Wintery Knight

…integrating Christian faith and knowledge in the public square

New study: voucher program improved odds of poor students graduating by 21 percent

The Daily Signal reports on the study.

Excerpt:

Private school choice initiatives have become increasingly common across the United States. Far from being rare and untested, private school choice policies are an integral part of the fabric of American education policy.

In the United States today, 56 different school choice policies exist in 28 states plus the District of Columbia, and the number of choice policies has approximately doubled every four years from 2000 to 2012.

The District of Columbia Opportunity Scholarship Program remains the nation’s only federally sponsored private school choice initiative. It provides scholarships worth up to $8,000 in grades K-8 and $12,000 in high school to low-income children in D.C. to attend any of more than 50 participating private schools.

When the Opportunity Scholarship Program was launched in 2004, the U.S. Department of Education’s Institute of Education Sciences selected me to lead the initial government evaluation of this pilot program in parental school choice. Demand for scholarships exceeded supply, so most applicants faced a lottery to determine if they would receive an Opportunity Scholarship, permitting us to use a “gold standard” experimental research design to determine what impact the program had on participants.

Students in our pioneering study graduated from high school at a rate 21 percentage points higher than they otherwise would have as a result of using an Opportunity Scholarship. In scientific terms, we are more than 99 percent confident that access to school choice through the Opportunity Scholarship Program was the reason students in the program graduated at these much higher rates.

But that’s just one program, how about some others?

My research team similarly found the Milwaukee Parental Choice Program significantly increased the rates of high school graduation, college enrollment and persistence in college for the low-income students participating in our nation’s oldest urban private school choice program.

Researchers at Harvard University and the Brookings Institution determined that a privately funded K-12 scholarship program in New York City significantly increased the rate at which black and immigrant students enrolled in college. Increasingly and consistently, researchers are finding that private school choice programs like the Opportunity Scholarship Program enable students to go farther in school.

It is so good for the poor, minority children if we let their parents get money for school tuition directly. We should let parents make the choice about which school is best for their child. But, Democrats oppose school choice, because they want their allies in the teacher unions to be insulated from competition from better-performing private schools.

Look how the Democrats have fought to kill the D.C. voucher program. They talk about helping poor kids, but they don’t really mean it. And note, that article is written by ultra-leftist Democrat Juan Williams, but even he cares more about poor, minority kids getting an education than the Obama administration does.

Filed under: News, , , , , , , , , ,

Why are Asian mothers so much better at raising high-performing children?

Consider this article in the Wall Street Journal.

But first – a little bit about Amy Chua, the author of the article:

Amy Chua is the John M. Duff Professor of Law at Yale Law School. Her first book World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability was a New York Times bestseller, was selected by both the Economist and the Guardian as one of the Best Books of 2003 and translated into eight languages. Her second book, Day of Empire: How Hyperpowers Rise to Global Dominance – and Why They Fall was a critically acclaimed Foreign Affairs bestseller. Amy Chua has appeared frequently on radio and television on programs such CNN Headline News, C-Span, The Lehrer News Hour, Bloomberg Television, and Air America. Her writings have appeared in the New York Times, the Washington Post, the Financial Times, Harvard Business Review, and the Wilson Quarterly. She lives with her husband, two daughters, and two Samoyeds in New Haven, Connecticut.

And now, an excerpt from the piece itself:

A lot of people wonder how Chinese parents raise such stereotypically successful kids. They wonder what these parents do to produce so many math whizzes and music prodigies, what it’s like inside the family, and whether they could do it too. Well, I can tell them, because I’ve done it.

[…]Despite our squeamishness about cultural stereotypes, there are tons of studies out there showing marked and quantifiable differences between Chinese and Westerners when it comes to parenting. In one study of 50 Western American mothers and 48 Chinese immigrant mothers, almost 70% of the Western mothers said either that “stressing academic success is not good for children” or that “parents need to foster the idea that learning is fun.” By contrast, roughly 0% of the Chinese mothers felt the same way. Instead, the vast majority of the Chinese mothers said that they believe their children can be “the best” students, that “academic achievement reflects successful parenting,” and that if children did not excel at school then there was “a problem” and parents “were not doing their job.” Other studies indicate that compared to Western parents, Chinese parents spend approximately 10 times as long every day drilling academic activities with their children. By contrast, Western kids are more likely to participate in sports teams.

What Chinese parents understand is that nothing is fun until you’re good at it. To get good at anything you have to work, and children on their own never want to work, which is why it is crucial to override their preferences. This often requires fortitude on the part of the parents because the child will resist; things are always hardest at the beginning, which is where Western parents tend to give up. But if done properly, the Chinese strategy produces a virtuous circle. Tenacious practice, practice, practice is crucial for excellence; rote repetition is underrated in America. Once a child starts to excel at something—whether it’s math, piano, pitching or ballet—he or she gets praise, admiration and satisfaction. This builds confidence and makes the once not-fun activity fun. This in turn makes it easier for the parent to get the child to work even more.

And here are her three main points:

Chinese parents demand perfect grades because they believe that their child can get them. If their child doesn’t get them, the Chinese parent assumes it’s because the child didn’t work hard enough. That’s why the solution to substandard performance is always to excoriate, punish and shame the child. The Chinese parent believes that their child will be strong enough to take the shaming and to improve from it. (And when Chinese kids do excel, there is plenty of ego-inflating parental praise lavished in the privacy of the home.)

[…]Chinese parents believe that their kids owe them everything. The reason for this is a little unclear, but it’s probably a combination of Confucian filial piety and the fact that the parents have sacrificed and done so much for their children. (And it’s true that Chinese mothers get in the trenches, putting in long grueling hours personally tutoring, training, interrogating and spying on their kids.) Anyway, the understanding is that Chinese children must spend their lives repaying their parents by obeying them and making them proud.

[…]Chinese parents believe that they know what is best for their children and therefore override all of their children’s own desires and preferences. That’s why Chinese daughters can’t have boyfriends in high school and why Chinese kids can’t go to sleepaway camp. It’s also why no Chinese kid would ever dare say to their mother, “I got a part in the school play! I’m Villager Number Six. I’ll have to stay after school for rehearsal every day from 3:00 to 7:00, and I’ll also need a ride on weekends.” God help any Chinese kid who tried that one.

[…]Here’s a story in favor of coercion, Chinese-style.

Now you go read the whole article to find out the three differences and read the coercion story. Read the coercion story now!

And what do we learn from it? Well, what I learned is that if we Christians want to have any hope of having an influence in the public square, then we will have to marry well, and we will have to train our children like Amy does. We should not be thinking of marriage as a way to have feelings and to gain happiness and fulfillment. Marriage should be about service to God. And one of the ways we serve is by producing children who will have an influence. I think that parents in the West tend to have the idea that the world is a safe place, and that we should try to please our children and make them like us – so that everyone will be happy. But there is one person who will not be happy if we focus on ourselves instead of serving God. Do you know who that might be?

One thing I would say in criticism of Amy is that she seems to only care about grades – which are assigned by teachers who are not necessarily going to have the same goals as a Christian parent. Teachers have their own agenda, and will happily give a child an F for espousing a belief in abstinence, or for talking about the Big Bang or protein sequence specificity, or for mentioning Climategate and dissent from man-made catastrophic global warming. If the class is math or computer science, then the children should be required to be the best. If the class is on hating America, then maybe the child should be going to a different school or being homeschooled. (Assuming that the Democrats have not banned all private schooling and homeschooling, which their masters in the teacher unions would dearly love to do).

My advice for men is this: Have a plan for marriage and parenting. Make decisions your whole life to implement that plan. Choose a wife based on the criteria of the job of marriage. And raise your children to have an influence for Christ.

If you cannot find a wife who actually puts serving God over her own feelings and desires, remain chaste and do not marry. There is no point in getting married unless marriage and parenting can serve God. The point of marriage is not to have a big wedding. The point of marriage is not to make women happy and fulfilled. The point of marriage is not for the woman to neglect her children while focusing on her career. The point of marriage is not to blindly hand children off to the schools to be indoctrinated as they obtain non-STEM degrees.

Filed under: Commentary, , , , , , , , , , , , , , , , , , , , , , , , ,

Bobby Jindal and Mike Lee on school choice / education reform

Lousiana Governor Bobby Jindal

Louisiana Governor Bobby Jindal

This is an editorial from the Washington Examiner, authored by school choice champion Bobby Jindal.

What is school choice?

On the most basic level, school choice represents the freedom to choose — empowering parents to select the best educational options for their sons and daughters. That could be a charter school, a private school, a religious school, home schooling, or even online learning. Governments should provide parents with the personalized and individualized tools they need to help their children excel academically.

That freedom to choose in turn will provide children with the freedom to succeed. With the right educational environment, teachers and academic training; students from all locations, income brackets and demographic groups will have better tools to compete in the global economy. We need to develop the talents of every American — no matter where he or she is from, and no matter the color of his or her skin — to maximize our country’s potential.

School choice also serves another important purpose — freeing low-income children from failing schools. No child should see his God-given talents go to waste because he is stuck in a failing school — and no parent should face the disempowerment that comes from knowing her son or daughter remains trapped in a poor school, and she lacks the financial means to move that child elsewhere. We can do better — and, by allowing parents dissatisfied with their school to move with their feet, school choice gives both high-performing and low-performing schools more incentive and motivation to improve their offerings.

Finally, school choice provides parents with freedom from the status quo — an educational-industrial complex that thinks bureaucrats, not parents, can best make decisions about the lives and futures of America’s children. It’s about pushing back when the then-head of Louisiana’s largest teachers’ union said low-income parents had “no clue” how to choose the right school for their children. And it’s even about standing up to the Attorney General of the United States, when the Department of Justice asked a court to block Louisiana’s school scholarship program on civil rights grounds — even though 90 percent of the program’s participants come from racial minority groups.

I don’t like people who talk conservative but govern liberal. I want to see the achievements.

The numbers:

For here in Louisiana, we’ve put those principles to practice. Since we removed the cap on charters in 2009, we’ve authorized almost 200 charter schools throughout the state — that’s 70,000 kids who now have a choice about where they go to school. This last year, our Recovery School District became the nation’s first school district with 100 percent charter school enrollment. And the results are dramatic: The graduation rate in New Orleans has increased from 54.4 percent before Hurricane Katrina in 2004 to 72.8 percent; the percentage of New Orleans students scoring basic and above has increased from 35 percent to 63 percent; and the percentage of failing schools in New Orleans has dropped from 67 percent in 2005 to 17 percent.

We expanded our school choice scholarship program, which was initially confined to New Orleans, statewide. Parental satisfaction with the statewide scholarship program stands at a whopping 91.9 percent. We went even further though and created a dollar for dollar rebate for donations used to fund nonpublic school scholarships low-income students through our “school tuition organizations.” Between 2008 and 2013, the percentage of students in the scholarship program who are proficient in third grade English language arts has grown by 20 percentage points and in math by 28 percentage points. Again and again, we’ve proven that giving more choice to parents is not only vital, but it gets results.

We also expanded access to online and dual enrollment courses for students across the state. This year, we’ve had over 19,000 students take advantage of our Course Choice program enrolling in advanced placement courses and career and technical courses that they otherwise wouldn’t have access to.

He’s in my top 2 for the 2016 presidential race, along with Scott Walker.

I’d like to see school choice enacted at the federal level, and fortunately, Utah Senator Mike Lee has the same idea.

Utah Senator Mike Lee

Utah Senator Mike Lee

The Daily Signal reports:

I recently introduced in the Senate a bill that would empower the people most acutely committed to the quality of our education system: America’s moms and dads. My colleague on the other side of the Capitol, Rep. Luke Messer, R-Ind., has introduced a companion bill in the House.

By giving parents more power to invest in their child’s education and to choose what school best meets their needs, the Enhancing Educational Opportunities for All Act takes an important step toward restoring accountability to our public education system—something that has been missing for far too long.

Under our current system—which has remained essentially unchanged since President Lyndon B. Johnson signed the 1965 Elementary and Secondary Education Act—most parents are powerless to influence the quality of their child’s education.

What occurs in public school classrooms around the country—what teachers teach and how they teach it—is the result of a long, convoluted, bureaucratic chain of command that zigzags its way from Washington to local school districts, but never includes parents.

First, Congress passes legislation authorizing federal bureaucrats to establish rules, regulations, and standards with which states must comply in order to receive federal education funds.

Next, state officials refine—or in some cases distort—these Washington directives, writing narrower rules for their school districts, which then establish the specific policies for individual schools.

At no point in this decision-making process are parents consulted.

Instead, they are left with a “take it or leave it” choice: either accept the education offered at the local public school—no matter how bad it may be—or buy a better alternative, by moving closer to a better school or paying private school tuition.

For America’s most affluent families, this is no big deal—they can afford private schools and so have the power to choose the school that is best for their children. For everyone else, it precludes parents from making choices about their children’s education.

So our bill would expand school choice to all parents, regardless of socio-economic status or zip code, by allowing federal “Title I” K-12 support funds to follow low-income students to any public or private school of their choice.

It would also remove the contribution limits on Coverdell education savings accounts and allow “529” account funds to cover K-12 education expenses.

Our bill would give working parents more opportunities to invest in a variety of learning services and products outside the classroom, such as tutoring, online courses and textbooks.

The problem facing our public school system today is not about a lack of money—we have nearly tripled our investments in elementary and secondary students since 1970. The problem is dysfunctional government policy—however well intentioned—and a lack of accountability.

And that’s exactly what we should expect when Washington bureaucrats have more control than parents over a child’s education. We have a moral and economic obligation to flip this equation and put parents back in the driver’s seat.

For when we tolerate a system in which the quality of a child’s education depends on her parents’ zip code, we fail to live up to the ideals at the heart of American exceptionalism.

And when millions of children learn from a young age not to dream big, but to surrender to the hopelessness of low expectations, we will live in a society where upward mobility is no longer rule but the exception.

We can and we must do better.

If a school is failing – and they often are, especially in poorer areas – then shouldn’t parents have the ability to send their kids to a better school? When I want to buy something online, I know I can always do better by comparing prices and reviews. Competition between suppliers drives prices down, and raises quality up. The customer is king in the free market. It can work in education, too.

Related posts

Filed under: News, , , , , , , , , , , , , ,

Jay Richards: eight common myths about wealth, poverty and the free market

Have you read Jay Richards’ book “Money, Greed and God?” Because if you haven’t, he’s written a series of articles that summarize the main points of the book.

The index post is here.

Here are the posts in the series:

  • Part 1: The Eight Most Common Myths about Wealth, Poverty, and Free Enterprise
  • Part 2: Can’t We Build A Just Society?
  • Part 3: The Piety Myth
  • Part 4: The Myth of the Zero Sum Game
  • Part 5: Is Wealth Created or Transferred?
  • Part 6: Is Free Enterprise Based on Greed?
  • Part 7: Hasn’t Christianity Always Opposed Free Enterprise?
  • Part 8: Does Free Enterprise Lead to An Ugly Consumerist Culture?
  • Part 9: Will We Use Up All Our Resources?
  • Part 10: Are Markets An Example of Providence?

Parts 4 and 5 are my favorites. It’s so hard to choose one to excerpt, but I must. I will choose… Part 4.

Here’s the problem:

Myth #3: The Zero Sum Game Myth – believing that trade requires a winner and a loser. 

One reason people believe this myth is because they misunderstand how economic value is determined. Economic thinkers with views as diverse as Adam Smith and Karl Marx believed economic value was determined by the labor theory of value. This theory stipulates that the cost to produce an object determines its economic value.

According to this theory, if you build a house that costs you $500,000 to build, that house is worth $500,000. But what if no one can or wants to buy the house? Then what is it worth?

Medieval church scholars put forth a very different theory, one derived from human nature: economic value is in the eye of the beholder. The economic value of an object is determined by how much someone is willing to give up to get that object. This is the subjective theory of value.

And here’s an example of how to avoid the problem:

How you determine economic value affects whether you view free enterprise as a zero-sum game, or a win-win game in which both participants benefit.

Let’s return to the example of the $500,000 house. As the developer of the house, you hire workers to build the house. You then sell it for more than $500,000. According to the labor theory of value, you have taken more than the good is actually worth. You’ve exploited the buyer and your workers by taking this surplus value. You win, they lose.

Yet this situation looks different according to the subjective theory of value. Here, everybody wins. You market and sell the house for more than it cost to produce, but not more than customers will freely pay. The buyer is not forced to pay a cost he doesn’t agree to. You are rewarded for your entrepreneurial effort. Your workers benefit, because you paid them the wages they agreed to when you hired them.

This illustration brings up a couple important points about free enterprise that are often overlooked:

1. Free exchange is a win-win game.

In win-win games, some players may end up better off than others, but everyone ends up better off than they were at the beginning. As the developer, you might make more than your workers. Yet the workers determined they would be better off by freely exchanging their labor for wages, than if they didn’t have the job at all.

A free market doesn’t guarantee that everyone wins in every competition. Rather, it allows many more win-win encounters than any other alternative.

2. The game is win-win because of rules set-up beforehand. 

A free market is not a free-for-all in which everybody can do what they want. Any exchange must be free on both sides. Rule of law, contracts, and property rights are needed to ensure exchanges are conducted rightly. As the developer of the house, you’d be held accountable if you broke your contract and failed to pay workers what you promised.

An exchange that is free on both sides, in which no one is forced or tricked into participating, is a win-win game.

On this view, what you really need to fear as a consumer is government intervention that restricts your choices in the marketplace.

Economists agree on the benefits of free trade

Who could possibly disagree with free trade? Well, many people on the left do. They favor imposing restrictions on free trade. For example, people on the left favor making those who import goods pay tariffs, which makes it harder to trade with other nations. People on the left want to pass rent control laws to block landlords and tenants from trading more freely. People on the left want to pass minimum wage laws that block employers and workers from trading wages for labor more freely. But economists generally don’t agree with any of restrictions on free trade. In fact, even across the ideological spectrum, the majority of economists view free trade as a wealth creating policy, and restrictions on free trade as a wealth destroying policy.

Harvard economist Greg Mankiw explains what most professional economists agree on.

Excerpt:

Here is the list, together with the percentage of economists who agree:

  1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
  2. Tariffs and import quotas usually reduce general economic welfare. (93%)
  3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
  4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
  5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
  6. The United States should eliminate agricultural subsidies. (85%)
  7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
  8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
  9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
  10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
  11. A large federal budget deficit has an adverse effect on the economy. (83%)
  12. A minimum wage increases unemployment among young and unskilled workers. (79%)
  13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
  14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

Now when you are talking to a Democrat, you are talking to someone who disagrees with most or all of those common sense economic policies. For example, Obama’s backers in the labor movement inevitably endorse higher import tariffs, which discourage free trade between countries. No economist supports these tariffs on imports, because history has shown (e.g. – Smoot-Hawley Act) that tariffs destroy economic growth and reduce wealth creation. And that’s what I mean when I talk about economic illiteracy – I mean ignoring what we know from economics and our past experience with bad policies.

Democrat economic policies don’t work because they are making policies that are based on economic myths. We know that these myths are myths because of economics is a mathematical science, and because we have tried good and bad policies in different times and places. We have calculations and we have experience to know what works and what doesn’t work. If you want to help the poor, you have to respect what economists know about how wealth is created. The solution is not to “spread the wealth around”, it’s to encourage people to create more wealth by inventing things that people freely choose to buy.

Filed under: Polemics, , , , , , , , , , , , , , ,

Jay Richards: eight common myths about wealth, poverty and the free market

Have you read Jay Richards’ book “Money, Greed and God?” Because if you haven’t, he’s written a series of articles that summarize the main points of the book.

The index post is here.

Here are the posts in the series:

  • Part 1: The Eight Most Common Myths about Wealth, Poverty, and Free Enterprise
  • Part 2: Can’t We Build A Just Society?
  • Part 3: The Piety Myth
  • Part 4: The Myth of the Zero Sum Game
  • Part 5: Is Wealth Created or Transferred?
  • Part 6: Is Free Enterprise Based on Greed?
  • Part 7: Hasn’t Christianity Always Opposed Free Enterprise?
  • Part 8: Does Free Enterprise Lead to An Ugly Consumerist Culture?
  • Part 9: Will We Use Up All Our Resources?
  • Part 10: Are Markets An Example of Providence?

Parts 4 and 5 are my favorites. It’s so hard to choose one to excerpt, but I must. I will choose… Part 4.

Here’s the problem:

Myth #3: The Zero Sum Game Myth – believing that trade requires a winner and a loser. 

One reason people believe this myth is because they misunderstand how economic value is determined. Economic thinkers with views as diverse as Adam Smith and Karl Marx believed economic value was determined by the labor theory of value. This theory stipulates that the cost to produce an object determines its economic value.

According to this theory, if you build a house that costs you $500,000 to build, that house is worth $500,000. But what if no one can or wants to buy the house? Then what is it worth?

Medieval church scholars put forth a very different theory, one derived from human nature: economic value is in the eye of the beholder. The economic value of an object is determined by how much someone is willing to give up to get that object. This is the subjective theory of value.

And here’s an example of how to avoid the problem:

How you determine economic value affects whether you view free enterprise as a zero-sum game, or a win-win game in which both participants benefit.

Let’s return to the example of the $500,000 house. As the developer of the house, you hire workers to build the house. You then sell it for more than $500,000. According to the labor theory of value, you have taken more than the good is actually worth. You’ve exploited the buyer and your workers by taking this surplus value. You win, they lose.

Yet this situation looks different according to the subjective theory of value. Here, everybody wins. You market and sell the house for more than it cost to produce, but not more than customers will freely pay. The buyer is not forced to pay a cost he doesn’t agree to. You are rewarded for your entrepreneurial effort. Your workers benefit, because you paid them the wages they agreed to when you hired them.

This illustration brings up a couple important points about free enterprise that are often overlooked:

1. Free exchange is a win-win game.

In win-win games, some players may end up better off than others, but everyone ends up better off than they were at the beginning. As the developer, you might make more than your workers. Yet the workers determined they would be better off by freely exchanging their labor for wages, than if they didn’t have the job at all.

A free market doesn’t guarantee that everyone wins in every competition. Rather, it allows many more win-win encounters than any other alternative.

2. The game is win-win because of rules set-up beforehand. 

A free market is not a free-for-all in which everybody can do what they want. Any exchange must be free on both sides. Rule of law, contracts, and property rights are needed to ensure exchanges are conducted rightly. As the developer of the house, you’d be held accountable if you broke your contract and failed to pay workers what you promised.

An exchange that is free on both sides, in which no one is forced or tricked into participating, is a win-win game.

On this view, what you really need to fear as a consumer is government intervention that restricts your choices in the marketplace.

Free trade in the real world

This is not a theoretical problem, either. Millions of people in the Ukraine are protesting against Vladimir Putin and his restrictive Russian policies in order to get more economic freedom by signing a free trade deal with the European Union.

Rick Pearcey posted about it on the Pearcey Report: (H/T Nancy Pearcey)

France24.com reports:

Hundreds of thousands of protesters swarmed Ukraine’s capital Kiev on Sunday, where the country’s opposition leaders urged them to continue heaping pressure on President Viktor Yanukovich to sack his government and abandon plans for closer ties with Russia.

Many of the demonstrators who gathered at the city’s central Independence Square are furious with the government over its decision to back out of a historic agreement with the European Union in favour of a possible trade deal with Russia, Ukraine’s Soviet-era ruler.

The protest . . . is just the latest sign of mounting tensions in Ukraine over the past two weeks, raising fears over the country’s political and economic stability.

That’s a real crisis: freedom-loving people fighting for their right to be prosperous by adopting the economic policies that produce wealth.

If you care about poverty, it’s often tempting to think that it can only be solved one way – by transferring wealth from the rich to the poor. But that is a very mistaken view, as any economist will tell you. The right way to create prosperity is by creating laws and policies that unleash individual creativity. Letting individuals create innovative products and services, letting them keep what they earn, making sure that the law doesn’t punish entrepreneurs – that incentivizes wealth creation. Fixing poverty does not mean transferring wealth, it means giving people more freedom to create wealth on their own. Free trade between nations is an important way that we encourage people to create better products and services that what they have available in their own countries.

Economists agree on the benefits of free trade

Who could possibly disagree with free trade? Well, many people on the left do. They favor imposing restrictions on free trade. For example, people on the left favor making those who import goods pay tariffs, which makes it harder to trade with other nations. People on the left want to pass rent control laws to block landlords and tenants from trading more freely. People on the left want to pass minimum wage laws that block employers and workers from trading wages for labor more freely. But economists generally don’t agree with any of restrictions on free trade. In fact, even across the ideological spectrum, the majority of economists view free trade as a wealth creating policy, and restrictions on free trade as a wealth destroying policy.

Harvard economist Greg Mankiw explains what most professional economists agree on.

Excerpt:

Here is the list, together with the percentage of economists who agree:

  1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
  2. Tariffs and import quotas usually reduce general economic welfare. (93%)
  3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
  4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
  5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
  6. The United States should eliminate agricultural subsidies. (85%)
  7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
  8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
  9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
  10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
  11. A large federal budget deficit has an adverse effect on the economy. (83%)
  12. A minimum wage increases unemployment among young and unskilled workers. (79%)
  13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
  14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

Now when you are talking to a Democrat, you are talking to someone who disagrees with most or all of those common sense economic policies. For example, Obama’s backers in the labor movement inevitably endorse higher import tariffs, which discourage free trade between countries. No economist supports these tariffs on imports, because history has shown (e.g. – Smoot-Hawley Act) that tariffs destroy economic growth and reduce wealth creation. And that’s what I mean when I talk about economic illiteracy – I mean ignoring what we know from economics and our own experience with bad policies when we make policy.

Democrat economic policies don’t work because they are making policies that are based on economic myths. We know that these myths are myths because of economics is a mathematical science, and because we have tried good and bad policies in different times and places. We have calculations and we have experience to know what works and what doesn’t work. If you want to help the poor, you have to respect what economists know about how wealth is created. The solution is not to “spread the wealth around”, it’s to encourage people to create more wealth by inventing things that people freely choose to buy.

Filed under: News, , , , , , , , , , , , , , ,

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