reading, last in science.

Still, the unions are banking that fear of the unknown will trump demonstrated incompetence. The opponents have raised a bundle to disseminate their predictions of doom, including more than $3 million from status quo headquarters, the National Education Association. They’re stoking that fear with antivoucher TV ads that aren’t winning high marks for honesty. Salt Lake’s KSL-TV, an NBC affiliate that has editorialized against vouchers, nonetheless felt compelled to label as “false” the central claims in two recent attack ads against vouchers.

One ad featured the “Utah teacher of the year” claiming that vouchers “take resources away from public schools.” In fact, the law provides only up to $3,000 per child toward private school tuition, depending on family income, and the voucher money comes from the state’s general fund, not the education budget. The average voucher will cost $2,000, but the state now spends $7,500 per student. The public schools get to pocket the difference, $5,500, without an obligation to provide any services. So the more parents choose vouchers, the higher per-student spending will rise in the public schools.

Another attack ad claimed that private schools would have “no accountability,” when in fact they are required under the law to report to parents how their children in voucher-supported schools do each year on nationwide achievement tests. Market-based competition will force exactly the kind of accountability that the unions fear in public schools.

Judging from recent polls, the scare campaign is winning. Still, supporters of school choice say that the voucher law could still survive, thanks to expected low turnout among the general population and higher-than-normal turnout among Utah Latinos, who make up roughly 12% of the population. Nonprofit Hispanics for School Choice reports an aggressive get-out-the-vote effort of personal visits and phone calls, and increased attention on Spanish-language radio, and at community events and church services.

Allowing the landmark voucher law to go forward would be a victory for students of all races, with more choices for parents and more opportunities for students. Halloween is over; Utahns should ignore the horror stories from unions trying to protect themselves, no matter the consequences for kids.

Anti-Voucher Myths Debunked

The following is a response to a comment made on an earlier blog post. I address it here partially because of it’s length, but mostly because I think it would be generally beneficial to lots of people who have doubts about Referendum 1.

@ Clint

Actually Referendum 1 will divert money away from public schools. The money being allocated may not be in the budget but it should be and that is the point. We could use this money to help fix our public schools.

Referendum 1 will not divert money from public schools. Even if it did, it would amount to .0025% of the education budget. That’s nothing, and putting so little money directly into public schools would solve nothing. This is not about the money, no matter how badly voucher haters want you think it is.

It seriously makes no sense to give up on our public school system.

Who’s giving up? Public schools will certainly have their place. Public and private schools are not mutually exclusive.

This money could be going to increase teacher’s pay. If we increased what teacher’s made it would be more of an incentive to go into the education field. We would get brighter and more qualified teachers.

Oh yes, if that .0025% raise goes directly to the teachers (which it wouldn’t), people will be absolutely clamoring for those jobs.

Here’s a real idea: why not create a market for those jobs so great teachers can choose whomever pays the best. A bigger market means more competition among employers, more competition among employers means increased teacher pay, and increased teacher pay together with increased competition means better teachers. Those are economic facts; it’s as simple as that.

If that were the case [that "we would get brighter and more qualified teachers"], we would also be able to reduce class sizes.

This bill will reduce class sizes, and it’ll do it for much cheaper.

Our children do not deserve to just be a number on a roll. We need to emphasize more one on one education and more time being spent on each child.

No kidding. Do you think anyone in the world disagrees with those arguments? Those are not points of differentiation, but as long as you’re trying to differentiate on points that everybody and their dog agrees on, you might think of adding: “No child should be force-fed summer sausages for mere amusement.”

I would argue that Referendum 1 protects your axioms better than the status quo: If any child really isn’t getting enough teacher face time, their parent will have reasonable alternatives so they can vote with their feet. Think about it.

Everyone who is for referendum one wants parents and kids to have a choice. The fact is they already do have a choice.

Exactly, one choice. As Henry Ford said: “The customer can have any color [Model T] he wants so long as it’s black”.

OK, I know you didn’t mean only one choice, but let’s face it: when the public school system limits you to any of its schools, that’s somewhat analogous to Del Taco saying you can eat anything in the world you want as long as you buy it from Del Taco’s dollar menu. That’s not choice.

Why do tax payers have to pay for someone else’s child to go to a private school?

On that note, why do taxpayers have to pay for any child to go to public school? The reason we subsidize education is that a educated populace is in everybody’s best interests. Granting a monopoly the exclusive right to those subsidies, on the other hand, is in almost nobody’s best interests.

But as long as we’re subsidizing, why not do it efficiently by offering smaller subsidies to children whose parents decide their needs are better served elsewhere? It really is that simple. For every poor kid that leaves a public school with a $3000 voucher, Utah taxpayers save about $4500.

Also, why should taxpayers who choose an alternative school have to pay twice? That’s a terrible price to pay to opt out of a system that (nationally) ranks 25th in the modernized world.

But something tells me the labor unions that are out to kill Referendum 1 aren’t really worried about tax increases. Indeed, their true interests lie in protecting their monopoly so as to continue to “own” education in America. This is much to the detriment of any parent who wants anything that’s not on their menu.

But in case it really is taxes you’re worried about, why don’t you take the Utah Taxpayer Association’s word for it? Referendum 1 save you money.

If you want your kid to go to a private school because you think public schools are failing our children then send them.

OK, but that option is currently only realistic to the rich because they’re the only ones who can afford to pay twice. Referendum 1 aims to give poor kids (like the 45 or so percent of Utah minorities that drop out of some disadvantaged Utah schools) the same freedom and flexibility that rich folks have –all by spending less. Would you deny them that right?

Charter’s schools are also a very affordable option for low income families who have given up on public schools.

Yes, but charter schools are not for everyone either. Even if they were for everyone, charter schools are very limited and many have very long waiting lists –so much so, in fact, that many charter schools have adopted a lottery system to determine the lucky few who get in. Are you seriously calling that a choice? If charter schools were already meeting current demand, whence all the outcry for more options?

Furthermore, the very labor union that fought tooth and nail to kill charter schools is now fighting tooth and nail to kill vouchers. In fact, they fight just about every new innovation that might ruffle the feathers of their educational Monopoly. Why climb in bed with them now? Is it because they’ve already begrudgingly conceded a little?

If you like charter schools now, chances are you’ll also like voucher schools: each takes the real decision-making power one step closer to its rightful owner, the parents.

I think the problem with public schools in Utah is they are poorly funded.

Then let’s increase their funding! Nobody is saying we don’t want to invest more in public schools, but let’s also make sure we’re spending our money wisely! If we invest in the entire market rather than just the monopoly, the entire market will be more responsive. But if we invest solely in the monopoly, it’s likely that nobody will be more responsive. Same ‘ol, same ‘ol.

We are taking money away from public schools just by not using this money to improve them.

Again it’s .0025% –almost 0. Even if you could fix the problem by throwing money at it (which you can’t –especially in a Government monopoly) that amount would do virtually nothing. I’ll be happy to put more money into everybody’s education, but I want to see that money create significant change.

The best way to help schools improve is to introduce real competition into the system. When FedEx came along, the Post Office improved dramatically: shorter lines, faster shipping, taller socks –the works. When email started to take off the USPS lowered rates. (But they were going to lower rates anyway, right? Isn’t it always in the nature of a monopoly to “give you the most value for money”? [Sarcasm added.])

Bottom line: increased competition is good for customers. Have you noticed you can buy any color of car you want these days? Education should operate on the same principle, but instead of getting adjustable cup holders and a built in CD player, we’ll get kids who can compete in a global market. Now that’s a sweet deal.

I understand the choice argument you are making. I just think it is misguided. Right now even with the poor funding we get in public schools, our kids can graduate from high school with an associate’s degree. Right now even with the poor funding we get in public schools, our kids can take Advanced Placement courses taught by teachers who are certified through local Universities. Right now even with the poor funding we get in public schools, our kids have every oppurtunity to succeed in our public schools through hard work and study.

Those are all great programs, but what about the 45% of minority students in Utah who never graduate from high school? Think about that number for a minute. Your school in Utah Valley might have served you well, but their schools in West Salt Lake have failed them; and now what is their outlook on life? Certainly something could be done to help those kids, and the answer is not more of the same.

Many of those minority kids would love to get into private school, but who can afford that? Why must the poor kids –the very ones that “free” public schools are meant to help– remain stuck in a system that is failing, especially when we can get them out of that system at no cost to us?

And what about kids who want do go directly into high-paying tech jobs? What about kids who need a dedicated “scholarship counselor” to have any chance at paying for the university of their choice? What about potential nightschool kids who never see their single moms because mommy has to work at night? What about kids who want to excel at anything that is not offered in our public schools?

If you’re saying that every conceivable innovation that might benefit Utah children has already happened in our public schools, you’re dead wrong. There is much more that can be done, and the innovations that will best serve Utah families will take root in an education market that is allowed to flourish because parents have a feasible opportunity to pay for the education that’s best for their kids.

Besides poor funding, another major problem is poor parenting. Having parents involved in a child’s education is crucial. If parents think they can just send their kid to a private school and assume their kid is doing well this is a mistake. Regardless of the school your child attends parents need to be involved and committed to their child’s education

That’s another non-differentiating point that nobody will argue with. Also, “Children can stay more focused when their study environment is kept hornet-free.”

But here’s a though, don’t you think that parents who can choose where their children are educated might be more involved in the system? It’s easy to disengage when you have virtually no choice in the matter.

Plus, I repeat, private schools are no better then public schools in this state.

No better for whom? Can you presume to know what is best for each child in Utah? I think parents know what’s best for their children –not bureaucrats, not teachers unions, and definitely not you.

Furthermore, if private schools and public schools really do test equally, where is the opposition to substituting a $7500 public school expense with a $500-$3000 private school expense. If both give equal results but one costs less, one of them really is better, isn’t it?

But there are many metrics good parents may use to measure up their schools; and although many metrics are academic, many more are not. The night school example was based on a family time metric. The high tech training school example was based on a job placement metric.

But let me push this further since I think it needs to be said. If your kid’s school starts handing out condoms without so much as advising you, might that also be some kind of metric?

Bottom line: Let parents decide what’s best for their kids. We know and love our own kids a hell of a lot more than you or anyone else does, and we are best equipped to make the decisions that will affect their entire lives. It’s a parent’s right to determine how, where, and what their children learn. Denying parents that right is a disservice to everyone, especially the kids.

If even one precious dollar is diverted from our public school system, which is broke down as it is, we have failed the overwhelming majority of Utah children. Yes, taking tax payer’s money to fund private schools instead of public schools is diverting money that could be used to fund our school system.

Its .0025 percent, dude. Freedom is priceless.

Good Night and Good Luck,
Clint.

You too bud. Tell Aaron I say hi.

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For more myth-busting goodness, please download this stellar doc. Remember, the polls results are tight, so please get out and vote on Tuesday.

Utah School Voucher Amounts: Dissecting the FUD

Opponents of Utah’s school voucher bill have ads that denounce the proposed voucher system as flawed because most of Utah’s low-income families would still not be able to afford attendance. But here’s a non-socialistic idea: why not let parents make their own financial decisions?

Even if this proposed voucher amounts weren’t enough at this very moment, I am 100% confident that the market would respond to the influx of potential cash made available by this program by lowing prices.

But the current amount is enough. The average K-8 schools is already around $4000, and Parents for Choice in Education reports that the median cost of private schools in Utah is around $4500. Beyond that, most private schools will already quietly make exceptions to their advertised prices to allow low-income families to attend, thereby subsidizing education for low-income families even further.

If that’s not proof enough, many low-income families are already making tremendous sacrifices to allow their attend privates school, and thousands more are on waiting lists. As the VCs would say, the dog is already eating the dog food. There’s no question that these low-income families would be benefited by the passing of referendum 1.

Furthermore, if the amount of money that vouchers are to provide really is too low to make a significant difference, whose fault would that be? Most pro-voucher people would probably prefer to make the voucher value as close to the $7500 we pay per public school student as possible. Instead, the average voucher scholarship will be only about $2500, and nobody will get more that $3000.

To me this is insidious; the very people who required the scholarship amount to be reduced in order for the bill to make it through the through the Utah legislature now say it’s too low to make a difference. These are the same people who would have the amount be 0. Does that seem disingenuous to anyone else?

Finally, the question begs to be asked: if the voucher amount really is so insufficient that most Utah families would have no choice but to leave their students in public schools, then why are the anti-voucher folks so worked up anyway? After all, isn’t that exactly what they want: a continuation of the status quo? They would not be fighting tooth and nail to kill this legislation if it were a moot point.

The truth is that the amount vouchers will provide is enough to make a real difference. Frankly, I wish it were more so low-income families could have even more freedom and flexibility to education their children. I wish it were more because an increase in voucher value would facilitate the creation of even more good, viable private schools. I wish it were more because good families all over Utah deserve more.

If it weren’t for the anti-voucher crowd the amount would be more, so don’t let them cloud the issue by saying that it’s not enough. That’s a FUD campaign. It’s their mechanism of creating Fear, Uncertainty and Doubt in your mind so you vote the way they want –making the voucher value essentially $0. This is political rhetoric, and frankly, I think it’s dishonest.

Hopefully voucher values will increase when the program proves successful, but we’ve got to give it that chance. In the meantime, it’s enough for the thousands of poor kids who are already on waiting lists.

Please get out and vote FOR referendum 1 to give Utah’s low-income students at least a sporting chance at freedom in education. And if you really value your freedom, grab a friend or 2 to vote with you. Polling shows the 2 sides as being neck-and-neck, so every vote really does count.

Let Free Market Principles Work for Utah Kids

I wish everyone in Utah would watch this phenomenal 20/20 video to get a real understanding of the free market principles that would make the voucher system work. It really is a must see.

It’s also enlightening to get a glimpse at the out-of-state union interests that are pouring millions into Utah to try to get this referendum killed. They’ve used the same tactics and the same flawed (or deceptive) arguments in other states with tremendous success, much to the detriment of America’s children and thus to society as a whole.Please watch the video and share it with anyone who may still be unsure about the merits of vouchers.