I was reading the overview to the new public policy analysis by Cato called ‘The Public Education Tax Credit’ when a simple though struck me. I haven’t read their piece yet so this may touch on some topics they cover.

One of the rallying cries for public education proponents is that schools do not spend enough on students. Teachers are constantly out of money for classroom activities, field trips are shortened or canceled, class options have to be cut. Many people falsely use educational spending-per-student as a litmus test to determine the adequacy of the education.

However this type of measurement is flawed, and any proponent of existing, static, public education, where parents are forced to send their children to a limited number of schools (if not a single school) touting it is misleading the bodies attached to the ears listening. Here’s why:

A government-run, public education system is largely a monopoly controlled by the state. Bureaucratic systems lacking any significant competition have no larger incentive to perform spectacularly. It is rare that any school system truly stand out and above mediocrity. As is the nature of any given bureaucracy, the larger it grows, the less efficient it performs. This happens for a wide variety of reasons but largely due to simple economic constraints and laws thought of by men long retired to the daisy pushin’ industry.

Competitive markets can also have players of equal clout, nearing monopoly powers. However any given business is driven to outperform the competition. There is a constant process of innovation. Complacency kills; things that do not perform are cut as if they were fat from meat. Microsoft’s long ride on the “monopoly” train has only increased its exposure to competition making the company dominant in some areas yet spread thin in many areas. While Microsoft charged ahead on the desktop, they were blown out of the Internet pool by many upstarts who were not encumbered by the internal bureaucracy in Microsoft. Yahoo stole the search show-pony only to be eclipsed by Google. If Microsoft is to survive, it must adapt to the marketplace of today rather than the marketplace of yesterday. These constraints are not present in government-run monopolies.

Competition also has interesting effects on prices. In most cases, prices are driven down as more competition enters the market. When you leverage technology and labor resources to gain any advantage over a competitor, you seek to increase your margin and reduce costs. Any intelligent advantage you can eek out to make your product more profitable will be taken. The key tenet is that you have to drive for efficiencies wherever you can without sacrificing your share of the market and increasing your share everywhere possible.

Business management theory has evolved to recognize quality as a key motivator of clients. Where there may exist some difference in pricing, quality becomes an intangible factor of costs. Public institutions can not compete in this same way. Private schools, while they do exist, are and will remain secondary to the Public system until some form of educational freedom is extended to parents.

Another key example is the technology sector. Early CD players cost a small fortune. Yet as the technology improved and the market expanded, the price was largely driven down. While there surely were poor CD players on the market, they were eclipsed by players from competitors who drove through on quality. This offered high-quality equipment from many vendors on a downward price spiral to the point where CD players were a commodity item costing no more than $20 - $30.

Don’t read this the wrong way - $0.00 spent on schools is a bad thing as there will always be some costs associated with it. However using per-student spending as a measure of adequacy is  grossly misleading when spending is unlinked from quality and competition.

So I bought a Motorola Q9c from Sprint back in February. It is, without a doubt, the worst phone I’ve ever owned. Oh Motorola Q9c, how I hate thee, let me count the ways:

• Since March 2008, it’s been bricked at least 3-4 times. Thankfully a hard reset resolved the issue each time but no after losing a bunch of settings.
• Windows Mobile blows. It’s like Windows 3.11, just a bit prettier
• The camera takes decent shots. But its slow.
• The menu system sucks.
• When the battery dies completely, you need to have a Motorola charger. You can’t just hook it up via USB and let it charge.
• Too bad a third party software company makes a better software for syncing on the Mac than anything available on Windows. That’s pretty damned sad.

Now I’m stuck with the phone for the next two years and i want to get rid of it completely. I’d sell it and get a new one but I would pity the poor fool who bought it.

As a late bloomer in terms of obtaining my own degree, my experiences may blur the reality of most college experience. The old standard of a college education is largely on the downward slope. Not that a college education is irrelevant or a waste of time - it is not by any means - but the general process of education has largely failed to adapt to the very economics of human society. Let me put it this way:

If you are a Sophomore or Junior in high school, pick up a book on your state’s GED program. If you are a bit above average in school, you may find the material bland. However if you find that you have little problem answering the test questions on the GED, I would suggest ditching your high school advisor’s advice and get your GED if you can pass the test. The earlier, the better. This is particularly well suited to those who are smart but not quite up to terms with taking so-called “AP” classes in high school because someone just didn’t think you were smart enough. You can circumvent the public school schedule and start taking real college classes at your local community college. If you forego your Senior year in high school and take classes at your community college, you can easily build up more credits than you would sitting in your classroom with your peers.

Now I’m sure you are thinking that you will miss your friends, but you’ll be in school during the day while your friends are also in school. More often than not, you will be studying between classes and home in time to hang out with your friends in the afternoon or evening.
Another strategy that I personally took was to use the CLEP and DANTES tests to full advantage. That’s right - get college credit for testing on the materials. Some people believe you don’t learn anything by doing this but surprisingly, you do need to have some knowledge of the material. They are simply pass/fail tests and many colleges give you full credits for passing.

For example, I studied (unfortunately nowhere near as much as I should have) for about a month, took three tests over the two days and walked away with a semester’s worth of credits using nothing more than SparkNotes, the CLEP practice tests and a slightly-dated book on microeconomics. If you can, test out of as many classes you can on your degree track. This shortens the amount of time you spend in class by eliminating many of the less interesting classes.

In the one year that you would be sitting in a high-school classroom learning high-school material, or possibly even a couple AP classes, you can cram in 1 1/2 years worth of college. On your college breaks, have fun! Go out with your friends, work a little bit and make some money. Just study and plan on taking one or two CLEP/Dantes tests on your vacation. It doesn’t sound like much but you don’t have to do much more than pick up a book and read it before you go to sleep. The goal is to get your Associate Degree from your community college in 1 1/2 actual years, cutting 6 months from the defined community college time line.

With an Associate Degree under your belt, pick a University with an accelerated bachelor’s that will accept your Associates as meeting your basic requirements. Typically, you can have all of this done in a year and a half, taking two or three classes a semester. It goes fast. This means, by leaving high school early and using just a little bit of free time wisely, you can be done with a college degree by the time your friends are coming home from their first year in college at their respective universities. Where most kids are done with high school at 17/18, you can be done with college by 19/20, making good money, building up experience and then preparing for a grad school or climbing up the ladder.

My alma-mater has a new Bachelor’s degree program (C3) that allows you to have your entire degree done in three years. If you start at 16, you’re done by 19 or you can just keep going on through a Master’s program and start in the workforce with your friends a step (degree) ahead.

If you are really (really, really) motivated, you can visit the original “BA in 4 weeks” website here. Much of what I discussed as a means to obtaining an expedited degree is talked about in greater detail.

Recently Lakergirl sent me an email of a letter written by a soldier to his wife just prior to the battle of Bull Run (Civil War)

“July 14th, 1861Washington D.C.My dear Sarah.The indications are very strong that we shall move in a few days — perhaps tomorrow. Lest I should not be able to write you again, I feel impelled to write lines that may fall under your eye when I shall be no more. Our movement may be one of a few days duration and full of pleasure — and it may be one of severe conflict and death to me. Not my will, but thine 0 God, be done. If it is necessary that I should fall on the battlefield for my country, I am ready. I have no misgivings about, or lack of confidence in, the cause in which I am engaged, and my courage does not halt or falter.

I know how strongly American Civilization now leans upon the triumph of the Government, and how great a debt we owe to those who went before us through the blood and suffering of the Revolution. And I am willing — perfectly willing — to lay down all my joys in this life, to help maintain this Government, and to pay that debt.But, my dear wife, when I know that with my own joys I lay down nearly all of yours, and replace them in this life with cares and sorrows — when, after having eaten for long years the bitter fruit of orphanage myself, I must offer it as their only sustenance to my dear little children — is it weak or dishonorable, while the banner of my purpose floats calmly and proudly in the breeze, that my unbounded love for you, my darling wife and children, should struggle in fierce, though useless, contest with my love of country?

I cannot describe to you my feelings on this calm summer night, when two thousand men are sleeping around me, many of them enjoying the last, perhaps, before that of death — and I, suspicious that Death is creeping behind me with his fatal dart, am communing with God, my country, and thee.I have sought most closely and diligently, and often in my breast, for a wrong motive in thus hazarding the happiness of those I loved and I could not find one. A pure love of my country and of the principles have often advocated before the people and “the name of honor that I love more than I fear death” have called upon me, and I have obeyed.Sarah, my love for you is deathless, it seems to bind me to you with mighty cables that nothing but Omnipotence could break; and yet my love of Country comes over me like a strong wind and bears me irresistibly on with all these chains to the battlefield.The memories of the blissful moments I have spent with you come creeping over me, and I feel most gratified to God and to you that I have enjoyed them so long. And hard it is for me to give them up and burn to ashes the hopes of future years, when God willing, we might still have lived and loved together and seen our sons grow up to honorable manhood around us.

I have, I know, but few and small claims upon Divine Providence, but something whispers to me — perhaps it is the wafted prayer of my little Edgar — that I shall return to my loved ones unharmed. If I do not, my dear Sarah, never forget how much I love you, and when my last breath escapes me on the battlefield, it will whisper your name.Forgive my many faults, and the many pains I have caused you. How thoughtless and foolish I have oftentimes been! How gladly would I wash out with my tears every little spot upon your happiness, and struggle with all the misfortune of this world, to shield you and my children from harm. But I cannot. I must watch you from the spirit land and hover near you, while you buffet the storms with your precious little freight, and wait with sad patience till we meet to part no more.

But, O Sarah! If the dead can come back to this earth and flit unseen around those they loved, I shall always be near you; in the garish day and in the darkest night — amidst your happiest scenes and gloomiest hours — always, always; and if there be a soft breeze upon your cheek, it shall be my breath; or the cool air fans your throbbing temple, it shall be my spirit passing by.Sarah, do not mourn me dead; think I am gone and wait for thee, for we shall meet again. As for my little boys, they will grow as I have done, and never know a father’s love and care. Little Willie is too young to remember me long, and my blue-eyed Edgar will keep my frolics with him among the dimmest memories of his childhood. Sarah, I have unlimited confidence in your maternal care and your development of their characters. Tell my two mothers his and hers I call God’s blessing upon them. O Sarah, I wait for you there! Come to me, and lead thither my children”

The point of discussion is as to the level of patriotism that is show in this letter; there are few signs of this kind of patriotism in the present or that it is hard to find people who are so willing to die for their country because they believe in the ideals, the purpose and the course of their country. (Lakergirl, correct me if I’m wrong about the direction of the question)

I believe it is difficult to really relate his experiences then to any notion of patriotism today. It is interesting to see his perspective and the overall admiration for his country. However  I believe the period represents an overall dark period in this country’s history. Slavery is, of course, dangerous and an inhumane practice. However from my personal knowledge of history - which may be admittedly wrong - the larger aspects of the war itself was not directly about slavery in entirety. The Southern viewpoint comes across as one where slavery is a key component of a larger fight between State rights and Federalism. While the balance between state and Federal power had always been contentious, it was driven toward the boiling point with Lincoln’s election.

If you ever have the chance, Jefferson Davis’ post-war book highlighted some of the more contentious issues in the South’s fight for independence. One often overlooked fact of slavery in the United States was that it was in decline and several southern governments were, or had, already banned the importation of new slaves. Note, this did not stop a healthy black market from arising and out of the importation ban. Slavery itself was on a general decline. With a long and often unguarded coast line, smuggling was big business but the numbers appeared to be negligible in scope of the pre-ban numbers. With laws preventing the growth of slave states in the West, the best southern slavery could do was spread itself more thin and trap itself between Union states.

What is not often recognized is Lincoln’s abuse of the Executive powers. He willfully and intentionally usurped Constitutional powers in order to preserve the Union. This is a bit of a paradox in that the Federal government was a collaboration of States with no provisions against secession.   What could be considered a legal withdraw from the government by Southern states was breached by a President and Congress who had no authority to do so.

It is odd to see those who are so disgusted with our current president and who look highly on Abraham Lincoln’s presidency. Lincoln’s abuses equal, if not transcend, the actions of our sitting president.  Yet the popular opinion of the masses today would say that the abuse of power was worth the result of ending slavery. Yet it proved that a government that was to be restrained from encroaching on individual liberties could not be held in check by its own devices.

But we’re not here to talk about the Civil War. We’re here to talk about patriotism. It is fantastic to see such dedication to an idea of God and Country. However patriotism in this sense is blindly dangerous. It lacks the sense of being composed of a larger view. While I can relate to the sense of love of country, I could never be driven to such devotion without question or concern for the larger rammifications of such a decision. The irony is that the letter is still largely relevant today, just as it was then. I tend to believe Americans (or any country for that matter) have a fundamental understanding of the nature of their government, but a willful ignorance of the fundamental aspects of government and power.

Much of patriotism in the quoted letter and in today’s America is superficial in nature. The nature of politics in America is driven towards promoting this superficial sense of patriotism rather than acknowledging the reality of government. Politics is power; government is the mechanism to exerting that power. Where the country was largely founded on a healthy distrust of government and the power it has over the constituency, it has transformed into a quite an opposite beast where the career politician is often the norm rather than, as Jessie “The Body” Ventura calls it, a position for a statesmen who serves his government and goes back to the private sector.

There is no healthy fear of government in modern America. There is no recognition of the larger dangers of a powerful government. There are few voices of dissent in the larger laviathan of modern American government. Where the government was formed to protect individualism, it now forms around unchecked populism.

Around the Internet you will find a common misattribution to Thomas Jefferson when it was actually used to describe an Thomas Jefferson’s political ideals and it is this: “Dissent is the highest form of patriotism”. I think there are few words that capture my own sentiments such as these.

Russ Roberts over at Cafe Hayek recently received an email purportedly from United Airlines pushing to have speculators (the bad ones, not the good ones) punished for driving up the price of oil in the futures markets.

If it is from United Airlines as supposed, it shows some basic ignorance on behalf of an organization in communication to its customers. Maybe inept is a better word. I’ll concentrate on a single point in the letter sent to the good Dr. Roberts:

A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab.

The problem with this one statement shows a general lack of comprehension of how a futures market works. Let me explain how futures work another way:

Let’s pretend I love cocaine and like to do it a lot but I have this paranoia that the police are going to put a short-term dent in the supply which will cause my drug dealer to raise prices. I don’t want prices to be raised. I want my 8-ball for no more than $275. I go down and talk to The Snow Man and say, “hey, let’s make a deal. I’ll give you $25 now if you’ll sell me an 8-ball for $250 next month.”

Now Snow Man may be thinking - hell yeah, I’ll get $25 now and I don’t have to give anyone anything. I just have to deliver an 8-ball next month?  Snow Man agrees.

Note that no drugs are exchanged. I hand him $25. That $25 gives me the right to buy drugs at $250 in the FUTURE. Cool hunh? but I bet you’re confused at this point. So let’s see what happens under two scenarios:

Price of cocaine goes up:

If the price of cocaine goes up to $300 for an 8ball between now and next month I still get to purchase the cocaine at $250. I gave the dealer $25 for the OPTION to buy the coke so I have a total cost of $275. I can now feed my addiction at the same price I always have and the price of cocaine NOW is irrelevant.

Price of cocaine goes down:

If the price of cocaine goes down to $200 for an 8ball, then I lose $25 but I can just pay the market rate of $200. Sure, I’m paying more for the cocaine than what the dealer is selling it for ($200 plus I already paid $25). It sucks that I have to pay more but at the same time, I come out o.k. I can just say f#@$k it and forget about buying the cocaine at all.

Remember, when I’m buying an option (also called a ‘call’), I’m buying the right to buy something in the future at a given price.

Now you can also sell an option (called a ‘put’) where you can sell at a given price in the future. It’s just the opposite of a ‘call’. If Snow Man wants to make sure he can sell his coke for $275 next month but expects there to be a bunch more dealers and a lot of cocaine out on the street, he might just go out and set up an agreement to sell some of his coke next month for $275.

If the street price of coke goes up, he begins to lose money. He’ll lose any money he gives out to buyers who agreed to buy his product at $275.

If the street price of coke goes down, he makes money because he can sell the coke at $275 to those people who bought his ‘put’.

In any event, note that when you have a ‘call’ or ‘put’ you pay a small price to protect against large price swings. It narrows the band of risk. This is what people mean when they say they need to ‘hedge’ their bets. You can reduce the impact of price fluctuations on a business that deals in anything that is generally a commodity.

Much of what is happening in the Oil industry is a situation where many people have started have fears about the price of oil in the future. So they buy options to bet on which way the price of oil is going to go. The profits from taking the options can then be used to bring the price down to a given point that is close to the present market rate. If a company bets wrong, they lose some money - but they do not lose all of their money. There is no actual oil be exchanged. Just a lot of options to buy and sell. In reality, some trades do actually take place. But in the world of commodities, it is often better to take the profits to off-set the cost of goods rather than having to worry where you will be putting 10000 barrels of oil - and that is why the futures and options markets are financial markets!

Imagine your drug dealers down at the corner actually trading drugs every time they wanted to buy and sell an option at a given price! You won’t because it doesn’t need to happen, they can just use the money made from trading the options on the underlying cocaine.

You have to love the French government - a modern country frozen in dark-ages mentality. However the precedent the French are attempting to set with this case is dangerous. Since eBay is largely a community of buyers and sellers, holding the mechanism responsible is just beyond the reach of the rational.

Fake goods are a plague for brands; a boon for those who could care less. However eBay never takes posession of the goods in the marketplace. It is not an escrow service for buying and selling and has no business verifying authenticity of goods on the site. While some may disagree, the responsibility lies with the person who sold the merchandise to the buyer. Imagine if we held the government up to the same standard. Any illegal activity taking place on the street would logically be the government’s fault. If drugs are illegal and sold on the street, the government would then be the sole party responsible for the sale of illegal drugs.  If someone were to die from taking a fake drug, the dealer would essentially remain free and the government would be levied with the burden of carrying the debt.

While I am, by no means, privy to any information in the case (see ‘About’ for disclaimer),  I do question the logic of the French court system. There are generally two outcomes that will arise: eBay will most likely be sued in French courts by others who are attempting to “protect” their brands, and consumers will face a backlash as the goods (real or fake) begin to disappear.

How is this good for consumers? It helps to clamp down on fake goods. How is it bad? Since eBay has no real ability to validate whether goods are legitimate, it may force the removal of legitimate luxury goods. Forget selling that Louis Vuitton hand bag you bought from the retail store on eBay. If eBay is the one holding the liability for those goods, do you really think they want to face lawsuit after lawsuit from these brands?

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