Fished to Death

     Many ocean fisheries are being fished to death.  This
destruction isn't the product of ignorance, or even
shortsightedness, of the fishermen.  They know what they are
doing and do it anyway.  The over fishing makes perfect sense
under the rules that prevail.

     The fishers earn more income by catching more fish now. 
If some fishers limit their catch, others will catch more.  The
result is that income is shifted from those who limit fishing to
those who don't.  Those who limit fishing do nothing to increase
fish for future catches.  Thus, each fisher is better off catching
as many fish as possible, as soon as possible.

     The only way to preserve the fish is to change the rules
of the game.  If someone owns and controls the fish, he will
have the incentive to limit fishing now in order to catch more
fish later.

     Private owners gain by preserving resources for future
production.  That which is "owned" by everyone is in reality
owned by no one.  Each tries to grab a larger share before the
resource is gone.  The US publicly "owned" buffalo heard was
hunted to near extinction.  Private ownership of some of the
remnant saved the buffalo.

     This column is about something far more important than
preserving fish and buffalo.  It is about preserving all of the
resources, natural and man made, upon which our survival
depends.

     The productivity boom of the industrial revolution sprung
from secure private ownership.  Entrepreneurs and investors
gained by preserving and enhancing the productive resources. 
Consumers reaped the benefits of increased productivity.

     Imagine a world where everything is owned by everyone. 
It would be like the ocean fisheries.  Most people would seek to
grab as much as they could before someone else grabbed it. 
Most, even all, might realize that they were destroying their
future.

     Each would be powerless to protect the future.  Thus,
they might as well eat, drink and be merry while they still could. 
Starving and suffering now wouldn't prevent starving and
suffering in the future.  The only hope would be to alter the
rules and establish private ownership that rewarded conservation
and productivity.

     Brick by brick we are dismantling the private ownership
that is the foundation of our prosperity.  In name at least, private
ownership is hanging on.  Ownership is the ability to control the
thing owned.  How much control do businesses and other owners
now have over what they supposedly own?

     Endless laws and regulations force "owners" to allow
others to gain benefits from the property the so-called owners
"own."  The "owners" discover that attempts to preserve their
property and its productivity are useless.  The benefits go to
someone else.  The "owner" is better off consuming his property
before someone else does.  The resources essential to future
production are consumed, like the fish in the oceans.

     Even worse, government seizes much wealth and tosses it
into the public ownership bowl.  It is up for grabs.  This grab
bowl contained only about 6 percent of what was produced in
1900.  The grab bowl now sucks up 40 percent or so of what we
produce.

     Everyone might as well grab as much as they can.  If
they don't someone else will grab it.  It won't be saved to
produce for the future.  Again, like the fish in the oceans, it will
be gone.

     Expecting individuals to refrain from dipping into the
grab bowl is unrealistic.  So long as the grab bowl is there, it
makes perfect sense to grab as much as you can.

     Government's solution is to raise taxes and increase
borrowing to fill the grab bowl.  This isn't a solution. 
Eventually government will toss everything into the grab bowl. 
There will be nothing left to use in production to replenish the
grab bowl.  The only way to avoid the disastrous end  is to
change the rules.  We must end the grab bowl and return to
secure private ownership of our resources.  Otherwise, we will
fish ourselves to death.

aldmccallum@gmail.com
                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2013
Albert D. McCallum

How Good Can Charter Schools Be?

     Charter schools are still controversial.  Some supposedly
fail to provide quality education while others do very well.  The
methods used to evaluate charter schools, and all other schools,
are suspect.  The evaluations consist mainly of bureaucrats
giving tests and calculating scores.

     Suppose we used this method to evaluate grocery stores. 
The stores that received low scores would be forced to close
their doors.  Stores would then focus on how to get good test
scores from bureaucrats, rather than focusing on serving and
pleasing customers.  Under such a  system we should expect that
good stores would often be forced to close while many mediocre
and poor ones remained open for business.

     We use a much better system to evaluate grocery stores
and all other free market businesses.  The customers served by
the grocery stores evaluate the stores.  Each customer either
gives a thumbs up by continuing to buy from the store, or gives
a thumbs down by spending his money elsewhere.

     Stores that poorly serve their customers fail and go out of
business.  Those that well serve their customers thrive and
expand.  A few stores which are great at serving and pleasing
customers expand and serve across the nation and even around
the world.

     Some people object to large businesses.  When there is
freedom in the marketplace the only way a business can grow
large is by pleasing many customers.  Government regulated and
dominated businesses expand by pleasing politicians and
bureaucrats who can never know enough to tell if the business is
well serving its customers.  The politicians and bureaucrats will
always be much more concerned about how much a business
serves them, than about how much it serves its customers.

     I don't doubt that some charter schools serve their
customers better than others do.  It is unbelievable that some
wouldn't be better than others.  This doesn't make charter
schools unique.  Some district schools do a much better job than
others.

     Every kind of enterprise known has its failures.  Many
grocery stores, barber shops, repair shops, bus companies, auto
makers, etc. have failed to well serve their customers.  With free
competition in the marketplace, customers give failures a thumbs
down and vote them off the island.

     One of the biggest problems in achieving quality
education is that, until recently, customers had almost no
opportunities to vote failing government schools off the island. 
The more the schools failed, the more money government tossed
to them   This sounds a lot like rewarding failure.  When we
preserve and reward failure, we should expect more failure.

     Improving charter schools, and all other schools, requires
less government control, not more.  Charter schools have been so
limited that most have waiting lists.  Why would a school work
and spend to improve service when it can fill all of its seats
without improving?  What kind of service would we get from
grocery stores if the stores already had more customers than they
could serve?

     There should be no limit on the number or size of charter
schools, including cyber schools.  Anyone, not just a few
colleges, should be allowed to start a charter school.  In other
words charter schools shouldn't need to have charters.  Unless
charters are available to all, charters are government granted
privileges that limit competition.  Limiting competition limits the
motivation to provide better service.

     Adam Smith published "An Inquiry Into the Nature and 
Causes of the Wealth of Nations" in 1776.  In it he documented
how the nation whose government interferes least with the
economy produces the most wealth.

     One of the biggest parts of a nation's wealth is the
knowledge and skills of its citizens.  A corollary to Smith's
conclusion is, the nation whose government interferes least with
education will produce the greatest wealth of knowledge and
skills.  Charter schools will improve education only if they result
in less government control of education.

aldmccallum@gmail.com
                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2013
Albert D. McCallum

Who Owns the Children?

     MSNBC's Melissa Harris-Perry kicked a hornet's nest
with the following comments:
"We have never invested as much in public education as we
should have, because we always had kind of a private notion of
children.  Your kid is yours, and totally your responsibility.  We
haven't had a very collective notion of 'These are our children.'  
So part of it is, we have to break through our kind of private
idea that kids belong to their parents, or kids belong to their
families, and recognize that kids belong to whole communities.
Once it's everybody's responsibility, and not just the household's,
then we start making better investments."

     I only have space to cover one of the absurdities included
in that statement.  Perhaps Harris-Perry recently crawled out
from under a rock.  Maybe she spent the last 150 years snoozing
with Rip van Winkle.  Apparently she missed out on the trend of
frowning upon owning humans.

     Ownership means control.  To own is to control.  The
person who owns you has the right to control you.  As far back
as John Lock, civilized people recognized that only one form of
owning humans is consistent with liberty and dignity.  That is
self ownership.

     Any free person owns himself.  To be owned by another
would be bondage, sometimes called slavery.  Only under self
ownership are individuals free.  The individual controls himself. 
To achieve liberty each self owned individual must respect the
self ownership of all other individuals.

     In other words, for liberty to prevail everyone must
refrain from aggression against all others.  No one may say to
another peaceful person, "Do it my way, or I will hurt you."  To
live in liberty such threats must be reserved for use only against
those who commit aggression.

     When John Lock stated "All men are created equal" he
made it clear that he meant all men were created with the equal
liberty of self ownership.  The drafters of the Declaration of
Independence relied heavily on the writings of John Lock.  Thus,
it is reasonable to assume that to them "all men are created
equal" also meant that all men were created with the equal
liberty of self ownership.

     Obviously children are incapable of full self control. 
Does this mean that they must be someone's slaves?  Are
children's only options to be owned by their parents, or owned
by the community?

     Under liberty no one can own the children.  Parents are
the natural guardians of their children.  It is the parents' duties as
guardians to protect the interests of their children.  When parents
fail, sometimes other adults intervene to provide other guardians
for the children.  Neither the parents nor the replacement
guardians own the children.

     It would be possible to strip guardianship from parents
and grant it to the community.  How would the community
exercise its power of guardianship?

     It is ridiculous to even suggest that the entire community
would participate in the guardianship.  If they did, the results
would be disaster for the children.  The children would be ruled
by the whims of a giant committee.

     In the real world a few individuals would take over. 
Children would still be controlled by a few individuals.  Would
the children be better off being controlled by strangers rather
than by parents?  This question has already been asked and
answered, in a slightly different form.  Are children better off
being raised in an orphanage than by their parents?  The answer
to this question is yes, only if the children have very
incompetent parents.

     Parents understand their children better, and care more
about them, than do the rest of the community.  The community
can assist parents.  The final decisions of guardianship must be
left to the  parents.  To do otherwise is the formula for disaster. 
Subject to guardianship, the children own themselves.  Hopefully
Ms. Harris-Perry will crawl back under her rock, take her advice
with her, and stay there for at least another 150 years.

                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2013
Albert D. McCallum

Too Much Education?

 

     A study found that half of US workers are over qualified
for their jobs.  Should we be concerned about over qualification? 
Is too much training and knowledge possible?

     On the flip side, millions don't have enough training for
jobs that produce much of anything.  We definitely have an
imbalance in training.  Obviously, resources have been
misallocated.

     The misallocation extends well beyond education.  One
reason workers are over trained is we don't have enough savings
to invest in equipment and facilities for the trained workers to
use.

     It is pointless to train research scientists if we don't have
the savings to build research facilities for them.  Investment is
indispensable to production and prosperity.  It is also
indispensable that savings and investment be put to the proper
uses.  We must invest in the right amounts of everything.

     The most productive investments are the most profitable
ones.  Free people guided by free market prices seek out those
profitable, productive investments, while shunning nonproductive
investments.

     Free people guide savings to their most productive uses. 
People make mistakes.  Mistaken investments are costly.  Thus,
free people seek to identify mistaken investments and quickly
liquidate them.

     Why then are we investing in the wrong kinds of
education, and probably investing too much in education?  We
aren't free to invest as we choose.  Government manipulates and
distorts investment.  Student loans and other government
manipulations have created massive educational waste.  The
students, or taxpayers, are stuck with the still unpaid bills for
much of that education.

     We have seen how government manipulation of housing
and housing finance inflated the housing bubble that burst into
disaster.   Government decided it knew best the kind and
quantity of houses we needed.

     Government also decided that families should own homes
rather than rent them.  The irony of this is that we now have the
lowest level of home ownership in decades.  Thank you
government.

     Free people interacting in voluntary cooperation won't
archive perfect investment balance.  Those who demand
perfection can always point out the failures of freedom.  Those
failures don't look so bad when compared to the far greater
failures of investments manipulated by government.

     There is one thing our education system hasn't taught
many people.  That is, don't judge by comparing the results
achieved to a perfect world.  Everything will come up short. 
Only make comparisons to options that are possible.

     Interestingly, usually only the private sector is judged in
comparison to utopia.  Private sector failures are met with claims
we have to much private sector and too little government. 
Government failures are also met with the claim we have to
much private sector and too little government.  Am I the only
one who sees the absurdity in this?

     Government manipulation of investment in education
mirrors government manipulation of housing investment.  It has
kited the cost of education pushing investment into training for
jobs that don't exist.  Part of the reason those jobs don't exist is
government has diverted savings away from building tools and
equipment.  If government backs off from manipulating
investment in education, much of the education establishment
will collapse.  This will have serious economic consequences. 
Like all bubbles, sooner or later the education bubble will burst. 
The sooner the bubble pops, the less the damage.

     The malinvestment in education will be liquidated.  If
government stays out of the way we will build a new structure
for education that will reduce costs and direct our savings to
where they will be most productive.  The new investment
allocation will better allocate savings within education, and
between education and other investments.

     The greatest crimes of government against prosperity are
the miss allocation of investment and the destruction of savings
through tax, borrow and spend.  Only by eliminating this double
whammy can be save prosperity.

aldmccallum@gmail.com
                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2013
Albert D. McCallum

Is it the Green Fairy's Fault?

     Two recent articles about the European Union seemed
unrelated.  Then again, maybe not.  The first was about the EU
parliament considering revisions to the definition of Absinthe,
also known as the "green fairy."  For some on this side of the
puddle, Absinthe may not be a familiar beverage.

     Absinthe is an alcoholic beverage that, traditionally at
least, contained a touch of thujone that is described as a
wormwood plant toxin.  Doesn't that make you thirsty?  The
thujone gives the green fairy its color and its wings.  It
supposedly causes hallucinations that "inspire" poets and writers. 
I know what you are thinking, but, I never touched the stuff.

     After due deliberation the EU parliament decided to punt
and leave the definition alone.  The definition doesn't require
that the green fairy contain any thujone.  What is left of the
green fairy without any fairy?

     Whatever the results, Doesn't the EU have enough bigger
problems to occupy the parliament's time?  Considering what
usually comes out of the EU parliament, fiddling with frivolities
may well be the best use of its time.

     I was ready to ignore the green fairy controversy.  Then
Reuters posted an article reporting some musings of Martin
Schulz, president of the EU parliament whom the reporter
described as a socialist.  Is describing a member of the EU
parliament as a socialist redundant?

     Mr. Schulz offered, "We saved the banks but are running
the risk of losing a generation."  He is probably overly
optimistic in believing that the EU bailout saved the banks for
more than a brief spell.  His other point deserves more serious
consideration.  Young people in various southern European
countries face unemployment rates of 50 percent and above.  In
the US only teenagers face such levels of unemployment.

     Then I read Mr. Schulz's prescription for a cure.  That
was when my mind drifted back to the green fairy.  Perhaps
while considering the hallucinating green fairy Mr. Schulz tested
a few too many bottles.

     I won't repeat all of Mr. Schulz's plan.  The substance of
it was that the EU should spend billions of euros to provide jobs
or welfare for unemployed young people.

     Let's see.  The youth are unemployed because the people
of various European nations are too broke to invest in the
facilities to provide productive jobs for those who want to work. 
The governments are worse than broke.  They wallow in debt
and are at the end of their lines of credit.

     Where will the billions of euros come from?  Oh, I
almost forgot, the EU can print the euros.  Unfortunately the EU
can't print anything to buy with those euros.  More money
without more things to buy isn't much of a solution, except for
those who enjoy the taste of money.

     In the short term the people in countries that squandered
their investment capital on spending binges can't do much to
help themselves.  All they can do is work at low paying jobs,
scrimp and save to replenish the investment that will again allow
workers to be productive.

     The only other option is to attract investment capital from
other countries.  High taxes, regulations and government
spending doesn't create an environment that screams "INVEST
HERE!"  The EU and the European national governments need
to clean up their acts and be responsible.  They can spend their
way into bankruptcy and poverty.  They can't spend their way
out, no matter what the green fairy may have whispered in their
ears.

     Should we in the US care?  The green fairy seems also to
be whispering in the ears of some congress critters.  The US is
plunging toward where the worst of Europe is now.  By letting
Europe serve as our bad example perhaps we could avoid its
fate.  Then Europe's self destruction would not be a total waste.

                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2013
Albert D. McCallum

Which Spending Is Important?

      According to certain politicians in D.C. every nickel
government spends is vitally important.  Cutting any expenditure
will jeopardize the future of the nation and its citizens.  The
politicians claim that even a small cut in the rate of increase in
government spending will bring on disaster.

     The now famous, or infamous, sequester doesn't reduce
government spending by even one cent.  It only reduces the
spending increases that the big spenders claim are vital.  Even
the House Republicans' proposed "drastic" cuts will, by their
own admission, result in government spending increasing by
more than one trillion dollars a year by the end of a decade.

     Let us consider a multiple choice question.  Which of the
following expenditures are vital and untouchable: a) $277,000
for three White House calligraphers: b) $1,500,000 to study why
lesbians are fat (supposedly most of them are): c) $227,000 for
Michigan State University to study how "National Geographic"
depicted animals for 120 years;  d) an undetermined amount for
White House tours?

     According to the politicians and bureaucrats only (d) is
expendable.  The first three march on.  A TV station ran a
feature showing that an invitation crafted with inexpensive
software was indistinguishable from one crafted by the three
pricey White House calligraphers.

     I don't question that a bankrupt nation can't afford to
spend on White House tours.  How can this same nation afford
the first three expenditures?

     There is a simple solution to the White House tour
problem.  Contract with a business to conduct the tours. 
Charge the business for any government costs of the tours.  The
business would charge its customers to recover its cost and earn
a profit.  If the tourists don't consider the tours worth paying for,
then ending the tours is the right thing to do.

     The government is also planning to buy 400,000 tons of
sugar to raise sugar prices and help the sugar industry.  Through
quotas, etc. the government already enables US sugar producers
to sell sugar at twice the price of sugar in the rest of the world. 
Without government protection the US sugar industry would
likely all but vanish.  So what?  We could use the resources,
including labor, to produce something to trade for cheaper sugar.

     How vital is it that the government spends to make
consumers pay more for sugar?  How much sugar is produced in
Canada, Norway, Sweden and other cool climate countries? 
These countries do fine without sugar production.  And, the
consumers pay half as much for sugar as we do.  Also, how
many bananas are grown in the US?

     There is a bit more behind the proposed government
sugar purchase.  The government lent money to the sugar
industry.  Even with the inflated price of sugar, the sugar
producers are having problems paying off the loans.  Thus,
government proposes spending millions of dollars for sugar to
raise prices enough so the sugar produces can repay the
government.

     The phrase that keeps popping into my mind is
"Throwing good money after bad."  This is also a solid example
of how government tries to paper over one mistake with another.

     These few examples aren't even a big start on saving the
nation from bankruptcy.  I didn't do any searching to find them. 
They simply popped up in headlines over the past few weeks. 
Undoubtedly these examples are the tip of the iceberg that
serious research would find.  Some have done that research and
found hundreds of billions of dollars is wasteful and frivolous
spending.

     The problem is that even frivolous expenditures are
someone's income   The people who get the money consider it
important, even if they too believe their work is frivolous. 
These people vote and lobby.  They also circle the wagons and
defend each other's special privileges.  If government can't fire
at least one of three White House calligraphers, How will it ever
screw up the courage to eliminate the billions in ethanol
subsidies and other government boondoggles?

                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2013
Albert D. McCallum

Fools and Their Princes

     An E-mail circulating through cyberspace refers to
Barrack Obama as the Prince of Fools.  The message concluded
that the problem never is the prince of fools.  The problem is the
fools who make him their prince.  The prince is more likely a
clever manipulator than a fool.

     An article covering a poll about government spending
reminded me of the E-mail.  Many polls have found a substantial
majority want government to cut spending.  I haven't taken these
poll results seriously.  I believed that those polled only wanted
to cut spending for other people.

     I had no proof that this was true.  A recent pool reported
by Newsmax confirmed my beliefs.  "Six in 10 adults oppose
scaling back the entitlements for seniors." Also, "Three-quarters
of Americans believe the nation can get its finances in order
without touching the public safety nets. . . ."

     Newsmax also reports "The only other federal spending
that survey respondents ranked higher on their don't-touch list
was education funding."  These are the fools who select our
princes.

     What is the foolishness?  Endless studies have found no
connection between high spending and better education.   Detroit
schools have one of the highest per pupil spending rates in
Michigan.  About 8 percent of Detroit 8th graders are proficient
in reading.  Washington, D.C. spends more per student than most
schools in the US.  The results are a disaster.  The list could go
on.

     One study found statistical support for a claim that
schools that spend the least do the best jobs.  There is a vast
amount of information available supporting the idea that more
spending doesn't get better results.  Only the willfully ignorant
can miss seeing this elephant in the room.  Fools are willingly
deceived by demagogues who prey on the ignorant to achieve
the demagogues' own goals.

     School spending is far from our biggest problem. 
Medicare is the 600-pound gorilla.  Estimates of unfunded cost
for Medicare range from $70 trillion or so to $150 trillion and
beyond.

     If we stay on the present path, in a few years Medicare,
Medicaid, Social Security and interest on debt will cost more
than all federal tax revenue.  There would be nothing left for the
military, education, highways, parks, research, farm subsidies, or
anything else.   The best part would be that the entire regulatory
arm of the federal government would have to close up shop.  
      Newsmax also reported that "Survey participants named
three areas they are willing see trimmed: foreign aid, funding for
the war in Afghanistan, and salaries and benefits for government
workers."  This is a pittance.  It doesn't come close to covering
the present deficit.  In a few years the present deficit will seem
small.

     Only the ignorant believe we can save the nation from
economic collapse and bankruptcy without drastically cutting
entitlement spending, including Medicare.  Even if Medicare is
the most wonderful and beneficial thing ever devised by humans,
it doesn't matter.

     "Senior entitlements" will be cut.  The only questions are,
How? and When?  In the long run it doesn't matter who is
elected.  The cuts will come.

     We might drastically cut spending soon while we still
have a chance to avoid economic collapse and national
bankruptcy.  Or, we can wait for the spending to end when there
is nothing left to spend.  That end will come long before the
close of the 21st century.

     For so long as the fools who choose our princes remain
in their dream world of ignorance and foolishness, their princes
will talk about balancing the budget, while continuing deficit
spending.  The cuts they talk about will always be next year. 
You may have noticed.  Next year never comes.

     With 70 percent of the voters committed to big spending,
What chance do we have?  Unless, and until, millions of voters
wake up to reality, elections don't matter.  Those elections will
change nothing, except the names of the princes.

aldmccallum@gmail.com
                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2013
Albert D. McCallum