Remember Martin Luther King Jr & his efforts

Back in 1947, Martin Luther King Jr argued that the critical intellect requires moral development. It is clear this still holds true even today. "The function of education is to teach one to think intensively and to think critically. Intelligence plus character - that is the goal of true education." You can find his article here.

I point this out because today's political debate is far too often lacking in intensive thought, critical thinking, and moral quality. And it has been so for some time. It aslo pervades more than just the political debate. Incompetence and malfeasance seem to abound just as much and can only amplify these problems.

Anyhow, these all point back to education as a source of this deficiency. And, specifically, statistics have shown that the US has been declining in math & science educational achievements compared against other nations in the world. These two subjects are especially crucial for developing critical thinking skills. You can understand more about why I think that here (click through the links a bit). Developing a moral character is more tricky. However, one can argue that in the tradition of academia, truth exists objectively and we are not individually in possession of the truth -- but seek it. And one can improve their moral character by observing these traditions of academia. Maintaining objectivity is tough. But gaining the ability & insights to sort through issues can come from a more robust education in science and mathematics. Thus leading to improved ability to maintain objectivity. Maintaining objectivity, is important to one's internal locus of control because it enables a strong moral character.

These subjects can improve the discussion for the following reasons. For one, science & math education can lead to the ability to understand and build a logical argument. Secondly, these subjects provide a foundation and even different processes that can be utilized. For example, the scientific method has a framework that can be adopted for use in the one's daily discourse. And if one were to follow it individually, one may find the quality of thought and even conclusions drawn improving.

Finally, I have always thought of what we do as a nation, as being done in striving for excellence. And I have always figured that individually, we strive to ensure it is so. I think we can take education more seriously. And I also think we can do better at heeding the true goal of education -- "intelligence plus character." The spirit of achieving excellence demands this!

Tax Debate or Obfuscation...???

One of the most intriguing parts of the tax debate is the dramatic inability to articulate the differences in positions distinctly enough to allow for making a clear choice. This leaves the American public mystified. On the one hand, tax cuts will be problematic to the government budget thereby perpetuating deficits. And on the other hand, it seems tax cuts are stimulative albeit with diminishing effect as one goes higher on the income scale. That is why a compromise may be made. And that is why opinion polls show American public support of extending the Bush tax cuts for all brackets. Who benefits from this confusion? Why is the American public opinion important anyhow? Do they even understand what's going on?

To illustrate, it isn't clear how an individual who makes millions of dollars annually will add jobs with the extra take home pay if they aren't a business owner. They'll have more disposable income but the increased likelihood (think marginal propensity to consume) of them spending that disposable income dollar by dollar diminishes. In fact, as one climbs that income scale, the propensity to spend diminishes & the propensity to save increases. Now, while an individual may save by leaving the funds in a savings account, purchasing a CD, investing in a mutual fund, etc, this is all savings. And while the term investing as used in an individual's case may connote investing, it actually is counted as saving in economics. In economics, individuals save and firms invest. And so, in saving how is this money being used to create jobs? Well, a bank may use the funds on deposit to extend a loan to a business to expand operations. Or help a business move part of their operations overseas. So, perhaps one can say there is a 50-50 chance that these proceeds will be used for either domestic uses or foreign uses. But many businesses aren't expanding operations domestically because they already have a situation of overcapacity.

Okay, so lets say this person is a business owner. It is unclear how likely a business owner is to take tax cuts and re-invest it into their business. For a businessperson to substantiate an investment activity in their company, there must be the attendant return. At this point, with so much capacity unused, what is the incentive for a business to expand their operations? And if they're expanding, as in the case of a small, growing business, what is the likelihood of them using funds from taxes vs getting a loan or an investor? And does all expansions include adding a position for a person to fill? Typically in times of a recession, there is an oversupply of labor that itself threatens those who continue to hold a job. At any moment one can lose their job or be replaced by a more willing candidate seeking a job – especially at a lower rate. So, employers tend to find willing, more helpful employees to take on more responsibilities. This is part of what typically leads to improved productivity in these times. So, how indeed does paying less taxes aid a business owner in adding more jobs? Or more pointedly, why would a business owner take their increased income and invest it into their company?

So, what we have illustrated here is the inability to distinguish between a business & an individual tax situation, between saving & investing in economic terms, the different tax usage implications, etc to get to the point of understanding how these issues affect the economy. I intentionally didn't answer all of the questions posed to demonstrate the added complexity of these issues. In my estimation, these issues are too complex for the American public to know enough to have an opinion. But this also demonstrates that taking a stance entails answering these questions. And depending upon how one answers these questions, one may see how a position is taken.

Overall, one gets the impression that much of the debate is intentionally obfuscated to create a smoke screen in order to get what is desired – keep tax the cuts across the board. And, good or bad, that is what they may be getting.

To Whom Do The Benefits Accrue?

In economics, an important question that is asked in economic analysis is: "To whom does the benefits accrue?" After making that determination, a value judgement typically yields a policy formulation. In the current state of economic affairs, we find ourselves saving more thereby spending less on consumer goods, paying down debts, etc. If there is any wonder why we're still in the "pain zone" so to speak, its because we're in a transition space with implications of structural realignment. But take a look at one aspect of the benefit accrual analysis: saving more means more money in bank accounts for banks to lend & lending is historically low, spending less on consumer goods is keeping jobs at bay as businesses still have untapped capacity and so lack an incentive to hire, households are paying down their debts and in doing so forgo opportunities to make consumer purchases that further complicate the situation. So, with more money in the bank & consumers paying down debts, this begets the following question(s): To whom does the benefits accrue? What is that money doing in the bank? Where does this money that is paying down debt going to? Who is benefiting from all of this?

Pursuit of Happiness

The other day I watched Pursuit of Happyness Starring Will Smith et al on TV and it struck me at how ignoble the protagonist's wife responded to the lack of happiness in their life. The protagonist told her how weak she was on account of her inability to cope with the lack of happiness. What she didn't get... What he got... was that it's a pursuit... not something you get & hold onto... And what of the journey? There will certainly be ups and downs. And believe it or not; it is healthy to experience the full spectrum of human emotions. How are you responding to tough times?!

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination are omnipotent. The slogan press on has solved and always will solve the problems of the human race. No person was ever honored for what he received. Honor has been the reward for what he gave." -- (John) Calvin Coolidge 30th President of the United States