Wall Street is rigged more than you thought and at lightning speed.
Archive for the ‘Economics’ Category.
Pity the small business. The federal government treats small business owners as cheats and shows them no mercy. Every month small businesses regardless of size must file payroll taxes which include the other 7.5% of each employee’s FICA plus withholding taxes. Every quarter the business also must file estimated taxes for the current fiscal year. Life is simpler for W-2 employees. Most of the work is hidden from them because if the average worker was responsible for carrying his or her share of the burden to comply with local, state and federal regulations, there would be riots in the streets. So instead governments burden the employers who must write it off as the cost of doing business in our society, and workers believe their tax refund is a “gift” from a benevolent government.
Much is being said about Matt Drudge’s “Liberty Tax”, and it’s clear that none of the critics have ever had to file a small business corporate return. If they had they’d understand how taxes are collected in this country and would recognize that Drudge isn’t lying. One issue I haven’t seen mentioned, however, is the individual penalty. Although Congress has raised the issue of delaying the individual penalty for those who opt out of Obamacare, it doesn’t appear likely to pass anytime soon, meaning that the penalty is already in force. We just don’t feel it yet.
Those who opt out, or carry a policy that doesn’t meet Obamacare’s minimum criteria of providing maternity care to men or Viagra to women, should increase their withholding amounts immediately or risk a surprise tax bill next year. How much will the penalty be? Here is an ACA Penalty Calculator that will estimate the amount due next year. For example, if you are filing as single with no dependents and make $75,000 this year, you will pay an additional $649 in 2014 rising to $1,339 next year and $1,725 the year after that (assuming 3% wage growth). Assuming the worker didn’t want to be stuck with that bill and was paid 26 times a year, she’d have to boost her withholding amount by another $25 a check this year, another $26.50 the next, and another $15 in FY2016. Things get complicated real quick with other permutations. Nothing the IRS does is simple, and handling Obamacare penalties is no different.
Most people don’t think about taxes until a few weeks before they are due, so I don’t expect this issue to get much airplay until early next year. But if you don’t have employer-sponsored health care or your plan isn’t qualified, then don’t kid yourself. You’re paying the penalty now.
NPR ran a story about the difficulty state governments are having acquiring the drugs they need to execute criminals using lethal injection. No American pharmaceutical companies make the drugs, and the EU bans their sale to US authorities because capital punishment is illegal in the EU. The sensible choice would be for states to source the drugs from China, which executes more people than the US and harvests their organs to boot, but currently the quality of the drugs is below standard.
Perhaps the Pro-Life movement could learn from the EU and target the makers of equipment used in abortion. Companies are very sensitive to bad publicity, especially over sales that provide a tiny fraction of their profits, and it wouldn’t take much effort on the part of Pro-Life groups to make it more difficult for abortion clinics to buy or repair equipment.
As for the states, they can get by on firing squads, the gas chamber or the electric chair. Sure the condemned prisoners will suffer more but at least death penalty opponents will be able to sleep at night, at least until the Chinese pharmaceutical companies take over.
If you peruse this website you’ll see I think deeply about many subjects. Two subjects that are dear to my heart are medicine and higher education. Why? The first is obvious: I’m married to a doctor and have a nice perch from which I can view the industry’s operation and development. The second is not so obvious. Although I am a college graduate I have no particular love for my alma mater. In fact when I visited it a few years ago I was surprised by how little a connection I felt on campus. It had changed as I had, but there was something else. I felt that I had been processed, just one of thousands that graduated from the university that by-gone year. It was a very mechanical operation. I paid my money, got my card punched for the required classes I needed, and received a certificate and a handshake at a forgettable ceremony at the end.
Yet I still think about and worry about higher education. I recognize its importance in a free society, which is why I rail against its takeover by leftists and fret over its cost. I also I have a child who will soon be college age, and so I’m mindful about the choices and opportunities higher education offers him.
Medicine and higher education also share one thing in common. Their prices are completely opaque. I recently lost my health insurance as a direct result of Obamacare, and as I get older I worry more about how long my body can last without seriously breaking down. Take for example a hernia repair. I had one done in 1999 and was similarly under-insured at the time. The price back then was $3,000 and was split 50-50 between my insurer and me. As I begin to prepare the farm for Spring (funny to think about considering I’m waiting to be walloped by a deadly winter storm as I write) I’m moving heavy things around. Every once in a while I get a twang in my lower gut on the opposite side of the repaired hernia and it scares me.
How much would a hernia operation cost me today?
I have absolutely no clue. I can go online and find the price of nearly any car. I can search real estate sites and learn the prices of houses in any neighborhood in North America. I can even find out how much companies charge to clean out my septic tank, but I cannot tell you how much the local hospitals are charging for hernia repair. All I know is that it’s probably going to cost me more than $1,500. Probably a lot more.
Why is this?
Similarly I can look up the cost of tuition at any college or university in North America. In many cases such numbers aren’t easily found, and when they are they really don’t mean much. For one thing the costs don’t include many mandatory fees that one has to pay. They also often don’t provide the cost of living one has to pay to attend. And finally, the tuition figure is a lot like “manufacturer’s suggested retail price.” Hardly anyone pays that number except for wealthy foreign students who tend not to be price sensitive thanks to their parents being members of some kleptocracy in the Third World. In most cases the cost of tuition will be lowered by need-based grants or scholarships.
Other costs are never mentioned. For example opportunity costs. For arguments sake let’s imagine that my son will attend college and graduate in four years. Not only will I have to account for the direct cost of his education such as tuition, fees and books, but I’ll have to include indirect costs like room and board, transportation, food, entertainment, clothing etc. On top of that there’s the cost of lost wages. During those four years he could have worked full time and earned say, $20,000 a year. That’s $80,000 in earnings he’s forfeited and that he will have to make up through better earning power of his degree. If he graduates and earns just $20k a year, then he’s wasted his time and I’ve wasted my money.
But by far the largest unmentioned cost is compound interest. As Einstein once said compound interest is the most powerful force in the Universe, and anyone who’s ever paid back a student loan knows he was right. Every month I cut a check to pay back the Wife’s medical school loans and the balance barely budges, and the reason it doesn’t is compound interest. Students may not understand that when they borrow $10,000 at 5% interest to attend school, they aren’t paying back $10,500 after they graduate. While they are in school that loan is capitalizing, and the interest is compounding so that by the time they pay back that $10,000 loan ten years after graduation they will have paid back $20,000 on top of the $10,000 they borrowed.
So how much does a year of college really cost?
Again, it’s difficult to say. The best I can do is estimate it.
I’ll start with my alma mater, University of California – San Diego which is to education what factory farming is to the poultry business. UCSD off-campus cost including tuition, estimated room, board, transportation is roughly $30,000 for the 2014-15 school year. I’ll assume my kid gets some grants, knocking the cost down to $25,000.
Say I throw in $15,00o leaving him to come up with $10,000. Since he’s a typical teenager, he won’t understand compound interest, so he’ll borrow his $10k and pay it off after he graduates. Because it will take time for him to pay it off, that original $10,000 will become $30,000 by the time he authorizes the last debit to his account for his student loan creditor. Adding in my original $15k means his year at my alma mater will really cost us both $45,000.
To reiterate, that’s the cost for one year at a public school in California based on the following assumptions:
- He graduates in 4 years. This is a big if these days. Many kids are taking 6 years or longer. The longer they take, the worse the compound interest on their student loans as the interest on the deferred loans compounds while they are in school.
- He gets $5,000 or roughly 17% in need based grants or scholarships. UCSD provides need-based aid to 70% of undergraduates, and some of that includes loans according to an admissions officer at the university I spoke to.
- I provide $15,000. That’s more than my entire stay at UCSD cost back in the 1980’s by the way…
- He borrows $10,000 and takes 10-15 years to repay it.
One of the dirtiest yet most effective ways to manage one’s time I’ve learned as a per-hour professional contractor is to determine the cost of whatever I’m doing or not doing in terms of a dollars per hour figure. What would it really cost my son to attend an hour long class at UCSD?
UCSD requires 180 units to graduate. So based on our assumptions that’s 45 units per school year of 30 weeks. Dividing the cost of the school year $45,000 by 30 weeks gets us $1,500 per week. In order to maintain our assumptions and finish in 4 years, our student will need to take 15 units per quarter, which translates into 15 classroom hours a week. Dividing the cost per week ($1,500) by classroom hours per week (15) provides us the cost of a classroom hour: $100.
We’ve all heard about dumb classes kids take. Rutgers University is offering “Polticizing Beyonce” ostensibly to explore race, gender and sexual politics. Assuming Rutgers charges the same as UCSD, I wonder how popular the class would be if students had to peel off a Benjamin each time they entered the classroom. Would they be as willing to explore race, gender, and sexual politics in a classroom for the same price they could explore race, gender, and sexual politics with a moderately priced hooker in private? Granted one doesn’t have to worry about catching an STD by attending class; then again with some of the types I’ve seen on university campuses these days, I’m not so sure about that.
People alter their spending habits when they know what the price of something is and can estimate its value, and the fact that both are hidden from us whenever we consider medicine or higher education should make us stop and ponder “Why?” The free market is a ruthlessly efficient thing. If students had to pay for each class they took when they took it, one could bet that higher education spending would be revolutionized.
Universities would focus on providing better teachers that students would be willing to pay for. They would be forced to cut costs, cutting back on the administrative bloat that inflates the cost of tuition. After all, a typical undergraduate core subject class at UCSD might have as many as 150 students in it. Multiply that number by a $100, and it’s quite likely the adjunct professor teaching the class and the dozen graduate students TA’ing the course see a pittance of that $15,000, the TA’s working for free and the adjunct prof earning about $25/hour. Where did that $14,975 go?
It went several places. To pay down the loan on the new student rec center. To pay off the new training equipment for the track and field team. And on administrators, hordes of administrators, a veritable plague of administrators. As this article shows, a new study finds the number non-academic administrative employees at US colleges and universities has doubled at the same time the number of part-time faculty has grown from a third in 1987 to half of all teachers today. University presidents contend they are doing everything to cut costs, but Richard Vedder, an economist and director at The Center for College Affordability, calls them liars.
“I wouldn’t buy a used car from a university president,” said Vedder. “They’ll say, ‘We’re making moves to cut costs,’ and mention something about energy-efficient lightbulbs, and ignore the new assistant to the assistant to the associate vice provost they just hired.”
Some of my friends have commented that my arguments attack the liberal arts and that I focus too much on STEM courses that provide good job opportunities after graduation. I don’t have a grudge against the liberal arts per se. In fact one of the most useful courses in terms of my career as a systems analyst I ever took was a philosophy course on logic. Some of the English courses were excellent too in terms of value. Being able to communicate to a broad audience is critical in business these days, yet so many students lack the basic ability of crafting a memo let alone being able to articulate complex subjects to non-technical audiences. If I could go back in time, I would happily peel off a Benjamin to pay for an hour of that logic course. It was worth it to me, and would likely be worth it to others. I’m advocating a system of price transparency and reform that will likely save such classes because the administrators who are waking up to the threat posed by parents like me are scrambling to cut costs by cutting teachers and courses instead of cutting their own jobs. Maybe Politicizing Beyonce is a great course well worth the cost, but the market, those paying for the class, should be given the opportunity to decide its true value.
A long time ago I wrote a fiction novel. 120,000 words whittled down from about 175k. It turns out it wasn’t any good although looking at it now some 20 years later it does have its moments. A nice turn of phrase here, an interesting description there. Although it was never published it was written and stands complete. For a week I outlined the novel, sometimes working on chunks then arranging those into a puzzle with pieces missing. I then added scenes to link these chunks together to create a narrative that I thought made sense. After another week or so of arranging the outline, I sat down and every day wrote 2,500-4,000 words, starting at one in the outline and ending at the next. By following the outline and writing from one element to the next, focusing only on the goals laid out in the outline while avoiding detours caused by tangents that weren’t relevant to the plot or the characters, within eight weeks I had completed a rough draft of the novel. I then spent the next four years editing and revising it, reviewing and rereading and re-everything , doing anything I could think of to make the novel shine. But it never did. It was still terrible. Hackneyed and predictable plot. Unbelievable characters who would be complimented by being called “two dimensional.”
Fast forward two decades and I’ve achieved my dream of being a paid writer. Sort of. As a systems analyst in the financial industry I am paid to write requirements documents and detailed software specifications. I have put together specs longer than my novel that could be measured by their thickness in inches if anyone dared print them out (people stopped doing that about 10 years ag0.) I have also put together specs that could fit into a PowerPoint presentation with enough space for goofy stick figure clip art. What differentiates the two is not my writing skills or even the size of the project: it’s the software methodology used by the institution.
Basic software design follows this process: People get together and decide on a solution to a problem they have and create a set of business objectives. A typical business objective that I deal with might be, “Let’s cut down the time it takes to report on delinquent accounts to senior management.” These objectives then determine the business requirements (the “what” of the project) which determine the functional requirements (“how” the business requirements are achieved), followed by the detailed design specs which tell the developers and coders what they need to build. The coders then code following the design spec and afterward conduct basic tests on their code to make sure it functions. The testers then work backwards, creating a test plan based on the functional requirements, then actually test what has been coded to make sure what the developers and coders coded actually matches what was laid out in the functional requirements specifications. Wrap the whole thing in a traceability matrix that ties the project objectives to the business requirements to the functional requirements to the tech specs to the testing documents, add in issues tracking for the inevitable bugs found and corrected before rollout, and you have a software project.
In software design there are two fundamental methodologies: “waterfall” and “iterative.” Waterfall methodology uses the metaphor of a series of waterfalls with one waterfall feeding another downstream. This requires all the project objectives to be clearly defined at the beginning of the project, the “waterfall top.” It assumes that you know everything there is to no about your business environment and needs up-front. The objectives cascade down to the business analysts who develop the business requirements before passing the documentation to the systems analysts, who produce the functional specs. Each team member does his or her assigned task without input from those who created the documentation “up stream” and is not involved in the consumption of the spec s/he creates by “downstream” developers, coders and testers. Once you produce your delivery artifact, the requirements document or functional spec for example, your role on that project is complete and the documents you created are expected not to change.
The iterative methodology starts with the business objectives, but instead of defining them all so that they can be codified into requirements, the expectation is that they will change and be added to throughout the process. In contrast to the waterfall methodology, the expectation is built into the process that you do not know everything about a particular system or business process at the project’s beginning, and you will learn as you go along. Documentation for these types of projects tend to be brief with lots of edits and versioning.
There are several different types within each methodology. Common iterative approaches are “Agile“, the first true iterative methodology developed in the early 1970s and “Extreme Programming,” developed in the 1990s but based on lessons learned during the Apollo space program. Some try to combine aspects of both methodologies. For example Scrum, an iterative methodology, takes what I consider a more waterfall approach by breaking up business objectives and spreading them throughout a project. This provides a more flexible approach to meeting a particular business requirement without changing the business objectives set at the project beginning which do not change through the project.
Most software projects fail. The reasons for these failures depend on who you talk to. As an analyst I often blame poor requirements documentation and questionable analytical techniques as well as spaghetti coding by developers who never invested time in reading the requirements and testers who were more concerned about ticking off check boxes than they were in actually using their brains and finding errors. But by far the greatest source of project failure is upstream with the decisions made by the business at the project’s inception.
What got me thinking about all this was an excellent piece by Clay Shirky on the failure of the Obamacare website. He cites Waterfall methodology. “The preferred method for implementing large technology projects in Washington is to write the plans up front, break them into increasingly detailed specifications, then build what the specifications call for. It’s often called the waterfall method, because on a timeline the project cascades from planning, at the top left of the chart, down to implementation, on the bottom right.”
Waterfall methodology has its place, although where that place is eludes me right now. The problem I have with waterfall is that it’s great for simple projects with a small set of clearly definable project goals and requirements. But complexity demands too much from the methodology which is why I find its pure form so rarely used in design these days. Most projects I’m involved are huge project impacting numerous business lines, data warehouses, and outside vendors. It is impossible for management to know all there is to know about their own business processes and systems, and the smart managers don’t even try. They speak in very broad, general terms and leave the impacted technical teams to hash out the details. That “hashing out” usually requires in depth analysis and reverse-engineering of the impacted systems designed by developer no longer with the institution from poorly detailed and written specs that were stored on someone’s hard drive that got wiped once they quit.
Shirky continues, writing, “By putting the most serious planning at the beginning, with subsequent work derived from the plan, the waterfall method amounts to a pledge by all parties not to learn anything while doing the actual work. Instead, waterfall insists that the participants will understand best how things should work before accumulating any real-world experience, and that planners will always know more than workers.”
This is a particular conceit of the Obama administration and bureaucrats in particular. One of my core beliefs is that the Law should leave a “light footprint” on a free society. It is impossible for legislators to write laws that are capable of responding to every circumstance, therefore laws should be written carefully to give the citizenry the benefit of the doubt, and give prosecutors and judges latitude to decide violations of the law on a case-by-case basis. It’s one reason why I oppose mandatory sentencing rules and making abortion illegal even though I recognize it as murder. Unfortunately legislators and bureaucrats don’t see their job that way. They strive to make new laws and write new regulations instead of making those that exist more effective and less onerous on the citizenry.
In the case of Obamacare the Obama administration thought it understood how to design software. It is a typical show of arrogance coming from the administration who brought us the “Reset with Russia” resulting in a new Cold War, supported the Arab Spring which has resulted in everyone in Egypt hating America instead of the two-thirds of Egyptians who hated us prior to the Obama administration, and now the Iranian Nuke Deal which results in Iran acquiring nuclear weapons. Giving this administration power was like giving hookers, cocaine, cars and guns to a group of teenagers. It’s going to take decades to undo the damage this administration has caused.
But in the meantime we have Obamacare. As the one lemming said to the others, “Forward!”
Bloomberg’s Matthew Klein has an article describing how Fed policies backed by the Obama administration continue to benefit the wealthy at the expense of everyone else. Walter Russell Mead writes, “This type of thing is an all-too common feature of blue politics. Despite the egalitarian and ‘social-justice’ impulses of the naive blue liberals at the grassroots, a decaying blue social model inevitably creates more inequality and privilege. Well-connected insiders get sweetheart deals from government, for example, and insurance lobbyists get to wield a veto power over Obamacare’s re-structuring of the American health care system. Most of the so-called green policies we’ve seen are basically ways to channel money from ordinary consumers to political insiders who invest in clever enterprises engineered to suck in subsidies or to thrive in protected, artificial markets created by regulations. Now Obama’s pick for Fed chief wants to add juice the economy by boosting the savings of the rich.”
Let’s put it in easy to understand terms. Say you have a checking/savings account with $10,000 in it. For argument’s sake we’ll imagine your bank pays you 1% on your money. This is pure imagination on my part because my bank pays a fraction of that. So after one year of leaving that money sit, you will have $10,100 in your account. Not great, but at least you got something for your money, right?
Wrong. According to this CPI calculator, you’ve lost money: Your $10,100 in 2013 is now worth only $9,903 in 2012 dollars. This is due to inflation which is officially running at 1.5% annually. This number is notorious for being easily manipulated by the government since it is a politicized statistic, and if it were calculated today the way it was by the government in 1990 the inflation rate would be closer to 5%.
Losing money is by design; it’s exactly what the Federal Reserve wants to happen to you and anyone else with money in the bank. When you earn a return less than inflation, economists say you are suffering the pain of “negative interest rates.” Klein writes, “Harming at least some savers, however, may be part of the plan, at least if Yellen agrees with Charles Evans, the president of the Federal Reserve Bank of Chicago. He has argued that the threat of wealth confiscation by negative interest rates is necessary to restore spending and “risk-taking” back to “normal levels.””
So wealth confiscation is necessary to force you to spend that $10,000 or risk it on the stock market. And some wonder why ordinarily sane people are attracted to Ron Paul’s “End the Fed” crusade.
In the grand scheme of things $10,000 isn’t a lot of money. It won’t get you a new car, or even a decent used one. It might get you a great vacation in the US for your wife and two kids, but abroad? Forget it. Airfare alone to Europe would eat up half that sum, and the while you can make do with the remaining $5k if you are smart with it, you won’t be living large by any stretch of the imagination during your vacation.
Of course if you spent it on a vacation, you’d have something to show for it: memories and snaps of you and the kids at the Arc de Triumph. On second thought, screw France. You and the kids outside Buckingham Palace. But then you’ll come home and your car breaks down and needs a new engine, or your furnace breaks and you’re looking at a $2,000 bill for a new oil heater. Where do you get that money?
Instead of a vacation, you decide to invest it in the stock market. In case you haven’t heard, the stock market is at all-time highs. Over the past 14 years we have had two financial bubbles: one in the stock market and the other in real estate. Do you see anything similar between today’s stock market and those bubbles? Do you believe the market will go up long enough for you to make money on your investment if you buy at the top of the market? There’s a South Park parody that shows what happens to small investors in this stock market: the money evaporates before their eyes.
Can you make money in this market? Of course, just like you can make money at roulette in Las Vegas. The only difference between investing in the stock market and betting it in Las Vegas is the speed at which you lose it. The end result is the same. There are ways to make money when the market collapses, but bear market investors and those who short the market have been burned over the past two years as the market has continued to defy rationality. As economist John Maynard Keynes once said, “the market can remain irrational longer than you can remain solvent,” and while the economic theory that bears his name sucks, the man at least knew a thing or two about markets.
Why is this happening? Why are the poor and middle class, those with more of their assets in bank accounts than the wealthy and particularly those on fixed incomes like seniors losing money? Because of the Federal Reserve’s policy of Quantitative Easing. QE makes money cheap by flooding the market with cash. In short what it is doing is buying debt from the federal government and then lending it to banks, thereby increasing the dollars in circulation. If the bank can borrow from the Fed for free, it doesn’t need to pay interest to savers. Additionally, increasing the supply of something makes that something worth less which is why many skeptics of the Federal Reserve are suspicious of official inflation statistics. The amount of dollars in the market should boost inflation, and it has; prices of products such as food and fuel are not included in the CPI, and everything from the smaller Dollar Menu at McDonald’s to the decreasing product sizes in the stores tell of inflation within the economy. Yet this “stealth inflation” goes unrecorded by official statistics.
Just as one might feel the pull of taking out that $10,000 and buying stock, the wealthy do too. The only real difference is that one’s $10,000 might represent 100% of one’s net worth whereas the wealthy have diverse portfolios that protect them regardless which way the market moves. That $10,000 might be your retirement nest egg. The wealthy don’t have a single egg, they have many and they have multiple baskets to put them in: stocks, bonds, offshore accounts, real estate.
But you have something with that $10,000 in the bank that they don’t: liquidity. You can go to the bank and within a minute or two leave it with $10,000 in hand. It’s hard to take that Soho apartment and turn it into cash instantly, so they borrow against it. From where? Banks of course. But wealthy people aren’t stupid; at least the ones who stay wealthy aren’t. They are sensitive to interest rates when they borrow money just like most people are. When interest rates are high, they’ll avoid taking. Low interest rates encourage them to take liens on their assets and turn it into cash – or rather chips for the Wall Street casino.
Providing them with cheap money to gamble encourages them to gamble more, and that’s exactly what the Fed wants.
The logic behind this is that by allowing the wealthy to get wealthier by gambling with cheap money society benefits because house prices rise and companies whose stock rises are more likely to invest in new jobs or equipment. Klein disagrees, writing, “The tens of millions of Americans who own neither shares nor their own homes may have benefited indirectly as relatively wealthy people got even wealthier, but that’s not much different than saying lower taxes on the rich improve the well-being of the poor. The increase in asset prices and collapse in real yields have also meant that workers have to save a larger chunk of their incomes to get the same quality of life in retirement.”
And speaking of retirement, a common argument used to justify policies that benefit Wall Street is that the common person benefits because their 401k is invested in the market. Therefore a rising stock market is good for everyone. The problem with this argument is everyone doesn’t have a 401k. I don’t, and neither does 53% of the American population. 401k’s are also highly illiquid; it’s not easy to convert them to cash without incurring serious penalties, so most people only do so when they have life-changing events. These events tend to be random, as does how the market is performing during a window when a 401k holder is thinking about retiring. For working people a 401k statement during a bubble is a psychological benefit. It makes them feel wealthy. But that profit is only worth as much as the paper it’s printed on until the person retires. Today those who are retiring and beginning to cash in their 401k’s are doing well. This wasn’t the case 5 years ago, and who is to say what things will be like in five years?
The Federal Reserve policies supported by this administration through it’s choice of Janet Yellin to head the Federal Reserve proves that both are redistributing wealth from relatively poor taxpayers to the wealthy. In a sense it is a tax on the poor whose proceeds are is then passed to the rich. Is this what President Obama’s supporters expected when they signed on for “hope and change?” This doesn’t even touch the moral issue of the Federal Government running extraordinary deficits that will have to be borne by future generations in order to support today’s wealthy.
Let me begin by stating that my primary care provider is a nurse practitioner, as is my son’s. My mother’s is a physician’s assistant, and she trusts him more than some of her children. But let’s make something very clear: physicians, nurse practitioners and physician assistants are not the same. They do not receive the same training, do not have the same responsibilities and do not treat the same. They all have their role in health care, but you cannot replace one with the other and expect the cost of treatment to go down and quality to remain the same.
And there is no shortage of primary care physicians.
Walter Russell Mead disagrees. He quotes Amelia Thomson-Deveaux’s piece in American Prospect who argues the solution to this shortage is to allow nurse practitioners to practice on their own without supervision of a doctor.
As you know my wife is a primary care physician (PCP) practicing in a rural underserved area. I’m a systems analyst who once ran a non-profit dedicated to fighting Industry’s efforts to flood the market with cheap H1-b and L-1 visa holders from abroad as they decried a “shortage of IT workers.” There was never a shortage of IT workers, just a shortage of those willing to work for the money IT companies wanted to pay.
Why is it that people become irrational when talking about professionals? If the price of something goes up, it means demand outstrips supply. This is a concept we innately understand. We know that the price will remain high until demand weakens, or the high price encourages producers to expand supply. This combination of reduced demand and increased supply inevitably leads to the price of that something declining. It could be natural gas, LCD televisions or salaries.
There is no shortage of primary care physicians. There is a shortage of PCPs willing to work long hours in disadvantaged areas for less money. I’d love to see where that $189k average PCP salary quoted by Thomson-Deveaux comes from because it sure isn’t paid out here in the Styx. Salaries out here should be higher to encourage docs to come here, and they are somewhat higher than in big metropolitan areas with lots of amenities. But a shortage means salaries are rising, and they should be rising faster out here than elsewhere – but they aren’t. Why not? Because there is no shortage.
The shortage is a myth perpetuated by those who want to manipulate the market to their advantage. Hospitals want nurse practitioners because those in our area are paid $50k per year, roughly 2.5x less than the average PCP salary here, but they bill out at 75% of a PCP. NP associations are working to remove obstacles for allowing NPs to practice unsupervised. That’s fine – as long as physicians aren’t held accountable for their mistakes.
There is a reason a primary care physician goes through 4 years of medical school, followed by 3 years of residency and internship: exposure to a much broader range of conditions and treatment modalities than an NP receives. According to the American Academy of Family Physicians, a family physician receives 21,700 hours of training verses 5,300 for a nurse practitioner. This added training teaches doctors to differentiate between horses and zebras, to know when a condition is presented is either common or uncommon, and to do so without additional tests.
NPs order more tests than physicians, and since those tests are conducted often within their practice or hospital, these tests benefit the providers who pay them. But the cost of that testing is then passed to the insurance company and patient, so they do not benefit from the lower salaries paid to NPs, while the patients suffer the consequences of inexperienced care. Most of the time it won’t matter – remember, I go to an NP as does my teenage son – but I’m healthy as is he. It would be a different matter if one of us were chronically sick.
KevinMD believes this argument between family physicians and nurse practitioners is a red herring. The problems with primary care go way beyond the threat posed to PCPs by nurse practitioners. He cites statistics showing specialists providing 41% of primary care office visits. He believes this is due to patients skipping the gate-keeping role of the PCP and going directly to the specialist because of the perception that they are more qualified. There is no reason for someone with a cough to see a pulmonologist unless he has been directed there by a primary care physician first. This only makes sense because a patient does not incur the cost of seeing the specialist beyond the extra few dollars in the co-pay.
Look, everyone knows the medical system in the USA is a disaster. I’ve lived under socialized medicine (the Kid was even born under it), and I’m not instinctively opposed to it the way some are. But we need to be honest about the problems and avoid scapegoats; there is plenty of blame to go around, starting with the patients themselves. But that’s another essay…
I’m fascinated by disaster and failure. I’m not talking natural disaster; although fascinating in themselves (who around back then does not recall when Mount St. Helens blew up in 1980?) natural disasters don’t provide teachable moments the way a man-made failure or disaster does. Soon the Discovery Channel and The Science Channel will simulcast a scripted movie about the Challenger disaster. The movie is based on Dr. Richard Feynman’s memoir “What Do You Care What Other People Think” and will invariably show how Science and the human analytical mind went from a cloud of smoke and debris at 50,000 feet to the reason for the disaster: an O-ring seal in a solid rocket booster. Such failure analysis is why travel on large aluminum jets is the safest method of transportation in human history, going from perhaps the deadliest form of transport to the safest in less than a century. Such success came about through hard detective work the scene of each disaster, followed by a long period of investigation and analysis where the failure was pinpointed and most importantly, having the lessons learned applied to the rest of the industry.
The bible for those interested in the study of failure is German professor Dietrich Dorner’s 1996 book, The Logic of Failure. The book is based on a set of cognitive experiments done with software simulating a small town’s society in the US, and a fictional area in the Sahel. The studies found that while participants came from varied walks of life and backgrounds, “People court failure in predictable ways.” It then ties the experiments to real life failures such as the nuclear catastrophe at Chernobyl. As a systems analyst involved with complex multi-million dollar software development programs, I consider the book “must reading” for everyone in IT. Feel free to pass along a copy to those behind the Obamacare rollout.
Five years ago the people of Iraq had, thanks to the blood of thousands of American and allied soldiers, achieved a level of freedom unparalleled in their history. The national sport of kite flying was legal again and girls headed to school in Afghanistan. al Qaeda and its affiliates were on the run and confined to lawless patches in northern Pakistan, northern Nigeria and Somalia. Iran was boxed in between biting sanctions that undermined the regime internally, successful American military operations on either side of it, and an Israel ready, willing and backed by American leadership to attack Iran to stop it from acquiring nuclear weapons. China was busy flooding the world with cheap crap, content to use North Korea as its proxy to stir up trouble in favor of the regime in Beijing. Our relationship with Russia had begun drifting away from engagement towards confrontation over its aggression towards Georgia, but Russia was clearly a state in decline both internally and internationally. Even Syria was seen as a player, with Democrats having genuflected at Bashir Assad’s feet, Nancy Pelosi having claimed “the road to peace begins in Damascus” in 2007, four years before Vogue’s schmaltzy interview with the Assad family, “A Rose In the Desert.”
Today Iraq is a client state of Iran, its skies filled with Iranian cargo planes resupplying the Assad regime in Syria and Hezballah in Lebanon, its social fabric once again ripped by car bombs as the Sunni/Shi’a war rages on the ground. The Obama administration, convinced of its failure before it took office walked away from American success in Iraq by its refusal to negotiate a status of forces agreement with Baghdad. Historians will one day ask “Who lost Iraq?” and the answer will be Barack Obama. Immediately after setting up their base in Afghanistan in 2001, the Marines buried a piece of steel taken from the World Trade Center rubble on the site. Soon the Taliban and their al Qaeda allies will reclaim this as a war trophy as the kites and girls disappear from the streets, and the music that has filled the air in Kabul since 2001 will be replaced once again with silence punctuated by gunfire and explosions. Again historians will ask “Who condemned these people to savagery? Who lost Afghanistan?” Again the answer will be President Obama, a man who once called Afghanistan “the good war.”
After taking power President Obama fluttered around the world on what critics like me called his “Apology tour,” apologizing for American misdeeds both real and imagined, in the belief that the new-found humility would please our friends and sway our enemies. The Obama Administration has accomplished exactly the opposite. Today Iran is expanding its “Shi’a Crescent” throughout the Middle East, and the only ones standing in the way is Israel in an unlikely (and unspoken) alliance with Saudi Arabia and the Gulf States. This after a popular rebellion took the streets in 2009 that could have changed the course of History, but it received no hint of support or backing from the Obama administration and it was ruthlessly crushed. It will be decades before the people rise up against the theocracy, if they ever do.
Today from Morocco across northern Africa to the Sinai, and from Nigeria across the continent to Somalia Africa burns with Muslim extremists allied with al Qaeda. Obama’s support of the rebellion to replace Mohammar Khaddafi in Libya has opened a Pandora’s Box of weaponry built over decades by Libya’s Great Loon, handing AK-47s, RPGs, and anti-aircraft missiles to everyone with an axe to grind and a Koran burning a hole in their hearts. Where there had been one failed state 5 years ago, Somalia, there are now at least 3 (Somalia, Mali, Libya) with numerous others (Algeria, Chad, Mauritania, Nigeria, Niger, Western Sahara) circling the drain. After Khaddafi’s fall al Qaeda training camps sprouted like mushrooms across North Africa and the Sub-Sahara, breathing the lawlessness that the Libyan Debacle created, and repaying the Obama administration for its “lead from behind” strategy by killing an American ambassador and his three bodyguards in the first such incident in 30 years.
Although the administration’s failure vis-a-vis China is not as bad as the disaster it has created in the Middle East, the Obama Doctrine of placating our foes while dissing our friends has been noticed in Asian capitals. South Korea is developing closer ties with China at the same time Japan rearms and prepares to ditch its anti-war constitution ghost written by Gen. Douglas MacArthur. Nations like Pakistan who haven’t really decided whether they are American allies or its enemies see no downside to throwing their lots in with the Chinese or Iranians. Pakistan even provides China the tail-section of a top-secret stealth helicopter used in the operation to kill Osama Bin Laden, America’s enemy number 1 watching porn in air conditioned comfort on Pakistani soil. There is no blow-back, no consequences suffered for entertaining the man responsible for the deaths of 3,000 Americans, and none for handing over the tail rotor section to America’s greatest military adversary. And to top it off, the true hero of the event, a local doctor who had the guts to help the Americans confirm Bin Laden’s identity, sits in jail as a traitor to his people. If anything playing up to America’s adversaries almost wins respect from the Obama administration itself. China understands this best, waging a cyber war against the US government and private industry without retribution.
Then there’s Europe. When the Obama Administration hasn’t sacrificed its allies to appease its enemies in Teheran and Moscow, it bugged their phones, proving yet again this administration’s inability to differentiate friend from foe. “Everyone does it,” is not an acceptable excuse for a superpower. There is absolutely no reason the US should be bugging Angela Merkel’s phone just as there is no reason it should be spying on 10 Downing Street. Perhaps the mushy-headedness that comes with moral relativism has blinded the administration to the differences of say, between Angela Merkel and Vladimir Putin, or David Cameron and Ayatollah Khamenei. The “Special Relationship” with the UK is special for a reason, one that is much older than the inhabitants of the West Wing and much more sublime than the political wonks can comprehend. Ditto the German Chancellor. Frau Merkel was born in East Germany and has first hand experience with illegal and unjustified surveillance. Unlike some of her predecessors, she has not risen to power on an anti-American platform, and has done an exemplary job of aligning the interests of Germany with the broader interests of Europe and the United States. Spying on her was a stupid idea that should never have been approved, and once approved, it should have been cancelled, and if not cancelled it should never have been revealed. Yet a contract DBA waltzed off with the keys to the entire American Intelligence in the worst espionage failure since Klaus Fuchs handed the Soviets the Bomb. Again, no consequences. No one fired let alone jailed.
Many on the right have concluded that this is all by plan, that the Obama administration and his Democratic party supporters have been intent on taking the ship of state and intentionally running it aground because they are socialists or communists. In the Irving Kristol Lecture to the American Enterprise Institute on February 10, 2004 Charles Krauthammer suggests it is more complex and subtle than that:
“What I do know is that today it is a mistake to see liberal foreign policy as deriving from anti-Americanism or lack of patriotism or a late efflorescence of 1960s radicalism.
On the contrary. The liberal aversion to national interest stems from an idealism, a larger vision of country, a vision of some ambition and nobility – the ideal of a true international community. And that is: To transform the international system from the Hobbesian universe into a Lockean universe. To turn the state of nature into a norm-driven community. To turn the law of the jungle into the rule of law – of treaties and contracts and UN resolutions. In short, to remake the international system in the image of domestic civil society…
And to create such a true international community, you have to temper, transcend and, in the end, abolish the very idea of state power and national interest. Hence the antipathy to American hegemony and American power. If you are going to break the international arena to the mold of domestic society, you have to domesticate its single most powerful actor. You have to abolish American dominance, not only as an affront to fairness but also as the greatest obstacle on the whole planet to democratized international system where all live under self-governing international institutions and self-enforcing international norms.” – Things That Matter: Three Decades of Passion, Pastimes and Politics
Seen in this light, Obama’s foreign policy has not been a failure at all. It has accomplished exactly what it was intended to do. It has weakened America’s foreign policy hand across the board. America’s military is weakened through political purges of its officer corps, lack of direction and budget cuts. Its diplomatic corps is undermined by the lack of protection of its staff, as proven in Benghazi, by the White House’s high-handedness shown towards America’s closest friends the UK and Israel, and the spying program targeting American allies as well as its enemies that State Department personnel are forced to explain in their host countries. Its adversaries Syria, Iran and North Korea are all in better positions than they were five years ago. Ditto China and Russia. As the US weakens its enemies strengthen, and its allies are then forced to either band together (EU standing up to Russia and encouraging Ukraine to join, ASEAN nations co-coordinating efforts to balance China) or leave its sphere of influence entirely (Saudi Arabia, Egypt and perhaps Israel in the Middle East, South Korea in East Asia).
Obama has domesticated America on the international stage, to use Krauthammer’s term: so now what? Where is the Golden Age promised by Locke and the internationalists? If they are correct, a humbled America should encourage its enemies to stop their own military buildups (they don’t need offensive military capability with America’s gone). North Korea and Iran no longer need nukes now that American nukes are rusting away awaiting destruction as Obama unilaterally disarms. Without American backing Israel should engage its enemies diplomatically in a desperate bid to secure peace with the Palestinians. The world should be much better today than it was five years ago.
Is it? I suppose that depends on your perspective. Five years ago Americans could have traveled safely throughout Africa except for one nation Somalia. Today I’d hesitate to walk through the narrow streets of Zanzibar as I once did freely nearly two decades ago, and have struck Valley of the Kings in Egypt off my bucket list until further notice. Northern Kenya, Mali, Eritrea, Mauritania, Nigeria, Chad, Niger, Western Sahara, and Libya are now no-go areas for Westerners. I suppose that’s great if you can’t help but shout Allahu Akhbar every time you touch an AK-47, but for the rest of us things have gotten worse not better under the new regime.
Dietrich Doerner writes, “For them (people who failed most often at complex analytical tests) to propose a hypothesis was to understand reality; testing that hypothesis was unnecessary. Instead of generating hypotheses, they generated ‘truths’.” The Obama administration came to power proposing a hypothesis, that the world would be a better place with the United States weakened. It treated this hypothesis as a truth, steadfastly refusing to let go of it, sacrificing ambassadors, diplomatic relationships built over generations, and American influence in the process. When Doerner’s study participants failed, they invariably blamed others for their failures just as the Administration has focused the blame on the GOP.
When the Obama administration took power I and many others had hoped it would govern from the center, that things wouldn’t be as dire as we had feared. We hoped that it would try its crazy ideas, learn they didn’t work, then try something else. But they didn’t learn. They stuck to their “truths.” Five years on our foreign policy is a shambles, America weaker and friendless as it has been at no other time in its history. The disaster is worse than we expected, and we still have 3 full years left in this president’s term.
Will America be able to survive this epic failure? Thirty-two years ago Ronald Reagan took power and turned around foreign policy debacles of the previous Carter administration pretty quickly. Will a Republican president be able to do the same after eight years of disaster? And what if the GOP selects the wrong candidate and Hillary Clinton wins in 2016? How much failure can this country accept and still survive?
Like many others I’ve recently been notified that my current health insurance policy will be cancelled and I will have to find another.
Thank you President Obama and his Democratic Party.
Hat tip: Snoop the Goon
I love American football. As a kid I loved playing pick-up games of it in our suburban backyards and touch versions in the street. Our city was cursed with the St. Louis Football Cardinals who eventually took their stinking-on-ice team to Arizona where they still suck, and most of my friends were from outside the area so I took to supporting their teams. My friend Ron H. was from Philadelphia, so I started rooting for the Eagles. But this was the era of the Steel Curtain, so I found myself cheering for the Pittsburgh Steelers as well. In fact I liked almost all the football teams except for my hometown disappointments.
After my bohemian period during which I thought American football was jejune and bourgeois, I had fallen in love with a woman who rekindled my interest in the Philadelphia Eagles after we moved into the area. I’ve rarely written about the sport because I have nothing to say beyond the usual “Go Birds” and the attendant “Cowboys Suck!” that comes with being a Philly fan. After moving south of the Mason Dixon, I have paid hundreds of dollars to watch the Eagles and other NFL teams play on DirecTV every season.
But every season the game seems to lose some of its appeal. Maybe there are too many penalties in an attempt to make the game safe. Maybe it’s because I’m growing older and have seen some pretty bad things happen to people. Maybe it’s because I’m just turning into a big pussy. But there’s only so many times I can see a player get hit and lay motionless on the ground while holding my breath before I begin to think something is wrong both with the sport and my enjoyment of it.
I love the sheer athleticism on display. I revel in the impossible plays just like any other fan. And yes these men are paid millions to destroy their bodies, but does the lucre they are paid free us fans from guilt? We are being entertained by men damaging their bodies in ways we would not do ourselves, or allow our children to do. I didn’t let my son play football even when he expressed interest in the sport. At the time I was more worried about a broken neck or ruined knees. That was before CTE, Chronic traumatic encephalopathy, a disease that destroys the brain and is specific to the sports boxing and football. Soccer players don’t exhibit it, nor do baseball players or lacrosse players. CTE does not wait until players are in their 70s or 80s to exhibit signs; it has been found in the brain of an 18 year old football player.
I am no nanny. If you want to kill yourself with drugs or whatever, fine – do so just not in front of me because I have a conscience and I will intervene to stop you. That is the way I was raised. For the past few years my conscience has been stirring when I watch American football, and seeing this program on PBS pretty much seals the deal. The NFL has denied the existence of CTE the exact same way the tobacco companies denied cancer caused by smoking. Recently the league has pushed the problem into the future by calling for “more study” just as the cigarette companies called for further research on lung cancer when the Science behind the causative link between smoking and lung cancer was unequivocal. What they’ve done is criminal but not surprising given the amount of money league owners have invested in the game.
Many of my friends have turned to European football known as soccer here in the States, and while watching the game seems about as exciting as watching a cat lick itself, at least I can watch it without my conscience stirring.
Perhaps technology can someday come to the rescue. Imagine: no penalties, no guilt, and as violent as we can make it. We could watch a true Steel Curtain descend on the opposing robot team and pulverize them, sending bits of plastic, steel and oil flying. Then, and only then will I be ready for some football.
The news that poachers killed 90 elephants with cyanide in Zimbabwe comes as bad news to those of us who have worked in animal conservation in Africa. But Africa seems full of bad news these days, and it’s tough not to become cynical. Perhaps our distant ancestors had it right, getting the **** out of Africa as soon as they could. If it’s not the diseases or the wild animals, the bad politics and toxic religion will kill you.
It seems to me that the choices for nature conservation in Africa are stark: either the people of Africa have to develop a solid middle class, or we have to take the animals and plants out of Africa and import them into a wealthy society to save them. I have been thinking about this for years ever since I met the Tongwe people, a small Tanzanian tribe that were pushed off their land and saw it turned into a national park where I worked. Poaching in the park was always a problem, and it’s not too difficult to sympathize with people who didn’t get the dollar a day jobs the park and conservation programs offered to those outside the park. Poachers that are actually catching the animals aren’t making much by western standards, and when it’s a choice between a poacher feeding his family or seeing them starve only the most heartless conservationists think they should be jailed or worse, shot on the spot.
Some wealthy environmental and conservation groups have tried co-opting the poachers by paying them better and turning them into guards. Other groups have set up co-operatives that help the locals profit from their natural resources through tourism and research. Most of these initiatives have failed and the few that haven’t continue to struggle.
Being free market oriented I’ve thought, “Okay, why don’t the groups and wealthy individuals buy up the land the animals sit on, then fence it.” But there are several problems with this. It has been tried in Kenya and South Africa with limited success. Fences may keep the animals inside the park, but they don’t keep determined people out. Shooting poachers on sight might sound good to some in Europe and the United States, but all it does is piss the locals off. When this happens they can make life very difficult for conservationists in many ways, from stealing their supplies to harassing their staff, and eventually in some democracies, electing politicians who support their positions. After all, chimps don’t vote but Tanzanians do.
So in order to support conservation of the animals, the foreign groups and individuals have to buy off the politicians. This may work for awhile, but it’s difficult for a politician to stay bought when their constituents aren’t very happy with them. Africa also has a poor track record when it comes to respecting property rights. A chimpanzee conservation group could buy up hundreds of thousands of chimp habitat in the Central African Republic only to see a new government take power and decide that the foreigners don’t own the land anymore. What are the groups going to do? Sue? In which court? The one whose Supreme Court Justice is the president’s brother?
The basic problem is that the wildlife we wish to conserve is in Africa, and the legal and economic systems capable of protecting it are outside of Africa.
In order to protect the animals of Africa we are going to have to import one of those. Either we bring the animals to North America and Europe or Africa imports our legal and economic systems. Since the latter should strike some of the politically correct minded as “colonialism,” the likelihood of Africa developing a thriving middle class and a legal system guaranteeing property rights will take much longer than the animals can survive poaching and habitat destruction. Westerners like to blame the ills of Africa on colonialism, and there were some serious ills like King Leopold II’s atrocities in The Congo, but after half a century of independence are the former colonies of France and the UK better off today than they were before independence? Is it possible that the roots of Africa’s problems do not lay in colonialism, but something else like the corruption that is endemic to the tribal and family-based communitarism?
The conservationists I have met who are serious about saving African wildlife tend to be socialists, and they all subscribe to a top-down model of government control over natural resources, or a bottoms-up communitarian approach whereby a whole village has a vested interest in the stewardship of wildlife resources. They must begin to challenge their own beliefs and either come up with new approaches to save the wildlife or buy it and ship it to wildlife refuges in North America and Europe. But they’d better act quickly, because the elephants of Zimbabwe and the rest of the wildlife on the continent are running out of time.
It’s hard not to sympathize with fast food workers, especially since so many of us have been them. One of the first real jobs I ever got was getting hired by a friend who managed a pizza restaurant of a small chain. I made and delivered pizza in the suburbs for minimum wage plus tips, blasting electronic music like Front 242 and goth classics by Bauhaus on my boom box riding shotgun as I drove my Dodge Omni into the ground. Meanwhile I attended college, and took more interest in my extracurricular studies than I did my job. I even let my hair grow out, and when the franchise was taken over, my new owner fired my friend, then demanded I cut my long hair. I refused, was fired, and with typical 19 year old drama told him to kiss my ass.
Looking back on the experience I learned quite a bit, how to handle rude people, the importance of being on as well as managing my own time. But most important I learned to get the skills I needed so that I never had to work fast food again.
When I go to fast food restaurants, I expect to see kids working. I don’t expect to see people making a career in them. If someone is above 30 and still slinging burgers through a drive thru window, I think that person has made a wrong turn somewhere. Perhaps they are a working mother trying to get some skills under her belt or a drunk trying to work and remain sober, or maybe an ex-con who is trying to reintegrate herself into society. Even with these people the job should be a temporary station in a long winding journey where they develop skills, get experience and move on to something better.
Sure the jobs suck, I’m not disagreeing with that. But they are supposed to be temporary; if you are working in the industry for years without moving up the corporate ladder then something is seriously wrong with you that doubling the minimum wage isn’t going to cure.
There’s a neighborhood K-5 public school in the middle class suburbs of St. Louis, Missouri. This school employs 18 teachers and 3 full time teacher’s assistants. It also has a staff of 2 full time special education teachers to help integrate special needs children with everything from autism to Down’s Syndrome into classes. So the 300 students who attend the school will be taught by 20 full time teachers and 3 teachers assistants.
This school also employs a librarian, a social worker, a guidance counselor, an occupational therapist, a speech therapist, an assistant principal and a principal. I have ties that I still wear that are older than the principal who makes $130k a year, and the assistant principal probably makes $20k less.
Assume for a minute that all the teachers make the same, ignoring that there is some variation due to experience, skill-set and gender, but the teacher’s assistants make only minimum wage so we’ll ignore them for now. Let’s make the teacher salary a unit called “teacher“.
With some variation the librarian, a social worker, guidance counselor, occupational therapist, and speech therapist all make the same; assume each makes the same as a teacher, so that’s 5 teachers. The principal’s salary is the equivalent of more than two teachers salaries but the assistant principal’s salary equals less than two teachers salaries, so they balance out to two teachers each, making 4 teachers.
There are also four child psychologists based at this school. These psychologists do spend time at other schools, but those schools also have their own psychologists, some of whom visit this neighborhood K-5 public school. These psychologists are all Ph. Ds with each earning about 1.5 teachers for a total of 6 teachers.
I’m sure non-teaching professionals provide some value to students, but it’s impossible to determine exactly what since there is no external pressure on these jobs. When budget cuts threaten, the principal doesn’t lose her job the music teacher does. One might think the vaunted teachers’ union that is such the bugaboo of the Right would protect the teachers from such cuts, but they don’t because the union leadership swaps out with school administrators in the district, so they don’t rock the boat because they don’t want to lose these positions when they come open. And although I personally love libraries, I recognize I love the idea of libraries. I devour books the way anacondas devour unlucky villagers, but I haven’t bought a book printed on paper in several years. More importantly, I haven’t used a library as a general reference resource in over a generation. Don’t get me wrong, as a genealogist libraries are crucial, but few K-5 kids are pouring over baptismal records on microfilm from 150 years ago. If the school employs a librarian, does it also employ a blacksmith and cooper? If not, why not?
So we have 20 teachers that actually teach, and 15 teachers who don’t. Out of the 35 teachers the taxpayers of this community pays for it only receives 20 teachers, a loss of more than 42%. And that doesn’t even count the overhead of the school district, a vast sprawling enterprise that consumes a quarter of a billion dollars of taxpayer revenue each year serving 22,000 students.
That’s $11,364 per student. The school also has a teacher-student ratio of 1:15, yet no teacher earns the $170k that ratio would suggest but the superintendent earns much more than that himself. In terms of actual pay the teacher-student ratio should be 1:5. Why is it three times higher?
While the school’s teacher-student ratio is publicized, what is the school administrator-teacher ratio? I understand that some support personnel are needed for teachers and students, but what keeps this school district from hiring too many, and if the system becomes top heavy with administrators, how does the district rebalance this teacher-administrator balance? What prevents a school district from demanding hire property taxes then using that money to hire a “self-esteem co-ordinator“, another school psychologist or perhaps a pay raise for the superintendent?
In the private sector when a company’s middle management gets too big it is reorganized and people are fired. This pressure comes from shareholders who vote with their money; when the firm is doing well it is assumed to be well run and the stock rises. When a firm does poorly shareholders assume it’s not well run and drive the price down resulting in restructuring and layoffs. When a firm is poorly managed it usually becomes a takeover target the way a wounded seal becomes a meal for a shark.
There is no pressure like this in public education (or medicine – which is a future topic), so how can the taxpayers make a school run efficiently, guaranteeing that their money is used to educate children instead of paying for Caribbean vacations for principals and their spouses?
One of the elite private K-6 elementary schools in St. Louis costs $15,822. That’s less than a $4,500 difference with much better results and a teacher-student ratio of only 1:7. Part of this difference could be made up by disbanding the US Department of Education and applying it’s $70 billion yearly budget to students in the form of a voucher. More savings could come from disbanding Missouri’s educational department. It’s difficult to calculate what that savings would be because some of the State’s money helps fund individual school districts, but for argument’s sake let’s assume that the savings cut the $4,500 difference down to $3,000. Would it be too much to ask parents to come up with $3k a year to pay for their own child’s education?
$3,000 is $250 a month. That’s a lot in some households, but somehow these same households manage to have cell phone service, cable, high speed internet, and various tattoos and piercings some of which cost thousands of dollars each. “That which is free is abused,” is one of Life’s great truisms, and forcing parents to pay for their children’s education, in the same way that Obamacare compels people to spend money on health insurance, makes them take a personal stake in their child’s education, one of the great problems all teachers face today. As for parents who have more than one child, most private schools offer discounts for multiple enrollments, and besides, why should the rest of Society pay for someone’s personal choice to have a large family? I own a large plot of land by choice, and I pay for that through higher property taxes and a bigger mortgage. I do not expect any type of relief from Society even though I am protecting the land from development and providing a sanctuary for wildlife on an important watershed in America’s Southeast. Now that I think of it, perhaps I should…
Following the Commerce Department’s revision of GDP numbers, Nathan “Nate” Silvers, an IT project manager from Mount Holly, New Jersey announced today on his Facebook page that he was revising his looks on the hotness scale from a previously reported “6” to “8”. “This is all about keeping my appearance up to date and relevant,” the divorced father of two said in a post to his 384 friends.
In addition Silvers took steps to revise his looks numbers all the way back to when he began dating his sophomore year of high school. The figures show he was more attractive during his divorce than his wife at the time reported. “That castrating bitch told me I was a ‘4’,” he said, referring to Jeanine Harris, his wife of 11 years. “But these numbers prove that I was a ‘7’.”
However they do show that he was not as hot as he thought he was during his “metal phase” in the early 1990’s after he revised himself down from a previously taken for granted score of “9” to a “6”. Silvers believes this was due to the over-emphasis of hair on the previous score, something the balding Silvers no longer believes is relevant, while under-emphasizing his earnings potential. “Chicks like-a da moola,” Silvers quipped, “And the revisions reflect this reality.” Silvers earns “almost six figures” as a contractor for a large financial institution and credits the wage as making up for the hairloss.
Nathan “8 out of 10” Silvers
Although the data revisions offer a slightly recalibrated view of Silvers in recent years, the findings do not change the overall picture.
“Despite the conceptual changes, Nate hasn’t really rewritten his history,” said Brian Vinton, a long time friend of both Silvers and his ex-wife Harris, pointing to the consistent scoring of his looks and very little revisions over the span of Silvers’s history.
Here is a classic example of how stealth inflation works.
The product is salsa for sale at Walmart. The old jar at the top is 16 oz while the new jar is 15.2 oz, a difference of roughly 5%.
Note how Walmart is advertising it as “new” in a different section away a few feet down from where it sells the old product for the exact same price. Normally Walmart doesn’t waste the effort moving the new size away from the older, larger size, but it has provided a section for the producer containing other of their products.
5% less salsa for the same price won’t kill anyone, but it is an example of how producers are hiding inflation from consumers, and how consumers pay more for products without realizing it. The company passes along increased prices to the consumer while maintaining market share that could be lost to brands that do not raise their prices. A buyer might notice a $.10 jump in the $2 price of salsa, but he may not notice when he receives $.10 less product. Hence the stealth designation.
Pretty clever, huh?