Friday, February 25, 2005

From the Horse's Mouth

I don’t really want to beat a dead horse, but it seems that this horse isn’t completely dead yet, it’s not even mostly dead. The poor animal doesn’t realize it’s losing the race. Worse, it doesn’t even know there is a race. The American public education system was a thoroughbred race horse, a real charger, but after long abuse it’s degenerated to the point of being a nag. Last week, Congressman Bernie Sanders hosted a town meeting in Montpelier which, in the words of W-CAX TV, would examine “the recent escalation of attacks on public education.” The congressman wants to “explore what can be done to preserve an educational system that provides equal educational access for all children and young people.” Slated to be with him on the stage were various school officials, the chairman of the House Education Committee, and Vermont State Teachers’ Union president.

I did not attend the town meeting, but I don’t expect there were many original ideas discussed. I imagine it was the tired, hackeneyed litany of “the vast right-wing conspiracy” led by “the moralistic, bible-thumping, homeschoolers” who were manipulated by “the evil Emporer Bush and Darth Rove” into depriving our future leaders of the education necessary to see through their nefarious and insidious (that’s evil for you recent public school graduates) machinations. I’d venture Congressman Sanders hasn’t a clue what’s causing the “escalation of attacks on public education” and his choice of cohorts suggests that the goal was to gloss over the real problems and fluff off the blame. It sounds like a conference of the foxes who guard the hen house. I can see it: the House Education Committee explaining how increased property taxes are better educating the kids, school officials with organizational charts showing the flow of funds down through the system to each student’s desk, and the president of the Teachers’ Union clarifying the relationship between teachers’ benefits and better education for our children. If you want to know why there are more attacks on public schools, ask the people who are making them not the people responsible for creating the problems.

Is anyone but me outraged at being taxed to pay for failure? Are teachers to blame, you betcha! Yes, it is a student’s responsibility to learn and a parent’s responsibility to monitor their child’s education, but it is the teachers’ responsibility to teach and the lion’s share of that is inspiring the kids to learn. The “It-Takes-A-Village-crowd” have appropriated much of the authority of parents, but they won’t take the commensurate responsibility of it. Teachers demanded recognition as ‘professionals,’ but when the students fail, they deny culpability: “there’s too many kids in the class,” or “there’s not enough parent involvement,” or “the kids need to be medicated.” Last time I checked, professionals are fired when they don’t perform and the boss doesn’t accept excuses, but in a school system the rules of life don’t seem to apply.

Ours is an interconnected, interdependent community. We all do our part and contribute to the whole. Teachers are important and deserve respect. But are they more important than the garbage man collecting and hauling their trash away? Or the bank teller? Or the grocery clerk? Or the secretary at any given office? On inservice days parents must lose a day’s pay or pay daycare for that time, in addition to paying the teachers for the day! Most people who work in the private sector, are required to maintain any “continuing education” on their own time. Teachers, on the other hand, rate pay increases that far outstrip others equally qualified and educated who are not in the public employ. They are guaranteed health insurance that a secretary in an office would kill for. Teachers qualify for taxpayer funded forgiveness on portions of student loans, but parents who give up careers to keep a home or homeschool don’t, nor do parents who take jobs and sacrifice time with their families for less pay than teachers get. Last week, Kathy Pellett announced legislation she’s drafting to exempt retired teachers from taxes incurred from “working more than a specified number of days...allowed under the provisions of their pension.” Well, excuse me, but other retirees don’t get that benefit, Representative Pellett.

If you really want to understand the “escalation of attacks on public education” simply look at page 100 of the Town of Springfield, Vermont Annual Report, Fiscal Year 2004. The report tells us that “spring 2004 results on the Vermont State Assessments demonstrate overall improvement of student learning, especially in reading and writing.” But the numbers give the lie to that bit of sophistry. In the tenth grade, 41% of “students met or exceeded the standard of learning” in reading with basic understanding, 39% read with analysis and interpretation, 36% could write effectively, 63% could demonstrate mathematical skills, but only 38% understood the concepts, and only 32% were able to demonstrate mathematical problem solving skills. Science was assessed in 11th grade where only 45% could demonstrate scientific knowledge and skills. The state averages are right around 10% above or below our Springfield students - yes, those numbers are what Springfield teachers are producing. If these teachers were graded according to the work they’ve done, their best grade (63%) would be failing - I think that’s a C-, isn’t it? If they were reviewed in any professional office in Springfield, or anywhere else, they would not be getting a raise or better benefits, but just might find themselves receiving a pink slip.

If inexcusable performance were not bad enough, the teachers tell us that school choice is a bad thing while they take full advantage of it for themselves. “Across the states, 12.2 percent of all families (urban, rural, and suburban) send their children to private schools...but urban public school teachers send their children to private schools at a rate of 21.5 percent,” according to a 2004 study by the Thomas B. Fordham Institute. In Washington, D.C. it’s 28 percent, 35 % in Baltimore, and 44 % in Philadelphia as reported in The Washington Times and The Chicago Sun-Times. Granted, the percentage is probably not as great here in Springfield, but any public school employee opting out of a public school is sending a thunderous message to parents and it’s being heard.

I homeschool my daughter. I won’t suggest this for everyone, but I know that what I’m doing with her can be done in any classroom in any school. Time-tested, tried-and-true techniques of the three “R”s and repetition. Teachers have told us for years that “mindless rote repetition” doesn’t work - except it’s not mindless, never has been, and so it does work, but it’s not fun, it’s work. At six, my daughter has read - yes, by herself, with minor input from me - Usborne’s Myths for young children and retold them in her own words so I knew she understood, she reads chapter books and does addition with carrying and subtraction with borrowing in triple digits; she has studied basic Earth Science and can explain concepts like plate tectonics, the life-cycle of a rock, and the cycles of air and water. At the kindergarten level she has internalized these concepts because of the “mindless rote repetitions,” and understands the material because we’ve invested the time in learning about these subjects - that’s teaching. I think it’s important to note that in our classroom we don’t have inservice days or snow days, just simple straight-forward reading, writing, and arithmetic. If you want the “attacks on public education” to end, stop using our children and taxes for social experimentation and get the horse back in the race - get back to the work of education.

Wednesday, February 16, 2005

Indefensible Public Schools

I was taken to task for slipping some “serious humor” into a recent article. “Serious humor” is making light of a serious subject. In discussing some historical figures and issues, I gave parenthetical explanations “for recent public school graduates.” One reader was so incensed that he feels I owe “the highly qualified and dedicated teachers in the Springfield school system, as well as the well educated graduates of Springfield High School a sincere apology.” Well, I have news for you - it ain’t gonna happen. When I’m wrong I will gladly, even gleefully, retract a statement, correct it, and apologize, but I won’t do so because some one’s feelings got hurt - especially when I’m right.

The facts of the matter suggest that schools in the United States are not performing adequately. We arguably had the greatest school system in the world, it was free for all, comprehensive, and produced a well educated citizen. This is no longer the case and hasn’t been for quite some time. I am a graduate of public school and I have worked in the public school system for many years in a variety of positions: student aide, teacher aide, special education aide, substitute teacher, and as a summer counselor in a High School immersion summer course known as Upward Bound. I dallied with the Education Dept while in college, so I know what it used to take to graduate with an Education Degree and I was not impressed (if you are a parent of a school age child I strongly suggest you take a few minutes and read the course requirements for an Ed degree).

My personal experience aside, a cursory perusal of the state of public education quite eloquently confirms my opinion. Most people reading this should recognize the acronym (for you recent public school grads that’s a word formed from initials, usually a name) ACT or, as it used to be known, American College Testing organization. ACT is a non-profit, non-partisan organization who’s goal is “to help individuals and organizations make informed decisions about education and work” by assessing “what learners have achieved through various stages of education, K-16,” through comprehensive testing, study and analysis. ACT released a report in Oct 2004 which stated “many high school graduates do not have all of the skills to succeed in college-level coursework or workforce training.” It is just that simple. Specifically, the report noted “only 22 percent of the 1.2 million high school graduates who took the ACT Assessment in 1004 achieved scores that would deem them ready for college in all three basic academic areas - English, math, and science.” Of those tested “only 26 percent [were] ready to earn a “C” or higher in their first college Biology course, and only 40 percent” in Algebra. I can see how this information is unpalatable, but I didn’t make it up.

American College Testing changed it’s name to ACT in 1996 because it was not just testing American students, it had globalized, but in fairness, let’s move on from ACT. The Program for International Student Assessment (PISA) completed it’s triennial testing in 2004 and you’ll be pleased to know that Finland and South Korea have the best students in the world. Out of 39 countries the United States placed 24th - for you recent grads, that’s not even in the middle, much less in the running. PISA measures “the ability of 15-year-olds to solve real-life math problems.” Not too long ago, a recent Springfield High School grad working at a local store needed a calculator to figure my change, is it any wonder? The United States was closer to the middle in last PISA, so we’re not getting better. How would we when we lower the educational standards to raise the performance levels?

No Child Left Behind (NCLB) has shown some promise, forcing many schools to perform, but even that is plagued by the very school system it is supposed to repair. The Center for Education Policy released a study demonstrating that “improved test scores are due to changes that 47 states have negotiated with the U.S. Department of Education that make it easier for schools to meet the law’s standards.” Read that again, please and notice that magic number. Forty-seven! Folks, there’s only 50 states in the Union. That means only THREE states have schools that are performing adequately. Any moment now some Bush-Basher is going to shred the paper frothing at the mouth and proclaim the failure of the schools is Bush’s fault for underfunding NCLB and cutting education spending, so let me be clear: in Bush’s first term, “the budget for the Department of Education has grown 58%” - check it out at

Is it any wonder why our children aren’t learning? You’d have to be blind, deaf, dumb, and completely disconnected to have missed the rash of school sex scandals. Jeffrey Owens was a middle school Spanish teacher at Camden School District in Oneida County, NY. Joseph Fischer was a Monessen High School (PA) teacher and football coach. Kathy Garrett was a special ed teacher in Seminole County, FL. Faron Grant Carpenter was a teacher of 4-year-olds at the Emmanuel Baptist Child Development Center in Farmington, NM. Christopher Casey was a third grade teacher at Castlemont Elementary School in San Jose, CA. Aaron Mohanlal was a middle school teacher at New Renaissance Middle School in Miramar, FL. Elizabeth Miklosovic was a teacher in South Haven, Michigan. Daniel Eugene Havlik taught at an Orange County (CA) middle school. Each of these individuals was engaged in sexual abuse or relations with students and these are only the ones from December 2004 that I bothered to keep track of. Just last week another three were caught. In case you think it doesn’t happen here, William L. Clark, principal at Plymouth (Vt) Elementary School was arrested in 1994 on a 1992 warrant for child molestation in Alaska. Hofstra University’s School of Education professor, Charol Shakeshaft wrote a report for Congress estimating “that almost one in 10 children, sometime between kindergarten and 12th grade, are targets of behavior ranging from unprofessional to criminal.” In January 2005, at Palo Alto’s (CA) Jane Lathrop Middle School career day event William Fried, a guest speaker, explained to 45 eighth-graders (i.e. 14-year-olds) that exotic dancing and stripping is a “viable and potentially lucrative” career worth upwards of $250,000 per year and that larger breasts “whether natural or augmented” adds to that figure: “for every two inches up there, it’s another $50,000.” Katie Couric just did a nationally broadcast interview of several students regarding their in-school sexual escapades and she wasn’t appalled, but rather flushed with excitement and reinvigorated. Seventeen magazine cavalierly reports that “55% of teenagers have tried oral sex” because (ala Bill and Monica) “they don’t regard oral sex as sex.”

I am not suggesting that all teachers are pedophiles, far from it. I believe the vast majority of teachers are good people and many are excellent teachers. If they would simply teach, I would probably have nothing to say, but there’s another agenda besides education in the school system. The NEA is one of the five largest Political Action Committees and one of the largest unions in the county. In 1996 it spent more than $39 million promoting it’s goals and has spent more each year since. The NEA lobbied Congress in opposition of tuition vouchers for private or parochial schools, in opposition to any Parental Rights Acts, and in support for taxpayer funded services for illegal aliens. According to it’s own resolutions, the NEA promotes education including “diversity of sexual orientation [because] it is the right of every individual to live in an environment of freely available information, knowledge, and wisdom about sexuality.” The NEA also vigorously opposes “merit-based pay” for teachers. “It’s contrary to a school working together and collaboratively,” according to CA Dept of Ed spokesperson, Jack O’Connell. Yvonne Chen, principal of Vaughn Next Century Charter School in Los Angeles, says “merit-based pay” has “helped turn the once failing school into an award-winning, blue ribbon center for learning while spending one-third less money per student than most average schools spend.” Schools regularly engage in education on a variety of other issues with partners like PETA where children are taught to “re-educate” their parents on animal rights and WorldWatch which teaches the children to “re-educate” their parents on global warming and the evils of automobiles. In Massachusetts, a middle school class was taken to Boston to watch the first homosexual marriage certificates being handed out because “it was an historic moment.” In Milwaukee children as young as 11 were excused from school to participate in a “get-out-the-vote” effort as if that were a civics lesson. In Manchester, Vermont, several years ago a teacher took a social studies class to see the Oliver Stone movie JFK as if it were a valuable and accurate portrayal of history and, more recently, a class from a local school here in Springfield went to the movies to see Polar Express - I fail to see the educational value, but maybe it’s just me.

What sums up the failures of the public education system for me and brings it right home to Springfield is my experience this summer. I was canvassing the Summer Festival registering people to vote. Recent Springfield High School graduates asked me how much the registration would cost, where they could register to vote for the national elections, and why they weren’t notified in the mail of upcoming elections. My favorite was one young lady who must have just come from her graduation. We were discussing the right and wrong of our intervention in Iraq, about which she had no clue. I tried to draw a parallel to WWII and when I noticed her vacant expression, I prompted her with a reference to the Holocaust, to which she replied pleasantly, “oh yeah, that’s when the Nazis ended that whole thing.” Yes, Virginia, there are many bright and committed students who graduate from public school, but unless you’re one of them don’t count on getting an education that prepares you for life.

Uncivil Rights

For the shortest month of the year, February has some important days in it. February starts with Groundhog Day which is shortly followed by Ash Wednesday. The day of love, Valentine’s Day, is in February. It has both Abraham Lincoln’s and George Washington’s birthdays and the day we celebrate them on, President’s Day. Oddly enough, February is also the month Frederick Douglass was born. In fact, Douglass and Lincoln have birthdays in the same week, which was why Dr. Carter G. Woodson, a Harvard scholar, created Negro History Week in 1926. Probably unforseen by Dr. Carter, Negro History Week developed into Black History Month. Another special February day for black history, which seems to never get mentioned, occurs in just a few days.

On February 26, the House of Representatives bill of 1964 arrived in the Senate. The story of this bill is remarkable in many ways and deserves some reflection. The original House version was passed by a vote of 291 in favor and 130 against. The record shows that Republicans supported the measure in greater numbers than Democrats, and in opposition Democrats numbered almost twice as many Republicans. Senator James Oliver Eastland, a Democrat from Mississippi, was the chairman of the Senate Judiciary Committee and a die-hard opponent of civil rights who had spoken often against such legislation. Somehow the House version was placed directly into the Senate calendar, thus by-passing Eastland’s committee where it was expected to be quashed. This bill would become a major battle in the Senate which was to be expected, considering the long, hard road it had traveled to get there.

The road began, if the movement can be tied to any one locus, with the Emancipation Proclamation of 1863, which was written by the first Republican President Abraham Lincoln and hotly criticized by Democrats on both sides of the Mason-Dixon line. Racism would keep blacks disenfranchised for still another hundred years, but in 1927 the Supreme Court decided Nixon v Herndon, making it illegal to hold “white primaries” and defining as unconstitutional state laws barring blacks from running in Democratic primaries. As a point of history, there were quite a few blacks already in Congress, but all of them were Republicans until 1935. Following the 1927 decision, the Democratic Party executive committees enacted rules that barred minorities, and those rules were struck down by the Supreme Court in Nixon v Condon in 1932. As a private group open to the public, the Democratic Party passed rules at the state level barring minorities and the Supreme Court banned those in Grovey v Townsend. The “Jaybird system” was created next by Democrats, organizing private clubs where slates of candidates could be selected by white-only voting and then transferred by sleight-of-hand to the party ballot, thus effectively barring minorities. The Supreme Court outlawed that in Terry v Adams. Stymied once again, the Democratic Party instituted literacy tests and other provisions that cumulatively became known as “Jim Crow” laws.

An interesting side note is that two founders of the NAACP, Ida Wells and Mary Terrell, were both Republicans. Surprising as it may seem today, it would have made sense then. The 1924 Democratic National Convention was held in New York City and hosted the “Independence Day Klanbake,” a KKK celebration culminating in the obligatory cross-burning. A minority of delegates proposed a condemnation of the KKK, but were not given time to speak. Not surprisingly, Democratic President FDR appointed two segregationists to the Supreme Court, Jimmy Byrnes and Senator Hugo Black (D-AL). Black was a proud KKK member. The New York Times reported on March 17, 1960 that South Carolina Governor Ernest Hollings “warned today that South Carolina would not permit ‘explosive’ manifestations in connection with Negro demands for lunch-counter services” and that Republican “President Eisenhower’s contention that minorities had the right to engage in certain types of demonstrations [was] confused [and had done] great damage to peace and good order.” On July 23, 1961, the New York Times told of a Democratic meeting including (hero of Bill Clinton) Governor Orval Faubus (AK), Ross Barnett (MS), Governor Ernest Hollings and other state governors. The meeting was held to organize the opposition to civil rights and the White Citizens Council was tapped to help at the grass roots. Between 1933 and 1964, Congress held no less than 26 major votes on civil rights issues which were supported 96% by Republicans and opposed 80% by Democrats. One such vote was on the Civil Rights Act of 1957, which was filibustered by the Democrats. Republican Senator Everett McKinley Dirksen of Illinois broke the Democratic obstruction and the law was signed by Republican President Dwight D. Eisenhower.

Democrat Senator Richard Bevard Russell, Jr of Georgia was in the vanguard of the opposition to the Civil Rights Act of 1964. Alongside Russell were Senators Eastland, Strom Thrumond of South Carolina, J. William Fulbright of Arkansas (another hero of Bill Clinton), Albert Gore, Sr. of Tennessee, Robert Byrd of West Virginia, and 15 others. They obstructed the bill on the Senate floor and Senator Byrd gained notoriety for long-windedness by filibustering for 14 hours. Again, it was Republican Senator Dirksen who broke the filibuster. According to the Chicago Tribune of May 31, 1964, “Without Dirksen’s efforts, this happy conclusion could not be anticipated, everyone agrees. If the Senate can be rescued from the morass in which it has floundered for nearly three months, the minority leader will rightly be given a major portion of the credit. The Democratic majority, huge as it is, would have been helpless without him.” For himself, Dirksen had this to say, “the time has come for equality of opportunity in sharing in government, in education, and in employment. It will not be stayed or denied.”

The final tally of the votes in the Senate was 73 in favor and 27 against. There were 46 Democrats in favor, or 69%. There were 27 Republicans supporting the bill, or 82%. Of Democrats, 38% stood in opposition while only 20% of Republicans did. It is odd, in retrospect, how the Republican Party has come to be cast as the party against civil rights. South Carolina Governor Ernest Hollings became a U.S. Senator despite raising the Confederate flag atop his state Capitol. He has retained his Senate seat despite blaming a 1984 Presidential loss on “wetbacks from California,” calling blacks “darkies” and the Rainbow PUSH Coalition the “Blackbow Coalition,” and deriding Senator Metzenbaum as “the Senator from B’nai B’rith.” In 1993, Hollings described the African Delegation to the Geneva GATT conference as “potentates from down in Africa, you know, rather than eating each other, they’d just come up and get a good square meal in Geneva.”

Strom Thrumond was a racist who accepted campaign funding from the KKK and ran for President as a segregationist in 1948. In honor of his 100th birthday, Republican Senator Trent Lott paid him homage, “when Strom Thurmond ran for president, we voted for him. We’re proud of it. And if the rest of the country had followed our lead, we wouldn’t have had all these problems over all these years, either.” Connecticut Senator Christopher Dodd observed that “if a Democrat leader had made [such] statements, we would have to call for his stepping aside, without any question, whatsoever.” The hounding Lott received resulted in just that, he stepped down. As an homage to Senator Robert Byrd’s 17,000th vote, Senator Dodd said, “Robert C. Byrd....would have been right at any time...he would have been right at the founding of this country...he would have been right during the great conflict of civil war in this nation. I cannot think of a single moment in this nation’s 220-plus year history where he would not have been a valuable asset to this country.” Robert Byrd was a recruiter for the KKK and both he and Christopher Dodd are still Senators to this day. Whatever happened to the “credit” that the Chicago Tribune thought should go to the Republican Senator?

Wednesday, February 09, 2005

Tidal Wage

The more things change, the more they stay the same. “A number of Washington’s lawmakers have once again proposed to substantially raise the minimum wage employers may pay workers” - could be a headline from any recent newspaper, but it’s from 1988. The year before that, Sen. Edward Kennedy was pushing for an increase in the minimum wage because the current rate did “not permit full-time workers to provide the bare necessities for their families.” In 1938 Congress wrote the Fair Labor Standards Act, which mandated a minimum wage for only the few ‘low wage workers’ (i.e. less than 50% of all workers). By 1990, the Fair Labor Standards Act had encompassed over 90% of American workers. If the minimum wage is a tide, it is not one that “lifts all our boats,” but rather a neap tide leaving all our boats wallowing in shallows.

The concept of a minimum wage seems laudable: provide the low-paid workers with a liveable wage. But, what is a liveable wage? How do we determine what that should be? A liveable wage is a highly subjective thing, it’s based on a myriad of choices a person can make. The current figure from Washington is $5.15, while in Vermont it’s $7 per hour. A McDonald’s hamburger is just under a dollar or about 10 minutes work. A movie will cost you over an hour’s pay, if you don’t get any popcorn (which will set you back half an hour). A nice, but not extravagant, dinner for two (depending on your tastes) will take you at least 6 hours to pay for if you work for minimum wage in Vermont. Who can afford to live at $7 an hour? Well, no one of course, so why is the minimum wage not set at $15 or 20$ an hour? If the idea is to assist low-wage workers, why the reticence to really do it, why the half-measure? Clearly, because no one would accept a realistic minimum “liveable” wage, except those who would earn it.

Of course, it’s clear that $7 isn’t a liveable wage, so the talk in Montpelier is to raise the minimum incrementally to $8 within 2 years and (hopefully) bind future increases to inflation, creating a ‘self-adjusting system.’ Not coincidentally, both Florida and Nevada have already initiated a similar system and Michigan is the current battleground. On January 24, the Associated Press reported “labor unions pushing for an increase in the state’s minimum wage” in Lansing, Michigan. The AFL-CIO and the Service Employees International Union are pressing the legislature to raise the minimum wage and are threatening to engage in a grass-roots effort to put the issue on the 2006 ballot. It’s curious that labor unions would be pushing the minimum wage issue. With their legally guaranteed and protected bargaining practices, labor union members don’t work for minimum wage. It’s curious until you consider that the unionized pay rates are tied to the free market pay scales: a raise in the minimum wage means the base unionized wage increases with the raises rising up the union ladder. But that couldn’t be why unions push raises in the minimum wage, they do it because the really care about low-wage workers.

David Card and Alan Krueger, both Princeton University economists, wrote Myth and Measurement: The New Economics of the Minimum Wage in which they challenge the conventional economic wisdom on the minimum wage. That economic wisdom is that a minimum wage is a bad thing and that it stifles the job market and the economy. President Bill Clinton and his Secretary of Labor Robert Reich used the book’s conclusions as the basis for raising the federal minimum wage. Not a great surprise, considering that Reich’s chief economist within the Department of Labor was, none other than, Alan Krueger. (It should also come as no surprise that the greatest supporters of Bill Clinton were labor unions.) Since it’s release, Myth and Measurement has been carefully studied and debunked. Card and Krueger focused on aspects of the research which promoted their theory and disregarded results or neglected to analyze aspects that challenged their theory. In one part they did phone surveys of fast food restaurants in New Jersey and Pennsylvania, establishing that the increase in minimum wage would not affect employment, but they never looked at the actual numbers after the minimum wage increases which clearly showed a dramatic effect. The minimum wage increased in 1991, in 1990 teenage employment was 33.8% and in 1992 it was 29.1%. The effect is more dramatic when compared to neighboring Pennsylvania. Both states have parity in 1988 at about 40.5% teenage employment. By 1992, New Jersey was down to 29.1% while Pennsylvania fell to 36.8%. The difference being that New Jersey raised it’s own minimum wage on top of the Federal mandate and Pennsylvania held to the Federal rate.

Economic theory suggests that demand and supply are linked by price. Real life confirms the economic theory. When Florida suffers a cold spell, orange trees are damaged, fruit production is diminished, and the cost of oranges at the market goes up. Now, if the growers simply raised the price of the oranges to increase profit, shoppers would buy fewer oranges. In the same way, when the price of a job is artificially raised by governmental fiat, employers will provide fewer jobs. Life really can be that simple. “Employment is lower than it would have been if no minimum wage existed. This is the case even in periods of substantial economic growth...” according to the 1983 Report to the U.S. Senate Committee on Labor and Human Resources of the General Accounting Office. Minimum wage rose 46% between 1977 and 1981 and 644,000 jobs were lost in the teenage bracket alone as reported by the 1981 Minimum Wage Study Commission. In 1988 the Congressional Budget Office was chastised by the House Democratic leadership and had to rewrite a study because the report, as a Democratic staffer put it, “provided information that was not requested.” The information not requested was a CBO prediction that the minimum wage increase being proposed would result in a loss of 250,000 to 500,000 jobs.

Here’s a simplistic, but accurate, way to view the “wage environment.” The “wage envrionment” is the pool of all workers across the entire spectrum of an economy. Nothing exists in a vacuum. The beat of a butterfly’s wings in Thailand might very well contribute to the hurricane in Bermuda. Toss a pebble into the pond and the ripples encompass the whole of it. When McDonald’s gives the hamburger-flipper a raise, the increase in the cost of doing business needs to come from somewhere, either the flipper produces more, or the cost of the hamburger goes up. If the flipper’s production increases, it’s all good. If the flipper’s production remains constant (i.e. his wage is increased by fiat), the offset of increased wage must be met by other means, usually an increase in the cost of the burger. The cashier, who’s been on the job longer than the flipper, sees his raise and expects one too. The secretary eating her lunch at McD’s notices lunch costs more and asks her employer (an accountant, let’s say) for a raise. The accountant gladly gives her a raise, because she’s worth it (and he can’t run the office without her, so he can’t let her quit). The accountant raises his fee to his clients. His clients own businesses and they pass on the increase in accounting fees to their customers, not to mention the raises they give to their employees who eat more expensive hamburgers at McDonalds. The ripple of raises spreads through every sector.

Aside from the simple issue of raises and cost of living (because that’s what COLA is - thus-and-such costs more, so the wage-earner needs more to simply keep up), there’s the issue of non-linear increases. The accountant pays more to his secretary and becomes more attuned his finances, so he might go out to dinner less frequently. The other business owners whose employees eat at McDs do the same. Now the waiter at his favorite restaurant has fewer tips and the restaurant owner has less income. The owner of the restaurant lays off a waiter or two. The waiters still working would like to see that new movie, but movies are expensive, so they wait for Blockbuster to get it. The folks at the theater feel the pinch. One less candy counter person or projectionist. The reverberations truly are felt around the world in a global economy such as we have today.

Contrary to the claim that employers would rather have government programs for low-wage earners than pay a “fair” wage, employers realize that the government is US (including them). Employers balance fair pay with fair production. They fire (when the law permits) low producers and hire the best producers available. Low wages are an issue of the nature of the work involved or lack of education/skill-set and that’s where we as a society need to focus to resolve low wages. As a humanitarian tool to raise the standard of living for the downtrodden, the minimum wage is another abject failure of ‘The Great Society’ and America can ill afford it.

Thursday, February 03, 2005

Ponzi Security or SSI and how they fooled us again

Psst... Hey, you. Check this out. I have a great deal going here. What? You don’t like money? O.K. then, here’s the deal: I’m going to bring you in on the ground floor. You’re going to thank me for this later. Sure, it’s going to cost you some money, $5000 to be exact, but hey...don’t look like that. I’m telling you this is going to work, it’s working for me. You invest $5000 with me and I’m going to help you make $50,000 in ninety days. No, really. See, it works like this: we’ll invite 10 of your friends to invest in the business. Each of them will put in $5,000 and that’s your share. Then we get 10 of their friends to each invest. You’re not going to believe how fast this works - I got mine in less than ninety days! We’re all going to be rich!

Chances are none of you have had this conversation, but maybe some of you have. This is known by the FBI as The Ponzi Scheme, for Carlos Ponzi who made it really, really big for a while between 1919 and 1934 when he was finally released from prison and deported to Italy. Upwards of 40,000 people bought into his scams and passed to him somewhere in the area of $15 million.

Another scam is known as Airplane. Investors can buy a low-grade ‘seat’ and, by selling ‘seats’ to other investors, they move up to better classes and ultimately (theoretically) cash out with big bucks. In Missouri, they’ve given it a new twist describing it as “gifting networks,” the most recent being the “Original Dinner Party.” In this scam, entrants begin at the “salad level” and progress through the scam by bringing new people in and moving up the menu to the “dessert level.” As a genre, these scams are cumulatively known as Pyramid schemes because of the hierarchical nature of the scheme with one person at the top reaping the greatest benefits and many people at the bottom losing their shirts.

There was an enterprising fellow in the 1930s who saw great potential in ‘pyramiding’ and created a scheme that has survived to this very day. In his scheme 16 people would pay into an account for one person and that beneficiary could then live off the proceeds for the remainder of his life. Down through the decades, the novelty of the scam has worn thin and today only 3 people are paying into each account, but it’s still the most popular game going. It’s called Social Security Insurance.

It is interesting to me to note that Ponzi, Airplane, and Pyramid schemes are illegal everywhere, but when the government does it, it’s ok. In the same way, gambling and lotteries are illegal, until the government runs them! Supporting the elderly and those who are unable to earn a living is certainly a good thing. I could make arguments about the legitimacy and legality of taking money from one group to give it to another, but I’ll leave that for another time. What really moves me is the dishonesty of those who so vocally and viciously oppose George W. Bush.

The Democratic Party is simply dishonest and it’s high time Democrats should admit it. What is good for the country, and even their constituents, is just not what moves Democrats. When Democrats criticize “No Child Left Behind” you should understand one thing - the program isn’t what they oppose, it’s who put it forward. Hillary Clinton, acting for her husband, then Governor of Arkansas, attacked the problems hindering the school system of Arkansas. She headed a commission, held hearings, analyzed reports, and ultimately created a program to save Arkansas schools. What she came up with bears a striking resemblance to NCLB. She was hailed as a visionary and is considered “the most intelligent woman on the planet today.” When George W. Bush does essentially the same thing (and gets results, I might add) he’s a partisan “shrub” trying to undermine and destroy our education system. In the same way, Bush get’s no support from Dems on Social Security reform, not because it’s in good shape, but because Bush and the Republicans should never get any credit.

Democrats would like to cast Social Security as a system that needs only some “adjustments,” that it has “challenges,” that it is in no way heading for “bankruptcy.” Even Democrats recognize that by 2042 the program will not be able to fully pay benefits. When you go to your creditors and ask to resolve your debts for a percentage of your indebtedness, that’s defined as being bankrupt. Despite that, Democrats insist that Social Security is not a “crisis” and that Bush is fear-mongering and inventing a crisis. Democrats don’t like history (they created Social Studies to replace it so that people like me wouldn’t exist); what history tells us about Social Security is that it most certainly is a looming crisis: it was in 1998 when Bill Clinton, speaking at Georgetown University, described “the looming fiscal crisis in Social Security.”

The Democrats’ solution to the ‘challenge’ is to raise payroll taxes, but they won’t say that; instead they propose to remove the cap to the payroll tax. So, let me get this straight: you’ll raise the cap, take in more in taxes, but that’s not a tax increase! What they mean is that the ‘little people’ won’t pay more in taxes, only the ‘wicked rich,’ and we’re only making them pay their fair share, anyway - at least until the ‘little people’ get raises or the Dems need more funds. For more Democratic dishonesty, let’s exercise a little history again. Previous to speaking at Georgetown in 1998, Bill Clinton commissioned 3 separate panels to examine the “looming fiscal crisis in Social Security.” The Bipartisan Commission on Entitlement and Tax Reform met between 1993 and 1995. From 1994 through 1996 the Advisory Council on Social Security held hearings. The National Commission on Retirement Policy worked between 1997 and 1998. Individual ‘private’ accounts were included in the reforms suggested by each panel! Al Gore was opposed to private accounts, but Bill Clinton favored them, as reported by former Assistant Treasury Secretary David Wilcox, former Deputy Assistant Treasury Secretary Douglas Elmendorf, and a former aide in the National Economic Council Jeffery Liebman. So, when Nancy Pelosi, John Kerry, and Harry Reid call Bush’s plan for personal savings accounts “divisive,” “partisan,” and “conservative,” they are being totally and completely dishonest and worse.

Why didn’t Bill Clinton ‘fix Social Security’ when he had the chance? Wilcox, Elmendorf, and Liebman published “Fiscal Policy and Social Security Policy During the 1990s” in June 2001. In their conclusion they wrote: “President Clinton decided to pursue Social Security reform based on bolstering the Social Security trust fund rather than on creating individual accounts...this decision may have been influenced by the changing political dynamic in late 1998, as the possibility that the president would be impeached came clearly into view.” The Social Security trust fund is a pool of money that is very much like Clinton’s budget surplus. The trust fund doesn’t exist except on paper and never has. Clinton’s budget surplus never existed either, except on paper (does the phrase “10 year projected” ring a bell?), it was projected based upon taxes that would be paid in the ensuing ten years. It never became a reality because those taxes were projected from Internet- and technology-related business that crashed and burned and the economy went into a recession partly as a result of the collapse of that internet-bubble.

The most damning thing that Wilcox, Elmendorf, and Liebman say is that the Clinton “administration’s economic team was also aware of a significant group within the Democratic Party that downplayed the need for Social Security reform” back in 1998. We see that group today in Nancy Pelosi, Harry Reid, John Kerry, Teddy Kennedy, Charles Rangle and other Democrats. The strongest leg of the Democrat party are Social Security recipients - people who live in thrall to those who hold the purse-strings. If Democrats relinquish control over these people, how will they go on telling them their benefits are threatened each election cycle? The Democrat resistance to fixing Social Security is purely partisan politics and the lust for power with complete disregard for the welfare of the people of these United States.