Calvin Coolidge and The Peace and Mercy of Christmas

Calvin Coolidge has long been one of my favorite presidents, based upon biographies I have read, his renown for executive restraint and fealty to Article II of the Constitution, and his whimsical penchant for pulling pranks on staff members – as Paul Johnson notes in his sweeping book, Modern Times, Coolidge would ring the bell for staff and then jump and hide under his desk.

He isn’t as widely revered and regarded as much more active presidents and abusers of executive authority, and that is a shame, because it validates American respect for the bully pulpit at the expense of valuing the freedom of the individual. It is also a shame in that it ignores Coolidge’s meaningful contributions to the American ethos, including his writings on the Spirit of Christmas. As the Acton Institute blog notes, Coolidge provided several narratives on the transcending value of Christmas as a defining moral and spiritual essence that Americans should follow for all time.  The most succinct of this prose occurred in his 1927 Christmas address to the nation, quaintly delivered as a hand-written snapshot in newspapers.

To cherish peace and good will, to be plenteous in mercy, is to have the real spirit of Christmas. If we think on these things there will be born in us a Savior and over us all will shine a star sending its gleam of hope to the world.

Further, in a 1930 Syndicated column, Coolidge would further state that:

Every day has been numberless times a birthday. Only a few are widely celebrated, for it is not the event of birth but what is done in after life that makes a natal day especially significant. For many generations, Christmas has been joyously observed wherever there has been a vestige of western civilization, because on that day was born one who grew to be the only perfect man and became the saviour of the world. No other fact, no other influence in human experience, has compared with the birth and life of Christ.

Down through the ages He was borne the name of Master. He gained that everlasting title not by the use of any material force but by demonstrating the moral and spiritual power of mankind.

Jesus’ birth on earth, quite simplified, was this – mercy and peace brought through a divine deity to earth. Let us all endeavor to have this spirit of peace and mercy forevermore.

Merry Christmas to you all! – Matt

“How to Cure Health Care” – Milton Friedman’s 2001 essay on the subject is still remarkably relevant

If I suddenly discovered that I had a serious disease and was handed a medicine concocted in 2001 as the only antidote available, I would very likely panic, despairing that surely something more timely and up to date could have been developed in the intervening 15-16 years. Alas, it seems that America’s healthcare system has been stuck in a reverse funhouse of distorting mirrors for so long, that it is equal parts amazing and depressing to read an essay from Milton Friedman on the subject and discover that the same advice he had for healthcare in 2001 is precisely the advice that would have cured our ailments if only we had followed it. Unfortunately, as he predicted, we did just the opposite, just how we have been doing it for decades since World War II. Thus, for this particular disease, hand me that vial from 2001, because everything else from then on has been cooked up by quacks and witch doctors. The hard medicine from 2001 might be painful to swallow, but it is the right palliative for the long-run.

In the essay, Friedman begins by noting the most important features of modern healthcare. First, there have been major advances in technology and science, which is no bad thing. Second, for several decades we have witnessed rising costs in healthcare relative to overall economic growth on an inflation-adjusted basis. Finally, healthcare features a decreasing satisfaction level amongst both consumers and producers. Within this feature set, Friedman notes that healthcare is unique amongst many other industries in not catalyzing technological advancement to actually lower per unit costs over time.

What distinguishes health care from these industries? Friedman has the answer – government involvement. Unique amongst all industries, healthcare is the only industry in which government plays such a dominating role in the production, financing, and delivering of medical services. And despite the role of the nominal private insurers in the market, I would point out that government finances, whether directly through Medicare and Medicaid, or indirectly through subsidies, a critical mass of over 50% of healthcare finance. Where the government leads on payment models, commercial players, largely structured in local monopolies, inevitably follow, making a mockery of any claims that this is a “market” in any sense of the word. Commercial insurers are not much different than government directed contractors.

The role of third party payment models
Within this doleful narrative, we can firmly point the finger at third party healthcare payment models as the culprit for the out of control expenditures and the mess of unintended consequences we have found ourselves in. And how we got third party payments is another lesson in how one muddled government intervention leads to the need for yet another, building an unsustainable house of cards that always needs one more card stacked on top. In this case, wage controls in the World War II era led employers to provide medical coverage as a benefit to get around controls and to more effectively compete for talent. By the time the IRS got wind of it and attempted to tax these benefits, they had become so popular that Congress intervened to make them a non-taxable benefit. Here is the catch though- the tax exemption was only provided to employers. Any consumer out on the marketplace buying insurance on their own receives no such benefit. Thus, people are conditioned and majorly incented to look for health coverage from their employer. Friedman summarizes the ill logic behind reliance on third party payment models and employer-based insurance:

We have become so accustomed to employer-provided medical care that we regard it as part of the natural order. Yet it is thoroughly illogical. Why single out medical care? Food is more essential to life than medical care. Why not exempt the cost of food from taxes if provided by the employer? Why not return to the much-reviled company store when workers were in effect paid in kind rather than in cash?

The major perverse impacts of employer-based insurance are that people delegate their healthcare provisioning and decision making to entities and individuals ill-equipped to perform those responsibilities. Furthermore, employees inevitably give up the ability to achieve in direct wages what is now siphoned off to healthcare coverage.

Then in the 1960s the U.S. Government enacted Medicare and Medicaid, driving third party payment models across even more populations. What is the logical impact? As Friedman notes, “nobody spends money from someone else as frugally as his own.” The third party administration of healthcare costs means no incentives for the individual to control those costs. As Friedman observes:

Enactment of Medicare and Medicaid provided a direct subsidy for medical care. The cost grew much more rapidly than originally estimated—as the cost of any handout invariably does. Legislation cannot repeal the nonlegislated law of demand and supply: the lower the price, the greater the quantity demanded; at a zero price, the quantity demanded becomes infinite. Some method of rationing must be substituted for price, which invariably means administrative rationing.

Astoundingly, healthcare as a share of our national income has risen from 3 percent in 1919 to close to 20 percent in 2016. To put this in perspective, Friedman comments that in 1946 seven times as much was spent on food, beverages, and tobacco than on healthcare. By 1996, healthcare had passed these collective categories.

What is Insurance? In healthcare, it bears little resemblance to what it typically means

In every other aspect of our lives, insurance means coverage for the catastrophic, long tail events that we never expect to happen but which would wipe us out financially if they did occur. It is the hurricane that reduces our house to rubble or the wreck that totals someone else’s car and puts them in a hospital. In healthcare, government meddling has forced this to become coverage for everything, however routine the expense. Much of this is based upon the employer incentives to move compensation into healthcare coverage, but even more pernicious is government mandates on what health plans must cover. It is analogous to auto insurance covering oil changes by force of government mandates. In this event, we would not marvel at oil change prices spiraling out of control. Similarly, it is little wonder that healthcare costs have exploded; between third party payment obfuscation, administrative bloat, and mandated coverages of all healthcare expenses, it would be an economical gravity defying miracle if costs didn’t explode.

“The Black Hole of Bureaucratization” 

One malignant outcome of third-party based payment systems is the concomitant growth in administrative functions, be it comprised of the administrative state for government programs or administrative bloat from commercial insurers required to finance, provision, deliver, and indeed ration medical care. As Friedman indicates, since the patient no longer has an incentive to care about healthcare costs and since the provider of health services has to worry about whether a certain service is covered by the third-party payer, a middle layer is required. In this model, the physician becomes little more than an employee of the insurer or the government, taking their guidance on what can be performed for the patient. In turn, the patient’s voice is squelched, as they are merely told what can be done within the confines of their plans.

Here is where Friedman delivers what I believe to be one of his most innovative economics insights, what he calls Gammon’s Law – which is defined as bureaucratization that causes both a rise in inputs and expense alongside a decrease in outputs and outcomes. Gammon’s Law is based upon observations of a British physician named Max Gammon, who performed an extensive study of the British National Health Service and noted that in this bureaucratic system that there was both an increase in expenditure as well as a fall in production. He noted that such systems behave like ‘black holes,’ ‘sucking in resources’ and ‘shrinking in terms of emitted production.’

There are some astounding statistics from the U.S. healthcare system that I believe are so shocking that their true gravity is hard for the human mind to grasp and that demonstrates Gammon’s Law at work. Friedman observes that inflation adjusted costs per patient day since 1946 have increased from $30 to $1,200 in 1996. A more recent update for this from the Kaiser Foundation updates this number to $2,200. This is a stonking seventyfold increase! Further highlighting Gammon’s Law at work, hospital staff per bed increased ninefold from 1946 to 1996. Given other trends in the industry, I highly doubt that this force has dissipated in the intervening 20 years. This Hospital Staffing Ratio from Statistica suggests a great amount of staffing per bed in the U.S.

In order to head off any common simplistic conjectures that medical science and technological progress are the reasons for the dramatic increase in inputs and expenditures, Friedman observes the following:

….True, medical machines have become more complex. However, in other areas where there has been great technical progress—whether it be agriculture or telephones or steel or automobiles or aviation or, most recently, computers and the Internet—progress has led to a reduction, not an increase, in cost per unit of output. Why is medicine an exception? Gammon’s law, not medical miracles, was clearly at work. The provision of medical care as an untaxed fringe benefit by employers, and then the federal government’s assumption of responsibility for hospital and medical care of the elderly and the poor, provided a fresh pool of money. And there was no shortage of takers. Growing costs, in turn, led to more regulation of hospitals and medical care, further increasing administrative costs and leading to the bureaucratization that is so prominent a feature of medical care today.

Friedman turns to the important question of what outputs are we getting for this increase in inputs? His answer is that it is almost impossible to tell given overall improvements in diet, clothing, housing, hygiene, sanitation, general improvements in public health, better diagnosis and treatment of conditions, etc. In short, while life span and life expectancy have increased, little of that is likely attributable to the increase in health system spend. In fact, the number of days people spend in a hospital have gone down over time. While obviously that can be a good outcome and a result of better care within the walls of a hospital, it is also directly correlated to cost pressures hospitals face – pressure that leads to a maniacal pursuit of getting patients out of beds and out of the door. In summary, we can’t point to any discernible improvements we have achieved in outcomes to pair with the seventyfold increase in expenditures. Again, Gammon’s Law of the black hole in all of its fearsome gravity sucking power.

Conclusions

In a comparison between the U.S. and other developed (OECD) countries, Friedman articulates that the hybrid system that America employs is particularly bad at controlling costs. In this respect alone, the U.S. has a relative disadvantage compared to peers such as the U.K. and Canada that have single-payer and monopoly over delivery systems. Of course, there is a tradeoff with these systems in access and innovation. Following the previously mentioned maxim on infinite demand when a good is effectively zero, the inherent tradeoff is administrative controlled rationing and inevitable queuing. Another major disadvantage of these systems is that the incentives push politicians to focus less on delivering best-in-class care to a primary focus on controlling costs.

At long last, we have arrived at the palliative against Gammon’s Law in healthcare. Of course, every classical liberal, of which Friedman is an apostle, a veritable “hero of the faith” whom we study and revere, dreams of a healthcare system that becomes as efficient and as consumer-centric as the likes of Amazon. We should be able to get on an intuitive dashboard and observe ratings of physicians and systems on the value that they drive. We should be able to observe both their pricing and outcomes, including being able to drill into the details by condition and procedure of concern to us in that moment. Competition should drive them to provide meaningful information to consumers in order to capture market share. We should have great care-based (not insurance-based) relationships with our primary care providers and other care planners and providers. A classical liberal is going to logically deduce, as does Friedman, that the idealistic path to get there is to eradicate Medicare and Medicaid, remove the tax exemption for employer-based coverage (in return for lower tax rates directly to consumers, of course) and a return of insurance to its proper role of covering catastrophes. Friedman observes that since these are going to be politically impossible in the short-run, we should aim for the next best thing – flexible health savings accounts. Friedman concludes his essay by outlining his policy proposals further:

A medical savings account enables individuals to deposit tax-free funds in an account usable only for medical expense, provided they have a high-deductible insurance policy that limits the maximum out-of-pocket expense. As noted earlier, it eliminates third-party payment except for major medical expenses and is thus a movement very much in the right direction…

…Medical savings accounts offer one way to resolve the growing financial and administrative problems of Medicare and Medicaid. It seems clear from private experience that a program along these lines would be less expensive and bureaucratic than the current system and more satisfactory to the participants. In effect, it would be a way to voucherize Medicare and Medicaid. It would enable participants to spend their own money on themselves for routine medical care and medical problems, rather than having to go through HMOs and insurance companies, while at the same time providing protection against medical catastrophes.

A more radical reform would, first, end both Medicare and Medicaid, at least for new entrants, and replace them by providing every family in the United States with catastrophic insurance (i.e., a major medical policy with a high deductible). Second, it would end tax exemption of employer-provided medical care. And, third, it would remove the restrictive regulations that are now imposed on medical insurance—hard to justify with universal catastrophic insurance.

This reform would solve the problem of the currently medically uninsured, eliminate most of the bureaucratic structure, free medical practitioners from an increasingly heavy burden of paperwork and regulation, and lead many employers and employees to convert employer-provided medical care into a higher cash wage. The taxpayer would save money because total government costs would plummet. The family would be relieved of one of its major concerns—the possibility of being impoverished by a major medical catastrophe—and most could readily finance the remaining medical costs. Families would once again have an incentive to monitor the providers of medical care and to establish the kind of personal relations with them that were once customary. The demonstrated efficiency of private enterprise would have a chance to improve the quality and lower the cost of medical care. The first question asked of a patient entering a hospital might once again become “What’s wrong?” not “What’s your insurance?”

In the aftermath of the surprise election putting Trump in charge of a unified GOP Congress, it is encouraging that the policy proposals developed under the moniker of “Better Way” produced by Paul Ryan and other Republicans in Congress make incremental gains in these areas. I have summarized these policy proposals in another post, and while they don’t go nearly as far as Friedman or I would want, it at least has the advantage of incremental gains, particularly in the area of health savings accounts. Given that Obamacare went even further in the wrong direction compared to Friedman’s prescriptions, further exacerbating the decades of bad decisions full of unintended consequences that is the hallmark of U.S. healthcare policy, getting at least a portion of that proverbial 2001 antidote vial is good momentum. Of course, Trump is the ultimate wild card on where he intends to take healthcare reform, but I hope he looks no further than some of the sensible plans that are already there. The ball is being handed off right in the gut. Don’t fumble it, Mr. President.

As bonus material, it is always a personal pleasure to observe the affable and remarkably quick on his feet Friedman address some of these questions and issues directly. Here are some great videos on this very subject.

A holy, beautiful, and moving Christmas work of art

I recently had the pleasure of hearing Morten Lauridsen’s “Lux Aeterna: O Nata Lux” by the Los Angeles Master Chorale on my holiday station of choice, WQXR (their specially set up, focused, and temporary holiday channel, to be precise. However, I do regularly tune in to their traditional channel). Having performed a Lauridsen piece as a member of a high school chorale, I immediately recognized the composer’s touch for the Latin liturgy delivered in an ethereal acapella without having to look up the composer name. This piece’s sereneness and holiness is worshipful, and the lyrics are in praise of Jesus’ birth on earth and its significance.

The song speaks directly to and honors the transcendent act of peace, mercy, and salvation of the deity who became flesh for our sake. The translation from Latin to English reveals the simple yet powerful narrative.

O nata lux de lumine,
Jesu redemptor saeculi,
dignare clemens supplicum
laudes precesque sumere.
Qui carne quondam contegi
dignatus es pro perditis,
nos membra confer effici
tui beati corporis.
O Light born of Light,
Jesus, redeemer of the world,
with kindness deign to receive
the praise and prayer of suppliants.
You who once deigned to be clothed in flesh
for the sake of the lost,
grant us to be made members
of your blessed body.

 

 

 

 

 

 

This rendition is as close to the WQXR rendition that I can find. It may be of the same recording.

If we must target wages for poverty reduction, wage subsidies > minimum wages

If we agree that poverty and welfare reduction are valuable goals that government should enact and that we want to supplement wages as a result, then this quick four minute video provides a simple explanation as to why wage subsidies are drastically superior to minimum wage policies. I would add that much of the muddle that we make of poverty reduction – whether it be food purchasing programs or healthcare financing, and all of those programs’ attendant bureaucracy, could be made much more efficient and effective through a wage subsidy. Plus, we could actually target poverty directly while supporting jobs and in turn reducing the rest of the inefficient welfare state.

Of course, those in government always prefer the minimum wage – it gives voters the impression that they did something to reduce poverty while shoving the consequences off of the government liabilities and accounting books, the problem being that it is less effective, drives down employment, and/or increases prices to consumers. In general, Marginal Revolution’s economics videos are always brief but insightful.

Support for Decentralized and Limited Government from the 18th Century Scottish Enlightenment

In the wake of my second-highest viewed post of all time, which covered the topic of decentralization of government (please don’t ask for actual viewing values; allow a man writing an obscure blog his small relative victories), I was pleased to get philosophical support from one of the greatest writers on the topic of government and political science of all time – David Hume. Most people who have enjoyed, or endured, depending on one’s perspective, an Economics 101 course are well familiar with one lion of the Scottish Enlightenment, Adam Smith. Smith gave credence in his Wealth of Nations to a philosophy of full-throated support of the individual liberties of merchants practicing their crafts and generating profits unencumbered by the meddling state that was a novel philosophy and code of ethics for the times. Smith forcefully advocated that betterments in society occurred in imperceptible and novel ways through people seeking profits, guided by the “invisible hand” of the pricing mechanism, which effectively coordinated their ideas and actions in ways that no government planner could match. Never mind that both modern day proponents and detractors of Smith both seem to believe that Adam Smith was some form of Machiavellian profit maximizer and utilitarian, thereby completely missing his comprehensive views of bourgeois ethics that he espoused in his perhaps even more compelling and powerful book, The Theory of Moral Sentiments, in which Smith speaks of the “impartial spectator” within us which guides and regulates our behavior such that it is socially acceptable and in most cases benevolent. The impartial spectator of Smith is driven by a mysterious combination of divine nature and the nurture that occurs as people (or the vast majority of people comprising society) interact with each other and seek approbation and praise of others. Scorn is something most of us do our best to avoid. In other words, while profit-seeking is a virtue of prudence, the vast majority of people operate in their daily lives with other self-regulating and self-controlling virtues that balance the prudence of profit-seeking. All of this social self-regulation is performed through emergent order without the need of heavy-handed law and government.

I digress, so back to the topic of David Hume. Hume was a Scottish Enlightenment contemporary and great friend of Adam Smith, and it is through his remarkable Selected Essays as compiled by Oxford World Classics that I find support for decentralized government under a different and additional rubric than I articulated in my original musings on the subject. Specifically, in his essay on Of The Rise and Progress of the Arts and Sciences, in which Hume generally makes the case that people living in free governments are much more likely to contribute to the progress of arts and sciences than those living in autocracy, Hume makes compelling arguments for divided and decentralized government. The first point Hume articulates is this:

A large government is accustomed by degrees to tyranny, because each act of violence is at first performed upon a part, which being distant from a majority, is not taken notice of, nor excites any violent ferment. Besides, a large government, though the whole be discontented, may, by a little art, be kept in obedience; while each part, ignorant of the resolutions of the rest, is afraid to begin any commotion or insurrection: not to mention that there is a superstitious reverence for princes, which mankind naturally contracts when they do not often see the sovereign, and when many of them become not acquainted with him so as to perceive his weaknesses. And as large states can afford a great expense in order to support the pomp of majesty, this is a kind of fascination on men, and naturally contributes to the enslaving of them.
In a small government any act of oppression is immediately known throughout the whole; the murmurs and discontents proceeding from it are easily communicated; and the indignation arises the higher, because the subjects are not to apprehend, in such states, that the distance is very wide between them on their sovereign. ‘No man,’ said the prince of Conde, ‘is a hero to his Valet de Chambre.
In other words, a large central government presiding over a wide swath of people and with large amounts of power can more readily get away with persecuting minorities, be they ethnic minorities or minorities in dissenting thoughts and views. Additionally, the further removed from proximity to a ruler or ruling elite, the more prone people are to superstitious reverence and obsequious behavior towards them. I loved the quote related to no man being a prince to his valet, since such close proximity as to that of a valet makes us all aware of any human’s noxious flaws and weaknesses. I would gently point out that Americans are no strangers to this superstitious reverence for powerful leaders – witness the rise of the bumptious Trump riding a wave of American voters seeking brash authority. Witness also the esteem, admiration, and honor we typically reserve for presidencies such as the two Roosevelts, who consistently abused executive power and authority. Contrast that to practitioners of great executive power restraint, such as Calvin Coolidge and William Howard Taft, who receive no such comparative historical encomiums.
Hume proceeds in the essay with the following observations:
But the divisions into small states are favorable to learning, by stopping the progress of authority as well as that of power…To balance a large state or society, whether monarchical or republican, on general laws, is a work of so great difficulty, that no human genius, however comprehensive, is able by the mere dint of reason and reflection, to effect it. The judgments of many must unite this work: experience must guide their labour: time must bring it to perfection: and the feeling of inconveniences must correct the mistakes, which they inevitably fall into, in their first trials and experiments. Hence appears the impossibility that the undertaking should be begun and carried on in an monarchy; since such a form of government, ere civilized, knows no other secret or policy, than that of entrusting unlimited powers to every governor or magistrate, and subdividing the people into so many classes and orders of slavery. From such a situation, no improvement can ever be expected in the sciences, in the liberal arts, in laws, and scarcely in the manual arts and manufactures. The same barbarism and ignorance, with which the government commences, is propagated to all posterity, and can never come to a period by the efforts or ingenuity of such unhappy slaves.

In other words, a centralized government taking on too much power is reduced to trying by sheer exertion of a “Tyranny of Experts” to borrow the William Easterly phrase, of trying to plan for and rule a great diversity of people. As Hume implies, it is an impossible task that starves us of all natural freedoms and the ingenuity that we would have exhibited without the heavy hand of a meddling government, and it makes us “unhappy slaves.” Or as Hume’s good friend Adam Smith might say, it also torches our invisible hand and extinguishes the impartial spectator within. Lest anyone think that I am speaking of some distant and ancient European monarchy, I am looking at you America and your Centers for Medicare and Medicaid Services, your Health and Human Services, your Obamacare, and your Dodd-Frank.

 

The Importance of Critical Reading

One of my favorite podcasts, EconTalk, presents a diverse range of topics that the host, Russ Roberts, somehow finds a way to adeptly navigate through. One recent example of this was Roberts hosting Doug Lemov as a guest on the subject of the central importance of critical reading. The implications are of tremendous importance as it relates to personal growth and development, as a parent raising young children to love reading and that singular activities’ critical foundational importance in developing knowledge and understanding all other subjects, and as members of a broader community in fostering within our school systems and educational models the most effective modes of learning. Lemov is a well-known author on teaching methods and also runs many successful charter schools in poorer communities throughout the Northeast. In other words, his theories have found a useful and meaningful practical home to great ends.

There were several key insights from the episode I wanted to write down and commit to my own practice and that I also wanted to share with anyone who has an interest on the topic:

  • Whereas most instructors and parents adhere to an idea of “age or level appropriate” reading and texts, Lemov urges us to have our children or pupils grapple with challenging texts. This allows them to work through more difficult concepts, ask probing questions, and hear words, ideas, and concepts that they may never get to experience in an edition of Magic Tree House, as fine as those kinds of simple serial books can be for pleasure reading. The example he uses in the podcast is reading with his then 2nd-grader a novel, The Island of the Blue Dolphins, which tells the story of a girl stranded for years off of the California coast and which is ostensibly an eighth-grade level text. He remarks that by reading aloud to her and grappling through the story with his daughter, she was able to interact with the story in a meaningful way, learn words such as “befall” that she would never learn in traditional assignments and novels, and begin to develop an anticipatory love of the types of great literature works that she would experience as she grew into adulthood. I am pleased to report that upon reading to my own daughters (3rd and 1st grades) the first two chapters of the same novel, I have witnessed the same impressive level of understanding, inquisitiveness, and delight at hearing aloud a novel much richer in context, feelings, and exploration of the human condition than other novels that they read on their own that are “their level.”
  • Lemov indicates that what is most common is to instruct children on understanding the higher level context on what is going on in a text and to bypass difficult language by offering a quick summary of the content distilled into modern simple language. Thus, a tough passage from Hamlet gets paraphrased and reduced to its simplest form. Lemov believes that while bigger picture thinking is an important part of instruction and knowledge building, of equal importance is deep and critical analysis of the actual written text. He advocates for a deeper level of understanding on a line by line basis and of developing knowledge of what the author was truly trying to say within the context of the author’s language. This means a more methodical plowing through of Shakespeare, but the long-term implications are that the person will develop a much broader ability to pick up and analyze challenging texts and to reap the benefits of their robust life insights.
  • I wholeheartedly agree with Lemov’s stance on technology in the classroom. In the podcast, he states unequivocally:

    I think a lot of parents, one of the first questions they ask about their school is, ‘Is the school infused with technology? How will my kids have access to technology?’ My concern is the opposite. If I could have anything from my school, it would be a place where my kids sustain their focus in conversation, in reading, in writing, without being interrupted with a technology for as long as possible.

Indeed, one public school that I toured focused very little on academic rigor in their “pitch” and much more on the modernity of the facilities, use of iPads, and use of electronic voice amplifiers that more effectively connect teachers to their students. My personal observation is that my own children pick up and adapt to technology in the home at an incredible pace without need of my aid. Thus, they have little need of a school teaching them how to adapt to smart devices. At best, technology access adds some ability to quickly reference some key concept, while vitiating the critical life skill of research and exploration. My fear, in addition to what Lemov discusses, is that it serves such a distraction and takes away from the deep meditative aspects of what a school should be that it erases any benefit that could be derived from it.

  • One novel concept Lemov spells out is to pair nonfiction concepts with fiction reading. As a result, a potentially bland topic (in the eyes of a young student) such as food rationing and war preparations comes alive when it is paired with a novel such as Lily’s Crossing, a novel about a girl whose life is disrupted when her father leaves for World War II, her best friend moves to a war production factory town, and life in New York City assumes a broader war posture with rationing and bombing raid preparations.

There are more great insights and practical ideas in the podcast, therefore I highly encourage the listen of this particular episode, which takes no overt ideological stances and is rather thought-provoking. I also recommend EconTalk in general for those who are interested in learning and hearing more about the philosophy of faith in the free individual working in a free market undergirded by a limited government applying the rule of law that is not arbitrary. In short, it is a tremendous podcast in defense of traditional classical liberalism/libertarianism.

“Slaughter & Rees Report: ‘Mr. President, You Are Mistaken, Sir'”

In a similar vein to my recent post on the Trump/Carrier “deal”, but with far more professional credibility from the authors – spanning the gamut of journalism, economics, private sector, and government experience, including one author’s (Matthew Slaughter) service on the Council of Economic Advisors for President George W. Bush and current service as the Dean of the Tuck School of Business at Dartmouth – this article, delivered as a letter to President-elect Trump, represents additional logic behind free trade. While my post largely focuses on the philosophy of individual freedom and dangers of government picking winners and losers, the Slaughter and Rees Report lines up several empirical reasons of why protectionism is actually economically harmful and counterproductive. It is worth the read.

Exhibit A: Industrial policy that protects the few at the expense of the many – Carrier keeps jobs in Indiana but on the backs of taxpayers and consumers

Image result for Carrier JObs

I just received an article from the Wall Street Journal that indicated that Carrier has agreed to keep roughly 1,000 jobs in a manufacturing plant rather than shift the employment to Mexico. Rather than celebrate this as a great example of private and public partnership and the deal-making style of Trump that successfully and benevolently puts Americans first, I am going to put a different, and perhaps unpopular, spin on this and call it what I believe it to truly be – arbitrary manipulation and industrial policy developed by government for the benefit of the few at the expense of the many.

Of course, the “saving” of 1,000 jobs is a positive thing on the surface, and it will no doubt lead to declarations of success and subsequently votes for the protectionist politicians who promoted it well into the future. Less visible will be the unintended consequences and foregone opportunities of non-government intervention. I will start with the obvious and work my way to the more philosophical, but just as important, reasons to decry, rather than to celebrate, such government interventions:

  • The 1,000 jobs were kept and promoted at a hefty price tag per worker. At a $7,000,000 tax incentive agreement, this works out to $7,000 per job “saved.” This means the rest of Indiana taxpayers are subsidizing this arbitrary policy. No doubt, you will find many lower-paid workers subsidizing their higher-paid brethren. I am sure the Indiana taxpayer could think of a million different things they could do with that $7,000 to help their own careers and families. This is the unintended consequences that are diffused and don’t get highlighted in the media that happens with industrial policy. This is also what happens when rent-seeking corporations get the ear of government officials who control too many of the levers of economic policy. They get to decide how to use our tax dollars and declare it a successful investment with little accountability or visibility to what ends those dollars could have gone to had they left them in our pockets.
  • The inability to shift labor to take advantage of wage rate/productivity imbalances leaves costs higher for American consumers in the long-run. Once again, this is government meddling in support of one small class of citizens at the expense of the many.
  • Preventing Mexico from taking advantage of their comparative advantages in their specific mixture of labor force participation, wages, and productivity will continue to put pressure on their citizens but not allowing them to grow economically, which further puts pressure on its citizens to immigrate. Being able to take advantage of cross-border trade is mutually beneficial and is not the zero-sum game that protectionists such as Trump believe it to be. The great irony is that plugging one “problem” of imbalanced trade only exacerbates another one of immigration- or at least in the sense that self-described American Economic Nationalists believe trade and immigration to be problems.
  • Sustaining or creating new abusive and arbitrary government power to take tax dollars from citizens in support of the few establishes/continues a dangerous precedence. What well-connected company or connected political body will take their turn next in using their connections to politicians to extract resources from the rest of us under the auspices of “America first?” Do we really trust the government to pick and choose these winners wisely and with all of our freedom, liberty, and economic interests in mind? I hope to someday make this a rhetorical question.
  • I keep coming back to this point from previous posts – but what right does the government have to tell me as a consumer where I can and can’t buy goods? By implication – browbeating, cajoling, and incenting them to stay (using my money) in America through taxpayer funds is ultimately an act to usurp my rights to buy goods from the provider who can make the highest quality good at the lowest cost and in the end is little more than theft of my resources to support their own arbitrary decisions.

Finally, freedom and liberty requires a tradeoff of uncertainty in outcomes that don’t always redound to every individual, but is the only way with which we can grow economically (and in turn emotionally and spiritually) in the long run. The fundamental question then becomes do we want to bequeath to our future generations and children an open and dynamic society where people are free to create the exciting and enriching occupations of the future, or do we want to confine them to the known quantities of the past and present?  We shouldn’t demand equality in outcomes, but rather demand the equality of opportunity combined with blind justice – good arbitration when conflicts arise over contracts between free people. Otherwise, we should keep government at a safe arm’s length that is akin to a good and impartial referee who knows a foul when it sees it and has a consistent redress for those fouls irrespective of the player that committed them. Instead, what we have these days is a referee who changes the rules in the middle of a game to the advantage of his favorite and most well-connected players. On this note of equality of opportunity and why it is extremely important, I land with a powerful excerpt from Deirdre McCloskey’s remarkable book, Bourgeois Equality, of which I have written more at length about in a separate post, but for today’s topic pull out this specific section:

The ideas of equality [in the English and Scottish Enlightenment period] led to other social and political movements not uniformly adorable. Hannah Arendt remarked in 1951 that ‘equality of condition…is among the greatest and most uncertain ventures of modern mankind.’ Alexis de Tocqueville had said much the same a century earlier. And Scottish equality has a harsh, even tragic side. It entails equal reward for equal merit in a marketplace in which others, by freedom of contract, can also compete. As John Stuart Mill put it in On Liberty, ‘Society admits no right, either legal or moral, in the disappointed competitors to immunity from this kind of suffering; and feels called on to interfere only when means of success have been employed which it is contrary to the general interest to permit – namely, fraud or treachery, or force.’ Yet in the real world, unhappily, if the poor are to be raised up, there is no magic alternative to such competition. An ill-advised and undercapitalized pet store, into which the owner pours his soul, goes under. In the same neighborhood a little independent office for immediate health care opens half a block from a branch of the largest hospital chain in Chicago, and seems doomed to fail the test of voluntary trade. Although the testing of business ideas in voluntary trade is obviously necessary for betterment of the economy (as it is too by non-monetary tests for betterment in art and sport and science and scholarship), such failures are deeply sad if you have the slightest sympathy for human projects, or for humans. But at least the pet store, the clinic, the Edsel, Woolworth’s, Polaroid, and Pan American Airlines face the same democratic test by trade: Do customers keep coming forward voluntarily? Does real income rise?

We could all by state compulsion backed by the monopoly of violence remain in the same jobs as our ancestors, perpetually “protected,” though at $3 a day. Or, with taxes taken by additional state compulsion, we could subsidize new activities without regard to a test by voluntary trade, “creating jobs” as the anti-economic rhetoric has it. Aside even from their immediate effect of making national income lower than it could have been, perpetually, such ever-popular plans – never mind the objectionable character of the violent compulsion they require – seldom work in the long run for the welfare of the poor, or the rest of us. In view of the way a government of imperfect people actually behaves in practice, job “protection” and job “creation” often fail to achieve their gentle, generous purposes. The protections and the creations get diverted to favorites. Laws requiring minority or female businesses to be hired, for example, tend to yield phony businesses run in fact by male whites. In a society run by male whites or inherited lords or clan members or Communist Party officials, or even by voters not restricted by inconvenient voting times and picture IDs, the unequal and involuntary rewards generated by sidestepping the test of trade are seized by the privileged. The privileged are good at that.

 

 

If I was an Onion writer for a day…

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My headline article would read something like the following: “Fidel Castro, mass murderer, usurper of the rule of law and the Laws of Nature, manipulator and oppressor of the poor, is mourned by thousands of Western progressive class warriors who ostensibly have devoted their lives and political actions to the needs of the poor.”

I suppose the challenge, however, is that the Onion is brilliant satire while my headline is in fact true –  witness Jill Stein’s Tweet that Castro was a “symbol for the struggle for social justice.” Admittedly, Stein is an absurd kook, but none other than the world’s favorite progressive Canadian Prime Minister, Justin Trudeau, delivered a ridiculous encomium, calling Castro “remarkable” and a “larger than life leader who served his people.” I would have rearranged that to read, “Castro was remarkablly durable in his ability to pervert justice and rule in maniacal tyranny over Cuba, a man who was larger than life for his crimes against humanity, and who served himself and his inner circle (as long as they could last in it) for as long as he lived…” but hey, that’s just me.

It is of the highest degree of mendacity to pretend that Castro was anything other than the monster that he was. It is also remarkable that the same people who place the CEO of Company X or the oil and gas lobbyist at the pinnacle of the “all that is most evil” pyramid, and who are deathly afraid that Trump is going to eviscerate and plunder America, can on the other hand reserve a soft spot in their heart and openly praise someone with literal blood on his hands. As Don Boudreaux at Cafe Hayek indicates, this is a special form of perverted ethics, and connects back to an earlier post I made about the modern “men without chests,” who fail the ancient humanitarian and spiritual test of being able to clearly differentiate good from evil.

Meantime, from his eighth level of the Inferno, Vladimir Lenin, recently joined by Fidel Castro, manages to smile from his backward turned head with the knowledge that useful idiots still exist in the West.

The Abolition of Man by C.S. Lewis – Modern Education and the Creation of “Men Without Chests”

I have written in previously in support of freedom of choice in our education models and in particular for support of the classical education model. I firmly believe that it is an inalienable right to be free to choose what manner or education is received, rather than the myopic and freedom of choice smothering one size fits all and centrally directed and dictated (and increasingly expensive with little return on investment) modern American education model we have blundered into. Recently, I found an ally of sorts in an unexpected corner – in the writings of C.S. Lewis. Many will recognize Lewis for \ his Chronicles of Narnia series or perhaps his more direct Christian books such as Mere Christianity and the Screwtape Letters, but oft neglected is his powerful and remarkably prescient book on primary education, The Abolition of Man.

In the Abolition of Man, Lewis takes aim at the then (1940s) education reformers and their zeal for removing the development of a foundation of objective values and replacing it with something in which the individual becomes much more critical and subjective. In a sense, this era witnessed the shift from attempts at educators to develop the moral and ethical character of a child to simply treating them as children to be loaded up with facts and to ostensibly create nothing more than rational and logical human beings who could conform to a certain desired standard way of thinking. With the hindsight of the year 2016, it is apparent to me that such reformers were successful in their aims with the modern education system as we know it. Of the reformers, Lewis has these rather harsh critiques:

They see the world around them swayed by emotional propaganda – they have learned from tradition that youth is sentimental – and they conclude that the best thing they can do is to fortify the young minds of young people against emotion. My own experience as a teacher tells an opposite tale. For every one pupil who needs to be guarded from a weak excess of sensibility there are three who need to be awakened from the slumber of cold vulgarity. The task of the modern educator is not to cut down jungles but to irrigate deserts. The right defence against false sentiments is to inculcate just sentiments. By starving the sensibility of our pupils we only make them easier prey to the propagandist when he comes. For famished nature will be avenged and a hard heart is no infallible protection against a soft head…. Their scepticism about values is on the surface: it is for use on other people’s values: about the values in their own set they are not nearly sceptical enough.

The consequence of such teaching is not benign in Lewis’ estimation, rather, it leads to the creation of an adult who is not really a human at all. Lewis has these dire observations about what the new education model would produce:

The old dealt with its pupils as grown birds deal with young birds when they teach them to fly: the new deals with them more as the poultry-keeper deals with young birds – making them thus or thus for purposes of which the bird knows nothing. In a word, the old was a kind of propagation – men transmitting manhood to men: the new is merely propaganda…

…We were told it all long ago by Plato. As the king governs by his executive, so Reason in man must rule the appetites by means of the ‘spirited element.’ The head rules the belly through the chest – the seat, as Alanus tells us, of Magnanimity, of emotions organized by trained habit into stable sentiments. The Chest – Magnanimity – Sentiment- these are indispensable liaison officers between cerebral man and visceral man…

…It is not excess of thought but defect of fertile and generous emotion that marks them out. Their heads are no bigger than the ordinary: it is the atrophy of the chest beneath that makes them seem so. And all the time – such is the tragi-comedy of our situation – we continue to clamor for those very qualities we are rendering impossible. You can hardly open a periodical without coming across the statement that what our civilization needs is more ‘drive,’ or dynamism or self-sacrifice or ‘creativity.’ In a sort of ghastly simplicity we remove the organ and demand the function. We make men without chests and expect of them virtue and enterprise. We laugh at honour and are shocked to find traitors in our midst. We castrate and bid the geldings by fruitful.

[As an side, since Lewis invoked the great word Magnanimty – I am linking to a previous article on the subject of that very word, that also connects back to the broader themes and points I am attempting to make in this one.]

To be clear, what Lewis has in mind when he speaks of the “old” is a return to fortifying the character of a child through teaching of objective values. One might call this conecpt ‘Natural Law’ – basic, fundamental, or even first principle universal virtues that we should all aspire to and should commonly agree should be inculcated in our children. Lest I set off any alarm bells for my secular friends, I should indicate that of all the Lewis books, this is one that is the least explicitly Christian. In fact, the virtues and values he builds up in the narrative he collectively labels The Tao, borrowing heavily from an ancient Chinese term that seems to translate roughly into “The Way.” While there are many Christian principles that are consistent with the Tao, Lewis endeavors to build a comprehensive list of virtues that reach back to ancient Egypt, Babylon, Confucius China, Indian Hinduism as well as building on ancient philosophers such as Plato and Aristotle. Indeed, it is a very Aristotelian list of virtues and ethics that Lewis builds into his Tao, echoing much of what Aristotle includes in his Nicomachean Ethics.  Specifically, Aristotle indicated that, “The aim of education is to make the pupil like and dislike what he ought.” Years prior, Aristotle’s mentor Plato said much the same about education when he stated that, “The little human animal will not at first have the right responses. It must be trained to feel pleasure, liking, disgust, and hatred.”  In Plato’s Republic, he elaborates that the well-nurtured youth is one, “who would see most clearly whatever was amiss in ill-made works of man or ill-grown works of nature, and with a just distaste would blame and hate the ugly even from his earliest years and would give delighted praise to beauty, receiving it into his soul and being nourished by it, so that he becomes a man of gentle heart.All this before he is an age of reason; so that when Reason at length comes to him, then, bred as he has been, he will hold out his hands in welcome and recognize her because of the affinity he bears to her.”

Lewis provides ample examples of what is included in the Tao – Natural Law elements such as honor, courage, good faith, justice, being free from cruelty and calumny, charity, and many others. The list of objective values that we could be teaching in schools could be distilled to seven virtues or as expansive as four-hundred. Our ample history and thousands of pages published on the subject from some of the world’s greatest philosphers and theologians provides us plenty of rich and viable options to choose from. I am personally partial to a recent innovation and list from Deirdre McCloskey’s book Bourgeois Equality in which she arrives at seven core values – a snapshot at which I have taken liberty of including in the (rather amateurish) picture below. Perhaps the broader point is that our public education systems aren’t teaching any of these. If there is any “value” being taught, it is the maniacal pursuit of of tolerance under a veneer of moral relativism. I believe this to be a travesty of the highest order, and I find it morally repugnant and offensive that we are under the shackles of being forced to pay tax dollars and forced to send our children to a school teaching such methods (and neglecting all others) by simple virtue of the arbitrarily drawn school districts we live in. We scramble to live in the right neighborhoods and pay dearly for housing  and property taxes to buy into certain school districts while ignoring that there truly is little difference in the education that is received out of them. There may be better “outcomes” due to clustering into wealthy neighborhoods, but ask yourselves, is there truly any differnece in what is learned? Does your chid truly develop any better character than the child forced into the “poor” school down the street? Isn’t it an injustice that the child born into poverty has no choice but to go to their locally zoned school? The connection back to my opening paragraph is that I believe school choice and reform is an idea ripe for harvest. I only hope to convince my fellow citizens of this fact one day, so that we can benefit our children, our families, communities, states, and nation.

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