What Can the Rich Afford that Average Americans Can’t? by Donald J. Boudreaux

Raffi Melkonian asks — as relayed by my colleague Tyler Cowen — “When can median income consumers afford the very best?”

Tyler offers a list of some of the items in the modern, market-oriented world that are as high-quality as such items get and yet are easily affordable to ordinary people. This list includes iPhones, books, and rutabagas. Indeed, this list includes nearly all foods for use in preparing home snacks and meals. I doubt very much that Bill Gates and Larry Ellison munch at home on foods — such as carrots, blueberries, peanuts, and scrambled eggs — that an ordinary American cannot easily afford to enjoy at home.

This list includes also non-prescription pain relievers, most other first-aid medicines and devices such as Band-Aids, and personal-hygiene products such as toothpaste, dental floss, and toilet paper. (I once saw a billionaire take two Bayer aspirin — the identical pain reliever that I use.) This list includes also gasoline and diesel. Probably also contact lenses.

A slightly different list can be drawn up in response to this question: When can median-income consumers afford products that, while not as high-quality as those versions that are bought by the super-rich, are nevertheless virtually indistinguishable — because they are quite close in quality — to the naked eye from those versions bought by the super-rich?

On this list would be most clothing. For example, an ordinary American man can today afford a suit that, while it’s neither tailor-made nor of a fabric as fine as are suits that I suspect are worn by most billionaires, is nevertheless close enough in fit and fabric quality to be indistinguishable by the naked eye from expensive suits worn by billionaires. (I suspect that the same is true for women’s clothing, but I’m less expert on that topic.)

Ditto for shoes, underwear, haircuts, corrective eye-wear, collars for dogs and cats, pet food, household bath towels and “linens,” tableware and cutlery, automobile tires, hand tools, most household furniture, and wristwatches.

(You’d have to get physically very close to someone wearing a Patek Philippe — and you’d have to know what a Patek Philippe is — in order to determine that that person’s wristwatch is one that you, an ordinary American, can’t afford. And you could stare at that Patek Philippe for months without detecting any superiority that it might have over your quartz-powered Timex at keeping time.)

Coffee. Tea. Beer. Wine. (There is available today a large selection of very good wines at affordable prices. These wines almost never rise to the quality of Chateau Petrus, d’yquem, or the best Montrachets, but the differences are often quite small and barely distinguishable save by true connoisseurs.)

Indeed, the more one ponders this question relayed by Tyler, the more one suspects that the shorter list would be one drawn up in response to this question: When can high-income consumers afford what median-income consumers cannot?

Such a list, of course, would be far from empty. It would include private air travel, beachfront homes, regular vacations in Tahiti and Davos, private suites at sports arenas, luxury automobiles, rooms at the Ritz, original Picassos and Warhols. (It would, by the way, include also invitations to White House dinners and private lunches with rent-creating senators, governors, and mayors.)

But I’ll bet that this latter list would be shorter than one made up in response to the question relayed by Tyler combined with one drawn up in response to the question that I pose above in the third paragraph (call this list “the combined list”).

And whether shorter or not, what other germane characteristics might distinguish the items on this last list from the combined list?

A version of this post first appeared at Cafe Hayek.

Donald J. BoudreauxDonald J. Boudreaux

Donald Boudreaux is asenior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, a professor of economics and former economics-department chair at George Mason University and, a former FEE president.

Regulators Are Not Heroes by Adam C. Smith & Stewart Dompe

Amazon is suing thousands of “fake” reviewers, who, for a fee, have posted positive reviews for various products. These pseudo reviews violate the spirit — and possibly the functionality — of Amazon’s largely self-governed rating system. Customers rely on reviews to guide their own choices, and a wave of sponsored reviews can mislead them into choosing inferior products.

A similar theme plays out in George Akerlof and Robert Shiller’s newest behavioral economics-cum-self-help book, Phishing for Phools. The authors, both Nobel laureates, claim that an unregulated market leads to massive amounts of manipulation and deception. Just how much remains unspecified, but the general thrust of the argument is that regulatory heroes are needed to rein in villainous dealers.

Heroic Regulators?

It is no surprise then that the authors favor heroic efforts of an older progressive sort, such as the works of Alice Lakey or her modern-day counterpart Elizabeth Warren. Their work, respectively, led to the establishment of the Food and Drug Administration and the Consumer Financial Protection Bureau. These progressives are seen as heroic for taking “action not selfishly but for the public good.” The trouble with such heroes, however, is that they invariably focus not on educating consumers so that they may make better choices but on corralling the cat herd of bureaucrats and politicians into ever-expanding spheres of regulation.

While it is true that consumer regulation can provide focal points that help buyers and sellers interact — in fact, Amazon appealed to just that in its lawsuit — this truth nevertheless misses the pivotal point (and an awkward one for Akerlof and Shiller) that it is Amazon that is working to resolve the problem, not government regulators.

Make no mistake. Akerlof’s classic paper on the quality of goods in a world of imperfect information clearly outlines a problem that markets must address, but it is a problem for both consumers and the market platforms on which they participate. Those platforms have a natural incentive to promote the information consumers need in order to make more informed decisions. The incentives faced by regulators are less well aligned with consumers’ interests. (But advocates of regulation rarely ask what incentives drive government regulators.)

There is another aspect of Akerlof’s model that is telling in this regard: in equilibrium, the so-called “lemons market” should unravel as more and more consumers become frustrated with ever-decreasing levels of quality. Thus, the market platform should topple over. The trouble with this theoretical outcome is that it again fails to account for the empirical observation that it is markets that are solving market problems.

Akerlof’s co-recipient of the 2001 Nobel Prize, Michael Spence, would have no trouble with this observation. Spence noted that it is far more interesting to compare the outcomes in the market to what is possible in a world of incomplete information, not to what is found where no imperfection exists by assumption. Spence explained in his Nobel address that when facing a world of imperfect information, the asymmetry between buyer and seller “cannot be simply removed by a wave of the pen.”

Compared to What?

Even when we acknowledge that individuals may be limited in their analytical and decision-making capabilities, we must ask ourselves, “Compared to what?” As noted elsewhere in these pages, every flaw in consumers is worse in voters. Furthermore, the immediate call for greater government regulation ignores the ongoing knowledge problem: acquiring information is limited by the abilities of normal people (after all, we can’t all be heroes). Knowing which transactions to avoid is valuable information, but that knowledge must first be discovered to be shared. If this information is not readily attainable, then it is unclear how regulators will know what market processes to target, much less how to improve on them.

And if the information does exist, then there is an opportunity for entrepreneurial action to gather this information and sell it to consumers. Put another way, market failures that cause individuals to make poor decisions are themselves profit opportunities for entrepreneurs to help people make better decisions.

In a world of uncertainty, ensuring quality can be a powerful competitive advantage. Amazon wants you, the customer, to use its search and recommendation system to buy new products, products that you cannot physically touch and inspect. The review system is one method of overcoming this informational asymmetry. When the integrity of the review system is challenged, Amazon is faced with the prospect of a lower volume of transactions and therefore lower profits.

Private Heroes

This is why Amazon is acting to curtail its rogue members. Retailers can only justify high prices when they can guarantee quality. Amazon’s feedback system constitutes a significant informational subsidy to its users, and the company is willing to create this information (or have it created by users) because it leads to a higher volume of trade and the accompanying consumer benefits that Amazon brings to book readers worldwide.

What Akerlof and Shiller miss is that creating and maintaining a viable platform for trade opportunities is enormously expensive. Having customers exit the door to never return — or perhaps write negative Yelp reviews — causes instability to the market that can be fatal if left unattended.

Rather than focusing on the failure of consumers, the original sin of our humanity, we should instead notice how information entrepreneurs are enabling us to make better choices. The information revolution led by these innovators has changed the world with the costs of distribution lower than ever.These may not be the welfarist heroes of Akerlof and Shiller’s fantasy world but market troubleshooters of the one we actually occupy.

Public-spirited regulators may be the heroes we want, but they are not the heroes we need.

Adam C. Smith

Adam C. Smith

Adam C. Smith is an assistant professor of economics and director of the Center for Free Market Studies at Johnson & Wales University. He is also a visiting scholar with the Regulatory Studies Center at George Washington University and coauthor of the forthcoming Bootleggers and Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics.

Stewart Dompe

Stewart Dompe

Stewart Dompe is an instructor of economics at Johnson & Wales University. He has published articles in Econ Journal Watch and is a contributor to Homer Economicus: Using The Simpsons to Teach Economics.

Brazil Is the New Greece by Tyler Cowen

At 70% of GDP, public debt is worryingly large for a middle-income country and rising fast. Because of high interest rates, the cost of servicing it is a crushing 7% of GDP. The Central Bank cannot easily use monetary policy to fight inflation, currently 10.5%, as higher rates risk destabilising the public finances even more by adding to the interest bill. Brazil therefore has little choice but to raise taxes and cut spending.

Too often, at the popular level, there is a confusion between “austerity is bad” and “the consequences of running out of money are bad.”

Sophisticated analysts of fiscal policy do not make this mistake.

By the way, here is a long study of how Brazilian fiscal policy has been excessively pro-cyclical.

And how is Brazilian output doing you may wonder?

By the end of 2016 Brazil’s economy may be 8% smaller than it was in the first quarter of 2014, when it last saw growth; GDP per person could be down by a fifth since its peak in 2010, which is not as bad as the situation in Greece, but not far off.

Two ratings agencies have demoted Brazilian debt to junk status. Joaquim Levy, who was appointed as finance minister last January with a mandate to cut the deficit, quit in December.

Any country where it is hard to tell the difference between the inflation rate — which has edged into double digits — and the president’s approval rating — currently 12%, having dipped into single figures — has serious problems.

Don’t forget this:

Since the constitution’s enactment, federal outlays have nearly doubled to 18% of GDP; total public spending is over 40%. Some 90% of the federal budget is ring-fenced either by the constitution or by legislation.

Constitutionally protected pensions alone now swallow 11.6% of GDP, a higher proportion than in Japan, whose citizens are a great deal older. By 2014 the government was running a primary deficit (ie, before interest payments) of 32.5 billion reais ($13.9 billion).

Brazilian commodity prices have fallen 41% since their 2011 peak, so I say Ed Prescott has earned his Nobel Prize right there.

The first underlying article/op-ed also is from the Economist. Without intending any slight to their other recent issues, the January 2-8 issue is one of their best in a long time. (I am very pleased to have bought it in advance at the airport rather than waiting to get to my copy back at home.)

This post first appeared at Marginal Revolution.

Tyler CowenTyler Cowen

Tyler Cowen is an American economist, academic, and writer. He occupies the Holbert C. Harris Chair of economics, as a professor at George Mason University, and is co-author, with Alex Tabborak, of the popular economics blog Marginal Revolution.

99% of Syrians entering U.S. are Muslims – Florida in top five ‘welcoming’ Syrians

Just a quick update on where we are with Obama’s promised 10,000 Syrians to be admitted to the US in FY 2016.  They are off to a slow start diversifying your towns and expanding the Democrat voter base, that is for sure.

Archbishop Joseph Kurtz of Kentucky is the President of the U.S. Conference of Catholic Bishops and is advocating for 100,000 Syrian, mostly Muslim, refugees to be placed in your parishes! Of the 674 Syrians so far this year, 3 are Catholics.

archbishop-kurtz

Archbishop Joseph Kurtz of Kentucky

I’m thinking there are two factors involved:  First, they can’t get them through security screening at anywhere near the numbers they need to make that 10,000 goal (and remember the resettlement contractors are still yammering for 100,000 this year).

And, two, maybe they are running into the same problem that Canada is having—they can’t find enough who want to move permanently to N. America. Why? Because they really want to go home!

The slow pace has nothing to do with grandstanding by the governors which we will tell you about shortly.

According to the US State Department data base we have admitted 674 Syrians in the first three months of the fiscal year (Oct. 1, 2015 to Dec. 31, 2015).  At that rate the feds will get 2,696 here by Sept. 30th, 2016 (obviously far short of 10,000).

99% of the 674 are Muslims (660 are Sunni Muslims).

Here are the top five states “welcoming” Syrians:

  1. California (83)
  2. Michigan (71)
  3. Florida (59)
  4. Texas (56)
  5. Pennsylvania (53)

And, not far behind is KY with 50.

97% of the USCCB migration fund comes from your wallets!  So, of course they want 100,000 Syrians this year!

RELATED ARTICLE: Merkel on Cologne sex assaults – don’t blame refugees

VIDEO: Gun Control Debate in the Sunshine State

Christian Ziegler, the Republican Party of Sarasota State Committeeman was on the Alan ABC Channel 7 to debate President Obama’s Executive Order on gun control. Ziegler was on the Alan Cohn Show. Cohn is anchor and managing editor of ABC 7 News at 7:00 p.m

In an email Ziegler wrote:

I appeared on WWSB ABC 7 tonight to debate Ed James III, Democrat for FL House, about President Obama’s Executive Order on Gun Control.

Click here to watch the debate and then, if you have any thoughts about this issue, please reply back to this email [Inform@christiangop.com] and share them with me.

-Christian Ziegler
State Committeeman, Sarasota County

Here is the video of the Alan Cohn Show debate:

RELATED ARTICLE: The Facts Behind 4 of Obama’s Claims About Guns

Integrity Florida Releases Research Report on Florida Ethics Laws

Integrity Florida, the nonpartisan research institute and government watchdog, released a new report today that examines Florida’s ethics laws and measures recent anti-corruption reforms against established benchmarks. The report finds Florida is making progress in the fight against public corruption, but much more remains to be done.

Ethics reforms that were passed in 2013 and 2014 represent the first significant attempt to update the state’s ethics laws since the 1970’s and since the 2012 publication of Integrity Florida’s 2012 report titled Corruption Risk Report: Florida Ethics Laws. That report analyzed federal public corruption conviction data and found that Florida led the nation in corruption convictions from 2000 to 2010. The new report finds Florida is now ranked number three for public corruption convictions behind Texas and California.

“Florida went too long neglecting public corruption and ethical abuses and its citizens have paid a real price for corrupt government practices that have cost taxpayers’ public funds and damaged the state’s reputation” said Ben Wilcox, Research Director for Integrity Florida. “We’ve made progress and the legislature will have the opportunity to act on more anti-corruption solutions in 2016.”

Key Findings

  • Florida is no longer number one in federal public corruption convictions for the ten-year period from 2003 to 2013, the most recent data available. While Florida is still in the top five states ranked at number three with 622 convictions, Texas is now number one with 870 convictions, followed by California at number two with 678 convictions. Federal public corruption convictions in Florida have flattened out and appear to be trending downward.
  • In the 2015 update of the 2012 State Integrity Investigation, Florida’s overall grade for the 14 categories measuring government accountability fell from a C-minus to a D-minus. Florida’s grade was lower in virtually every category measured except in “Ethics Enforcement Agencies.” In that category Florida went from an F grade to a D-minus.
  • While a few of the recommendations of the Nineteenth Statewide Grand Jury
    have been adopted, the majority of those recommendations have never been considered by the Florida legislature.

Policy Recommendations

Ethics Reform/Anti-Corruption legislation that has been filed that would reduce corruption risk if passed in 2016 include:

  • Senate Bill 582/House Committee Bill by the Rules, Calendar and Ethics Committee: These bills would put into law two anti-corruption recommendations that were in the 2010 Nineteenth Statewide Grand Jury Report.
  • Senate Bill 686/House Bill 593: Titled the Florida Anti-Corruption Act of 2016, this an omnibus ethics reform measure that includes the provisions in Senate Bill 582.
  • Online financial disclosure filing system: Create an online, publicly accessible filing system for financial disclosure statements for state and local officials as envisioned in the plan submitted by the Commission on Ethics to the Florida legislature.

Additional Ethics Reform/Anti-Corruption policy solutions that could be enacted to advance government ethics in Florida include:

  • Increase penalties: Increase the maximum civil penalty for violations of ethics laws from $10,000 to $20,000 as recommended by the Florida Commission on Ethics.
  • Self-initiate investigations: Allowing the Commission on Ethics to self-initiate investigations would be the single most effective change in the ethics laws that could be made, both in terms of actually enforcing the law and in terms of public confidence in government.
  • Require all Elected Officials to file Full and Public Financial Disclosure (Form 6): All constitutional officers in Florida are currently required to file Full and Public Financial Disclosure known as Form 6. Many other elected officers, including city officials, are only required to file the less-informative Form 1, known as Disclosure of Financial Interests.
  • Improve fine collections: The problem of officials who fail to pay the automatic fines they receive for failing to file financial disclosure is well-documented. Allowing the Commission to record its final orders as liens on the debtor’s real and personal property would give them another tool to collect unpaid fines.
  • Raise the standard for awarding attorney’s fees against complainants: This would restore the law on recovery of attorney fees to the way it had been construed by the Commission prior to a decision by the 1st District Court of Appeal; that Complainants are held to the same standard applicable to media publications regarding public figures. Under that standard, the Ethics Commission awarded attorney’s fees only against complainants who maliciously and knowingly filed complaints based on false information.
  • Change the burden of proving an ethics violation from “clear and convincing evidence” to a “preponderance of the evidence.”

Read the full report here.

ABOUT INTEGRITY FLORIDA

Integrity Florida is a nonpartisan research institute and government watchdog whose mission is to promote integrity in government and expose public corruption.  More information at www.integrityflorida.org. Download Florida’s Path to Ethics Reform.

The Barbarianism of Paternalism by Aaron Ross Powell

Lots of people do lots of things I wish they wouldn’t. And lots of people don’t do lots of things I wish they would. In fact, I’m rather certain the world would be a better place for me and people just like me if more people were willing to go along with my desires and tastes, instead of stubbornly pursuing their own thing.

Take drinking tons of soda. For the life of me, I can’t figure out why people consider sugar water a multiple-times-a-day beverage. It’s like wanting to pour chocolate sauce on everything, or eat brownies with every meal. In short, to my sensibilities, it’s gross. And it’s way less healthy than drinking water — which tastes a whole lot better, too.

Part of being civilized — arguably most of being civilized — is recognizing that different people do things differently and that such differences deserve respect. Respecting difference means allowing behaviors we find disagreeable, provided those behaviors don’t cause us harm. This covers big stuff like religious toleration — those people of other faiths sure do eat weird things and have a funny way of talking, but that’s their business — to, yes, even the dreadful behavior of drinking half-a-dozen Cokes a day.

Of course, civilized people aren’t prevented from making their opinions known. I just did, with my quips about soda, and if I happen to see you drinking one, I’m free to tell you what I think. (Though I risk coming across as an officious jerk if I’m not careful.) What civilized people don’t do is hit each other with clubs over such differences.

That’s why the paternalism Sarah Conly offers three cheers for in the pages of the New York Times amounts to a rah-rah for barbarism. Conly, an assistant professor of philosophy at Bowdoin College and author of Against Autonomy: Justifying Coercive Paternalism, wants those upstanding chaps of the NYPD to flex their might to stop Americans from getting so fat.

To support her preference for state interference, Conly turns to the great classical liberal John Stuart Mill.

In his great work, On Liberty, Mill advances the “harm principle” as a crucial limit on the authority of the state:

The only purpose for which power can be rightfully exercised over any member of a civilised community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinions of others, to do so would be wise, or even right.

Which sounds pretty bad for the soda ban. But not so fast, Conly says. She tells us Mill endorsed preventing our freely chosen actions “when we are acting out of ignorance and doing something we’ll pretty definitely regret. You can stop someone from crossing a bridge that is broken, he said, because you can be sure no one wants to plummet into the river.”

From that, she gets to the idea that, because people underestimate the dangers of drinking lots of soda, they’re (often/usually) acting out of ignorance when they drink it, and so we’re justified in at the very least making it much more difficult for them to consume the stuff in bulk.

But read the full passage from Mill:

If either a public officer or any one else saw a person attempting to cross a bridge which had been ascertained to be unsafe, and there were no time to warn him of his danger, they might seize him and turn him back, without any real infringement of his liberty; for liberty consists in doing what one desires, and he does not desire to fall into the river.

Nevertheless, when there is not a certainty, but only a danger of mischief, no one but the person himself can judge of the sufficiency of the motive which may prompt him to incur the risk: in this case, therefore (unless he is a child, or delirious, or in some state of excitement or absorption incompatible with the full use of the reflecting faculty), he ought, I conceive, to be only warned of the danger; not forcibly prevented from exposing himself to it.

It seems Conly left out the bit about such interference requiring first “no time to warn him of his danger.” Nor does she seem at all bothered by the important limit that, “when there is not a certainty, but only a danger of mischief, no one but the person himself can judge of the sufficiency of the motive which may prompt him to incur the risk.”

Even accounting for the cognitive biases — which Conly says, if only he’d known about them, would’ve led Mill to support soda nannyism — it’s difficult to square the harm caused by a large Coke with the imminent danger and certainty of effect needed to override the harm principle.

In fact, a great deal of On Liberty seems perfectly aimed at exposing the immorality of Conly’s paternalism. She should’ve read not only the rest of that passage, but also the rest of On Liberty. Mill warns of an increasing inclination to stretch unduly the powers of society over the individual, both by the force of opinion and even by that of legislation: and as the tendency of all the changes taking place in the world is to strengthen society, and diminish the power of the individual, this encroachment is not one of the evils which tend spontaneously to disappear, but, on the contrary, to grow more and more formidable.

The disposition of mankind, whether as rulers or as fellow-citizens to impose their own opinions and inclinations as a rule of conduct on others, is so energetically supported by some of the best and by some of the worst feelings incident to human nature, that it is hardly ever kept under restraint by anything but want of power; and as the power is not declining, but growing, unless a strong barrier of moral conviction can be raised against the mischief, we must expect, in the present circumstances of the world, to see it increase.

This “mischief” results from that urge to have others prefer the same thing we prefer, to have others behave the way we behave. But, like I said above and like Conly seems to forget, civilization means recognizing the primacy of individual choice, even choices we think silly.

There is no reason that all human existences should be constructed on some one, or some small number of patterns. If a person possesses any tolerable amount of common-sense and experience, his own mode of laying out his existence is the best, not because it is the best in itself, but because it is his own mode.

Human beings are not like sheep; and even sheep are not undistinguishably alike. A man cannot get a coat or a pair of boots to fit him, unless they are either made to his measure, or he has a whole warehouseful to choose from: and is it easier to fit him with a life than with a coat, or are human beings more like one another in their whole physical and spiritual conformation than in the shape of their feet?

If it were only that people have diversities of taste, that is reason enough for not attempting to shape them all after one model. But different persons also require different conditions for their spiritual development; and can no more exist healthily in the same moral, than all the variety of plants can in the same physical, atmosphere and climate.

The same things which are helps to one person towards the cultivation of his higher nature, are hindrances to another. The same mode of life is a healthy excitement to one, keeping all his faculties of action and enjoyment in their best order, while to another it is a distracting burthen, which suspends or crushes all internal life.

Such are the differences among human beings in their sources of pleasure, their susceptibilities of pain, and the operation on them of different physical and moral agencies, that unless there is a corresponding diversity in their modes of life, they neither obtain their fair share of happiness, nor grow up to the mental, moral, and aesthetic stature of which their nature is capable.

Is drinking large sodas a way of life, though? Conly mocks the idea: “Large cups of soda as symbols of human dignity? Really?” But consider that if you drink 32 ounces of Coca-Cola, you’ll rack up 388 calories. A 20-ounce Iced White Chocolate Mocha from Starbucks has 500. Both aren’t good for you, but the Mocha’s worse. The difference is that the kinds of people who want to use government to save ignorant Americans from the harms of soft drinks are the kinds of people who prefer an Iced White Chocolate Mocha to a Coca-Cola.

That Conly calls for a ban on Cokes and not Mochas indicates that what really bothers her is the behavior of those low-brow folks who slam giant soft drinks, but not so much the worse behavior of the middle-class and educated who just can’t start the day without a latte. About this tendency to use ourselves as the moral yardstick, Mill noted, “our idea of improvement chiefly consists in persuading or forcing other people to be as good as ourselves.”

So the real trouble is people aren’t acting like Conly — or the majority Conly imagines agrees with her — would like them to. Thus it’s time to call in the law. To which Mill says this:

A theory of “social rights,” the like of which probably never before found its way into distinct language — being nothing short of this — that it is the absolute social right of every individual, that every other individual shall act in every respect exactly as he ought; that whosoever fails thereof in the smallest particular, violates my social right, and entitles me to demand from the legislature the removal of the grievance.

So monstrous a principle is far more dangerous than any single interference with liberty; there is no violation of liberty which it would not justify; it acknowledges no right to any freedom whatever, except perhaps to that of holding opinions in secret, without ever disclosing them: for the moment an opinion which I consider noxious, passes any one’s lips, it invades all the “social rights” attributed to me by the Alliance.

The doctrine ascribes to all mankind a vested interest in each other’s moral, intellectual, and even physical perfection, to be defined by each claimant according to his own standard.

To which Conly likely offers another three cheers. Especially when the individual rights she wants violated in the name of social rights are so, well,dumb. “As irritating as it may initially feel, the soda regulation is a good idea,” she writes. “It’s hard to give up the idea of ourselves as completely rational. We feel as if we lose some dignity. But that’s the way it is, and there’s no dignity in clinging to an illusion.”

Writing in The Subjection of Women — regarding a different group then burdened with the charge of irrationality — Mill had this to say about a Conly-style disregard for personal choice: “The yoke is naturally and necessarily humiliating to all persons, except the one who is on the throne, together with, at most, the one who expects to succeed to it.”

Conly may cheer the power of the throne, but the civilized among us should not.

This essay first appeared at Libertarianism.org.

Aaron Ross PowellAaron Ross Powell

Aaron Ross Powell is a research fellow and editor of Libertarianism.org.

About That Fortune Article on Common Core…

I have been reading Peter Elkind’s January 01, 2016, article in Fortune on the Common Core State Standards (CCSS).

Elkind’s work is a study in foolishness. Basically, he demonstrates the unfounded faith that powerful individuals whose lives only skirt the worlds of whose with children in public schools have placed in a set of rushed, contrived standards to cure all that ails American public education. Whether such ailments are real or contrived becomes irrelevant; CCSS is the needed fix.

Nevertheless, truth regarding CCSS leaks out from among Elkind’s words. Consider this statement in regards to billionaire Bill Gates’ trying to convince billionaire Charles Koch to support CCSS (a failed effort on Gates’ part):

This extraordinary tête-à-tête is just one example of how the war over Common Core has personally engaged—and bedeviled—some of America’s most powerful business leaders. Hugely controversial, it has thrust executives into the uncomfortable intersection of business and politics.

CCSS is hugely controversial, if for no other reason than its rushed-and-hushed creation. And surely one must wonder about the motives behind Gates’ continued push of what is little more than a Gates latest-and-greatest pet project.

Had CCSS been developed and implemented with sense– one grade level at a time, openly, and prior to any formal state adoption– the “hugely controversial” component would have been quelled.

Elkind does not mention this. Instead, he shows that CCSS is very much a corporate tool– a magic tool that is supposed to serve their corporations by contorting the purpose of education into corporate service:

In truth, Common Core might not exist without the corporate community. The nation’s business establishment has been clamoring for more rigorous education standards—ones that would apply across the entire nation—for years. It views them as desperately needed to prepare America’s future workforce and to bolster its global competitiveness. One measure of the deep involvement of corporate leaders: The Common Core standards were drafted by determining the skills that businesses (and colleges) need and then working backward to decide what students should learn.

CCSS: “working backward.” Truer words….

Surely a sensible business community absorbed with serving itself would have required proof that CCSS would deliver on its claim of “college and career readiness.” But no. Business jumped right into selling CCSS– with the likes of Exxon’s Rex Tillerson so enamored with CCSS that he even threatened to not do business with states that did not have CCSS. (As Elkind notes, Tillerson is currently satisfied that CCSS is so embedded in American education that he rescinded his bizarre threat.)

When one is in love, sensibility becomes irrelevant. The CCSS violins in Tillerson’s ears must be proof enough of its faithfulness.

“Businesses say they can’t find enough skilled workers,” reports Elkind.

What board meeting involved any CCSS promoter (David Coleman? Chester Finn?) offering details on exactly how CCSS translates into “enough skilled workers”?

Those pushing CCSS also be required to guarantee its implementation. But they can’t because, well, it is just not that easy.

Elkind mentions the “executive mindset… favors consistency, efficiency, and accountability.” What he also hints at it that the executive mindset assumes that it is right– that it has the right to “insist” on how an issue should be– any issue that captures that executive’s attention. Yes, CCSS has captured that attention, and executives like Tillerson want American education to be accountable to their perceptions of how American education should work– even as such ivory-towered power-wielders overlook the glaring reality that CCSS is, as Elkind points out, a “grand experiment”:

It remains unclear how well this grand experiment will meet its ultimate goal: better preparing kids (and our country) for a challenging future.

You just can’t drop an education reform from the top and expect it to work on the local level as willed by the top. It will be resisted, and it will be gamed. No Child Left Behind (NCLB) offered that lesson. And CCSS will too– even as it is excused for not being “properly implemented.”

And to think that CCSS would work if only America just relaxed about the appendaged CCSS testing is plain ignorant:

A key element of the Common Core effort—common standardized tests to allow honest assessments of progress—remains unfulfilled, swept back by a wave of parental concern about over-testing and teacher anxiety about being judged too harshly too soon.

Elkind, when you can produce for me a major testing company willing to guarantee that its student assessments are able to accurately grade teachers and schools, then you can toss off commentary about “honest assessment” with no beef from me. However, the reality is that students are being over-tested, and much of it has to do with grading teachers and schools– which will never be a valid use of a student achievement test.

So, as a teacher, I will tell you that CCSS and the attendant assessment craze in which it was birthed will only perpetuate opportunities to game a system imposed from the top to smother the bottom into some flaky, cognac-at-the-club-induced illusion of globally-competitive submission.

The likes of CCSS will fail, not because of poor implementation, but because it will collapse under the foolishness of its own ill-conceived weight. Indeed,Fortune magazine is willing to accept the word of Chester Finn– whose Fordham Institution promoted CCSS even though it conceded that standards in some other states were better–regarding the state of CCSS:

“We’re better off than we were before Common Core,” says veteran education scholar Chester Finn, a senior fellow with Stanford’s Hoover Institution. “We’ve got better standards. There’s less lying about the performance of kids and schools. There’s some better curriculum in place. If you were hoping for a 100% gain, today we’re probably looking at a 37% gain. But honestly it’s still early days. The aircraft carrier of an education system turns really slowly.”

If you want to see some lying in the form of pro-CCSS marketing, read Finn’s July 2010 review of state standards and CCSS. Finn proves that creative writing is very much alive in association with CCSS.

As for that “37 percent gain”– I wonder if any of the CCSS corporate pushers will finally decide to follow through on their supposed mindset of accountability and ask for the hard proof behind Finn’s marshmallow stat– and whether they will pin him down on exactly how long that aircraft carrier takes to turn.

EDITORS NOTE: The author has written A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education. She also has a second book, Common Core Dilemma: Who Owns Our Schools?. If you don’t care to buy from Amazon you may purchase her books directly from Powell’s City of Books. The featured image is courtesy of Fortune Magazine.

Arne Duncan is gone -– But U.S. DOE Nonsense Remains

December 2015 is gone, and so is US Secretary of Education Arne Duncan, who announced in October that he would be leaving DC in December.

In this January 02, 2016, NBC “Meet the Press” article, President Obama offers an unsubstantiated statement in an effort to portray Duncan’s tenure in Washington, DC, as successful:

“Arne has dedicated his life to the cause of education — and sometimes in the nicest possible way, he has gotten on people’s nerves because he has pushed them and prodded them,” Obama said at the signing of the Every Student Succeeds Act.

“Had he not been, I believe, as tenacious as he was, I think that we would not have as good of a product as we do here today. And so I could not be prouder of Arne Duncan,” the president added.

I wonder exactly what that “as good of a product” is. Obama isn’t offering details.

The NBC article is generous in its assessment (funny word choice) of Duncan’s accomplishments. For example, NBC credits Duncan with “helping convince” states to adopt the Common Core State Standards (CCSS):

Duncan helped convince 42 states to adopt education goals based on the Common Core, and 21 of them to use tests that directly align with those standards, which were created by a bi-partisan group and attempt to both make U.S. schools more challenging and the curriculum more similar from state-to-state.

Recall that CCSS was supposedly “state led.” Too, the wording that CCSS was an “attempt” to make schools more challenging is wording polished to a glossy sheen given the rush to write and implement CCSS before America knew what had hit it.

And let me add a corrective finger wag to NBC– CCSS isn’t supposed to be a curriculum— even though taking hold of standards on one end and assessments on the other will indeed drive the curriculum in the middle.

Arne was just “helping” with all of this.

Note, however, that the CCSS push was in the works before Duncan arrived in 2009 (e.g., billionaire Bill Gates was asked to fund the venture in summer 2008), so what Duncan did in 2009 was attach money to CCSS via Race to the Top (RTTT), which was careful to not name CCSS, instead opting for the term “common standards” that were “consortium developed.”

In June 2009, Duncan attended the National Governors Association (NGA) symposium and announced that RTTT would be coming– and that the federal government would foot the bill for CCSS’s consortium-developed, common assessments. However, before Duncan officially announced RTTT, 46 states and three territories had already signed the CCSS memorandum of understanding (MOU).

Of course, it is possible that the governors were willing to sign onto a CCSS that did not yet exist because of the smell of federal money coming– and Duncan certainly could have helped them smell it.

(Note that the CCSS MOU also indicated that the federal government would have an extensive role in all to do with CCSS except specifically funding its writing.)

To NBC’s credit, it does note later in its Duncan piece that “conservatives accurately cast Duncan as effectively federalizing education policy.” However, the NBC article adds that Duncan views the CCSS backlash as “more about a failure to communicate his vision than his ideas themselves.”

Dream on, Arne.

Duncan was protective of CCSS to the extent that he told newspaper editors how to report on CCSS; he has even insulted parents for CCSS opposition. These details did not make it into the NBC article, and apparently, Duncan does not consider that his vision was indeed accurately communicated.

What did make it into the NBC piece was Duncan’s charter school affinity– so much so that he is credited with “presiding over” charter school growth in places that were charter-school friendly pre-Duncan, such as DC and New Orleans:

While some liberals dislike charter schools, Duncan has been a strong supporter of them and presided over a huge growth in students attending charters in cities like Washington, D.C. and New Orleans.

Yes, Duncan is friendly toward charter schools. No Child Left Behind (NCLB) and the latest Elementary and Secondary Education Act (ESEA) revision, the Every Student Succeeds Act (ESSA), both seek to expand the presence of “high quality charter schools” (should be a trademarked term by now) without addressing issues of charter school mismanagement and scandal. Indeed, on the day that he resigned, Duncan doled out a cool $249 million to charter schools despite the criticism that his Department of Ed failed to monitor its generous charter school payouts:

On that day, Duncan rattled the education policy world with news of a controversial grant of $249 million ($157 the first year) to the charter school industry. This announcement was controversial because, as The Washington Post reports, an audit by his department’s own inspector general found “that the agency has done a poor job of overseeing federal dollars sent to charter schools.”

Post reporter Lynsey Layton notes, “The agency’s inspector general issued a scathing report in 2012 that found deficiencies in how the department handled federal grants to charter schools between 2008 and 2011″ – in other words, during Duncan’s watch.

Even more perplexing is that the largest grant of $71 million ($32.5 the first year) is going to Ohio, the state that has the worst reputation for allowing low-performing charter schools to divert tax money away from educational purposes and do little to raise the achievement of students.

Any Duncan legacy piece should account for this glaring Duncan lapse, and NBC’s piece on Duncan does not.

Is this part of Obama’s “good” educational “product”? Is he proud of Duncan for his failure to bring some of that so-called accountability over federal charter school cash?

He isn’t saying.

In giving $71 million to Ohio, which has been in the news for issues of charter corruption– including the Ohio Department of Education’s manipulating charter school stats– the USDOE offered the unbelievably weak explanation that it simply did not conduct a thorough review of the Ohio application before approving Ohio for that $71 million.

Another issue: NBC alludes to Duncan’s attempts to coerce states into his, uh, “vision” via his conditional NCLB waivers, which actually led to lots of detailed ESSA language attempting to limit the role of future US secretaries of education, especially as concerns Title I funding. I am in the process of writing a digest on the 1,061-page ESSA; below is an excerpt regarding the ESSA prohibitions on the US secretary of education.

They are undeniably inspired by the actions of former US Secretary of Education Arne Duncan:

[Regarding ESSA state plans and Title I funding], there are a number of specifics that the secretary cannot do. …The secretary cannot create a hard-and-fast, exhaustive list of illustrations on how the Title I state plan should read, and the secretary cannot offer “new, non-regulatory guidance” that “purports to be legally binding” (page 104)– hinting at Duncan’s overreach with his No Child Left Behind (NCLB) waivers.

There is also the statement that the secretary cannot add to the data reporting requirements of Title I: “[the secretary cannot] require data collection under this part beyond data derived from existing Federal, State, and local reporting requirements” (page 104).

The secretary cannot redefine Title I terminology in an effort to bypass the limitations on the secretary’s role regarding Title I (pages 104-105).

The US secretary-limiting language in ESSA is attributed to Duncan, and NBC does get that right:

Earlier this month (December 2015), Congress passed the “Every Student Succeeds Act,” a replacement to the Bush-era “No Child Left Behind” law. Included in the ESSA, at the behest of congressional Republicans, are several provisions that explicitly bar the federal Department of Education from setting policy for all of America’s schools. Republicans wanted to ensure there are no more Arne Duncans.

If the Republicans wanted to ensure there were “no more Arne Duncans,” they likely missed their goal, at least in part. When it comes to the 95-percent participation requirement for English language arts (ELA) and math testing in grades 3 through 8 and once in high school, ESSA tells states that they are not supposed to fashion state- and local-level opt out laws and regulations based on the federal testing requirement as a condition for Title I funding.

In other words, don’t blame the federal government for the federally-required Title I testing.

This will produce a showdown in which states that fail to make the federally-mandated 95 percent of students tested will be at the mercy of the next US secretary of education, who does have the authority to waive ESSA requirements. (For details, see pages 815 to 826 of the ESSA document.)

As it stands, spring 2016 testing still falls under NCLB. Note that the NCLB intention of the 95-percent of students tested was retained in ESSA, with tighter language in ESSA. NCLB language is looser in that it notes that states must administer tests (there was no parental opt-out in 2001 and therefore no inkling that state-administered tests would be resisted by parents and students), but it seems that Ann Whalen, whose temp title is “Delegated the authority to perform the functions and duties of Assistant Secretary for Elementary and Secondary Education,” plans to put the squeeze on states to get that 95 percent of students to actually take the tests that the state is required by NCLB to “administer.” (It is one issue for states to administer the tests and quite another for parents to allow their children to take the tests that the state is in good NCLB faith offering to administer.)

Whalen advises states to put pressure on districts to get that 95 percent of students participating in the testing. Among her suggestions are lowering the less-than-95-percent-testing district rating in the state accountability system; requiring districts with fewer than 95 percent test takers to develop an “improvement plan”; designating such districts or schools as “high risk,” or a state’s withholding state or federal aid from such districts.

Finally, before her creepy “we look forward to working with you” closing, Whalen states that she is not beyond withholding Title I funding, especially for states with notable opt outs last year:

If a State with participation rates below 95% in the 2014−2015 school year fails to assess at least 95% of its students on the statewide assessment in the 2015−2016 school year, ED will take one or more of the following actions: (1) withhold Title I, Part A State administrative funds; (2) place the State’s Title I, Part A grant on high-risk status and direct the State to use a portion of its Title I State administrative funds to address low participation rates; or (3) withhold or redirect Title VI State assessment funds.

For all States, ED will consider the appropriate action to take for any State that does not assess at least 95 percent of its students in the 2015−2016 school year — overall and for each subgroup of students and among its LEAs. To determine what action is most appropriate, ED will consider SEA and LEA participation rate data for the 2015−2016 school year, as well as action the SEA has taken with respect to any LEA noncompliance with the assessment requirements of the ESEA.

We look forward to working with you to ensure that all students participate in statewide assessments during the 2015−2016 school year and each year thereafter, and in supporting implementation of the Every Student Succeeds Act, which includes a new focus on auditing and reducing unnecessary State and local assessments and providing parents and families with better information about required testing….

Please do not hesitate to contact your State’s program officer in the Office of State Support if you need additional information or clarification. Thank you for your continued commitment to enhancing education for all of your State’s students.

Nice. If it seems that Whalen sounds like a Duncan, it is because she has ties to Duncan and Chicago. I know her from reading her pro-corporate-reform writing at Ed Post (which happens to be run by another Duncan-Chicago-USDOE crony, Peter Cunningham):

Ann Whalen is senior advisor to Secretary of Education Arne Duncan.

Prior to returning to the U.S. Department of Education, she served as the director of policy for Education Post.

Whalen has served more than five years in the Obama Administration with the U.S. Department of Education. At the department, Ann was director of the Implementation and Support Unit, providing technical assistance to states and school districts as they rolled out new reform programs to improve student results. In that role, she managed a 35-member team and a portfolio of over $50 billion in grant programs. She also served as a special assistant to Secretary of Education Arne Duncan, helping shape administration policy across a range of issues. She also worked with Duncan at Chicago Public Schools for six years and served in the City of Chicago Department of Planning and Development under the administration of former Mayor Richard M. Daley.

She has B.A. in political science from Stanford University.

You can read Whalen’s December 22, 2015, “I’m warning you” letter to state superintendents in its entirety here, compliments of Alyson Klein of EdWeek.

Duncan is gone, and the USDOE test worship continues.

We’ll see what spring brings for Whalen.

EDITORS NOTE: Schneider is the author of A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education. She has published a second book, Common Core Dilemma: Who Owns Our Schools?. If you don’t wish to buy from Amazon you may purchase the books from Powell’s City of Books directly.

‘Le Grand Guignol’ Comes to Town – Political Corruption

By Wallace Bruschweiler and William Palumbo

Grand_Guignol_poster

Promotional poster for a Grand Guignol performance. Courtesy of Wikipedia.com.

Over the last several years, the American people have witnessed one perplexing political shenanigan after another – a never-ending story.  Instead of standing up for principles, for democracy itself, our elected leaders routinely sell-out the same country to which they swore an oath to protect.

The most recent enormous sell-out was the passage of a budget that served only the government, not the country.  It began with the election of a new Speaker, whom many hoped would serve the country better than his predecessor.  Instead of a political savior, we got yet another total political loser.

Once in power, the Speaker raised the curtain on a most appalling political horror, a true grand guignol: a budget that funds a government which is already standing on financial quicksand, and that has an abysmal, out-proportion debt.  So much for “we won’t get fooled again.”

Indeed, many of the men and women whom we once considered true patriots have, in recent years, months, and weeks, shown that their own personal agenda and banks accounts take priority over the safeguarding and destiny of our nation.  Their treachery – their betrayal­ – of the American people is forcing a major geopolitical realignment.  Under rule of the current political establishment, the United States is a leading contender in whatever Oscar equivalent is awarded to banana republics.

How and why did all this happen?  Without access to personal records, such as bank accounts domestically and on an international level, including tax shelters, it is impossible to say with certainty.  But, if past is prologue, then bribery facilitated by a government-entrenched mafia is what greases this political machinery.

Welcome to Our Real World: Today’s Ugly Reality

It is not pleasant at all to think that a mafia-type government runs Washington, D.C.   Yet it exactly explains why, despite widespread disapproval of Barack Hussein Obama and Congress, both parties continue working shamelessly against the interests and well-being of the American electorate.

Take, for example, the so-called Iranian nuclear deal.  By legitimizing Iran, the world’s preeminent sponsor of terrorism, Obama has opened the Iranian markets (especially oil and natural gas) to the western world.  In the long run, this deal has the potential to generate trillions of dollars in international trade.  Companies represented by extremely well-financed and influential lobbyists see Iran as the mother-of-all potential markets.

Despite the overwhelming dangers that emanate from enriching a brutal regime with not-so-veiled nuclear ambitions and a proven worldwide terrorist network, the Republican-led Congress refused to try anything which would have effectively postponed and/or killed the deal.

Again, how and why could this have happened?  The answer is unfortunately obvious: money (and, in the case of the Iranian nuclear deal, close family connections between the negotiating members from both sides).

There are other examples that come to mind: a multi-trillion dollar “stimulus” package, a $700 billion dollar bank bailout, countless “green” energy loans that have ended in bankruptcy, etc.

How likely is it that some of this money has been used to line pockets for political favors on both sides of the aisle?  All of this was paid and financed by the people’s tax dollars.

“A government of the mafia, by the mafia, and for the mafia” – that seems to be today’s motto

Mafia is non-ideological: it does not embrace political ideals.  It cynically espouses ideals from time to time, but ultimately it will not uphold virtues that interfere with the strict pursuit of money and power.  So, when (not if) necessary, ideals and decency are conveniently forgotten.

The public at large calls this process “a bipartisan compromise.”  However, in reality, there is only one party.  It is a political animal which puts your God-given rights on the auction block, to be sold to the highest willing and able bidder.

It’s also indisputably true that politicians, on both sides of the aisle, are taking bribes.  Wherever power accumulates, corruption immediately follows. Widespread corruption is the defining trait of Washington’s establishment today.  There is no principled leader among them.

Politicians, like everyone else, have a price.

Vetting Isn’t All It’s Cracked Up to Be

Should Americans be comfortable with the current refugee vetting process? 

Recently, the world was rocked by high profile Islamic terrorist attacks in far flung locales such as Paris, France and San Bernardino, California.  Some Americans have begun to raise serious concerns about how well individuals coming into the United States are screened.  Particularly, those streaming into our republic from such unfriendly places like Syria, Saudi Arabia, Iran, Pakistan and Northern Sudan are a justifiable cause for concern.

I have wondered if the vetting process is really any good in the present configuration, particularly in regard to checking out people who are dedicated to a religion that thrives on the deception of non-participants.  Many passports certain people are using to get into our republic could and have at times been filled with false information.  In fact, some Muslim refugees traipsing into our nation have been found to be carrying false information about themselves.

Many applicants seeking entry into America apply for refugee status through the United Nations High Commissioner on Refugees (UNHCR).  Then the applicants are forwarded to the traitorous U.S. State Department, which prepares these applications for adjudication by Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS).

Once an applicant is referred to the State Department biometric and biographic checks are conducted against various United States security databases are incorporated in this process, they include.

  1. Department of State
  • Consular Lookout and Support System (CLASS)
  • Consular Consolidated Database (CCD)
  1. Department of Homeland Security
  • TECS   (a DHS Security System)
  • DHS Automated Biometric Identification System (IDENT)
  1. National Counter Terrorism Center/FBI’s Terrorist Screening Center
  • Terrorist Identifies Datamart Environment
  • Terrorist Screening Database
  1. Federal Bureau of Investigation
  • Extracts of the National Crime Information Center’s wanted Persons File, Immigration
  • Violator File, Foreign Fugitive File, Violent Gang and Terrorist Organization File (and the Interstate Identification Index)
  • Integrated Automated Fingerprint Identification System (IAFIS)
  1. Interpol
  2. Drug Enforcement Administration
  3. Department of Defense
  • Automated Biometric Identification System (ABIS)

In addition, the refugee process requires a security advisory opinion to be completed by the FBI and the intelligence community on numerous refugee applicants who are considered higher risk.  Similarly, inter-agency checks (IACs) are constantly being done in connection with a wide range of U.S. agencies.

After the series of background checks, United States Citizenship and Immigration Services conducts a refugee interview.  These interviews cover everything from refugee immigration matters to security and nation-specific inquiries.

For example, Syrian Refugees Offices must undergo a one week training course on Syrian-specific issues, including classified information.  On top of that, scrutiny already is being applied to Syrians through the enhanced review for Syrian applicants process that put additional security and intelligence resources at the disposal of adjudicators.

Only at this point can an applicant be approved.  For those that are approved, health screenings and orientations begin.  The traitorous State Department and Office of refugee Resettlement within the Department of Health and Human Services work with voluntary resettlement agencies to arrange for resettlement agencies to arrange for resettlement services and assistance.  After an average of 12 to 18 months, this process ends with entry into the United States.

My concern amongst many is that President Obama in typical bigoted, progressive fashion has stepped up efforts to make sure tens of thousands of Muslims file into the United States, while denying entry to Christian refugees from Syria.  It does not matter to Mr. Obama or other progressives in general that Christians are being slaughtered for sport, while the black African Christian that aren’t murdered are forced into brutal slavery, per instructions in the little quran.’

We must not forget that president Obama said that he wants to fundamentally change America.  One of the efficient ways to change America fundamentally is to flood her with people who have nothing in common with and no desire to assimilate into our country or culture.  In the case of dedicated Muslims, the vetting process is very detailed, but in a since fool-hearty.  By the way, since Muslims have declared war on the United States and Israel, it would not be wrong to consider a long moratorium on allowing them into our republic, at least until hostilities are extinguished.

Unfortunately, all dedicated Muslims who follow the tenets of their political/religious persuasion do not believe in assimilation into the countries they migrate to.  Their ultimate goal is domination and reducing women to sharia law third class abused citizens.  As we transition into a new year, let us as Americans rise together in unison from sea to shining sea in a Providentially guided effort to restore our nation under God with Liberty and Justice for all.  Then we will free ourselves from the dastardly plans of those who seek to kill, steal from and destroy America via a fake vetting system and open borders.

Happy New Year, God bless you God bless America and may America bless God.

FEE’s Top 10 Articles of 2015 by Jeffrey A. Tucker & Daniel Bier

FEE was founded in 1946 to be a voice for liberty in our world, and today FEE makes ideas on freedom, markets, and ethical principles familiar and credible to the rising generation.

This year FEE’s outreach broke all records in achieving that goal. You can see the progress in programs, publications, and media appearances by FEE faculty and staff. This has coincided with major progress in how we reach the world through FEE.org.

Here is a roundup of activities on FEE.org this year.

Top Ten Articles

FEE has been a leading commentary on current affairs, using everything from technological trends to popular culture to politics as a way to illustrating the usefulness of good economics backed by evolved norms.

Hundreds of articles, blog posts, books, and other resources have been published on FEE.org this year, all contributing to record-breaking traffic performance. Here are our top 15 performers of 2015:

10) New York’s Taxi Cartel Is Collapsing. Now They Want a Bailout.

Ride sharing apps are fundamentally changing transportation, dethroning taxi monopolies and replacing them with human choice. Note that this isn’t happening through any political reform. Innovation is the force that is making the difference.

9) The Economics of a Toddler and the Ethics of a Thug

This headline neatly sums up so much of the “progressive” political mindset, particularly socialist supporters of Sen. Bernie Sanders. They scream about the need to plunder the rich, using massive police-state power, without a thought given to where new wealth is going to come from.

8) “Jesus Christ Was a Progressive Because He Advocated Income Redistribution to Help the Poor”

This piece by FEE president Larry Reed dealt squarely with an intellectual confusion that dates nearly to the beginning of Christianity itself. He shows that Jesus did not advocate income redistribution. “One can scour the Scriptures with a fine-tooth comb and find nary a word from Christ that endorses the forcible redistribution of wealth by political authorities.”

7) How Policing Works in a Privatized City

We are fortunate to have examples of the success of liberty all around us. Many cities today are carving out areas that are purchased by private developers. The results are spectacular, and Atlanta’s “Atlantic Station” is one such case: private streets, private policing, private housing. Surprise: these places are not walled gardens but rather hugely welcoming to all.

6) Supreme Court to DoJ: Fourth Amendment Is Not a “Useless Piece of Paper”

When the Supreme Court actually does something right, it’s worth noting. A sound opinion from the Court said that police can’t use a traffic stop to do search missions that are completely unrelated, without having some reasonable and specific suspicions. It’s a good start.

5) Alabama Senate Votes to End State Marriage Licenses

This article covered a possible solution to the marriage debate: get rid of licenses completely and replace them with regular contracts. Opponents of same-sex marriage favored the bill too, but, ironically, such a step would help de-politicize the entire subject. Sadly, the bill died in the House.

4) The Eugenics Plot of the Minimum Wage

How many times have you heard that a higher minimum wage will help the poor? The original architects of wage floors actually knew the truth. They favored the laws in order to exclude the poor, whom they wanted swept out of the population. This is chilling material and completely forgotten history.

3) America Isn’t Getting More Liberal — It’s Getting More Libertarian

This piece documents public polling on a range of issues: immigration, drugs, taxes, gay rights, guns, environment, the draft, and federal power. In most cases, it finds that people are becoming more libertarian over time. It’s another case where mainstream narrative is completely wrong.

2) How Many Children Are You Required to Save?

Just when you think only current news goes viral, this serious philosophical piece rocked the traffic hard. The post showed how the popular argument by Peter Singer relies on false intuitions and casuistry.

1) 6 Reasons to Welcome Refugees after Paris

Our most popular piece of the year! The more you look at the arguments over immigration and refugees, the more you realize that so much of what people think they know is wrong. There is no evidence that vetted US refugees are likely to become terrorists. In fact, refugees tend to become more successful in America than economic immigrants. ISIS sees Syrian refugees as traitors to their cause, so there’s every reason to welcome them as a part of stopping violent extremism.

Other big hits this year included “7 Habits of Highly Effective Libertarians,” “Millions in Brazil Follow a Teen Leader to Freedom,” “Handcuffed and Helpless,” and “Bernie Sanders’ Anti-Immigration Crankery.”

And don’t forget, you can also check out the beautiful and completely redesigned quarterly Freeman magazines online.

Best Books on FEE.org in 2015

The entire book Liberalism by Ludwig von Mises is online at FEE.org. Also, a lost work, Interventionism: An Economic Analysis, is now available. Planned Chaos also made its first online appearance this year.

The first book that FEE ever published, Essays on Liberty, is available as an ePub.

The classic by Henry Hazlitt, What You Should Know About Inflation, is now free to download. FEE also has the full text of Henry Hazlitt’s classic Economics in One Lesson online.

Our five most popular books are available on iTunes and Amazon.

In the physical world, FEE’s edition of Economics in One Lesson is still one of our most popular among young adults — 70 years after its first publication.

Web Development

FEE.org went through dramatic redesign and restructuring this year, and part of this included the building of a platform for leveraging content from like-minded institutions. This has multiplied the reach of great content many times over.

2015 was also the first year that FEE.org became part of the “Creative Commons”, allowing anyone to repost, republish, remix, adapt, sell, or do anything else with FEE’s original content. This move has enormously increased the reach and impact of FEE’s content, which has been published in many new outlets, such as Newsweek.com.

We also took steps to move all web development in house, using the best talent to make FEE.org an ever greater platform. You can look forward to a more comprehensive front page, a member center, tools for finding related material, online learning, and much more.

We’ve also released a major new program for networking: the FEE Faculty Network!

One more thing: we are now distributing some awesome swag in our fancy store. Have a look!

Thank you for an amazing year. Let’s continue to build a freer world in 2016.

Jeffrey A. Tucker

Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook.

Daniel BierDaniel Bier

Daniel Bier is the editor of Anything Peaceful. He writes on issues relating to science, civil liberties, and economic freedom.

Why Is the Middle Class Shrinking? 2 Arguments in Favor of Economic Inequality by Steven Horwitz

Economic inequality continues to be a major political issue even as the headlines scream about terrorism and climate change. Bernie Sanders has made it a centerpiece of his presidential campaign, and other candidates have addressed it along the way. And a recent study by the Pew Research Center has added new, though misplaced, fuel to the fire of those concerned about inequality.

The Pew study has been discussed in the media, and one key point has been grossly misunderstood. Among other things, the study found that the American middle class is shrinking and is now just under half of the population. Commentators quickly began to refer to the “hollowing out” of the middle class and to tie this study to the concerns about growing inequality.

However, a close look at the data shows that the middle class has shrunk since 1971 because more members of the middle class have moved up the income ladder than down it.

Don’t believe me? Look for yourself at the terrific graphic that the Financial Times created to illustrate the data:

You can watch as the folks on the left slowly slide to the right over 44 years. When you compare the 1971 distribution with the 2015 one, what do you see? A growth in households earning around $80,000 or above, adjusted for inflation, since 1971 and a significant decline in those making less than that amount (with the exception of the folks right around $0). It’s true that there’s not a fat middle class anymore, but why should that trouble us if there are more high-income households and fewer low-income households overall?

The funny part of this is that if you read the story in the Financial Times that accompanies this graphic, it’s as if they never actually looked at the graphic they produced. Their narrative is at odds with it, as the narrative proclaims the doom-and-gloom story that the graphic actually refutes. As they say, never let the facts get in the way of a good story.

This growth in household income may, to some extent, be a by-product of the same economic processes that have produced the concerns about inequality, illustrated in this graphic by the significant growth of the ultra-rich.

There are far more very rich people today than there were 44 years ago, but the growth of the upper class has gone hand in hand with the enrichment of a large number of less-well-off households. Are there ways in which economic inequality is good, then? I think the answer to that question is yes. If so, then, what are they? Here are two defenses of economic inequality that proponents of the free market could make.

First is the more obvious one: growing inequality is good because it might be a consequence of economic institutions that produce all kinds of results that we think are desirable. For example, if competitive markets lead to peace and rising prosperity for all but also create inequality along the way by allowing some folks to get very rich, then we should at least tolerate that inequality because the things that produce it also produce other things we like.

This is the usual defense libertarians invoke, and it’s a good argument. The critic, however, might say that even if the defense is true, it doesn’t prove that inequality is necessary for that result. There’s a difference between saying, “Good economic institutions will produce inequality while creating good economic outcomes for all,” and saying, “Good economic outcomes for all can’t be produced without inequality.” The critic would likely ask how reducing the inequality that markets produce will harm their ability to produce those good results.

And here is where we come back to the Pew study and get a second defense of inequality. One way the middle class (and all of us) has become richer in the last generation is that the cost of so many goods and services has dropped in terms of the number of hours we have to work at the average wage in order to purchase them. The lower price of basic goods has enabled more and more people to afford things like large TVs, smartphones, and new, cheaper medications.

One thing that has made this process happen is inequality. In The Constitution of Liberty, F.A. Hayek argued,

A large part of the expenditure of the rich, though not intended for that end, thus serves to defray the cost of the experimentation with the new things that, as a result, can later be made available to the poor.… Even the poorest today owe their relative material well-being to the results of past inequality.

Having a group of very rich people is what enables yesterday’s luxuries to become today’s basics.

There are two parts to this process: cost bearing and discovery. The very rich are able to afford the high prices of new technologies, thereby providing an incentive for firms to market new and expensive products. Once the rich pay the high initial price and cover the fixed costs of research and development, sellers can begin to price closer to the much lower marginal cost of producing additional units, making the good much more affordable to more people.

But the rich are also an economic canary in the coal mine that informs producers whether they are getting it right.

For example, a critic of inequality might complain that no one “really needs” a $100,000 luxury car with all kinds of new high-tech gadgets on it. But the fact that some can afford it and want to buy it helps the car companies figure out which new features might be popular. Rear-view cameras were once only available on top-end cars, but they have slowly become a standard feature. The same may soon be true of collision warning systems now available on high-end models of some cars.

In fact, everything we think of as basics today was once the province of only the well-off. The first microwaves were expensive and bought mostly by the rich. I can remember my parents paying about $900 for a VCR in the late 1970s. VCRs, of course, fetch a price close to zero these days. The rich who bought the early LCD TVs helped manufacturers defray the fixed production costs and figure out what people wanted, and now these TVs are in the vast majority of houses at a more affordable price.

The inequality at any point in time is a key part of the process that creates wealth for the rest of society over the years to follow. The very rich enable producers to experiment and cover their costs, and that makes more goods more affordable for the rest of us, from fun toys to life-saving necessities.

The inequality produced by the market is a key part of how the market moves forward, enriching all of us in the process. And that’s why the middle class is shrinking: the rich, through the competitive market, have helped make the middle class richer.

Steven HorwitzSteven Horwitz

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions.

He is a member of the FEE Faculty Network.

Five Housing Market Predictions for 2016

aei housing risk center logoMy predictions for 2016:

  1. The National Mortgage Risk Index (NMRI), particularly for First-Time Buyers (FTBs), will continue its upward trend that is now nearly 3 years old.
  2. Demand pressure resulting from continuing moderate economic growth combined with increasing leverage and limited housing supply growth will extend the seller’s market that is now over 3 years old.
  3. This will cause home prices to once again grow faster than inflation and incomes; expectation is for nominal home prices to increase about 5% in 2016.
  4. Expect the FHA to further decrease its premium sometime in 2016.
  5. If mortgage rates increase moderately in 2016, debt ratios will grow to accommodate the impact on monthly payments.

Also, the key findings in this month’s National Mortgage Risk Index (NMRI) release for Agency purchase loans:

  • Mortgage credit has continued to loosen, especially for first-time buyers
    • The NMRI for first-time buyers hit 15.81%, a new series high; the November level is up 1.0 percentage point from a year earlier and is well above the Repeat Primary Homebuyer NMRI of 9.83%.
  • The pace of homebuying continued to be strong, with loan volume in November up 15% from a year earlier. The overall volume was buoyed by strengthening demand from first-time buyers, driven by looser lending and an improving job market.
    • About 135,000 purchase loans for first-time buyers were added in November, up 19% from a year earlier, bringing the total in the NMRI to 3.6 million since April 2013.
  • Fueled by historically low mortgage rates and high and growing leverage, a seller’s market has now prevailed for 38 straight months.
    • As a result, real home prices are up 14.2 percent since 2012:Q2 trough, far outstripping real income growth and crimping affordability
  • Credit standards for first-time home buyers are not tight.
    • In November, 70% had down payments less than or equal to 5%, 27% had DTIs greater than the QM limit of 43%, and the median FICO score was 706, a bit below the median for all individuals in the U.S.
  • The cut in FHA’s annual insurance premium early this year boosted its market share to 29.3% in November from 22.9% in March.
    • This increase has come largely at the expense of Fannie Mae and the Rural Housing Service.
  • The seismic shift in market share from large banks to nonbanks continued in November, boosting overall risk as nonbanks have a much higher MRI.
    • In November, the large bank share was 27%, down from more than 60% three years earlier.

Link to December 2015 Mortgage Risk Index briefing presentation.

Florida: Legislature wants to roll property taxes into state sales tax

Florida comes in at #25 for property taxes with a rate of 1.06%. New Jersey has the highest rate at 2.38 percent.  Hawaii has the lowest rate at 0.28 percent.

There have been efforts to eliminate Florida’s property taxes and rolling it into the state sales tax. The Florida legislature will be looking into doing just that during the 2016 session, which starts in January.

CBS News Miami reports:

A House committee is looking at ways to replace property taxes with a higher state sales tax.

The House Finance & Tax Committee on Wednesday started to explore different scenarios that would shift the tax burden to shoppers by eliminating or reducing the number of Floridians paying property taxes.

Committee Chairman Matt Gaetz, R-Fort Walton Beach, said any scenarios will need “many hours to fine tune,” with economists expected to address the committee before anything is advanced for the 2016 legislative session.

Read more.

We will see who comes out in opposition of this effort.

What is the property tax rate in your state? A new map from the Tax Foundation has the answer:

property_taxes-01-1024x893

Kate Scanlon from The Daily Signal reports:

The Tax Foundation, a non-partisan research think-tank based in Washington, D.C., notes that states tax property in a variety of ways and that the rates listed are the “effective rate” paid by the taxpayer.

Jared Walczak, a policy analyst with the Center for State Tax Policy at the Tax Foundation, writes that the map “cuts through this clutter, presenting effective tax rates on owner-occupied housing.”

“This is the average amount of residential property tax actually paid, expressed as a percentage of home value,” Walczak wrote.

New Jersey has the highest rate at 2.38 percent.

Illinois has the second highest rate at 2.32 percent, followed by New Hampshire at 2.15 percent and Connecticut at 1.98 percent.

Hawaii has the lowest rate at 0.28 percent. Alabama has the second lowest rate at 0.43 percent, then Louisiana at 0.51 percent and Delaware at 0.55 percent.

Read more.