Sunday, November 23, 2014

Eliminating Failure for Students or for Government Schools?


Most Americans know in their heart that the American school system is mostly a failure.  It is a failure to the students and the parents, although it might be considered a success for some teachers and administrators that profit from the system.

Education in government schools has been centralized to a great degree over the last few decades, although there are still some differences between states, and even counties.

The latest interesting news in government education comes from Orange County (the Orlando, Florida area), where the school board recently announced that it will eliminate grades that fall below a 50 percent.  The stated reason is to help students pass who instead might give up or drop out of school.

I guess you could say that the county is implementing the principles of “No Child Left Behind”.  If you can’t get the students to be smarter or perform better, then just make it easier to pass.  That is the easiest way to make sure that none of them get left behind, at least in terms of the government school system.

I suppose we should be happy that at least this is happening just in one county and that it isn’t being mandated by the federal government.  But even here, we need to take a look at other government policies and how they encourage some of these local policies.

Centralization and Common Core

If you look at a copy of the U.S. Constitution, you will see nothing in it about educating children.  Based on the 10th Amendment – which states that those powers not specifically granted in the Constitution should be left to the states or the people – the federal government should have zero involvement in education.

As a libertarian, I don’t believe the government should be involved in educating children on any level, but I recognize that if it were left to states and cities – as opposed to Washington DC – we would at least see a little more competition and a little less bureaucracy.

Instead we get things like “No Child Left Behind” and the Common Core curriculum.  Common Core is an absolute disaster.  It is not necessarily easy.  In fact, sometimes it is too difficult for the age level.  And it is often taught in a convoluted way – particularly the math – that even adults can’t understand it.  It was obviously written by a bunch of bureaucrats.

There are also state standards where teachers are essentially forced into teaching to a test.  The problem here is that it is a one-size-fits-all policy.  It is also assuming that the tests were written by people who know what is best for the children.

So in one way, I actually sympathize a little with the school board in Orange County for trying to get rid of grades below a 50.  They have been given garbage materials to teach and garbage tests to give out.  We should not be surprised that this is happening and it will probably happen elsewhere.

In one sense, I like the Common Core only because it shows what a joke the government school system is.  This is not at all a criticism of teachers.  I think most teachers don’t like it at all, and for good reason.  Some of the better teachers are even quitting or retiring early because of it.

We need to let the free market work.  I understand that we aren’t going to get the government out of the education business overnight.  The first step needs to be removing the federal government from education.  With the failure of the Common Core, the federal government may be helping us do that.  It is increasing homeschooling and it is frustrating parents.

We should not let a small number of bureaucrats in Washington DC dictate policies that apply to tens of millions of children.  When that happens, you end up getting new policies such as the one in Orange County.

There is a lot of blame to go around with the failing school system.  The problem is that it shouldn’t be a system.  It certainly shouldn’t be a system run from the top down.  We need more liberty and less government.  Our children need that.

Friday, November 14, 2014

An American No-Fly Zone


When you think of no-fly zones, Iraq may come to mind.  Perhaps you may think of protecting the White House.  But did you know that Ferguson, Missouri had its own no-fly zone?

Back in August, when there were large street protests after police shot and killed 18-year old Michael Brown, the FAA imposed a no-fly zone over Ferguson.  As with so many things the government does, it was done in the name of safety.

But as is the case so often, it actually involves the safety of government officials, even if it is just a matter of protecting their reputation.

Police claimed at the time that shots had been fired at a police helicopter.  While that was unsubstantiated, the police could have just chosen not to fly their helicopters over protesters.

Here is where the big problem comes in.  Commercial airlines were still flying over the area.  The restriction didn’t apply to commercial planes or police.  The FAA restriction was applied to the media.  Audio recordings present evidence that local authorities can confirm that the primary reason for the FAA restriction was to keep away the media filming the protests.

It really makes you wonder what the government doesn’t want you to see.  Regardless of what you think happened with Michael Brown, the militarized police state came out in full force against the protesters there.

Government Authority

Politicians and other government officials generally don’t like to relinquish power.  They don’t like protests and they don’t like coverage of protests.  They don’t want other people to see what is going on.

This FAA no-fly zone that only applied to the media is more proof that government officials seek secrecy and power.  It also shows that they understand that they rely on the consent of the people because they didn’t want public opinion outside of Ferguson going against them.

Imagine if things really got out of control and protesters ended up dead from police shootings.  If the media is flying overhead in helicopters filming everything, then the videos will tell the story.

Government officials and police officers – particularly corrupt and abusive police officers – generally don’t like video cameras.  Government officials always say that if you have nothing to hide, then you shouldn’t fear an invasion of your privacy.  But it seems many government officials have something to hide then.

If the Ferguson police have nothing to hide, why would they want to ban the media from flying overhead?

While police departments have become more militarized, I believe there have always been police officers who are good and bad and in between.  You can read far more stories now about police corruption and wrongdoing because of the internet and cell phones.  These things happened in the past too, but people didn’t have cell phones to record the events.

Despite the NSA and other government agencies using technology against us, I believe that technology is generally on the side of liberty.  The majority of adult Americans have smartphones that can be instantly used as a camera or video camera.  It is the best weapon you can ask for against police abuse and corruption.

Government officials don’t like to be seen in a negative light.  They know they can’t survive without the consent of the people.  This is why they attempted to shut out the media in Ferguson.

This may have been unlawful and unconstitutional, but technology cannot be stopped.  The FAA, or any other government agency, won’t be able to take away everyone’s smartphones.

Tuesday, November 11, 2014

Where are the Hurricane Sandy Funds?


The governor of New Jersey, Chris Christie, recently had a confrontation with a demonstrator when giving a speech.  Christie tends to like these confrontations because it gives him an opportunity to run his mouth and look like a tough guy who is standing his ground.

The protester was James Keady, who is something of a political activist.  And while I’m not here to defend everything he stands for, Keady brings up some interesting points about Christie and his handling of Hurricane Sandy funds.

Keady claims that Christie and his administration have mismanaged funds that were specifically designated to help Hurricane Sandy victims.  Keady says that Christie is sitting on about $800 million of the $1.1 billion that is supposed to help residents that suffered losses from the storm.

While Christie had some choice comments to make about Keady, he didn’t really address the accusations at hand.  Christie has done plenty of self-promotion for his handling of Hurricane Sandy, which includes spending the government funds.

Of course, I am not one to advocate that the government spend more money, if that is in fact the case here.  But it does show another example of a politician who is misleading the public in what he says.

Hurricane Relief

After Hurricane Sandy hit, we immediately heard the cries for government assistance, which included federal government assistance.  Aside from being unconstitutional, sending federal funds to a stricken area is a bad idea.  But it is automatic for some people to instantly demand government help whenever there is a problem.

It is a bit ridiculous that American taxpayers are forced to pay for the cleanup in the northeast because of a hurricane.  The same goes for anywhere in the U.S.  It is a constant game of shifting money around and helping the politically connected.

Communities don’t get cleaned up because of government – particularly the federal government.  It is charity and people voluntarily pitching in to help.  There is also the function of insurance.

I don’t understand why homeowners need to get big checks from the government.  Don’t they have homeowners insurance?  Don’t the businesses have insurance?

Don’t get me wrong here.  If the government is going to waste taxpayer money, I would rather see it go to hurricane victims than going towards the NSA to spy on us or going towards drones that drop bombs on wedding parties in Afghanistan.

But regardless of what you think of using federal funds for disaster relief, we can be certain that there is a lot of fraud and corruption involved.  We saw this with Hurricane Katrina.  There were endless stories about people living rent-free in hotel rooms for long periods of time.  There were stories about people using their Katrina money to go to strip clubs.

I suppose Keady, this political activist, should be careful what he asks for.  If the government tries to spend $800 million, who knows how many more problems and bureaucratic programs will be created that will ultimately harm people.  Sometimes the best we can hope for is that the money is just wasted without doing further damage.

Americans are incredibly charitable.  If almost half of their money wasn’t taken from them at all levels of government, then they would be far more charitable than they already are.  You don’t need to force people to be charitable, or else it then ceases to be charity.

If the politicians are really so caring, they should volunteer their own time and money, instead of forcing others to do so.  But Christie was too busy getting his photo-op hugging Obama.

Thursday, November 6, 2014

Election Analysis and Your Investments

Another election has come and gone.  Republicans gained a lot of seats and will soon have a majority in the Senate.  So what does this mean for you?  It means absolutely nothing.

This election really was a repudiation of Obama and all of the Democrats who have followed him.  These were generally not votes in favor of Republicans.  They were votes against Democrats.

I think the big difference maker was Obamacare.  It is completely tied to the Democrats.  Most legislation has more subtle negative consequences that happen years down the line.  Most legislation will avoid the blame because it is so far in the past or the negative consequences are hard to tie to one thing in particular.

This wasn't so with Obamacare.  The so-called Affordable Care Act has been anything but affordable.  This is right around the time that employers are having their employees enroll for next year's benefits.  Employees see how much their health insurance premiums are rising.  The election couldn't come at a worse time for Democrats.

Obamacare is not completely at fault for the dramatically rising premiums.  It is certainly partially responsible.  But it is getting most of the blame.  Therefore, swing voters came out against the Democrats.

This will have very little effect in the next two years.  We already have gridlock and this will be more of it.  We have a lame duck president who has relatively low ratings right now.  He wasn't going to get anything major done anyway, regardless of who controlled the Senate.  We can expect the status quo for the next two years, assuming there are no new major wars.  It will be big government and bureaucracy as normal, but we won't see any new big initiatives.  We won't see any big increases in spending.  Of course, we won't see any decreases either.

I am a little fearful for 2016.  The two main contenders may consist of a Republican against Hillary Clinton.  Anyone who cares about liberty knows that Hillary Clinton is a complete disaster in every way.  But I also fear if there is a Republican president and a majority in both houses of Congress.  It may mean more war.  It may mean more big government programs, just as we saw early on in the Bush years.

We typically see the smallest increases in government spending when there is a Republican-controlled Congress and a Democrat president.  This was true of Clinton and it is true now with Obama.

In terms of your investments, this election changes nothing, at least for the next two years.  The Federal Reserve, the NSA, and the CIA all have more control over your life than Congress.

The Fed is going to dictate the economy and your investments for the foreseeable future.  The Fed is on hold with its monetary inflation, but I doubt this will last if and when we see stocks tumble or we see GDP shrink.

I am preparing for a possible recession, followed by another round of massive money creation by the Fed.  Who knows what the next round of quantitative easing will bring?

For one final note, as a libertarian, I am encouraged by more states somewhat legalizing marijuana.  We have taken great steps forward in the last few years and I hope it continues.  It gives me great hope that more Americans are discovering liberty as an answer.

Wednesday, November 5, 2014

More Nukes for Your Freedom


The official Cold War may be over for now, but apparently the lust for nuclear weapons is not.  The U.S. government has plans to vastly expand the production of nuclear weapons.

The peace president – that would be Obama – promised to bring peace, close the Guantanamo detention center, and reduce the stockpile of nuclear weapons, among many other things.  Either Obama was lying, or he had a change of heart, or he is not the one pulling the strings.  I suspect the first and third options are the most likely.

The U.S. government is increasing its production of nuclear weapons and plans to spend $355 billion over the next decade.  Considering there are already thousands of nuclear warheads, this seems like a bit overkill.

The Department of Energy oversees the laboratories that produce these nukes.  Most Americans don’t think of the Department of Energy doing this kind of thing.

While this whole story is a bit scary when considering that a few nukes could pretty much end civilization on earth, adding more nukes probably doesn’t make the situation that much more dangerous.  There is always the possibility that something could go very wrong, but the U.S. government already has plenty of nuclear warheads to blow up the world.

When there are hundreds of billions of dollars involved, we should not be surprised by these events.  We can be certain that there is plenty of influence being bought at the Energy Department.

There was an accident earlier this year involving nuclear weapons waste, which exposed several workers to radiation.  So the Energy Department needs to be proactive in making sure that the budget keeps increasing and isn’t cut due to a little bad publicity.

Obama – The Rubber Stamp

While many Obama critics will say that he is a liar, I think there is more to it than that.  He may or may not have run for president with good intentions.  I really don’t know that.

But one thing I’m sure Obama has learned as president is that the president doesn’t actually have that much power.  It is hard for most people to fathom this concept, but the president really is just a figurehead in a lot of ways.

The president has some power, but it has to be exercised within a narrow window.  This window usually involves the growth of government, or at least the maintenance of the bureaucratic system.

So while Obama is certainly responsible for expanding nuclear production, it was probably not his initial decision to do so.  He is just rubber stamping it.

Perhaps it is due to a lack of principles or perhaps is due to a fear of the consequences of not going along.  It is probably some of both.  But I point this out only because so many people put all of their hopes in politics.

Think of the leftist political guru who was really excited about Obama in 2008.  Here was a guy who said that the Iraq War was a huge mistake and that he was going to change policy towards more peace.  The more principled members of the left cheered on Obama.  There were only a few who cautioned the cheering.

Now they have a president who is presiding over many small wars and international campaigns all over the Middle East, bringing death and destruction to more and more places.  Obama has not fulfilled his promises.  And now nuclear weapon production is expanding on his watch.

The next time a political candidate makes a promise, don’t believe anything that is said.  Whether it is smaller government promises from George W. Bush or more peace from Barack Obama, the end result is usually the same.

Tuesday, November 4, 2014

A War on Afghan Drugs


Most government programs end up having unintended consequences, or at least unintended by the majority of people who support them.  Sometimes I take this a step further and say that government programs not only don’t achieve their stated purpose, but they often do the exact opposite.

The government gave us a War on Poverty and we get more poverty.  The government gave us a War on Terror and we get more terrorism, particularly in the places where the War on Terror is being fought.  The same goes with the government’s War on Drugs, which does anything but eradicate drug use.

But the drug war is not just at home.  It has also been fought in Afghanistan.  You thought the military was there to kill terrorists?  You thought the military was there to free the Afghan people?  No, it is much better than that.  The military is fighting opium poppy cultivation in Afghanistan.  There is a U.S. War on Drugs in Afghanistan.

This is not chump change either.  Since the beginning of the war and occupation of Afghanistan, the U.S. government has spent approximately $7.6 billion in operations to stop drug production by farmers in Afghanistan.  As an American taxpayer, do you think that is money well spent?

Meanwhile, according to one report, Afghan farmers grew the largest amount of opium poppy in 2013, surpassing the previous peak set in 2007.  The drug trade is valued at almost $3 billion, which is a lot of money, but still not as much as what has been spent to fight it.

Just like most government programs, the U.S. has declared previous victories, only to see these supposed victories vanish.  Think of “Mission Accomplished”, except apply this to every other government operation.

Six years ago, one area of Afghanistan was declared drug free, but since that time, poppy farming has since resumed and expanded.  Somehow the defeats do not get reported in the same manner as the so-called victories.

End the Drug War – Everywhere

It is amazing how one government intervention is used as an excuse for another.  Fighting drugs in America has been used extensively as an excuse to infringe on the civil liberties of Americans, including searches, traffic stops, monitoring financial transactions, and many more things.  Of course, the War on Terror has been used in the same way.

In the case of Afghanistan, the War on Terror led to another war on drugs.  We supposedly have to fight drugs in Afghanistan because that money can be used to fund terrorist organizations.  But ironically, the only reason that drug farming is so profitable in Afghanistan is because of the high prices due to their illegality, particularly in the United States.  This is a full circle of logic here.

Also, does this mean that anything profitable should be destroyed in Afghanistan?  I thought the U.S. military was bringing freedom and democracy to the country.  If someone sells handcrafted rugs, couldn’t that money be used to fund terrorism too?  I suppose I shouldn’t belabor this point or we may end up with a War on Rugs too.

Poppy cultivation is one of the few things in Afghanistan that is profitable.  It is a war-torn country that is extremely poor.  It is no surprise that people are going to do whatever they can to make a little money just to put food on the table, if they even own a table.

The U.S. drug war – both at home and abroad – causes nothing but increased violence.  It should be ended everywhere.  When alcohol was legalized in the U.S. in the midst of the Great Depression, violent crime went down significantly.  Now we don’t see gang warfare in the inner cities between wine companies and beer companies.

Americans have had enough and the Afghanis have certainly had enough.  Let’s start a new world of peace, starting with the ending of these government wars.  And we can save a lot of money in the process too.

Thursday, October 30, 2014

FOMC Finishes the Taper

The Federal Open Market Committee issued its latest statement on monetary policy on October 29, 2014.  It finally finished its "taper" that has been going on since the beginning of the year.  As of a couple of weeks ago when stocks were going down, I wasn't sure if the Fed was going to make it to the end of this one.

This marks the end of QE3, or whatever you want to call it.  This round of quantitative easing (QE) started around September 2012 at $40 billion per month for mortgage-backed securities (bank bailouts).  But the Fed quickly more than doubled this amount a few months later.  In December 2012, the FOMC statement announced additional buying of $45 billion per month in longer-term government debt.

Combined, this meant Fed purchases of $85 billion per month in 2013, or approximately one trillion dollars in one year.  So QE3 was really the biggest money creation scheme in world history, at least in terms of real wealth.  Zimbabwe was creating hundreds of trillions of dollars constantly for a time period, but this was essentially worthless money.

Here is the key part of the latest FOMC statement:

"Accordingly, the Committee decided to conclude its asset purchase program this month.  The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction."

If the Fed does what the statement says, then the adjusted monetary base should stay relatively steady for now.  This is after it has quintupled in size over the last 6 years.

While the media obsesses over interest rates, I am mainly concentrating on the monetary base.  I am also paying attention to the excess reserves held by banks to see if more money gets loaned out.

The federal funds rate is only mildly interesting at this point.  It was important in the past because it tended to dictate monetary policy.  A lower rate meant more money creation.  A higher rate meant a tighter monetary policy.  But in today's world, this rate doesn't really matter much, as we can see by the changing monetary policy, despite the federal funds rate target being below .25% for about 6 years now.

If the excess reserves held by banks don't decrease significantly, then I expect a downturn in the economy.  I believe in the Austrian Business Cycle Theory.  The Fed's policies over the last 6 years have misallocated resources and caused something of an asset boom.  With a tighter monetary policy now, this boom is going to end.  It may happen within a month, or it may take a year or more.  But it is almost certain to happen, assuming the reserves stay bottled up and the Fed keeps a tight policy.

I expect the Fed to reverse course and begin to ramp up another round of QE, or digital money printing.  It will do this when the economy shows severe weakness.  That will probably be the time to start loading up on gold and other real assets.