Tuesday, September 30, 2008


My Response to Al.

Yes money is frequently misspent on new schools in the wrong place and on remodeling old schools while not spending on the technology equipment needed in our modern world. Once again, small mistakes are compounded into large mistakes when we insist on big group decisions. This is nothing but the old story that a camel is a horse designed by a committee.

A few days ago, I went to a beautifully renovated school. The building was impressive, but the students refused to quietly take an educational survey. The survey was done on paper because there were not computers for each student. For a teacher to teach, the student must want to learn; these kids could have cared less.

Give parents a voucher with which to select the best school, give the school the option of accepting the student and the kids who want to learn will go to productive schools. One method being used in productive schools is to use online resources to help the kids move forward at their own pace. For some reason, we insist on doing school the way the Soviets did refrigerators, there was only one brand, it was a lousy appliance but there was no other choice.

The irony is that the growing home schooling movement has been counter productive for the students who remain in traditional schools. The quality of ones education depends greatly on the skills and attitudes of ones peers; it is great to learn about diversity, but horrible to sit through a disrupted class. Home schooled kids do very well partly because their education is coordinated with kids from other families who care.

The class I really enjoyed teaching a couple of weeks ago was an honors class in international affairs. The students were interested in learning about what is going on in the world. Even so, when I strayed from what would be included on the test, they lost interest.

In other recently taught classes, I have faced serious challenges. Most of the students did not care about learning. I had to teach a few students while maintaining some semblance of order around them. These were frustrating and sad experiences. Most of the kids would have been better off working at McDonald's for the day.

My radical proposal to "fix the problem" is to fund preschool programs, giving more children a head start while providing only partial funding for high schools. The advantage gained is to teach children while they are like sponges, soaking up knowledge.

A tax increase would not be required for the preschool programs due to the savings at the high school level. Only the kids who put forth serious effort in middle schools would get "full scholarships" their first year of high school. A sliding scale would give other students partial scholarships, giving parents the incentive to learn what their child needs to do to get a full scholarship. Students would have to continue to earn their scholarships. Kids not willing to put forth effort in school should be encouraged to go to work at the age of 16 and come back to "adult high school" when they are ready to learn.

We maintain high graduation rates by giving away diplomas. We teach that it is acceptable to slide through life.

The data is compelling. Students in Catholic/Private schools perform much better than students in public schools. Home schooled students do even better. By their senior year, home schooled students rank 92nd percentile on reading and 88 on math. Yes, most of the home schooled kids would be better than average students if they attended public schools. The parents of these kids are much more likely to have advanced degrees. It is important to note that these parents are concerned about character education and not just "book learning".

While our country has traditionally been about equal opportunity, it is tipping toward socialism. Our children are not being taught basic concepts, such as free trade benefits both the consumer and the producer, because the concepts are not politically correct. Our politicians are focused on trying to give every child the same education, instead of the same opportunity.

I attended public schools as did my children. To the extent that I have influence over my grand children, I hope they will be semi home schooled. I intend to offer considerable time to assist with the task. It will require much effort to get them to group activities such as dance, music, sports and gymnastics.

During the past couple of weeks, the teachers in North Carolina have been well informed about the "wonderful efforts" of our State Attorney General to prosecute service station price gougers. Since service stations are in fear of prosecution if they let the "Magic of the Invisible Hand of Adam Smith" ration supplies, they have resorted to fixed limits on quantities available. For example, one station offers no more than $20 worth per fill up. Fist fights have broken out, cheats have paid people for their place in line and several station owners have had their lives threatened. Business people are afraid to travel because they may not have enough gas to get back home. In the mean time, people who do not need the gas refill their tanks to the brim each time they have room for $20 worth.

How silly? We have school teachers, who have never run a business or met a payroll, teaching our kids that it is unfair to charge the market price for goods! One result is that trillions of dollars worth of home mortgages were mandated at below market rates and our banking system is on the edge of total collapse. The "crisis" is not as bad as it has been painted, but, if the goose can use hyperbole to make her point, then why can't the gander?

I was surprised when the house voted against the Paulson Plan. I did not think the congress would have the guts to stand up this powerful man. What's next?

The administration and the congressional leadership is continuing to pressure the congress. However, there are many unused tools in the bags of the FOMC and the Treasury. Indeed, it appears that tools have been purposely left idle in order to put the most pressure on the congress possible. For example, FDIC insurance was increased from $40,000 per account to $100,000 per account something like 25 years ago and held steady ever since. Recently, the runs on banks have been partly in order to move excesses above $100,000.

If memory serves, the FOMC has the power to reduce bank capital requirements without the permission of congress. If the capital requirements were temporarily reduced, FDIC insurance increased and premiums set to go up significantly for banks with low capital balances two years from now, the liquidity crisis would be improved dramatically. Banks would have a two year window to right themselves before facing penalties.

Note that when the FDIC allowed Citibank to take over Wachovia, private capital was used. Sure, the FDIC took a 10% ownership in Citibank; the Wachovia shareholders were not bailed out. Here again, 12 billion dollars worth of capital was manufactured out of thin air by the stroke of a pen (taken from Wachovia shareholders as a result of the poor judgment exercised when the company bought billions of dollars worth of California real estate at the top of the market). The US tax payer was protected and the confidence of Wachovia depositors was restored. (I demonstrated poor judgment when I assumed the move from $59 to $15 per share was enough to reconcile the accounts.)

In the short run, Obama has made much political hay. He has gained several points in several battleground states. It remains to be seen if the public is open to understanding why we are in this mess. Most fingers of blame continue to be pointed toward wall street. The reality is that our government moved away from free market principles and demanded that trillions of dollars of high risk home loans be made. Like the Soviets, we decided that every citizen deserves a refrigerator if they will pay for it or not.

On Mon, Sep 29, 2008 at 6:40 PM, Al wrote:

In PA federal spending has been declining steadily as a percentage of the cost per student, so has state spending so we have had steadily increasing property taxes to make up the difference.
I haven't taught since 1975, but my daughter is a k-6 art teacher. I ran for school director in 1999, but wasn't elected. Best thing that ever happened to me! I favored a new high school and fewer renovations. The tax payers wanted the "cheaper" renovation program. So here we are today with a newly renovated HS that is overcrowded from the day it was completed along with an overcrowded middle school needing renovation or replacement and elementary schools that are renovated or as in the case of my daughter's school, being renovated. The district has borrowed to the state allowed limit so it will be awhile until the middle school can be addressed an our property taxes increase every year by several percent.