In the Wall Street Journal today there is a lengthy article extolling the wonderful possibilities of smart growth in Sacramento, California. The author, likely being ignorant that “Smart Growth” caused the housing crash never stops to think about the consequences of central planning.
Sacramento decided to pursue smart growth vigorously a few years back in what the author seems to imply as prescient and enlightened. Sacramento so embraced Smart Growth that the article uses this quote to describe what is happening there:
“"They're really the model," says Steve Winkelman, a transportation expert at the Center for Clean Air Policy.
I say that smart growth leaves cities vulnerable to housing market booms and busts. Who’s right?
Well, according to RadarLogic’s April RPX Monthly Housing Market Report, Sacramento, the very model of Smart Growth, has experienced the worst housing decline of any city they track in America.
Free Market - 1
Smart Growth - 0
Monday, July 7, 2008
Sunday, July 6, 2008
Is Libertarianism a Failure?
I recently ran across this commentary by Charles Wheelan, the author of Naked Economics. Entitled “Confessions of a Maturing Libertarian”, Dr. Wheelan makes a mistake that far too many economists and laymen make when it comes to the point of libertarianism and belief in the free market. From his article:
I've discovered just one problem with my elegant libertarian philosophy after spending two decades in public policy: It's terribly impractical for actually governing society. My whole quibble with libertarians can be boiled down to one banal question: What's the libertarian point of view on stoplights?
I like stoplights. More to the point, they're a simple and tangible example of how government can make us better off: They enable complete strangers to interact more safely and efficiently. Given a choice between the freedom to speed through an intersection at any time and the coercive red light, I'll tolerate the red light.
That's kind of silly, so consider a more significant example, like counterterrorism. In a world of libertarians, who finds Osama bin Laden?
Far too many libertarians believe that the market is omniscient, and too many anti-libertarian skeptics belittle it for not being so. Both sides are wrong.
By omniscient, I am speaking of the assumption by many libertarians that if only the government was eliminated all problems would go away. They embrace the power that the free market has in solving problems with religious fervor. It’s not that this viewpoint is far from the truth, but when proselytizing to a skeptical world it’s a little like quoting the Bible to Richard Dawkins. Saying “let the free market figure it out” falls on the deaf ears of non-believers.
The problem with these puritanical libertarians, and Dr. Wheelan’s understanding, is that the free market doesn’t have all the answers. The concept of the tragedy of the commons was first noted in 1833. The solution is to set up private property rights. This was fine in England where plots of land were small and stone was readily available to build fences. In the American West this was not so easy. It can be rather costly and time consuming to fence a 50,000 acre ranch. It wasn’t until the invention of cheap barbed wire that this was a viable option. Yes, the market found a solution, but the problem was apparent long before the solution came along.
In recent decades pollution has become one of the more befuddling externalities. A number of economic mechanisms have been created to reduce the negative affects it has on those uninvolved in its production. The most recent being cap and trade. The market has failed to produce a solution that eliminates the problem. A debate can be had as to the magnitude of loss that pollution produces, but I am aware of very few market solutions for it. Should we wait and let the market figure out a marketable use for soot and other pollutants? I don’t want to bet my health on it in the meantime.
Mr. Wheelan’s mistake, as with many others, is that their conversation ends here. I hold libertarianism as an ethic to strive towards in my economic analysis. Simply because there is no free market solution right now does not mean that there isn’t going to be one down the road. The market doesn’t have all the answers right now, but it is the best mechanism we have to find the answers that avoid coercion. Profit focuses our attention to solve complex problems.
I will never concede that the free market fails. It is only the limited knowledge of humanity that prevents it from finding the answer, not the failure of the mechanisms it creates. I see examples of free rider problems in the private sector all the time, from the unkempt refrigerator in the break room to community LAN space. Market “failures” are examples of bounded human knowledge not a blight on libertarianism.
I've discovered just one problem with my elegant libertarian philosophy after spending two decades in public policy: It's terribly impractical for actually governing society. My whole quibble with libertarians can be boiled down to one banal question: What's the libertarian point of view on stoplights?
I like stoplights. More to the point, they're a simple and tangible example of how government can make us better off: They enable complete strangers to interact more safely and efficiently. Given a choice between the freedom to speed through an intersection at any time and the coercive red light, I'll tolerate the red light.
That's kind of silly, so consider a more significant example, like counterterrorism. In a world of libertarians, who finds Osama bin Laden?
Far too many libertarians believe that the market is omniscient, and too many anti-libertarian skeptics belittle it for not being so. Both sides are wrong.
By omniscient, I am speaking of the assumption by many libertarians that if only the government was eliminated all problems would go away. They embrace the power that the free market has in solving problems with religious fervor. It’s not that this viewpoint is far from the truth, but when proselytizing to a skeptical world it’s a little like quoting the Bible to Richard Dawkins. Saying “let the free market figure it out” falls on the deaf ears of non-believers.
The problem with these puritanical libertarians, and Dr. Wheelan’s understanding, is that the free market doesn’t have all the answers. The concept of the tragedy of the commons was first noted in 1833. The solution is to set up private property rights. This was fine in England where plots of land were small and stone was readily available to build fences. In the American West this was not so easy. It can be rather costly and time consuming to fence a 50,000 acre ranch. It wasn’t until the invention of cheap barbed wire that this was a viable option. Yes, the market found a solution, but the problem was apparent long before the solution came along.
In recent decades pollution has become one of the more befuddling externalities. A number of economic mechanisms have been created to reduce the negative affects it has on those uninvolved in its production. The most recent being cap and trade. The market has failed to produce a solution that eliminates the problem. A debate can be had as to the magnitude of loss that pollution produces, but I am aware of very few market solutions for it. Should we wait and let the market figure out a marketable use for soot and other pollutants? I don’t want to bet my health on it in the meantime.
Mr. Wheelan’s mistake, as with many others, is that their conversation ends here. I hold libertarianism as an ethic to strive towards in my economic analysis. Simply because there is no free market solution right now does not mean that there isn’t going to be one down the road. The market doesn’t have all the answers right now, but it is the best mechanism we have to find the answers that avoid coercion. Profit focuses our attention to solve complex problems.
I will never concede that the free market fails. It is only the limited knowledge of humanity that prevents it from finding the answer, not the failure of the mechanisms it creates. I see examples of free rider problems in the private sector all the time, from the unkempt refrigerator in the break room to community LAN space. Market “failures” are examples of bounded human knowledge not a blight on libertarianism.
Tuesday, July 1, 2008
Gas Prices - A Comparison of States
Gasbuddy.com has some interesting information on gas prices including a great graphic located here. I put a smaller version on the right. The dark green equates to low gas prices, and the dark red equates with high gas prices. Because prices tend to change dramatically across state lines, I'm willing to bet that state gas taxes, regulations, and mandates are the major contributors to the differences.
South Carolina seems to have the cheapest gas, with Missouri close behind, even though they are not major oil producing or refining states. In the northeast, New Jersey seems to be an island of cheaper gas. What is really striking though is how California is solid dark red. The West Coast has dramatically higher gas prices than the rest of the U.S. In the northeast, New York and Connecticut stand out amongst the rest.
Because you can't read the key at the bottom right here is a list of select states and their average gasoline prices. Source here.
South Carolina - $3.85
Missouri - $3.85
Texas - $3.95
New Jersey - $3.97
Florida - $4.02
Massachusetts - $4.05
New York - $4.25
California - $4.59
California is paying 74 cents more than South Carolina. If your state wants to lower gas prices, they should try to not do what California is doing.
As much as I and other stereotype California's problems stemming from being more left-wing it doesn't really explain why Massachusetts isn't having such problems. Why California in particular is wracked by crisis after crisis is anyone's guess. Even when compared to other states that get ample media exposure it seems to have far more problems. Perhaps while the Northeast tends to be on the left it has more economic literacy due to it's heavy concentration of financial services.
***Update*******
Mark Perry at his Carpe Diem blog also used this graphic this morning. I suspect that we read the same article that referenced it. In addition, he has a graphic of state gas taxes. Here's the link. Gas taxes in California explain 39.7 of the 74 cent difference between California and South Carolina.
Monday, June 30, 2008
Op-Ed at RealClearMarkets - Oil Speculation
A more polished version of my post on Friday was published today on Real Clear Markets. It can be found here.
Friday, June 27, 2008
As American as Oil Speculation and Apple Pie
There has been a lot of accusations about speculators driving up the price of oil. This of course implies that a handful of people can manipulate prices outside of the laws of supply and demand. Perhaps it is also possible that the world is flat and the moon is made of cheese.
To explain why this is incorrect, let me use an analogy.
Aunt Ethel decides to open a booth at the county fair making her wonderful apple pies. Every pie costs her $2 to make so she decides to sell them for $2.50. Almost immediately, her pies are a hit. A line grows in front of her booth. Her sister Eileen is running the cash box and suggests to Ethel, who is making and baking the pies, that they raise the price to $3 since the pies are so popular. Ethel agrees and they raise the price. The line continues to grow. They raise the price again to $4 then to $5, yet the line continues to grow and customers are starting to get impatient.
Eileen, being the better businesswoman, then suggests to Ethel that they sell tickets that promise to deliver a pie later that day. This will shorten the line and limit the number of people standing and waiting for their pies to be finished. The line gets much shorter as Eileen sells the tickets and Ethel feverishly cranks out more and more pies. Ethel and Eileen are making plenty of money and everyone is happy. Well, except the lonely lady at the Dippin Dots who complains to the fair chairman of their “excessive profits”.
Now Jacob, runs the tilt-a-whirl and notices how many pies Ethel and Eileen are selling. He hears someone say, “Her pies are so good I would pay $10 for another.” Jacob gets an idea to buy the tickets and resell them later, at dinnertime, for a higher price. He’s going to speculate on the price of pies. He heads over to Ethel’s booth and starts buying up pie tickets. Then he starts selling them for $7, then $8, and then $10.
Other ride operators notice what Jacob is doing, so they get in on the gig as well, knowing that soon Ethel can’t possibly promise too many more pies. They start buying up the remaining tickets. Of course, Eileen is no fool. She raises the prices to $12, to $15, to $20, and all the way up to $25. The speculators keep buying the tickets, pouring more and more money into the apple pie market at the county fair.
Here’s the problem. What will happen if no one wants to buy the pies for $25? What if no one is willing to pay more than $10 for a pie? The pies are coming whether they want to eat them or not. People attending the fair have to buy the pies from the speculators or the speculators will be left holding a bunch of pies that nobody wants. Unless the speculators are complete idiots, they know this too. There is a chance that the price will crash because they have paid Ethel to produce way too many pies.
I could imagine that ride operators at the county fair might not be so wise, but to suggest that Wall Street analysts would be so foolish and not realize that this was possible is a stretch. If they bid up the price of oil much higher than refineries are willing to pay they will likely face catastrophic losses.
Even if they are this foolish this is good for the consumer in the long run. The price will eventually crash and oil will be cheaper than ever before. When prices are high, oil companies spend more and more money building oil rigs and pipelines, and they will find more and more oil. They are just like Ethel, churning out more and more pies. If the price plummets this new capacity doesn’t go away, because the costs are sunk costs. There will be a huge glut of oil for a long time. If the speculators are really driving up the price of oil, our current pain will soon be alleviated with years of cheap gasoline.
I am not so arrogant to believe that Wall Street is filled with a bunch of idiots who nevertheless studied much harder than I did in school, so I don’t believe that speculation is driving up the price of oil to begin with. Even if I’m wrong, it still is a good thing in the long run for consumers of gasoline because the price will soon plummet.
Leave the speculators alone. If they are right, they will make money. If they are wrong, they will lose money. Either way it doesn’t change what we have to pay at the pump. Just because Jacob bought a pie for $25, doesn’t mean that visitors to the fair will pay $25. Just because Jacob and speculators paid Ethel to bake 500 pies, doesn’t mean people want to eat 500 pies. When a speculator pays $140 a barrel for some oil months in advance, it doesn’t mean that refiners will pay $140 when that oil arrives. When speculators pay drillers to pump a trillion barrels of oil, it doesn’t mean that we will want a trillion barrels of oil. Supply and Demand still rule the retail market.
To explain why this is incorrect, let me use an analogy.
Aunt Ethel decides to open a booth at the county fair making her wonderful apple pies. Every pie costs her $2 to make so she decides to sell them for $2.50. Almost immediately, her pies are a hit. A line grows in front of her booth. Her sister Eileen is running the cash box and suggests to Ethel, who is making and baking the pies, that they raise the price to $3 since the pies are so popular. Ethel agrees and they raise the price. The line continues to grow. They raise the price again to $4 then to $5, yet the line continues to grow and customers are starting to get impatient.
Eileen, being the better businesswoman, then suggests to Ethel that they sell tickets that promise to deliver a pie later that day. This will shorten the line and limit the number of people standing and waiting for their pies to be finished. The line gets much shorter as Eileen sells the tickets and Ethel feverishly cranks out more and more pies. Ethel and Eileen are making plenty of money and everyone is happy. Well, except the lonely lady at the Dippin Dots who complains to the fair chairman of their “excessive profits”.
Now Jacob, runs the tilt-a-whirl and notices how many pies Ethel and Eileen are selling. He hears someone say, “Her pies are so good I would pay $10 for another.” Jacob gets an idea to buy the tickets and resell them later, at dinnertime, for a higher price. He’s going to speculate on the price of pies. He heads over to Ethel’s booth and starts buying up pie tickets. Then he starts selling them for $7, then $8, and then $10.
Other ride operators notice what Jacob is doing, so they get in on the gig as well, knowing that soon Ethel can’t possibly promise too many more pies. They start buying up the remaining tickets. Of course, Eileen is no fool. She raises the prices to $12, to $15, to $20, and all the way up to $25. The speculators keep buying the tickets, pouring more and more money into the apple pie market at the county fair.
Here’s the problem. What will happen if no one wants to buy the pies for $25? What if no one is willing to pay more than $10 for a pie? The pies are coming whether they want to eat them or not. People attending the fair have to buy the pies from the speculators or the speculators will be left holding a bunch of pies that nobody wants. Unless the speculators are complete idiots, they know this too. There is a chance that the price will crash because they have paid Ethel to produce way too many pies.
I could imagine that ride operators at the county fair might not be so wise, but to suggest that Wall Street analysts would be so foolish and not realize that this was possible is a stretch. If they bid up the price of oil much higher than refineries are willing to pay they will likely face catastrophic losses.
Even if they are this foolish this is good for the consumer in the long run. The price will eventually crash and oil will be cheaper than ever before. When prices are high, oil companies spend more and more money building oil rigs and pipelines, and they will find more and more oil. They are just like Ethel, churning out more and more pies. If the price plummets this new capacity doesn’t go away, because the costs are sunk costs. There will be a huge glut of oil for a long time. If the speculators are really driving up the price of oil, our current pain will soon be alleviated with years of cheap gasoline.
I am not so arrogant to believe that Wall Street is filled with a bunch of idiots who nevertheless studied much harder than I did in school, so I don’t believe that speculation is driving up the price of oil to begin with. Even if I’m wrong, it still is a good thing in the long run for consumers of gasoline because the price will soon plummet.
Leave the speculators alone. If they are right, they will make money. If they are wrong, they will lose money. Either way it doesn’t change what we have to pay at the pump. Just because Jacob bought a pie for $25, doesn’t mean that visitors to the fair will pay $25. Just because Jacob and speculators paid Ethel to bake 500 pies, doesn’t mean people want to eat 500 pies. When a speculator pays $140 a barrel for some oil months in advance, it doesn’t mean that refiners will pay $140 when that oil arrives. When speculators pay drillers to pump a trillion barrels of oil, it doesn’t mean that we will want a trillion barrels of oil. Supply and Demand still rule the retail market.
Wednesday, June 25, 2008
Is Texas Getting Screwed?
Of the many topics currently being debated in Congress virtually every position that the Democrats are pushing is bad for Texas. Here's a list.
Mortgage Bailout: The foreclosure rate in Texas has been flat and ever so slightly decreasing over the last 3 years, as included in my op-ed here. Home prices have not significantly declined, if at all. The bailout that just passed the Senate is for $300 Billion in loan guarantees. How much of this money will Texas get? Not likely much since we never had a housing bust. Now California with it's huge price declines and foreclosure rates that have surged over 300% will probably get the lion's share. This will be a huge redistribution of wealth out of our state.
Colombia FTA: Right behind New Orleans, the Port of Houston is likely to be the second largest beneficiary of increased free trade from Colomia from what I gather. Nancy Pelosi killed this one with a massive delay. Thanks for killing job opportunities in Houston, Nancy!
Cap and Trade: While I support the mechanism as a theoretical device, the cap being proposed by many will cripple manufacturers. Texas leads the nation in the growth of manufacturing jobs, with Houston being the largest center of those jobs in the country. We also tend to have heavier polluters because of the concentration of oil refineries. Texas will be disproportionately affected by the punitive limitations.
Windfall Profits Tax: With the overwhelming percentage of oil and gas companies headquartered in Texas, this is a direct assault on our state. Had it not failed, this would have been an enormous confiscation of profits, leading to fewer jobs and less investment capital.
Nationalizing the Oil Industry: I don't know if this is serious, but some House Democrats have expressed their support of this idea. This is grossly unconstitutional. Virtually every country on the planet is slowly denationalizing industry because they know from experience that the government can not efficiently run a business. This would cripple and atrophe an industry that employs tens of thousands of Texas.
Renegotiating NAFTA: There are thousands of companies that have set up shop in Texas because of our proximity to Mexico. They either sell to Mexico, buy from Mexico, or take advantage of cheaper labor in Mexico. Remember what the Smoot-Hawley act did for the U.S. right before the Great Depression? Wouldn't that be great for Texas?
Much of the same could probably be said for Oklahoma and Louisiana since their economies are dependent on much of the same industries.
Mortgage Bailout: The foreclosure rate in Texas has been flat and ever so slightly decreasing over the last 3 years, as included in my op-ed here. Home prices have not significantly declined, if at all. The bailout that just passed the Senate is for $300 Billion in loan guarantees. How much of this money will Texas get? Not likely much since we never had a housing bust. Now California with it's huge price declines and foreclosure rates that have surged over 300% will probably get the lion's share. This will be a huge redistribution of wealth out of our state.
Colombia FTA: Right behind New Orleans, the Port of Houston is likely to be the second largest beneficiary of increased free trade from Colomia from what I gather. Nancy Pelosi killed this one with a massive delay. Thanks for killing job opportunities in Houston, Nancy!
Cap and Trade: While I support the mechanism as a theoretical device, the cap being proposed by many will cripple manufacturers. Texas leads the nation in the growth of manufacturing jobs, with Houston being the largest center of those jobs in the country. We also tend to have heavier polluters because of the concentration of oil refineries. Texas will be disproportionately affected by the punitive limitations.
Windfall Profits Tax: With the overwhelming percentage of oil and gas companies headquartered in Texas, this is a direct assault on our state. Had it not failed, this would have been an enormous confiscation of profits, leading to fewer jobs and less investment capital.
Nationalizing the Oil Industry: I don't know if this is serious, but some House Democrats have expressed their support of this idea. This is grossly unconstitutional. Virtually every country on the planet is slowly denationalizing industry because they know from experience that the government can not efficiently run a business. This would cripple and atrophe an industry that employs tens of thousands of Texas.
Renegotiating NAFTA: There are thousands of companies that have set up shop in Texas because of our proximity to Mexico. They either sell to Mexico, buy from Mexico, or take advantage of cheaper labor in Mexico. Remember what the Smoot-Hawley act did for the U.S. right before the Great Depression? Wouldn't that be great for Texas?
Much of the same could probably be said for Oklahoma and Louisiana since their economies are dependent on much of the same industries.
Tuesday, June 24, 2008
Housing Crisis Beginning to End
New S&P Case-Shiller data came out today that shows that home price declines are starting to end. Two months ago all of the 21 metro areas tracked by the index experienced declines. Last month, their data showed that 2 metros had finally started to increase(Dallas and Charlotte). This month's release shows that 7 metros are beginning to rise. Only one metro that was previously falling, fell faster than the previous month (NYC). On the index, 19 of 21 showed slower losses or faster growth rates than the month before. However, certain parts of the country seem to have more room to fall. California, Arizona, Nevada, Florida, and Detroit.
I made some perilous predictions a few months ago. Here's how it has gone.
---------Predicted-------Since Prediction
Miami..........(-32%).................(-14%)
Los Angeles.(-31%).................(-13%)
Tampa.........(-28%).................(-11%)
Las Vegas....(-28%).................(-15%)
Washington.(-24%).................(-8%)
All of these cities are still experiencing falling home prices, but Las Vegas and Washington look like they may be near their bottoms because their price declines have slowed.
I made some perilous predictions a few months ago. Here's how it has gone.
---------Predicted-------Since Prediction
Miami..........(-32%).................(-14%)
Los Angeles.(-31%).................(-13%)
Tampa.........(-28%).................(-11%)
Las Vegas....(-28%).................(-15%)
Washington.(-24%).................(-8%)
All of these cities are still experiencing falling home prices, but Las Vegas and Washington look like they may be near their bottoms because their price declines have slowed.
Monday, June 23, 2008
Let's Be Like The French
...and Switzerland
Last week I attended a business conference in lovely Corpus Christi, Texas. Among the speakers was a gentleman named Dr. Selvoy M. Fillerup, MD. He has written a book called Chronic Crisis in which he analyzes health care systems around the world and reports what seems to work and what doesn't. I don't agree with him 100%, but I wouldn't be heartbroken if his suggestion were inacted in the United States.
What I did find interesting in his presentation was the revelation that the single-payer socialized medicine model of the UK and of Canada is actually quite rare. Much of Europe allows for extensive private insurance. The universal mandate is very common, but often it is only for limited coverage.
The percentage of population with Private Health Insurance for various industrialized countries:
(No private primary, just supplementary)
UK - 3.3%
Canada - 11%
(With Private primary)
Germany - 10%
Netherlands - 31%
Australia - 46%
Ireland - 49%
Japan - 60%
France - 86%
Switzerland - 99%
I'm not sure what America's percentage is exactly, but I have seen number in the range of 66% for the amount of health care expenditures paid by private insurance companies and individuals. The rest being from Medicare, Medicaid, and Veterans Administration.
It was the opinion of Dr. Fillerup that all of the countries in the (with Private Primary) list had superior health outcomes than the UK, Canada, and the United States. All countries with a single-payer socialized plan had very long lines. The U.S. is the rare exception that does not mandate that every citizen have insurance.
When asked, he had criticisms for both Hillary and Obama's health plans, saying they failed on 3 of 5 points he suggests. He made no comment on any of John McCain's positions. However, I talked with him afterwards and he did support my position of dropping the tax breaks for employer provided health care. I think McCain also supports this position, and proposes a tax credit for buying personal coverage.
Last week I attended a business conference in lovely Corpus Christi, Texas. Among the speakers was a gentleman named Dr. Selvoy M. Fillerup, MD. He has written a book called Chronic Crisis in which he analyzes health care systems around the world and reports what seems to work and what doesn't. I don't agree with him 100%, but I wouldn't be heartbroken if his suggestion were inacted in the United States.
What I did find interesting in his presentation was the revelation that the single-payer socialized medicine model of the UK and of Canada is actually quite rare. Much of Europe allows for extensive private insurance. The universal mandate is very common, but often it is only for limited coverage.
The percentage of population with Private Health Insurance for various industrialized countries:
(No private primary, just supplementary)
UK - 3.3%
Canada - 11%
(With Private primary)
Germany - 10%
Netherlands - 31%
Australia - 46%
Ireland - 49%
Japan - 60%
France - 86%
Switzerland - 99%
I'm not sure what America's percentage is exactly, but I have seen number in the range of 66% for the amount of health care expenditures paid by private insurance companies and individuals. The rest being from Medicare, Medicaid, and Veterans Administration.
It was the opinion of Dr. Fillerup that all of the countries in the (with Private Primary) list had superior health outcomes than the UK, Canada, and the United States. All countries with a single-payer socialized plan had very long lines. The U.S. is the rare exception that does not mandate that every citizen have insurance.
When asked, he had criticisms for both Hillary and Obama's health plans, saying they failed on 3 of 5 points he suggests. He made no comment on any of John McCain's positions. However, I talked with him afterwards and he did support my position of dropping the tax breaks for employer provided health care. I think McCain also supports this position, and proposes a tax credit for buying personal coverage.
Tuesday, June 17, 2008
Happy Father's Day
A few months ago I was involved in a conversation at a men’s bible study. We were discussing the handful of deepest fears and challenges that men face. Among these were:
The ability to defend oneself and one’s family from a burglar or attacker.
The ability to achieve in one’s career, keep a job, and take care of your family financially.
The ability to woo a woman or keep the attention of the one you are with.
The ability to stand up for what you believe in.
When the fourth one was mentioned I didn’t think that it was really one of the core fears, but several of the other guys seemed to agree that it was something they dealt with. For the next couple of weeks it was brought up a few more times and I was confused as to why they thought it was such a big deal.
It took me a while, but it finally dawned on me that this wasn’t a fear for me because I have always been outspoken about what I believe. In fact, I had to make it a habit later in college not to argue with every person who said something that I disagreed with. My outspokenness was not winning me very many friends.
As much as I would like to think that this was a level of bravery that I chose for myself there are a couple people in my family that should get much of the credit for modeling this behavior for me. Foremost is my father. While he and I disagree on some things he rarely, in my life, holds his tongue when it comes to what he believes in. It is sometimes good, sometimes bad, sometimes embarrassing, and sometimes funny, but you always know what he thinks about the issues. From my father I learned that there is no use in having an opinion if you’re not willing to defend it.
Secondly, is my Grandpa. He knows that I disagree with him on some things, but it doesn’t stop him from arguing his point. For better or for worse, he has held to a faith that has set him apart from most others. He has allowed his convictions to determine his lifestyle, instead of letting his lifestyle determine his convictions.
Not surprisingly, when the three of us get together the topic of conversation is almost always religion or politics. It probably drives my other relatives crazy, but I always find it fun.
To correspond with this recent Father’s Day I wanted to say thanks to my father and my grandfather for giving me such a strong legacy of conviction, that not defending my beliefs doesn’t really cross my mind.
The ability to defend oneself and one’s family from a burglar or attacker.
The ability to achieve in one’s career, keep a job, and take care of your family financially.
The ability to woo a woman or keep the attention of the one you are with.
The ability to stand up for what you believe in.
When the fourth one was mentioned I didn’t think that it was really one of the core fears, but several of the other guys seemed to agree that it was something they dealt with. For the next couple of weeks it was brought up a few more times and I was confused as to why they thought it was such a big deal.
It took me a while, but it finally dawned on me that this wasn’t a fear for me because I have always been outspoken about what I believe. In fact, I had to make it a habit later in college not to argue with every person who said something that I disagreed with. My outspokenness was not winning me very many friends.
As much as I would like to think that this was a level of bravery that I chose for myself there are a couple people in my family that should get much of the credit for modeling this behavior for me. Foremost is my father. While he and I disagree on some things he rarely, in my life, holds his tongue when it comes to what he believes in. It is sometimes good, sometimes bad, sometimes embarrassing, and sometimes funny, but you always know what he thinks about the issues. From my father I learned that there is no use in having an opinion if you’re not willing to defend it.
Secondly, is my Grandpa. He knows that I disagree with him on some things, but it doesn’t stop him from arguing his point. For better or for worse, he has held to a faith that has set him apart from most others. He has allowed his convictions to determine his lifestyle, instead of letting his lifestyle determine his convictions.
Not surprisingly, when the three of us get together the topic of conversation is almost always religion or politics. It probably drives my other relatives crazy, but I always find it fun.
To correspond with this recent Father’s Day I wanted to say thanks to my father and my grandfather for giving me such a strong legacy of conviction, that not defending my beliefs doesn’t really cross my mind.
Gasoline and Mexico
The Houston Chronicle has an article that adds some information to the policy I proposed a few months ago to exchange more visas and citizenships for liberalization of Mexico's oil industry.
The specific quotes I found interesting were:
"The kick is that the fuel is being refined in the United States and trucked across the border to Mexico, only to be sold at prices subsidized by the government..."
"So even while the nation still exports crude oil, it imports about 40 percent of its fuel."
Mexico, because it refuses to allow American investment in their oil industry, does not have the refining capability or technology to produce their own gasoline. This demand for gasoline likely drives up the price of gasoline in the U.S. My policy proposal would fix this.
Mexico's subsidization of gasoline also leads its citizens to consume more gasoline than if the price were allowed to float in the market. This decrease in consumption would lead to less consumption of gasoline from the United States. It would also decrease the demand on crude oil.
One way to lower gas prices is to offer Mexico incentives to allow American investment in their energy industry and drop their subsidization of gasoline. Offering more avenues of immigration can be this incentive.
The specific quotes I found interesting were:
"The kick is that the fuel is being refined in the United States and trucked across the border to Mexico, only to be sold at prices subsidized by the government..."
"So even while the nation still exports crude oil, it imports about 40 percent of its fuel."
Mexico, because it refuses to allow American investment in their oil industry, does not have the refining capability or technology to produce their own gasoline. This demand for gasoline likely drives up the price of gasoline in the U.S. My policy proposal would fix this.
Mexico's subsidization of gasoline also leads its citizens to consume more gasoline than if the price were allowed to float in the market. This decrease in consumption would lead to less consumption of gasoline from the United States. It would also decrease the demand on crude oil.
One way to lower gas prices is to offer Mexico incentives to allow American investment in their energy industry and drop their subsidization of gasoline. Offering more avenues of immigration can be this incentive.
Monday, June 16, 2008
Republican Party Convention of Texas
During Thursday and Friday of last week, I attended Texas' Republican Party Convention in Downtown Houston. I had a really good time. It is a rare event that I am surrounded by people who want to talk about politics.
I was able to listen to quite a few speakers, so I thought I would pass along my impressions.
Sen. Kay Bailey Hutchinson - She seems like a very sweet lady, but she is a terrible public speaker.
Sen. John Cornyn - I was more impressed with him than I have been in the past. He wasn't spectacular, but he seems to be quite smart.
Gov. Rick Perry - I know that he's not the most popular governor we've had, but I think he is consistently a good speaker. I also remember him just humiliating Sanchez back in the 2002 gubernatorial debates. He is a smart guy, and comes across well everytime I hear him.
Lt. Gov. David Dewhurst - Not a great speaker, but not bad. He was soundly booed when he mentioned his support for a national ID card. He seemed to get flustered by the response. Overall, not a good moment for him.
Former Speaker Newt Gingrich - He's good and insightful, but not very inspiring. I was disappointed by his populist dig against speculators driving up oil prices, which I think is bogus. He's fun to listen to though. His humor avoided the cheeky one liners everyone used.
Fmr. Gov. Mike Huckabee - Absolutely superb. I did not, and will not, vote for him for a number of reasons, but I found what he had to say very compelling. He avoided economic topics, which is good because he doesn't have a clue. He's funny and charming. Odd how 20 years in the pulpit helps someone become a good communicator.
Michael Williams, Texas Railroad Commissioner - Very good! He came across knowing much more than I do about the economics of energy, which is unprecedented in any politician that I have ever heard. Funny, engaging, and persuasive. I hope that he runs for the Senate in 2010 to replace the retiring Hutchinson. The crowd loved him.
There were other speakers from Texas, but none of them rose much above mediocre.
I was able to listen to quite a few speakers, so I thought I would pass along my impressions.
Sen. Kay Bailey Hutchinson - She seems like a very sweet lady, but she is a terrible public speaker.
Sen. John Cornyn - I was more impressed with him than I have been in the past. He wasn't spectacular, but he seems to be quite smart.
Gov. Rick Perry - I know that he's not the most popular governor we've had, but I think he is consistently a good speaker. I also remember him just humiliating Sanchez back in the 2002 gubernatorial debates. He is a smart guy, and comes across well everytime I hear him.
Lt. Gov. David Dewhurst - Not a great speaker, but not bad. He was soundly booed when he mentioned his support for a national ID card. He seemed to get flustered by the response. Overall, not a good moment for him.
Former Speaker Newt Gingrich - He's good and insightful, but not very inspiring. I was disappointed by his populist dig against speculators driving up oil prices, which I think is bogus. He's fun to listen to though. His humor avoided the cheeky one liners everyone used.
Fmr. Gov. Mike Huckabee - Absolutely superb. I did not, and will not, vote for him for a number of reasons, but I found what he had to say very compelling. He avoided economic topics, which is good because he doesn't have a clue. He's funny and charming. Odd how 20 years in the pulpit helps someone become a good communicator.
Michael Williams, Texas Railroad Commissioner - Very good! He came across knowing much more than I do about the economics of energy, which is unprecedented in any politician that I have ever heard. Funny, engaging, and persuasive. I hope that he runs for the Senate in 2010 to replace the retiring Hutchinson. The crowd loved him.
There were other speakers from Texas, but none of them rose much above mediocre.
Wednesday, June 11, 2008
My Rebellion
Over the last few months, my wife and I have decided that we are going to home school our children. We are doing this for some of the same reasons that others are doing it, but our focus is different.
In the end, my children will annihilate most of their public school counterparts both socially and academically. This is not necessarily our goal, but it is simply stating the way it will be. In addition to the path that they choose, they will be extraordinarily well learned on the virtues of freedom both externally, through the study of history and free market economics, and internally, through philosophies that lead to freedom from sin.
Why Are Public Schools Inherently Inferior?
We believe that public schooling, run by a government monopoly, has proved to be so endemically miserable because the system inherently cannot escape failure.
Reason 1) A public school system is a large public bureaucracy and suffers from a principal-agent problem (no pun intended). School managers cannot actively observe the behavior of individual teachers. The teacher’s prerogatives, as virtuous as they may seem, are not going to align perfectly with the prerogatives of management and parents. Thus, states and districts create curriculum and measurement that applies to all teachers in an attempt to curtail inferior or aberrant teaching.
The curriculum binds teachers to present information to students that will not match the interests or passions of every child. The more uniform the curriculum and the more diverse the population of students, the less likely that any individual child will be engaged to learn. The curriculum will approximate the values of the dominant political class in the region creating the curriculum. It will serve only the students who most embrace those values. Students who differ from the ideal will receive an inferior education. Many students will receive instruction that is impertinent and impersonal. Thus, the public school monopoly fails many students.
Any measurement of success used by schools will inherently distort the behavior of managers and teachers to maximize the methods that lead to measured success. Much as we have seen through by the No Child Left Behind act, which is amongst many failed measurement techniques, teachers focus on certain subjects at the expense of others. Measurements based on minimum standards will lead educators to focus on improving those students below the minimum standards at the expense of those who are already above them. The bad incentives brought by measurement yield an incomplete education to every student.
Reason 2) A public school system groups children with varying levels of expectations. These expectations reveal themselves in the behaviors of students. These behaviors model inconsistent values. Modeling of these behaviors (peer pressure) will push all students towards mediocrity. This mediocrity dulls the genius of the most academically focused students, and slows the progress of human ingenuity overall. An educational system that leads to mediocrity leads to a society of mediocrity.
Reason 3) A public school system, because of the separation of church and state and other requirements of pluralism cannot offer purpose in education. A public school system can only offer bland and inoffensive materials in political, economic, religious, and literature. It is a system that squelches minority opinions. The lack of purpose leads to the oft repeated tautologies “It just is”, “You’ll need to know this in the real world”, and “It will get you ready for next year” in response to students who question the importance of pieces of curriculum. Older children learn less because they do not see a purpose to what they are learning. They see less purpose because a public school system is limited from imbuing purpose to maintain political harmony. They see less purpose because the bland purposes that public school systems are allowed to imbue are highly unlikely to match the values of many students.
Why is Home Schooling Inherently Superior?
Reason 1) Home Schooling can teach with purpose. The direction that home schooling education takes can be guided by the purpose the child finds most appealing. In early years the child will need direction and a purpose imposed on them, but as they discover their talents and interests they can be supported in those endeavors without the choking limitations of public schools.
Reason 2) Home Schooling greatly reduces the predatory behavior of social competition. A home school student will not waste his or her faculties worrying about their clothes, hair, skin, makeup, car, or other measure of status during their education. They are free to dedicate their faculties to things that will actually matter in adulthood. In my home, they will not be exposed to the peer pressure of low expectations, or inculcated with the “virtues” of anti-social behavior.
Reason 3) Home Schooling is less restricted by the pragmatic realities of a larger public school. A home school environment is not bound by bells, bus rides, bathroom breaks, calendars, report card cycles, or curriculum. It is not bound to a classroom, a couple field trips to local museums, and a simple playground. Home School students can make use of the wasted time of a public school with more learning or more playing. Home School is not bound by geography and can take children to experience what their public school counterparts will only read about.
Reason 4) Home Schooling does not suffer from a principal-agent problem because the principal and the agent are the same person.
Aren’t you limiting your children by only offering a Christian viewpoint?
No, because we won’t only be offering a Christian viewpoint. No, because you do not understand that sin is a burden, and that the optimal life is found by throwing off its shackles. No, because my children will not be so dulled by a mediocre educational system that they will not have the brainpower to question their own beliefs.
In the end, my children will annihilate most of their public school counterparts both socially and academically. This is not necessarily our goal, but it is simply stating the way it will be. In addition to the path that they choose, they will be extraordinarily well learned on the virtues of freedom both externally, through the study of history and free market economics, and internally, through philosophies that lead to freedom from sin.
Why Are Public Schools Inherently Inferior?
We believe that public schooling, run by a government monopoly, has proved to be so endemically miserable because the system inherently cannot escape failure.
Reason 1) A public school system is a large public bureaucracy and suffers from a principal-agent problem (no pun intended). School managers cannot actively observe the behavior of individual teachers. The teacher’s prerogatives, as virtuous as they may seem, are not going to align perfectly with the prerogatives of management and parents. Thus, states and districts create curriculum and measurement that applies to all teachers in an attempt to curtail inferior or aberrant teaching.
The curriculum binds teachers to present information to students that will not match the interests or passions of every child. The more uniform the curriculum and the more diverse the population of students, the less likely that any individual child will be engaged to learn. The curriculum will approximate the values of the dominant political class in the region creating the curriculum. It will serve only the students who most embrace those values. Students who differ from the ideal will receive an inferior education. Many students will receive instruction that is impertinent and impersonal. Thus, the public school monopoly fails many students.
Any measurement of success used by schools will inherently distort the behavior of managers and teachers to maximize the methods that lead to measured success. Much as we have seen through by the No Child Left Behind act, which is amongst many failed measurement techniques, teachers focus on certain subjects at the expense of others. Measurements based on minimum standards will lead educators to focus on improving those students below the minimum standards at the expense of those who are already above them. The bad incentives brought by measurement yield an incomplete education to every student.
Reason 2) A public school system groups children with varying levels of expectations. These expectations reveal themselves in the behaviors of students. These behaviors model inconsistent values. Modeling of these behaviors (peer pressure) will push all students towards mediocrity. This mediocrity dulls the genius of the most academically focused students, and slows the progress of human ingenuity overall. An educational system that leads to mediocrity leads to a society of mediocrity.
Reason 3) A public school system, because of the separation of church and state and other requirements of pluralism cannot offer purpose in education. A public school system can only offer bland and inoffensive materials in political, economic, religious, and literature. It is a system that squelches minority opinions. The lack of purpose leads to the oft repeated tautologies “It just is”, “You’ll need to know this in the real world”, and “It will get you ready for next year” in response to students who question the importance of pieces of curriculum. Older children learn less because they do not see a purpose to what they are learning. They see less purpose because a public school system is limited from imbuing purpose to maintain political harmony. They see less purpose because the bland purposes that public school systems are allowed to imbue are highly unlikely to match the values of many students.
Why is Home Schooling Inherently Superior?
Reason 1) Home Schooling can teach with purpose. The direction that home schooling education takes can be guided by the purpose the child finds most appealing. In early years the child will need direction and a purpose imposed on them, but as they discover their talents and interests they can be supported in those endeavors without the choking limitations of public schools.
Reason 2) Home Schooling greatly reduces the predatory behavior of social competition. A home school student will not waste his or her faculties worrying about their clothes, hair, skin, makeup, car, or other measure of status during their education. They are free to dedicate their faculties to things that will actually matter in adulthood. In my home, they will not be exposed to the peer pressure of low expectations, or inculcated with the “virtues” of anti-social behavior.
Reason 3) Home Schooling is less restricted by the pragmatic realities of a larger public school. A home school environment is not bound by bells, bus rides, bathroom breaks, calendars, report card cycles, or curriculum. It is not bound to a classroom, a couple field trips to local museums, and a simple playground. Home School students can make use of the wasted time of a public school with more learning or more playing. Home School is not bound by geography and can take children to experience what their public school counterparts will only read about.
Reason 4) Home Schooling does not suffer from a principal-agent problem because the principal and the agent are the same person.
Aren’t you limiting your children by only offering a Christian viewpoint?
No, because we won’t only be offering a Christian viewpoint. No, because you do not understand that sin is a burden, and that the optimal life is found by throwing off its shackles. No, because my children will not be so dulled by a mediocre educational system that they will not have the brainpower to question their own beliefs.
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