Education Lottery

In this TED talk by Sugata Mitra ("The child-driven education"), though it is not the main idea in the talk, he talks about the mismatch between what is taught in school and what is useful in life.

Here is some text about the talk:

Education scientist Sugata Mitra tackles one of the greatest problems of education -- the best teachers and schools don't exist where they're needed most. In a series of real-life experiments from New Delhi to South Africa to Italy, he gave kids self-supervised access to the web and saw results that could revolutionize how we think about teaching. 

I have seen news reports that have lead me to believe that the skills taught in schools in many countries are very badly matched to what people need to know in those countries. In those countries education becomes like a very costly lottery.  If you are at the very top of the class it might enable you to get visa to work in a developed country or to get one the few high level jobs available domestically but if you are not at the top of your class you get very little that is useful in your life.  There was a News report that focused on a girl in India and one of the comments by her family was that her older sister went to school for what they considered a long time and she was still a goat herder.  

I have seen a few reports that  claimed that many in Egypt had college degrees but were working jobs that did not require college. 

Shouldn't education be a way out or a way to live better?

The Big Compromise

As a Christan libertarian would like to see Government greatly reduced in  size and scope but most people want a government that provides for the poor and particularity in the areas of schooling and healthcare.  

Here are some of the numbers.

We are clearly spending an huge amount of money for what we get.  

If we must have a mixed system economic freedom with a robust social safety net in some areas let's at least make the system as efficient as possible. 

So to simplify and minimize the costs of providing for the poorest among us we would replace AFDC (commonly called welfare), food stamps, housing subsidies,  Social Security with a basic income guaranty. This leaves a role for the church and Charity in general because some people will drink and drug away their income.  Now some people are under the illusion that  food stamps and housing subsidies are superior because the cannot be spent on drugs and booze but that is a miss conception (interestingly they do not worry about that when it comes to Social Security).  $200/weak for every adult who was born in the USA should cover it.  You cannot give anything for children because the invectives would be bad this also leaves room for charity.

If you look at the statistics it seems medical care beyond the Vaccinations, antibiotics and trauma care yield very low benefits per dollar spent much less that people assume, but people feel very much compelled to provide them so:

Socialized medical care with deductibles based on a persons last years income. The individual would be required to pay for his own care up to his last years income minus the poverty level of income - his prior years medical expenses.  This would encourage the most capable people to shop for price in medical care.  Of course cheap high value items like vaccinations could be provided by Government free of charge. 

Shockingly to most people if you look at the statistics it seems schooling beyond the 3rd grade also yields very little overall benefit for society but again it is an area were people feel strongly that it must be provided by the state.  

You cannot subsidize the middle class and our current school system shows that clearly.  Have the Make middle class and rich pay for using Government Schooling.  Each families bill would be based on their prior years income.  

Some programs for the handicapped might be kept also.  

How to pay for all this, since we are trying to transfer some consumption from the rich and middle class toe poor we should collect money through a consumption tax.   Since most people feel that the rich should pay at a higher percentage rate than the poor the tax should be a progressive consumption tax.  You can have a progressive consumption tax by allowing individuals to put as much money as the want into an IRA and taxes them on any income that is not put into the IRA plus and money withdraw from the IRA.  This would greatly simplify taxation.

Additionally taxing externalizes like pollution taxes should be maintained and the Gasoline tax which is really a user fee should be maintained.

Biochar Kiln Plan

I have not yet built and tested this biochar kiln but I think it is a good plan and I will try to get it made.  

It is made with just a barrel and stove pipe. 

Could Wealth Decrease Longevity!

A friend on mine posted a link to this article on facebook.  

Here is an excerpt:

When Cuba's benefactor, the Soviet Union, closed up shop in the early 1990s, it sent the Caribbean nation into an economic tailspin from which it would not recover for over half a decade.
The biggest impact came from the loss of cheap petroleum from Russia. Gasoline quickly became unobtainable by ordinary citizens in Cuba, and mechanized agriculture and food distribution systems all but collapsed. The island's woes were compounded by the Helms-Burton Act of 1996, which intensified the U.S. trade embargo against Cuba, preventing pharmaceuticals, manufactured goods, and food imports from entering the country. During this so-called "special period" (from 1991 to 1995), Cuba teetered on the brink of famine. Cubans survived drinking sugared water, and eating anything they could get their hands on, including domestic pets and the animals in the Havana Zoo.
Cubans became virtual vegans overnight, as meat and dairy products all but vanished from the marketplace.
The economic meltdown should logically have been a public health disaster. But a new study conducted jointly by university researchers in Spain, Cuba, and the U.S. and published in the latest issue of BMJ says that the health of Cubans actually improved dramatically during the years of austerity. These surprising findings are based on nationwide statistics from the Cuban Ministry of Public Health, together with surveys conducted with about 6,000 participants in the city of Cienfuegos, on the southern coast of Cuba, between 1991 and 2011. The data showed that, during the period of the economic crisis, deaths from cardiovascular disease and adult-onset type 2 diabetes fell by a third and a half, respectively. Strokes declined more modestly, and overall mortality rates went down.

I am very skeptical of any statistic out of Cuba but this has very interesting implications. We all know that for some peopel increased wealth can lead to earlier death but if this article is correct it would mean that an increase in wealth above some subsistence level has a negative effect on enough people's longevity that a fall in wealth brought up the overall life expectancy in Cuba.  

BTW: I would bet that most, if not all of the gain, is due to reduced accidents, reduced smoking an drinking. 

Here is another excerpt:

During the special period, expensive habits like smoking and most likely also alcohol consumption were reduced, albeit briefly. 

Even in the USA recessions tend to accompanied by a decline in death rates mostly due to less driving, fewer on the job accidents, less drinking and smoking.  

Also here is a related Article Why early retirement may not be good for your health.  

Dubner: Well look, it may sound terrible but Kai, I'm happy to say, there's a hidden side, a little silver lining here to consider. So the economist Josef Zweimuller, at the University of Zurich, recently did a study that looked at two fairly identical groups of blue-collar workers in Austria. One group that got early retirement up to three and a half years earlier than the other, and what Zweimuller found is that early retirement -- as much as we may crave -- actually has a considerable downside.
Josef Zweimuller: I mean actually what we find in our study is that among blue-collar workers, we see that workers who retire earlier have higher mortality rates. And these effects are pretty large.
Ryssdal: 'Higher mortality rates' -- they die, the people who took the early retirement?
Dubner: Correct. The study showed that for every extra year of early retirement, you lose about two months of life expectancy. And I should say, this is not the first study to show there's a fairly strong relationship between early retirement and earlier death.
Ryssdal: What we do we know about the causes of these deaths? Is it heart attack, what is it?
Dubner: A lot of them cardiovascular, likely due to things like more smoking and drinking, worse diet, not enough exercise. But there's also evidence to show it goes beyond the physical, that working longer is tied to better mental health as well.
Here's Mo Wang, he's a psychologist at the University of Florida who studies retirement.
Mo Wang: Working actually gives you a way to structure life and that's very important. Usually it's interesting you see people travel right after they retire, but then after like one or two years, people just sit at home watching TV.

Here if more...

Josef Zweimuller: I mean actually what we find in our study is that among blue-collar workers, we see that workers who retire earlier have higher mortality rates. And these effects are pretty large.

Combined these should give us some real food for though. 

Of course a longer but less enjoyable life may not be better than a shorter more enjoyable life but there are those in the health movement (Michael Bloomberg for example) for whom the implications should be thought through as to what they imply for our welfare programs like food stamps and social security. 

Catholic Economist Critiques Economists

Pascal-Emmanuel Gobry, here on Forbes.com no less.

 The college wage premium vs the marriage wage premium. In contemporary societies, there is a strong college wage premium. That is to say, people who go to college make more money on average than people who don’t. While a minority of economists (including Cowen) have questioned why this premium should exist, the majority of economists generally take the existence of this college wage premium to mean that college is good and important, that more people should go to college, and that public policy has some role to play in promoting and subsidizing college attendance. I would bet a goodly sum of money that if you picked at random ten tenured economists from top-20 economics departments, and asked them to list what an 18-year-old should do to increase his chances of getting high wages, a majority would say “go to college.”

There also exists a marriage wage premium, which is roughly as significant and as consistent as the college wage premium. To say that the marriage wage premium doesn’t get the same amount of attention is an understatement. Economists recoil at the idea of praising marriage and supporting public policies that increase marriage. They are much more likely to dismiss the marriage wage premium as reflecting selection bias (it’s not that marriage makes people earn more money, it’s that people who would have earned more money anyway tend to get married) or intone that “correlation is not causation”–criticisms that apply equally to analyses of the college wage premium.  I would bet a goodly sum of money that if you picked at random ten tenured economists from top-20 economics departments, and asked them to list what an 18-year-old should do to increase his chances of getting high wages, none of them would say “get married and stay married”–even though the data on the marriage wage premium supports this conclusion to the same extent as it does going to college.

...

Usually if economists acknowledge the population growth problem, their preferred solution is to increase immigration–which aligns perfectly well with the “cosmopolitan perspective” Cowen praises. Leaving aside the fact that it’s a zero-sum proposition (those immigrants have to come from somewhere, and global population growth is slowing), these discussions often take an interesting turn. Even though I genuinely share economists’ enthusiasm for opening borders, when arguing that opening borders makes sense alongside a natalist policy, I have been accused of being against immigration, and possibly even a xenophobe. On its face, this is absurd. But if what we’re dealing with isn’t a public policy debate, but a clash of ideologies, where one ideology views as taboo the idea of public policy having an influence on the private sphere, then anger and accusation are a perfectly understandable reaction.

The pro-immigration view (which, again, I share) is as much a productivity view as a population view. The normal argument for immigration is that more people will allow for more specialization, which should raise productivity as people focus on the things they’re best at and learn from each other. That this is also an argument for increasing the birth rate seems not to occur.

Anyway–we can have all the arguments about increasing population growth we want: whether it is desirable, whether it is even possible, whether it is consistent with a liberal outlook (my answers: yes, let’s try, of course). My point here is that the subject is just completely ignored by the economics profession, and that this can be explained largely by the existence of bias.

Some Notes on the Affordable Care Act

I respect point of view of people who want to provide medical care for the poor through government and it makes some logical sense but here are some rules in the affordable care act that make me feel like we are being scammed:

• The mandate doesn’t apply to firms with fewer than 50 workers 

If it is impotent enough to make it a law that employers provide health insurance for workers why exempt some employers?  Won't this in the long run eliminate employers in those competitive low wage paying industries with between 50 and say 70 or 80 employees?  Outsourcing some services can help such businesses get under the 50 employee limit but it is sometimes less efficient.

• The mandate doesn’t apply to employees who work fewer than 30 hours

If it is impotent enough to make it a law that employers provide health insurance for workers why exempt some workers? This rule nudges employers to hire more part time workers and fewer full time workers.  This is bad for the guy who ends up working two part time jobs instead of one full time job. 

• The employee’s share cannot exceed 9.5% of wages for low- and moderate-income workers and an industry rule of thumb that employers must pick up at least 50 percent of the tab.

Considering Tax Incidence why would ACA require that the employee’s share of insurance costs not exceed 9.5% of wages.  Most everyone who studies it closely comes to the conclusion that employees pay for such benefits in reduced wages (that goes for the employers share of FICA also.)

Such rules make me feel like I am being scammed. If the employee will pay in the long run why try to hide that by making the employer no show it in the wage stub? If it is important enough to require employers to pay for health insurance why exempt some employers?

Also why should the costs of providing for healthcare fall in the short run on employers of low wage employees and in the long run consumers who buy products produced by low wage employees rather than on all taxpayers.

Morgan Warstler's Attemp at Making a Workable Hourly Wage Subsidy

Moragan Warstler has attempted to create an hourly wage subsidy without needing to verify hours.

I realy like the idea of an hourly wage subsidy to replace or at least reduce many of the welfare programs that we currently have.  It seems like it is a far more efficient way to support low earners.   

The problem with implimenting and hourly wage subsidy is that if we had to check and see if a person is working number of hours that they claim it would too difficult to even consider. 

Morgan has come up with a method that might alight incentives in such a way that this problem could be reduced.
An hourly wage subsidy is better than a base income guaranty and an income subsidy like the EITC in that it does less to reduce the  incentive to work than other subsidies. It also is superior to unemployment insurance, food stamps and AFDC and could be much cheaper for the taxpayers.

His basic plan is described at The Money Illusion and below.

The Basic PlanUsing the Paypal and Ebay platforms, the US govt. should establish a Guaranteed Income of $240 per week. Anyone who wants to work registers, receives a Paypal Debit Card, and each Friday at 5PM has their GI deposited.
All GI recipients have their labor weeks auctioned online.
Job offers begin at $40 per week ($1 per hour).  Offers increase by .50 cents per hour ($20 increments).
At $40 per week, there’s no able bodied / able minded person that some rational returns bidder won’t find use for.  The 70 yr old woman in a wheelchair who wants to work to keep busy?  Plenty of teleservice operators have work for her to do from home for $1 per hour.
Note: I solve for the criminally lazy.  Identifying and fixing them is one of my plan’s advantages. I’ll get to it a bit later in the What Abouts plan.So minimum take home cash under GI is $7 per hour or $280.  $240 is the social commitment paid out of taxes and $40 is the winning job offer.
To perfectly align incentives, for each $20 per week offer increase over $40, the govt. gets back $10 of our $240 social commitment, and the auctioned employed keeps $10.
So, on a offer of $100, the govt. is paying $210 and the auctioned receives $310.  A offer of $200, hits the govt. for $160 and auctioned receives $360.
The system ends at $10 per hour.  The maximum offer allowed in the GI Auction is $280 and the govt. is still kicking $120 netting the auctioned $400 per week.
Here is the actual schedule I’m suggesting:
Winning BID        GI paid by govt.              Payday: GI + BID
$40                      $240                               $280
$60                      $230                               $290
$80                      $220                               $300
$100                    $210                               $310
$120                    $200                               $320
$140                    $190                               $330
$160                    $180                               $340
$180                    $170                               $350
$200                    $160                               $360
$220                    $150                               $370
$240                    $140                               $380
$260                    $130                               $390
$280                    $120                               $400
At this point people tend to have lots of questions.  Since I’m writing this to woo progressives let’s starts here.  Companies like WalMart will now  need to pay more than $400 a week, to keep workers from choosing GI.Here are the basic rules:Recipients can choose to take lower paying jobs.
Recipients cannot be made to work outside a radius of 5 miles.  This is a guesstimate.
Bidders must also establish their real identity and deposit money into system before they bid.  No more craigslist roofing scams paying after the fact.
Bidders and auctioned cannot be related or cohabitating.
Bidders must accurately describe the job (check boxes) and cannot add to it after winning bid or require work not checked.
Feedback will be given both ways. If you are familiar with Ebay buyer / seller feedback, you understand what this accomplishes.  It makes it the whole thing work.   If you are not familiar with Ebay, get familiar with it before you state your opinion on this plan.
There are no taxes paid by employer or employee.  There are basic workplace protection requirements. Umbrella insurance is sold on Ebay for folks bringing labor into their home.
Upon meeting some fair criteria, the criminally lazy can be suspended from GI program. Perhaps 6 weeks as first suspension.
Only individuals and incorporated SMBs earning less than $3M per year can bid.   This is not subsidized labor for Fortune 1000.  Under this plan, their labor costs go up.  I am proposing Internet based  Distributism.

After a few days pondering I have begun to doubt weather this plan is better than a basic minimum guarantied income. A person would be able to collude with an employer to get the $240 without working, so why not just write a $200.00 check each week to each citizen and eliminate the minimum wage. 

Often when we talk about people not working they really are working, they are just not working in the taxed economy. They may be working illegally for cash, or they may be working for in-family consumption which is the case for house wives and these people often work quite hard. There is no reason that production for in family consumption should be disadvantaged.  So the advantage over minimum income guarantee may not be big enough to overcome the expense and complication.  

Having now ready the more complete  plan I think the enforcement against employer  employee collusion would be too difficult to enforce and the idea of making the punishment harsher (you propose making hiring people to not work a felony) is not a good approach because of difficulty of enforcement is a bad idea. In fact I think it is might be more effective to make he punish light like maybe a $1,000 fine might make people more likely to turn someone in. We do not want more felons than we already have. 

Another advantage of a guaranteed minimum income is that it could replace Social Security along with AFDC, food stamps, subsidized housing and unemployment insurance.

I like the plan but I am still bouncing it around in my head. All plans to help the poor have downsides, the question in my mind is does the fact that it nudges people to work more overcome the advantages of a income subsidy or the much simpler minimum income guarantee. 

BTW in either case recent immigrants would need to be ineligible for the program.  

I still find the idea is very interesting, perhaps so tweaks can overcome my objection. Anyway thanks for the effort.