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Dependents and Dependency

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Do we have designated dependents in this country? Is dependency a goal of government?

It is the 21st Century, 150 years after a Civil War was fought to eliminate slavery, the ultimate and most evil form of dependency. That evil was vanquished but a similar one is in place. It seems that dependents and dependency are wanted by government.

If there is any good news regarding this observation, dependents are no longer defined along racial lines. However, dependents are still disproportionately made up of people of color, not necessarily by government design.

Government (ours and all others) need dependents. Those who think and do for themselves are threats, unless they can be co-opted in some other fashion. The piece below is from my forthcoming book Wealth If You Want It. This part of the book attempts to alert those already dependents or potential dependents that government is not really helping them.

The book is a step-by-step guide to escape dependency. It includes a simple and effective investment model for those who want to go beyond merely saving. This website will provide downloadable PDF and EPub files. They will be free to anyone who desires them.

The first half of the book is for complete novices, those with no financial savvy. The second part provides an effective investing model for readers, sophisticated or otherwise.

The book will be available shortly. Should any other websites wish to provide it as a free download, I encourage them to contact me.

Are You Prevented From Achieving Wealth?

H. L. Mencken, a scholarly curmudgeon, claimed that dependence among the citizenry was necessary:

“The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable …”

The quote is from the Mencken Chrestomathy, a book originally copyrighted in 1916. Mencken argued that it was convenient to discourage independent thinking. Government wanted servile followers not questioners. He didn’t claim that all citizens were, or need be, ignorant or dependent. Clearly some level of knowledge and wealth are necessary for society to advance. Too much, whatever that might mean, he believed presented a threat to the power structure. To examine his contention, assume at least one of these two ingredients is necessary for independence: knowledge or wealth. We can look to see whether either is harder to achieve today than in prior times. A finding along these lines would lend support to his claims.

A cursory review suggests that both knowledge and wealth, at least for the masses, are harder to obtain today than in prior periods. Furthermore, much of the difficulty results directly from government policies.

The Acquisition of Knowledge

Is knowledge easier to obtain today than in prior times? The internet certainly makes it more available. However, there needs to be a minimal base of knowledge prior to internet use that allows one to know what to pursue. Porn, jokes, games and smiley faces are not knowledge and do not expand your skill set. The basic knowledge comes via formal education. The fact that the federal government has a near monopoly over its delivery and content suggests a review of this source.

School Performance

A simple question is whether school outcomes are better or worse than they used to be? There are two ways to make this judgment. One involves what is called longitudinal analysis which compares the same schools over time. The other involves what is called Cross-sectional analysis which compares different schools at similar points in time.

Comparisons regarding the knowledge required to graduate high school today with that of 50 or 100 years ago is a form of longitudinal analysis. It suggests standards have declined. Recent push-backs over content and quality by parents reflect dissatisfaction. (Sadly, it took crazy Marxist Critical Race Theory to get them focused, but hopefully the concern goes beyond this utter nonsense to the bigger problem – children are not being educated as well as they used to be.)

The graphic below highlights education results and resources over time:

There has been no improvement in test scores while spending increased by over 140% in inflation-adjusted dollars and staffing increased by over 75%! (I do not know why the science data are incomplete.) Two conclusions seem possible. One interprets the substantial increase in resources as suggestive of government wanting better outcomes. The other interprets the consistent or declining outcomes to government ineptness.

The rise in inputs is hardly surprising and likely not particularly relevant. It is simply the way of bureaucracies. Every government entity spends more each year, regardless of need or outcomes. Bureaucracies are monopolies. They service their “owners” (in the case of schools, teachers, their union and other educational bureaucrats). Workplace conditions are made easier and more attractive. Demands are reduced. Performance is secondary.

Digging deeper into curriculum changes and standards will find other reasons why performance stagnated or declined. Much of what is “taught” today is little more than indoctrination.

Enormous commitment of resources produced no improvement since 1970 (and signs of dis-improvement). This result is not proof of Mencken’s contention but it is not inconsistent with it.

Cross-sectional analysis measures performance across different school systems. These data are useful when comparing one school system against another. These comparisons can be done intra-state, inter-state or internationally. The data are meaningful in the sense that they highlight differences among school systems based on comparative performance statistics.

Results for the US schools versus other countries can be compared via standardized test scores. These comparisons are not good. Here is a summary of a recent international comparison:

“In 2018, there were 8 education systems with higher average reading literacy scores for 15-year-old[s] than the United States, 30 with higher mathematics literacy scores, and 11 with higher science literacy scores.”

The Pew Research Foundation summarized it this way:

“One of the biggest cross-national tests is the Programme for International Student Assessment (PISA), which every three years measures reading ability, math and science literacy and other key skills among 15-year-olds in dozens of developed and developing countries. The most recent PISA results, from 2015, placed the U.S. an unimpressive 38th out of 71 countries in math and 24th in science. Among the 35 members of the Organization for Economic Cooperation and Development, which sponsors the PISA initiative, the U.S. ranked 30th in math and 19th in science.”

These results were achieved among developed and developing countries. The US had major advantages in terms of resources committed to education.

The data show that schools are not improving longitudinally and clearly losing ground cross-sectionally (internationally).

Is this due to government incompetence or design? Motive is difficult to assess, but if a different result were wanted, it would not be hard to bring about.

The rise in home schooling, charter and private schools show a marketplace attempting to combat the monopolistic world of public schools. Disgusted parents are making sacrifices to avoid inferior outcomes for their children. Privatizing schools would be a simple, popular and effective solution. Not surprisingly, the majority of the political class is against this solution. Also, not surprisingly, those who would benefit the most are strongly for this solution. It is a key to breaking dependency, at least for those who want to do so.

Course Content

If wealth were truly a concern, it would be addressed in schools. That is not done. Is this because wealth is a way out of dependency? Or is it because other subject matter is considered too valuable to sacrifice? This latter question is laughable, although our educators think otherwise. How difficult would it be to incorporate age-old wisdom and advice regarding prudent financial habits into early-grade curricula? Something as simple as Ben Franklin’s sage advice. Or even non-religious quotes from the Bible could be included:

“Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.” Proverbs 6:6-8 (NIV) 

I am not advocating putting the Bible back into schools. I am advocating teaching children basic habits and verities that have served humanity well for thousands of years. No one is in greater need of this learning than those who come from broken or failed homes. Sadly, it seems they are the easy ones to make dependents. They are treated as votes and little else.

Adam Smith, 250 years ago, observed: “The real tragedy of the poor is the poverty of their aspirations.” Is there anything more important for the disadvantaged than to teach them that poverty need not be permanent and they are not trapped in some modern-day caste system? Is it too much to ask that they be given a chance to break this cycle? The image to the left presents another observation from Smith.

Mencken’s observations were made long before the federal government had a stranglehold on the content and delivery of education. Here is another of his observations (with my emboldening):

“The most erroneous assumption is to the effect that the aim of public education is to fill the young of the species with knowledge and awaken their intelligence, and so make them fit to discharge the duties of citizenship in an enlightened and independent manner. Nothing could be further from the truth. The aim of public education is not to spread enlightenment at all; it is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardized citizenry, to put down dissent and originality. That is its aim in the United States, whatever the pretensions of politicians, pedagogues and other such mountebanks, and that is its aim everywhere else.”

The Burning Platform offered this assessment:

“Our public education indoctrination centers have taught multiple generations to feel rather than think, believe rather than question, obey rather than challenge, and allow their minds to be molded by elitists to follow orders and do as they are told, no questions asked.”

Any monopoly is inefficient. Serving the needs of “customers” takes a back-seat to those of the “owners.” “Owners,” the political class, teacher unions and demagogues, are served before “Customers” (students and parents). In this Kafkaesq system, customers are ill-served.

Is there any doubt that the wealthiest and most innovative country in the world could not educate its citizens better if that were truly a goal? “School choice” or “vouchers” offers a simple, cost-efficient method of changing outcomes. It solves the problem of parents who want better education for their kids than the current monopoly provides. Yet this solution is anathema to the political and educational establishment. The parents of underprivileged children are overwhelmingly in favor of it. Anyone concerned about educating children should demand it. That includes politicians, especially those who send their own children to private schools.

Beyond Education

Income Inequality

Politicians are quick to talk about income and wealth inequality. That talk is usually an attempt to attract votes rather than truly address these problems. (There are more poor voters than rich ones and they are easier to scam.)

Wealth and income inequality statistics are difficult to compare. They are used by demagogues on both sides of the issue to claim any desired outcome. The chart to the left is from Charles Hugh Smith using Federal Reserve data. It purports to show how the Federal Reserve and its monetary policy exacerbates wealth inequality. While I don’t mean to overemphasize this chart, it does show how “easy money” benefits those holding financial assets (those already having wealth). What it does not show is how this easy money reduces the purchasing power of those barely getting by. The rich benefit from inflation in asset prices and the poor lose purchasing power from a diminished dollar.

The late Walter Williams wrote an entire book on the subject of making matters more difficult for the less fortunate in society. He entitled it The State Against Blacks, although its points apply to anyone trapped in the underclass.

Dr. Williams grew up in the ghettos of Philadelphia and explained how, over the course of his lifetime, escape routes for the un- and under-educated were systematically closed. It was made harder, not easier, to escape a poor education. Legislation and restrictions closed these opportunities. Arguments for and against such legislation are reasonable, however, every one reduced the ability of the under-served to remedy their condition.

(For those unfamiliar with Williams, I encourage you to google his name and read/watch his approach to various topics. A video interview with Reason magazine is especially recommended.)

The most outrageous and harmful example of this kind of “protection” is minimum wage legislation. This law bans consensual agreement between adults regarding an employment arrangement, unless the hourly pay exceeds some arbitrary level set by remote, mindless bureaucrats. From an economic standpoint, there is no dumber or more harmful law! But that assumes you are interested in helping these people escape the cycle of poverty.

Mencken had no difficulty understanding such laws. For him, they were support for his contention. Those cheated by inadequate government schools used to be able to escape by getting a job and learning the skills and habits denied them in an inferior educational experience. Government found a way to stop this escape while pretending to be compassionate. In reality, there is no crueler law than the one they pretend helps those who it hurts most. Unless some corporation wants to engage in charity and pay more than inferior skills are worth, government produces more dependents.

Supporters of the minimum wage are incurably stupid or cruel (hardly mutually exclusive). Is there anything more deplorable than pretending to help someone, while knowingly condemning him to a life of poverty? What kind of animal behaves this way? The cruelest one of all – the Animus Politicus!

The insanity of the minimum wage fortunately limits its damage. If it were truly beneficial, $20 or $50 per hour would be even more “compassionate.” Thankfully logic limits the scam, but not before it condemns the neediest to a life of dependency. What can be said about the minimum wage can be said about many other government programs. Nothing has harmed the underclass more than the so-called Welfare State. Nothing has created more dependency. The Cato Institute, commenting on the welfare system, reported:

“The current welfare system provides such a high level of benefits that it acts as a disincentive for work. Welfare currently pays more than a minimum‐​wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states it pays more than $15 per hour. If Congress and state legislatures are serious about reducing welfare dependence and rewarding work, they should consider strengthening welfare work requirements, removing exemptions, and narrowing the definition of work. Moreover, states should consider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tightening eligibility requirements.”

Continuing to address the barriers and disincentives placed in front of the most needy could fill a book (which Dr. Williams actually did). Mencken spotted the intent early on, even before many of the barriers were instituted. Politicians who support these harmful programs are either too dumb or dishonest to remain in office. Government is rewarding you to remain dependent because they want you to be dependent! They want your vote and are willing to pay for it. The bargain is Faustian. You give up a normal life as part of this bargain. Remember this simple fact: Government is power. Power is always abused. Centuries of evidence document these claims across all nations and forms of government.

The Root of the Problem

No government is innocent. Power always grows and power always corrupts! Murray Rothbard explained the problem in his (free version) of The Anatomy of the StateThe Founding Fathers knew the benefits of liberty and the evils of coercion. Every prior government exploited its citizens, especially those most vulnerable. The Founders attempted to remedy that with the Constitution. The document’s intent, according to the late Joseph Sobran, was as an “antitrust act against government.” It was to constrain, control and contain government, not the citizens.

The Founders were not naïve. They knew this paper document could not stand up against the power hungry. Thomas Jefferson, acknowledged that the checks and balances contained within would not hold back evil on their own. His view of enforcement was stark:

“[t]he tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”

No government is guided by idealism and the love of liberty. Politicians are a sorry lot! They are mostly incompetent, unmotivated and dishonest. Most people are now seeing what Frederic Bastiat, a Frenchman writing in the early to mid 1800s, pointed out:

“It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds.”

Men with questionable competence enter government as a career, not as service. Most become millionaires if they hang around for a few terms. Barack Obama was virtually broke when elected to public office. He left the Presidency with a net worth exceeding a hundred million dollars (for about ten years of total “service”). Joe Biden, a political hack for 50 years, has an estimated net worth of $50 million. The man is barely capable of tying his shoes. Does anyone believe these outcomes happen on a political salary? Does anyone believe it happens as a result of advancing the country? Does anyone believe these doofuses are extraordinarily capable people?

We began this discussion looking at an opinion of H. L. Mencken’s. Like Mark Twain before him, he railed against all forms of pomposity and arrogance. For both, politics was a big carnival, replete with all the clowns, nonsense and scams. Mencken considered it led by the incapable selling the indefensible to the ignorant! Oh that both were still around for current “bread and circuses.”

In the meantime, admire them for discernment and wit, especially Mencken for his prescience.

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