What are your public school educators reading?

Why, Educational Leadership from the Association of Curriculum and Development of course. ASCD is highly respected by public educators, in fact your local schools most likely have implemented a number of programs that ASCD promotes.

OK, but what are they reading? Note the quote below from the following article written by Richard Hanzelka, ASCD president:

"Regardless of international differences, we should all take heed of China's concern for the development of a whole child who is capable of being part of a harmonious society."

In an article reminiscent of John Dewey's excited report written after seeing his ideas incorporated in the schools of Soviet Russia, ASCD trumpets China's embrace of the "whole child."

For those new to such terminology, the "whole child" is the Progressive utopian child that is self-actualized yet devoid of knowledge. Educators appeal to the concept of the "whole child" since it frees public schools from having to teach the three R's. Parents, when you hear "whole child" mentioned think of the article below - the goal of this type of educations - and you will understand why college remediation rates are so high.

And people wonder why the education profession gets branded a socialist cartel, especially when the educationist want us to pursue the harmonious society that is Communist China.

Note: Your tax dollars pay for this rot. You simply cannot cannot make up stuff this bizarre.

from the latest ASCD daily email:

Harmonious Learning for the Whole Child: Education Perspectives from China

Message from the President


Richard Hanzelka

As educators in the United States struggle to expand their view of learning to embrace the whole child and not just achievement test scores, it is encouraging to know that other nations are engaged in similar processes. China, a country I have been fortunate enough to visit twice in the last two years, is also challenging itself to build a system that addresses the whole child.

This summer I traveled to China to participate in the first China-U.S. Education Leadership Conference. What I learned and experienced expanded and clarified the impressions I formed during the ASCD Board of Directors trip to China in November 2005.

continue reading ...

A Fair Wage

An always timely article published by EdNews.org:

by Jim Fedako

You hear it from them all the time; teachers just want a fair wage. Oh, well who doesn't? This line of thought begs two questions: How are wage rates established in a free market? And, are market wage rates fair?

read more ...

$6 billion gone ... Fooled by Randomness

A hotshot trader loses over $6 billion in a matter of a week. How can that happen? To understand how such loses can occur to both a successful trader and hedge fund, read Fooled by Randomness by Nassim Nicholas Taleb. This insightful book details how randomness is disguised as seemingly ordered events, leading to incorrect conclusions and decisions, as well as horrific loses.

Brian Hunter, the hedge fund's 32-year-old chief energy trader, was recently hailed as a rising star. What many thought was an innate ability to understand the market was simply a lucky run at the gambling table. The point is that we tend not to look for randomness in events, especially the statistical descriptions of those events.

By assuming that statistics, the tool of the positivist and empiricist, reveals absolute truths, we end up traveling down a path that leads to trouble.

Oh, there certainly is a place for statistics in describing past events, but predicting the future based on a statistical analysis can easily result in the $6 billion loss. As the sage words from the TV show Hill Street Blues reminds us, "Hey, let's be careful out there."

Wal-Mart and history

Engaged in the Wal-Mart debate are two sides: those who shop at Wal-Mart due to its selection and low price; and those who want to use the punitive arm of government to put Wal-Mart out of business.

Those of us who support Wal-Mart are a fickle lot. The minute a better option appears we will quickly cross the street to the new store without even a mournful glance at our previously favored best buy. You see, Wal-Mart's time will come. Someday it will be supplanted by a store that out performs it on price, selection, or both. The supporters represent the free market.

Those who fight Wal-Mart want to see the end of everyday low prices. Since the opponents recognize that the consumer desires Wal-Mart, they appeal to government to close the doors on all those packed supercenters. These folks represent statist interventionism.

The problem with having government intervene is that no better option exists once Wal-Mart is locked by decree. Sure the doors can be closed, but where does the consumer go to purchase goods at the price and quality desired? The followers of the free market have no qualms watching Wal-Mart's assured demise once a new competitor appears that can offer a more satisfactory option. When our choices close the doors on the Bentonville Behemoth, it will because the better option is available. The closing of Wal-Mart will simply be a signal that the consumer is now better off.

If government acts according to statist interventionism, it destroys consumer choice, investor capital, and jobs; leaving no better option, just waste, inefficiencies, and unmet wants. But isn't that the typical result of all government interventions?

Homeland Security in the Chicken Coop

The big arrest outside the September 21, 2006 gubernatorial debate. I'm glad the police are keeping our street clear of opposition candidates.

From the Peirce campaign web site: "Here’s a quick little music video of the Peirce supporters in chicken suits mocking the Ken & Ted ‘Fraid Chickens at Wednesday’s Gubernatorial Debate."





At the close of the Constitutional Convention in Philadelphia on September 18, 1787, a Mrs. Powel anxiously awaited the results, and as Benjamin Franklin emerged from the long task now finished, asked him directly: "Well Doctor, what have we got, a republic or a monarchy?" "A republic if you can keep it" responded Franklin. From a speech delivered by the Hon. Ron Paul of Texas, current member of Congress.

This video would be funny if it wasn't so sad watching our Liberty fade away. Thank goodness for internet, the last remaining avenue of free speech.

Value-Added Analysis

You are going to here a lot about value-added analysis as an indicator of academic performance in the coming year as the state begins rolling out value-added as a new accountability indicator. Be careful.

Value-added is purported to show whether or not a child has achieved a year's worth of academic growth during the past school year. The year-for-a-year will become the new standard by which student achievement, as well as district, school, and teacher performance, is judged.

There are problems with this standard. It is important to understand that value-added only shows whether or not a student has remained in the same place on the bell curve from year to year. [1] In addition, value-added only compares the current level of student achievement against past levels of grouped, similar-situated student achievement.

If we agree that the education system needs to improve, basing the standard on a string of historic test scores will not drive improvements. To satisfy that standard, the school system only needs to continue producing the same product as has been historically produced. In other words, Detroit in the 80's and 90's could have satisfied a value-added standard by simply producing the same cars that it had produced in the 60's and 70's. Value-added would not have set the standard at the level of newer model Japanese cars.

A concept of total achievement is a much more valid standard. Instead of evaluating student progress against historical aggregates, total achievement looks at student performance against a measure set by students and their parents. The student who desires to attend college needs to graduate with skills that open college doors. Having met year-for-a-year growth, then subsequently receiving letters of non-acceptance, or letters of qualified acceptance (where acceptance is based on taking remedial college course-work), would constitute a failure of the system. The year-for-a-year does not guarantee a quality outcome – only an average outcome based on the historic academic achievement of similarly-situated students.

So, for example, if your child struggles for a few years, value-added will place you child in a path with other students who struggled. In this situation, a lower-level of achievement becomes the acceptable standard; acceptable to the school system, but not to the parent.

Keep in mind that a year-for-a-year is not what is appears to be. I have yet to see a source that details a year's academic growth as a normative standard and not a relative ones; a normative standard described by a rubric that defines in exact terms what a year's growth looks like.

In other words, a year's worth of growth is defined as x where x has no relationship to other similarly-situated students' historical pattern of test results; a rubric that answers the question, "What is the expected level of achievement, in absolute terms, of a given child at the end of fourth grade." Without such definitions, value-added is an empty concept when it is used as a standard of individual student achievement.

A look at total achievement: The fact that ACT is stating that the greater majority of students taking the ACT are not ready for college-level work shows that absolute levels of achievement are not being met - according on ACT's informed standards.

Basing a year's worth of growth on historic levels of achievement will never solve the education problem. In addition, telling parents that, "We did our job by advancing your child at the same pace as similarly-situated students (a year for a year), so your child's inability to get into college is not our problem," has a hollow ring. In this instance, the total achievement goal set by parents and child was to be college-ready upon graduation - a higher standard than a simple year's worth of growth.

I suspect most parents want more with regard to their child's education than a simple progression equal to the historic test patterns of similarly-situated children.

That's what value-added isn’t; now for what value-added is. Value-added is a statistical means to evaluate programs and teacher effectiveness; a tool that takes into account all attributes of a child so that no one can claim that a program or teacher's class achieved low-level of results due to the students being the product of poor demographics, or that simply meeting state proficiency levels is sufficient for high socio-economics districts.

Value-added is not the ends, it is the means to improve the system. Programs or teachers that cannot keep pace with average growth should, respectively, be discontinued or shown the door.

The solution must be growth patterns that continually exceed historic averages across the board. Anything less is an insult to children, and their parents.

Notes:

[1] This is a very simple description of a complex system, though it is accurate in a simplistic way.

Quotes

"It may sometimes be expedient for a man to heat the stove with his furniture. But if he does, he should know what the remoter effects will be. He should not delude himself by believing that he has discovered a wonderful new method of heating his premises." Human Action, Ludwig von Mises.


"If it is believed that these elementary schools will be better managed by the governor and council, the commissioners of the literary fund, or any other general authority of the government, than by the parents within each ward, it is a belief against all experience." (Thomas Jefferson, letter to Joseph C. Cabell, 1816)

Response to the push for federal education standards

Be cautious about advocating for federal control over any issue. The feds are simply an aggregation of state officials and bureaucrats - no better, though more power-hungry. Sometimes we forget that the drive to game the system is found at all levels of government.

Having the feds involved creates a positive impression simply because we have been taught to believe in the omniscience of the greater governmental power. That's why issues move up the chain of control, since those who are unhappy with their local situation appeal to the next level of government for redress.

A true market doesn't need governmental control as all can be satisfied with their own choices. Of course, some are only satisfied when we all are required to select the supposed correct public good.

The movement of standards from the local level to the federal level will not reduce the politics involved in the process. Typically, federal issues are more political due to the increased amount of money at stake with any decision.

Advocating for federal standards, and their certain to follow accountability and control, seems antithetical to school choice. Once the feds push standards down to the local level, all schools will have to adhere to them, whether they are good for a given child or not. School choice will become the same as the choice between a Whopper or Big Mac. Not much of a choice at all for those who prefer a Taco Bell Bean Burrito.

Blowing the whistle on silly laws

Effective tomorrow, Ohio Revised Code § 4511.56. Signal devices on bicycle will contain the following language:

C) A bicycle may be equipped with a device capable of giving an audible signal, except that a bicycle shall not be equipped with nor shall any person use upon a bicycle any siren or whistle.

Yes, the state is finally putting a stop to such activities! Blowing a whistle while riding a bike, indeed!

Similar to Thomas Woods's comment about the volumes of federal laws and regulations; thank goodness we have ORC 4511.56. One can only imagine the chaos that would ensue should this law be repealed.

So, who says our state representatives don't earn their pay?

Knowledge, action, and the feds

Latest Mises.org Blog post by Jim Fedako
http://blog.mises.org/archives/005629.asp


As has been reported on this blog, Israel Kirzner wrote a short article where he distinguishes between information-knowledge and action-knowledge. The distinction between the two is that action-knowledge refers to "knowledge that actually spurs and shapes action" while information-knowledge is simply facts and figures that exist in memory. The point is that information alone has no economic value unless it takes the form of action-knowledge, thereby causing acting man to direct and redirect scarce resources to satisfy the most-pressing needs.

As reported by The Christian Science Monitor, Congress is working on a bill which will provide for a searchable internet database that details how government is spending our federal tax dollars. I'm certain that all of this data will be of interest to a lot of people, but additional heaps of data will not spur or shape any political change. The Soviet Union, another planned economy, was flooded in data yet continually wasted scarce resources chasing utopian dreams.

We already have sufficient data to know for certain that the feds are spending way too much of our tax dollars. We don't need more data; we need someone to stand before Congress like Davey Crockett and remind our representatives that our money is not theirs to give. We need action, and its requisite action-knowledge, instead of servers full of more depressing data.

Is All-Day Kindergarten An Economic Fix?

Latest Mises.org article:

Is All-Day Kindergarten An Economic Fix?
By Jim Fedako
Posted on 9/14/2006

Is your state's economy in the doldrums? Does it need a kick start to get it humming again? The immediate and boring solution is reduced government regulations and tax cuts. But according to a new civic ethos, the long-term and innovative solution is mandatory, all-day kindergarten.

That's rights, all-day kindergarten is the perfect solution for the politician looking for headlines and votes. What a great way to stand out from the crowd of other power-seekers. All-day kindergarten is for the children, and it will improve the state's economy — though improvements will not be seen for a quarter century at best.

You see, it takes anywhere from 3 to 5 years to fully implement a government solution, so the first class to benefit from all-day kindergarten is still 3 to 5 years in the future. Then it takes another 17 years for a child to move through the primary, secondary, and tertiary school programs in order to receive a Bachelor of Arts degree. Finally, the new graduate has to find a job and become acclimated to a new career — add another 5 years. So, there you have it, benefits to all-day kindergarten do not begin accruing for at least 25 years.

And, more importantly, the first time anyone can empirically assess the benefits relative to the costs is more like 28 years from now — assuming three years for data to be gathered and analyzed. Of course, that is if there are any benefits to accrue. In the meantime, the bills keep coming and coming.

Twenty-eight years from now? By then, who cares? The politician who crafted the law is retired in Florida, and the years of additional interventions have muddied the educational waters so that all-day kindergarten will be the least of our worries. If the public education system is still plodding along, there will be other ideas to implement and the educationists and unions will still sing praises to the man who gave the state mandatory, all-day indoctrination of five-year olds.

Success will follow implementation, because the success will be the implementation. The praises and awards will be given to the man who was brave enough to push such a beneficial program forward against hostile and vile opposition; a program that not only benefited the kids, but also got the economy back on track.

Advance the clock a couple of years after the proposal of this long-term solution: The governor who ran on the platform of all-day kindergarten pushed and prodded his legislature to fund the program a year ago. Through the rustbelt haze, a solitary economic report shows that the state is on the rebound. The media is summoned and governor proudly states that his plan for an improved educational climate in the state has lead to an economic resurgence. All-day kindergarten has saved the day.

You ask, "How could the economy benefit in such a relatively short time from a program whose results will not be known for decades?" The governor's Keynesian court will set this matter straight. See, it wasn't the increased academic performance to be reaped years hence that saved the state today; it was the pumping of additional funds into the state's rustbelt economy. Yes, the state — I mean the governor — has guided the state to brighter horizons.

Think about it, we are talking about a double benefit here. An improved economy now, plus the utopian society born a little more than two decades from now as the first all-day-kindergarten class graduates college and introduces the world to the Progressive heaven on earth. What a way to retire fulfilled on the beaches of a sunny coast? The marble bust of this visionary governor will rest in the center of the state capital rotunda, a Lenin-inspired monument visited by future children as they learn about the great state and its role in all facets of life.

All-day kindergarten, what a silly solution. And what fools we must be to even consider its merit. If the economy is lagging and education is the reason, the finger needs to be pointed at the changes in education that grew out of the 1960s and the work-to-rule unionization of teachers — the public education system itself. If education is the solution, the improved product will not begin hitting the streets for years — and it will never be the result of government programs, as only the market can solve the education malaise.

Carl Menger noted in his groundbreaking work, Principles of Economics, that time is central to understanding economics. Goods of a lower order cannot be produced today unless goods of higher order are already available. One cannot simply abstract time out of plans and expect immediate and realistic results. Time must be considered before proposing solutions or pursuing ends.

In addition, higher order goods derive their goods-character — their value — from corresponding goods of a lower order. The time factor comes into play whenever consumer desire for first order goods changes, resulting in changes to the value of corresponding higher order goods. Time is key. The motions set into play today may lead to the satisfaction of tomorrow's needs. But, then again, they may not.

The all-day Kindergarten solution is the means to satisfy some hypothetical end 25 years in the future. There is a high probability that today's education solution will not meet tomorrow's employment needs, especially when the solution is in the form of a government program and not the plans of a profit-seeking entrepreneur.

The educational and political systems do not recognize time when proposing solutions. How else can you explain the support for a program that may produce benefits decades from now; a program that is being proposed as a solution to an immediate problem? Of course there is the desire to hold power that drives humans to make fallacious statements, but I sometimes believe that many politicians and bureaucrats actually believe in their programs. The only reason for such invalid beliefs must that these individuals don't include time in their models and plans.

Programs created today that are supposed to have a future benefit are risky in the free market. Look back at entrepreneurial predictions that were proposed three decades ago and see how many hit the mark. Who predicted the internet age other than Al Gore? Despite the risks, government is always inclined to take on the long-term project that may never satisfy a need. The reason is simple, the kudos are delivered at the groundbreaking ceremony, along with the photo ops and headlines. The failures are forgotten or pinned on the other political party.

Voters go along with these ideas since they were never taught the concept of time, and how time affects economics matters. The current mainstream paradigm, the one taught in public schools and most universities, simply abstracts out the influence of time. Only the Austrian School recognizes time since the Austrians understanding of the allocation of scarce resources is not tied to static models of equilibrium; models where time has neither place nor merit.

So we are stuck with dueling gubernatorial candidates debating whose plan for all-day Kindergarten will save a rustbelt economy. Neither candidate takes into consideration the added tax dollars that must be picked from taxpayer pockets in order to fund the program. They never debit their account for all the lost economic activities that would have occurred had those dollars been allowed to be freely invested in order to satisfy real consumer wants. They only credit their account for the implementation of a program that might produce results far off in the future.

Let's settle the scores; the politicians and bureaucrats win since they claim success based on programs implemented, the children lose due to additional years in state institutions, the teachers and their unions win as more money is pumped into the sinking barge, and the taxpayer — William Graham Sumner's forgotten man — continues to pay the bill year after year.

In economics, the best solution is always boring one — simply reduce regulations and cut taxes. Everything proposed by government is a fool's errand.


--------------------------------------------------------------------------------

Jim Fedako, a former professional cyclist who lives in Lewis Center, OH, is a member of the Olentangy Local School District and maintains a blog: Anti-Positivist. Send him mail. Comment on the blog.

Letter to the editor

Israel M. Kirzner is an economist from the Austrian School. In his article, Action-Knowledge and Information-Knowledge, he distinguishes between the two types of knowledge. Congressman Tiberi appears to grasp only the simpler information-knowledge as he doesn't seem to be able to utilize his information-knowledge as action-knowledge.

Dear Editor:

Some knowledge is only valuable if someone will act on it. In his letter, "Bill shines brighter light on federal spending," U.S. Rep. Tiberi expresses his support for another federal initiative, the creation of a Google-like search engine that will allow internet users the ability to see exactly where Washington is spending our money. Tiberi says that the search engine will give taxpayers the ability to determine if too much, or too little, money is being spent on federal programs. Well, I don't need another search engine to figure out that too much money is currently being spent. So, the question to Tiberi is: When are you going to act and do something about it? Only then will the additional knowledge be of any value to overburdened taxpayers.

Jim Fedako

The exception that proves the rule

Hear's an interesting graphic.

click on graphic to enlarge

The correlation is supposed to be between wealth and performance, but Olentangy is the obvious exception to this rule. Second on wealth, yet 79th on performance. Something is very wrong with these results.

Or, should we spin the results, claim reverse causation, and pride ourselves with earning a lot despite the district's scores? That's it ... there's nothing like a positive spin ...

Blackwellian economics

How we are fooled sometimes. PT Barnum spoke the truth when he talked about the fool born every minute, and this appears to be my minute.

You see, I ran for a seat on the Central Committee of the Delaware County Republican Party because I thought that Ken Blackwell was a true small-government candidate. I supported his campaign financially because I believed what he said, although I apparently missed what he truly meant in his speeches and campaign literature.

Read the healthcare plan below and guess whether it's from Blackwell or some lesser socialist. Hint: It's Blackwell's plan.

In addition, Blackwell has transportation and energy plans that sound like they are a blend of Corporatism and Mussolini Fascism (I'm dealing strictly with the economics definition of this term, not its more sinister political one).

Watch out! Anytime you combine business sectors and government bureaucracies nothing good can result. I had always believed the conservative wing of the Republican Party understood this, now I realize that I am wrong once again.

The Blackwell campaign shows why FA Hayek, Nobel Laureate in Economics, stated that he could never call himself a conservative. The philosophy of the Right has blended with the Left, and now they're both statist fighting over whose central plan works best.

Spending reductions? Tax cuts? Please, you can't reduce spending and cut taxes when you truly believe that government provides the solutions.

It's Blackwell's inability to understand economics - the science of human action with regard to scarcity - that leads me to support Bill Peirce, Libertarian candidate for governor.



The Blackwell Plan

My Plan relies on five keys to success:

Government Reform: The Blackwell Plan will create a five member appointed Commission to coordinate healthcare policy and expenditures and supervise the numerous state agencies involved in the healthcare industry as well as Ohio's Medicaid Program.

Covering the Uninsured: The Blackwell Plan will create a new program called the "Buckeye Health Connection" which will work to provide health insurance to uninsured Ohioans by matching uninsured individuals with private health insurance coverage and facilitate (not replace) those relationships.

Medicaid Reform: The Blackwell Plan will work to address remaining issues reported by the Ohio Commission to Reform Medicaid; namely the creation of a separate Medicaid agency, the modernization of Medicaid's information systems, the establishment of a consumer-directed health care model for Medicaid clients, adequate funding for a complete audit of the Medicaid program, a more consumer-focused approach to clients in our long-term care programs which would enable them to have more control over the care they receive, and lastly ensuring that manipulation of eligibility for Medicaid not be used as a method of exercising fiscal control over the program.

Pharmacy Management: The Blackwell Plan will propose a statewide drug purchasing pool for all programs administered or financed by state government and will recommend pursuing affiliation with one or more of the existing state consortiums to include states already actively managing their pharmacy expenditures.

Insurance Reform: The Blackwell Plan will immediately increase the age a young adult can remain on a family insurance policy to 29, begin to strengthen health purchasing pools by allowing new forms of consumer-directed health care products, including health savings accounts.

Carl Menger, an economist and genius

According to Mises.org, Carl Menger (1840-1921) "was the true and sole founder of the Austrian school of economics proper." After reading Menger's work, Principles of Economics, Ludwig von Mises decided to become an economist.

Menger is known as one of the three economists (along with Jevons and Walras) who contemporaneously discovered the notion of marginal utility, thus defining many of the concepts that eluded Classical School of Economics (Adam Smith, David Ricardo, etc.) for a century. Menger's ideas founded the Austrian School of Economics - the school of economics that was founded in Austria but is now centered in the US.

The book is a great read and is available to download or purchase from Mises.org.

A listserve response on curriculum, standards, and tests

Deb hits the issue on the mark. Unless the political climate of the past hundred years or so reverses overnight, we will see little or no real change resulting from a government-run, top-down system. Whether its aegis is with the feds or the states, top-down, government-run systems do not work; though we at least have a chance at the statehouses.

Take NCLB, or its Ohio predecessor, as the example. My district, one of the wealthiest in Ohio, has been improving on state-mandated tests since they were inaugurated almost a decade ago. Not just improving in the number of students scoring proficient, but also in the number scoring accelerated or advanced proficient. The state report card scores imply that we are improving, but improving based on what?

Typically, 35% of our graduates still require remedial coursework at state universities, and the ACT College Readiness Report shows that only 36% of our recent graduates were prepared for college-level classes in the four subjects analyzed.

So, my district is now ranked excellent by the state, yet the colleges and universities are saying that our product is poor. How can that be reconciled?

Let's assume that the feds push through a national curriculum. What will we have? We will have a system similar to that already in place. My district aligns itself to the state curriculum, as well as those offered by entities such as the National Council of Teacher of Mathematics. Per Ohio law, the local board approves its curriculum.

During the approval process, I always ask questions such as, "What is the standard or rubric to evaluate a studen'ts understanding of the content item, 'Student will be able to explain the causes of the Civil War?'" You see, the response to such a content item could be either a simple paragraph or a research task that could easily become someone's life work. The response from the administration is always the anemic, "Our teachers know what it means to attain that standard." If they really know, why can't they convey it to the board member who religiously asks that very same question?

But, you say, the standards are set be the state and are evaluated by the tests. As a member of the Ohio Department of Education's Grade 4 Writing Content Advisory Committee, I have been involved in the creation of state test items. I know firsthand that the tests do not reveal what they claim to show. These committees are stacked by teachers and administrators who reduce state-level tests of curriculum standards to a farce.

The tests are a farce so the supposed improvement is also a farce; just ask the colleges and universities if they are seeing the improvements implied by district scores of state tests.

Anyone who thinks that the feds can and will form a committee that defines a curriculum, standards, and test items, free of educationist bias hasn't paid attention to who actually runs state committees and bureaucracies. The unions and the other pro Progressive Education organizations - such as your own state's school boards association - are always given the biggest stake in any supposed stakeholders meeting.

Legislatures will stand up to these groups the day Ohio ends de facto teacher right-to-work laws. That said, our legislature has been willing to move forward on charters and vouchers since these are outside the public education system - untouched by the committees and bureaucracies, at least initially. Anything that comes out of education committee/bureaucracy system has educationist fingerprints all over it.

Don't expect the feds to have any more will to drive those evils out of the system. If anything, the educationist will be able to gain more power since the goings-on that occur in DC, far from the sights of most of us, stay in DC.

Deb, Your are indeed correct.

Jim Fedako
Member, Olentangy Board of Education
blog: antipositivist.blogspot.com

All-day Kindergarten: a fool's errand

Is your state's economy in the doldrums? Does it need a kick-start to get it humming again? The immediate and boring solution is reduced government regulations and tax cuts. The long term and innovative solution is mandatory, all-day Kindergarten. [1]

That’s rights, proposing all-day Kindergarten as the solution to a sluggish economy is perfect for the politician seeking headlines and votes. What a great way to stand out from the crowd of other power-seekers. All-day Kindergarten is for the children, and it will improve the state’s economy – though any possible improvement will not be seen for at least a quarter century.

You see, since it takes anywhere from 3 to 5 years to fully implement a government solution, the first class of students to benefit from all-day Kindergarten is still 3 to 5 years in the future. Then it takes another 17 years of education for a child to receive a Bachelor of Arts degree. Finally, the new graduate has to find a job and become acclimated to a new career – add another 5 years. So there you have it, the benefits from all-day Kindergarten do not begin accruing for at least 25 years. Of course, that is if there are any benefits to accrue.

In addition, and more importantly, the first time anyone can empirically access the benefits relative to the costs is something like 28 years from now – assuming three years for data to be gathered and analyzed. In the meantime, the bills keep coming and coming.

28 years from now? By then, who will care? The politician who crafted the law is retired in Florida and the years of additional interventions have muddied the already murky educational waters to the extent that all-day Kindergarten will be the least of our worries. If the public education system is still plodding along after all those years, there will be other ideas to implement; new solutions to propose.

Success will follow implementation, because the success will be the implementation. The praises and awards will be given to the man who was brave enough to push forward such a beneficial program in the face of hostile opposition; a program that not only benefited the kids, but also got the economy back on track.

Advance the clock a couple of years after the proposal of this long-term solution: The governor who ran on the platform of all-day Kindergarten pushed and prodded his legislature to fund the program a year ago. Through the rustbelt haze, a solitary economic report crosses the governor's desk proclaiming that the state is on the rebound. The media is summoned and governor proudly states that his plan for an improved education climate has lead to an economic resurgence. All-day Kindergarten has saved the day.

You ask, “How could the economy benefit in such a relatively short time from a program whose results will not be known for decades?” The governor’s Keynesian court will set this matter straight. See, it was not the increased academic performance to be reaped years hence that saved the state today, it was the pumping of additional funds into the state’s rustbelt economy. Yes, the state – I mean the governor – has guided the state to brighter horizons.

Think about it, we are talking about a double benefit here. An improved economy now, plus the utopian society born a little more than two decades in the future as the first all-day Kindergarten class graduates from college and introduces the world to the Progressive heaven on earth. What a way to retire fulfilled on the beaches of a sunny coast? The marble bust of this visionary governor will rest in the center of the state capital rotunda, a Lenin-inspired monument visited by future children as they learn about the great state and its role in all facets of life.

All-day Kindergarten, what a silly solution? And, what fools we must be to even consider its merit. If the economy is lagging and education is the reason, the finger needs to be pointed at the changes in education that grew out of the Sixties and the work-to-rule unionization of teachers, along with all the other ills of a government-run education system. If education is the solution, the improved product will not begin hitting the streets for years – and it will never be the result of government programs as only the market can generate a solution to education's malaise.

Carl Menger notes in his groundbreaking work, Principles of Economics, that time is central to understanding economics. Goods of a lower order cannot be produced today unless goods of higher order are already available. One cannot simply abstract time out of plans and expect immediate and realistic results. Time must be considered before proposing solutions or pursuing ends.

In addition, higher order goods derive their goods-character – their value – from corresponding goods of a lower order. The time factor comes into play whenever consumer desire for first order goods changes, resulting in changes to the value of corresponding higher order goods. Time is key. The motions set into play today may lead to the satisfaction of tomorrow's needs. But, then again, they may not.

The all-day Kindergarten solution is the means to satisfy some hypothetical end 25 years in the future. There is a high probability that today's education solution will not meet tomorrow's employment needs, especially when the solution is in the form of a government program and not the plans of a profit-seeking entrepreneur.

The educational and political systems do not recognize time when proposing solutions. How else can you explain the support for a program that may produce benefits decades from now; a program that is being proposed as a solution to an immediate problem? Of course there is the desire to hold power that drives humans to make fallacious statements, but I sometimes believe that many politicians and bureaucrats actually believe in their programs.

Programs created today that are supposed to have a future benefit are risky in the free market. Look back at entrepreneurial predictions that were proposed three decades ago and see how many hit the mark. Who predicted the internet age other than Al Gore? Despite the risks, government is always inclined to take on the long-term project that may never satisfy a need. The reason is simple, the kudos are delivered at the groundbreaking ceremony, along with the photo ops and headlines. The failures are forgotten or pinned on the other political party.

Voters go along with these ideas since they were never taught the concept of time, and how time affects economics matters. The current mainstream paradigm, the one taught in public schools and most universities, simply abstracts out the influence of time. Only the Austrian School recognizes time since the Austrians understanding of the allocation of scarce resources is not tied to static models of equilibrium; models where time has neither place nor merit.

So we are stuck with dueling gubernatorial candidates debating whose plan for all-day Kindergarten will save a rustbelt economy. Neither candidate takes into consideration the added tax dollars that must be picked from taxpayer pockets in order to fund the program. They never debit their account for all the lost economic activities that would have occurred had those dollars been allowed to be freely invested in order to satisfy real consumer wants. They only credit their account for the implementation of a program that might produce results far off in the future.

Let’s settle the score; the politicians and bureaucrats win since they claim success based on programs implemented, the children lose due to additional years in state institutions, the teachers and their unions win as more money is pumped into the sinking barge, and the taxpayer – William Graham Sumner’s forgotten man – continues to pay the bill year after year.

In economics, the best solution is always boring one; simply reduce regulations and cut taxes. Everything proposed by government is a fool's errand.


[1] Of course the same can be said about suggestions for preschool programs, especially government-run preschool programs.

Football, economically speaking

Coming soon. In an economic sense, is high school football a public good or a private good?

Life Without Government Equals Chaos. Hardly!

We tend to assume that without an interventionist government – a government that extends beyond the enumerated powers in the Constitution - life would resolve into chaos. Nothing could be farther from the truth.

In the nineteenth century, French economist Frédéric Bastiat remarked on the wonder of that phenomenon by exclaiming, "Paris gets fed!" The same can be said of New York, Tokyo, Mexico City, etc. It's doesn't take the intervention of a governmental planning board to ensure adequate food for all of us. Entrepreneurs seeking profit make certain that eggs and milk are readily available for tomorrow's breakfast.

Consider the alternative: In the late 1970's and early 1980's I spent three weeks in the then-socialist countries of Yugoslavia and East Germany. If it wasn't for the illegal food market there would have been nothing to eat other than cookies, Vodka, and stale bread. Keep in mind that the brightest minds planned these economies. Not much to be said for central planning.

But we tend to forget these real-world examples of government planning. Maybe we assume that our bureaucrats are more omniscient and brighter than those of Yugoslavia and East Germany. Ludwig von Mises of the Austrian School of Economics proved over 80 years ago that all attempts at central planning lead to chaos. He was correct then, and he is still correct today.

Yet we still believe in governmental solutions. As I have previously written, if government is omniscient, I am omniscient. And even I don’t believe that to be true. Parents allow school officials, such as me, to make important decisions for their children because there exists the belief that school officials somehow are unbiased and altruistic, and better at guiding children than their own parents. While it is certainly true that most school employees like working with students, they can’t possible have a child’s best interests in mind. That is the realm of parents only.

School officials have jobs, careers and families of their own. They also have biases and beliefs that greatly differ from individual parents. There is nothing wrong with differing views, but parents should not simply hand over their children to the schools and assume the best. We bristle at the idea of our friends, neighbors and family members guiding our parental decisions, yet we readily give school officials, who are nothing more than friends, neighbors and family members, the power to make those very same decisions. The robe of omniscience does not come with school employment or board election. In fact, there is nothing unique and special about school employment.

Remember, it's the entrepreneur who will truck the eggs and milk today so that you can eat tomorrow.

Jim Fedako

"But, who's going to run this thing?"

For many, the assumption is that only government can run a school system. But why is government the assumed solution to the problems that it alone creates?

Most of us don't want government running any operation since we know intuitively, and have seen empirically, that government operations fail to produce efficient results. Simply look at the former Soviet republics or review the operations of any state agency. Yet, many continue to advocate for government in education. Why?

The following is a reponse to a listserve post from a gentleman posing questions regarding who would run the schools if they were privatized. His line of questions are more statements of his belief in a government solution than a true attempt to gain additional knowledge.

John,

Your questions are similar to those posed almost two decades ago by citizens of the former Soviet Bloc as they faced new lives of freedom. When you ask these types off questions, you are not thinking "out of the box." Your questions are central-planning-centric in that you ask questions that are laced with doubts; doubts that lead to the response that the solution can only be realized through government planning. Your weakness is your refusal to believe in the free market that makes the wonders of this world possible, including this listserve.

When the internet exploded a decade ago, were we asking, "But, who is going to run this thing?" Sure, some asked that question simply because they sought government control over all forms of information, others because they feared change. The rest of us marveled at the ingenuity of the entrepreneurs who continue to improve the delivery of information and entertainment. No planning required

When you no longer ask your questions, you will find your answer.

note: Tom was correct in his use of the term "moron." I sit as a moron on a school board since I have no knowledge as to the real solution that will improve education for our future students. That knowledge is not available to me as a member of a government bureaucracy, though it is available to entrepreneurs who seek it. In addition, I cannot calculate whether the decisions I make will satisfy the desires of the consumers. It is the calculation question that destroys centrally-planned endeavors. Books by FA Hayek will explain the knowledge issue while books by Mises will explain the calculation issue. These books can lead to "out of the box" thinking if you are willing to let go of your current biases.

Jim Fedako
Member, Olentangy Board of Education
blog: antipositivist.blogspot.com
Skype: antipositivist

Peirce has my vote

Bill Peirce and I share views on a lot of issues. Though I recognize that Peirce as governor will not solve all of the state's problems in one jump, having him in office will spring Ohio in the right direction.

From Bill Peirce:

I approach all public policies with the vision of a truly free world of the sort that v. Mises described as the ultimate goal. My specific platform will not get us there in one jump, because the existing mass of federal, state, and local regulations is so complex and the people have been so conditioned by statism that they have to learn to be free. I will use every opportunity to cut spending, cut taxes, and decrease government intrusions into personal and business decisions.

Bill Peirce
Libertarian Candidate for Governor

www.peirceforohio.com

Fooled again!

How we are fooled sometimes. PT Barnum spoke the truth when he talked about a fool born every minute, and this appears to be my minute.

You see, I ran for a seat on the Central Committee of the Delaware County Republican Party because I thought that Ken Blackwell was a true small-government candidate. I supported his campaign financially because I believed what he said, although I apparently missed what he truly meant in his speeches and campaign literature.

Read the healthcare plan below and guess whether it's from Blackwell or some lesser socialist. Hint: It's Blackwell's plan.

In addition, Blackwell has transportation and energy plans that sound like they are a blend of Corporatism and Mussolini Fascism. Anytime you combine business sectors and government bureaucracies nothing good can result. I had always believed the conservative wing of the Republican Party understood this, now I realize that I am wrong once again.

The Blackwell campaign shows why FA Hayek, Nobel Laureate in Economics, stated that he could never call himself a conservative. The philosophy of the Right has blended with the Left, and now they're both statist fighting over whose central plan works best.

Spending reductions? Tax cuts? Please, you can't reduce spending and cut taxes when you truly believe that government provides the solutions.

Oh, and by the way, I'm in the market for a new gubernatorial candidate. Let me know if you find one on the horizon.



My Plan relies on five keys to success:

Government Reform: The Blackwell Plan will create a five member appointed Commission to coordinate healthcare policy and expenditures and supervise the numerous state agencies involved in the healthcare industry as well as Ohio's Medicaid Program.

Covering the Uninsured: The Blackwell Plan will create a new program called the "Buckeye Health Connection" which will work to provide health insurance to uninsured Ohioans by matching uninsured individuals with private health insurance coverage and facilitate (not replace) those relationships.

Medicaid Reform: The Blackwell Plan will work to address remaining issues reported by the Ohio Commission to Reform Medicaid; namely the creation of a separate Medicaid agency, the modernization of Medicaid's information systems, the establishment of a consumer-directed health care model for Medicaid clients, adequate funding for a complete audit of the Medicaid program, a more consumer-focused approach to clients in our long-term care programs which would enable them to have more control over the care they receive, and lastly ensuring that manipulation of eligibility for Medicaid not be used as a method of exercising fiscal control over the program.

Pharmacy Management: The Blackwell Plan will propose a statewide drug purchasing pool for all programs administered or financed by state government and will recommend pursuing affiliation with one or more of the existing state consortiums to include states already actively managing their pharmacy expenditures.

Insurance Reform: The Blackwell Plan will immediately increase the age a young adult can remain on a family insurance policy to 29, begin to strengthen health purchasing pools by allowing new forms of consumer-directed health care products, including health savings accounts.

Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946

Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946, Benjamin M. Anderson, available at Mises.org, is a wonderful exposition on government interventionism during that 30-year period. The book captures the litany of policies, laws, regulations, etc., that proved to be folly; an evil folly at that.

As I read about the financial machinations committed by various governments, I couldn't help wonder if those holding political power even recognized that the average American simply wanted to trade goods and services for money in order to purchase desired items. Let's face it, people want to trade, and they will trade despite governmental attempts to stop them - witness the black market in the former Soviet Union.

The farmer raises eggs but needs shoes while the cobbler makes shoes but needs bread, so they can only trade goods and services in an indirect manner; they need money. Or, stated correctly; they need money that will hold its value.

Federal Reserve inflation causes the farmer to fear letting his eggs go for the paper dollar. The reason being that he has no way of knowing the value that the dollar will hold tomorrow when he heads to the market to purchase the shoes he desires. This is most obvious during periods of high inflation and loose money, such as The Great Depression.[1] Had the US simply held to the gold standard and stopped inflating, people would have quickly adjusted to the situation and begun trading once again. The decade-long financial downturn would have ended much earlier, as previous depressions reveal.

Get government out of the financial markets and allow us to trade as we desire. The result will certainly be an improving economy and a brighter future.

I highly recommend Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946.


[1] We are currently in a period of high inflation that is beginning to manifest itself in the real estate market, similar to the technology stock market in the 1990's.

The wage gap the feds will never try to solve

Latest Mises.org post by Jim Fedako

"Here’s an easy way to double your salary: Go to work for the U.S. government." That's right, government employees receive an average compensation twice that of the average private-sector employee. Don't hold your breath for the commission to investigate this wage gap.

No need to fear, he only looks like Che (a slight resemblance)

Mises.org sells a number of t-shirts that have photos and slogans from the founders of the Austrian School of Economics. One prominent founder is Eugen von Boehm-Bawerk, an astute economist and a cool mug-shot. Boehm-Bawerk wrote classic treatises on economics that influenced Ludwig von Mises. I personally recommend Basic Principal of Economic Value.

Oh, yeh ... intellectually speaking, he is as far away from Che as is possible.

For additional reading, try Interventions are always losers.

Regulations, expense, and lost freedom

This Mises.org article explains the results of government interventionism at all levels.

A Wonderful World of Parrillas
by N. Joseph Potts
[Posted on Monday, August 21, 2006]
[Subscribe at email services, tell others, or Digg this story.]


This is a story about a barbecue. In the South Florida back yard of a friend who had invited me over for dinner, I saw a most unusual barbecue, but what I learned about it from its owner informed me about a lot more than barbecues.

It hinted at the incredible power of freedom — the freedom of people to trade with each other, over distances and across borders. A freedom that has always throughout my life and the life of everyone else alive today been throttled, bled, and interfered with by government, for government. If it hadn't been, this would be no story at all. It would be everyday routine.

continue reading ...

Free books to download

Go to Gary North's web site to read excellent books on the Bible and Christian thought. Not only are the books interesting, challenging, and timely, they really are free.

Or, go to Mises.org for a host of free books on Austrian Economics and the free market. You can read, or download and read, all the classics, including Human Action and Man, Economy, and State. Enjoy them all.

Is the district really excellent?

Ohio's state-mandated tests purport to show student abilities relative to state academic standards, the test scores are hence a true measure of student achievement and knowledge. In addition, as an aggregate score, the tests are supposed to show the educational outcomes - product - of Ohio's school districts. At least that's the spin.

As a member of ODE's Grade 4 Writing Content Advisory Committee, I have been involved in the creation of state test items. I know firsthand that the tests do not reveal what they claim to show. When a district gets a high report card score and designation, it doesn't follow that high achievement really occurred. But don't take my word for it; go to the gatekeepers and third-party evaluators for a second opinion.

Olentangy is a state-designated excellent school district, but what does that really mean? According to the latest High Transition Report from the Ohio Board of Regents, 37% of Olentangy graduates attending one of Ohio's public colleges or universities required remedial course work. In addition, ACT - the organization that produces the ACT assessment - provides districts with a College Readiness Report [1] that shows only 36% of Olentangy graduates were prepared for college in all four subjects analyzed (English composition, algebra, social science, and biology).

Both the reports should be reason for pause when celebrating the district's state designation of excellence, especially in light of the district's mission statement and failed AYP status. These report should also be reason to pressure the board and administration for better performance. Tax dollars and student futures are on the line.

Footnote
[1] ACT does not make this report available on its web site, but you can request a copy of the original from the district.

Not meeting AYP. Significant?

Absolutely. When a district has adopted the mission to facilitate maximum learning for every child, every group of students had better perform at least above the state minimum academic standards. Keep in mind that districts are not held to the 75% pass rate for AYP calculations; the state-created, federally-mandated, AYP standards are actually much lower[1]. And, at least for Olentangy, the district's performance with regard to certain subgroups has been lacking for years.

Before you state that some of these subgroups have a history of low-performance and the Olentangy district performed as expected, download the data from ODE and see for yourself how many districts with much less resources saw subgroup scores much higher than those attained by Olentangy. The issue is not with the subgroup, the issue is the failure to satisfy the heart of the mission statement.

Missing AYP in 2006 should not shock anyone. Sadden? Yes. Shock? No.

Funny how missing AYP never made the district's self-congratulatory dispatch regarding results from the latest state report card. Swept under the rug I suppose ...


footnotes:

[1] In school year '07-'08, the AYP threshold will ratchet up once more. This means the AYP standard will increase above the current standard Olentangy failed to meet.

Improved state report card scores: What do they mean?

I like to say that my swimming times would have won Olympic Gold, if only I swam in 1952. Just as times in swimming have improved each year, scores on state-mandated tests have also been improving over time. The question one has to ask when reviewing district scores: Were the tax dollars spent by your district worth the improvement when even the average district is improving at a significant rate? Based on simple probability, half of the district certainly implemented programs of little merit. So, average improvement does not necessarily show improved programs or wisely-spent tax dollars. Average improvements may simply be a reflection of what happens naturally over time; result improve.

Coming soon

I didn't buy my property to enhance your property value. An essay on home ownership, property rights, and supposed externalities.

Also coming soon

An Austrian School of Economics response to Education and Capitalism: How Overcoming Our Fear of Markets and Economics Can Improve American Schools, Herbert Walberg and Joseph Bast, editors, 2005 Hoover Institution Press.

My response to a great article from George Reisman

George Reisman posted a great article on Mises.org. In Mining for the Next Million Years, Reisman addresses the fallacy of a world running out of energy and minerals.

My response:

Great article. One point that is sometimes missed is that capital is required to access those minerals. Even the minerals that coat my hand when planting trees are not easily extractable. Go farther underground or deeper into the oceans and the need for capital goods to extract minerals becomes obvious. The real problem is that though we fear that we are running out of minerals, such as oil, we look to government to tax profits and capital from investments in mineral-producing sectors. A pathetic response to the problem, but the only one than can make it so that we live the paraphrased quote from O'Neill, "it is horrible to be dying of cold with oil so near."

A great weekly news magazine

Read World magazine for a Christian perspective on the news. Every media source has its own bias, so chose the bias that fits with your views. And since there are no "R" rated photos or stories, you don't have to be embarrassed leaving a copy around for kids and guests to review. The magazine contains nothing other than the national and world news reported from a Christian perspective. Refreshing, indeed.

The Freedom to Reject the Best

The Freedom to Reject the Best
by Jim Fedako
[Posted on Tuesday, August 08, 2006]

Digg it!

A new study suggests that private schools are not inherently better than public schools. Surprised? Enough people were such that the study, funded by the US Department of Education, has created a stir in the education arena, as well as in the national news. But I want to argue that the results are meaningless, and for reasons not having to do with the methodology employed in the study.

The authors of Comparing Private Schools and Public Schools Using Hierarchical Linear Modeling analyzed math and reading scores of nearly 7,000 public schools and more than 500 private schools on the 2003 National Assessment of Educational Progress at the fourth and eighth grades. NAEP was the chosen assessment tool since it is considered to be the national achievement test and is used to assess student academic performance against national standards.

Though the title sounds impressive, the findings simply suggest a conclusion. Nothing has really been proven and no new truths exposed. I could begin by questioning the whole concept of empirical studies that suggest this or suggest that. I could ask, "What truths have been brought to light by any study that is couched in such a vague qualifier?" I could attack all the assumptions that went into the model and then list those that did not. Had I gone that route, I hopefully would have raised enough doubt in the reader that the study would be discarded as worthless.

But the real error here is more philosophical than empirical. Studies such as these simply show that a deeper ill exists, a malaise caused by government interventionism.

Consider Consumer Reports

The popular magazine reviews consumer goods based on a proprietary set of standards. They test, analyze, test, analyze, etc., until they are satisfied as to the quality of the products under review. CR then assigns individual product ratings and notes one product as a best buy. Though most Americans accept CR's results as being of excellent quality, the noted best buy is not usually the market best-seller. Yes, I will occasionally look at CR prior to purchasing a good, but I almost never buy the best buy. I agree that the CR results are scientifically valid based on their standards, but that doesn't mean I am in the market for the scientifically valid, CR best-buy product.

Though it may only last six months, I want the new hairdryer complete with the latest features, bathed in the hottest colors. That's my choice. My preference rank for features and colors is above that for durability. Who is to say that I am wrong? In a free market, anyone. But, they cannot force me to act otherwise.

What would happen if Consumer Reports had legislative and regulatory authority akin to government? We would all be forced to purchase the best buy and we would all spend our lives unsatisfied. On the surface it sounds great to have a leading research organization controlling the market for "the general good and welfare," but consider your own actions vis-à-vis CR's best buys.

The same holds for a government-run education system. Even if the federal government mandated a set of standards that were scientifically valid according to the DOE national outcomes, the set of standards and outcomes would not be the standards and outcomes most Americans would choose as acting individuals.

Scientific research can create goods that are bigger, smaller, faster, slower, etc. But just because research can create the good doesn't mean that there is a market for it. No one wants a hypodermic needle that is rougher, wider, longer, etc. The superlatives associated with improvements and innovations from scientific research are not always desired by consumers.

In education, the best that DOE could be is a truly benevolent authority. It could gather the nation's greatest thinkers to divine standards of education outcomes and employ the top psychometricians, statisticians, etc., to create assessments that are mapped to those standards. At its hypothetical best, this brain-trust would simply function as CR does in the products market. The assessments would be scientifically valid and could rank achievement and note the educational best buy — based on the arbitrary set of DOE standards. But parents and students, as well as community members, teachers, and radicals, etc., would be unsatisfied; just as the consumer would be unsatisfied having to always purchase the CR best buy.

So, what's the solution? Simply, let the market reign. [1] A free market system of education would create for those who seek different options a system that encourages the implementation of the spectrum of educational choices — best viewed as experiments, just as each new product, service, store, etc., is a market experiment. The successful experiments become the market standard that new entrepreneurs seek to surpass.

These choices would involve all aspects of education — including pedagogies, methodologies, etc. — which would afford all parents the ability to satisfy their desires for their children's education. Each idea would be evaluated by the parent, the education consumer, ex ante over the summer according to individual preferences and ultimate goals, and once again ex post at the end of each school year.

Parents would choose their standard of results and they would seek out entrepreneurs who would then hire teachers and administrators that could deliver the parents' vision. The entrepreneurs would purchase products to implement the vision and the science community would be engaged to improve old products and innovate new ones — all due to the market pressures of the freely acting parents, the consumers. This is the proper direction of improvements and innovations, from the consumer back to the scientist, engineer, researcher, etc.

The standards set by the parent would drive the research that would deliver the product, not the reverse. [2] Currently we have a system where the standards are set by a myriad of governments and agencies — standards no one wants or agrees with — and we have a spectrum of research whose real goal is to drive the standards and grab the tax dollars.

There are scientific winners in the field of the delivery of quality, basic education, such as Direct Instructions, etc., but we know a significant number of parents, teachers, and administrators don't give a hoot about reading, writing, and arithmetic. They want affective learning — the feel-good, Progressive educationist-babble currently in favor — and long for the ideal child, the product of the latest version of Trotsky's proletarian paradise .

I disagree with them, but their solutions may actually end up being correct, or they will fail. Only a market can show whether a solution is right or wrong.

That said, we have to keep in mind that Consumer Reports creates valid ratings that we mostly ignore, and we are all better off because we continue to make our own choices. Our individual wants drive improvements and innovations to provide for our greater satisfaction. Why should education be any different?


--------------------------------------------------------------------------------

Jim Fedako, a former professional cyclist who lives in Lewis Center, OH, is a member of the Olentangy Local School District and maintains a blog: Anti-Positivist. Send him mail. Comment on the blog.

Notes

[1] The free market is the only economic system where we can disagree yet live peacefully. My wife likes Coke while I prefer Pepsi. In fact, I'd rather drink a glass of baking soda than a glass of Coke (OK, a little hyperbole for effect). Due to the free market in soft drinks, my wife and I can live happily ever after. Under interventionism, or plain socialism, the fight becomes which bland flavor will be served by the scowling apparachik wearing a faded Babushka. Choose freedom every time.

[2] Certainly a scientist could act as an entrepreneur prospector and create a product even though no current desire exists. But if they fail to meet future needs, they will suffer financial loses. The current system does not discipline the scientist since government purchases the product whether the education consumer wants it or not.

The market strikes again

Latest Mise.org blog post:
http://blog.mises.org/archives/005434.asp

Digg it!

Once again the capitalists, entrepreneurs, petty-bourgeois, and associated travelers exploited those in need of goods; they ripped me off by selling school supplies at an outrageous price. These profiteers recognized the increased demand for education wares as school fast approaches so they acted just as the interventionist predicted; they lowered priced, outrageously. Oh, well, I guess that means that they actually acted opposite of what was predicted.

Regardless, they still are evil, aren't they? I just purchased a pack of 60 pencils for less than $1.50. Of course, these criminals simply used this price as a tactic to get me into their stores where they forced 10-cent note pads, cheap binders, etc., into my hands. Yes, the saving continues.

If you happen to see your state Attorney General, let him know of the evils that lurk in a free market system - it happens every year around this time. I'm certain he'll be outraged and put a stop to this nonsense.

The Green(back) Thumbs of Welfare

Some of us are taxpayers while others are tax-recipients. Ludwig von Mises long ago describe the real class structure of modern society: Two classes exist, those who pay the taxes and those who receive them. This link takes you to some of the biggest tax-recipients of Delaware County - and they are not the unemployed hucksters we normally read about.

Imagine getting close to $100,000 per year from the federal government, almost $1 million over the last ten years. Not a bad way to make a living. We keep paying and they keep cashing. Some of these farmer have such a tough life.

Go to the Environmental Working Group's Farm Subsidy Database to learn more ...

Charter schools and fixed costs

From a pure economic standpoint, if you can't reduce fixed costs after the reduction of a student, that student did not contribute to fixed costs.

The term fixed cost can be used to describe short-term obligations (e.g. salaries, leases, etc.) and long-term capital expenses (e.g. bond repayments, etc.). Since a district's general fund does not include the capital costs associated with a building, and because the charter funding debate is always centered on school district's general fund and operating expenses, I will only focus on short-term obligations.

A school board must approve the district's annual appropriation before the start of the fiscal year (beginning July 1). The initial appropriation can be a temporary measure, with all districts having to approve a permanent appropriation measure by the 1st of October. Even though the permanent appropriation measure can be modified throughout the school year, the initial appropriation measure reflects the likely general fund expenditures for the school year.

Each district in Ohio bases its budget on projected student enrollment (ADM). The process to estimate actual enrollment is difficult and subject to error. If a district miscalculates its ADM, it usually cannot make midyear corrections since districts typically don't hire additional teachers or RIF excess teachers during the current school year.[1] Districts can correct enrollment projection errors when approving the subsequent year's budget, but once set, a budget and its associated contracts create short-term fixed costs for the current school year.

What does the opening sentence mean in light of what we have just discussed? It's simple, there are fixed costs based on the current budget, but those costs are short-term and may not even be associated with the student who transfers to a charter school.

Example: Assume an elementary has 600 students and a child moves into the district after the budget was approved and then subsequently transfers to a charter school. In this instance, here is no way to reduce fixed costs since the current budget has already been set. Though costs cannot be reduced, state basic aid flows out of the district to the charter along with the child. [2] To understand the impact of this transfer, one has to go back in time to the point where that child entered the school. Upon enrollment, overhead costs were already fixed so the school did not incur additional fixed costs due to that child. Therefore, at the margin, no fixed cost can be attributed to that child, whether on the way in or way out of the school.

Fixed costs can be attributed to the student whose enrollment brings about a new section, school, etc. If a district loses enough students that it can reduce staff or close an elementary, the fixed costs of associated with the section or school can be wiped from the books.

Suppose a student caused the need for a new third grade section, the marginal fixed cost associated with the child are the costs of operating an additional section; new teacher contract, etc. Subsequent third grade students result in no additional fixed costs and only minimal operating costs since the section is already available with empty seats. If the subsequent students transfer to a charter school, no fixed costs can be reduced since no additional fixed costs were incurred due to their enrollment - the operating costs automatically disappear. When the child that caused the opening of the new section transfers, the fixed costs associated with the child can be wiped from the books since the section, teaching position, etc., are no longer needed.

In Ohio, when a district opens its doors to more students than planned, it sees a revenue gain. The district's operating costs were fixed by the budget, so each new student provides approximately $5,400 in additional state funding aid while only creating slightly more operating costs; for water, paper, etc. Low estimates create a financial bonus.

High estimates, conversely, create financial distress. In such situation, costs were fixed by the budget yet the district loses approximately $5,400 for each student that doesn't arrive as planned.

These hardships are not the result of charter schools; they are purely the result of poor planning by the district. Student populations change over time as students move into and out of districts, change to and from private schools, and choose or return from home schooling. None of these other movements of students are criticized like charter school enrollment, but there is no real difference between them; all cause an increase or decrease of $5,400 for each student over or under enrollment projections.

In fact, some of these movements are cheered. Districts encourage their students to enroll in colleges and universities through post-secondary enrollment options (PSEO), as well as encourage students to attend alternative schools such as the Columbus Zoo's Zoo School. Each of these activities cause state funds to leave the district, yet there are few critics of such school options.

Part of the confusion comes from the presentation of state basic aid on the Ohio Department of Educations SF3 form. The forms leaves the impression that the state funds on a per student basis at the state share percentage [3]. In addition, districts also believe that fixed overhead costs are apportioned out to students equally. As shown above, these are absolutely not the case.

The confusion is also due to districts not understanding the effects of changes over time. In the subsequent year after an outflow to charters or other situations, districts can reduce administration and staff in order to recoup most of the fixed costs. That said, some costs, such as the need for a board of education, superintendent, treasurer, and at least one teacher, educational service personnel, etc., are truly fixed but are minimal compared to property tax revenue being generated locally.

Note:

[1] District's approve teacher contracts that provide teachers with an implied right to work. My district's negotiated agreement spells out the specifics by which the district may apply reduction in force (RIF) to terminate a teaching contract. The agreement states that the district cannot reduce staff midyear.

[2] Keep in mind that this analysis deals mainly with the expense side of the charter issue. As has been shown before, charter schools do not reduce local revenue. The only funding that leaves the district with the student who transfers to a charter school is the approximately $5,400 that the state earmarked for that student. The district received an additional $5,400 when the child entered the district and "lost" the same $5,400 when the child transferred to the charter school. The net result is a wash in revenue due to the child. No money was actually lost.

[3] The SF3 includes a state share percentage figure that many assume is the percentage by which the state funds the marginal student. This is not the case. After the charge-off - 23 mills times recognized valuation - has been met, the state funds each marginal student at the full basic aid amount, approximately $5,400.

Interventions are always losers.

Mises.org blog post
http://blog.mises.org/archives/005277.asp


One truism has never been successfully challenged: Government interventions lead to a less efficient, less well-ordered society.

In his important book, Basic Principles of Economic Value, Eugen von Böhm-Bawerk develops, among other important concepts, his basic law of prices and includes a footnote that is both intriguing and worthy of exploration.

In the narrative associated with the footnote (p. 119), Böhm-Bawerk develops his law of prices (pp.107-129) by using the now-standard chart of subjective values of a group of horse buyers and sellers. Chart 1 (reproduced below), shows that five horses will be bought and sold at a market price somewhere between $210 and $215.

Notice that in the market range of $210 to $215, not all horses are sold since some sellers value their horse more than the established market price (sellers 6, 7, and 8). In the footnote, Böhm-Bawerk reorders the values so that the sellers’ valuations are in descending order similar to the buyers’ set of values (chart 2 below). He then notes that if the buyers and sellers sought out each other in this manner, all available horses would have been sold. This intriguing situation is worthy of further exploration since it is always important to investigate the possibilities of a government helping-hand with regard to the market.

A question arises: If government intervened to coercively pair buyers with sellers in the manner that the chart in the footnote details (chart 2 below) and forced exchanges based solely on the pair at hand’s valuations (e.g. Buyer 1 and Seller 8, Buyer 2 and Seller 7, etc.), ignoring an aggregate market price, would the society of horse buyers and sellers be better off?

First, we have to look at how value is increased through voluntary exchange and then apply that knowledge to the intervention.

Value has a subjective magnitude. Individuals participate in voluntary exchanges if and only if they expect ex ante an increase in subjective value ex post due to the exchange.

Based on the market established in chart 1, Buyer 1 will exchange with Seller 1 at some price between $100 and $300. Regardless of the price, an increase of $200 is recorded to subjective valuations of this two-person society since the buyer values the horse $200 more than the seller; while the buyer and seller simply split the cash based on the agreed upon price.

The pre-exchange valuations show the buyer holding $300 in cash with the seller holding a $100 horse. Should the price have been $200 for the exchange, the buyer now has a $300 horse and $100 in cash while the seller has $200 in cash. This shows a $200 increase in subjective valuation.

Any other price for the horse simply moves cash from one holder’s account to the other; buyer's to seller's, or visa versa. The money price has no effect on the increase in the subjective valuation to the buyer over the seller of the exchanged horse. The money price only affects the decision to exchange or hold, money prices do not change valuations subjective to the individual actors.

The aggregate valuation increase for the larger society as detailed in chart 1 is calculated by summing the valuations of the more-capable buyers – those able to purchase a horse on the market – and subtracting from that total the summed valuations of the associated sellers. In the example, the aggregate increase due to the exchanges is $570.

What would be the aggregate increase to society due to a government intervention that coercively paired buyers with sellers?

Using chart 2, sum the valuations of capable buyers and subtract the sum of the valuations of the associated sellers. In this instance, there are eight buyers and sellers. The result, an increase of $435, shows that the coerced exchange reduced the aggregate subjective valuation gain.

More horses were sold but less value was created. This intervention, like all government interventions, is a net loser.

Moreover, and more importantly, the losses due to the coerced exchanges are not found only in the hypothetical market created by Böhm-Bawerk, the loss of subjective valuation occurs regardless of the make-up of the market. In addition, this can be extended to show that government cannot tax valuation "left on the table" [1] and increase the aggregate subjective valuation since all government would be doing is reducing cash-holdings through taxation. The subjective valuations remain what they are regardless of the exchange price.

Additionally, if government would then use the cash generated through taxation to subsidize exchanges that would not have occurred naturally in the market, the aggregate net valuation would suffer a loss – just as it did under a coerced exchange – and the cash-holdings would be reduced by the inefficiencies of government.

Based on a superficial analysis, coerced exchanges appear to lead to greater satisfaction. Aren’t more horses traded? Isn’t more cash passed between buyer and seller? The answer is yes to both. However, the unseen is as important as the seen. On the surface, government appears to be a market catalyst for good, while the hidden results proves that interventions lead to a loss of value and cash-holdings.

Governments opt for the seen as their continued power is based on trumpeting their interventions of the obvious; governments then blame the final results, lost values and cash-holdings, on someone or something else altogether.

Yet, this is exactly what government does when it alters the normal actions of individuals through taxation or other coercive forces, such as subsidies, etc. Nothing good results simply because nothing good can result from coerced changes to the free market.

Footnote:

[1] Valuation “left on the table” is value external to the exchange, viz. the subjective value Buyer 1 assigns to the horse, $300, that is that is greater that the market price, between $210 and $215 in this instance. Some suggest that government should levy a tax of either $90 or $85 respectively so that the value the buyer attributed to the horse is paid in a combination of market price and taxation. The belief is that this combination would capture all value generated by the exchange. As noted above, government simply decreases the aggregate valuation and cash-holdings of society through such interventions.



Jim Fedako [send him mail], a former professional cyclist who lives in Lewis Center, OH, is a member of the Olentangy Local School District and maintains a blog: Anti-Positivist.


Appendix

Chart 1

Chart 2

note: refer to Mises.org blog posting for chart 2.



fedako

Quality is a Market Notion

Mises.org article:http://mises.org/story/2090
Quality is a Market Notion
by Jim Fedako


For generations, products have advertised themselves as "new and improved." We are too quick to dismiss this phrase as a promotional boilerplate. The market really does generate unrelenting improvements in our living standards. Meanwhile, the public sector is forever promising to improve its services and products but every attempt creates only conflict and eventual stalemate.

For example: the proposed solution to the ills of public education is for government to raise the quality of teachers by increasing salaries and certification requirements. The belief is that a better workforce will lead to better educational outcomes and an improved economy.

Of course the adjective better has no agreed upon definition. Every pressure group and political faction has its own definition of better. Mostly these disparate definitions contradict each other. Regardless, the call for better continues to grow louder each election cycle.

There are perceived ills in the free market too — not ills in the same sense as discussed above, but ills in that all consumers have wants that are unmet. The argument for better can be applied to any sector of the economy. Better factors of production are always sought since acting man desires improvements in consumer goods; improvements that are reflected in increased selection and quality, as well as lower price.

In this case, the adjectives better, improved, and increased can go undefined since they are subjective value judgments of each individual consumer. No one needs to define them in literal terms; the actions of consumers define those terms as ends that are either satisfied or unsatisfied. More importantly, acting man does not need government bureaucrats or commissions to codify such terms for quality. The entrepreneur knows he matched the market definitions of better, improved, and increased simply by looking at his profit-and-loss statement at the end of each accounting cycle.

That better factors are not simply added to each and every recipe — the directions for producing desired goods — is explained in one simple word: scarcity. Scarce factors have to be correctly employed in the production of the most sought-after ends. Any other application leads to accounting losses and financial ruin for the entrepreneur.

Entrepreneurs have more solutions to the unmet wants of man than capital goods. Capital goods are required in the creations of factors of production, which are themselves required in the production of consumer goods. Using resources to produce goods other than those most wanted leads to economic losses, as does using goods inefficiently to produce most-wanted goods. Consumers buying and abstaining from buying along with double entry bookkeeping provide guidance for the allocation of factors of production.

The socialist utopian belief that the burden of scarcity can be lifted with the correct utilization of current capital and factors of production is still prevalent. The line of thought goes that once the altruistic and omniscient bureaucrat grabs the reigns of the economy and guides the factors to their correct application, scarcity will fade away and the Land of Cockaigne will appear on the horizon.

But this is not reality. Scarcity will always be with us as long as man's desires exceed his ability to satisfy them. Of course, once scarcity is lifted, once all desires are met, society will meet the same fate as the ants in an Uncle Milton's Ant Farm: it will quickly die off.

At any given point in time, each factor is limited. Successful entrepreneurs recognize this and direct scarce resources to the most pressing needs. Government, on the other hand, recognizes no concept of scarcity. It only sees one side of the equation, or only one result of its actions. Government functions counter to Hazlitt's admonition to see the unseen; to look for secondary effects of any proposed action.

It's important to employ resources and factors where they will have the greatest effect. The successful entrepreneur would not use a high-quality diamond in a simple industrial process when a low-quality one would work fine. A CEO would not place his or her CFO in the company cafeteria to run the register simply because a $10 cash-versus-sales shortfall was being reported on a daily basis. To employ a highly skilled and hence scarce resource to chase the odd $10 would be wasteful and inefficient.

Human qualities are indeed scarce resources. No one would suggest that Joe Paterno would be most efficiently employed as a high school junior varsity coach. Would Joe Pa be effective? Of course he would. Would it be the best use of such a quality resource? Of course not. Many less experienced coaches could achieve the same result, though those same coaches could not generate Joe Pa's lifetime college win record.

The same goes with other scarce resources. Would Mises have generated the greatest bang for the buck teaching eighth grade economics? Would the resource known as Bill Gates be most efficiently employed as a ninth grade business teacher? How about Einstein as an AP physics instructor? It depends on who you ask.

The socialist utopians truly believe that a Mises, a Gates, or an Einstein would be most efficiently employed in the classroom. They have no concept of scarcity of human qualities and have adopted Trotsky's vision of all men rising to the height of Goethe and beyond. A utopian's fantasies do not allow him to see the world as it is. His epistemology is invalid so his beliefs and conclusions are errant.

Mises said that only a handful of any generation has the abilities to advance economic knowledge, and indeed he was correct. But to coerce the best and brightest to become primary and secondary teachers is to rob future generations of essential knowledge. The same can be said of the use of tax dollars to guide such geniuses into the primary and secondary classrooms by raising the incomes of teachers above their marginal product.

The unhampered free market correctly allocates resources to their best use. Interventionism changes the allocation so that resources are applied to uses that are not beneficial to a society. Government loves to create roadblocks to entry into fields of choice.

Raising teacher certification standards above that required by the desires of man simply creates shortages where none should exist. Attracting the best and brightest with too-high salaries — salaries above their marginal product — or by creating shortages (real or perceived) succeeds only in raising the cost of education; it does nothing to solve the ills of a government-run education system.
Because of this, education is best left in the hands of the free market. Under a free market, the allocation of scarce human qualities and knowledge will be matched to the desires and wants of man. Public school math teachers, gym teachers, librarians, etc., would be paid exactly what they produce; no more, no less.

Should the desire for knowledge garnered in a ninth grade business class exceed that of the desire for faster and cheaper personal computers, Gates would find his most remunerative employment in the classroom. Otherwise, keep the Miseses, Gateses, and Einsteins of the world out of primary and secondary classrooms, and keep government out of education. We will all be better off.